Today's Top Gainer
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Your Directors have the pleasure in presenting the Eleventh Annual Report on the business & operations of your Company along with the Consolidated & Standalone Audited Financial Statements for the year ended March 31,2018.
1. FINANCIAL AND OPERATIONAL OVERVIEW
a) Financial Highlights:
(Rs. in million)
|Financial year ended March 31,2018||Financial year ended March 31,2017*||Financial year ended March 31,2018||Financial year ended March 31,2017*|
|Other expenses (other than Finance cost and Depreciation)||10067.80||9985.27||9270.90||8550.93|
|Depreciation and amortisation expenses||2,485.90||2,761.00||1442.17||1848.15|
|Share of profit/ (loss) of Associates||(5.90)||(29.71)||-||-|
|Net Profit/(loss) before tax after exceptional items||(71.54)||(1547.71)||(457.87)||(2162.55)|
|Total tax expense||99.65||329.89||(148.08)||-|
|Profit/(loss) after tax||(171.19)||(1877.60)||(309.79)||(2162.55)|
* Previous year figures had been re-stated as per applicable IND-AS.
During the year under review, the total revenue of your Company was Rs. 11,010.11 million on standalone basis and Rs. 13,149.81 million on consolidated basis as compared to the last years revenue of Rs. 9472.71 million on standalone basis and Rs. 11,986.70 million on consolidated basis respectively. The Post Tax Loss of your Company was Rs. 309.79 million on standalone basis and Rs. 171.19 million on consolidated basis as compared to the last years Post Tax Loss was Rs. 2162.55 million on standalone basis and Rs. 1877.60 million on consolidated basis respectively.
b) Operational Highlights:
Hi-Speed Fixed Line Broadband
DEN Broadband Private Limited, a 100% subsidiary of DEN Networks Limited and Indias fastest growing fixed broadband Internet service provider (ISP) announces expansion of its hi- speed internet services to 100 cities across India by 2019. After an encouraging response to the pilot project in five cities, DEN has already started its first phase of expansion in 15 cities. DENs expansion plan is in sync with the massive growth in the internet consumption in the country. Data usage in India has already jumped 144 per cent (y-o-y) with average consumption per user in 4G Broadband reaching 11GB per month. Moreover, the rise in data consumption has not been matched by a corresponding increase in the speed of connection. While India globally ranks 67th in fixed broadband speeds with an average download speed of 20.72 Mbps, mobile broadband speeds still lags at 109th rank with an average download speed of 9.01 Mbps, as per Ooklas speedtest Global Index, Feb 2018 report. With speeds up to 1Gbps at affordable prices, DEN Broadband will cater to the future needs of Internet while penetrating further into the untapped markets. Den Broadband intends to tap into high potential market by capitalizing existing Cable TV infrastructure of Den and providing Fli-Speed fixed broadband internet.
Join hands with BARC India for RPD
TV viewership measurement in India is set to get a boost. In a major development, DEN has partnered with BARC India for measuring TV viewership using Return Path Data (RPD) via its digital set top boxes (STBs). As part of this partnership, BARC India will fetch data from STBs of DEN Networks. DEN networks, will use this data for subscriber management, packaging opportunities and to drive advertising revenue on their in- house channels. With this partnership, DEN has taken the first steps towards world class data analytics of subscriber viewing patterns which will help us to serve customers in a far more effective way and enabling us to offer personalized services.
Technology & Services in Cable
DEN has recently launched its premium, 4K, Android Internet TV box, which will provide unified TV entertainment across Cable and Internet. DEN is the first MSO to launch unique offering which has features like voice search for browsing through channels and other content. The Internet TV box also provides hi-graphics games which use smartphones as gamepad, apart from other Wi-Fi enabled joysticks. It also use smart phones as remote controls and enables content sharing between mobile phone and TV. Using Wi-Fi and Bluetooth, this will integrate with loT devices and act as a home gateway across all devices to create smart homes. With this offering, DEN becomes the first MSO to provide 4K services.
Demerger of Broadband Undertaking:
The Company had filed a Composite Scheme of Arrangement between DEN Networks Limited ("the Company") and the Skynet Cable Network Private Limited ("Skynet") (a whollyowned subsidiary oftheCompany), for demerger of Broadband/ Internet Service Provider ("ISP") Business Undertaking into Skynet during the financial year 2016-17. The honourable National Company Law tribunal vide its order dated September 19, 2017 has approved Demerger of Broadband division of the Company with DEN Broadband Private Limited (a wholly owned subsidiary Company) (Formerly known as Skynet Cable Network Private Limited). The demerger has enabled a focused attention on the ISP business and achieve structural and operational efficiency, enhanced competitiveness and greater accountability besides accelerating value creation for shareholders.
Merger/Demerger of Subsidiaries
Den Futuristic Cable Networks Private Limited ("Den Futuristic"), a wholly owned subsidiary of the Company had filed a composite scheme of arrangement during the financial year 2016-17 for merger of 23 subsidiaries and demerger of cable business of Amogh Broad Band Services Private Limited ("Amogh Broad band") (another wholly owned subsidiary Company of Den) into DEN Futuristic. The Flonorable National Company Law tribunal vide its order dated 16th August, 2017 has approved merger of 23 subsidiary Companies and demerger of cable business of Amogh Broad Band. The Companys expecting that the merger and demerger will facilitate operational synergies, which in turn eliminate inefficiencies and streamline corporate structures and cash flows. It is also expected that a single entity will result in better centralized management and oversight, cost efficiencies and supporting the groups competitive growth.
Den Ambey Cable Networks Private Limited ("Den Ambey") had filed a composite scheme of arrangement during the financial year 2017-18 under section 233 of the Companies Act, 2013 for merger of its eight wholly owned Subsidiary Companies with Den Ambey. Den is holding 61% equity stake in Den Ambey. Den Ambey has received order of the Honorable Regional Director, Northern region dated 06th July, 2018 for merger of its wholly owned subsidiaries into Den Ambey.
During the financial year 2017-18, the Company sold its remaining 19.29% (approx.) to Wall Street Investments Limited. With this the Company has completely exited from the soccer business in order to focus on the core business of Cable and Broadband. The Company had acquired the Delhi Dynamos FCteam of the Indian Super League, a soccer league in India in 2014.
c) Consolidated Financial Statements: Pursuant to applicable Ind AS on Consolidated Financial Statements, the Audited Consolidated Financial Statements are provided in this Annual Report.
d) Subsidiary Companies: A statement containing the performance and financial position of each of the subsidiaries, associates and joint venture companies for the year ended 31st March, 2018 is given pursuant to Section 129(3) of the Companies Act, 2013 read with rule 5 and 8 of the CompaniesDEN Networks Limited (Accounts) Rules, 2014 in AOC-1 as "Annexure A".
The Policy for determining material subsidiaries as approved may be accessed on the Companys website at the link: http://www . dennetworks.eom/index.php/corporate-announcement#corporate-governance
|Name of Company||Relationship||Details of Changes||Date of Change|
|I. Aster Entertainment Private Limited 2. Capital
Entertainment Private Limited (formerly known as Uttar Pradesh Entertainment Private
Limited) 3. Den Bellary City Cable Private Limited 4. Den Digital Entertainment Gujarat
Private Limited 5. Den Entertainment Network Private Limited 6. Den Montooshah Network
Private Limited 7. Den RIS Cable Network Private Limited 8. Matrix Cable Network Private
Limited 9. Shaakumbari Den Media Private Limited 10. Shine Cable Network Private Limited
II. Kerala Entertainment Private Limited (formerly known as BMC Cable Network Private Limited) 12. Rajasthan Entertainment Private Limited 13. Uttar Pradesh Digital Cable Network Private Limited (formerly known as Delhi Entertainment Private Limited), 14. Den Mewar Rajdev Cable Network Private Limited 15. Den Sky Media Network Private Limited 16. Den Narmada Network Private Limited 17. Den Infoking Channel Entertainers Private Limited 18. Mahadev Den Network Private Limited 19. Den Shiva Cable Network Private Limited 20. Astonishing Network Private Limited (formerly known as Den Nanak Communications Private Limited) 21. Scorpio Cable Network Private Limited 22. Den Krishna Vision Private Limited 23. Den UCN Network India Private Limited
|Wholly Owned Subsidiaries /Indirect Subsidiaries||23 Subsidiary (Direct/ Indirect) Companies have been merged with Den Futuristic Cable Networks Pvt. Ltd. (a wholly owned subsidiary of DEN) pursuant to the order of the honorable National Company Law Tribunal.||16.08.2017|
|Amogh Broad Band Services Private Limited||Wholly Owned Subsidiary||Pursuant to the order of Honorable National Company Law Tribunal the Cable business of Amogh Broad Band has been demerged into DEN Futuristic. However Amogh Broad Band Services Private Limited will continue as a wholly owned subsidiary of the company.||16.08.2017|
|Delhi Sports & Entertainment Private Limited
(Formerly known as Den Sports & Entertainment Private
|Associate||The Company has diluted its remaining 19.29% Stake in Delhi Sports.||16.08.2017|
|DEN Broadband Private Limited||Wholly owned subsidiary||Pursuant to the order of the Honorable National Company Law Tribunal, the Broadband undertaking of DEN Networks ("the Company") has been demerged into DEN Broadband Pvt. Ltd. (a wholly owned subsidiary Company).||19.09.2017|
|VBS Digital Distribution Network Private Limited||Subsidiary||The share-purchase and shareholders agreement was executed for acquisition of 51 % stake in VBS Digital.||05.01.2018|
The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays up to the date of the Annual General Meeting as required under Section 136 of the Companies Act, 2013. The financial statements of the subsidiary companies are also uploaded on the Companys website http://www.dennetworks . com/index.php/lnvestors#financial-result. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of your Company.
e) Particulars of Loans, Guarantees or Investments: Particulars of loans, guarantees and investments made by the Company required under section 186(4) of the Companies Act, 2013 are contained in Notes of the Standalone Financial Statements and are not reproduced for the sake of brevity.
f) Dividend: Your Directors do not recommend any Dividend for the financial year ended March 31,2018.
g) Transfer to Reserves: Your Company has not made any transfer to the Reserves during the financial year 2017-18.
h) Public Deposits: Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
i) Internal Financial Controls: The Company has in place adequate internal financial controls with reference to financial statements.The Companys internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance of corporate policies. It has continued its efforts to align all its processes and controls with global best practices. Your Company uses a System Applications Products (SAP) to record data for accounting and management information purposes and connects to different locations for efficient exchange of information. The Company has continued its efforts to align all its processes and controls with global best practices.The entity level polices include Code of Conduct, Whistle Blower Policy, and other policies (like Organization Structure, InsiderTrading, HR Policy etc.)
j) Managements Discussion and Analysis Report: The
Managements Discussion and Analysis as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirement), Regulations, 2015 forms an integral part of this Report and gives detail of the overall industry structure and development, business review, financial performance review in cable television business and broadband business, key growth drivers, opportunities and threats, risks and concerns, internal control system and its adequacy. It is presented in a separate section forming part of the Annual Report.
2. MATTERS RELATED TO BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) Board of Directors & Key Managerial Personnel
As on March 31st, 2018, your Company had seven Directors which includes Four Independent, Two Non-Executive Directors and One Executive Director. However, as on date of adoption of this Directors Report, the Company has six Directors.
Directors: (Ms.) Dr. Archana Niranjan Hingorani - She resigned from the Board w.e.f 1st August 2017. She was again appointed as an Additional Director (designated as Non-Executive Independent Director) w.e.f. 09th November, 2017.
Pursuantto the provisions of section 161 ofthe Companies Act, 2013 and other applicable provisions, an additional Director shall hold office up to the date of ensuing AGM. Accordingly, the Company has received notice under section 160 of the Companies Act, 2013 and other applicable provisions along with requisite fees from a shareholder proposing candidature of (Ms.) Dr. Archana Niranjan Hingorani for the office of Non- Executive Independent Director. It is proposed to appoint her as Non-Executive Independent Director for a period of 3 years i.e., upto 08th Nov, 2020.
Mr. Krishnakumar P. T Gangadharan was appointed as an Additional Director (designated as Non-Executive Nominee Director) by the Board w.e.f 01st August, 2017. Thereafter his appointment was regularized by the shareholders in Annual General Meeting ofthe Company held on 27th Sep, 2017. He has resigned from the directorship on 02nd August, 2018.
Mr. Sameer Manchanda was appointed as Chairman Managing Director for a period of three years from 10-09-2015 to 09- 09-2018. His office as Chairman Managing Director will be completed on 09th Sep, 2018.
As per provisions of section 152 of the Companies Act, 2013 and its rules made thereunder, Mr. Ankur Ambika Sahu (DIN: 03623120), shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. The Board recommends his re-appointment for approval of shareholders.
Key Managerial Personnel:
Mr. Manish Dawar resigned as Key Managerial Personnel and Group Chief Financial Officer w.e.f. November 30,2017.
Mr. Himanshu Jindal has been appointed by the Board of Directors as new Chief Financial Officer ofthe Company w.e.f 04th April, 2018.
b) Declaration by Independent Directors: The Company has received declarations from all the Independent Directors ofthe Company under section 149 (6) of the Companies Act, 2013 and applicable regulation(s) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, if any, confirming that they meet the criteria of independence. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors. The details of programs for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link: http://www.dennetworks.com/ index.php/corporate-announcement#corporate-governance
c) Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements), Regulations 2015, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. The Schedule IV of the Companies Act, 2013 states that the performance evaluation of the Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated.
3. DISCLOSURE RELATED TO BOARD, COMMITTEES & POLICIES
a) BOARD MEETINGS
The Board of Directors met 4 times during the financial year ended 31st March, 2018 in accordance with the provisions of Companies Act, 2013 and rules made thereunder. The dates on which the Board of Directors met during the financial year under review are as under:-
Date of Board Meeting *
22nd May, 2017
1st August, 2017
09th November, 2017
16th January, 2018
b) DIRECTORS RESPONSIBILITY STATEMENT
Your Directors state that:
a) in the preparation of the annual accounts for the year ended March 31,2018, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2018 and of the loss of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concernbasis;
e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
c) CORPORATE SOCIAL RESPONSIBILITY
In terms of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors have constituted Corporate Social Responsibility Committee. However, since the Company has no profits in the preceding 3 financial years, no amount was required to be incur for Corporate Social Responsibility activities. Hence, the Company hasnt undertaken any CSR initiatives during the year under review. The CSR Policy may be accessed on the Companys website at the link: http://www.dennetworks.com/index.php/corporate- announcement#corporate-governance
The key philosophy of all CSR initiatives of the Company is guided by three core commitments of Scale, Impact and Sustainability.
The Statutory disclosure with respect to CSR activities is annexed herewith as "Annexure B".
d) RISK MANAGEMENT
Pursuant to the regulation 21 (5) of SEBI (Listing Obligations and Disclosure Requirements) regulation, 2015, Top 500 listed entities, determined on the basis of market capitalization as at the end of immediate previous financial year needs to formulate Risk Management Committee. Your Company is not falling under Top 500 list. However, following the good corporate practice, the Company has formulated risk management committee as the better corporate practice and for the upward mobility of the Company. The Committee met once in during the financial year 2017-18. The Risk Management Committee consisting three Directors:
|Name of Committee Members||Designation|
|Mr. Ajaya Chand||Chairman|
|Mr. Robindra Sharma||Member|
|Mr. Ankur Ambika Sahu||Member|
The Members has been entrusted with the responsibility to assist the Board in:
(a) Overseeing and approving the Companys enterprise wide risk management framework; and
(b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security.
property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.
e) AUDIT COMMITTEE
The scope and terms of reference of the Audit Committee are in accordance with Section 177 of the Companies Act, 2013. The Audit Charter was approved by the Board in accordance with the provisions of the Companies Act, 2013 and SEBI (LODR). As on March, 31,2018, the composition of the committee was following:-
|Name of Committee Members||Designation|
|Mr. Ajaya Chand||Chairman|
|Mr. Robindra Sharma||Member|
The Audit Committee met 5 times during the financial year 2017-18. All the recommendations made by the Audit Committee were accepted by the Board. The details about the meetings of the Audit Committee during the financial year 2017-2018 is available in Corporate Governance Report and hence not repeated here for the sake of brevity.
f) VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism Policy to deal with instance of fraud and mismanagement, if any. In staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility.
g) NOMINATION AND REMUNERATION COMMITTEE
In accordance with the provisions of section 178 (3) of the Companies Act, 2013, the Board of Directors of theCompany has formulated the policy setting out the criteria for determining credentials, positive attributes, independence of a Director and policy relating to Remuneration of Directors, Key Managerial Personnel and Senior Management Personnel. The details of Policy of committee are available at www.dennetworks.com/ index.php/corporate-announcement#corporate-governance. The Committee met 2 times during the financial year 2017-18, the details of the meetings held during the financial year 2017- 2018 are available in Corporate Governance Reportand hence not repeated here for the sake of brevity.
h) STAKEHOLDERS RELATIONSHIP COMMITTEE
Pursuant to section 178 of the Companies Act, 2013 and other applicable provisions, if any, the Company has Stakeholders Relationship Committee of Board of Directors. The Committee formulate the policies and procedures in line with the statutory guidelines to ensure speedy disposal of various requests received from security holders from time to time and work for Redressal of shareholders and investor complaints/grievances.
i) DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5
OF COMPANIES (APPOINTMENT & REMUNERATION) AMENDMENT RULES, 2016:
The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year under review is given under "Annexure C".
The information required pursuant to Section 197(12) of Companies Act, 2013 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of remuneration details as required in Rule 5(1) and details of employees of the Company as required in Rule 5(2) of (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be provided upon request.
In terms of Section 136(1) of the Act, the financial statements are being sent to the members and others entitled thereto, excluding the information on employees particulars specified under rule 5(2) & (3) (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The same are available on the website of the Company viz. www.dennetworks.com and for inspection by the members at the Registered Office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary.
4. AUDITORS AND REPORTS
a) REPORT OF STATUTORY AUDITOR
The Board has duly examined the Report issued by the Statutory Auditors of the Company on the Accounts for the financial year ended March 31, 2018. The notes to the financial statements, as presented in this Annual Report, are self-explanatory in this regard and hence do not call for any further clarification. The AuditorsReport does not contain any qualification, adverse remark.
b) SECRETARIAL AUDIT
Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Neelesh Jain, Company Secretaries in practice of M/s NKJ & Associates to undertake the Secretarial Audit of the Company. The Secretarial Auditors Report does not contain any qualification, reservation or adverse remark. The Secretarial Audit report is annexed herewith as "Annexure D".
c) COST AUDITORS
The Board has duly examined the Report issued by the Cost Auditorsof the Company on the Cost Accounts for the financial year ended March 31, 2018. The Report doesnt contain any qualification, reservation or adverse remark. Pursuant to the provision of section 148 of the Companies Act, 2013 and Rule 3 of Companies (Cost Records and Audit) Rules, 2014 and other applicable provisions, if any. Cost Audit was applicable on the Broadband segment of the Company. The Broadband undertaking has been demerged into Den Broadband Private Limited (A Wholly Owned Subsidiary Company), in terms of order of the honorable National Company Law Tribunal dated 19th September, 2017. Now, cost Audit is not applicable on the Company. However, following the good corporate practice, the Board has re-appointed M/s Ajay Kumar Singh & Company as Cost Auditors for the financial year 2018-19 to conduct cost audit of accounts maintained by the Company. Full particulars of the Cost Auditors are mentioned below:-
M/s Ajay Kumar Singh & Company
1/26,2nd Floor, Lalita Park,
Laxmi Nagar, Delhi-110092
Telephone No.- 011-45595822,
email- id- email@example.com
Firm Membership No. - 30778
d) APPOINTMENT OF NEW STATUTORY AUDITORS:
In terms of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. Deloitte Haskins & Sells, Chartered Accountants were appointed as Statutory Auditors of the Company for 3 years (i.e., 29th Sep, 2015). The office of Deloitte shall be completed in ensuing Annual General Meeting. The Board of Directors in their meeting dated 03rd August, 2018 has proposed appointment of M/s. B S R & Associates LLP, Chartered Accountants as Statutory Auditors of the Company for a period of 5 years (i.e., form the conclusion of Eleventh Annual General Meeting to the conclusion of Sixteenth Annual General Meeting), subject to the approval of shareholders in eleventh Annual General Meeting. The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Statutory Auditors and are eligible to hold the office as Auditors of the Company.
The requisite resolution for appointment of the said Auditors is included in the notice of AGM for seeking approval of members.
e) CERTIFICATE ON CORPORATE GOVERNANCE FROM PRACTICING COMPANY SECRETARIES:
In terms of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Practicing Company Secretaries certificate on corporate governance is forming part of Corporate Governance Report. The certificate for the financial year ended on March 31,2018 does not contain any qualification, reservation or adverse remark.
5. OTHER DISCLOSURES
a) EXTRACTS OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure E".
b) CREDIT RATING:
The details of credit rating of company are as followed:
|Long Term Debt & Cash Credit Facilities||ICRA||A||Stable|
|Short Term - Non Fund based limit||ICRA||A1||Stable|
|Long Term/Short Term unallocated limit||ICRA||A/A1||Stable|
c) CONTRACTSANDARRANGEMENTSWITH RELATED PARTIES
During the financial year 2017-18, your Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014 and any amendment thereof, which were in the ordinary course of business and on arms length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued thereunder and Regulation 34(3) and 53(f) and Schedule V of SEBI (LODR). During the financial year 2016-17, there were no transactions with related parties which qualify as material transactions under the applicable provisions of the Companies Act, 2013 and SEBI (LODR).
d) MATERIAL CHANGES
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2017-18 and date of this Report.
e) CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviors of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an appendix to the Code. The Code has been posted on the Companys website www.dennetworks . com. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behaviour from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard.
f) EMPLOYEESSTOCK OPTION SCHEME:
The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees Stock Option Scheme of the Company in accordance with the applicable SEBI Guidelines.
DEN ESOP SCHEME 2010
The DEN ESOP Scheme 2010, was approved by the Shareholders of the Company in its meeting dated September 10, 2010 to issue and grant up-to 52,19,599 Equity Shares to the eligibleemployees of the Company. There are 4,82,500 ESOP options are in force under DEN ESOP Scheme, 2010. The Company had granted 1 lac ESOP options to eligible employees on 01st January, 2018 under the said scheme.
DEN ESOP SCHEME 2014
The DEN ESOP Plan Scheme, 2014 was approved by the shareholders of the Company through postal ballot on January 05,2015 to grant and issue up-to 89,09,990 Equity Shares (i.e., 5% of issued and paid up capital) to the eligible employees of the Company. Out of said 5%, 2.5% was approved through purchase from secondary market (DEN ESOP Plan A-2014) and 2.5% through new allotment (2.5%, DEN ESOP Plan B -2014). The Shareholders of the Company vide approval through postal ballot dated June 23rd, 2015 terminated the DEN ESOP Plan A -2014 and increased the same no. of shares under DEN ESOP Plan B -2014. Hence, the total no. of shares under DEN ESOP Plan B -2014 were increased to 89,09,990. There are 2,80,000 ESOP options are in force under DEN ESOP Plan B, 2014. During the year 17,50,000 options vested and exercised under said scheme. The Company & eligible employee has given the relevant disclosures under SEBI (Prohibition of InsiderTrading) Regulations, 2015.
The Objective of ESOP is to give benefit to eligible employees with a view to attract and retaining the best talent, encouraging employees to align individual performance with company objectives, and promoting increased participation by them in the growth of the Company.
The details of ESOP Plans, including terms of reference and the requirements specified under Regulation 14 of the SEBI (Share- based Employee Benefits), Regulations, 2014 is available on the Companys website at http://www.dennetworks.com/ index.php/corporate-announcement#corporate-governance. The details of the employee stock options plans form part of the Notes to accounts of the financial statements in the Annual Report.
The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SEBI Guidelines and the resolution passed by the members. The certificate would be placed at the Annual General Meeting for inspection by members.
Voting rights on the shares issued to employees under the ESOS are either exercised by them directly or through their appointed proxy.
g) COMPLIANCE WITH SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure Compliance with the provisions of all secretarial standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.
h) GOODS AND SERVICES TAX
Effective July 01,2017 with initiation of the Goods and Services Tax (GST) regime, India introduced the landmark Tax return. Your Company made a timely and seamless transition to the new GST system.
i) PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of InsiderTrading with a view to regulate trading in securities by the Directors and Designated Employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the Designated Employees have confirmed compliance with the Code.
j) OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
In order to prevent sexual harassment of women at work place as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. However, during the year Company has not received any complaint of harassment. Your Directors further state that during the year under review, there were no cases led pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
k) DETAILS OF UNCLAIMED SHARES AS PER SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS), REGULATIONS, 2015:
Dematerialization credit of equity shares of Rs. 10 each, for allottees could not happen till date, due to incorrect particulars of account holders. The Company through its Registrar and Share Transfer Agent viz., M/s. Karvy Computershare Private Limited, had sent several reminders to these allottees and in the absence of any response from any of them, had finally transferred the aforesaid equity shares to Den Networks Limited - Unclaimed Securities Suspense Accountas required under SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, following is the status of outstanding shares lying in the aforesaid account as on March 31,2018:
|Particulars||No. of Shareholders||No. of Equity Shares|
|Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the beginning of the year i.e. 1st April, 2017 / transferred to Account during the year ended 31st March, 2018||4||309|
|Number of shareholders who approached to the Company / RTA for transfer of shares from Unclaimed Suspense Account during the year ended 31st March 2018||Nil||Nil|
|Particulars||No. of Shareholders||No. of Equity Shares|
|Number of shareholders to whom shares were transferred from Unclaimed Suspense Account during the year ended 31st March 2018||Nil||Nil|
|Aggregate Number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the end of the year i.e. as on 31st March, 2018.||4||309|
The voting rights on these shares are frozen till the rightful owner of these shares claims the shares.
l) CORPORATE GOVERNANCE
Corporate Governance is about maximizing shareholders value legally, ethically and sustainably. At DEN, the purpose of corporate governance is to entrust justice for every shareholder. We believe sound Corporate Governance is critical in enhancing and retaining stakeholders trust. Our priority is attainment of all performance goals with integrity. The Company is committed to maintain the highest Standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. A certificate from practicing Company Secretary regarding compliance of the conditions of Corporate Governance, as stipulated under SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, is attached to the Report on Corporate Governance. Certificate of the CEO/CFO, inter alia, confirming the correctness of the financial statements, compliance with Companys Code of Conduct, adequacy of the internal control measures and reporting of matters to the Audit Committee s, is attached in the Corporate Governance report and forms part of this Report.
m) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Pursuant to provisions of the Companies Act, 2013 and applicable rules thereof, the following information is provided:
Conservation of Energy: Your Company is not an energy intensive unit; however possibilities are continuously explored to conserve energy and to reduce energy consumption at editing facilities, studios, and workstations of the Company.
Technology absorption: Your Company is conscious of implementation of latest technologies in key working areas. Technology is ever-changing and employees of your Company are made aware of the latest working techniques and technologies through workshops, group e-mails and discussion sessions for optimum utilization of available resources and to improve operational efficiency.
Foreign Exchange Earnings and Outgo: Disclosure of foreign exchange earnings and outgo is given in "Notes to the financial statements" forming part of the Audited Annual Accounts, the summary of foreign exchange earnings and outgo are mentioned below:
|(Rs. in million)|
|Foreign Exchange Earnings||NIL|
|Foreign Exchange Outgo||547.99|
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review
1) Details relating to deposits covered under Chapter V of the Act.
2) Issue of equity shares with differential rights as to dividend, voting or otherwise.
3) Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.
4) Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
5) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.
6) Material changes and commitments, affecting the financial position of the company.
7) Change in the nature of business
8) Disclosure u/s 67(3) in respect of voting rights not exercised by employees in respect of shares to which the scheme relates
9) Re-appointment of independent director after 5 years u/s 149(10)
Your Directors place on record their gratitude to the Central Government, State Government, Companys Bankers and business partners/for the assistance, co-operation and encouragement they extended to the Company. Your Directors also wish to place on record their sincere thanks and appreciation for the continuing support and unstinting efforts of investors, vendors, dealers, business associates and employees In ensuring an excellent all around operational performance.
For and on behalf of the Board of Directors
Chairman Managing Director
Place: New Delhi