Info Edge (India) Ltd.
|BSE: 532777||Sector: Others|
|NSE: NAUKRI||ISIN Code: INE663F01024|
|BSE 00:00 | 22 Feb||1657.50||
|NSE 00:00 | 22 Feb||1644.60||
|Mkt Cap.(Rs cr)||20,241|
|Mkt Cap.(Rs cr)||20241.39|
Info Edge (India) Ltd. (NAUKRI) - Director Report
Company director report
The board of directors of your company take pleasure in presenting thetwenty second annual report on the business and operations of the company together withthe audited standalone & consolidated financial statements and the auditor'sreport thereon for the financial year ended march 31 2017
The results of operations for the year under review are given below:
I. Results of operations:
(Rs. in million)
Financial review standalone financial statements
Your company adopted beginning april 1 2016 indian accountingstandards for the first time with a transition date of april 1 2015. The annual auditedstandalone financial results for the year have been prepared in accordance with thecompanies (indian accounting standards) rules 2015 (ind-as) prescribed under section 133of the companies act
2013 and other recognized accounting practices and policies to theextent applicable. Necessary disclosures as regards to the key impact areas & otheradjustments upon transition to ind-as reporting have been made under the notes tofinancial statements.
Your company's revenue from operations reached '8021.06 million('8208.55 million as per igaap) during the year under review as against '7176.07 million('7234.76 million as per igaap) during the previous financial year a growth of around11.8% (13.5% as per igaap) year on year. The total income increased by around 8.6% (13.3%as per igaap) from '7961.09 million ('8062.86 million as per igaap) in fy 2016 to'8646.29 million ('9138.17 million as per igaap) in fy 2017.
The operating expenses remained in line with previous year and stood at'5746.16 million ('5531.23 million as per igaap) in fy2017 as compared to '5820.75million ('5656.31 million as per igaap) in fy2016.
Operating ebidta for the year recorded an increase of around 68% overprevious year and stood at '2274.90 million ('2677.32 million as per igaap) incomparison with '1355.32 million ('1578.45 million as per igaap) in fy2016. Profitbefore tax (pbt) from ordinary activities and after exceptional items is '2618.74 million('3325.55 million as per igaap) in fy2017 as against '1815.36 million ('2081.57 millionas per igaap) in fy2016.
Total comprehensive income in fy2017 is reported to be '2039.33million ('2660.62 million as per igaap) (after exceptional expense of '39.84 million)with an increase of more than 64% over previous year and in comparison to '1242.53million ('1415.80 million as per igaap) in fy2016 (after exceptional expense of '114.58million in fy 2016).
Your company has a consistent & impressive track record of dividedpayment.
The board had revised the dividend policy of the company in its meetingheld on march 12 2016. The revised dividend policy indicates that the company strives tomaintain a dividend pay-out ratio of 15%-40% of standalone profits after tax which may bemodified in light of exceptional circumstances affecting the financials.
In line with its aforesaid dividend policy the board has recommended afinal dividend of '1.50/- per equity share in its meeting held on may 29 2017 which willbe paid on or after july 27 2017 subject to approval by the shareholders at the ensuingannual general meeting. This is in addition to the two interim dividends at the rate of'1.50/- per equity share declared in the month of october 2016 and in the month offebruary 2017
The total dividend pay-out (excluding dividend distribution tax) duringthe current year is '363.50 million as against '362.55 million for the previous year. Theamount of dividend distribution tax paid/provided by the company for the year is '74million as compared to '73.62 million during the previous financial year.
The register of members and share transfer books of the company shallremain closed from july 15 2017 to july 21 2017 for the purpose of payment of finaldividend for the financial year ended march 31 2017 and the annual general meeting. Theannual general meeting is scheduled to be held on july 21 2017
Transfer to reserves
The company did not transfer any amount to reserves during the year.
During the year under review the company issued & allotted300000 equity shares from time to time to info edge employees stock option plan trust.Pursuant to the above allotment the issued & paid-up equity share capital of thecompany increased to & stood as on march 31 2017 at '1212161590 divided into121216159 equity shares of '10/- each.
The fresh shares allotted as aforesaid have been duly listed on thestock exchanges.
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 financial year 201718 to bse andnse has been paid.
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 companies act 2013 read together with the companies (acceptance of deposits) rules2014.
The company considers its business segments as the primary segments tomonitor the performance of each of its business segments on regular basis with effect fromquarter ended june 30 2015 and therefore these have been considered as reportablesegments under ind-as 108 on segment reporting. The reportable segments represent"recruitment solutions" and "99acres" and the "others"segment which comprises jeevansathi and
Shiksha service verticals since they individually do not meet thequalifying criteria for reportable segment as per the said accounting standard. Thefinancial numbers given below for each of the business segments are as per ind - as.
The recruitment solutions business is built around naukri.com andcomprises the www.naukri.com
Recruitment solutions which is the company's core businesscontinued to deliver strong results in terms of growth in revenues and profits with theflagship portal of the company naukri.com continuing to remain the primary source ofrevenue and cash generation for the company.
Naukri.com has two major sources of revenue: (i) from recruiters whichaccounts for around 90% of revenues. The different elements include job listing/responsemanagement; employer branding/visibility and others such as resume short listing andscreening career site management and campus recruitment and non-recruitment advertisingother than for jobs; and (ii) from job seekers which relate to all job seeker advisoryservices.
During the year under review recruitment solutions grew by 12.5% from'5289.91 million in fy 2016 to ' 5953.43 million in fy 2017 operating ebitda fromrecruitment solutions in fy 2017 was '3213.51 million.
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% of traffic 99acres is the clear leaderamongst major players in the market. While the company has established leadership intraffic share the business environment still continues to be difficult. In fact the realestate market remains sluggish and demand for new homes remains to be weak as also theunfinished projects and inventory overhang continues.
During the year under review real estate business grew by 4% from'1082.53 million in fy2016 to '1122.24 million in fy2017 operating ebitda loss from realestate business stood at '59715 million in fy 2017 largely on account of additionalinvestments in people.
Your company also provides matrimonial and education based classifiedsand related services through its portals jeevansathi.com and shiksha.com respectively. Theother business verticals of the company have been gaining traction for some time.
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.
Within the online education classifieds space shiksha has beenstrategically positioned as a website which helps students decide undergraduate and postgraduate options by providing useful information on careers exams colleges and courses.The business model focuses on providing a platform for branding and advertising solutionfor colleges and universities (ug pg post pg) where both indian and foreign entitiesadvertise. Revenues are also generated through lead generation for institutions in termsof potential student or applicants details bought by colleges and their agents.
With revenues from these other verticals increasing by 18% theircombined contribution to the company's net sales was 12% in fy2017 jeevansathi.comgrew by 21.9% & shiksha.com grew by 11.4%. The company would continue to invest moreto scale up these businesses.
Detailed analysis of the performance of the company and its businesseshas been presented in the section on management discussion and analysis report formingpart 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 companies act 2013 and other recognised accounting practices andpolicies to the extent applicable.
The consolidated financial statements have been prepared on the basisof the audited financial statements of the company its subsidiaries and associatecompanies as approved by their respective board of directors. However for the purpose ofconsolidation of financial statements of the company as regards the investment in kinobeosoftware pvt. Ltd. unaudited financial statements have been considered.
Your company on a consolidated basis achieved net sales of '8876.31million during the year under review as against '7475.12 million during the previousfinancial year a growth of more than 19% year on year. The total income for the year is'9704.76 million as compared to '11881.67 million in fy2016.
Operating ebidta for the year stood at '1771.98 million incomparison with '921.84 million in fy2016. Total comprehensive income in fy2017 isreported to be '238.56 million loss in comparison to '1447 million in fy 2016.
Details of subsidiaries/joint venture (associate) companies
As on march 31 2017 we have 11 subsidiaries. During the year theboard of directors reviewed the affairs of the subsidiaries. A statement containing thesalient features of the financial statement of our subsidiaries/joint venture companies inthe prescribed format aoc-i is given as annexure-l to this report. The statement alsoprovides the details of performance and financial positions of each of the subsidiaries.
The developments in the operations/performance of each of thesubsidiaries & associates included in the consolidated financial statement arepresented below:
Naukri internet services ltd. (nisl) had net revenue of ' 100 thousandduring the year similar to the ' 100 thousand revenue during the previous financial year.The total loss of nisl is ' 44566 thousand in fy2017 as compared to ' 50994 thousand infy2016.
Nisl holds 7.02% of the paid-up share capital of zomato media privatelimited on fully converted & diluted basis with voting rights.
Jeevansathi internet services pvt. Ltd. (jispl) owns & holds thedomain names & related trademarks of the company. During the year under review it hadnet revenue of '100 thousand similar to the ' 100 thousand revenue during the previousfinancial year. The total income stood at ' 109 thousand in fy 2017 as against ' 101thousand in fy 2016.
Allcheckdeals india pvt. Ltd. (acd) provides brokerage services in thereal estate sector in india. During the year under review it achieved net revenue of'5221 thousand as against '13482 thousand during the previous financial year. The totalincome is ' 11540 thousand in fy 2017 as compared to '37775 thousand in fy 2016.
During the year under review acd allotted 0.0001% 455000 compulsoryconvertible debentures of '100/- each (ccds) aggregating to '45.50 million to thecompany. It also allotted 253550 ccds to smartweb internet services ltd. Upon conversionof loan including interest thereon extended by smartweb to acd during the year.
Acd during the year acquired a company i.e. newlnc internet servicespvt. Ltd. (newlnc) as its wholly-owned subsidiary by acquiring its entire equity sharecapital at face value. The company further invested in newlnc by subscribing to 2480000.0001% compulsory convertible debentures (ccds) of '100 each aggregating to '24.80million.
The company through acd subscribed to 175 equity shares and 23003190.01% optionally convertible cumulative redeemable preference shares of ideaclicksinfolabs pvt. Ltd. (zippserv) for an aggregate consideration of about ' 24.35 millionduring the year under review.
Makesense technologies ltd. (mu) had no revenue during the yearsimilar to the previous financial year. The total income of mtl is ' 494 thousand infy2017 as compared to nil in fy2016.
During the year under review mtl pursuant tolnvestment-cum-shareholders agreement dated september 23 2015 entered into amongst themtl macritchie investments pte. Ltd. And the company converted 499900 fully paid- upcompulsory convertible preference shares ('ccps') of ' 100 each aggregating to'49990000/- held by m/s. Macritchie investments pte. Ltd. Into 499900 equity sharesof '10 each aggregating to '4999000.
The company continues to own 50.01% of mtl while mtl holds about 19.65%in etechaces marketing & consulting pvt. Ltd. (policybazaar).
Interactive visual solutions pvt. Ltd. is the owner of a proprietarysoftware which enables a high quality virtual video/3d image of a proposed or existingreal estate development to be viewed online by customers.
During the year under review the total income of the company is '38thousand only as compared to '1 thousand in fy 2016.
During the year the authorised share capital of the company wasincreased from '100000 consisting of 10000 equity shares of '10/- each to '1000000consisting of 10000 equity shares of '10/- each and 9000 preference shares of '100/-each.
Interactive also allotted 137281 0.0001% compulsory convertibledebentures of '100 each (ccds) to acd and 11004 ccds to the company on conversion ofloan outstanding from acd and the company.
Newinc internet services pvt. Ltd. (newinc) was acquired by acd onjanuary 5 2017 during the period under review newinc acquired land measuring 4992 squaremeters (53713 square feet) from the company at an acquisition cost of '297.27 million.Necessary funds for the purpose were mobilized by issuing 248000 0.0001% compulsoryconvertible debentures (ccds) of '100 each aggregating to '24.80 million to acd andbalance is payable.
Startup investments (holding) ltd. (sihl) is a holding and investmentcompany. During the year sihl made following investments by way of purchase of shares:
400000 preference shares of '100 each in vcare technologiespvt. Ltd. For consideration of about '40 million.
39998395 preference shares of re. 1 each in unnati online pvt.Ltd. For consideration of about '40 million.
1868 preference shares of '10 each in happily unmarriedmarketing pvt. Ltd. For a consideration of about '50 million.
1554841 preference shares in canvera digital technologies pvt.Ltd. For a consideration of about '173.33 million.
600000 compulsorily convertible debentures (ccds) in greenleaves consumer services pvt. Ltd. For a consideration of about '60 million.
Additionally the company transferred the following investments held byit to sihl during the year:
remaining shareholding (73150 preference shares) held by thecompany in kinobeo software pvt. Ltd. At cost of acquisition of about '135 million.
entire shareholding (6000000 preference shares) held by thecompany in mint bird technologies pvt. Ltd. At cost of acquisition of about '60 million.
entire shareholding (743808 preference shares) held by thecompany in rare media company pvt. Ltd. At the cost of acquisition of about '74.38million.
It had the total income of '149904 thousand in fy2017 as compared to'171186 thousand in fy2016.
Smartweb internet services ltd.(smisl) a company incorporated for thepurpose of carrying on the business of providing all kinds of internet services extendeda loan for an amount of '10 million to happily unmarried marketing pvt. Ltd. during theyear.
The company had also extended loan of '25 million to acd which wasconverted into ccds as elaborated earlier.
It had the total income of '22759 thousand in fy2017 as compared toloss of '22171 thousand in fy2016.
Startup internet services ltd. (sisl) is a wholly owned subsidiary ofthe company for the purpose of providing all kinds and types of internet services. It hadthe total income of '132 thousand in fy2017 as compared to nil in fy2016.
Your company has following continuing external strategic investments:
All holding percentages in the investee companies given below arecomputed on fully converted and diluted basis. The percentage holding are held directly orindirectly through its subsidiaries. It may be noted that the economic interest in theseinvestee companies may or may not be equal to the percentage shareholding on account ofthe terms of the agreements with them.
ZOMATO MEDIA PVT. LTD.
Zomato media pvt. Ltd. Owns & operates the website
During the year under review zomato achieved on consolidated basisnet sales of '3322.72 million as against '1839.47 million during the previous financialyear. The total income increased by 94% from '2062.18 million in fy 2016 to '3993.51million in fy 2017.
APPLECT LEARNING SYSTEMS PVT. LTD.
Applect owns & operates a website with the name
During the year under review it achieved net sales of '363 million asagainst '287 million during the previous financial year. The total income increased by 26%from '298 million in fy 2016 to '374 million in fy 2017.
Applect falls in the category of a subsidiary company of the company.
Etechaces marketing & consulting pvt. Ltd.
Etechaces operates through website
During the year the company had transferred its balance shareholding inetechaces to one of its wholly owned subsidiary viz. Makesense technologies ltd.("mtl") during the previous financial year. Accordingly the company continuesto own 50.01% of mtl while mtl holds about 19.65% in etechaces marketing & consultingpvt. Ltd.
Kinobeo software pvt. Ltd.
Your company has invested an aggregate amount of '270 million in
During the year the company transferred 73150 preference shares inkinobeo software pvt. Ltd. For a consideration of about '135 million to its wholly ownedsubsidiary i.e. Startup investments (holding) ltd.
Canvera digital technologies pvt. Ltd.
The website www.canvera.com isowned & operated by this company. The website is operational since 2008 and offerssolutions to professional photographers. Revenues are generated primarily from sale ofprinted photo books.
Your company had invested an aggregate amount of '1074 million incanvera for a 57.46% stake out of which '787 million had been booked as loss on accountof diminution in value/provision for impairment. The additional investments were madethrough its wholly owned subsidiary viz. Startup investments (holding) ltd.
Canvera also falls in the category of a subsidiary company of thecompany.
Happily unmarried marketing pvt. Ltd.
Company has invested an amount of '223 million including a loan of '10million in www.happilyunmarried.com . Thecompany holds around 48% stake in it. This business generates revenues from design andsale of fun creative products as also a men's grooming range ("ustra") andhas a large addressable market.
Mint bird technologies pvt. Ltd.
Company has invested an amount of '60 million in
During the year the company transferred its investment in 6000000preference shares in mint bird technologies pvt. Ltd. For a consideration of about '60million to its wholly owned subsidiary i.e. Startup investments (holding) ltd.
Green leaves consumer services pvt. Ltd.
Company has invested an amount of '124 million in
Rare media company pvt. Ltd.
Company has invested an amount of '74 million in
Vcare technologies pvt. Ltd.
Vcare technologies pvt. Ltd. (dirolabs) is a phonebook managementcompany with features like allowing users to create a group phone books which can beshared with friends and family creation of private phone books where only key members onthe group will have rights to edit removing duplicate accounts.
During the year the company acquired 400000 preference shares invcare technologies pvt. Ltd. For a consideration of about '40 million for around 15%stake on fully diluted & converted basis.
Unnati online pvt. Ltd.
Unnati online pvt. Ltd. Is an internet company which runs a website bythe name of www.unnatihelpers.com and is inthe business of providing a technology enabled employment exchange for enabling hiring ofinformal sector workers through its web portal. The company has invested an aggregateamount of '40 million in www.unnatihelpers.com for 29% stake.
Ideaclicks infolabs private limited
The company has invested an aggregate amount of '24 million in
The aforesaid investee companies achieved an aggregate revenue of'6643.78 million as against '4744.09 million during the previous financial year. Theaggregate operating ebitda level loss was '2624.76 million as compared to '6819.18million during the previous financial year.
The above companies are treated as "associate companies/jointventure" except where mentioned specifically in our consolidated financial statementsas per the accounting standards issued by the institute of chartered accountants of indiaand 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 website
Particulars of loans guarantees or investments
During the fy2017 your company invested directly or indirectly about'617 million into the investee companies. Particulars of contracts or arrangements withrelated parties
As per the provisions of the act and the listing regulations yourcompany has formulated a policy on related party transactions which is also available oncompany's website at
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 committee for review andapproval. Prior omnibus approval is also obtained for related party transactions on anannual basis for transactions which are of repetitive nature and/ or entered in theordinary course of business and at arm's length basis. The company has not enteredinto any material related party transactions i.e. Transactions exceeding 10% of theannual 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 in the prescribed form aoc-2 are given inannexure 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 directorsinform 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.
The digital economy in india has come of age and for entrenched playerslike info edge there are several opportunities for growth. Deeper internet penetration andenhanced broadband usage continued to show strong secular growth trends. Therefore thepotential for growth of internet enabled businesses is immense. India's internet baseis expanding at an increasing rate which is expected to continue in the near future.
Having established a leadership position in its main business domainsyour company continues to lay emphasis on promoting innovation and makes investments inbranding people product development and processes to maintain its leadership positionand defend markets. Info edge focuses on building businesses that have defensibilitysustainable competitive advantage and an ability to make healthy profits in the longterm. With the positive sentiments in the macro-economic space in india the job marketremained upward in fy2017 the company's investments specifically in productdevelopment will continue to help maintain and strengthen its leadership position. Withmarket hysteria dying down in the online real estate space investment requirements into99acres.com especially from a marketing perspective are expected to reduce. By continuingto invest in various areas like verified listings better user interface and designsimproving products and features on the site the mobile platform the platform for newprojects and analytics 99acres is expected to firmly continue its leadership position inthe market. This can be effectively leveraged once the real estate market in india picksup. Jeevansathi and shiksha have also gained some traction. Shiksha is going through itsnormal course of evolution in a steady manner and establishing several touchpoints thatcan be effectively monetised and scaled up in the future. At jeevansathi too this yearwe made some marketing spends and revitalised the brand. We continue to emphasize onbuilding this as a product that addresses niche needs of specific regional communities inindia.
Amongst the investee companies cash burn has reduced significantly atzomato while revenues are picking up. This will realign the business model toward betterperformance on fundamental parameters. Overall the company is expected to deliver goodgrowth in revenues across brands profitability of the brands are expected to improve butat the aggregate level the company will have to keep on investing in products and peopleto maintain leadership in a market which is fast getting exposed/prone to competition.
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 sebi (lodr) regulations a separatesection on "corporate governance" with a detailed compliance report on corporategovernance and a certificate from m/s. Chandrasekran & associates company secretariessecretarial auditors of the company regarding compliance of the conditions of corporategovernance forms part of this annual report. The report on corporate governance alsocontains certain disclosures required under the companies act 2013.
Management discussion & analysis
The management discussion & analysis report for the year underreview as stipulated under listing regulations with the stock exchanges in india ispresented in a separate section forming part of this annual report.
Number of meetings of the board of directors
The board of directors of the company met 6 (six) times during the yearunder review. In addition to this two meetings of independent directors were also held.The details of the meetings of the board including that of its committees and independentdirectors' meeting are given in the report on corporate governance section formingpart 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 was one complaint received throughthe said mechanism which does not pertain to the nature of complaints sought to beaddressed through this platform. However the company has taken cognizance of the matterand is investigating it further.
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.
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) read with rule 12 of the companies(management and administration) rules 2014 the extract of annual return in form mgt-9 isfurnished in annexure iii to this report.
Directors and key managerial personnel
There were no changes in the composition of the board during the yearunder review.
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 companies act 2013
Read with article 119 of the articles of association of the companymr. Chintan thakkar (din 00678173) is liable to retire by rotation and being eligibleoffers himself for re-appointment.
Declaration by independent directors
The independent directors hold office for a fixed term of five yearsand are not liable to retire by rotation. The company has received declarations from allthe independent directors of the company confirming that they meet the criteria ofindependence as prescribed both under the act and under the sebi (lodr) regulations2015.
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 linkinfoedge.in/ir-corporate-governance-ac. Asp#a11.
Performance evaluation of the board of directors
Listing regulations laying down the key functions of the board mandatesthat the board shall monitor and review the board evaluation process and also stipulatesthat the nomination and remuneration committee of the company shall lay down theevaluation criteria for performance evaluation of independent directors. Section 134 ofthe companies act 2013 states that a formal evaluation needs to be made by the board ofits own performance and that of its committees and individual directors. Further scheduleiv to the companies act 2013 states that performance evaluation of independent directorsshall be done by the entire 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 and quality of preparation/participation ability toprovide leadership work as team player. In addition few criteria for independentdirectors include commitment to protecting/enhancing interests of all shareholderscontribution 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 companies act 2013 and listingregulations two meetings of independent directors were held during the year i.e. On may25 2016 and on december 19 2016 without the attendance of executive directors andmembers of management.
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. Chintan thakkar whole-time director & cfo.
3. Mr. Murlee manohar jain vp- secretarial & company secretary.
4.auditors rno auditor's report statutory auditors
M/s. Price waterhouse & co bangalore llp (frn-007567s/s-200012)chartered accountants hold office until the conclusion of forthcoming annual generalmeeting.
As provided under section 139 of the companies act 2013 m/s. Pricewaterhouse & co. Bangalore llp has already served for more than 10 years as thestatutory auditors of the company and cannot be re-appointed as the statutory auditors ofthe company.
In accordance with the aforesaid section 139 of the companies act 2013and the companies (audit and auditors) rules 2014 audit committee of the company hasrecommended the appointment of m/s. S.r. Batliboi & associates ll_p charteredaccountants as statutory auditors of the company to the board which is a member firm inindia of ernst & young ltd. (eyg). The board further recommends their appointment asstatutory auditors of the company for carrying out the audit of the financial statementsof the company for the financial years 2017-18 to 2021-22 to the shareholders for approvalin the ensuing agm. Pursuant to first proviso to section 139 the said appointment ifapproved by shareholders shall be placed for ratification at every annual generalmeeting.
M/s. S.r. Batliboi & associates llp chartered accountants havefurnished a certificate of their eligibility as per section 141 of the companies act 2013and have provided their consent for appointment as statutory auditors of the company.
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.
Pursuant to the provisions of section 204 of the companies act 2013read with companies (appointment and remuneration of managerial personnel) rules 2014the company had appointed m/s. Chandrasekaran & associates company secretaries as thesecretarial auditors of the company to undertake secretarial audit of the company forfy2017. The secretarial audit report is annexed herewith as annexure iv.
The secretarial audit report does not contain any qualificationreservation or adverse remark.
M/s. T.r. Chaddha & associates chartered accountants perform theduties of internal auditors of the company and their report is reviewed by the auditcommittee quarterly.
E.cdrpdrrte 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.
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 sebi (listing obligations and disclosure requirements) regulations2015 mandates the top 500 listed companies by market capitalisation to give buisnessresponsibility report ("br report") in their annual report describing theinitiatives taken by the company from an environmental social and governance perspectivein the format specified by the sebi. This requirement became applicable w.e.f. April 12016.
The concept of business responsibility report lays down nine (9) 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:-
The company has implemented the "green initiative" to enableelectronic delivery of notice/documents/ annual reports to shareholders. Electronic copiesof the annual report 2017 and notice of the 22nd annual general meeting are sent to allmembers whose e-mail addresses are registered with the company/depository participant(s).For members who have not registered their e-mail addresses physical copies of the annualreport 2017 and the notice of the 22nd annual general meeting are sent in permitted mode.Members requiring a physical copy may send a request to the company secretary.
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 companies act 2013 read with relevant rules thereon.The instructions for e-voting are provided in the notice of the agm.
In furtherance of the aforesaid principle of "greeninitiative" the company has decided to forego the practice of printing financialstatements of its subsidiaries as part of the company's annual report with a view tohelp the environment by reducing paper consumption as it results in reduced carbonfootprint for the company. However the audited financial statements of each of thesubsidiaries alongwith relevant directors' report and auditors' report thereonare available on our website www.infoedge.in . Thesedocuments will also be available for inspection during business hours at our registeredoffice.
E.huhrn resources mrnreement
Human resources management at info edge goes beyond the set boundariesof compensation performance reviews and development. We look at the employee'sentire lifecycle to ensure timely interventions that help build a long-lasting andfruitful career. The company's hr practices are aimed at finding a balance betweenoptimizing the resources and investing in the value added activities. The companyconducted several employee engagement initiatives such as holistic healing and stressmanagement which observed encouraging participation.
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 undercompanies act 2013 forms part of this report. However pursuant to provisions of section136 of the companies act 2013 the annual report excluding the aforesaid information isbeing sent to all the members of your company and others entitled thereto. Any memberinterested in obtaining such particulars may write to the company secretary of thecompany. The same shall also be available for inspection by members at registered officeof your company.
Company's policy relating to remuneration for directors key managerialpersonnel and other employees
The company's policy relating to remuneration for directors keymanagerial personnel and other employees is given in the report on corporate governancesection 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:
5 the non-executive/independent directors are paid sitting fees& commission basis their attendance at the board/committee meetings. The variation intheir remuneration is on account of increase in the amount of sitting fee/commissionpayable to them pursuant to the approval of the board of directors in its meeting held onmay 25 2016 within the overall limits approved by the shareholders in their meeting heldon july 25 2016 within the permissible limits under the companies act 2013.
$ mr. Chintan thakkars remuneration was revised by the board on therecommendation of the nomination & remuneration committee in its meeting held onjanuary 30 2017 effective april 1 2016 in accordance with the authority granted byshareholders in their meeting held on july 27 2015.
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 26.5% 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 2016-17 was around 10%. Percentage increase in the managerial remunerationpaid for the year was 4.47%.
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 esop schemebeing used to grant stock based compensation to our associates since 2007. This wasapproved by passing a special resolution in the extra-ordinary 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 to provideequity-based incentives to employees of the company i.e. The options granted under thescheme 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 2017 with regard to the employees' stock option scheme (esos) areannexed with this report as annexure viii.
A certificate from m/s price waterhouse & co bangalore llpchartered accountants (firm registration number: 007567s/s-200012) with regards to theimplementation of the company's employee stock option scheme in line with sebi (sharebased employees benefits) regulations 2014 would be placed in the ensuing annual generalmeeting.
The shares to which company's esop scheme relates are held by thetrustees on behalf of info edge employees stock option plan trust. The individualemployees do not have any claim against the shares held by said esop trust unless they aretransferred to their respective de-mat accounts upon exercise of vested options by them.Thus there are no shares in which employees hold beneficial ownership however the votingrights in respect of which are exercised by someone other than such employees. The esoptrust did not vote on any resolution moved at the previous annual general meeting.
7. Director's responsibility sthtement
In accordance with the provisions of section 134(3)(c) and 134(5) ofthe companies act 2013 the board of directors confirm that:
A) in the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures;
B) the directors have selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company as at march 31 2017and of the profit of the company for that year;
C) the directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
D) the directors have prepared the annual accounts on a going concernbasis;
E) the directors have laid down internal financial controls to befollowed by the company and that such financial controls are adequate and were operatingeffectively;
F) the directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
Your company's organisational culture upholds professionalismintegrity and continuous improvement across all functions as well as efficientutilisation 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.