DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the Thirty Third Annual Report on the business and operations of your Company and the Audited Accounts for the financial year ended 31st March, 2015, together with the Auditors' Report thereon. REVIEW OF OPERATIONS: During the year under review the Company reported a total income of Rs.4339.37 Lakhs against Rs.4753.90 Lakhs in the previous year. The Operating profit amounted to Rs.61.54 Lakhs as against operating profit of Rs.331.57 Lakhs in the previous year. The Company reported profit primarily due to the measures brought in by the management to reduce operational costs without compromising the ability to earn and grow further. DIVIDEND: Your Directors regret to inform that they do not recommend any dividend for the financial year 2014-15. INFUSION OF CAPITAL: During the year under review, the Company has not raised funds. TRANSFER TO RESERVES: An amount of Rs.56.05 Lakhs was transferred to reserves during the year under review. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL: In accordance with the provisions of the Companies Act, 2013, Mr. Sanjiv Gupta retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. During the year, Mr. Palaniappna Natarajan, Managing director of the Company, resigned w.e.f. 24thJanuary, 2015 and Mr. Ramakrishna L.N., S.V.P. & C.F.O. of the Company was appointed as Managing Director w.e.f. 24th January, 2015. Mr. Prabhakar Rao Kallur, SM - Finance of the Company was designated as C.F.O. of the Company w.e.f. 14th February, 2015. During the year, Mr. Shankaraiah Arram resigned from the directorship of the company w.e.f. 28th May, 2014 and Mr. Muthukrishnan Swaminathan was appointed as an additional director on the board of the company w.e.f. 30th May, 2015. Notice in writing under Section 160 of the Companies Act, 2013, proposing candidature of Mr. Muthukrishnan Swaminathan and Mr. Ramakrishna L.N. for the office of Director of the Company, has been received to appoint them as Directors of the Company. According to the provisions of section 149 and 152 of the Companies Act, 2013, Mr. Muthukrishnan Swaminathan has given declaration confirming that he meets the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. He is proposed to be appointed as Independent Director for a period of 5 years. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors. DIRECTORS' RESPONSES ON THE QUALIFICATIONS MADE BY THE STATUTORY AUDITORS IN THE AUDITORS REPORT: The Board of Directors is of the view that appropriate provisions will be made in the books of accounts upon quantification of the diminution in value of investments. The Board of Directors is resorting to various measures to recover the outstanding debit balances and to settle statutory dues. LISTING: Due to exit of Madras Stock Exchange Ltd, shares of the Company were shifted to dissemination board of NSE. Consequently, Company made direct listing application to BSE Limited and got listed therein w.e.f. 4th May, 2015. AUDITORS: Statutory Auditors: At the 32ndAnnual General Meeting (AGM), M/s. Nisar & Kumar, Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office till the conclusion of sixth consecutive Annual General Meeting to be held in the calendar year 2019. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditor shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Nisar & Kumar, Chartered Accountants, as statutory auditors of the Company, is being placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. Secretarial Auditors: M/s.P.S.Rao & Associates, Practicing Company Secretaries, was appointed to conduct the Secretarial Audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rule 9 there-under. The secretarial audit report for FY 2014-15 forms part of this Report as Annexure -VII. The Board has appointed M/s.P.S.Rao & Associates, Practicing Company Secretaries, as Secretarial Auditors of the Company for the financial year 2015-16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE OUTGO: The particulars as required to be disclosed pursuant to Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of Companies (Accounts) Rules, 2014, are given to the extent applicable in Annexure-V RISK MANAGEMENT POLICY: Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has formulated a policy on the Risk Management. The Risk Management Policy of the Company is posted on Company's website: www.bodhtree.com Various risks, including the risks associated with the economy, regulation, competition, foreign exchange, interest rate etc., are documented, monitored and managed efficiently SUBSIDARIES, JOINT VENTURES AND ASSOCIATE COMPANIES: During the year under review, the company does not have any subsidiaries and joint ventures. Though the Company holds more than 20% of total share capital of two other companies there is no Significant Influence shown by the Company on affairs of those companies. There were no transactions with those companies during the period under review. Management of the Company is different from that of those two companies. Details in this regard are mentioned in MGT-9 (Annexure-II). ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS: The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. Various Audit Systems in the Company monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Based on the audit reports, company undertakes corrective actions in respective areas and strengthens the control. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board periodically. The Board of Directors of the Company have adopted various policies like Related Party Transactions policy, Whistle Blower Policy and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. NOMINATION AND REMUNERATION POLICY: A committee of the Board named as "Nomination and Remuneration Committee" has been constituted to comply with the provisions of section 178, Schedule IV of the Companies Act and Clause 49 of the Listing Agreement and to recommend a policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and Evaluation of their performance and to recommend the same to the Board from time to time. Nomination and Remuneration Policy of the Company is enclosed herewith as Annexure-VI FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE, INDIVIDUAL DIRECTORS AND OF ITS COMMITTEES: As required under the provisions of Schedule IV of the Companies Act, 2013 the performance evaluation of independent directors has been done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the nomination and remuneration committee. CORPORATE SOCIAL RESPONSIBILITY (CSR): During the year under review, the company does not fall under the purview of provisions of section 135 read with Schedule VII of the Companies Act, 2013. Hence the company has not made any contributions towards CSR Activities. DIRECTOR'S RESPONSIBILITY STATEMENT: Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors' confirm that: i. In preparation of annual accounts for the financial year ended 31st March, 2015 the applicable Accounting Standards have been followed along with proper explanation relating to material departures; ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2015 and of the profit and loss of the Company for the year; iii. The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other 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 the company and that such internal financial controls are adequate and were operating effectively; and vi. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. OTHER DISCLOSURES: Board Meetings: During the year under review Five Board Meetings were held. For further details, please refer report on Corporate Governance enclosed herewith. Committees of Board: Your company has the following committees namely: 1. Audit Committee 2. Nomination and Remuneration Committee 3. Stakeholder's Relationship Committee 4. Risk Management Committee The constitution of all the committees are as per the Companies Act, 2013 and Listing Agreement with Stock Exchanges. The details of the Constitution are mentioned in Corporate Governance Report, which forms part of this Annual Report. Corporate Governance Report: Your Company has complied with the requirements of Clause 49 of the Listing Agreement entered with the Stock Exchanges, Report on Corporate Governance including Auditor's Certificate on compliance with the code of Corporate Governance specified under the said Clause is enclosed as Annexure - VIII to this report. Management Discussion and Analysis: A brief note on the Management discussion and analysis for the year is enclosed as Annexure - I to this report. Vigil Mechanism: In pursuant to the provisions of section 117(9) & (10) of the Companies Act , 2013 and Clause 49 of the Listing Agreement a Vigil Mechanism for directors and employees to report genuine concerns has been established. Protected disclosures can be made by a whistle blower to the Chairman of the Audit Committee. The Policy on vigil mechanism may be accessed on the Company's website at the link:<http://www.bodhtree.com/downloads/Whistle> Blower Policy.pdf Remuneration ratio of the directors/ Key Managerial Personnel/ Employees: Statement showing disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed herewith as Annexure - III PARTICULARS OF EMPLOYEES: The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure - III to the Board's report. A statement containing the names of every employee employed throughout the financial year and in receipt of remuneration of Rs. 60 lakh or more, or employed for part of the year and in receipt of Rs. 5 lakh or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure - III to the Board's report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: Details of the Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are given in the notes to the financial statements pertaining to the year under review. DEPOSITS: Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet. RELATED PARTY TRANSACTIONS: Related party transactions entered during the financial year under review are disclosed in Note No.36 of the Financial Statements of the Company for the financial year ended 31st March, 2015. These transactions entered were at an arm's length basis and in the ordinary course of business. Form AOC-2, containing the note on the aforesaid related party transactions is enclosed herewith as Annexure - IV The policy on materiality of Related Party Transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website www.bodhtree.com GENERAL: Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Issue of equity shares with differential rights as to dividend, voting or otherwise. 2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. 3. Neither the Managing Director nor the Whole-time Director of the Company receive any remuneration or commission from any of its subsidiaries. 4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. 5. No material changes and commitments affecting the financial position of the Company have 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 cases filed/registered pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. ACKNOWLEDGMENTS: Your Directors wish to express their gratitude to investors, analysts, financial institutions, banks, partners, vendors and various statutory authorities, business associates and customers who have extended their immense support to the Company. Your Directors commend all the employees of your Company for their continued dedication, significant contributions, hard work and commitment. For and on behalf of the Board Ramakrishna L.N. Managing Director DIN: 03623543 K.Rajesh Director DIN: 02727491 Place: Hyderabad Date: 14thAugust, 2015 |