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To the Members,
The Board of Directors have pleasure in presenting the Twenty Third Annual Report and the Audited Financial Statements of the Company for the period ended 31st March, 2015 consisting of 18 months ( i.e. from 1st Oct, 2013 to 31st Mar, 2015).
Your Company has achieved a turnover of Rs. 4,387.06 lakhs for the period ended 31st March, 2015 (consisting of 18 months i.e., from 1st October, 2013 to 31st March, 2015), against the turnover of Rs. 11,362.85 lakhs for the previous year ended 30th September, 2013 (12 months only
Presently your Company offers the following business activities:
– Providing solutions using umbrella of AIDC technologies and smart card manufacturing.
– Financial Inclusion Division for implementing the FI projects as per the guidelines of RBI.
Providing solutions in Radio Frequency Identification and Data Capture (RFID) Technology.
Your Company continues to see strong growth traction across existing business and expects the momentum to continue in future also.
Foreign Currency Convertible Bonds:
Your Company, during 2007–08 had successfully issued Foreign Currency Convertible Bonds (FCCBs) as under:
The Foreign Currency Convertible Bonds (FCCB's) are listed on the Singapore Stock Exchange. These bonds were due for redemption in February 2013. The company has appointed M/s Avista Advisory Group, Mumbai, to assess all the options available with the company and finalize best suited approach in order to address the maturity. The options available with the company include restructuring the bonds i.e., rolling over the bonds for next five years or replacing the bonds with fresh bonds, or redeeming all the bonds at a mutually 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 initiated discussions which are at advanced stages now. The company had filed a request for an extension of the maturity of the bonds to 4th May, 2014 with Reserve Bank of India which was granted vide letter dated 21st February, 2014. The company has applied for further extension of the maturity of the Bonds to Reserve Bank of India (RBI) and the Company is waiting to hear from RBI to move forward. The Company 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 the paid up capital stand at Rs. 34.04 crores there has been no change in the share capital during the period ended 31st March, 2015.
Extension of Financial Year & time to hold the Annual General Meeting:
The Financial Year 2013–14 (consisting of 12 months i.e., from 1st October 2013 to 30th September, 2014) of your Company has been extended up to 31st March, 2015 consisting of 18 months i.e., from 1st October, 2013 to 31st March, 2015 in order to maintain uniform accounting year as per new provisions of the Companies Act, 2013, so that the balance sheet and profit and loss account giving effect to such extension shall be compiled for a period of 18 months for the period 2013–2015 (from 01st October, 2013 to 31st March, 2015), accordingly the time to hold/ conduct Annual General Meeting for the period 2013–15 is extended up to 30th June, 2015 with the approval of Registrar of Companies, Hyderabad, Andhra Pradesh & Telangana.
Restatement of Financial Statements for the Financial Year 2013:
National Stock Exchange of India Limited, Mumbai vide their letter no NSE/LIST/1583 dated 30th October, 2014 has advised the Company to restate the Financial Statements for the year ended 30th September, 2013 (i.e., Financial Year 2012–13) on the impact of trade receivables of the Company i.e., the Company was advised to create provision for the trade receivables of Rs. 65.85 Crores, which was not created by the Company originally.
The Company at their Board of Directors meeting held on 20th May, 2015 has restated the financials by creating provision for trade receivables and the same were circulated to the Stock Exchanges and also placed at the company's website i.e., www.bartronics.com .
Particulars of Loans, Guarantees and Investments:
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 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 the Companies Act, 2013 are given in the notes to the Financial Statements.
Your Company has two subsidiary companies viz., Bartronics Asia Pte. Limited and Bartronics Middle East FZE and four step down subsidiary companies viz., Bartronics Hongkong Ltd, Bartronics Global Solutions Limited, Veneta Holdings Ltd and Burbank Holdings Ltd.
Bartronics Asia Pte Limited:
The Company was incorporated as a wholly owned subsidiary of Bartronics India Limited on 14th June 2007, in the Republic of Singapore with a Share Capital of US$ 7,69,500. Bartronics Asia Pte Limited (BAPL) acquired the only issued share of Cason Limited on 21st December, 2007; subsequently the name of the Company was change to Bartronics Hong Kong Limited with effect from 15th October, 2008. In the month of April 2011, BAPL acquired the only shares 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 22nd June, 2010 as a wholly owned subsidiary of Bartronics India Limited with a share capital of AED 1,50,000 Shares.
Consolidated Financial Statements:
As required under the Listing Agreements entered into with the Stock Exchanges and as per provisions of Companies Act, 2013, a consolidated financial statement of the Company and all its subsidiaries is attached. The consolidated financial statement has been prepared in accordance with the relevant accounting standards as prescribed under Section 129, 133 of the Companies Act, 2013 and as per Schedule III of the Companies Act, 2013. The consolidated financial statement discloses the assets, liabilities, 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 any investor at its Head Office in Hyderabad and that of the subsidiary companies concerned. A gist 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 the period 2013–2015.
Significant and Material Orders passed by the Regulators or Courts or Tribunals Impacting the Going Concern Status of the Company.
There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Company's future operations.
Your Directors are happy to report that during the period there were very cordial and extremely good industrial relations at all levels.
In accordance with the Articles of Association of the Company, Mr. A. B. Satyavas Reddy is liable to retire by rotation and being eligible, offer himself for reappointment.
During the period the Board of Directors had appointed Mr. C. Prakash Ramaiah as an Additional Director (Independent) of the Company w.e.f. 12th February, 2014 and appointed Mrs. A. Syamala Reddy as an Additional Director (Independent) of the Company w.e.f. 30th March, 2015.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
Further Mr. Sudhir Sundar Rao was reappointed as Managing Director of the Company from 20th August, 2014 to 31st May, 2015 subject to the approval of members.
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholder Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.
During the period six Board Meetings and six Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Listing Agreement.
During the period a meeting of Independent Directors was convened and held on 31st March, 2015.
Directors' Responsibility Statement:
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
a) that in the preparation of the annual financial statements for the period ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) that such accounting policies as mentioned in Note: 2 of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the period ended on that date;
c) that proper and sufficient care has been taken for the 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;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
f) 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.
Related Party Transactions:
As mentioned in the Note No. 33 (on Page No. 66) under the head Notes to Accounts.
The Company has adopted related party transactions policy as per Clause 49(VIII)(A)(2).
Code of Conduct:
As the New Companies Act, 2013 has been made effective from 01st April, 2014 which replaces the erstwhile Companies Act, 1956 (to the extent of notified sections) and the provisions of Section 149 (8) requires that the Audit Committee shall review and recommend to the Board for their approval, the Code of Conduct for the Independent Directors. In this connection, the draft Code of Conduct for Independent Directors was placed before the Board along with the recommendations of the Audit Committee and the same was approved by the Board in the Meeting held on 20th January, 2014.
The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on Companies website. Board Members and Senior Management Personnel have affirmed Compliance with the Code for the period 201315. A separate declaration to this effect is made out in the Corporate Governance Report.
The Company has adopted code of practices and procedures for fair disclosures of unpublished price senstive in information and code of conduct as required under Regulation (8)(1) and Regulation (9)(1) of the SEBI (Prohibition of Insider Trading) Regulations, 2015.
Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo:
Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134 (3)(m) of the Companies Act, 2013, read with the Rule, 8 (3) of the Companies (Accounts) Rules, 2014, are given in the Annexure–A attached hereto and forms part of this Report.
The Company's Statutory Auditors, M/s T. Raghavendra & Associates, Chartered Accountants [Registration No.003329S], Hyderabad will retire at the ensuing Annual General Meeting of the Company and being eligible offers themselves for re–appointment.
The Company has received necessary certificates from the Auditor pursuant to Section 139 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 being sought at the ensuing Annual General Meeting.
Your Board recommends the appointment of M/s T. Raghavendra & Associates, Chartered Accountants as Auditors of the Company.
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 Mr. Y. Ravi Prasada Reddy, a Company Secretary in Practice (having CP No. 5360) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure B".
In terms of provisions of Section 197 read with Rule, 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, none of the employees are receiving remuneration as mentioned in the said section.
The information required pursuant to Section 197 read with Rule, 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is annexed as per Annexure C.
Human Resource Management:
The Company believes and considers its human resources as the most valuable asset. The Management is committed to providing an empowered, performance oriented and stimulating work environment to its employees to enable them realize their full potential. Robust HR processes and initiatives adopted by the Company helped in containing the attrition of executives. Industrial Relations remained cordial and harmonious during the period.
Policy on Prevention of Sexual Harassment
The Company has formulated and implemented a policy for Prevention of Sexual Harassment of Women at workplace. During the year under review, the Company has not received any complaints under the policy.
The company has many systems, processes and policies to ensure professional ethics and harmonious working environment. We follow Zero Tolerance towards Corruption and unethical conduct. These are ensured through Whistle Blower Policy, Gift Policy, Sexual Harassment Policy and Redressal Guidelines.
Your Company accorded high priority to quality, safety, training, development, health and environment. The Company endeavors to ensure continuous compliance and improvements in this regard.
All the properties and insurable assets of the Company, including Building, Plant and Machinery, stocks etc., wherever necessary and to the extent required, have been adequately covered.
Your Company has not accepted any fixed deposits from the public and the provisions of Section 73 of the Companies Act, 2013 are not applicable.
Your Company is committed to principles of good Corporate Governance. The Board of Directors ensures that your Company is in compliance with all the applicable provisions of the Clause 49 (as amended) of the Listing Agreement pertaining to Corporate Governance. A detailed report on Corporate Governance is attached and forms part of this report. Certificate from the Practicing Company Secretary confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the listing agreement is attached to this report.
Risk Management Policy:
The Company has adopted Risk Management Policy as per Clause 49 of the Listing Agreement.
Corporate Social Responsibility:
The Board of Directors of the Company had constituted Corporate Social Responsibility Committee and had formulated a policy on Corporate Social Responsibility. The Company was not required to spend any amount during the financial year.
Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT 9 are annexed herewith as "Annexure D".
Whistle Blower Policy and Vigil Mechanism:
Your Company recognizes the value of transparency and accountability in its administrative and management practices. The Company promotes the ethical behavior in all its business activities. The Company has adopted the Whistle blower Policy and Vigil Mechanism in view to provide a mechanism for the directors and employees of the Company to approach Audit Committee of the Company to report existing/probable violations of laws, rules, regulations or unethical conduct.
Explanation to the Qualifications in Auditor's Report and Secretarial Audit Report:
There are no qualifications or adverse remarks in the Auditor" s Report or Secretarial Audit Report:
The Board of Directors of the Company extends their sincere appreciation to the Government, Bankers, Financial Institutions and others for their kind support. On behalf of the Company, the Board of Directors thanks the Employees for their valuable efforts and the shareholders for their undaunted faith in the Company.
BY ORDER OF THE BOARD
Sudhir Sundar Rao Managing Director
A. B. Satyavas Reddy Director