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Brightcom Group Ltd.

BSE: 532368 | NSE: BCG |

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Series: BE | ISIN: INE425B01027 | SECTOR: Computers - Software Medium & Small

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Annual Report

For Year :
2016 2015 2014 2013 2012 2011 2010 2009 2008

Director’s Report

Dear Members,

We are pleased to present the 17th Annual Report of your Company on business and operations along with the Audited Financial Statements and the Auditor’s Report for the Financial Year ended March 31, 2016.

1. Financial Highlights Rs. in Lakhs



FY 2015-16


FY 2014-15


FY 2015-16

Standalone FY 2014 -15

Total Revenue





Gross Profit before Interest, Depreciation & Tax





Less: Interest










Profit before T ax





Less: Provision for Tax





Less: Deferred Tax Liability





Profit after T ax





Balance Brought forward from the previous year





Profit available for appropriations





Less: Amount transferred to retained earnings as per Schedule II of Companies Act 2013





Less: Transferred to General Reserve





Profit Carried to Balance Sheet





Performance Review

During the year under review, your Company achieved a consolidated turnover of Rs. 226078.56 lakhs as against Rs. 197117.32 lakhs in the previous fiscal. Your Company has earned a consolidated gross profit of Rs. 67966.93 lakhs before interest, tax and depreciation as against Rs. 58588.99 lakhs in the previous year. After deducting financial charges of Rs. 1589.69 lakhs, providing for depreciation of Rs. 6364.72 lakhs and provision for tax of Rs. 19518.80 lakhs, the operations resulted in a net profit of Rs. 40504.74 lakhs as against Rs. 34221.77 lakhs in the previous year.

The digital segment revenues grew by 21.8% and overall revenue growth is 15.3% compared to last year.

There is no change in the nature of business carried on by the Company during the year under review.

Further information on the Business Overview and Outlook and the state of the affairs of the Company and the Industry in which it operates, is discussed in detail in the Management Discussion & Analysis segment annexed to this report.

There are no Material Changes and Commitments affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this Report.


Your Directors have recommended a dividend of Rs.0.10 (i.e. 5%) per equity share of Rs.2 each for the financial year ended March 31, 2016, amounting to Rs.5,73,20,678/- (inclusive of tax of Rs.96,95,528). The dividend payout is subject to approval of members at the ensuing Annual General Meeting.

Transfer to General Reserve

The Company proposes to transfer an amount of Rs.1,02,945/- lakhs to the General Reserve out of the amount available for appropriations.


The Company has not accepted any fixed deposits from public.

Loans, Guarantees or Investments

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements.

Subsidiary Companies

The Company has formulated a policy for determining ‘material’ subsidiaries pursuant to the provisions of the Listing Agreement. The said policy is available at the Company website

Pursuant to Provision to Section 129 (3) of the Act, a statement containing the brief details of performance and financials of the Subsidiary Companies for the financial year ended March 31, 2016 is attached to Financial Statements of the Company.

During the year under review, the Company and Apollo International Limited formed a Joint Venture Company “Apollo Lycos Netcommerce Limited”.

Consolidated financial statements

In compliance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and in compliance with the provisions of Section 129(3) and other applicable provisions of the Companies Act, 2013 and the Accounting Standards on consolidated financial statements, your Directors have pleasure in attaching the consolidated financial statements for the financial year ended March 31, 2016, which forms part of the Annual Report.

Management’s discussion and analysis

Management’s discussion and analysis forms part of this annual report and is annexed to the Board’s report.

Corporate Governance

Pursuant to the provisions of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance has been incorporated in the Annual Report for the information of the shareholders. A certificate from the Practicing Company Secretary regarding compliance with the conditions of Corporate Governance as stipulated under the said Schedule V of SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015 also forms part of this Report.

Directors and key Managerial Personnel

In pursuance of Section 152 of the Companies Act, 2013 and the rules framed there under, Mr. Vijay Kancharla, Executive Director is liable to retire by rotation, at the ensuing Annual General Meeting and being eligible has offered himself for reappointment.

At the 16th Annual General Meeting of the Company held on 28th September, 2015 the Company has appointed Mr. Michael Loren Mauldin and Mr. Subrato Saha as Independent Directors under the Companies Act, 2013 for 5 years term which ends at conclusion of the 21st Annual General Meeting.

A declaration of Independence in compliance with Section 149(6) of the Companies Act, 2013, has been taken on record from all the independent directors of the Company.

During the year under review Mr. Raghunath Allamsetty and Mr.Vijaya Bhasker Reddy Maddi, ceased to be the Directors of the Company on completion of their tenure on September 29, 2015. The Board of Directors records its sincere appreciation and recognition of the valuable contribution and services rendered by both during their association with the Company.

Mr. Y. Ramesh Reddy resigned as Independent Director w.e.f. 09th May, 2016. Mrs. S. V. Rajyalaxmi Reddy has resigned as Director of the Company w.e.f. 18th May, 2016.

The Board of Directors appointed Mr. Y. Ramesh Reddy as an Additional Director and Executive Director (Finance) & Group CFO w.e.f. 09th May, 2016 and Dr. K. Jayalakshmi Kumari as an Independent Director of the Company w.e.f.17th May, 2016.

The resolutions seeking approval of the Members for the appointment of Mr. Y. Ramesh Reddy as Executive Director (Finance) & Group CFO and Dr. K. Jayalakshmi Kumari as Independent Director for a term of five years have been incorporated in the notice of the annual general meeting of the Company.

The Company has received notices under Section 160 of the Act along with the requisite deposit proposing the appointment of Mr. Y. Ramesh Reddy as Director and Dr. K. Jayalakshmi Kumari as Independent Director.

During financial year under review, Mrs. K Anusha has resigned from the position of Company Secretary w.e.fllSlBJBraSffl| URl| K0UU5 and Mrs. V. Sri Lakshmi was appointed as Company Secretary w.e.f. September 09, 2015.

The Policy on appointment and remuneration for Directors, Key Managerial Personnel and other employees as specified under Section 178(3) of the Act has been disclosed in Corporate Governance Report.

Board Evaluation

As required under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, an evaluation of all the directors, the Board as a whole and its committees was conducted based on the criteria and framework adopted by the Board.

The details of the said evaluation have been enumerated in the Corporate Governance Report, which is annexed to the Boards’ Report.

Nomination and Remuneration Policy

The Company has adopted the Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

The Nomination and Remuneration Committee has considered the following factors while formulating the Policy:

(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(iii) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company. Details of the Remuneration Policy are given in the Corporate Governance Report.

Board and Committee Meetings

The Board during the financial year 2015-16 met five times. Detailed information regarding the meetings of the Board are included in the report on Corporate Governance, which forms part of the Board’s Report.

The details of Boards Committees - the Audit Committee, the Nomination and Remuneration Committee, Stakeholders Relationship Committee and the Corporate Social Responsibility Committee have been disclosed separately in the Corporate Governance Report which is annexed to and forms part of this annual report.

The Audit Committee comprises Mr. Y. Ramesh Reddy, Mr. Subrato Saha, and Mr. Vijay Kancharla as Members. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board.

Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the SEBI (LODR) Regulations, 2015.

Related Party Transactions

All transactions entered into with Related Parties as defined under Companies Act, 2013 during the year were in the ordinary course of business and on an arm’s length basis. There were no materially significant related party transactions entered by the Company during year under review.

The Company has formulated a policy on “materiality of related party transactions” and the process of dealing with such transaction, which are in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The same is also available on the website of the Company Prior omnibus approval from the Audit Committee are obtained for transactions which are repetitive and also normal in nature. Further, disclosures are made to the Committee and the Board on a quarterly basis.

Since all the related party transactions were in ordinary course of business and were on Arm’s length basis, disclosure in form AOC-2 as required under Section 134(3) (h) of the Act is not applicable.

Details of the transactions with Related Parties are provided in the accompanying financial statements.

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 Companies Act, 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 uses electric energy for its equipment such as computer terminals, air conditioners, lighting and utilities in the work premises. Adequate measures have been taken to conserve energy by using energy-efficient computers and equipment with the latest technologies.

However, the requirement of disclosure of particulars with respect to conservation of energy 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 not provided.

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 is Digital Marketing and Software Development. The change in the industry paradigm is dynamic. The Company is continuously updating these changes and constantly evaluating these developments to improve its capabilities towards the industry. Accordingly, research and development of new services, display advertising, platforms and methodologies, continue to be of importance to us. This allows us to enhance quality, productivity and customer satisfaction through continuous improvements and innovations. As part of the continuous thrust on R&D, the company is also focused on Solutions Research and Vertical Focus Research. These would identify new ideas which would enable business process improvement for customers and would be aligned with the business strategy and growth opportunities of the organization. Our R & D activities are not capital intensive and 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 are given in notes to Standalone financial statements.

Auditors Statutory Auditors

The Company’s Statutory auditors M/s. P. Murali & Co., (Registration Number 007257S) Chartered Accountants, Hyderabad, who retire at the ensuing Annual General Meeting, may continue as statutory auditors for the financial year ending March 31, 2017. M/s. P. Murali & Co., have confirmed their eligibility and willingness to accept office, if re-appointed.

Based on the recommendation of Audit Committee, the Board has approved the proposal for placing the matter of re-appointment of M/s. P. Murali & Co., as statutory auditors for the financial year ending March 31, 2017 at the 17th Annual General Meeting. A resolution to that effect forms part of notice of the 17th Annual General Meeting sent along with this Annual Report.

Secretarial Auditors

Mr. A. Sridhar was appointed to conduct the secretarial audit of the Company for FY 2015-16, as required under section 204 of the Companies Act, 2013 and rules there under. The Secretarial Audit Report for FY 2015-16 forms the part of the annual report as Annexure -A to the Board’s report.

The Auditors’ Report and the Secretarial Audit Report for the financial year ended 31st March, 2016 do not contain any qualification, reservation, adverse remark or disclaimer.

Significant and material orders

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 the future.

Extract of Annual Return

An extract of the Annual Return in Form MGT-9 in compliance with Section 92 of the Companies Act 2013 read with applicable Rules made there under is annexed to this Report as Annexure B.

Internal Financial Controls and Risk Management

The details relating to internal financial controls and their adequacy and Risk Management are included in the Management Discussion and Analysis Report.

Vigil Mechanism/ Whistle Blower Policy

The Company had implemented a vigil mechanism, whereby employees, directors and other stakeholders can report matters such as unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Vigil Mechanism Policy is available on the Company’s website

Particulars of Employees and related disclosures:

No Salary is being paid to Directors of the Company including Managing Director other than sitting fee to Independent Directors and hence the details as required to be disclosed under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration to Key Managerial Personnel) Rules, 2014 is not applicable.

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

There was no employee employed throughout the year, who was in receipt of remuneration, in aggregate, more than One Crore Two Lakh Rupees. There was no employee employed throughout the year or any part thereof, who was in receipt of remuneration, at a rate, in aggregate, more than Eight Lakh Fifty thousand Rupees per month.

Corporate Social Responsibility

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the company on CSR activities during the year as required to be disclosed under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure C to this Report.

Sexual Harassment

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under.

Directors’ Responsibility Statement:

In compliance with Section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirm the following:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The directors had 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 that period;

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) The directors had prepared the annual accounts on a going concern basis;

(e) The directors have laid down internal financial controls based on internal controls framework established by the Company, which in all material respects were adequate and operating effectively.

(f) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


The Board greatly appreciates the commitment and dedication of its employees across all levels who have contributed to the growth and sustained success of the Company. We would like to thank all our clients, partners, vendors, investors, bankers and other business associates for their continued support and encouragement during the year look forward to the same in the future.

For and on behalf of the Board of Directors

Place: Hyderabad (M. Suresh Kumar Reddy)

Date: 21-11-2016 Chairman and Managing Director

Director’s Report