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Directors Report of Infronics Systems Ltd.

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