Your Directors are hereby pleased to present the 24thAnnual Report and theAudited Financial Statements of the Company for the financial year ended 31stMarch 2019.
INITIATION OF CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP)
Pursuant to the orders of Hon'ble National Company Law Tribunal (NCLT) New DelhiBench Corporate Insolvency Resolution Process (CIRP) has been initiated in respect ofOrtel Communications Limited (the Company) under the provisions of theInsolvency and Bankruptcy Code 2016 (the Code) with effect from 27thNovember 2018.
In this connection Mr. Anil Bhatia was appointed as Interim Resolution Professional ofthe Company and subsequently on 07.01.2019 the Meeting of Committee of Creditors wasconvened and in the said meeting the Committee of Creditors proposed to replace theInterim Resolution Professional and the same was approved through e-voting. That theHon'ble Adjudicating Authority vide its order dated 01.02.2019 (received on 07.02.2019)approved the appointment of Mr. Srigopal Choudhary as Resolution Professional to carry outthe activities relating to CIRP as per the rules regulations and guidelines prescribed bythe Code for the management of the affairs of the Company Since the company is underCorporate Insolvency Resolution Process (CIRP) as per Section 17 of the Insolvency &Bankruptcy Code from the date of appointment of the Resolution Professional Since thecompany is under Corporate Insolvency Resolution Process (CIRP) as per Section 17 of theInsolvency & Bankruptcy Code from the date of appointment of the ResolutionProfessional.
(a) The management of the affairs of the company shall vest in the ResolutionProfessional.
(b) The powers of the Board of Directors company shall stand suspended and be exercisedby the Resolution Professional.
(c) The officers and managers of the company shall report to the ResolutionProfessional and provide access to such documents and records of the company as may berequired by the Resolution Professional.
(d) The financial institutions maintaining accounts of the company shall act on theinstructions of the Resolution Professional in relating to such accounts furnish allinformation relating to the company available with them to the Resolution Professional.
Pursuant to notification dated February 16 201S issued by the Ministry of CorporateAffairs the Company has adopted the Indian Accounting Standards (Ind AS) witheffect from April 01 2017. Accordingly financial statements for the year ended March 312019 have been prepared in accordance with the recognition and measurement principles laiddown in the Ind AS prescribed under Section 133 of the Companies Act 2013 read with therelevant rules issued thereunder and the other accounting standards generally accepted inIndia.
A summary of your Company's financial performance is given below:
Rs. In Crores
|Particulars || |
| || |
For the year ended
For the year ended
| || |
| ||2019 ||2018 ||2019 ||2018 |
|Total Revenue ||114.76 ||186.19 ||114.76 ||186.19 |
|Operating Expenses ||113.47 ||142.23 ||113.47 ||142.23 |
|Earnings Before Interest Depreciation Tax & Amortization (EBIDTA) ||1.29 ||43.96 ||1.29 ||43.96 |
|Interest and Financial Charges ||21.04 ||29.20 ||21.04 ||29.20 |
|Earnings before Depreciation Tax & Amortization (EBDTA) ||-19.75 ||14.76 ||-19.75 ||14.76 |
|Depreciation Amortization & other exceptional expenses ||31.48 ||31.20 ||31.48 ||31.20 |
|Earning Before Tax (EBT) ||-51.23 ||-95.26 ||-51.23 ||-95.26 |
|Tax ||0 ||0 ||0 ||0 |
|Earning After Tax (EAT) ||-51.23 ||-95.26 ||-51.23 ||-95.26 |
STATE OF COMPANY'S AFFAIRS AND OPERATIONAL RESULTS
The highlights of the Company's performance are as under:
Total revenue was Rs.114.76 Cr compared to the previous year's total revenue ofRs.186.19 Cr
EBITDA stood at Rs.1.29 Cr compared to Rs. 43.97 Cr of corresponding previousfinancial year.
Earning Before Tax (EBT) for the period is Rs.(S1.23) Cr as compared toRs.(9S.26) Cr of last fiscal.
Earning After Tax (EAT) stood at Rs.(S1.23) Cr as compared to Rs.(9S.26) Cr oflast fiscal.
EPS stood at Rs.(1S.70) as compared to Rs.(31.28) of last financial year.
The Year 2018-19 has been a challenging year for the Company due to delay incollections higher competitive intensity in the market as well as issues pertaining todebt payment and company gone into CIRP Process. Not with standing this your company hasdemonstrated healthy growth in revenues from cable TV business on a year-on- year basis(Y-o-Y) during the year under review.
Members will be happy to know that in spite of all the difficult situations EBITDAhave been positive during the year under review.
The Management reviewed the details of receivables and took a firm step by creatingprovision of Rs.41.41 million against doubtful receivables declaring bad debts of Rs.78.6S million and Company has not issued Any credit notes during the year under review.This amount is primarily on account of disruption of services during the process ofdigitization and acquisition of local operators.
SEGMENT REVENUE CONTRIBUTION
The contribution of each income stream to the total revenue is as below:
|Cable TV services : ||64% |
|Data Services : ||10% |
|Infra-structure leasing : ||8% |
|Carriage fees : ||15% |
|Others : ||3% |
SEGMENT WISE ANALYSIS
i) CABLE TV SERVICE
During the year TRAI implemented the New Tariff Order (NTO) from 1st February 2019.The NTO is set to dramatically change the distribution landscape in India. It will bringin far greater transparency and overall it will be good for all stakeholders leading tofair share allocation of subscription revenues within the stakeholders.
Some of the key features for the NTO are as below:
Every broadcaster is required to declare the maximum retail price (MRP) of itspay channels on a-la-carte basis. However such MRP shall be uniform for all types ofaddressable systems.
Every Broadcaster must declare a distribution fee at a minimum of 207 of the MRPof pay channel or bouquet of pay channels which can be upto 3S7. o In addition to thedistribution fee Broadcasters may offer discounts to distributors which cannot exceed 1S7of the MRP of pay channels or bouquet of pay channels. However in no
case the sum of distribution fee declared by a broadcaster and discountsoffered can exceed 3S7 of the MRP of pay channel or bouquet of pay channels as the casemay be.
Every broadcaster should publish on its website the Reference InterconnectionOffer (RIO) containing the information such as MRP of its pay channels and bouquet of paychannels distribution fee discounts etc.
Every broadcaster is required to enter into written interconnection agreementson the basis of the RIO published by it for providing signals of pay channels to adistributor of television channels.
Similarly every distributor of television channels is required to publish RIOon its website for carrying a channel on its distribution network. Such RIO mustnecessarily contain the information such as target market rate of
Carriage fee manner of calculation of carriage fee etc.
The rate of carriage fee has been capped at Re.0.20 per Standard Definitionchannel and Re. 0.40 per High Definition Channel. The manner of carriage calculation is asprescribed in the regulations. The distributor can offer a discount on the carriage fee.However such discount cannot be more than 35%.
Every distributor is required to enter into written agreement on the basis ofits published RIO with the broadcaster for carrying television channels in respect ofwhich the request has been received from such broadcasters.
Any other kind of fee for a channel such as marketing fee placement fee etc.between two service providers should be made part of interconnection agreement andreported to the Authority.
It is mandatory for MSOs to enter into a written agreement with LCOs beforeproviding the signals. Such interconnection agreement must comply with the standardprovisions as per the Model Interconnection Agreement (MIA)/ Standard InterconnectionAgreement (SIA) as prescribed by the Authority.
During the year under review your company continued to be a dominant player in theCable TV market in Odisha and has continued to consolidate its position in the states ofChhattisgarh Andhra Pradesh and Telangana.
As on 31.03.2019 the total Cable TV customer base is 429290 (Previous Year:766980) which is a de-growth of 44% growth over previous year.
With internationally used "Last Mile" model implemented by your Companydigitization of entire CATV subscribers and completion of integration process in the newlyacquired locations the Company is hopeful of continuing growth in the customer base inthe future.
ii) BROADBAND SERVICES OPERATION
The total Broadband subscriber base as on 31.03.2019 is 17329 (Previous Year: 50086).With competition across the Industry the broadband growth significantly reduced duringthe year. However your Company is hopeful of increasing the growth trend of customer basein the coming years with the launch of new competitive plans higher data speed and bettertechnology including service.
Your Company has successfully launched broadband plans starting from Rs.99 per monthwhich will counter the plans launched by the Telecom players in the 4G and LTE space. Inaddition to this the DOCSIS 3.0 plans will have speeds up to 100 Mbps with One Terabyteof usage option. To offer better experience broadband speed to the customers your Companyhas withdrawn all the schemes where the download speed was below 2 Mbps. With aggressiveATL and BTL marketing your company expects to grow the Broadband numbers in the comingfinancial year. Your company is using HFC network architecture which can easily beupgraded to FTTH topology in future. Your company is currently providing FTTH for puredata usage. With the implementation of new technology high speed data service andaggressive marketing strategy the Company is well placed to cater to the growing demand.Considering both cable TV and broadband together your company has achieved total RGU baseof by the end of the current year 446619 (previous year 817066) a de-growth of 4S%.It is important to note here that in line with your company's philosophy of operating on"Last Mile" Model 90% company's RGUs are on its own 'last mile' network.
iii) INFRASTRUCTURE LEASING
Over the last few years your Company is pursuing infrastructure segment as anothermajor revenue generating stream by leasing out its own infrastructure to corporate clientsfor their communication requirement and has leased out to various corporates a total of1374 kms (Previous Year: 1556 kms) as on 31 March 2019 a reduction of 12% over theprevious year.
HOLDING SUBSIDIARIES 8 ASSOCIATES
The Company has one subsidiary as on March 31 2019 incorporated during the year 2018to provide internet services. There are no associates or joint venture companies withinthe meaning of Section 2(6) of the Companies Act 2013 ("Act"). There has beenno material change in the nature of the business of the subsidiaries.
Pursuant to the provisions of Section 129(3) of the Act a statement containing thesalient features of financial Statements of the Company's subsidiary in Form AOC-I isattached to the financial statements of the Company.
Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited financial statements in respect of subsidiary is available on thewebsite of the Company http:/ /www.ortelcom.com/investor-relations.html.
In accordance with the provision of Section 129(3) of the Companies Act 2013 read withrule 8 of the Companies (Accounts) Rules2014 as amended the Company has prepared itsconsolidated financial statements including its subsidiary company which forms part ofthis report. The financial position and performance of the subsidiary company of theCompany is annexed to this report.
Any shareholder interested in obtaining a physical copy of the aforesaid financialstatements may write to the Company Secretary at the Registered Office of the Company.
Further please note that the said financial statements will also be available forinspection by the Members of the Company at the Registered Office of the Company duringbusiness hours from 10:00 A.M. to 6:00 P.M. on all working days except Sundays andNational Holidays.
Your company is under Corporate Insolvency Resolution Process (CIRP) since 27thNovember 2018 and has reported losses for the year under review; hence no dividend hasbeen recommended by the Resolution Professional for the financial year 2018-19.
TRANSFER TO RESERVES
As no dividend is proposed due to losses so no amount is recommended to be transferredto General Reserve.
The movement of the share capital during the year under review is as follows:
|Particulars ||Equity Share Capital (in Rs.) |
|At the beginning of the year i.e. as on April 01 2018 ||304769000 |
|Equity shares allotted during the year on 22nd May 2018 ||25000000 |
|At the end of the year i.e. as on March 31 2019 ||329769000 |
|Particulars ||Preference Share Capital (in Rs.) |
|At the beginning of the year i.e. as on April 01 2018 ||0 |
|Preference shares allotted during the year on 12th April 2018 ||100000000 |
|At the end of the year i.e. as on March 31 2019 ||100000000 |
CHANGE IN THE NATURE OF BUSINESS IF ANY
During the year under review there were no material changes in the nature of thebusiness of the Company.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated financial statements prepared and annexed in accordance withAccounting Standards as prescribed under Section 133 of the Companies Act 2013 read withRule 7 of (Accounts) Rules 2014 and Guidelines issued by Securities and Exchange Board ofIndia (SEBI) also forms Companies part of this Annual Report.
REVISION OF FINANCIAL STATEMENT
There was no revision of the financial statements for the year under review.
EXTRACT OF THE ANNUAL RETURN
An extract of annual return for the financial year ended on 31st March 2019 in FormMGT-9 pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of the Companies(Management and Administration) Rules 2014 is attached as Annexure-I forming part of thisReport.
Under Section 139 of the Companies Act 2013 and the Rules made thereunder M/sHaribhakti & Co. LLP Chartered Accountants Kolkata has completed its first term ofS years as permitted under the said section. The Resolution Professional of the Companyhas proposed not to appoint M/s Haribhakti & Co. LLP Chartered Accountants Kolkatafor a 2nd term of 5 years but recommended for the appointment of M/s K. Prasad& Co. Chartered Accountants (Firm Registration No. 303062E) as Statutory Auditors ofthe Company. M/s K. Prasad & Co. Chartered Accountants Kolkata will hold office fora period of five consecutive years from the conclusion of the 24th AnnualGeneral Meeting till the conclusion of the 29th Annual General Meeting to be held in 2024.The first year of audit will be of the financial statements for the year ending 31stMarch 2020.
M/s K. Prasad & Co. Chartered Accountants (Firm Registration No. 303062E) haveconfirmed that their appointment if made shall be in accordance with the provisions ofSection 139 of the Companies Act 2013. Accordingly An ordinary resolution seekingmembers approval on appointment of M/s K. Prasad & Co. Chartered Accountants (FirmRegistration No. 303062E) as the Statutory Auditors of the Company for a period of fiveconsecutive years is included at Item No.3 of the Notice convening the Annual GeneralMeeting.
OBSERVATIONS OF THE AUDITORS
Observations of the Auditors on the Annual Accounts of the Company forms part of theAuditors Report. The observations made in their report when read together with therelevant notes to the accounts are self-explanatory.
The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company in the year under review.
Pursuant to the provisions of Section 179 and 204 of the Companies Act 2013 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 M/sKumar Suresh & Associates Gurugram a firm of Practicing Company Secretaries wasappointed as Secretarial Auditor to conduct the Secretarial Audit of the Company for theFinancial Year 2018-19.
CS Suresh Kumar Yadav Secretarial Auditor has given the Secretarial Audit Report inForm No. MR-3 and the same has been annexed to the Board's Report and marked asAnnexure-2. The Secretarial Audit Report does not contain any qualification reservationadverse remark or disclaimer and is self-explanatory.
The Resolution Professional has also reappointed M/s Kumar Suresh &AssociatesGurugram as Secretarial Auditor for FY 2019-20 who is eligible for such reappointment toconduct Secretarial Audit of your Company.
Terms of M/s NIRAN & CO. Cost Accountants Bhubaneswar Odisha who werereappointed as Cost Auditor of the Company for Financial Year 2018-19 expired on 31stMarch 2019.
The Resolution Professional has approved their reappointment for FY 2019-20 and theirremuneration shall be ratified by the members in the ensuing Annual General meeting.
Terms of M/s SCM & Associates Chartered Accountants Bhubaneswar Odisha who werereappointed as Internal Auditor of the Company for Financial Year 2018-19 expired on 31stMarch 2019.
The Resolution Professional has not approved their reappointment for financial year2019-20 but appointed M/s SBN & Associates Chartered Accountants Cuttack as internalauditors of the Company for financial year 2019-20.
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto meetings of the Board of Directors' and General Meetings respectively have been dulyfollowed by the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(S) of the Companies Act 2013 the ResolutionProfessional hereby state that:
a) in the preparation of the annual accounts for the year ended March 31 2019 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b) the directors have selected such accounting policies and applied them consistentlyand made judgment and estimates that they are reasonable and prudent so as to give a trueand fair view of the state of affairs of the company as at March 31 2019 and of theprofit or loss of the company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act for safeguardingthe assets of the company and preventing and detecting fraud and other irregularities;
d) the directors have prepared the annual accounts on a going concern basis;
e) the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively and
f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Your Company has not given any loans or guarantee or made any investments under Section186 of the Companies Act 2013.
PARTICULARS OF LOANS/ ADVANCES OR INVESTMENTS OUT STANDING DURING THE FINANCIAL YEAR
Disclosure on particulars relating to loans advances and investments outstanding duringthe financial year is disclosed
in note no S 6 7 & 14 under Notes to Financial Statement forming part of thefinancial statement of the Company.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions pertaining to the pre CIRP period entered bythe Company during the Financial Year with related parties were in the ordinary course ofbusiness and on an arm's length basis and were reviewed and approved by the AuditCommittee and Board and contracts/arrangements/transactions pertaining to the post CIRPperiod were reviewed and approved by the Committee of Creditors (COC). Duringthe year the Company has not entered into any contracts/arrangements/transactions withrelated parties which could be considered material in accordance with the Company's Policyon Materiality of Related Party Transactions. All the transactions made on arm's lengthbasis are being reported in Form No. AOC-2 in terms of Section 134 of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed as Annexure-3.
The policy on dealing with Related Party Transactions can be viewed athttp://www.ortelcom.com
PERFORMANCE EVALUATION OF BOARD COMMITTEES AND INDIVIDUAL DIRECTORS INCLUDING MANAGINGDIRECTOR
In compliance with the Companies Act 2013 and Regulation 17 of the ListingRegulations the performance evaluation of the Board its Committees and individualDirectors including Managing Director were carried out during the year under review.
Independent Directors in their separate meeting evaluated performance of Board as awhole non-independent Directors and Chairperson of the Board.
Further based on the appraisal report of the individual Directors both for self andother Directors Board carried out evaluation of Independent Directors Managing Directorand all its committees.
The evaluation framework for assessing the performance of Directors comprises of thefollowing parameters:
Attendance of Board Meetings and Board Committee Meetings
Contribution at meetings
Guidance/support to Management
Relationship with Board and Committees
Degree of participation etc.
Since the powers of the Board of Directors has been suspended w.e.f. 27.11.2018pursuant to the orders of Hon'ble National Company Law Tribunal (NCLT) dated 27.11.2018evaluation of Board has not taken place post to that period.
Risk management has always been an integral part of the corporate strategy whichcomplements the organizational capabilities with business opportunities robust planningand execution. The Company through a process of management mechanism covering the riskmapping and trend analysis risk exposure potential impact and risk mitigation practicemanages the potential risks. A detailed regular exercise is being carried out to identifyevaluate manage and monitor both business and non-business risks. A Risk ManagementCommittee of the Board periodically reviews the risks and suggests steps to be taken tocontrol and mitigate the same.
More details on Risk Management indicating development and implementation of RiskManagement policy including identification of elements of risk and their mitigation arecovered in Management's Discussion and Analysis section which forms part of this Report.
During year under review your company has neither invited nor accepted any FixedDeposits from the public.
DECLARATION GIVEN BY INDEPENDENT DIRECTORS
All the Independent Directors have given declaration of their independence in terms ofSection 149(7) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (ListingObligations And Disclosure Requirements) Regulations 2015.
MEETINGS OF BOARD OF DIRECTORS
Three meetings of the Board of Directors were held on May 22 2018 August 10 2018 andSeptember 12 2018 during the year under review. Since the powers of the Board ofDirectors have been suspended w.e.f. 27.11.2018 pursuant to the orders dated 27.11.2018 ofHon'ble National Company Law Tribunal (NCLT) thereafter no meetings were conducted bythe Board of Directors. The particulars of meetings held and attended by each Director aredetailed in the Corporate Governance Report which forms part of this Report.
The Board has constituted various committees viz. Audit Committee Nomination andRemuneration Committee Stakeholders Relationship Committee Share Allotment committeeFinance Committee Corporate Social Responsibility Committee and Risk Management Committeeetc. to enable better management of the affairs of the Company with terms of referencein line with provisions of Companies Act 2013 and SEBI LODR Regulations.
Since the powers of the Board of Directors has been suspended w.e.f. 27.11.2018pursuant to the orders dated 27.11.2018 of Hon'ble National Company Law Tribunal (NCLT)the powers of the various committees have also been suspended w.e.f. the same date and nomeetings have since been conducted.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
a. During the year the Company made Preferential allotment of 2S00000 Equity Sharesat Rs.3S/- per share amounting to Rs.87S00000/- to Odisha Television Limited and BPDevelopers Private Limited- both entities belonging to Existing Promoter Group.
b. During the year the Company made Preferential allotment of 10000000Non-Convertible Cumulative & Redeemable Preference Shares at Rs.10/- per shareamounting to Rs.100000000/- to Indian Metals & Ferro Alloys Limited.
There were no significant material changes and commitments affecting the financialposition of the Company which has occurred between the end of the Financial Year of theCompany to which the Financial Statement relate and the date of its report.
EMPLOYEE STOCK OPTION SCHEME
During the year under review the Company has not allotted Equity Shares to anyemployees of the Company under Ortel Employee Stock Option Scheme 2015 (ESOS2015) and As per ESOS 2015 an Ortel Employee Welfare Trust was executed by theCompany to acquire shares of the Company from secondary market for offering them to theeligible employees in future as per the direction of Nomination & RemunerationCommittee of the Board. During the year under review the Trust has not acquired anyequity shares of the Company from the secondary market. The details of disclosure formpart of the Corporate Governance.
During the year under review Mr. Jyoti Bhusan Pany and Mr. Joseph Puliparambil havebeen resigned from the Board as Non-Executive-Independent Director with effect from12.09.2018 and Mr. Debaraj Biswal has been resigned from the Board asNon-Executive-Independent Director with effect from 26.09.2018. The Board acknowledges thevaluable contributions rendered by them during their tenure as NonExecutive-IndependentDirector of the Company and places on record their deep appreciation for the insightfulperspectives and suggestions provided by them at the meetings of the Board/Committees.
Pursuant to Section 149(13) of the Companies Act 2013 the independent directors arenot liable to retire by rotation. Further Section 152 (6) of the Companies Act 2013stipulates that 2/3rd of the total number of directors of the public company should beliable to retire by rotation and out of such directors 1/3rd should retire by rotation atevery Annual General Meeting of the company.
To meet the requirement of provisions of Section 152 (6) of the Companies Act 2013 andArticle 149 150 151 and 152 of the Article of Association the Managing Director or thewhole time Director shall not while he/she continues to hold that office be subject toretirement by rotation under Article 151 but he/she shall be subject to the provision ofany contract between him/her and the Company be subject to the same provisions as to theresignation and removal as the other Directors of the Company and he/she shall ipso factoand immediately cease to be a Managing Director or Whole-time Director if he/she ceases tohold the office of Director for any cause provided that if at any time the number ofDirectors (including the managing Director or Whole-time Director) as are not subject toretirement by rotation shall exceed one-third of the total) number of the Directors forthe time being then such of the Managing Director or Whole-time Director or two or more ofthem as the Directors may from time to time determine shall be liable to retirement byrotation in accordance with the Article 151 to the intent that the number of Directors notliable to retirement by rotation shall not exceed one-third of the total number ofDirectors for the time being. However he/she shall be counted in determining the numberof Directors to retire (save as otherwise provided in a contract in terms of provisions ofthe Act or Rules made hereunder or in a resolution passed by Board or Shareholders of theCompany).
In view of the above Ms. Jagi Mangat Panda Managing Director of the Company isretiring at the ensuing Annual General Meeting. Your Directors and the ResolutionProfessional have recommended her reappointment in the ensuing AGM.
During the year under review no other changes took place in the composition of theBoard of Directors of the Company.
The composition of the Board of Directors of the Company is in compliance with theapplicable norms
DECLARATION OF INDEPENDENCE
All the Independent Directors of the Company have given their respective declarationsstating that they meet the criteria prescribed for independence under the applicable lawsand in the opinion of the Board all the independent Directors of the Company meet thesaid criteria.
KEY MANAGERIAL PERSONNEL
During the year under review Mr. Satynarayan Jena CFO of the Company has resignedfrom the post as CFO w.e.f. 28th February 2019 and no other changes took placein the composition of the Key Managerial Personnel of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
Pursuant to the orders of Hon'ble National Company Law Tribunal (NCLT) New DelhiBench Corporate Insolvency
Resolution Process (CIRP) has been initiated in respect of Ortel Communications Limited(the Company) under the provisions of the Insolvency and Bankruptcy Code 2016(the Code) with effect from 27th November 2018. Accordingly thecompany is under moratorium period as per the IBC.
Besides the above to the best of our knowledge there seems to have been nosignificant and material orders passed by the regulators or courts or tribunals impactingthe going concern status and the Company's operations. However members' attention isdrawn to the statement on contingent liabilities commitments in the notes forming part ofthe financial statements.
PARTICULARS OF EMPLOYEES
Information as per section 197 and Rule S(1) & S(2) of the
Companies (Appointment & Remuneration of Managerial Personnel) Rule 2014 asamended a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said rules are provided as Annexure-4.
DISCLOSURE WITH RESPECT TO UNCLAIMED SUSPENSE ACCOUNT
Pursuant to Listing Regulations details in respect of the shares lying in the OrtelCommunications Limited-Unclaimed Suspense Account till 31st March 2019 are as under:
|Description ||No of shareholders ||No. of shares |
|(i) Aggregate number of shareholders and the outstanding shares in the unclaimed suspense account lying as on 1st April 2018 ||1 ||7S |
|(ii) Number of shareholders who approached the Company for transfer of shares from unclaimed suspense account during the year 2018-19 ||0 ||0 |
|(iii) Number of shareholders to whom shares were transferred from unclaimed suspense account during the year 2018-19 ||0 ||0 |
|(iv) Aggregate number of shareholders and the outstanding shares in the unclaimed suspense account lying as on 31st March 2019 ||1 ||7S |
The Company is committed to maintain the highest Standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India (SEBI). The report on Corporate Governance as stipulated under the ListingRegulations Management Discussion and Analysis Certificate regarding Compliance ofconditions of Corporate Governance and Certificate by CEO & CFO forms an integral partof this Report as Annexures.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As stipulated under SEBI (Listing Obligations and Disclosures Requirements) Regulations201S the Report on Management Discussion and Analysis is annexed to this report and formspart of the Annual Report.
POLICY ON CODE OF CONDUCT
The Company has laid down a "Code of Conduct" for all Board members andSenior Management Personnel. Pursuant to SEBI (Listing Obligations and DisclosuresRequirements) Regulations 201S the Declaration by the Resolution
Professional affirming the compliance with the Code of Conduct is attached to theReport on Corporate Governance.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS 8 OUTGO
The Company is a Multi System Operator (MSO) and is carrying on business of interalia providing Cable TV and Broadband services along with other value added services.Since this does not involve any manufacturing activity most of the Information requiredto be provided under Section 134(3)(m) of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 are nil / not applicable.
Further your Company being a service provider requires minimal energy consumptionand Company takes all possible measures to ensure optimal use of energy avoid wastagesand conserve energy as far as possible. Following are the energy conservation measuresbeing taken by Company over a period of time to ensure minimum energy consumption andtechnology absorption:
Conservation of Energy:
|1. The steps taken or impact or conservation of energy || Conservation of RF Optical Electrical and fuel energy is being accomplished by your company in economically responsible and beneficial ways by using power efficient equipment broadband HFC network provisioning system ergonomics in the cable layout cleanest and state of art technologies.- |
Increasing deeper fiber by using Broadband HFC network in star structure has resulted less power consumption.
Applying the strongest feasible energy efficiency standards to network upto electronics RF products and signal quality.
|2. The steps taken by the company for utilizing alternate sources of energy. |
|3. The capital investment on energy conservation equipment. |
|1. The efforts made towards technology absorption. || Your company is one of the MSOs in India which has started Triple Play services over Broadband HFC network. It has chosen best economical and state of art technologies. |
Your company uses Cable Modem Technology for high speed Internet access. The Company is also using Metro Ethernet ("MEN") and Ethernet over Cable (EoC) technology which engages different network topology for providing high speed data service at a lower cost.
Your company has also adopted digital video technology to deliver qualitative video and audio using MPEG-2 and MPEG-4 Technology. Your company has also started HD TV services and offers HD channels to its subscribers in select markets.
Your Company has also introduced high speed broadband technologies such as DOCSIS 3.0 to cater to subscribers who have increased Video led Internet Consumption. HD video content viewings as well as increased download speeds are the main benefits of DOCSIS 3.0 technology. DOCSIS 3.0 allows for a much higher through put compared to the earlier versions by using multi-channel bonding simultaneously for download/upload. This technology has been widely used in Europe and USA by leading ISPs.
Your company is also using HFC architecture which can easily be converted or upgraded to FTTH. Your company is currently undertaking trial with FTTH for pure data usage.
|2. The benefits derived like product improvement cost reduction product development or import substitution. |
|3. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):- |
|a. the details of technology imported; |
|b. the year ofimport; |
|c. whether the technology been fully absorbed; |
|d. if not fully absorbed areas where absorption has not taken place and the reasons thereof; |
|e. The expenditure incurred on Research and Development |
FOREIGN EXCHANGE EARNINGS 8 OUTGO
The particulars of expenditure and earnings in foreign currency are provided in notesto financial statements.
Your company has been certified and recertified by Bureau
Veritas Certification (India) Pvt. Ltd. (BVQ.I) to confirm with ISO 9001:2008standardization for both cable and data services for Bhubaneswar Cuttack Rourkela andSambalpur operational sites.
Your company has also received certification from BECIL (TRAI appointed CertifyingAgency) for its digital Encryption and Subscriber Management System of digital services.Your company is the first of its kind in India to receive such certification.
CORPORATE SOCIAL RESPONSIBILITY
As per the provisions of Section 13S of the Companies Act 2013 the Company hasconstituted the CSR committee to formulate implement and monitor the CSR Policy of theCompany. However as the Company does not have average net profits for the three yearsimmediately preceding financial years the Company was not required to make anyexpenditure on CSR activities during financial year 2018-19 as specified under Section13S(S) of the Act. Hence the information on CSR activities as required under Section13S(S) of the Act and Rule 8 of Companies (Corporate Social Responsibility Policy) Rules2014 has not been provided by the Company for the financial year 2018-19.
INTERNAL FINANCIAL CONTROL
Internal Financial Controls are an integrated part of the risk management processaddressing financial and financial reporting risks. The Company has a well laid downproper and adequate internal control system which ensures that all assets are safeguardedand protected and that the transactions are authorized recorded and reported correctly.The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate.
During the year under review no material or serious observation has been received fromthe Internal Auditors of the Company for inefficiency or inadequacy of such controls.
The Board of Directors has appointed M/s SCM & Associates Chartered Accountants asthe Internal Auditor of the Company. The Internal Auditors independently evaluate theadequacy of internal controls and concurrently audit the majority of the transactions invalue terms. Independence of the audit and compliance is ensured by direct reporting ofInternal Auditors to the Audit Committee of the Board. During the year the Companycontinued to implement their suggestions and recommendations to improve the controlenvironment. Internal Auditors findings are discussed on aquarterly basis and suitablecorrective actions taken as per the directions of Audit Committee on an ongoing basis toimprove efficiency in operations.
The Company has also its own Internal Audit Department. Internal Audit team under theguidance of head of Internal Audit conduct various checks audit and submit their reportto the management and is responsible for implementing adequacy of internal control both interms of financial and operational control.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy that aims to provide protection to employees at the workplace and prevent andredress complaints of sexual harassment and for matters connected or incidental theretowith the objective of providing a safe working environment where employees feel secure.
The Company has also constituted an Internal Complaints Committee known as thePrevention of Sexual Harassment (POSH) Committee to inquire into complaints of sexualharassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during the financialyear 2018-19.
PERSONNEL 8 INDUSTRIAL RELATIONS
The Company enjoyed cordial relations with the employees during the year under reviewand the Management appreciates the employees of all cadres for their dedicated services tothe Company and expects continued support higher level of productivity for achieving thetargets set for the future.
Your Directors state that no disclosure or reporting is required in respect of thefollowing matters as there were no transactions on these items during the year underreview:
Issue of equity shares with differential rights as to dividend voting orotherwise.
Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme save and except Employees' Stock Options Plan referred to in this Report.
The Company does not have any scheme of provision of money for the purchase ofits own shares by employees or by trustees for the benefit of employees.
Neither the Managing Director nor any Directors of the Company receive anyremuneration or commission from its subsidiary.
CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP)
The Company is under CIRP and information pertaining to the process is available at theCompanys website www.ortelcom.com
ACKNOWLEDGEMENTS AND APPRECIATIONS
The Resolution Professional wish to express appreciation of the support andco-operation of the Committee of Creditors (CoC) various departments of Central and theState Governments Directors Bankers Financial Institutions Suppliers EmployeesAssociates Contractors and Subcontractors.
|Place: Kolkata |
|Date: August 16 2019 |
|Srigopal Choudhary |
|Resolution Professional |
|For Ortel Communications Limited (under CIRP) |
|Address - Flat 7J Tower -3 South City |
|37S P.A.S. Road Kolkata - 700068 |
|Registration No- IBBI/IPA-001/IPP-01238/2018-19/11893 |