Dish TV

1.  BACKGROUND
 
 Dish TV India Limited (formerly known as ASC Enterprises Limited) is
 registered in the state of Delhi and is mainly in the business of
 providing Direct to Home (DTH) Satellite Television Service and
 Teleport Service.
 
 2.  USE OF ESTIMATES
 
 The preparation of financial statements requires the management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities, as of the date of the financial statements and the
 reported amount of revenue and expenses of the year. Actual results
 could differ from those estimates. Any revision to estimates is
 recognized prospectively over current and future periods.
 
 3.  GOING CONCERN
 
 The accompanying financial statements have been prepared assuming the
 Company will continue as a going concern. The management believes that
 it is appropriate to prepare these financial statements on a ‘going
 concern’ basis, for the following reasons:
 
 4.1 The Company holds DTH license from Government of India for a
 considerable long time.
 
 4.2 The Company is the first to launch DTH services in India. This
 type of business necessitates long gestation period. Being first mover,
 the Company has incurred huge expenses on awareness of the product,
 brand building on a pan India basis, the benefits of which will accrue
 in the future years.
 
 4.3 The Promoters are fully seized of the matter and is of the view
 that going concern assumption holds true and that the Company will be
 able to discharge its liabilities in the normal course of business and
 the Company during the year, has raised finance through rights issue of
 equity shares, loans from banks and is also considering other financial
 options including debts to meet its future fund requirements. Hence, no
 adjustment is required in accounts relating to recoverability of the
 recorded assets amounts and in respect of liabilities as might be
 necessary for compilation as where the Company is no longer a going
 concern.
 
 5.  SECURED LOANS
 
 5.1 Term Loan from banks Rs. 2,590,700,000 (Rs. Nil) is under
 syndicate debt facility and secured by all movable assets, uncalled
 capital, intellectual property, goodwill and all investments, all
 rights, title, interests of all insurance contracts (both present and
 future), all contracts, government approvals and licenses relating to
 project, all amounts in the accounts or other receivables liable to be
 credited to the accounts in the course of the business, all amounts and
 receivables from whomsoever person, both present and future in relation
 to project, floating charge on other assets. Further the Company is
 required to maintain minimum reserve amount with the banks which is
 guaranteed by a related party. The promoters of the Company have
 provided undertaking for project completion.
 
 5.2 Bridge Loan of Rs. Nil (Rs. 604,780,715) is secured by
 hypothecation of all movable properties including movable plant and
 machinery, machinery spares, tools and accessories, book debts etc.,
 present and future, and corporate guarantee of related party and pledge
 of certain shares held by the promoters in the Company.
 
 5.3 Cash Credit of Rs. 74,604,622 (Rs. 75,872,009) is secured by first
 pari passu charge by way of hypothecation on moveable fixed assets of
 the Company and pledge of shares owned by related parties.
 
 5.4 Vehicle loans are secured against hypothecation of vehicles, (ROC
 charge not registered) (Amount repayable within a year Rs. 1,218,870)
 
 6.  UNSECURED LOANS
 
 6.1 Term Loan (Foreign currency arrangement of buyer credit) from bank
 Rs.1,475,853,910 (Rs. 351,714,000) is guaranteed by a related party.
 
 6.2 Term Loan (Foreign currency arrangement by way of buyer credit)
 from bank of Rs. 687,170,250 (Rs. Nil) is on undertaking provided by
 related party and the Company has to maintain minimum reserve
 equivalent to three months payments of principal and interest on
 outstanding amount.
 
 6.3 Short Term Loan from bank Rs. Nil (Rs. 800,000,000) is ranking
 pari passu in all respect with all other, present and future, senior,
 unsecured and unsubordinated obligation of the Company. A reserve
 account is maintained to provide cover for three
 
 (Currency: Indian Rupee)
 
 months interest on outstanding loan. Related party of the Company is
 required to provide negative pledge of shares of the Company held by
 them.
 
 6.4 Term Loan from bank Rs. 3,000,000,000 (Rs. Nil) is collaterally
 secured by immovable property and corporate guarantee provided by
 related parties. The Company to maintain debt service reserve
 equivalent to three months’ installment and interest.
 
 6.5 Short Term Loan from bank Rs. 1,000,000,000 (Rs. Nil) is
 guaranteed by a related party.
 
 7.  TAXES ON INCOME
 
 7.1 In view of the book loss and loss computed as per Income Tax Act,
 provision for current tax is not required.
 
 7.2 In accordance with the Accounting Standards-22 on -Accounting for
 Taxes on Income” deferred tax assets and liability should be recognized
 for all timing difference in accordance with the said standard.
 However, considering the present financial position and requirements of
 the accounting standard regarding certainty/virtual certainty, the same
 is not provided for. The same will be reassessed at a subsequent
 Balance Sheet date and will be accounted for in the year when certainty
 / virtual certainty in accordance with the aforesaid accounting
 standard is ascertained.
 
 8.  INVESTMENTS
 
 Investments in subsidiaries are carried at cost as the projects
 undertaken by them are under implementation and also keeping in view
 the long-term involvement and interest in these companies.
 
 9.  OTHERS DISCLOSURES
 
 9.1 Previous year figures have been regrouped, rearranged and recasted
 wherever considered necessary to confirm to current year presentation.
 Figures in brackets pertain to previous year.
 
 9.5 Loans and Advances
 
 9.5.1 Advances against share application money includes Rs.
 630,003,231 (Rs. 633,353,285) and Other Advances includes Rs.
 1,940,904,642 (Rs. 395,511,900) receivables from subsidiary companies.
 
 9.5.2 Other Advances includes Rs. 1,208,430,395 due from foreign
 companies acquired as part of multi mission satellite system project
 considered as doubtful in earlier years and provided for.
 
 9.5.3 Loans (including interest thereon) and other advances includes
 to Rs. 957,267,575 and Rs. 216,317,469 respectively recoverable from
 two parties are overdue. The management is of the view that these
 amounts are recoverable.
 
 9.6 Creditors for Expenses and Other Liabilities
 
 9.6.1 Includes Rs. 926,694 (Rs. 926, 694) due to a Subsidiary Company.
 
 9.6.2 Includes cheque overdrawn Rs. 128,441,287 (Rs. Nil)
 
 9.7 Remuneration to the Directors
 
 No commission is paid/payable to any director and hence the computation
 of profits under Section 198/349 of the Companies Act, 1956 is not
 required. Remuneration is paid/payable to the Managing Director as per
 the approval of the Central Government.
 
 9.9 Employee Stock Option Plan – ESOP-2007
 
 The shareholders of the Company at the Annual General Meeting held on
 August 03, 2007 approved Employee Stock Option Plan i.e. ESOP 2007
 (The Scheme). The Scheme provides for issue of 4,282,228 options
 (underlying equity share of Re.1 each) to the employees of the Company
 as well as that of its subsidiaries and also to non-executive directors
 including independent directors of the Company at the market price
 determined as per the SEBI (ESOS) Guidelines, 1999.
 
 The options granted under the Scheme shall vest not less than one year
 and not more than five years from the date of grant of options. Under
 the terms of the Scheme, 20% of the options will vest in the employee
 every year equally. The Option Grantee must exercise all vested options
 within a period of four years from the date of vesting. Once the
 options vest as per the Scheme, they would be exercisable by the Option
 Grantee at any time and the shares arising on exercise of such options
 shall not be subject to any lock-in period.
 
 The Shareholders in their meeting held on August 28, 2008 have approved
 the re-pricing of options already granted but not exercised.
 Consequently the Remuneration Committee in its meeting held on August
 28, 2008 has re-priced the exercise price at Rs.37.55 per option,
 determined as per SEBI (ESOS) Guidelines, 1999.
 
 The Board of Directors decided not to make any price adjustment on
 options already granted under the Scheme, consequent to the issuance
 and allotment of equity shares on right basis, as there was no material
 impact on options value granted to employees of the Company.