DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the Thirty First (31st) Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2015. 1. FINANCIAL & OPERATION OVERVIEW: a. Financial Highlights During the year under review, the total income of your Company marginally increased to Rs. 1550.98 lacs as compared to last year's income of Rs. 1548.22 lacs. During the year under review, the Company incurred a net loss of Rs. 313.13 lacs on standalone basis due to steep increase in operating expenses mainly on account of pay channel cost during the year. The company is adhering to its policy of focused growth and as a result of which the total subscription income vis-a-vis the gross operating profit of the company had increased. b. Operational Highlights: (i) Cable TV Business: During the year under review, your Company has seeded 2000 Set Top Boxes (STB) cumulatively totaling to 53500 STB seeded. Your Company will continue to seed boxes in near future as well. The strategy of your Company is to seed more High Definition (HD) STB's in order to increase the average rate per unit (ARPU). We anticipate that with smarter packaging the company will be able to drive higher ARPU. Your Company has received a good feedback on HD product proposition. The proposition is priced at Rs. 150/- per month in which the customer can view 25 high quality HD channels. We believe that value added services and innovative content will give a further fillip to ARPU in the future. (ii) Broadband Business: The Broadband reach of your Company is about 53500 homes where it can offer our services. Your Company is a Category - B Internet Service Provider (ISP) and it covers both retail and corporate segments. As of 31st March, 2015, your Company has over 1400 + broadband subscribers. With a high quality and high capacity HFC Network, your Company is well placed to garner a larger share of the growing broadband market. Based on continuous customer service improvement, we could also improve customer ARPU by Rs. 400/- on monthly basis. c. Consolidated Accounts: The consolidated financial statements of your Company for the financial year 2014-2015, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and Listing Agreement as prescribed by the Securities and Exchange Board of India (SEBI). d. Management Discussion and Analysis The Management Discussion and Analysis forms an integral part of this Report and gives detail of the overall industry overview, business overview, and performance review and state of affairs of the Company in Cable Television business and Broadband business during the year under review. e) Report on performance of subsidiaries, associates and joint venture Companies: A statement containing the performance and financial position of the Subsidiary Company, associates and joint venture companies for the year ended 31st March, 2015 is given, pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 and 8 of the Companies (Accounts) Rules, 2014 in AOC-1 in Annexure - I to this report. The details of the subsidiary are as follows: The financial statements of the subsidiary company 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 (AGM) as required under Section 136 of the Companies Act, 2013. 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. f) Dividend: Considering the loss incurred in the current financial year, your Directors have not recommended any dividend for the financial year under review. g) Transfer to reserves: In view of losses incurred during the year under review, the Board of Directors has not recommended transfer of any amount to reserves. h) Revision of financial statement: There was no revision of the financial statements for the year under review. i) Deposits: The Company has not accepted any public deposits during the year under review. j) Disclosures under section 134(3)(i) of the Companies Act, 2013: Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and date of this report. k) Disclosure of Internal Financial Controls: The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls. l) Particulars of loans, guarantees, investments and securities: There are no loans given, investments made, guarantees given and securities provided during the year under review. 2. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL a) CHANGE IN BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL Ms. Nandita Swamy (DIN: 03181823) was appointed vide circular resolution dated 31st March, 2015 as an Additional Independent Director of the Company to hold office up to the date of ensuing Annual General Meeting. As recommended by the Nomination and Remuneration Committee, the Board of Directors of the Company has appointed vide th circular resolution dated 30 July 2015, Mr. Shyam P V (DIN: 07247247) and Mr. Vineet Garg (DIN: 06935347) as Additional Directors to hold office till the ensuing Annual General Meeting whose office is liable to retire by rotation. The Company has received notices from shareholders along with requisite deposits proposing the candidature of Ms. Nandita Swamy, Mr. Shyam P V and Mr. Vineet Garg for appointment as Director at the ensuing Annual General Meeting. Mr. Hetal Thakore, Independent Director has resigned as Director of the Company with effect from 6th April, 2015. Mr. Milind Karnik has resigned as Director with effect from 30th July, 2015. The Board places on record its appreciation for the services rendered by them during their tenure on the Board. In accordance with the provisions of the Act, none of the Independent Directors is liable to retire by rotation. In accordance with the provisions of Articles of Association of the vide circular resolution dated 31st March, 2015 Company, the Managing Director is not liable to retire by rotation. Accordingly, none of the Directors of the Company are liable to retirement by rotation at the ensuing Annual General Meeting pursuant to the provisions of Section 152 of the Companies Act, 2013, since the resolutions for the appointment/re-appointment of the existing Directors have been included for voting at the ensuing Annual General Meeting. Key Managerial Personnel: b. DECLARATION BY INDEPENDENT DIRECTORS: The Company has received declaration from all the Independent Directors under Section 149(6) of the Companies Act, 2013 confirming their independence vis-à-vis the Company. 3. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES a. BOARD MEETINGS: The Board of Directors met 5 times during the financial year ended 31 March 2015 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. Date of the Board Meeting 26th May, 2014 11th August, 2014 18th September, 2014 14th November, 2014 12th February, 2015 The Audit Committee of Directors was constituted pursuant to the provisions of Section 177 of the Companies Act, 2013. The composition of the Audit Committee is in conformity with the provisions of the said section. The Audit Committee as on the date of this report comprises of: The scope and terms of reference of the Audit Committee have been amended in accordance with the Act and the Listing Agreement entered into with the Stock Exchange. During the year under review, the Board of Directors of the Company had accepted all the recommendations of the Committee. c. NOMINATION AND REMUNERATION COMMITTEE: The Nomination and Remuneration Committee of Directors as constituted by the Board of Directors of the Company in accordance with the requirements of Section 178 of the Act. The Board of Directors has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining credentials, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees. d. STAKE HOLDERS RELATIONSHIP COMMITTEE: Pursuant to Section 178 of the Companies Act, 2013, the Board of Directors of the Company has constituted the Stakeholder's Relationship Committee, comprising of: The Company Secretary acts as the Secretary of the Stakeholders' Relationship Committee. e. MEETING OF INDEPENDENT DIRECTORS: The Company's Independent Directors meet at least once in every financial year without the presence of Executive Director or management personnel and is conducted informally. One meeting of Independent Director was held during the year. f. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES: The Board of Directors of the Company has, pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, framed “Vigil Mechanism Policy” for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, etc. The employees of the Company have the right/option to report their concern/grievance to the Chairman of the Audit Committee. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. g. RISK MANAGEMENT POLICY: The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company's businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews. h. CORPORATE SOCIAL RESPONSIBILITY POLICY: As per the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee as under: The Board of Directors of the Company has approved CSR Policy based on the recommendation of the CSR Committee. Since the Company has no profits in preceding 3 financial years, no amount was required to be spent for corporate social responsibility activities. i. ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD: In accordance with the Companies Act, 2013, and Clause 49 of the Listing Agreement, the Company has framed a Policy for evaluation of performance of Independent Directors, Board, Committees and other Individual Directors which includes criteria for performance evaluation of non-executive directors and executive directors. A questionnaire was formulated for evaluation of performance of Board after taking into consideration the following aspects: • Board Composition; • Strategic Orientation; • Board functioning and Team Dynamics. Performance evaluation of Independent Directors was conducted by the Board of Directors, excluding the Director being evaluated. The criteria for performance evaluation of Independent Directors laid down by the Nomination, Remuneration and Compensation Committee is as below: • Ethics and values, • knowledge and proficiency, • diligence, • Behavioral traits and • Efforts for personal development Similarly, performance evaluation of the Chairman and Non – Independent Directors was carried out by the Independent Directors at the meeting of the Board of Directors held on 11th February 2015. j. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014: The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year under review has been marked as Annexure II. k. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION: The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees. 4. DIRECTOR'S RESPONSIBILITY STATEMENT: In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31 March, 2015, the Board of Directors hereby confirms that: a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b. such accounting policies have been selected and applied consistently and the Directors 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 31 March, 2015 and of the loss of the Company for that year; c. proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. the annual accounts of the Company have been prepared on a going concern basis; e. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively; f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively; 5. AUDITORS AND REPORTS The matters related to Auditors and their Reports are as under: a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2015: The observations made by the Statutory Auditors in their report for the financial year ended st 31 March 2015 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. ST b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31 MARCH 2015: Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from Practicing Company Secretary. M/s Rathi and Associates, Company Secretaries had been appointed to issue Secretarial Audit Report for the financial year 2014-15. Secretarial Audit Report issued by M/s Rathi and Associates, Company Secretaries for financial year 2014-15 in Form MR-3 has been marked as Annexure III and forms part to this report. The said report does not contain any observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. c. RATIFICATION OF APPOINTMENT OF AUDITORS: Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. G. M. Kapadia & Co, Chartered Accountants, the Statutory Auditors of the Company have been appointed for a term of 3 years. However, their appointment as Statutory Auditors of the Company shall be required to be ratified by the Members at the ensuing Annual General Meeting. The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company. Necessary resolution for ratification of appointment of the said Auditors is included in the Notice of AGM for seeking approval of members. d. RELATED PARTY TRANSACTIONS: During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. 6. OTHER DISCLOSURES Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under: a. EXTRACT OF ANNUAL RETURN: Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the st Annual Return for the financial year ended 31 March 2015 made under the provisions of Section 92(3) of the Act is attached as Annexure IV which forms part of this Report. b. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. have been furnished in Annexure VI which forms part of this Report. c. CORPORATE GOVERNANCE: (Applicable to Companies giving remuneration as per Section II of Schedule V): All elements of remuneration package such as salary, benefits, bonuses, stock options, pension, etc., of all the directors :Not Applicable Details of fixed component and performance linked incentives along with the performance criteria :Not Applicable Service contracts, notice period, severance fees :Not Applicable Stock option details, if any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable :Not Applicable 7. GENERAL: 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. Payment of remuneration or commission from any of its Holding or subsidiary Companies to the Managing Director or the Whole-time Directors of the Company. 3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. 4. Cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 8. AKNOWLEDGEMENTS AND APPRECIATION: Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company. Registered Office Rahejas, 4 Floor, Corner of Main Avenue & V. P. Road, Santacruz West, Mumbai 400054 CIN: L65910MH1984PLC034514 Tel No. 022-2600 1306 • Fax No. 022-2600 1307 Mail: investors.bhawani@hathway.net FOR AND ON BEHALF OF THE BOARD SAMSON JESUDAS Managing Director & CEO (DIN: 02539442) VINEET GARG Director (DIN:06935347) Place: Mumbai Date: 12/08/2015 |