Press release from Business Wire India
Source: Zoom Communications
Thursday, February 03, 2011 06:27 PM IST (12:57 PM GMT)
Editors: General: Economy, Law & justice, Politics, Sports; Business: Accounting & management consultancy services, Media & entertainment, Sports
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Media Statement from Zoom Communications
Prelimnary Response to the first Report of the HLC on Host Broadcasting
New Delhi, Delhi, India, Thursday, February 03, 2011 -- (Business Wire India) -- The findings of the First Report of the HLC on Host Broadcasting for the Delhi Commonwealth Games (CWG 2010) had been made public on the 1st of February 2011. ZOOM Communications would like to clarify and correct several inaccuracies made by the Shunglu Committee in the Report.
FINDING:SIS Live sub-contracted to ZOOM Communications for Rs. 177 Crores
Key Flaws Of The Report
1. Value of sub-contract to ZOOM Communications is Rs. 160.74 Crores and not Rs. 177 Crores.
2. ZOOM Communications sub-contract costs were significantly in excess of Rs. 110 Crores. The company made an investment of Rs. 65 Crores towards the purchase of equipment for CWG 2010 alone.
3. ZOOM Communications estimated profit from the CWG sub-contract 2010 is approximately 32 Crores and not Rs. 65 Crores.
4. Estimated profit stated in October 2010 of Rs. 75 Crores was for the Financial Year 2010-11 and includes various other projects and not CWG alone.
5. ZOOM Communications had no commercial dealings with Prasar Bharati between CYG Pune 2008 and CWG 2010.
6. SIS Live and ZOOM Communications are two completely independent entities with no linkages at the Board or Ownership Level.
7. ZOOM Communications considers the report to be prejudiced as the Shunglu Committee did not contact any of its representatives on the allegations.
Fact 1: The value of the sub-contract to ZOOM Communications is Rs. 160.74 Crores and not Rs. 177 Crores as stated in the finding of the First Report of the HLC on Host Broadcasting.
Fact 2: The figure of Rs. 177 Crores includes a 10.3% service tax that is not revenue to ZOOM Communications but service tax paid/payable to the Government of India.
Fact 3: It is a worldwide practice that all primary contractors request for costs from potential sub-contractors in order to arrive at their own competitive bid price. In the case of CWG 2010 too, most of the eligible entities that participated in the RFP had sought pricing from ZOOM Communications for providing varied levels of Production and Technical services prior to submitting their own bids.
In fact, SIS Live too sub-contracted ZOOM Communications for CWG 2010 only after requesting for competitive bids from various international sub-contractors.
FINDING: ZOOM Communications had costs of Rs. 111 Crores towards its sub-contract with SIS Live
Fact 1: ZOOM Communications completed all the requisite deliverables including Hotels for all Crew, Diems, Wages for Crew provided by ZOOM, Helicopter hire, RF licenses, Freight for equipment, Travel- overseas and domestic, Clearing and forwarding, Consumables, Warehousing and office space, Local transport, Food, etc. All these were part of its scope of work in the sub-contract with SIS Live and have resulted in costs currently estimated to be approximately Rs. 129 Crores for this project.
Fact 2: In fact, to ensure the successful completion of its deliverables to SIS Live, ZOOM Communications made fresh capital investments of approximately Rs. 65 Crores towards the purchase of High Definition Broadcast equipment. The company carries the risk of non-deployment of this specialised equipment in subsequent years thereby leading to potential losses in the future. This fresh investment was in addition to existing equipment inventory (gross block in excess of 160 Crores) owned by ZOOM Communications, a significant portion of which was deployed for the successful broadcast of the games.
FINDING: ZOOM Communications made a profit of Rs. 65 Crores from the CWG sub-contract
Fact 1: ZOOM Communications is one of the largest Outside Broadcast (OB) Services provider in South East Asia. This estimation of profit made for the entire financial year 2010-11 includes various other projects that the company has undertaken in live sports and in long term installations for broadcasters that it continues to deliver upon.
Fact 2: ZOOM Communications has not made a profit of Rs. 65 Crores from the CWG sub-contract. The company had estimated a profit of Rs. 75 Crores in October 2010 for the entire financial year 2010-11 (that is still underway and ending on 31st March 2011). However, this estimated profit for the entire financial year of 2010-2011 has now been revised to approximately Rs. 52 Crores.
Fact 3: ZOOM Communications would like to state that the estimated profit from the SIS Live sub-contract is likely to be approx 20% of its sub-contract value of Rs. 160.74 Crores, which is roughly Rs. 32 Crores. This percentage is significantly less than the normal percentage of profit for ZOOM Communications in earlier years. The estimated profits from other projects conducted and underway in FY 2010-11 is estimated to be approximately Rs. 20 Crores.
FINDING: Irregular award of contract in Commonwealth Youth Games (CYG) 2008 that was adversely commented upon by CVC.
Fact 1: Zoom Communications responded to tenders floated by Doordarshan for the provision of Equipment and Manpower for CYG 2008. ZOOM was awarded the contract on the basis of the tender. This was successfully executed. ZOOM Communications is not aware of any adverse comments by the CVC.
FINDING: Role of Vaseem Ahmed Dehlvi
Fact 1: ZOOM Communications strongly refutes the finding that Vaseem Ahmed Dehlvi had any special access to the former CEO of Prasar Bharati B.S. Lalli or the DG, Doordarshan Aruna Sharma. In fact, prior to the letter of Award to SIS Live in October 2009, Vaseem Ahmed Dehlvi had not met any official of Prasar Bharati and did not attend any meetings conducted by the Prasar Bharati. Thereafter, he attended meetings along with other senior SIS officials. Vaseem Ahmed Dehlvi is a reputed broadcast professional with over 25 years of experience; ZOOM Communications also strongly refutes the allegations that he "bullied" PB officials into not asking any inconvenient questions.
FINDING: ZOOM Communications had regular commercial dealings with Prasar Bharati since the CYG Pune 2008.
Fact 1: ZOOM Communications clarifies that it has had absolutely no commercial dealings with Prasar Bharati between CYG Pune 2008 and CWG 2010 Content/ Tape transfer facility contract.
FINDING: SIS Live assigned the CWG 2010 Production and Coverage contract to ZOOM Communications.
Fact 1: ZOOM Communications strongly refutes the findings that suggest that the contract was assigned to ZOOM Communications by SIS Live. ZOOM Communications was sub-contracted by SIS Live and performed its defined scope of work under the overall supervision and responsibility of SIS Live.
FINDING: SIS Live and ZOOM Communications are two sides of the same coin.
Fact 1: SIS Live and ZOOM Communications are two completely independent companies having no linkages with each other, both at ownership and management levels.
Furthermore, ZOOM Communications is a responsible broadcast service provider and has been providing world class services for the past 20 years and is a leading company in this domain. In fact, the company had a turnover of over Rs. 90 Crores in FY 2009-10 and had profits of 27% or approximately Rs. 24 Crores.
It is our belief and conviction that for CWG 2010, the company provided world-class services at a competitive price to SIS Live and our services to them were critical to ensuring the successful coverage of CWG 2010.
CONTACT DETAILS
Deepika Bansal, Zoom Communications, +91 9811292247, deepikab@sixdegreespr.co.in
KEYWORDS
ECONOMY, LAW, POLITICS, SPORTS, CONSULTANCY SERVICES, MEDIA
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