To the Members
The Board of Directors have pleasure in presenting the Twenty Sixth Annual Report andthe Audited Financial Statements of the Company for the financial year ended 31st March2018.
I. FINANCIAL PERFORMANCE:
Your Company has achieved a turnover of Rs. 7305.31 lakhs for the financial year ended31st March 2018 against the turnover of Rs. 7531.31 lakhs for the previous year ended31st March 2017. Key highlights of financial performance of your Company for thefinancial year 201718 are provided below:
(Rupees in Lakhs)
|Particulars ||2017-2018 (12 months) ||2016-2017 (12 months) |
|Profit Before Depreciation & Interest ||1483.33 ||675.3 |
|Financial Costs ||5238.89 ||5187.35 |
|Depreciation ||589.82 ||606.89 |
|Profit Before Tax ||(4345.38) ||(5118.94) |
|Provision for Tax || || |
|- Current Tax ||- ||- |
|- Deferred Tax ||(39.12) ||(39.92) |
|Profit After Tax ||(4306.26) ||(5079.02) |
|Balance of profit brought forward from earlier years ||(17521.47) ||(11715.39) |
|Add: Excess Provision for IT written off ||- ||- |
|Less : OCI ||44.35 ||(727.06) |
|Profit available for appropriation ||(21783.38) ||(17521.47) |
|Appropriations: || || |
|Proposed Dividend: || || |
|- Equity ||- ||- |
|- Preference ||- ||- |
|- Dividend Tax ||- ||- |
|Balance of Profit ||(21783.38) ||(17521.47) |
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 your company revenue visibility and we expect thismomentum to continue given the un-deterred Government's focus.
Foreign Currency Convertible Bonds (FCCB):
Bartronics India Ltd. had issued Foreign Currency Convertible Bonds (FCCB) for anaggregate sum of USD 50mn in January 2008. These bonds got matured in February 2013. Inthis regard the company had filed a request for an extension of the maturity of the bondsto May 4 2014 with Reserve Bank of India which was granted by them vide their letterdated February 21 2014. The company has appointed M/s Avista Advisory Group to assess allthe options available with the company and finalize best suited approach in order toaddress the maturity. The options available with the company include restructuring thebonds i.e. rolling over the bonds for next five years or replacing the bonds with freshbonds or redeeming all the bonds at a mutually agreeable price. With these availableoptions; the Company along with M/s. Avista Advisory Group has got in touch with thebondholders and has been having discussions with them. The Company has applied for furtherextension of the maturity with Reserve Bank of India and is waiting to hear from RBI tomove forward. The Company is confident of addressing the maturity of the bonds oncompletion of the discussions.
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 2018.
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 2017-2018.
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 B artronics HongKong Limited with effect from 15th October 2008. In the month of April 2011 BAPLacquired the only share of Veneta Holdings Limited Mauritius making it its wholly ownedsubsidiary. BAPL had incorporated another subsidiary in Mauritius named Burbank HoldingsLimited.
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 2018 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 barcode 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 manufacture 80mn smart cards per annum. Using these twosynergies the company could successfully venture into Financial Inclusion projects drivenby Reserve Bank of India popularly known as Jan Dhan Yojana. The exposure togovernment driven projects give your company revenue visibility and we expect thismomentum to continue in the domestic markets given the un-deterred Government'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 our key 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 aseparate section on corporate governance practices followed by your Company together witha certificate from Mr. Y. Ravi Prasada Reddy Company Secretary on compliance withcorporate governance norms under the Listing Regulations forms part of the report oncorporate 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. Avula Balliahgari Satyavas Reddy is liable to retire by rotation andbeing eligible offer himself for reappointment.
Mrs. Geetha Vavelakolanu Independent Director of the Company resigned from the Boardof Directors with effect from May 30th 2018. The Board placed on record its appreciationfor the outstanding contribution made by Mrs. Geetha Vavelakolanu.
Board of Directors has appointed Mr. Shareq Jamil Ayaaz Mowla Mr.Krishna KishoreMadicharla and Ms. Gaddam Varshitha as Additional Directors (Independent-Non Executive) ofthe Company w.e.f May 25th 2018.
Mrs. Archana Kalara Independent Director of the Company resigned from the Board ofDirectors with effect from August 14th 2018. The Board placed on record its appreciationfor the outstanding contribution made by Mrs. Archana Kalara.
The Resolutions proposing their reappointment/ appointments as Directors will be placedbefore the Shareholders for their approval at the ensuing Annual General Meeting of theCompany.
None of the Directors of your Company is disqualified under Section 164 (2) of theCompanies Act 2013. As required by law this position is also reflected in the Auditors'Report.
The Company had appointed Mr. Phaneendra Modali as the Company Secretary of the Companyw.e.f November 14 th 2017. Further Mr. Phaneendra Modali has resigned from the post ofCompany Secretary and Key Managerial Personal w.e.f March 05th 2017. Since then theCompany is searching for an appropriate replacement'.
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 4 (Four) times during the financial year 2017-18 on 24th May 2017 10thAugust 2017 14th November 2017 and 12th February 2018. The maximum time gap betweenany 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 2018 to evaluatethe performance evaluation of the Chairman the Non Independent Directors the Board andflow of 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 in Annexure-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 partof this 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. 102 lakhs or moreemployees employed for part of the year and in receipt of Rs. 80.50 lakhs or more permonth pursuant to Rule 5(2) the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided as Annexure IV to this report.
VI. 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.
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 Committee established a robust RiskManagement framework by framing a Risk Management Policy to deal with all risks includingpossible instances of fraud and mismanagement if any. The Risk Management Policy detailsthe Company's objectives and principles of Risk Management along with an overview of theRisk Management process procedures and related roles and responsibilities.
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.
M/s N. G. Rao & Associates (Membership No. 207300) Chartered AccountantsHyderabad (FRN: 009399S) are proposed to be appointed as auditors for a period of 5 yearscommencing from the conclusion of 26th AGM till the conclusion of the 31st AGM in place ofM/s T. Raghavendra & Associates Chartered Accountants [Registration No.003329S] whoseterm as the Statutory Auditor of the Company expires at the ensuing Annual GeneralMeeting.
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 reappointment of M/s N. G. Rao &Associates (Membership No. 207300) Chartered Accountants Hyderabad (FRN: 009399S) asAuditors of the Company is being sought at the ensuing Annual General Meeting.
The Audit Committee and Board recommends the appointment of M/s N. G. Rao &Associates (Membership No. 207300) Chartered Accountants Hyderabad (FRN: 009399S) asstatutory Auditors of the Company from the conclusion of the 26th AGM till the conclusionof 31st AGM to the shareholders for approval.
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 2018. Pursuant to provisions of section 143(12) of theCompanies Act 2013 the Statutory Auditors have not reported any incident of fraud to theAudit Risk and Compliance Committee during the year under review.
Pursuant to the provisions of Section 204 of the
Companies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Company has appointed Mr. Y. Ravi Prasada Reddy PracticingCompany Secretary to conduct Secretarial Audit of the Company.
The Report of the Secretarial Audit in Form MR-3 for the financial year ended 31stMarch 2018 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 TechnologyAbsorption and Foreign Exchange Earnings and Outgo as required under Section 134 of theCompanies Act 2013 read with the Companies (Accounts) Rules 2014 are given in theAnnexure -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 2018 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 Obligation:
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 |
|Managing Director ||Director |
|(DIN: 03298532) ||(DIN: 00137948) |
|Place: Hyderabad || |
|Date: 29th August 2018 || |