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Baron Infotech Ltd.

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NSE: N.A. ISIN Code: INE228B01017
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Baron Infotech Ltd. (BARONINFOTECH) - Director Report

Company director report

Your Directors have pleasure in presenting herewith the 18th Annual Report on thebusiness of Your Company together with the Audited Accounts for 9 months ended 31st March2015.

FINANCIAL PERFORMANCE:

The Company has been in the process of developing solutions. Some of applications havebeen given to customers to explore the marketing possibilities. On successful launch ofany application generating revenues will start. Till then the spending on the applicationsis being treated as an expense.

DIVIDEND:

In the absence of profits the directors of your Company do not recommend any dividendfor the Financial Year 2014-15.

TRANSFER TO RESERVES:

Your Company has not transferred any amount to the general reserve.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL:

During the year under review Sri. Nallaparaju Viswanadha Rama Raju; Sri Katari VenkataNarsimha Raju and Sri Aareti Chandra Sekhar ceased to the Directors of the Company w.e.f17th April 2015 and Smt. N.Kamala Kumari has been co-opted as Additional Director w.e.f.30th March 2015 and Sri. B.Vishnu Vardhan Reddy and Sri. P.Srinivasa Rao has beenco-opted as Additional Directors w.e.f 17th April 2015. Notice in writing under Section160 of the Companies Act 2013 proposing their candidature for the office of Director ofthe Company has been received to appoint them as Independent Directors of the Companywhose period of office shall not be determinable by retirement of Director by rotation.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under the Actand Clause 49 of the Listing Agreement with the Stock Exchanges.

The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which include criteria for performanceevaluation of the non-executive directors and executive directors.

AUDITORS

The Statutory Auditors of the Company M/s. Venkata Pavan Kumar & Co CharteredAccountants have expressed their inability to act/continue as such hence the AuditCommittee and Board recommended the appointment of M/s. Nekkanti Srinivasu & coChartered Accountants as Statutory Auditors of your Company for a period of 5 years i.etill the conclusion of the Sixth Annual General Meeting from this Annual General Meetingwhose appointment is subject to ratification by the members at every Annual GeneralMeeting.

In this regard the Company has received a certificate from the auditors to the effectthat if they are appointed it would be in accordance with the provisions of Section 141of the Companies Act 2013.

Accordingly the appointment of M/s. Venkata Pavan Kumar & Co. CharteredAccountants as the Statutory Auditors is being proposed as an Ordinary Resolution.

Secretarial Auditor:

P.S.Rao & Associates Practicing Company Secretaries was appointed to conduct thesecretarial audit of the Company for the financial year 2014-15 as required under Section204 of the Companies Act 2013 and Rules there-under. The secretarial audit report for FY2014-15 forms part of the Annual Report as Annexure-3 to the Board’s report.

The Board has appointed P.S.Rao & Associates Practicing Company Secretaries assecretarial auditors of the Company for the financial year 2015-16.

DIRECTORS’ RESPONSES ON THE QUALIFICATIONS MADE BY THE SECRETARIAL AUDITORS INTHEIR REPORT:

With regard to the qualification raised in the Secretarial Audit Report with regard tonon-appointment of CFO & Company Secretary your Company has made all possible sincereand valid efforts to appoint Company Secretary and CFO but was unable to find suitablecandidates. The Company is taking steps to appoint them during 2015-16.

FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS COMMITTEESAND INDIVIDUAL DIRECTORS

As required under the provisions of Schedule IV of the Companies Act 2013 theperformance evaluation of independent directors has been done by the entire Board ofDirectors excluding the director being evaluated. The evaluation of all the directors andthe Board as a whole was conducted based on the criteria and framework adopted by theBoard. The Board approved the evaluation results as collated by the nomination andremuneration committee.

None of the independent directors are due for re-appointment

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations.

The Board of Directors of the Company have adopted various policies like Related PartyTransactions policy Whistle Blower Policy such other procedures for ensuring the orderlyand efficient conduct of its business for safeguarding its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information.

NOMINATION AND REMUENRATION POLICY

A committee of the Board named as "Nomination and Remuneration Committee" hasbeen constituted to comply with the provisions of section 178 Schedule IV of theCompanies Act and Clause 49 of the Listing Agreement and to recommend a policy of theCompany on directors’ appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters and to frame proper systems for identification appointment of Directors &KMPs Payment of Remuneration to them and Evaluation of their performance and to recommendthe same to the Board from time to time. Nomination and Remuneration Policy of the Companyis enclosed herewith as Annexure – 2.

RISK MANAGEMENT:

The Risk Management is overseen by the Audit Committee of the Company on a continuousbasis. The Committee oversees Company’s process and policies for determining risktolerance and review management’s measurement and comparison of overall risktolerance to established levels. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuous basis. Fordetails please refer to the Management Discussion and Analysis report which form part ofthe Board Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act 2013 Your Directors’ confirmthat:

i. In preparation of annual accounts for the financial year ended 31st March 2015 theapplicable Accounting Standards have been followed along with proper explanation relatingto material departures;

ii. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give true andfair view of the state of affairs of the Company at the end of the financial year ended31st March 2015 and of the profit and loss of the Company for the year;

iii. The Directors have taken proper and sufficient care for their maintenance ofadequate accounting records in accordance with the provisions of the Companies Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

iv. The Directors had prepared the annual accounts on a ‘going concern’basis; such internal financial controls are adequate and were operating effectively; and

vi. The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure - 1.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

As per the criteria laid down in the Companies Act 2013 the provisions of CorporateSocial Responsibility are not applicable to your Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE OUTGO

As your Company has not carried any operations during the financial year review noInformation as required under section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 is not being provided.

OTHER DISCLOSURES:

Board Meetings

For the period ended 31st March 2015 Four Board Meetings were held. For furtherdetails please refer report on Corporate Governance Report enclosed herewith.

Committees of Board

Your company has the following committees namely:

1. AUDIT COMMITTEE

2. NOMINATION AND REMUNERATION COMMITTEE

3. STAKEHOLDERS RELATIONSHIP COMMITTEE

The constitution of all the committees is as per the Companies Act 2013 and ListingAgreement with Stock Exchanges. The details of the Constitution are mentioned in CorporateGovernance Report which forms part of this Annual Report.

Corporate Governance Report

Your Company has complied with the requirements of Clause 49 of the Listing Agreemententered with the Stock Exchanges; Report on Corporate Governance including Auditor’sCertificate on compliance with the code of Corporate Governance specified under the saidClause forms part of this report.

Management Discussion and Analysis

A brief note on the Management discussion and analysis for the year is annexed as partof this report

Vigil Mechanism:

In pursuant to the provisions of section 117(9)( & (10) of the Companies Act 2013and Clause 49 of the Listing Agreement a Vigil Mechanism for directors and employees toreport genuine concerns has been established. Protected disclosures can be made by awhistle blower through to the Chairman of the Audit Committee. The Policy on vigilmechanism and whistle blower policy may be accessed on the Company’s website

Remuneration ratio of the directors/ Key Managerial Personnel/ Employees:

As your Company has carried limited operations during the year under review yourCompany has not employed any permanent employees on its rolls and managerial remunerationwas not paid to the Director(s) hence no information is being provided as required underSection 197(12) of the Companies Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014

PARTICULARS OF EMPLOYEES

As required under Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 NO employee of your Company is in receipt ofremuneration of Rs. 60 lakh or more or employed for part of the year and in receipt ofRs. 5 lakh or more a month during the financial year under review.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

Details of the Loans guarantees and investments if any covered under Section 186 ofthe Companies Act 2013 are given in the notes to the financial statements pertaining tothe year under review.

DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interestwas outstanding as on the date of the Balance sheet.

RELATED PARTY TRANSACTIONS:

Your Company does not have any related party transactions during the financial yearreview.

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013:

The Company has not employed any women employee during the financial year under reviewfurther your Company has zero tolerance for sexual harassment at workplace and ifnecessary would adopt a policy on prevention prohibition and redressal of sexualharassment at workplace in line with the provisions of Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the rules framed thereunder.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.

3. Neither the Managing Director nor the Whole-time Director of the Company receive anyremuneration or commission from any of its subsidiaries.

4. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company’s operations in future.

5. No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the Financial year and date of report.

ACKNOWLEDGEMENTS:

Your Directors wish to convey their appreciation to business associates for theirsupport and contribution during the year. The Directors would also like to thank theemployees shareholders customers suppliers alliance partners and bankers for thecontinued support given by them to the Company and their confidence reposed in themanagement.

For and on behalf of the Board
Sd/-
Place : Hyderabad S.PAVAN NANDAN
Date : 14-08-2015 Chairman

Annexure I

FORM NO. MGT-9

EXTRACT OF ANNUAL RETURN

As on the financial year ended on 31.03.2015

[Pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of the Companies

(Management and Administration) Rules 2014]

I. REGISTRATION AND OTHER DETAILS:

i CIN L72200TG1996PLC025855
ii Registration Date 2nd December 1996
iii Name of the Company BARON INFOTECH LIMITED
iv Category / Sub-Category of the Company IT Software
v Address of the Registered office and contact details 1-8-313 4th Floor Linus Building Chiran Fort
Lane Begumpet Secunderabad. email: info@baroninfotech.com
vi Whether listed company Yes / No Yes
vii Name Address and Contact details M/s. Venture Capital And Corporate
of Registrar and transfer agent if any Investments Private Limited
12-10-167 Bharat Nagar
Hyderabad 500018
Tel: +91 040-3818475/76/23868023
Fax : +91 040-23868024
Email: info@vccilindia.com

II. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES

S.No Name and Address of The company CIN/GLN Holding/ Subsidiary/ Associate % of shares held Applicable Section
- - - - -

III. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)i) Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year
Demat Physical Total % of total Shares Demat Physical Total % of total Shares % Change during the year
A. Promoters
(1) Indian - 1059200 1059200 10.38 - 1059200 1059200 10.38 -
a) Individual/HUF - 1059200 1059200 10.38 - 1059200 1059200 10.38 -
Sub-total A)(1):-
(2) Foreign
a) Individual/ 210000 - 210000 2.06 210000 - 210000 2.06 -
HUF
Sub-total A)(2):- 210000 - 210000 2.06 210000 - 210000 2.06 -
Total shareholding of Promoter 210000 1059200 1269200 12.44 210000 1059200 1269200 12.44 -
(A) =(A)(1)+(A)(2)
B. Public - - - - - - - - -
Shareholding
1. Institutions
Sub-total (B)(1):-

-

-

-

-

-

-

-

-

-

2. Non-Institutions
a) Bodies Corp. 239429 - 239429 2.35 232283 - 232283 2.28 0.07
b) Individuals
i) Individual shareholders holding nominal share capital upto Rs. 1 lakh 3406371 1217669 4624040 45.33 3401990 1194762 4596752 45.07 0.26
ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh 2084125 1861805 3945930 38.69 2120043 1861805 3981848 39.04 0.35
c) Others
- NRI 108084 - 108084 1.06 107984 - 107984 1.06 -
- Clearing members 13317 - 13317 0.13 11933 - 11933 0.12 0.01
Sub-total (B)(2):- 5851326 3079474 8930800 87.56 5874233 3056567 8930800 87.57 0.01
Total Public Shareholding
(B)= (B)(1)+ (B)(2) 5851326 3079474 8930800 87.56 5874233 3056567 8930800 87.57 0.01
C. Shares held by - - - - - - - - -
Custodian for GDRs & ADRs Grand Total 6061326 4138674 10200000 100 6084233 4115767 10200000 100 -
(A+B+C)

(ii) Shareholding of Promoters

S.No Shareholder’s Name Shareholding at the beginning of the year Share holding at the end of the year
No. of Shares % of total total Shares of the company %of Shares Pledge encumbered to total shares No of Shares %of total Shares of the company %of Shares Pledge cecumbered to total shares % change In shares holding during
1 ALLURI S R V S S S N S M RAJU

210000

2.06%

-

210000

2.06%

-

-

2 D SRINIVASA RAJU 95000 0.93% - 95000 0.93% - -
3 D KRISHNAM RAJU

47000

0.46%

-

47000

0.46%

-

-

4 D KRISHNAVENI

15500

0.15%

-

15500

0.15%

-

-

5 VENKATA SATYANARAYANA
RAJU KUNAPARAJU

200

0.00%

-

200

0.00%

-

-

6 VENKATA SURYA NARAYANA
RAJU SAKHINETI

10000

0.10%

-

10000

0.10%

-

-

7 SRINIVASA RAJU GOKARAJU

50000

0.49%

-

50000

0.49%

-

-

8 N VIJAYA LAXMI

9500

0.09%

-

9500

0.09%

-

-

9 D BANGARA RAJU

4500

0.04%

-

4500

0.04%

-

-

10 K KRISHNA VENI

9500

0.09%

-

9500

0.09%

-

-

11 V SATYANARAYANA RAJU

20000

0.20%

-

20000

0.20%

-

-

12 K KASI RAJU

30000

0.29%

-

30000

0.29%

-

-

13 T RAMAMURTHY RAJU

30000

0.29%

-

30000

0.29%

-

-

14 KALLAPALLI VENKATA SUGUNA 15000 0.15% - 15000 0.15% - -
15 DEAN C SENIFF 210000 2.06% - 210000 2.06% - -
16 PADMA KUNAPARAJU 43000 0.42% - 43000 0.42% - -
17 VARMA KUNAPARAJU 86000 0.84% - 86000 0.84% - -
18 SUBBA REDDY
ANNAPUREDDY PADMA

10500

0.10%

-

10500

0.10%

-

-

19 N V RAMA RAJU 373500 3.66% - 373500 3.66% - -
TOTAL : 1269200 12.44% - 1269200 12.44% - -

(iii) Change in Promoters’ Shareholding: NO CHANGE

S.No Name Of the Shareholder Shareholding at the beginning of the year Cumulative Shareholding during the year
No. of shares % of total shares of the company No. of shares % of total shares of the company
- - - - -

(iv) Shareholding Pattern of top ten Shareholders (other than Directors Promoters andHolders of GDRs and ADRs):

S.No Name Of the Shareholder Shareholding at the beginning of the year Cumulative Shareholding during the year
No. of shares % of total shares of the company No. of shares % of total shares of the company
1 CHALLA PAVAN KUMAR
At the beginning of the year
At the end of the year 325500 3.19 325500 3.19
2 ASHAKANI SURESH KUMAR
At the beginning of the year
At the end of the year 223500 2.19 223500 2.19
3 SYED RASHEED AHMED
At the beginning of the year
At the end of the year

200000

1.96

200000

1.96

4 BHONGIR SOHAN BAPU
At the beginning of the year
At the end of the year 161000 1.58 161000 1.58
5 BATTINA MADHRI
At the beginning of the year
At the end of the year 150000 1.47 150000 1.47
6 KONDABATHULA RAVI SHANKAR
At the beginning of the year
At the end of the year 150000 1.47 150000 1.47
7 A SEETA RAMA RAJU
At the beginning of the year
At the end of the year

150000

1.47

150000

1.47

8 K. BAPU RAO
At the beginning of the year
At the end of the year

124105

1.22

124105

1.22

9 RAMA BHADRA VARMA ALLURI
At the beginning of the year
At the end of the year

108000

1.06

108000

1.06

10 ALLURI SRI LATHA
At the beginning of the year
At the end of the year 104500 1.02 104500 1.02

(v) Shareholding of Directors and Key Managerial Personnel:

S.No Name Of the Shareholder / key managerial personnel (KMP) Shareholding at the beginning of the year Cumulative Shareholding during the year
No. of shares % of total shares of the company No. of shares % of total shares of the company
- - - - -

IV. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due forpayment

Secured Loans excluding Deposits Unsecured Loans deposits Total Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii)
Change in Indebtedness during the financial year
Addition
Reduction NIL
Net Change
Indebtedness at the end of the financial year
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii)

B. Remuneration to other directors:

S.No Particulars of Remuneration Name of Directors Total Amount
1. Independent Directors
Fee for attending board / committee meetings
Commission
Others please specify -- --
2. Total (1)
Other Non-Executive Directors
Fee for attending board / committee meetings
Commission
Others please specify -- --
Total (2) -- --
Total (B)=(1+2) -- --
Total Managerial Remuneration -- --
Overall Ceiling as per the Act -- --

C. Remuneration to Key Managerial Personnel Other Than MD/Manager/WTD

S.No Particulars of Remuneration Name of KMP Total
Amount
1. Gross salary
(a) Salary as per provisions contained in
section 17(1) of the Income-tax Act 1961
(b) Value of perquisites u/s 17(2)
Income-tax Act 1961
(c) Profits in lieu of salary under section 17(3)
Income-tax Act 1961 -- --
2. Stock Option -- --
3. Sweat Equity -- --
4. Commission
- as % of profit
- others specify… -- --
5. Others please specify -- --
Total (A) -- --
Ceiling as per the Act

VI. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of The Companies Act Brief Description Details of Penalty / Punishment/ Compounding Authority [RD / NCLT/ COURT] fees imposed Appeal made if any (give Details)
Penalty -- -- -- -- --
Punishment -- -- -- -- --
Compounding -- -- -- -- --
OTHER OFFICERS IN DEFAULT
Penalty -- -- -- -- --
Punishment -- -- -- -- --
Compounding -- -- -- -- --

NOMINATION AND REMUNERATION POLICY

1. INTRODUCTION

A transparent fair and reasonable process for determining the appropriate remunerationat all levels of Baron Infotech Limited (the Company) is required to ensure thatshareholders remain informed and confident in the management of the Company. To harmonizethe aspirations of human resources consistent with the goals of the Company and in termsof the provisions of the Companies Act 2013 and the rules made there under and theListing Agreement as amended from time to time this policy on nomination and remunerationof Directors (including non-executive directors) on the Board of Directors the KeyManagerial Personnel (KMP) and Senior Management has been formulated by the Committee andapproved by the Board of Directors. This Policy shall act as a guideline for determininginter-alia qualifications positive attributes and independence of a director mattersrelating to the remuneration appointment removal and evaluation of performance of theDirectors (including non-executive directors) Key Managerial Personnel and SeniorManagement Personnel.

2. OBJECTIVE OF THE POLICY

(a) The objective of this Policy is to outline a framework to ensure that theCompany’s remuneration levels are aligned with industry practices and are sufficientto attract and retain competent director(s) on the Board KMP(s) and the Senior ManagementPersonnel of the quality required Shilpa Medicare allowing fair rewards for theachievement of key deliverables and enhanced performance. The key objectives of thisPolicy include:

(i) guiding the Board in relation to appointment and removal of Director(s) KeyManagerial Personnel and Senior Management;

(ii) evaluating the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board.

(iii) recommending to the Board the remuneration payable to the Director(s) and settingforth a policy for determining remuneration payable to KMP and Senior ManagementPersonnel.

(b) While determining the remuneration for the Director(s) (including non-executivedirectors) and KMPs and Senior Management Personnel regard should be had to prevailingmarket conditions business performance and practices in comparable companies also tofinancial and commercial health of the Company as well as prevailing laws and government/other guidelines to ensure that pay structures are appropriately aligned and the levelsof remuneration remain appropriate. (c) While designing the remuneration package it shouldbe ensured:

(i) the level and composition of remuneration is reasonable and sufficient to attractretain and motivate the person to ensure the quality required to run the Companysuccessfully; (ii) there is a balance between fixed and incentive pay reflecting shortand long term performance objectives appropriate to the working of the Company and itsgoals.

(d) Some part of the remuneration package may be linked to the achievement of corporateperformance targets of the Company and a strong alignment of interest with stakeholders.

(e) The Committee may consult with the chairman of the Board as it deems appropriate.The Committee shall observe the set of principles and objectives as envisaged under theCompanies Act 2013 ("Act") (including Section 178 thereof) rules framed thereunder and clause 49 of the Listing Agreement including inter-alia principles pertainingto determining qualifications positives attributes integrity and independence.

(f) In this context the following policy has been formulated by the Nomination andRemuneration Committee and adopted by the Board of Directors through circulation on 08thDecember 2014.

3. EFFECTIVE DATE

This policy shall be effective from the date of its adoption by the Board.

4. DEFINITIONS

(a) In this Policy unless the context otherwise requires:

(i) ‘Board of Directors’ or ‘Board’ in relation to the Companymeans the collective bodyof the directors of the Company. (ii) ‘Committee’ meansNomination and Remuneration Committee of the Company asconstituted or reconstituted by theBoard. (iii) ‘Company’ means "BARON INFOTECH LIMITED".

(iv) ‘Independent Director’ means a director referred to in Section 149(6) ofthe Companies Act 2013 read with clause 49 of the Listing Agreement. (v) ‘KeyManagerial Personnel’ (KMP) shall have the meaning ascribed to it in the Act and theRules made thereunder. (vi) ‘Non-Executive Directors’ includes IndependentDirectors.

(vii) ‘Policy’ means Nomination and Remuneration policy.

(viii) ‘Senior Management Personnel’ for this purpose shall mean personnel ofthe Companywho are members of its core management team excluding Board of Directors. Itwould comprise all members of management one level below the executive director(s)including the functional heads. (b) Unless the context otherwise requires words andexpressions used in this policy and not defined herein but defined in the Companies Act2013 and/ Listing Agreement as may be amended from time to time shall have the meaningrespectively assigned to them therein.

5. APPLICABILITY

This Policy is applicable to:

(i) Directors including Non- Executive Directors (ii) Key Managerial Personnel (iii)Senior Management Personnel

6. MEMBERSHIP

(a) The Committee shall consist of such number of directors as is required underapplicable laws. (b) Membership of the Committee shall be disclosed in the Annual Reportand on the website of the Company. (c) Term of the Committee shall be continuous unlessterminated by the Board of Directors.

7. CHAIRMAN

(a) Chairman of the Committee shall be an Independent Director.

(b) Chairperson of the Company (whether executive or non executive) may be appointed asa member of the Committee but shall not be the Chairman of the Committee. (c) Chairman ofthe Nomination and Remuneration Committee meeting shall be present at the Annual GeneralMeeting or may nominate some other member to answer the shareholders’ queries.

8. FREQUENCY OF MEETINGS

The meeting of the Committee shall be held at such intervals as may be required.

9. COMMITTEE MEMBERS’ INTERESTS

(a) A member of the Committee is not entitled to be present when his or her ownremuneration is discussed at a meeting or when his or her performance is being evaluated.(b) The Committee may invite such executives as it considers appropriate to be presentat the meetings of the Committee.

10. SECRETARY

The Company Secretary of the Company shall act as Secretary of the Committee.

11. QUORUM

The quorum necessary for transacting business at a meeting of the Committee shall betwo members or one-third of the members of the Nomination and Remuneration Committee;whichever is greater.

12. VOTING

(a) Matters arising for determination at Committee meetings shall be decided by amajority of votes of members present. Any such decision shall for all purposes be deemed adecision of the Committee. (b) In the case of equality of votes the Chairman of themeeting will have a casting vote.

13. RESPONSIBILITY OF THE COMMITTEE

(a) The Committee is responsible for:

(i) formulating criteria for determining qualifications positive attributes andindependence of a Director for the purpose of this Policy; (ii) advising the Board onissues concerning principles for remuneration and other terms of employment includingremuneration for the Directors (including Non-Executive Directors) KMPs and the SeniorManagement; (iii) monitoring and evaluating programs for variable remuneration bothon-going and those that have ended during the year for the Directors (includingNon-Executive Directors) KMPs and the Senior Management; (iv) monitoring and evaluatingthe application of this Policy; (v) monitoring and evaluating current remunerationstructures and levels in the Company; and (vi) any other responsibility as determined bythe Board.

14. APPOINTMENT OF DIRECTORS KMP OR SENIOR MANAGEMENT PERSONNEL

(a) The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as a Director KMP and/or Senior ManagementPersonnel. (b) A person should possess adequate qualifications expertise and experiencefor the position he/ she is considered for appointment. The Committee has discretion todecide whether qualification expertise and experience possessed by a person aresufficient / satisfactory for the concerned position. (c) Appointment of Directors KMPsand Senior Management Personnel is subject to compliance of provisions of the CompaniesAct 2013 and compliance of clause 49 of the Listing Agreement. (d) The appointment of aDirector or a KMP as recommended by the Nomination and Remuneration Committee furtherrequires the approval of the Board.

15. REMUNERATION

(a) Remuneration to Executive Directors Directors other than Executive Director:

(i) The remuneration/ compensation/ commission etc. to Directors will be determined bythe Committee and recommended to the Board for approval. The remuneration/ compensation/commission etc. shall be subject to the prior/post approval of the shareholders of theCompany and Central Government wherever required. (ii) The remuneration and commission tobe paid to Directors shall be as per the statutory provisions of the Companies Act 2013and the rules made there under for the time being in force. (iii) Increments to theexisting remuneration/ compensation structure of Directors shall be recommended by theCommittee to the Board which should be within the slabs approved by the Shareholders inthe case of Directors. (iv) Where any insurance is taken by the Company on behalf of itsDirectors for indemnifying them against any liability the premium paid on such insuranceshall not be treated as part of the remuneration payable to any such personnel. Providedthat if such person is proved to be guilty the premium paid on such insurance shall betreated as part of the remuneration. (v) Remuneration to Executive Director

Fixed pay:

G Executive Director(s) shall be eligible for a monthly remuneration as may be approvedby the Board on the recommendation of the Committee in accordance with the statutoryprovisions of the Companies Act 2013 and the rules made thereunder for the time being inforce.

G

The break-up of the pay scale and quantum of perquisites includingemployer’scontribution to P.F pension scheme medical expenses club fees etc. shallbe decided and approved by the Board on the recommendation of the Committee and approvedby the shareholders and Central Government wherever required.

Variable components:

G

The Executive Director(s) may be paid performance linked commission within theoveralllimits as approved by the shareholders. Remuneration to Directors other than ExecutiveDirector:

Sitting Fees:

G

The Non- Executive / Independent Director may receive remuneration by way offees forattending meetings of Board or Committee thereof.

Provided that the amount of such fees shall not exceed the maximum amount asprovided inthe Companies Act 2013 per meeting of the Board or Committee or such amount as may beprescribed by the Central Government from time to time.

(b) Remuneration to KMP and Senior Management Personnel:

(i) The remuneration payable to KMP and Senior Management Personnel including theirincrements will be determined by the Managing Director and recommend to the Nomination andRemuneration Committee for approval. (ii) Where any insurance is taken by the Company onbehalf of its KMP and Senior Management Personnel for indemnifying them against anyliability the premium paid on such insurance shall not be treated as part of theremuneration payable to any such personnel. Provided that if such person is proved to beguilty the premium paid on such insurance shall be treated as part of the remuneration.(iii) Remuneration:

(i) Fixed pay:

G

KMP and Senior Management shall be eligible for a monthly remuneration as maybeapproved by the Committee in accordance with the statutory provisions of the CompaniesAct 2013 and the rules made there under for the time being in force.

G

The break-up of the pay scale and quantum of perquisites includingemployer’scontribution to P.F pension scheme medical expenses club fees etc. shallbe decided and approved by the Committee.

(ii) Variable components:

G

Based on the performance KMP and Senior Management Personnel will be paidincentives.

16. POLICY ON BOARD DIVERSITY

(a) The Board of Directors shall have the optimum combination of Directors from thedifferent areas/ fields like[production management quality assurance finance sales andmarketing research and development Human Resources etc] or as may be consideredappropriate. (b) The Board shall have at least one Board member who has accounting orrelated financial management expertise.

17. REMOVAL

The Committee may recommend to the Board with reasons recorded in writing removal ofa Director(s) KMP(s) and Senior Management subject to the provisions and compliance ofthe applicable Act rules and regulations if any.

18. DISCLOSURE OF INFORMATION

This Policy shall be disclosed in the Board’s report.

19. DEVIATION FROM THE POLICY

The Board may in individual or collective case deviate from this Policy in itsabsolute discretion if there are particular reasons to do so. In the event of anydeparture from the Policy the Board shall record the reasons for such departure in theBoard’s minutes.

20. AMENDMENTS TO THE POLICY

The Board of Directors on its own and / or as per the recommendations of Nomination andRemuneration Committee can amend this Policy as and when deemed fit.

In case of any amendment(s) clarification(s) circular(s) etc. issued by the relevantauthorities not being consistent with the provisions laid down under this Policy thensuch amendment(s) clarification(s) circular(s) etc. shall prevail upon the provisionshereunder and this Policy shall stand amended accordingly from the effective date as laiddown under such amendment(s) clarification(s) circular(s) etc.

ANNEXURE -3

Form No. MR-3

SECRETARIAL AUDIT REPORT

[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules 2014]

SECRETARIAL AUDIT REPORT

For The Financial Year Ended 31st March 2015

To

The Members

Baron Infotech Limited Hyderabad – 500 003

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s. Baron Infotech Limited(hereinafter called the company). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing our opinion thereon. Based on our verification of the Company’s bookspapers minute books forms and returns filed and other records maintained by the companyand also the information provided by the Company its officers agents and authorizedrepresentatives during the conduct of secretarial audit We hereby report that in ouropinion the Company has during the audit period covering the financial year ended on31st March 2015 has complied with the statutory provisions listed hereunder and also thatthe Company has proper Board-processes and compliance-mechanism in place to the extent inthe manner and subject to the reporting made hereinafter:

1. We have examined the books papers minute books forms and returns filed and otherrecords maintained by the company for the financial year ended on 31st March 2015according to the provisions of: (i) The Companies Act 2013 (the Act) (to the extentapplicable) and the Rules made under that Act; (ii) The Companies Act 1956 and the Rulesmade under that Act (To the extent Applicable); (iii) The Securities Contracts(Regulation) Act 1956 (‘SCRA’) and the rules made there under; (iv) TheDepositories Act 1996 and the Regulations and Bye-laws framed there under; (v) ListingAgreements entered with the Stock Exchanges;

(vi) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):- (a) Securities and ExchangeBoard of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011; (b)Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 1992;(c) Securities and Exchange Board of India (Depositories and Participants) regulations1996;

2. Provisions of the following Regulations and Guidelines prescribed under Securitiesand Exchange Board of India Act 1992 (‘SEBI Act’) were not applicable to theCompany in the financial year under report:- (a) Securities and Exchange Board of India(Issue and Listing of Debt Securities) Regulations 2008; (b) Securities and ExchangeBoard of India (Delisting of Equity Shares) Regulations 2009; and (c) Securities andExchange Board of India (Buyback of Securities) Regulations 1998; (d) Securities andExchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009;The industry specific law(s) that are applicable to the Company are as follows:

(a) The Information Technology Act 2000

(b) The Export and Import Policy of India

(c) The Indian Copyright Act 1957

(d) The Patents Act 1970

(e) The Trade Marks Act

We have also examined compliance with the applicable clauses of the Listing Agreementsentered into by the Company with BSE Limited (BSE); During the period under review theCompany has complied with the provisions of the Acts Rules Regulations Guidelines etc.mentioned above subject to the following observations; a) Key Managerial Persons i.e.Company Secretary and CFO were not appointed for the financial year ended 2014-15.

We further report that

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. Adequate noticewas given to all directors to schedule the board meetings agenda and detailed notes onagenda were sent and a system exists for seeking clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting. We further report that thereare adequate systems and processes in the Company commensurate with the size andoperations of the Company to monitor and ensure compliance with applicable laws rulesregulations and guidelines.

For P.S. Rao & Associates
Company Secretaries
P.S.RAO
Company Secretary
Place: Hyderabad ACS No:9769
Date: 14-08-2015 C P No:3829

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