Bodhtree Consulting Ltd.
|BSE: 539122||Sector: IT|
|NSE: BODHTREE||ISIN Code: INE104F01011|
|BSE LIVE 15:40 | 01 Mar||40.60||
|NSE LIVE 00:00 | 23 Jan||Stock Is Not Traded.|
|Mkt Cap.(Rs cr)||73.28|
|Mkt Cap.(Rs cr)||73.28|
Bodhtree Consulting Ltd. (BODHTREE) - Director Report
Company director report
Your Directors have pleasure in presenting the Thirty Fourth Annual Report of BodhtreeConsulting Limited (the "Company" or "Bodhtree") on the business andoperations and the Audited Accounts for the financial year ended 31 March 2016 togetherwith the Auditors' Report thereon. Consolidated performance of the Company and itssubsidiaries has been referred to wherever required.
1. Financial Summary:
Your Company's results (Standalone) for the year in comparison with the previous yearare given below in a summarized format:
2. Company's Performance:
During the year under review the Company reported a total income of Rs. 4772.08 Lakhsagainst Rs. 4339.37 Lakhs in the previous year. The Operating profit amounted to Rs.128.21 Lakhs as against operating profit of Rs. 61.54 Lakhs in the previous year. TheCompany reported profit primarily due to the measures brought in by the management toreduce operational costs without compromising the ability to earn and grow further.
Your Directors regret to inform that they do not recommend any dividend for thefinancial year 2015-16.
4. Transfer to Reserves:
The Company proposes to transfer an amount of Rs. 177.08 Lakhs to the general reserveout of the amount available for appropriation during the year under review.
5. Share Capital:
The Paid-up Share Capital of the Company as on 31 March 2016 is Rs. 205971050.
During the year under review the Company has raised funds through preferential offerof 0.001% Compulsory Convertible Preference Shares of Rs. 10/- each to the extent of Rs9.763 Crores including premium amount to meet the working capital requirementsfinancially support the general corporate purposes and to maintain adequate liquidity forfuture expansion activities by the Company. As a result of this the issued subscribedand paid up capital of the Company has increased from Rs. 175461670 in FY 2014-15 toRs. 205971050 in FY 2015-16.
6. Listing of Company's Equity Shares:
The Company's Equity shares are listed with M/s. BSE Limited (Stock Exchange) PhirozeJeeJeebhoy Towers Dalal Street Mumbai - 400 001.
The Company has paid the Annual Listing Fees to the said Stock Exchange for theFinancial Year 2016-17.
7. Change in the Nature of Business:
There is no change in the nature of the business of the Company during the year underreview.
8. Subsidiaries Joint Ventures and Associate Companies:
During the year under review a 100% wholly owned subsidiary Company in the name andstyle of M/s. Bodhtree Human Capital Private Limited was incorporated in order to tap thedomestic as well as global market for the staff augmentation and related service sector.Consequently the Company has 1 (one) Subsidiary as on 31 March 2016.
The Company holds more than 20% of total share capital of two other Companies which areM/s. Learnsmart India Private Limited and M/s. Pressmart Media Limited. But there was noSignificant Influence shown by the Company on affairs of those Companies. There were nosignificant and material transactions with those Companies during the period under review.Management of the Company is different from that of those two Companies. Details in thisregard are mentioned in Form No. MGT-9 (Extract of Annual Return) which is enclosed tothis report.
As per the provisions of Section 129(3) of the Companies Act 2013 (the Act) read withCompanies (Accounts) Rules 2014 a statement containing the salient features of thefinancial statements of the Company Subsidiary in Form AOC-1 is enclosed as Annexure -IV to this Report.
Performance and financial position of each of the subsidiaries associates and jointventures:
As per Rule 8 of Companies (Accounts) Rules 2014 a Report on the performance andfinancial position of each of the subsidiaries associates and joint venture companies ofthe Company is enclosed as Annexure - IA to this Annual Report.
9. Management Discussion and Analysis:
The Management Discussion and Analysis forms an integral part of this Report andenclosed as Annexure - I and gives details of the overall industry structuredevelopments performance and state of affairs of the Company's business internalcontrols and their adequacy risk management systems and other material developmentsduring the financial year.
10. Extract of Annual Return:
As provided under section 92(3) of the Act the extract of annual return is given in Annexure- II in the prescribed Form No. MGT-9 which forms part of this report.
11. Director's Responsibility Statement:
Pursuant to Section 134 (5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:
i) In preparation of annual accounts for the financial year ended 31stMarch 2016 the applicable Accounting Standards have been followed along with properexplanation relating to material departures;
ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give true andfair view of the state of affairs of the Company at the end of the financial year ended 31stMarch 2016 and of the profit and loss of the Company for the year;
iii) The Directors have taken proper and sufficient care for their maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) The Directors had prepared the annual accounts on a 'going concern' basis;
v) The directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
vi) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bymanagement and the relevant board committees including the audit committee the board isof the opinion that the Company's internal financial controls were adequate and effectiveduring FY 2015-16.
12. Statement on Declaration given by Independent Directors under Section 149(6):
The independent directors have submitted the declaration of independence as requiredpursuant to Section 149(7) of the Act stating that they meet the criteria of independenceas provided in Section 149(6) of the Act.
13. Details of Directors or Key Managerial Personnel:
Mr. Ramanujam Kuppusamy resigned as a Director from the Board of Directors of theCompany on 05th August 2015 due to his preoccupations. The Board places onrecord its sincere appreciation for Mr. Ramanujam Kuppusamy value addition and fruitfulassociation with the Company and thanks him for providing valuable guidance to the Companyduring his tenure.
During the year Mr. Muthukrishnan Swaminathan was appointed as Independent Director onthe Board of the Company for a period of Five years w.e.f. 30 September 2015 and theMembers approved his appointment at the 33rd Annual General Meeting of theCompany.
During the year upon the recommendation of Nomination and Remuneration Committee Mrs.Muneashwari Lakkimsetti was appointed as Additional Director (Non-Executive NonIndependent) of the Company by the Board at its meeting held on 14 November 2015 pursuantto Section 161 of the Act read with Articles of Association of the Company and holdsoffice up to the date of this AGM. Notice in writing under Section 160 of the Actproposing her candidature for the office of Director of the Company has been received bythe Company. According to the provisions of section 149 and 152 of the Companies Act2013 she is proposed to be appointed as Women Director of the Company who is liable toretire by rotation.
In accordance with the provisions of Act and the Articles of Association of theCompany Mr L N Ramakrishna will retire by rotation at the ensuing Annual General Meetingand being eligible offers himself for reappointment.
The aforesaid appointment/reappointment of Director/s are subject to your approval.
During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company other than the sitting fees commission andreimbursement of expenses incurred by them for the purpose of attending meetings of theCompany.
Pursuant to the provisions of section 203 of the Act the key managerial personnel ofthe Company are - Mr. L N Ramakrishna Managing Director; Mr. Prabhakar Rao Kallur ChiefFinancial Officer and Mr. Srikanth Reddy Kolli Company Secretary. During the year Ms. GPushkarini had resigned as Company Secretary due to personnel reasons and the Board placeson record its sincere appreciation for Ms. G Pushkarini value addition and fruitfulassociation with the Company and thanks her for providing valuable guidance to the Companyduring her tenure. Thereafter Mr Srikanth Reddy Kolli was appointed as Company Secretaryand Compliance Officer at the Board meeting held on 14 November 2015. There has been noother changes in the key managerial personnel during the year under review.
14. Number of meetings of the board:
6 (Six) meetings of the board were held during the year. For details of the meetings ofthe board please refer to the corporate governance report which forms part of thisreport.
15. Board Evaluation:
The board of directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations").
The performance of the board was evaluated by the board after seeking inputs from allthe directors on the basis of the criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The board and the nomination and remuneration committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual director to the board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the chairman was also evaluated on the key aspects of his role.
In a separate meeting of independent directors held on 12 February 2016 performanceof non-independent directors performance of the board as a whole and performance of thechairman was evaluated taking into account the views of executive directors andnon-executive directors. The same was discussed in the board meeting that followed themeeting of the independent directors at which the performance of the board itscommittees and individual directors was also discussed. Performance evaluation ofindependent directors was done by the entire board excluding the independent directorbeing evaluated.
Criteria for Performance Evaluation:
a. Ability of the candidates to devote sufficient time and attention to hisprofessional obligations as Independent Director for informed and balanced decisionmaking.
b. Adherence to the Code of Conduct in letter and in spirit by the IndependentDirectors.
c. Bringing objectivity and independence of view to the Board's discussions in relationto the Company's strategy performance and risk management
d. Statutory Compliance and ensuring high standards of financial probity and CorporateGovernance
e. Responsibility towards requirements under the Companies Act 2013 Responsibilitiesof the Board and accountability under the Director's Responsibility Statement.
16. Policy on directors' appointment and remuneration and other details:
The Company's policy on directors' appointment and remuneration and other mattersprovided in section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of this report.
17. Committees of Board:
Your Company has the following committees namely:
1. Audit Committee
2. Compensation Committee
3. Stakeholder's Relationship Committee
4. Risk Management Committee
The constitution of all the committees are as per the Companies Act 2013 and SEBIListing Regulations. The details of the Constitution are mentioned in Corporate GovernanceReport which forms part of this Report.
18. Corporate Governance Report:
Your Company has complied with the requirements of Regulation 17(7) 72 of SEBI (LODR)Regulations 2015 read with Schedule II & V therein and the Corporate GovernanceReport including Auditor's Certificate on compliance with the conditions of CorporateGovernance specified in Schedule V(E) is enclosed as Annexure- VII to this report.
19. Consolidated Financial Statements:
The consolidated financial statements prepared and annexed in accordance with theAccounting Standards 21 and 23 as prescribed under Section 133 of the Act read with Rule7 of Companies (Accounts) Rules 2014 and Guidelines issued by Securities and ExchangeBoard of India ("SEBI") also forms part of this Report.
As per the provisions of Section 136 of the Act the Company will place separateaudited accounts of its subsidiaries on its website www.bodhtree.comand copy of separate audited financial statements of its subsidiaries will be providedto the shareholders at their request.
20. Internal financial control systems and their adequacy:
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations.
Various Audit Systems in the Company monitors and evaluates the efficacy and adequacyof internal control system in the Company its compliance with operating systemsaccounting procedures and policies of the Company. Based on the audit reports Companyundertakes corrective actions in respective areas and strengthens the control. Significantaudit observations and corrective actions thereon are presented to the Audit Committee ofthe Board periodically.
The Board of Directors of the Company have adopted various policies like Related PartyTransactions policy Whistle Blower Policy and such other procedures for ensuring theorderly and efficient conduct of its business for safeguarding its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information. The details inrespect of internal financial control and their adequacy are included in the managementdiscussion & analysis which forms part of this report.
Pursuant to the provisions of section 139 of the Act and the rules framed thereafterM/s. Nisar & Kumar Chartered Accountants were appointed as statutory auditors of theCompany from the conclusion of the thirty second annual general meeting (AGM) of theCompany held on 23 December 2014 till the conclusion of the thirty seven AGM to be heldin the year 2019 subject to ratification of their appointment at every AGM.
22. Auditors' report:
The auditors' report does contain qualifications reservations or adverse remarks whichare mentioned in the Auditors report and which forms part of this Annual Report.
23. Directors' Responses on the Qualifications made by the Auditors:
The Board of Directors is of the view that the provision for diminution in the value ofinvestments will be made based on the assessment given by the expert Valuer and hence notable estimate the impact currently. The Board of Directors is confident of collecting thereceivables and hence no estimation has been made. The Board of Directors is resorting tovarious measures to recover the outstanding debt balances and to settle statutory dues.
24. Secretarial Auditor Report:
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 M/s. P. S. Rao & Associates Practicing Company Secretaries as SecretarialAuditors to conduct Secretarial audit of the Company for the financial year ended 31March 2016.
The Secretarial Audit Report issued by M/s. P. S. Rao & Associates PracticingCompany Secretaries in Form No. MR-3 is enclosed as Annexure - VIII to this AnnualReport.
The Secretarial Audit Report does not contain any material qualifications reservationsor adverse remarks except the delayed compliances as required by the various statutesapplicable to the Company during period under review.
25. Internal Auditors:
The Board of Directors of the Company have appointed M/s. Srinivas & PoornaChartered Accountants as Internal Auditors to conduct the Internal Audit of the Companyfor the Financial Year ended 31 March 2016.
26. Risk management:
The board of directors of the Company has formed a risk management committee to frameimplement and monitor the risk management plan for the Company. The committee isresponsible for reviewing the risk management plan and ensuring its effectiveness. Theaudit committee has additional oversight in the area of financial risks and controls.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuing basis.
The development and implementation of risk management policy and various risksincluding the risks associated with the economy regulations competition foreignexchange interest rate etc. are documented monitored and managed efficiently.
27. Corporate Social Responsibility (CSR):
During the year under review the Company does not fall under the purview of provisionsof section 135 read with Schedule VII of the Companies Act 2013. Hence the Company hasnot made any contributions towards CSR Activities.
28. Particulars of loans guarantees and investments:
The particulars of loans guarantees and investments have been disclosed in thefinancial statements being a part of this Annual Report.
29. Deposits from public:
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
30. Transactions with related parties:
Information on transactions with related parties pursuant to section 134(3)(h) of theAct read with rule 8(2) of the Companies (Accounts) Rules 2014 are given in Annexure -V in Form No. AOC-2 and the same forms part of this report.
The policy on materiality of Related Party Transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website
31. Vigil Mechanism:
In pursuant to the provisions of section 177 (9) & (10) of the Act and SEBIListing Regulations a Vigil Mechanism for directors and employees to report genuineconcerns has been established. Protected disclosures can be made by a whistle blower tothe Chairman of the Audit Committee. The Policy on vigil mechanism may be accessed on theCompany's website at the link: http://www.bodhtree.com/downloads/WhistleBlower Policy.pdf
32. Remuneration ratio of the directors/ Key Managerial Personnel/ Employees:
Statement showing disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of Annexure-III which is enclosed to this Board Report.
33. Particulars Of Employees:
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms partof Annexure - III. A statement containing the names of every employee employedthroughout the financial year and in receipt of remuneration of Rs. 60 lakh or more oremployed for part of the year and in receipt of Rs. 5 lakh or more a month under Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014forms part of Annexure - III which is enclosed to this Board's Report.
34. Conservation of energy Technology absorption Foreign exchange outgo:
The particulars as required to be disclosed pursuant to Section 134(3)(m) of theCompanies Act 2013 read with rule 8 of Companies (Accounts) Rules 2014 are given tothe extent applicable by way of Annexure - VI.
35. Human Resources:
The industrial relations of the Company continued to be harmonious during the yearunder review.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
a. Issue of equity shares with differential rights as to dividend voting or otherwise.
b. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
c. Neither the Managing Director nor the Whole-time Director of the Company receive anyremuneration or commission from any of its subsidiaries.
d. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
e. No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year and date of report.
Your Directors further state that during the year under review there were no casesfiled/registered pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
The directors thank the Company's employees customers vendors investors and academicinstitutions for their continuous support. The directors also thank the governments ofvarious countries Government of India governments of various states in India andconcerned government departments / agencies for their cooperation. The directorsappreciate and value the contributions made by every member of the Bodhtree family.