To the Members
The Board of Directors (the Board) hereby submits the report on thebusiness and operations of Infinite Computer Solutions (India) Limited (theCompany) along with the Audited Financial Statements (standalone and consolidated)for the financial year ended March 312019.
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 highlightsfor 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 ||30563.00 ||28002.37 |
|Total Expenses ||28805.79 ||26233.18 |
|Total Income before Tax & Depreciation ||1757.21 ||1769.19 |
|Depreciation ||352.40 ||343.61 |
|Profit/(Loss) before Tax (PBT) ||1404.81 ||1425.58 |
|Profit/(Loss) after Tax (PAT) ||1012.91 ||1116.99 |
| || ||Rs. in Million |
|Particulars ||Year ended March 31 2019 ||Year ended March 31 2018 |
|Total Sales and Income ||4935.27 ||4302.61 |
|Total Expenses ||4117.01 ||3289.74 |
|Total Income before Tax & Depreciation ||818.26 ||1012.87 |
|Depreciation ||116.23 ||122.29 |
|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.. 30563 Million which wasincreased by 9.14 % in comparison to the previous year. Net Profit before tax wasRs..1404.81 Million (previous yearRs.. 1425.58 Million) and Net Profit after tax wasRs..1012.91 Million (previous yearRs.. 1116.99 Million) which decreased by 9.32% over theprevious year.
On standalone basis the revenue for FY 2018-19 wasRs.. 4935.27 Million (previousyearRs.. 4302.61 Million). Profit before tax wasRs.. 702.03 Million and Net Profit aftertax wasRs.. 559.51 Million.
CHANGES IN THE NATUREOF BUSINESS
During the financial year ended March 312019 there has been no material change in thenature of the business of the Company.
The Authorized Capital of the Company as on March 312019 wasRs.. 500 million dividedinto 50000000 (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.. 333.56million divided into 33355514/- (Thirty-Three Million Three Hundred Fifty-Five ThousandFive 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 anystock option or equity shares with differential voting rights.
In order to conserve resources and keeping in view future strategic initiatives theBoard has not recommended any dividend on the Equity Sharesforthe FYended March 312019.
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 ofthe Companies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014 duringthe year under review.
The Company has 21 wholly owned subsidiaries (including 7 overseas) as on March312019. There has been no material change in the nature of the business of thesubsidiaries.
Additional investments as applicable have been adequately disclosed in the FinancialStatements.
The annual accounts of the subsidiary companies are available for inspection to theMembers at the registered office of the Company. A copy of the same shall be provided to amember upon request.
Pursuant to the provisions of Section 129(3) of the Act a statement containing thesalient features of financial statements of the Company's subsidiaries in Form AOC-1 formsa 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 withrelevant rules thereto the extract of Annual Return of the Company for the financial yearended March 312019 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 Companyat the following link: www.infinite.com/investors.
As on March 312019 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 passingspecial resolution via Postal Ballot the results of which were declared on March 09 2018and 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 boththe Stock Exchanges (BSE & NSE) for voluntary delisting of equity shares. Pursuant toin-principle approval the Promoter Group Companies namely MC Data Services PrivateLimited and Inswell IT Application Services Private Limited (collectivelyAcquirers) had made a Public Announcement (PA) on October 04 2018to the Public Shareholders of the Company in respect of their intention for acquisition of8344478 equity shares of face value Rs.. 10 each (Equity Shares)representing 25.02% of the total paid up equity share capital of the Company andconsequent voluntary delisting of the equity shares of the Company from BSE and NSEpursuant to the provisions of SEBI (Delisting of Equity Shares) Regulations 2009(SEBI Delisting Regulations). Upon this the Letter of Offer alongwith theBidding Form were sent to all public shareholders whose names appeared in the register ofthe Company or Depository as on the date specified in the PA. The shareholders were giventhe opportunity to tender their shares by submitting their bids during the bidding periodwhich remained open from October 112018 to October 172018 pursuant to the Reverse BookBuilding (RBB) Process. Post Bidding Period the Discovered Price (price atwhich the Promoter Group shareholding reached at 90%) came out to beRs.. 480/- per equityshare in terms of the SEBI Delisting Regulations. The Acquirers had accepted thediscovered price of Rs.. 480/-as the final price (Exit Price) for the delisting offer andmade 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 andNSE for discontinuation in trading and delisting of the equity shares of the Company. Asper the notifications the Company's shares became delisted w.e.f. December 212018 fromboth the Stock Exchanges (BSE & NSE) in India.
Delisting means that the Equity Shares of the Company cannot be traded on the StockExchanges and a liquid market for trading of the Equity Shares will no longer beavailable.
You directors believe that the above delisting apart from providing exit opportunity tothe public shareholders would result in enhancing the operational flexibility (owing tomore control); saving in compliance costs with more focus on Company's business in future.
Ongoing Exit Opportunity for Shareholders
Upon delisting in accordance with the SEBI Delisting Regulations the Acquirers havegiven an Exit Opportunity to the Remaining Public Shareholders of the Company who did notor were not able to participate in the RBB Process or who unsuccessfully tendered theirEquity Shares in the RBB Process to tender their equity shares for a period of one yearfrom 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 theAcquirer to all the Remaining Public Shareholders mentioning the terms and conditions andthe procedure for tendering equity shares under the Exit Offer. In case any shareholderhas not received the Exit LOO he/she may download the same from Company's website or maysend an email request to the Company's Registrar and Transfer Agent firstname.lastname@example.org or to the Company at email@example.com to provide the sa me.
The shareholders who desire to participate in the Exit Offer must note that the ExitOffer isopen until December 202019 only and therefore they should take all the necessarysteps 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: May302018 July 022018 August 142018 September 11 2018September 272018 November142018and February 142019.
The maximum interval between any two meetings did not exceed 120 days as prescribedunder 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 NRCPolicy are:
a. The NRC Policy prescribes the criteria for determining qualifications competenciespositive attributes and independence for the appointment of a Director(executive/non-executive) Key Managerial Personnel (KMP) Senior Managementand other Employees.
b. The NRC Policy states the procedure determining the tenure of Director KMP SeniorManagement and other Employees and also for removal and retirement of them.
c. The NRC Policy prescribes the criteria for determining their remuneration ofDirectors KMP Senior Management and other Employees.
d. The NRC Policy mentions the criteria for evaluation of performance of Independentand Non-Independent Directors and Executive Directors.
e. The Board of Directors may review and amend the NRC Policy upon recommendations fromthe Nomination & Remuneration Committee.
There have been no changes done to the NRC Policy during the last financial year. TheNRC 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 theCompany due to his unforeseen death on December 312018.
b. Mr. Ravindra RTuraga was re-appointed as Independent Director for the second termeffective April 012019 upto 31 March 2024. The appointment was approved by theshareholders vide postal ballot concluded on March 272019.
c. Mr. Sanjeev Gulati Chief Financial Officer was appointed as Additional Director onthe Board w.e.f. February 14 2019. The Board further appointed Mr. Sanjeev Gulati asWhole Time Director and designated him as a 'Director and Chief Financial Officer' subjectto the approval of shareholders at the ensuing Annual General Meeting (AGM).The resolutions seeking shareholders' approval for his appointment as Director and asWhole 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.SanjayGovil being the longest serving member on the Board and who is liable to retire at thisAGM being eligible seeks re-appointment. The Board recommends his re-appointment and theresolution seeking shareholders' approval for his re-appointment forms part of the Noticeof the ensuing AGM.
e. The first term of Mr. Ashok Kumar Garg Independent Director is going to conclude onNovember 122019. The Directors recommend for re-appointment of Mr. Ashok Kumar Gargfor asecond term. A resolution seeking shareholders' approval for his appointment forms a partof 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. May31 2018. To fill the position the Board appointed Mr.Saurabh Madaan as Company Secretaryeffective September 112018.
During the year under review the non-executive directors of the Company had nopecuniary relationship or transactions with the Company other than sitting fees andreimbursement of expenses incurred by them for the purpose of attending meetings of theBoard/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 312019 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 confirmingthat they meet the criteria of Independence as provided under the provisions of the Actand the Rules framed thereunder.
COMMITTEES of the BOARD
As on March 31 2019 the Board had four committees Audit Committee Nomination andRemuneration Committee Corporate Social Responsibility Committee and StakeholdersRelationship Committee.
As on March 312019 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 dueto his death on December 31 2018. The Company Secretary acts as the Secretary to theAudit Committee.
The Committee works in accordance with the terms of reference as stipulated by theBoard in accordance with the provisions of the Companies Act 2013. During the year theBoard 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 theprovisions of Rule 5(2) of Chapter XIII viz. The Companies (Appointment and Remunerationof 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 confirmthat:
a. in the preparation of the annual accounts for the financial year ended March312019 the applicable accounting standards have been followed along with properexplanation relating to material departures;
b. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit and loss of the Company for that period;
c. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. they have prepared the annual accounts of the Company for the Financial Year endedon March 312019 on a going concern basis;
e. they have devised proper systems to ensure compliance with the provisions of allapplicable 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 adequatefinancial controls as per the provisions of section 134 of the Companies Act 2013. TheBoard has laid down policies and processes in respect of internal financial controls andensures the controls to be adequate and operating efficiently.
These controls cover the policies and procedures adopted by the Company for ensuringthe orderly and efficient conduct of its business including adherence to the Company'spolicies safeguarding of its assets of the Company prevention and detection of itsfrauds and errors accuracy and completeness of accounting records and timely preparationof reliable financial information.
The Company has an internal control system commensurate with the size scale andcomplexity of its operation. The scope and authority of the Internal Audit function isclearly defined by the Audit Committee of the Board. To maintain its objectivity andindependence the Internal Audit function reports to the Chairman of the Audit Committee.The Internal Auditors monitors and evaluates the efficacy and adequacy of internal controlsystem of the company its compliance with applicable laws/regulations accountingprocedures and policies. Based on the report of the Internal Auditors corrective actionis undertaken and thereby strengthen the controls. Significant audit observations andaction 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 theStatutory Auditors of your Company in the AGM held on September 28 2017 for a term offive years until the conclusion of the Twenty Third AGM of the Company to be held in theyear 2022. The requirement to place the matter relating to appointment of auditors forratification by members at every AGM has been done away by the Companies (Amendment) Act2017 with effect from May 7 2018. Accordingly no resolution has been proposed forratification of appointment of statutory auditors at the ensuing AGM.
The Auditors' Report read along with notes to accounts is self-explanatory andtherefore does not call for further comments. The Auditors' Report does not contain anyqualification reservation or adverse remark.
Your Company had appointed M/s. BMP & Co. LLP (LLPIN: AAI-4194) CompanySecretaries Bangalore to conduct Secretarial Audit of your Company for the financial year2018-19.
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 asprescribed under the provisions of Section 148(1) of the Companies Act 2013 are notapplicable for the business activities carried out by the Company.
RISK MANAGEMENT POLICY
The Company has established a Risk Management Policy which sets out the Company'sprinciples and processes with regard to identification analysis and management ofapplicable 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 andmonitored.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
In terms of the provisions of the Companies Act 2013 the Company has constituted aCSR Committee comprising of majority of Independent Directors. Your Company has adoptedCSR Policy as a tool for sustainable growth of the society. The brief outline of the CSRPolicy of the Company and the initiatives undertaken by the Company on CSR activitiesduring the year under review are set out in Annexure D of this report in the formatprescribed 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 followingevaluations were carried out:
a. The members of Nomination and Remuneration Committee carried outannual evaluation ofeach Director's performance;
b. The Board of Directors in the meeting carried out an annual evaluation of the BoardCommittees; and
c. In a separate meeting the Independent Directors carried out evaluation ofperformance of Non-Independent Directors i.e. Executive Directors the Board as a wholeand the Chairman of the Company.
The evaluation process was based on the criteria mentioned in the given questionnaireswhich set the broad parameters for appraisal of each Director the Board and itsCommittees. The detailed questionnaires are designed in such a way to keep different pointof views for each evaluation.
RELATED PARTY TRANSACTIONS
During the year under review transactions entered into with related parties during thefinancial year were in the ordinary course of business and at arms' length basis and wereapproved by the Audit Committee. The particulars of contracts or arrangements with relatedparties as referred to in section 188(1) of the Companies Act 2013 in the prescribed FormAOC-2 is appended at Annexure E to the Board's Report.
The detailed disclosure on related parties and transactions done with them during theyear forms part of Notes to the financial statements.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
The particulars of Loans Guarantees or Investments under section 186 of the CompaniesAct 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 ProtectionFund Authority (Accounting Audit Transfer and Refund) Rules 2016 (the IEPFRules) requires the Companies to transfer dividend that has remained unclaimed fora period of seven years from the unpaid dividend account to the IEPF. Further the IEPFRules requires that the shares on which dividend has not been paid or claimed for sevenconsecutive 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 amountof FY 2011-12 of Rs.. 115653/-to IEPF.
The Company sends periodic intimation to the shareholders advising them to lodge theirclaims with respect to unclaimed dividends. The details of dividend transferred to theIEPF so far is given below:
| || || || ||Amount in |
|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 ||98082 |
|2011-12 ||Interim Dividend ||November 9 2011 ||December 31 2018 ||115653 |
Shareholders may note that both the unclaimed dividend and corresponding sharestransferred to IEPF including all benefits accruing on such shares if any can beclaimed from IEPF following the procedure prescribed in the Rules. No claim shall lie inrespect thereof with the Company.
Further the below table mentions the list of dividends which shall be eligible to betransferred 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 haveoccurred between the end of the financial year of the Company to which the financialstatements 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 orTribunals 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 theCompany to conserve energy on a perpetual basis include ensuring procurement of energysaving devices and systems. The endeavor is to identify opportunities for energy saving inthe areas like airconditioning systems indoor environment quality improvement electricalsystems fire-fighting systems data centers etc. For water conservation the Companyfollows the approach of rainwater harvesting which helps the environment to augment thecapacity to recharge the ground water.
The Company does not have any technical collaboration arrangements with any businesspartners; 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 ||2371.8(5 ||2391.21 |
|Expenditure in foreign currency ||124.98 ||114.89 |
The Company has complied with applicable mandatory Secretarial Standards issued by theInstitute of Company Secretaries of India.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company has established a vigil mechanism and formulated a Whistle Blower Policyas perthe provisions of section 177 of the Companies Act 2013. The policy provides theframework and processes through which the employees and Directors can express theirgenuine concerns. It also provides adequate safeguards against victimization of employeesand Directors against any kind of discrimination harassment or any unfair practice beingadopted against them.
During the year under review no employee was denied access to the Chairman of theAudit Committee. No complaints were received under Vigil Mechanism & Whistle BlowerPolicyduringthefinancialyear2018-19.
The Whistle Blower Policy as adopted by the Company can be accessed through thefollowing 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 sexualharassment at workplace and has a duly constituted Internal Complaints Committee in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 (the Act) and the Rules thereunder. TheCompany is committed to provide and promote safe healthy and congenial atmosphereirrespective of gender caste creed or social class of the employees. During the yearthe Company did not receive any complaints under thesaid Act.
The Statutory Auditors of the Company have not reported incident related to fraudduring the financial year to the Audit Committee or Board of Directors undersection143(12) of the Companies Act 2013.
Your Directors place on record their sincere thanks to our clients partners vendorsbankers business associates consultants and various Government Authorities for theircontinued support extended to your Company during the year under review. Your Directorsalso acknowledge the grateful support and confidence of the shareholders reposed in theCompany and look forward the same in the future.
|For and on behalf of the Board of Directors || |
|Sd/- ||Sd/- |
|Upinder Zutshi ||Ravindra RamaraoTuraga |
|Managing Director & CEO ||Director |
|DIN: 01734121 ||DIN: 01687662 |
|Rockville USA ||Gurugram |