Your Board of Directors ('Board') is pleased to present the eighteenth annual report ofyour company IRIS Business Services Limited for the financial year ended 31stMarch 2018. In line with the requirements of the Companies Act 2013 and the rules framedthereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015this report covers the financial results and other developments during 1stApril 2017 to 31st March 2018 in respect of IRIS Business Services Limited('IRIS').
1. SUMMARY OF OPERATIONS/RESULTS
|Particulars || |
| ||F.Y. 2018 ||F.Y. 2017 ||F.Y. 2018 ||F.Y. 2017 |
|Turnover ||349076697 ||271711979 ||349514144 ||273166195 |
|Other Income ||4226316 ||1475987 ||6384371 ||2542173 |
|Total Expenditure ||405965686 ||384504542 ||411790553 ||392549362 |
|Operating Profit (Loss) ||(52662672) ||(111316576) ||(55892038) ||(116840994) |
|Exceptional Items ||540765 ||4376928 ||- ||4376928 |
|Net Profit (Loss) before tax ||(53203437) ||(115693504) ||(55892038) ||(121217922) |
|Tax Expense: ||- ||- ||- ||- |
|Current Tax ||- ||- ||- ||428067 |
|Deferred Tax ||(4273918) ||(15642720) ||(4273918) ||(15642720) |
|Tax expense/(income) for earlier years ||- ||- ||- ||- |
|Profit (Loss) for the year ||(48929519) ||(100050784) ||(51618120) ||(106003269) |
2. PERFORMANCE OF THE COMPANY
In the reporting year the company recorded an improved sales performance compared tothe previous year while containing the loss at the operating level. The company'sperformance improved significantly in the second half of the reporting year with a healthysales growth of 50.31% (compared to the corresponding period in the previous year) andprofits at the EBITDA and after tax levels.
In the reporting year the company acquired key regulator customers in new geographieswhile building a base for increasing sales in such high potential markets.
Highlights of our standalone financial results Revenues:
Our total revenues in the fiscal year ended March 31 2018 were H35.33 cr an increaseof 29% over our total revenues of H27.32 cr in the fiscal year ended March 31 2017.
Our revenues from operation in the fiscal year ended March 312018 were H34.91 cr anincrease of 28% over our total revenues of H27.17 cr in the fiscal year ended March312017.
Our export revenues strengthened by 11% from H21.15 cr in fiscal year ended 2017 toH23.47 cr in fiscal year ended 2018. Also domestic revenues strengthened by 90% from H6.02cr in fiscal year ended 2017 to H11.44 cr in fiscal year ended 2018.
Our revenues from "Collect" segment grew by 23% from H17.80 cr in the fiscalyear ended 31st March 2017 to H21.91 cr in fiscal year ended 31stMarch 2018.
Revenues from "Create" segment grew by 65% from H6.54 cr in the fiscal yearended 31st March 2017 to H10.76 cr in the fiscal year ended 31stMarch 2018 primarily due to launch of our GST compliance platform.
Revenues from "Consume" segment dropped by 21% from H2.83 cr in the fiscalyear ended 31st March 2017 to H2.23 cr in the fiscal year ended 31stMarch 2018.
Our other income primarily comprises of interest on bank deposits and foreign exchangegain/loss. Our other income in the fiscal year ended 31st March 2018 were H0.42cr as compared to H0.15 cr in the fiscal year ended 31st March 2017. Theincrease is primarily due to increase in interest on fixed deposits from the unutilizedmoney raised through IPO and parked in bank deposits.
Employee costs in the fiscal year ended March 31 2018 stood at H18.89 cr an increaseof 22% over our employee costs of H15.49 cr in the fiscal year ended March 31 2017.Employee costs relate to salaries and bonus paid to employees.
Finance costs in the fiscal year ended March 31 2018 were H1.99 cr a decrease of 4%over our finance costs of H2.08 cr in the fiscal year ended March 31 2017. Finance costsrelate to interest paid by the company on the credit facilities availed from theBanks/Financial institutions.
Travel related expenses:
Our travel related expenses stood at similar levels at H2.40 cr for the fiscal yearended March 312018 and 2017.
Our other expenses decreased by 6% from H16.27 cr for the fiscal year ended March 312017 to H15.23 cr for the fiscal year ended March 312018.
Depreciation and Amortization:
Our Depreciation and amortization charge was H4.49 cr and H4.61 cr for the year endedMarch 31 2018 and March 312017 respectively representing 13% and 17% of revenues fromoperations for the year ended March 312018 and March 312017 respectively.
Exceptional items for the fiscal year ended March 31 2018 consists of diminution inthe value of our investment made in our Italian subsidiary "Atanou S.r.l"
Highlights of our consolidated financial results Revenues:
Our total revenues in the fiscal year ended March 312018 were H35.59 cr an increaseof 29% over our total revenues of H27.57 cr in the fiscal year ended March 31 2017.
Our revenues from operation in the fiscal year ended March 312018 were H34.95 cr anincrease of 28% over our total revenues of H27.32 cr in the fiscal year ended March312017.
Our export revenues strengthened by 10 per cent from H21.30 cr in fiscal year ended2017 to H23.51 cr in fiscal year ended 2018. Also domestic revenues strengthened by 90 percent from H6.02 cr in fiscal year ended 2017 to H11.44 cr in fiscal year ended 2018.
Our revenues from "Collect" segment grew by 23% from H17.87 cr in the fiscalyear ended 31st March 2017 to H21.91 cr in fiscal year ended 31stMarch 2018.
Revenues from "Create" segment grew by 63% from H6.61 cr in the fiscal yearended 31st March 2017 to H10.81 cr in the fiscal year ended 31stMarch 2018 primarily due to launch of our GST compliance platform.
Revenues from "Consume" segment dropped by 21% from H2.83 cr in the fiscalyear ended 31st March 2017 to H2.23 cr in the fiscal year ended 31stMarch 2018.
Our other income primarily comprises of interest on bank deposits and foreign exchangegain/loss. Our other income in the fiscal year ended 31st March 2018 were H0.64cr as compared to H0.25 cr in the fiscal year ended 31st March 2017. Theincrease is primarily due to increase in interest on fixed deposits from the unutilizedmoney raised through IPO and parked in bank deposits.
Employee costs in the fiscal year ended March 31 2018 stood at H20.42 cr an increaseof 15% over our employee costs of H17.76 cr in the fiscal year ended March 31 2017.Employee costs relate to salaries and bonus paid to employees.
Finance costs in the fiscal year ended March 31 2018 were H2.00 cr a decrease of 4%over our finance costs of H2.08 cr in the fiscal year ended March 31 2017. Finance costsrelate to interest paid by the company on the credit facilities availed from theBanks/Financial institutions.
Travel related expenses:
Our travel related expenses stood at almost similar levels at H2.90 cr for the fiscalyear ended March 312018 and at Rs. 2.87 cr for March 312017.
Our other expenses decreased by 3% from H14.78 cr for the fiscal year ended March 312017 to H14.27 cr for the fiscal year ended March 31 2018.
Depreciation and Amortization:
Our depreciation and amortization charge for the year was H4.49 cr and H4.63 cr for theyear ended March 312018 and March 31 2017 respectively representing 13% and 17% ofrevenues from operations for the year ended March 312018 an March 312017 respectively.
3. STATE OF COMPANY AFFAIRS
The reporting year was significant for your company in many respects. Firstly yourcompany debuted in the capital markets through an Initial Public Offering (IPO). The fundsraised have helped your company to strengthen its financial position and competeeffectively in the global markets. Secondly your company has widened its presence in theglobal markets with key wins in Malaysia South Africa and Nepal. Finally in the Indianmarkets your company launched IRISGST a cloud based GST compliance platform that hasfound good traction in the market.
Your company continues to execute its strategy to focus on the Regtech market and offera suite of IP driven software products and solutions built around structured data. Yourcompany continues to enjoy a leading position globally in reporting solutions built on theXBRL information standard.
The market for your company's structured data based offerings has continued to witnessstrong interest across segments such as regulators and enterprises. Countries across theworld have adopted XBRL as the reporting standard for external reporting. Regulatorsacross capital markets banking business registries and taxation are at the forefront ofXBRL adoption. Adoption paves the way for your company to enter these countries through atwo step process of solutions for regulators (the 'Collect' segment) followed by softwareto a range of filing entities (the "Create" segment). Your company's regulatoryfiling platform iFile already has more than twenty regulator clients across fifteencountries. More countries and regulators are expected to be added to the list. Multipletypes of regulators and geographies have given your company an unparalleled depth ofknowledge in the XBRL domain which is leveraged in driving the software product strategyas well.
In the "Create" segment your company's collaborative cloud (SaaS) basedXBRL filing authoring solution "IRIS Carbon" now caters to clients in the USAUK Italy South Africa and Indian markets. "IRIS
Carbon has an inbuilt versatility that enables your company to meet the needs ofdifferent regulatory mandates build global scale while mitigating customer concentrationrisks. Your company has also leveraged its well recognised strengths in compliancereporting platforms to enter the GST compliance market in India through an integrated SaaSbased GSP and ASP solution. This market is emerging and offers exciting opportunities.
4. TRANSFER TO RESERVE
The company does not propose to transfer any amount to reserves.
5. DIVIDEND AND TRANSFER TO IEPF
The Board of Directors does not recommend any dividend on equity shares.
The company was not required to transfer any unpaid/unclaimed amount of dividend toInvestor Education and Protection Fund (IEPF) during the financial year ended 31stMarch 2018.
6. CHANGE IN THE NATURE OF BUSINESS
There are no changes in the nature of business during the financial ended 31stMarch 2018.
7. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE ANDTHE DATE OF THE REPORT
During the year there were no material changes and commitment affecting financialposition of the company between end of the financial year to which this financialstatements relate and the date of the report.
8. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL
During the year there were no significant material orders passed by theRegulators/Courts/Tribunals which would impact the going concern status of the company andits future operations.
9. RISK AND CONCERN
The company operates in a global market characterised by intense competition. Althoughthe company has a strong position in the area of external financial reporting andespecially in XBRL based mandates there is the need to have adequate marketing spend andproduct differentiation to establish presence and build market share. In addition manyregulators initially prefer to offer free tools to enterprises to create the regulatoryfilings which hamper market growth. Migration from free tools to paid platforms is ajourney that takes time as well. Mature markets face pricing pressure and relatively highswitching costs. In addition even though XBRL as a data standard is widely adoptedcompeting data standards and the adoption of APIs could affect the market potential ofXBRL specific software. The GST mandate in India is yet to be fully articulated as the
GST council has deferred invoice level reconciliation which is a big driver foradoption of third party compliance platforms. Moreover the segment had witnessed intensecompetition in the year of GST introduction and there is no reason why the market would beless competitive in the years ahead.
10. RISK MANAGEMENT
Your company is aware of the risks associated with the business. The company is in theprocess of institutionalizing a mechanism for identifying minimizing and mitigating riskswhich will be periodically reviewed.
Some of the risks identified and which will have the attention of the management are:
1. Securing critical resources including capital and human resources;
2. Ensuring cost competitiveness;
3. Building product differentiation and the appropriate value proposition
4. Maintaining and enhancing customer service standards.
5. Stepping up marketing and branding activities
The company had not accepted any deposits during the financial year ended 31stMarch 2018 nor there were any unpaid/unclaimed deposits at the financial year ended on 31stMarch 2018. Further as the company has never accepted deposits there have been nodefaults in repayments thereof nor any non-compliance thereto.
12. SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES
The company has the following subsidiaries:
1. IRIS Business Services (Asia) Pte. Ltd.
2. IRIS Business Services LLC
3. Atanou S.r.l.
The company has not entered into any joint venture and doesn't have any associatecompany.
The audited consolidated financial statements pursuant to Section 129(3) of CompaniesAct 2013 including financial results of the above subsidiaries forms part of AnnualReport
13. PERFORMANCE AND FINANCIAL HIGHLIGHTS OF SUBSIDIARY COMPANIES AND THEIR CONTRIBUTIONTO OVERALL PERFORMANCE OF THE COMPANY
The consolidated financial statements of the company forms a part of this AnnualReport. A Statement containing salient features of the financial statement of subsidiariespursuant to first proviso to subsection (3) of section 129 read with rule 5 of Companies(Accounts) Rules 2014 in the prescribed Form AOC-1 are enclosed as Annexure
- 1 to this report.
14. SHARE CAPITAL
The Authorized Share Capital of the company was increased from H80000000 dividedinto 8000000 equity shares of H10/- to H250000000/- divided into 25000000 equityshares of H10/- in the Extra Ordinary General Meeting of the company held on 13th September2017.
Further The company has issued and allotted 6937581 Bonus Shares of H10/- each inthe ratio of 1:1 i.e. one bonus share for every one share held to equity shareholders ofthe company which was approved in the Extra Ordinary General Meeting held on 13th September2017.
The company had issued 5004000 equity shares of H10/- each face value at H32/- pershare to public through an Initial Public Offer (IPO). The IPO opened on 29.09.2017 andclosed on 04.10.2017. The shares of the company were admitted to trading on BSE Limited(SME Platform) with effect from 11.10.2017.
i. Issue of Equity Shares with Differential Rights: The company has not issued anyequity shares with differential rights during the financial year ended 31stMarch 2018.
ii. Issue of Sweat Equity Shares: The company has not issued any Sweat Equity Sharesduring the financial year ended 31st March 2018.
iii. Issue of Employee Stock Options: The company has approved IRIS Employee StockOptions Scheme 2017 (IRIS ESOP Scheme 2017) at the Extra Ordinary General Meeting held on13th September 2017. The Nomination and Remuneration Committee of the Boardinter-alia administers and monitors the Employees Stock Option Scheme of the company inaccordance with the applicable provisions of the SEBI Regulations. The Nomination andRemuneration Committee of the Board has on 9th October 2017 granted total700000 Options to eligible employee(s) under the IRIS ESOP Scheme 2017. The details ofEmployee Stock Options Scheme as required under rule 9 of Companies (Share Capital anddebentures) rules 2014 and those under SEBI (Share Based Employee Benefits) Regulations2014 as amended to the extent applicable are provided in Annexure - 2 attached hereto.
There is no change to the share capital of the company from the end of the financialyear to the date of this Report.
15. INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY
The company has internal financial control and risk mitigation system which isconstantly assessed and strengthened. The company also conducts an internal audit fromtime to time. The Audit Committee actively reviews the internal audit report adequacy andeffectiveness of the internal financial control and suggests the improvements for thesame.
16. DECLARATIONS GIVEN BY INDEPENDENT DIRECTORS
The company has received necessary declarations and disclosures from the independentdirectors under Section 149(7) and Section 184(1) of the Companies Act 2013 stating thatthey meet the criteria of independence as laid down in Section 149(6) of the CompaniesAct 2013 and disclosing their interest in form MBP-1.
17. DIRECTORS AND KEY MANAGERIAL PERSONNEL AND COMPOSITION OF BOARD
In accordance with the provisions of Section 152 of the Companies Act 2013 and thecompany's Articles of Association Ms. Deepta Rangarajan (DIN - 00404072) Whole TimeDirector retires by rotation at the forthcoming eighteenth Annual General Meeting andbeing eligible has offered herself for re-appointment.
Mr. U. R. Bhat (DIN: 00008425) and Mr. Rakesh Kathotia (DIN: 00165880) resigned as adirector of the company w.e.f. 03rd September 2017 and 12thSeptember 2017 respectively.
Mr. Sanjoy Bhattacharya (DIN: 00059480) resigned as Director w.e.f. 24thNovember 2017 and Mr. Partho Datta (DIN: 00040345) resigned w.e.f. 28thNovember 2017.
Mr. Ashok Venkatramani (DIN: 02839145) and Mr. Bhaswar
Mukherjee (DIN: 01654539) joined the Board on 9th October 2017 asIndependent Directors.
Mr. Vinod Balmukand Agarwala (DIN: 01725158) joined the Board of the company on 27thNovember 2017 as an Independent Director.
Mr. Balachandran Krishnan Whole Time Director was additionally appointed as ChiefFinancial Officer of the company w.e.f. 11th September 2017. Mr. Rajesh Singh(ICSI Membership No. ACS 50320) was appointed as Company Secretary & ComplianceOfficer of the company w.e.f. 11th September 2017 and he resigned on 28thFebruary 2018.
Mr. Jay Mistry (ICSI Membership No. ACS 34264) was appointed by the Board as CompanySecretary and Compliance Officer of the company w.e.f. 10th March 2018.
Mr. Swaminathan Subramaniam (DIN: 01185930) Ms. Deepta Rangarajan (DIN: 00404072)and Mr. Balachandran Krishnan (DIN: 00080055) were re-appointed by the Board ofDirectors of the company as Whole Time Director(s) of the company for a period of 3 yearscommencing from 1st May 2018 on the recommendation of the Nomination andRemuneration Committee at its meeting held on 25th April 2018 subject to theapproval of the members at the ensuing Annual General Meeting of the company.
The composition of Board of Directors as on 31.03.2018 is as follows:
|Sr. No. ||Name of Director ||DIN ||Category |
|1. ||Mr. Swaminathan Subramaniam ||01185930 ||Promoter Whole Time Director & CEO |
|2. ||Mr. Balachandran Krishnan ||00080055 ||Promoter Whole Time Director & CFO |
|3. ||Ms. Deepta Rangarajan ||00404072 ||Promoter Whole Time Director |
|4. ||Mr. Narayan Seshadri ||00053563 ||Non-Executive Independent Director |
|5. ||Mr. Vinod Agarwala ||01725158 ||Non-Executive Independent Director |
|6. ||Mr. Ashok Venkatramani ||02839145 ||Non-Executive Independent Director |
|7. ||Mr. Bhaswar Mukherjee ||01654539 ||Non-Executive Independent Director |
Mr. Jay Mistry is the company Secretary & Compliance Officer and a Key ManagerialPersonnel (KMP) of the company.
18. BOARD MEETING(S)
The Board met six (6) times during the financial year ended 31st March2018. The meeting(s) were held on 22nd May 2017 11th September2017 13th September 2017 9th October 2017 27th November2017 and 10th March 2018. The maximum interval between any two meetings did notexceed 120 days as prescribed under the Companies Act 2013.
Attendance of Director(s) at meeting(s) during the financial year 2017-18
|Sr. No. ||Name of the Director ||Board meeting(s) attended |
|1. ||Mr. Balachandran Krishnan ||05 |
|2. ||Mr. Swaminathan Subramaniam ||06 |
|3. ||Ms. Deepta Rangarajan ||05 |
|4. ||Mr. Partho Datta* ||01 |
|5. ||Mr. Narayan Seshadri ||05 |
|Sr. No. ||Name of the Director ||Board meeting(s) attended |
|6. ||Mr. Rakesh Kathotia ||01 |
|7. ||Mr. U. R. Bhat# ||0 |
|8. ||Mr. Sanjoy Bhattacharyya & ||01 |
|9. ||Mr. Vinod B. Agarwala ||01 |
|10. ||Mr. Bhaswar Mukherjee ||02 |
|11. ||Mr. Ashok Venkatramani ||02 |
* Mr. Partho Datta resigned from Directorship w.e.f. 28.11.17
@ Mr. Rakesh Kathotia resigned from Directorship w.e.f. 12.09.17
# Mr. U. R. Bhat resigned from Directorship w.e.f. 03.09.17
& Mr. Sanjoy Bhattacharyya resigned from Directorship w.e.f. 24.11.17
19. COMMITTEES OF THE BOARD
I. AUDIT COMMITTEE
The company has constituted an Audit Committee in accordance with Section 177 of theCompanies Act 2013. The terms of reference of the Committee are as follows:
1. Oversight of the company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible.
2. Recommending to the Board the appointment reappointment and if required thereplacement or removal of the statutory auditor and the fixation of audit fees.
3. Approval of payment to statutory auditors for any other services rendered by thestatutory auditors.
4. Reviewing with the management the annual financial statements before submission tothe board for approval with particular reference to:
a) Matters required to be included in the Director's Responsibility Statement to beincluded in the Board's report in terms of clause (c) of sub-section 3 of section 134 ofthe Companies Act 2013;
b) Changes if any in accounting policies and practices and reasons for the same;
c) Major accounting entries involving estimates based on the exercise of judgment bymanagement;
d) Significant adjustments made in the financial statements arising out of auditfindings;
e) Compliance with listing and other legal requirements relating to financialstatements;
f) Disclosure of any related party transactions;
g) Qualifications in the draft audit report.
5. Reviewing with the management the half yearly financial statements beforesubmission to the board for approval.
6. Reviewing with the management the statement of uses / application of funds raisedthrough an issue (public issue right issue preferential issue etc.) the statement offunds utilized for purposes other than those stated in the offer document/DraftProspectus/ Prospectus /notice and the report submitted by the monitoring agencymonitoring the utilization of proceeds of a public or rights issue and making appropriaterecommendations to the Board to take up steps in this matter.
7. Review and monitor the auditor's independence performance and effectiveness ofaudit process.
8. Approval or any subsequent modification of transactions of the company with relatedparties.
9. Scrutiny of inter-corporate loans and investments.
10. Valuation of undertakings or assets of the company wherever it is necessary.
11. Evaluation of internal financial controls and risk management systems.
12. Reviewing with the management performance of statutory and internal auditorsadequacy of the internal control systems.
13. Reviewing the adequacy of internal audit function if any including the structureof the internal audit department staffing and seniority of the official heading thedepartment reporting structure coverage and frequency of internal audit.
14. Discussion with internal auditors any significant findings and follow up there on.
15. Reviewing the findings of any internal investigations by the internal auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the board.
16. Discussion with statutory auditors before the audit commences about the nature andscope of audit as well as post-audit discussion to ascertain any area of concern.
17. To look into the reasons for substantial defaults in the payment to the depositorsdebenture holders shareholders (in case of non payment of declared dividends) andcreditors.
18. To oversee and review the functioning of the vigil mechanism which shall providefor adequate safeguards against victimization of employees and directors who avail of thevigil mechanism and also provide for direct access to the Chairperson of the AuditCommittee in appropriate and exceptional cases.
19. Call for comments of the auditors about internal control systems scope of auditincluding the observations of the auditor and review of the financial statements beforesubmission to the Board.
20. Approval of appointment of CFO (i.e. the Whole-Time Finance Director or any otherperson heading the finance function or discharging that function) after assessing thequalifications experience & background etc. of the candidate.
21. To investigate any other matters referred to by the Board of Directors.
22. Carrying out any other function as is mentioned in the terms of reference of theAudit Committee.
The Audit Committee shall mandatorily review the following information:
(a) Management discussion and analysis of financial information and results ofoperations;
(b) Statement of significant related party transactions (as defined by the AuditCommittee) submitted by the management;
(c) Management letters / letters of internal control weaknesses issued by the statutoryauditors;
(d) Internal audit reports relating to internal control weaknesses; and
(e) The appointment removal and terms of remuneration of the chief internal auditorshall be subject to review by the Audit Committee.
The Audit Committee met two (2) times during the financial year ended 31stMarch 2018 on 27th November 2017 and on 10th March 2018. Thecomposition of the Audit Committee as on 31.03.2018 is as follows:
|Name of the Committee Member ||Category ||No. of meetings held ||No. of meeting(s) attended |
|Mr. Bhaswar Mukherjee (Chairman) ||Independent Non-Executive Director ||02 ||02 |
|Mr. Vinod Agarwala ||Independent Non-Executive Director ||02 ||01 |
|Mr. Ashok Venkatramani ||Independent Non-Executive Director ||02 ||02 |
|Mr. Balachandran Krishnan ||Whole time Director & CFO ||02 ||02 |
II. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee ('NRC') had formulated a policy for theNomination and Remuneration of the Directors Key Managerial Personnel (KMP) and SeniorManagement.
The terms of reference of the NRC are as follows:
1. Formulation of the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board a policy relating to the level andcomposition of remuneration of the directors key managerial personnel and otheremployees;
2. Formulation of criteria for evaluation of independent directors and the Board;
3. To ensure that the relationship of remuneration to performance is clear and meetsappropriate performance benchmarks;
4. Devising a policy on Board diversity; and
5. Identifying persons who are qualified to become directors and who may be appointedin senior management in accordance with the criteria laid down and recommend to the Boardtheir appointment and removal.
The company had adopted a Nomination and Remuneration policy (policy) in accordancewith Section 178 of the Companies Act 2013. The Policy is attached as Annexure - 3 tothis report and is also available on the website of the company viz. www.irisbusiness.com.
The NRC met three (3) times during the financial year ended March 31 2018. Themeetings were held on 9th October 2017 27th November 2017 and 10thMarch 2018. The constitution and terms of reference of the committee are in compliancewith the requirements of section 178 of the Companies Act 2013 and the provisions of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
The composition of the NRC as on 31.03.2018 is as follows:
|Sr. No. ||Name of the Committee Member ||Category ||No. of meetings held ||No. of meeting(s) attended |
|1 ||Mr. Ashok Venkatramani (Chairman) ||Independent Non-Executive Director ||3 ||1 |
|2 ||Mr. Vinod Agarwala ||Independent Non-Executive Director ||3 ||1 |
|3 ||Mr. Narayan Seshadri ||Independent Non-Executive Director ||3 ||3 |
III. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR COMMITTEE)
The company has constituted a CSR Committee in accordance with Section 135 of theCompanies Act 2013. No meetings of the Committee were held during the financial year2017-18. The Composition of the Committee as on 31st March 2018 is as follows:
|Sr. No. ||Name of the Director ||Category |
|1 ||Mr. Ashok Venkatramani (Chairman) ||Independent NonExecutive Director |
|2 ||Ms. Deepta Rangarajan ||Whole Time Director |
|3 ||Mr. Swaminathan Subramaniam ||Whole Time Director& CEO |
IV. STAKEHOLDERS RELATIONSHIP COMMITTEE
The company has constituted a Stakeholder's Relationship Committee in accordance withSection 178 of the Companies Act 2013 and the SEBI (Listing Obligation and DisclosureRequirements) Regulation 2015 specifically for the purposes of looking after the matterof handling and resolving shareholders / investors grievances. No meetings of theCommittee were held during the financial year 2017-18.
The terms of reference of the Committee are as follows:
a. Efficient transfer of shares; including review of cases for refusal of transfer /transmission of shares and debentures;
b. Redressal of security holder's/investor's complaints Efficient transfer of shares;including review of cases for refusal of transfer / transmission of shares and debentures;
c. Reviewing on a periodic basis the approval/refusal of transfer or transmission ofshares debentures or any other securities;
d. Issue of duplicate certificates and new certificates on split/consolidation/renewal;
e. Allotment and listing of shares;
f. Reference to statutory and regulatory authorities regarding investor grievances;
g. To otherwise ensure proper and timely attendance and redressal of investor queriesand grievances; and
h. Any other power specifically assigned by the Board of Directors of the company.
The composition of the Committee as on 31st March 2018 is as follows:
|Sr. No. ||Name of the Director ||Category |
|1 ||Mr. Bhaswar Mukherjee (Chairman) ||Independent NonExecutive Director |
|2 ||Ms. Deepta Rangarajan ||Whole Time Director |
|3 ||Mr. Balachandran Krishnan ||Whole Time Director & CFO |
20. COMPLIANCE WITH SECRETARIAL STANDARD
During the period 1st April 2017 to 31st March 2018 thecompany complied with the Secretarial Standard - 1 and Secretarial Standard - 2 issuedand revised by the Institute of Company Secretaries of India.
21. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The company has a CSR Committee and an approved CSR Policy in accordance with Section135 of the Companies Act 2013 read with rules made thereunder.
The company is exempt from mandatory CSR expenditure as per Rule 3(2) CSR Rules 2014due to not falling in criteria of CSR applicability for three consecutive years i.e. forfinancial years 201415 2015-16 and 2016-17.
The company has on a voluntary basis provided disclosure in Annexure - 4 to this reportin the prescribed format under Section 135 of the Companies Act 2013 which is attachedto this report.
Further the composition of the CSR Committee is covered under 'Committee of the Board'part of the Directors' Report.
The CSR policy of the company is available on the website of the company viz -www.irisbusiness.com.
22. RELATED PARTY TRANSACTIONS
The details of transactions entered into by the company with related parties are atarm's length and in ordinary course of business. The details of the transactions as persection 188 of the Companies Act 2013 and Rules framed thereunder are enclosed asAnnexure - 5 in Form AOC-2 as required under Rule 8(2) of Companies (Accounts) Rules2014.
23. PARTICULARS OF REMUNERATION OF DIRECTORS KMP AND EMPLOYEES AND DISCLOSURES INBOARD'S REPORT
The disclosure on remuneration of Directors Key Managerial
Personnel (KMP) and employees as required under the Companies Act 2013 and rules madethereunder is provided in Annexure - 6 to this Report.
The information required under Rule 5 (2) of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in the Annexure - 6 formingpart of this Report. In terms of first proviso to Section 136 of the Act the Report andAccounts are being sent to the members excluding certain information covered underaforesaid Annexure. Any member interested in obtaining the same may write to the companySecretary at the Registered Office of the company. None of the employees listed in thesaid Annexure - 6 is related to any Director of the company.
24. ANNUAL EVALUATION OF DIRECTORS COMMITTEE AND BOARD
The Nomination and Remuneration Committee of the Board has formulated a PerformanceEvaluation Framework under which the Committee has identified criteria upon which everyDirector every Committee and the Board as a whole shall be evaluated. During the yearunder review the evaluation of every Director every Committee and the Board had beencarried out.
25. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is enclosed as Annexure -7 to this report.
26. STATUTORY AUDITORS
The members at the 15th Annual General Meeting ("AGM") hadapproved the appointment of M/s. M. P Chitale & Co. as the statutory auditors of yourCompany for a period of five years to hold office as such till the conclusion of the sixthconsecutive AGM subject to ratification of appointment by the members at every AGM.
As per Companies (Audit and Auditors) Amendment Rules 2018 dated 7th May2018 notified by the Ministry of Corporate Affairs the requirement of ratification ofAuditor's appointment has been relaxed. Accordingly ratification of Auditor's appointmentis not sought by the Directors.
27. SECRETARIAL AUDITOR
In terms of Section 204 of the Companies Act 2013 and Rules made there under M/s.Parikh & Associates Practicing Company Secretaries Mumbai were appointed as aSecretarial Auditors of the company to conduct the Secretarial Audit of the company forfinancial year 2017-2018. The report of the Secretarial Auditor is enclosed as Annexure-8.
28. INTERNAL AUDITOR
In terms of Section 138 of the Companies Act 2013 and Rules made there under M/s.Moore Stephens Singhi Advisors LLP Chartered Accountants Mumbai the Internal Auditor ofthe company for the Financial Year 2017-18 have been appointed as Internal Auditors ofthe company for the Financial Year 2018-19. During the year the company continued toimplement its suggestions and recommendations to improve the control environment. Theirscope of works includes review of processes for safeguarding the assets of the companyreview of operational efficiency effectiveness of systems and processes and assessingthe internal control strengths in all areas.
29. STATUTORY AUDITORS' REPORT
The Statements made by the Auditors in their report are selfexplanatory and doesn'trequire any comments by the Board of Directors.
30. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS
There are no qualifications reservations or adverse remarks made by the Auditors intheir report.
31. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT - 9 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are enclosed as Annexure 9 to this report.
32. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The company has not granted any loans to any persons or body corporate. Further thedetails of guarantees given and investments made as covered under the provisions ofSection 186 of the Companies Act 2013 forms part of notes to the standalone financialstatements of the company.
33. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and information and based on the information andexplanations provided to them by the company your Directors make the following statementin terms of Section 134(3)(c) of the Companies Act 2013 (the Act):
a. That in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
b. That the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;
c. That the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
d. That the directors had prepared the annual accounts on a going concern basis;
e. That proper internal financial controls were laid down and that such internalfinancial controls are adequate and were operating effectively;
f. That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
34. HUMAN RESOURCES / INDUSTRIAL RELATIONS INCLUDING NUMBER OF PEOPLE EMPLOYED
Your company provides regular training to employees to improve skills. Your company hasput in place a performance appraisal system that covers all employees. Your Company had300 employees as on 31st March 2018 while the employee count was 297 as on 31stMarch 2017.
35. CORPORATE GOVERNANCE
The company being listed on the SME platform of BSE Limited is exempted from provisionsof corporate governance as per Regulation 15 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015. Therefore nocorporate governance report is annexed to this report. However your Company has compliedwith the relevant provision of the Companies Act 2013 and rules thereunder with regardsto formation of committees.
36. COMMITTEE AND POLICY UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The company has constituted Internal Complaints Committee under and as per the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. Duringthe year under review no instance of complaint or report under the said Act wasregistered with the company.
37. WHISTLE BLOWER POLICY / VIGIL MECHANISM
Your Company has Whistle Blower Policy /Vigil mechanism policy for the company toreport to the management instances of unethical behaviour actual or suspected fraud orviolation of the company's code of conduct.
38. CODE OF CONDUCT
The Board of Director has approved a Code of Conduct which is applicable to the membersof the Board of Directors and Senior Management Personnel. It is confirmed that allDirectors and Senior Management Personnel have affirmed their adherence to the provisionsof the Code of Conduct during the financial year 2017-18. The declaration to this effectis enclosed to this report as Annexure 10.
39. MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MDA)
In terms of provisions of Regulation 34(2)(e) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a Management Discussion & Analysis Reporthas been separately furnished in the Annual Report.
40. POLICIES AND DISCLOSURE REQUIREMENTS
In terms of provisions of the Act and provisions of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the company has adopted the followingPolicies. The policies are available on Company's website - http://www.irisbusiness.com
Policy on Related Party Transactions
Nomination and Remuneration Policy
Corporate Social Responsibility Policy
Code of Conduct for Director & Senior Management Personnel
Material Subsidiary Policy
Policy for Determination of Materiality of Events
Policy for Preservation of Documents
Terms and Condition of appointment of Independent Director
Vigil Mechanism Policy
Code for Prohibition of Insider Trading
The company's policy on Directors' appointment remuneration and other matters providedin Section 178(3) of the Companies Act 2013 forms part of Nomination and RemunerationPolicy.
Your Board takes this opportunity to thank all its employees for their dedicatedservice and firm commitment to the goals of the company. Your Board also wishes to placeon record its sincere appreciation for the wholehearted support received from membersvendors bankers and all other business associates. We look forward to continued supportof all these partners in progress.
| ||For and on behalf of the Board of Directors of IRIS Business Services Limited |
| ||Swaminathan Subramaniam ||Deepta Rangarajan ||Balachandran Krishnan |
|Date: 30th May 2018 ||Whole Time Director & CEO ||Whole Time Director ||Whole Time Director & CFO |
|Place: Navi Mumbai ||(DIN: 01185930) ||(DIN: 00404072) ||(DIN: 00080055) |