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Infronics Systems Ltd.

BSE: 537985 Sector: IT
NSE: N.A. ISIN Code: INE463B01036
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NSE 05:30 | 01 Jan Infronics Systems Ltd
OPEN 23.60
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VOLUME 514
52-Week high 23.60
52-Week low 5.24
P/E 393.33
Mkt Cap.(Rs cr) 19
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 23.60
CLOSE 23.60
VOLUME 514
52-Week high 23.60
52-Week low 5.24
P/E 393.33
Mkt Cap.(Rs cr) 19
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Infronics Systems Ltd. (INFRONICSSYS) - Director Report

Company director report

To the Members M/s. Infronics Systems Limited

The Directors have pleasure in presenting before you the Boards' Report of the Companytogether with the Audited Statements of Accounts for the year ended 31st March 2019.

1. FINANCIAL SUMMARY/HIGHLIGHTS OPERATIONS STATE OF AFFARIS:

The performance during the period ended 31st March 2019 has been as under:

(Rs. In Lakhs)

Particulars Standalone
2018-19 2017-18
Turnover/Income (Gross) 374.38 832.15
Profit before Finance charges (25.39) (10.72)
Depreciation and Taxation
Less: Finance charges (excluding amount capitalized) -- --
Profit/ (Loss) before Depreciation and Tax (25.39) (10.72)
Less: Depreciation -- 153.92
Profit/ (Loss) Before Exceptional Item (25.39) (164.64)
Exceptional Item -- 2.31
Less: Provision for taxation -- 297.67
Profit after Tax (25.39) (464.62)

2. MATERIAL CHANGES AND COMMITMENTS:

There were no material changes and commitments affecting financial position of thecompany between 31st March 2019 and the date of Board's Report. (i.e.14.08.2019)

3. 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.

4. DETAILS RELATING TO DEPOSITS COVERING THE FOLLOWING:

The Company has not accepted any deposits falling within the meaning of sec.73 74& 76 of the Companies Act 2013 read with the Rule 8(v) of Companies (Accounts) Rules2014 during the financial year under review. Further there are no deposits which are notin compliance with the requirements of Chapter V of the Companies Act 2013.

5. TRANSFER TO RESERVES:

The company has not transferred any amount to reserves for the year.

6. DIVIDEND:

Keeping the Company's revival plans in mind the Directors have decided not torecommend dividend for the year.

7. REVISION OF FINANCIAL STATEMENTS:

There was no revision of the financial statements for the year under review

8. BOARD MEETINGS:

The Board of Directors duly met 4 (Four) times on 29.05.2018 14.08.2018 14.11.2018and 14.02.2019 and in respect of which meetings proper notices were given and theproceedings were properly recorded and signed in the Minutes Book maintained for thepurpose.

9. 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.

10. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS:

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.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:

The details of transactions/contracts/arrangements entered into by the Company withrelated parties as defined under the provisions of Section 2(76) of the Companies Act2013 during the financial year under review are furnished in detail in auditors reportunder the head accounting policies and forms part of this Report.

12. CORPORATE GOVERNANCE:

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.

13. 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.

14. DIRECTORS/CEO/CFO AND KEY MANANGERIAL PERSONNEL:

No Directors or Key Managerial Personnel have resigned during the Year.

15. 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.

16. COMPOSITION OF AUDIT COMMITTEE:

I. The Audit Committee of the Company is constituted in line with the provisions ofRegulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015read with Section 177 of the Companies Act 2013.

II. The terms of reference of the Audit Committee include a review of thefollowing:

• Overview of the Company's financial reporting process and disclosure of itsfinancial information to ensure that the financial statements reflect a true and fairposition and that sufficient and credible information is disclosed.

• Recommending the appointment and removal of external auditors fixation of auditfee and also approval for payment for any other services.

• Discussion with external auditors before the audit commences of the nature andscope of audit as well as post-audit discussion to ascertain any area of concern.

• Reviewing the financial statements and draft audit report including quarterly /half yearly financial information.

• Reviewing with management the annual financial statements before submission tothe Board focusing on:

1. Any changes in accounting policies and practices;

2. Qualification in draft audit report;

3. Significant adjustments arising out of audit;

4. The going concern concept;

5. Compliance with accounting standards;

6. Compliance with stock exchange and legal requirements concerning financialstatements and

7. Any related party transactions

• Reviewing the company's financial and risk management's policies.

• Disclosure of contingent liabilities.

• Reviewing with management external and internal auditors the adequacy ofinternal control systems.

• Reviewing the adequacy of internal audit function including the auditcharacter the structure of the internal audit department approval of the audit plan andits execution staffing and seniority of the official heading the department reportingstructure coverage and frequency of internal audit.

• Discussion with internal auditors of any significant findings and follow-upthereon.

• Reviewing the findings of any internal investigations by the internal auditorsinto the matters where there is suspected fraud or irregularity or a failure of internalcontrol systems of a material nature and reporting the matter to the Board.

• Looking into the reasons for substantial defaults in payments to the depositorsdebenture holders shareholders (in case of non-payment of declared dividends) andcreditors.

• Reviewing compliances as regards the Company's Whistle Blower Policy.

III. The previous Annual General Meeting of the Company was held on 29.09.2018 andChairman of the Audit Committee attended previous AGM.

IV. The composition of the Audit Committee and the attendance of each member of theAudit Committee are given below:

The Company has complied with all the requirements of Regulation 27 of SEBI (LODR)Regulations 2015 relating to the composition of the Audit Committee.

During the financial year 2018-19 (4) four meetings of the Audit Committee were heldon the 29.05.2018 14.08.2018 14.11.2018 and 14.02.2019.

The details of the composition of the Committee and attendance of the members at themeetings are given below:

Name Designation Category No. of Meetings held No. of Meetings attended
Mr. K. Srinivasa Rao Chairman NED (I) 4 4
Mr. M.V.S. Ramesh Varma Member NED (I) 4 4
Mrs. Namburu Satyavathi Member NED (I) 4 4

NED: Non- Executive Independent Director

17. STAKEHOLDERS RELATIONSHIP COMMITTEE

A) Composition:

The Details of composition of the Committee are given below:

Name Designation Category No. of Meetings held No. of Meetings attended
Mr. K. Srinivasa Rao Chairman NED (I) 4 4
Mr. M.V.S. Ramesh Varma Member NED (I) 4 4
Mrs. Namburu Satyavathi Member NED (I) 4 4

B) Powers:

The Committee has been delegated with the following powers:

• To redress shareholder and investor complaints relating to transfer of sharesDematerialization of Shares non-receipt of Annual Reports non-receipt of declareddividend and other allied complaints.

• To approve transfer transmission and issue of duplicate / fresh sharecertificate(s)

• Consolidate and sub-division of share certificates etc.

• To redress approve and dispose off any other complaints transactions andrequests etc. received from any shareholder of the company and investor in general.

The Board has delegated the power to process the transfer and transmission of shares tothe Registrar and Share Transfer Agents who process share transfers within a week oflodgment in the case of shares held in physical form.

18. VIGIL MECHANISM:

Vigil Mechanism Policy has been established by the Company for directors and employeesto report genuine concerns pursuant to the provisions of section 177(9) of the CompaniesAct 2013 and Regulation 46 of SEBI (LODR) Regulations 2015. The same has been placed onthe website of the Company.

19. BOARD EVALUATION

Pursuant to the applicable provisions of the Companies Act 2013 and SEBI ListingRegulations the Board has carried out an Annual Evaluation of its own performanceperformance of the Directors and the working of its Committees. The Board's functioningwas evaluated on various aspects including inter alia degree of fulfillment of keyresponsibilities Board structure and composition establishment and delineation ofresponsibilities to various Committees effectiveness of Board processes information andfunctioning.

Evaluation of the Committees performance was based on the criteria like compositionits terms of the reference and effectiveness of committee meetings etc. IndividualDirector's performance evaluation is based on their preparedness on the issues to bediscussed meaningful and constructive discussions and their contribution to the Board andCommittee meetings. The Chairperson was evaluated mainly on key aspects of his role. Theseperformance exercises were conducted seeking inputs from all the Directors / CommitteeMembers wherever applicable.

The evaluation procedure followed by the company is as mentioned below:

i) Feedback is sought from each Director about their views on the performance of theBoard covering various criteria such as degree of fulfillment of key responsibilitiesBoard structure and composition establishment and delineation of responsibilities tovarious Committees effectiveness of Board processes information and functioning Boardculture and dynamics quality of relationship between the Board and the Management andefficacy of communication with external stakeholders. Feedback was also taken from everyDirector on his assessment of the performance of each of the other Directors.

ii) The Nomination and Remuneration Committee (NRC) then discusses the above feedbackreceived from all the Directors.

iii) Based on the inputs received the Chairman of the NRC also makes a presentation tothe Independent Directors at their meeting summarizing the inputs received from theDirectors as regards Board performance as a whole and of the Chairman. The performance ofthe Non-Independent Non-Executive Directors and Board Chairman is also reviewed by them.

iv) Post the meeting of the Independent Directors their collective feedback on theperformance of the Board (as a whole) is discussed by the Chairman of the NRC with theChairman of the Board. It is also presented to the Board and a plan for improvement isagreed upon and is pursued.

v) Every statutorily mandated Committee of the Board conducts a self-assessment of itsperformance and these assessments are presented to the Board for consideration. Areas onwhich the Committees of the Board are assessed include degree of fulfillment of keyresponsibilities adequacy of Committee composition and effectiveness of meetings.

vi) Feedback is provided to the Directors as appropriate. Significant highlightslearning and action points arising out of the evaluation are presented to the Board andaction plans are drawn up. During the year under report the recommendations made in theprevious year were satisfactorily implemented.

The peer rating on certain parameters positive attributes and improvement areas foreach Board member are also provided to them in a confidential manner. The feedbackobtained from the interventions is discussed in detail and where required independentand collective action points for improvement are put in place.

20. 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) TheDirectors had laid down internal financial controls to be followed by the company and thatsuch internal financial controls are adequate and were operating effectively.

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.

21. FAMILIARISATION PROGRAMMES:

The Company familiarises its Independent Directors on their appointment as such on theBoard with the Company their roles rights responsibilities in the Company nature ofthe industry in which the Company operates etc. through familiarisation programme. TheCompany also conducts orientation programme upon induction of new Directors as well asother initiatives to update the Directors on a continuing basis. The familiarisationprogramme for Independent Directors is disclosed on the website of the Company.

22. THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES:

NIL

23. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR.

Mudunuru Software Limited and Biomof Systems Limited during the year

24. DETAILS IN REPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB- SECTION (12) OF SECTION143 OTHER THAN THOSE WHICH ARE REPORTABLE TO CENTRALGOVERNMENT.

There have been no frauds reported by the auditors as per section 143 (12).

25. STATUTORY AUDITORS:

The members of the company in accordance with section 139 of the Companies Act 2013had passed a resolution for appointment of M/s. Chanamolu & Co as Statutory Auditorsof the company for a period of 5 years in the AGM held on 29.09.2018 to hold office up tothe conclusion of 23rd Annual General Meeting of the company to be held for the financialyear 2022-23.

26. INTERNAL AUDITORS:

The company has appointed M/s. Bandaru & Associates as internal auditors for theFinancial Year 2018-19.

27. SECRETARIAL AUDITORS:

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

28. 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.

29. QUALIFICATIONS IN AUDIT REPORTS:

(a) Statutory Auditors Report:

The Board has duly reviewed the Statutory Auditor's Report on the Accounts for the yearended March 31 2019 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) except that the Company does not have a full timeCompany Secretary and internal auditor the Secretarial Audit Report in Form MR-3 isannexed to the Annual Report as Annexure – I.

30. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Since Company does not have the net worth of Rs. 500 Crore or more or turnover of Rs.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 responsibility.

31. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The company has not given loans or Guarantees during the year under review.

32. CREDIT & GUARANTEE FACILITIES:

The Company has not availed any facilities of credit and guarantee during the year.

33. DISCLOSURE ABOUT COST AUDIT:

Cost Audit is not applicable to your Company.

34. 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

35. 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: All the Factors mentioned in Rule 8 (3) (b) Technologyabsorption are not applicable to the Company.

C. Foreign Exchange Earnings and Out Go:

Foreign Exchange Earnings: Rs. NIL Foreign Exchange Outgo: Rs. NIL

36. INSURANCE:

The properties and assets of your Company are adequately insured.

37. 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.

38. 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.

39. SECRETARIAL STANDARDS

The company is in compliance with Secretarial Standards SS-1 and SS-2 issued by TheInstitute of Company Secretaries of India on Meetings of the Board of Directors andGeneral Meeting.

40. 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 equity sharesduring 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 any shareswith differential rights and hence no information as per provisions of Section 43(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 not issuedany equity shares under Employees Stock Option Scheme during the year under review andhence 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 there were noinstances of non-exercising of voting rights in respect of shares purchased directly byemployees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) ofCompanies (Share Capital and Debentures) Rules 2014.

5. Disclosure on purchase by company or giving of loans by it for purchase of itsshares: 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 period underreview.

7. Disclosure about revision: Since the company did not undergo any revision thisclause 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.

41. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT:

Management Discussion and Analysis Report for the year under review which forms part ofAnnual Report pursuant to the SEBI (LODR) Regulations 2015 as ANNEXURE III.

42. EMPLOYEE RELATIONS

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.

43. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND 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

44. ACKNOWLEDGEMENTS:

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
Director Director
(DIN: 06680580) (DIN: 06465192)

 

Place: Hyderabad
Date: 14.08.2019

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