Your Directors have pleasure in presenting the 31st Annual Report covering the businessand operations and Audited Financial Statement of your company for the Financial Yearended on 31st March 2016.
1. Financial Highlights:
The highlights of the financial results of your company are as under:
| || || |
(Rs. in Lacs)
| ||Standalone ||Consolidated |
| ||Year Ended 31.03.16 ||Year Ended 31.03.15 ||Year Ended 31.03.16 ||Year Ended 31.03.15 |
|Total Revenue ||5075.96 ||3272.05 ||5089.42 ||3298.22 |
|Earnings Before Interest Depreciation Taxation and Amortization (EBIDTA) ||448.97 ||184.15 ||461.38 ||188.03 |
|Interest and Finance Charges ||(85.37) ||(56.46) ||(86.94) ||(56.96) |
|Depreciation ||(49.80) ||(70.54) ||(91.91) ||(86.94) |
|Profit Before Tax ||313.80 ||57.15 ||282.53 ||44.13 |
|Provision for Tax -Current year ||(116.55) ||(20.70) ||(116.55) ||(20.70) |
|Provision for (Deferred Tax)/ Assets ||10.88 ||15.40 ||10.88 ||15.40 |
|Profit After Tax ||208.13 ||51.85 ||176.86 ||38.83 |
|Appropriation: || || || || |
|Balance carried over to Balance Sheet ||208.13 ||51.85 ||176.86 ||38.83 |
2. Results of operations:
(a) Standalone Results:
The gross turnover on a standalone basis increased to Rs. 5075.96 lacs from Rs.3272.05 lacs in the previous year registering a growth rate of 55.13%. The operatingEBIDA was Rs. 448.97 lacs as compared to Rs. 184.15 lacs during the last financialyear.
(b) Consolidated Results:
On consolidated basis revenue from operations for FY 2015-16 at Rs. 5089.42lacs was higher by 54.31% over last year figure of Rs. 3298.22 lacs. EBIDTA was Rs. 461.38lacs registering a growth of 145.53% over corresponding figure of Rs. 188.03 for theprevious financial year.
In accordance with the Accounting Standards AS-21 on Consolidated FinancialStatements read with Accounting Standard AS-23 on Accounting for Investment in Associatesand AS-27 on Financial Reporting on Investment in Joint Ventures the audited ConsolidatedFinancial Statements are provided in the Annual Report.
Keeping in view of the funds requirement especially for meeting higher working capitalrequirement for set top business and investment in joint venture companies your Board ofDirectors are of the view that the current years profits be ploughed back into theoperations and hence do not recommend any dividend payment for the financial year ended31st March 2016. However the Board of Directors of your company are quite confident todeliver growth and enhance shareholders value in the coming years.
4. Corporate Review:
Reflecting your companys focus on delivering superior performance your companyhad a good financial year with unprecedented growth in the overall revenue and profits ofthe Company. During the financial year 2015-16 the Indian economy saw a revival with theGovernments economic policies showing positive results and the effects of sucheconomic recovery were visible in the growth of the Indian television and media industry.Your company has two business divisions. The division-wise performance of the company isas follows:
CATV Equipment & Systems Division:
This division sells electronic equipment to cable TV operators for use in their cableTV network. The Phase-3 of the digitalization programme of the government required allurban areas of India to switch to digital broadcasting from Jan 01 2016. This created ahuge demand for digital headend equipment and set top boxes (STBs) both of which yourcompany manufactures. Your companys sales grew exponentially. But as it happens sooften in India the whole digitalization process came to an abrupt halt after cable TVoperators took stay orders from high courts on some ground or the other. These stay ordersare still in place. It is expected that they will be lifted by the end of October/Novemberthis year.
The Set Top Box business of the Company contributed a revenue of Rs. 1683.21 lacs ascompared to Rs. 485.00 lacs in the previous year. Hence venturing into manufacturing ofSet Top Boxes was a game changing step for the Company which is evident from the fact thatthe company crossed the landmark figure of Rs. 50.00 Crores turnover during the year underreview.
The companys flagship digital headend system "TRINETRA"has received a very good response from the market and the operators prefer it to importedsystems from china.
Phase-4 of the government digitalization programme which envisages switch-off of analogsignal in all semi-urban and rural areas (rest of India) will come in to effect from Jan01 2017. Like the previous year your company expects a big demand for digital headend andset top boxes. However the experience of Phase-3 has introduced an element ofuncertainty.
Hotel Systems & Services Division:
This division primarily addresses the hospitality sector providing solutions in CableTV and IPTV. A change in regulatory policy and slowdown in hospitality had both adverselyimpacted your companys business in this division. The previous year your Companyoptimized operating costs in this division and slowly brought it back to profitability. Inparallel the Company applied for a Digital Addressable System (DAS) licence from thegovernment which enables the Company to operate as a cable TV operator. You will be happyto know that your company has obained this license and is now preparing to become aservice provider to hotels rather than equipment supplier. This is a big change in thebusiness model but your company is confident of success because of its unrivalledleadership and years of experience in this segment.
5. Projects and Expansion Plans:
Digitalization of cable TV has created a huge demand for set top boxes in the country.To address this demand and in order to provide complete range of products to cabletelevision operators and MSOs your company has started in-house manufacturing of worldclass Set Top Boxes (STBs) in its existing factory at Dehra Dun. The STBs manufactured bythe Company have received excellent response from the market. The Indian market is stilldominated by Standard Definition (SD) STBs but gradually the consumers are moving to HighDefinition (HD) Boxes. The demand for HD boxes is expected to climb steeply. In order tomeet the demand of STBs your company is setting up a hardware and software design centreat its premises in Noida. This will enable your company to customize designs for largercustomers and offer comprehensive technical support - key requirement of this business.Commercial production is expected to begin in the current financial year.
6. Joint Venture Companies:
As required under Clause 32 of the Listing Agreement and Section 129 of the CompaniesAct 2013 the consolidated financial statements have been prepared by the Company inaccordance with the applicable Accounting standards and form part of the Annual Report. Astatement containing the salient features of the Financial Statements of the jointventures of your Company in Form AOC-1 as required under Rule 5 of the Companies(Accounts) Rules 2014 form part of the notes to the financial statements.
Pursuant to the provisions of Section 136 of the Companies Act 2013 the financialstatement of the Company consolidated financial statement along with the relevantdocuments are available on the website of the Company.
7. Certification and Recognitions:
Quality of products and services is vital to any business. Your company strives toachieve excellence in quality by instituting high standards periodic checks and reviewsas we believe that right and efficient processes can only help us in deliveringconsistently against all odds.
Your companys Quality Management System (QMS) is aligned and focused with thelong term objectives of the company. The QMS of the Company has been reassessed this yearas per the requirement of ISO 9001:2008 by the certification agency who conducted arenewal audit. Post audit the certification agency declared that the QMS of the Companycontinues to conform to international standard and recommended for renewal of the ISOCertificate.
During the year under review the Company has accepted deposits from the members of theCompany under the Companies Act 2013 (here in after referred as the Act).The details relating to deposits covered under Chapter V of the Companies Act 2013 arehere under:
|Sr. No. ||Particulars ||Amount (in Rs.) |
|1 ||Accepted during the financial year ||2950000/- |
|2 ||Remained unpaid or unclaimed as at the end of the year ||Nil |
|3 ||Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved:- || |
| ||(i) at the beginning of the year || |
| ||(ii) maximum during the year || |
| ||(iii) at the end of the year ||Nil |
|4 ||Details of deposits which are not in compliance with the requirements of Chapter V of the Companies Act 2013 ||Nil |
9. Internal Financial Control Systems and their Adequacy:
Your company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Internal Audit Department monitors and evaluates theefficacy and adequacy of internal control system in the Company its compliance withoperating systems accounting procedures and policies at all locations of the Company.Based on the report of internal audit function process owners undertake corrective actionin their respective areas and thereby strengthen the controls. Significant auditobservations and recommendations along with corrective actions thereon are presented tothe Audit Committee of the Board. The Statutory Auditors has also commented on theinternal financial control system in their report.
The compliance team in the Legal and Secretarial department ensures amongst othersthat there are adequate systems and processes in the Company commensurate with the sizeand operations to monitor and ensure compliance with applicable laws rules regulationsand guidelines. The Human Resources department carries out similar exercise for ensuringcompliance with all relevant legislation.
10. Audit Committee of the Company:
Your companys Audit Committee comprises 4 (four) members of which 3(three) areindependent. The composition of the Audit Committee is in compliance with the requirementsof Section 177(8) of the Act and amended Clause 49 of the Listing Agreement entered intowith the Stock Exchanges. All the recommendation made by the Audit Committee were acceptedby the Board during the financial year 2015-16.
11. Declaration by Independent Directors:
In compliance with Section 149(7) of the Act all Independent Directors of the Companyhave given their declaration that they meet the criteria of independence as laid down149(6) of the Act and Regulation 16(1) (b) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
12. Policy on Directors Appointment and Remune-ration:
The policy of the Company on directors appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a Directorand other matters provided under Section 134(3) (e) and 178(1) to (3) of the Act 2013 isavailable on the website of the Company.
13. Key Managerial Personnel:
In terms of the Section 134(3) (q) and 203 of the Act 2013 Board of Directors intheir meeting held on 29.05.2016 has appointed Mrs. Ankita as Company Secretary andCompliance Officer of the Company in place of Ms. Anubha Samariya. Pursuant to theprovisions of Section 203 of the Act. 2013 which came into effect from 1st April 2014the appointments of Mr. Syed Athar Abbas Managing Director Mr. Vinod Rawat ChiefFinancial Officer and Mrs. Ankita as Company Secretary as the Key Managerial Personnel ofthe Company were formalized.
14. Board Effectiveness :
(i) Board Evaluation :
Your company conducted a formal Board Effectiveness Review as part of its efforts toevaluate identify improvements and thus enhance the effectiveness of the Board ofDirectors (Board) its Committees and individual directors. This was in line with therequirements mentioned in the Actand the Listing Agreement.
The Nomination and Remuneration Committee of the Board has designed and executed thisprocess which was adopted by the Board. The Directors were vocal about the Boardfunctioning effectively but also identified areas which show scope for improvement. TheIndividual Committees and Board Members feedback was shared with the Chairman. Themanner in which the evaluation has been carried out has been explained in the CorporateGovernance Report.
(ii) Remuneration Policy :
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.
15. Change in nature of Business:
During the year under review there has been no change in the nature of business of theCompany and there are no material changes affecting the financial position of the Companywhich have occurred between March 31 2016 and the date of this Report.
16. Conservation of energy technology absorption and foreign exchange earnings andoutgo:
(i) Conservation of Energy:
The overall energy consumption of the Company is not substantial as being & anelectronic manufacturer; its processes require very little energy. However it hassuccessfully implemented various energy and fuel conservation projects with internalexpertise and continued its emphasis on energy conservation through operationaloptimization continuous monitoring and implementation of energy saving mechanisms. Duringthe year the Company has taken initiative by going for LED lighting at the manufacturingfacility to meet general lighting requirements.
(ii) Research and Development:
Research & Development of new designs frameworks process and methodologiescontinue to be most importance to the Company. This allows the Company to enhance qualityproductivity and customer satisfaction. Your company has successfully deployed a diverseteam of experienced people to meet these challenges. Your company continues to upgradeexisting technology on an on-going basis. This enables the company to up-grade existingproducts and introduces new products to meet changing market needs.
(iii) Technology Absorption Adoption and Innovation:
Your company has made efforts towards technology absorption adoption and innovation.Continuous efforts are made with an objective to achieve development of newproducts/application improvement in productivity reduction in product wastage etc. Yourcompany strives to remain abreast of state-of-the-art systems and has used tested provenand appropriate technology to suit the special needs of its customers. Technical helpespecially in software design was taken from consultants and component vendors. Severaltangible and intangible benefits are derived.
(iv) Foreign Exchange Earning and outgo:
| ||Year Ended 31.03.16 (Rs.) ||Year Ended 31.03.15 (Rs.) |
|1. Foreign Exchange Inflow: || || |
|a) Exports & Merchant || || |
|Trading ||15606060 ||76192407 |
|b) Services ||25972931 ||38726433 |
|2. Foreign Exchange || || |
|Outflow : || || |
|a) Materials ||200700558 ||110916005 |
|b) Travelling & Other Expenses ||1634843 ||2492209 |
|c) Rent ||151457 ||457809 |
17. Directors Responsibilities Statement:
Pursuant to the provisions contained in Section 134 (5) of the Act your Directorsbased on the representation received from the Operating Management and after enquiryconfirm.
a. that in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation and that no material departure has beenmade from the same;
b. that they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period. ;
c. that they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. that they have prepared the annual accounts for the financial year ended 31st March2016 on a going concern basis;
e. that they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively; and
f. that they have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
18. Related Party Transactions:
During the year there were no materially significant related party transactions made bythe Company with Promoters Directors Key Managerial Personnel or other designatedpersons which may have a potential conflict with the interest of the Company at large. Allrelated party transactions (RPT) entered into during the financial year2015-16 with Related Parties as defined under the Act and Clause 49 of the ListingAgreement were in the ordinary course of business and were on an arms length basis.During the year the Company had not entered into any transaction referred to in Section188 of the Act with related parties which could be considered material under the ListingAgreement.
Accordingly the disclosure of Related Party Transactions as required under Section134(3) of the Act in Form AOC-2 is not applicable. Attention of Members is drawn to thedisclosures of transactions with related parties as set out in Notes to Accounts formingpart of the Standalone financial statements. As required under Clause 49(VIII) of theListing Agreement the Company has formulated a RPT Policy which is available on thewebsite of the Company.
19. Subsidiary/Associate Companies:
The Company does not have any subsidiary. However the Company has the followingjointly controlled entities :
1. Catvision Unitron Pvt. Ltd.
2. Unicat Ltd.
20. Code of Conduct:
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe Company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings/ behaviors of any form and the Board has laid down thedirectives to counter such acts. The code laid down by the Board is known as "code ofbusiness conduct" which forms an Appendix to the Code. The Code has been posted onthe Companys website www.catvisionindia.com.
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. The Code gives guidance through examples on the expectedbehavior from an employee in a given situation and the reporting structure.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code. All Management Staff were given appropriate training in this regard.
21. Prevention of Insider Trading:
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in companys shares andprohibits the purchase or sale of company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed. The Board isresponsible for implementation of the Code.
All Board Directors and the designated employees have confirmed compliance with theCode.
22. Auditors Report & Secretarial Audit Report:
The observation made in the Auditors Report and Secretarial Auditorsreport read together with relevant notes thereon are self explanatory and there are noqualifications reservations adverse remarks.
(i) Statutory Auditors:
M/s Gaur & Associates Chartered Accountants auditors of the Company wereappointed as a Statutory Auditors of the Company from the conclusion of the previousAnnual General Meeting for a term of three years i.e. until the conclusion of the 31stAnnual General Meeting. They have confirmed the eligibility under Section 141 of the Actand the Rules framed there under for reappointment as Auditors of the Company. As requiredunder Clause 49 of the Listing Agreement the auditors have also confirmed that they holdvalid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India.
In term of Section 139 of the Act the Company shall place the matter relating to suchappointment ratification by members at every Annual General Meeting. So the Auditor willbe appointed every year by the shareholders. Thus an appropriate resolution seeking yourapproval to the said re-appointment is appearing in the Notice convening the AnnualGeneral Meeting of the Company.
(ii) Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act and Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 Pramod Kothari & Co. a practicingfirm of Company Secretaries holding Practicing No. 11532 were appointed SecretarialAuditor to conduct the Secretarial audit of the Company for the financial year ending 31stMarch 2017. The Report of the Secretarial Audit carried out is annexed herewith as "Annexure-A".
The Board at its meeting held on 29th May 2016 has re-appointed Pramod Kothari &Co. a practicing firm of Company Secretaries as Secretarial Auditor for conductingSecretarial Audit of the Company for financial year 2016-17.
There are no qualifications reservations or adverse remarks or disclaimers in thereports of the Statutory Auditors and Secretarial Audit Report.
24. Business Risk Management:
The Companys vigorous risk management framework identifies and evaluates businessrisks and opportunities. The Company recognizes that these risks need to be managed andmitigated to protect its shareholders and other stakeholders to achieve its businessobjectives and enable sustainable growth. The risk framework is aimed at effectivelymitigating the Companys various business and operational risks through strategicactions. Risk management is embedded in our critical business activities functions andprocesses. The risks are reviewed for the change in the nature and extent of the majorrisks identified since the last assessment. It also provides control measures for risksand future action plans.
The Company believes that the overall risk exposure of present and future risks remainswithin risk capacity.
25. Management Discussion and Analysis:
Information of the operation and financial performance among others is given in theManagement Discussion and Analysis report which is annexed to this Report and has beenprepared in accordance with Clause 49 of the Listing Agreement.
26. Corporate Governance:
Your company is committed to Corporate Governance as stipulated under Clause 49 of theListing Agreement. Your company believes that great companies are built on the foundationof good governance practices. The Board of Directors of your company lays strong emphasison transparency accountability and integrity.
As required under Clause 49 of the Listing Agreement report of Corporate Governancetogether with Auditors Certificate on compliance of the conditions of CorporateGovernance along with the Management Discussion and Analysis report and CEO/CFOCertificate on discharge of finance function are attached as Annexure to this report.
27. Depository System:
Trading in Equity Shares of your company in the dematerialized form is compulsory forall shareholders with effect from 25th September 2000 in terms of the notification issuedby the Securities and Exchange Board of India (SEBI). The Equity Shares of the company areavailable for dematerialization with the National Securities Depository Ltd. (NSDL) andCentral Depository Services (India) Ltd. (CDSL) under ISIN No. INE 660B01011. 69.17% ofthe Equity Shares of the Company are in the demat form as on 31st March 2016.
Mr. Sudhir Damodaran retires by rotation at the forthcoming Annual General Meeting andis eligible for re-appointment.
29. Statutory Disclosures:
(i) Particulars of Loans Guarantees or investments:
The Company has not given any loans or guarantees covered under the provisions ofsection 186 of the Act.
(ii) Vigil Mechanism / Whistle Blower Policy:
The Company has a vigil mechanism named Whistle Blower Policy to deal with instance offraud and mismanagement if any.
In staying true to our values of Strength Performance and Passion and in line with ourvision of being one of the most respected companies in India the Company is committed tothe high standards of Corporate Governance and stakeholder responsibility.
The Company has a Whistle Blower Policy to deal with instances of fraud andmismanagement if any. The Policy ensures that strict confidentiality is maintained whilstdealing with concerns and also that no discrimination will be meted out to any person fora genuinely raised concern.
During the year 5 (five) Board Meetings and 4 (four) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the Act.
(iv) Extract of Annual Return:
The Extract of Annual Return as prescribed in Form No. MGT-9 of the Companies(Management and Administration) Rules 2014 is appended as Annexure-B to thisReport.
(v) Significant and Material Orders passed by the Regulators or Courts or Tribunal :
There are no significant material orders passed by the Regulators/Courts/Tribunalimpacting the going concern status of the Company and its future operations. There arealso no material changes and commitments after the closure of the year till the date ofthis report which affect the financial position of the Company.
(vi) Prevention of Sexual Harassment at Workplace:
The Company has zero tolerance for sexual harassment at workplaces and has in place anAnti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment ofWomen at Work Place (Prevention Prohibition and Redressal) Act 2013. An internalcomplaints Committee has been set up to redress complaints received regarding sexualharassment. All the employees (permanent contractual temporary trainees) are coveredunder this policy. No complaints pertaining to sexual harassment were received in thefinancial year 2015-16.
(vii) Particulars of Employees and Related Disclosures:
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 has been appended as Annexure-Dto this Report. The information required pursuant to Section 197 of the Act read with Rule5(2)&(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of employees of your company is available during business hours onworking days up to the date of the ensuing Annual General Meeting. If any member isinterested in obtaining a copy thereof such member may write to the Company Secretarywhereupon a copy would be sent.
As required under Section 197(12) of the Act and Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 a statement containingthe names of the top ten employees in terms of remuneration drawn is enclosed.
(viii). Change in Share Capital:
There has been no change in the capital structure of the Company during the year underreview.
30. Acknowledgement and Appreciation:
The Board takes this opportunity to sincerely thank all its stakeholders i.e..shareholders customers suppliers contractors bankers government authorities andinternational business associates and the immediate society for their un-stinted supportand cooperation during the year.
The Board appreciates and value the contribution made by every member of Catvisionfamily.
| ||S. A. Abbas |
| ||Managing Director |
| ||(DIN: 00770259) |
| ||Hina Abbas |
|Place: Noida-U.P. ||Executive Director |
|Date: 29th May 2016 ||(DIN : 01980925) |