To the Members
Everonn Education Limited
Your Directors present the 16th Annual Report of the Company along with AuditedFinancial Statements for the financial year ended 31st March 2016.
1. Financial Highlights
Rs. In Lakhs
| ||For the year ended |
|Particulars ||31st March 201 6 ||31st March 2015 |
|Income from operations ||1762.19 ||2832.54 |
|Other Income ||135.90 ||28.59 |
|Total Revenue ||1898.09 ||2861.13 |
|Total expenditure before interest & Depreciation ||3213.98 ||3305.20 |
|Operating Profit / (Loss) (EBIDTA) ||(1315.89) ||(444.07) |
|Interest ||3987.05 ||4083.30 |
|Depreciation / Amortization ||893.21 ||3277.24 |
|Profit before exceptional and extraordinary items and tax ||(6196.15) ||(7804.61) |
|Less Exceptional items ||69516.64 ||634.39 |
|Profit / (Loss) before tax ||(75712.79) ||(8439.00) |
|Income Tax/ Deferred Tax Reversal ||18993.35 ||- |
|Profit / (Loss) after tax (PAT) ||(94706.14) ||(8439.00) |
2. REVIEW OF OPERATIONS:
During the year under review the Company earned total revenue of Rs.1898.09 Lakhs asagainst Rs.2861.13 Lakhs in the previous year. The Loss before tax was Rs.75712.79 Lakhsas against'Rs.8439.00 Lakhs in the previous year. The Loss after tax (which includeseffect of reversal of Deferred Tax assets created in previous years amounting toRs.17056.36 Lakhs) was Rs.94706.14 Lakhs as against Rs.8439.00 Lakhs in the previousyear.
The agreed business plans as per the Debt Restructuring Agreement (DRA) entered withthe lending banks could not be implemented in view of failure on the part of the lendingbanks to honor their disbursement commitment to the Company. The lending banks demandedthe company to keep servicing the debt which the company was unable to honor. The lendingbanks have classified the loans as Non-Performing Assets (NPA). The lenders have issuedlegal notices for recovery of debts and recalling the loans. Accordingly the difficultiesfaced by the Company shall have a resulting impact on the operations of the Companyincluding its subsidiaries.
The management is of the view that adoption of the concept of 'realization basis' wouldreflect the true and fair view of the operations of the Company rather than the use of theconcept of 'Going Concern'. The Financial Statements have therefore been prepared onrealization basis and hence necessary provisions / reversal s have been made which have animpact of Rs. 88509.99 lakhs in the Loss after Tax during the FY 2015-16
Steps taken towards reduction of above Financial Loss
For the financial year 2016-17 the management continues to focus on successfulexecution and completion of the existing ICT (Instructional Computing Technology)contracts and drive the collection of legacy receivables and advances. The management hasdownsized its manpower and other overheads including office premises and is also exploringavenues for monetization of non-core assets across the portfolios in order to unlock theavailable value in the business.
In view of the accumulated losses the Board of Directors have not recommended paymentof dividend for the year 201 5-1 6.
4. PUBLIC DEPOSITS:
During the year under review the Company has not accepted any deposits within themeaning of Section 73 and 76 of the Companies Act 2013 read with Companies (Acceptance ofDeposits) Rules 2014.
5. SHARE CAPITAL:
There was no change in the share capital of the Company during the year 2015-16.
6. LISTING OF SHARES:
The Equity Shares of the Company are listed on National Stock Exchange of India Limited(NSE) and Bombay Stock Exchange Limited (BSE). The Listing fees for the year 2015-16 havealready been paid to BSE and NSE. The custodial fees payable to depositories namely NSDL& CDSL have also been remitted by the Company.
7. CHANGE OF REGISTERED OFFICE:
In view of the steps taken for reduction of above financial losses during the year2015-16 the Registered Office of the Company was shifted from "1 st Floor 'A BlockS. P. Infocity Plot # 40 MGR Salai Kandanchavadi Perungudi Chennai - 600 096"to "Capital Tower Unit No 203 & 204 II Floor Door Nos.6/13& 6/14Kodambakkam High Road Nungambakkam Chennai - 600034" .
8. EXTRACT OF ANNUAL RETURN:
An extract of Annual Return in Form MGT 9 is appended to this Report as Annexure I.
9. SUBSIDIARY COMPANIES:
As on 31st March 2016 the Company has 15 Subsidiary Companies including 3 step flownSubsidiary Companies. The Company also has 1Associate Company. There has been no materialchange in the nature of the business of the subsidiaries.
Pursuant to the provisions of Section 129 134 and 136 of the Companies Act 2013 readwith rules framed thereunder your Company has prepared Consolidated Financial Statementsof the Company and its Subsidiaries which forms part of the Annual Report.
The Consolidated Financial Statements do not include the consolidation of Right TrackAdmizzionz Campus Private Limited (Associate Company) as the investment made in the saidcompany is not from long term perspective; besides the Company also does not have controlover the management of the said associate. Pursuant to provisions of Section 129(3) of theAct a statement containing salient features of the financial statements of thesubsidiaries in Form AOC-1 is attached as Annexure II.
In accordance with the provisions of Section 1 36 of the Companies Act 201 3theAudited Financial Statements including the Consolidated Financial Statements as aboveand relevant information of the Company are available on the website of the Company i.e.www.everonn.com. The financial statements of the subsidiary companies shall be kept forinspection at the registered office of the Company and of the respective subsidiarycompanies during working hours on all working days and during the Annual General Meeting.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management & Administration) Rules 2014 and Articles of Association of theCompany;
Mr. Ajay Shekar Shetty Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible has offered himself for re-appointment. YourBoard recommends his re-appointment. Mr. Mustafa Sheriff and Ms. Priyanka GuptaIndependent Directors of the Company resigned from the Board w.e.f 31st December 2015 and2nd February 2016 respectively.
Mr. C. N. Radhakrishnan Managing Director of the Company stepped down from theposition of Managing Director of the Company w.e.f 12th February 2016. However hecontinues as Non-Executive Director of the Company.
Mr. Sandeep Maniyar Whole Time Director and Chief Financial Officer of the Companyresigned from the position of Whole Time Director and Chief Financial Officer w.e.f 12thFebruary 2016 however he will continue as Non-Executive Director of the Company.
Mr. Himansu Sekhar Kabi was appointed as Chief Financial Officer of the Company w.e.f.12th February 2016. Mr. Sachin Dhingra was appointed as Manager of the Company w.e.f.12lh February 2016 this is subject to the approval of the shareholders.
The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet the criteria of independence for the year 2015-16 as prescribedboth under Section 149(6) of the Companies Act 2013 and erstwhile Clause 49 of ListingAgreement read with Regulation 16(1)(b) of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 (hereinafter referred to as Listing Regulations).
At present there are no Independent Directors (including a female director) in theCompany and hence the Composition of the Board of Directors is not in accordance to theprovisions of Companies Act 2013 and Listing Regulations. In view of the challengingbusiness situation the Company is unable to attract suitable persons for the position ofindependent directors (including a female director). Hence the Board had decided to takeappropriate steps in this direction including filing suitable petition/application withNational Company Law Tribunal as and when the constitution is in place; however in theinterim the Company is seeking advice on any other recourse available in order to be incompliance with the provisions of Companies Act 2013 and Listing Regulations.
As stipulated under the Regulation 36 of the Listing Regulations brief resume of theDirectors proposed to be appointed/re-appointed are given in the Notice convening the AGM.
11. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to provisions of Section 134(3)(c) of the Companies Act 2013 the Board ofDirectors state that: a. in the preparation of the annual accounts the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures; if any b. the directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year 31st March 2016 and of the loss of the company for that period; 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 'Realization Basis' as use of 'Going Concern'assumption is considered not appropriate; e. the board appointed an externalconsultant to review the Internal Financial Control (IFC) process and it's adequacy. Theconsultant reviewed the process and financial controls in place during the FY 2015-16 andsubmitted it's report to the board. The board has taken cognizance of the report and it'sfindings. The board has also directed the CFO and the Compliance officer of the company tosuitably address the findings of the IFC report and place the follow up report before theboard in the subsequent board meeting.
However during the FY 2015-16 the company has in place adequate compensating controlsdirectly monitored by Directors to ensure adequate financial and operational controls. f.the directors have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and are operating effectively.
12. MEETINGS OF THE BOARD:
The Board meets at regular intervals to discuss and decide on Company's business policyand strategies apart from other business. In case of a special and urgent business needthe Board's approval is taken by passing resolutions through circulation as permitted bylaw which are confirmed in the subsequent Board meeting.
The notice of Board / Committee meetings is given well in advance to all the Directorsof the Company. The agenda of the Board/Committee meetings including detailed notes on theitems to be discussed is circulated normally seven days prior to the date of the meeting.
The details of meetings of the Board of Directors are given in the Report on CorporateGovernance and the intervening gap between the two consecutive meetings was within theperiod prescribed under the Companies Act 2013.
13. ANNUAL PERFORMANCE EVALUATION BY THE BOARD MEMBERS:
In view of the non- availability of the Independent Directors on the Board theComposition of Nomination and Remuneration Committee is presently not in conformity withthe Listing Regulations/ Companies Act 2013. Hence the performance evaluation of theIndependent Directors by the Board is not carried out.
14. AUDIT COMMITTEE:
The details pertaining to composition of Audit Committee are included in the Report onCorporate Governance which forms part of this report.
In view of the non- availability of the Independent Directors on the Board theComposition of theAudit Committee is presently not in conformity with the ListingRegulations/ Companies Act 2013.
15. COMMITTEES OF THE BOARD:
Subsequent to the resignation of the Independent Directors from the Board of theCompany/during the year the constitution of the committees are not in compliance with theCompanies Act 2013 and the Listing Regulations. There are currently three Committees ofthe Board as follows:
1. Audit Committee
2. Stakeholders' Relationship Committee
3. Nomination and Remuneration Committee
The Composition of the Committee/s after re-constitution is detailed below:
|SI. No. ||Name of the Committee / Directors ||Mr. Mustafa Shariff Mohammed ||Ms. Priyanka Gupta ||Mr. C. N. Radhakrishnan ||Mr.Ajay Shekar Shetty ||Mr. Sandeep Maniyar |
|1. ||Audit ||Chairman ||Member ||Member (w.e.f ||Member ||Member |
| ||Committee ||(w.e.f 23.05.2015 upto 31.12.2015) ||(w.e.f 23.05.2015 upto 01.02.2016) ||12.02.2016) ||(w.e.f 23.05.2015) ||(w.e.f 29.05.2015) |
|2. ||Stakeholders ||Chairman ||Member ||Member (w.e.f ||Member ||Member |
| ||Relationship Committee ||(w.e.f 23.05.2015 upto 31.12.2015) ||(w.e.f 23.05.2015 upto 01.02.2016) ||12.02.2016) ||(w.e.f 23.05.2015) ||(w.e.f 29.05.2015) |
|3. ||Nomination & ||Chairman ||Member ||Member (w.e.f ||Member ||Member |
| ||Remuneration Committee ||(w.e.f 23.05.2015 upto 31.12.2015) ||(w.e.f 23.05.2015 upto 01.02.2016) ||12.02.2016) ||(w.e.f 23.05.2015) ||(w.e.f 29.05.2015) |
Details of the committees with respect to their terms of reference meetings andattendance at the meetings held during the year are provided in the Report on CorporateGovernance forming part of this report.
16. WHISTLE BLOWER POLICY/ VIGIL MECHANISM:
The Company has a vigil mechanism / whistle blower Policy to deal with instance offraud and mismanagement f any. The mechanism also provides for adequate safeguardsagainst victimization of directors and employees i who avail of the mechanism and alsoprovide for direct access to the Chairman of the Audit Committee in exceptional cases.
The details of the Vigil Mechanism Policy is explained in the Report on CorporateGovernance and also posted on the website of the Company i.e.http://everonn.com/PDFs/Wishtle Blower Policy.pdf We affirm that during the financial year2015-16 no employee or director was denied access to the Audit
17. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
The policy on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters provided in Section 178(3) of the Companies Act 2013 and Listing Regulations hasbeen disclosed in the Report on Corporate Governance.
18. RISK MANAGEMENT:
The company had appointed an in-house internal Auditor to identify evaluate and assessthe risk and it's potential impact on a regular basis and report to the management. Duringthe FY 2015-16 the Internal Auditor has carried out the audit on an regular basis andreported to the management in case of any no-compliance financial irregularities processgaps as well as business and operational risk exposures.
19. CORPORATE SOCIAL RESPONSIBILITY:
The provisions of Section 135 of the Companies Act 2013 on Corporate SocialResponsibility is not applicable to the Company.
20. INTERNAL FINANCIAL CONTROL SYSTEMS :
The details in respect of internal financial control and their adequacy are included inthe Management Discussion & Analysis which forms part of this Report.
21. INTERNAL AUDITORS:
The Company had an Internal Auditor during the financial year 2015-2016.
22. STATUTORY AUDITORS:
M/s. Haribhakthi & Co. LLP Chartered Accountants Statutory Auditors of theCompany holds office as such upto the conclusion date of the ensuing AGM of the Companyand are eligible for re-appointment. The Company has received a letter from them to theeffect that they are willing to continue as Statutory Auditors and if reappointed theirre-appointment would be within the limits prescribed under Section 139 of the CompaniesAct 2013 and they are not disqualified from being appointed as Auditor.
Your Directors recommend the re-appointment of M/s. Haribhakthi & Co. LLPCharteredAccountants pursuant to the provisions of Section 139 of the Companies Act 2013and the Rules framed thereunder as statutory auditors of the Company from the conclusionof the 1 6th AGM till the conclusion of the 20th AGM to be held for the year ended 31stMarch 2020 subject to the approval of the shareholders in the forthcoming AGM.
23. REMARKS IN AUDITORS' REPORT:
With regard to observation made by the Auditors' in their Standalone and ConsolidatedReport please refer the management reply to the auditor's qualification in the addendumto director's report forming part of the Annual Report.
24. SECRETARIAL AUDITORS' REPORT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Boardhad appointed Mr. S Hari Krishnan Practicing Company Secretary Chennai as SecretarialAuditors to conduct the Secretarial Audit of the Company for the Financial Year 2015-16.The Report of the Secretarial Auditor is given as Annexure III which forms part ofthis report.
25. PARTICULARS OF LOANS. GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF COMPANIES
The details particulars of loans guarantees and investments made by the Company underSection 186 of the Companies Act 2013 during the financial year 2015-16 have beendisclosed in Notes to Accounts of the financial statements.
26. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN
SECTION 188(1) OF THE COMPANIES ACT 2013
There were no materially significant related party transactions made by the Companywith Promoters Directors Key Managerial Personnel which may have a potential conflictwith the interest of the Company at large. The policy on Related Party Transactions asapproved by the Board is uploaded on the Company's website at http://everonn.com/PDFs/RTPPolicy.pdf.
None of the Directors has any pecuniary relationships or transactions vis-a-vis theCompany. Accordingly the disclosure of Related Party Transactions as required underSection 134(3) of the Companies Act 2013 in Form AOC-2 is not applicable.
27. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
Details regarding Conservation of energy technology absorption foreign exchangeearnings and outgo is given as in Annexure IV.
28. PARTICULARS OF REMUNERATION:
Pursuant to Section 197 of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial personnel) Rules 2014 details are appendedto this report as Annexure V (PART A). A Statement showing names of the top tenemployees in terms of remuneration drawn is forming part of Annexure V (PART B)appended to this report.
During the year under review no employee was in receipt of remuneration exceeding thelimits as prescribed under provisions of Section 197 of the Companies Act 2013 and Rule5(2)and 5(3)of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
29. REPORT ON CORPORATE GOVERNANCE:
The report of the Directors on Corporate Governance is given as a separate sectiontitled 'Corporate Governance Report' which forms part of the Annual Report.
Further pursuant to Regulation 34 read with Schedule V of Listing Regulations thefollowing have also been made a part of the Annual Report and are attached to this report:a. Management Discussion and Analysis b. Certificate regarding compliance with provisionsof Corporate Governance
30. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
No order has so far been passed by any regulator or court or tribunal impacting thegoing concern status of the Company. However there are certain winding up petitionsagainst the company that may have a bearing on Going Concern' status of the Company's 'andits operations in future.
In view of the challenges faced by the Company with the Lenders for disbursement of thefunds as was envisaged and agreed with them the management is of the view that the use of'Going Concern' assumption for the preparation of the financial statements of the Companyis considered not appropriate.
31. INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION.PROHIBITION AND REDRESSAL) ACT. 2013:
The Company has zero tolerance for sexual harassment at workplace and adopted a Policyon prevention prohibition and Redressal of sexual harassment at workplace in line withthe provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules thereunder. There was no complaint on sexual harassmentduring the year under review.
32. ACKNOWLEDGEMENT AND APPRECIATION:
Your Directors take this opportunity to express their appreciation to all its employeesand stakeholders support.
| ||For and behalf of the Board of the Directors || |
| ||Sandeep Maniyar ||Ajay Shekar Shetty |
| ||Director ||Director |
|Place: Chennai || || |
|Date: 12th Aug 2016 || || |