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InfoBeans Technologies Ltd.

BSE: 532560 Sector: IT
NSE: INFOBEAN ISIN Code: INE344S01016
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InfoBeans Technologies Ltd. (INFOBEAN) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 7th Annual Report of your Company(‘the company’ or ‘InfoBeans’) along with the audited financialstatements for the financial year ended March 31 2017. The consolidated performance ofthe company and its subsidiaries has been referred to wherever required."

Results of our operations

(In Rs.)

Particulars Standalone Consolidated
2017 2016 2017 2016
Total Revenue 685900990 620601787 844454122 744006934
Total Expenses 564776515 468756093 716819506 595687458
Profit or Loss before Tax 121124475 151845694 127936791 148319476
Less:
1. Current Tax 26150000 33500000 26336644 33704693
2. Deferred Tax (4510121) (1784462) (4510121) (1891923)
3. Earlier Year Tax (429338) 378484 (429338) 378484
4. MAT Credit Entitlement (28431162) (15858905) (28431162) (15858905)
5.CSR 2043000 1383500 2043000 1383500
Profit or Loss After Tax 126302096 134227077 132927768 130603627
Earning Per Equity Share (EPS)
(1) Basic 7.15 7.59 7.52 7.39
(2) Diluted 7.15 7.59 7.52 7.39

Operating Performance

Total revenue from operations at Rs. 84.48 crore for the year ended March 31 2017 asagainst Rs. 74.40 crore for the corresponding previous period an increase of 13.5%mainly on account of increase revenues from new technologies.

The staff expenses for the financial year ended March 31 2017 were Rs 54.27 crore asagainst Rs. 41.70 crore for the corresponding previous period an increase of 30.5%.

The other expenses for the financial year ended March 31 2017 were Rs. 14.48 crore asagainst Rs 15.19 crore for the corresponding previous period a decrease of 4.7%.

The EBIDTA (earnings before interest depreciation and tax) was Rs. 15.53 crore for theyear ended March 31 2017 as against Rs. 17.37 crore for the corresponding previousperiod a decline of 10.6%.

The depreciation for the financial year ended March 31 2017 was Rs. 2.88 crore asagainst Rs. 2.67 crore for the corresponding previous period an increase of 7.9%.

The interest for the financial year ended March 31 2017 was Rs. 0.05 crore as againstRs. 0.01 crore for the corresponding previous period.

The EBIT (earnings before interest and tax) were Rs. 12.65 crore for the year endedMarch 31 2017 as against Rs. 14.7 crore for the corresponding previous period.

The EPS (Earning Per Share) for the financial year ended March 31 2017 was Rs. 7.52for a face value of Rs 10 per share as against Rs. 7.39 for the corresponding previousperiod.

Consolidated Financial Statements

As per Regulation 33 of the Securities and Exchange Board of India(Listing Obligationsand Disclosure Requirements) Regulations2015 (hereinafter referred to as "ListingRegulations") and applicable provisions of the Companies Act 2013 read with theRules issued there under the Consolidated Financial Statements of the Company for thefinancial year 2016-17 have been prepared in compliance with applicable AccountingStandards and on the basis of audited financial statements of the Companyits subsidiariesand associate companies as approved by the respective Board of Directors.

The Consolidated Financial Statements together with the Auditors’ Report form partof this Annual Report.

Subsidiaries

A separate statement containing the salient features of financial statements of allsubsidiaries of the Company forms a part of consolidated financial statements incompliance with Section 129 and other applicable provisions if any of the Companies Act2013. In accordance with Section 136 of the Companies Act 2013 the financial statementsof the subsidiary and associate companies are available for inspection by the members atthe Registered Office of the Company during business hours on all days except SaturdaysSundays and public holidays upto the date of the Annual General Meeting (‘AGM’).

Any member desirous of obtaining a copy of the said financial statements may write tothe Company Secretary at the Registered Office of the Company. The financial statementsincluding the consolidated financial statements financial statements of subsidiaries andall other documents required to be attached to this report have been uploaded on thewebsite of the Company(http://www.infobeans.com/wp-content/uploads/2015/12/Policy-on-Material-Subsidiary.pdf).TheCompany has formulated a policy for determining material subsidiaries. The policy may beaccessed on the website of the Company.

Dividend

During the financial year 2016-17 the Company declared and paid to the shareholdersan interim dividend of Rs 0.15/- per fully paid up equity share of Rs 10/- each for thequarter ended December 31 2016.

Changed the Registrar and Transfer Agent of the company

The Company has changed the Registrar and share transfer agent from Ankit ConsultancyPrivate Limited to Link Intime India Private Limited for the financial year 2016-17 TheBoard of Directors of the Company at their meeting held on 11th February 2017 hadapproved the appointment of Link Intime India Private Limited as the Registrar andTransfer Agent with effect from 1st April 2017. The company has restrained AnkitConsultancy Private Limited from conducting Registrar & Transfer Agent activities.

Management’s Discussion and Analysis Report

Management Discussion and Analysis forms an integral part of this report is annexed asAnnexure IX which gives details of the overall industry structure economic developmentsperformance and state of affairs of the Company’s various businesses.

Report On Corporate Governance

In compliance with Regulation 34 of the Listing Regulations a separate report onCorporate Governance along with a certificate from the Auditors on its compliance forms anintegral part of this report is annexed as an Annexure X.

Annual Return

The details forming part of the extract of the Annual Return as on 31st March 2017 inForm MGT - 9 in accordance with

Section 92 (3) of the Companies Act 2013 read with Companies (Management andAdministration) Rules 2014 are set out in the Annexure I to this report.

Directors Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm that:

a) In the preparation of the annual accounts for the year ended March 31st 2017 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31st 2017 and of the profitof the Company for the year ended on that date;

c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

Internal Financial Controls and Their Adequacy

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants and the reviews performed by management andthe relevant board committees including the audit committee the board is of the opinionthat the Company’s internal financial controls were adequate and effective during thefinancial year 2016-17.

Directors and Key Managerial Person

During the Year under review the following changes occurred in the position ofDirectors/KMPs of the Company.

In compliance with the provisions of Sections 149152 read with Schedule IV and allother applicable provisions of the Companies Act 2013 and the Companies (Appointment andQualification of Directors) Rules 2014 (including any statutory modification(s) orre-enactment thereof for the time being in force) and SEBI (LODR) Regulation 2015 thecomposition of Board of Directors and Key Managerial Personnel are as follows:-

S.No. Key Managerial Person Name DIN/ PAN Designation
1. Siddharth Sethi # 01548305 Managing Director
2. Mitesh Bohra 01567885 Whole time Director
3. Avinash Sethi 01548292 Director cum Chief Financial Officer
4. Sumer Bahadur Singh @ 07514667 Non-Executive Independent Director
5. Santosh Muchhal 00645172 Non-Executive Independent Director
6. Shilpa Saboo 06454413 Non-Executive Independent Director
7. Trapti Jain * BARPJ7361K Company Secretary
8. Nitisha Pareek $ BQSPP3620G Company Secretary

# Appointment of Mr. Siddharth Sethi (DIN: 01548305) who retires by rotation and beingeligible has offered himself for re-appointment be and is hereby re-appointed as adirector of the company liable to retire by rotation.

@Mr. Sumer Bahadur Singh is appointed as the Additional Director of the company witheffect from 22nd December 2016 subject to approval of Shareholders in the upcoming AnnualGeneral Meeting of the company.

*Ms. Trapti Jain was resigned from the post of Company Secretary of the company witheffect from 21st August 2017.

$ Ms. Nitisha Pareek was appointed as a Company Secretary of the company with effectfrom 21st August 2017.

As per the provisions of the Companies Act 2013 Independent Directors are required tobe appointed for a term of five consecutive years but shall be eligible for reappointmenton passing of a special resolution by the Company and shall not be liable to retire byrotation. Therefore Mr. Santosh Muchhal Ms. Shilpa Saboo Mr. Sumer Bahadur SinghDirectors of the Company was appointed as Non-Executive Independent Director of theCompany to hold office for the period of 5 years. The Company has received declarationsfrom all the Independent Directors confirming that each of them meets the criteria ofindependence as prescribed under Section 149(6) of the Companies Act 2013 and per SEBI(LODR) Regulations 2015.

In the Meeting of the Members of the Company held on 28th February 2015 Mr. SiddharthSethi is appointed as the Managing Director of the Company for a period of three yearswith effect from 20th February 2015 to 19th February 2018. Further the board found thatMr. Avinash Sethi being capable of becoming Chief Financial Officer of the Companytherefore he is appointed as the Chief Financial Officer of the Company with effect from20th February2015.

Declaration By Independent Directors

The Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions of theCompanies Act 2013 read with the Schedules and Rules issued there under as well asRegulation 16 of Listing Regulations (including any statutory modification(s) orre-enactment(s) thereof for the time being in force).

Meetings of the Board of Directors

The following Meetings of the Board of Directors were held during the Financial Year2016-17:

SN Date of Meeting Board Strength No. of Directors Present
1. 12/04/2016 6 4
2. 30/05/2016 6 3
3. 06/09/2016 6 3
4. 22/12/2016 7 6
5. 11/02/2017 6 6
6. 02/03/2017 6 4
7. 11/03/2017 6 3
8. 28/03/2017 6 4

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 read with the rules issued thereunder Regulation 17(10) of the Listing Regulations and the circular issued by SEBI dated5th January 2017 with respect to Guidance Note on Board Evaluation the evaluation of theannual performance of the Directors/Board/Committees was carried out for the financialyear 2016-17.

The following are some of the broad issues that are considered in performanceevaluation:

Criteria for evaluation of Board and its Committees:

• Setting up of performance objectives and performance against them

• Board’s contribution to the growth of the Company

• Whether composition of the Board and its Committees is appropriate with theright mix of knowledge and skills sufficient to maximize performance in the light offuture strategy

• Board’s ability to respond to crisis

• Board communication with the management team

• Flow of quality information to the Board

Criteria for evaluation of Independent Directors

1. Demonstrates willingness to devote time and effort to understand the Company and itsbusiness

2. Demonstrates knowledge of the sector in which the Company operates

3. Quality and value of their contributions at board meetings

4. Contribution to development of strategy and risk management policy

5. Effective and proactive follow up on their areas of concern

Criteria for evaluation of Non-Independent Directors

1. Knowledge of industry issues and exhibition of diligence in leading the organization

2. Level of attendance at the Board and Committee meetings where he is a member

3. Effectiveness in working with the Board of Directors to achieve the desired results

4. Providing direction and support to the Board regarding its fiduciary obligations andgovernance role

5. Providing well-balanced information and clear recommendations to the Board as itestablishes new policies.

Nomination and Remuneration Policy

The board of directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by Securities and Exchange Board of India("SEBI") under SEBI (LODR) Regulation 2015.

The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc. The Board and the Nomination and RemunerationCommittee ("NRC") reviewed the performance of the individual directors on thebasis of the criteria such as the contribution of the individual director to the Board andcommittee meetings. In addition the Chairman was also evaluated on the key aspects of hisroleis annexed herewith marked as Annexure VII to this Report

In a separate meeting of independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent Directors at which the performance of the Board its committees andindividual directors was also discussed.

Auditors and Audit report

The Company’s Auditors M/s. Prakash S. Jain & Co. Chartered Accountants whoare the statutory auditors of the Company hold office till the conclusion of theforthcoming AGM and being eligible have consented and offered themselves forre-appointment. Pursuant to the provisions of section 139 of the Companies Act 2013 andthe Rules framed thereunder it is proposed to appoint M/s. Prakash S. Jain & Co.Chartered Accountants as statutory auditors of the Company from the conclusion of theforthcoming AGM till the conclusion of the AGM to be held in the year 2020 subject toratification of their appointment at every AGM.

The Company has received written consent(s) and certificate(s) of eligibility inaccordance with Sections 139 141 and other applicable provisions of the Companies Act2013 and Rules issued thereunder (including any statutory modification(s) orre-enactment(s) thereof for the time being in force) from Prakash S. Jain & Co..Further M/s. Prakash S. Jain & Co. Chartered Accountants have confirmed that theyhold a valid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India as required under the Listing Regulations.

The Auditor’s Report for the fiscal year 2017 does not contain any qualificationreservation or adverse mark. The Auditors report is enclosed with financial statements inthis annual report for your kind perusal and information.

Secretarial Auditor’s Report

The Board has appointed CS Manish Maheswari Proprietor of M.Maheshwari&AssociatesPractising Company Secretary to conduct Secretarial Audit for the financial year 2016-17The Secretarial Audit Report for the financial year ended March 31 2017 is annexedherewith marked as Annexure II to this Report. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.

Board Committee

Pursuant to Section 178 of the Companies Act 2013 Company had constituted thefollowing Board Committees:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders Relationship Committee; and

The composition of all Committees has been stated under Corporate Governance Reportforms an integral part of Annual Report.

Subsidiaries Joint Ventures And Associate Companies

We along with our subsidiaries and group companies provide consulting technologyoutsourcing and next generation services we have two subsidiaries.

During the year the Board of Directors (‘the Board’) reviewed the affairs ofthe subsidiaries. In accordance with Section 129(3) of the Companies Act 2013 we haveprepared consolidated financial statements of the Company and all its subsidiaries whichform part of the Annual Report. Further a statement containing the salient features ofthe financial statement of our subsidiaries in the prescribed format AOC-1 is appended asAnnexure III to the Board's report.

The statement also provides the details of performance financial positions of each ofthe subsidiaries.

In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on our websitewww.infobeans.com

These documents will also be available for inspection during business hours at ourregistered office in Indore India.

During the year investments were made in the following subsidiaries / associate:

• InfoBeans Technologies DMCC

• InfoBeans Technologies Europe GmbH

• InfoBeans INC

• InfoBeans IT City Private Limited

Particulars of Employees

In accordance with the provisions of Section 197 (12) of the Companies Act 2013("the Act") read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 in respect of employees of the Company will be providedupon request. In terms of Section 136 of the Act the Report and Accounts are being sentto the members and others entitled thereto excluding the information on employees’particulars which is available for inspection by the members at the Registered Office ofthe Company during business hours on working days of the Company up to the date of theensuing AGM. If any member is interested in obtaining a copy thereof such member maywrite to the Company Secretary of the Company in this regard.

Particulars of Loans Guarantees or and Investments

Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the Financial Statement.

Disclosure Requirements

• As per the Provisions of the SEBI (LODR) Regulation 2015 entered into with thestock exchanges corporate governance report with auditor’s certificate thereon andmanagement discussion and analysis are attached which form part of this report.

• Details of the familiarization programme of the independent directors areavailable on the website of the Companyhttp://www.infobeans.com/wp-content/uploads/2015/12/Familiarization-Programme-of-Independent-Director.pdf

• The Company has formulated and published a Whistle Blower Policy to provideVigil Mechanism for employees including directors of the Company to report genuineconcerns. The provisions of this policy are in line with the provisions of the Section177(9) of the Act; the whistle blowing Policy is available on the company’s websiteat http://www.infobeans.com/wp-content/uploads/2015/12/Whistle-Blower-Policy.pdf

Disclosure under the Sexual Harassment of Women at Workplace (Prevention andRedressal) Act 2013

InfoBeans is committed to provide the healthy environment to all its employees thecompany has in place a Prevention of the Sexual Harassment Policy and an Internalcomplaints committee as per the requirements of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 The policy aims at educating employeeson conduct that constitute sexual harassment ways and means to prevent occurrence of anysuch incident and the mechanism for dealing with such incident and the mechanism fordealing with such incident in the unlikely event of its occurrence. The Company has alsoconstituted an Internal Committee as required under Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and rules made there under.

The Company has zero tolerance on Sexual Harassment at workplace. During the year underreview no complaints were received against the sexual harassment at workplace.

Related Party Transactions

During the financial year 2016-17 the Company entered into transactions with relatedparties as defined under Section 2 (76) of the Companies Act 2013 read with Companies(Specification of Definitions Details) Rules 2014 all of which were in the ordinarycourse of business and on arm’s length basis and in accordance with the provisions ofthe Companies Act 2013 read with the Rules issued there under and the ListingRegulations.

Further there were no transactions with related parties which qualify as materialtransactions under the Listing Regulations.

All transactions with related parties were reviewed and approved by the Audit Committeeand are in accordance with the Policy on Related Party Transactions formulated inaccordance with the provisions of Companies Act 2013 read with the Rules issued thereunder and the Listing Regulations.

Prior omnibus approvals are granted by the Audit Committee for related partytransactions which are of repetitive nature entered in the ordinary course of businessand are on arm’s length basis in accordance with the provisions of Companies Act2013 read with the Rules issued there under and the Listing Regulations. The details ofthe related party transactions as per Indian Accounting Standards (Ind AS) - 24 are setout in the Financial Statements of the Company.

The Form AOC - 2 pursuant to Section 134 (3) (h) of the Companies Act 2013 read withRule 8(2) of the Companies (Accounts) Rules 2014 is set out in the Annexure IV to thisreport.

Conservation Of Energy Technology Absorption

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is set out herewith as Annexure V to this Report.

Corporate Social Responsibility

The CSR initiatives of the Company were under the thrust areas of health & hygieneeducation water management and enhancement of vocational training.

The key objective of Kaleidoscope is to provide infrastructure support developmentoriented activities and events across health and education areas centered on schools andcommunities along with activate employee contribution and participation.

The Company’s CSR Policy statement and annual report on the CSR activitiesundertaken during the financial year ended 31st March 2017 in accordance with Section135 of the Companies Act 2013 and Companies (Corporate Social Responsibility Policy)Rules 2014 (including any statutory modification(s) or re-enactment(s) thereof for thetime being in force) is set out in the Annexure VI to this report.

Employee Stock Option Schemes

The Company established a scheme - InfoBeans Partnership Program in 2016 for grantingstock options to the eligible employees with a view to attracting and retaining the besttalent and encouraging employees to align individual performance with company objectivesand promoting increased participation by them in growth of the company. Each optionrepresenting one equity share of the company The scheme is governed by Employee StockOption Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amendedfrom time to time. The vesting period of stock options granted during the year shall beFive years. The stock options shall be exercisable within six months from the date ofvesting. As per the guidelines issued by the SEBI the excess of the market price of theunderlying equity shares as on the date of grant of option over the exercise price of theoption is to be recognized and amortized on a straight line basis over the vesting period.

The Shareholders of the company in the meeting held on 22nd July 2016 approved theallocation of originally approved 100 000/- stock options (Revised 350000 options dueto bonus) to the eligible employees of the company and its subsidiaries. The details ofthe 2015 plan including reference and the requirements specified under Regulations 14 ofSEBI (Share Based Employee Benefits) Regulations 2014.

The details of the employee stock options plan form part of the notes to account of thefinancial statements in this annual report.

Foreign Exchange Earnings and Outgo

We have established a Substantial direct marketing around the world including DubaiFrankfurt Tampa and Dublin. These offices are staffed with Sales and marketingspecialists who sell our services to large international clients.

Activity in foreign currency - Standalone (in Rs.)
Particulars 2017 2016
The Foreign Exchange earned in terms of actual inflows during the year; 661231773 600006600
z
And the Foreign Exchange outgo during the year in terms of actual outflows. 11497352 9831054

Risk Management

In today’s economic environment Risk Management is a very important part ofbusiness. The main aim of risk management is to identify monitor & take precautionarymeasures in respect of the events that may pose risks for the business. The Board &Audit Committee is responsible for reviewing the risk management plan and ensuring itseffectiveness. Major risks identified by the businesses and functions are systematicallyaddressed through mitigating actions on a continuing basis by keeping Risk ManagementReport before the Board & Audit Committee periodically.

Appreciation

Your Directors wish to express their grateful appreciation to the continuedco-operation received from the Banks Government Authorities Customers Vendors andShareholders during the year under review. Your Directors also wish to place on recordtheir deep sense of appreciation for the committed service of the Executives staff andworkers of the Company.

For & on behalf of the Board of Directors
Siddharth Sethi
Date: 21.08.2017 DIN: 01548305
Place Indore Chairman cum Managing Director