BSE Prices delayed by 5 minutes... << Prices as on Oct 23, 2018 - 12:51PM >>   ABB 1237.1 [ -0.90 ]ACC 1382.35 [ -2.58 ]AMBUJA CEM 200 [ -2.82 ]ASIAN PAINTS 1128.2 [ -6.10 ]AXIS BANK 561.3 [ 0.04 ]BAJAJ AUTO 2541.95 [ -0.58 ]BANKOFBARODA 102.1 [ -0.58 ]BHARTI AIRTE 288.65 [ 0.93 ]BHEL 74.3 [ 0.75 ]BPCL 263.3 [ -2.91 ]BRITANIAINDS 5500.05 [ -1.41 ]CAIRN INDIA 285.4 [ 0.90 ]CIPLA 619.75 [ -1.50 ]COAL INDIA 279 [ 1.09 ]COLGATEPALMO 1129.7 [ 0.75 ]DABUR INDIA 404.2 [ -0.14 ]DLF 151.2 [ -1.08 ]DRREDDYSLAB 2484.65 [ -1.46 ]GAIL 338.7 [ -0.99 ]GRASIM INDS 838.85 [ -2.15 ]HCLTECHNOLOG 974.7 [ -0.55 ]HDFC 1702.9 [ 2.57 ]HDFC BANK 1991.95 [ -0.05 ]HEROMOTOCORP 2718 [ -0.43 ]HIND.UNILEV 1575 [ -0.63 ]HINDALCO 222.45 [ -0.69 ]ICICI BANK 324 [ -0.92 ]IDFC 36.2 [ -1.50 ]INDIANHOTELS 124.95 [ -2.19 ]INDUSINDBANK 1455.3 [ 0.91 ]INFOSYS 664.8 [ -1.98 ]ITC LTD 289.2 [ 0.33 ]JINDALSTLPOW 168.5 [ -0.06 ]KOTAK BANK 1160.65 [ -0.51 ]L&T 1200.75 [ -0.48 ]LUPIN 864 [ -2.05 ]MAH&MAH 718.05 [ -2.24 ]MARUTI SUZUK 6733 [ -1.19 ]MTNL 13.09 [ -2.68 ]NESTLE 9400 [ -2.56 ]NIIT 72.2 [ -0.89 ]NMDC 111.1 [ 1.69 ]NTPC 164 [ -0.61 ]ONGC 152.9 [ -2.05 ]PNB 64.8 [ -1.52 ]POWER GRID 188 [ -0.56 ]RIL 1055.5 [ -0.65 ]SBI 257.5 [ -0.94 ]SESA GOA 215.1 [ 0.87 ]SHIPPINGCORP 41.5 [ 1.22 ]SUNPHRMINDS 585.9 [ -3.48 ]TATA CHEM 672.05 [ 0.52 ]TATA GLOBAL 217.5 [ -2.68 ]TATA MOTORS 172.85 [ 1.35 ]TATA STEEL 542 [ -0.54 ]TATAPOWERCOM 69.1 [ -0.58 ]TCS 1876.7 [ -1.34 ]TECH MAHINDR 679 [ 0.21 ]ULTRATECHCEM 3296.55 [ -5.05 ]UNITED SPIRI 505 [ -0.79 ]WIPRO 308.4 [ -4.21 ]ZEETELEFILMS 438.4 [ -1.77 ] BSE NSE
You can view the entire text of Notes to accounts of the company for the latest year

BSE: 533137ISIN: INE947J01015INDUSTRY: Entertainment & Media

BSE   ` 69.65   Open: 65.45   Today's Range 65.30
71.30
+1.70 (+ 2.44 %) Prev Close: 67.95 52 Week Range 45.10
149.55
Year End :2017-03 

1. Corporate information

DEN NETWORKS LIMITED (hereinafter referred to as ‘the Company’ or ‘DEN’) was incorporated in India on 10 July, 2007 and is primarily engaged in distribution of television channels through digital cable distribution network and provision of broadband services. The Company is having its registered office at 236, Okhla Industrial Area, Phase III, New Delhi -110020.

The Company changed its status from a Private Limited Company to a Public Limited Company on 15 April, 2008 thereby changing its name to DEN Digital Entertainment Networks Limited. Subsequently, the Company changed its name to DEN Networks Limited on 27 June, 2008. The equity shares of the Company are listed on two of the stock exchanges in India i.e NSE and BSE.

During the financial year 2013-14, the Company had raised funds of Rs. 9,608.22 million by way of Qualified Institutional Placement (QIP) and Preferential Issue of equity shares. Further, during the current year, the Company has also raised Rs. 1,424.34 million by way of Preferential Issue of equity shares.

The Company does not have any scheme of share based payments and hence the requirements of the amendment will not have any impact of the financial statements.

Notes :

i. Of the above 37,843,195 (31 March, 2016 31,923,370 ; as at 1 April, 2015 34,042,370) equity shares having carrying and investment value of Rs. 4,877.95 million (31 March, 2016 Rs. 4,472.41 million ; as at 1 April, 2015 Rs 4,493.60 million ) and Rs. 4,708.05 million (31 March, 2016 Rs. 4,302.51 million ; 1 April, 2015 Rs. 4,393.53 million) investments in subsidiaries are pledged with Infrastructure Development Finance Company (IDFC) Limited against loans taken by the Company (See note 18)

ii. Of the above 11,257,500 (31 March, 2016 11,257,500 ; 1 April, 2015 11,257,500) preference shares having carrying and investment value to Rs. 107.05 million ( 31 March, 2016 Rs. 94.54 million ; 1 April, 2015 Rs. 87.96 million ) and Rs. 142.58 million (31 March, 2016 142.58 million ; 1 April, 2015 142.58) of investments in subsidiaries are pledged with Infrastructure Development Finance Company (IDFC) Limited against loans taken by the Company (See note 18)

iii. Of the above 17,601,020 (31 March ,2016 9,373,622 ; as at 1 April, 2015 29,358,095 ) equity shares amounting to Rs. 277.43 million (31 March, 2016 Rs. 452.40 million ; 1 April, 2015 Rs. 554.73 million ) of investments in subsidiaries are committed to be pledged with Infrastructure Development Finance Company (IDFC) Limited against loans taken by the Company.

iv. Of the above 10,847,115 (31 March, 2016 13,517,115 ; as at 1 April, 2015 11,475,000) preference shares having carrying and investment value to Rs. 110.57 million (31 March, 2016 Rs. 118.37 million ; 1 April 2015 Rs. 69.30 million ) and Rs. 221.99 million (31 March, 2016 Rs. 221.99 million ; 1 April, 2015 Rs. 114.75 million) of investments in subsidiaries are committed to be pledged with Infrastructure Development Finance Company (IDFC) Limited against loans taken by the Company.

Notes:

a) The average credit period on sales of services is 90-180 days. No interest is charged on any overdue trade receivables.

b) The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows:

Of the above:

a. Fully paid equity shares, which have a par value of Rs. 10, carry one vote per share and carry a right to dividends.

b. 72,475,520 equity shares of Rs. 10 each were issued in 2009-10 as bonus shares in the ratio of 4:1 for every one equity share by utilisation of securities premium.

c. In 2009-10, the Company issued bonus shares for 39,993,000 .001% Cumulative Convertible Preference Shares of Rs. 10 each in the ratio of one share for every ten .001% Cumulative Convertible Preference Shares held by its shareholders by utilisation from the securities premium account resulting in total of 43,992,300 .001% Cumulative Convertible Preference Shares. These shares were subsequently converted into 13,361,361 fully paid up equity shares of Rs. 10 each in 2009-10.

d. 4,019,606 fully paid up equity shares of Rs. 10 each at premium of Rs. 185 were issued in 2009-10 against consideration payable towards investments made in subsidiary companies.

e. Share options granted under the Company’s employee share option plan (See note 39)

As at 31 March, 2017 11,053,394 shares (As at 31 March, 2016 11,053,394 shares) were reserved for issuance as follows:

(i) 2,143,404 shares (As at 31 March, 2016 2,143,404 shares; As at 1 April, 2015 2,143,404 shares) of Rs. 10 each towards outstanding employee stock options granted under Employee Stock Option Plan 2010 and

(ii) 8,909,990 shares (As at 31 March, 2015 8,909,990 shares; As at 1 April, 2015 8,909,990 shares) of Rs. 10 each towards outstanding employee stock options granted under Employee Stock Option Plan-B 2014. (See Note 39).

g. The Company has one class of equity shares having a par value of Rs. 10 per share. Each equity shareholder is eligible for one vote per share held and dividend as and when declared by the Company. Interim Dividend is paid as and when declared by the Board. Final dividend is paid after obtaining shareholder’s approval. Dividends are paid in Indian Rupees. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amount in proportion to their shareholding.

* The Company has paid advance towards the above claims aggregating to Rs. 314.48 million (31 March, 2016: Rs. 201.55 million; 1 April, 2015: Rs. 164.87 million).

** Against this corporate guarantee, the obligation outstanding as on 31 March, 2017 is Rs. 74.75 million (As at 31 March, 2016 - Rs. 121.33 million, As at 1 April, 2015 - Rs. 250 million).

*** The Company has undertaken to arrange for the necessary financial support to certain of its subsidiaries (held directly or indirectly) in the form of capital funding and/or short term funding for meeting their business requirements. [See note 38A(xvi)]

2. segment information

Information reported to the chief operating decision maker (CODM) for the purpose of resource allocation and assessment of segment performance focuses on the types of services provided. The CODM has identified Cable and Broadband as its reportable segments.

a) Cable segment consists of distribution and promotion of television channels.

b) Broadband segment consists of providing internet services.

Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Property, plant and equipment that is used interchangeably amongst segments is not allocated to segments.

3. Operating Lease

The Company has taken office premises and accommodation for its employee under cancellable operating lease agreements. The lease rental expenses recognised in the Statement of Profit and Loss:

4. Finance lease as lessee

The Company has entered into finance lease arrangements for certain equipment which provide the Company an option to purchase the assets at the end of the lease period. The averge lease term is 3 years.

Interest rates underlying all obligations under finance leases are fixed at respective contract dates ranging from 8.55% to 9% per annum (at 31 March, 2016 - 8.55% to 9% per annum, at 1 April, 2015 - 8.55% to 9% per annum).

5. Finance lease as lessor

The Company has entered into finance lease arrangements for certain of its equipment which provide the Company an option to sell the assets at the end of the lease period. Future minimum lease payment and reconciliation of gross investment in the lease and present value of minimum lease payments.

Unguaranteed residual values of assets leased under finance leases at the end of the reporting period are estimated at Rs. Nil (at 31 March, 2016 - Rs. Nil at 1 April, 2015 - Rs. Nil).

The interest rate inherent in the leases is fixed at the contract date for the entire lease term. The average effective interest rate contracted is approximately 9% per annum (at 31 March, 2016 - 9% to 13% per annum, at 1 April, 2015 - 13% to 10% per annum)

6. Employee benefit plans

(i) Defined contribution plans

The Company operates defined contribution retirement benefit plans for all its qualifying employees. Where empoyees leave the plans prior to full vesting of the contributions, the contributions payable by the Company are reduced by the amount of forfeited contributions.

The total expense recognised in profit or loss of Rs. 37.43 million (for the year ended 31 March, 2016: Rs. 41.75 million) for provident fund contributions and Rs. 0.49 million (for the year ended 31 March, 2016: Rs. 0.59 million) for Employee State Insurance Scheme contributions represents contributions payable to these plans by the Company at rates specified in the rules of the plans. As at 31 March, 2017, contributions of Rs. 5.45 million (as at 31 March, 2016: Rs. 6.52 million) due in respect of 2016-2017 (2015-2016) reporting period had not been paid over to the plans. The amounts were paid subsequent to the end of the respective reporting periods.

(ii) Defined benefit plans Gratuity plan

Gratuity liability arises on retirement, withdrawal, resignation, and death of an employee. The aforesaid liability is calculated on the basis of 15 days salary (i.e. last drawn salary plus dearness allowance) for each completed year of service or part thereof in excess of 6 months, subject to a maximum of Rs. 1,000,000. Vesting occurs upon completion of 5 years of service.

The present value of the defined benefit obligation and the related current service cost are measured using the Projected Unit Credit method with actuarial valuations being carried out at each balance sheet date.

The gratuity plan typically exposes the Company to actuarial risks such as: interest rate risk, longevity risk and salary risk.

Interest risk

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.

Longevity risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability

Salary risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

No other post-retirement benefits are provided to these employees

In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation was carried out as at 31 March, 2017 by Charan Gupta Consultants Private Limited, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

a) The principal assumptions used for the purposes of the actuarial valuations were as follows.

The following tables set out the unfunded status of the defined benefit scheme and amounts recognised in the Company financial statements as at 31 March, 2017:

b) Amounts recognised in Statement of Profit and Loss in respect of these defined benefit plans are as follows:

The current service cost and the net interest expense for the year are included in the employee benefits expense line item in the Statement of Profit and loss.

The remeasurement of the net defined benefit liability is included in other comprehensive income.

c) The amount included in the balance sheet arising from the entity’s obligation in respect of its defined benefit plans is as follows.

d) Movements in the present value of the defined benefit obligation are as follows:

e) Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

i) If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by Rs. 3.26 million (increase by Rs. 3.50 million) [as at 31 March, 2016: decrease by Rs. 3.41 million (increase by Rs. 3.43 million)] [as at 1 April, 2015: decrease by Rs. 2.76 million (increase by Rs. 2.70 million)].

ii) If the expected salary growth increases (decreases) by 0.50%, the defined benefit obligation would increase by Rs. 3.48 million (decrease by Rs. 3.26 million) [as at 31 March, 2016: increase by Rs. 3.41 million (decrease by Rs. 3.47 million)] [as at 1 April, 2015: increase by Rs. 2.67 million (decrease by Rs. 2.78 million)].

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

f) The average duration of the benefit obligation represents average duration for active members at 31 March, 2017: 17.66 years (as at 31 March, 2016: 17.34 years; as at 1 April, 2015: 16.90 years).

g) The Company expects to make a contribution of Rs. 16.14 million (as at 31 March, 2016: Rs. 19.28 million; as at 1 April, 2015: Rs. 15.44 million) to the defined benefit plans during the next financial year.

h) The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

i) The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

j) The gratuity plan is unfunded.

k) Experience on actuarial gain/(loss) for benefit obligations and plan assets:

7. Related Party Disclosures I. List of related parties

a. Related parties where control exists

i. Subsidiaries held directly

1 Den Mahendra Satellite Private Limited

2 Den Mod Max Cable Network Private Limited

3 DEN Krishna Cable TV Network Private Limited

4 DEN Pawan Cable Network Private Limited

5 DEN BCN Suncity Network Private Limited

6 DEN Harsh Mann Cable Network Private Limited

7 Den Classic Cable TV Services Private Limited

8 Den Bindra Network Private Limited

9 Den Montooshah Network Private Limited

10 Den Ashu Cable Private Limited

11 Shree Siddhivinayak Cable Network Private Limited

12 Drashti Cable Network Private Limited

13 Den MCN Cable Network Private Limited

14 Mahadev Den Network Private Limited

15 Mahadev Den Cable Network Private Limited

16 DEN Patel Entertainment Network Private Limited

17 Den Digital Cable Network Private Limited

18 DEN Malayalam Telenet Private Limited

19 Den Bellary City Cable Private Limited

20 Den-Manoranjan Satellite Private Limited

21 Den Supreme Satellite Vision Private Limited

22 Den Nashik City Cable Network Private Limited

23 Radiant Satellite (India) Private Limited

24 Den Radiant Satelite Cable Network Private Limited

25 Den Mewar Rajdev Cable Network Private Limited

26 Den RIS Cable Network Private Limited

27 Den Sky Media Network Private Limited

28 Den Prince Network Private Limited

29 DEN Varun Cable Network Private Limited

30 DEN Crystal Vision Network Private Limited

31 Meerut Cable Network Private Limited

32 Den Jai Ambey Vision Cable Private Limited

33 Den Fateh Marketing Private Limited

34 Den Enjoy Cable Networks Private Limited

35 Den Maa Sharda Vision Cable Networks Private Limited

36 Den F K Cable TV Network Private Limited

37 Den Shiva Cable Network Private Limited

38 Den Pradeep Cable Network Private Limited

39 Den Satellite Cable TV Network Private Limited

40 Den Narmada Network Private Limited

41 DEN Ambey Cable Networks Private Limited

42 Den Budaun Cable Network Private Limited

43 Den Aman Entertainment Private Limited

44 Den Kashi Cable Network Private Limited

45 Den Futuristic Cable Networks Private Limited

46 DEN Digital Entertainment Gujarat Private Limited

47 Aster Entertainment Private Limited

48 Den Entertainment Network Private Limited

49 Shine Cable Network Private Limited

50 Den Rajkot City Communication Private Limited

51 Den Elgee Cable Vision Private Limited

52 Den Malabar Cable Vision Private Limited

53 Amogh Broad Band Services Private Limited

54 Galaxy Den Media & Entertainment Private Limited

55 Den Ucn Network India Private Limited

56 Bali Den Cable Network Private Limited

57 Mahavir Den Entertainment Private Limited

58 Den Citi Channel Private Limited

59 Fab Den Network Private Limited

60 Fortune (Baroda) Network Private Limited

61 Den Infoking Channel Entertainers Private Limited

62 United Cable Network (Digital) Private Limited

63 Shri Ram Den Network Private Limited

64 Den Krishna Vision Private Limited

65 Cab-i-Net Communications Private Limited

66 Den Sahyog Cable Network Private Limited

67 Den Sariga Communications Private Limited

68 DELHI SPORTS & ENTERTAINMENT PRIVATE LIMITED (formerly DEN SPORTS & ENTERTAINMENT PRIVATE LIMITED) (upto 30 March, 2016)

69 Den Kattakada Telecasting and Cable Services Private Limited

70 Den A.F. Communication Private Limited

71 Sree Gokulam Starnet Communication Private Limited

72 Big Den Entertainment Private Limited

73 Ambika DEN Cable Network Private Limited

74 Den Steel City Cable Network Private Limited

75 Crystal Vision Media Private Limited

76 Victor Cable Tv Network Private Limited

77 Sanmati DEN Cable TV Network Private Limited

78 Multi Channel Cable Network Private Limited

79 Gemini Cable Network Private Limited

80 Multi Star Cable Network Private Limited

81 DEN VM Magic Entertainment Private Limited

82 Matrix Cable Network Private Limited

83 Antique Communications Private Limited

84 Sanmati Entertainment Private Limited

85 Disk Cable Network Private Limited

86 Shaakumbari Den Media Private Limited

87 Silverline Television Network Private Limited

88 Ekta Entertainment Network Private Limited

89 Libra Cable Network Private Limited

90 Devine Cable Network Private Limited

91 Nectar Entertainment Private Limited

92 Pee Cee Cable Network Private Limited

93 Multitrack Cable Network Private Limited

94 Glimpse Communications Private Limited

95 Indradhanush Cable Network Private Limited

96 Adhunik Cable Network Private Limited

97 Blossom Entertainment Private Limited

98 Rose Entertainment Private Limited

99 Trident Entertainment Private Limited

100 Eminent Cable Network Private Limited

101 Mansion Cable Network Private Limited

102 Den Discovery Digital Network Private Limited

103 Jhankar Cable Network Private Limited

104 Den Premium Multilink Cable Network Private Limited

105 Scorpio Cable Network Private Limited

106 Desire Cable Network Private Limited

107 Marble Cable Network Private Limited

108 Augment Cable Network Private Limited

109 Macro Commerce Private Limited (w.e.f. 16 July, 2016)

110 Skynet Cable Network Private Limited (w.e.f. 1 April, 2016)

ii. subsidiaries held indirectly

1 Astonishing Network Private limited (formerly known as Den Nanak Communication Private Limited)

2 Den Saya Channel Network Private Limited

3 Den Ambey Citi Cable Network Private Limited

4 Den Enjoy Navaratan Network Private Limited

5 Den Ambey Jhansi Cable Network Private Limited

6 Den Deva Cable Network Private Limited

7 Den Faction Communication System Private Limited

8 Den Ambey Farukabad Cable Network Private Limited

9 Star Channel Den Network Private Limited

10 Kishna DEN Cable Networks Private Limited

11 Divya Drishti Den Cable Network Private Limited

12 Delhi Soccer Private Limited (formerly known as DEN SOCCER PRIVATE LIMITED) upto 30 March, 2016

13 Fun Cable Network Private Limited

14 Rajasthan Entertainment Private Limited

15 Kerela Entertainment Private Limited

16 Uttar Pradesh Digital Cable Network Private Limited

17 Saturn Digital Cable Private Limited

18 DEN Enjoy SBNM Cable Network Private Limited

19 Capital Entertainment Private Limited

20 Bhadohi DEN Entertainment Private Limited

21 DEN STN Television Network Private Limited

22 Srishti DEN Networks Private Limited

23 Maitri Cable Network Private Limited

24 Melody Cable Network Private Limited

25 Mountain Cable Network Private Limited

26 Portrait Cable Network Private Limited

27 DEN Prayag Cable Networks Private Limited

28 Angel Cable Network Private Limited

29 ABC Cable Network Private Limited

30 DEN MTN Star Vision Networks Private Limited

b. Joint ventures

1 Star Den Media Services Private Limited (upto 30 March, 2016)

2 Media Pro Enterprise India Private Limited (upto 30 March, 2016)

3 Macro Commerce Private Limited (upto 15 July, 2016)

c. Associate entities

1 DELHI SPORTS & ENTERTAINMENT PRIVATE LIMITED (formerly DEN SPORTS & ENTERTAINMENT PRIVATE LIMITED)

2 DEN ADN Network Private Limited

3 CCN DEN Network Private Limited

4 Den Satellite Network Private Limited

d. Entities in which KMP can exercise significant influence

1 Lucid Systems Private Limited

2 Verve Engineering Private Limited

e. Key managerial personnel

1 Mr. Sameer Manchanda (Chairman and Managing Director)

2 Mr. S.N Sharma (Chief Executive Officer)

f. Other related party- employees welfare trust

1 DNL Employees Welfare Trust

i. Transactions/Outstanding balances with related parties during the year

ii. Amount recoverable from DNL Employees Welfare Trust as at 31 March, 2017: Rs. 0.36 million (As at 31 March, 2016: Rs. 0.36 million; As at 1 April, 2015: Rs. 0.36 million)

iii. Guarantee given by the Company for a term loan taken from bank by an associate Company, Den Satellite Network Private Limited outstanding as at the end of the year amounted to Rs. 250 million [As at 31 March, 2016: Rs. 250 million; As at 1 April, 2015: Rs. 250 million].

iv. Lucid Systems Private Limited (‘LSPL’) has given guarantee by way of pledge of 8.20 million (previous year - 5.50 million) equity shares held in the Company for credit facilities availed by the Company on loans taken from a financial institution / bank during the year ended 31 March, 2017 and 31 March, 2016.

v. Mr. Sameer Manchanda (Chairman and Managing Director of the Company) had extended guarantee for a term loan as at 31 March, 2017: Rs. Nil (As at 31 March, 2016: Rs. Nil; As at 1 April, 2015: Rs. 184.88 million) borrowed from a bank by a subsidiary Company.

8. share Based payments

A. Employee stock Option Plan 2010 (“EsOP 2010”)

a) Details of the employee share option plan of the company

The weighted average fair value of the share options granted under ESOP 2010 during the financial year is Rs. 29.11 (during the year ended 31 March, 2016: Rs. 29.34). Options were priced using Black Scholes model

The Company had established an Employee Stock Option Plan (ESOP 2010) in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, which has been approved by the Board of Directors and the shareholders. A Nomination and Remuneration / Compensation Committee comprising majority of independent, non-executive members of the Board of Directors administers the ESOPs. All option under the ESOPs are exercisable for equity shares. The Company had taken approval of the Shareholders to grant and allot upto 5,219,599 equity options under the said scheme. The total outstanding options under the scheme are 850,000 equity options.

There shall be a minimum period of one year between the grant of options and vesting of options. The vesting shall happen in one or more tranches as may be decided by the Nomination and Remuneration / Compensation Committee. The exercise period of the options is a period of one year after the vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price (as determined by the Nomination and Remuneration / Compensation Committee) of share determined with respect to the date of grant.

As per approval of the shareholder, the Company may issue options to employees of the Company/ subsidiaries/ directors of the subsidiaries.

Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the receipt of the option. The options carry neither rights to dividend nor voting rights. Options may be exercised at any time fform the date of vesting to the date of their expiry.

All options vested on their date of grant and expiry within twelve months of their issue, or one month after the resignation of the executive or senior employee, whichever is earlier.

b) Fair value of share options granted in the year

The vesting shall happen in one or more tranches as may be decided by the Nomination and Remuneration / Compensation Committee. The exercise period of the options is a period of one year after the vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price (as determined by the Nomination and Remuneration / Compensation Committee) of share determined with respect to the date of grant. The Company has granted 3,926,195 options upto 31 March, 2017.

The fair value of the options, calculated by an external valuer, was estimated on the date of grant using the Black-Scholes model with the following significant assumptions:

The volatility of the options is based on the historical volatility of the share price since the Company’s equity shares are publicly traded, which may be shorter than the term of the options.

c) Movement in share options during the year

The following reconciles the share options outstanding at the beginning and end of the year :

d) Share options outstanding at the end of the year

The share options outstanding at the end of the year had remaining contractual life of 1.26 years (as at 31 March, 2016 is 2.21 years; as at 1 April, 2015 is 3.19 years).

B. Employee Stock Option Plan 2014 (“ESOP 2014”)

a) Details of the employee share option plan of the company

The weighted average fair value of the share options granted under ESOP 2014 during the financial year is Rs. 57.03 (during the year ended 31 March, 2016: Rs. 30.61). Options were priced using Black Scholes model.

The shareholders of the Company vide shareholders approval through postal ballot dated 5 January, 2015 had approved purchase upto 2.5% of paid-up equity share capital of the Company from the secondary market under the DEN ESOP Plan A- 2014. Further, the shareholders of the Company vide shareholders approval through postal ballot dated 23 June, 2015, terminated the DEN ESOP Plan A- 2014 and allocated the same option under DEN ESOP Plan B -2014. After approval, the total number of equity shares under the DEN ESOP Plan B-2014 has increased to 8,909,990.

During the year, the Nomination and Remuneration / Compensation Committee of the Company, had granted 1,750,000 options under this Scheme to eligible employees. Total outstanding options under DEN ESOP Plan-B 2014 are 2,950,000. The vesting period of 1,750,000 options is 2 years and for the rest of the options it is 4 years.

The Company has a share option scheme for executives and senior employees of the Company and its subsidiaries. In accordance with the term of the plan, as approved by shareholders at a previous annual general meeting, executives and senior employees with more than five years service with the Company may be granted options for purchase equity shares.

Each employee share option converts into one equity share of the company on exercise. No amounts are paid or payable by the receipt of the option. The options carry neither rights to dividend nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.

All options vested on their date of grant and expiry within twelve months of their issue, or one month after the resignation of the executive or senior employee, whichever is earlier.

b) Fair value of share options granted in the year

The vesting shall happen in one or more tranches as may be decided by the Nomination and Remuneration / Compensation Committee. The exercise period of the options is a period of one year after the vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price (as determined by the Nomination and Remuneration / Compensation Committee) of share determined with respect to the date of grant.

The fair value of the options, calculated by an external valuer, was estimated on the date of grant using the Black-Scholes model with the following significant assumptions

c) Movement in share options during the year

The following reconciles the share options outstanding at the beginning and end of the year :

d) share options outstanding at the end of the year

The share options outstanding at the end of the year had remaining contractual life of 1.39 years (as at 31 March, 2016 is 1.76 years; as at 1 April, 2015 is 2.19 years).

9. Financial Instruments

a) Capital Management

The Company’s management reviews the capital structure of the Company on periodical basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital. The Company has a target gearing ratio of 18% - 25% determined as the proportion of net debt to total equity. The gearing ratio at 31 March, 2017 of 19.73% (see below) was within the target range.

The capital structure of the Company consists of net debt (borrowings as detailed in notes 18, 20 and 22 and offset by cash and bank balances and current investments in notes 14, 15 and 12) and total equity of the Company.

The Company sets the amount of capital required on the basis of annual business and long-term operating plans.

The funding requirements are met through a mixture of equity, internal fund generation, non-current and current borrowings. The Company’s policy is to use non-current and current borrowings to meet anticipated funding requirements.

b) Financial risk management objective and policies Financial assets and liabilities:

The accounting classification of each category of financial instruments, and their carrying amounts, are set out below:

c) Risk management framework

The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The objective of the Company’s risk management framework is to manage the above risks and aims to :

- improve financial risk awareness and risk transparency

- identify, control and monitor key risks

- provide management with reliable information on the Company’s risk exposure

- improve financial returns

(i) Market risk

Market risk is the risk that the fair value of financial instrument will fluctuate because of change in market price. Market risk comprises of three types of risks - interest risk - See - 40 c (iv), foreign currency - See - refer 40 c (iii), and other price risk - See - 40 c (v), such as equity price risk.

The Company’s activities expose it primarliy to interest rate risk, currency risk and other price risk such as equity price risk. The financial instruments affected by market risk includes : Fixed deposits, current investments, borrowings and other current financial liabilities.

(ii) Liquidity risk

The Company requires funds both for short-term operational needs as well as for long-term investment needs.

The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening the balance sheet. The maturity profile of the Company’s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.

(iii) Foreign currency risk

Foreign exchange risk comprises of risk that may arise to the Company because of fluctuations in foreign currency exchange rates. Fluctuations in foreign currency exchange rates may have an impact on the Statements of Profit and Loss. As at the year end, the Company was exposed to foreign exchange risk arising from foreign currency payables and buyer’s credit denominated in foreign currency availed by the Company.

The carrying amounts of the Company foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows :

The results of Company’s operations may be affected by fluctuations in the exchange rates between the Indian Rupee against the US dollar. The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange rate exposure with a simultaneous parallel foreign exchange rates shift in the currencies by 1% against the functional currency of the Company.

For the year ended 31 March, 2017 and 31 March, 2016, every 100 basis points depreciation/ appreciation in the exchange rate between the Indian rupee and U.S. dollar will decrease/increase the Company’s losses before tax by Rs. 14.71 million (31 March, 2016 : Rs. 38.01 million).

(iv) Interest rate risk

The Company is exposed to interest rate risk on current and non-current borrowings and fixed deposits outstanding as at the year end. The Company’s policy is to maintain a balance of fixed and floating interest rate borrowings and the proportion of fixed and floating rate debt is determined by current market interest rates. The borrowings of the Company are principally denominated in Indian Rupees. The US dollar debt representing the buyers credit facility availed by the Company is composite of fixed and floating rates (linked to US dollar LIBOR). These exposures are reviewed by appropriate levels of management on a monthly basis. The Company invests in fixed deposits to achieve the Company’s goal of maintaining liquidity, carrying manageable risk and achieving satisfactory returns.

Interest rate sensitivity analysis on borrowings:

If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Company’s losses before tax for the year ended March 31, 2017 would decrease/increase by Rs. 6.01 million (year ended 31 March, 2016 : Rs. 6.98 million). This is mainly attributable to the Company’s exposure to interest rates on its variable rate borrowings.

Interest rate sensitivity analysis on fixed deposits:

If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Company’s losses before tax for the year ended 31 March, 2017 would decrease/increase by Rs. 2.39 million (year ended 31 March, 2016 : Rs. 4.39 million). This is mainly attributable to the Company’s exposure to interest rates on its variable rate borrowings.

(v) Other price risk

The Company is exposed to price risks arising from fair valuation of Company’s investment in mutual funds and preference shares. These investments are held for short term purposes. The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting year.

If prices had been 100 basis points higher/lower, loss before tax for the year ended 31 March, 2017 would increase/decrease by Rs. 2.67 million (for the year ended 31 March, 2016: Rs. 2.43 million) as a result of the changes in fair value of these investments which have been designated as at FVTPL.

(vi) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company’s exposure to credit risk primarly arises from trade receivables, balances with banks and security deposits. The credit risk on bank balances is limited because the counterparties are banks with good credit ratings. Trade receivables consist of a large number of customers. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The Company’s policies on assessing expected credit losses is detailed in notes to accounting policies (See note 2.12). For details of exposure, default grading and expected credit loss as on the reporting year (See note 13).

10. During the year, post receipt of approval from the Central Government, the managerial remuneration of Rs. 7.25 million paid during the year ended 31 March, 2016, in excess of the limits prescribed under Section 197 read with Schedule V and applicable rules of the Companies Act, 2013, was adjusted with the remuneration to be paid/provided for the year ended 31 March 2017.

11. During the financial year 2013-14, the Company had raised funds of Rs. 9,608.22 million by way of Qualified Institutional Placement (QIP) and Preferential Issue of Equity Shares. Further, during the current financial year, the Company has also raised Rs. 1,424.34 million by way of Preferential Issue of Equity Shares (See note 44 for details of Preferential Issue).

12. The Company has investments of Rs. 5,387.88 million (net of provision for impairment of Rs. 736.43 million) in subsidiary companies and associate companies as on 31 March, 2017. Of these, networth of investments with carrying value of Rs. 763.30 million (net of provision for impairment of Rs. 593.30 million) and balances of loans/advances of Rs. 21.90 million as at 31 March, 2017 has fully/ substantially eroded. Of these, investments aggregating to Rs. 103.70 million in companies whose net worth is fully/substantially eroded have earned profits for the year ended 31 March, 2017. Based on the valuations as per discounted cash flow method, the management of the Company expects that these companies will have positive cash flows to adequately sustain its operations in the foreseeable future and therefore no further provision for impairment is considered necessary.

13. During the year ended 31 March, 2017, the Securities Issue Committee of the Board of Directors at its meeting held on 27 October, 2016 has issued and allotted 15,826,039 equity shares of Rs. 10 each at a premium of Rs. 80 per share to the affiliates of Goldman Sachs Group, Inc. who form part of the persons belonging to Non Promoter category. With the aforesaid allotment, the holding of affiliates of the Goldman Sachs Group, Inc. has increased from 17.79% to 24.49%. The Company has received total allotment consideration of Rs. 1,424.34 million. The above issue was approved by shareholders in their Extraordinary general meeting dated 14 October, 2016.

45. Exceptional items comprises the following:

a. During the year ended 31 March, 2017, the Company has made a provision for impairment of Rs. 248.42 million on investment in DELHI SPORTS & ENTERTAINMENT PRIVATE LIMITED (formerly DEN SPORTS & ENTERTAINMENT PRIVATE LIMITED) (‘Delhi Sports’) on account of fair market value of equity shares of Delhi Sports. Further, during the year ended 31 March, 2017, the Company has decreased its investment stake in Delhi Sports by way of sale of 21,052,789 equity shares for a sale consideration of Rs. 80 million and booked a loss on sale of investment of Rs. 130.53 million. The total provision for impairment of Rs. 248.42 million and loss on sale of investment of Rs. 130.53 million for the year ended 31 March, 2017 has been disclosed as an exceptional item in the Ind AS financial statements.

b. During the year ended 31 March, 2017, the Company had made a provision for impairment of Rs. 210.00 million on investment in Macro Commerce Private Limited (‘MCPL’), erstwhile joint venture, on account of fair value of equity shares of MCPL and the same has been disclosed as an exceptional item in the Ind AS financial statements.

c. During the year ended 31 March, 2017, the Company has incurred expenses of Rs. 56.63 million on account of separation pay paid to some employees as part of the organisational restructuring of the Company. The same has been disclosed as an exceptional item in the Ind AS financial statements.

d. Allowance for doubtful debts of Digital Addressable System customers of Rs. 637.43 million. Pursuant to TRAI notification, Digital Addressable System (DAS) was implemented in a phased manner in select cities / towns in FY 2012-13 and FY 2013-14. The Company had not been able to finalise the agreements with distributors/ Local Cable operators for DAS areas and hence revenues were accounted for on a best estimate basis. Based on current market trends of DAS rates and discussions/ negotiations with trade partners, the Company had made an assessment of its trade receivables of debtors pertaining to DAS areas and had accordingly made an allowance of doubtful debts of Rs. 637.43 million during the year ended 31 March, 2016.

e. Provision for impairment of investments in subsidiaries for the year ended 31 March, 2016: Rs. 234.37 million.

f. During the year ended 31 March, 2016, the Company had sold its entire 50% stake in Star Den Media Services Private Limited (‘Star Den’) for a sales consideration of Rs. 403.50 million which had resulted in a net profit of Rs. 378.50 million and the same was disclosed as an exceptional item in the Ind AS financial statements.

g. During the year ended 31 March, 2016, profit on disposal of investments in joint venture has been netted off from the charge on account of provision for doubtful trade receivables and provision for other than temporary diminution in value of investments to arrive at a net exceptional item charge of Rs. 493.30 million.

14. Expenditure on Corporate Social Responsibility (CSR)

a. Gross amount required to be spent by the Company during the period ended 31 March, 2017 is Rs. Nil (Previous year Rs. Nil)

b. Amount spent during the period ended 31 March, 2017

Figures in bracket relates to previous year.

c. Details of related party transactions:

- Contribution during the period ended 31 March, 2017 is Rs. Nil (Previous year Rs. Nil)

- Payable as at 31 March, 2017 is Rs. Nil (Previous year Rs. Nil)

15. The Company did not have any long-term contracts including derivative contracts for which there were any material forseeable losses.

16. Fair value measurement

i). Financial assets and financial liabilities that are not measured at fair value are as under:

Note :

The carrying value of the above financial assets and financial liabilities carried at amortised cost approximate these fair value.

ii) Fair value hierarchy of assets measured at fair value as at 31 March, 2017; 31 March, 2016 and 1 April, 2015 is as follows:

Notes to the reconciliation items:

(a) Investments in preference shares of subsidiaries

Under previous GAAP, the entity accounted for investments in preference shares of subsidiaries at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, the entity accounts for such investments as FVTPL investments. As required by Ind AS, these FVTPL investments have been measured at fair value with gains and losses recognised in Statement of Profit and Loss. At the date of transition to Ind AS, difference between the instruments fair value and previous GAAP carrying amount has been recognised as deemed equity investment and included within the respective equity investment in subsidiaries.

(b) Current investments in mutual funds

Under Ind AS, the entity accounts for such investments as FVTPL investments. As required by Ind AS, these FVTPL investments have been measured at fair value with gains and losses recognised in Statement of Profit and Loss. At the date of transition to Ind AS, difference between the instruments fair value and previous GAAP carrying amount has been adjusted in opening reserves.

(c) Borrowings and security deposits at amortised cost method

Under previous GAAP, Borrowings (liabilities) and security deposits (assets) were accounted for at their undiscounted nominal values. Under IndAS, these have been accounted for at amortised cost method by discounting the cash flows using effective interest rates. Accordingly, loan processing fees has been netted with borrowings to reflect the amortised cost using effective interest rate. Consequently, the changes in balances of security deposits and the effect of interest income under amortised cost method has resulted in changes in cash flows from operating and investing activities in the cash flow statement.

(d) Deferment of activation revenue

Under previous GAAP, the activation revenue on Set top boxes (STBs) was recognised fully in the year of activation. Under Ind AS, activation revenue on STBs is recognised over the period of customer relationship. Activation fees received in advance is accounted for as ‘Deferred Revenue’ and grouped under “Other current liabilities” and “Other non-current liabilities” Deferred revenue calculated as at the opening balance sheet date has been adjusted against opening reserves.

(e) Fair valuation of ESOP

Under previous GAAP, the cost of equity settled employee share-based payments was recognised using the intrinsic value method. Under Ind AS, the cost of equity-settled employee share-based payments are recognised based on grant date fair value of options. Accordingly, the incremental difference between fair value and intrinsic value of options has been accounted for as employee benefit expenses. The opening impact of this difference has been adjusted in the opening reserves.

(f) Gain/loss on re-measurement of net defined benefit liability

Under previous GAAP, there was no concept of other comprehensive income and actuarial gains and losses were accounted for in Statement of Profit and Loss. Under Ind As, actuarial gain or losses are accounted for as other comprehensive income.

(g) Trade receivables

Under previous GAAP, the entity determined provisions for impairment of trade receivables (provision for bad and doubtful debts) using incurred loss model. i.e. if they remained outstanding over the prescribed period. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL), which has resulted in additional provisions being accounted for profit and loss. The impact of additional provisions due to ECL as at the opening balance sheet date has been adjusted in opening retained earnings.

(h) Subsidiaries

Under previous GAAP, the Company had accounted for 3 entities as subsidiaries. However, as per the control definition in Ind AS, these entities have been accounted for as associates under Ind AS.”

(i) Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income expense, gains, or losses are required to be presented in other comprehensive income.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

17. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

18. The Board of Directors of the Company in its meeting held on 5 September, 2016 considered and approved a Scheme of Arrangement (“the Scheme”) amongst DEN NETWORKS LIMITED (‘Company’) and SKYNET CABLE NETWORK PRIVATE LIMITED (‘SKYNET’), a wholly owned subsidiary, in terms of provisions of sections 391 to 394 of the Companies Act, 1956. With effect from the Appointed date i.e. 1 April, 2016, the Internet Service Provider business (“Broadband”) of the Company will be demerged into SKYNET. The Company has received No-objection/observation letter (‘NOC’) from the Stock Exchanges in terms of Regulation 37 of the SEBI (Listing obligations and Disclosure Requirements) Regulation 2015. Subsequent to said NOC, the Company has filed the scheme with the National Company Law Tribunal. The scheme has been approved by shareholders and unsecured creditors of the Company. Further, the scheme is subject to all other statutory approvals.

19. DEN FUTURISTIC CABLE NETWORK PRIVATE LIMITED (‘Transferee’), a wholly owned subsidiary of the Company, has filed a composite Scheme of Arrangement (“the Scheme”) with the National Company Law Tribunal (NCLT) in terms of the provisions of the Companies Act, 2013 for merger of 23 Subsidiaries and demerger of Cable Business of one subsidiary with the transferee company. The order of NCLT subsequent to this filing is awaited.

20. The financial statements were approved for issue by the Board of Directors on 22 May, 2017.