The Board of Directors have pleasure in presenting the Twenty Fourth Annual Report andthe Audited Financial Statements of the Company for the financial year ended 31st March2016.
I. financial performance:
Your Company has achieved a turnover of Rs. 6197.98 lakhs for the financial year ended31st March 2016 against the turnover of Rs. 4387.06 lakhs for the previous year ended31st March 2015 recording a growth of 41.28%. Key highlights of financial performance ofyour Company for the financial year 2015-16 are provided below:
| || ||(Rs. in Lakhs) |
|Particulars ||2015-16 ||2013-2015 |
| ||(12 months) ||(18 months) |
|Profit Before Depreciation & Interest ||2937.50 ||(47.89) |
|Financial Costs ||5364.15 ||7004.75 |
|Depreciation ||1115.93 ||5721.11 |
|Profit Before Tax ||(3542.58) ||(12773.75) |
|Provision for Tax || || |
|- Current Tax ||- ||- |
|- Deferred Tax ||(224.90) ||(1528.94) |
|Profit After Tax ||(3317.69) ||(11244.81) |
|Balance of profit brought forward from earlier years ||(8397.70) ||2847.11 |
|Add: Excess Provision for IT written off ||- ||- |
|Profit available for appropriation ||(11715.39) ||(8397.70) |
|Approp ri ation s: ||- ||- |
|Proposed Dividend: ||- ||- |
|- Equity ||- ||- |
|- Preference ||- ||- |
|- Dividend Tax ||- ||- |
|Balance of Profit ||(11715.39) ||(8397.70) |
Your Company started with proving solutions based on barcode and has emerged as leadingplayer in the country to provide solutions using umbrella of AIDC technologies. YourCompany also has state of the art manufacturing facility with the capacity to manufacture80mn smart cards per annum. Using these two synergies the Company could successfullyventure into Financial Inclusion projects driven by Reserve Bank of India popularly knownas "Jan Dhan Yojana". The exposure to government driven projects give yourCompany revenue visibility and we expect this momentum to continue given the un-deterredGovernment's focus.
Foreign Currency Convertible Bonds (FCCB):
Your Company during 2007-08 had successfully issued Foreign Currency Convertible Bonds(FCCBs) as under:
|Particulars ||Year of Issue ||Size of Issue (In Million US$) |
|FCCB 2013 ||2007-08 ||50 |
|Conversion Period ||FCCB 2013 (January 09 2008 and January 23 2013) |
|Conversion Price per Equity Shares (Rs) ||191.25 |
|Number of shares converted till 31st March 2016 out of FCCB 2013 issue ||Nil |
|Outstanding FCCBs as on 31st March 2016 (In Millions US$) ||50 |
The Foreign Currency Convertible Bonds (FCCB's) are listed on the Singapore StockExchange. These bonds were due for redemption in February 2013. The Company has appointedM/s. Avista Advisory Group Mumbai to assess all the options available with the Companyand finalize best suited approach in order to address the maturity. The options availablewith the Company include restructuring the bonds i.e. rolling over the bonds for nextfive years or replacing the bonds with fresh bonds or redeeming all the bonds at amutually agreeable price. With these available options; the Company along with M/s.Avista Advisory Group Mumbai has got in touch with the bondholders and has initiateddiscussions which are at advanced stages now. The Company had filed a request for anextension of the maturity of the bonds to May 4 2014 with Reserve Bank of India which wasgranted vide letter dated February 21 2014. The Company has applied for further extensionof the maturity of the Bonds to RBI and is waiting to hear from them to move forward. TheCompany is confident of addressing the maturity of Bonds shortly.
Changes to Share Capital:
At present the Authorized Share Capital of the Company stands at Rs. 110 crores and thepaid up capital stand at Rs. 34.04 crores There has been no change in the share capitalduring the period ended 31st March 2016.
Consolidated Financial Statements:
As required under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and as per provisions of Companies Act 2013 a consolidated financialstatement of the Company and all its subsidiaries is attached. The consolidated financialstatement has been prepared in accordance with the relevant accounting standards asprescribed under Section 129 133 of the Companies Act 2013 and as per Schedule III ofthe Companies Act 2013. The consolidated financial statement discloses the assetsliabilities income expenses and other details of the Company and its subsidiaries.
The annual accounts of the subsidiary companies will also be kept for inspection by anyinvestor at its Head Office in Hyderabad and that of the subsidiary companies concerned. Agist of the financial performance of the subsidiary Companies is contained in the report.
In the absence of profit your directors are unable to declare any dividend for thefinancial year 2015-2016.
Your Company has two subsidiary companies viz. B artronics Asia Pte. Limited andBartronics Middle East FZE and four step down subsidiary companies viz. BartronicsHongkong Ltd Bartronics Global Solutions Limited Veneta Holdings Ltd and BurbankHoldings Ltd.
Bartronics Asia Pte Limited:
The Company was incorporated as a wholly owned subsidiary of Bartronics India Limitedon 14th June 2007 in the Republic of Singapore with a Share Capital of US$ 769500.Bartronics Asia Pte Limited (BAPL) acquired the only issued share of Cason Limited onDecember 21 2007; subsequently the name of the Company was change to Bartronics Hong KongLimited with effect from 15th October 2008. In the month of April 2011 BAPL acquired theonly share of Veneta Holdings Limited Mauritius making it its wholly owned subsidiary.BAPL had incorporated another subsidiary in Mauritius named Burbank Holdings Limited.
Bartronics Middle East Fze:
Bartronics Middle East FZE Sharjah UAE was incorporated on June 22 2010 as a whollyowned subsidiary of Bartronics India Limited with a share capital of AED 150000 Shares.
A separate statement containing the salient features of the Financial Statement for thefinancial year ended 31st March 2016 of the aforesaid Subsidiary Companies are includedin the Annual Report as Form AOC-1 as an Annexure-I.
Particulars of Loans Guarantees and Investments:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
Contracts and Arrangements with Related Parties:
Details of Contracts and arrangements with related parties under Section 188 of theCompanies Act 2013 are given in the notes to the Financial Statements.
II. BUSINESS OUTLOOK:
Your Company started with proving solutions based on barcpde has emerged as leadingplayer in the country to provide solutions using umbrella of AIDC technologies. YourCompany also has state of the art manufacturing facility with the capacity to manufacture80mn smart cards per annum. Using these two synergies the Company could successfullyventure into Financial Inclusion projects driven by Reserve Bank of India popularly knownas "Jan Dhan Yojana". The exposure to government driven projects give yourCompany revenue visibility and we expect this momentum to continue given the un-deterredGovernment's focus.
Management Discussion and Analysis Report:
In terms of regulation 34 of the Listing Regulations the Management Discussion andAnalysis report on your Company's performance industry trends and other material changeswith respect to your Company and its subsidiaries wherever applicable forms a part ofthis Report. The MD&A report provides a consolidated perspective of economic socialand environmental aspects material to our strategy and our ability to create and sustainvalue to all our stakeholders and includes aspects of reporting as required by Regulation34 of the Listing Regulations with Stock Exchange on Business Responsibility Report.
iii. governance and ethics:
Your Company believes in adopting best practices of corporate governance. A soundCorporate Governance is critical to enhance and retain stakeholders' trust. CorporateGovernance principles forms core values of the Company. These guiding principles are alsoarticulated through the Company's code of conduct corporate governance guidelinescommittees and disclosure policy.
As per regulation 34 of the Listing Regulations a separate Section on corporategovernance practices followed by your Company together with a certificate from Y. RaviPrasada Reddy Practising Company Secretary on compliance with corporate governance normsunder the Listing Regulations forms part of the report on Corporate governance.
Board of Directors and Key Managerial Personnel:
The Board comprises of one Executive Director and four Non-Executive Directors of whichthree are Independent Directors.
Definition of Independence' of Directors is derived from regulation 16 of theListing Regulations and Section 149(6) of the Companies Act 2013. The Company hasreceived necessary declarations from the Independent Directors stating that they meet theprescribed criteria for independence.
In accordance with the Articles of Association of the Company Mr. A. B. Satyavas Reddyis liable to retire by rotation and being eligible offer himself for reappointment.
During the period the Board of Directors had appointed Mrs. V. Geetha as an AdditionalDirector (Independent) of the Company w.e.f. 13th October 2015.
Pursuant to the recommendation of Board Governance Nomination and RemenerationCommittee the Board at its meeting held on 13th November 2015 approved subject tomembers' approval appointment of Mr. K. Udai Sagar as Executive Director and ManagingDirector from 13 th November 2015 to 12 th November 2018 for a period of 3 years.
The Resolutions proposing their reappointment/ appointments as Directors will be placedbefore the Shareholders for their approval at the ensuing Annual General Meeting of theCompany.
Mr. Prakash Ramaiah Independent Director of the
Company resigned from the Board of Directors with effect from 30th June 2016. TheBoard placed on record its appreciation for the outstanding contribution made by Mr.Prakash Ramaiah.
None of the Directors of your Company is disqualified under Section 162 (2) of theCompanies Act 2013. As required by law this position is also reflected in the Auditors'Report.
Ms. Isharath Unnisa Begum is appointed as the Company Secretary and Key ManagerialPersonal by the Board at its meeting held on 12th August 2016.
Committees of the Board
The Company's Board has the following committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Risk Management Committee
Details of terms of reference of the Committees Committee membership and attendance atmeetings of the Committees are provided in the Corporate Governance report.
Number of Meetings of the Board:
The Board met 5 (Five) times during the financial year 2015-16 on 14th May 2015 12thAugust 2015 07th September 2015 13th November 2015 and 12th February 2016. Themaximum time gap between any consecutive meetings did not exceed 120 days.
The Board of Directors evaluated the annual performance of the Board as a whole itscommittee's and the Directors individually in accordance with the provisions of theCompanies Act 2013 and Listing Regulations in the following manner:
Structured evaluation forms after taking into consideration inputs receivedfrom the Directors covering various aspects of the Board's functioning such as adequacyof the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance for evaluation of theperformance of the Board its Committee's and each director were circulated to all themembers of the Board along with the Agenda Papers.
The members of the Board were requested to evaluate by filling the evaluationforms and the duly filled in evaluation forms were required to be sent to the CompanySecretary in a sealed envelope or personally submitted to the Chairman at the concernedmeeting.
The Board also provided an individual feedback to the concerned director onareas of improvement if any.
A separate meeting of Independent Directors was held on 31st March 2016 to have theperformance evaluation of the Chairman the Non Independent Directors the Board and flowof information from management.
Related Party Transactions
As a part of its philosophy of adhering to highest ethical standards transparency andaccountability your Company has historically adopted the practice of undertaking relatedparty transactions only in the ordinary and normal course of business and at arm's length.In line with the provisions of the Companies Act 2013 and the Listing Regulations theBoard has approved a policy on related party transactions.
All Related Party Transactions are placed on a quarterly basis before the AuditCommittee and also before the Board for approval. Prior omnibus approval of the AuditRisk Committee is obtained for the transactions which are of a foreseeable and repetitivenature.
There are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large. The requisite details ofthe related party transactions entered into during the financial year are provided inAnnexure-II included in this report.
In line with the requirements under Section 177(9) and (10) of the Companies Act 2013and regulation 22 of the Listing Regulations your Company has established vigil mechanismby framing a Whistle Blower Policy to deal with instance of fraud and mismanagement ifany. The Vigil Mechanism framework ensures that strict confidentiality is maintainedwhilst dealing with concerns and also that no discrimination shall be meted out to anyperson for a genuinely raised concern. The designated officer/ Audit Committee Chairmancan be directly contacted to report any suspected or confirmed incident of fraud/misconduct.
Directors' Responsibility Statement:
Directors' Responsibility Statement as required under the provisions of Section 134(5)of the Companies Act 2013 is given in the Annexure-III attached hereto and forms part ofthis Report.
Particulars of Employees
Information required pursuant to Section 197(12) of the Companies Act 2013 read withRule 5 of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014is provided along with a statement containing inter alia names of employees employedthroughout the financial year and in receipt of remuneration of Rs. 60 lakhs or moreemployees employed for part of the year and in receipt of Rs. 5 lakhs or more per monthpursuant to Rule 5(2) the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is provided as Annexure-IV to this report.
IV. INTERNAL FINANCIAL CONTROLS AND AUDIT:
Internal Financial Controls and their Adequacy:
The Board of your Company has laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and operatingeffectively. Your Company has adopted policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
Risk Management :
The Risk Management policy of your Company is focused on ensuring that risks are knownand addressed. The Board of Directors on recommendation of the Audit Committeeestablished a robust Risk Management framework by framing a Risk Management Policy to dealwith all risks including possible instances of fraud and mismanagement if any. The RiskManagement Policy details the Company's objectives and principles of Risk Management alongwith an overview of the Risk Management process procedures and related roles andresponsibilities.
The Board is of the opinion that there are no elements of risks that may threaten theexistence of the Company. The board periodically tracks the progress of implementation ofthe Risk Management policy.
The Company's Statutory Auditors M/s T. Raghavendra & Associates CharteredAccountants [Registration No. 003329S] Hyderabad will retire at the ensuing AnnualGeneral Meeting of the Company and being eligible offers themselves for re-appointment.
The Company has received necessary certificates from the Auditor pursuant to Section139 and 141 of the Companies Act 2013 regarding their eligibility for re-appointment.
Accordingly the approval of the Shareholders for the re-appointment of M/s. T.Raghavendra & Associates Chartered Accountants as Auditors of the Company is beingsought at the ensuing Annual General Meeting.
Your Board recommends the appointment of M/s T. Raghavendra & Associates CharteredAccountants as Auditors of the Company.
There are no qualifications reservations or adverse remarks made by M/s T. Raghavendra& Associates Chartered Accountants Statutory Auditors in their report for thefinancial year ended 31st March 2016.
Pursuant to provisions of Section 143(12) of the Companies Act 2013 the StatutoryAuditors have not reported any incident of fraud to the Audit Risk and ComplianceCommittee during the year under review.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Y. Ravi Prasada Reddy Practicing Company Secretary to conduct SecretarialAudit of the Company.
The Report of the Secretarial Audit in Form MR-3 for the financial year ended 31stMarch 2016 is enclosed at Annexure-V to the Report. There are no qualificationsreservations or adverse remarks made by the Secretarial Auditor in his report.
V. other disclosures:
Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo:
Particulars with respect to Conservation of Energy
Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section134 of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 are givenin the Annexure-VI attached hereto and forms part of this Report.
Extract of Annual Return:
Pursuant to Section 92(3) and Section 134(3)(a) extract of the Annual Return as on31st March 2016 in form MGT- 9 is enclosed as Annexure-VII to this report.
Material Changes and Commitments Affecting the Financial Position of the Company:
There have been no material changes and commitments affecting the financial positionof the Company which occurred during the end of the financial year to which the financialstatements relate and the date of this report.
All the properties and insurable assets of the Company including Building Plant andMachinery stocks etc. wherever necessary and to the extent required have beenadequately the covered.
Details of Significant and Material Orders Passed by the regulators/Courts/TribunalsImpacting the Going Concern Status and the Company's Operations in Future: There are nosignificant material orders passed by the Regulators/ Courts which would impact the goingconcern status of the Company and its future operations.
Sexual Harassment Policy:
The Company as required under the provisions of "The Sexual Harassment of Women atWorkplace (Prohibition Prevention and Redressal) Act 2013" has framed a Policy onProhibition Prevention and Redressal of Sexual Harassment of Women at Workplace andmatters connected therewith or incidental thereto.
In the year under review the Company has not received any complaint under the saidPolicy.
Environment and Social Obligations:
The Company's plants comply with all norms set up for clean and better environment bythe competent authorities. The Company undertakes regular checks / inspections includingcertification for the maintenance of the environment. The Company values environmentalprotection and safety as the major considerations in its functioning. The Company hasadequate effluent Treatment Plants to prevent pollution. The Company is continuouslyendeavoring to improve the health and quality of life in the communities surrounding itsindustrial complexes.
Human Resource Management:
The Company believes that Human Resource is its most valuable resource which has to benurtured well and equipped to meet the challenges posed by the dynamics of BusinessDevelopments. The Company has a policy of continuous training of its employees bothin-house. The staff is highly motivated due to good work culture training remunerationpackages and the values which the Company maintains. Your Directors would like to placeon record their deep appreciation of all employees for rendering quality services and toevery constituent of the Company be its customers shareholders regulatory agencies orcreditors. Industrial relations have remained harmonious throughout the year.
Acknowledgements and Appreciation:
Your Directors take this opportunity to thank the customers shareholders suppliersbankers business partners/ associates financial institutions and Central and StateGovernments for their consistent support cooperation and encouragement to the Company.
The Board of Directors wishes to express its appreciation to all the employees of theCompany for their outstanding contribution to the successful operations of the Company.
| || |
BY ORDER OF THE BOARD
| ||K. Udai Sagar ||A.B. Satyavas Reddy |
|Place: Hyderabad ||Managing Director ||Director |
|Date: 12th August 2016 ||(DIN: 03298532) ||(DIN: 00137948) |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
[Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) of the Comppnies(Accounts) Rules 2014]
a. conservation of energy:
|a) ||Energy conservation ||Energy saving measures is being implemented to reduce energy cost per unit of manufacture. |
|b) ||Additional investment and proposals if any being implemented for reduction of consumption of energy. ||--NIL-- |
|c) ||Impact of the measures at (a) and (b) above for reduction of energy and consequent impact on cost of production. ||Cost of production will come down and prices will become competitive. |
|d) ||Total energy consumption and energy consumption per unit of production. ||Details given hereunder in Table-A. |
b. technology absorption:
|Efforts made in technology absorption. ||Details given hereunder in Table- B. |
c. foreign exchange earnings & outgo:
|Activities relating to export initiatives taken to increase exports development of new export markets for products and services and export plans. ||The Company has planned expansion of export markets. |
|Total foreign exchange used and earned. ||Earned Rs. 1210.52 Lakhs Used Rs. 666.58 Lakhs. |
Particulars with respect to conservation of energy:
ELECTRICITY-PURCHASED FOR MANUFACTURE OF SMART CARDS AND RELATED PRODUCTS:
| ||2015-16 ||2013-15 |
| || ||(18 Months) |
|Units (KWH) ||242320 ||367000 |
|Total amount (Rs.) ||2527350 ||3819514 |
|Rate/units (Rs) ||10.43 ||10.41 |
|Diesel ||- ||- |
DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION RESEARCH ANDDEVELOPMENT (R&D)
|1 Specific areas in which R&D carried out by the Company ||Nil |
|2 Benefit derived as a result of the above R &D ||Nil |
|3 Future plan of Action: Completion of product development action Expenditure on R&D ||Nil |
|4 Technology Absorption Adoption and Innovation: ||Nil |
|1. Efforts in brief made towards technology absorption adoption and innovation. || |
|2. Benefits derived as a result of the above efforts e.g. product improvement cost reduction product development import substitution. || |
|3. In case of imported technology (imported during the last five years reckoned from the beginning of the period) || |
|a) Technology imported ||N.A. |
|b) Year of import || |
|c) Has technology been fully absorbed || |
|d) If not fully absorbed areas where this has not taken place reasons here of and future plans of action || |