Ortel Communications Director Report
BSE:539015 | NSE:ORTELBZ | IND:Cable/DTH | ISIN code:INE849L01019 | SECT:Media & Entertainment
BSE
Change:
Volume:
Open:
Prv. Close:
Bid:
()
Offer:
()
NSE
Change:
Volume:
Open:
Prv. Close:
Bid:
()
Offer:
()
To the esteemed Members,
The Directors have pleasure in presenting their 21st Annual Report on the business and operations along with the Audited Accounts of your Company for the Financial Year ended March 31, 2016.
Financial Highlights
A summary of your Company’s financial performance is given below:
Rs. In Crores.
Particulars |
2015-16 |
2014-15 |
Total Operating and other Revenue |
196.29 |
161.12 |
Operating Expenses |
126.00 |
102.20 |
Earnings Before Interest, Depreciation, Tax & Amortization (EBIDTA) |
70.29 |
58.92 |
Interest and Financial Charges |
23.56 |
22.45 |
Earnings before Depreciation, Tax & Amortization (EBDTA) |
46.73 |
36.47 |
Depreciation, Amortization & other exceptional expenses |
31.74 |
29.41 |
Earnings before Tax (EBT) |
14.99 |
7.06 |
Tax |
3.06 |
1.46 |
Earnings after tax (EAT) |
11.93 |
5.60 |
State of Company’s affairs and Operational Results
The highlights of the Company’s performance are as under:
- Total revenue was Rs.196.29 Cr compared to the previous year’s total revenue of Rs.161.12 Cr.
- EBITDA stood at Rs.70.29 Crs compared to Rs.58.92 Cr of corresponding previous financial year.
- Earning before Tax (EBT) for the period was Rs. 14.99 Cr in compared to Rs.7.06 Cr of last fiscal.
- Earning after Tax (EAT) stood at Rs.11.93 Cr as compared to Rs.5.60 Cr of last fiscal.
- EPS stood at Rs.3.93 as compared to Rs.2.30 of last financial year.
The Financial Year 2015-16 has been another successful year
in terms of overall prospective. The Company has achieved better result in terms of Market expansion, Customer base as well as financial numbers.
Business/ Operational Review
The year 2015-16 has been a remarkable year for the Company as the Company has managed to expand aggressively not only in its existing markets but also in many new markets. In addition to the existing states of Odisha, Chhattisgarh, Andhra Pradesh and West Bengal, your company also started its Operations in two new states; Madhya Pradesh and Telangana. By way of proactive plans and aggressive buying out of local cable operators, the Company has been able to increase its operational locations to seventy (70) from Thirty nine (39) during the previous financial year and hope to add further going forward.
The contribution of each income stream to the total revenue is as below:-
Cable TV services |
48 % |
Data Services : |
17 % |
Infra-structure leasing |
11 % |
Carriage fees : |
18 % |
Others |
6%. |
Segment wise Analysis i) Cable TV Operation of the cable TV customer base has been digitized as on the end of year under review (previous Year: 22.7 %). We will continue to digitize the remaining analog subscriber base and also expand in select geographies to consolidate our presence further.
With internationally acceptable “Last Mile” model implemented by your Company and digitization of entire CATV subscribers, the Company is hopeful of remarkable growth in the revenue in the future.
Total Income, EBITDA, EBT and EAT for the period under review increased by 21.83%, 18.07%, 112.39% and 113.04% over Total Income, EBITDA, EBT and EAT of last financial year respectively.
During the year under review, your Company continued to be a dominant player in the Cable TV market in Odisha and has continued to consolidate its position in the states of Chhattisgarh and Andhra Pradesh.
Members will be happy to know that, your Company has expanded its operation in to the State of Madhya Pradesh and Telangana.
As on 31.03.2016, the total Cable TV customer base (Analog and Digital) has been increased to 628,710 (Previous Year: 471,592) which is a whopping 33% growth over previous year.
The Digital Subscriber base has grown by 117% to 233,012 as on 31st March 2016 (Previous year: 107,175). A total of 37.1 %
ii) Broadband Services Operation
In spite of stiff competition from national telecom players, your Company continued to be a significant Data service provider in its operational market.
Your Company has successfully implemented DOCSIS 3.0 high speed broadband service during the year under review and is currently offering data service up to a speed of 50 Mbps. The Company has also identified new markets as a part of expanding the Data operation and has planned to expand further in the coming financial year. Your Company is using HFC network architecture, which can easily be upgraded to FTTH topology in future. Your Company is currently undertaking trial run with FTTH for pure data usage. With the implementation of new technology, high speed data service and aggressive marketing strategy, the Company is well placed to cater to the growing demand.
The total Broadband subscriber base as on 31.03.2016 is 72,482 (Previous Year: 58,519), a growth of 23.86% over previous year''s subscriber base. As the Company is committed to expansion of network and development of data service, the Company is hopeful of increasing the growth trend of customer base in the coming years.
In total, your Company has achieved total RGU base (Analog, Digital and Data) of 701,192 during the year (previous year 530,111), a growth of 32.27 %. It is important to note here that in line with your Company’s philosophy of operating on "Last Mile Model", 92% company''s RGUs are on its own last mile network.
iii) Infrastructure leasing
Over last few years, your Company has aggressively pursued as another major revenue generating stream by leasing out its own infrastructure to corporate clients for their communication requirement and has leased out to various corporate a total of 1568.82 kms (Previous Year: 761.42kms) as on 31 March, 2016, a growth of 106% over the previous year.
Dividend
Though the Company has reported profits for the year, no dividend is being recommended due to accumulated losses for the past Financial Years.
Transfer to Reserves
As no dividend is proposed, so no amount is recommended to be transferred to General Reserve.
Share Capital
During the year under review, there were no change in the Share Capital of your Company.
Holding, Subsidiaries & Associates
Your Company does not have any holding, subsidiary or associate during the period under review.
Change in the Nature of Business, if any
During the year under review, there were no changes in the nature of the business of the Company.
Revision of financial statement
There was no revision of the financial statements for the year under review.
Extract of Annual Return
The extract of the Annual Return of your Company as on March 31, 2016 as provided under sub-section (3) of Section 92 of the Companies Act, 2013 in the Form MGT 9 is enclosed as ''Annexure-1'' forming part of this Report.
Statutory Auditors
M/s. Haribhakti & Co. LLP, Chartered Accountants Kolkata, were appointed as Statutory Auditors of your Company for a period of five years with effect from 19th Annual General Meeting till the conclusion of 24th Annual General Meeting of the Company subject to ratification of their appointment by the shareholders in the Annual General meeting of the Company every year, if eligible.
Now Board has recommended members for ratification of said appointment of M/s. Haribhakti & Co. LLP, Chartered Accountants, Kolkata, being eligible, as the Statutory Auditors of the Company at the ensuing Annual General Meeting.
Observations of the Auditors
Observations of the Auditors on the Annual Accounts of the Company forms part of "Auditors'' Report". The observations made in their report when read together with the relevant notes to the accounts are self-explanatory.
Secretarial Auditor
Pursuant to the provisions of Section 179 and 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Kumar Suresh & Associates, Gurgaon, a firm of Practicing Company Secretaries was appointed as Secretarial Auditor to conduct the Secretarial Audit of the Company for the Financial Year 2015-16.
CS. Suresh Yadav, Secretarial Auditor has given the Secretarial Audit Report in Form No. MR-3 and the same has been annexed to the Board''s Report and marked as ''Annexure - 2''. There is no qualification in the Report of Secretarial Auditor which is self-explanatory.
Your Board has also appointed M/s. Kumar Suresh & Associates, Gurgaon, as Secretarial Auditor for FY 2016-17 who is eligible for such reappointment to conduct Secretarial Audit of your Company.
Cost Auditor
Terms of M/s. NIRAN & CO., Cost Accountants, Bhubaneswar, Odisha who were reappointed as Cost Auditor of the Company for Financial Year 2015-16 expired on 31 March, 2016.
Your Directors have approved their reappointment for FY 2016-17 and their remuneration shall be ratified by the members in the ensuing Annual General meeting.
Internal Auditor
Terms of M/s. SCM & Associates, Chartered Accountants, Bhubaneswar, Odisha who were reappointed as Internal Auditor of the Company for Financial Year 2015-16 expired on 31 March, 2016.
Your Directors have approved their reappointment for FY 2016-17.
Directors'' Responsibility Statement Yours Directors hereby certify
a) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.
b) that the directors had selected such accounting policies and applied them consistently and made judgment and estimates that they are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period.
c) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and preventing and detecting fraud and other irregularities.
d) that the directors had prepared the annual accounts on a going concern basis.
e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively
Utilization of IPO Proceeds
Against Rs.100.79 Cr of IPO proceeds (net of issue expenses) Rs. 75.78 Cr was utilized for the object set out in the offer document and balance amount pending utilization was kept in the Bank and fixed deposit. There was no deviation in the utilization of issue proceeds during the year under review.
Particulars of loans, guarantees or investments under section 186
Your Company has not given any loans or guarantee or made any investments under Section 186 of the Companies Act, 2013.
Particulars of loans/ advances or investments outstanding during the financial year
Disclosure on particulars relating to loans, advances and investments outstanding during the financial year is disclosed in Note No. 4 of "Notes on Accounts" forming part of the financial statement of the Company.
Particulars of contracts or arrangements with related parties
All contracts / arrangements / transactions entered by the Company during the Financial Year with related parties were in the ordinary course of business and on an arm''s length basis and were reviewed and approved by the Audit Committee and Board. During the year, the Company has not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the Company''s Policy on Materiality of Related Party Transactions. All the transactions made on arm''s length basis are being reported in Form No. AOC - 2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 and is annexed as ''Annexure-3''.
The policy on dealing with Related Party Transactions can be viewed at http://www.ortelcom.com
Performance Evaluation of Board, Committees and Individual Directors including Managing Director
In compliance with the Companies Act, 2013, and Regulation 17 of the Listing Regulations, the performance evaluation of the Board, its Committees and individual Directors including Managing Director were carried out during the year under review.
Independent Directors in their separate meeting evaluated performance of Board as a whole, non-independent Director and Chairperson of the Board.
Further, based on the appraisal report of the individual Directors both for self and other Directors, Board carried out evaluation of Independent Directors, Managing Director and all its Committees.
The evaluation framework for assessing the performance of Directors were comprised of parameters such as; Attendance of Board and Committee Meetings, Contribution at meetings, Guidance/ support to Management, Relationship with Board and Committees, Degree of participation etc.
Risk Management
Risk management has always been an integral part of the corporate strategy which complements the organizational capabilities with business opportunities, robust planning and execution. The Company through a process of management mechanism covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation practice, manages the potential risks. A detailed regular exercise is being carried out to identify, evaluate, manage and monitor both business and non-business risks. A Risk Management Committee of the Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same.
Deposits
Your Company has not accepted any deposit from public during the period under review.
Declaration given by Independent Directors
All the Independent Directors have given declaration of their independence in terms of Section 149(7) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015.
Number of meetings of Board of Directors
For the Financial Year 2015-16, the Company held five (05) meetings of the Board of Directors, details of which form part of the Corporate Governance Report.
Material changes and commitments, if any
There were no significant material changes and commitments, affecting the financial position of the Company which has occurred between the end of the Financial Year of the Company to which the Financial Statement relate and the date of the report
Employee Stock Option Scheme
During the year under review, the Company has neither offered/granted nor allotted any new Stock Option either under ''Ortel Employee Stock Option Scheme, 2015'' ("ESOS 2015") or under old Scheme ESOS 2010. As per ESOS 2015, a Ortel Employee Welfare Trust (herein after referred as "Trust") was executed by the Company to acquire shares of the Company from Secondary market for transferring them to the eligible employees in future as per the direction of Nomination & Remuneration Committee of the Board. During the period under review, the Trust has acquired 3095 shares of the
Company. The details of disclosure form part of the Corporate Governance.
Directors and Key Managerial Personnel
Mr. Subhrakant Panda, Non-Executive Director of the Company is retiring at the ensuing Annual General Meeting. Your Directors have recommended his reappointment in the next AGM. The detailed resume of Mr. Panda who has offered for re-appointment is annexed to the notice of the Annual General Meeting.
There are no other changes in the constitutions of the Board of Directors and key managerial personnel.
Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future
No such significant and material order have been passed by any regulator/ court/ tribunal against the Company which will impact the going concern status and Company''s operation in future. In those matters which are pending before various regulators or courts or tribunal, your Company has strong reasons to succeed in all the said disputed matters.
Particulars of Employees
Information as per section 197 and Rule 5(1) & 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rule, 2014 is provided as ''Annexure-4''.
Corporate Governance
Pursuant to SEBI Listing Regulations, a report on the Corporate Governance, Management Discussion and Analysis, Certificate regarding Compliance of conditions of Corporate Governance and Certificate by CEO & CFO have been made part of the Annual Report as Annexure.
Conservation of energy, technology, foreign exchange earnings and outgo
The Company is a Multi System Operator (MSO) and is carrying on business of, inter alia, providing cable TV and broadband service along with other value added services. Since this does not involve any manufacturing activity, most of the Information required to 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 consumption and Company takes all possible measures to ensure optimal use of energy, avoid wastages and conserve energy as far as possible. Following are the energy conservation measures being taken by Company over a period of time to ensure minimum energy consumption and technology absorption.
Foreign Exchange Earnings & Outgo
Conservation of Energy: |
|
1. The steps taken or impact or conservation of energy. 2. The steps taken by the Company for utilizing alternate sources of energy. 3. The capital investment on energy conservation equipment. |
- 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 more deeper fiber by using Broadband HFC network in star structure has resulted less power consumption. - Applying the strongest feasible energy efficiency standards to network onto electronics, RF products and signal quality. |
Technology Absorption: |
|
1. The efforts made towards technology absorption. 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 of import; 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 |
- 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. |
Details of foreign exchange earnings and outgo are disclosed in Notes No. 33 to 35 of “Notes on Accounts” forming part of the financial statement of the Company.
Certifications
Your Company has been certified and recertified by Bureau Veritas Certification (India) Pvt. Ltd. (BVQI) to confirm with ISO 9001:2008 standardization for both cable and data services for Bhubaneswar, Cuttack, Rourkela and Sambalpur operational sites.
Your Company has also received certification from BECIL (TRAI appointed Certifying Agency) 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
Being a responsible Corporate Citizen, your company is committed to contribute towards social wellbeing of the communities through various corporate social responsibility (“CSR”) initiatives and has been undertaking various social works as part of its CSR over a period of time. It invests in Social programs for the under privileged girl child, contributes towards their overall learning and personal growth, opens employment avenues and also it attempts to bring about significant and sustainable improvements in their standard of living. Your Company’s flagship CSR activity known as ‘Ortel
Dayitwa’ provides financial support to girl children for college education. Ortel Dayitwa encourages girls to pursue education after secondary education with an objective to reduce dropouts after secondary education and also conducts various education awareness programs from time to time.
After mandatory applicability of provisions of Section 135 of the Companies Act, 2013 to the Company in FY. 2015-16, the Company has constituted a Corporate Social Responsibility Committee of the Board (“CSR Committee”).
The Board of Directors of the Company has approved CSR Policy based on the recommendation of the CSR Committee. The CSR Policy of the Company is available on the Company’s web-site and can be accessed in the link www.ortelcom.com
Though as per the criteria specified under Section 135 of the Companies Act, 2013 (“Act”), the Company was not required to mandatorily contribute towards CSR activities, but your Company has contributed Rs.1,00,000/- towards education of poor and under privileged girl child through ‘Ortel Dayitwa’ Charitable Trust. As required under Section 134 of the Act and Companies (Corporate Social Responsibility Policy) Rules,
2014, statement containing the details of CSR expenditure is disclosed as ‘Annexure -5’.
The Company continues and shall continue to contribute towards social well being in future.
Internal Financial Control
The Company has a well-placed, proper and adequate internal control system, which ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.
The Board of Directors has appointed M/s. SCM & Associates, Chartered Accountants as the Internal Auditor of the Company. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Auditors to the Audit Committee of the Board. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Internal Auditors findings are discussed at quarterly basis and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.
The Company has also its own internal audit department commensurate with the size of the Company. Internal Audit team under the guidance of Head of Internal Audit conduct various check and audit and submit their report to the management and is responsible for ensuring adequacy of internal control both in terms 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 a Policy which aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during the financial year 2015-16.
Personnel & Industrial Relations
Personnel & industrial relations during the year were cordial & harmonious.
Acknowledgement
Your Directors place on record their sincere appreciation for the continued support from shareholders, customers, suppliers, government authorities, banks and financial institutions and other business associates. A particular note of thanks to all employees of your Company, without whose contribution, your Company could not have achieved the year’s results.
On behalf of the Board of Directors
For Ortel Communications Ltd
Sd/- Sd/-
Jagi Mangat Panda Jyoti Bhusan Pany
Managing Director Director
Place: Bhubaneswar
Date: 30 April, 2016
Quick Links
Ortel Communications Ltd. Quick Links
Cash Flow Statement
Half Yearly Results
Capital Structure
Chairman's Speech
Company History
Locations
Dividends
Splits
Competitors
Date Sources:Live BSE and NSE Quotes Service: TickerPlant | Corporate Data, F&O Data & Historical price volume data: Dion Global Solutions Ltd.
BSE Quotes and Sensex are real-time and licensed from the Bombay Stock Exchange. NSE Quotes and Nifty are also real time and licenced from National Stock Exchange. All times stamps are reflecting IST (Indian Standard Time).
By using this site, you agree to the Terms of Service and Privacy Policy.