MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMIC REVIEW

In 2014-15, the Indian economy witnessed the first green shoots of tangible recovery. The year saw perceptible improvement in business confidence, foreign inflows and stability of key macroeconomic indicators. GDP growth (at market prices) improved to 7.3% in 2014-15 compared to 6.9% in the brvious year (Source: CSO). This was on the back of a stronger growth in the manufacturing and services sectors.

India is a net importer of global commodities, such as crude and benefited from their steep global price correction. The commodity meltdown helped the Government and Reserve Bank of India (RBI) stabilise key macroeconomic indicators such as inflation, current account deficit and fiscal deficit, all of which had deviated from their desirable levels in the brceding years. With new policy initiatives, these are all now trending towards the desired levels. The commodity price correction is also expected to have a strong positive impact on savings and discretionary spending.

The Government, over the past year has taken several initiatives to create a strong foundation for a sustainable and inclusive growth. Some of these include the introduction of the GST Bill, the Pradhan Mantri Jan Dhan Yojna (PMJDY) to promote financial inclusion, the Smart Cities programme to facilitate urban renewal, and the Digital India campaign to drive a digitally empowered future. These and other initiatives are collectively expected to invite and incentivise domestic and foreign investments into India.

India's strong demographic profile, large consumer base and fast growing middle class have attracted the interest of many global investors and multi­national corporations. During 2014-15, a decisive government, and an improving macroeconomic and regulatory environment further enhanced their interest.

INDUSTRY REVIEW

Media & Entertainment Industry

In the year 2014, the Indian Media & Entertainment (M&E) industry grew 11.7% and crossed Rs. 1 trillion, for the first time ever. TV, the largest segment in the M&E industry grew by a strong 13.8% to Rs. 475 billion. Digital Advertising (grew 44.5% to Rs. 43.5 billion) and Gaming (grew 22.4% to Rs. 23.5 billion) were the fastest growing segments during the year.

TV Industry

The TV industry has grown at a CAGR of 13% over the last 5 years and today forms over 46% of the M&E Industry. It is expected to grow by 14.3% to Rs. 543 billion in 2015. Over the 5 year period, between 2014 to 2019, the TV Industry is expected to have an even stronger CAGR of 15.5%. This is significantly higher than the projected overall M&E CAGR of 13.9% during the same period. Looked at another way, the TV industry is projected to add more revenue to the M&E industry going forward, than all other sub sectors put together.

Subscription revenue grew by 13.9% to Rs. 320 billion in 2014. Over the next five years (by 2019), it is expected to grow at a CAGR of 16.1% to Rs. 676 billion. Advertising revenue on the other hand grew by 13.9% during the year and is expected to grow at a CAGR of 14% to Rs. 299 billion by 2019. Subscription is expected to account for 71% of the total incremental increase projected in TV Industry revenue over the next five years, whereas the contribution of advertisement will be under 30%. In 2014, the overall TV penetration in India increased to 61% or 168 million households. India is the world's second largest TV market after China.

Cable and Satellite

The number of Cable and Satellite (C&S) subscribers increased by 10 million in 2014 to 149 million, of which the number of paid subscribers is estimated at 139 million. The numbers of TV households are expected to grow at CAGR of 3.1% between 2014 and 2019. Paid C&S subscriber penetration is projected to increase from the current 82% to 90% of the households in 2019. The increased penetration will result in a rapid growth in the total number of paid subscribers at 175 million (at CAGR of 4.7 %) by 2019.

Digitisation

The Indian TV industry is going through a rapid and historic transformation. Traditionally, the distribution of television content has been highly fragmented. This and other impediments in the analog regime resulted in a slow growth of the industry. To help consolidate and organise the industry, and to make it more transparent, TRAI formulated a road map to migrate analog customers to digital in 4 phases across a four year period beginning 2012. The first two phases have been rolled out, while the remaining two, i.e. Phase III and Phase IV, are targeted to be completed by December of 2015 and 2016, respectively.

IMPACT OF DIGITISATION

Digitisation will benefit all stakeholders including consumers, the broadcasting industry, the distribution industry and the government.

Consumers will benefit through an easy access to hundreds of new channels, sharper picture quality, better services and customised channel packages based on their individual brferences.

The broadcasting industry will benefit through higher transparency, resulting in lesser revenue leakages, more accurate subscriber base information and higher subscription revenues.

The distribution industry will benefit from higher subscription revenues, more efficiencies , better margins, opportunity to sell bundled services and more accurate data collection.

The Government will benefit through higher transparency resulting in higher tax revenues. This has been a key reason for the rapid growth of the Direct-To-Home (DTH) business.

Digitisation will also benefit players across the distribution value chain -- the broadcasters who produce the content, the Multi System Operators (MSOs) who operates multiple cable television systems and Local Cable Operators (LCOs) who provide last mile connectivity to individual homes. In addition, a few MSOs who have a greater operational control of their networks are entering majority ownership of joint ventures and acquiring the primary points (LCOs) to meet certain cost value criteria

Unlike DTH which came into existence more than a decade ago, digital cable has only been in the market for three years. Its performance has to therefore be viewed in this context. With the implementation of Digital Addressable Cable TV Systems, and given its numerous advantages, it is fast becoming the brferred option over DTH for consumers. These include the ability to carry many more channels, higher resilience under adverse weather conditions, provision of bundled services like broadband, lower maintenance costs, more value for money for the customer, ability to offer exclusive local channels and a prompt service support. For these reasons, the digital cable subscriber base is expected to have a CAGR of 26.5% over the next 5 years, compared to DTH's expected CAGR of 13.7%. In terms of net subscriber addition over the next five years, digital cable is projected add 65 million new subscribers compared to 36 million for DTH. (Source: FICCI-KPMG M&E 2015 Report)

Growing ARPU

MSOs are equipped to address a variety of consumer demands and yet remain cost-competitive while driving higher yields. This is happening through an innovative use of package-wise billing intelligently bundled with a other value added services. Together with this, a equitable revenue sharing arrangement with LCOs is also favourably impacting the Average Revenue per User (ARPUs) of the MSOs. Demand for services such as HD channels and brmium channels has also helped in increasing ARPU. According to data published by indiatelevision.com , the share of net ARPUs to multi system operators (MSOs) have grown 10x, to INR 100 per subscriber per month due to the transition from analog to digital.

A 13.2 % increase in ARPU is projected for digital cable in 2015, compared to the brvious year. This will be primarily driven by expected realisation increase, a better product mix in the form of additional services such as HD and brmium channels besides other value-added services. Digital cable ARPUs are expected to have a strong CAGR of 10% over the next five years, from Rs. 190 in 2014 to Rs. 306 in 2019. Going forward, the growth in digitisation will have a positive impact on the operating margins of MSOs.

Broadband

The number of internet subscribers in India stood at 267 million at the end 2014. Nearly 86 million of these are broadband subscribers, of which 19 million are wired internet subscribers.

India's internet penetration, at 21% is less than half of any other comparable emerging economy -- China, Brazil or Russia. The increasing proliferation of technology-enabled devices, policy-driven push through programmes such as the Digital India campaign and high-speed broadband highways will all lead to a dramatic increase in the internet subscriber base and penetration levels. (Source: TRAI

In India, 68% of internet subscribers use DSL (narrowband) technology for internet connections. Globally, however the cost effective Data Over Cable Service Interface Specification (DOCSIS) technology - commonly referred to as broadband, is brdominant because it allows a higher speed compared to DSL technology. The growth in subscriber base of broadband is significantly higher than that of DSL. This is due to the brference of new users for high-speed broadband and migration of existing DSL users. The percentage of broadband subscribers with over 10 Mbps of speed were 1.1% of the total connected population in Q4CY2014, registering a year-on-year increase of 104%. The percentage of broadband subscribers with over 4 Mbps were 7.8% of the total connected population in Q4CY14, a year-on-year increase of 86%. (Source: AKAMAI, The State of the Internet / Q4 2014; 199 countries surveyed across Geographies). This points towards a scenario where high­speed broadband connections is the clear brference.

In 2014, average internet traffic grew by 30% to 714 Petabytes (PB) per month compared to 550 PB per month in 2013. Peak internet traffic grew much faster by 40% during the year. During the year, fixed/wired IP traffic grew by 36%.

The average broadband speed grew by 33% to 4.0 Mbps as compared to 3.0 Mbps in the brvious year. During the year, the average data generated by a household increased by 32% to 12.1 Gigabytes (GB) per month compared to 9.2 GB per month in CY2013. The number of internet households generating more than 50 GB per month of data increased by 55% to 1 million during the year (Source: Cisco). The brference for high speed internet and the growing consumption of data, is therefore the two key demand drivers of the internet technology in India.

The broadband business offers multiple synergistic benefits to MSOs by allowing them to leverage their existing infrastructure and consumer base. Wired internet provides faster, cheaper and more reliable internet connectivity compared to wireless. It is the therefore a brferred option for high speed and heavy data downloads. During the year, wire-line contributed 52.6% to the total internet traffic, much ahead of other broadband technologies. Broadband offers higher ARPU and margins than digital cable and is in line with the changing consumer brferences for non-linear access of content. Given the low penetration of internet in India, the broadband segment is an attractive growth opportunity.

All India Digital Cable Federation (AIDCF)

AIDCF is an industry association of major Indian Multi System Operators (MSOs) created in October 2014. The objective of AIDCF is to organise the Digital Cable Industry for the overall benefit of all stakeholders and to facilitate and further create momentum for digitisation for Phase III and IV. Its members include all the leading MSOs such as SITI Cable, Hathway, Den Network, In Cable, Digi Cable, Fastway, GTPL, ICNCL and Manthan, among others. The Federation unanimously elected Mr. V D Wadhwa, Executive Director & CEO of SITI Cable, as their President for an initial term of two years.

AIDCF plans to drive the initiatives and programmes for the overall development of the industry. The Federation is the authorised body to rebrsent the industry and interact with TRAI, Ministry of Information and Broadcasting,. Financial Institutions, other technical bodies and industry associations.

Policy initiatives

The Government has undertaken several initiatives that directly or indirectly affect the digital cable industry. The implementation of Goods and Services Tax (GST) and Digital India campaign are two factors that will have a positive impact.

Goods and Services Tax

The implementation of the GST, when done, will eliminate multiple taxes such as service tax, entertainment tax and VAT, helping the industry to be more tax efficient. It will also standardise the tax structure across states enabling a more uniform and competitive fee structure for players. AIDCF has also submitted its recommendations to the GST committee with a suggestion to subsume entertainment tax under the GST.

In order to ease MSOs' broadband expansion plans, the AIDCF recommended the removal of the 8% AGR (Adjusted Gross Revenue) to the Information and Broadcasting Ministry (I&B) and the Department of Telecommunications (DoT). The AIDCF also sought the Government's intervention in the protection of expensive infrastructure laid on ground by the MSOs since there is currently none in place. In addition, the AIDCF requested the Government to rationalise the import duties on network equipment and to allow the use of Universal Service Obligation (USO) fund for wireline network rollout in the country.

(Source: <http://www.indiantelevision.com/cable-tv/msos/aidcf->submits-recommendations-to-ib-asks-for-removal-of-8-agr-on-cable-broadband-150708)

Digital India

With a vision to transform India into a digitally-empowered society and knowledge economy, the Government launched Digital India programme. The programme aims create a single, easy-to-access platform for citizens to engage with the various departments of the Government, and to ensure the electronic availability of government services.

The three core components of Digital India are creation of digital infrastructure, digital delivery of services and digital literacy. Digital infrastructure will focus on providing high­speed secure internet across entire rural and urban India. Through this programme, the Government endeavours to link the largest of Indian cities to the smallest of the villages

through high-speed broadband highways. Additionally, through a better internet connectivity, the Government plans to strengthen India's technological infrastructure across key sectors such as education, finance, healthcare, agriculture and governance. Digital literacy will focus to empower citizens by making them digitally literate and by providing digital services and resources in Indian languages. Digital delivery will focus on public accountability and providing government services digitally.

Digital technologies will continue to drive a high degree of convergence between entertainment, information and telecommunication. This will create a significantly enhanced viewership experience and will lead to new opportunities for all digital players in general and MSOs in particular. Digital cable, unlike most other technologies, allow two-way communication, have a localised nature of services and are more reliable, owing to the resilience of their infrastructure to harsh weather conditions.

India has one of the lowest pay television ARPU, globally. With the migration of existing analog subscribers to digital and the addition of new subscribers, the industry will witness greater transparency, subscriber oriented initiatives and a consistent increase in ARPU. ARPU growth will come from an increase in the base prices, healthy mix of package wise billing, increase in subscribers opting for value added services and also new due to launch of new services. Digitisation will also result in significant transfer of power and revenue share from LCOs to MSOs.

The broadband industry in India is at a very nascent stage. The percentage of users with over 4 Mbps connection as on December 2014, was 7.8% in India as compared to 27% in China, 88% in Japan and 95% in South Korea (Source: AKAMAI Q4 2014 Report). Only 1.5 users per 100 people in India use a wired broadband connection today. (Source: TRAI Q4 2014 Report)

Internet traffic in India is projected to grow 4.2x over the next 5 years to 3.0 Exabytes (EB) per month, while busy hour internet traffic is projected to grow to 5.6x over the same period. This growth is going to be led by significantly higher consumption of video traffic, which is projected to grow to 7x to 2.2 EB per month by 2019 compared to 326 PB in 2014. The total internet video traffic will increase to 74% of all internet traffic in 2019 compared to 46% in 2014. The Ultra HD, HD and SD will be 6.1%, 38.1% and 55.8% of internet video traffic in 2019, respectively, compared to 0.2%, 7.1%, 92.6%, respectively, in 2014. The internet-video-to-TV is projected to grow to 8x between 2014 and 2019. (Source: Cisco VNI Forecast)

The growth in data consumption will be supported by a growth in network speed. The average broadband speed is projected to grow by 2.9x to 11.6 Mbps between the years 2014 and 2019. In 2019, 46% of the fixed broadband connections will be faster than 5 Mbps as compared to 24% in 2014. Similarly 36% of the fixed broadband connections in 2019 will be faster than 10 Mbps compared to 11% in 2014. The internet traffic generated by an average internet household is projected to grow 3.4x to 40.8 GB in 2019 compared to 12.1 GB in 2014. The number of households  generating more than 50 GB per month will grow 27x in 2019, or 27 million internet households, compared to 1 million households in 2014. (Source: Cisco VNI Forecast)

To tap the projected demand potential in the digital cable as well as the broadband segments, the Industry will need to keep up the pace of investments in infrastructure and network. In digital cable, this is likely to increase the pace of consolidation with the top MSOs controlling a major portion of the market share. With higher economies of scale, optimal use of modern technologies and better utilisation of the infrastructure, the industry is likely to witness significant improvement in its cost and capital efficiency parameters. (Source: FICCI KPMG Indian M&E 2015 Report)

COMPANY OVERVIEW

SITI Cable Network Limited (earlier known as Wire and Wireless (India) is one of India's leading Multi System Operator (MSO). The Company is part of the USD 8 billion Essel Group that has a strong brsence across the media industry and interests in infrastructure, education, packaging, brcious metals, gaming, theme parks and health, lifestyle and wellness. The Group is one of the leading producers, content aggregators and distributors of Indian programming globally and has brsence in over 169 countries.

SITI Cable provides digital / analog cable TV and broadband services and has a subscriber base of over 10.5 million across India. Presently, the Company has 61 analog and 15 digital head ends and a network of more than 14,600 Kms of optical fibre and coaxial cable.

Operational Review

2014-15 was an important and successful year for SITI Cable. The total cable subscriber base was 10.5 million compared to 10 million in 2013-14. However, there was a significant increase in the digital subscriber base compared to 2013-14 - from 3.8 million to 5.38 million. We expanded our digital cable brsence to 130 cities. Our internet subscriber base expanded to 70,100 at the end of the 2014-15, across 5 cities. This rebrsents a nearly 80 per cent growth from the 38,600 subscribers we had at the beginning of the year.

During the year, we continued to expand our reach by entering into newer cities that were part of the Phase II rollout plan proposed by the Ministry of Information and Broadcasting (MIB). Together with this, we also carried out proactive seeding in cities and territories falling in Phase II and Phase III of the roll-out plan. We increased our focus towards monetising our existing infrastructure by bundling additional high margin services such as broadband and HD channels. As a result, our revenues grew by 32%, while EBITDA grew by 34% in 2014-15. Operating EBITDA grew even faster by 133.6% on a year-on-year basis, underscoring the increasing share of recurring revenue in the total.

Extending reach

In 2014-15, we continued to act on our focus to create an intensive pan-India brsence. We marked our brsence in new regions such as Nagpur, Pune, Mysore and Dehradun. As a part of the Phase III roll out plan, we entered into several new towns in the states of Kerala, Madhya Pradesh, Maharashtra, Andhra Pradesh and Haryana.

Harnessing operating leverage of existing infrastructure

During 2014-15, we continued to make incremental investments to extend our reach and increase the share of high return, high margin broadband services. This was done with a view to optimise the use of our existing infrastructure. We launched high-speed internet services on the DOCSIS 3.0 platform in Delhi/NCR by leveraging our existing cable network. The DOCSIS 3.0 platform allows us to offer internet speeds ranging from 5 Mbps to 100 Mbps with a data plan policy up to 100 GB at very competitive prices. We will continue to leverage DOCSIS and EOC technologies to offer multiple, differentiated combinations of broadband services aligned to evolving consumer brferences across the cost, speed and data download limits paradigms.

We work to identify new revenue streams in line with our revenue maximisation strategy. In 2014-15, we introduced fresh platforms for advertisers to connect with their desired target group by using our Set Top Box as a platform.

Advertisers can now place their ads on the Electronic Programming Guide (EPG), boot up screens, channel bar and the volume bar.

Enhancing Margins

At SITI Cable, we are fine tuning our strategy and leveraging our core strengths to drive higher margins from our operations. Some of these strategies include:

Increasing ARPU

We are making ourselves relevant to consumers by offering innovative and flexible channel packages on an a-la-carte basis. Therefore consumers can create a bespoke bundle of channels to watch in accordance with their taste and needs. These packages enhance consumer loyalty, lead to greater stickiness, and help in enhancing our ARPU. We also offer bundled services by including brmium content such as HD channels with our existing cable services to further augment ARPU.

Improving Monetisation of LCOs

LCOs are an integral part of our system and we consider them partners in our business strategy and growth. During 2014-15, we worked closely with them to jointly market our products and services, increase our last-mile visibility and generate consumer awareness and a demand pull. We also devised a more equitable revenue share mechanism that rebrsents a win-win for both the LCOs and us. This is done through the mechanism of an interconnect agreement, which we have entered into with all our LCOs and are regularly sharing revenues.

Net Content Cost

During 2014-15, we continued to focus on rationalisation of net content cost. We maintained our focus on building mutually beneficial and long-term relationships with major broadcasters in order to offer our subscribers the best of content at competitive rates. Our content cost grew in line with the industry average during the year. We also increased our carriage revenues by 9.6%, underscoring the extensive reach that we provide to various channels.

Broadband

Broadband is a high margin, high-growth business. We are focusing on optimally leveraging our digital cable infrastructure to provide cost-effective, high-speed broadband services. At SITI Cable, we believe that India's demographic profile and rising economic prosperity and awareness levels will lead to a rapid proliferation of internet connections and data downloads. Therefore, broadband services have a very bright future, with its stable speed and lower costs. The broadband business enjoys huge synergy with our digital cable business. The two-way communication capability of digital cable enables us to provide broadband services by undertaking much lower investments and hence at a much higher ROI. Additionally, our strong LCO partnerships equip us to provide high quality localised broadband services to our subscribers without a proportionate increase in operational and maintenance costs. In 2014-15, we have augmented our broadband reach and subscriber base.

Harnessing synergies within the Group

SITI Cable is part of the Essel Group, India's leading vertically-integrated media and entertainment (M&E) group. Essel Group is also one of the leading producers, content aggregators and distributors of Indian programming, globally. DISHTV, our sister concern, is Asia's largest Direct to home (DTH) company . Our Group's integrated brsence across the M&E value chain has enabled us to derive efficient costs in many facets of our operations. Through a consolidated procurement of content, facilitated through Comnet, our Joint Venture with DISHTV, we are looking to negotiate a improved deal from broadcasters and accordingly offer more value to our customers. We jointly procure common supplies like STBs, augmenting our bargaining power and leveraging on economies of scale. In addition, we have started transitioning certain back-end processes to our Group shared services entity. This lowers operating costs while allowing the operational team to focus on the core business.

Effective LCO partnerships and consumer focus

Over the last few years, we have taken several steps to deepen our relationship with our subscribers and partner LCOs. We are the only MSO that provides gross billing in Phase-1 cities. We provide a web-based "Own Your

Customer" Subscriber Management System, allowing our LCO partners real-time access to subscriber billings, payments, account statements, activation, de-activation, up-gradation, down gradation, packaging and monthly collections. We have set up two call centres with toll-free access for efficient and timely customer service.

We also extended our reach during the year and acquired select direct points from LCOs in the NCR region.

High level of Professional, Integrity and Work Ethics

Professional Management Team

SITI Cable is led by a competent team of seasoned professionals with a focus on corporate governance. During the year, we expanded our leadership quotient by inducting leading talent at senior and middle management level from consumer-oriented industries.. A few of the senior professionals who joined us during the year include:

• Mr. Vinay Chandhok (Chief Operating Officer) - He has over 24 years of experience and has led large teams in mass distribution, retail operations and enterprise/ institutional sales.

m Mr. Sanjeev Mahajan (COO Broadband) - He has over 27 years of experience as a sales professional with leading telecom companies.

m Mr. Bibhash Jha (Head Content & Carriage) - He has over 20 years of distribution experience, including 15 years with Star Sports India.

m Mr. Anil Jhamb (Chief Technology Officer, Broadband) -He has 23 years of experience in the areas of Network Engineering Technology & Operations.

Compliance, Integrity and Work Ethics

We strive to maintain the highest standards of integrity and compliance across our operations. We adhere proactively to regulatory guidelines, maintain a high level of transparency and have uniform commercial policies across all our locations. We are among the only MSOs to have entered into interconnect agreements with all our LCOs and share revenues with them as per agreement. In line with our principles, we do not release br-activated STBs to shore up our numbers. We activate our STBs only after receiving activation charges along with a completed subscriber acquisition form and necessary clearances. Additionally, we are the only MSO to provide gross billing in phase 1 cities as per TRAI guidelines. Till date a majority of our subscribers have submitted their customer application forms and we have full cognizance of our customers' coordinates and brferences.

Fund Raising

During 2014-15, we successfully raised Rs. 2,211 million from the secondary market via the Qualified Institutional  Placement route in March 2015. The capital raised is to fund our Phase III expansion and to roll out broadband in various cities. Marquee investors such as HDFC, UBS, Reliance MF and others subscribed to this issue.

Financial Review

As a result of our expansion and monetisation strategies SITI Cable reported a strong financial performance in 2014­15. Our revenues grew by 32%, and EBITDA grew by 34%. Operating EBITDA grew even faster by 133.6% on a year-on-year basis, underscoring the increasing share of recurring revenue in the total.

Internal Control Systems

At SITI Cable, we have implemented sound internal control systems to ensure continuity of operations and efficient management of risks. We have adopted well-defined standard operating procedures, covering various scenarios. We have empowered relevant people to take appropriate actions. To ensure an optimal productivity while maintaining stringent and adequate controls, we have assigned limits, defined operational budgets and an approval mechanism for all our subsidiaries. We have procured compliance modules to manage subsidiary operations better. High-value transactions by subsidiary companies, such as purchase of head-ends or capital expenditure, are cleared through a robust approval mechanism.

We have put in place requisite systems to ensure responsible utilisation of the organisation resources and protection of assets against unauthorised use. Through incorporation of standard operating procedures into the SAP cash management system we monitor and record of various transactions and maintain high levels of operating efficiency.

Compliance with various policies and procedures are periodically monitored across various levels by a team of internal and external auditors. The internal audit committee meets four times every year to review the internal control mechanism of the Company and capability of the system to reduce the risks to acceptable levels.

Human Resource Development

At the heart of our organisational objective is to build a strong, performance driven and empathetic people culture. We have created an environment and formulated policies that enable us to attract, nurture and retain top-notch talent that is the best in the industry. We have a structured induction programme to ensure smooth on-boarding of new employees. In addition, a well-articulated career advancement program helps employees aspire for career growth and greater responsibilities. Our performance-rewarding culture is accentuated by monetary and intangible incentives designed to encourage excellence.

Performance-driven Appraisal System

In order to create an excellence driven organisation that fosters a proactive and creative approach, we  have developed a KRA and PLI (Performance Linked Incentive) based appraisal system. KRAs are defined for each team member at the beginning of the appraisal cycle and periodically reviewed. The compensation structure comprises of a fixed and variable component. Performance during the year and evaluation against defined KRAs is the basis for defining incentives and career growth. We are also looking to introduce an ESOP scheme for Senior management and Key Personnel shortly to align priorities further.

ACE Employee of the month

The programme is aimed at recognising the efforts of employees towards excellence in operational performance. Its broader objective is to boost team and individual morale towards greater productivity. The award comprises an apbrciation certificate a trophy and a prize.

The ACE monthly winner is decided by the 'Rewards and Recognition Committee' after evaluating nominations received from various departments across the country. At the end of the year, all 2 ACE employees compete for the ACE Employee of the Year recognition. The winner receives the CEO's certificate for the year, a trophy and an all expenses paid family holiday in India.

Induction Programme: Voyage

The Voyage 2014 programme focused on inducting candidates from diverse industries and to take them through a 'building blocks' training to ensure future growth. This is part of our strategy of cross-pollination of ideas and adopting best practices from lateral learnings. Voyage introduced the mentor-mentee methodology for new joinees. With a rigorous two month induction schedule, the programme enabled new joinees to hone industry knowledge and get orientated with the organisational processes. As a result, new joinees are able to hit the ground running and perform to the best of their abilities in their respective profiles.

Training and Development: Corporate Culture

Orientation into the corporate culture is a programme which is specifically designed for people who are with the organisation for three months or less. The programme focuses on supporting employees in adjusting to the new culture and internalise the spirit of the organisation.

This has enabled our new recruits get comfortable in the operating environment and make new friends.

Talent Acquisition: New hires from different Industries

In 2014-15, SITI Cable inducted cross-functional expertise form diverse industries. This brought to us many fresh perspectives and best practices from various consumer-interfacing industries such as telecom, FMCG and broadcasting. This is expected to foster growth and aid our transformation into a consumer-centric organisation.

Outlook

During the last three years, we have aggressively invested to expand our reach across India. The inherent advantage of our business model enables us to leverage our existing infrastructure to offer dual play, viz. content and broadband, with very limited new investments. We will continue to invest in Digital Cable, DOCSIS 3.0 and EOC technologies to ensure we provide multiple options to the consumer to view content.

Viewers are rapidly shifting to non-linear content consumption, where the TV is one of the many platforms on which content is viewed. This is aided by the growing penetration of smart devices and internet enabled TVs. SITI Cable, through its high speed broadband services and other bundled VAS services is well positioned to suitably address this growing demand in  its focus markets. Therefore, we shall be a platform for our customers to access the internet and television content from, anytime, anywhere. Our growth shall be aided by the inherent advantages of digital cable over other technologies. Together with this, we shall leverage the strong capabilities of our Group in the M&E industry, which allows us to provide a formidable combination of content, distribution platforms, service quality and value mix.

In the near-term, our investments will remain consistent as we further expand our digital cable network across India and launch broadband services in newer markets. Upon completion of this infrastructure creation, the routine operational and maintenance costs will be much lower, leading to recurring and stable cash flows (with a positive bias) and lower finance costs. With an expanded subscriber base, growing penetration of our broadband services and increasing demand of other value-added services, we anticipate a consistent improvement in our margins. We shall also benefit from the tailwind provided by the impending improvement in the economy that will boost discretionary spends. This in turn, will drive a higher demand for brmium channels and HD channels among others, leading to a further growth in our ARPUs.

Therefore, SITI Cable is confident of its ability to deliver strong and sustainable stakeholder returns in the years to come.

Cautionary Statement

In this Annual Report, we have disclosed forward looking information to enable investors to combrhend our prospects and take investment decisions. This report and other statements - written and oral - that we periodically make contain forward looking statements that set out anticipated results based on the management's plans and assumptions. We have tried, wherever possible, to identify such statements by using words such as 'anticipate', 'estimate', 'expects', 'projects', 'intends', 'plans', 'believes', and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward looking statements will be realised, although we believe we have been prudent in our assumptions. The achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward looking statement, whether as a result of new information, future events or otherwise.