| Your Directors place the Thirteenth Annual Report on the working of
your Company for the financial year ended 31st March 2006.
PERFORMANCE HIGHLIGHTS
Particulars Current Year Previous Year
Rs. Rs.
Total Revenues 75,30,920 27,71,403
Total Expenditure 1,21,21,916 1,07.35,707
Net Profit after Tax (45,90,996) (79,64,304)
BUSINESS REVIEW & FUTURE PROSPECTS
The Companys business during the year has gone through a bad phase,
which has had an effect on the earnings. The Company has been trying to
make a dent in new areas of business, but due to tight liquidity the
company has been going slow on the same.
The Companys is negotiating with the KSFC for a one time settlement
and is hopeful of the same being settled during the year.
DIVIDEND
The Board is not recommending any Dividend for the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS
a. Industry structure and developments.
The Company operates in the areas of media and marketing
communications.
It is projected that the ad industry will grow at an annual rate of 7%
to 8%. Due to privatization and globalisation and shackles being
opened for FDI to come into the country in a big way, there is a
potential for this industry. Many MNCs Operating in the ad industry
have come in with their own wholly owned subsidiaries and have got
referral business.
Your company has built a reputation over the years amongst its
customers for quality work.
b. Opportunities and Threats.
* Retail being asked to come into the country in a big way.
* Entry of new businesses in to country due to liberalization in FDI
policy.
The Company can utilize its skills in the industry due to its domain
expertise and past experience in working with international brands.
c. Segment-wise or product-wise performance.
The company operates only in one pre dominant segment ie., the
advertising & Print Production industry.
d. Outlook
Despite working capital shortage and financial crunch, your Directors
have endeavoured and prioritized vigorous improvement in productivity
of its employees and have been successful in keeping its clients happy
on the delivery front.
The Company is also negotiating with the secured lenders for relief and
concessions.
The Management looks to the future with optimism.
e. Risks and concerns.
* High attrition rate in ad professionals and high salary costs are the
major risks the industry is facing.
* Shortage of funds for the Company is a cause of concern for the short
term.
The Company having created a niche its services and by remaining
competitive would be able to meet any situation arising out of the
risks stated herein above.
f. Internal control systems and their adequacy.
The Companys internal control systems are in place and the management
is of the opinion that they are adequate keeping in view the current
level of operations of the Company.
g. Discussion on financial performance with respect to operational
performance.
The Companys operations have not been up to the mark in for the
financial year under review. The Company is looking at ways and means
of getting into new lines of work to enable the company to increase its
bottom line.
h. Material developments in Human Resources/Industrial Relations
front, including number of people employed.
DEPOSITS
In terms of the provisions of Section 58A of the Companies Act, 1956
read with the Companies (Acceptance of Deposits Rules) 1975, the
Company has not accepted any fixed deposit during the year under
review.
PERSONNEL
None of the employees of the Company were drawing remuneration in
excess of the limits specified in Section 217 (2A) of the Companies Act
1956 read with the Companies (Particulars of Employee Rules), 1975.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956, and the
Articles of Association of the Company, Mr. Charles Armitage & Mr.
Mohammed Alt Baig, Directors retire by rotation at the ensuing Annual
General Meeting and being eligible, offer themselves for
re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT:
As per the provisions of Section 217 (2AA) of the Companies Act 1956,
the Directors hereby submit that:
1. The Company has followed all the applicable Accounting standards and
there is no material departure from this in the preparation of the
annual accounts.
2. The Company had selected the normal accounting policies and applied
them consistently and made judgment and estimates that are responsible
and prudent so as to give a true and fair view of the affairs of the
Company at the end of the financial year and the profit and loss
account of the Company for that period.
3. Proper and sufficient care has been taken by the Company for
maintenance of proper accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for detecting frauds and irregularities.
4. The accounts of the Company are prepared on a `going concern
concept basis.
AUDITORS & AUDIT REPORT
M/s B K Ramadhyani and Co., Chartered Accountants, Auditors of the
Company hold office as Auditors until the conclusion of the ensuing
Annual General Meeting and are eligible for re-appointment and have
expressed their willingness to continue as auditors, if re-appointment.
In response to the qualifications of the Auditors in their report, your
directors wish to state as follows:
Point 4(f) and Point 11 of annexure in Auditors Report
An application has been made to the Debenture holders seeking
Re-phasement of Repayment/Redemption and waiver of interest and
resultantly these amounts are not due for Redemptions.
Point 4(g) and Point 10 of annexure in Auditors Report
The management is of the belief that the operations can be revived and
made profitable by increasing the operational efficiency and the
ability to obtain future contracts on consultancy basis The management
is of the belief that it can obtain a favorable order from high court
of Bombay and repossess the confiscated goods imported under EPCG
Scheme along with waiver of the fine, export obligations and refund of
deposit.
Point 5(a) in Auditors Report The Company had sent formal requests to
debtors and creditors for confirmation of balances. In spite of earnest
efforts made by the company, most of the debtors/creditors have not
responded confirming the same. The same has been mentioned also in Note
2, Schedule 17.
Point 5(b) in Auditors Report : The appeal filed with the Ministry of
Commerce on the conditions imposed under the EPCG scheme is pending
disposal. The Company had filed a writ in the High Court of Karnataka
to hasten the hearing of the appeal pending with the DGFT. The same has
been mentioned also in Schedule 17.
Point 7 of Annexure to Auditors Report
The Company is going through a turbulent period and all expenses have
been pared to the minimum. Once the cash flows become smooth, the
Company will comply.
Point 9 (a) & (c) of Annexure to Auditors Report
There has been a delay in remittance of statutory dues only on certain
months, which were basically due to tight cash flows and in respect of
service tax payable the company has paid in due course.
AUDIT COMMITTEE
The Board of Directors has constituted an Audit Committee pursuant to
the provisions of Section 292A of the Companies Act, 1956 read with
Clause 49 of the listing Agreement
consisting of Mr. B P Ravishankar, Mr. Mohan Krishnan and Mr. Gautam
Chowdhury, as members, under the Chairmanship of Mr. B P Ravishankar.
LISTING AGREEMENT REQUIREMENTS
The Companys shares are listed on Bangalore Stock Exchange, The
Hyderabad Stock Exchange and The Stock Exchange of Mumbai.
CORPORATE GOVERNANCE:
The report on compliances of the corporate governance code is Annexed
herewith as Annexure A. Auditors report on the same is also annexed
herewith.
PERSONNEL
None of the employees of the Company are drawing remuneration in excess
of limits specified under Section 217 (2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information as required under Section 217(1)(e) of the Companies
Act, 1956 is enclosed as Annexure B to this report.
ACKNOWLEDGEMENTS
The Board of Directors take this opportunity to express their
appreciation to the employees at all levels in the Company for their
dedicated service. Your Directors also thank the Bankers, KSFC and the
customers for their unstinted support to the Company.
By Order of the Board
FOR ODYSSEY VIDEO COMMUNICATIONS LIMITED.
WHOLE TIME DIRECTOR DIRECTOR
Place: Bangalore
Date: 29th September 2006 | 