Transforming the present taking on the future PDF room

Transforming the present Taking on the future Hathway Cable and Datacom Limited 57th Annual Report 2016-17 Unveiling the transformation 02 Communiqué from the MD 05 A transformational journey A transformed entity 08 Ready to take on the future and how! 10 Broadbasing the present to take on the future 14 Bringing the future closer and how! 16 Cabling today’s strengths to future needs 18 Getting people ready to take on the future 20 An endorsement of our FY 2017 performance 21 Building social capabilities to take the future www.hathway.com Visit Company’s official website to download the Annual Report 24 26 Board of Directors An endorsement of our futuristic strategy Awards & Recognitions 28 Notice of the Annual General Meeting 34 Directors’ Report 73 Management Discussion and Analysis 82 Report on Corporate Governance 99 Standalone Financial Statements 173 Consolidated Financial Statements Corporate Information BOARD OF DIRECTORS Mr Akshay Raheja Non-Executive Director DIN: 00288397 Mr Rajan Gupta Managing Director DIN: 07603128 REGISTERED OFFICE S Mahomedbhai & Co (Mumbai) “Rahejas”, 4th Floor, Corner of Main Avenue & V P Road, Santacruz (W), Mumbai - 400 054 Tel No.: (022) 26001306; Fax No.: (022) 26001307 CIN: L64204MH1959PLC011421 Tulsi Gokulraj and Associates (Hyderabad) CORPORATE OFFICE Axis Bank Limited 805/806, Windsor, 8th Floor, Off CST Road, Kalina, Santacruz (E), Mumbai - 400 098 Tel No.: (022) 67742500; Fax No.: (022) 67742400 YES Bank Limited STATUTORY AUDITORS IDFC Bank Limited G M Kapadia & Co Chartered Accountants REGISTRAR AND TRANSFER AGENT SECRETARIAL AUDITORS Mr Devendra Shrotri Independent Director DIN: 02780296 Rathi and Associates Company Secretaries Ms Ameeta Parpia Independent Director DIN: 02654277 Ashok Agarwal & Co Cost Accountants Trilegal (Mumbai) Arun Khatpalia (Senior Advocate) Jayant Tripathi (Advocate) Jayant Mehta (Advocate) BANKERS ICICI Bank Limited Kotak Mahindra Bank Limited IndusInd Bank Limited RBL Bank Limited HDFC Bank Limited Link Intime India Private Limited C-101, 247 Park, LBS Marg, Vikhroli (W), Mumbai - 400 083 Tel: (022) 49186000; Fax: (022) 49186060 COST AUDITORS STANDALONE FINANCIAL STATEMENTS CHIEF FINANCIAL OFFICER Shiv Prakash and Associates (Bangalore) REPORT ON CORPORATE GOVERNANCE Mr Sasha Mirchandani Independent Director DIN: 01179921 Law Offices of Indu Malhotra & Associates (Delhi) MANAGEMENT DISCUSSION & ANALYSIS Mr Vinayak Aggarwal Non-Executive Director DIN: 00007280 Jaitley & Bakshi Associates (Delhi) DIRECTORS’ REPORT Mr Viren Raheja Non-Executive Director DIN: 00037592 Dua & Associates (Mumbai) NOTICE OF THE ANNUAL GENERAL MEETING Mr Rajan Raheja Non-Executive Director DIN: 00037480 Mr Ajay Singh FCS No.: 5189 ADVOCATES AND SOLICITORS BOARD OF DIRECTORS Mr Sridhar Gorthi Chairman and Independent Director DIN: 00035824 HEAD LEGAL, COMPANY SECRETARY AND CHIEF COMPLIANCE OFFICER CORPORATE OVERVIEW Corporate Information INTERNAL AUDITORS Ernst & Young LLP Mr Vineet Garg CONSOLIDATED FINANCIAL STATEMENTS Annual Report 2016-17 | 01 Hathway Cable and Datacom Limited Communiqué from the MD Dear Shareholders, As we enter FY 2017-18, optimism about the India’s growth story is at its peak Indian economy is picking up pace and offering a glimpse of its true potential “Hathway stands at the forefront of the technological revolution sweeping the digital bandwidth of the country” Current government has the strongest mandate in 30 years to deliver reforms that can resuscitate the Indian economy and deliver sustainable growth for the future As Government prepares India’s passage to the future, Digital India initiative is going to be a key enabler for this journey With a clear vision, the present government is pushing ahead the Digital India initiative to transform the country into a digitally empowered society and a knowledge economy FY 2016-17 for Hathway was all about investing in worldclass digital infrastructure to take advantage of opportunities unleashed by Digital India and build a bigger, stronger and more profitable business for the long term I would now like to share some specific step taken towards this transformation journey Corporate restructuring: • As of closing business hours on March 31, 2017, we have carved out our Cable Television business (Cable TV) into a whollyowned subsidiary Hathway Digital Private Limited [HDPL] (f.k.a Hathway Datacom Central Private 02 Limited), through slump sale Broadband business and Investment in GTPL Hathway Limited, along with Investment in various other joint venture remains with your Company I am happy to share that all groundwork for the demerger has been smoothly completed This new structure allows us to invest more aggressively in high growth high profit broadband business and in parallel facilitate HDPL to focus on monetisation of Investment done in different phases of Digital addressable system (DAS) and undertake significant cost optimisation initiatives Cable TV - Phase III & IV digitisation: • During the year, we have seeded close to Mn set top boxes (STBs) and as on year-end, we have 6.3 Mn STBs in Phase III & IV areas We are proud to contribute towards dramatically improving consumer TV viewing experience in these markets through enhanced digital content and new-age packaging Consumer satisfaction in these markets is very high and we have started monetising this investment and the same will be major growth driver for FY 2017-18 Cable TV - “Hathway Connect” Journey: • As cable TV industry is going through multiple Communiqué from the MD Looking ahead, our focus will be on profitable growth and positive cash flows and this perspective shall guide all our actions across business operations Strong emphasis has been placed on technology to upgrade business excellence; customer-centricity along with cost optimisation enables us to look up to the future with confidence We expect the collective impact of various growth initiatives to continue scaling up in FY 2018 and helping us accelerate profitable growth I have never felt more optimistic about where we are going Thank you, Rajan Gupta Managing Director Annual Report 2016-17 | 03 CONSOLIDATED FINANCIAL STATEMENTS Finally, I thank you for your continuing guidance, trust and support STANDALONE FINANCIAL STATEMENTS I would like to thank our employees as well as extended partners and other stakeholders for their hard work and commitment in this critical phase of our growth journey REPORT ON CORPORATE GOVERNANCE I firmly believe years of hard work on digitisation of cable TV business has finally started showing results on ground in terms of revenue and EBITDA growth Imminent monetisation of subscription revenue in Phase III & IV markets will be one more accelerator for this business Our cable TV business has now more opportunities for growth than at any point in its history Consumers are demanding more of best content on their terms, be it live on the main television set at home or on-demand content being offered by various As we look ahead into the future of broadband business, we have exciting opportunity to help accelerate digital India mission We will continue to invest heavily in high-speed fibre broadband and Gigabyte speed network roll out Strong cash flows in broadband business allows us to fund this expansion through internal accruals Growth of broadband customer base with focus on quality acquisition and going deeper in current geographies will remain our prime focus MANAGEMENT DISCUSSION & ANALYSIS • During FY 2016-17, we • FY 2017 was a period of relooking at every aspect of the business functioning and processes We have used technology to remodel many processes and increase efficiencies of other processes as well Journey on right-sizing various functional units as per changing external environment has also started Complete results of these actions are expected in over the coming to 12 months DIRECTORS’ REPORT Broadband Network transformation: • Millennials also known as digital natives have grown up with smart devices & connectivity and sharing matter to them augmented by high speed broadband service To meet the expectations of these consumers, we are undergoing our own digital transformation, which will enable us to engage with our customers in ways that are more meaningful to them We have launched our new easy-to-navigate website, which gives a seamless experience on both the large screen and handheld devices Our newly launched consumer App for Android and iOS facilitates consumers to track their data usage and connect to our customer service team without the need to reach out to our call centres It also facilitates one click payment and auto renewal for ease of payment We have also stepped up our efforts on digital and social media marketing to reach our consumers in a non-intrusive manner and convey strongly Business excellence and cost optimiSation: OTT players However, daily viewing to television remain high and more importantly consumers continuously want to be entertained on the big screen Due to the large broadband footprint, Hathway is in a unique position to take advantage of this convergence of linear TV and OTT We still have Mn consumers in our cable TV universe in metro and mini metros who are yet to take our broadband services giving us substantial headroom for growth NOTICE OF THE ANNUAL GENERAL MEETING • We continue to participate in opportunity to digitise India by investment in building additional home passes During the year, we entered new markets of Kolkata, Indore and Chennai and overall built a high-speed broadband infrastructure and as on year-end have a total home passes of 5.4 Mn All the home passes in Chennai is provisioned with Gigabyte speed units at consumer homes Customers, especially millennials as centre stage in our business strategy: our proposition of best value for money in market on speed, data limits and pricing BOARD OF DIRECTORS Growing broadband home passES: have taken massive network upgrade for our broadband business to cater for existing and expected data growth Based on these network improvements, we are able to give all our consumers 25 Mbps base speed and 200 Mbps peak speed Due to extra capacity of data centre, we are able to increase monthly data limits of all consumers by 200 GB This was a necessary step for our broadband business to remain a disruptor, rather than be disrupted CORPORATE OVERVIEW challenges from different dimensions-changing regulatory landscape, technology disruptions and increased competition, Hathway Connect, along with improved packaging aligned to the evolving consumer needs, is the perfect recipe for reinventing and reimagining rules of engagement in cable TV It gives consumers choice to select bouquet and la carte channels according to their needs For LCOs, it is a tool to manage their operations better by removing inefficiencies and provide complete transparency of transactions with Hathway For Hathway, it brings the Company one-step closer to the consumer Hathway is able to consumer level billing, automatic dunning management and bring efficiencies in collections We have made major strides in implementing Hathway Connect in FY 2016-17 and a significant portion of our digital base is transacting through Hathway Connect portal Hathway Cable and Datacom Limited In the possibilities of today, lie the realities of tomorrow At Hathway, we have mastered the art of identifying and harnessing these possibilities to proactively transform the present in order to take on the future We have firmed up the foundation of today’s growth 04 to scale up the business for tomorrow, enabling us to deepen our engagement with the customers and enhance their experience We have opened the doors to new vistas of progress through the windows of opportunities that beckoned us through the year, empowering us to be ready to take off on the next trajectory of growth The present is already the past, and the future is where we see ourselves today – a future packed with even more possibilities for dynamic and far-reaching growth We are Transforming the present Taking on the future A transformational journey A transformed entity CORPORATE OVERVIEW A transformational journey A transformed entity System Operator (MSO) providing digital cable TV and broadband services • India’s largest cable broadband service provider with approximately 5.4 Mn twoway broadband homes passes 
 • main head-ends and 11 support head-ends, with over 32,000 Kms of HFC backbone network pan India Our mission To provide an incomparable world-class TV viewing and broadband experience to consumers Stock ticker BSE: 533162
 NSE: HATHWAY Bloomberg: HATH:IN Reuters: HAWY.NS STANDALONE FINANCIAL STATEMENTS • More than 52% share of the total cable broadband market in India • More than 12.5 Mn Set Top Boxes (STBs) deployed across the country REPORT ON CORPORATE GOVERNANCE Broadband (High-Speed) • 13.3 Mn cable TV households, with 12.5 Mn digital cable subscribers MANAGEMENT DISCUSSION & ANALYSIS Our bouquet of products is designed to deliver value to customers and other stakeholders across the broadband and cable TV businesses, which continued to post exciting growth and expanded to notch many more milestones of success during FY 2017 Cable TV (Standard Definition and High Definition) DIRECTORS’ REPORT Transformational offerings to transform the future Our vision To be a single point access provider, bringing into the home and workplace the converged world of information, entertainment and services NOTICE OF THE ANNUAL GENERAL MEETING 525 cities and towns and broadband presence in 29 cities, Hathway is one of India’s largest Multi BOARD OF DIRECTORS The numbers tell their own story of our transformation With a cable TV reach spanning CONSOLIDATED FINANCIAL STATEMENTS Annual Report 2016-17 | 05 Hathway Cable and Datacom Limited How we have transformed over the years: Promoter funding and launch Acquired lakh cable TV Primary subscribers Acquired 50% stake in GTPL Introduced HD PVR boxes 1998 2000 2003 2007 2008 2010 Chrys Capital invests ` 2.6 Bn % Acquired 1.5 lakh cable TV Primary subscribers News Corp acquires 26% equity stake in Hathway at ` 3.4 Bn IPO - Raised ` 4.8 Bn Introduced HD boxes 06 A transformational journey A transformed entity CORPORATE OVERVIEW Preferential allotment of ` 4.5 Bn to Capital Research & Tybourne Capital Introduced GPON FTTH high speed internet service BOARD OF DIRECTORS Providence Equity acquires News Corp stake % Oracle Billing & Revenue Management system implemented Ericsson partnership NOTICE OF THE ANNUAL GENERAL MEETING Introduced Hathway Connect portal for secondary subscribers 2012 2013 2014 2015 Preferential allotment of ` 2.5 Bn to Promoters, Providence Equity & others 2016 DIRECTORS’ REPORT Broadband subscriber base reaches lakh mark 2017 DOCSIS 3.0 implemented Our growth drivers Leverage broadband and cable TV presence to give differentiated content, services and applications Investment for growth Increase broadband subscriber base by increasing penetration in existing geographies Leverage cable TV network for broadband business for accelerating sub growth Cost Leadership • Best-in-class consumer/ Transform costs • Shared services model • Automation • Centralisation / outsourcing CONSOLIDATED FINANCIAL STATEMENTS Trendsetter in broadband industry on speed, GBs, Price & Value For Money equation STANDALONE FINANCIAL STATEMENTS Objective Build Value for all stakeholders in the Value chain Differentiated customer experience REPORT ON CORPORATE GOVERNANCE Prepaid implemented for Primary subscribers The cable television business has been spun off to a whollyowned subsidiary company MANAGEMENT DISCUSSION & ANALYSIS Cable TV Subscriber base reaches 12 Mn mark LCO user interface in cable TV industry • New tariff order to optimise content cost Annual Report 2016-17 | 07 Hathway Cable and Datacom Limited READY TO TAKE ON THE FUTURE… AND HOW! 08 Hathway Cable and Datacom Limited Notes to Consolidated Financial Statements (` in Crore unless otherwise stated) Particulars Liabilities Non-Current Liabilities Financial Liabilities Borrowings Trade payables Other financial liabilities Provisions Deferred tax liabilities (Net) Other Non-current liabilities Total Non-Current Liabilities Current Liabilities Financial Liabilities Borrowings Trade payables Other financial liabilities Other current liabilities Provisions Current Tax Liabilities (Net) Total Current Liabilities TOTAL EQUITY AND LIABILITIES Notes & 14 & 14 11 14 14 14 & 15 14 March 31, 2016 April 1, 2015 (End of last period presented (Date of transition) under previous GAAP) Previous Adjustments As per Ind Previous Adjustments As per Ind GAAP* AS balance GAAP* AS balance sheet sheet 975.14 0.03 18.44 23.49 1.62 3.55 1,022.27 (1.76) 1.37 (3.46) (3.85) 973.38 0.03 19.81 20.03 1.62 3.55 1,018.42 672.38 15.02 5.25 0.46 0.63 693.74 (2.70) (0.05) (0.46) (3.21) 669.68 14.97 4.79 0.46 0.63 690.53 199.28 177.18 533.63 143.88 0.50 1.07 187.28 199.28 177.68 534.70 331.16 100.02 143.10 418.45 83.07 1.28 1.18 163.46 100.02 144.38 419.63 246.53 3.45 0.04 1057.46 3,126.64 0.02 188.87 228.14 3.47 0.04 1246.33 3,354.77 6.82 0.06 751.52 2,656.17 0.02 165.94 265.30 6.84 0.06 917.46 2,921.47 * Amount less than ` 50,000/- Reconciliation of Net profit / (loss) as reported under previous GAAP vis-à-vis under Ind AS is as below: Particulars INCOME Revenue From Operations Other Income Total Income EXPENSES Pay channel cost Other operational expenses Employee benefits expense Finance costs Depreciation and amortization expense Other expenses Total Expenses 244 Notes 15 5, 6, 9, 10 7,16 Previous GAAP* Adjustments As per Statement of profit & loss for year ended March 31, 2016 under Ind AS 1,160.69 14.73 1,175.42 (23.82) 3.44 (20.38) 1,136.87 18.17 1,155.04 433.56 204.99 89.03 88.57 257.38 275.61 1,349.14 (1.34) (2.83) 1.27 1.48 16.91 15.49 433.56 203.65 86.20 89.84 258.86 292.52 1,364.63 Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements Particulars Previous GAAP* (173.72) 12, 13 & 14 (18.40) - 19.36 (30.37) (11.01) (135.96) (84.64) (220.60) 27.46 (163.42) (10.09) (74.55) 17.37 (237.97) 0.07 (0.36) (0.29) (163.13) (74.55) 0.07 (0.36) (0.29) (237.68) * The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purpose of this note Reconciliation of Other equity as reported under previous GAAP vis-à-vis Ind AS is as below : Particulars 2,3,5,6,8,9 &10 4,5 &15 & 16 & 16 (187.28) (163.46) 391.13 377.65 (92.68) (71.45) 2.50 2.45 (2.75) 922.72 (77.00) (33.12) (1.26) (0.24) 1,146.89 1,044.32 STANDALONE FINANCIAL STATEMENTS April 1, 2015 (Date of transition) REPORT ON CORPORATE GOVERNANCE Effect of expected credit loss Joint Venture and LLP related Ind AS adjustment Other Ind AS Adjustments Re-measurements of defined benefit plans Other Comprehensive Income Other Equity as reported under Ind AS 15 March 31, 2016 (End of last period presented under previous GAAP) 880.80 MANAGEMENT DISCUSSION & ANALYSIS Other Equity as reported under previous GAAP Increase / (Decrease): Effect of Activation Income being deferred and amortised over customer relationship period Effect of measuring financial instruments at fair value Notes DIRECTORS’ REPORT 18.40 NOTICE OF THE ANNUAL GENERAL MEETING Profit / (loss) for the year Adjustments As per Statement of profit & loss for year ended March 31, 2016 under Ind AS (35.87) (209.59) BOARD OF DIRECTORS Profit / (loss) before share of profit/(loss) of an associates / a joint ventures and exceptional items Amount transferred on change in stake in subsidiaries / Joint Ventures Share of profit / (loss) of an associate and joint ventures Profit / (loss) before exceptional items and tax Exceptional items Profit / (loss) before tax Tax expenses : Current tax Deferred tax Notes CORPORATE OVERVIEW (` in Crore unless otherwise stated) CONSOLIDATED FINANCIAL STATEMENTS Annual Report 2016-17 | 245 Hathway Cable and Datacom Limited Notes to Consolidated Financial Statements Footnotes for Ind AS Adjustments Note 1: Property, Plant and Equipment The Group has availed the exemption available under Ind AS 101 to continue the carrying value for all of its Property, Plant and Equipment and Intangibles as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition Note 2: Investment in equity instruments of other companies - Non current Under previous GAAP, non current investment in equity instruments of other companies were measured at cost less provision for dimunition (other than temporary) Under Ind AS, the Group has recognised such investments at FVTOCI through irrecovable option On the date of transition to Ind AS, the difference between the fair value of Non-Current Investments as per Ind AS and their corresponding carrying amount as per financial statements prepared under previous GAAP, has resulted in decrease in the carrying amount of these investments which has been recognised directly in opening retained earnings Note 3: Current investments - Investments in Mutual funds Under previous GAAP, current investment were measured at lower of cost or fair value Under Ind AS, these investments have been classified as FVTPL on the date of transition Note 4: Loss allowance on Trade receivables Under the previous GAAP, the Group has created provision for impairment of receivables consisting specific amount for incurred losses Under Ind AS, impairment allowance has been determined based on Expected Credit Loss Model (ECL) which has led to an increase in the amount of provision as on the date of transition Note 5: Security deposits Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value Under Ind AS, all financial assets are required to be recognised at fair value Accordingly the Group has fair valued these security deposits under Ind AS and the difference between the fair value and the transaction value of the security deposit has been recognised as prepaid rent Note 6: Financial Corporate guarantee The Group has issued corporate guarantee on behalf of its joint ventures for the borrowings taken by them Under previous GAAP, financial guarantee contracts were not accounted for.The Group has recognised finance guarantee obligation at fair value with corresponding recognition in investments Interest income is recognised with a corresponding reduction from Finance Guarantee Obligation Note 7: Defined benefit plans Both under the previous GAAP and Ind AS, the Group recognised costs related to its post employment defined benefiit plans on an actuarial basis Under previous GAAP the entire cost, including actuarial gains and losses are charged to the Statement of Profit and Loss Under Ind AS, remeasurement (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognised immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income and the corresponding tax effect is also given in Other Comprehensive Income Note 8: Borrowings Under previous GAAP, in case of fixed interest rate borrowings, transaction cost incurred were charged to statement of profit and loss on straight line basis over the tenure of the borrowings and the borrowings are measured as per their schedule of terms made As per Ind AS 109, the transaction costs incurred towards origination of borrowings are deducted from the carrying amount of borrowings on initial recognition These costs are recognised in the statement of profit and loss over the tenure of the borrowing as part of the interest expense by applying effective interest rate method (i.e amortised cost method) As per Ind AS 109, for variable interest rate borrowings, the transaction costs incurred towards origination of borrowings are deducted from the carrying amount of borrowings on initial recognition Accordingly the unamortised balance of transaction cost has been deducted from the carrying amount of the borrowings as on the date of transition 246 Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements Under previous GAAP, there is concept of deferred premium/discount which is recognised based on difference between spot rate and forward rate and amortised over the tenure of the forward contract Under Ind AS, forward contract is required to accounted at fair value Accordingly, the Group has reversed deferred premium outstanding in the books of accounts Under previous GAAP, interest free loans given to joint ventures are accounted at their transaction value Under Ind AS, the Company has discounted the interest free loans given to joint ventures with corresponding increase in the investment BOARD OF DIRECTORS Note 10: Loan given to Joint Ventures CORPORATE OVERVIEW Note 9: Derivative Instruments - Forward contracts Note 11: Deferred tax Note 12: Subsidiaries consolidated under previous GAAP classified as Joint venture Note 13: Subsidiary consolidated under previous GAAP classified as Ind AS 109 investment The Group has assessed that as per Ind AS 111 it does not have joint control one of the entity classified as subsidiary under previous GAAP The Group concluded that it as investment under Ind AS 109 and hence accounted for the said entity as Investment designated as Fair value through other comprehensive income The Group has joint control over certain entities Under previous GAAP, Group has proportionately consolidated its interest in such entities in the consolidated financial statements On transition to Ind AS, the Group has accounted for interest in such entities using the equity method as against proportionate consolidation MANAGEMENT DISCUSSION & ANALYSIS Note 14: Change in method for consolidation of Joint Venture DIRECTORS’ REPORT Based on control assessment carried out under Ind AS 110 Consolidated Financial Statements, certain entities are considered as to be joint ventures of the Group under Ind AS which under previous GAAP were considered as subsidiaries, because the Group does not have the power and exposure to variable returns and concluded that it has a joint control over such entities NOTICE OF THE ANNUAL GENERAL MEETING The previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period Ind AS 12 requires entities to account for deferred taxes using balance sheet approach which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base Various transitional adjustments has resulted in recognition of temporary differences Note 15: Deferment of activation income Under previous GAAP, the Group has not presented Other Comprehensive Income separately Note 17: Inclusion of Bank Overdraft for the purpose of Cashflow STANDALONE FINANCIAL STATEMENTS Note 16: Other Comprehensive income REPORT ON CORPORATE GOVERNANCE Under previous GAAP, activation income is recognized upfront as revenue Under Ind AS, supply of services involving a nonrefundable fee along with subsequent periodic payments for services in future are construed as linked transactions All linked transactions where individual transactions have no commercial meaning on their own and occurrence of one is dependent on occurrence of another are to be evaluated on combined basis Activation fee, which in substance is an advance payment for future services or the ongoing services being provided are essential to the subscribers receiving the expected benefit of the upfront payment of activation fee Accordingly, activation fee is earned as services are provided over the term of the arrangement and need to be deferred over the expected customer relationship period (i.e expected life of the customer) Annual Report 2016-17 | 247 CONSOLIDATED FINANCIAL STATEMENTS Under Ind AS, bank overdrafts which are repayable on demand and form an integral part of the Group’s cash management system and are included in cash and cash equivalents for the purpose of presentaion of Statement of Cashflows Whereas under previous GAAP, there was no similar guidance and hence, bank overdrafts were considered similar to other borrowings and the movements therein were reflected in cashflows from financing activities Hathway Cable and Datacom Limited Notes to Consolidated Financial Statements (` in Crore unless otherwise stated) 4.24 Additional Information as required under Schedule III to the Companies Act,2013, of entities consolidated as Subsidiaries,Joint Ventures and Associates March 31, 2017 : Name of the entity in the group 248 Net assets (total assets Share in profit or minus total liabilities) (loss) As % of Amount As % of Amount consolidated consolidated net assets profit or loss Parent Subsidiaries (Group’s share) Indian 40.17% 359.99 79.35% Share in other Share in total comprehensive income comprehensive income As % of Amount As % of Amount consolidated consolidated other total comprehensive comprehensive income income -152.75 119.01% 0.31 79.29% -152.43 Hathway Bhawani Cabletel and Datacom Ltd* Hathway Digital Private Limited (f.k.a Hathway Datacom Central Ltd) Hathway Broadband Pvt Ltd Hathway Krishna Cable Pvt Ltd Bee Network and Communication Pvt Ltd Hathway Nashik Cable Network Pvt Ltd Hathway Kokan Crystal Cable Network Pvt Ltd Hathway Cnet Pvt Ltd Channels India Network Pvt Ltd Hathway Enjoy Cable Network Pvt Ltd Hathway JMD Farukhabad Cable Network Pvt Ltd Chennai Cable Vision Network Pvt Ltd Hathway Media Vision Pvt Ltd Elite Cable Network Pvt Ltd Hathway United Cables Pvt Ltd UTN Cable Communication Pvt Ltd Hathway Space Vision Cabletel Pvt Ltd Hathway Universal Cabletel and Datacom Pvt Ltd Hathway Gwalior Cable and Datacom Pvt Ltd Ideal Cables Pvt Ltd Binary Technology Transfers Pvt Ltd Hathway Internet Satellite Pvt Ltd ITV Interactive Media Pvt Ltd Liberty Media Vision Pvt Ltd Vision India Network Pvt Ltd Win Cable & Datacom Pvt.Ltd Hathway Mantra Cable and Datacom Pvt Ltd Hathway New Concept Cable and Datacom Pvt Ltd Hathway Software Developers Pvt Ltd Hathway Mysore Cable Network Pvt Ltd Non-controlling interests in all subsidiaries Indian Joint ventures (Investment as per equity method) Hathway Universal Cabletel and Datacom Pvt Ltd GTPL Hathway Limited (f.k.a GTPL Hathway Pvt Ltd) * -0.45% -7.73% -4.01 -69.27 0.47% 14.84% -0.90 (28.57) 20.97% -14.30% 0.06 (0.04) 0.44% 14.88% -0.84 -28.60 0.32% -1.79% -0.15% -1.09% 0.08% -0.05% -0.15% 0.00% 0.00% 2.85 -16.01 -1.34 -9.77 0.75 -0.43 -1.32 0.01 - -0.09% 1.17% 0.00% 0.00% 0.52% 0.00% 0.00% 0.00% 0.00% 0.17 (2.25) (0.01) (1.00) - 0.00% 0.00% 0.00% 0.00% -5.32% 0.00% 0.00% 0.00% 0.00% (0.01) - -0.09% 1.17% 0.00% 0.00% 0.53% 0.00% 0.00% 0.00% 0.00% 0.17 -2.25 -0.01 -1.01 - -0.22% -0.18% 0.00% -0.02% -2.24% -0.12% 0.00% -2.00 -1.63 -0.02 -0.16 -20.04 -1.04 0.01 0.00% 0.33% 0.00% 0.00% 1.28% 0.00% -0.01% (0.64) (2.46) 0.02 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% - 0.00% 0.33% 0.00% 0.00% 1.28% 0.00% -0.01% -0.64 -2.46 0.02 -0.07% -0.09% -0.19% -0.19% -0.05% -0.25% -0.23% -2.20% -0.55% 0.31% -0.67 -0.82 -1.68 -1.69 -0.42 -2.27 -2.06 -19.70 -4.96 2.77 0.00% 0.00% 0.04% 0.04% 0.00% 0.01% 0.00% 0.00% 0.32% 0.71% (0.08) (0.08) (0.02) (0.62) (1.36) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% - 0.00% 0.00% 0.04% 0.04% 0.00% 0.01% 0.00% 0.00% 0.32% 0.71% -0.08 -0.08 -0.02 -0.62 -1.36 -1.55% -1.61% -13.92 -14.41 1.12% 1.58% (2.15) (3.04) 0.00% 0.00% - 1.12% 1.58% -2.15 -3.04 0.10% 0.87 -0.23% 0.44 0.00% - -0.23% 0.44 0.00% 0.01 0.00% - 0.00% - 0.00% - 75.47% 676.42 -4.38% 8.44 -22.66% -0.06 -4.36% 8.38 Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements Name of the entity in the group 0.53% 0.07% 0.31% 0.05% 0.02% 0.63% 0.06% 1.20% 0.02% 0.72% 0.55% 0.09% 0.34% 0.00% 4.75 0.64 2.74 0.46 0.20 5.66 0.57 10.74 0.19 6.41 4.95 0.84 3.08 - 0.94% 0.22% -0.13% 0.06% 0.01% 0.10% 0.00% -1.65% 0.00% 0.01% -0.08% 0.20% -0.13% 0.49% -1.81 -0.42 0.25 -0.11 -0.02 -0.20 3.17 -0.02 0.15 -0.38 0.26 -0.94 0.00% 0.00% 4.52% 0.00% 0.00% -2.21% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01 -0.01 - 0.94% 0.22% -0.14% 0.06% 0.01% 0.10% 0.00% -1.65% 0.00% 0.01% -0.08% 0.20% -0.13% 0.49% -1.81 -0.42 0.26 -0.11 -0.02 -0.20 3.17 -0.02 0.15 -0.38 0.26 -0.94 0.00% - 0.00% -0.01 0.00% - 0.00% -0.01 0.00% 0.00% 100.00% 896.23 1.32% -2.55 1.69% -3.24 100.00% (192.53) 0.00% 0.00% 100.00% 0.26 1.33% -2.55 1.69% -3.24 100.00% (192.24) * Based on consolidated financial statement of the respective entities March 31, 2016 : Name of the entity in the group 527.92 71.39% -0.30% -5.85% -3.28 -63.76 0.57% 15.66% -1.36 -37.06 2.81% 2.65% -0.08 -0.07 0.60% 15.51% -1.44 -37.14 0.25% -1.27% -0.12% -0.90% 0.16% -0.04% -0.12% 0.00% 2.68 -13.86 -1.34 -9.76 1.76 -0.43 -1.32 0.01 -0.07% 2.94% 0.00% 0.00% 0.42% 0.00% 0.00% 0.00% 0.17 -6.96 -0.98 - 0.00% 0.00% 0.00% 0.00% 0.06% 0.00% 0.00% 0.00% ** - -0.07% 2.90% 0.00% 0.00% 0.41% 0.00% 0.00% 0.00% 0.17 -6.96 -0.99 - Annual Report 2016-17 | 249 CONSOLIDATED FINANCIAL STATEMENTS 48.43% STANDALONE FINANCIAL STATEMENTS Hathway Bhawani Cabletel and Datacom Ltd* Hathway Digital Private Limited (f.k.a Hathway Datacom Central Ltd) Hathway Broadband Pvt Ltd Hathway Krishna Cable Pvt Ltd Bee Network and Communication Pvt Ltd Hathway Nashik Cable Network Pvt Ltd Hathway Kokan Crystal Cable Network Pvt Ltd Hathway Cnet Pvt Ltd Channels India Network Pvt Ltd Hathway Enjoy Cable Network Pvt Ltd Share in other Share in total comprehensive income comprehensive income As % of Amount As % of Amount consolidated (`in consolidated (`in other Crore) total Crore) comprehensive comprehensive income income -168.97 97.25% -2.75 71.69% -171.72 REPORT ON CORPORATE GOVERNANCE Parent Subsidiaries (group’s share) Indian Net assets (total assets Share in profit or minus total liabilities) (loss) As % of Amount As % of Amount consolidated consolidated net assets profit or loss MANAGEMENT DISCUSSION & ANALYSIS -0.06% 0.00% -0.05% DIRECTORS’ REPORT 0.69 0.27 NOTICE OF THE ANNUAL GENERAL MEETING 0.08% 0.00% 0.03% Share in other Share in total comprehensive income comprehensive income As % of Amount As % of Amount consolidated consolidated other total comprehensive comprehensive income income 0.11 0.00% -0.06% 0.11 0.00% 0.00% 0.09 0.00% -0.05% 0.09 BOARD OF DIRECTORS Hathway Cable MCN Nanded Pvt Ltd Hathway ICE Television Pvt Ltd Hathway Latur MCN Cable and Datacom Pvt Ltd Hathway Sai Star Cable and Datacom Pvt Ltd Hathway Sonali OM Crystal Cable Pvt Ltd Net Online Hathway Pvt Ltd Hathway Palampur Cable Network Pvt Ltd Hathway Prime Cable and Datacom Pvt Ltd Hathway MCN Pvt Ltd Hathway SS Cable & Datacom LLP Hathway Sukhamrit cable & Datacom Pvt Ltd Hathway Bhawani NDS Network Pvt Ltd Hathway CCN Multinet Pvt Ltd Hathway CCN Entertainment (India) Pvt Ltd Hathway CBN Multinet Pvt Ltd Hathway CCN Multi Entertainment Pvt Ltd Hathway Digital Saharanpur Cable and Datacom Pvt Ltd Hathway Channel Cable and Datacom Pvt Ltd Hathway Mysore Cable Network Pvt Ltd Hathway Dattatray Cable Network Pvt Ltd Total Net assets (total assets Share in profit or minus total liabilities) (loss) As % of Amount As % of Amount consolidated consolidated net assets profit or loss CORPORATE OVERVIEW (` in Crore unless otherwise stated) Hathway Cable and Datacom Limited Notes to Consolidated Financial Statements (` in Crore unless otherwise stated) Name of the entity in the group Hathway JMD Farukhabad Cable Network Pvt Ltd Chennai Cable Vision Network Pvt Ltd Hathway Media Vision Pvt Ltd Elite Cable Network Pvt Ltd Hathway United Cables Pvt Ltd UTN Cable Communication Pvt Ltd Hathway Space Vision Cabletel Pvt Ltd Hathway Universal Cabletel and Datacom Pvt Ltd Hathway Gwalior Cable and Datacom Pvt Ltd Ideal Cables Pvt Ltd Binary Technology Transfers Pvt Ltd Hathway Internet Satellite Pvt Ltd ITV Interactive Media Pvt Ltd Liberty Media Vision Pvt Ltd Vision India Network Pvt Ltd Win Cable & Datacom Pvt.Ltd Hathway Mantra Cable and Datacom Pvt Ltd Hathway New Concept Cable and Datacom Pvt Ltd Hathway Software Developers Pvt Ltd Non-controlling interests in all subsidiaries Indian Joint ventures (Investment as per equity method) GTPL Hathway Limited (f.k.a GTPL Hathway Pvt Ltd) * Hathway Cable MCN Nanded Pvt Ltd Hathway ICE Television Pvt Ltd Hathway Latur MCN Cable and Datacom Pvt Ltd Hathway Mysore Cable Network Pvt Ltd Hathway Sai Star Cable and Datacom Pvt Ltd Hathway Sonali OM Crystal Cable Pvt Ltd Net Online Hathway Pvt Ltd Hathway Palampur Cable Network Pvt Ltd Hathway Prime Cable and Datacom Pvt Ltd Hathway MCN Pvt Ltd Hathway SS Cable & Datacom LLP Hathway Sukhamrit cable & Datacom Pvt Ltd Hathway Bhawani NDS Network Pvt Ltd Hathway Universal VCN Cable Network - LLP Hathway CCN Multinet Pvt Ltd Hathway CCN Entertainment (India) Pvt Ltd Hathway CBN Multinet Pvt Ltd Hathway CCN Multi Entertainment Pvt Ltd Hathway Digital Saharanpur Cable and Datacom Pvt Ltd 250 Net assets (total assets Share in profit or minus total liabilities) (loss) As % of Amount As % of Amount consolidated consolidated net assets profit or loss Share in other Share in total comprehensive income comprehensive income As % of Amount As % of Amount consolidated (`in consolidated (`in other Crore) total Crore) comprehensive comprehensive income income 0.00% 0.00% - 0.00% - 0.00% -0.18% -0.15% 0.00% -0.01% -1.59% -0.10% 0.00% -2.00 -1.61 -0.02 -0.15 -17.33 -1.04 - 0.01% 0.00% 0.00% -0.01% 1.35% 0.00% 0.00% -0.03 0.01 -3.20 -0.01 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% - 0.01% 0.00% 0.00% -0.01% 1.34% 0.00% 0.00% -0.03 0.01 -3.20 -0.01 -0.06% -0.07% -0.15% -0.15% -0.04% -0.21% -0.19% -1.81% -0.40% 0.32% -0.67 -0.81 -1.61 -1.61 -0.42 -2.24 -2.06 -19.70 -4.34 3.51 0.02% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.50% 0.26% -0.04 -0.01 -3.54 -0.61 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% - 0.02% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.48% 0.26% -0.04 -0.01 -3.54 -0.61 -1.05% -11.40 1.74% -4.13 0.00% - 1.72% -4.13 0.11% 1.20 -0.43% 1.02 0.00% - -0.42% 1.02 61.29% 668.04 -0.78% 1.85 -2.92% 0.08 -0.81% 1.93 0.05% 0.00% 0.58 0.00 -0.02% 0.00% 0.04 - 0.00% 0.00% - -0.02% 0.00% 0.02% 0.17 -0.05% 0.13 0.00% - -0.05% 0.13 0.27% 0.60% 0.10% 0.23% 0.05% 0.02% 0.54% 0.05% 0.69% 0.01% 0.16% 0.59% 0.44% 0.11% 0.26% 0.00% 2.95 6.56 1.06 2.49 0.57 0.22 5.86 0.57 7.57 0.08 1.73 6.43 4.79 1.22 2.82 - 2.10% 1.63% 1.78% -0.05% 0.02% -0.09% 0.26% 0.15% -1.19% 0.00% 0.11% 0.03% -0.05% 0.18% -0.05% 0.15% -4.97 -3.85 -4.22 0.12 -0.04 0.22 -0.61 -0.36 2.82 -0.27 -0.07 0.12 -0.43 0.13 -0.35 0.00% 0.00% 0.00% 0.15% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% ** - 2.08% 1.61% 1.76% -0.05% 0.01% -0.09% 0.25% 0.15% -1.18% 0.00% 0.11% 0.03% -0.05% 0.18% -0.05% 0.14% -4.97 -3.85 -4.22 0.12 -0.04 0.22 -0.61 -0.36 2.82 -0.27 -0.07 0.12 -0.43 0.13 -0.35 0.04 - Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements Name of the entity in the group 0.00% - 0.00% Share in other Share in total comprehensive income comprehensive income As % of Amount As % of Amount consolidated (`in consolidated (`in other Crore) total Crore) comprehensive comprehensive income income -0.01 0.00% 0.00% -0.01 0.00% - 0.00% -0.01 0.00% - 0.52% -1.22 100.00% (236.68) 0.00% 100.00% (2.82) 0.00% 100.00% 1,090.03 * Based on consolidated financial statement of the respective entities ** Amount less than ` 50,000 As per our report of even date For G M Kapadia & Co Chartered Accountants Firm's Registration No : 104767W For and on behalf of the Board (Vinayak Aggarwal) Director DIN : 00007280 (Rajan Gupta) DIN : 07603128 Managing Director (Ajay Singh) Head Legal, Company Secretary and Chief Compliance Officer FCS - 5189 (Vineet Garg) Chief Financial Officer Place: Mumbai Date : May 30, 2017 MANAGEMENT DISCUSSION & ANALYSIS Place: Mumbai Date : May 30, 2017 0.51% -1.22 100.00% (239.52) DIRECTORS’ REPORT (Viren Thakkar) Partner Membership No : 49417 -0.01 NOTICE OF THE ANNUAL GENERAL MEETING 0.00% BOARD OF DIRECTORS Hathway Channel Cable and Datacom Pvt Ltd Hathway New Concept Cable and Datacom Pvt Ltd Hathway Dattatray Cable Network Pvt Ltd Total Net assets (total assets Share in profit or minus total liabilities) (loss) As % of Amount As % of Amount consolidated consolidated net assets profit or loss CORPORATE OVERVIEW (` in Crore unless otherwise stated) REPORT ON CORPORATE GOVERNANCE STANDALONE FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS Annual Report 2016-17 | 251 NOTES  HATHWAY CABLE AND DATACOM LIMITED ‘Rahejas’, 4th Floor, Corner of Main Avenue & V.P Road, Santacruz (West), Mumbai – 400054 Tel: 91-22-26001306 Fax: 91-22-26001307 CIN: L64204MH1959PLC011421 Website: www.hathway.com ; E-mail: info@hathway.net ATTENDANCE SLIP Registered Folio No./ DP ID No / Client ID No: Name and address of the Member(s): Joint Holder 1: Joint Holder 2: Number of Shares held: I certify that I am a member / proxy for the member of the Company I hereby record my presence at the 57th Annual General Meeting of the Company at ISKCON’s Auditorium, Hare Krishna Land, Next to Hare Krishna Temple, Juhu, Mumbai – 400049 on Friday, 15th September, 2017 at 3.00 p.m Name of the member / proxy Signature of member / proxy Note: Only Member/Proxyholder can attend the Meeting Please fill up the attendance slip and hand it over at the entrance of the meeting hall Members are requested to bring their copies of the Annual Report to the AGM HATHWAY CABLE AND DATACOM LIMITED ‘Rahejas’, 4th Floor, Corner of Main Avenue & V.P Road, Santacruz (West), Mumbai – 400054 Tel: 91-22-26001306 Fax: 91-22-26001307 CIN: L64204MH1959PLC011421 Website: www.hathway.com ; E-mail: info@hathway.net MGT-11 PROXY FORM [Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014] 57th Annual General Meeting – 15th September, 2017 Name of the Member(s) : Registered Address : Email : Folio No / Client ID : DP ID : I/We, being the member(s) of _ shares of the above named company, hereby appoint Name: _ E-mail Id:  Address:  Signature:  or failing him/her Name: _ E-mail Id:  Address:  Signature:  or failing him/her Name: _ E-mail Id: Address:  Signature:   as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 57th Annual General Meeting of the company, to be held on Friday, 15th September, 2017 at 3.00 p.m at ISKCON’s Auditorium, Hare Krishna Land, Next to Hare Krishna Temple, Juhu, Mumbai – 400049 and at any adjournment thereof in respect of such resolutions as are indicated below: Resolution Particulars No Voting For Against Abstain ORDINARY BUSINESS Adoption of: (a)  Audited Standalone Balance Sheet as at 31st March, 2017, Statement of Profit & Loss and Cash Flow Statement for the year ended on that date together with Report of Directors and Auditors thereon (b)  Audited Consolidated Balance Sheet as at 31st March, 2017, Statement of Profit & Loss and Cash Flow Statement for the year ended on that date together with Report of Auditors thereon To appoint a Director in place of Mr Akshay Raheja, (DIN 00288397), liable to retire by rotation and being eligible seeks reappointment To appoint a Director in place of Mr Viren Raheja, (DIN 00037592), liable to retire by rotation and being eligible seeks reappointment To appoint M/s Nayan Parikh & Co., Chartered Accountants (Firm Registration No 107023W) as Auditors of the Company SPECIAL BUSINESS To regularize the appointment of Mr Rajan Gupta (DIN: 07603128), as a Director, in the capacity of Managing Director of the Company To appoint M/s Ashok Agarwal & Co., Cost Accountants, (Firm Registration No 000510) as Cost Auditors of the Company Signed this _day of _2017 Signature of shareholder Affix revenue Stamp of ` 1/- Signature of Proxy holder(s) Note:  his form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the T Company, not less than 48 hours before the commencement of the Meeting It is optional to indicate your preference If you leave the for, against or abstain column blank against any or all resolutions, your proxy will be entitled to vote in the manner as he/she may deem appropriate Hathway Cable and Datacom Limited 57th Annual Report 2016-17 www.hathway.com Toll Free No 1800-221-119 ...Unveiling the transformation 02 Communiqué from the MD 05 A transformational journey A transformed entity 08 Ready to take on the future and how! 10 Broadbasing the present to take on the future. .. Maestros of the field To enable our customers to experience these services, we offered them for free for the first month at the time of the launch 12 Broadbasing the present to take on the future. .. by our continuing efforts to strengthen our connect with the LCOs Technological empowerment of the LCOs is acting as a bridge for the Company to connect the present with the future in the cable