Your Directors are delighted to present the 3rd Annual Report on the business andoperations of the Company together with the audited accounts for the financial year endedMarch 31, 2010.
The key financial figures on standalone and consolidated basis of your Company for theyear ended March 31, 2010 are as follows:
| || || |
(Rs. in lakhs)
|Particulars || |
| ||Financial year ended March 31, 2010 ||Financial year ended March 31, 2009 ||Financial year ended March 31, 2010 ||Financial year ended March 31, 2009 |
|Net Revenue ||92,559.33 ||71,934.61 ||33,477.73 ||27,111.82 |
|Operating profit/(loss) before interest and depreciation interest ||9,615.77 ||1,081.61 ||6,125.18 ||896.07 |
|Interest ||1,944.25 ||998.81 ||1,930.39 ||991.91 |
|Depreciation ||3,288.34 ||1,602.78 ||2,186.30 ||1,055.15 |
|Net Profit/(loss) before Tax ||4,383.18 ||(1,519.98) ||2,008.49 ||(1,150.99) |
|Provision for taxes/deferred tax ||740.80 ||200.59 ||(71.68) ||224.89 |
|Profit/(loss) after tax and Minority Interest ||3,011.14 ||(1,511.28) ||2,080.17 ||(1,375.88) |
RESULT OF OPERATIONS
The year under review was a transformational year for the Company. This was a landmarkyear for the Company for its operating performance. During the FY 10 your Company, on aconsolidated basis, has generated over Rs. 925.59 Crores of revenues and post tax profitof Rs. 36.42 Crores. The corresponding figures for FY 09 were revenue of Rs 719.34 Croresand post tax loss of Rs. 17.21 Crores.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Accounting Standard AS-21 on Consolidated Financial Statements read withAccounting Standard AS 23 on the Accounting for Investments in Associates and AccountingStandard AS 27 on Accounting on Joint Ventures, issued by The Institute of CharteredAccountants of India, the Audited Consolidated Financial Statements are provided in thisAnnual Report.
REVIEW OF YEAR GONE BY
The FY 10 will go as a landmark year in the history of our company. Various independentestimates suggested DEN to emerge as the largest cable TV distributor in India with anestimated reach of 110 lakhs subscribers. The Company became the first national MSO tosuccessfully complete its IPO and get listed on the two leading stock exchanges of India.During the year, the Company expanded its analogue cable services to 84 cities and digitalcable services to a majority of cities where it present and plans to roll out digitalcable television in all of the remaining cities of its operations across the country. TheCompany acquired majority stake in the business of 76 MSOs and took its affiliates countto 83. From becoming the first national MSO to turn EBITDA positive last year, DENrecorded a positive PAT (After Minority Interest) of Rs. 3,011.14 lacs in FY 10 and becamethe first national MSO to turn profitable.
INITIAL PUBLIC OFFER
During the FY 10, the Company issued and allotted 18,567,240 Equity Shares of facevalue of Rs. 10/- each, pursuant to the Initial Public Offer (IPO), which were admittedfor listing and trading on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE)with effect from November 24, 2009.
Company has been growing from strength to strength, both in terms of the organizationand the activity profile.
Your Directors do not recommend any Dividend for the financial year ended March 31,2010.
TRANSFER TO RESERVES
Your Company has not made any transfer to the Reserves during the FY 10.
During the year under review your Company has not accepted any deposits from the publicunder Section 58A of the Companies Act, 1956.
MANAGEMENTS DISCUSSION AND ANALYSIS REPORT
In terms of requirement of Clause 49 of the Listing Agreement with the StockExchange(s) Managements Discussion and Analysis Report disclosing the operations ofthe Company in detail is provided separately as a part of Directors Report.
Mr. Ajaya Chand and Mr. Atul Sharma, Directors of the Company, retire by rotation atthe ensuing Annual General Meeting and being eligible, have offered themselves forre-appointment. The relevant details of the directors proposed to be re-appointed areprovided in the Corporate Governance Report forming part of this report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended,your Directors confirm:
i) that in the preparation of the annual accounts for the financial year ended March31, 2010, the applicable Accounting Standards have been followed;
ii) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of profit or loss of the Company for the year under review;
iii) that the Directors have taken proper and sufficient care for maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) that the Directors have prepared the accounts for the financial year ended March31, 2010 on a going concern basis.
CHANGES IN CAPITAL STRUCTURE
During the year ended March 31, 2010, the Authorized Share Capital of the Companyincreased from Rs. 30,00,00,000 (Rupees Thirty Crores) to Rs. 1,65,00,00,000 (Rupees OneHundred Sixty Five Crores) and issued & paid up Equity Share Capital of the Companyincreased from Rs. 18,11,88,800 (Rupees Eighteen Crores Eleven Lacs Eighty Eight Thousandand Eight Hundred Only) to Rs. 1,30,48,99,750 (Rupees One Hundred Thirty Crores FortyEight Lacs Ninety Nine Thousand and Seven Hundred Fifty).
Ministry of Corporate Affairs, Government of India has granted approval that therequirement to attach various documents in respect of subsidiary companies, as set out insub-section (1) of Section 212 of the Companies Act, 1956, shall not apply to the Company.Accordingly, the Balance Sheet, Profit & Loss Account and other documents of thesubsidiary companies are not being attached with the Balance Sheet of the Company.Financial information of the subsidiary companies, as required by the said approval, isdisclosed in the Annual Report. The Company will make available the Annual Accounts of thesubsidiary companies and the related detailed information to any member of the Company whomay be interested in obtaining the same. The annual accounts of the subsidiary companieswill also be kept open for inspection at the registered office of the Company and that ofthe respective subsidiary companies. The consolidated financial statements presented bythe Company include financial results of its subsidiary companies.
AUDITORS & AUDITORS REPORT
The term of M/s. Deloitte Haskins & Sells, Chartered Accountants, the StatutoryAuditors of your Company, expires at the ensuing Annual General Meeting. The Company hasreceived a certificate from them to the effect that their appointment, if made, would bewithin the prescribed limit as mentioned under Section 224 (1B) of the Companies Act,1956.
Your Board has duly examined the Report issued by the Statutory Auditors of theCompany on the Accounts for the financial year ended March 31, 2010. The notes onAccounts, as presented in this Annual Report, are self-explanatory in this regard andhence do not call for any further clarification
Corporate Governance philosophy of the Company lies in following strong CorporateGovernance practices driven by its core values to enhance the interests of all itsstakeholders. A report on Corporate Governance along with Certificate from PracticingCompany Secretary confirming the compliance of conditions on Corporate Governance asstipulated in Clause 49 of the Listing Agreement forms a part of this Annual Report.
PARTICULARS OF EMPLOYEES
The names and other particulars of employees as required under Section 217(2A) of theCompanies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 formspart of this Directors Report and the same is attached as Annexure - A.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies(Disclosures of particulars in the report of the Board of Directors) Rules, 1988, thefollowing information is provided:
A. Conservation of Energy
Your Company is not an energy intensive unit; however possibilities are continuouslyexplored to conserve energy and to reduce energy consumption at working areas of theCompany.
B. Technology absorption
Your Company is conscious of implementation of latest technologies in key workingareas. Technology is ever-changing and employees of your Company are made aware of thelatest working techniques and technologies through workshops, group e-mails, discussionsessions for optimum utilization of available resources and to improve operationalefficiency.
C. Foreign Exchange Earnings and Outgo
Disclosure of foreign exchange earnings and outgo as required under Rule 2(C) is givenin Schedule No. 15 Notes on Accounts forming part of the Audited AnnualAccounts.
|Foreign Exchange Earnings ||: Nil |
|Foreign Exchange Outgo ||: Rs. 1.69 Crore |
Your Directors take this opportunity to place on record their deep appreciation for thecontinuous support extended by all the Employees, Shareholders of the Company, variousGovernment Departments and Bankers towards conducting the operations of Companyefficiently.
| ||For and on behalf of the Board of Directors |
|Place: New Delhi ||Sd/- |
|Date: August 10, 2010 ||Chairman |
Annexure to the Directors Report
Information as per Section 217 (2A) of the Companies Act, 1956, read with the companiesParticulars of Employee rules, 1975, as amended and forming part of the DirectorsReport for the year ended March 31, 2010. Nature of Duties
|Name of the Employee ||Designation ||Qualification ||Date of Joining ||Age ||Exp. ||Gross Remuneration (In Lacs) ||Previous Employment || |
Nature of Employment
|Shailender Nath Sharma ||President ||BE, MBA ||1-Sep-07 ||49 ||23 ||514.80 ||Hathway Cable Datacom Pvt. Ltd. ||Permanent ||Overall Management And Head of Finance & all Divisions |
|Anuj Gandhi ||Chief Executive Officer ||MBA ||1-Sep-07 ||42 ||17 ||190.00 ||SET Discovery Pvt. Ltd. ||Permanent ||Overall Management and as Directed by the Board from time to time |
|Rajesh Kaushall ||Chief Financial Officer ||CA, CWA ||7-Sep-07 ||39 ||13 ||60.00 ||Tekelec Inc. ||Permanent ||Head of Finance & Accounts Division. |
|Sunil Punj ||Vice President- Operations ||BE ||1-Aug-07 ||39 ||14 ||80.00 ||Hathway Cable Datacom Pvt. Ltd. ||Permanent ||Looking After Operations- Delhi NCR |
|Mohit Kumar Jain ||Vice President- Technical ||Three years diploma ||1-Aug-07 ||44 ||14 ||60.04 ||Hathway Cable Datacom Pvt. Ltd. ||Permanent ||Head of Technical Department |
|Yogesh Sharma ||Vice President- Operations ||BE ||7-Sep-07 ||40 ||14 ||80.00 ||Hathway Cable Datacom Pvt. Ltd. ||Permanent ||Looking After Operations- U.P. |
|Vikas Bali ||President- Digital Services & Corporate Strategy ||BE, MBA ||2-Jan-08 ||39 ||15 ||110.00 ||Tata Sky ||Permanent ||Head Digital Services & Corporate Strategy Dept. |
|Devendra Upendra Naik ||Vice President- Operations ||BE ||18-Oct-07 ||44 ||18 ||32.00 ||Hathway Cable Datacom Pvt. Ltd. ||Permanent ||Looking After Operations -Mumbai |
|Navroj Phiroz Behramfram ||Chief Technical Officer ||MBA ||01-Dec-07 ||49 ||25 ||55.40 ||Tata Sky ||Permanent ||Digital Services |
|Akhil Mathur ||Sr. VP- VAS Network s ||Post Graduate ||10-Dec-07 ||52 ||26 ||75.00 ||Teleste Corporation ||Permanent ||Digital Services (resigned during the year) |
|Mohd. Ghulam Azhar ||President Business Development & Strategy ||Master in Finance Control ||01-Nov-07 ||40 ||15 ||84.00 ||Access Financial Services ||Permanent ||Looking after Finance & Business Strategy |
|Chetan Navalkar ||Assistant Vice President-Technical ||Diploma in Electronics ||01-Feb-08 ||43 ||18 ||35.00 ||Hathway Cable Datacom Pvt. Ltd. ||Permanent ||Looking After Operations- Mumbai |
|Shankar Devarajan ||AVP- Finance ||CA ||01-Mar-08 ||49 ||24 ||29.00 ||Reliance Retail ||Permanent ||Accounts head- South & West |
|Aditya Pratap Tripathi ||Sr. VP- Business Development ||MBA from IIM Ahmedabad ||12-May-08 ||41 ||15 ||75.00 ||Set Discovery Pvt. Ltd. ||Permanent ||Business Development (resigned during the year) |
|Vivek Nanda ||DGM-Operations ||Graduate ||14-Oct-07 ||43 ||18 ||34.95 ||Hathway Cable Datacom Pvt. Ltd. ||Permanent ||Looking after Operations U.P. |
|Amit Vijh ||AVP Finance ||CA ||02-Jun-08 ||34 ||12 ||35.00 ||Nortel Networks India Pvt. Ltd. ||Permanent ||Account & Finance- North |
|Rajeev Puri ||General Manager ||Graduate ||22-Feb-08 ||43 ||23 ||25.20 ||HCL Infosystems Ltd. ||Permanent ||Looking after Purchase of Set up Boxes |
1. Remuneration includes basic salary, contribution to provident fund and otherbenefits/perquisites as per the Companys rules.
2. Particulars regarding percentage of equity shares held by the employee either byhimself or along with spouse and dependent children, not less than two percent of theequity shares of the Company is not applicable.
3. None of the above employees is relative of any Director of the Company.