We have audited the accompanying standalone financial statements of DEN
Networks Limited (the Company), which comprise the Balance Sheet as
at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FOR THE Standalone Financial STATEMENTS
The Company''s Board of Directors is responsible for the matters stated
in Section134(5) of the Companies Act, 2013 (the Act) with respect to
the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies(Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143 (10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reason able assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
proceduress elected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its loss and its cash flows for the year ended
on that date.
EMPHASIS OF MATTERS
We draw attention to note 43 of the standalone financial statements
wherein it is stated that the Digital Addressable System (DAS)
subscription fee has not yet been finalised and the revenue on account
of the same has been recognised based on certain estimates which in the
management''s view are reasonable.
Our opinion is not modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditors'' Report) Order, 2015 (the
Order) issued by the Central Government in terms of Section 143(11) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31st March, 2015, taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164(2) of the
(f) With respect to the other matters to be included in the Auditors''
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date)
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b. The Company has a program of verification of fixed assets to cover
all items in a phased manner over a period of three years other than
set top boxes which are in possession of the customers/ third parties
and distribution equipment comprising overhead and underground cables.
Management is of the view that it is not possible to verify these
assets due to their nature and location. Pursuant to the program,
certain fixed assets were physically verified by the Management during
the year. According to the information and explanation given to us, no
material discrepancies were noticed on such verification.
In our opinion, other than for physical verification of set top boxes
and distribution equipment referred to above, the frequency of
verification of fixed assets is reasonable having regard to the size of
the Company and the nature of its assets.
ii. In respect of its inventories:
a. As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
iii. According to the information and explanations given to us, the
Company has granted loans, secured or unsecured, to companies, firms or
other parties covered in the Register maintained under Section 189 of
the Companies Act, 2013. In respect of such loans:
a. The receipts of principal amounts and interest have been regular/as
b. There is no overdue amount in excess of Rs. 1 lakh remaining
outstanding as at the year-end.
iv. In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the capital
items purchased are of special nature and suitable alternative sources
are not readily available for obtaining comparable quotations, there is
an adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchase of fixed
assets and the sale of goods and services. During the course of our
audit, we have not observed any major weakness in such internal control
v. According to the information and explanations given to us, the
Company has not accepted any deposit during the year.
vi. We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended and the Cost Records and Audit (Telecommunication Industry)
Rules prescribed by the Central Government under sub- section (1) of
Section 148 of the Companies Act, 2013, and are of the opinion that,
prima facie, the prescribed cost records have been made and maintained.
We have, however, not made a detailed examination of the cost records
with a view to determine whether they are accurate or complete.
vii. According to the information and explanations given to us in
respect of statutory dues:
a. The Company has generally been regular in depositing its undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Value
Added Tax, Cess and other material statutory dues applicable to it with
the appropriate authorities during the year. According to the
information and explanations given to us, the Company''s operations did
not give rise to any Excise Duty.
b. There were no undisputed amounts payable in respect of Provident
Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Value Added Tax, Cess and other material
statutory dues in arrears as at 31st March, 2015 for a period of more
than six months from the date they became payable except for the dues
related to amusement tax and entertainment tax, the details of which
are given below:
Name of Nature of Involved to which Due Date
Statute Dues (Rs in the Amount Relates
Entertainment Amusement 10.24 April Within
Cum Amusement tax 2013 to 30 days
Tax Act, 1982 March from the
Tax Act, Entertainment 12.49 April Within
1996 Tax 2014 to 7 days
September from the
According to the information and explanations given to us, the
Company''s operations did not give rise to any Excise duty.
c. Details of dues of Value Added Tax and Sales Tax which have not been
deposited as on 31st March, 2015 on account of disputes are given below:
Name of Nature of Forum where Period to Amount
Statute Dues Dispute which the involved
is Pending Amount (Rs in
UP Value Added Value added Commercial June 2013 5.84
Tax Act, 2008 tax Tax Lucknow
UP Value Added Value added Additional April 100.39
Tax Act, 2008 tax Commissioner 2012 to
UP Value Added Value added Deputy September 14.36
Tax Act, 2008 tax Commissioner, 2013 to
Bihar Value Value added Joint April 2012 14.94
Added Tax tax Commissioner to March
Act,2005 of Commercial 2014
Karnataka Value Value added Joint of April 21.51
Added Tax and tax and Commissioner 2008 to
CST Act, 2003 Central To March
Sales Commercial 2009
Tax Tax (Appeals)
Kerala Value Value added Assistant April 2011 18.16
Added Tax and tax and Commissioner to March
CST Act, 2003 Central Appeals, 2013
We are informed that there are no dues in respect of Income Tax,Wealth
Tax, Service Tax, Customs Duty and Cess which have not been deposited
on account of any dispute.
d. There are no amounts that are due to be transferred to the Investor
Education and Protection Fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and Rules made there
viii The accumulated losses of the Company at the end of the financial
year are less than fifty percent of its net worth and the Company has
not incurred cash loss during the preceding year but has incurred cash
losses during the current financial year.
ix. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and financial institutions. The Company has not issued any
x. In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantee given by the
Company for loan taken by others from banks and financial institutions
are not prima facie prejudicial to the interests of the Company.
xi. In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained.
xii. To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For DELOITTE Haskins & SELLS
Firm''s registration no. 015125N)
NEW DELHI Partner
11 May, 2015 (Membership No. 87104)