Your Directors have pleasure in presenting the Twentieth Annual Report of the Companyalong with Company's Audited Financial Statements (Standalone and Consolidated) for theFinancial Year ended on March 31 2019.
|Particulars ||Consolidated ||Consolidated ||Standalone ||Standalone |
| ||FY 2018-19 ||2017-18 ||FY 2018-19 ||2017-18 |
|Total Revenue ||257772.74 ||242028.43 ||45672.41 ||45482.82 |
|Gross Profit before Interest Depreciation & Tax ||75683.00 ||71329.30 ||1204.80 ||1224.90 |
|Less: Interest ||1317.70 ||1479.57 ||1317.42 ||1478.75 |
|Depreciation ||13510.19 ||10814.98 ||100.41 ||107.92 |
|Profit before Tax ||60855.11 ||59034.75 ||(213.03) ||(361.77) |
|Less: Provision for Tax ||16402.62 ||18455.01 ||- ||- |
|Less: Deferred Tax ||54.87 ||(120.89) ||107.57 ||(67.70) |
|Profit after Tax ||44397.61 ||40700.63 ||(320.60) ||(294.07) |
|Add: Other comprehensive income ||(26542.31) ||964.83 ||322.07 ||68.53 |
|Total comprehensive income for the period ||17855.31 ||41665.46 ||1.48 ||(225.54) |
|Balance Brought forward from the previous year ||219200.54 ||177535.08 ||6699.09 ||6924.63 |
|Profit available for appropriations ||237055.85 ||219200.54 ||6700.56 ||6699.09 |
|Less: Dividend ||- ||- ||- ||- |
|Less: Tax on Dividends ||- ||- ||- ||- |
|Less: Amount transferred to retained earnings as per Schedule II of Companies Act 2013 ||- ||- ||- ||- |
| || || || || |
|Less: Transferred to General Reserve ||- ||- ||- ||- |
|Profit Carried to Balance Sheet ||237055.85 ||219200.54 ||6700.56 ||6699.09 |
State of Affairs / Company's performance
During the year under review your Company achieved a consolidated turnover of Rs.257772.74 lakhs as against Rs. 242028.43 lakhs in the previous year. Your Company hasearned a consolidated gross profit of Rs. 75683.00 lakhs before interest depreciationand tax as against Rs. 71329.30 lakhs in the previous year. After deducting financialcharges of Rs. 1317.70 lakhs depreciation of Rs. 13510.19 lakhs and provision for taxof Rs. 16457.49 lakhs the operations resulted in a net profit of Rs. 44397.61 lakhs asagainst Rs. 40700.63 lakhs in the previous year.
There is no change in the nature of business carried on by the Company during the yearunder review.
There are no Material Changes and Commitments affecting the financial position of theCompany which occurred between the end of the financial year to which the financialstatements relate and the date of this Report.
Transfer to Reserves:
Your Company has not proposed to transfer any amount to the general reserve.
Your Company has not accepted any deposits falling within the meaning of Section 73 ofthe Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014during the financial year.
The Company has not declared dividend for the financial year ended March 31 2019.
Particulars of Loans Guarantees & Investments:
The company makes investments or extends loans/guarantees to its wholly-ownedsubsidiaries for their business purposes. Details of loans guarantees and investmentscovered under Section 186 of the Companies Act 2013 along with the purpose for whichsuch loan or guarantee was proposed to be utilized by the recipient form part of thenotes to the financial statements provided in this annual report.
CHANGE IN THE NATURE OF BUSINESS IF ANY
During the year there was no change in the nature of business of the company or any ofits subsidiaries.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no such changes.
The Company has 16 subsidiaries as of March 31 2019. There was no material change inthe nature of the business carried on by the subsidiaries. During the year under reviewthe Company has not floated any new subsidiary Company.
Section 129(3) of the Companies Act 2013 states that where the company has one or moresubsidiaries it shall in addition to its financial statements prepare a consolidatedfinancial statement of the company and of all subsidiaries in the same form and manner asthat of its own and also attach along with its financial statement. A statement containingthe brief details of performance and financials of the Subsidiary Companies for thefinancial year ended March 31 2019 is attached to Financial Statements of the Company.
Consolidated financial statements:
In compliance with Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and in compliance with the provisions of Section 129(3)and other applicable provisions of the Companies Act 2013 and the Indian AccountingStandards Ind AS-110 and other applicable Accounting Standards your Directors havepleasure in attaching the consolidated financial statements for the financial year endedMarch 31 2019 which forms part of the Annual Report.
Management's discussion and analysis:
Pursuant to the provisions of Regulation 34 read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a detailed report onManagement Discussion & Analysis is provided as a separate disclosure in the annualreport.
Related Party Transactions:
All related party transactions that were entered into during the financial year were inthe ordinary course of the business of the Company and were on an arm's length basis.There were no materially significant related party transactions entered by the Companyduring the year with the Promoters Directors Key Managerial Personnel or other personswhich may have a potential conflict with the interest of the Company.
The policy on related party transactions as approved by the Audit Committee and theBoard of Directors is hosted on the website of the Company www.brightcomgroup.com. Prioromnibus approvals from the Audit Committee are obtained for transactions which arerepetitive and also normal in nature. Further disclosures are made to the Committee andthe Board on a quarterly basis.
None of the Directors had any pecuniary relationship or transactions with the Companyother than to the extent of their shareholding and except the payments made to them in theform of remuneration/sitting fee.
Since all related party transactions entered into by the Company were in the ordinarycourse of business and were on an arm's length basis the requirement of furnishing therequisite details in Form AOC-2 is not applicable to the Company.
The details of related party disclosures form part of the notes to the financialstatements provided in this annual report.
Pursuant to the provisions of Chapter IV read with Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate section onCorporate Governance has been incorporated in the Annual Report for the information of theshareholders. A certificate from the Practicing Company Secretary regarding compliancewith the conditions of Corporate Governance as stipulated under the said Schedule V ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 also forms partof this Annual Report.
Transfer of Un-Claimed Dividend to the Investor Education and Protection Fund:
Your Company during the year under review transferred the Unclaimed Dividend pertainingto the Financial Year 2010-11 to the Investor Education and Protection Fund in compliancewith the provisions of Section 125 of the Companies Act 2013.
Directors and key Managerial Personnel:
In pursuance of Section 152 of the Companies Act 2013 and the Rules framed there underMr. M. Suresh Kumar Reddy Managing Director is liable to retire by rotation at theensuing Annual General Meeting and being eligible has offered himself for reappointment.
The Board of Directors on the recommendation of Nomination and Remuneration Committeein their meeting held on March 28 2019 subject to the approval of the Members of theCompany at the ensuing Annual General Meeting considered and approved the reappointment ofMr. M. Suresh Kumar Reddy as the Chairman & Managing Director and Mr. Vijay Kancharlaas Executive Director of the Company for a further period of Five (5) Years commencingfrom 01.04.2019 to 31.03.2024 and remuneration payable to them.
Pursuant to the provisions of regulation 36 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Secretarial Standard 2 on General Meetingsissued by ICSI brief resume and other disclosures relating to the Directors who areproposed to be appointed/ re-appointed are given in the Annexure to the Notice of the 20thAGM.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with criteria of independence as prescribed under Section 149(6)of the Act and under Regulation 16(1)(b) of SEBI Listing Regulations. None of thedirectors of the company is disqualified under the provisions of the Companies Act 2013(Act') or under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. All Independent Directors have provided confirmations as contemplatedunder section 149(7) of the Act.
Evaluation of performance of the Board Members of the Board and the Committees of theBoard of Directors:
The Nomination and Remuneration Committee has laid down criteria for performanceevaluation of Directors Chairperson Board Level Committees and the Board as a whole andalso the evaluation process for the same. The Nomination and Remuneration Committee hasreviewed the performance evaluation of the Directors Chairperson Audit Committee andStakeholders Relationship Committee and the Board as a whole.
The statement indicating the manner in which formal annual evaluation of the Directorsthe Board and the Board level Committees are given in the report on Corporate Governancewhich forms part of this Annual Report.
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 have been disclosed in the corporate governancereport which forms part of this annual report and is also hosted on the Company's websitewww.brightcomgroup.com.
Meetings of Board of Directors:
During the Financial Year Eight (8) meetings of the Board of Directors were held. Thedetails of the meetings of the Board are given under the Section Corporate GovernanceReport which forms part of this Report.
The details of the familiarization programme formulated for Independent Directors ishosted on the Company's website www.brightcomgroup.com.
Audit Committee of the Company meets the requirements of section 177 of the CompaniesAct 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The details of the composition of the Audit Committee as required underthe provisions of Section 177(8) of the Companies Act 2013 is given in the CorporateGovernance Report furnished as part of the Annual Report. During the year under reviewthe Board has accepted all the recommendations of the Audit Committee.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo:
The particulars as prescribed under sub-section (3)(m) of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 are as follows:
A. Details of Conservation of Energy
The operations of your company do not consume high levels of energy. The Company useselectric energy for its equipment such as computer terminals air conditioners lightingand utilities in the work premises. Adequate measures have been taken to conserve energyby using energy-efficient computers and equipment with the latest technologies.
However the requirement of disclosure of particulars with respect to conservation ofenergy as prescribed in the Section 134(m) of the Companies Act 2013 read with Rule 8(3)of Companies (Accounts) Rules 2014 are not applicable to the Company and hence notprovided.
B. Technology Absorption
The Information Technology (IT) and Information Technology Enabled Services (ITES)Industry are subject to high rate of technological obsolescence. The Company's business isDigital Marketing and Software Development. The change in the industry paradigm isdynamic. The Company is continuously updating these changes and constantly evaluatingthese developments to improve its capabilities towards the industry. Accordingly researchand development of new services display advertising platforms and methodologiescontinue to be of importance to us. This allows us to enhance quality productivity andcustomer satisfaction through continuous improvements and innovations. As part of thecontinuous thrust on R&D the company is also focused on Solutions Research andVertical Focus Research. These would identify new ideas which would enable businessprocess improvement for customers and would be aligned with the business strategy andgrowth opportunities of the organization. Our R&D activities are not capital intensiveand we do not specifically provide for the same in our books.
C. Foreign Exchange Earnings and outgo
The particulars of earnings and expenditure in foreign exchange during the year aregiven in notes to Standalone financial statements.
M/s. P C N & Associates (formerly known as Chandra Babu Naidu & Co.) (FirmRegistration No.016016S ) Chartered Accountants were appointed as Statutory Auditors ofthe Company for a term of Five years from the conclusion of the 18th AnnualGeneral Meeting till conclusion of 23rd Annual General Meeting conducted theStatutory Audit for the FY-2018-19. The Independent Auditors' Report(s) to the Members ofthe Company in respect of the Standalone Financial Statements and the ConsolidatedFinancial Statements for the Financial Year ended March 31 2019 form part of this AnnualReport and do not contain any qualification(s) or adverse observations.
There have been no instances of fraud reported by the Auditors including the Statutoryof the Company under Section 143(12) of the Companies Act 2013 and the Rules framed thereunder either to the Company or to the Central Government.
Adequacy of Internal Financial Control Systems & Risk Management:
The company has in place adequate internal financial controls with reference to itsfinancial statements. These controls ensure the accuracy and completeness of theaccounting records and the preparation of reliable financial statements.
The details relating to internal financial controls and their adequacy and RiskManagement are included in the Management Discussion and Analysis Report.
In compliance with the provisions of Section 204(1) of the Companies Act 2013 theCompany has appointed Mr. A. Sridhar Practicing Company Secretary to conduct SecretarialAudit of the records and documents of the Company for the Financial Year 2018-19. TheSecretarial Audit Report for the Financial Year ended March 31 2019 in Form MR-3 isannexed to the Board's Report - Annexure -A and forms part of this Report. The SecretarialAuditors' Report to the Members of the Company for the Financial Year ended March 31 2019does not contain any qualification(s) or adverse observations.
Compliance with Secretarial Standards:
The Company has complied with applicable provisions of the Secretarial Standards issuedby the Institute of Company Secretaries of India and approved by the Government of Indiaunder Section 118(10) of the Companies Act 2013.
Extract of Annual Return:
The extract of the Annual Return of the Company in Form MGT-9 for the Financial Yearended March 31 2019 is given in Annexure- B and forms part of the Boards' Report.
Vigil Mechanism/ Whistleblower / Ombudsperson Policy:
The Company has a vigil mechanism policy to deal with instances of fraud andmismanagement if any. The vigil mechanism policy is uploaded on the website of theCompany www.brightcomgroup.com.
The Policy provides for adequate safeguards against victimization of employees whoavail of the mechanism and also provides for direct access to the Chairman of the AuditCommittee. It is affirmed that no personnel of the Company has been denied access to theAudit Committee.
Particulars of Employees and related disclosures:
No Salary is being paid to Directors of the Company including Managing Director otherthan sitting fee to Independent Directors and hence the details as required to bedisclosed under Section 197of the Act read with Rule 5(1) of the Companies (Appointmentand Remuneration to Key Managerial Personnel) Rules 2014 is not applicable.
The information as per Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 will be provided upon request by any Member of theCompany. In terms of Section 136 of the Companies Act 2013 the Annual Report includingthe Board's Report and the Audited Accounts are being sent to the Members excluding thesame. Any Member interested in obtaining a copy of the same may write to the CompanySecretary at the Registered Office of the Company.
Corporate Social Responsibility:
The provisions of Section 135 of the Companies Act 2013 are not applicable to theCompany as it ceased to be a Company covered under subsection (1) of Section 135 of theCompanies Act 2013 in the reporting financial year; hence disclosure in this regard isnot provided.
Significant and material orders:
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in the future.
Information required under Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:
The Company has formulated a policy on Prevention of Sexual Harassment of Women atWorkplace and also complied with provisions relating to the constitution of InternalComplaints Committee in accordance with The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. During the financial year ended 31stMarch 2019 the Company has not received any complaints pertaining to Sexual Harassment.
Directors' Responsibility Statement:
Pursuant to the requirement under Section 134(5) of the Act with respect to Directors'Responsibility Statement your Directors to the best of their knowledge and abilityhereby confirm that:
(a) in the preparation of the annual accounts for the year ended March 31 2019 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed along with proper explanation relating to material departures;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2019 and of the profitand loss of the Company for the year ended on that date;
(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts for financial year ended March 312019 on a going concern basis;
(e) the Directors have laid down internal financial controls based on internal controlsframework established by the Company which in all material respects were adequate andoperating effectively.
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Directors place on record their sincere appreciation and thanks for the valuablecooperation and support received from the employees of the Company at all levelsCompany's Bankers Associates partners clients vendors and Members of the Company andlook forward for the same in equal measure in the coming years.
| ||For and on behalf of the Board of Directors |
| || |
|Place: Hyderabad ||M. Suresh Kumar Reddy |
|Date: August 30 2019 ||Chairman and Managing Director |
| ||DIN: 00140515 |