Infinite Computer Solutions India Ltd Directors Report.
To the Members,
The Board of Directors (the Board) hereby submits the report on the business and operations of Infinite Computer Solutions (India) Limited (the Company) along with the Audited Financial Statements (standalone and consolidated) for the financial year ended March 31,2019.
The financial statements of the Company are prepared in accordance with the Companies (Accounting Standards) Rules, 2006 notified under Section 133 of the Companies Act, 2013 (the Act) and other relevant provisions of the Act. The financial highlights for the year under review, compared with the previous financial year, are given below:
|Summary-Consolidated Financials||Rs. in Million|
|Particulars||Year ended March 31, 2019||Year ended March 31, 2018|
|Total Sales and Income||30,563.00||28,002.37|
|Total Income before Tax & Depreciation||1,757.21||1,769.19|
|Profit/(Loss) before Tax (PBT)||1,404.81||1,425.58|
|Profit/(Loss) after Tax (PAT)||1,012.91||1,116.99|
|Rs. in Million|
|Particulars||Year ended March 31, 2019||Year ended March 31, 2018|
|Total Sales and Income||4,935.27||4,302.61|
|Total Income before Tax & Depreciation||818.26||1,012.87|
|Profit/(Loss) before Tax (PBT)||702.03||890.58|
|Profit/(Loss) after Tax (PAT)||559.51||726.69|
On a consolidated basis, the revenue for FY 2018-19 was Rs.. 30,563 Million which was increased by 9.14 % in comparison to the previous year. Net Profit before tax wasRs.. 1,404.81 Million (previous yearRs.. 1425.58 Million) and Net Profit after tax wasRs.. 1,012.91 Million (previous yearRs.. 1,116.99 Million), which decreased by 9.32% over the previous year.
On standalone basis, the revenue for FY 2018-19 wasRs.. 4,935.27 Million (previous yearRs.. 4,302.61 Million). Profit before tax wasRs.. 702.03 Million and Net Profit after tax wasRs.. 559.51 Million.
CHANGES IN THE NATUREOF BUSINESS
During the financial year ended March 31,2019, there has been no material change in the nature of the business of the Company.
The Authorized Capital of the Company as on March 31,2019 wasRs.. 500 million divided into 50,000,000 (Fifty Million Only) Equity Shares of Rs.. 10 (RupeesTen only) each.
The Issued and Paid-up Capital of the Company as on March 31, 2019 stood atRs.. 333.56 million divided into 33,355,514/- (Thirty-Three Million Three Hundred Fifty-Five Thousand Five Hundred Fourteen Only) equity shares of Rs.. 10 (Rupees Ten only) each.
During the year under review, the Company has not issued any shares, nor granted any stock option or equity shares with differential voting rights.
In order to conserve resources and keeping in view future strategic initiatives, the Board has not recommended any dividend on the Equity Sharesforthe FYended March 31,2019.
TRANSFER TO GENERAL RESERVES
No amount is proposed to be transferred to the General Reserve.
Your Company has not accepted any deposits within the meaning of section 73 and 74 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year under review.
The Company has 21 wholly owned subsidiaries (including 7 overseas) as on March 31,2019. There has been no material change in the nature of the business of the subsidiaries.
Additional investments, as applicable, have been adequately disclosed in the Financial Statements.
The annual accounts of the subsidiary companies are available for inspection to the Members at the registered office of the Company. A copy of the same shall be provided to a member upon request.
Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Companys subsidiaries in Form AOC-1 forms a part of the financial statements of the Company.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of section 92(3) of the Companies Act, 2013 read with relevant rules thereto, the extract of Annual Return of the Company for the financial year ended March 31,2019 inform MGT-9 is provided as the Annexure A of this Annual Report.
The Annual Return of the Company will also be available on the website of the Company at the following link: www.infinite.com/investors.
As on March 31,2019, the Company does not have any associate or joint venture.
VOLUNTARY DELISTING OF EQUITYSHARES
Earlier, the shareholders of the Company had approved the delisting offer by passing special resolution via Postal Ballot, the results of which were declared on March 09, 2018 and notified to both the Stock Exchanges viz. National Stock Exchange of India Limited (NSE) and BSE Limited (BSE), on the same date.
During the year under review, your Company had received in-principle approval from both the Stock Exchanges (BSE & NSE), for voluntary delisting of equity shares. Pursuant to in-principle approval, the Promoter Group Companies namely MC Data Services Private Limited and Inswell IT Application Services Private Limited (collectively Acquirers) had made a Public Announcement (PA) on October 04, 2018 to the Public Shareholders of the Company in respect of their intention for acquisition of 8,344,478 equity shares of face value Rs.. 10 each (Equity Shares) representing 25.02% of the total paid up equity share capital of the Company and consequent voluntary delisting of the equity shares of the Company from BSE and NSE pursuant to the provisions of SEBI (Delisting of Equity Shares) Regulations, 2009 (SEBI Delisting Regulations). Upon this, the Letter of Offer alongwith the Bidding Form were sent to all public shareholders whose names appeared in the register of the Company or Depository as on the date specified in the PA. The shareholders were given the opportunity to tender their shares by submitting their bids during the bidding period which remained open from October 11,2018 to October 17,2018 pursuant to the Reverse Book Building (RBB) Process. Post Bidding Period, the Discovered Price (price at which the Promoter Group shareholding reached at 90%) came out to beRs.. 480/- per equity share in terms of the SEBI Delisting Regulations. The Acquirers had accepted the discovered price of Rs.. 480/-as the final price (Exit Price) for the delisting offer and made a PA in this regard.
Thereafter, upon filing of Final application with both the Stock Exchanges (BSE & NSE) for delisting of shares, the Company had received the notifications from the BSE and NSE, for discontinuation in trading and delisting of the equity shares of the Company. As per the notifications, the Companys shares became delisted w.e.f. December 21,2018 from both the Stock Exchanges (BSE & NSE) in India.
Delisting means that the Equity Shares of the Company cannot be traded on the Stock Exchanges and a liquid market for trading of the Equity Shares will no longer be available.
You directors believe that the above delisting apart from providing exit opportunity to the public shareholders, would result in enhancing the operational flexibility (owing to more control); saving in compliance costs with more focus on Companys business in future.
Ongoing Exit Opportunity for Shareholders
Upon delisting, in accordance with the SEBI Delisting Regulations, the Acquirers, have given an Exit Opportunity to the Remaining Public Shareholders of the Company who did not or were not able to participate in the RBB Process, or who unsuccessfully tendered their Equity Shares in the RBB Process, to tender their equity shares for a period of one year from the date of delisting at the Exit Price of Rs.. 480 per equity share.
For the purpose, an Exit Letter of Offer (Exit LOO) were sent by the Acquirer to all the Remaining Public Shareholders, mentioning the terms and conditions and the procedure for tendering equity shares under the Exit Offer. In case, any shareholder has not received the Exit LOO, he/she may download the same from Companys website or may send an email request to the Companys Registrar and Transfer Agent at email@example.com or to the Company at firstname.lastname@example.org to provide the sa me.
The shareholders who desire to participate in the Exit Offer must note that the Exit Offer isopen until December 20,2019 only and therefore they should take all the necessary steps to apply within this period only.
NUMBER OF MEETINGS of the BOARD
The Board met seven (7) times during the financial year on the following dates: May 30,2018, July 02,2018, August 14,2018, September 11, 2018,September 27,2018, November 14,2018and February 14,2019.
The maximum interval between any two meetings did not exceed 120 days, as prescribed under the Companies Act, 2013.
NOMINATION AND REMUNERATION POLICY
The Board has upon recommendation of the Nomination and Remuneration Committee framed a Nomination and Remuneration Policy (NRC Policy). The salient features of NRC Policy are:
a. The NRC Policy prescribes the criteria for determining qualifications, competencies, positive attributes and independence for the appointment of a Director (executive/non-executive), Key Managerial Personnel (KMP), Senior Management and other Employees.
b. The NRC Policy states the procedure determining the tenure of Director, KMP, Senior Management and other Employees and also for removal and retirement of them.
c. The NRC Policy prescribes the criteria for determining their remuneration of Directors, KMP, Senior Management and other Employees.
d. The NRC Policy mentions the criteria for evaluation of performance of Independent and Non-Independent Directors and Executive Directors.
e. The Board of Directors may review and amend the NRC Policy upon recommendations from the Nomination & Remuneration Committee.
There have been no changes done to the NRC Policy during the last financial year. The NRC Policy is also available on our website at http://www.infinite.com/ policies.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Following events have happened during the financial year under review till date:
a. Mr. Narendra Kumar Agrawal, Non-Executive Director ceased to be a Director of the Company due to his unforeseen death on December 31,2018.
b. Mr. Ravindra RTuraga, was re-appointed as Independent Director for the second term effective April 01,2019 upto 31 March 2024. The appointment was approved by the shareholders vide postal ballot concluded on March 27,2019.
c. Mr. Sanjeev Gulati, Chief Financial Officer, was appointed as Additional Director on the Board w.e.f. February 14, 2019. The Board further appointed Mr. Sanjeev Gulati as Whole Time Director and designated him as a Director and Chief Financial Officer subject to the approval of shareholders at the ensuing Annual General Meeting (AGM). The resolutions seeking shareholders approval for his appointment as Director and as Whole Time Director respectively forms a part of the Notice of the ensuing AGM.
d. As per the provisions of the Companies Act, 2013 (the Act), Mr.Sanjay Govil, being the longest serving member on the Board and who is liable to retire at this AGM, being eligible, seeks re-appointment. The Board recommends his re-appointment and the resolution seeking shareholders approval for his re-appointment forms part of the Notice of the ensuing AGM.
e. The first term of Mr. Ashok Kumar Garg, Independent Director is going to conclude on November 12,2019. The Directors recommend for re-appointment of Mr. Ashok Kumar Gargfor a second term. A resolution seeking shareholders approval for his appointment forms a part of the Notice of the ensuing AGM.
Changes in KMP
During the FY 2018-19, Mr. Rajesh Kumar Modi resigned as Company Secretary w.e.f. May 31, 2018. To fill the position, the Board appointed Mr.Saurabh Madaan as Company Secretary effective September 11,2018.
During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.
Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel (KMP) of the Company as on March 31,2019 were:
Mr. Upinder Zutshi, Chief Executive Officer and Managing Director,
Mr. Sanjeev Gulati, Director & Chief Financial Officer, and
Mr.Saurabh Madaan, Company Secretary.
Declaration of Independence
Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of Independence as provided under the provisions of the Act and the Rules framed thereunder.
COMMITTEES of the BOARD
As on March 31, 2019 the Board had four committees, Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders Relationship Committee.
As on March 31,2019 the Audit Committee comprised of 3 Independent Directors namely:
Mr. Ravindra RTuraga - Chairman;
During the year, Mr. Narendra Kumar Agrawal ceased to be a member of the Committee due to his death on December 31, 2018. The Company Secretary acts as the Secretary to the Audit Committee.
The Committee works in accordance with the terms of reference as stipulated by the Board in accordance with the provisions of the Companies Act, 2013. During the year, the Board accepted all recommendations made by the Audit Committee.
PARTICULARS OF EMPLOYEES
The information pursuant to section 197(12) of the Companies Act, 2013 read with the provisions of Rule 5(2) of Chapter XIII viz. The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided as Annexure B to this report.
DIRECTORS RESPONSIBILITY STATEMENT
In compliance with section 134(3)(c) of the Companies Act, 2013, your Directors confirm that:
a. in the preparation of the annual accounts for the financial year ended March 31,2019, the applicable accounting standards have been followed, along with proper explanation relating to material departures;
b. they have 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 and of the profit and loss of the Company for that period;
c. they 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. they have prepared the annual accounts of the Company for the Financial Year ended on March 31,2019 on a going concern basis;
e. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY
The Board of your Company is responsible for establishing and maintaining adequate financial controls as per the provisions of section 134 of the Companies Act, 2013. The Board has laid down policies and processes in respect of internal financial controls and ensures the controls to be adequate and operating efficiently.
These controls cover the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to the Companys policies, safeguarding of its assets of the Company, prevention and detection of its frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.
The Company has an internal control system, commensurate with the size, scale and complexity of its operation. The scope and authority of the Internal Audit function is clearly defined by the Audit Committee of the Board. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee. The Internal Auditors monitors and evaluates the efficacy and adequacy of internal control system of the company, its compliance with applicable laws/regulations, accounting procedures and policies. Based on the report of the Internal Auditors, corrective action is undertaken and thereby strengthen the controls. Significant audit observations and action plan are presented to the Audit Committee of the Board on quarterly basis.
AUDIT & AUDITORS REPORT
M/s. HDSG & Associates, Chartered Accountants, New Delhi were appointed as the Statutory Auditors of your Company in the AGM held on September 28, 2017 for a term of five years until the conclusion of the Twenty Third AGM of the Company to be held in the year 2022. The requirement to place the matter relating to appointment of auditors for ratification by members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018. Accordingly, no resolution has been proposed for ratification of appointment of statutory auditors at the ensuing AGM.
The Auditors Report read along with notes to accounts is self-explanatory and therefore does not call for further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.
Your Company had appointed M/s. BMP & Co. LLP (LLPIN: AAI-4194), Company Secretaries, Bangalore to conduct Secretarial Audit of your Company for the financial year 2018-19.
The Secretarial Audit Report is enclosed herewith as Annexure C to this Annual Report. It does not contain any adverse remarks or qualifications.
Cost Records and Cost Audit
Provisions related to maintenance of Cost Records and requirement of Cost Audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.
RISK MANAGEMENT POLICY
The Company has established a Risk Management Policy which sets out the Companys principles and processes with regard to identification, analysis and management of applicable risks. The Policy helps to identify, evaluate business risks and opportunities. The Policy mandates the ways in which respective risks are expected to be mitigated and monitored.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
In terms of the provisions of the Companies Act, 2013, the Company has constituted a CSR Committee comprising of majority of Independent Directors. Your Company has adopted CSR Policy as a tool for sustainable growth of the society. The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure D of this report in the format prescribed in the Companies (CorporateSocial Responsibility Policy) Rules, 2014.
PERFORMANCE EVALUATION of the BOARD, ITS COMMITTEES & DIRECTORS
During the year, pursuant to the provisions of the Companies Act, 2013, following evaluations were carried out:
a. The members of Nomination and Remuneration Committee carried outannual evaluation of each Directors performance;
b. The Board of Directors in the meeting carried out an annual evaluation of the Board Committees; and
c. In a separate meeting, the Independent Directors carried out evaluation of performance of Non-Independent Directors i.e. Executive Directors, the Board as a whole and the Chairman of the Company.
The evaluation process was based on the criteria mentioned in the given questionnaires, which set the broad parameters for appraisal of each Director, the Board and its Committees. The detailed questionnaires are designed in such a way to keep different point of views for each evaluation.
RELATED PARTY TRANSACTIONS
During the year under review, transactions entered into with related parties during the financial year were in the ordinary course of business and at arms length basis and were approved by the Audit Committee. The particulars of contracts or arrangements with related parties as referred to in section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended at Annexure E to the Boards Report.
The detailed disclosure on related parties and transactions done with them during the year forms part of Notes to the financial statements.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The particulars of Loans, Guarantees or Investments under section 186 of the Companies Act, 2013, have been disclosed in Notes to the financial statements.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Section 124 of the Companies Act, 2013, read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the IEPF Rules), requires the Companies to transfer dividend that has remained unclaimed for a period of seven years from the unpaid dividend account to the IEPF. Further, the IEPF Rules requires that the shares on which dividend has not been paid or claimed for seven consecutive years or more be transferred to the demat account of the IEPF Authority. During the year, the Company transferred the unclaimed and unpaid interim dividend amount of FY 2011-12 of Rs.. 1,15,653/-to IEPF.
The Company sends periodic intimation to the shareholders, advising them to lodge their claims with respect to unclaimed dividends. The details of dividend transferred to the IEPF, so far, is given below:
|FY||Type of Dividend||Date of declaration||Date of Transfer to IEPF||Amount transferred to IEPF|
|2010-11||Interim Dividend||November 2, 2010||December 13, 2017||98,082|
|2011-12||Interim Dividend||November 9, 2011||December 31, 2018||115,653|
Shareholders may note that both the unclaimed dividend and corresponding shares transferred to IEPF, including all benefits accruing on such shares, if any, can be claimed from IEPF following the procedure prescribed in the Rules. No claim shall lie in respect thereof with the Company.
Further, the below table mentions the list of dividends which shall be eligible to be transferred to IEPF on the below given dates:
|FY||Type of Dividend||Date of declaration||Due date of Transfer to IEPF|
|2011-12||Final Dividend||August 23, 2012||September 22, 2019|
|2012-13||Interim Dividend||November 9, 2012||December 9, 2019|
|2012-13||Final Dividend||August 30, 2013||September 29, 2020|
|2013-14||Interim Dividend||February 10, 2014||March 12, 2021|
|2013-14||Final Dividend||September 24, 2014||October 24, 2021|
MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There has been no material change in the nature of business of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGUALTORS
There were no significant/material orders passed by any of the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of Energy
The operations of the Company are not energy intensive. However, steps taken by the Company to conserve energy on a perpetual basis include ensuring procurement of energy saving devices and systems. The endeavor is to identify opportunities for energy saving in the areas like airconditioning systems, indoor environment quality improvement, electrical systems, fire-fighting systems, data centers etc. For water conservation, the Company follows the approach of rainwater harvesting which helps the environment to augment the capacity to recharge the ground water.
The Company does not have any technical collaboration arrangements with any business partners; the issue of absorption of such technologies, therefore, does not arise.
Foreign Exchange Earnings and Outgo
|Rs. in Million|
|Foreign Exchange earnings and outgo||FY 2018-19||FY 2017-18|
|Foreign exchange earnings||2,371.8(5||2391.21|
|Expenditure in foreign currency||124.98||114.89|
The Company has complied with applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company has established a vigil mechanism and formulated a Whistle Blower Policy as perthe provisions of section 177 of the Companies Act, 2013. The policy provides the framework and processes through which the employees and Directors can express their genuine concerns. It also provides adequate safeguards against victimization of employees and Directors against any kind of discrimination, harassment or any unfair practice being adopted against them.
During the year under review, no employee was denied access to the Chairman of the Audit Committee. No complaints were received under Vigil Mechanism & Whistle Blower Policyduringthefinancialyear2018-19.
The Whistle Blower Policy as adopted by the Company can be accessed through the following link: http://www.infmite.com/policies.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has in place, a policy on prevention, prohibition and redressal of sexual harassment at workplace and has a duly constituted Internal Complaints Committee in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the Act) and the Rules thereunder. The Company is committed to provide and promote safe, healthy and congenial atmosphere irrespective of gender, caste, creed or social class of the employees. During the year, the Company did not receive any complaints under thesaid Act.
The Statutory Auditors of the Company have not reported incident related to fraud during the financial year to the Audit Committee or Board of Directors undersection 143(12) of the Companies Act 2013.
Your Directors place on record their sincere thanks to our clients, partners, vendors, bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Company during the year under review. Your Directors also acknowledge the grateful support and confidence of the shareholders reposed in the Company and look forward the same in the future.
|For and on behalf of the Board of Directors|
|Upinder Zutshi||Ravindra RamaraoTuraga|
|Managing Director & CEO||Director|
|DIN: 01734121||DIN: 01687662|