The Board of Directors of your Company take pleasure in presenting theTwenty Fifth Annual Report on the business and operations of the Company together with theAudited Standalone & Consolidated Financial Statements and the Auditor's Reportthereon for the financial year ended March 31 2020.
Results of Operations
The results of operations for the year under review are given below:
(` in Million)
| ||Standalone ||Consolidated |
|Particulars ||FY 2020 ||FY 2019 ||FY 2020 ||FY 2019 |
|1. Net Revenue ||12726.95 ||10982.56 ||13119.30 ||11509.32 |
|2. Other Income ||876.18 ||1111.52 ||1044.65 ||1203.13 |
|3. Total Income (1+2) ||13603.13 ||12094.08 ||14163.95 ||12712.45 |
|Expenditure: || || || || |
|a) Network and other charges ||234.03 ||220.58 ||271.90 ||236.36 |
|b) Employees Cost ||5395.72 ||4586.39 ||5845.95 ||5099.43 |
|c) Advertising and Promotion Cost ||2044.21 ||1756.93 ||2062.87 ||1768.92 |
|d) Depreciation/Amortization ||413.78 ||203.80 ||477.41 ||221.41 |
|e) Cost of Material Consumed ||- ||- ||21.05 ||88.27 |
|f) Other Expenditure ||1025.68 ||1005.24 ||1191.30 ||1188.75 |
|4. Total expenditure ||9113.42 ||7772.94 ||9870.48 ||8603.14 |
|5. EBITDA(3-4+3d) ||4903.49 ||4524.94 ||4770.88 ||4330.72 |
|6. Finance Cost ||66.89 ||0.84 ||81.97 ||11.13 |
|7. Profit before tax and exceptional items (3-4-6) ||4422.82 ||4320.30 ||4211.50 ||4098.18 |
|8. Exceptional Item ||1232.95 ||334.08 ||(1821.06) ||(6165.80) |
|9. Net Profit before tax (7-8) ||3189.87 ||3986.22 ||6032.56 ||10263.98 |
|10. Tax Expense ||1133.22 ||1169.19 ||1199.86 ||1242.80 |
|11. Net Profit after tax (9-10) ||2056.65 ||2817.03 ||4832.70 ||9021.18 |
|12. Share of Profit/(Loss) Joint Ventures/Associate ||- ||- ||(7290.18) ||(3099.16) |
|13. Share of Minority interest in the losses of Subsidiary Companies ||- ||- ||81.25 ||114.61 |
|14. Other Comprehensive Income (including share of profit/(loss) of Joint Venture/Associate-Net of Tax ||(48.54) ||(22.28) ||(29.11) ||(30.66) |
|15. Total Comprehensive Income (11+12+13+14) ||2008.11 ||2794.75 ||(2405.34) ||6005.97 |
1. Financial review
STANDALONE FINANCIAL STATEMENTS
The annual Audited Standalone Financial Statements for the year havebeen prepared in accordance with the Companies (Indian Accounting Standards) Rules 2015(Ind-AS) prescribed under Section 133 of the Companies Act 2013 (the Act) and otherrecognized accounting practices and policies to the extent applicable.
Your Company derives its revenue from recruitment real estatematrimonial and education classifieds and related services and other income.
The Revenue from operations for FY 2020 increased by 15.9% to`12726.95 million from `10982.56 million for the FY 2019 primarily on account ofincreases in sales of services from recruitment solutions services real estate servicesas a result of increased subscription from new customers and from our existing customerssubscribing to higher priced packages. This increase was partly offset due to impact ofCOVID-19 in mid-March on our business.
The total income of the Company increased by 12.5% to `13603.13million for FY 2020 from `12094.08 million for FY 2019 on account of increase in ourrevenue from operations. The other income of the Company contributed `876.18 million tothe total income for FY 2020.
The total expenses for the year increased by 18.1% to `9180.31 millionfor the FY 2020 from `7773.78 million for the FY 2019 primarily on account of increasein employee benefit expenses higher spend on advertising and promotion costs anddepreciation and amortization expenses.
During the year under review there were exceptional loss items of`1232.95 million primarily on account of a provision for diminution in the carrying valueof investments in companies. Please refer the table below.
|Particulars ||March 31 2020 (`Mn) |
|Provision for diminution in carrying value of investment: || |
|-Startup Investments (Holding) Limited || |
|-Applect Learning Systems Private Limited || |
|-Smartweb Internet Services Limited || |
|-Allcheckdeals India Private Limited || |
|-Newinc Internet Services Private Limited || |
|-Interactive Visual Solutions Private Limited || |
|Reversal of diminution in carrying value of investment: || |
|-Naukri Internet Services Limited || |
|Total ||1232.95 |
Operating EBITDA for the year recorded an increase of around 18.0%over previous year and stood at `4027.31 million in comparison with `3413.42 million inFY 2019. Profit before tax (PBT) from ordinary activities (before exceptional items) is`4422.82 million in FY 2020 as against `4320.30 million in FY 2019.
Your Company has been maintaining a consistent & impressive trackrecord of dividend payment for past many years in line with its approved dividend policy.During the year under review as well the Board of Directors of the Company declared twointerim dividends as per following details.
|Type of Dividend ||Date of Declaration ||Record Date ||Rate of Dividend per share (face value `10 per share) ||% ||Total Payout (` Mn) |
|1st Interim Dividend ||November 12 2019 ||November 22 2019 ||`2.50 ||25 ||305.8 |
|2nd Interim Dividend ||February 12 2020 ||February 20 2020 ||`3.50 ||35 ||428.8 |
The Board has however not recommended any final dividend for FY 2020.Accordingly the 2 (two) Interim Dividends paid during the financial year as aforestatedaggregating to `6 per share are considered as the total dividend for FY 2020.
The total dividend pay-out (excluding Dividend Distribution tax) duringthe current year is `979.23 million (including final dividend for FY 2019) as against`671.34 million for the previous year. The amount of Dividend Distribution Tax paid by theCompany for the year is `198.59 million as compared to `138.03 million during the previousfinancial year. The Register of Members and Share Transfer Books of the Company shallremain closed from September 16 2020 to September 22 2020 for the purpose of the AnnualGeneral Meeting. The Annual General Meeting is scheduled to be held on September 22 2020.
TRANSFER TO RESERVES
The Company did not transfer any amount to reserves during the year.
During the year under review the Company issued & allotted 400000equity shares (200000 shares on June 13 2019 & 200000 shares on December 23 2019)at an issue price of `10 each to Info Edge Employees Stock Option Plan Trust. Pursuant tothe above allotment the issued & paid-up equity share capital of the Companyincreased to & stood as on March 31 2020 at `1225161590 divided into 122516159equity shares of `10/- each.
The fresh shares allotted as aforesaid have been duly listed on theStock Exchanges.
Further as part of its growth strategy to augment the long-termresources of the Company meeting fund requirements of its business activities and forgeneral corporate & other purposes the Board of Directors of your Company at itsmeeting held on the date of this report has approved the issuance of Equity Shares by wayof qualified institutions placement (QIP) for raising an amount upto `18750 million inaccordance with Chapter VI of the Securities and Exchange Board of India (Issue of Capitaland Disclosure Requirements) Regulations 2018. The proposed issuance of shares shall besubject to approval of the shareholders to be obtained by way of a postal ballot.
LISTING OF SHARES
The Company's shares are listed on BSE Ltd. (BSE) & NationalStock Exchange of India Ltd. (NSE) with effect from November 21 2006 post its initialpublic offering (IPO). The annual listing fees for the FY 2021 to BSE and NSE has beenpaid.
During the year under review your Company has not invited or acceptedany Deposits from the public/members pursuant to the provisions of Sections 73 and 76 ofthe Act read together with the Companies (Acceptance of Deposits) Rules 2014.
2. Operations Review
The Company is primarily in the business of internet based servicedelivery operating in four service verticals through various web portals in respectiveverticals namely recruitment solutions comprising primarily naukri. com other recruitmentrelated portals and ancillary services related to recruitment 99acres.com for real estaterelated services jeevansathi.com for matrimony related services and shiksha.com foreducation related services. The Board of Directors of the Company examines theCompany's performance both from a business & geographical perspective and hasaccordingly identified its business segments as the primary segments to monitor theirrespective performance on regular basis and therefore the same have been considered asreportable segments under Ind-AS 108 on Segment Reporting. The reportable segmentsrepresent "Recruitment Solutions" "99acres" and the"Others" segment which comprises Jeevansathi and Shiksha
service verticals since they individually do not meet the qualifyingcriteria for reportable segment as per the said Accounting Standard.
The recruitment solutions business is built around naukri.com andcomprises the www.naukri.com www. quadranglesearch.com www.naukrigulf.comwww.firstnaukri.com and Fast Forward-Candidate services. Recruitment Solutions which isthe Company's core business continued to deliver strong results in terms of growth inrevenues and profits with the flagship portal of the Company naukri.com continuing toremain the primary source of revenue and cash generation for the Company.
Recruitment Solutions has two major sources of revenue: (i) fromrecruiters which accounts for around 90% of revenues and (ii) from job seekers whichrelate to all job seeker advisory services.
During the year under review Recruitment Solutions grew by 15.4% from`7858.49 million in FY 2019 to `9067.60 million in FY 2020. Operating EBITDA fromRecruitment Solutions in FY 2020 was `5041.16 million as compared to `4295.33 million inFY 2019.
99acres.com derives its revenues from property listings builders'and brokers' branding and visibility through microsites home page links and bannersservicing real estate developers builders and brokers. With a share of around 50% oftraffic 99acres is the clear leader amongst major players in the market. While theCompany has established leadership in traffic share the business environment in the realestate market continues to be difficult. In fact in continuation with the past years thereal estate market remains sluggish and demand for new homes remains weak as also theunfinished projects and inventory overhang continues. This difficult situation has beenfurther perpetuated by the economic slowdown caused by COVID-19 pandemic.
During the year under review real estate business grew by 18.8% from`1919.64 million in FY 2019 to `2279.61 million in FY 2020. Operating EBITDA from realestate business stood at `84.02 million in FY 2020.
Your Company also provides matrimonial and education-based classifiedsand related services through its portals jeevansathi.com and shiksha.com respectively.These other business verticals of the Company have been gaining traction for some time andare able to create strong networks in a few geographies and communities across India.
While Jeevansathi offers a platform for free listing searching andexpressing interest for marriage its revenues are generated from payments to get contactinformation and certain value-added services. Jeevansathi has two-pronged strategic focus.On the one hand it is to cover specific communities to grow revenues. On the other handemphasis is being laid to convert the community already on the site to increase their useof paid services. In addition the Company has made a lot of effort in creating a worldclass experience for users on the mobile platform through its mobile site and app. Morethan 90% of users access jeevansathi.com from their mobiles which indicates userstickiness' and helps increase time on site and active user base. Further themultipronged advertising campaign undertaken by the Company over the last three years hasenabled us to strengthen our brand presence in prominent communities in Northern andWestern India. The Company has developed solid understanding of large metropolitan citieswithin these regions which helps to drive our traffic.
Within the online education classifieds space our Company provideseducational classifieds and related services through its website www.shiksha.com. Thewebsite provides prospective undergraduate and postgraduate students a platform where theycan research about various careers educational institutes and courses provided by thoseinstitutes to help them make course and institute choices. We also provide advertisingspace for colleges and universities from India and abroad on the site. Shiksha.com coversapproximately 30000 domestic colleges and approximately 1850 international collegesapproximately 200000 courses and has over 180000 reviews. Revenues are generated fromadvertisements placed by colleges institutes and universities. This site aims to providestudents with information through which students can compare various educationalinstitutes based on important features like placements and fees. Our website usestechnology led differentiators to ensure that students and parents can easily findrelevant content.
With revenues from these other verticals increasing by 14.6% theircombined contribution to the Company's revenue was 10.8% in FY 2020. Jeevansathi.comgrew by 17.1% & Shiksha.com grew by 10.8%. The Company would continue to invest moreto scale up these businesses.
Detailed analysis of the performance of the Company and its respectivebusiness segments has been presented in the section on Management Discussion and AnalysisReport forming part of this Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements have been prepared in accordancewith the Companies (Indian Accounting Standards) Rules 2015 (Ind-AS) prescribed underSection 133 of the Act and other recognized accounting practices and policies to theextent applicable.
The Consolidated Financial Statements have been prepared on the basisof the audited financial statements of the Company its subsidiaries and associate/jointlycontrolled companies as approved by their respective Board of Directors. However for thepurpose of consolidation of financial statements of the Company as regards the investmentin Agstack Technologies Private Limited International Educational Gateway PrivateLimited Bizcrum Infotech Private Limited Printo Document Services Private LimitedGreytip Software Private Limited Llama Logisol Private Limited Medcords HealthcareSolutions Private Limited Shopkirana E Trading Private Limited and LQ Global ServicesPrivate Limited unaudited financial statements have been considered.
Your Company on a consolidated basis achieved net revenue of`13119.30 million during the year under review as against `11509.32 million during theprevious financial year a growth of 14% year on year. The total consolidated income forthe year is `14163.95 million as compared to `12712.45 million in FY 2019.
Operating EBITDA for the year stood at `3726.23 million incomparison with `3127.59 million in FY 2019. Total Comprehensive loss in FY 2020 isreported to be `2405.34 million in comparison to Total Comprehensive Income of `6005.97million in FY 2019.
DETAILS OF SUBSIDIARIES/JOINT VENTURE (ASSOCIATE) COMPANIES
As on March 31 2020 the Company has 11 subsidiaries. During the yearunder review and the period between the end of the financial year and the date of thisreport following changes have taken place in status of subsidiary companies of theCompany:
Complete acquisition of Highorbit Careers Private Limited (www.iimjobs.com and www.hirist.com ) on May 27 2019 which provides online classifiedsdatabase digital platform and recruitment solutions in the recruitment and employabilityvertical to small medium and large enterprises and job seekers across different verticalsparticularly (in the case of www.iimjobs.com) mid and senior management verticals and (inthe case of www.hirist.com) engineering technology verticals. This acquisition will helpyour Company to further expand its service offerings and diversify its user base in theemployment market.
Divestment of its total shareholding on fully converted &diluted basis (including holding through its wholly owned subsidiary) in Applect LearningSystems Private Limited ("Meritnation").
During the year the Board of Directors of your Company reviewed theaffairs of the subsidiaries. A statement containing the salient features of the financialstatements of the subsidiaries/joint ventures (associates) companies in the prescribedformat AOC-I is given as Annexure-I to this report. The statement also provides thedetails of performance and financial position of each of the subsidiaries/joint ventures(associates) companies and their contribution to the overall performance of the Company.
The developments in the operations/performance of each of thesubsidiaries & joint ventures (associates) companies included in the ConsolidatedFinancial Statements are presented below:
1. Startup Investments (Holding) Ltd. (SIHL) is awholly-owned subsidiary company which is engaged in making investments in start-upcompanies. During the year SIHL made following investments by way ofsubscription/purchase of shares/debentures:
6000000 0.01% Compulsorily Convertible Preference Shareshaving face value of `10/- each of Bizcrum Infotech Pvt. Ltd. ("ShoeKonnect" or"Bijnis") for an aggregate consideration of about ` 60 million.
32339 0.01% Compulsorily Convertible Preference Shares havingface value of `10/- each at a premium of `4319.03/- each of Agstack Technologies Pvt.Ltd. ("Gramophone") for an aggregate consideration of about `140 million.
1511 0.1% Series F Compulsorily Convertible Preference Sharesof EtechAces Marketing and Consulting Pvt. Ltd. ("Policybazaar") for anaggregate consideration of about `689.54 million.
3417 0.001% Compulsorily Convertible Debentures having a facevalue of `10/- each at a premium of `14622.72/- each of Printo Document Services Pvt.Ltd. ("Printo") for an amount of `50 million.
41653 0.01% Series A2 Compulsorily Convertible PreferenceShares having a face value of `1/- each at a premium of `239.08 of Wishbook InfoservicesPvt. Ltd. for an aggregate consideration of about `10 million.
2333 0.01% Series B Compulsorily Convertible Preference Shareshaving face value of `10/- each of Shop Kirana E Trading Pvt. Ltd.("Shopkirana") for an aggregate consideration of about ` 469.62 million.
16661 0.01% Series A3 Compulsorily Convertible PreferenceShares having face value of `1 each of Wishbook Infoservices Pvt. Ltd.("Wishbook") for a total consideration of about `4 million.
1622 0.01% Series C3 Compulsorily Convertible PreferenceShares and 10 Ordinary shares of Bizcrum Infotech Pvt. Ltd. ("ShoeKonnect") foran aggregate consideration of about `40 million.
1244 Optionally Convertible Cumulative Redeemable PreferenceShares of Happily Unmarried Marketing Pvt. Ltd. ("HUM") for an aggregateconsideration of about `60 million.
16215 Seed Compulsorily Convertible Preference Shares and 10Ordinary Shares LQ Global Services Pvt. Ltd. ("LegitQuest") for an aggregateconsideration of about `15 million.
2005 0.01% Series A1 Compulsorily Convertible PreferenceShares of `10/- each of Llama Logisol Pvt. Ltd. ("Shipsy") for an aggregateconsideration of about `50 million.
3000000 Class A Units having face value of `100/- each ofInfo Edge Venture Fund I a scheme of Info Edge Venture Fund ("IEVF") a trustRegistered with SEBI as Category II AIF under the SEBI (Alternative Investment FundsRegulations) 2012 for consideration of an amount not exceeding `300 million.
2869 Series A Compulsorily Convertible Preference Shareshaving face value of `100/- each of Medcords Healthcare Solutions Pvt. Ltd.("Medcords") for an aggregate consideration of about `70 million.
3986 Series A1 Compulsorily Convertible Preference Shareshaving face value of `100/- each of International Educational Gateway Pvt. Ltd.("Univariety") for an aggregate consideration of about `80 million.
SIHL had advanced inter-corporate loans worth `183 million to ApplectLearning Systems Pvt. Ltd. which were duly settled at the time of its divestment. It alsoadvanced the following inter-corporate loans which remain outstanding/repaid at the endof the year:
`26 million to Medcords Healthcare Solutions Pvt. Ltd.
`30 million to CXWAI Tech India Pvt. Ltd.
`20 million to International Educational Gateway Pvt. Ltd.
SIHL during the year under review issued & allotted 222953730.0001% Compulsorily Convertible Debentures (CCDs) of `100/- each to the Company forabout `2229.54 million. This money was used for making the aforesaid investments throughSIHL.
It had the total loss of `875.80 million in FY 2020 as compared to lossof `565.63 million in FY 2019.
2. Diphda Internet Services Ltd. (Diphda) is a wholly ownedsubsidiary of the Company as on March 31 2020. During the year under review the Companyacquired 4 Equity Shares and 7548 0.1% Series F Compulsorily Convertible PreferenceShares for a sum of `3446.32 million (approx. USD 50 million) through Diphda in EtechacesMarketing & Consulting Pvt. Ltd. ("Etechaces"). For this purpose theCompany invested `3481.32 million in it and increased its authorized share capital by`3500 million.
It had the total loss of `27.71 million in FY 2020 as compared to lossof `0.27 million in FY 2019 the first year of its operations.
3. Makesense Technologies Ltd. (MTL) had no revenue fromoperations during the year. The total income of MTL from other sources is `0.81 million inFY 2020 as compared to `2.85 million in FY 2019.
The Company owns 50.01% of MTL while MTL holds about 16.51% inEtechaces.
4. Naukri Internet Services Ltd. (NISL) had no revenueduring the year. The total profit of NISL on account of other income is `89.88 million inFY 2020 as compared to profit of `109.62 million in FY 2019.
During previous financial year NISL had filed a petition with NationalCompany Law Tribunal ("NCLT") for reduction of its preference share capital. Thesaid petition had been approved by the Hon'ble NCLT vide its order dated October 302019. Basis authority of this order NISL extinguished and cancelled 34000000 fully paidup CRPS and repaid `3400 million to the Company.
5. Allcheckdeals India Pvt. Ltd. (ACD) provides brokerageservices in the real estate sector in India. During the year under review it achieved nilrevenue as against `4.17 million during the previous financial year. The total income is `0.48 million in FY 2020 as compared to `6.37 million in FY 2019.
During the year under review ACD acquired 10000 0.0001% CompulsorilyConvertible Debentures of Interactive Visual Solutions Private Limited having face valueof `100/- each for an aggregate sum of `1 million.
6. NewInc Internet Services Pvt. Ltd. (NewInc) awholly-owned subsidiary of ACD is engaged in the business of providing all kinds andtypes of internet computer and electronics data processing services. During the yearunder review the total income of NewInc is `0.02 million as compared to `0.03 million inFY 2019.
7. Interactive Visual Solutions Pvt. Ltd. (Interactive) isthe owner of a proprietary software which enables a high quality virtual video/3D image ofa proposed or existing real estate development to be viewed online by customers.
During the year under review it issued & allotted 10000 0.0001%Compulsorily Convertible Debentures having face value of `100/- each to AllcheckdealsIndia Pvt. Ltd. for an aggregate sum of `1 million.
The total income of Interactive stood at Nil as compared to `0.14million in FY 2019.
8. Jeevansathi Internet Services Pvt. Ltd. (JISPL) owns& holds the domain names & related trademarks of the Company. During the yearunder review it had net revenue of `0.1 million similar to `0.1 million revenue duringthe previous financial year. The total income stood at `0.11 million in FY 2020 as against`0.17 million in FY 2019.
9. Smartweb Internet Services Ltd. (SMISL) is a companyincorporated for the purpose of carrying on the business of providing all kinds ofinternet services. During the year under review it issued & allotted 10000000.0001% Compulsorily Convertible Preference Shares of nominal value of `100/- each to theCompany for an amount of `100 million. Further it also issued & allotted 5000000.0001% Compulsorily Convertible Debentures having face value of `100/- each to theCompany for an aggregate sum of `50 million.
Also during the year under review SMISL adopted a new clause in theObjects Clause of its Memorandum of Association to act as investment advisor financialconsultant management consultant investment manager and/or sponsor of alternativeinvestment fund(s). SMISL also obtained registration of an Alternative Investment Fund(AIF) with SEBI named Info Edge Venture Fund (IEVF) a Trust as Category-II AIF under theSEBI Alternative Investment Funds Regulations 2012 for which SMISL is the InvestmentManager and Beacon Trusteeship Limited is the Trustee.
SMISL has invested an amount of about `50 million in IE Venture Fund Ia scheme of IEVF by way of subscription of 500000 Class B Units having face value of`100/- each.
The objective of IEVF is to invest in tech and tech-enabled entitiesthat provide technology to create market and distribute innovative products and servicesthat benefit consumers at large. During the year under review IEVF through its schemenamed IE Venture Fund I has made the following investments by way of subscription/purchaseof shares/debentures:
916356 Compulsorily Convertible Preference Shares having aface value of `10/- each for consideration of about `180 million and 72000 CompulsoryConvertible Cumulative Participating Debentures having face value of `1000/- each forconsideration of about `72 million of Qyuki Digital Media Pvt. Ltd.
1354 Series A Cumulative Compulsorily ConvertibleParticipatory Preference Shares having a face value of `10/- each and 10 Equity Shareshaving a face value of `10/- each of Dotpe Pvt. Ltd. for an aggregate consideration ofabout `104 million.
The Company has also made investment in IE Venture Fund I a scheme ofIEVF by way of subscription of 10000000 Class A Units having face value of `100/- eachfor consideration of about `1000 million.
SMISL had the total income of `23.16 million in FY 2020 as compared to`0.66 million in FY 2019.
10. Startup Internet Services Ltd. (SISL) is a wholly ownedsubsidiary of the Company incorporated for the purpose of providing all kinds and typesof internet services. It had the total income of `2.14 million in FY 2020 as compared to`0.31 million in FY 2019. During the year under review it issued & allotted3500000 0.0001% Compulsory Convertible Debentures having face value of `100/- each tothe Company for an aggregate sum of `350 million. Further SISL has made investment in IEVenture Fund I by way of subscription of 1500000 Class A Units having face value of`100/- each for consideration of about `150 million.
11. Highorbit Careers Pvt. Ltd. (iimjobs.com) as stated aboveduring the year under review the Company acquired 100% share capital of iimjobs.com on afully diluted basis for an aggregate consideration of `808.25 million. Consequentlyiimjobs.com became wholly owned subsidiary of the Company.
During the year under review it had net revenue of `195.17 million ascompared to `166.39 million revenue during the previous financial year. The total incomestood at `196.81 million in FY 2020 as against `172.46 million in FY 2019.
Your Company has the following continuing external strategicinvestments.
All holding percentages in the investee companies given below arecomputed on fully converted and diluted basis. The percentage holdings are held directlyor indirectly through its subsidiaries. It may be noted that the actual economic interestin these investee companies may or may not result into equivalent percentage shareholdingon account of the terms of the agreements with them.
ZOMATO PVT. LTD. (ZOMATO)
Zomato Pvt. Ltd. [Formerly known as Zomato Media Pvt. Ltd.] owns &operates the website www.zomato.com. It generates revenue from advertisements ofrestaurants and lead sales. The aggregate investment of the Company in Zomato is about`1522 million.
Zomato achieved on consolidated basis net revenue from operations of`26047.37 million during the current financial year as against `13125.86 million duringthe previous financial year. The total income increased by 96.3% from `13970.06 millionin FY 2019 to `27427.39 million in FY 2020.
APPLECT LEARNING SYSTEMS PVT. LTD. (MERITNATION/APPLECT)
Applect owns & operates a website with the name www.meritnation.comwhich is delivering kindergarten to Class 12 (K-12) study material. Applect has anexperienced team that specializes in content development and assessment modules in theeducation space.
During the year under review the Company divested its entireshareholding (65.67%) including holding through its wholly owned subsidiary in ApplectLearning Solutions Pvt. Ltd. ("Meritnation") to Aakash Educational ServicesLtd. for sale value of about `501.20 million.
ETECHACES MARKETING & CONSULTING PVT. LTD. (ETECHACES/POLICYBAZAAR)
Etechaces operates through website www.policybazaar.com which helpscustomers understand their need for insurance and other financial products to selectproducts/schemes that best suit their requirements.
During the year under review Etechaces received investment for anamount of `4135.86 million from Diphda and SIHL as mentioned earlier herein.
The aggregate investment of the Company held indirectly through itsSubsidiaries/Joint Ventures in
PolicyBazaar as on March 31 2020 is 24.10%. However since 49.99% ofMakesense Technologies Ltd. (holding 16.51% in PolicyBazaar) is held by TemasekCompany's relevant economic interest in Etechaces is 15.85%.
PRINTO DOCUMENT SERVICES PVT. LTD. (PRINTO)
Printo is a retail chain which provides personal and business print andcorporate merchandise in India. The company provides business cards business stationaryID Cards and accessories flyers/leaflets posters standees brochures signagestickers calendars and diaries gif products personalized greeting cards photo booksT-shirts and apparel and marketing collaterals. It sells products online at www.printo.inand through its retail stores in 6 states.
During the year under review the Company through its wholly-ownedsubsidiary SIHL invested an amount of about `50 million in Printo. The Company as onMarch 31 2020 holds 27.85% on a fully converted and diluted basis. During the year underreview SIHL made a provision for diminution in the carrying value of investment for`120.6 million.
HAPPILY UNMARRIED MARKETING PVT. LTD. (HUM)
The business of HUM generates revenues from design and sale of funcreative products as also a men's grooming range ("Ustra") and has a largeaddressable market.
During the year under review the Company through its wholly-ownedsubsidiary has invested `60 million in HUM and holds through its wholly owned subsidiarySIHL stake of 42.33% on a fully converted and diluted basis.
NOPAPERFORMS SOLUTIONS PVT. LTD. (NOPAPERFORMS)
Nopaperforms runs a business of providing a SaaS platform (via websitenamely www.nopaperforms.com) which has a suite of software products including leadmanagement system application management system campaign management etc. The site aimsto create IP out of providing an end-to-end solution to institutions and individuals asthe case may be for managing their leads and workflows.
The Company through its wholly-owned subsidiary has invested aggregateamount of `336.6 million for a stake of 48.10% on fully converted and diluted basis.
INTERNATIONAL EDUCATIONAL GATEWAY PVT. LTD. (UNIVARIETY)
Univariety is engaged in an educational business of providing productsand services and counselling to students schools colleges and educators. These enablestudents and parents take better informed decisions on higher education and relatedproducts and services. The products and services are provided through physical connectsan online portal named as www.univariety.com and through third party portals of partnerentities.
During the year SIHL extended loan of `20 million to Univariety.Further the Company through its wholly owned subsidiary invested about `80 million inUnivariety during the year under review. The Company has invested aggregate amount of `205million for a stake of 39.88% on fully converted and diluted basis.
AGSTACK TECHNOLOGIES PVT. LTD. (GRAMOPHONE)
Gramophone is a technology enabled marketplace (operated through awebsite www.gramophone.in and its app Gramophone') for enabling efficient farmmanagement. Farmers can buy quality agricultural input products like seeds cropprotection nutrition and equipment directly from its m-commerce platform.
The Company through its wholly owned subsidiary invested `140 millionduring the year under review. The Company has invested aggregate amount of `203.8 millionfor a stake of 36.02% on fully converted and diluted basis.
BIZCRUM INFOTECH PVT. LTD. (SHOEKONNECT)
ShoeKonnect is a B2B marketplace ("ShoeKonnect" mobile appwww.shoekonnect.com website) that enables footwear brands manufacturers wholesalers andretailers to connect communicate & transact with each other for conducting andexpanding their business. The platform facilitates catalogue/inventory uploading orderplacement order receipt delivery scheduling and payment management amongstmanufacturers wholesalers manufacturers and retailers.
During the year under review the Company through its wholly ownedsubsidiary has invested `100 million in ShoeKonnect. The Company has invested aggregateamount of `160 million for a stake of 35.93% on fully converted and diluted basis.
MEDCORDS HEALTHCARE SOLUTIONS PVT. LTD. (MEDCORDS)
Medcords (operated through a website www.medcords.com and its appMedcords') is a cloud- based ML powered ecosystem that connects and enablesvarious stakeholders of the healthcare ecosystem. The ecosystem facilitates among otherthings remote consultations and follow-up consultations with doctors and intelligentdigitization of users' medical records and on-demand availability of such records.The venture aims to create IP out of medical data and advanced analytics to createefficient healthcare decision systems for doctors hospitals government etc. Theycurrently have a web-app for doctors and android apps for pharmacies and patients.
During the year under review SIHL extended loan of `26 million toMedcords. Further the Company through SIHL invested an amount of `70 million in Medcordsduring the year under review. The Company has invested aggregate amount of `96.4 millionfor a stake of 17.52% on fully converted and diluted basis.
SHOP KIRANA E TRADING PVT. LTD. (SHOPKIRANA)
Shopkirana is engaged in the business of developing a B2B e-Commerceplatform for ordering delivery payments and related products/services among variousstakeholders in grocery/FMCG supply chain. Shopkirana helps retailers with simple andefficient M-distribution platform by ensuring the most competitive prices quick deliveryand single sourcing channel for retailers while brands have visibility and direct connectto retailers for promotions or product launch.
During the year under review the Company through its wholly-ownedsubsidiary has invested `469.6 million in Shopkirana. The Company has invested aggregateamount of `603.5 million for a stake of 25.36% on fully converted and diluted basis.
GREYTIP SOFTWARE PVT. LTD. (GREYTIP)
Greytip is an HR and Payroll SaaS company focused on serving SMEcustomers in India and abroad. Their software solutions cover all areas includingemployee information management leave and attendance management payroll expense claimsand more. They enable companies in their digital transformation by streamlining HRoperations increasing productivity and by enhancing employee experience.
During the year under review the Company invested (via mix of primaryand secondary purchase) about `350 million in Greytip for a stake of 21.78% on a fullyconverted and diluted basis.
LQ GLOBAL SERVICES PVT. LTD. (LEGITQUEST)
LegitQuest is SaaS product at the intersection of Technology &Legal utilizing Machine Learning Modern Search algorithm & Data Analytic for thelegal professionals. It is a LegalTech venture run by versatile team of tech-savvyattorneys engineers and designers who aim to make the practice of law simpler for its endusers.
During the year under review the Company through its wholly ownedsubsidiary invested an amount of `15 million in LegitQuest for a stake of 18.02% on afully converted and diluted basis.
METIS EDUVENTURES PVT. LTD. (ADDA247)
Adda247 is an online government jobs preparation platform. It isIndia's leading educationtechnology company that helps students prepare forseveral government jobs via its multiple platforms bankersadda.com sscadda. com Adda247mobile app Adda247 Youtube channel ctetadda.com and Career Power.
During the year under review the Company invested (via mix of primaryand secondary purchase) about `280 million in Adda247 for a stake of 16.97% on a fullyconverted and diluted basis.
TERRALYTICS ANALYSIS PVT. LTD. (TERRALYTICS)
Terralytics is engaged in the business of developing real estateintelligence and analytics platform for sale to banks developers consulting firms etc.for diligence information and other purposes.
During the year under review the Company invested about `50 million inTerralytics for a stake of 20% on a fully converted and diluted basis.
LLAMA LOGISOL PVT. LTD. (SHIPSY)
Shipsy's vision is to digitalize the entire logistics ecosystem.It has recently launched the platform for Exporters and Importers to manage their vendorsfor Price Procurement Shipment Execution and end to end container tracking. The productis designed to empower exporters and importers to digitalize their operations and bringabout significant time and cost savings.
During the year under review the Company through its wholly ownedsubsidiary invested an amount of `50 million in Shipsy for a stake of 10% on a fullyconverted and diluted basis.
SUNRISE MENTORS PVT. LTD. (SUNRISE)
Sunrise is engaged in the business of providing online education andoperates an e-learning platform - CodingNinjas.
During the year under review the Company invested about `371 millionin Sunrise for a stake of 25% on a fully converted and diluted basis.
During the year under review following companies are fully provisionedfor/written off: a) VCare Technologies Pvt. Ltd. b) Unnati Online Pvt. Ltd. c) IdeaclicksInfolabs Pvt. Ltd. d) Wishbook Infoservices Pvt. Ltd.
The aforesaid Investee Company(ies) including the companies thatbecame part of the portfolio during the year achieved an aggregate revenue of `38775.94million as against `20122.98 million during the previous financial year. The aggregateoperating EBITDA level loss was `27330.19 million as compared to `26399.61million duringthe previous financial year.
The above companies are treated as "Associate Companies/JointVentures" except where mentioned specifically in our Consolidated FinancialStatements as per the Accounting Standards issued by the Institute of CharteredAccountants of India and notified by the Ministry of Corporate Affairs.
Pursuant to the provisions of Section 136 of the Act the FinancialStatements of the Company the Consolidated Financial Statements along with all relevantdocuments and the Auditors' Report thereon form part of this Annual Report. Furtherthe audited financial statements of each of the subsidiaries alongwith relevantDirectors' Report and Auditors' Report thereon are available on our websitewww.infoedge.in. These documents will also be available for inspection during businesshours at our registered office.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the FY 2020 your Company invested (including outstandinginter-corporate loans) directly or indirectly about `6265.43 million into the aforesaidInvestee companies.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
As per the provisions of the Act and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) your Company hasformulated a Policy on Related Party Transactions which is also available onCompany's website at http://infoedge.in/pdfs/Related-PartyTransaction-Policy.pdf.
The Policy intends to ensure that proper reporting approval anddisclosure processes are in place for all transactions between the Company and relatedparties.
This Policy specifically deals with the review and approval of materialrelated party transactions keeping in mind the potential or actual conflicts of interestthat may arise because of entering into these transactions.
All related party transactions are placed before the Audit Committeefor review and approval. Prior omnibus approval is also obtained for related partytransactions on an annual basis for transactions which are of repetitive nature and/ orentered in the ordinary course of business and at arm's length basis. The Company hasnot entered into any material related party transactions i.e. transactions exceeding 10%of the annual consolidated turnover as per the last audited financial statements.
The particulars of contracts or arrangements with related partiesreferred to in sub-section (1) of Section 188 of the Act in the prescribed Form AOC-2 aregiven in Annexure II.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company andthe date of the Report.
As required under Section 134(3) of the Act the Board of Directorsinforms the members that during the financial year there have been no material changesexcept as disclosed elsewhere in report:
In the nature of Company's business;
In the Company's subsidiaries or in the nature of businesscarried out by them; and
In the classes of business in which the Company has an interest.
We are one of the key players in the online classifieds industry inIndia with strong domains in recruitment classifieds real estate classifieds andmatrimonial classifieds and related services. We are also expanding in the onlineeducational classifieds and related services in India. According to industry reports overthe past four years between fiscals 2016 to 2020 the online classifieds industry hasposed a strong growth rate of CAGR 22% to clock ~`29 billion and ~`64 billion during FY2016 and FY 2020 respectively. We derive a substantial portion of our revenue fromrecruitment classifieds and related services. Developments in the Indian economy and levelof economic activity have a direct impact on our businesses particularly the recruitmentand the real estate businesses. In a good economic cycle recruitments in the Indianemployment market and real estate activity generally increase thereby having a positiveeffect on our recruitment and real estate businesses.
As a complement India has witnessed a drastic surge in internet usersover the years with internet penetration as a percentage of total population crossing 50%in fiscal 2020. It is expected that the total number of internet subscribers in thecountry will reach ~910 million by fiscal 2023 resulting in ~67% internet penetration.This can be attributed to the increased demand for data competitive pricing of 4Gservices and availability of affordable handsets.
The COVID-19 pandemic crisis is however expected to take a hit on theaforesaid growth prospect in fiscal 2021. We expect the growth for the overall onlineclassifieds industry to contract 5-7% on year in fiscal 2021. According to industryreports the IMF projected a sharp contraction of 4.5% for the Indian economy in fiscal2021 citing the Covid-19 pandemic following a longer period of lockdown and slowerrecovery than anticipated. However with the economy expected to bounce back from fiscal2022 and with increasing demand for the online classifieds in India the industry isexpected to clock a CAGR of 16-20% between fiscals 2020 and 2023 to reach `100-110 billionin fiscal 2023. India's GDP is also expected to bounce back with a robust 6% growthrate.
Amidst all this play of the dynamic external forces Info Edge findsitself well positioned to leverage many of the opportunities arising out of a moredigitally connected Indian economy. Your Company continues to lay emphasis on promotinginnovation and makes needful investments in branding people product development andprocesses to maintain its leadership position and defend markets.
Naukri.com has established clear leadership position in India.99acres.com has achieved its leadership position through continued investments in productaesthetics data quality and marketing which has ensured quality and innovation drivingcustomer retention and growth. Jeevansathi.com is growing fast with investments being madeon brand development. Shiksha.com is gaining traction and becoming profitable.
Overall the Company expects the economic conditions to improve in FY2022 and is well positioned to leverage market opportunities and grow. It will continue toexplore opportunities to make strategic investments in investee companies whilemaintaining a war chest of cash in its reserves to preserve and protect existing brandsunder control.
3. CORPORATE GOVERNANCE
Your Company always places a major thrust on managing its affairs withdiligence transparency responsibility and accountability thereby upholding the importantdictum that an organization's corporate governance philosophy is directly linked tohigh performance. The Company understands and respects its fiduciary role andresponsibility towards its stakeholders and society at large and strives to serve theirinterests resulting in creation of value for all its stakeholders.
In terms of Regulation 34 of the Listing Regulations a separatesection on "Corporate Governance" with a detailed compliance report on corporategovernance and a certificate from M/s. Chandrasekaran & Associates CompanySecretaries Secretarial Auditors of the Company regarding compliance of the conditions ofCorporate Governance forms part of this Annual Report. The report on Corporate Governancealso contains certain disclosures required under the Act.
MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion & Analysis Report for the year underreview as stipulated under the Listing Regulations is presented in a separate sectionforming part of this Annual Report.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company met 7 (seven) times during theyear under review. In addition to this 2 (two) meetings of Independent Directors werealso held. The details of the meetings of the Board including that of its Committees andIndependent Directors' meeting(s) are given in the Report on Corporate Governancesection forming part of this Annual Report.
COMPOSITION OF AUDIT COMMITTEE
During the year all recommendations of Audit Committee were acceptedby the Board.
The details of the composition powers functions meetings of theCommittee held during the year are given in the Report on Corporate Governance sectionforming part of this Annual Report.
ESTABLISHMENT OF THE VIGIL MECHANISM
The Company has formulated an effective Whistle Blower Mechanism and apolicy that lays down the process for raising concerns about unethical behavior actual orsuspected fraud or violation of the Company's Code of Conduct or Ethics Policy. TheCompany has appointed M/s. Thought Arbitrage Consulting as an Independent ExternalOmbudsman. This policy is further explained under Corporate Governance section formingpart of this Report and the full text of the Policy is available on the website of theCompany at www.infoedge.in.
Your Company hereby affirms that no Director/Employee have been deniedaccess to the Chairman of the Audit Committee. There were two complaints received throughthe said mechanism which did not pertain to the nature of complaints sought to beaddressed through this platform. However the Company took cognizance of the matters andinvestigated these further to lead to their logical conclusion.
RISK MANAGEMENT POLICY
The Company has an effective risk management procedure which isgoverned at the highest level by the Board of Directors covering the process ofidentifying assessing mitigating reporting and review of critical risks impacting theachievement of Company's objectives or threaten its existence.
To further strengthen & streamline the procedures about riskassessment and minimization procedures the Board of Directors constituted a Board levelRisk Management Committee (RMC). The details on Risk Management plan of the Company aregiven in the Report on Corporate Governance section forming part of this Annual Report.
During the year under review the Board of Directors have amended thecharter of RMC in order to include review of cyber security within its purview.
INTERNAL FINANCIAL CONTROLS
Your Company has put in place adequate internal financial controls withreference to the financial statements. During the year such controls were tested and noreportable material weakness in the design or operation were observed.
The Company has also put in place adequate systems of Internal Controlto ensure compliance with policies and procedures which is commensurate with size scaleand complexity of its operations. The Company has appointed an external professional firmas Internal Auditor. The Internal Audit of the Company is regularly carried out to reviewthe internal control systems and processes. The internal Audit Reports along withimplementation and recommendations contained therein are periodically reviewed by AuditCommittee of the Board.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THEREGULATORS/COURTS/TRIBUNALS
During the year under review no significant and material orders havebeen passed by the regulators or courts or tribunals impacting the going concern statusand Company's operations in the future.
EXTRACT OF ANNUAL RETURN
As required by Section 92(3) of the Act read with Rule 12 of theCompanies (Management and Administration) Rules 2014 the Extract of Annual Return inForm MGT-9 is furnished in Annexure III to this Report. The Annual Return filed for the FY2019 is available on the website of the Company at url: www.infoedge.in/annual-return.asp.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review Mr. Chintan Thakkar was re-appointed bythe shareholders of the Company in the 24th Annual General Meeting held on August 13 2019as Whole-time Director & Chief Financial Officer of the Company to hold office for afurther term of 5 (five) years i.e. from October 16 2019 to October 15 2024.
Further Mr. Sharad Malik was also re-appointed by the shareholders ofthe Company in the 24th Annual General Meeting held on August 13 2019 as an IndependentDirector of the Company to hold office for a further term of 5 (five) years i.e. December16 2019 to December 15 2024.
Also Ms. Geeta Mathur who was appointed as an Additional Director ofthe Company w. e. f. May 28 2019 to be designated as Independent Director was appointedas an Independent Director of the Company in the 24th Annual General Meeting held onAugust 13 2019 for a term of 5 (five) consecutive years i.e. May 28 2019 to May 272024.
Mr. Sharad Malik has served on the Technical Advisory Board of severalhi-tech companies and he is the Professor of Engineering at Princeton University and theChair of the Department of Electrical Engineering. Further he has also received the IITDelhi Distinguished Alumni Award. Also Ms. Geeta Mathur has experience in finance withover 25 years of experience in banking large corporate treasuries investor relations anddevelopment sector and specializes in the area of project corporate and structuredfinance treasury investor relations and strategic planning.
Pursuant to clause (iiia) of sub-rule 5 of Rule 8 of the Companies(Accounts) Rules 2014 the Board is of the opinion that Mr. Sharad Malik and Ms. GeetaMathur who were appointed/re-appointed during the year under review as IndependentDirectors possesses high integrity expertise and experience enabling them toeffectively perform their duties.
The present term of appointment of Mr. Hitesh Oberoi as the ManagingDirector & Chief Executive Officer is valid up to April 26 2021. The Board has in itsmeeting held on June 22 2020 subject to the approval of the members in the forthcomingAnnual General Meeting on recommendation of Nomination & Remuneration Committeeapproved the re-appointment of Mr. Oberoi as the Managing Director & CEO for anotherperiod of five years post completion of his present term.
Also the present term of appointment of Mr. Sanjeev Bikhchandani asthe Executive Vice Chairman & Whole-time Director is valid up to April 26 2021. TheBoard has in its meeting held on June 22 2020 on the recommendation of the Nomination& Remuneration Committee and subject to the approval of the members in the forthcomingAnnual General Meeting approved the re-appointment of Mr. Bikhchandani as the ExecutiveVice Chairman & Whole-time Director for another period of five years post completionof his present term.
Since Mr. Saurabh Srivastava Independent Director will attain the ageof 75 years on March 4 2021 approval of the members is sought in pursuance of Regulation17(1A) of the Listing Regulations vide special resolution in the forthcoming AnnualGeneral for continuation of his existing term as an Independent Director upto March 312023.
During the year under review Mr. Arun Duggal Non-ExecutiveIndependent Director & Chairman of the Audit Committee had resigned from the office ofdirectorship of the Company w.e.f the end of 19th day of December 2019. The Board placeson record its deep appreciation for the contribution made by Mr. Arun Duggal during histenure as an Independent Director of the Company and wishes him all success happiness andbest of health in life.
DIRECTORS LIABLE TO RETIRE BY ROTATION
In accordance with the provisions of the Act not less than 2/3rd(Two-third) of the total number of Directors (other than Independent Directors) shall beliable to retire by rotation. Accordingly pursuant to the Act read with Article 119 ofthe Articles of Association of the Company Mr. Chintan Thakkar (DIN- 00678173) is liableto retire by rotation and being eligible offers himself for re-appointment.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors hold office for their respective term and arenot liable to retire by rotation. The Company has received declarations from all theIndependent Directors of the Company confirming that they meet the criteria ofindependence as prescribed both under the Act and under the Listing Regulations and thatthey are not aware of any circumstance or situation which exist or may be reasonablyanticipated that could impair or impact their ability to discharge their duties with anobjective independent judgment and without any external influence as required underRegulation 25 of the Listing Regulations. Further in pursuance of Rule 6 of the Companies(Appointment and Qualifications of Directors) Rules 2014 all Independent Directors ofthe Company have confirmed their registration with the Indian Institute of CorporateAffairs (IICA) database.
FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
In compliance with the requirements of the Listing Regulations theCompany has put in place a familiarization programme for the Independent Directors tofamiliarize them with their roles rights and responsibility as Directors the working ofthe Company nature of the industry in which the Company operates business model etc. Thedetails of the familiarization programme are explained in the Corporate Governance Report.The same is also available on the website of the Company and can be accessed by web linkwww.infoedge.in/pdfs/Board-Familiarisation.pdf.
PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS
Listing Regulations laying down the key functions of the Boardmandates that the Board shall monitor and review the Board Evaluation Process and alsostipulates that the Nomination & Remuneration Committee of the Company shall lay downthe evaluation criteria for performance evaluation of Independent Directors. Section 134of the Act states that a formal evaluation needs to be made by the Board of its ownperformance and that of its committees and individual directors. Further Schedule IV tothe Act states that performance evaluation of Independent Directors shall be done by theentire Board of Directors excluding the director being evaluated.
In accordance with the aforesaid provisions the Board has carried outthe annual performance evaluation of its own performance the Directors individually aswell as the evaluation of the working of its Committees.
Some of the performance indicators based on which the evaluation takesplace are - attendance in the meetings quality of preparation/participation ability toprovide leadership and work as team player. In addition few criteria for independentdirectors include commitment to protecting/enhancing interests of all shareholders andcontribution in implementation of best governance practices. Performance criteria forWhole-time Directors includes contribution to the growth of the Company new ideas/planning and compliances with all policies of the Company.
SEPARATE MEETING OF INDEPENDENT DIRECTORS
Pursuant to Schedule IV to the Act and the Listing Regulations twomeetings of Independent Directors were held during the year i.e. on May 28 2019 and onFebruary 12 2020 without the attendance of Executive Directors and members ofManagement.
In addition the Company encourages regular separate meetings of itsIndependent Directors to update them on all business-related issues and new initiatives.At such meetings the Executive Directors and other members of the Management makepresentations on relevant issues.
KEY MANAGERIAL PERSONNEL
The following persons have been designated as Key Managerial Personnelof the Company pursuant to Section 2(51) and Section 203 of the Act read with the Rulesframed thereunder:
1. Mr. Hitesh Oberoi Managing Director & CEO 2. Mr. ChintanThakkar Whole-time Director & CFO
3. Mr. Murlee Manohar Jain SVP- Secretarial & Company Secretary
4. Auditors and Auditor's Report
M/s. S.R. Batliboi & Associates LLP Chartered Accountants(FRN:101049W/E300004) pursuant to your approval were appointed as the Statutory Auditorsof the Company in the 22nd Annual General Meeting of the Company for carrying out theaudit of the financial statements of the Company for FY 2018 to FY 2022.
The notes on financial statements referred to in the Auditors'Report are self-explanatory and do not call for any further comments. The Auditors'Report does not contain any qualification reservation or adverse remark or disclaimer.
Pursuant to the provisions of Section 204 of the Act read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors had appointed M/s. Chandrasekaran & Associates Company Secretaries as theSecretarial Auditors of the Company to undertake Secretarial Audit of the Company for FY2020.
The Secretarial Audit Report is annexed herewith as Annexure IV. TheSecretarial Audit Report does not contain any qualification reservation or adverse remarkor disclaimer.
M/s. T.R. Chadha & Associates Chartered Accountants perform theduties of internal auditors of the Company and their report is reviewed by the AuditCommittee quarterly.
REPORTING OF FRAUDS BY AUDITORS
During the year under review none of the auditors viz. StatutoryAuditors and Secretarial Auditors have reported to the Audit Committee under Section143(12) of the Act any instances of fraud committed against the Company by its officersor employees the details of which would need to be mentioned in the Board's Report.
5. Corporate Social Responsibility (Csr)
For your Company Corporate Social Responsibility (CSR) means theintegration of social environmental and economic concerns in its business operations. CSRinvolves operating Company's business in a manner that meets or exceeds the ethicallegal commercial and public expectations that society has of businesses. In alignmentwith vision of the Company Info Edge through its CSR initiatives will continue toenhance value creation in the society through its services conduct & initiatives soas to promote sustained growth for the society.
The CSR Committee of the Company helps the Company to frame monitorand execute the CSR activities of the Company. The Committee defines the parameters andobserves them for effective discharge of the social responsibility of your Company. TheCSR Policy of your Company outlines the Company's philosophy & the mechanism forundertaking socially useful programmes for welfare & sustainable development of thecommunity at large as part of its duties as a responsible corporate citizen. Theconstitution of the CSR Committee is given in the Corporate Governance Report which formspart of this Annual Report.
CSR FUNDS ALLOCATED
A snapshot of the geography-wise and sector-wise spread of the causessupported by the Company is given on the next page.
CSR PROJECTS FUNDED IN FY 2019-20
Info Edge's CSR policy mainly focuses on supporting organizationsthat are making impactful interventions at various stages across the education andemployability spectrum.
The Annual Report on CSR activities in accordance with the Companies(Corporate Social Responsibility Policy) Rules 2014 is set out as Annexure V to thisReport.
BUSINESS RESPONSIBILITY REPORT
The Listing Regulations mandates the top 1000 listed companies bymarket capitalization to give Business Responsibility Report ("BR Report") intheir Annual Report describing the initiatives taken by the Company from an EnvironmentalSocial and Governance perspective in the format specified by the SEBI. This requirementfor the Company became applicable w.e.f. April 1 2016.
The concept of Business Responsibility Report lays down 9 (nine) coreprinciples which a listed company shall follow while undertaking its business operations.In terms of aforesaid Regulations a separate section on "Business ResponsibilityReport" with a detailed compliance report forms part of this Annual Report and isgiven in Annexure VI.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
The particulars relating to conservation of energy and technologyabsorption as required to be disclosed under the Act are part of Annexure VII to theDirectors' report. The particulars regarding foreign exchange earnings andexpenditure are furnished below:-
|Particulars ||FY 2020 ||FY 2019 |
|Foreign exchange earnings || || |
|Revenue ||914.93 ||845.02 |
|Total inflow ||914.93 ||845.02 |
|Foreign exchange outflow || || |
|Internet & Server Charges ||16.04 ||17.20 |
|Advertising and Promotion Cost ||3.08 ||81.71 |
|Travel & conveyance ||1.35 ||0.58 |
|Foreign Branch Expenses ||183.57 ||172.35 |
|Others ||41.57 ||27.31 |
|Total Outflow ||245.61 ||299.15 |
|Net Foreign exchange inflow ||669.32 ||545.87 |
The Company has implemented the "Green Initiative" to enableelectronic delivery of notice/documents/ annual reports to shareholders.
Further in view of the COVID-19 pandemic the Ministry of CorporateAffairs Government of India ("MCA") vide General Circular No.14/2020 datedApril 08 2020 General Circular No.17/2020 dated April 13 2020 General Circular No.20/2020 dated May 5 2020 and General Circular No. 22/2020 dated June 15 2020 (the"MCA Circulars") has allowed companies to conduct their EGM/AGM through videoconferencing or other audio visual means and also granted relaxations to issue/servicenotices and other reports/documents of AGM/EGM/Postal Ballots to its shareholders onlyelectronically at their registered e-mail address(es).
Accordingly in compliance with the aforementioned MCA CircularsNotice of the AGM along with the Annual Report 2019-20 is being sent only throughelectronic mode to those Members whose email addresses are registered with theCompany/Depository Participant. Members may note that the Notice and Annual Report 2019-20will also be available on the Company's website www.infoedge.in websites of theStock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited atwww.bseindia.com and www.nseindia.com respectively and on the website of NationalSecurities Depository Limited (NSDL) https://www.evoting.nsdl.com.
The members of the Company are requested to send their request forregistration of e-mails following the procedure given below for the purpose of receivingthe AGM Notice alongwith Annual Report 2019-20:
a) You may temporarily get your email registered with theCompany's RTA by clicking the link-https://linkintime.co.in/EmailReg/Email_Register.html and following the registrationprocess as guided thereafter. In case of any queries shareholder may write tornt.helpdesk%linkintime.co.in under Help section or Call on Tel no.: 022 49186000.
b) For permanent registration of email address the shareholders arehowever requested in respect of electronic holdings to register their email address withthe Depository through the concerned Depository Participants with whom you hold your demataccount. In respect of physical holding please send your email address for registrationto the Registrar & Share Transfer Agents of the Company M/s Link Intime India Pvt.Ltd. at https://linkintime.co.in/EmailReg/Email_Register.html providing Folio No. name ofthe shareholder scanned copy of the share certificate (front & back) PAN (Selfattested scanned copy of PAN Card) AADHAR (self-attested scanned copy of Aadhar Card).
Those shareholders who have already registered their email addressesare requested to keep their email addresses validated with their DepositoryParticipants/RTA to enable servicing of communication and documents electronically. Incase of any queries shareholder may write either to the Company at investors%naukri.comor to the RTA at aforesaid email id provided.
Registering email address will help in better communication between theCompany and you as an esteemed stakeholder and most importantly will reduce use of paperalso contributing towards green environment.
The Company is providing e-voting facility to all members to enablethem to cast their votes electronically on all resolutions set forth in the Notice. Thisis pursuant to Section 108 of the Act read with relevant rules thereon. The instructionsfor e-voting are provided in the Notice of the AGM.
6. Human Resources Management
Human resources management at Info Edge goes beyond the set boundariesof compensation performance reviews and development. Your Company considers people as itsbiggest assets and Believing in People' is at the heart of its human resourcestrategy. Your Company has put concerted efforts in talent management and successionplanning practices strong performance management and learning and training initiatives toensure that your Company consistently develops inspiring strong and credible leadership.During the year the focus of your Company was to ensure that young talent is nurtured andmentored consistently that rewards and recognition are commensurate with performance andthat employees have the opportunity to develop and grow. Your Company has established anorganization structure that is agile and focused on delivering business results. Withregular communication and sustained efforts it is ensuring that employees are aligned oncommon objectives and have the right information on business evolution. Your Companystrongly believes in fostering a culture of trust and mutual respect in all its employeesand seeks to ensure that company's values and principles are understood by all andare the reference point in all people matters.
Some of the key initiatives taken by the Company during the year underreview are:
PERFORMANCE BASED MERITOCRATIC CULTURE Annual Appraisals &Continuous Performance Feedback:
Your Company has a robust performance management system which includesannual & quarterly goal setting mid-year conversation & year-end appraisalprocess. There is an intensive focus on continuous development and feedback by way ofauthentic performance dialogues. The objective is to ensure performance and potentialbased differentiation in order to promote a meritocratic culture. Your Company ensures100% compliance and ensures that the authentic performance feedback is shared with itsassociates on timely basis.
Infoedge Merit Awards:
In line with Company's pursuit of fostering meritocracy andbuilding high performing teams your Company drives "Infoedge Merit awards"every year. Through these awards the Company recognizes teams/individuals who havecontributed in impactful cross functional projects or shown exemplary leadership. Thenominations received from various business heads undergoes a rigorous process ofshortlisting through panel discussions and jury presentations. Company's awardcategories include Team Awards in which associates across various functions work togetherto launch a new product or feature that ultimately has an impact on business metrics likerevenues improved user experience etc. Apart from this your Company has Individual Awardcategories like Tech Excellence Sales Excellence Emerging Leader and Key Achiever Awardfor significant performance by an individual in their respective work area. This year yourCompany concluded 3rd Infoedge Merit Award ceremony and felicitated a total of14 winners in individual award categories and 23 teams under different team awardcategory. In all around 200 associates received these awards.
The Company also conducted Merit Award Showcase at our corporate officewhere kiosks were set up and every associate caught a glimpse of innovation at Info Edge.
ENGAGEMENT SURVEY TO DRIVE CHANGE I-speak:
The Company's yearly engagement survey is a tool to measure andassess the engagement levels of its associates. It is a platform for the associates tovoice their opinions so that the Company can drive change in the organization. This surveyis conducted on a tool that ensures confidentiality of the responses and enables deeperanalytics. Your Company's overall participation and satisfaction scores have beenincreasing year on year. I-speak is a key instrument to seek insights and drive change inthe organization hence post the survey results the Company identifies the key action areasin every division through focus group discussions and ensures that the results arecascaded downwards till the employee.
Employee Townhall: To share updates on the Company performance andkey business initiatives across the organization; your Company organize townhalls. Theevent sees key business leaders present insights to its associates. This event contains anopen forum where questions are invited from the audience and gets addressed by the CEO& various business heads.
Inside Edge the Infoedge Newsletter: This quarterly newsletter isan internal communication medium that helps the Company's associates to stay updatedregarding the internal Company news viz. important dates launches events or evenleisure activities. It also acts a platform to acknowledge and publish the successstories product launches and highlights of our various business.
ROBUST INTERNSHIP PROGRAM TO ATTRACT THE BEST TALENT
Infoedge is preferred employer at some of the top tier engineeringcolleges. To continue to attract the best talent your Company recently launched 6 months(for 4th year students) and 2 months (for 3rd year students)internship program. Total of 33 students underwent this internship in the Technology andQuality Assurance function. These students were from top engineering colleges like IIITsand NITs.
LEARNING & DEVELOPMENT
Infoedge focusses on Learning and Development using a three prongapproach which includes broad based classroom trainings leadership development andcoaching programs and vast offerings from the online learning platforms. The endeavor isto give the power of choice and flexibility offer world class content yet stay relevantscalable and frugal.
In FY 2020 around 3000 associates enrolled for the online course andout of that 1680 associates have completed their courses. Also 3500 associates werecovered in 184 sessions of instructor led classroom trainings. Apart from these severalsocial learning platforms like Brownbags have been organized inviting enthusiasticparticipation of approx. 2500+ associates across 110 session.
Mediclaim & Accidental Insurance coverage
All the Company's associates and their dependents are coveredunder the Mediclaim and accidental insurance plans. These plans are flexible and theassociate can make a selection basis their choice. Along with this the Company also drivesvarious wellness session and camps across India.
Icare: Employee Assistance Program i-care is benefit program thatoffers 24x7 phone counselling support for the associates to address any personalchallenges and/or concerns which may affect their well-being and/or work performance. Itis completely confidential and free for the associates.
THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at workplace andhas adopted a Policy on the Prevention of Sexual Harassment at its workplaces in line withthe provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules made thereunder for prevention and redressal ofcomplaints of sexual harassment at workplace.
The Company has complied with the provision relating to theconstitution of Internal Committee under the Sexual Harassment of Women at the Workplace(Prevention Prohibition and Redressal) Act 2013.
During the FY 2020 the Company had received two complaints on sexualharassment under the Sexual
Harassment of Women at the Workplace (Prevention Prohibition andRedressal) Act 2013 which have been duly resolved as on the end of FY 2020.
Further in pursuance of guidelines issued by the Noida Administrationthe Company has registered itself on the application named "S.H.O.R" (SexualHarassment Online Redressal) that allow women professionals in Noida and Greater Noida tolodge complaints of sexual harassment at workplace and track the disposal process.Further the Company has also uploaded the details of Internal Complaints Committee on thesaid application.
PARTICULARS OF EMPLOYEES
The particulars of employees required under Rule 5(2) of the Companies(Appointment and Remuneration of the Managerial Personnel) Rules 2014 framed under theAct forms part of this Report. However pursuant to provisions of Section 136 of the Actthe Annual Report excluding the aforesaid information is being sent to all the members ofyour Company and others entitled thereto. Any Member interested in obtaining suchparticulars may write to the Company Secretary of the Company. The same shall also beavailable for inspection by members at Registered Office of your Company.
COMPANY'S POLICY RELATING TO REMUNERATION FOR DIRECTORS KEYMANAGERIAL PERSONNEL AND OTHER EMPLOYEES
The Company's Policy relating to Remuneration for Directors KeyManagerial Personnel and other Employees has been explained in the Report on CorporateGovernance section forming part of this Annual Report.
Ratio of the remuneration of each director to the median remunerationof the employees of the Company for the Financial Year is given on next page:
|Name of Director ||Designation ||Remuneration of Director/KMP for FY 2020 (` in million) ||% increase in remuneration in the FY 2020 ||Ratio of Remuneration of each Director/ to median remuneration of employees |
|Mr. Kapil Kapoor ||Non-Executive Chairman ||1.10 ||(15.38)& ||1.75 |
|Mr. Arun Duggal# ||Non-Executive Independent Director ||1.26 ||(45.92)& ||2.00 |
|Mr. Sanjeev Bikhchandani ||Promoter Executive Vice-Chairman ||15.93* ||(41.67) ||25.28 |
|Mr. Hitesh Oberoi ||Promoter Managing Director & CEO ||16.71* ||(40.85) ||26.52 |
|Mr. Chintan Thakkar ||Whole Time Director & CFO ||19.15*$ ||(14.16) ||30.40 |
|Mr. Saurabh Srivastava ||Non-Executive Independent Director ||2.25 ||(23.21)& ||3.57 |
|Mr. Naresh Gupta ||Non-Executive Independent Director ||2.23 ||(4.29)& ||3.54 |
|Ms. Bala C Deshpande ||Non-Executive Independent Director ||1.15 ||(50.00)& ||1.82 |
|Mr. Sharad Malik ||Non-Executive Independent Director ||1.80 ||(5.76)& ||2.86 |
|Mr. Ashish Gupta ||Non-Executive Independent Director ||1.35 ||(6.90)& ||2.14 |
|Ms. Geeta Mathur# ||Non-Executive Independent Director ||1.79 ||NA ||2.84 |
|Mr. MM Jain ||Company Secretary ||6.03 ||13.77 ||9.57 |
& The non-executive/independent directors are paid sittingfees & commission on the basis of their attendance at the Board/Committee Meetings.The change in remuneration of these Directors is on account of number of meetings held orattended during the year.
$ Remuneration of Mr. Chintan Thakkar was revised by theNomination & Remuneration Committee through resolution by circulation dated April 262020 effective April 1 2019 in accordance with the authority granted by shareholders intheir meeting held on August 13 2019 and remuneration in the table above does not includeemployee share based payment.
* The remuneration paid to the three Executive Directors of theCompany as mentioned in the table above does not include the amount of annual bonus/commission payable to them every year. Taking note of the impact on the overallperformance of the Company under the unprecedented situation created due to COVID-19pandemic Board has for the time being deferred its decision about payment of saidannual bonus/commission to the Executive Directors. The Board has decided to evaluate theperformance of the Company at regular intervals and subject to satisfactory results maydecide to pay such annual bonus/commission to the three Executive Directors for the FY2020 as & when and if at all that decision is finally taken.
# Ms. Geeta Mathur had been appointed as an Independent Directoron May 28 2019 and Mr. Arun Duggal resigned from the Directorship of the Company w.e.f.end of the day on December 19 2019.
THE PERCENTAGE INCREASE IN THE MEDIAN REMUNERATION OF EMPLOYEES IN THEFINANCIAL YEAR.
The percentage increase in the median remuneration of the employees ofthe Company during the financial year is 4% as compared to last year.
THE NUMBER OF PERMANENT EMPLOYEES ON THE ROLLS OF THE COMPANY.
AVERAGE PERCENTILE INCREASE ALREADY MADE IN THE SALARIES OF THEEMPLOYEES OTHER THAN THE MANAGERIAL PERSONNEL IN THE LAST FINANCIAL YEAR AND ITSCOMPARISON WITH THE PERCENTILE INCREASE IN THE MANAGERIAL REMUNERATION AND JUSTIFICATIONTHEREOF AND POINT OUT IF THERE ARE ANY EXCEPTIONAL CIRCUMSTANCES FOR INCREASE INMANAGERIAL REMUNERATION.
The average increase in salaries of employees other than managerialpersonnel in FY 2020 was around 15%. However the managerial remuneration paid during theyear has decreased as compared to the previous year.
AFFIRMATION THAT THE REMUNERATION IS AS PER THE REMUNERATION POLICY OFTHE COMPANY.
It is hereby affirmed that the remuneration paid is as per theRemuneration Policy for Directors Key Managerial Personnel and other Employees.
EMPLOYEE STOCK OPTION PLAN
Our ESOP schemes help us share wealth with our employees and are partof a retention-oriented compensation program. They help us meet the dual objective ofmotivating key employees and retention while aligning their long-term career goals withthat of the Company.
ESOP-2007 (MODIFIED IN JUNE 2009): This is a SEBI compliant ESOPscheme being used to grant stock based compensation to our Associates since 2007. This wasapproved by passing a special resolution in the Extraordinary General Meeting (EGM) heldin March 2007 which was further amended in June 2009 through approval of shareholders byPostal Ballot by introducing Stock Appreciation Rights (SARs)/ Restricted Stock Units(RSUs) and flexible pricing of ESOP/SAR Grants.
ESOP-2015: This is a new Scheme introduced by the Company toprovide equity-based incentives to Employees of the Company i.e. the Options granted underthe Scheme may be in the form of ESOPs / SARs / other Share-based form of incentives. TheCompany shall issue a maximum of 40 lac Options exercisable into equity shares of theCompany. The scheme is currently used by the Company to make fresh ESOP/SAR grants.
The applicable Disclosures as stipulated under the SEBI Guidelines ason March 31 2020 with regard to the Employees' Stock Option Scheme (ESOS) areannexed with this report as Annexure VIII.
A certificate from M/s. S.R. Batliboi & Associates LLP CharteredAccountants (Firm Registration Number: 101049W/E300004) with regards to the implementationof the Company's Employee Stock Option Scheme in line with SEBI (Share BasedEmployees Benefits) Regulations 2014 would be placed in the ensuing Annual GeneralMeeting.
The shares to which Company's ESOP Schemes relates are held by theTrustees on behalf of Info Edge
Employees Stock Option Plan Trust. The individual employees do not haveany claim against the shares held by said ESOP Trust unless they are transferred to theirrespective de-mat accounts upon exercise of options vested in them. Thus there are noshares in which employees hold beneficial ownership however the voting rights in respectof which are exercised by someone other than such employees. The ESOP trust did not voteon any resolution moved at the previous annual general meeting.
7. Directors' Responsibility Statement
In accordance with the provisions of Section 134(3)(c) and 134(5) ofthe Act the Board of Directors confirms that: a) in the preparation of the AnnualAccounts the applicable accounting standards have been followed along with properexplanation relating to material departures; b) the Directors have selected suchaccounting policies and applied them consistently and made judgements and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at March 31 2020 and of the profit of the Company for that year; c) theDirectors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities; d) the Directorshave prepared the annual accounts on a going concern basis; e) the Directors have laiddown internal financial controls to be followed by the Company and that such financialcontrols are adequate and were operating effectively; f) the Directors have devised propersystems to ensure compliance with the provisions of all applicable laws and that suchsystems were adequate and operating effectively; g) the Company has complied with therevised Secretarial Standards issued by the Institute of Company Secretaries of India onMeetings of the Board of Directors and General Meetings; h) the Company has complied withthe provisions relating to the constitution of Internal Committee under Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
Your Company's organizational culture upholds professionalismintegrity and continuous improvement across all functions as well as efficientutilization of the Company's resources for sustainable and profitable growth.
Your Directors acknowledge with gratitude and wishes to place on recordits appreciation for the dedication and commitment of your Company's employees at alllevels which has continued to be our major strength. Your Directors also thank theshareholders investors customers visitors to our websites business partners bankersand other stakeholders for their confidence in the Company and its management and lookforward for their continuous support.
|Date: June 22 2020 ||For and on behalf of Board of Directors |
|Place: Noida || |
| ||Kapil Kapoor |
| ||Chairman |
| ||DIN: 00178966 |