Trend Electronics Ltd Management Discussions.

The Management Discussion and Analysis Report is prepared in adherence to the spirit enunciated in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Management presents herein the Industry Structure and Development, Opportunities and Threats in the Consumer Electronics Industry, Segment/ Product wise performance, Risks and Concerns, Internal Control Systems and their adequacy and the Companys Outlook for the future.


The set-top box market is expected to register a CAGR of over 6% over the next five years (2019-2024). The market is expected to witness demand for STBs over the next five years period owing to the increasing penetration of high definition channels among consumers and the growing adoption of smart TVs.

High levels of technological innovations have led to the development of a wide range of STBs equipped with various features. Digital video recording is one of the most popular features as it enables viewers to watch and record their favorite shows. Over-the-air DVR systems are a standalone set-top box that enables the viewers to broadcast and record TV programs. Apart from DVRs, subscription-based TV services providers offer STBs to customers. The latest trend witnessing momentum in the market is the availability of TVs integrated with STBs. These TVs provide access to online video streaming platforms and social media. Additionally, they deliver better storage options with capacities up to 2TB. Moreover, government regulations mandating the digitization of cable networks in economies such as India and China have boosted the demand for STBs in these cantries.

The global set-top box market is classified on the basis of its content quality, product type, services, end-user and regional demand. On the basis of its Content Quality, the market is divided into Standard Definition, High Definition, and 4K. Based on its Product Type, the market is segmented into Digital Terrestrial Television, Internet Protocol (IP) TV, Satellite, Over-The-Top Content (OTT), Cable, and Others. Based on its Services, the market is categorized into Interactive Services (Video on Demand, Video Conferencing and High-Speed Internet Television), and Managed Services (Testing, Repairing, Screening). On the basis of its End-User, the market is divided into Residential and Commercial.

India is a huge market for set-top boxes. In addition to a thriving direct-to- home satellite business, the country is nearing the end of the digitization of its cable TV system, an effort which saw the massive upgrade of cable boxes across the country. There is a tough competition between Cable TV and DTH. However, TV viewers might be able to switch their DTH or cable service providers without changing the set-top box (STB) by the end of 2020. The introduction of Smart TVs and High Definition (HD) channels has led to an increase in digital TV viewing, which in turn will boost the growth of the Set-top box (STB) market.

Furthermore, growing disposal income coupled with the presence of numerous government regulations about the digitalization of wired cable television broadcast channels across the region is expected to boost the growth of the STB market over the forecast period.

The manufacturers are working towards introduction of artificial intelligence in their latest set-top boxes.



1. Technological proliferation, reduced prices of smart TVs and the introduction of HD channels are anticipated to boost the global STB market growth.

2. The increasing awareness pertaining to Internet-based STB devices, such as IPTV and OTT, is expected to present substantial opportunities for the growth of these technologies over the next few years.

3. The ongoing mergers and acquisitions in the market are expected to further continue over the forecast period, thereby eventually leading to market consolidation.

4. STB manufacturers are increasingly forming a strategic partnership with the content and internet service providers across the world, in order to leverage patent technologies and increase their geographic presence.

5. Consumers across the globe are increasingly demanding connectivity from their electronics devices, and set top boxes are expected to play a central role in the networking of products.

6. Whilst set top box is a much more matured commodity market, several innovations in telecom and broadcast technologies, such as the emergence of cloud-enabled and 4K services, are anticipated to continue to drive the demand for next generation hybrid STBs.

7. Worldwide service providers are presumed to focus more on lifecycle and logistics challenges, in addition to testing and integration, in order to fuel the market growth, as well as focus on the upcoming 4K and HDR color set top boxes over the forecast period.

8. As a part of "Make in India" Campaign, announced by Government of India, there are huge opportunity to enhance its activity across a globe.

9. The Global Set Top Box market is becoming more versatile and dynamic as it provides several benefits to customers, such as pause and store facilities and easy deployment options. Improving picture quality, the advent of HD TVs and multiple TV sets in a house are some of the major factors leading to an increase in the demand for STBs.


a. Over-the-top services is the most prominent challenge faced by the set top box market. Online streaming services like Netflix, and Amazon have become popular amongst the young population with their ease of accessibility and original content. Investment in introducing innovation to the set top box experience is the way to combat this challenge.

b. High subscription rates of pay channels are expected to challenge the growth of HD and 4K STBs

c. Increase in competition from foreign Competitors.

d. Raw materials are not available through indigenous source and have to be imported. This adds to the cost of the STBs.

e. Technology obsolescence.

f. Changing consumer preferences.


The smart STB market is witnessing high consolidation, where several vendors are focusing on mergers and acquisitions to strengthen the portfolio. For instance, Videocon D2h Limited got amalgamated with Dish TV India Limited. Also, the growing construction activities in residential and hospitality sector is expected to increase the demand for smart settop boxes. The smart STB market is witnessing rapid transformations. The growing consumption of hybrid content, digitization in emerging economies, the rising internet penetration, and growing demand from the commercial sector are some of the prominent factors leading to the growth of the smart STB market.The increasing consumption of OTT content on smartphones and other handheld devices are major drivers for the smart set-top box market. The rising demand for energy-efficient smart appliances is expected to generate high innovation opportunities for smart set-top boxes during the forecast period. The introduction of artificial intelligence and voice assistant technology is also fueling the smart STB market growth.Besides, the digitization of cable networks in high population countries has also increased the demand for smart settop boxes. Also, the emergence of new smartphone and online platforms and digital pathways is supporting operators to provide cloud-based non-linear and on-demand services, thereby offering a high potential and growth for the smart STB market during the forecast period.

The Company intends to exploit the growing demand of STBs by offering innovative products.


Your Company is exposed to risks such as high interest rates, stiff competition, and possible entry of multinational companies into manufacturing of Set Top Boxes in India.The management is aware of the risks and has laid down the procedure to mitigate the same.

In addition to this, the Company is also concerned about shortage of working capital considering that the Company is into Corporate Insolvency Resolution Process. The outcome of CIRP will be decide about the future prospects for the Company.


Your Company has proper and adequate systems of Internal Controls, to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposal and that transaction are authorized, recorded and reported correctly.

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations.

Prior to Commencement of CIRP, the Company adheres to the following internal control system:

• Properly conducting Board and General Meetings;

• Recording of data discussed during the meeting in proper manner;

• Well prescribed internal reporting hierarchy; and

• Timely preparation of records, reports, minutes and other financial and statutory documents.

The Internal Audit was not carried for last two quarter of financial year ended 31st March, 2019.

The Company has put in place a Risk assessment and mitigation policy for process across all its business operations, which is periodically reviewed by the management.

In the past, significant findings of the internal audit were brought to the notice of the Audit Committee and corrective measures are recommended for implementation. Reports of the internal auditors are also continuously reviewed by the management and corrective actions are initiated to strengthen the controls and enhance the effectiveness of the existing systems.


The Company is primarily engaged in manufacturing of electrical andelectronics appliances and there is no other reportable segment as definedin Accounting Standard 17 on "Segment Reporting."




During the year under review, the Company recorded a turnover of Rs. 1,814.79 Million as against Rs. 3,949.50 Million for the year ended on March 31,2018.

Other Income

Other Income for the year was Rs. 7.05 Million as against Rs. 16.10 Million for previous period ended on March 31,2018. Other income comprises of profit on sale of fixed assets, interest income, Exchange Rate Fluctuation and other non operating income.


Cost of Goods Consumed

During the year, the Cost of Goods Consumed/sold stood at Rs. 1,682.80 Million as against Rs. 5,337.08 Million for the previous year ended on March 31,2018.

Employee Benefits Expenses

During the year under review, the Salary and Wages were Rs. 182.60 Million as against Rs. 193.35 Million for the previous year ended on March 31,2018.

Other Expenses

During the year under review, the Other Expenses were Rs. 226.77 Million as against Rs. 280.83 Million for the previous year ended on March 31, 2018.

Finance Cost

Interest and Finance Charges were to the tune of Rs. 1,452.08 Million as against Rs. 1,090.42 Million for the previous year ended on March 31,2018.

Depreciation & Amortization

During the year under review, Depreciation & Amortization amounted to Rs. 201.45 Million as against 230.54 Million for the previous year ended on March 31,2018.

Loss Before Tax

The Loss before Tax for the current year amounted to Rs. 1,923.86 Million as against a loss of Rs. 3,271.86 Million for the previous year ended on March 31st, 2018.

Net Profit /Loss

Net Loss of the Company for the current year amounted to Rs. 1,923.86Million as against a loss of Rs. 3,028.23 for the previous year ended on March 31,2018.

Earnings Per Share

Earnings Per Share for the current year amounted to Rs. (256.51) as against Rs. (403.76) for the previous year ended on March 31,2018.

Details of significant changes (i.e change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanation therefor, including:

S. No Nature of Ratio Ratio 2018-2019 RATIO 2017-2018 Reason
1 Debtor Turnover 3.57 2.30 There has been a significant change in all the key financial ratios on account of overall impact on the operations of the Company. The operations were impacted on account of the referral and consequently the commencement of Corporate Insolvency Resolution Process.
2 Inventory 1.03 1.88
3 Interest Coverage Ratio -0.32 -2.00
4 Current Ratio 0.54 0.64
5 Debt Equity Ratio -2.39 -3.72
6 Operating Profit Margin (%) -26.38 -55.64
7 Net Profit Margin (%) -106.01 -76.67

Similarly, the change in Return on Net Worth as compared to the immediately previous financial year was on account of significant losses and provisioning.


The Company is committed to maintain a cordial and healthy atmosphere with the employees at all levels. It considers the quality of its human resources to be the most important asset; and places significant focus on training and development of its employees. The Company ensures that it attracts right competency, develop them continuously and keep its employees motivated throughout.

The Company continue to strengthen employer-employee relationship by providing a conducive working environment. Imparting adequate HR training programmes and specialized trainings to the employees of the Company is an ongoing exercise.

The total staff strength of the Company for the period ended March 31, 2019, was around 276 (Including 108 permanent work).


Statements made in this report describing the Companys objectives, production, estimates and expectations may be ‘forward looking statements within the meaning of applicable laws and regulations. These statements are based on certain assumptions and expectation of future events. The actual results might differ substantially or materially from those expressed or implied due to the influence of external and internal factors beyond the control of the Company. Further, the discussion herein reflects the perceptions on major issues as on date and the opinions expressed herein are subject to change without notice. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events or otherwise.

(A Company under Corporate Insolvency Resolution Process by NCLT order dated 25th September, 2018)
DIN: 00214361 DIN:08136757
Place: Mumbai
Date: 17th December, 2019