To the Members M/s. Infronics Systems Limited
The Directors have pleasure in presenting before you the Board's Report of the Companytogether with the Audited Statements of Accounts for the year ended 31 March 2017.
FINANCIAL SUMMARY/HIGHLIGHTS OPERATIONS STATE OF AFFARIS:
The performance during the period ended 31 March 2017 has been as under: (Rs. InLakhs)
|Particulars ||Standalone ||Consolidated |
| ||2016-17 ||2015-2016 ||2016-2017 |
|Gross Income ||953.98 ||698.33 ||953.98 |
|Profit Before Interest and Depreciation ||95.64 ||38.26 ||95.05 |
|Finance Charges ||18.87 ||5.52 ||18.87 |
|Gross Profit ||76.77 ||32.73 ||76.18 |
|Provision for Depreciation ||49.37 ||77.07 ||63.47 |
|Net Profit Before exceptional items ||27.40 ||(44.34) ||12.71 |
|Exceptional items ||23.44 ||-- ||23.44 |
|Provision for Tax ||66.99 ||(8.69) ||69.25 |
|Net Profit After Tax ||(63.03) ||(35.65) ||(79.98) |
|Net Profit After Tax (after Minority Interest) ||-- ||-- ||(76.33) |
|Balance of Profit brought forward ||(1217.53) ||(1573.84) ||(1217.53) |
|Balance available for appropriation ||(1280.56) ||(1217.53) ||(1130.34) |
|Proposed Dividend on Equity Shares ||-- ||-- ||-- |
|Tax on proposed Dividend ||-- ||-- ||-- |
|Transfer to General Reserve ||-- ||-- ||-- |
|Surplus carried to Balance Sheet ||(1280.56) ||(1217.53) ||(1130.34) |
EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
There were no material changes and commitments affecting financial position
of the company between 31 March and the date of Board's Report. (I.e.02/09/2017)
CHANGE IN THE NATURE OF BUSINESS IF ANY:
During the period under review and the date of Board's Report there was no change inthe nature of Business.
The Company has not accepted any fixed deposits and as such no amount of principal orinterest was outstanding as of the Balance Sheet date.
TRANSFER TO RESERVES:
The company has not transferred any amount to reserves for the year.
Keeping the Company's revival plans in mind the Directors have decided not torecommend dividend for the year.
REVISION OF FINANCIAL STATEMENTS:
There was no revision of the financial statements for the year under review
DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT 2013:
No material changes and commitments which could affect the Company's financial positionhave occurred between the ends of the financial year of the Company.
DISCLOSURE OF INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation have been noticed for inefficiency or inadequacy of such controls. TheCompany maintains appropriate system of internal control including monitoring proceduresto ensure that all assets are safeguarded against loss from unauthorized use ordisposition. Company policies guidelines and procedures provide for adequate checks andbalances and are meant to ensure that all transactions are authorized recorded andreported correctly.
DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL
No orders have been passed by any Regulator or Court or Tribunal which can have impacton the going concern status and the Company's operations in future.
PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
The details of transactions/contracts/arrangements entered into by the Company withrelated party(ies) as defined under the provisions of Section 2(76) of the Companies Act2013 during the financial year under review are furnished in detail somewhere else inthe report (if applicable) and forms part of this Report.
Corporate Governance is not applicable to the company since the paid up equity sharecapital and net worth of the company does not exceed Rs. 10 crores and Rs. 25 croresrespectively. However the company voluntarily provides a separate section in the AnnualReport titled "Report on Corporate Governance" along with the Auditors'Certificate on Corporate Governance as stipulated under Regulation 34 read with Schedule Vof Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.
EXTRACT OF ANNUAL RETURN:
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report Annexure II
DIRECTORS/CEO/CFO AND KEY MANANGERIAL PERSONNEL:
Mr. M. Madhusudan Raju resigned as Managing Director of the company w.e.f 24.08.2016.The Board places on record its appreciation for the services rendered by Mr. M. MadhusudanRaju during his tenure with the Company.
DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:
The Company has received declarations from Mrs. N. Satyavathi Mr. K. Srinivasa Rao andMr. M.V.S Ramesh Varma Independent directors of the company to the effect that they aremeeting the criteria of independence as provided in Sub-section (6) of Section 149 of theCompanies Act 2013 and Regulation 25 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.-Annexure-III
DIRECTOR'S RESPONSIBILITY STATEMENT:
In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:
a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
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 on a going concern basis; and
e) The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
f) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES /ASSOCIATES:
The Company has subsidiaries namely Mudunuru Software Limited and Zoraly SolutionPrivate Limited and associates namely Biomorf Systems Limited. However Infronics Inc. awholly owned subsidiary of Infronics Systems Limited was non operationalduring the yearunder review and has been so since April 2013.Annexure V.
DETAILS IN REPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12)OF SECTION 143OTHER THAN THOSE WHICH ARE REPORTABLE TO CENTRALGOVERNMENT.
There were no frauds reported by the auditors as per section 143 (12).
M/s. M.M. Reddy & Co Statutory Auditors of the company retires at the ensuingannual general meeting and is eligible for reappointment. As required under the provisionsof Section 139 of the Companies Act 2013 the Company has received a written consent fromthe auditors for their re-appointment and a certificate to the effect that theirre-appointment if made would be in accordance with the Companies Act 2013 and the rulesframed there under and that they have satisfied the criteria provided in Section 141 ofthe Companies Act 2013.
The Board recommends re-appointment of M/s. M.M. Reddy & Co. as the statutoryauditors of the Company from the conclusion of this Annual General Meeting till theconclusion of the next Annual General Meeting.
The company has appointed M/s. Chanamolu & Co. as internal auditors for theFinancial Year 2016-17.
Pursuant to the provisions of Section 134(3)(f) & Section 204 of the Companies Act2013 Secretarial audit report as provided by M/s. Sambhu Prasad M & AssociatesPracticing Company Secretaries is annexed to this Report as Annexure - I
INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs vide its notification dated 16th February 2015 hasnotified the Companies (Indian Accounting Standards) Rules 2015. In pursuance of the saidnotification the Company will adopt Indian Accounting Standards with effect from 01stApril 2017. The implementation of Indian Accounting Standards (IAS) is a major changeprocess for which the Company has set up a dedicated team and is providing desiredresources for its completion within the time frame. The impact of the change on adoptionof said IAS is being assessed.
(a) Statutory Auditors Report:
The Board has duly reviewed the Statutory Auditor's Report on the Accounts for the yearended March 31 2017 and has noted that the same does not have any reservationqualification or adverse remarks. However the Board decided to further strengthen theexisting system and procedures to meet all kinds of challenges and growth in the marketexpected in view of the robust growth in the industry.
(b) Secretarial Audit Report:
The Board has duly reviewed the Secretarial Audit Report on the Compliances accordingto the provisions of section 204 of the Companies Act 2013 and the qualificationsreservations or adverse remarks (if any) the Secretarial Audit Report in Form MR-3 isannexed to the Annual Report as Annexure - I
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Since your Company does not have the net worth of Rs. 500 Crore or more or turnover ofRs. 1000 Crore or more or a net profit of Rs. 5 Crore or more during the financial yearSection 135 of the Companies Act 2013 relating to Corporate Social Responsibility is notapplicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy.
COMPLIANCE WITH SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS2015:
In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Company has signed uniform listing agreement with Stock Exchanges and framed thefollowing policies which are available on Company's website i.e. www.infronics.com
i. Board Diversity Policy
ii. Policy on preservation of Documents
iii. Risk Management Policy
iv. Whistle Blower Policy
v. Familiarisation programme for Independent Directors
vi. Anti-Sexual Harrassment Policy
vii. Related Party Policy
viii. Code of Conduct
THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:
The company acquires stake in small time companies namely Zoraly Solutions PrivateLimited (39.33%) and Mudunuru Software Limited (22.95%) making them its subsidiaries. Thecompany also acquired stake in Biomorf Systems Limited (41.79%) which continues to act asan associate company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
The required information as per Sec.134 of the Companies Act 2013 is providedhereunder:
A. Conservation of Energy:
Your Company's operations are not energy intensive. Adequate measures have been takento conserve energy wherever possible by using energy efficient computers and purchase ofenergy efficient equipment.
B. Technology Absorption:
1. Research and Development (R&D): NIL
2. Technology absorption adoption and innovation: NIL
C. Foreign Exchange Earnings and Out Go:
Foreign Exchange Earnings: Rs.517.16 lakhs Foreign Exchange Outgo: Rs. NIL
The properties and assets of your Company are adequately insured.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The company has not given loans or Guarantees during the year under review.
CREDIT & GUARANTEE FACILITIES:
The Company has not availed any facilities of credit and guarantee during the year.
DISCLOSURE ABOUT COST AUDIT:
Cost Audit is notapplicable to your Company.
NON-EXECUTIVE DIRECTORS' COMPENSATION AND DISCLOSURES
None of the Independent / Non-Executive Directors has any pecuniary relationship ortransactions with the Company which in the Judgment of the Board may affect theindependence of the Directors.
CEO/ CFO Certification
The Managing Director and CEO/ CFO certification of the financial statements for theyear 2016-17 is provided elsewhere in this Annual Report.
INDUSTRY BASED DISCLOSURES AS MANDATED BY THE RESPECTIVE LAWS GOVERNING THE COMPANY
The Company is not a NBFC Housing Companies etc. and hence Industry based disclosuresis not required.
The company is in compliance with Secretarial Standards SS1 and SS2 issued by TheInstitute of Company Secretaries of India on Meetings of the Board of Directors andGeneral Meeting.
EVENT BASED DISCLOSURES
During the year under review the Company has not taken up any of the followingactivities:
1. Issue of sweat equity share:The Company has not issued any sweat equityshares during the year under review and hence no information as per provisions of Section54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture)Rules 2014.
2. Issue of shares with differential rights:The Company has not issued anyshares with differential rights and hence no information as per provisions of Section43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture)Rules 2014.
3. Issue of shares under employee's stock option scheme:The Company has notissued any equity shares under Employees Stock Option Scheme during the year under reviewand hence no information as per provisions of Section 62(1)(b) of the Act read with Rule12(9) of the Companies (Share Capital and Debenture) Rules 2014
4. Non- Exercising of voting rights : During the year under review therewere no instances of non-exercising of voting rights in respect of shares purchaseddirectly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule16(4) of Companies (Share Capital and Debentures) Rules 2014.
5. Disclosure on purchase by company or giving of loans by it for purchase ofits shares: The company did not purchase or give any loans for purchase of its shares.
6. Buy back shares:The company did not buy-back any shares during the periodunder review.
7. Disclosure about revision:Since the company did not undergo any revisionthis clause is Not Applicable to the company for the period under review.
8. Preferential Allotment of Shares: The Company did not allot any shares onpreferential basis during the period under review.
Your Directors are pleased to record their sincere appreciation of the contribution bythe staff at all levels in the improved performance of the Company.
None of the employees is drawing Rs. 850000/- and above per month or Rs.10200000/-and above in aggregate per annum the limits prescribed under Section 197(12) of CompaniesAct 2013 read with Rule 5 of Companies(Appointment & Remuneration Of ManagerialPersonnel) Rules 2014.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaint Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees are covered under this policy.
The following is the summary of sexual harassment complaints received and disposedduring the calendar year.
|No. of complaints received: ||Nil |
|No. of complaints disposed off: ||Nil |
The Directors wish to place on record their appreciation of the contribution made bythe employees at all levels for the continued growth and prosperity of your Company.
The Directors also wish to place on record their appreciation of business constituentsbanks and other financial institutions other statutory authorities like SEBI ROC StockExchanges NSDL CDSL etc and shareholders of the Company for their continued support forthe growth of the Company.
| ||For and on behalf of the Board of |
| ||Infronics Systems Limited |
| ||Sd/- ||Sd/- |
| ||M.V.S. Ramesh Varma ||K. Srinivas Rao |
|Place: Hyderabad ||Director ||Director |
|Date: 02.09.2017 ||(DIN: 06680580) ||(DIN: 06465192) |
Code of Conduct
The Company has formulated and implemented a Code of Conduct for Board Members andSenior Management of the Company.
Certificate of Code of Conduct for the year 2016-17 as per Regulation 17(5) read withRegulation 34(3) Schedule V of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
Infronics Systems Limited is committed for conducting its business in accordance withthe applicable laws rules and regulations and with highest standards of business ethics.The Company has adopted a "Code of Ethics and Business Conduct" which isapplicable to all director officers and employees.
I hereby certify that all the Board Members and Senior Management have affirmed thecompliance with the Code of Ethics and Business Conduct under a certificate of Code ofConduct for the year 2016-17.
| ||For and on behalf of the Board of |
| ||Infronics Systems Limited |
| ||Sd/- |
| ||M V S Ramesh Varma |
|Place: Hyderabad ||Director |
|Date: 02.09.2017 ||(DIN: 06680580) |