HOTLINE TELETUBE AND COMPONENTS LIMITED
ANNUAL REPORT 2005-2006
Hotline Teletube & Components Ltd.
Your Directors are pleased to present the Seventeenth Annual Report
together with the Audited Statement of Accounts of the company for the year
ended 31st March 2006.
FINANCIAL RESULTS (Rs. In Lacs)
Particulars Year ended Year ended
31st March 2006 31st March 2005
Sales and Other Income 4796 6467
Depreciation and Financial
Expenses 320 467
Financial Expenses 200 227
Cash Profit/(Cash Loss) 120 240
Depreciation 136 128
Net Profit/(Loss) before tax -16 112
Tax Including FBT: 13 61
Deferred Tax: -13 -39
Net Profit After Tax -16 90
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to sub section (2AA) of section 217 of the Companies Act, 1956 the
Board of Directors of the Company hereby state and confirm that:
(i) In the preparation of Annual Accounts for the year ended 31st March
2006, the applicable Accounting Standards have been followed.
(ii) The financial statements do give a true and fair view of the state of
affairs of the company for the financial year ended 31st March 2006 and
your directors have selected and applied the consistent Accounting Policies
and the judgement and estimates made therein are reasonable and prudent.
(iii) Proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956 for
safe guarding the assets of the Company and for preventing and detecting
fraud and other irregularities have been ensured.
(iv) The Annual Accounts for the year ended 31st March 2006 have been
prepared on a going concern basis.
During the year, the company has incurred a net loss of Rs.16 lakhs as
against a net profit after tax of Rs.90 lakhs in the year 2004-2005.
Considering decline in Black & white TV industry, your company had started
manufacturing sheet metal parts for Colour TV tubes. It has been supplying
these parts to Hotline CPT Limited. During the year under review the scale
of operations of Hotline CPT Limited were severally effected due to non
availability of funds. This affected the results of your Company as well.
The turnover including other income declined from Rs. 64.67 crores to
In view of losses in the current year your Directors are not recommending
any dividend this year.
There is still some demand for Black & White Televisions. However, due to
high rate of taxation, the sales in organized sector have gone down
drastically. Your Company has represented to government for reduction in
excise duty and sales tax to shift the business to organized sector.
Besides there is market for black & white picture tubes in CCTV, Defence
Application etc. Decision to produce Black & White Tubes will depend on the
Government policy and demand from other applications.
The focus of the Company is to produce sheet metal parts for Colour Picture
Tube industry. The profitability of the Company is dependant on the Colour
TV industry which is witnessing a growth of over 12-15% for last 5 years.
Presentably Company is producing sheet metals parts for Hotline CPT Limited
only. It has plans to diversify into production of sheet metal parts for
other Companies within or outside the Industry as well to fully utilize its
capacity. If the scales of Hotline CPT Limited increase, the profitability
of your Company will also improve.
A separate section on Corporate Governance and a Certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with the
Stock Exchanges, form part of the Annual Report.
The Company has not accepted any fixed deposit from the public during the
At present the shares of Company are listed on The Stock Exchange, Mumbai.
The Company has paid the listing fees of The Stock Exchange, Mumbai for the
During the year the share of the Company got De-listed from Calcutta Stock
Exchange. The Company has completed all formalities for Delisting from
Madhya Pradesh Stock Exchange as well.
Mr. D.C. Mathur and Mr. Amarjit Chopra retire by rotation and being
eligible; offer themselves for reappointment at the ensuing Annual General
Meeting. Mr. Anuj Gupta was appointed as Additional Director till the
Annual General Meeting. He is to be appointed by you as a Director of the
Company subject to retirement by rotation. Brief resume of the above
Directors, as stipulated under Clause 49 of the Listing Agreement with the
Stock Exchanges, are given in Corporate Governance Report forming part of
the Annual Report. During the year Mr. Govind Narain, and Col B.K. Rai
resigned from the Directorship of the Company.
M/s. S. S. Kothari Mehra and Co., Chartered Accountants, Delhi, Statutory
Auditors of the Company retire as Auditors of the Company at the
forthcoming Annual General Meeting and being eligible offer themselves for
reappointment. The Audit Committee of Directors at its meeting held has
recommended continuing the appointment of M/s. S. S. Kothari Mehta and Co.
as Statutory Auditors of the Company.
OBSERVATION OF AUDITORS
The observation of Auditors is self explanatory and/or has been suitably
explained in the notes to the Accounts.
PARTICULAR OF EMPLOYEES
None of the employees are covered under section 217 (2A) of the Companies
Act, 1956 and rules framed there under.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND
A. ENERGY CONSERVATION
The Company changed critical operations of the plant from DG Power to State
Power thus saving substantial amount on Power cost. It has planned to use
electricity based on CNG to save further cost in coming years.
Company has developed various new Sheet Metal Parts through In-House
Technology. It has designed various tools and dies which have improved the
B. RESEARCH &DEVELOPMENT
In order to minimize wastage of Chemicals, raw materials and other process
wastes and increase productivity the company carries continuous Research &
Development As a result of this Research & Development activity company
saved substantial amount on cost of important raw materials and power. The
expenditure on Research & Development is booked in respective accounting
C. FOREIGN EXCHANGE EARNINGS & OUTFLOW
Total foreign exchange outflow by Company during the period is Rs.240 Lacs
for imports, commission on sale and traveling and foreign exchange earned
during the period is Rs. 53 Lacs from exports.
Your directors wish to place on record their sincere appreciation for
continuous co-operation, support and assistance provided by shareholders,
banks, government bodies, customers, dealers and suppliers of the company.
Your directors also wish to place on record their appreciation for the
dedicated services rendered by the employees of the Company.
FOR AND ON BEHALF OF BOARD OF DIRECTORS
PLACE : NEW DELHI
DATE : 23.08.2006
1. Management discussion and Analysis Report
- Industry Structure and Development - The business of the Company is
dependant on the growth of the TV industry, as the Company is dealing in
various components of television. The TV industry is growing at 12 to 15%
per annum. The Black & White TV market, is being slowly replaced by colour
- Opportunities and Threats -As the purchasing power continue to increase
steadily the demand for Colour TV is growing. Due to low level of
penetration of Colour TVs in urban, semi-urban as well as rural market all
these areas will continue to have increased demand in coming years for
Colour TVs. Further global increase in demand especially from developing
countries is expected to increase demand. Hence, there is great opportunity
for the company to manufacture the parts required in this industry.
Lowering of custom duties on TV, Picture Tubes and other major components
of TV poses a challenge for the Industry.
- Segment wise or Product wise Performance - The Company has been engaged
in the business of picture tubes and components and no separate segment has
- Outlook - The outlook for Colour TV industry is bright due to:-
(i) Decline in the prices of Colour TV coupled with increasing per capita
income of the country.
(ii) Unexplored rural market having low penetration levels presently
(iii) Emphasis of the Government on Rural Electrification.
As the future of your Company is directly related to the growth of Colour
TV industry, the outlook for the Company is positive.
- Risks and Concerns - Being dependent on a single buyer, though the market
for Colour TV and Colour Picture Manufacturing is increasing in the
country. To mitigate this risk your Company plans to expand its customer
base from TV as well as other industries.
- Internal Control Systems and their adequacy - The Company has Internal
Control System and procedures commensurate with its size and nature of
business. The Internal Control Systems are supported by internal audit
carried out by professional audit firms aiming at increasing operational
efficiency and achieving cost efficiency and reduction in overheads at all
ends of the business operations
The Internal Audit Reports of the Internal Auditors are discussed at the
Audit Committee Meetings and appropriate corrective steps have been taken.
- Discussions on financial performance with respect to operational
performance - During this year, the company have incurred a net loss before
tax of 16 lakhs as against net profit before tax of Rs.112 lakhs in the
year 2004-2005. The loss has been due to reduced scales of operations of
Hotline CPT Limited, to whom the Company has been supplying sheet metal
- Material developments in Human Resources / Industrial Relations front,
including number of people employed - To manage the ever increasing
competition and changing work environment your Company focuses its efforts
to upgrade the skills of its workforce. Your Company provides equal
opportunities to the employees to perform and in their work.
The company provides in-house training to its employees and maintaining
safety and healthy environment for workers working within the factory
The company employs 102 workers. As a result of sound Human Resources
policies the industrial as well as labour relations have been good and