Bodhtree Consulting Ltd Directors Report.
Your Directors have pleasure in presenting the Thirty Seventh Annual Report of Bodhtree Consulting Limited (the "Company" or "Bodhtree") on the business and operations and the Audited Accounts for the financial year ended 31 March, 2019, together with the Auditors Report thereon. Consolidated performance of the Company and its subsidiaries has been referred to wherever required.
1. Financial Summary:
Your Companys results (Standalone and consolidated) for the year in comparison with the previous year are given below in a summarized format:
|Particulars||(Re. in Lakhs)||(Re in lakhs)|
|Income from Operations||11628.84||11449.51||11635.23||11449.51|
|Profit before depreciation & Tax||1844.50||1237.21||1815.68||1236.68|
|Prior Period & Exceptional Items||0||0||0||0|
|Profit before Tax & Extra-Ordinary||1258.51||657.93||1229.69||657.40|
|Tax Expense / (Reversal)||446.18||214.98||446.19||214.98|
|Profit (Loss) after tax||812.33||442.95||783.50||442.42|
|Other Comprehensive Income||(5.83)||(12.20)||(5.82)||(12.20)|
|Total Comprehensive Income||806.50||430.75||777.68||430.22|
2. Companys Performance:
During the year under review the Company reported a total income of Re. 11893.64 Lakhs against Re. 11472.46 Lakhs in the previous year. The Operating profit amounted to Re. 1248.51 Lakhs as against operating profit of Re. 657.93 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.
3. General Reserve:
The Company has not proposed to transfer any amount to the general reserve for the Financial Year ended 31 March, 2019.
Your Directors regret to inform that they do not recommend any dividend for the financial year 2018-19. The Company is in its growth phase and hence needs to maintain the growth capital and meet its growth oppurtunities.
5. Share Capital:
The Paid-up Share Capital of the Company as on 31 March, 2019 is Re. 19,95,82,360/ and there has been no change in the capital structure of the Company during the year 2018-19.
6. Listing of Companys Equity Shares:
The Companys Equity shares are listed with M/s. BSE Limited (Stock Exchange), Phiroze JeeJeebhoy Towers, Dalal Street, Mumbai 400 001.
The Company has paid the Annual Listing Fees to the said Stock Exchange for the Financial Year 2019-20 on 02 August, 2019.
7. Change in the Nature of Business:
There is no change in the nature of the business of the Company during the year under review.
8. Subsidiaries, Joint Ventures and Associate Companies:
During the year under review, the Company is having one wholly owned subsidiary Company in the name and style of M/s. Bodhtree Human Capital Private Limited which is engaged in the business of sta augmentation and related service sector.
The Company holds more than 20% of total share capital of two other Companies which are M/s. Learnsmart India Private Limited and M/s. Pressmart Media Limited. However, there was no Signi cant In uence shown by the Company on the a airs of those Companies. There were no significant 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 this regard are mentioned in Form No. MGT-9 (Extract of Annual Return) which can be accessed at the companys website www.bodhtree.com under investors section.
As per the provisions of Section 129(3) of the Companies Act, 2013 (the Act) read with Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Subsidiary in Form AOC-1 is enclosed as Annexure IV to this Report.
Performance and financial position of each of the subsidiaries, associates and joint ventures:
As per Rule 8 of Companies (Accounts) Rules, 2014, a Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies of the Company is enclosed as Annexure IV to this Report.
9. Management Discussion and Analysis:
The Management Discussion and Analysis forms an integral part of this Report and enclosed as Annexure - I and gives details of the overall industry structure, developments, performance and state of a airs of the Companys business, internal controls and their adequacy, risk management systems and other material developments during the financial year.
10.Extract of Annual Return:
As provided under section 92(3) of the Act, the extract of annual return is enclosed as Annexure II in the prescribed Form No. MGT-9, which forms part of this report and also can be accessed at the companys website www.bodhtree.com under investors section.
11. Directors Responsibility Statement:
Pursuant to Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, con firm that:
i) In preparation of annual accounts for the financial year ended 31st March 2019 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 a airs of the Company at the end of the financial year ended 31st March 2019 and of the profit and loss of the Company for the year;
iii) The Directors have taken proper and suficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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 the ectively; 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 the ectively.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Companys internal financial controls were adequate and the ective during FY 2018-19.
12. Statement on Declaration given by Independent Directors under Section 149(6):
The independent directors have submitted the declaration of independence, as required pursuant to Section 149(7) of the Act stating that they meet the criteria of independence as provided in Section 149(6) of the Act.
13. Details of Directors or Key Managerial Personnel:
During the year, Mr. Muthukrishnan Swaminathan resigned as a Director from the Board of Directors of the Company w.e.f. 21st November, 2018 due to his pre-occupations. The Board places on record its sincere appreciation for Mr. Muthukrishnan Swaminathans value added contributions and fruitful association with the Company and thanks him for providing valuable guidance to the Company during his tenure.
During the year, upon recommendation of the Nomination and Remuneration Committee, Mr. Muninder Raja Arram was co-opted as Additional director (Non-Executive Non- Independent) and Mr. Srinivas Reddy Mallayagari was co-opted as Additional Director of the Company in the category of Independent Director of the Company by the Board at its meeting held on 14th November, 2018 and 16th February, 2019 respectively pursuant to Section 161 of the Companies Act, 2013.
In accordance with the provisions of Section 152(6) of the Act and the Articles of Association of the Company, Mr. L N Ramakrishna will retire by rotation at the ensuing Annual General Meeting and, being eligible, o ers himself for re-appointment.
The aforesaid appointment/re-appointment of Director/s are subject to your approval.
The Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, recommends the appointment of the above-mentioned directors at the ensuing Annual General Meeting.
Brief pro les of the directors is given in the notice convening the 37th AGM for reference of the shareholders.
During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than the receiving sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.
Key Managerial Personnel
During the year under review, Mr. Srikanth Reddy Kolli resigned from the o ce of Company Secretary with the ect from 24th September, 2018 and Mr. Prabhakar Rao Kallur resigned from the o ce of Chief Financial Officer w.e.f. 18th April, 2019. Ms. Varsha Gupta was appointed as Company Secretary & Compliance Officer w.e.f. 1st October, 2018.
Mr. L N Rama Krishna continues to be the Managing Director of the Company.
14. Number of meetings of the board:
6 (Six) meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.
15. Board Evaluation:
The board of directors has carried out an annual evaluation of its own performance, and that of the board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulations").
The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, the ectiveness of board processes, information and functioning, etc.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.
The board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspects of his role.
In a separate meeting of independent directors held on 22nd March, 2019, performance of non-independent directors, performance of the board as a whole and performance of the Chairman of the Company was evaluated, taking into account the views of executive directors and non-executive directors. In addition to that, the Independent Directors evaluated the quality, quantity and timeliness of flow of information between the Board and the management of the Company which enabled the Board to perform its functions reasonably and the ectively. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.
Criteria for Performance Evaluation:
a. Ability of the candidates to devote suficient time and attention to his professional obligations as Independent Director for informed and balanced decision making.
b. Adherence to the Code of Conduct in letter and in spirit by the Independent Directors.
c. Bringing objectivity and independence of view to the Boards discussions in relation to the Companys strategy, performance, and risk management
d.Statutory Compliance and ensuring high standards of financial probity and Corporate Governance
e. Responsibility towards requirements under the Companies Act, 2013, Responsibilities of the Board and accountability under the Directors Responsibility Statement.
16. Policy on directors appointment and remuneration and other details:
The Company adopted a policy relating to the appointment and remuneration of Directors and Senior Management Personnel. This Policy covers the remuneration and other terms of employment for the Companys Executive Team. The remuneration policy for Members of the Board and for Management, aims at improving the performance and enhancing the value of the Company by motivating and retaining them and to attract the right persons to the right jobs in the Company. The object of this Remuneration Policy is to make your Company a desirable workplace for competent employees and thereby secure competitiveness, future development and acceptable pro tability. In order to achieve this, it is imperative that the Company is in a position to o er competitive remuneration in all its operational locations.
Neither the Managing Director nor any other Directors of the Company received any remuneration or commission from any of its Subsidiaries.
A detailed policy on remuneration of the Directors and Senior Management is placed on the Companys website under the web link: http://www.bodhtree.com/about us/investors/codes & Policies.
Policy for selection of directors and determining directors independence
The Nomination and Remuneration committee identi es persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommends to the Board their appointment and removal.
The criteria for the appointment of Directors, KMPs and Senior Management :
A person for appointment as director, KMP or in senior management should possess adequate quali cation, expertise and experience for the position considered for appointment. The Nomination and Remuneration committee decides whether the quali cation, expertise and experience possessed by a person are suficient for the concerned position. The committee ascertains the credentials and integrity of the person for appointment as director, KMP or at senior management level and recommends to the Board his / her appointment.
The Committee, while identifying suitable persons for appointment to the Board, will consider candidates on merit against objective criteria and with due regard for the benefits of diversity on the Board.
The Nomination and Remuneration committee assesses the independence of directors at the time of appointment, reappointment and the Board assesses the same annually. The Board re-assesses independence when any new interests or relationships are disclosed by a Director.
The criteria of independence is as prescribed in the Act and the Listing Regulations. The Independent Directors shall abide by the Code for independent directors as specified in Schedule IV of the Act.
17. Committees of the Board:
Your Company has the following committees namely:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders Relationship Committee
4. Risk Management Committee
The constitution of all the committees are as per the Companies Act, 2013 and SEBI Listing Regulations. The details of their Constitution are mentioned in Corporate Governance Report, 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 Governance Report including Auditors Certi cate on compliance with the conditions of Corporate Governance 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 the Accounting Standards 21 and 23 as prescribed under Section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014 and Guidelines issued by Securities and Exchange Board of India ("SEBI") also forms part of this Report.
As per the provisions of Section 136 of the Act, the Company has placed its financial statements, including consolidated financial statements and all documents attached thereto, as well as the separate audited accounts of its subsidiaries on its website www.bodhtree.com. A copy of the above-mentioned documents will be provided to 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 and complexity of its operations.
Various Audit Systems in the Company monitors and evaluates the the cacy 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. Signi cant 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 the cient 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. The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report.
21. Statutory Auditors:
M/s Nisar & Kumar, Chartered Accountants were appointed as Statutory Auditors of the Company for a period of 5 consecutive years at the 32nd Annual General Meeting (AGM) of the Company held on 23rd December, 2014. Their term of five years expires at this ensuing AGM and the Board recommends to appoint new Auditors in place of the retiring auditor.
In consideration of the above, the Board of Directors upon the recommendation of the Audit Committee at its meeting held on 14th August, 2019 recommended the appointment of M/s NSVR & Associates LLP, Chartered Accountants, Hyderabad as the Statutory Auditors of the Company for a period of 5 years, commencing from the conclusion of the 37th AGM. The said recommendation is forming part of the Notice to the 37th Annual General Meeting for approval of members of the Company.
M/s NSVR & Associates LLP is a Chartered Accountants firm with Registration No. 008801S/S200060. The firm is having close to two decades of experience in the eld of Audit, Taxation (Direct and Indirect), Internal Financial Control Review, Financial Advisory, Management Consulting, Financial restructuring, Business Modeling, System Design Management Support Services. The firm has a strong team of 8 partners and 40+ professional sta (quali ed and semi-quali ed Chartered Accountants).
The Audit Committee considered various parameters like capability to serve the business landscape of the Company, audit experience in the Companys operating segments, market standing of the firm, clientele served, technical knowledge etc. and found NSVR & Associates LLP to be best suited to handle the scale, diversity and complexity associated with the audit of the financial statements of the Company.
The financial statements of the year ended 31st March, 2019 were audited by M/s Nisar & Kumar, Chartered Accountants. The standalone and consolidated financial statements have been prepared in accordance with the Indian Accounting Standards prescribed under Section 133 of the Act read with the relevant rules issued thereunder and other accounting principles generally accepted in India.
22. Auditors report:
The auditors report on the financial statements does not contain quali cations, reservations or adverse remarks and the Notes on the financial statements referred to therein are self-explanatory, thereby not requiring any further comments on the same.
23. 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 has appointed M/s. P. S. Rao & Associates, Practising Company Secretaries as Secretarial Auditors to conduct Secretarial audit of the Company for the financial year ended 31 March, 2019.
The Secretarial Audit Report issued by M/s. P. S. Rao & Associates, Practising Company Secretaries in Form No. MR-3 is enclosed as Annexure VIII to this Annual Report.
Explanations for the observations made by Secretarial Auditor M/s P S Rao & Associates, in Secretarial Audit Report:
1. As per the provisions of the Act, the Company shall deposit the dividend amount in a separate bank account within 5 days from the date of its declaration, whereas the Company deposited the same on the 30th day. Further, there was a shortage in deposit of dividend amount by Rs.14.34 Lakhs.
The company deposited the amount in the dividend account based on the shares listed and traded in the Stock Exchange as on the record date. A total of 19,12,069 shares allotted to M/s Premeya World Wide Pte Ltd by way of conversion of outstanding CCPS are yet to be admitted to the depository system as the trading approval from BSE Limited is awaited to be applied for. Hence there is shortage in the dividend amount to the extent of Rs. 14.34 lakhs. However, the company has remitted the funds to the unpaid dividend account to ensure compliance with the governing provisions of the Act after the same was observed by the Auditors at the time of audit.
2. Delay in ling forms with the Ministry of Corporate A airs
The company shall strive to complete the ling of forms with Registrar of Companies, Telangana within the prescribed time and avoid payment of additional fees thereto.
3. Notice was issued by SEBI authorities to certain designated employees and an Independent Director of the Company who executed contra trades within the prescribed limit and during the closure of trading window.
The Company issued warning le ers to the concerned Director and Designated Persons to strictly adhere to the Code of Conduct and avoid making transac ons which are not in compliance with the provisions of SEBI (PIT) Regulations, 2015. Further, the profit made on the said transactions was transferred to the SEBI- IEPF Account.
4. The Company has been providing information to the concerned SEBI Authority regarding the transfer of shares held by the BCL Employees Benefit Trust. Further, the Company seeks to comply with the provisions of SEBI (Employee based Benefit Regulations), 2014 and extinguish/ dispose o the shares of the Trust within the prescribed time of December, 2019.
24. Internal Auditors:
The Board of Directors of the Company has appointed M/s. Srinivas & Poorna, Chartered Accountants as Internal Auditors to conduct the Internal Audit of the Company for the Financial Year ended 31 March, 2019.
25. Risk management:
The board of directors of the Company has voluntarily formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its the ectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
The Board has framed a Risk management Policy, which, inter-alia, identi es the elements if risks which may threaten the existence of the Company. Various risks faced by the Company, including the risks associated with the economy, regulations, competition, foreign exchange, interest rate etc., and the development and implementation of the Risk Management Policy and are documented, monitored and managed the ciently.
26. Corporate Social Responsibility (CSR):
During the year under review, the Company did not fall under the purview of provisions of section 135 of the Companies Act, 2013. Hence, the provisions of Corporate Social Responsibility as specified therein were not applicable to the Company and accordingly, it has not made any contributions towards CSR Activities.
27. Particulars of loans, guarantees and investments:
The particulars of loans, guarantees and investments have been disclosed in the Notes to financial statements, being a part of this Annual Report.
28. Deposits from public:
The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.
29. Transactions with related parties:
Information on transactions with related parties pursuant to section 134(3)(h) of the Act 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 party transactions as approved by the Board may be accessed on the Companys website www.bodhtree.com.
30. Vigil Mechanism:
In pursuant to the provisions of section 177 (9) & (10) of the Act, and SEBI Listing Regulations, 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 Companys website www.bodhtree.com.
31. 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 forms part of Annexure- III which is enclosed to this Board Report.
32. Particulars of Employees:
The table containing the names and other particulars of top 10 employees in terms of remuneration drawn 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, forms part of abovementioned Annexure - III.
A statement containing the names of every employee employed throughout the financial year and in receipt of aggregate remuneration of Rs. 102 lakh or more for the year, or employed for part of the year and in receipt of Rs. 8.50 lakh or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of abovementioned Annexure - III which is enclosed to this Boards Report.
33. 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 by way of Annexure VI.
34. Human Resources:
The Industrial relations of the Company continued to be harmonious during the year under review.
35. Employees Stock Options Scheme:
The Board in its Meeting held on 14 November, 2016 has approved BCL ESOP-2016 policy to its Employees with 10 Lakh fully paid-up Equity Shares, which were approved by the shareholders in the 35th Annual General Meeting held on 30 September, 2016. The in-principle approval for the said 10 lakh options was obtained from BSE on 04 January 2017. The Company did not grant any options to its employees during F.Y. 2018-19. The details of Employees Stock Options pursuant to section 62 of the Companies Act, 2013 read with Rules made thereunder; and SEBI (Share Based Employee Benefits) Regulations, 2014 and erstwhile SEBI (Employee Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are provided as Annexure IX to this Report.
37. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The company has in place a Policy for prevention of Sexual Harassment at the Workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed of during the year:
a. Number of complaints pending at the beginning of the year; - Nil
b. Number of complaints received during the year - Nil
c. Number of complaints disposed o during the year -Nil
d. Number of cases pending at the end of the year- Nil
36. Compliance with secretarial standards on board and annual general meetings
During the year under review, the Company has complied with secretarial standards issued by the Insfitute of Company Secretaries of India on Board Meetings and Annual General Meetings.
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:
a. Issue of equity shares with differential rights as to dividend, voting or otherwise.
b. Neither the Managing Director of the Company receive any remuneration or commission from any of its subsidiaries.
c. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.
d. No material changes and commitments a ecting the financial position of the Company have occurred between the end of the financial year and date of report.
The directors thank the Companys employees, customers, vendors, investors and academic institutions for their continuous support. The directors also thank the governments of various countries, Government of India, governments of various states in India and concerned government departments / agencies for their co-operation. The directors appreciate and value the contributions made by every member of the Bodhtree family.
|Place: Hyderabad||For and on behalf of the Board|
|Date: 14.08.2019||For Bodhtree Consulting Ltd|
|L N Rama Krishna.||K Rajesh|
|DIN: 03623543||DIN: 02727491|