I extend a warm Greetings to all of you and your family members as I present the annualreport and accounts for the Financial Year 2016-17. This is the second annual report ofyour Company post listing of your Company's shares on Indian stock exchanges.
It is indeed a great satisfaction to find that your Company has made a significantprogress and grown larger in revenues and profits. The Company for quadrupling the profitssince last year enabling us to generate accruals.
In the fast-growing e-commerce industry your Company operates a unique business modeland earns revenue and profits from twin platforms; viz. the e-commerce infrastructureservices to merchants and digital market place for consumers.
1. The Service platform is called as Infibeam Web Services [IWS] where your Companyprovides cloud based e-commerce platform related ancillary services digital paymentsolutions along with complete delivery fulfilment infrastructure to the merchants andbrands for their e-commerce business requirements
2. The Product platform is called as infibeam.com a multi-category online shoppingstore for the consumers to buy merchandise through multi-channel online platforms It is amatter of great satisfaction to find that Infibeam is the only e-commerce company in Indiaproviding global e-commerce trade experience to some of the large Indian and Internationalcompanies. The improvement in digital infrastructure combined with growing consumerconfidence towards online transactions augurs well for the e-commerce sector. let mereview some of the key achievements with you.
Financial Performance for consolidated revenues and profits the Financial Year2016-17 (FY17) grew by 31% and 396% to Rs 4413 million and Rs 435 millionrespectively over the previous year despite the temporary disruption caused by thedemonetisation reflected poorly on the cash-on-delivery (CoD) business model our revenuehas grown at a CAGr of 28% over the last five years beginning FY12 our profits after taxhas increased to Rs 435 million in FY17 as against Rs 88 million in FY 16 our revenue andprofits have significantly increased due to our increasing focus on the Services (IWS)segment that generates nearly above 50% EBITDA margins and has grown at a CAGr of 100% inthe last five years and currently contributes 36% to total revenues in FY17 from 4% inFY12 year on year uroperating cash to Rs 593.2 million
During the year your Company significantly strengthened presence in the local as wellas global markets.
I am happy to find your Company making successful inroads into the international marketthrough our prestigious associations with companies like Saudi Telecom Company (MEnAregion) and Sears (uSA) who have signed up our platform to grow their business
We entered into an Mou with Il&FS Township & urban Assets limited forundertaking and implementing projects in digital space and e-commerce for CentralGovernment various State
Governments and Private Partners
The Company has also been awarded a prestigious contract by Government of India todesign develop and implement Government e-marketplace (GeM) We have also receivedconfirmation from the Government of Gujarat Delhi Sikkim and Maharashtra to provide aunique & Verified Digital Identity Platform (Digital Services)on the .ooo global top level domain (gTlD) with authorised and secured digitalwallets for citizens residing in those states We signed an Mou with Gujarat Co-operativeMilk Marketing Federation ltd. (GCMMF) for developing online and mobile' framework.We are operational at multiple locations in Gujarat since 2nd half of the year and theprogress has been extremely encouraging
I would now like to draw your attention to key corporate actions in FY17 showcasing ourlong-term growth and sustainability.
We have acquired stake and filed to merge Avenues (India) Pvt ltd (CCAvenue) thatoperates payment gateway services. CCAvenue enjoys 85% of the payments so aggregated inthe country for over 100000 merchants
In FinTech stream of digital commerce CCAvenue is the largest transaction processingcompany with volume exceeding Rs 120 billion and growing above 70% CAGr since FY2015 likeInfibeam CCAvenue is also a profitable company in the FinTech segment
Combined with IWS CCAvenue payment platform will result in an integrated servicesplatform to merchants enabling your Company to tap the immense potential in digitalpayments both in India and globally
This is a strategic investment by us to gain an access to the growing digital paymentsindustry. This will also allow us its to offer a complete e-commerce solution to themerchants globally
I am thankful to you for your consent and approval of merger of CCAvenue withInfibeamwhich you gave to the board of your Company
During the year we have also acquired DrC Systems specialising in customised systemintegrations and developing ErP-related solutions for merchants used in e-commercebusiness. DrC System is a profit-making entity and will to deliver digital solutions toour customers
Following are some of the major milestones achieved by your Company in FY17
Incorporation Mr. Vishal Mehta Managing Director Infibeam limited wasconferred with B. H. Jajoo AMA outstanding I.T. Entrepreneur of the Year Award on May 262017 Infibeam nIFTY Alpha 50 Index. nIFTY Alpha 50 Index aims to measure the performanceof securities listed on nSE with high alphas;it is a well-diversified 50 stock index inFutures and on March 31 2017 Infibeam options segment of national Stock Exchange of Indialtd. (nSE) Morgan Stanley India Domestic Index (MSCI) a leading provider of benchmarkindices globally have added Infibeam 6 companies recent-companies listing; Infibeam hasbeen included in the list which has been effective from November 30 2016
From August 26 2016 Infibeam has been a part of S&P BSE 500 Index
IPO Proceeds Update
Setting up of cloud data centre and purchase of property for setting up registeredand corporate office of our Company: The Company has executed the Transfer Deed andtaken possession of GIFT Two building in GIFT City as per the agreed payment terms inprospectus. We are planning to move to GIFT City anytime during the third quarter of thecurrent financial year.
Setting up of Logistics Centre: The Company has plans to expand acrossadditional 75 centres within the next 3 years at an estimated capital cost of Rs 375million. The investment is expected to result into cost efficiencies revenue fromservices. The Company has started the investment by identifying locations with moreclarity coming under the GST.
The Company will report further progress on Capex incurred on quarterly basis under theterms stated in prospectus.
Purchase of Software: The Company has initiated work towards Mobile Ad frameworkand the software is expected to be purchased and put to use in a phase wise manner over aperiod of next 12 months. The Company will be reporting the progress in successivequarters.
General Corporate Purpose: As stated in prospectus the IPo & Advertisementexpenses have been incurred and accounted for in the full year Financial statement ofMarch 31 2016. The Company through its fully owned subsidiary made an investment inCCAvenues as a part of long term strategy.
A combined cash balance in books duly increased under the in their contributionscoming from earned profits 2017 stands at Rs 3067 million.
I would like to acknowledge the efforts made by the Management Team of your Company andproducing profitable financial performance achieving landmarks beyond targets. I wouldalso like to thank all our investors and bankers for believing in our potential. I wouldalso like to thank all our customers merchants suppliers service providers and eachemployees of your Company for their continued support.
We will continue exploring newer opportunities to offer our unique web-based servicesand technology infrastructure and power digital enterprise of our customers and add valueto each of our stakeholders associated with us. And more importantly I thank you ourshareholders for trusting us with your investments.
Chairman Infibeam Incorporation limited