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B2B Software Technologies Ltd.

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Jan 16, 16:00
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Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2006

Director’s Report

Dear Members, The Directors hereby present the Twenty First Annual Report of your Company together with the Audited Accounts including Consolidated Accounts for the financial year ended March 31, 2015 and the report of the Auditors thereon. FINANCIAL RESULTS: (In Rupees) Standalone PARTICULARS 2014 - 2015 2013 - 2014 Revenue from operations 54,572,549 47,272,600 Other Income 2,484,645 2,301,888 TOTAL INCOME 57,057,194 49,574,488 Total Expenditure 49,735,031 43,432,952 Profit / (Loss) before exceptional Items 7,322,163 6,141,536 Exceptional Items Profit / (Loss) before extraordinary items 7,322,163 6,141,536 Extraordinary items Profit / (Loss) before tax 7,322,163 6,141,536 Less: Provision for tax Fringe Benefit Tax Deferred Tax Profit / Loss after tax for the year 7,322,163 6,141,536 Basic and Diluted EPS 0.63 0.53 Consolidated PARTICULARS 2014 - 2015 2013 - 2014 Revenue from operations 82,919,783 72,349,239 Other Income 2,484,645 2,301,888 TOTAL INCOME 85,404,428 74,651,127 Total Expenditure 78,040,635 67,801,638 Profit / (Loss) before exceptional Items 7,363,793 6,849,489 Exceptional Items Profit / (Loss) before extraordinary items 7,363,793 6,849,489 Extraordinary items Profit / (Loss) before tax 7,363,793 6,849,489 Less: Provision for tax Fringe Benefit Tax Deferred Tax Profit / Loss after tax for the year 7,363,793 6,849,489 Basic and Diluted EPS 0.64 0.59 Industry Structure and development Microsoft Dynamics is a growing business and global organizations identify Microsoft Dynamics as the preferred vendor for their next ERP investment.Microsoft Dynamics customer relationship management (CRM) and enterprise resource planning (ERP) software connects people, processes, and systems. With easy to use, fast to implement tools to manage financials, supply chain, and operations.Microsoft Dynamics is sold by a global network of solution specialists, known as partners or resellers. State of Company affairs B2B is one of the Microsoft Partner specialized in providingImplementation services for Microsoft Dynamics ERP in Microsoft Dynamics World. Our diverse clientele includes mid-sized companies and larger enterprises. As a Microsoft partner - B2B advances and adds value to Microsoft''s leading business solutions and client relationships by ensuring that companies get the highest level of attention, expertise and results from Microsoft technology. B2B has developed several Add-on''s namely Quality, HR & Payroll, Plant Maintenance and Life sciences Vertical for Microsoft Dynamics on NAV and AX. LISTING OF EQUITY SHARES: The Company''s Equity shares are presently listed on BSE Limited and the Company has paid the Annual Listing Fees to the said Stock Exchanges for the financial year 2014 - 2015. TRANSFER TO RESERVES: Your Company has accumulated losses amounting to Rs.72,561,661/- brought forward from the previous years. The profit of Rs.7,322,163/- earned during the year has been adjusted against the losses and the accumulated losses are reduced to Rs.65,567,354/-. Hence your company does not propose to transfer any amount to the Reserves. CHANGE IN NATURE OF BUSINESS, IF ANY: During the year under review, there has been no change in the nature of business of the Company. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT: There are no material changes and commitments in the business operations of the Company from the Financial year ended 31st March, 2015 to the date of signing of the Directors Report. PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY COMPANY: During the year, the Board of Directors (''the Board'') reviewed the affairs of the subsidiary. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and its subsidiary, which form part of the Annual Report. Further, a statement containing the salient features of the financial statement of the subsidiary in the prescribed format AOC - 1 is appended as Annexure 1 to the Board''s report. The statement also provides the details of performance, financial positions of each of the subsidiaries. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of the subsidiary, are available on our website www.b2bsoftech.com. These documents will also be available for inspection during business hours at our registered office. CORPORATE GOVERNANCE: The Corporate Governance Report and a certificate by the Statutory Auditors regarding compliance of the conditions of corporate governance by your Company as stipulated in clause 49 of the Listing Agreement with Stock Exchanges, are annexed to this Report. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS: All the Independent Directors have given declarations of Independence, as required pursuant to Section 149 (7) of the Companies Act, 2013 stating that they meet the criteria of Independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. MEETING OF INDEPENDENT DIRECTORS: The performance of the Individual Directors on the Board and the Committees thereof is done by the Board and the Independent Directors in their exclusive meeting done as per the policy formulated by the Board in this regard. VIGIL MECHANISM: In terms of the provisions of Section 177 of the Companies Act, 2013 your Company has formulated a Whistle Blower Policy as a Vigil Mechanism. This mechanism aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. All permanent employees of the Company are covered under the policy. This mechanism is for the employees to report concerns about unethical behaviour, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against victimization of employees who avail of the mechanism and allows direct access to the Chairman of the Audit Committee in exceptional cases. BOARD EVALUATION: Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the performance evaluation of the Board, the Committees of the Board and Individual Directors is done on annual basis. The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors. CHANGES IN DIRECTORS: INDUCTIONS: On the recommendations of the nomination and remuneration committee, the Board appointed Ms. Rajeswari Immani (DIN: 07127791) as an Independent Director on the Board with effect from 28th March, 2015. We seek your support in confirming the appointment of Ms. Rajeswari Immani (DIN: 07127791) in the ensuing Annual General Meeting. RE - APPOINTMENTS: As per the provisions of the Companies Act 2013, Dr. Murthy Mutyala (DIN: 02394524) and Dr. Ram Nemain (DIN: 01131212) retire at the ensuing Annual General Meeting and being eligible, seek their re-appointment. The Board recommends their re-appointment. None of the independent directors will retire at the ensuing Annual General Meeting. RESIGNATIONS: None of the Directors have resigned during the year under review. CHANGES IN KEY MANAGERIAL PERSONNEL: Dr. RAM NEMANI: During the year, the Board of your Company has appointed existing Director Dr. Ram Nemani as Chief Executive Officer (CEO) with effect from 1st October, 2014 which was approved by the Audit Committee and the Nomination and Remuneration Committee. EXECUTIVE DIRECTORS : Mr. V. Bala Subramanyam was appointed as Executive Director with effect from 1st October, 2014 for a period of 3 years. Mr. V.V. Nagendra was redesignated as the Executive Director of the company with effect from 1st October, 2014 for a period of 3 years. The said appointments were approved by the members in the AGM held on 30.09.2014. Mr. SUNIL NEMANI: During the year, the Board of your Company has appointed existing Director Mr. Sunil Nemani as the Chief Financial Officer (CFO) with effect from 1st October, 2014 which was approved by the Audit Committee and the Nomination and Remuneration Committee. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS: During the year under review 8 (Eight) Board meetings were held on the following dates: a. 28.05.2014 b. 06.08.2014 c. 23.08.2014 d. 30.09.2014 e. 25.10.2014 f. 16.12.2014 g. 12.02.2015 h. 28.03.2015 The intervening gap between any two Board Meetings was within the period prescribed under the provisions of the Companies Act, 2013. All the recommendations given by the Audit Committee are accepted by the Board. INTERNAL FINANCIAL CONTROL: The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of 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 disclosures. DIRECTORS'' RESPONSIBILITY STATEMENT: Pursuant to the requirement of Section 134(5) of the Act, and based on the representations received from the management, the directors hereby confirm that: i. in the preparation of the annual accounts for the financial year 2014 - 15, the applicable accounting standards have been followed and there are no material departures; ii. selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the financial year; iii. and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. prepared the annual accounts on a going concern basis; v. laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and vi. devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS: There have been no loans, guarantees & investments under Section 186 of the Act during the financial year 2014 - 15. CORPORATE SOCIAL RESPONSIBILITY: Your Company does not fall under any of the criteria specified under the provisions of Companies Act, 2013. Hence the Company has not constituted any committee and is required to furnish information required under the provisions of the said Act. COMMITTEES OF THE BOARD: Audit Committee The Audit Committee constitutes of Mr. M. Rambabu, Mr. A. Rambabu, Mr. Ch. Suresh, Ms. Rajeswari Immani, Dr. Murthy Mutyala and Dr. Ram Nemani. The Board of Directors have accepted all the recommendations given by the Audit Committee. The terms and reference of Audit Committee and details of meetings are given in the Corporate Governance Report. Nomination and Remuneration Committee: The Nomination and Remuneration Committee consits of Mr. A. Rambabu, Mr. M. Rambabu, Mr. Ch. Suresh and Dr. Murthy Mutyala. The terms of reference and the policy are provided in the Corporate Governance Report. TRANSACTIONS WITH RELATED PARTIES: There were no related party transactions during the year except that entered in the ordinary course of business and on arms length basis. There were no materially significant related party transactions between your Company and the Directors, promoters, Key Managerial Personnel and other designated persons which may have a potential conflict with the interest of company at large. Form AOC - 2 for disclosure of particulars of contracts / arrangements, entered into by your company with related parties is attached herewith as Annexure - II. Risk and Risk Mitigations : Microsoft Dynamics being a growing business, new entrants into the market and competition will continue to exert pricing pressure undermining industry profitability. Strategic positioning and generating higher level of economic value by continuing to build IP and offer value added services around verticals and add-on''s is mandatory. Scale of operations is limited to the existing level unless a fresh funding route is identified. The Board of Directors of your company have not identified any risks which will affect the going concern nature of the company. TECHNOLOGY ABSORPTION, ENERGY CONSERVATION & FOREIGN EXCHANGE EARNINGS AND OUTGO: Information in accordance with clause (m) of sub section (3) of Section 134 of the Companies Act, 2013 is annexed herewith as Annexure - III to this report. PARTICULARS OF EMPLOYEES: The information and statement required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 (1) and 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company are provided in Annexure - IV and forms part of this report. The Nomination and remuneration committee of the Company has affirmed that the remuneration is as per the Remuneration policy of the Company. Your Directors take this opportunity to record their deep appreciation of the continuous support and contribution from all employees of the Company. EXTRACT OF ANNUAL RETURN: As required under Sub-Section (3) of Section 92 of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 an extract of Annual Return in Form MGT - 9 forms part of this report as Annexure - V. DEPOSITS: During the year under review your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date. AUDITORS: Statutory Auditors: At the Annual General Meeting held on September 30, 2014 M/s. Umamaheswara Rao & Co., Chartered Accountants, were appointed as the Statutory Auditors of the Company to hold office till the conclusion of the 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 auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Umamaheswara Rao & Co., Chartered Accountants, as the statutory auditors of the Company is 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 reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. There are no specifications, reservations, adverse remarks on disclosures by the Statutory Auditors in their report. They have not reported any incident of fraud to the Audit Committee of the Company during the year under review. Secretarial Auditor: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Mrs. K. Jhansi Laxmi, Company Secretary in Whole time Practice to undertake the Secretarial Audit of the Company for the financial year 2014 - 2015. The Secretarial Audit report is annexed herewith as Annexure - VI Reply to observation raised by the Secretarial Auditor: Owing to the Financial position of the Company, we are not able to find a Whole Time Company Secretary who is suitable for our size of Company. The Company is still in process of search of a Whole Time Company Secretary. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2014-15, the Company has not received any complaints on sexual harassment. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS: There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future. ACKNOWLEDGEMENTS: Your Directors place on record their appreciation for the assistance and co-operation extended by the Bankers, STPI, Customs and Central Excise and various State and Central Government Agencies. Your Directors also thank all the Customers, Members and Employees for their valuable support and confidence in the Company. For and on behalf of the Board Place : Hyderabad Date : 14.08.201 V. BALA SUBRAMANYAM V.V. NAGENDRA Executive Director Executive Director DIN: 06399503 DIN: 0231729

Director’s Report