To the Members,
The Directors are pleased to present the 29th (Twenty Ninth) Annual Report covering the business and operations of the Company and the Annual Audited Financial Statements of the Company for the Financial Year ended March 31, 2017.
The Financial Performance of your Company for the Financial Year ended March 31, 2017 is summarized below:
(Rs. In Lakhs)
Standalone -Year Ended
Consolidated- Year Ended
Year ended March 31, 2017
Year ended March 31, 2016
Year ended March 31, 2017
Year ended March 31, 2016
Sales & Services
Profit/(Loss) before Tax & Prior Period Item
Prior Period Item
Profit/(Loss) before Tax
Profit from continuing operations before tax
Profit/(loss) from discontinuing operations before tax
- Current tax
- Deferred tax credit
- Income tax -prior years
Profit from continuing operations after tax
Profit/(loss) from discontinuing operations after tax
Profit/(Loss) after Tax
Profit/(Loss) for the Year
Add: Balance brought forward
Adjustment for depreciation
Amount available for appropriations
Balance Carried Forward
There have been no material changes and commitments that have occurred after close of the financial year till the date of this report, which affect the financial position of the Company other than the Order of the Hon’ble National Company Law Tribunal, Mumbai Bench approving the proposal of the Company for “Capital Reduction by way of reduction of the Securities Premium Account by writing off the deficit in the Statement of Profit & Loss Account of the Company”. The same has been dealt in this report.
The Board takes the pleasure to report that your Company continues to be in profits in the financial year under review. With sustained focus on the business, your Company has reported a profit of Rs.16,269 lacs during the financial year under review. Pursuant to Section 123 of the Companies Act, 2013 read with Companies (Declaration and Payment of Dividend), Rules, 2014, a Company is required to set off accumulated losses of previous years / depreciation not provided in previous years against profits of the current year before declaration of any dividend. Since there is an accumulated debit balance of Rs.139,601 lacs in the profit and loss account of the Company hence no dividend is recommended for the year under review.
The Board of your Company has approved the Dividend Distribution Policy of the Company in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) as applicable to the top 500 Listed Companies. The said Policy of the Company sets out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. The policy is available on the website of the Company viz. www.dishtv.in
According to the Economic Survey, the entertainment industry has been one of the fastest growing segments of the economy in the last two decades. It is projected to reach Rs.1,964 billion by 2019. Your company with its pioneering spirit continues to ride this wave and move from strength to strength.
In the year under review, your Company continued to make substantial profits to the tune of Rs.16,269 lacs. This was achieved with a sustained focus on the customer and working towards their needs and requirements. Introducing innovative packaging and making Hi-Definition (HD) more affordable were the key initiatives which ensured growth in gross subscribers.
With growing disposable income, growth and improvements in technology, our customers’ viewing devices also keep on improving and hence, their needs and expectations continue to evolve. At the other end of the spectrum, new customers are coming in with the digitization drive. Our ability to enhance content quality together with affordability, makes us the prime choice for customers across the country.
Dish TV strives to enhance viewing experience of a diverse audience and will continue to evolve with time and technology. This will also help us overcome the multiple challenges bound to come our way.
We will continue to empower our customers and transform their entertainment needs with the power of digitization, offering more channels, On Demand Services and Interactive Television Services. In addition, we ensure high quality of the received signal and uses a secure digital distribution system. Consumers can experience new improved services with enhanced quality.
Entertainment has emerged as one of the key human requirement and that has made the market more lucrative than ever. It has also made it more competitive than ever before. Bigger, stronger players will have a greater role to play in this market.
Dish TV will continue to offer a wide array of multibrand and multi product portfolio to suit the needs of different consumer segments. Competitiveness on the fronts of technology, content and price will be the key drivers of the brand’s affinity with its consumers. This three pronged focus will enable the company to expand its overall base and move existing customers up the value chain, enhancing ARPU. The introduction of a completely new & advanced interface will enhance the experience of subscribers manifold.
Dish TV has always endeavored to make entertainment accessible in the most convenient ways to the consumers. Recent technological advances are making it possible for entertainment to be available anytime anywhere. Your Company has tapped onto that trend with DishOnline. Going forward Dish TV will continue to strengthen its presence in this segment and meeting the requirements of its customers in this segment.
This year will be about giving more power in the hands of the customer. Greater value will be provided with the introduction of benefits on long term recharges. This would be a win-win situation for both subscriber and Company with the former saving money and the latter improving retention. Enhancing freedom by introducing flexibility has been given in the form of selecting individual channels to customize base packs. Finding means for maximizing value for the customer will always be the never ending quest which drives each and every employee of the company.
SUBSIDIARIES AND ASSOCIATE OPERATIONS
Subsidiary in Sri Lanka:
Your Company, upon the approval of Board of Directors, incorporated a Joint Venture (‘JV’) Company with Satnet (Private) Limited, a Company incorporated under the Laws of Sri Lanka, in the name and style of ‘Dish T V Lanka (Private) Limited’ for providing Direct to Home Services in Sri Lanka, on April 25, 2012 with a paid up share capital of 1 million Sri Lankan Rupees. Your Company holds 70% of the paid-up share capital and Satnet (Private) Limited holds 30% of the paid-up share capital in Dish T V Lanka (Private) Limited. Dish T V Lanka (Private) Limited has commenced the operations under the requisite licenses and permissions obtained from regulatory authorities. The Company has also been registered as a Board of Investment (‘ BO I’) approved Company in Sri Lanka. The registration with BOI grants various benefits to the Company including duty free imports of the equipment and set top box for one year, tax holiday of 7 years etc.
Subsidiary in India:
Your Company, upon the approval of Board of Directors and the Members of the Company, acquired the entire share capital of Xingmedia Distribution Private Limited (‘Xingmedia’) on March 24, 2014. Upon requisite approvals, the name of Xingmedia has been changed to ‘Dish Infra Services Private Limited’ (‘Dish Infra’). Post approval of Members of the Company by way of Special Resolution passed by Postal Ballot, the non-core business of the Company (undertaking pertaining to the provision of infra support services to the subscribers for facilitating the DTH services including the instruments which are required for receiving DTH signals such as set top boxes(STB), dish antenna, Low Noise Boxes (LNB) and other customer related services including call centre services and repairs) has been transferred to Dish Infra with effect from April 1, 2015.
Upon nomination by the Company, one Independent Director of the Board has been appointed as an Independent Director on the Board of Dish Infra (Company’s material non-listed Indian Subsidiary) in compliance with the provisions of Regulation 24 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Associate Company in India:
Your Company, upon the approval of Board of Directors incorporated an Associate Company in the name and style of ‘C&S Medianet Private Limited’ on May 5, 2016. C&S Medianet Private Limited’s initial paid up capital is Rs.100,000. Your Company holds 48% of the initial capital and Siti Cable Network Limited also hold 48% of the initial capital. The said Company shall act as a negotiating agency for Content / Advertisement Sales / Carriage etc. for the television channel distribution industry (DTH and Cable). The said Company is yet to commence its operations.
Apart from the above, no other Subsidiary / Joint-venture / Associate was formed or divested during the financial year 2016-17.
Audited Accounts of Subsidiary Companies:
Your Company has prepared the Audited Consolidated Financial Statements in accordance with Section 129(3) of the Companies Act, 2013 read with applicable Accounting Standards and Listing Regulations, 2015. The statement pursuant to Section 129(3) of Companies Act, 2013 and Rule 5 of Companies (Accounts) Rules, 2014 highlighting the summary of the financial performance of the subsidiaries is annexed to this Report.
As required under the Accounting Standard 21 -’Consolidated Financial Statements’, issued by the Institute of Chartered Accountants of India (‘ IC AI’) and applicable provisions of the Listing Regulations, the Audited Consolidated Financial Statements of the Company reflecting the Consolidation of the Accounts of its subsidiaries are included in this Annual Report. Further, a statement containing the salient features of the financial statements of the subsidiaries and associate in the prescribed format AOC -1 is appended to this report.
In accordance with Section 136 of the Companies Act, 2013, the audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of subsidiaries are available on the website of the Company viz. www.dishtv.in. These documents will also be available for inspection during business hours at the Registered Office of the Company.
Your Company has a policy for determining Material Subsidiaries. The Policy is disclosed on the Company’s website viz. www.dishtv.in and is accessible at https:// www.dishtv.in/Pages/Investor/Corporate-Governance. aspx.
Your Company’s fully paid up equity shares continue to be listed and traded on National Stock Exchange of India Limited (‘NSE’) and BSE Limited (‘BSE’). Both these Stock Exchanges have nation-wide trading terminals and hence facilitates the shareholders/investors of the Company in trading the shares. The Company has paid the annual listing fee for the Financial Year 2017-18 to the said Stock Exchanges.
The Company has also paid the annual maintenance fee to the Luxembourg Stock Exchange in respect of its Global Depository Receipts (‘GDR’) for the year 2017.
Your Company has arrangements with National Securities Depository Limited (‘NSDL) and Central Depository Services (India) Limited (‘CDSL’), the Depositories, for facilitating the members to trade in the fully paid up equity shares of the Company in Dematerialized form. The Annual Custody fees for the Financial Year 2017-18 has been paid to both the Depositories.
During the year under review, your Company has allotted 1,04,070 fully paid equity shares, upon exercise of Stock Option by the eligible Employees of the Company, pursuant to the Employee Stock Option Scheme - 2007 (‘ESOP - 2007’) of the Company and these shares were duly admitted for trading on both the stock exchanges viz. NSE and BSE.
During the Financial Year 2008-09, your Company had come up with Right Issue of 518,149,592 equity shares of Rs.1 each, issued at Rs.22 per share (including premium of Rs.21 per share), payable in three installments. Upon receipt of valid second call money from the concerned shareholders, during the year under review, the Company converted 121 equity shares from Rs.0.75 each paid up to Rs.1 each fully paid up.
Pursuant to the issue of further equity shares under ESOP scheme and subsequent to conversion of partly paid equity shares, the paid up capital of your Company during the year has increased from Rs.1,06,58,51,431.75 (comprising of 1,06,58,30,337 fully paid up equity shares of Rs.1 each, 15,383 equity shares of Rs.1 each, paid up Rs.0.75 per equity share & 19,115 equity shares of Rs.1 each, paid up Rs.0.50 per equity sharejto Rs.1,06,59,55,532 (comprising of 1,06,59,34,528 fully paid up equity shares of Rs.1 each, 15,262 equity shares of Rs.1 each, paid up Rs.0.75 per equity share & 19,115 equity shares of Rs.1 each, paid up Rs.0.50 per equity share!.
EMPLOYEE STOCK OPTION SCHEME
In compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, as amended from time to time, your Board had authorized the Nomination and Remuneration Committee (formerly ‘Remuneration Committee’) to administer and implement the Company’s Employees Stock Option Scheme (ESOP - 2007) including deciding and reviewing the eligibility criteria for grant and /or issuance of stock options under the Scheme. The ESOP Allotment Committee of the Board considers, reviews and allots equity shares to the eligible Employees exercising the stock options under the Employee Stock Option Scheme (ESOP - 2007) of the Company.
During the period under review, the Nomination and Remuneration Committee (formerly ‘Remuneration Committee’) of the Board granted 8,03,800 stock options to the eligible Employees as per the ESOP - 2007 Scheme of the Company. The Company, during the year, allotted 1,04,070 fully paid equity shares, upon exercise of the stock options by eligible Employees under the ESOP - 2007.
Applicable disclosures relating to Employees Stock Options as at March 31, 2017, pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014, as amended from time to time, are available on the website of the Company at https://www.dishtv.in/Pages/ Investor/Corporate-Governance.aspx. The ESOP-2007 Scheme of the Company is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014.
Statutory Auditors’ certificate to the effect that the ESOP - 2007 Scheme of the Company has been implemented in accordance with the SEBI Guidelines and as per the resolution passed by the members of the Company, as prescribed under Regulation 13 of the SEBI (Share Based Employee Benefits) Regulations, 2014, has been obtained and shall be available for inspection at the Annual General Meeting of the Company. Copy of the same shall also be available for inspection at the Registered Office of the Company on all working days (Monday to Friday) between 2.00 P.M. to 4.00 P.M. up to the date of Annual General Meeting of the Company.
RIGHT ISSUE OF SHARES & UTILISATION OF PROCEEDS THEREOF
Out of the total Right Issue size of Rs.113,992.91 Lacs, the Company has received a sum of Rs.113,988.63 Lacs towards the share application and call money(s) as at March 31, 2017.
The details of utilization of Rights Issue proceeds are placed before the Audit Committee and the Board on a quarterly basis. Further, the Company also provides the details of the utilization of Rights Issue proceeds to IDBI Bank Limited, the Monitoring Agency of the Company, on half yearly basis along with Auditors’ Certificate on Utilization and furnishes the Monitoring Report to the Stock Exchanges.
The Board at its meeting held on May 28, 2009 approved to make changes in the manner of usage of right issue proceeds. The utilization of rights issue proceeds as on March 31, 2017, is as under:
Amount (Rs. In Lakhs)
Repayment of loans
Repayment of loans received after launch of the Rights Issue
General Corporate Purpose
Acquisition of Consumer Premises Equipment (CPE)
Right Issue Expenses
The half yearly Monitoring Reports issued by IDBI Bank Limited, the Monitoring Agency of the Company, was recorded by the Audit Committee and the Board at their respective meetings and necessary compliance in this regard had been carried out.
GLOBAL DEPOSITORY RECEIPT
The Global Depository Receipt (‘GDR’) Offer of the Company for 117,035 GDRs at a price of US $ 854.50 per GDR, each GDR representing 1,000 fully paid equity shares of the Company were fully subscribed by Apollo India Private Equity II (Mauritius) Limited. The underlying shares against each of the GDRs were issued in the name of the Depository - Deutsche Bank Trust Company Americas. As on March 31, 2017, NIL GDRs are outstanding, the underlying shares of which forms part of the existing paid up capital of the Company.
The manner of utilization of GDR proceeds as on March 31, 2017, is as under:
Amount (Rs. In Lakhs)
Acquisition of FA including CPE
GDR Issue Expenses
Advance Against Share Application Money given to erstwhile Subsidiary
Repayment of Bank Loans
Operation Expenses including interest payment bank charges, exchange fluctuation
Less: Interest earned-realized
Balance with non-scheduled bank
During the year under review, the Board of Directors at their meeting held on August 12, 2016 approved shifting of the Registered Office of the Company to State of Maharashtra, Mumbai for ease of administration and cost effectiveness. The shifting was further approved by the Shareholders of the Company on September 19, 2016 by passing Special Resolution through Postal Ballot. After obtaining the necessary permission / approval of change of Registered Office from concerned authority (ies), the Registered Office of the Company was shifted from the National Capital Territory of Delhi to the state of Maharashtra, Mumbai with effect from November 3, 2016. Accordingly, the Registered Office of the Company is presently situated at 18th Floor, A Wing, Marathon Futurex, N M Joshi Marg, Lower Parel, Mumbai - 400013, Maharashtra.
CAPITAL REDUCTION - BY WAY OF REDUCTION OF SECURITIES PREMIUM ACCOUNT FOR WRITING OFF THE DEFICIT IN THE STATEMENT OF PROFIT & LOSS ACCOUNT
During the year under review, the Board of Directors of your Company had at its meeting held on May 23, 2016, approved the arrangement for reduction of the Securities Premium Account of the Company for writing off the deficit in the statement of Profit and Loss Account. The reduction in share capital (securities premium account) shall not prejudicially affect the Company or its Shareholders and would not in any way adversely affect the ordinary operations of the Company or the ability of the Company to honor its commitments that may arise in the ordinary course of business.
Upon receipt of No objection(s) of the Stock Exchanges to the said reduction and approval of Shareholders of the Company by passing Special Resolution through Postal Ballot on September 19, 2016, the Company had filed necessary application and petition with Hon’ble National Company Law Tribunal, Mumbai Bench (NCLT) for approval of the said Capital Reduction proposal.
The Hon’ble NCLT, vide its Order dated June 28, 2017, has approved the said reduction of share capital of the Company by way of utilizing the amount standing to the credit of the Securities Premium Account for writing off deficit in the statement of Profit and Loss account of the Company. Accordingly, the entire Securities Premium account amounting to Rs.15,43,39,65,550 (Rupees One Thousand Five Hundred Forty Three Crores Thirty Nine Lakhs Sixty Five Thousand Five Hundred and Fifty Only) as on March 31, 2016, shall stand reduced for writing off deficit in the statement of Profit and Loss Account of the Company. Post receipt of the said Order, necessary filings were made with the Stock Exchange(s) and Registrar of Companies.
SCHEME OF ARRANGEMENT FOR AMALGAMATION OF VIDEOCON D2H LIMITED INTO AND WITH DISH TV INDIA LIMITED
On November 11, 2016, the Board of Directors of your Company and Videocon d2h Limited (‘Vd2h’) approved a scheme of arrangement (“Scheme”) for the amalgamation of Vd2h into Dish TV India Limited and the execution of definitive agreements in relation to such amalgamation (the “Transaction”). The draft Scheme pursuant to the provisions of Sections 391 to 394 of the Companies Act, 1956 and/or applicable sections of the Companies Act, 2013, read with rules thereto has been made with a view to reduce operational costs, increase operational efficiencies and enable optimal utilization of various resources as a result of pooling of financial, managerial and technical resources, and technologies of both the Companies.
Following the completion of the amalgamation process, subject to necessary approvals, your Company will be renamed as Dish TV Videocon Limited (“Dish TV Videocon”). Upon the Scheme becoming effective, your Company shall issue fully paid equity shares as provided for in the Scheme.
Upon receipt of No-objection(s) of the Stock Exchanges to the Scheme and approval of the Equity Shareholders of the Company at their meeting held on May 12, 2017, necessary petition was filed before the Hon’ble National Company Law Tribunal (NCLT), Mumbai for sanction of the Scheme. The scheme has also received the approval of Competition Commission of India, New Delhi for the said combination as embodied in the Scheme of Arrangement.
Further, the Board of Directors of both the Companies, in order to provide greater flexibility to the Scheme, at its meeting held on May 24, 2017 approved the proposal to amend the scheme by amending the clause 5.8.5 of the scheme. Pursuant to the said amendment, the GDSs to be issued by the Company pursuant to the Amalgamation can be listed on ”Luxembourg Stock Exchange or London Stock Exchange or any Other Stock Exchange”. The said amendment was placed before the Hon’ble NCLT on June 7, 2017 for approval. During the hearing before the Tribunal, the said amendment was changed to ”Luxembourg Stock Exchange or London Stock Exchange”.
The Hon’ble NCLT vide its Order dated July 27, 2017 approved the aforesaid Scheme. The certified copy of the said order is awaited. The Appointed date for the Scheme has been fixed on October 1, 2017.
The Company has already made an application to the Ministry of Information and Broadcasting (‘MIB’) for granting necessary permissions. Upon receipt of the MIB approval, the order of the Hon’ble NCLT shall be filed with the Registrar of Companies, post which the Scheme shall be effective from October 1, 2017.
The transaction is expected to create a leading cable and satellite distribution platform in India. The amalgamated Company would serve approximately 28 million net subscribers in India, out of a total of 181 million TV households in India, with significant room for growth.
Post completion of the Transaction, the equity shares of the amalgamated Company shall continue to be listed on NSE and BSE in India. The existing Vd2h ADR holders will be entitled to receive their new shares in the form of the GDRs, unless they elect to receive and hold the new shares directly, as part of the scheme.
REGISTRAR & SHARE TRANSFER AGENT
The Registrar & Share Transfer Agent (‘RTA’) of the Company was changed from Sharepro Services (India) Private Limited to Link Intime India Private Limited, with effect from July 1, 2016 pursuant to restraining order issued by SEBI against the erstwhile RTA. During the year under review, Link Intime India Private Limited, the present RTA of the Company shifted their registered office from C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup (West), Mumbai 400 078 to their own premises at C 101, 247 Park, LBS Marg, Vikhroli (West), Mumbai - 400 083, Maharashtra.
Requisite proposal seeking shareholders’ approval for maintaining Register & Index of Equity Shareholders, Register of Transfer and other Registers including Annual Return at the new office of the RTA forms part of Notice of ensuing Annual General Meeting.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis report as provided under Listing Regulations is separately attached hereto and forms an integral part of this Annual Report. The said report gives details of the overall industry structure, economic developments, performance and state of affairs of your Company’s business and other material developments during the financial year under review.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with requirements of Section 135 of the Companies Act, 2013, your Company has a duly constituted Corporate Social Responsibility Committee (CSR Committee) comprising of five members including three Independent Directors.
Your Company has adopted a unified approach towards CSR at Group level, wherein CSR contributions of eligible group entities are pooled in, to fund high cost long-term projects that help build Human capital and create lasting impact on the society. The Committee has approved the CSR Policy with Education, Health Care, Women Empowerment and Sports as primary focus area. During the year under review, a Section 8 Company in the name of Dr. Subhash Chandra Foundation was established at Group level and the Company had contributed to the said foundation towards Group’s Educational infrastructure development project at Hisar, Haryana.
A detailed report on Corporate Social Responsibility activities initiated by the Company during the year under review, in compliance with the requirements of Companies Act, 2013, is annexed to this report.
During the year under review, your Company sought the approval of the Shareholders on the following matters, vide Postal Ballot Notice dated August 12, 2016:
- Special Resolution for Reduction of Capital (Securities Premium Account).
- Special Resolution for Shifting of Registered Office of the Company from the National Capital Territory of Delhi to the State of Maharashtra, Mumbai.
The said notice along with Postal Ballot Form and Business Reply Envelopes were duly sent to the Shareholders and your Company also offered E-Voting facility as an alternate option for voting by the Shareholders, which enabled them to cast their votes electronically, instead of Physical Postal Ballot Form. The result on the voting conducted through Postal Ballot process was declared on September 22, 2016.
The procedure prescribed under Section 110 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules 2014, was adopted for conducting the Postal Ballot.
Further, details related to the Postal Ballot procedure adopted, voting pattern and result thereof have been provided under the General Meeting Section of ‘Report on Corporate Governance’.
CORPORATE GOVERNANCE AND POLICIES
‘Corporate Governance’ is an ethically driven business process that is committed to values aimed at enhancing an organization’s brand and reputation in order to achieve the objectives of the organization transparently. This is ensured by taking ethical business decisions and conducting business with a commitment to values, while meeting shareholder’s expectations.
Your Company believes that maintaining the highest standards of Corporate Governance is imperative in its pursuit of leadership in the Direct to Home (‘DTH’) business. The Company continues to focus its resources, strengths and strategies to achieve its vision of continuing to be the leader in DTH Industry.
Your Company considers it an inherent responsibility to disclose timely and accurate information and also places high emphasis on best business practices and standards of governance besides strictly complying with the requirements applicable as per Listing Regulations and Companies Act, 2013.
In terms of Schedule V of Listing Regulations, a detailed report on Corporate Governance along with Compliance Certificate issued by the Statutory Auditors of the Company is attached and forms an integral part of this Annual Report. Management Discussion and Analysis Report and Business Responsibility Report as per Listing Regulations are presented in separate sections forming part of the Annual Report. The said Reports will also be available on the Company’s website www.dishtv. in as part of the Annual Report.
Your Company is committed to benchmarking itself with global standards of Corporate Governance. It has put in place an effective Corporate Governance system which ensures that provisions of the Companies Act and Listing Regulations are duly complied with, not only in form but also in substance.
In compliance with the requirements of Companies Act, 2013 and Listing Regulations, your Board has approved various Policies including Code of Conduct for Directors & Senior Management, Material Subsidiary Policy, Insider Trading Code, Document Preservation Policy, Material Event Determination and Disclosure Policy, Fair Disclosure Policy, Corporate Social Responsibility Policy, Whistle Blower and Vigil Mechanism Policy, Related Party Transaction Policy, Dividend Distribution Policy and Remuneration Policy. All these policies and codes have been uploaded on Company’s website viz.www.dishtv.in and is accessible at https://www. dishtv.in/Pages/Investor/Corporate-Governance.aspx.
Additionally, Directors Familiarisation Programme and Terms and Conditions for appointment of Independent Directors can be viewed on Company’s website viz. www.dishtv.in.
In compliance with the requirements of Section 178 of the Companies Act, 2013, the Nomination and Remuneration Committee of your Board had fixed the criteria for nominating a person on the Board which inter alia include desired size and composition of the Board, age limits, qualification / experience, areas of expertise and independence of individual.
The Audit Committee of the Board has been vested with powers and functions relating to Risk Management which inter aliaincludes (a) review of risk management policies and business processes to ensure that the business processes adopted and transactions entered into by the Company are designed to identify and mitigate potential risk; (b) laying down procedures relating to Risk assessment and minimization; and (c) formulation, implementation and monitoring of the risk management plan.
DIRECTORS & KEY MANAGERIAL PERSONNEL
As on March 31, 2017, your Board comprised of 6 Directors including 4 Independent Directors.
During the year under review, Mr. Eric Louis Zinterhofer, an Independent Director, tendered his resignation from the Board of the Company on account of him being resident of USA and not being able to attend the Board Meetings of the Company held in India. Mr. Zinterhofer resigned from the Board of the Company from the close of business hours of March 24, 2017. Your Board placed on record its appreciation for the contributions made by him during his tenure.
Pursuant to the Members’ approval at the 26th Annual General Meeting held on September 29, 2014, Mr. Bhagwan Das Narang and Mr. Arun Duggal were appointed as Independent Directors of the Company for a term of 3 (three) consecutive years from the date of the 26th Annual General Meeting upto the 29th Annual General Meeting of the Company to be held in the calendar year 2017. Special Resolution seeking members’ approval for appointing them as Independent Directors for the second term of 5 years from expiry of their current term forms part of the Notice of the ensuing Annual General Meeting. Your Company has received a notice in writing along with requisite deposit pursuant to Section 160 of Companies Act, 2013, proposing reappointment of Mr. Bhagwan Das Narang and Mr. Arun Duggal for second term and based on performance evaluation and contributions made by them, your Board recommends their appointment for the second term of 5 years from the date of the 29th Annual General Meeting upto the date of the 34th Annual General Meeting of the Company to be held in the calendar year 2022.
Mr. Ashok Kurien, Non-Executive Director is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible has offered himself for re-appointment. Your Board recommends his re-appointment.
Further, Mr. Lakshmi Chand, an Independent Director on the Board of the Company tendered his resignation with effect from August 17, 2017, on account of his other engagements and pre-occupations. Your Board took note of the said resignation at its meeting held on August 17, 2017 and placed on record its appreciation for the contributions made by him during his tenure.
During the year under review, there was no change in the Key Managerial personnel of the Company. However, Mr. Arun Kumar Kapoor, Chief Executive Officer, tendered his resignation from the close of working hours of May 15, 2017. Your Board placed on record its appreciation for the contributions made by him during his tenure. Based on the recommendation of Nomination and Remuneration Committee your Board appointed Mr. Anil Kumar Dua as the Group Chief Executive Officer of the Company in place of Mr. Kapoor with effect from May 17, 2017.
In compliance with the requirements of Section 203 of the Companies Act, 2013, as on the date of this report, Mr. Jawahar Lal Goel, Managing Director and Chairman, Mr. Anil Kumar Dua, Chief Executive Officer, Mr. Rajeev Kumar Dalmia, Chief Financial Officer and Mr. Ranjit Singh, Company Secretary of the Company are Key Managerial Personnel of the Company.
Mr. Jawahar Lal Goel, continues to be the Chairman and Managing Director of the Company. During the tenure of Mr. Goel as Managing Director, the Company has continuously maintained strong growth in terms of revenue as well as continued its stronghold on the Direct To Home (DTH) market share. The Company has made considerable progress in all the spheres and has achieved tremendous growth and acquired goodwill and reputation in the business. Mr. Goel has spearheaded the organization with strong zeal and commitment despite strong competitive intensity, rise of digital cable network, regulatory challenges and technological upheavals.
Mr. Goel has led your Company in a highly competitive and volatile market to not just consolidate its market leadership but also in shaping the future of your Company into a modern, technology & innovation-driven organisation.
As on March 31, 2017, your Board comprises of 6 Directors including 4 Independent Directors (inclusive of 1 women Director). The Company recognizes and embraces the importance of a diverse Board in its success. The Board has also adopted the Board Diversity Policy.
The Board met seven times during the Financial Year, the details of which are given in the Corporate Governance Report which forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and Listing Regulations.
Declaration by Independent Directors
Independent Directors of the Company provide declarations, both at the time of appointment and annually, confirming that they meet the criteria of independence as prescribed under Companies Act, 2013 and the Listing Regulations. Your Company has received the said declarations from all the Independent Directors. In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made thereunder and Listing Regulations and are independent of the management.
A formal evaluation of the performance of the Board, it’s Committees, the Chairman and the individual Directors was carried out for the Financial Year 2016-17.
The Independent Directors of your Company, in a separate meeting held without presence of other Directors and management, evaluated the performance of the Chairman & Managing Director and other Non-Independent Directors along with performance of the Board/Board Committees based on various criteria recommended by Nomination & Remuneration Committee and ‘Guidance Note on Board Evaluation’ dated January 5, 2017 issued by SEBI. A report on such evaluation done by the Independent Directors was taken on record by the Board and further your Board, in compliance with requirements of Companies Act, 2013, evaluated performance of all Independent Directors based on various parameters including attendance, contribution etc.
Policy on Directors’ appointment and remuneration
In compliance with the requirements of Section 178 of the Companies Act, 2013, the ‘Nomination & Remuneration Committee’ (NRC Committee) of your Board had fixed the criteria for nominating a person on the Board which inter alia include desired size and composition of the Board, age limit, qualification / experience, areas of expertise and independence of individual. The Committee had also approved in-principle that the initial term of an Independent Director shall not exceed 3 years. Your Company has also adopted a Nomination, Appointment, Remuneration and Training Policy, salient features whereof is annexed to this report.
Further, pursuant to provisions of the Act, the NRC Committee of your Board has formulated the Remuneration Policy for the appointment and determination of remuneration of the Directors, Key Management Personnel, Senior Management and other Employees of your Company. The NRC Committee has also developed the criteria for determining the qualifications, positive attributes and independence of Directors and for making payments to Executive Directors of the Company.
The NRC Committee takes into consideration the best remuneration practices in the industry while fixing appropriate remuneration packages and for administering the long-term incentive plans, such as ESOPs. Further, the compensation package of the Directors, Key Management Personnel, Senior Management and other employees are designed based on the set of principles enumerated in the said policy. Your Directors affirm that the remuneration paid to the Directors, Key Management Personnel, Senior Management and other employees is as per the Remuneration Policy of your Company.
The Remuneration details of the Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary, along with details of ratio of remuneration of each Director to the median remuneration of employees of the Company for the FY under review are provided as Annexure to this Report.
Familiarisation Programme for Independent Directors
During the year under review, to familiarize the Directors with strategy, operations and functions of the Company, the senior managerial personnel made presentations about Company’s strategy, operations, product offering, market, technology, facilities and risk management. The Directors were also provided with relevant documents, reports and internal policies to enable them to familiarise with your Company’s procedures and practices, from time to time, besides regular briefing by the members of the senior leadership team.
Also the Board including all Independent Directors were given a detailed presentation on March 24, 2017 by J. Sagar Associates on various aspects of Companies Act, 2013, Listing Regulations including Roles and Duties of Directors, Procedural Aspects & provisions relating to merger, Insider Trading Regulations etc.
Further, at the time of appointment of an Independent Director, the Company issues a formal letter of appointment outlining their duties and responsibilities as a Director.
Detail of familiarisation program organized for Independent Directors during FY under review form part of Corporate Governance Report annexed hereto and are also posted on the Company’s website viz. www.dishtv. in and can be viewed on the following link: https://www. dishtv.in/Pages/Investor/Corporate-Governance.aspx.
Committees of the Board
In compliance with the requirements of Companies Act, 2013 and Listing Regulations your Board had constituted various Board Committees including Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. As on March 31, 2017, the Audit Committee of the Board consisted of Mr. B D Narang, an Independent Director as the Chairman of the Committee and Mr. Arun Duggal and Mr. Lakshmi Chand, both Independent Directors as its members.
Details of the constitution of these Committees, which are in accordance with regulatory requirements, have been uploaded on the website of the Company viz. www.dishtv.in. Details of scope, constitution, terms of reference, number of meetings held during the year under review along with attendance of Committee Members therein form part of the Corporate Governance Report annexed to this report.
Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated Vigil Mechanism/Whistle Blower Policy which provides a robust framework for dealing with genuine concerns & grievances. The Policy provides opportunity to Directors/ Employees/Stakeholders of the Company to report concerns about unethical behavior, actual or suspected fraud of any Director and/or Employee of the Company or any violation of the Code of Conduct. Further during the year under review, no case was reported under the Vigil Mechanism. During Financial Year 2016-17, no individual was denied access to the Audit Committee for reporting concerns, if any.
At the 26th Annual General Meeting of the Company held on September 29, 2014, M/s. Walker Chandiok & Co. LLP, Chartered Accountants, Gurgaon, having Registration No 001076N/N-500013 were appointed as the Statutory Auditors of the Company to hold office till the conclusion of the 29th Annual General Meeting. In terms of Section 139 of the Companies Act, 2013 and the rules made thereunder re-appointment of the Statutory Auditors for the second term would require approval of the Shareholders at their meeting. The Board, on recommendation of the Audit Committee, has proposed to the members, the re-appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants, New Delhi, (Firm Registration No. 001076N/N-500013) as Statutory Auditors’ of the Company, for second term for a period of Five (5) consecutive years to hold office from the date of 29th Annual General Meeting until the conclusion of the 34th Annual General Meeting of the Company to be held in the calendar year 2022 and also to fix their remuneration.
In this regard, the Company has received necessary consent and certificate from M/s Walker Chndiok & Co LLP, Chartered Accountants, New Delhi, to the effect that their re-appointment, if made will be in accordance with Section 141 of the Companies Act, 2013 read with Companies (Audit & Auditors) Rules 2014.
Your Board is of the opinion that continuation of M/s Walker Chandiok & Co. LLP, Chartered Accountants, as Statutory Auditors will be in the best interests of the Company and therefore Members are requested to consider the their re-appointment as Statutory Auditors of the Company.
During the year, the Board re-appointed Mr. Jayant Gupta, Practicing Company Secretary, proprietor of M/s Jayant Gupta & Associates, Company Secretaries as the Secretarial Auditor of the Company for conducting the Secretarial Audit for the financial year 2016-17. The Secretarial Audit was carried out in compliance with Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The reports of Statutory Auditor and Secretarial Auditor forming part of this Annual report do not contain any qualification, reservation or adverse remarks. During the year the Statutory Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under the applicable provisions of the Act.
In compliance with the requirements of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, M/s Chandra Wadhwa & Co., (Firm Registration No. 000239), Cost Accountants, were engaged to carry out Audit of Cost Records of the Company for the Financial Year 2016-17. The Board of your Company on the basis of the recommendation of the Audit Committee, had approved the re-appointment of M/s Chandra Wadhwa & Co., (Firm Registration No. 000239), Cost Accountants, as the Cost Auditors for the financial year ending March 31, 2018 on the same terms and conditions including remuneration.
Requisite proposal seeking ratification of remuneration payable to the Cost Auditor for the Financial Year 2016-17 as well as for the Financial Year 2017-18 by the Members as per Rule 14 of Companies (Audit and Auditors) Rules, 2014, forms part of the Notice of ensuing Annual General Meeting.
Reporting of frauds by Auditors
During the year under review, the Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this report.
i. Particulars of Loans, guarantees and investments:
Particulars of Loans, guarantees and investments made by the Company required under Section 186(4) of the Companies Act, 2013 and the Listing Regulations are contained in Note no. 49 to the Standalone Financial Statement.
ii. Borrowings and Debt Servicing: During the year under review, your Company has not accepted any Loans.
iii. Transactions with Related Parties: All related party transactions are placed before the Audit Committee for its approval and statement of all related party transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions along with arms-length justification. All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm’s Length basis. During the year under review, there have been no materially significant related party transactions as defined under Section 188 of the Act and Regulations 23 the Listing Regulations and accordingly no transactions are required to be reported in Form AOC-2 as per Section 188 of the Companies Act, 2013.
iv. Internal Financial Controls and their adequacy:
Your Company has a robust and well embedded system of internal controls. This ensures that all assets are safeguarded and protected against loss from unauthorised use or disposition and all financial transactions are authorised, recorded and reported correctly. Your Company has approved internal financial controls and policies / procedures to be adopted by the Company for orderly and efficient conduct of the business including safeguarding of assets, prevention and detection of frauds and errors, ensuring accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically.
v. Deposits: Your Company has not accepted any public deposit under Chapter V of the Companies Act, 2013.
vi. Transfer to General Reserve: During the Financial Year under review, no amount has been transferred to the General Reserve of the Company
vii. Extract of Annual Return: The extract of Annual return in form MGT-9 as required under Section 92(3) of the Act read with Companies (Management & Administration) Rules, 2014 is annexed to this report.
viii. Sexual Harassment: The Company has zero tolerance for Sexual Harassment at workplace and has adopted a Policy on prevention of Sexual Harassment in line with the provisions of ‘The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redresssal) Act, 2013’ and the Rules made thereunder. There was no complaint on sexual harassment during the year under review.
ix. Regulatory Orders: No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and Company’s operations in future.
CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO
Your Company is in the business of providing Direct-to- Home (‘DTH’) services. Since the said activity does not involve any manufacturing activity, most of the Information required to be provided under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are not applicable.
However the information, as applicable, are given hereunder:
Conservation of Energy:
Your Company, being a service provider, requires minimal energy consumption and every endeavor is made to ensure optimal use of energy, avoid wastages and conserve energy as far as possible.
In its endeavor to deliver the best to its viewers and business partners, your Company is constantly active in harnessing and tapping the latest and best technology in the industry.
Foreign Exchange Earnings and Outgo:
Particulars of foreign currency earnings and outgo during the year are given in Note no. 27, 28 and 29 to the notes to the Accounts forming part of the Annual Accounts.
HUMAN RESOURCE MANAGEMENT
Your Company has been successful in attracting best of the talent from industry and academic institutions and has been effectively retaining them. The talent base of your Company has steadily increased and your Company has created a favorable work environment following the SAMWAD philosophy which encourages innovation, meritocracy and team collaboration. The Company is committed to nurturing, enhancing and retaining talent through superior Learning & Organization Development interventions. During the year, various programmes were initiated to upgrade the skill of the human resource of the Company. Your company also initiated interventions to align employees to company’s stated vision and core values.
Your Company believes that committed employees are vital for the sustained growth of the Company. The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. Your Company has established policies and procedures to discover and use the employees’ capabilities and potential to increase their commitment and contribution to the overall organization.
The Company has a robust appraisal system based on MBO (Management by Objectives) philosophy with specified SLAs for each KRA. KRAs are set and appraisals are done following a top down approach and open performance discussions. We encourage meritocracy and reward excellence in performance. The employees display highest level of business integrity and ethics in their business conduct.
Your Directors place on record their appreciation for the significant contribution made by all employees, who through their competence, dedication, hard work, cooperation and support have enabled the Company to cross milestones on a continual basis.
PARTICULARS OF EMPLOYEES
As on March 31, 2017, the total numbers of permanent employees on the records of the Company were 394. The information required under Section 197 of the Companies Act, 2013 (‘Act’) read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, along with statement showing names and other particulars of the employees drawing remuneration in excess of the limits prescribed under the said rules is annexed to this report.
DIRECTORS’ RESPONSIBILITY STATEMENT
In terms of and pursuant to Section 134 of the Companies Act, 2013, in relation to the Annual Financial Statements for the Financial Year 2016-17, your Directors state and confirm that:
a) The Financial Statements of the Company -comprising of the Balance Sheet as at March 31, 2017 and the Statement of Profit & Loss for the year ended on that date, have been prepared on a going concern basis following applicable accounting standards and that no material departures have been made from the same;
b) Accounting policies selected were applied consistently and the judgments and estimates related to the financial statements have been made on a prudent and reasonable basis, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017, and, of the profit of the Company for the year ended on that date;
c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act, to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities;
d) Requisite internal financial controls were laid down and that such financial controls are adequate and operating effectively; and
e) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
RISK MANAGEMENT SYSTEM & INTERNAL CONTROL SYSTEMS
Your Company follows a comprehensive system of Risk Management. It has adopted a policy and procedure for rapid identification, definition of risk mitigation plans and execution. Actions include adjustments in prices, dispatch plan, inventory build-up, and active participation in regulatory mechanisms. Many of these risks can be foreseen through systematic tracking. Major risks can be categorised across following:
1. Changes in regulations
2. Market contraction due to macro-economic factors
3. Socio-economic-political disruptions
Your Company has an effective internal control and risk mitigation system, which is constantly assessed and strengthened with standard operating procedures and which ensures that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded. The Company has laid down procedures to inform audit committee and board about the risk assessment and mitigation procedures, to ensure that the management controls risk through means of a properly defined framework. The internal control systems of your Company ensures that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly.
Your Company has in place adequate internal financial controls with reference to financial statements. Based on internal financial control framework and compliance systems established in the Company, the work performed by statutory, internal and secretarial auditors and reviews performed by the management and/or relevant Audit and other Committees of the Board, your Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2016-17. During the year, no reportable material weakness in the design or operation was observed.
Properly documented policies, guidelines and procedures are laid down for this purpose. The internal control system has been designed to ensure that the financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets.
The Company also has an Audit Committee, presently comprising of 3 (three) Non-Executive professionally qualified Directors, who interact with the Statutory Auditors, Internal Auditors and Auditees in dealing with matters within its terms of reference. The Committee inter alia deals with accounting matters, financial reporting and internal controls which also periodically reviews the Risk Management Process.
INSIDER TRADING CODE
In compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (‘the PIT Regulations’) on prevention of insider trading, your Company had instituted a comprehensive Code of Conduct for regulating, monitoring and reporting of trading by Insiders. The said Code lays down guidelines, which advise Insiders on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances.
Your Company has further put in place a Code of practices and procedures of fair disclosures of unpublished price sensitive information. Both the aforesaid Codes are in line with the PIT Regulations.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report (‘BRR’) has been prepared and forms part of the Annual Report as Annexure. The Report provides an overview of initiatives taken by your Company.
ICRA Limited, a Credit rating agency, has during the year under review assigned ICRA A (ICRA A plus) rating to Dish Infra Services Private Limited (Company’s wholly owned subsidiary) for the Long Term Loans and ICRA A / ICRA A1 for long-term/ short-term interchangeable facilities. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lower credit risk.
CARE (Credit Analysis and Research Limited), a Credit rating agency has assigned the rating of CARE A (SO) to Dish Infra Services Private Limited (C