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 24 Board of Directors 05 A transformational journey. A transformed entity. 26 An endorsement of our futuristic strategy Awards & Recognitions 08 Ready to take on the future... and how! 28 Notice of the Annual General Meeting 10 Broadbasing the present to take on the future 34 Directors’ Report 14 Bringing the future closer... and how! 73 Management Discussion and Analysis 16 Cabling today’s strengths to future needs 18 Getting people ready to take on the future 82 Report on Corporate Governance 20 An endorsement of our FY 2017 performance 99 Standalone Financial Statements 21 Building social capabilities to take the future 173 Consolidated Financial Statements www.hathway.com Visit Company’s official website to download the Annual Report. Corporate Information CORPORATE OVERVIEW Corporate Information BOARD OF DIRECTORS HEAD LEGAL, COMPANY ADVOCATES AND SOLICITORS DIRECTORS SECRETARY AND CHIEF BOARD OF Mr. Sridhar Gorthi Dua & Associates (Mumbai) COMPLIANCE OFFICER Chairman and Independent Jaitley & Bakshi Associates (Delhi) Director Mr. Ajay Singh Law Offices of Indu Malhotra & Associates (Delhi) DIN: 00035824 FCS No.: 5189 Shiv Prakash and Associates (Bangalore) S. Mahomedbhai & Co (Mumbai) Mr. Rajan Raheja REGISTERED OFFICE GENERAL ANNUAL NOTICE OF THE Non-Executive Director Tulsi Gokulraj and Associates (Hyderabad) “Rahejas”, 4th Floor, Corner MEETING DIN: 00037480 of Main Avenue & Trilegal (Mumbai) V. P. Road, Santacruz (W), Arun Khatpalia (Senior Advocate) Mr. Akshay Raheja Mumbai - 400 054. Non-Executive Director Jayant Tripathi (Advocate) Tel No.: (022) 26001306; DIN: 00288397 Fax No.: (022) 26001307 Jayant Mehta (Advocate) CIN: L64204MH1959PLC011421 Mr. Viren Raheja BANKERS DIRECTORS’ Non-Executive Director REPORT CORPORATE OFFICE Axis Bank Limited DIN: 00037592 805/806, Windsor, 8th Floor, YES Bank Limited Mr. Rajan Gupta Off CST Road, ICICI Bank Limited Managing Director Kalina, Santacruz (E), Kotak Mahindra Bank Limited DIN: 07603128 Mumbai - 400 098. IndusInd Bank Limited DISCUSSION & Tel No.: (022) 67742500; MANAGEMENT RBL Bank Limited ANALYSIS Mr. Vinayak Aggarwal Fax No.: (022) 67742400 Non-Executive Director HDFC Bank Limited DIN: 00007280 STATUTORY AUDITORS IDFC Bank Limited G. M. Kapadia & Co. Mr. Sasha Mirchandani Chartered Accountants REGISTRAR AND TRANSFER AGENT Independent Director Link Intime India Private Limited DIN: 01179921 GOVERNANCE CORPORATE SECRETARIAL AUDITORS C-101, 247 Park, LBS Marg, ON REPORT Vikhroli (W), Mumbai - 400 083 Mr. Devendra Shrotri Rathi and Associates Tel: (022) 49186000; Fax: (022) 49186060 Independent Director Company Secretaries DIN: 02780296 COST AUDITORS Ms. Ameeta Parpia Ashok Agarwal & Co. Independent Director STANDALONE Cost Accountants STATEMENTS DIN: 02654277 FINANCIAL INTERNAL AUDITORS CHIEF FINANCIAL OFFICER Ernst & Young LLP Mr. Vineet Garg CONSOLIDATED STATEMENTS FINANCIAL Annual Report 2016-17 | 01 Hathway Cable and Datacom Limited Communiqué from the MD Dear Shareholders, As we enter FY 2017-18, Limited), through slump optimism about the India’s sale. Broadband business growth story is at its peak. and Investment in GTPL Indian economy is picking up Hathway Limited, along with pace and offering a glimpse of Investment in various other its true potential. joint venture remains with your Company. I am happy Current government has the to share that all groundwork strongest mandate in 30 years for the demerger has been to deliver reforms that can smoothly completed. This resuscitate the Indian economy new structure allows us to and deliver sustainable growth invest more aggressively for the future. As Government in high growth high profit prepares India’s passage to broadband business and the future, Digital India initiative in parallel facilitate HDPL is going to be a key enabler to focus on monetisation for this journey. With a clear of Investment done in vision, the present government different phases of Digital is pushing ahead the Digital addressable system (DAS) India initiative to transform and undertake significant the country into a digitally cost optimisation initiatives. empowered society and a “Hathway stands knowledge economy. CABLE TV - PHASE III & IV at the forefront of digitisation: FY 2016-17 for Hathway was • During the year, we have the technological all about investing in world- seeded close to 2 Mn set class digital infrastructure top boxes (STBs) and as revolution to take advantage of on year-end, we have 6.3 opportunities unleashed by Mn STBs in Phase III & sweeping the Digital India and build a bigger, IV areas. We are proud digital bandwidth stronger and more profitable to contribute towards business for the long term. dramatically improving of the country” consumer TV viewing I would now like to share some experience in these markets specific step taken towards through enhanced digital this transformation journey content and new-age packaging. Consumer Corporate satisfaction in these markets RESTRUCTURING: is very high and we have • As of closing business started monetising this hours on March 31, 2017, investment and the same we have carved out our will be major growth driver Cable Television business for FY 2017-18. (Cable TV) into a wholly- owned subsidiary Hathway CABLE TV - “HathWay Digital Private Limited CONNECT” JOURNEY: [HDPL]. (f.k.a. Hathway • As cable TV industry is Datacom Central Private going through multiple 02 COMMUNIQUÉ FROM THE MD challenges from different have taken massive network our proposition of best OTT players. However, daily dimensions-changing upgrade for our broadband value for money in market viewing to television remain CORPORATE OVERVIEW regulatory landscape, business to cater for existing on speed, data limits and high and more importantly technology disruptions and and expected data growth. pricing. consumers continuously increased competition, Based on these network want to be entertained on the Hathway Connect, along improvements, we are able BUSINESS EXCELLENCE big screen. Due to the large with improved packaging to give all our consumers AND COST OPTIMISation: broadband footprint, Hathway aligned to the evolving 25 Mbps base speed and • FY 2017 was a period of is in a unique position to take consumer needs, is the 200 Mbps peak speed. advantage of this convergence relooking at every aspect DIRECTORS perfect recipe for reinventing BOARD OF Due to extra capacity of of the business functioning of linear TV and OTT. We still and reimagining rules data centre, we are able to and processes. We have have 3 Mn consumers in our of engagement in cable increase monthly data limits used technology to remodel cable TV universe in metro TV. It gives consumers of all consumers by 200 GB. many processes and and mini metros who are yet to choice to select bouquet This was a necessary step increase efficiencies of take our broadband services and à la carte channels for our broadband business other processes as well. giving us substantial headroom according to their needs. GENERAL ANNUAL to remain a disruptor, rather Journey on right-sizing for growth. NOTICE OF THE For LCOs, it is a tool to than be disrupted. MEETING manage their operations various functional units As we look ahead into the better by removing as per changing external Customers, especially future of broadband business, inefficiencies and provide environment has also MILLENNIALS AS CENTRE we have exciting opportunity complete transparency of started. Complete results of stage IN OUR BUSINESS to help accelerate digital India transactions with Hathway. these actions are expected strategy: mission. We will continue to For Hathway, it brings the in over the coming 6 to 12 • Millennials also known months. invest heavily in high-speed Company one-step closer DIRECTORS’ fibre broadband and Gigabyte REPORT to the consumer. Hathway as digital natives have is able to do consumer level grown up with smart Looking ahead, our focus speed network roll out. Strong billing, automatic dunning devices & connectivity and will be on profitable growth cash flows in broadband management and bring sharing matter to them and positive cash flows business allows us to fund this efficiencies in collections. augmented by high speed and this perspective shall expansion through internal We have made major strides broadband service. To guide all our actions across accruals. Growth of broadband customer base with focus on DISCUSSION & in implementing Hathway meet the expectations of business operations. Strong MANAGEMENT Connect in FY 2016-17 and these consumers, we are emphasis has been placed quality acquisition and going ANALYSIS a significant portion of our undergoing our own digital on technology to upgrade deeper in current geographies digital base is transacting transformation, which will business excellence; will remain our prime focus. through Hathway Connect enable us to engage with our customer-centricity along with portal. customers in ways that are cost optimisation enables us We expect the collective more meaningful to them. to look up to the future with impact of various growth GROWING BROADBAND We have launched our new confidence. initiatives to continue scaling GOVERNANCE CORPORATE HOME passES: easy-to-navigate website, up in FY 2018 and helping us ON REPORT • We continue to participate in which gives a seamless I firmly believe 5 years of accelerate profitable growth. I opportunity to digitise India