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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 20-F

OR

For the fiscal year ended March 31, 2015

OR

Date of event requiring this shell company report                     

Commission file number 001-36901

Videocon d2h Limited

(Exact name of Registrant as specified in its charter)

Republic of India

(Jurisdiction of incorporation or organization)

1st Floor, Techweb Centre

New Link Road

Oshiwara Jogeshwari (West)

Mumbai 400 102 Maharashtra, India

(Address of principal executive offices)

Law Debenture Corporate Services Inc.

400 Madison Avenue, 4th Floor

New York, NY 10017

Tel: (212) 7506474

Fax: (212) 7501361

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the Annual Report:

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on our corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨                Accelerated filer  ¨                Non-accelerated filer  x

Indicate by checkmark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by checkmark which financial statement item the registrant has elected to follow.    Item 17  ¨    Item 18  x

If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

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TABLE OF CONTENTS

i

Table of Contents

DEFINITIONS

ADS

means an American Depositary Share.

add-on

means individual channels or a set of channels that subscribers may add to their current subscription package.

a la carte

means a subscription package whereby subscribers can create a custom subscription package.

Antrix Corporation

means the commercial division of the Department of Space, Government of India.

ARPU

means Average Revenue Per User.

BSE

refers to BSE Limited, located in Mumbai, Maharashtra, India.

Contribution Agreement

refers to the Contribution Agreement dated December 31, 2014, as amended from time to time, between the Company and Silver Eagle Acquisition Corp.

DAS

means Digital Addressable Cable TV System.

Daily Burn Rate

means daily charge for the package used by subscribers.

Department of Space

refers to the Department of Space, Government of India.

DTH

means Direct-to-Home satellite, a means of receiving signals transmitted from direct broadcast satellites.

DTH License Agreement

means License Agreement, dated December 28, 2007, executed between Videocon d2h and the President of India acting through the Director, Broadcasting, Policy and Legislation, Ministry of Information and Broadcasting, Government of India.

equity shares

means the equity shares of Videocon d2h with face value of Rs.10 each.

ESOP 2014

means the Videocon d2h Employees Stock Option Scheme 2014, adopted by Videocon d2h on August 1, 2014, subject to the approval of the MIB.

GNIDA

refers to the Greater Noida Industrial Development Authority.

GoI

refers to the Government of India.

Gross subscribers

means total registered subscribers.

HD

means High Definition.

IFRS

refers to International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB).

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Indian Companies Act

means together, the notified provisions of the Companies Act, 2013 (along with applicable rules framed thereunder) and the Companies Act, 1956, as amended (to the extent in force).

KuBand

means the 1218 GHz portion of the electromagnetic spectrum in the microwave range of frequencies primarily used for satellite communications.

KuBand Lease Agreement

means a KuBand Lease Agreement, dated April 19, 2012, as amended on June 19, 2013 (”Amendment 1”), as amended on July 1, 2014 (“Amendment 2”) and as amended on February 27, 2015 (“Amendment 3”) entered into between Videocon d2h and the Department of Space, Government of India.

MIB

refers to Ministry of Information and Broadcasting, Government of India.

MPA Report

refers to “Indian DTH Market Overview — Key Dynamics & Future Outlook 2015”, a report prepared by Media Partners Asia, Ltd, an independent provider of information services, focusing on media, communications, and entrainment industries.

Nasdaq

means The Nasdaq Stock Market LLC.

Net subscribers

means subscribers authorized to receive DTH broadcasting services on account of payment of subscription charges or any entry offer at the time of initial connection, as well as subscribers who are temporarily disconnected due to non-payment of subscription charges for a period not exceeding 120 days.

Principal Shareholders

means Mr. Saurabh Pradipkumar Dhoot, Synergy Appliances Private Limited, Solitaire Appliances Private Limited, Greenfield Appliances Private Limited, Platinum Appliances Private Limited, Shree Dhoot Trading and Agencies Limited and Dome Bell Electronics India Private Limited.

Recharge

means the payments made by a subscriber from time to time in order to receive the services offered by Videocon d2h.

SEC

means the U.S. Securities Exchange Commission.

SingTel

refers to Singapore Telecommunications Limited.

ST2

satellite” refers to a telecommunications satellite made by Mitsubishi Electric, operated by the ST2 Satellite Ventures joint company of SingTel and Chunghwa Telecom.

TDSAT

refers to Telecom Disputes Settlement and Appellate Tribunal of India.

TRAI

refers to Telecom Regulatory Authority of India.

Videocon d2h

means Videocon d2h Limited, a public limited company organized under the laws of the Republic of India.

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Videocon Group

means the group of entities controlled by Mr. Venugopal Nandlal Dhoot, Mr. Rajkumar Nandlal Dhootand/or Mr. Pradipkumar Nandlal Dhoot.

Videocon Industries or VIL

refers to Videocon Industries Limited, the Videocon Group’s flagship entity with its securities listed on the BSE Limited, the National Stock Exchange of India Limited, the Bourse de Luxemburg and the Singapore Exchange Securities Trading Limited.

CERTAIN DEFINITIONS, CONVENTIONS AND GENERAL INFORMATION

Unless the context otherwise requires, references in this Form 20-F to the “Company”, “ Videocon D2H”, “we”, “us”, and “our” are to Videocon d2h Limited. References to “India” are to the Republic of India. References to “rupee,” “INR”, or “Rs.” are to the lawful currency of India. All references to the “GoI” herein are references to the Government of India. References to “United States” or “US” are to the United States of America. References to “US Dollar” or “US$” are to the lawful currency of the United States. Certain figures (including percentages) have been rounded for convenience, and therefore indicated and actual sums, quotients, percentages and ratios may differ. References to “fiscal” year is to the year ended March 31 of the year referenced.

Our financial statements as of March 31, 2015, 2014 (restated) and 2013 (restated) and for the years ended March 31, 2015, 2014 (restated) and 2013 (restated) included in this Form 20-F (the “Financial Statements”) have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Solely for the convenience of the reader, certain Indian Rupee amounts have been converted into US Dollars at specified rates. Unless otherwise indicated, US Dollars equivalent information for amounts in Indian Rupee are converted at the Reserve Bank of India Reference Rate for March 31, 2015, which was Rs.62.59 to US$1.00. The Federal Reserve Bank of New York does not certify for customs purposes a noon buying rate for cable transfers in Indian Rupee. No representation is made that the Indian Rupee or US Dollar amounts shown herein could have been or could be converted into US Dollar or Indian Rupee, as the case may be, at any particular rate or at all. See Item 3 “Key Information – Selected Financial Data – Exchange Controls” for further information regarding rates of exchange between the Indian Rupee and the US Dollar.

FORWARD-LOOKING STATEMENTS

This Form 20-F contains “forward-looking statements” as defined in Section 27A of the US Securities Act of 1933, as amended (“Securities Act”) and Section 21E of the US Securities Exchange Act of 1934, as amended (“Exchange Act”), within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our expectations and projections for our future operating performance and business prospects. The words “believe”, “expect”, “anticipate”, “estimate”, “project” and similar words identify forward-looking statements. In addition, all statements other than statements of historical facts included in this Form 20-F are forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements herein are reasonable, we can give no assurance that such expectations will prove to be correct. These forward-looking statements are subject to a number of risks and uncertainties, including changes in the economic, social and political environments in India. This Form 20-F discloses, under Item 3 “Key Information – Risk Factors” and elsewhere, important factors that could cause actual results to differ materially from our expectations.

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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

The following tables present our selected financial information and operating statistics as of the dates and for each of the periods indicated. The selected financial information as of and for the years ended March 31, 2013, 2014 and 2015 presented below is based upon our audited Financial Statements prepared in conformity with IFRS as issued by the IASB. The selected financial information as of and for the years ended March 31, 2013, 2014 and 2015 should be read in conjunction with, and is qualified in its entirety by reference to, our audited Financial Statements, including the notes thereto, and the other information included elsewhere in this Form 20-F.

The Public Accountant Firm Khandelwal Jain & Co. audited our Financial Statements as of and for the years ended March 31, 2013, 2014 and 2015.

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Exchange Rate Information

The following table shows the exchange rate of Indian Rupee to US Dollar based on the noon buying rate in The City of New York for cable transfers of Indian Rupees as certified for customs purposes by the Federal Reserve Bank of New York.

Source: Federal Reserve Bank of New York

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Not applicable.

Not applicable.

We have accumulated losses resulting in substantial erosion of our net worth, which may affect our ability to continue as a “going concern.”

We incurred losses for the fiscal years 2013, 2014 and 2015 of Rs.3,524.33 million, Rs.3,195.48 million and Rs.2,726.64 million, respectively. Our auditors have stated in their audit opinion that we incurred a loss of Rs.2,726.64 million during the year ended March 31, 2015 and accumulated losses amounting to Rs.17,300.70 million as at March 31, 2015, resulting in substantial erosion of our net worth. Our auditors have stated in their audit opinion that our accumulated losses exceed our paid-up share capital and that our ability to continue as a going concern is dependent on our ability to fund our operations and capital expenditure requirements. See “Item 5. Operating and Financial Review and Prospects.” We cannot assure you that we will not continue to incur losses, or that the our auditors will continue to prepare our financial statements on a going concern basis.

Our indebtedness could adversely affect our financial health and make it more difficult for us to service our debt or obtain additional financing, if necessary.

As of March 31, 2015 and March 31, 2014, we had outstanding secured indebtedness of Rs.25,931.38 million and Rs.30,138.45 million, respectively, from banks and financial institutions. We may incur additional indebtedness in the future. Our indebtedness could have several important consequences, including but not limited to the following:

As of March 31, 2015, substantially all of our indebtedness consisted of floating rate indebtedness. An increase in prevailing interest rates would increase borrowing costs with respect to existing floating rate obligations or new loans, which may adversely affect our business, financial condition and results of operations.

We are not in compliance with certain terms and conditions of our loan agreements, which could lead to termination of facilities, acceleration of loans, or cross-defaults, which could have an adverse effect on our business, financial condition and results of operations.

While we believe that our relationships with our lenders are good, compliance with various terms and conditions of our loan agreements is subject to interpretation and, as a result, it is possible that a lender could assert that we have not complied with certain terms under our financing agreements. Any failure to service our indebtedness, obtain a required consent or perform any condition or covenant could lead to a termination of one or more of our credit facilities, acceleration of amounts due under such facilities and cross-defaults under certain of our other financing agreements, any of which may adversely affect our ability to conduct our business and have an adverse effect on our financial condition and results of operations. See “—Videocon Industries may be determined to be in default under certain of our financing agreements, which could result in our Company being in default or cross-default under certain provisions of our loan agreements”. Currently, we are not in compliance with certain terms of our financing agreements relating to maintenance of certain financial ratios (as described below). However, our lenders have neither enforced any security nor accelerated repayment of the loans for any such non-compliance.

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We have been unable to maintain the following financial ratios required to be maintained under our financing arrangements:

Our failure to adhere to the terms and conditions contained in the DTH License Agreement could have an adverse effect on our business, financial condition and results of operations. In addition, we may owe additional amounts under our DTH License Agreement for prior years of operations.

We entered into the DTH License Agreement, dated December 28, 2007, with the President of India acting through the Director, Broadcasting, Policy and Legislation, Ministry of Information and Broadcasting, GoI, or the MIB. Pursuant to the terms of the DTH License Agreement, we are required to pay an annual fee of 10.0% of our gross revenue as defined in the DTH License Agreement (“DTH Gross Revenue”) to the MIB for the relevant fiscal year. Separately, we are also required to pay license fees and royalty for the spectrum we use, as determined by the Wireless Planning & Coordination Wing of the Ministry of Communications and Information Technology, Department of Telecommunications, GoI.

The DTH license is valid until December 12, 2018, and it may be terminated by the MIB without compensation to us in the event of breach of any of the terms and conditions of the license (after giving us an opportunity to address the breach). If the DTH License Agreement is terminated or is not renewed, we would lose the ability to provide DTH services in India and our business, financial condition and results of operations would be adversely affected. Since the commencement of our DTH operations we have paid license fees to the MIB, calculated on the basis of revenue earned from licensed activities net of certain permitted deductions (”Adjusted DTH Gross Revenue”). Pay DTH operators, including Videocon d2h, are currently in a dispute with the MIB regarding whether license fees should be calculated based on DTH Gross Revenue or Adjusted DTH Gross Revenue and a final decision by the Supreme Court of India is pending. If the Supreme Court rules in favor of the GoI and we are required to pay additional DTH license fees based on DTH Gross Revenue instead of Adjusted DTH Gross Revenue, we may incur additional liability and our business and financial condition of our operations may be adversely affected. We make an estimation of and discloses such potential liability in our financial statements as a contingent liability. For the period since incorporation until March 31, 2015, such potential liability is estimated to be Rs.3,661.07 million (inclusive of interest as of March 19, 2014 on liability accruing until March 31, 2013), as per our financial statements as of March 31, 2015, whereas the MIB raised a demand against us for an aggregate amount of Rs.1,582.89 million towards outstanding license fees (together with interest at the rate of 1% per month) for periods until March 31, 2013. See “Item 5. Operating and Financial Review and Prospects”.

Our leased satellite ST2 is subject to operational, lease and environmental risks that could limit our ability to utilize the satellite.

The ST2 satellite was launched in May 2011 and it has an estimated useful life of 12 to 15 years. It is subject to significant operational risks while in orbit, resulting from the satellite manufacturer’s errors or operational failures. The satellite is also subject to a variety of atmospheric risks while in orbit that may adversely affect operations, including meteoroid strikes, electrostatic storms, increased solar activity and collisions with space debris. In the event the ST2 satellite experiences a technical failure, is damaged or lost, our ability to provide programming to our subscribers could be seriously disrupted or suspended, even for prolonged periods, as we do not have any additional backup satellite. We do not own any satellites and previously entered into a KuBand Lease Agreement and extension agreement (“Lease Agreement”), with the Department of Space, GoI, which provided for the lease of KuBand space segment capacity on the ST2 satellite of SingTel. The extension agreement expired on April 14, 2015. We are currently in the process of renewing of our lease for KuBand space segment capacity on the ST2 satellite. We received an extension until May 31, 2015, and subsequently until July 31, 2015. Typically, the Department of Space enters into lease agreements for a period of up to three years and the agreements are renewed from time to time. While we believe that we will be able to secure a renewed lease agreement in the near future, there can be no assurance that such an agreement will be secured in a timely manner, or at all. If we are unable to secure suitable replacement satellite transmission capacity, our business, financial condition and results of operations would be adversely affected.

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A significant portion of our operations are currently located in a single digital broadcast center in Noida, India.

Although we have taken steps to set up an additional broadcast site at Bharuch in Gujarat as a backup to our existing broadcast center, a significant portion of our operations are still currently located in a single digital broadcast center in Noida, India. As a result, we are vulnerable to the effects of natural disasters, such as an earthquake, flood or fire, or other calamity or event, such as technological failures, that would cause significant damage to this facility and/or disrupt our ability to conduct business. In the event of a significant disruptive event affecting this facility, we may face disruptions in the delivery of channels or degradation in the audio and visual quality of such channels.

Further, pursuant to the terms of the facility’s lease agreement, or the Noida Lease Agreement, executed between our Company and the Greater Noida Industrial Development Authority, or the GNIDA, we are required to comply with certain terms and conditions, including providing prior written notice to the GNIDA in respect of any change in our capital structure, among other things. If we are in default of the terms of the Noida Lease Agreement, the GNIDA may terminate the lease, in which case we would be required to vacate the facility. If our operations at the digital broadcast center in Noida are disrupted for any reason, our business, financial condition and results of operations would be adversely affected.

A significant portion of our shares held by the Principal Shareholders are pledged as security to banks and financial institutions.

As of March 31, 2015, certain of our Principal Shareholders have pledged an aggregate of 35.00% of our shares to banks and financial institutions, in addition to executing undertakings (along with powers of attorney) not to transfer or dispose of an additional 12.93% of their shareholding in our Company.

In the event of enforcement of pledges on such encumbered equity shares for any reason (including any default under the terms and conditions of the relevant agreements pursuant to which such pledges have been created), such pledged equity shares may be required to be transferred to third parties in whose favor the pledges were created. This could result in a change in our shareholding pattern, which may adversely affect our ability to carry out our business operations and thereby adversely affect our business, financial condition, results of operations and the trading price of our ADSs.

We rely on third parties to provide us with programming and any increase in programming costs or new regulations may adversely affect our business, financial condition and results of operations.

We rely on third party content providers to provide us with programming and our ability to compete successfully in the DTH pay-TV industry depends on our ability to obtain programming for delivery to our subscribers at competitive prices. Content procurement by broadcasting service providers in India, including our Company, takes place through channel distributors or owners. Under Indian interconnection regulations, all channel owners and distributors are required to offer their content to all broadcasting platforms and operators, including pay DTH service providers such as our Company, subject to payment of content costs, which are regulated by the GoI. Any change in Indian interconnection regulations that would permit content owners and distributors to refuse to provide programming to DTH operators or impose discriminatory terms or conditions, may adversely affect our ability to acquire programming in a cost-effective manner, or at all, which would adversely affect our business, financial condition and results of operations.

Further, we typically enter into agreements with channel distributors and owners, in order to be able to acquire multiple channels offered by such distributors or owners as a bundle, at negotiated prices (typically below the ceiling prices prescribed by the Indian regulator). Significant content agreements that we have entered into at negotiated rates include those entered into with Taj Television (India) Private Limited, Multiscreen Media Private Limited and TV 18 Broadcast Limited. Our programming agreements generally have terms ranging from one to five years and contain various renewal and termination provisions.

Although we have been able to readily renew our contracts with our major content providers we may not be able to renew them on favorable terms in the future, in a timely manner, or at all, if the market environment changes due to new regulations or increase in content costs for channel distributors. If we are unable to renew our material content agreements, our programming costs may increase. If we are unable to pass on such increased programming costs to our subscribers, or if such increase in the subscriber fees leads to increased subscriber churn or inability to add to our subscriber base, our business, financial condition and results of operations may be adversely affected. In addition, we have paid our content fees after the due date under our major content agreements from time to time, and the content providers are entitled to terminate the agreement within 21 – 45 days after serving a written demand for payment if payment has not been received by the due date. Although none of the content providers have sought to terminate agreements due to delayed payments or otherwise, we believe we have had good relationships with all the major content providers since inception; we cannot assure you that the major content providers will not exercise their right to terminate the agreements in the future due to delays in payments for content, which could adversely affect our business, financial condition and results of operations.

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Damage to our relationship with the Videocon Group or the “Videocon” brand could have a material adverse effect on our business, financial condition and results of operations.

We benefit from our relationship with the Videocon Group in many ways, such as their reputation, cross-selling of our services through the Videocon Group, the ability to reduce our marketing spend by using Videocon Group’s existing marketing network and goodwill and the Videocon Group’s willingness to guarantee our loan agreements. Our growth and future success are influenced, in part, by our continued relationship with the Videocon Group because of the goodwill and market reputation that Videocon Group has established in India, and we rely on such benefits to position ourselves in the market to attract subscribers. We cannot assure you that we will be able to continue to take advantage of our relationship with Videocon Group in the future. If we cease to benefit from this relationship for any reason, our business, financial condition and results of operations may be adversely affected.

We believe that our subscribers, vendors and members of the financial community perceive the “Videocon” brand to be that of a trusted provider of quality products and services. We cannot assure you that the established “Videocon” brand name will not be adversely affected in the future by events that are beyond our control, including subscriber complaints or negative publicity relating to our Company or the Videocon Group. Any damage to the “Videocon” brand name, if not immediately and sufficiently remedied, could have an adverse effect on our business, financial condition and results of operations.

If we are unable to recover the consumer premises equipment from churned subscribers, there could be a significant erosion of the realizable value of our consumer premises equipment.

Consumer premises equipment comprised 78% of our net tangible assets as of March 31, 2015. When subscribers discontinue or terminate our services, we are not always able to recover our consumer premises equipment that we have provided on a rental basis to such subscribers. We recognize a subscriber as a churned subscriber if the subscriber has not made a payment for at least 120 days. As of March 31, 2015, we have encountered a cumulative churn of 2.91 million subscribers since we commenced operations in 2009, out of which we have already provided for impairment of 1.3 million churned subscribers. If we are unable to recover the consumer premises equipment from such churned subscribers, there could be a significant erosion of the realizable value of our consumer premises equipment. See “Item 5. Operating and Financial Review and Prospects.”

We face intense and increasing competition.

Our business is primarily focused on providing DTH pay-TV services and we have traditionally competed against other DTH pay-TV providers and cable companies, some of whom have greater financial, marketing and other resources than us. Moreover, mergers and acquisitions, joint ventures and alliances among cable television providers, telecommunications companies and others may result in, among other things, greater financial leverage and an increase in service offerings from our competitors capable of bundling television, broadband and telephone services. We and our competitors would need to attract a greater proportion of new subscribers from each other’s existing subscriber bases as well as first-time purchasers of DTH pay-TV services, including cable to DTH switch over subscribers. In addition, because other DTH pay-TV providers may be seeking to attract a greater proportion of their new subscribers from our existing subscriber base, we may be required to increase retention spending which is capital-intensive. Competition in the DTH pay-TV industry has intensified in recent years as the industry has matured and seen the growth of digital cable-based pay-TV services offered by digital cable operators. These cable-based pay-TV services have significantly greater capacity, enabling them to offer substantial HD programming content as well as bundled services. This increasingly competitive environment may require us to increase subscriber acquisition and retention spending or accept lower subscriber activation and higher subscriber churn. Further, as a result of this increased competitive environment and the maturation of the DTH pay-TV industry, our future growth opportunities may be limited. In addition, our margins maybe reduced if we are unable to finance our capital needs, duly service our debt obligations or secure other financing when needed, on acceptable terms, which could have a material adverse effect on our business, results of operations, financial condition and cash flow.

We have had overdue payments under some of our loan agreements.

During the fiscal year 2015 we were delayed in making payments under certain of our loan agreements from time to time. In the event of our failure to make timely payments to our lenders, such lenders may issue a notice declaring an event of default under each of these loan agreements. However, our lenders have neither enforced any security nor have accelerated repayments of the loans for any such non-compliance. Should we fail to comply with the covenants of our various loan agreements in time, or fail to make timely payments to our lenders in the future, and our lenders elect to accelerate any or all amounts outstanding under the relevant loan agreements and declare such amounts immediately due and payable, together with accrued and unpaid interest, it could have an adverse effect on our business, financial condition and results of operations.

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Further, a default under the terms of any of our loan agreements also constitutes a cross-default under our other financing agreements. Such default could result in acceleration of amounts due under those facilities, which may individually or in the aggregate have an adverse effect on our business, financial condition and results of operations. In addition, we may have to dedicate a substantial portion of our future cash flow from operations to repay our debts under the financing agreements, thereby reducing the availability of cash flow to meet working capital requirements and use for other general corporate purposes. Such continued defaults and any action initiated by a lender may also impact our ability to obtain financing in the future and may result in a decline in the value of our equity shares and the trading price of the ADSs.

Any failure or inadequacy of our information technology and network systems may have an adverse effect on our business operations.

Our success depends, in part, on the continued and uninterrupted performance of our information technology and network systems. The capacity, reliability and security of our information technology hardware and software infrastructure (including our billing systems) are important to our business operations, which would suffer in the event of system failures or cyber attacks. Similarly, our ability to expand and update our information technology infrastructure in response to our growth and changing needs is important to implementation of our new service offering initiatives. Our inability to expand or upgrade our technology infrastructure could have adverse consequences, which could include delayed implementation of new service offerings, service or billing interruptions, amongst others.

Our systems are vulnerable to damage from a variety of sources, including telecommunications failures, power loss, malicious human acts and natural disasters. Moreover, despite our security measures, our servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems. Despite the precautions we have taken, unanticipated problems affecting our systems could cause failures in our information technology and network systems or disruptions in the transmission of signals. Sustained or repeated system failures that interrupt with our ability to provide services to our subscribers or otherwise meet our business obligations in a timely manner would adversely affect subscriber satisfaction. If one or more of such events occur, this could potentially jeopardize our customer and other information processed and stored in, and transmitted through, our information technology hardware and software infrastructure, or otherwise cause interruptions or malfunctions in our operations, which could result in our incurring significant losses or reputational damage.

If our information technology systems are subjected to floods, fire or other natural disasters, terrorism, computer viruses, power loss, other catastrophe or unauthorized access, our operations and customer relations could be adversely affected. Any failure in the operation of our information technology and network systems could result in business interruptions, which may adversely affect our reputation, weaken our competitive position and have an adverse effect on our business, financial condition and results of operations. We may also be required to expend significant additional resources to modify our security measures or investigate and remediate vulnerabilities or other exposures in our information technology systems, and we may be subject to litigation.

Our inability to keep pace with technological developments could have a material adverse effect on our business, financial condition and results of operations.

In the DTH industry, changes occur as new technologies are developed, which could adversely affect our business and increase our cost of operations. Technological developments within the DTH industry include changes that may result in improved utilization of capacity, more robust content recording features and new interactive content. Consumers may also choose to view digital media through other platforms, such as computers, mobile phones, tablet computers and other devices. If we are unable to keep pace with such technological developments, our business, financial condition and results of operations may be adversely affected. If new technologies in which we invest fail to achieve acceptance in the marketplace or our technology does not work and requires significant cost to replace or fix, we could suffer a material adverse effect on our competitive position, which could reduce our revenues and earnings. For access to technologies and products that are necessary to remain competitive, we may make acquisitions and investments and may enter into strategic partnerships with other companies. Such investments may require commitment of significant capital and human and other resources. The value of such acquisitions, investments and partnerships and the technology required may be highly speculative. Such arrangements with third parties can lead to disputes and dependence on others for development and delivery of necessary technology that we may not be able to control or influence. Such relationships may result in us committing to technologies that are rendered obsolete or precluding pursuit of other superior technologies.

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In addition, our business is subject to risks relating to increased competition from other leisure and entertainment activities which occupy consumers’ time. Our business competes with many other media used for entertainment and information delivery, including broadcast television, films, live events, radio broadcasts, home video products, video and computer games, print media, social media and the Internet. Technological advancements, such as new video formats, and delivery of video content through streaming and downloading services on the Internet, have increased the number of entertainment and information delivery choices available to consumers and intensified the challenges posed by audience fragmentation. The increasing number of choices available to consumers could adversely affect demand for our products and services and changes in technology could adversely affect our ability to maintain, expand or upgrade our systems and respond to competitive pressures. We cannot assure you that we will be able to fund the capital expenditures necessary to keep pace with future technological developments. We also cannot assure you that we will successfully anticipate the demand for products and services requiring new technology. Any inability to keep pace with technological changes and offer advanced services in a timely manner, or to anticipate the demands of the market, could adversely affect our business and increase our costs of operation.

Videocon Industries may be determined to be in default under certain of its financing agreements, which could result in our Company being in default or cross-default under certain provisions of our loan agreements.

In June 2007, Intesa Sanpaolo S.p.A. (“Intesa”) and Banca Intesa Mediocredito S.p.A. (“Banca Intesa”) (collectively, the “Lenders”) entered into a loan agreement with VDC Technologies S.p.A. (“VDC”), a company incorporated in Italy, which was then an indirect subsidiary of Videocon Industries, for a maximum principal amount of €35 million. In relation to the loan to VDC, Videocon Industries issued patronage letters dated June 1, 2007 and June 5, 2007 in favor of Intesa (collectively, the “Patronage Letters”), towards the fulfillment of VDC’s obligations under the loan agreement.

VDC ceased to be a subsidiary of Videocon Industries in March 2008. Since such time, VDC had allegedly defaulted under the terms of the loan agreement. Intesa sought to enforce the Patronage Letters alleging continued default under the loan agreement. The Court of Turin, Italy passed an ex parte decree against Videocon Industries ordering that it pay Intesa the principal amount of the loan of €35 million along with other interests and costs incurred, aggregating €36.2 million. Further, as a result of the alleged violation of the terms of the Patronage Letters together with the ex parte decree passed by the Court of Turin, Videocon Industries may be determined to be in default under certain of its financing agreements, including a cross-default under the terms and conditions of the unsecured US$200,000,000, 6.75% convertible bonds due 2015 (the “Bonds”) issued by Videocon Industries. Any default or declaration of an event of default under the Bonds could have an adverse effect on Videocon Industries’ and the Videocon Group’s financial condition, business and reputation.

Videocon Industries is a flagship entity of the Videocon Group and a number of our secured loans were either guaranteed or supported through undertakings by Videocon Industries. Under the terms of these facilities, we may be in default if one of our guarantors (including Videocon Industries) fails to comply with its own debt obligations, defaults under one or more of its loan facilities or if any of such entities’ indebtedness, becomes due and payable prior to maturity on account of an event of default. Thus, if Videocon Industries were to default under a loan facility or if any of its indebtedness becomes due and payable prior to maturity on account of an event of default, such event could trigger a series of defaults or cross-defaults under its or our loan facilities for which Videocon Industries has provided a guarantee, which could adversely affect our financial condition, business, results of operations and reputation.

We may be unable to manage our growth effectively.

Since the commencement of our operations, our subscriber base and total revenue have grown rapidly. Our gross DTH subscriber base has increased from approximately 0.44 million as of March 31, 2010 to 13.09 million as of March 31, 2015. Our total revenue has increased from Rs.142.07 million for fiscal year 2010 to Rs.23,377.08 million for fiscal year 2015. In order to manage our continued growth effectively, we must continue to increase our subscriber base, acquire programming offerings, manage the selection of programming, including structuring of subscriber packages, introduce new models of set-top boxes and additional service features, develop and improve our operational, financial and other controls, keep pace with technological advancements, effectively withstand pricing and other competitive pressures, effectively manage a growing labor force and hire, train and retain skilled personnel for our management and technical teams. If we are unable to manage our growth effectively, our business, financial condition and results of operations may be adversely affected.

We experience seasonal fluctuations in our business.

We are exposed to seasonal fluctuations in our business. India’s DTH market is affected by seasonal factors, such as Diwali and other regional festivals and sports events, especially cricket tournaments such as the ICC Cricket World Cup. Other seasonal sporting events that could affect the demand in the DTH industry are major football leagues and the Olympics. These seasonal events could have an impact on subscribers in the suspension or churn group to become active subscribers and additional new subscribers may sign up for our services during these festivals or sporting events. Further, existing subscribers may move from a base pack to a sports pack or sports HD pack which would result in additional revenue for us during the relevant period. However, we cannot assure you that the subscribers who sign up for our services or upgrade their subscription packages during such events will continue to pay for their subscriptions or not revert to base subscription packages, which could adversely affect our business, financial condition and results of operations.

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We do not intend to pay dividends in the foreseeable future.

We have not declared any dividends since our incorporation, have not adopted a formal dividend policy and do not intend to pay dividends in the foreseeable future. The declaration and payment of dividends by our Company, if any, will be recommended by our board of directors and approved by our shareholders at their discretion, subject to the provisions of our Articles of Association and the Indian Companies Act. As a result, capital appreciation in the price of our ADSs, if any, may be your only source of gain from investment in our ADSs.

Grant of the proposed sweat equity shares will result in a charge to our profit and loss account, which may adversely affect our results of operations.

Our board has adopted a resolution with respect to granting of up to 2,800,000 shares of face value Rs.10 each in the form of sweat equity to Mr. Saurabh Dhoot equivalent to 700,000 Videocon d2h ADSs, exercisable at a value determined by a registered valuer in accordance with applicable law, in two tranches of 50% each, which shall be allotted if the last sales price of the Company’s ADSs on the Nasdaq (converted into Indian Rupees on each such day at the Indian Rupee/US dollar exchange rate on such date) equals or exceeds 125% of the listing price of the ADSs, and 150% of the listing price of the ADSs, respectively, for any 20 trading days within any 30 trading period within three years from the closing date (as adjusted for splits, dividends, reorganizations, recapitalizations and the like). Any grant under this plan is subject to compliance with the applicable laws and regulations. Under IFRS, the grant of sweat equity shares will result in a charge to our profit and loss account and dilute the earnings per share which may adversely affect our results of operations.

A slowdown in economic growth in India may adversely affect our business, financial condition, results of operations, the value of our equity shares and the trading price of our ADSs.

Our results of operations and financial condition are dependent on, and have been adversely affected by, conditions in financial markets in the global economy, and, particularly in India. The Indian economy could be adversely affected by various factors such as political or regulatory action, including adverse changes in liberalization policies, business corruption, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest rates, inflation, commodity and energy prices and various other factors. Any slowdown in the Indian economy may adversely affect our business, financial condition, results of operations, value of our equity shares and the trading price of our ADSs.

Regional hostilities, terrorist attacks, communal disturbances, civil unrest and other acts of violence or war involving India and other countries may result in a loss of investor confidence and a decline in the value of our equity shares and trading price of the ADSs.

Terrorist attacks, civil unrest and other acts of violence or war may negatively affect the Indian markets in which we operate our business and also adversely affect the worldwide financial markets. In addition, Asia has from time to time experienced instances of civil unrest and hostilities among the neighboring countries. Hostilities and tensions may occur in the future and on a wider scale. Military activity or terrorist attacks in India, such as the attacks in Mumbai in November 2008 and in July 2011, may result in investor concerns about stability in the region, which may adversely affect the value of our equity shares and the trading price of the ADSs. Events of this nature in the future, as well as social and civil unrest within other countries in Asia, could influence the Indian economy and could have an adverse effect on our business, including the value of our equity shares and the trading price of our ADSs.

The occurrence of natural disasters may adversely affect our business, financial condition and results of operations.

The occurrence of natural disasters, including hurricanes, floods, earthquakes, tornadoes, fires and pandemic disease may adversely affect our business, financial condition or results of operations. The potential impact of a natural disaster on our results of operations and financial position is speculative, and would depend on numerous factors. The extent and severity of these natural disasters determine their effect on the Indian economy. Although the long term effect of diseases such as the H5N1 “avian flu”, H1N1, the swine flu, or Middle East Respiratory Syndrome (MERS) cannot currently be predicted, previous occurrences of avian flu and swine flu had an adverse effect on the economies of those countries in which they were most prevalent. An outbreak of a communicable disease in India could adversely affect our business, financial condition and results of operations. We cannot assure you that natural disasters will not occur in the future or that our business, financial condition and results of operations will not be adversely affected.

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Any downgrade of credit ratings of India or Indian companies may adversely affect our ability to raise debt financing.

India’s sovereign foreign currency long-term debt is currently rated (i) “BBB” (negative) by Standard & Poor’s Rating Group, a division of McGraw Hill Companies, Inc., or Standard & Poor’s, (ii) “BBB” (negative) by Fitch Ratings Ltd, or Fitch, and (iii) “Baa3” (stable) by Moody’s Investors Services Limited, or Moody’s. These ratings reflect an assessment of the GoI’s overall financial capacity to pay its obligations and its ability or willingness to meet its financial commitments as they become due.

No assurance can be given that Standard & Poor’s, Fitch, Moody’s or any other statistical rating organization will not downgrade the credit ratings of India. Any downgrade could cause interest rates and borrowing costs to rise, which may negatively impact both the perception of credit risk associated with our current variable rate debt and our ability to access the debt markets on favorable terms in the future. This could have an adverse effect on our financial condition.

A decline in India’s foreign exchange reserves may affect liquidity and interest rates in the Indian economy.

According to a report released by Reserve Bank of India (RBI), India’s foreign exchange reserves totaled approximately US$352 billion as of May 29, 2015. India’s foreign exchange reserves have declined recently and may have negatively affected the valuation of the Rupee. Further declines in foreign exchange reserves could adversely affect the valuation of the Rupee and could result in reduced liquidity and higher interest rates that could adversely affect our future financial condition and the market price of our ADSs.

In the event that our shares required to be issued pursuant to certain agreed earnouts are issued by way of a bonus issue, the holders of the ADSs (including any holders of equity shares underlying such ADSs), other than the shareholders of the Company as of the date of the Contribution Agreement and the Sponsor, shall have no interest in or entitlement to equity shares issued pursuant to such bonus, and such holders have been deemed to have waived their interest in or entitlement to equity shares issued pursuant to such bonus.

Pursuant to the Contribution Agreement between Silver Eagle Acquisition Corp. and the Company dated December 31, 2014, as amended (the “Contribution Agreement”), our existing shareholders as of the date of the Contribution Agreement and the Sponsor, Global Eagle Acquisition LLC, are entitled to receive by way of a bonus issue of shares (or such other form of share issue as determined by the independent members of our board of directors) upon satisfaction of certain share price performance hurdles of the ADSs on the Nasdaq being satisfied within three years of the initial listing of the ADSs (the “Earnout”), namely an “Initial Performance Hurdle” and a “Subsequent Performance Hurdle”, each as defined in the Contribution Agreement.

In the event that we issue shares pursuant to the Earnout by way of a bonus issue or otherwise, the holders of the ADSs (including any holders of equity shares underlying such ADSs), other than the shareholders of the Company as of the date of the Contribution Agreement and the Sponsor, shall have no interest in or entitlement to such shares issued pursuant to such bonus issue or otherwise, and such holders have been deemed to have waived their interest in or entitlement to such shares issued pursuant to such bonus issue or otherwise. See Questions and Answers about the Proposals for Stockholders and Public Warrantholders on the Form F-4 filed on February 4, 2015.

The board of directors of the Company, at their meeting held on July 22, 2015, determined that the Initial Performance Hurdle has been achieved and satisfied. Khandelwal Jain & Co., an independent statutory auditor of the Company, has also confirmed and certified that the Initial Performance Hurdle has been achieved and satisfied.

Accordingly, the board of directors of the Company has approved, subject to approval of Ministry of Information and Broadcasting and such other approvals and consents as may be required under the applicable regulations, the issuance of 23,360,000 equity shares (equivalent to 5,840,000 ADSs) to the shareholders of the Company as of the date of the Contribution Agreement and the issuance of 3,999,984 equity shares (equivalent to 999,996 ADSs) to the Sponsor by way of a bonus issue, in accordance with the terms of the Contribution Agreement and the Articles of Association of the Company.

Since a majority of our directors, officers and assets reside or are located outside of the United States, investors may have difficulty enforcing judgments against us, our directors and officers.

We are incorporated under the laws of India. Further, we conduct substantially all of our operations in India. The majority of our directors and officers reside outside the United States, and a majority of our assets and some or all of the assets of such persons are located outside the United States. As a result, it may be difficult or impossible to effect service of process within the United States upon us or those persons, or to recover against us or those persons on judgments of United States courts, including judgments predicated upon the civil liability provisions of the United States federal securities laws. An award of punitive damages by a United States court based upon United States federal securities laws is likely to be construed by Indian courts to be penal in nature and therefore unenforceable in India. Further, no claim may be brought in India against us or our directors and officers in the first instance for a violation of United States federal securities laws because these laws have no extraterritorial application under Indian law and are not enforceable in India. However, an Indian court may impose civil liability, including the possibility of monetary damages, on us or our directors and officers if the facts alleged in a complaint constitute or give rise to a cause of action under Indian law. Moreover, it is unlikely that a court in India would award damages on the same basis as a foreign court if an action were brought in India or that the Indian court would enforce foreign judgments if it viewed the amount of damages as excessive or inconsistent with Indian practice or public policy.

Further, the United States has not been declared by the Government of India to be a reciprocating territory for the purposes of enforcement of foreign judgments, and there are grounds upon which Indian courts may decline to enforce the judgments of United States courts. Some remedies available under the laws of United States jurisdictions, including remedies available under the United States federal securities laws, may not be allowed in Indian courts if contrary to public policy in India. Because judgments of United States courts are not automatically enforceable in India, it may be difficult for you to recover against us or our directors and officers. In India, prior approval of the RBI is required in order to repatriate any amount recovered pursuant to such judgments.

As a foreign private issuer, we are permitted to follow certain home country corporate governance practices in lieu of certain Nasdaq requirements applicable to U.S. issuers. As a result, our shareholders will not have the protections afforded by these corporate governance requirements, which may make our ADSs less attractive to investors or otherwise negatively affect the ADS share price.

As a foreign private issuer we are permitted to follow certain home country corporate governance practices in lieu of certain Nasdaq requirements, although we will be subject to certain independence requirements with respect to our audit committee under Nasdaq rules. Nasdaq listing rules require, inter alia, that (i) a majority of the board of directors of a listed company be comprised of independent directors; (ii) each listed company have an audit committee comprised of at least three members, each of whom must be an independent director; and (iii) each listed company have a compensation committee comprised of at least two members, each of whom must be an independent director.

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In accordance with the Indian Companies Act a public company with paid up share capital of Rs.100 million or more; or turnover of Rs.1,000 million or more; or outstanding loans, debentures and deposits which in aggregate exceed Rs.500 million, is required to have at least two independent directors on its board of directors. Further, such company is required to constitute a Nomination and Remuneration Committee, comprising at least three nonexecutive directors, of whom a majority must be independent directors, who shall be responsible for determining qualifications and independence of directors and formulating a policy relating to the remuneration of directors and key managerial personnel. A foreign private issuer must disclose in its annual reports filed with the Securities and Exchange Commission, or the SEC, each Nasdaq requirement it does not comply with, followed by a description of its applicable home country practice. As a company incorporated in India and listed on the Nasdaq, we expect to follow our home country practice with respect to the composition of our board of directors and Nomination, Remuneration and Compensation Committees and executive sessions. Unlike the requirements of the Nasdaq, the corporate governance practice and requirements in India include, that a “public company” under the Indian Companies Act, which is not listed on any stock exchanges in India, is required to comply with the provisions of the Indian Companies Act, including the following provisions relating to corporate governance:

Composition of Board of Directors: In accordance with Indian Companies Act, a public company with paid up share capital of Rs.100 million or more; or turnover of Rs.1,000 million or more; or outstanding loans, debentures and deposits which in aggregate exceeds Rs.500 million, is required to have at least two independent directors on its board of directors. The Indian Companies Act prescribes certain eligibility criteria for qualifying as an independent director.

Additionally, a public company with paid up share capital of Rs.1,000 million or more; or turnover of Rs.3,000 million or more is required to have at least one woman director on its board of directors with effect from April 1, 2015.

Board Committees: In accordance with the Indian Companies Act, a public company with paid up share capital of Rs.100 million or more; or turnover of Rs.1,000 million or more; or outstanding loans, debentures and deposits which in aggregate exceeds Rs.500 million, is required to constitute the following committees.

In addition, should a company have a net worth of Rs.5,000 million or more or turnover of Rs.10,000 million or more or net profit of Rs.50 million or more during any fiscal year, it will be required to constitute a Corporate Social Responsibility Committee of the Board composed of three or more directors, of which at least one director is required to be an independent director. Similarly, should a company have more than 1,000 security holders, it will be required to constitute a Stakeholders Relationship Committee for resolving the grievances of the security holders, composed of a chairman who is a non-executive director and such other members that the board of directors may decide.

Accordingly, our shareholders will not have the same protection afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements, which could make our ADSs less attractive to some investors or could otherwise negatively affect the ADS share price.

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Future sales of our shares subject to lock-ups or otherwise held by major shareholders may depress our share price.

Certain of our shareholders that hold ADSs and/or shares are subject to lock-up agreements, imposing restrictions on the sale of such ADSs and shares. Pursuant to the Sponsor Lockup Agreement certain ADSs are subject to a one-year lock-up, although such sale restrictions will be removed earlier if certain performance hurdles for the market share price of the ADSs are met. Pursuant to the Shareholder Lockup, Tag Along and Voting Agreement (“Shareholder Lockup Agreement”), certain equity shares of the Company are subject to a one-year lock-up, although such sale restrictions will be removed if certain performance hurdles for the market share price the ADSs are met.

If the sales restrictions on the shares and/or ADSs subject to such lock-up agreements are released, we cannot predict the effect, if any such release may have on the market price of our ADSs prevailing from time to time. Sales of a significant number of our ADSs in the public market or the perception that such sales may occur may adversely affect the market price of our ADSs. Large dispositions by Mr. Dhoot or such other existing major shareholders may significantly affect the trading price of our ADSs.

Future issuances of any equity shares by us may dilute your holdings and decrease the market value of your ADSs.

Any issuance of equity shares by us such as pursuant to our ESOP 2014, could dilute our shareholders’ interests and could substantially decrease the value of our equity shares and the ADSs. We may issue equity or equity-linked securities in the future for a number of reasons, including to finance our operations and business strategy (including in connection with acquisitions and other transactions), to adjust debt to equity ratio, to satisfy our obligations upon the exercise of then outstanding options or other equity-linked securities, if any, or for other reasons.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

As a public company, we are subject to the reporting requirements of the Securities Exchange Act, the Sarbanes-Oxley Act and Nasdaq rules, including those promulgated in response to the Sarbanes-Oxley Act. The requirements of these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time consuming or costly and increase demand on our systems and resources. The Exchange Act generally requires, among other things, that companies file annual, quarterly and current reports with respect to its business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we will need to commit significant resources, hire additional staff and provide additional management oversight.

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We will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. In addition, sustaining our growth will require us to commit additional management, operational and financial resources to identify new professionals to join our organization and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert management’s attention from other business concerns, which could have a material adverse effect our business, financial condition, results of operations and cash flows.

We expect to incur significant additional annual expenses related to these steps associated with, among other things, director fees, reporting requirements, transfer agent fees, additional accounting, legal and administrative personnel, increased auditing and legal fees and similar expenses. We also expect that the new rules and regulations we will be subject to as a result of being a public company will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage for such directors and officers. Any of these factors could make it more difficult for us to attract and retain qualified members of the board of directors.

If we fail to establish and maintain an effective system of integrated internal controls, we may not be able to report our financial results accurately, which could have a material adverse effect on our business, financial condition and results of operations.

Establishing adequate internal financial and accounting controls and procedures in order to produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be frequently evaluated. Section 404 of the Sarbanes-Oxley Act requires public companies to conduct an annual review and evaluation of their internal controls and provide attestations of the effectiveness of internal controls by independent auditors. We would be required to perform the annual review and evaluation of our internal controls no later than for the fiscal year ending 2020. We initially expect to qualify as an emerging growth company, and thus, would be exempt from the auditors’ attestation requirement until such time as we no longer qualify as an emerging growth company. We will need to implement substantial control systems and procedures in order to satisfy the reporting requirements under the Exchange Act and applicable Nasdaq requirements, among other items. Establishing these internal controls will be costly and may divert the management’s attention.

Evaluation by us of our internal controls over financial reporting may identify material weaknesses that may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of Nasdaq listing rules. There also could be a negative reaction in the financial markets due to a loss of investor confidence in us or the reliability of our financial statements. Confidence in the reliability of our financial statements also could suffer if we or our independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting.

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This could materially adversely affect Videocon d2h’s business, financial condition and results of operations and could also lead to a decline in the price of its ADSs.

If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our ADSs, the ADS market price and trading volume could decline.

The trading market for our ADSs will be influenced by the research and reports that industry or securities analysts publish about us or our business. If any of the analysts who cover us downgrade our ADSs or publish inaccurate or unfavourable research information about our business, our ADS market price may decline. If analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume of our ADSs to decline.

Videocon d2h’s ADS price may be volatile.

The market price of our ADSs may be highly volatile and could be subject to wide fluctuations. Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could reduce the market price of our ADS in spite of our operating performance. In addition, our operating results could be below the expectations of public market analysts and investors due to a number of potential factors, including changes in our quarterly operating results or dividends, additions or departures of key management personnel, failure to meet analysts’ earnings estimates, publication of negative research reports about our industry, litigation and government investigations, changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business, adverse market reaction to any indebtedness we may incur or securities we may issue in the future, changes in market valuations of similar companies or speculation in the press or investment community, announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments, adverse publicity about the industry we operate in or individual scandals, and in response to these events the market price of our ADSs could decrease significantly.

We may be classified as a passive foreign investment company, which could result in adverse United States federal income tax consequences to US Holders.

Based on the market prices of our ADSs and the composition of our income and assets, including goodwill, although not clear, we do not believe we were a PFIC for United States federal income tax purposes for our taxable year ended March 31, 2015. However, the application of the PFIC rules is subject to uncertainty in several respects and, therefore, the US Internal Revenue Service may assert that, contrary to our belief, we were a PFIC for such taxable year. Moreover, although the asset test (defined below) is required to be calculated based on the fair market value of our assets, we did not do a valuation of our assets and our belief that we were not a PFIC for our taxable year ended March 31, 2015 is, in part, based on the book value of our assets. A non-United States corporation will be considered a passive foreign investment company, or PFIC, for any taxable year if either (1) at least 75% of its gross income for such year is passive income or (2) at least 50% of the total value of its assets (based on an average of the quarterly values of the assets during such year) is attributable to assets, including cash, that produce or are held for the production of passive income, or passive assets. In addition, a separate determination must be made after the close of each taxable year as to whether we were a PFIC for that year. Because the aggregate value of our assets for purposes of the PFIC test will generally be determined by reference to the market price of our ADSs, fluctuations in the market price of the ADSs may cause us to become a PFIC. In addition, changes in the composition of our income or assets may cause us to become a PFIC. Accordingly, we cannot assure you that we will not be a PFIC for the taxable year that will end on March 31, 2016 or any future taxable year. If we were a PFIC for any taxable year during which a US Holder (as defined in “Item 10. Additional Information — E. Taxation — US Federal Income Taxation”) holds an ADS or an equity share, certain adverse United States federal income tax consequences could apply to the US Holder. A US Holder of shares in a PFIC may mitigate such adverse tax consequences under the PFIC rules by making a “qualified electing fund” election to include in income its share of the corporation’s income on a current basis. However, if we are a PFIC, you may make a qualified electing fund election with respect to our ADSs or equity shares only if we agree to furnish you annually with certain tax information, and we currently do not intend to prepare or provide such information.

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Holders of the ADSs might not have the same voting rights as the holders of our equity shares and might not receive voting materials in time to be able to exercise their right to vote.

Holders of the ADSs will not be able to exercise voting rights attached to the equity shares evidenced by the ADSs on an individual basis. Under the deposit agreement, holders of ADSs must vote by giving voting instructions to the depositary, including instructions to give a discretionary proxy to a person designated by us. Upon receipt of such holder’s voting instructions, the depositary will vote the underlying equity shares in accordance with these instructions. Holders of ADSs will not be able to directly exercise their right to vote with respect to the underlying equity shares unless they withdraw the equity shares. Holders of ADSs may not receive voting materials in time to instruct the depositary to vote, and it is possible that holders of ADSs, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise their right to vote.

The voting rights of holders of ADSs are limited by the terms of the deposit agreement.

A holder of the ADSs may only exercise voting rights with respect to the underlying equity shares in accordance with the provisions of the deposit agreement. Upon receipt of voting instructions of a holder of ADSs in the manner set forth in the deposit agreement, the depositary will endeavor to vote the underlying equity shares in accordance with these instructions. When a general meeting is convened, holders of ADSs may not receive sufficient notice of a shareholders’ meeting to permit them to withdraw their equity shares to allow them to cast their votes with respect to any specific matter. In addition, the depositary and its agents may not be able to send voting instructions to holders of ADSs or carry out their voting instructions in a timely manner. We will make all reasonable efforts to cause the depositary to extend voting rights to holders of ADSs in a timely manner, but we cannot assure such holders that they will receive the voting materials in time to ensure that they can instruct the depositary to vote their shares. Furthermore, the depositary will not vote on any matter for which voting is conducted on a show of hands basis in accordance with our Articles of Association and will not have an obligation to demand voting on a poll basis. The depositary and its agents will not be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast, or for the effect of any such vote. As a result, holders of ADSs may not be able to exercise their right to vote and may lack recourse if their equity shares are not voted as requested.

A holder of ADSs right to participate in any future rights offerings may be limited, which may cause dilution to such holder’s holdings.

We may, from time to time, distribute rights to our shareholders, including rights to acquire our securities. However, we cannot make rights available to holders of ADSs in the United States unless we register the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirements is available. In addition, the deposit agreement provides that the depositary will not make rights available to holders of ADSs unless the distribution to ADS holders of both the rights and any related securities are either registered under the Securities Act or exempted from registration under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. Accordingly, ADS holders may be unable to participate in our rights offerings and may experience dilution in their holdings. In addition, if the depositary is unable to sell rights that are not exercised or not distributed, or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in which case holders of ADSs will receive no value for these rights.

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Holders of ADSs may be subject to limitations on transfer of their ADSs.

ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems necessary in connection with the performance of its duties. The depositary may close its books from time to time for a number of reasons, including in connection with corporate events such as a rights offering, during which time the depositary needs to maintain an exact number of ADS holders on its books for a specified period. The depositary may also close its books in emergencies, and on weekends and public holidays. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement.

Holders of ADSs might not receive distributions on our equity shares, or any value for them at all, if it is unlawful or impracticable for us to make them available to such holders.

The depositary of the ADSs has agreed to pay holders of ADSs the cash dividends or other distributions it or the custodian for the ADSs receives on our equity shares or other deposited securities after deducting our fees and expenses in accordance with the deposit agreement. Holders of ADSs will receive these distributions in proportion to the number of our equity shares that their ADSs represent. However, the depositary is not responsible if it is unlawful or impracticable to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the Securities Act but such securities are not properly registered or distributed pursuant to an applicable exemption from registration. The depositary is not responsible for making a distribution available to any holders of ADSs if any government approval or registration is required for such distribution. We have no obligation to take any other action to permit the distribution of the ADSs, equity shares, rights or anything else to holders of the ADSs. This means that holders of ADSs might not receive the distributions that we make on our equity shares or any value for them at all if it is unlawful or impracticable for us to make them available to you.

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ITEM 4. INFORMATION ON THE COMPANY

HISTORY AND DEVELOPMENT OF THE COMPANY

2002

Incorporated as Bharat Business Channel Limited.

2009

DTH services launched in July 2009.

2010

Achieved one million gross subscriber base.

2011

Launched the HD DVR with 3D.

2011

Achieved three million gross subscriber base.

2012

Achieved five million gross subscriber base; Title sponsor of the Kings XI Punjab cricket team in the Indian Premier League 2012; and achieved six million gross subscriber base.

2013

Achieved eight million gross subscriber base.

2014

Achieved 10 million gross subscriber base; sponsored an Indian Super League team (FC Goa).

Changed our business name to Videocon d2h Limited.

2015

Launch of 4K set-top boxes in January 2015

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Awards, Certifications and Recognitions

We have received the following, awards, certifications and recognitions:

2009

Recognized as one of the most successful brand launches across product categories at the Business Standard Brand Derby survey.

2012

Received a silver trophy for the ‘Best Search Engine Optimization Campaign’ by the Indian Digital Media Awards 2012.

2013

Recognized as ‘Asia’s Most Promising Brand 2012 – 2013’ in the DTH category by iBrands 360 (Iconic Brands 360), a World Consulting and Research Corporation enterprise.

2014

Endorsed as one of the top brands in India by the Economic Times Best Brands 2014. Recognized as “Asia’s Most Promising Brand 2013 – 2014” in the DTH category by iBrands 360 (Iconic Brands 360), a World Consulting and Research Corporation enterprise.

2015

Awarded as Economic Times Promising Brand for the Year 2015

Received BCS Ratna Award for most effective packages and highest subscriber additions.

BUSINESS PORTFOLIO

DTH Subscription Television Services

Our primary business is the provision of DTH subscription television services to subscribers in India. We operate under the “Videocon d2h” brand. We carry out transmission of programming to subscribers through satellite broadcasting, which allows a subscriber to directly receive a broadcast signal from a satellite, through a satellite dish antenna and other equipment installed at the subscriber’s premises, which is then decoded by a set-top box.

All of our channels are turnaround channels meaning that Videocon d2h rebroadcasts all of the channels offered without modifying the content. Videocon d2h also derives advertising revenue from selling advertising on the “home” channel, which is the channel that comes on when the system is powered on, and certain pathway channels which serve as pathways to popular channels.

Subscription Packages and Package Options

Our subscribers have an access to over 500 national and international channels and services, including 35 HD channels and 42 audio and video channels through our Music Channel Services through several subscription packages, as well as the option of choosing add-ons and a la carte channels and receiving certain discounts through long-term recharge offers. We also launch various subscription packages to cater to the varied needs of customers from time to time.

As of March 31, 2015, the charges for our monthly subscription packages ranged from Rs.241 to Rs.590 per month (inclusive of taxes). The packages offered are similar throughout India, apart from South India, where we offer more regional specific packages and charge prices ranging from Rs 180 to 590 per month. All packages include the Doordarshan channels and other free-to-air channels.

The following are the key monthly subscription packages currently being offered, in addition to certain other regional and HD related packages:

Entry level:

Super Gold Pack. Under this package, the subscriber receives up to 335 channels and services for Rs.241 per month (inclusive of taxes). This package includes popular Hindi channels, in addition to regional channels.

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Mid-tier:

New Gold Sports Pack. Under this package, the subscriber receives up to 352 channels and services for Rs.325 per month (inclusive of taxes). This package provides the Super Gold Pack channels, plus a variety of sports channels.

New Diamond Pack. Under this package, the subscriber receives up to 400 channels and services for Rs.385 per month (inclusive of taxes). This package provides the New Gold Sports Pack channels, plus additional English channels.

High-tier:

Platinum Pack. Under this package, the subscriber receives up to 407 channels and services for Rs.445 per month (inclusive of taxes). This package provides the New Diamond Pack channels, plus additional lifestyle channels.

New Platinum HD Pack. Under this package, the subscriber receives up to 439 channels and services for Rs.590 per month (inclusive of taxes). This package in addition to all the channels offered in the Platinum Pack, provides additional lifestyle channels and all of the HD channels that we offer.

For any of the packages selected, the subscriber has a choice of 11 different language zones: Hindi, English, Punjabi, Marathi, Gujarati, Oriya, Bengali, Tamil, Malayalam, Kannada and Telugu. Upon selection of a language zone, the subscriber receives certain regional programming in his or her chosen language.

Add-Ons. With add-ons, a subscriber may add individual channels or a set of channels to their current subscription package.

A La Carte. With a la carte programming, a subscriber may create a custom subscription package.

Long-Term Recharge Offers. Long term recharge offers reward subscribers who have subscribed to our services for a duration of at least three months.

Additional subscriptions are required for the use of an additional set-top box in the same household by a subscriber. We charge a reduced price for the additional subscription and also subsidize the payment relating to installation of additional set-top box as an incentive to subscribers.

User Experience Services

In addition to subscription packages and package options, we offer certain services designed to augment customers’ viewing experiences. The following sets forth the key services that we currently offer:

12 Picture-in-Picture Mosaic. This feature allows a subscriber to view an on screen mosaic of the current programming of up to 12 channels.

Electronic Program Guide. The Electronic Program Guide is a graphical user interface that allows subscribers to browse channels and program schedules.

Value-Added Services

In addition to subscription packages, package options, and user experience services, we offer a variety of value-added services. The following sets forth the key value-added services that we offer currently:

Movie Channel Services: We offer four Movie Channel Services to subscribers. Two of these services are available as a part of all subscription packages for no additional charge, with two of these services (d2h cinema : SD and HD) available as an add-on which can be subscribed for on a monthly basis.

Active Music Channel Services: We offer 42 Music Channel Services that include a variety of musical genres.

HD 3D Active Channel Service: We offer a HD 3D Active Channel Service which provides a variety of HD 3D content.

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Tickers: We offer a variety of screen “tickers” that appear at the bottom of the screen which can be viewed simultaneously with any channel. The tickers display information, such as sports scores, stock market numbers and a variety of news, including Bollywood, politics, sci-tech, business, lifestyle and general news.

Going forward, we intend to expand these value-added channels and continue to provide differentiated content tailored to the demographics in the Indian market that we target.

Our customer portfolios include:

Our subscriber base has increased significantly since we commenced operations in July 2009. Our gross DTH subscriber base has increased from approximately 0.44 million as of March 31, 2010 to 13.09 million as of March 31, 2015.

The following table presents information regarding our gross and net subscriber base in million as of March 31, 2014 and 2015:

SALES, DISTRIBUTION AND MARKETING

Sales and Distribution

We use a zonal sales and distribution network to facilitate distribution across India and to provide an optimum level of service throughout India. As of March 31, 2015, we had over 3,900 distributors and direct dealers, and over 180,000 sub-dealers and recharge counters. As of March 31, 2015, we had a team of 311 sales executives working in 25 offices that sign up new distributors and dealers to expand our network.

Our distributors act as wholesale distributors of our consumer premises equipment and recharge vouchers, and are typically distributors of products that are in a related category or synergistic to those of Videocon d2h, such as durable consumer goods, consumer electronics or telecommunications. We appoint distributors based on certain key criteria, such as location, track record, potential for expansion, technological competence and business type.

Dealers provide product and service demonstrations, sell consumer premises equipment and subscription packages and serve as collection and service points for existing subscribers. Dealers are typically retail outlets of various kinds. Certain dealers also provide installation and other services and are typically not exclusive to any particular DTH operator.

Seasonality

We experience seasonal fluctuations in our business, whereby we have increased subscriptions during the holiday seasons in India and sporting events such as the Olympics, the football world cup and the cricket world cup. See “Risk Factors - We are exposed to seasonal fluctuations in our business.”

Marketing

Our marketing program includes the use of retail signage, print, television, radio and digital advertising, road shows, exhibitions and special events and promotional campaigns to market our products and services. We have strategically targeted what we believe to be high value and high growth markets, focusing on the youth, urban and suburban segments. We determine the platform to be utilized for our marketing efforts on the basis of various factors such as the target group, the location, the communication suitability, the return on investment and the final expected outcome from the initiative.

As part of our marketing initiatives, we have sponsored teams participating in Indian Premier League cricket matches and the Indian Super League soccer matches. In order to market our brand, we have used actors, such as Abhishek Bachchan and Parineeti Chopra as national brand ambassadors. These ambassadors and the associated marketing initiatives reinforce our belief in investing in sports and Bollywood to connect with the youth segment in India, which is the largest demographic in the country.

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Advertising

We derive advertising revenue from selling advertising on the “home” channel, which is the channel that comes on when the system is powered on, and certain pathway channels which serve as pathways to popular channels.

Sources of content and equipment

We enter into content agreements with channel broadcasters and distributors to license channels and we pay them content and programming fees that are stipulated under the agreements. The major channel broadcasters and distributors, from whom we procure content include Star India Private Limited, Taj Television (India) Private Limited, Turner International India Private Limited, TV 18 Broadcast Limited, and Multi Screen India Private Limited. We have recently renewed our agreements with each of these content providers, which provides us with visibility as to our programming content and content costs as the substantial majority of content (and associated content costs) are through these providers.

We procure consumer premises equipment, which primarily comprises set-top boxes, outdoor units, accessories and smart cards, from our suppliers and distribute such equipment through our distribution network to subscribers at subsidized prices. We purchase a majority of the set-top boxes, outdoor units and its accessories and spares from Trend Electronics Limited. See “Item 7. Related Party Transactions” and Note 28 to financial statements for the fiscal year ended March 30, 2015 in “Item 18. Financial Statements”.

Marketing Strategy

LICENSING

We entered into the DTH License Agreement pursuant to which we have been granted a DTH license. The DTH license is valid until December 12, 2018 (10 years from the date of the issue of the wireless operational license from Wireless Planning & Coordination Wing, Ministry of Communications and Information Technology, Department of Telecommunications, Government of India, or “PW”).

Pursuant to the terms of the DTH License Agreement, we paid a non-refundable entry fee of Rs.100.00 million and are required to pay an annual fee of 10.0% of gross revenue to the MIB. The determination of gross revenue is currently subject to the Telecom Disputes Settlement Appellate Tribunal’s ruling which determined that gross revenue should be determined after taking into consideration certain deductions. See “Risk Factors — Our failure to adhere to the terms and conditions contained in the DTH License Agreement could have an adverse effect on our business, financial condition and results of operations. In addition, Videocon d2h may owe additional amounts under our DTH License Agreement for prior years of operations.” We are also required to pay license fees and royalty for the spectrum we use, as determined by the PW.

The DTH License Agreement is effective until December 12, 2018, unless terminated earlier for default, insolvency or transfer of the DTH license or in the event that MIB revokes or suspends the DTH License in the event of any breach of terms and conditions of the license. The DTH license may be terminated by the licensor without compensation to us if we become bankrupt or otherwise insolvent or apply for being adjudicated as insolvent or bankrupt.

Under the terms of the DTH License Agreement, any change in our equity structure is required to be carried out in consultation and with the prior approval of the licensor. In addition, a majority of the board and the chief executives of our Company are required to be Indian citizens. See “— Government Regulation — Foreign investment regulations” for details on foreign investment permitted in companies involved in the DTH industry.

TRADEMARKS, COPYRIGHTS, INDUSTRIAL DESIGNS AND PATENTS

We have entered into a renewal of our trademark license agreement with CE India Limited, a Videocon Group entity, for the use of the “Videocon” and “V” trademarks on a non-exclusive basis for a nominal fee. This license is valid until March 31, 2022, and is renewable upon mutual agreement. We have registered 25 trademarks, including in relation to the “d2h” brand name and have applied for registration of further 22 trademarks.

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COMPETITION

We compete directly with other DTH operators, as well as indirectly with cable operators, free-to-air television, Internet Protocol Television and other mass media, including print media, film, computer and video games, and internet media. We believe that we compete primarily based on price, programming offerings, service, subscriber satisfaction, network quality and content delivery. We believe that our key DTH competitors are Tata Sky Limited which operates the “Tata Sky” brand, Dish TV India Limited which operates the “Dishtv” brand and Bharti Telemedia Limited which operates the “Airtel” brand.

GOVERNMENT REGULATIONS

We are subject to various laws and regulations in India arising from our operations in India, including specific regulations and policies applicable to the DTH broadcasting services sector.

We were granted a license to establish, maintain and operate a DTH platform, on the terms and conditions set out in the DTH License Agreement. The DTH License Agreement is effective for a period of 10 years from the date of issue of the wireless operational license (which was issued to us on December 12, 2008), unless terminated earlier in accordance with our terms. Pursuant to the terms of the DTH License Agreement, we are required to pay an annual fee of 10% of our gross revenue (gross revenue includes, among other things, the gross inflow of cash, receivables, or other consideration arising in the course of ordinary activities of the DTH enterprise from rendering services and from the use by others of the enterprise resources yielding rent, interest, dividend, royalties or commissions). Further, pursuant to the terms of the DTH License Agreement, prior approval of the Licensor is required for effecting any change in our equity structure and the transfer of the license or any rights and obligations under the DTH License Agreement.

On July 23, 2014, TRAI released its Recommendations to MoIB on Issues related to New DTH Licenses (“New DTH License Recommendations”), which included recommendations relating to a new DTH licensing regime. TRAI has recommended that, among other things, the period of the DTH license be increased to 20 years, renewable for 10 years at a time and the license fee be reduced from 10% of gross revenue to 8% of adjusted gross revenue (where adjusted gross revenue is calculated by excluding service tax, entertainment tax and sales tax/VAT actually paid from the gross revenue). TRAI has also recommended that once the GoI notifies the new DTH licensing regime, an existing DTH operator should be allowed to migrate to the new regime at any time during the currency of their existing licenses, provided that it clears all its dues and fulfils all obligations under the terms and conditions of the existing license as well as those arising out of legal cases pending before various courts of law. However, the New DTH License Recommendations are not binding in any manner and we have no further information on if and when the GoI will notify a new DTH licensing regime or whether such new regime, if notified, will retain the recommendations, either in full or in part, made by TRAI through the New DTH License Recommendations.

As a licensed DTH broadcasting service provider, we are subject to the terms of the Guidelines for Obtaining License for Providing Direct-To-Home (DTH) Broadcasting Service in India issued by the MIB on March 15, 2001, as amended from time to time (“DTH Guidelines”). Under the DTH Guidelines, only companies registered under the laws of India with Indian management control (i.e., with a majority of the members of the board of directors as well as the chief executive of such company being Indian residents) are permitted to provide DTH services in India, and any Company providing DTH services cannot hold more than 20% of the total equity of a company engaged in the business of cable network services or vice versa. Further, the licensee company must adhere to the program and advertising codes issued by the MIB and follow the prescribed technical standards and other obligations. Licensees are prohibited from carrying any television broadcast or channel which has not been registered by the Central Government for being viewed within the territory of India and must carry the television channels notified by the MIB for mandatory and compulsory carriage from time to time.

The Direct to Home Broadcasting Services (Standards of Quality of Service and Redressal of Grievances) Regulations, 2007, as amended, establishes the standards of quality of DTH services that Indian DTH service providers are required to maintain, including standards relating to provision of consumer premises equipment to subscribers through outright purchase, hire purchase and rental agreements and procedures for billing and effective redress of subscribers’ grievances.

Under the Indian Wireless Telegraphy Act, 1933, as amended (“Wireless Act”), no person is permitted to possess a wireless telegraphy apparatus without obtaining a license. Accordingly, we have obtained a certificate from the Department of Telecommunication, Ministry of Communications and Information Technology, Government of India (“MIT”) permitting us to establish, maintain and work wireless telegraphs in India, which is renewable on an annual basis. This license granted to us is currently valid until December 31, 2015. Additionally, we have obtained a license, dated November 2, 2007, issued by the WPC for establishing a wireless telegraph station at Greater Noida, Uttar Pradesh, India (where the headquarters is located) and an approval dated November 14, 2007, from the Standing Advisory Committee of Radio Frequency Allocation (“SACFA”) for installation of a wireless station at such location.

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On May 27, 2013, TRAI issued the Telecommunication (Broadcasting and Cable) Services (6th) (The Direct to Home Services) Tariff Order, 2013 (“DTH Tariff Order”), directing all DTH service providers in India to offer to every subscriber the standard packages for supply and installation of the consumer premises equipment, as specified in the DTH Tariff Order, in addition to any other packages that may be offered. The standard packages prescribe, among other things, the rent per month (for the consumer premises equipment) and the refundable/adjustable security deposit that a subscriber may be charged. Certain DTH service providers, including our Company, have challenged the DTH Tariff Order before the appropriate telecom disputes redressal forum in India on various grounds, including that TRAI lacks jurisdiction to issue such a tariff order and that it has incorrectly computed the cost of consumer premises equipment in determining the standard packages.

TDSAT rendered a decision, confirming TRAI’s authority to regulate prices charged by DTH operators related to consumer premises equipment on October 1, 2014. DTH operators including us filed an appeal challenging TDSAT’s decision regarding Telecommunication (Broadcasting and Cable) Services (Sixth) (The Direct to Home Services) Tariff Order, 2013 before the Supreme Court. The appeal has been admitted and a hearing is pending in July 2015.

Additionally, an appeal challenging TRAI’s new tariff order called the Telecommunication (Broadcasting and Cable) Services (Seventh) (The Direct to Home Services) Tariff Order, 2015 dated April 1, 2015 for Commercial Interoperability has been filed before TDSAT. The appeal was filed because TRAI failed to consider certain cost components significant to the business of DTH operators, resulting in the revised tariff order being adverse to the interests of DTH operators.

TDSAT through its judgement and order dated 3 June, 2011 has directed Union of India (“UOI”) to direct Bureau of Indian Standards (“BIS”) to lay down the standards for MPEG 4. TRAI has filed an appeal before the Supreme Court against the Order of TDSAT challenging the powers of TDSAT.

Under the Telecommunication (Broadcasting and Cable Services) Interconnection Regulations, 2004 (“Interconnection Regulations”), distributors of TV channels in India are ensured non-discriminatory access to content of all broadcasters, and the Interconnection Regulations mandate that broadcasters issue a public notice before disconnecting signals to enable consumers to protect their interests.

Environmental regulations

We have obtained consents to operate under the Air (Prevention and Control of Pollution) Act, 1981 and the Water (Prevention and Control of Pollution) Act, 1974, each, from the Uttar Pradesh Pollution Control Board, with respect to the premises where our digital broadcast centre is located at Greater Noida, Uttar Pradesh, India. These consents are subject to renewal from time to time and are currently valid until December 31, 2015.

Labor regulations

Under the terms of the Contract Labor (Regulation and Abolition) Act, 1970 (“CLRA”) we have obtained the necessary Certificate of Registration from the Office of the Registering Officer & Assistant Labour Commissioner (Central), Ministry of Labour & Employment, Government of India as a principal employer for engaging contract labour. This Certificate of Registration is valid from February 9, 2015 onwards.

Trademarks

The Trade Marks Act, 1999 (“Trade Marks Act”) provides for the application and registration of trademarks in India. The purpose of the Trade Marks Act is to grant exclusive rights to marks such as a brand, label and heading, and to provide relief in case of infringement for commercial purposes as a trade description. The Trade Marks Act prohibits registration of, among other things, deceptively similar marks. It also provides for penalties for infringement, falsifying and falsely applying trademarks. We have obtained registrations in our name for various trademarks, including ‘D2H’, ‘Direct Hai Correct Hai’. Further, we have entered into a deed of trademark usage license dated September 11, 2009 with CE India Limited, whereby, we have been authorized by CE India Limited to use the trademarks ‘Videocon’ and ‘V’, for our DTH broadcasting business activities, on a non-exclusive basis. The current term of this agreement expires on March 31, 2022, subject to further renewal.

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Foreign investment regulations

The Department of Industrial Policy and Promotion has issued the Consolidated FDI Policy, with effect from April 17, 2014, which consolidates the policy framework on FDI in Indian companies, and is updated from time to time. Currently, under the provisions of the Consolidated FDI Policy, FDI in a company engaged in the DTH broadcasting sector, like Videocon d2h is permitted in up to 49% of the paid-up equity share capital of such company under the automatic route, and FDI in excess of 49% and up to 74% of the paid-up equity share capital is permitted in such a company with prior approval of the GoI, subject in each case to, among others, the following conditions:

Additionally, under the Consolidated FDI Policy, such company is also required to provide traceable identity of the subscribers to its DTH services and to ensure that such subscribers’ database is not transferred to any person or place outside India, unless permitted by applicable law. Further, companies are obligated to utilize equipment which enables lawful interception and monitoring from a centralized location as and when required by the GoI.

We benefit from our relationship with the Videocon Group. We believe that the “Videocon” brand is well recognized in India. Videocon Industries is the flagship entity of the Videocon Group, a group that we have a strong relationship with. The Videocon Group has diversified interests in consumer electronics, oil and gas, power, retail and insurance, among others.

We have no subsidiaries or associate companies.

We maintain a registered office in Aurangabad, Maharashtra, India, a corporate office in Mumbai, Maharashtra, India and a digital broadcast facility in Greater Noida, Uttar Pradesh, India where our digital broadcast center is located.

Pursuant to a Transfer Deed of Leasehold Rights for Industry dated April 25, 2008, Videocon Industries transferred its leasehold rights in the industrial plot leased from the GNIDA (under a lease deed dated March 29, 2000 executed between Videocon Industries and GNIDA), and the ownership rights in the buildings constructed by it, comprising a covered area measuring 25 square meters and an industrial shed covering 2,358.29 square meters to our Company. We have the right to use this industrial plot until 2090. We operate our digital broadcast center at these premises.

The “Auto Cars,” a partnership firm, comprising members of the Dhoot family, has authorized us to use the premises where our registered office is located pursuant to a letter dated August 1, 2012. We are licensed to use the premises where our corporate digital DTH service office is located, pursuant to a leave and license agreement dated October 23, 2012 executed with V-Techweb (India) Private Limited, which is valid until September 30, 2017.

Additionally, we entered into leave and license agreements with various parties in respect of 374 premises as of March 31, 2015, which are used by us as branch offices and service centers for carrying out our business and marketing activities across India.

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INSURANCE

We maintain insurance on our Greater Noida digital broadcast center infrastructure assets, and consumer premises equipment up to the point where we deliver the equipment to distributors, for a variety of risks, including fire. We do not maintain any key man insurance or insurance for business interruption caused by satellite failure or liability for breach of environmental regulations.

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis of our financial condition and results of operations is based upon, and should be read in conjunction with our financial statements and related notes that appear elsewhere in this annual report. Our financial statements are prepared in accordance with IFRS. Our fiscal year ends on March 31 of each year. Accordingly, all references to a particular fiscal year are to the twelve months ended March 31 of that year. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. For additional information regarding such risks and uncertainties, see “Risk Factors” and “Forward-Looking Statements”.

Overview

We are the fastest growing direct-to-home, or DTH, service provider in India by acquisition of new subscribers, adding approximately 10.23 million gross subscribers during the period from April 2011 to March 2015 across India, according to the MPA Report. We distribute multiple digital television channels and allied video and audio services to subscribers via direct satellite feeds as part of our DTH services. We bring our subscribers quality digital television viewing and currently carry over 500 national and international channels and services, including high definition, or HD, channels and 42 audio and video channels as part of our Music Channel Services. We commenced DTH operations in July 2009 and have since grown to a gross subscriber base of 13.09 million and a market share of 17.1% in the DTH market in India as of March 31, 2015 according to the MPA Report. We provide our services throughout India and believe we are well positioned to capitalize on the growth opportunities in the Indian DTH market.

Principal Factors Affecting our Financial Condition and Results of Operations

Subscriber Growth

Almost all of our revenue comprises income from DTH subscribers, particularly, subscription revenue and income from installation, activation and lease of consumer premises equipment. Subscription revenue is dependent upon the number of subscribers, pricing of offerings and services and subscriber loyalty. Our total number of gross subscribers was 10.45 million and 13.09 million as of March 31, 2014 and 2015, respectively.

Our revenue growth is driven primarily by subscriber additions and subscriber churn management. We seek to increase our subscriber base by providing a wide range of subscription packages at competitive prices and attractive value-added services that we believe are competitive. Additionally, with our marketing efforts, we intend to increase our subscriber base by reaching out to a wider population. We also utilize dealer incentives to drive subscriber growth. As subscribers grow, so does the amount of consumer premise equipment leased, which results in an increase in lease revenue.

Subscriber churn is a critical factor affecting our results of operations. We calculate churn as the number of subscribers who have not made payments and remain disconnected for at least 120 days. Any amount of churn tends to result in loss of operating revenue from those subscribers. Our monthly churn rate (as a percentage of average net subscribers) was 0.76 % in fiscal year 2014 and 0.80 % in fiscal year 2015. Churn arises mainly as a result of personal economic factors and, to a lesser extent, changes in consumer preferences and competitor offerings. Churn also tends to increase after major sports events which have led to a spike in new subscriber additions. Churn may also increase due to factors beyond our control, including, a slowing economy and consumer fraud. We seek to control churn through managing the consumer life cycle, continuously improving and increasing content, providing innovative products and technology, and providing quality customer service. We controlled exclusive direct service centers in over 216 cities as of March 31, 2015, which allows us to retain control of the customer service experience, unlike certain of our competitors which outsource the majority of their customer service operations. We also believe the reliability of our content offerings serves to limit churn. We have been able to maintain good relationships with broadcasters, allowing access to the full range of offerings from such content providers. We also believe that the quality of new subscribers can also serve to decrease churn. In line with industry practice, we have ceased the practice of granting a free viewing period to new subscribers. We believe that this has led to increased quality of new subscribers and a decrease in our churn rate, as new subscribers have demonstrated a willingness to pay for our services. Our total number of net subscribers, which is calculated as gross subscribers less churn, was 8.44 million and 10.18 million for fiscal years 2014 and 2015, respectively.

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We intend to capitalize on the digitization of the analog market in India in order to grow our subscriber base. This digitalization program provides DTH operators, such as Videocon d2h, with a significant opportunity to further expand our subscriber base in urban areas and cable stronghold markets. According to the MPA Report, the DTH market is projected to grow rapidly over the next few years, garnering a high share of new pay-TV subscribers as well as increasing its share of the pay-TV market from the market share of cable television as a result of the digitalization initiative. We believe that our pan-India presence, along with our broad distribution network, wide selection of channels, service offerings and content help us leverage off the new digital addressable cable TV system, or DAS being implemented, and maximize subscriber additions.

Content and Programming Costs

Content and programming costs comprise the largest portion of our operating expenses, comprising 33.6% and 37.3% of our total expenses for fiscal 2014 and 2015, respectively. Programming procurement by DTH operators in India, including Videocon d2h, generally takes place through channel distributors or owners. These programming procurement costs consist primarily of license fees paid to broadcasters and distributors of channels and content. We enter into content agreements with channel broadcasters and distributors to license channels and we pay them content and programming fees that are stipulated under the agreements. The major channel broadcasters and distributors, from whom we procure content include Star India Private Limited, Taj Television (India) Private Limited, Turner International India Private Limited, TV 18 Broadcast Limited, and Multiscreen Media Private Limited. We renewed our agreements with each of these content providers during the fiscal year 2015, which provides us with visibility as to our programming content and content costs as the substantial majority of content (and associated content costs) are through these providers.

Typically upon expiration of existing contracts, content suppliers renegotiate the commercial terms based on subscriber and ARPU growth, which tends to increase content and programming costs. Given the competitive DTH market, broadcasters have limited ability to pass on increases in content and programming costs to the subscribers. As such, increases in content and programming costs may have an impact on our results of operations.

Subscriber Acquisition Costs

We incur significant expenses in acquiring new subscribers. Subscriber acquisition cost per subscriber was Rs.1,890 and Rs.1,984 in fiscal years 2014 and 2015, respectively. Our subscriber base has grown significantly since the commencement of operations. As we grow our business, our subscriber acquisition costs may increase to the extent that we continue to add new subscribers or due to increased competition.

Subscriber Choice of Packages

We provide subscribers with a choice of packages through three tiers: entry level, mid-tier and high-tier, as well as add-on à la carte channels. As of March 31, 2015, our monthly subscription packages ranged from Rs.241 to Rs.590 per month (inclusive of taxes). Generally, the sale of higher priced packages is more profitable and positively affects our results of operations. We seek to improve average revenue per user, or ARPU, by encouraging customers to adopt higher-priced packages, à la carte channels and value-added services; and seek to minimize lapses in subscriptions payments.

Our ARPU was Rs.181 and Rs.196 in fiscal years 2014 and 2015, respectively. The increase in ARPU has primarily resulted from an increase in monthly subscription rates and an increase in customers choosing higher-priced packages.

Competition

We compete directly with other DTH operators, as well as indirectly with cable operators, free-to-air television, media-on-demand and other mass media. We believe that we compete primarily based on price, content offering, service, viewing experience and customer satisfaction, and the quality of the system and distribution network and content delivery.

We believe that our key DTH competitors are Tata Sky Limited, which operates the “Tata Sky” brand, Dish TV India Limited, which operates the “Dishtv” brand, and Bharti Telemedia Limited, which operates the “Airtel” brand. We incur substantial expense in acquiring new subscribers, including activation expenses, marketing and promotional expenses, installation costs and consumer premises equipment costs. As competition intensifies, we may have to increase subsidies for consumer premises equipment and increase marketing and sales and distribution expenses in order to grow our subscriber base and maintain market share. Although we have increased our base package price from Rs.150 in 2011 to Rs.241 as of March 31, 2015, in the future we may be unable to increase the price of our various packages in order to remain competitive.

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Finance Costs

We use debt to finance our business and operations. We had total long-term and short-term borrowings outstanding of Rs.30,138.45 million and Rs.25,931.38 million, as of fiscal years 2014 and 2015, respectively. Finance costs (net of finance income) in fiscal years 2014 and 2015 were Rs.4,351.02 million and Rs.4,614.22 million, respectively. We expect that we will continue to use debt to finance our business and operation.

Depreciation

Consumer premise equipment comprises a large part of our property, plant and equipment. As we add subscribers, the amount of consumer premise equipment deployed increases along with the related depreciation. As of March 31, 2014 and 2015, we had deployed consumer premise equipment of Rs.25,895.80 million and Rs.32,704.35 million, respectively. We depreciate consumer premise equipment over a seven year period using the straight line method. In fiscal years 2014 and 2015, our depreciation expenses relating to this equipment were Rs.3,647.96 million and Rs.4,604.40 million, respectively.

Going Concern

Our financial statements have been prepared on a going concern basis. Our accumulated losses as of March 31, 2013, March 31, 2014 and March 31, 2015 were Rs.11,378.58 million, Rs.14,574.06 million and Rs.17,300.70 million, respectively, exceeding our paid-up share capital and securities premium in such periods. This point was noted in the audit opinion issued by Khandelwal Jain & Co. Our ability to continue as a going concern is dependent on the success of our operations and our ability to arrange funds for our operations.

KuBand Lease Agreement

We entered into a KuBand Lease Agreement with the Department of Space, which provided for the lease of KuBand space segment capacity on the ST2 satellite owned by SingTel. The agreement expired on April 14, 2015, and an extension was granted until May 31, 2015, and subsequently until July 31, 2015. We are in the process of securing a new lease and believe that we will be able to secure a renewed lease agreement in the near future. Typically, the Department of Space enters into lease agreements for a period of up to three years. If we are unable to secure suitable replacement satellite transmission capacity, our business, financial condition and results of operations would be adversely affected as our business will have to cease operations.

Critical Accounting Policies

In preparing our financial statements, we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and various assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our results of operations may differ if prepared under different assumptions or conditions. We believe the following principal accounting policies affect the more significant judgments and estimates used in the preparation of our financial statements:

Impairment reviews

IFRS requires the management to undertake an annual test for impairment of finite lived assets, to test for impairment if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment testing is an area involving management judgment, requiring assessment as to whether the carrying value of assets can be supported by the net present value of future cash flows derived from such assets using cash flow projections that have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of highly uncertain matters including the management’s expectations of:

Our property, plant & equipment are mainly classified under two broad categories:

i. Assets that are located at our premises or are in our possession. These assets are tested for impairment based on their revenue generating ability and remaining useful lives. We determine whether future profitability will be sufficient to cover the written-down value of these assets and until ascertained no provision is required; and

ii. Consumer premises equipment, which are assets located at our subscribers’ premises and are used to receive the direct-to-home services. Consumer premises equipment comprises 77.2% and 78.1% of our total property, plant & equipment as of March 31, 2014 and March 31, 2015. We determine the number of subscribers who have not recharged their subscription for a period of 620 days and after which provide for impairment of the related consumer premises equipment on a cost basis. The impairment provided was Rs.361.93 million and Rs.359.04 million, for fiscal years 2014 and 2015, respectively.

Revenue recognition

The subscribers to our services buy a recharge balance from our distribution network (which includes our distributors, direct dealers and sub-dealers) and which enables them to recharge their subscription account with us. The current recharge balances appear as liabilities under the heading “Income Received in Advance” in our financial statements. On delivering the services we provide to the subscribers with the recharge balance, the revenue is recognized on a time proportionate basis. We debit the Daily Burn Rate based on the package selected by the subscriber, which gets accumulated over a period of a month or over a period of service, whichever is less, and this is accounted for at the end of the month.

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Arrangements with multiple deliverables

In revenue arrangements including more than one deliverable, the arrangement consideration is assigned to one or more separate deliverables based on the relative fair value of the applicable deliverable for revenue recognition purposes.

The initial amount charged to new subscribers is assigned to various deliverables including activation charges, installation charges and lease rental of set top box, outdoor unit and accessories on the basis of fair value of each element. While determining the fair value of each of these deliverables, we consider the relevant cost of the service and/or goods provided to the new subscriber. We also incur charges such as discounts and margin to the distribution network (which includes our distributors, dealers and sub-dealers) and other charges relating to the creation of a subscriber data base, the assigning of the selected packages, and other such matrix at the time new subscribers are activated. We assign our activation revenue considering these costs towards activation.

Income taxes

We are subject to income taxes in a number of Indian jurisdictions. A significant amount of judgment is required to determine the amount of provision for income taxes. There are certain transactions and calculations for which the ultimate determination by the relevant taxing authorities is uncertain. We recognize liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be found to be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made. Where considered necessary, estimates are computed by management based on advice from an external specialist, such as an actuary.

Recognition of deferred assets

We will be required to make substantial investments to grow our subscribers base. We will fund this investment through a mix of borrowing, which will increase our interest payments, and funding from operations. In addition, our revenue may decrease if we are unable to increase our subscription package pricing due to competition. Furthermore, any change in government regulations or increase in any levy of taxes or duties may impact our revenue, but this tax burden should be able to be passed on to subscribers.

Notwithstanding the above, we believe that we will be able to achieve sufficient taxable profits within the next six years to utilize the benefit of our deferred tax assets as we have acquired a threshold level of subscriber base which has resulted in cash profits. We believe that we will be able to make cash profits as we expect to maintain and grow the subscriber market share. In addition, we expect to add new subscribers as the DTH pay-TV industry will benefit from the digitalization in Phase III and IV of the Government’s DAS program. It is estimated that we will gain an addition of 97 million subscribers during Phase III and IV of the Government’s DAS program (as a result of the conversion of analog cable, terrestrial and free air satellite to the digital base (Source: MPA Report)). We believe that these additions in subscriber base and favorable pricing trends in the industry will help us achieve sufficient taxable profits to utilize the deferred tax assets.

Deferred tax assets are recognized to the extent that it is probable that sufficient taxable profit will be realized.

Note: Deferred tax assets are reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefit of part or all of the deferred tax asset to be utilized. Any reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available.

Employee benefits

The present value of the employee benefit obligation is determined upon actuarial valuation made in conformity with generally accepted actuarial principles and practices by the professional actuary, industry practices and underlying assumptions. The assumptions used in determining the net cost (income) for employment benefits include mortality, retirement age, attrition rate, salary escalation rate, discount rate, and others which are done by professional actuary as per the actuary practices prevailing in India. For example, management confirmed the discount rate of 9.31% and 7.80% for the fiscal years 2014 and 2015, respectively. Any changes in these assumptions will have an effect on the carrying amount of employment benefits. After considering professional advice, management determines the appropriate discount rate at the end of each fiscal year. This is the interest rate used to discount the defined benefit obligation and calculate the net interest recognized in profit or loss on the net defined benefit liability. In determining the appropriate discount rate, consideration is given to the interest rates of high quality corporate bonds that are denominated in the currency in which the benefits are to be paid and that have terms of maturity approximating the terms of the related pension obligation. Management also considers current market conditions.

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ESOP Plan 2014

The employee stock option plan is measured by reference to fair value at the date when the equity instruments are granted or offered to be granted, and is recognized as an expense over the vesting period, which ends on the date on which the employee becomes fully entitled to the award. Fair value is determined by using the Black Scholes Model of valuation.

License Fees

Management uses discretion and interpretation of law to determine the amount of license fees we should pay to the Government. The Government interprets the license agreement differently and accordingly believes that a different amount is due as license fees. This dispute is currently in litigation. We recognize liabilities based on estimates of whether additional fees will be found to be due. Where the final outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income statement and liabilities for the applicable period. See “Risk Factors — Our failure to adhere to the terms and conditions contained in the DTH License Agreement could have an adverse effect on our business, financial condition and results of operations. In addition, we may owe additional amounts under our DTH License Agreement for prior years of operations”.

Property, plant and equipment

Estimates of useful life

The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. Depreciation is charged so as to write off the cost of assets, other than land and properties under construction, using the straight-line method, over their estimated useful lives, which are as follows:

Increasing an asset’s expected life or its residual value would result in a reduced depreciation charge in the income statement.

The useful lives and residual values of our assets are determined by management at the time the asset is acquired and reviewed annually for appropriateness. The lives are based on historical experience with similar assets, certificates obtained from technical persons and anticipation of future events which may impact their life such as changes in technology. Historically, changes in useful lives and residual values have not resulted in material changes to our depreciation charge and as of date hereof no such adjustments have been made.

Provisions and contingent liabilities

We exercise judgment in measuring and recognizing provisions and the exposures to contingent liabilities related to pending litigation or other outstanding claims subject to negotiated settlement, mediation, arbitration or government regulation, as well as other contingent liabilities. Judgment is necessary in assessing the likelihood that a pending claim will succeed, or a liability will arise, and to quantify the possible range of the financial settlement. Because of the inherent uncertainty in this evaluation process, actual losses may be different from the originally estimated provision.

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A. Operating Results

The following table sets forth select financial data from our income statement for the periods indicated, the components of which are also expressed as a percentage of total revenue for such periods.

Non-GAAP Measures

Earning before interest, tax and depreciation & amortization (EBITDA)

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Revenue

Our revenue comprises revenue from operations and other income.

Revenue from Operations

The following table shows a breakdown of our revenue from operations for the periods indicated:

Subscription Revenue: Subscription revenue comprises (i) monthly subscription fees paid by our subscribers for our programming packages, and (ii) fees for extra services such as additional channels, combination of channels or other add-on packages or value-added services that we offer. The total amount of subscription revenue depends on the number of paying subscribers and the amount of monthly subscription fees paid for the packages subscribed by the subscribers.

Other Operating Revenue: Other operating revenue comprises income received from the installation of consumer premises equipment, revenue received for repairs undertaken and for services provided to the subscriber, carriage fees received from broadcasters for carrying their channels on our platform and for net activations paid by new subscribers. Fees for activation are collected up front and recognized as revenue upon the activation of consumer premises equipment. Fees for activation are reflected net of any applicable activation expenses.

Lease Rental: Lease rental represents the rental revenues for the lease of set-top boxes and outdoor units and any associated spares and accessories. The lease rental we receive from a new subscriber is recognized over a period of seven years from the date of activation. We offer subscribers the option to lease, buy or rent-to-own the set-top box, in accordance with applicable Indian regulations.

Sale of Set-top Boxes and Other Accessories: Sale of set-top boxes and other accessories primarily comprises revenue received from the sale of set-top boxes, spares and tools. The sale price of set-top boxes depends on the model type of the product. These sales also include the sale of related spares and accessories.

Other Income

Our other income comprises liabilities/provisions no longer required to be written back which primarily relate to recovery of credit provided to customers once their subscriptions expire and other non-operating income. The following table shows our components of other income for the periods indicated:

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Expenses

Our expenses comprise (i) operating expenses; (ii) employee benefits expense; (iii) administrative and other expenses; and (iv) selling and distribution expenses.

Operating Expenses: Operating expenses comprise content and programming costs, IT support costs, license fees and taxes, space segment charges and fees, installation and service expenses, and cost of materials and components consumed. Content and programming costs comprise monthly license fees due to television broadcasters and channel distributors. IT support costs comprise expenses for IT support activities. License fees and taxes comprise license fees payable to the MIB and also include entertainment taxes paid under protest to the respective authorities. Space segment charges and fees comprise fees paid towards the rental of the transponders of the ST2 satellite of SingTel pursuant to the KuB and Lease Agreement, with the Department of Space, as well as the network operations control center fee and spectrum charges. Installation and service expenses comprise expenses we incur when we install consumer premises equipment for a new subscriber and expenses incurred towards repair of such equipment. Cost of materials and components consumed comprise the cost of set-top boxes that are sold to subscribers and the cost of consumption of spares and tools for the purpose of undertaking repairs of consumer premises equipment. The following table shows the components of our operating expenses for the periods indicated:

Employee Benefits Expense: Our employee benefits expense comprises salaries, discretionary bonuses and allowances, contributions to Provident and other funds, and staff welfare expenses. The following table shows the components of our employee benefits expenses for the periods indicated:

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Administrative and Other Expenses: Administrative and other expenses include, among other things, expenses related to state government fees and taxes, travelling and conveyance expenses, rent, office and general expenses and power and fuel expenses. The following table shows the components of our administrative and other expenses for the periods indicated:

Selling and Distribution Expenses: Selling and distribution expenses comprise advertisement and marketing expenses, customer support services, which are expenses incurred towards customer care, subscriber management and logistics costs, and expenses incurred for distribution. The following table shows the components of our selling and distribution expenses for the periods indicated:

Finance Costs/Finance Income (Net): Finance costs comprise interest expense, other borrowing costs and bank charges incurred. Finance income comprises interest income on deposits. The following table shows the components of our finance costs/finance income (net) for the periods indicated:

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Depreciation, Amortization and Impairment Expense: Depreciation and amortization expense comprises depreciation of plant and machinery and other equipment, furniture, office equipment, vehicles, computer hardware and amortization of computer software and other intangible assets. It also includes the amortization of consumer premises equipment that we lease to our subscribers. We amortize the cost of consumer premises equipment over a period of seven years. Impairment expense includes the net cost of consumer premises equipment installed at the premises of subscribers who have not made payment for more than 500 days after recognizing churn (which is currently recognized after non-payment by a subscriber for a continuous period of 120 days).

Income Tax Expense: Income tax comprises current tax and deferred tax. Provision for current income tax is made on the assessable income and benefits at the rate applicable to the relevant assessment year. Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences, subject to certain considerations. Deferred tax is measured using the tax rates enacted or substantively enacted as of the balance sheet date. Deferred assets carried forward are reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of the deferred tax asset to be utilized. Any reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available.

Certain Key Measures of Financial Performance

Average Revenue Per User

ARPU represents the revenue we receive per average number of subscribers per period. We calculate ARPU by dividing our subscription revenue by the average of our net subscribers for the period.

The following table provides our ARPU and churn (as a percentage of subscription revenue) for fiscal years 2013, 2014 and 2015.

ARPU is a common terminology used in the pay TV industry worldwide to measure the operational performance of a company in the DTH pay-TV business. The subscription and activation charges are considered on a gross basis without netting off the margins or discounts provided to the distributors as an industry practice.

Our financial statements include items labelled as “Subscription Revenue” and “Other Operating Revenue”. Other Operating Revenue includes installation income, revenue from repairs services, carriage fees received from broadcasters and net activation fees paid by new subscribers.

Subscriber Acquisition Costs

We calculate subscriber acquisition cost as the difference between upfront charges received from new subscribers (net of taxes) and costs incurred towards activation of those subscribers, including the cost of consumer premises equipment, distributors’ margin and marketing spend. The following table provides our subscriber acquisition costs per subscriber for fiscal years 2013, 2014 and 2015:

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Fiscal year 2015 compared to fiscal year 2014

Revenue from operations: Our revenue from operations increased by 32.5% to Rs.23,377.08 million for the fiscal year 2015 from Rs.17,644.10 million for the fiscal year 2014, primarily as a result of an increase in total subscription revenue due to an increase in the total number of gross subscribers to 13.09 millions of the fiscal year 2015 from 10.45 million as of the fiscal year 2014, which also led to a corresponding increase in lease rentals and sale of set-top boxes and other accessories and an increase in ARPU.

Subscription Revenue: Our subscription revenue increased by 38.3% to Rs.20,581.41 million for the fiscal year 2015 from Rs.14,877.41 million for the fiscal year 2014, primarily as a result of an increase in the total number of gross subscribers as the DTH industry overall witnessed an increase of 10.44 million subscribers in fiscal year 2014 primarily on account of GoI’s rolling out of phase I and II of digitalization and an increase in ARPU due to the reduction of free air time extended to subscribers, increase in base prices of packages offered and subscribers opting for premium packages (Source: MPA Report). Our package prices increased to the range of Rs.241 to Rs.590 per month from the range of Rs.231 to Rs.550 per month for the fiscal year 2014.

Other Operating Revenue: Our other operating revenue decreased by 7.0 % to Rs.1,760.16 million for the fiscal year 2015 from Rs.1,891.88 million for the fiscal year 2014 due to outsourcing of installation and repair services since November 2014.

Lease Rental: Our lease rental revenue increased by 21.8% to Rs.927.35 million for the fiscal year 2015 from Rs.761.34 million for the fiscal year 2014, primarily as a result of an increase in the total number of gross subscribers.

Sale of Set-top Boxes and Other Accessories: Our revenue from sale of set-top boxes and other accessories decreased by 4.7% to Rs.108.16 million for the fiscal year 2015 from Rs.113.47 million for the fiscal year 2014, primarily as a result of decrease in sale of set-top boxes.

Other Income: Our other income decreased by 99.5% to Rs.0.08 million for the fiscal year 2015 from Rs.17.26 million for the fiscal year 2014, as a result of recognition of expenses from bad debts in the fiscal year 2015 compared to a gain from recovery of bad debts in the fiscal year 2014.

Total Expenses: Our total expenses increased by 26.6% to Rs.22,707.51 million for the fiscal year 2015 from Rs.17,935.50 million for the fiscal year 2014, as a result of an increase in operating expenses, employee benefit expenses, selling and distribution expenses and administrative and other expenses and depreciation, amortization and impairment during the fiscal year 2015 compared to the fiscal year 2014.

Operating Expenses: Our operating expenses increased by 29.3% to Rs.13,853.05 million for the fiscal year 2015 from Rs.10,715.06 million for the fiscal year 2014, primarily as a result of an increase in content costs to Rs.8,459.24 million for the fiscal year 2015 from Rs.6,019.58 million for the fiscal year 2014 as the company began operating under new content agreements. These new agreements provide predictability on content costs over the next three to four years, with better operating leverage and improved margins as subscriber base and ARPU and revenue increase over time, an increase in license fees and taxes to Rs.2,489.52 million for the fiscal year 2015 from Rs.1,832.05 million for the fiscal year 2014 resulting from the increase in revenue and gross subscribers, an increase in space segment charges to Rs.1,403.49 million for the fiscal year 2015 from Rs.1,332.29 million for the fiscal year 2014 resulting from the increase in the US dollar rate and decrease in installation and service expenses to Rs.938.36 million for the fiscal year 2015 from Rs.1,028.68 million for the fiscal year 2014, primarily as a result of increased installation expenses.

Employee Benefit Expense: Our employee benefit expense increased by 18.4% to Rs.1,023.28 million for the fiscal year 2015 from Rs.864.28 million for the fiscal year 2014, primarily as a result of an increase in salary and wages to Rs.957.87 million for the fiscal year 2015 from Rs.809.94 million for the fiscal year 2014 as a result of the periodic increase in compensation to our employees and an increase in the number of employees to 1,084 as of March 31, 2015 compared to 1,078 as of March 31, 2014.

Administrative and Other Expenses: Our administrative and other expenses increased by 27.7% to Rs.688.04 million for the fiscal year 2015 from Rs.538.71 million for fiscal year 2014, due to an increase in legal and professional charges to Rs.147.55 million for the fiscal year 2015 from Rs.67.11 million for the fiscal year 2014, an increase in travelling and conveyance cost to Rs.154.46 million for the fiscal year 2015 from Rs.131.45 million for the fiscal year 2014 primarily due to costs incurred in connection with our listing.

Selling and Distribution Expenses: Our selling and distribution expenses increased by 15.6% to Rs.1,856.32 million for the fiscal year 2015 from Rs.1,605.56 million for the fiscal year 2014, primarily due to the increase in customer support expenses to Rs.871.77 million for the fiscal year 2015 from Rs.627.16 million for the fiscal year 2014 as a result of an increase in the total number of gross subscribers.

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Depreciation, Amortization and Impairment Expense: Our depreciation, amortization and impairment expense increased to Rs.5,286.82 million for the fiscal year 2015 from Rs.4,211.89 million for the fiscal year 2014, primarily as a result of an increase in the total number of gross subscribers. This in turn led to the corresponding increase in depreciation recognized for consumer premises equipment installed, and an increase in the number of subscribers who had not made payment for more than 500 days after recognizing churn.

Finance Costs/Finance Income (Net): Our finance costs/finance income (net) increased by 6.0% to Rs.4,614.22 million for the fiscal year 2015 from Rs.4,351.02 million for the fiscal year 2014, as a result of additional borrowings made during the fiscal year 2015.

Tax Expense: We did not have any current tax expense for the fiscal year 2015 or fiscal year 2014. Our deferred tax expense decreased by 14.8% to Rs.1,217.93 million for the fiscal year 2015 from Rs.1,429.68 million for the fiscal year 2014.

Loss for the Year: Our loss for the year decreased by 14.7% to Rs.2,726.64 million for the fiscal year 2015 from Rs.3,195.48 million for the fiscal year 2014, as a result of the factors described above.

Fiscal year 2014 Compared to Fiscal year 2013

Revenue from operations: Our revenue from operations increased by 56.2% to Rs.17,644.10 million for the 2014 fiscal year from Rs.11,295.47 million for the 2013 fiscal year. This was primarily a result of an increase in total subscription revenue due to an increase in the total number of gross subscribers to 10.45 million as of March 31, 2014 from 8.03 million as of March 31, 2013, which also led to a corresponding increase in lease rentals and sale of set-top boxes and other accessories.

Subscription Revenue: Our subscription revenue increased by 59.0% to Rs.14,877.41 million for the fiscal year 2014 from Rs.9,356.23 million for the fiscal year 2013, primarily as a result of a 2.3 million increase in the total number of gross subscribers as the overall DTH industry witnessed an increase of 8.78 million subscribers in Fiscal 2014 (source: MPA Report), and as one of the fastest growing DTH players we had an incremental share of 27.7% of the new subscribers. The industry grew at this pace primarily on account of the GoI’s rolling out of phase I and II of digitalization and an increase in ARPU due to the reduction of free airtime extended to subscribers, the increase in base prices of packages offered and subscribers opting for premium packages. The ARPU increased from Rs.150.10 per month to Rs.180.90 per month.

Other Operating Revenue: Our other operating revenue increased by 45.4% to Rs.1,891.88 million for the fiscal year 2014 from Rs.1,300.85 million for the fiscal year 2013, primarily as a result of an increase in the number of gross subscribers.

Lease Rental: Our lease rental revenue increased by 28.6% to Rs.761.34 million for the fiscal year 2014 from Rs.591.90 million for the fiscal year 2013, primarily as a result of an increase in the total number of gross subscribers.

Sale of Set-top Boxes and Other Accessories: Our revenue from sale of set-top boxes and other accessories increased by 144.1% to Rs.113.47 million for the fiscal year 2014 from Rs.46.49 million for the fiscal year 2013, primarily as a result of an increase in the total number of gross subscribers.

Other Income: Our other income increased by 379.44% to Rs.17.26 million for the fiscal year 2014 from Rs.3.60 million for the fiscal year 2013, on account of increase in write back of liabilities/provisions no longer required. During fiscal year 2014, the provisions for doubtful debts amounting to Rs.15.41 million was written back as those subscribers paid the dues and reactivated their subscription accounts as compared to Rs.2.52 million written back during fiscal year 2013.

Total Expenses: Our total expenses increased by 31.4% to Rs.17,935.50 million for the fiscal year 2014 from Rs.13,647.94 million for the fiscal year 2013, as a result of an increase in operating expenses, employee benefit expenses, selling and distribution expenses and administrative and other expenses and depreciation, amortization and impairment during the fiscal year 2014 compared to the fiscal year 2013.

Operating Expenses: Our operating expenses increased by 29.7% to Rs.10,715.06 million for the fiscal year 2014 from Rs.8,264.59 million for the fiscal year 2013, primarily as a result of an increase in content costs to Rs.6,019.58 million for the fiscal year 2014 from Rs.4,568.58 million for the fiscal year 2013. This was mainly due to an increase in gross subscribers, an increase in license fees and taxes to Rs.1,832.05 million for the fiscal year 2014 from Rs.1,114.43 million for the fiscal year 2013 resulting from the increase in revenue and gross subscribers, an increase in space segment charges and fees to Rs.1,332.29 million for the fiscal year 2014 from Rs.994.47 million for the fiscal year 2013 resulting from an increase in the number of leased transponders from 8 to 10 during the 2014 fiscal year. This increase was partially offset by a decrease in installation and service expenses to Rs.1,028.68 million for the fiscal year 2014 from Rs.1,228.72 million for the fiscal year 2013, which resulted from our transition from a service franchisee model to providing customer service through direct service centers.

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Employee Benefits Expense: Our employee benefits expense increased by 11.0% to Rs.864.28 million for the fiscal year 2014 from Rs.778.70 million for the fiscal year 2013, primarily as a result of an increase in salary and wages to Rs.809.94 million for the fiscal year 2014 from Rs.729.34 million for the fiscal year 2013 as a result of the periodic increase in compensation to our employees and an increase in the number of employees to 1,078 as of March 31, 2014 compared to 1,052 as of March 31, 2013.

Selling and Distribution Expenses: Our selling and distribution expenses increased by 55.4% to Rs.1,605.56 million for the fiscal year 2014 from Rs.1,033.37 million for the fiscal year 2013, primarily due to an increase in advertisement and marketing expenses to Rs.893.68 million for the fiscal year 2014 from Rs.336.82 million for the fiscal year 2013 as we capitalized brand acquisition expenses in the 2013 fiscal year but incurred brand development expenses in the 2014 fiscal year.

Administrative and Other Expenses: Our administrative and other expenses increased by 20.9% to Rs.538.71 million for the fiscal year 2014 from Rs.445.41 million for the fiscal year 2013, primarily as a result of an increase in travelling and conveyance expenses to Rs.131.45 million for the fiscal year 2014 from Rs.122.53 million for the fiscal year 2013. This resulted from an increase in the number of employees and an increase in fuel costs and an increase in rent to Rs.89.78 million for the fiscal year 2014 from Rs.72.91 million for the fiscal year 2013, resulting from our transition from a service franchisee model to providing customer service through direct service centers, which incur rental expenses.

Depreciation, Amortization and Impairment Expense: Our depreciation, amortization and impairment expense increased to Rs.4,211.89 million for the fiscal year 2014 from Rs.3,125.87 million for the fiscal year 2013, primarily as a result of an increase in the total number of gross subscribers. This in turn led to the corresponding increase in depreciation recognized for consumer premises equipment installed, and an increase in the number of subscribers who had not made payment for more than 500 days after recognizing churn.

Finance Costs/Finance Income (Net): Our finance costs/finance income (net) increased by 58.4% to Rs.4,351.02 million for the fiscal year 2014 from Rs.2,746.52 million for the fiscal year 2013, as a result of an increase in bank loan interest to Rs.4,235.14 million for the fiscal year 2014 from Rs.2,493.74 million for the fiscal year 2013, primarily as a result of an increase in our secured long term loans to Rs.27,888.45 million as of March 31, 2014 from Rs.23,002.50 million as of March 31, 2013.

Tax Expense: We did not have any current tax expense for the 2014 or 2013 fiscal year. Our deferred tax expense decreased by 9.0% to Rs.1,429.68 million for the 2014 fiscal year from Rs.1,571.06 million for the 2013 fiscal year.

Loss for the Year: Our loss for the year decreased by 9.3% to Rs.3,195.48 million for the fiscal year 2014 from Rs.3,524.33 million for the fiscal year 2013, as a result of the factors described above.

B. Liquidity and Capital Resources

Our auditors have stated in their audit opinion that the Company has incurred a loss of Rs.2,726.64 million during the year ended March 31, 2015 and has accumulated losses amounting to Rs.17,300.70 million as at March 31, 2015, resulting in substantial erosion of our net worth and that our ability to continue as a going concern is dependent on our ability to fund our operations and capital expenditure requirements. See “Risk Factors — We have accumulated losses, which may affect our ability to continue as a “going concern”. As of March 31, 2015 we had Rs.25,931.38 million in outstanding indebtedness, substantially all of which was floating rate Rupee denominated indebtedness. During the fiscal year 2015, we sometimes experienced delays in payment on our indebtedness as the industry we operate in is highly capital intensive. However, as of March 31, 2015, we had no overdue payments on any of our indebtedness. We believe that we have a good relationship with our lenders and we keep them apprised of any payment delays. See “Risk Factors — Our Company has had overdue payments under some of our loan agreements” for a description of the potential consequences of these payment delays.

We anticipate that we will incur annual capital expenditure of approximately Rs.7,000 million to Rs.8,000 million for purchase of consumer premises equipment in fiscal year 2016. These capital expenditures for consumer premises equipment are for acquisition of new subscribers. In the initial years of operations, when the subscriber base was low we generated low cash flow from operations and the operational expenditures were high, we met our revenue gap and capital expenditure requirements with term loans from banks and our Principal Shareholders, and also from unsecured loans received from Videocon Industries Limited. We have experienced cash flow mismatches in the past, resulting in delays in servicing our debt repayment obligations. However, with the year on year increase in our subscriber base and revenue, the financial position of our Company has been improving and we believe we have sufficient working capital to operate our business.

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Cash Flows

The table below summarizes our cash flows for the fiscal years 2013, 2014 and 2015:

Net Cash From/Used in Operating Activities

Net cash from operating activities was Rs.9,107.87 million for the fiscal year 2015 and consisted of a net loss before tax of Rs.3,944.57 million as adjusted primarily for non-cash and non-operating items, such as depreciation, amortization and impairment of Rs.5,286.82 million and finance costs (net of interest income) of Rs.4,716.75 million. In the fiscal year 2015, the cash collection predominantly increased on account of an increase in subscription revenue, installation revenue and other operating revenues of Rs.5,732.98 million compared with the fiscal year 2014. Our industry operates on a prepaid model which generates cash upfront from subscribers to use our services. The increase in net cash from operating activities is mainly attributable to growth in subscriber base and increase in ARPU due to the reduction of free airtime extended to subscribers, increase in base prices of packages offered and subscribers opting for premium packages. In the fiscal year 2015, we have added additional 2.64 million subscribers leading to a closing gross subscriber base of 13.09 million. This increase in cash collection was utilized for meeting increased operating expenditures, acquiring capital assets and paying finance charges. Our operating cash flow before changes in assets and liabilities was Rs.5,980.63. million for the fiscal year 2015. Changes in assets and liabilities primarily consisted of an increase in trade payable by Rs.2,134.17 million and an increase in other financial and non financial liabilities by Rs.1,258.55 million for the fiscal year 2015.

Net cash from operating activities was Rs.3,327.60 million for the fiscal year 2014 and consisted of a net loss before tax of Rs.4,625.16 million as adjusted primarily for non-cash and non-operating items, such as depreciation, amortization and impairment of Rs.4,211.89 million and finance costs (net of interest income) of Rs.4,447.98 million. In the fiscal year 2014, the cash collection predominantly increased on account of an increase in subscription revenue, installation revenue and other operating revenues of Rs.6,348.63 million compared with the fiscal year 2013. The increase was mainly attributable to growth in subscriber base and increase in ARPU due to the reduction of free-airtime extended to subscribers, an increase in base prices of packages offered and subscribers opting for premium packages. In the fiscal year 2014, we have added additional of 2.43 million subscribers leading to a closing gross subscriber base of 10.45 million. This increase in cash collection was utilized for meeting increased operating expenditures, acquiring capital assets and paying finance charges. Our operating cash flow before changes in assets and liabilities was Rs.3,928.72 million. Changes in assets and liabilities primarily consisted of an increase in other financial and non financial assets of Rs.1,635.12 millions and increase in financial and non financial liabilities of Rs.875.65 millions. We also paid income taxes of Rs.19.25 million.

Net cash from operating activities was Rs.3,633.26 million for the fiscal year 2013 and consisted of a net loss before tax of Rs.5,095.39 million as adjusted primarily for non-cash and non operating items, such as depreciation, amortization and impairment of Rs.3,125.97 million, and finance costs of Rs.2,797.35 million. In fiscal year 2013, the cash collection predominantly increased on account of an increase in subscription revenue by Rs,4,230.00 million. Our industry operates on a pre-paid model which generates cash upfront from the end-subscriber to use our service. The increase is mainly attributable to growth in our subscriber base and an increase in ARPU due to an increase in base prices of packages offered and subscribers opting for premium packages. The subscriber base in the fiscal year 2013 increased by 2.55 million. This increase in cash collection was utilized for meeting increased operating expenditures, acquiring capital assets and paying finance charges. With the growth in subscriber base, we experienced heavy outflows on account of purchase of consumer premises equipment of Rs.6,528 million, which was funded by operating cash surplus and by availing borrowings. Our operating profit before changes in assets and liabilities was Rs.789.19 million. Changes in assets and liabilities consisted primarily of an increase in other financial and non financial assets of Rs.310.18 million and an increase in other financial and non-financial liabilities of Rs.2,797.97 million. We also paid direct taxes of Rs.20.01 million.

Net Cash From/Used in Investing Activities

Net cash used in investing activities was Rs.7,546.74 million for the fiscal year 2015 and consisted primarily of property, plant and equipment and capital work-in-progress of Rs.7,597.34 million primarily relating to consumer premises equipment.

Net cash used in investing activities was Rs.6,119.34 million for the fiscal year 2014 and consisted primarily of property, plant and equipment and capital work-in-progress of Rs.6,438.82 million primarily relating to consumer premises equipment, partially offset by a decrease in Capital Work-in-Progress of Rs.285.54 million.

Net cash used in investing activities was Rs.7,448.48 million for the fiscal year 2013 and consisted of property, plant and equipment and capital work-in-progress of Rs.7,010.37 million, and purchase of intangible assets of Rs.491.08 million relating to brand acquisition.

Net Cash From/Used in Financing Activities

Net cash generated in financing activities was Rs.8,142.75 million for the fiscal year 2015 and consisted of an increase in share capital by Rs.1,510.00 million, an increase in share premium by Rs.15,540.88 million, proceeds from borrowings of Rs.8,163.82 million, partly offset by repayment of borrowings of Rs.12,355.20 million and finance charges of Rs.4,716.75 million.

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Net cash used in financing activities was Rs.2,812.03 million for the fiscal year 2014 and consisted of repayment of borrowings of Rs.5,697.30 million and finance charges paid of Rs.4,447.98 million, partially offset by proceeds from borrowings of Rs.7,333.25 million.

Net cash from financing activities was Rs.9,561.96 million for the fiscal year 2013 and consisted of proceeds from borrowings of Rs.14,269.50 million partially offset by interest and other borrowing costs paid of Rs.2,797.35 million and repayments of borrowings of Rs.1,909.95 million.

Financial Condition, Liquidity and Sources of Capital

As of March 31, 2015, we had Rs.25,931.38 million in outstanding indebtedness, substantially all of which was floating rate, Rupee denominated indebtedness and cash and cash equivalent of Rs.9,888.77 million. We also have term deposits with banks of Rs.3,110.71 million which are placed towards margin / reserves for loans and bank guarantees. These are shown under other financial assets. We regularly experienced delays in payment on our indebtedness during fiscal 2015 as the industry in which we operate in is highly capital intensive. We anticipate that we will have annual capital expenditure of approximately Rs.7,000 million to Rs.8,000 million for purchase of consumer premises equipment in fiscal year 2016. These capital expenditures for consumer premises equipment are for acquisition of new subscribers. In the initial years of operations, when the subscribers base was low and we were generating low cash flow from operations and the operational expenditures were high, we met our revenue gap and capital expenditure requirement with borrowings of term loans from banks and our Principal Shareholders, and also from unsecured loan received from Videocon Industries Limited. We have experienced cash flow mismatches in the past, resulting in delays in servicing our debt repayment obligations. However, with the year-on-year increase in our subscriber base and revenue, our financial position is improving and is expected to continue to improve. This is expected to improve our liquidity and financial position, enabling us to service our debt obligations in a timely manner in the future.

We believe that we have a good relationship with our lenders and keep them apprised of any payment delays. See “Risk Factors — Our Company has had overdue payments under some of our loan agreements” for a description of the potential consequences of these payment delays.

We have made certain defaults in repayment of term loans and interest during the fiscal year 2015. However, there was no continuing default as at March 31, 2015. There are certain restrictive covenants in certain of our arrangements with our lenders, including:

As of March 31, 2015, we were not in compliance with certain of our financial covenants stipulated under our loan agreements, such as maintaining EBITDA, total debt, debt to EBITDA ratio, debt to net cash accruals ratio,

The following table summarizes our long-term indebtedness and subordinated debt obligations, all of which were secured, as of March 31, 2015 and March 31, 2014.

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Interest Rate as of March 31, 2015

Interest rates on our indebtedness ranged from 13.0% to 14.5% per annum as of March 31, 2015.

Contingent Liabilities

See Note 27 to our financial statement for the year ended March 31, 2015 included in this Form 20-F under Item 18.

Capital Expenditures

We have historically financed our capital expenditure requirements with cash flows from operations, as well as through long-term and short-term borrowings.

We made capital expenditures of Rs.7,486.31 million, Rs.6,216.29 million and Rs.7,597.34 in fiscal years 2013, 2014 and 2015, respectively. We expect to spend approximately Rs.7,000 to Rs.8,000 million on capital expenditures during the 2016 fiscal year, primarily on cost towards purchase of consumer premises equipment.

Our actual capital expenditures may vary from projected amounts due to various factors, including changes in market conditions, ability to obtain adequate financing for planned capital expenditures, the GoI’s policies regarding the DTH industry and the condition of the Indian economy. In addition, our planned capital expenditures do not include any expenditure for potential acquisitions or investments that it may evaluate from time to time.

Our Indebtedness

Set forth below is a brief summary of our outstanding borrowings of approximately Rs.25,931.38 million, as of March 31, 2015, together with a brief description of certain significant terms of such borrowings.

A. Details of Secured Borrowings of Videocon d2h

Set forth below is a summary of our secured borrowings as of March 31, 2015 (unless otherwise stated).

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Our secured financing arrangements contain various restrictive covenants which require us to obtain prior written consent of our lender(s) for undertaking, among others, the following activities:

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B. Details of Our Unsecured Borrowings

As of March 31, 2015 we had no unsecured borrowings.

C. Research and development, patents, licenses, etc.

Research and development

We have a dedicated research and development team which is committed to developing new products and enhancing current products in order to improve customer experience. In particular, the research and development team primarily focuses on developing set-top boxes with new technology. The research and development team operations span from board design to driver development, including enabling features such as wifi and Radio Frequency for Consumer Electronics, or RF4CE (which is a protocol for communication between the set-top box and remote control without the two being in line of sight) in the set-top box. The research and development team is responsible for complete end to end research and development, including testing and customization of the user interface. We believe that our in-house research and development team provides us with greater flexibility in determining our product roadmap by working in close conjunction with conditional access/middleware vendors and chipset vendors.

The amount spent on research and development was Rs.93.08 million, Rs.39.83 million and Rs.59.0 million for the fiscal year ended March 31, 2013, 2014 and 2015 respectively.

Intellectual Property

We have entered into a renewal of our trademark license agreement with CE India Limited, a Videocon Group entity, for the use of the “Videocon” and “V” trademarks on a non exclusive basis for a nominal fee. This license is valid until March 31, 2022, and is renewable upon mutual agreement. We have registered 25 trademarks, including in relation to the “d2h” brand name and have applied for registration of further 22 trademarks.

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D. Trend Information

Please see item 5.A “ – Operating Results “of this Form 20-F.

E. Off-Balance Sheet Commitments and Arrangements

We do not have any off-balance sheet arrangements.

F. Tabular Disclosure of Contractual Obligations

The following table sets forth information regarding our contractual obligations and commitments as of March 31, 2015.