Mar 31, 2015
Dear Members,
We have pleasure in presenting the Fifteenth Annual report together
with Audited accounts for the year ended 31st March, 2015.
1. FINANCIAL SUMMARY/ HIGHLIGHTS. OPERATIONS. STATE OF AFFAIRES:
(Rs. in lakhs)
Particulars_ 2014-15 2013-14
Gross Income 796.86 930.55
Profit Before Interest and Depreciation (311.48) 327.96
Finance Charges 175.84 150.26
Gross Profit (785.42) (173.99)
Provision for Depreciation 298.10 351.69
Net Profit Before Tax (1694.57) (173.99)
Provision for Tax (86.05) (38.53)
Net Profit After Tax (1608.52) (135.46)
Balance of Profit brought forward 34.68 636.76
Balance available for appropriation (1,573.84) 501.30
Proposed Dividend on Equity Shares -- -
Tax on proposed Dividend -- -
Transfer to General Reserve -- --
Surplus carried to Balance Sheet (1,573.84) 501.30
During the year under review, the Company has recorded an income of
Rs.796.86 Lakhs and the loss of Rs. (1608.52) as against the income of
Rs.930.55 Lakhs and reported loss of Rs. (135.46) Lakhs in the previous
financial year ending 31.03.2014.
2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
The company obtained loan from SBI and due to several business related
issues, the company could not make enough revenues and as a result
defaulted in repayment of loan. SBI has declared the company as NPA and
the company making sincere efforts to come out of the financial
default.
3. CHANGE IN THE NATURE OF BUSINESS:
During the period under review and the date of Board's Report there was
no change in the nature of Business.
4. DIVIDEND:
Your Directors have decided not to recommend dividend for the year as
the company has incurred losses.
5. BOARD MEETINGS:
The Board of Directors met 6 times during the year on 28.05.2014,
03.07.2014, 14.08.2014, 14.11.2014, 14.02.2015 and 30.03.2015 in
respect of which meetings, proper notices were given and the
proceedings were properly recorded and signed in the Minutes Book
maintained for the purpose and the maximum gap between any two meetings
was less than four months, as stipulated under Clause 49.
6. DIRECTORS AND KEY MANANGERIAL PERSONNEL:
a) During the year, Mrs. N. Satyavathi was appointed as Additional
Director. Now the Board proposes to appoint her as Independent
Director.
The Board of Directors of the Company has decided to adopt the
provisions with respect to appointment and tenure of Independent
Directors which is consistent with the Companies Act, 2013. In line
with the requirements of the Companies Act, 2013, it is therefore
proposed to appoint existing additional director in the independent
category, as Independent Director on the Board of the Company for a
term up to five consecutive years. A brief profile of proposed
Independent Director, including nature of her expertise, is provided in
this Annual Report.
Notice has been received from a Member proposing candidature of the
Director namely Mrs. N. Satyavathi for the office of Independent
Director of the Company. In the opinion of the Board, she fulfills the
conditions specified in the Companies Act, 2013 and the Rules made
there under for appointment as Independent Director of the Company.
b) Mr. K Sambasiva Rao, Managing Director liable to retirement since
his term of appointment as a Managing Director has expired and he has
expressed his unwillingness for renewal of his term. The Board placed
on record his sincere appreciation for the valuable services rendered
by him during his tenure as Managing Director of the Company.
c) Mr. M. Madhusudan Raju was appointed as a Managing Director with
effect from 05.05.2015 and the same is proposed for approval of the
members.
Mr. Siddantapu Enmanuel Raju was appointed as a CFO of the Company
POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS'
INDEPENDENCE
1. Scope:
This policy sets out the guiding principles for the Nomination &
Remuneration Committee for identifying persons who are qualified to
become Directors and to determine the independence of Directors, in
case of their appointment as independent Directors of the Company.
2. Terms and References:
2.1 "Director" means a director appointed to the Board of a Company.
2.2 "Nomination and Remuneration Committee means the committee
constituted in accordance with the provisions of Section 178 of the
Companies Act, 2013 and clause 49 of the Equity Listing Agreement.
2.3 "Independent Director" means a director referred to in sub-section
(6) of Section 149 of the Companies Act, 2013 and Clause 49(II)(B) of
the Equity Listing Agreement.
3. Policy:
Qualifications and criteria
3.1.1 The Nomination and Remuneration Committee, and the Board, shall
review on annual basis, appropriate skills, knowledge and experience
required of the Board as a whole and its individual members. The
objective is to have a board with diverse background and experience
that are relevant for the Company's operations.
3.1.2 In evaluating the suitability of individual Board member the NR
Committee may take into account factors, such as:
* General understanding of the company's business dynamics, global
business and social perspective;
* Educational and professional background
* Standing in the profession;
* Personal and professional ethics, integrity and values;
* Willingness to devote sufficient time and energy in carrying out
their duties and responsibilities effectively.
3.1.3 The proposed appointee shall also fulfill the following
requirements:
* shall possess a Director Identification Number;
* shall not be disqualified under the companies Act, 2013;
* shall Endeavour to attend all Board Meeting and Wherever he is
appointed as a Committee Member, the Committee Meeting;
* shall abide by the code of Conduct established by the company for
Directors and senior Management personnel;
* shall disclose his concern or interest in any company or companies or
bodies corporate, firms, or other association of individuals including
his shareholding at the first meeting of the Board in every financial
year and thereafter whenever there is a change in the disclosures
already made;
* Such other requirements as any be prescribed, from time to time,
under the companies Act, 2013, Equity listing Agreements and other
relevant laws.
3.1.4 The Nomination & Remuneration Committee shall evaluate each
individual with the objective of having a group that best enables the
success of the company's business.
3.2 criteria of independence
3.2.1 The Nomination & Remuneration Committee shall assess the
independence of Directors at time of appointment/ re-appointment
and the Board shall assess the same annually. The Board shall re-
assess determinations of independence when any new interest or
relationships are disclosed by a Director.
3.2.2 The criteria of independence shall be in accordance with the
guidelines as laid down in companies Act, 2013 and Clause 49 of the
Equity Listing Agreement.
An independent director in relation to a company, means a director
other than a managing director or a whole-time director or a nominee
director-
a. Who, in the opinion of the Board, is a person of integrity and
possesses relevant expertise and experience;
b. (i) who is or was not a promoters of the company or its holding,
subsidiary or associate company;
(ii) Who is not related to promoters or directors of the company its
holding, subsidiary or associate company
c. Who has or had no pecuniary relationship with the company, its
holding, subsidiary or associate company, or their promoters, or
director, during the two immediately preceding financial year or during
the current financial year;
d. None of whose relative has or had pecuniary relationship or
transaction with the company, its holding, subsidiary or associate
company, or their promoters, or directors, amounting to two per cent or
more of its gross turnover or total income or fifty lakh rupees or such
higher amount as may be prescribed, whichever is lower, during the two
immediately preceding financial year or during the current finance
year;
e. Who, neither himself nor any of his relative-
(i) Holds or has held the position of a key managerial personnel or is
or has been employee of the or associate company in any of the three
finance years immediately preceding the finance year in which he is
proposed to be appointed;
(ii) Is or has been an employee or proprietor or a partner, in any of
the three finance year immediately preceding the finance year in which
he is proposed to be appointed of-
(A) a firm of auditors or company secretaries in practice or cost
auditors of the company or its holding, subsidiary or associate
company; or
(B) any legal or a consulting firm that has or had any transaction with
the company, its holding subsidiary or associate company amounting to
ten per cent or more of the gross turnover of more of the gross
turnover of such firm;
(iii) holds together with his relatives two per cent or more of the
total voting power of the company; or
(iv) is a chief Executive or director, by whatever name called, of any
non- profit organization that receives twenty-five per cent or more of
its receipt from the company any of its promoters , directors or its
holding subsidiary or associate company or that holds two per cent or
more of the total voting power of the company; or
(v) is a material supplier, service provider or customer or a lesser or
lessee of the company.
f. Shall possess appropriate skills experience and knowledge in one or
more field of finance , law management, sales, marketing
administration, research, corporate governance, technical operations,
corporate social responsibility or this disciplines related to the
company's business.
g. Shall possess such other qualifications as may be prescribed from
time to time, under the companies Act, 2013.
h. Who is not less than 21 years of age
3.2.3 The independent Director shall abide by the "code for independent
Directors "as specified in Schedule IV to the companies A ct, 2013.
3.3 other directorships/ committee memberships
3.3.1 The Board members are expected to have adequate time and
expertise and experience to contribute to effective Board performance
Accordingly, members should voluntarily limit their directorships in
other listed public limited companies in such a way that it does not
interfere with their role as director of the company. The NR Committee
shall take into account the nature of, and the time involved in a
director service on other Boards, in evaluating the suitability of the
individual Director and making its recommendations to the Board.
3.3.2 A Director shall not serve as director in more than 20 companies
of which not more than 10 shall be public limited companies.
3.3.3 A Director shall not serve an independent Director in more than 7
listed companies and not more than 3 listed companies in case he is
serving as a whole-time Director in any listed company.
3.3.4 A Director shall not be a member in more than 10 committee or act
as chairman of more than 5 committee across all companies in which he
holds directorships.
For the purpose of considering the limit of the committee, Audit
committee and stakeholder's relationship committee of all public
limited companies, whether listed or not, shall be included and all
other companies including private limited companies, foreign companies
and companies under section 8 of the companies Act, 2013 shall be
excluded.
Remuneration policy for Directors, key managerial personnel and other
employees
1. Scope:
1.1 This policy sets out the guiding principles for the Nomination and
Remuneration committee for recommending to the Board the remuneration
of the directors, key managerial personnel and other employees of the
company.
2. Terms and Reference:
In this policy the following terms shall have the following meanings:
2.1 "Director" means a director appointed to the Board of the company.
2.2 "key managerial personnel" means
(i) The Chief Executive Officer or the managing director or the
manager;
(ii) The Company Secretary;
(iii) The Whole-time Director;
(iv) The Chief Finance Officer; and
(v) Such other office as may be prescribed under the companies Act,
2013
2.3 "Nomination and Remuneration committee" means the
committee constituted by Board in accordance with the provisions of
section 178 of the companies Act, 2013 and clause 49 of the Equity
Listing Agreement.
3. Policy:
3.1 Remuneration to Executive Director and key managerial personnel
3.1.1 The Board on the recommendation of the Nomination and
Remuneration (NR) committee shall review and approve the remuneration
payable to the Executive Director of the company within the overall
approved by the shareholders.
3.1.2 The Board on the recommendation of the NR committee shall also
review and approve the remuneration payable to the key managerial
personnel of the company.
3.1.3 The remuneration structure to the Executive Director and key
managerial personnel shall include the following components:
(i) Basic pay
(ii) Perquisites and Allowances
(iii) Stock Options
(iv) Commission (Applicable in case of Executive Directors)
(v) Retrial benefits
(vi) Annual performance Bonus
3.1.4 The Annual plan and Objectives for Executive committee shall be
reviewed by the NR committee and Annual performance bonus will be
approved by the committee based on the achievement against the Annual
plan and Objectives.
3.2 Remuneration to Non - Executive Directors
3.2.1 The Board, on the recommendation of the NR Committee, shall
review and approve the remuneration payable to the Non - Executive
Directors of the Company within the overall limits approved by the
shareholders as per the provisions of the Companies Act.
3.2.2 Non - Executive Directors shall be entitled to sitting fees
attending the meetings of the Board and the Committees thereof. The
Non- Executive Directors shall also be entitled to profit related
commission in addition to the sitting fees.
3.3. Remuneration to other employees
3.3.1. Employees shall be assigned grades according to their
qualifications and work experience, competencies as well as their roles
and responsibilities in the organization. Individual remuneration shall
be determined within the appropriate grade and shall be based on
various factors such as job profile skill sets, seniority, experience
and prevailing remuneration levels for equivalent jobs.
7. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL
BASIS:
The Company has received necessary declaration from Mr. K. Srinivas Rao,
Mr. M. V. S. Ramesh Varma and Mrs. N. Satyavathi, Independent Directors
of the Company under Section 149(7) of the Companies Act, 2013 that they
as Independent Directors of the Company meet with the criteria of their
Independence laid down in Section 149(6).(Annexure II)
8. COMPOSITION OF AUDIT COMMITTEE:
Audit Committee:
I) The Audit Committee of the Company is constituted in line with the
provisions of Clause 49 of the Listing Agreements with the Stock
Exchanges read with Section 177 of the Companies Act, 2013.
II) The terms of reference of the Audit Committee include a review of
the following:
* Overview of the Company's financial reporting process and disclosure
of its financial information to ensure that the financial statements
reflect a true and fair position and that sufficient and credible
information is disclosed.
* Recommending the appointment and removal of external auditors,
fixation of audit fee and also approval for payment for any other
services.
* Discussion with external auditors before the audit commences, of the
nature and scope 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 to the 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
financial statements 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 of internal control systems.
* Reviewing the adequacy of internal audit function, including the
audit character, the structure of the internal audit department,
approval of the audit plan and its execution, staffing and seniority of
the official heading the department, reporting structure, coverage and
frequency of internal audit.
* Discussion with internal auditors of any significant findings and
follow-up thereon.
* Reviewing the findings of any internal investigations by the internal
auditors into the matters where there is suspected fraud or
irregularity or a failure of internal control systems of a material
nature and reporting the matter to the Board.
* Looking into the reasons for substantial defaults in payments to the
depositors, debenture holders, shareholders (in case of non-payment of
declared dividends) and creditors.
* Reviewing compliances as regards the Company's Whistle Blower Policy.
III) The previous Annual General Meeting of the Company was held on
30.09.2014 and Chairman of the Audit Committee, attended previous AGM.
IV) The composition of the Audit Committee and the attendance of each
member of the Audit Committee are given below:
The Company has complied with all the requirements of Clause 49 (II)
(A) of the Listing Agreement relating to the composition of the Audit
Committee.
During the financial year 2014-2015, (4) four meetings of the Audit
Committee were held on the 28.05.2014, 14.08.2014, 14.11.2014 and
14.02.2015.
The details of the composition of the Committee and attendance of the
members at the meetings are given below:
Name Designation Category No. of No. of
meetings meetings
held attended
Mr. K. Srinivas Rao Chairman NED (I) 4 4
Mr. M.V.S. Ramesh Member NED (I) 4 4
Varma
Mr. N. Satyavathi* Member NED (P) 4 Apptw.e.f.
30.03.2015
Mr. Madhusudan Raju @ Member NED (I) 4 4
* Appointed w.e.f. 30.03.2015
* Appointed as Managing Director w.e.f. 05.05.2015, resigned from the
committee
NED (I): Non Executive Independent Director
NED (P): Non Executive Director Promoter
NOMINATION & REMUNERATION COMMITTEE:
The details of composition of the Committee are given below:
Name Designation Category No. of No. of
meetings meetings
held attended
Mr. K.Srinivas Rao Chairman NED (I) 1 1
Mr. M.V.S. Ramesh Member NED (I) 1 1
Varma
Mrs. N. Satyavathi Member NED (I) 1 1
NED (I): Non Executive Independent Director
Terms of reference:
The main term of reference of the Committee is to approve the
fixation/revision of remuneration of the Managing Director/Whole Time
Director of the Company and while approving:
* To take into account the financial position of the Company, trend in
the industry, appointee's qualification, experience, past performance,
past remuneration etc.
* To bring out objectivity in determining the remuneration package
while striking a balance between the interest of the Company and the
Shareholders.
Remuneration Policy:
The objectives of the remuneration policy are to motivate Directors to
excel in their performance, recognize their contribution and retain
talent in the organization and reward merit.
The remuneration levels are governed by industry pattern,
qualifications and experience of the Directors, responsibilities
shouldered, individual performance etc.
No remuneration has been paid to any of the Directors of the Company.
The details of remuneration paid to the Executive
Directors/Non-Executive Director for the financial year 2014-15 are
given below:
Name of the directors Salary Other Commission
Perquisites
and allowances
K.S. Rao 9,68,359 Nil Nil
STAKEHOLDER RELATIONSHIP COMMITTEE (SHAREHOLDERS/INVESTOR GRIEVANCE AND
SHARE TRANSFER COMMITTEE):
A. Composition:
The Details of composition of the Committee are given below:
Name Designation Category
Mr. K. Srinivas Rao Chairman NED (I)
Mr. M.V.S. Ramesh Varma Member NED (I)
Mr. N. Satyavathi* Member NED (I)
Mr. Madhusudan Raju @ Member NED (P)
* Appointed w.e.f. 30.03.2015
* Appointed as Managing Director w.e.f. 05.05.2015, resigned from the
committee
NED (I): Non Executive Independent Director
B. Powers:
The Committee has been delegated with the following powers:
* to redress shareholder and investor complaints relating to transfer
of shares, Dematerialization of Shares, non-receipt of Annual Reports,
non-receipt of declared dividend and other allied complaints.
* to approve, transfer, transmission, and issue of duplicate / fresh
share certificate(s)
* Consolidate and sub-division of share certificates etc.
* To redress, approve and dispose off any, other complaints,
transactions and requests 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 to the Registrar and Share Transfer Agents, who
process share transfers within a week of lodgment in the case of shares
held in physical form.
RISK MANAGEMENT COMMITTEE
A. Composition:
The Details of composition of the Committee are given below:
Name Designation Category
Mr. K. Srinivas Rao Chairman NED (I)
Mr. M.V.S. Ramesh Varma Member NED (I)
Mr. M. Madhusudan Raju Member ED (P)
NED (I) : Non Executive Independent Director
ED(P) Executive Director (Promoter)
Role and Responsibilities of the Committee includes the following:
* Framing of Risk Management Plan and Policy
* Overseeing implementation of Risk Management Plan and Policy
* Monitoring of Risk Management Plan and Policy
* Validating the process of risk management
* Validating the procedure for Risk minimization.
* Periodically reviewing and evaluating the Risk Management Policy and
practices with respect to risk assessment and risk management
processes.
* Continually obtaining reasonable assurance from management that all
known and emerging risks have been identified and mitigated or managed.
9. VIGIL MECHANISM:
Vigil Mechanism Policy has been established by the Company for
directors and employees to report genuine concerns pursuant to the
provisions of section 177(9) & (10) of the Companies Act, 2013. The
same has been placed on the website of the Company.
10. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Sec. 134(5) of the Companies Act, 2013
the Board of Directors hereby confirms that:
a. In the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
b. The Directors have selected such accounting policies and applied
them consistently and made judgment 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 and
loss of the Company for that period;
c. The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the Assets of
the Company and for preventing and detecting fraud and other
irregularities;
d. The Directors have prepared the Annual accounts on a going concern
basis.
e. The Directors of the Company had laid down internal financial
controls and such internal financial controls are adequate and were
operating effectively.
f. The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
11. STATUTORY COMPLIANCE:
The Company has complied with the required provisions relating to
statutory compliance with regard to the affairs of the Company in all
respects.
12. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF
THE SUBSIDIARIES / ASSOCIATES/ JOINT VENTURES:
The Particulars of subsidiary first proviso to sub-section (3) of
section 129 read with rule 5 of Companies (Accounts) Rules, 2014 in
Form AOC- 1 as ANNEXURE - III.
13. EXTRACT OF ANNUAL RETURN:
As required pursuant to section 92(3) of the Companies Act, 2013 and
rule 12(1) of the Companies (Management and Administration) Rules,
2014, an extract of annual return in MGT 9 as a part of this Annual
Report ANNEXURE- I.
14. AUDITORS:
M/s. M M REDDY & CO., Statutory Auditors of the company retire at the
ensuing annual general meeting and are eligible for reappointment. As
required under the provisions of Section 139 of the Companies Act,
2013, the Company has received a written consent from the auditors to
their re- appointment and a certificate to the effect that their
re-appointment, if made, would be in accordance with the Companies Act,
2013 and the rules framed there under and that they have satisfied the
criteria provided in Section 141 of the Companies Act, 2013.
The Board recommends the re-appointment of M/s. M M REDDY & CO., as the
statutory auditors of the Company from the conclusion of this Annual
General meeting till the conclusion of the next Annual General Meeting.
15. INTERNAL AUDIT:
M/s. Penmetsa & Associates, Chartered Accountants, Vishakhapatnam are
the Internal Auditors of the Company.
16. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 134(3)(f) & Section 204 of the
Companies Act, 2013, Secretarial audit report as provided by M/s. S.
Sarveswar Reddy, Practicing Company Secretary is annexed to this Report
as annexure.
17. AUDIT REPORTS:
The Board has duly reviewed the Statutory Auditor's Report on the
Accounts for the year ended March 31, 2015 and given explanations in
Notes to Accounts annexed to Balance Sheet.
However, the Board decided to further strengthen the existing system
and procedures to meet all kinds of challenges associated with the
business.
The Board has duly reviewed the Secretarial Audit Report on the
Compliances according to the provisions of section 204 of the Companies
Act 2013, and noted is at the same that there is no company secretary
appointed during the year in the company but the company is taking
necessary measures to appoint the same at the earliest.
18. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The required information as per Sec. 134(3)(m) of the Companies Act
2013 is provided hereunder:
A. Conservation of Energy
Your company's operations are not energy intensive. Adequate measures
have been taken to conserve energy wherever possible by using energy
efficient computers and purchase of energy efficient equipment.
B. Technology Absorption (Rs. Lakhs)
1. Research and Development (R&D) : Nil
2. Technology absorption, adoption and innovation : Nil
C. Foreign Exchange Earnings and Out Go (Rs. Lakhs)
Foreign Exchange Earnings : 51.20
Foreign Exchange Outgo : Nil
19. DETAILS RELATING TO DEPOSITS, COVERING THE FOLLOWING:
Your 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) Rules 2014, during the financial year under
review.
20. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:
During the period under review there were no significant and material
orders passed by the regulators or Courts or Tribunals impacting the
going concern status and the company's operations in future.
21. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:
Your Company has well established procedures for internal control
across its various locations, commensurate with its size and
operations. The organization is adequately staffed with qualified and
experienced personnel for implementing and monitoring the internal
control environment. The internal audit function is adequately
resourced commensurate with the operations of the Company and reports
to the Audit Committee of the Board.
22. INSURANCE:
The properties and assets of your Company are adequately insured.
23. PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS:
The company has not given loans.
24. CREDIT & GUARANTEE FACILITIES:
The Company has been availing facilities of Credit and Guarantee as and
when required, for the business of the Company, from State Bank of
India.
25. RISK MANAGEMENT POLICY:
The Risk Management Committee constitutes for the purpose will ensure
all required measures shall be in place for better compliance.
26. CORPORATE SOCIAL RESPONSIBILTY POLICY:
Since your 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 year, section 135 of the Companies
Act, 2013 relating to Corporate Social Responsibility is not applicable
and accordingly the Company need not adopt any Corporate Social
Responsibility Policy.
27. RELATED PARTY TRANSACTIONS:
The Particulars of Contracts or Arrangements with Related parties
referred to in Section 188(1) in Form AOC- 2 as ANNEXURE - IV.
28. FORMAL ANNUAL EVALUATION:
As per section 149 of the Companies Act, 2013 read with clause VII (1)
of the schedule IV and rules made there under, the independent
directors of the company had a meeting on 30.03.2015 without attendance
of non- independent directors and members of management. In the meeting
the following issues were taken up:
(a) Review of the performance of non-independent directors and the
Board as a whole;
(b) Review of the performance of the Chairperson of the company, taking
into account the views of executive directors and non-executive
directors;
(c) Assessing the quality, quantity and timeliness of flow of
information between the company management and the Board that is
necessary for the Board to effectively and reasonably perform their
duties.
The meeting also reviewed and evaluated the performance of non-
independent directors.
The meeting also reviewed and evaluated the performance the Board as
whole in terms of the following aspects:
* Preparedness for Board/Committee meetings
* Attendance at the Board/Committee meetings
* Guidance on corporate strategy, risk policy, corporate performance
and overseeing acquisitions and disinvestments.
* Monitoring the effectiveness of the company's governance practices
* Ensuring a transparent board nomination process with the diversity of
experience, knowledge, perspective in the Board.
* Ensuring the integrity of the company's accounting and financial
reporting systems, including the independent audit, and that
appropriate systems of control are in place, in particular, systems for
financial and operational control and compliance with the law and
relevant standards.
It was noted that the Board Meetings have been conducted with the
issuance of proper notice and circulation of the agenda of the meeting
with the relevant notes thereon.
29. DISCLOSURE ABOUT COST AUDIT:
Cost Audit is not applicable to your Company.
30. RATIO OF REMUNERATION TO EACH DIRECTOR:
Under section 197(12) of the Companies Act, 2013, and Rule 5(1)(2) &
(3) of the Companies(Appointment & Remuneration) Rules, 2014,
remuneration of Rs. 9,68,359/- has been paid to Mr. K. S. Rao, Director
of the Company who has been retired from the company.
31. LISTING WITH STOCK EXCHANGES:
The Company is listed with Ahmedabad Stock Exchange Ltd. and BSE Ltd.
and the Company confirms that it has paid the Annual Listing Fees where
the Company's Shares are listed.
32. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:
Since the paid up capital of the Company is less than Rs. 10 Crores and
Net worth of the Company is less than Rs. 25 Crores, Corporate
Governance is Not Applicable.
33. 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 disclosures is not required.
34. SECRETARIAL STANDARDS:
EVENT BASED DISCLOSURES:
1. Issue of sweat equity share: NA
2. Issue of shares with differential rights: NA
3. Issue of shares under employees stock option scheme: NA
4. Disclosure on purchase by company or giving of loans by it for
purchase of its shares: NA
5. Buy back shares: NA
6. Disclosure about revision: NA
35. EMPLOYEE RELATIONS:
Your Directors are pleased to record their sincere appreciation of the
contribution by the staff at all levels in the Company.
None of the employees is drawing Rs. 5,00,000/- and above per month or
Rs.60,00,000/- and above in aggregate per annum, the limits prescribed
under Section 134 of the Companies Act, 2013.
36. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION. PROHIBITION AND REDRESSAL) ACT. 2013.
The Company has in place an Anti Sexual Harassment Policy in line with
the requirements of The Sexual Harassment of Women at workplace
(Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint
Committee (ICC) has been set up to redress complaints received
regarding sexual harassment. All employees are covered under this
policy.
The following is the summary of sexual harassment complaints received
and disposed during the calendar year.
No. of complaints received : Nil
No. of complaints disposed off : Nil
37. ACKNOWLEDGEMENTS:
Your Directors also wish to place on record their appreciation of
business constituents, banks and other financial institutions and
shareholders of the Company like SEBI, BSE, ASE, NSDL, CDSL, SBI etc.
for their continued support for the growth of the Company.
For and on behalf of the Board
For Infronics Systems Limited
Sd/-
M. Madhu Sudan Raju
Place: Hyderabad Managing Director
Date: 14.08.2015 DIN: 00471678
Mar 31, 2014
Dear Members,
We have pleasure in presenting the 14th Annual Report with Audited
Statements of Accounts for the year ended 31st March 2014.
FINANCIAL HIGHLIGHTS FOR THE YEAR 2013-14:
On standalone basis
(Rupees in Lakhs)
Particulars 2013-14 2012-13
Income
* Software Development Services 909.37 2179.57
* Other Income 21.18 21.30
Total Income 930.55 2200.87
Expenditure 752.86 2189.66
Depreciation 351.68 348.71
Profit before Tax (173.99) (337.50)
Less: Provision for tax (including fringe
benefit tax and deferred tax) (38.53) (127.24)
Profit / (Loss) after Tax (135.46) (210.26)
On Consolidated basis (Rupees in Lakhs)
Particulars 2012-13 2012-13
Income
* Software Development Services 1064.18 2182.83
* Other Income 21.18 21.30
Total Income 1085.36 2204.12
Expenditure 907.52 2192.56
Depreciation 351.69 (337.14)
Profit before Tax (173.85)
Less: Provision for tax (including fringe
benefit tax and deferred tax) (38.41) (127.21)
Profit / (Loss) after Tax (135.44) (209.93)
PERFORMANCE REVIEW:
During the year under review the Company has generated a Total Income
of Rs.930.55 Lakhs and reported net loss of Rs. 135.46 Lakhs on
Stand-alone basis against total income of Rs. 2200.87 Lakhs and net
loss of Rs. 210.26 Lakhs for the previous financial year 2012-13.
The Company on consolidated basis generated a total inome of Rs.
1085.36 Lakhs and reported a net loss of Rs.135.44 Lakhs against Total
Income of Rs. 2204.12 lakhs and net loss of Rs.209.93 Lakhs.
DIVIDEND:
Your Directors have expressed inability to recommend dividend for the
year.
PUBLIC DEPOSITS:
Your Company has not accepted any deposits falling within the meaning
of Sec.58A of the Companies Act, 1956 read with the Companies
(Acceptance of Deposits) Rules, during the financial year under review.
LISTING/TRADING:
The equity shares of your company are listed on BSE Limited and
Ahmedabad Stock Exchange Limited.
CAPITAL OF THE COMPANY:
The authorized capital of the company is Rs.11,00,00,000. The paid up
capital of the company stands at Rs. 7,92,64,615/- divided into
1,58,52,923 equity shares of Rs.5 each.
SUBSIDIARY COMPANY:
Presently the company is having one subsidiary i.e. Infronics Inc. in
USA.
INSURANCE:
The company''s properties have been adequately insured against major
risks. All the insurable interests of your Company including
inventories, buildings, plant and machinery and liabilities under
legislative enactments are adequately insured.
DIRECTORS:
In accordance with the Companies Act, 1956 read with Articles of
Association of the company the Director namely Mr. M. Madhusudan Raju
retires by rotation and is eligible for re-appointment. Your Board
recommends the re-appointment of the Director.
Pursuant to the notification of Sec. 149 and other applicable
provisions of Companies Act, 2013, your Directors are seeking
appointment of Mr. K. Srinivasa Rao and Mr. M. V. S. Ramesh Varma as
Independent Directors for five consecutive years for a term upto 31st
March, 2019. Details of the proposal for appointment of Mr. K.
Srinivasa Rao and Mr. M. V. S. Ramesh Varma are mentioned in the
Explanatory Statement under Section 102 of Companies Act, 2013 of the
Notice of 14th Annual General Meeting.
In pursuance of Section 217(2AA) of the Companies Amendment Act, 2000
your directors confirm
i) That the directors in the preparation of the annual accounts the
applicable accounting standards have been followed along with proper
explanations relating to material departures.
ii) That 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.
iii) That the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safe guarding the assets of the company and
for preventing and deleting fraud and other irregularities.
iv) That the directors had prepared the annual accounts on the going
concern basis.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
EARNINGS AND OUT GO :
The required information as per Sec.217 (1) (e) of the Companies Act
1956 is provided hereunder:
A. Conservation of Energy:
Your Company''s operations are not energy intensive. Adequate measures
have been taken to conserve energy wherever possible by using energy
efficient computers and
purchase of energy 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. 71.39 Lakhs
Foreign Exchange Outgo : Rs. 8.05 Lakhs
PARTICULARS OF EMPLOYEES:
There is no employee who is falling under section 217 (2A). Therefore,
the disclosures required to be made under section 217 (2A) of the
Companies Act, 1956 and the rules made there under are not applicable.
CODE OF CONDUCT:
The Code of conduct has been circulated to all the members of the Board
and Senior Management and the compliance of the same has been affirmed
by them. A declaration signed by the Managing Director is given in
Annexure.
AUDITORS:
Your directors recommend the appointment of M/s. M REDDY & CO, as
statutory auditors to hold office until the conclusion of the next
Annual General Meeting of the company.
CORPORATE GOVERNANCE:
As a listed company, necessary measures have been taken to comply with
the listing agreements of Stock Exchanges. A report on Corporate
Governance, along with a certificate of compliance from the Auditors,
Forms part of this Report as Annexure.
MANAGEMENT DISCUSSION AND ANALYSIS:
A detailed review of operations, performance and future outlook of your
Company and its businesses is given in the Management Discussion and
Analysis, which forms part of this Report.
ACKNOWLEDGEMENTS:
Your directors would like to express their grateful appreciation for
assistance and co- operation received from clients, banks, investors,
Government, other statutory authorities and all others associated with
the company. Your directors also wish to place on record their deep
sense of appreciation for the excellent contribution made by the
employees at all levels, which enabled the company to achieve sustained
growth in the operational performance during the year under review.
For and on behalf of the Board of
Infronics Systems Limited
Sd/-
K. Sambasiva Rao
Place: Hyderabad Managing Director
Date: 14.08.2014 (DIN : 01363257)
Mar 31, 2013
The have pleasure in presenting the 13th Annual Report with Audited
Statements of Accounts for the year ended 31st March 2013.
FINANCIAL HIGHLIGHTS FOR THE YEAR 2012-13:
On standalone basis
(Rupees in Lakhs)
Particulars 2012-13 2011-12
Income
-Software Development Services 2179.57 4639.96
-Other Income 21.30 36.74
Total Income 2200.87 4676.70
Expenditure 2189.66 3976.72
Depreciation 348.71 321.53
Profit before Tax (337.50) 368.84
Less: Provision for tax
(including fringe
benefit tax and deferred tax) (127.24) 130.95
Profit / (Loss) after Tax (210.26) 237.89
On Consolidated basis (Rupees in Lakhs)
Particulars 2012-13 2011-12
Income
-Software Development Services 2182.83 4639.96
-Other Income 21.30 36.74
Total Income 2204.12 4676.70
Expenditure 2192.56 3978.54
Depreciation (337.14) 321.53
Profit before Tax 367.03
Less: Provision for tax
(including fringe
benefit tax and deferred tax) (127.21) 130.95
Profit / (Loss) after Tax (209.93) 236.08
PERFORMANCE REVIEW:
During the year under review the Company has earned a Total Income of
Rs. 2200.87 lakhs on Stand-alone basis and Rs. 2204.12 lakhs on
consolidated basis against the company has incurred the Loss of Rs.
210.26 lakhs on stand-alone basis and Rs. 209.93 lakhs on consolidated
basis.
DIVIDEND:
Your Directors have expressed inability to recommend dividend for the
year.
PUBLIC DEPOSITS:
Your Company has not accepted any deposits falling within the meaning
of Sec.58A of the Companies Act, 1956 read with the Companies
(Acceptance of Deposits) Rules, during the financial year under review.
LISTING:
The equity shares of your company are listed on the Ahmedabad Stock
Exchange and are being traded on IndoNext Model of BSE.
CAPITAL OF THE COMPANY:
The authorized capital of the company is Rs.11,00,00,000. The paid up
capital of the company stands at Rs. 7,92,64,615/- divided into
1,58,52,923 equity shares of Rs.5 each.
SUBSIDIARY COMPANY:
Presently the company is having one subsidiary i.e. Infronics Inc. in
USA.
INSURANCE:
The company''s properties have been adequately insured against major
risks. All the insurable interests of your Company including
inventories, buildings, plant and machinery and liabilities under
legislative enactments are adequately insured.
DIRECTORS:
In accordance with the Companies Act, 1956 read with Articles of
Association of the company the Director namely Mr. M. Madhusudan Raju
retires by rotation and is eligible for re-appointment. Your Board
recommends the re appointment of the Director mentioned above in the
best interests of the company.
During the year, Mr. D.V. Raju, Mr. N. Natarajan and Mr. A. Laxmanana
Mohan resigned from the Board. The Board placed on record its sincere
appreciation for the valuable services rendered by them during their
tenure as Directors of the Company.
During the year, Mr. K. Srinivas Rao and Mr. M.V.S. Ramesh Varma were
appointed as additional directors w.e.f. 13.8.2013.
DIRECTORS'' RESPONSIBILITY STATEMENT:
In pursuance of Section 217(2AA) of the Companies Amendment Act, 2000
your directors confirm
i) That the directors in the preparation of the annual accounts the
applicable accounting standards have been followed along with proper
explanations relating to material departures.
ii) That 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.
iii) That the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safe guarding the assets of the company and
for preventing and deleting fraud and other irregularities.
iv) That the directors had prepared the annual accounts on the going
concern basis.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
EARNINGS AND OUT GO :
The required information as per Sec.217 (1) (e) of the Companies Act
1956 is provided hereunder:
A. Conservation of Energy:
Your Company''s operations are not energy intensive. Adequate measures
have been taken to conserve energy wherever possible by using energy
efficient computers and purchase of energy 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. 1044.10 Lakhs
Foreign Exchange Outgo : Rs. 35.09 Lakhs
PARTICULARS OF EMPLOYEES:
There is no employee who is falling under section 217 (2A). Therefore,
the disclosures required to be made under section 217 (2A) of the
Companies Act, 1956 and the rules made there under are not applicable.
CODE OF CONDUCT:
The Code of conduct has been circulated to all the members of the Board
and Senior Management and the compliance of the same has been affirmed
by them. A declaration signed by the Managing Director is given in
Annexure.
AUDITORS:
Your directors recommend the appointment of M/s. Ramana Reddy &
Associates, as statutory auditors to hold office until the conclusion
of the next Annual General Meeting of the company.
CORPORATE GOVERNANCE:
As a listed company, necessary measures have been taken to comply with
the listing agreements of Stock Exchanges. A report on Corporate
Governance, along with a certificate of compliance from the Auditors,
Forms part of this Report as Annexure.
MANAGEMENT DISCUSSION AND ANALYSIS:
A detailed review of operations, performance and future outlook of your
Company and its businesses is given in the Management Discussion and
Analysis, which forms part of this Report.
ACKNOWLEDGEMENTS:
Your directors would like to express their grateful appreciation for
assistance and co-operation received from clients, banks, investors,
Government, other statutory authorities and all others associated with
the company. Your directors also wish to place on record their deep
sense of appreciation for the excellent contribution made by the
employees at all levels, which enabled the company to achieve sustained
growth in the operational performance during the year under review.
DECLARATION BY MANAGING DIRECTOR OF AFFIRMATION BY DIRECTORS AND SENIOR
MANAGEMENT PERSONNEL OF COMPLIANCE WITH THE CODE OF CONDUCT:
The shareholders
I, K. Sambasiva Rao, Managing Director of the Company do hereby declare
that the directors and senior management of the Company have exercised
their authority and powers and discharged their duties and functions in
accordance with the requirements of the code of conduct as prescribed
by the company and have adhered to the provisions of the same.
For and on behalf of the Board of
Infronics Systems Limited
Sd/-
Place: Hyderabad K. Sambasiva Rao
Date: 13.08.2013 Managing Director
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