The Board of Directors hereby submits their Forty - Seventh Annual Report on thebusiness and operations of your Company along with Audited Financial Statements for thefinancial year ended March 31 2017.
The summary of the financial performance of the Company during the financial year 2016- 17 is summarized as under:
| || || || ||( H in lacs) |
| || |
|Particulars || |
For the year ended
For the year ended
For the year ended
For the year ended
| || |
|Gross Income ||24239.53 ||24236.54 ||30889.76 ||27557.33 |
|Profit Before Interest Depreciation and Tax (Excluding Exceptional Income) ||10595.56 ||10784.59 ||11328.37 ||10938.03 |
|Finance Charges ||17.46 ||11.40 ||17.46 ||11.40 |
|Provision for Depreciation ||459.69 ||385.63 ||667.90 ||412.16 |
|Profit Before Tax (Excluding Exceptional Item) ||10118.41 ||10387.56 ||10643.01 ||10514.47 |
|Exceptional Cost ||- ||- ||411.40 ||- |
|Provision for Tax ||3168.32 ||3335.05 ||3235.68 ||3390.82 |
|Net Profit After Tax ||6950.09 ||7052.51 ||6995.93 ||7123.65 |
|Balance of Profit Brought Forward ||8870.41 ||7452.66 ||9079.57 ||7590.68 |
|Balance Available for Appropriation ||15820.50 ||9575.66 ||16075.50 ||9784.81 |
|Transfer to General Reserve ||695.01 ||705.25 ||695.01 ||705.25 |
|Surplus carried to Balance Sheet ||15125.49 ||8870.41 ||15380.49 ||9079.57 |
The revenue from operations on standalone basis for the year ended March 31 2017 stoodat H223.56 crores as against H224.04 crores for the previous year. Standalone operationalexpenses for the year were H136.44 crores as compared to H134.52 crores ProfitAfter Tax forthepreviousyear.Thestandalone year ended March 31 2017 was H69.50 crores and EPSH37.33 per share as against H70.53 crores and H37.88 per share respectively for theprevious year. An amount of H6.95 crores has been transferred to General Reserve duringthe year ended March 31 2017 as compared to an amount of H7.05 crores for the previousyear.
The consolidated revenue from operations for the year ended March 31 2017 increased toH288.70 crores as against H257.21 crores for the previous year. Consolidated operationalexpenses for the year were H195.61 crores as compared to H166.19 crores for the previousyear. The consolidated Profit After Tax for the year ended March 31 2017 was H69.96crores and EPS H37.58 per share as against H71.24 crores and H38.26 per share respectivelyfor the previous year. An amount of H6.95 crores has been transferred to General Reserveduring the year ended March 31 2017 as compared to an amount of H7.05 crores for theprevious year.
In the preparation of Financial Statements the provisions of the Companies Act 2013(the "Act") read with the Companies (Accounts) Rules 2014 applicableAccounting Standards and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (the "Listing Regulations") have beenfollowed.
In order to conserve the resources for the inorganic growth and business expansion theBoard of Directors of the Company did not declare any dividend during the year.
Transfer to the Investor Education and Protection Fund
During the year under review no amount became due for transfer to the InvestorEducation and Protection Fund established by the Central Government under Section 125 ofthe Act.
Details regarding unclaimed dividend has been updated on the website of the Companywww.adi-mps.com. The shareholders who have not yet claimed any of their previousdividends are requested to contact the Company's Registrar and Share Transfer Agent (the"RTA") for timely claiming the same. The contact details of the RTA are providedin the Annual Report as well as on the Company's website.
Consolidated Financial Statement
Consolidated Financial Statements prepared in accordance with Accounting Standard 21 isseparately disclosed in the Annual Report. As per the requirements of Section 129 of theAct read with Rule 5 of the Companies (Account) Rules 2014 a statement containingsalient features of the financial statements of subsidiaries in Form AOC - 1 is attachedto the Consolidated Financial Statement.
Statutory Auditor and Audit Report
At the 46th Annual General Meeting ("AGM") held on July 19 2016 M/s. BSR& Co. LLP Chartered Accountants (firm registration no. 101248W/W-100022) had beenappointed as the Statutory Auditors of the Company for a term of 5 years to holdofficetill the conclusion of the 51st AGM of the Company to be held in the calendar year2021. In terms of the first proviso to Section 139 of the Act the appointment of theauditors shall be placed for ratification at every AGM. Accordingly the appointment ofM/s. BSR & Co. LLP as Statutory Auditors of the Company is placed for ratificationby the shareholdes. The Company has received written consent and confirmation from M/s BSR& Co. LLP to the effect that their appointment if made would be within the limitsprescribed under Section 141 of the Act and rules framed thereunder and they satisfy thecriteria provided under the Act for being appointed as the Statutory Auditors of theCompany.
The Audit Report on the Financials Statements of the Company for the financial yearended March 31 2017 read with relevant Notes thereon are self - explanatory and do notcall for any further explanation. The Auditors Report does not contain any qualificationreservation or adverse remark. During the year under review the Statutory Auditors havenot reported any matter under Section 143(12) of the Act and therefore no details arerequired to be disclosed under Section 134 (3)(ca) of the Act.
During the year there has been no change in the paid up equity share capital of theCompany which stood at H18.62 crores. During the year the Company has neither introducedany Stock Option Scheme nor issued any shares with differential voting rights.
Mag+: During the year the Company acquired Mag+ a leading digital platform forcreating and distributing content apps through a Share Purchase Agreement dated July 012016. Mag+ is a complete ecosystem for creating and distributing content to apps on the 1billion+ mobile devices in the world. Mag+ apps are content hubs that engage users andkeep them coming back. It gives users tools for creating and delivering designedtouchscreen - native documents and issues news items real - time notifications in - appmessaging and web content. Mag+ pioneered touchscreen publishing on the first iPad andremains the fastest and simplest publishing platform for creating content optimized formobile devices without the need for programming skills. Mag+ acquisition enhanced MPS'platform capabilities and expanded its reach into newer publishing markets includingenterprises and magazine publishers.
Think Subscription: The Company signed an Assets Purchase Agreement dated February 032017 for acquisition of THINK Subscription Business ("THINK") based in ProvoUtah USA.
This acquisition was subject to customary closing conditions which were completed onApril 1 2017. THINK is a provider of subscription management fulfillmentsoftware to andcontent publishers online service providers media vendors and other subscription basedbusinesses. Acquisition of THINK will enhance Company's platform capabilities to includesubscription management and fulfillment solutions
MPS North America LLC ("MPS North America") wholly owned subsidiary of yourCompany is focused on content creation and development project management and mediaasset development for K12 Higher Education Academic and STM publishers. The operationsof past three USA - based acquisitions (Element EPS and TSI) completed through MPS NorthAmerica have now been completely integrated into the overall operations of MPS NorthAmerica. The revenue of MPS North America for the year ended March 31 2017 was H79.69crores as compared to H37.41 crores during the previous year. The Profit Before Tax forthe year was H 1.48 crores and Profit After Tax was H0.80 crores as compared to theprevious year's Profit Before Tax ofH1.27 crores and Profit After Tax ofH0.71 croresrespectively. During the financial year 2016 - 17 your Company acquired 100% securitiesof Mag+AB a Sweden based company which became its direct wholly owned subsidiary. MPSNorth America acquired 100% securities of MagPlus Inc. a USA based company which becamea step down subsidiary of your Company. The revenue of Mag+AB for the period from July 012016 to March 31 2017 was H9.56 crores. The loss for the period was H0.26 crores. Tostrengthen the product and market focus which will be driven from India & USA and inorder to rationalize these operations Mag+AB Sweden has opted for voluntarydissolution. The Company Registrar at Sweden on Mag+AB application appointed aliquidator. The liquidation process is expected to be completed in the next financialyear.
The Board met four (4) times during the financial year 2016 - 17 to transact thebusiness of the Company. Details of the Board meetings including the attendance ofDirectors at these meetings are covered in the Corporate Governance Report forming part ofthe Annual Report. The maximum interval between any two consecutive Board meetings did notexceed 120 days.
Audit Committee of your Company is constituted in accordance with the provisions ofSection 177 of the Act and the Listing Regulations. Composition role terms of referenceand details of meetings of the Audit Committee are provided in the Corporate GovernanceReport forming part of the Annual Report.
Pursuant to the provisions of the Act and the corporate governance requirements asprescribed under Listing Regulations the Board of Directors carried out an annualperformance evaluation of individual Directors the Board as a whole and its Committeesbased on the criteria set out by the Nomination and Remuneration Committee. Theperformance of the Board was evaluated after seeking inputs from individual Directors onthe basis of the criteria such as the Board composition and structure effectiveness ofBoard processes information and functioning quality of relationship between the Boardand the management etc.
The Board reviewed the performance of the individual Directors on the basis of criteriasuch as contribution of the individual Director to the Board and Committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.
The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee Members on the basis of the criteria such as the composition of Committeeseffectiveness of Committee meetings quality of relationship of the Committee and themanagement etc. In a separate meeting of Independent Directors performance of Non -Independent Directors Board as a whole and the Chairman were evaluated taking intoaccount the views of Executive Directors and Non - Executive Directors. Same was discussedin the Board meeting at which the performance of the Board its Committees and individualDirectors were also discussed. Performance evaluation of Independent Directors was done bythe entire Board excluding the Independent Director being evaluated.
Directors Key Managerial Personnel and Employees
There has been no change in the Board of Directors during the year under review.
In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Rahul Arora retires by rotation at the ensuing AGM and being eligibleoffers himself for re - appointment. Further post closure of the financial year 2016 -17 Mr. Nishith Arora resigned as Whole Time Director of theCompany and has beenappointed as an Additional Director (Non - Executive) of the Company both effective fromMay 15 2017. As an Additional Director Mr. Nishith Arora would hold office upto the dateof 47th AGM. The Company has received a notice from a Member alongwith deposit ofrequisite amount under Section 160 of the Act notifying the directorship of Mr. NishithArora at 47th AGM. Your Directors recommend the appointment of Mr. Nishith Arora at the47th AGM as a Non - Executive Director liable to retire by rotation. Mr. Nishith Arorahas been elected as a Chairman (Non - Executive) of the Board effective May 15 2017.
A brief resume details of expertise and other Directorships/ Committee membershipsheld by the above Directors form part of the Notice convening the 47th AGM of theCompany.Independent Directors have declared to the Company that they meet the criteria ofindependence as provided under Section 149(6) of the Act and Regulation 17 of the ListingRegulations.
Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s R Sridharan andAssociates Practicing Company Secretaries carried out the Secretarial Audit of theCompany during the financial year 2016 - 17. The Secretarial Audit Report for thefinancial year 2016 - 17 prepared by them is annexed to this Report as Annexure A.
The Secretarial Auditors have not expressed any qualification or reservation in theirreport and their report is self - explanatory.Secretarial Auditors had also not reportedany matter under Section 143(12) of the Act and therefore no details are required to bedisclosed under Section 134 (3)(ca) of the Act.
During the year under review your Company has not accepted any deposits under ChapterV of the Act and hence no amount of principal and interest thereof was outstanding.
Loans Guarantees and Investment
Pursuant to Section 186 of the Act and Schedule V of the Listing Regulationsdisclosure on particulars relating to loans advances guarantees and investments areprovided in the Financial Statements. All the investments made by theCompany were inaccordance with the provisions of Section 186 of the Act and the rules made thereunder.During the financial year under review your Company has neither obtained any secured termloan nor provided any secured / unsecured loan to other bodies corporate or guarantees /securities with respect to any such loan.
Utilization of the Proceeds from Qualified Institutional Placement
Your Company had raised a sum of H150 crores through "Qualified InstitutionalPlacement" (the "QIP") during the financial year 2014 - 15. The netproceeds of the issue (net of issue expenses) are primarily to augment funds for growthopportunities such as acquisitions and strategic initiatives for general corporatepurposes and any other purposes as may be permissible under applicable law. During theyear an amount of H27.56 crores was utilized by the Company for the acquisitions of Mag+and THINK The remaining net proceeds of H120.24 crores from QIP remain invested ininterest / dividend bearing liquid instruments and will be utilized as per the objects ofthe QIP as and when a suitable opportunity of acquisition materializes.
Nomination and Remuneration Policy
The Board has on the recommendation of the Nomination and Remuneration Committeeframed criteria for appointment performance evaluation and determining remuneration ofDirectors Key Managerial and Senior Management Personnel. The Board has also adopted aNomination and Remuneration Policy for Directors Key Managerial Personnel / SeniorManagement and other employees which is annexed as Annexure B to this Report.
Particulars of Directors and Employees
Pursuant to Section 197(12) of the Act read with Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 details/informations related to theremuneration of Directors and Key Managerial Personnel are set out in Annexure C to thisReport.
Director's Responsibility Statement
Pursuant to Section 134(3)(c) of the Act the Board of Directors to the best of theirknowledge and ability confirm the following: a. In the preparation of the Annual Accountsfor the financial year ended March 31 2017 the applicable Accounting Standards have beenfollowed along with proper explanation relating to material departures; b. The Directorshave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit andloss of the Company for that period; c. The Directors sufficient have taken proper andcare for the maintenance of adequate accounting records in accordance with the provisionsof this Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; d. The Directors have prepared these Annual Accounts(Standalone) on a going concern basis; e. The Directors have laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and were operating effectively; and f. The Directors have devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively
Internal Financial Control
The Company has an external and independent firm Internal Auditors that scrutinizes thefinancials and other operations of the Company. Based on the framework of internalfinancial controls and compliance systems established and maintained by the Company workperformed by the Internal Statutory and Secretarial Auditors including audit of internalfinancial controls over financial reporting by the Statutory Auditors and the reviewsperformed by management and the Audit Committee the Board is of the opinion that theCompany's internal financial controls were adequate and effective during the financialyear 2016 - 17.
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Identification of the business risk and their mitigationa continuing process. Based diversifiedscale of on the business operations your Companyhas formulated a Risk Management Policy to assist the Board in: overseeing and approvingthe Company's enterprise wide risk management framework; and overseeing that all the risksthat the organization faces such as strategic financial market liquidity securityproperty IT legal regulatory reputational and other risks have been identified andassessed and there is an adequate risk management infrastructure in place capable ofaddressing those risks. The Company's management systems organizational structureprocesses standards code of conduct and behavior together form a system that governshow the Company conducts its business and manages the associated risks.
Related Party Transactions
All related party transactions that were entered into during the financial year 2016 -17 were on arm's length basis and in the ordinary course of business. The Audit Committeereviews all the related party transactions and approves wherever such approval is requiredas per the provisions of Section 188 of the Act rules made thereunder Regulation 23 ofthe Listing Regulations and applicable Accounting Standards. The Company has not duringthe year entered into any related party transaction that may have a potential conflictwith that of the Company at large. During the year the Company has not entered into anymaterial related party transactions as specified in Section 188(1) of the Act with anyof its related parties. Accordingly the disclosure of related party transactions as perSection 134(3)(h) of the Act in Form AOC - 2 is not applicable. The details of relatedparty transactions of the Company are disclosed in the Financials Statements of theCompany.
Your Company has formulated a Policy on Related Party Transactions which isdisseminated on the Company's website www.adi-mps.com.
The Company has adopted a "Whistle Blower Policy" (the "Policy")through which employees are provided a platform to raise concerns in line with MPS'commitments to the highest possible standards of ethical moral and legal businessconduct and its commitment to open communications. Directors and employees can report tothe Chairman of the
Audit Committee and Company Secretary or Ombudsman on a confidential basis anypractices or actions believed to be inappropriate or illegal. It is affirmed that noperson has been denied access to the Audit Committee. The Policy provides completeconfidentiality and safeguard of the employees who raises the whistle against suchimproper conduct.
Policy has been communicated to all the Directors and employees of the Company throughintranet site of the Company.
Prevention of Sexual Harassment at Workplace
Your Company has a Policy for prevention of Sexual Harassment in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Internal ComplaintCommittees has been constituted at all thelocations of the Company in India to redress the complaints if any received. The detailsof the complainant are kept confidential. During the year under review no complaint wasreceived from any employee of the Company involving sexual harassment and thus no casewas filed pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
As per the requirements of Section 92(3) of the Act and Rule 12(1) of the Companies(Management and Administration) Rules 2014 an extract of Annual Return in Form MGT 9 isannexed to this Report as Annexure D.
Corporate Social Responsibility
MPS has been an early adopter of Corporate Social Responsibility (the "CSR")initiatives. In terms of the provisions of Section 135 of the Act your Company hasconstituted a CSR Committee. The composition and terms of reference of theCSR Committeeare provided in the Corporate Governance Report forming part of this Annual Report. TheCompany has also formulated a CSR Policy which is available on the website of the Companyviz. www.adi-mps.com. Your Company has evolved various CSR initiatives which includesimparting primary high - quality education to out - of - school under privileged girlsimparting computer education to underprivileged children providing tailored madeeducation to students with learning disabilities building intellect and instill highervalues of life in youths through education building strengths of a person affected withmental illness and providing support to home/ care - center for mentally retarded andphysically handicapped children. Your Company has also devisedpropersystemto monitor theCSR activities as per its CSR Policy. In terms of the provisions of Section 135 of theAct and the Companies (Corporate Social Responsibility) Rules 2014 as amended thedetails of the CSR Projects undertaken by the Company during the year are provided inAnnexure E.
Your Company believes in adopting best practices of corporate governance and adheres tothe standards set out by the Securities and Exchange Board of India. Corporate governanceis about maximizing shareholder's value legally ethically and sustainably. Our Boardexercises its fiduciary responsibilities in the widest sense of the term. We also endeavorto enhance long - term shareholder value and respect minority rights in all our businessdecisions. A detailed report on Corporate Governance pursuant to the requirements ofRegulation 34 of the ListingRegulations
Developments forms part of the Annual Report together with a certificate from theStatutory Auditors of the Company confirming compliance with the conditions of CorporateGovernance. change or
Management's Discussion and Analysis Report
Management's Discussion and AnalysisReportfortheyear and Material under reviewas stipulated under Regulation 34 of the Listing Regulations is presented in a separatesection forming part of the Annual Report.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Out -Go
Pursuant to Section 134(3)(m) of the Act read with the Rule 8 of the Companies(Accounts) Rules 2014 the following information is provided:
A. Conservation of Energy
The provisions regarding disclosure of particulars with respect to Conservation ofEnergy are not applicable to the publishing services industry as the operations are notenergy - intensive. However constant efforts are being made to make the infrastructuremore energy - efficient
B. Technology Absorption
Particulars regarding Technology Absorption are annexed to this Report as Annexure F.
C. Foreign Exchange Earnings and Outgo
During the year under review foreign exchange earned through exports was H223.36crores as against H223.87 crores for the previous year ended March 31 2016. Foreignexchange outgo was H12.56 crores as against H14.82 crores for the previous year. Thus thenet foreign exchange earned by the Company during the year ended March 31 2017 wasH210.80 crores. The details of foreign exchange earnings and outgo are provided in theNotes forming part of the Financial Statements of the Company for the year ended March 312017.
Significant After the Close of the Financial Year
Except the events disclosed elsewhere in the Annual Report development that couldaffect the nosignificant Company's financial position has occurred between the end of thefinancial year and the date of this Report
Significant Orders Passed by any Regulators or Court
During the year under review no significant was passed by any regulator or court thatwould impact the going concern status or future business operations of the Company.
Your Directors take this opportunity to thank the customers shareholders suppliersbankers business partners / associates and Central and State Governments for theirconsistent support and encouragement to the Company. We place on record our appreciationfor the contribution made by our employees at all levels. Our consistent growth was madepossible by their hard work solidarity cooperation and support.
| ||For and on behalf of the Board of Directors |
|Gurugram ||Nishith Arora |
|May 10 2017 ||Chairman |
NOMINATION AND REMUNERATION POLICY
Objective and purpose of the Policy:
The objective and purpose of this policy are:
To lay down criteria with regard to identifying persons who are qualified to becomeDirectors (Executive and Non - Executive) and persons who may be appointed in SeniorManagement and Key Managerial positions of the Company.
To determine remuneration based on the Company's size financial position trends andpractices on remuneration prevailing in peer companies engaged in the industry as theCompany.
To carry out evaluation of the performance of Directors Key Managerial Personnel (KMP)and Senior Management Personnel.
To attract retain motivate and promote talent and to ensure long term sustainabilityof talented Managerial Persons and create competitive advantage.
This policy shall be effective from August 20 2014.
Independent Director means a Director as defined in Section 149 (6) of the CompaniesAct 2013 read withSchedule IV and Clause 49 of the Listing Agreement with the StockExchanges and any further amendment or modification made thereto.Key Managerial Personnel(KMP) means -
(i) Executive Chairman and / or Managing Director;
(ii) Whole - Time Director;
(iii) Chief Financial Officer;
(iv) Company Secretary;
(v) Such other officer as may be prescribed under the applicable statutory provisions /regulations. Senior Management means personnel of the Company who are Members of its CoreManagement team excluding Board of Directors comprising all Members of Management onelevel below the Executive Directors including the functional heads. Unless the contextotherwise requires words and expressions used in this policy and not defined herein butdefined in the Companies Act 2013 as may be amended from time to time shall have themeaning respectively assigned to them therein.
The Policy is applicable to Directors (Executive and Non - Executive) Key ManagerialPersonnel Senior Management Personnel
This Policy is divided in three parts:
Part A covers the matters to be dealt with and recommended by the Committee to theBoard Part B covers the appointment and nomination and Part C covers remuneration andperquisites etc. The key features of this policy shall be included in the Board's Report.
MATTERS TO BE DEALT WITH PERUSED AND RECOMMENDED TO THE BOARD BY THE NOMINATION ANDREMUNERATION COMMITTEE
The Committee shall:
Formulate the criteria for determining qualifications positive attributes andindependence of a Director. Identify persons who are qualified to become Director(s) andpersons who may be appointed in Key Managerial and Senior Management positions inaccordance with the criteria laid down in this policy.
Recommend to the Board their appointment (including terms thereof) and removal ofDirector KMP and Senior Management Personnel.
The Committee may delegate the powers of appointment remuneration and removal ofSenior Management Personnel to the Chairman and Managing Director.
POLICY FOR APPOINTMENT AND REMOVAL OF DIRECTOR KMP AND SENIOR MANAGEMENT PERSONNEL
Appointment criteria and qualifications:
1. The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director and / or KMP and recommend to theBoard his / her appointment.
2. A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee shall decide whetherqualification expertise and experiencepossessedbyapersonaresufficient / satisfactory forthe concerned position.
3. The Committee shall not recommend the appointment of any person as a Directorincluding a Managing Director or Whole Time Director who is below the age of twenty oneyears or has attained the age of seventy years. Provided that the Committee can subjectto the subsisting laws on the subject recommend the re - appointment of a person holdingthe position even if the tenure of re - appointment may extend beyond the age of seventyyears and such recommendation would be subject to the approval of shareholders by aspecial resolution.
4. The Committee shall not recommend the appointment or continue the employment of anyperson as a Managing Director or Whole Time
Director who is a. an undischarged insolvent or has at any time been adjudged as aninsolvent; b. has at any time suspended payment to his creditors or makes or has at anytime made a composition with them; or c. has at any time been convicted by a court of anoffence and sentenced for a period of more than six months.
Term / Tenure:
1. Managing Director / Whole - time Director:
The Company shall appoint or re - appoint any person as its Managing Director / WholeTime Director for a term not exceeding five years at a time.
No recommendation for re - appointment shall be made earlier than one year before theexpiry of term.
2. Independent Director:
The recommendation of the Committee for the appointment or re - appointment of anIndependent Director shall be guided by the following:
a. An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for re - appointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board's Report.
b. No Independent Director shall hold office for more than two consecutive terms butsuch Independent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director. Provided that an Independent Director shallnot during the said period of three years be appointed in or be associated with theCompany in any other capacity either directly or indirectly. However if a person who hasalready served as an Independent Director for 5 years or more in the Company as on 1stOctober 2014 or such other date as may be determined by the Committee as per regulatoryrequirement he / she shall be eligible for appointment for one more term of 5 years onlyas per Listing Agreement.
c. At the time of appointment of an Independent Director it should be ensured thatnumber of Boards on which such Independent Director Serves is restricted to seven listedcompanies as an Independent Director and three listed companies as an Independent Directorin case such person is serving as a Whole - time Director of a listed company.
The Committee shall carry out evaluation of performance of every Director.
Due to reasons for any disqualification mentioned in the Companies Act 2013 rulesmade thereunder or under any other applicable Companies Act 2013 rules and regulationsor the breach of contractual obligation the
Committee may recommend to the Board with reasons recorded in writing removal of aDirector and / or KMP or a Senior Management Personnel subject to the provisions andcompliance of the Companies Act 2013 or any other applicable law and rules andregulations made thereunder.
The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the
Companies Act 2013 and/or the prevailing policy of the Company. The Board shall havethe discretion to retain the Director in the same position / remuneration or otherwiseeven after attaining the retirement age for the benefit of the Company in accordance withthe provisions of the Companies Act 2013.
POLICY RELATING TO THE REMUNERATION FOR THE WHOLE - TIME DIRECTOR KMP AND SENIORMANAGEMENT PERSONNEL
1. The remuneration / compensation / commission etc. to the Whole - time Director KMPand Senior Managerial Personnel will be determined by the Committee and recommended to theBoard for approval. The remuneration / compensation / commission etc. shall be subject tothe prior/post approval of the shareholders of the Company and Central Governmentwherever required.
2. The remuneration and commission / variable pay to be paid to KMP(s) shall be inaccordance with theArticles of Association of the Company and as per the provisions of theCompanies Act 2013 and the rules made thereunder.
3. Increments to the existing remuneration / compensation structure may be recommendedby the Committee to the Board in the case of Whole - Time Director KMP and SeniorManagement Personnel.
4. Where any insurance is taken by the Company on behalf of its Whole - Time DirectorChief Executive Officer Chief Financial Officer Company Secretary and any otheremployees for indemnifying them against any liability the premium paid on such insuranceshall not be treated as part of the remuneration payable to any such personnel.
Remuneration to Whole - time / Executive / Managing Director KMP and Senior ManagementPersonnel:
1. Fixed pay: a) The Whole - Time Director and KMP shall be eligible for a monthlyremuneration as may be approved by the Board on the recommendation of the Committee. Thebreakup of the pay scale and quantum of perquisites including employer's contribution toP.F pension scheme medical expenses other perks etc. shall be decided and approved bythe Board on the recommendation of the Committee and approved by the shareholders andCentral Government wherever required. b) The Remuneration of Senior Management Personnelincluding any subsequent change in the remuneration shall be decided in line with the HRpractices of the Company. c) Any subsequent change in the Remuneration of KMP (other thanExecutive Directors) shall be decided in line with the HR practices of the Company.
2. Minimum Remuneration:
If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Managing / Whole - timeDirector(s) in accordancewith the provisions of Schedule V of the Companies Act 2013 and if it is not able tocomply with such provisions with the previous approval of the Central Government.
3. Provisions for excess Remuneration:
If any Whole - time Director draws or receives directly or indirectly by way ofremuneration any such sums in excess of the limits prescribed under the Companies Act2013 or without the prior sanction of the Central Government where required he / sheshall refund such sums to the Company and until such sum is refunded hold it in trust forthe Company.
The Company shall not waive recovery of such sum refundable to it unless permitted bythe Central Government.
Remuneration to Non - Executive Directors:
1. Remuneration / Commission:
The remuneration / commission shall be recommended in accordance with the limits andconditions mentioned in the Articles of Association of the Company and the Companies Act2013 and the rules made thereunder.
2. Sitting Fees: a) The Non - Executive Directors will receive remuneration by wayof fees for attending meetings of Board or Committee thereof provided that the amount ofsuch fees shall not exceed the amount as may be prescribed by the Central Government fromtime to time. b) The sitting fee per Meeting for attending the Board / Committee Meetingsof the Company will be as follows: i) For Board Meeting H 80000 per Meeting ii) ForAudit Committee Meeting H80000 per Meeting iii) For Stakeholders Relationship CommitteeMeeting H60000 per Meeting iv) For Corporate Social Responsibility Committee MeetingH60000 per Meeting v) For Nomination and Remuneration Committee Meeting H60000 perMeeting
3. Commission: a) Commission may be paid as approved by the shareholders subjectto the limit as per the applicable provisions of the Companies Act 2013. b) At thecurrent level of Company's size and operation the total amount of commission and sittingfees to be paid to the Non - ExecutiveDirectors in the aggregate shall be subject to amaximum of H80 lacs in any given financial year.
This limit may be reviewed by the Committee in April 2016 and thereafter at thebeginning of each financial year.
Details of Remuneration under Section 197 of Companies Act 2013 and Rule 5 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
A. Details as per Section 197 and Rule 5(1):
(i) Ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2016 - 17 percentageincreaseinremunerationofChiefFinancialOfficer Chief Executive Company Secretary orManager if any in the financial year 2016 - 17 is as follows:
|Sl. No. ||Name of Executive Director / KMP ||Designation || |
Percentage increase in Remuneration from previous year
Ratio of Remuneration of each Director to median remuneration of employees#
|1 ||Nishith Arora* ||Chairman & Whole Time Director ||(24%) ||22:1 |
|2 ||Rahul Arora** ||CEO & Whole Time Director ||54% ||62:1 |
|3 ||Sunit Malhotra ||Chief Financial Officer ||8% ||Not Applicable |
|4 ||Hitesh Kumar Jain ||DGM - Legal & Company Secretary ||7% ||Not Applicable |
*Resigned as Whole Time Director and appointed as Non - Executive Director effectivefrom May 15 2017.
**CEO is being paid remuneration from the US Branch of the Company post his deputationto USA w.e.f. September 18 2015. There was no increase in the remuneration of CEO duringthe financial year 2016 - 17. Percentage increase reflected from the previous year is dueto revision in the salary with effect from September 18 2015. The salary level at USA isnot comparable to the salary level in India.
# For the purpose of ratios the PLB payable for the respective financial year has beenconsidered in the same financial year. Median Annual Remuneration for the financial year2016 - 17 wasH243179/-.
Ms. Yamini Tandon Non - Executive Director did not receive any remunerationincluding sitting fees from the Company. The Non - Executive Independent Directors of theCompany are paid sitting fee and commission within the limits as approved and prescribedunder the Companies Act 2013. The details of remuneration paid to Non - ExecutiveIndependent Directors are detailed in the Corporate Governance Report.
The ratio of remuneration and percentage increase for the
Non - Executive Independent Directors' remuneration has not been considered for thispurpose.
(ii) Increase in Median Remuneration:
During the financial year 2016 - 17 Median Annual Remuneration of employees has beenincreased by 5% over the previous financial year.
(iii) Permanent Employees:
The Company had 2760 permanent employees on its rolls on standalone basis as on March31 2017.
(iv) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and exceptionalcircumstances if any for increase in the managerial remuneration:
During the financial year 2016 - 17 average increase in the remuneration of employeeswas 7% while the increase in the average managerial remuneration from the previous yearwas 17% which is mainly due to difference in the total remuneration received during thefinancial year 2016 - 17 viz - a - viz in the financial year 2015 - 16 as salary of CEOrevised during the previous year w.e.f. September 18 2015. (v) The Company affirms thatthe remuneration to Directors and employees during the financial year 2016 - 17 is as perits Remuneration Policy.
B. Details as per Section 197 and Rule 5(2) and 5(3) of the Act:
1. Statement of Top 10 permanent employees in terms of remuneration drawn duringthe financial year 2016 - 17:
|Employee Name ||Designation ||Educational Qualification || |
Remuneration1 (in H lacs)
|Rahul Arora ||Chief Executive Officer and Whole Time Director ||PGPM ||7 ||132.88 ||Gallup India |
|Narendra Kumar V ||Chief Technical Officer ||BE - Computer Science ||26 ||60.55 ||Scientific Publishing Solutions |
|Nishith Arora ||Executive Chairman and Whole Time Director ||PGDBM ||38 ||53.80 ||ADI BPO Services Ltd. |
|Sunit Malhotra ||Chief Financial Officer ||CA CS ||28 ||39.60 ||S. K. Birla Group |
|Atul Nigam2 ||Senior Vice President ||M. Tech ||26 ||39.59 ||Datamatics Technologies Ltd |
|Nigel Gary Wyman3 ||Senior Vice President Operations ||MBA ||39 ||35.04 ||OKS Preprocess Services |
|Gautam Kumud4 ||Vice President ||MBA ||15 ||26.30 ||EMR Technologies |
|Hitesh Kumar Jain ||DGM - Legal & Company Secretary ||CS LLB ||14 ||25.12 ||TV18 Broadcast Ltd. |
|Satya Pal ||Vice President Service Delivery ||M Tech ||24 ||24.10 ||Wolters Kluwer |
|Harish V Iyer ||Vice President ||Masters in International Business ||28 ||20.06 ||Hurix System Pvt Ltd. |
Notes: 1 The remuneration details are as per Income Tax Act except for CEO and WholeTime Director who is paid (except PLB which was paid in India) from US Branch of theCompany and as such not liable to tax in India.
2 Was in employment till January30 2017. 3 Was in employment till January17 2017. 4Was in employment till December 15 2016.
All the above employees are / were permanent employees of the Company and not holdingany equity shares of the Company in their respective names.
2. During the financial year 2016 - 17 no employee of the Company other than CEO& Whole Time Director received remuneration of one crore and two lakh rupees or moreper annum while working for the whole year or at the rate of eight lakh and fifty thousandrupees per month while working for a part of the year.
3. During the financial year 2016 - 17 or part thereof no employee of the Companyexcept Narendra Kumar V CTO (whose remuneration details are mentioned at point B(1)above) received remuneration in excess of the remuneration drawn by Whole - Time Director.During the financial year 2016 - 17 no employee of the Company (by himself or along withhis spouse and dependent children) was holding two percent or more of the equity sharesof the Company.
4. During the financialyear 2016 - 17 no employee of the Company resident in Indiaposted and working in a country outside India not being Directors or their relatives haddrawn more than sixty lakh rupees per year or five lakh rupees per month.
| ||For and on behalf of the Board of Directors |
|Gurugram ||Nishith Arora |
|May 10 2017 ||Chairman |
Disclosure of Particulars with Respect to Technology Absorption Research &Development:
|1. Specific areas in which R&D was ||Workflow management and tracking solutions |
|carried out by the Company ||Review process and leveraging technology to build review systems |
| ||Content delivery systems |
| ||Web application security |
| ||Content management solutions |
| ||Further customization of MPSTrak (workflow management system) for customer-specific requirements |
| ||Ad hoc Reports |
| ||Integration with SAP RightsLink FundRef ORCID Alfresco and Documentum |
| ||Front end testing using Protractor |
| ||Angular JS development |
| ||HTML5/CSS based auto composition |
| ||Automated quality checking tools for the composition / PDF output |
| ||Optimization of production process and workflow |
| ||Custom Development and QA projects for customers |
| ||Technology Migration |
| ||The Company continued its effort towards development of the following: |
| ||- Advanced editing and XML generation tools |
| ||- Advanced graphics automation tools |
| ||- Advanced server based auto composition systems |
| ||- Implementation of workflows / processes with more |
| ||Cloud based systems |
|2. Benefits derived from the above ||Improved competitive positioning |
| ||Consolidation of IT resources |
| ||Optimized bandwidth usage and management |
| ||Improved business continuity at optimized cost |
| ||Data security and protection from external threats |
| ||Improved communication standards and cost efficiency |
| ||Improvement in quality and consistency of service deliveries |
| ||Improved productivity with lean workflow |
|3. Future plan of action ||Enhancing DigiCore platform as per project roadmap |
| ||HTML5-based composition system with automated quality tools |
| ||Further leverage of HTML5 for providing enhanced experience and powering interactive products |
| ||Migration to AngularJS |
| ||Mobile application development |
| ||Migration of more systems to cloud with increased scalability and availability |
| ||Further improvement in business continuity and disaster recovery plan |
| ||Centralization of key processes for cost efficiency |
| ||Improved process automation resulting in increased productivity |
|4. Expenditure on R & D result ||Expenses on R&D in the development of Mobile App and new technology which will help in processing of large data. |
Technology Absorption Adaptation and Innovation
|1. Efforts in brief made towards technology absorption adaptation and innovation. ||Development and implementation of innovative cloud-based systems for end- to-end publishing services |
| ||Adoption of PCI-DSS standards of security |
| ||Implementation of ITIL process frame work and IS 27001 |
| ||Implementation of application security processes |
|2. Benefits derived from the above ||Tangible benefits to clients in terms of reducing time to publish and increasing productivity |
| ||More secured and scalable products |
| ||Improved customer interests and associated service / technology requests from various customers |
| ||Standardization of measurement techniques and information |
| ||Ability to produce and deliver larger value at existing resource level |
|3. Imported Technology ||No technologies were imported |
| ||For and on behalf of the Board of Directors |
|Gurugram ||Nishith Arora |
|May 10 2017 ||Chairman |