The Directors present the Twenty-Fifth Annual Report of your Company
together with the Audited Accounts and Auditors'' Report for the
financial year ended on 31st December, 2014.
The performance of the Company for the financial year ended on 31st
December, 2014, is summarized below:
Particulars Year ended Year ended
31 Dec., 2014 31 Dec., 2013
Net Sales 14,768.79 14,250.64
Other Income 23.61 1.22
Total Income 14,792.40 14,251.86
Profit before Finance Costs,
Tax & Depreciation 457.07 374.61
Finance Costs 686.57 751.54
Depreciation and Amortisation 218.09 213.21
Profit/(Loss) before Tax (447.59) (590.14)
Profit/(Loss) after Tax (347.79) (500.49)
The year 2014 showed a steady growth in the Set Top Box (STB) market.
Rise in disposable income along with high penetration of television in
rural India is driving the Indian STB market. The introduction of High
Definition (HD) channels and Smart TVs has led to an increase in
digital TV viewing which in turn will hike the growth of the STB
market. The Core Advisory Group for Research and Development in
Electronics Hardware (CAREL) has identified STBs as one of the six
products to be designed, developed and manufactured indigenously. STB
industry provides a huge potential for economic activity, employment
generation and saving valuable foreign exchange and increase in the
revenue for the government.
During the year under review, the Company has earned a total income of
Rs. 14,792.40 Million as against Rs. 14,251.86 Million for the previous
year. Total Expenditure amounted to Rs. 15,239.99 Million as against Rs.
14,842.00 Million for the previous year. The Company has incurred a
net loss of Rs. 347.79 Million as against a loss of Rs. 500.49 Million for
the previous year.
DIVIDEND AND TRANSFER TO RESERVES
In view of the loss incurred, the Board of Directors does not recommend
any dividend for the year under review.
Transfer to Reserves:
In view of the loss incurred, the Board of Directors propose not to
transfer any amount to the General Reserve.
TRANSFER OF INVESTOR EDUCATION AND PROTECTION FUND
The Company has transferred a sum of Rs. 0.19 Million in respect of
unpaid/ unclaimed dividend for the financial year 2006-07 to the
Investor Education and Protection Fund.
Your Company has not accepted/renewed any fixed deposit within the
meaning of Section 58A of the Companies Act, 1956 and as such, no
amount of principal or interest was outstanding as on the Balance Sheet
The Company does not have any employee whose particulars are required
to be furnished under Section 217(2A) of the Companies, 1956, read with
the Companies (Particulars of Employees) Rules, 1975, as amended from
time to time.
CONSERVATION OF ENERGY
Conservation when used in relation to natural resources and
energy is a virtuous act. Conservation and efficient utilization of
energy resources play a vital role in narrowing the gap between demand
and supply of energy. Your Company firmly believes that, improving
energy efficiency is probably the most profitable thing that can be
done in the short term. Energy conservation is the quickest, cheapest
and most practical method of overcoming energy shortage.
The Company has initiated a drive for the conservation of natural
resources, including the energy conservation. The Company focuses on
reducing energy consumption through various in-process innovations and
adoption of best practices like machine productivity and improving the
efficiency to reduce specific energy consumption. The
Company focuses on developing energy saving methods to avoid wastage of
energy. Your Company follows and practices Energy saved is Energy
produced principle truly in law and spirit.
The In-house expert team under the valuable guidance of expert
engineers from the Research and Development Centre of the Company
continuously monitors and devise various means to conserve energy and
identify methods for the optimum use of energy without affecting
This is ensured through:
- Installation of electronic timers which has helped to cut down the
- Addition and installation of newer generation Air Compressor;
- Energy efficiency audit;
- Proper ventilation at the Factory Premises and use of energy saving
- Regular maintenance and replacement of worn-out Machinery for
optimum performance with reduction in power consumption;
- Recycling of Products i.e papers, cups, cardboards and envelopes;
- Use of dimmer switches;
- Unplugging appliances when not in use or unused;
- Insulation of walls & ceilings;
- Awareness programmes towards optimum utilization of natural
resources at managerial as well as employee level;
- Display of charts at the premises, plant, office, showing the means
for conservation of energy;
- Inspection of machinery by the team of experts at regular
- Encourage communications through e-mails.
Your Company lays emphasis on Sustainable Development i.e
development that meets the needs of the present without compromising
the ability of future generations to meet their own needs.
The above initiatives have resulted in proper monitoring and usage of
energy, minimizing the wastage and increase in overall efficiency at
every stage of power consumption. Your Company''s endeavor to introduce
energy efficient electronic products has met with success.
RESEARCH AND DEVELOPMENT (R&D) AND TECHNOLOGY ABSORPTION
The Research and Development (R&D) is an important contributor to
economy of any country and hence growth and sustainability of R&D is
vital for nations. As the pace of technology is accelerating and newer
and newer technologies and processes are becoming important, R&D is
becoming a crucial factor in success of the companies and economies in
a globalized and competitive world. In today''s competitive scenario,
innovation has become a key to success, in areas of process, product,
sales & after sales service.
In endeavor to keep pace with the changing technologies worldwide and
to offer products with maximum durability at low cost, the Company pays
utmost importance to R&D. The Company has in-house R&D Facility
comprising of experts to help Company to stay at par with the latest
Usually the primary function of the R&D department is to conduct
researches for new products and develop new solutions. Every product
has its shelf life and the consumers always need something new. In
order to be competitive, the Company continuously has to be updated and
has to find ways for new technologies and development of various
products. During the continuous process of R&D, both the R&D managers
and their staff take responsibility of performing the following key
- Ensuring the new products meet the product specification;
- Researching the products according to allocated budget;
- Checking if the product meets production costs;
- Delivering product at the right time and at right place in the
- Developing the product to comply with regulatory requirement and
specified quality levels; and
- To bring variety of products at an affordable price level.
Benefits derived from R & D Activities:
The well focused R&D activities of the Company have resulted in
introducing variety of models with superior technology and improved
proficiency and reliability at right time and at right cost, which meet
the needs of all the categories of the consumers. Because of these
efforts only, the Company was successful in developing and launching
the India''s first 4K Set Top Box.
Further, the Company could also derive the following benefits:
- Introduction of High Definition 4K Set-top Box with Digital Video
Recording facility to record as much content as a subscriber wishes to.
- Development and production of Digital Direct Broadcast (DDB)
technology in India with a broader convergence of TV, D2H, Internet and
Cloud computing, STRATA & HARMAN-KARDON certified audio, 2D to 3D
- Introduction of MPEG-4 DVBS-2 technologies which has many exciting
features like Multiple Tickers, 12 PIP Mosaic, 22 Active Music Audio
Video Channels, which shall take viewing experience to a new level.
- Introduction of Direct to Mobile (d2m) facility, where it is
possible to see television on mobile phone.
The Company''s now plan to introduce a unique feature to HD Set Top Box
i.e., Unlimited Recording feature, where the user can record any
programme if he is busy at that time. User can either record a Live TV
programme or even record a scheduled programme and can watch recorded
programme later at his/her leisure.
Future Plan of Action:
In near future, your Company shall continue to focus on all the areas
mentioned earlier and also aims to offer new technologies and processes
to provide better products at affordable prices to the customers. Your
Company shall continue to rollout innovative products, which is in line
with its ideology of bringing about change combined with quality that
is trusted by the millions of customers.
The future plan of action includes:
- The Company plans to provide the Set Top Box with internet
connectivity. Such connectivity can offer the user to directly access
popular applications such as Youtube, Picassa etc.;
- The future plan also includes introducing Wi-Fi connectivity in the
Set Top Box;
- The Company has plans to introduce a unique motion control & Audio
Streaming remote control in the Set Top Box. With this innovative
product, the user can listen to the Audio Streaming using Headphones,
without disturbing others, & can also use Google Voice search, can
navigate using the motion control or Air Mouse Function. Such an Air
Mouse function, will allow the customer to play interactive video games
via the Set Top Box.
During the year under review, the recurring expenses on R&D amounted to
Rs. 3.75 Million representing 0.03% of the turnover.
Using technology efficiently needs a conscious effort. Because of its
continuous efforts in the sphere of technology absorption, your Company
has been accredited with Certificate of Compliance to the latest eSd
Standard i.e., ESD 20:20 which minimize or eliminate risks associated
with electrostatic discharge, improving product quality and customer
satisfaction. All the products that are manufactured by the Company are
certified to the latest Bureau of Indian Standard, ISO 13252:2010.
The Company has also installed Climatic Chambers and Salt Spray
Chambers to simulate the effect of ageing of the products in actual
field conditions, ahead of the production. Such tests help predict the
possibility of early failures and thereby, the same can be prevented.
The Company also plans to focus on development of new technologies
which would offer better products to all classes of consumers at an
In due recognition of the key role played by Information Technology
(IT) in revolutionizing the world, your Company has re-engineered its
processes by leveraging IT for building, sustaining and expanding its
The management believes that use of latest and upgraded IT can be
extensively used in all spheres of its activities to improve
productivity and efficiency levels. The Company has already
implemented SAP (System Analysis Programming), a customized ERP
(Enterprise Resource planning) module, at its manufacturing facility.
The Company has implemented latest version of SAP and ERP for better
operational control. MySAP solution has enabled your Company to
leverage the benefits of integration in business operations,
optimization of enterprise resources, standardized business process,
thereby enabling standard operating practices with well established
controls. It has also benefited the management at all levels with
business information which is available online and reliable to control
the business operations in a well- informed manner. The Company has
implemented a network application for facilitating the storage &
retrieval of the Set Top Box pairing elements. The application
developed uses state of the art Database Servers & deployed using
Microsoft, .Net and Java. The applications have been integrated with
the online production management system effectively.
FOREIGN EXCHANGE EARNINGS AND OUTGO
During the year, the foreign exchange outgo amounted to Rs. 3,219.07.
Million as against Rs. 2,531.23 Million for the year ended on 31st
December, 2013. There was no foreign exchange earnings during the year
and previous year ended on 31st December, 2013.
HEALTH, SAFETY AND ENVIRONMENT
The Company''s vision is to be a safe operator and a sustainable
corporate citizen, leading the industry in health and safety standards
whilst demonstrating top quartile performance among its domestic and
global peers. Your Company believes that all injuries and fatalities
are preventable and is committed to ensure safety of all employees and
individuals involved in Manufacturing activities.
Your Company lays special emphasis to ensure safety at its
manufacturing plant and also undertakes continuous efforts to reduce
the accidents by constantly improving the standards of safety
equipments. The following steps have been taken to improve the safety
standards at the factory:
- Timely disposal of waste and scrap materials;
- Round the clock occupational health center and ambulance with all
- Conducting regular safety audit and mock drill;
- Installation of Effluent Treatment Plant, where the waste water is
treated & re- cycled for gardening purpose;
- First-Aid boxes are located at several points in the factory;
- Providing protective clothing and equipment to employees;
- Proper safeguards are put into place to eliminate the risk of
violence as far as possible;
- Risk-assessment at the workplace at regular intervals;
- Organized Safety Week, in order to promote Safety awareness
among the staff & employees;
- AIDS Awareness Program; and
- Blood Donation Camps.
The Company is continuously taking efforts to build a ''just safety
culture''. It''s not the effort of one person, but the focus and
determination of the entire team working towards a common goal of
health and safety and environment protection.
The manufacturing facility and offices are equipped with modern
amenities to meet strict requirements of efficient servicing and smooth
functioning at all times. The Company follows strict compliance of
pollution, environment and safety norms in carrying out all its
Industrial Relations remained cordial during the year under review.
CORPORATE SOCIAL RESPONSIBILITY
Corporate social responsibility is no longer defined by how much money
a company contributes to charity, but by its overall involvement in
activities that improve the quality of people''s lives.
Your Company as a whole aims at Corporate Social Responsibility (CSR)
Management that is trusted by the society and implements this by
undertaking several initiatives that contribute to the society and
promote energy saving and environmental sustainability management.
Developing green and energy-efficient products, reducing Co2 emissions,
resource circulation, contributing to local communities, encouraging
the spread of environmental conservation activities, developing an
excellent working environment and promoting ''eco ideas'' for everybody
everywhere are some of the ways your Company carries out CSR
activities. The manufacturing process and plants of your Company adhere
with the standards laid down by various regulatory authorities for the
protection of environment and safety of workers engaged in the
Your Company shall continue to discharge its CSR in the best possible
HUMAN RESOURCE MANAGEMENT
We view our employees as our greatest asset and are committed to
providing them with a progressive workplace. The Company provides
vibrant working environment to enable employees to innovate, discover
potential and realize professional dreams. Several initiatives were
taken to facilitate the performance and developmental requirements of
employees. The Company will continue to strengthen employer- employee
relationship by providing a conducive working environment and offering
a competitive compensation package. Imparting adequate HR training
programmes and specialized trainings to the employees of the Company is
an ongoing exercise. Your Company continuously gives emphasis on use
of advance technology in production. With a view to increase the
productivity and output the management organizes training programs,
lectures of experts, training camps, on regular basis, which boosts,
motivates the employees to give their best to the organization.
BOARD OF DIRECTORS
During the year under review, Mr. Vivek D. Dharm was appointed as an
Independent Director by the shareholders of the Company at the Annual
General Meeting held on 30th June, 2014 for a term of 5 years from 30th
June, 2014. Subsequently, in order to further comply with the new
requirements of the provisions of Section 149 of the Companies Act,
2013 and the provisions of Clause 49 of the Listing Agreement and so as
to ensure optimum composition of Independent Directors on various
committees, the Board of Directors thought it fit to appoint Mr.
Subhash S. Nabar and Mr. Bhopinder J. Chopra also as Independent
Director(s) for a period of five years. Accordingly, the Board of
Directors of the Company at its meeting held on 14th August, 2014 have
made to continue appointment of Mr. Subhash S. Nabar and Mr. Bhopinder
J. Chopra as Independent Director(s) to hold office upto a term of five
consecutive years from 14th August, 2014, not liable to retire by
rotation. These Directors have confirmed that they meet criteria of
independence as provided in Sub-Section (6) of Section 149 of the
Companies Act, 2013.
After the Balance Sheet date, pursuant to the provisions of Companies
Act, 2013, Mrs. Smita Dharm was appointed as an Additional Director
with effect from 31st March, 2015. She holds office upto the date of
ensuing annual general meeting.
The Company has also received a notice in writing along with requisite
deposit, from a member under Section 160 of the Companies Act, 2013,
signifying its intention to propose candidature of each of Mr. Subhash
S. Nabar and Mr. Bhopinder J. Chopra for confirmation/appointment to
the office of Director of the Company as Independent Director and its
intention to propose candidature of Mrs. Smita Dharm to the office of
Director of the Company.
The Board recommends the confirmation/appointment of Mr. Subhash S.
Nabar, Mr. Bhopinder J. Chopra and Mrs. Smita Dharm at the ensuing
Annual General Meeting.
A brief profile of the Directors seeking confirmation/appointment,
nature of expertise in specific functional area, name of other public
companies in which he/she holds directorship and
membership/chairmanship of the committees of the Board of Directors and
the particulars of the shareholding as stipulated under Clause 49 of
the Listing Agreement entered with the Stock Exchange form integral
part of the Corporate Governance Report.
CASH FLOW STATEMENT
As per the requirements of Clause 32 of the Listing Agreement with the
Stock Exchange, the Cash Flow Statement as prepared in accordance with
the Accounting Standard on Cash Flow Statement (AS-3) issued by the
Institute of Chartered Accountants of India, is given along with the
Balance Sheet and Profit and Loss Account.
Pursuant to the provisions of Section 177 of the Companies Act, 2013
and as per the provisions of the Listing Agreement, the Company has
constituted an Audit Committee. The composition, scope and powers of
Audit Committee together with details of meetings held during the year
under review forms part of the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
During the year under review, the Company has formed a Committee titled
as Corporate Social Responsibility Committee in terms of the
provisions of Section 135 of the Companies Act, 2013. The said
a. recommend the amount of expenditure to be incurred on such
b. monitor the Corporate Social Responsibility Policy of the Company.
The composition, detailed scope and powers of the Committee forms part
of the Corporate Governance Report.
The Audit Report of the Company is Unqualified. However, the Auditors
of the Company have in their statement annexed to the report have
mentioned that There are accumulated losses of Rs. 892.92 Million as
on 31st December, 2014 which are more than fifty percent of its net
worth. The Company has incurred cash losses during the financial year
and also during the immediately preceding financial year. In this
regard, the management explanation is as under:
The Networth of the Company is Rs. 1,718.85 Million as at 31st December,
2014. The Management has already prepared a concrete plan and well
laid strategy for increasing operational efficiencies and optimum
utilization of available infrastructures, which are expected to lead to
higher efficiency/cost savings in the time to company and resulting
into improved turnover and profitability. Further, the promoters of the
Company also have proposed to infuse an amount of Rs. 1,000 Million
immediately into the Company. The necessary steps for this infusion are
being taken by the Company.
In terms of Section 139 of the Companies Act, 2013 read with the Rules
made thereunder, the Company had, on 30th June 2014, appointed M/s.
Khandelwal Jain & Co., (Firm Registration No. 105049W) Chartered
Accountants, Mumbai and M/s. Kadam & Co., (Firm Registration No.
104524W) Chartered Accountants, Ahmednagar, as the Statutory Auditors
of the Company for a period of three years from the conclusion of 24th
Annual General Meeting of the Company upto the conclusion of 27th
Annual General meeting.
As per the provisions of Rule 3(7) of the Companies (Audit and
Auditors) Rules, 2014, such appointment made by the company shall be
subject to ratification in every Annual General Meeting upto the end of
the tenure of appointment of the auditors.
M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s.
Kadam & Co., Chartered Accountants, Ahmednagar have confirmed their
eligibility in terms of the provisions of Section 141 of the Companies
Act, 2013 and Rule 4 of Companies (Audit and Auditors) Rules, 2014.
The Board recommends the ratification of the appointment of M/s.
Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s. Kadam &
Co., Chartered Accountants, Ahmednagar, from the conclusion of this
meeting i.e, 25th Annual General Meeting until the conclusion of 27th
Annual General Meeting (subject to ratification by the Members at every
subsequent meeting) on such remuneration as shall be fixed by the Board
of Directors of the Company.
The Central Government had directed vide its order no. 52/26/CAB-2010
dated 6th November, 2012 to conduct a Cost Audit in respect of the
specified products viz., Electrical & Electronic Equipments
The Board of Directors of the Company has accorded its approval for the
appointment of Sneha Gaurav Badwe & Co., Cost Accountant in Whole-Time
Practice (Membership Number 35552), Ahmednagar, as the Cost Auditor of
the Company, to conduct audit of the Cost Accounting Records maintained
by the Company for the financial year commencing on 1st January, 2015
and ending on 31st December, 2015, subject to the approval of the
In compliance with the provisions of the Companies (Cost Audit Report)
Rules, 2011 and General Circular No. 15/2011 issued by Government of
India, Ministry of Corporate Affairs, Cost Audit Branch, we hereby
submit that, the Company has filed the Cost Audit Report for the
financial year ended on 31st December, 2013 on 11th February, 2015. As
regards, to the financial year ended on 31st December, 2014, the due
date for filing the Cost Audit Report is 29th June, 2015 and the
Company shall file the same on or before due date.
The Company does not have any subsidiary.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed review of performance and future prospects is included in
the section Management Discussion and Analysis Report of the Annual
As required under Clause 49 of the Listing Agreement with the Stock
Exchange, the Reports on Corporate Governance and Management Discussion
and Analysis form part of this Report.
The Company is in full compliance with the requirements and disclosures
that have to be made in this regard. A certificate from the Statutory
Auditors of the Company confirming compliance of the Corporate
Governance is appended to the Report on Corporate Governance.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of Section 217(2AA) of the Companies Act, 1956, we, the
directors of TREND ELECTRONICS LIMITED, state in respect of financial
year ended 31st December, 2014 that:
- in the preparation of Annual Accounts, the applicable Accounting
Standards have been followed along with proper explanation relating to
material departures, if any;
- the directors have selected such accounting policies and applied
them consistently and made judgments and estimates that 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 loss of the
Company for the year ended on that date;
- the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
- the directors have prepared the Annual Accounts on a going concern
Your Directors wish to express their deep sense of appreciation for the
committed services of all the employees of the Company. Your Directors
also take this opportunity to thank all stakeholders, banks, regulatory
and government authorities for their continued support.
For and on behalf of the Board of Directors of
TREND ELECTRONICS LIMITED
V. D. DHARM S. S. NABAR
Place : Mumbai Director Director
Date : 14th May, 2015 DIN: 00214361 DIN: 01341057