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Den Networks Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018

Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018

Notes to the standalone unaudited financial results:

1. The above standalone unaudited financial results have been reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on 15 January, 2019. The statutory auditors of the Company have carried out a limited review of the standalone unaudited financial results for the quarter and Nine months ended 31 December, 2018.
2. These standalone unaudited financial results have been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder ('Ind AS') and other accounting principles generally accepted in India.
3. The Company has investments of Rs. 54,287 lakhs (net of provision for impairment of Rs. 1,757 lakhs) in subsidiary companies and associate companies as on 31 December, 2018. Of these, net worth of investments with carrying value of Rs. 26,689 lakhs (net of provision for impairment of Rs. 955 lakhs) and balances of loans / advances of Rs. 158 lakhs as at 31 December, 2018 have fully/substantially eroded. Of these, investments aggregating to Rs. 2,659 lakhs in companies whose net worth is fully/substantially eroded have earned profits for the Nine months ended 31 December, 2018. Based on the projections, 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.
4. The Company operates only in cable business, which is the only reportable segment in accordance with the requirement of Ind AS 108 "Operating Segments".
5. The Shareholders of the Company in its meeting dated, 14 November, 2018 have unto considered and approved issuance and allotment on a preferential basis 28,14,48,000 Equity shares face value INR 10/- each Equity Shares for cash at a price of INR 72.66 per share (including a premium of INR 62.66 per Equity share) to Jio Futuristic Digital Holdings Private Limited (13,68,47,150 Equity shares ), Jio Digital Distribution Holdings Private Limited (7,12,48,280 Equity shares) and Jio Television Distribution Holdings Private Limited (7,33,52,570 Equity shares) (collectively be referred as 'Investors'), subject to regulatory approvals. The Board of Directors in its meeting dated 17 October, 2018 had approved execution of shareholders and share subscription agreement with the Investors. The Board had also taken note that Mr. Sameer Manchanda, promoter, M/s Lucid Systems Private Limited, promoter and M/s Verve Engineering Private Limited, promoter (collectively be referred as SM Group) have entered into share purchase agreement with the Jio Futuristic Digital Holdings Private Limited to sell 3,35,85,000 Equity shares of SM group, subject to regulatory approvals. The Investors have filed an open offer document with the Securities and Exchange Board of India, pursuant to which they will purchase upto 12,21,83,457 Equity shares representing 25.58% of increased share capital. The investor has also filed an application with the Competition Commission of India for approval of proposed transaction.