Your Directors are pleased to present their Report together with the Audited FinancialStatements (Standalone & Consolidated) for the financial year ended on March 312018.
FINANCIAL RESULTS (STANDALONE)
Your Company's performance during the financial year ended on March 312018 along withprevious year's figures is summarized below:
| || ||(Rs in Lacs) |
|Particulars ||2017-18 ||2016-17 |
|Total Income ||95956 ||102532 |
|Earnings before interest tax depreciation and amortization (EBITDA) ||26054 ||29759 |
|Less: Depreciation ||1966 ||2021 |
|Less: Finance cost ||1133 ||1614 |
|Profit before tax ||22955 ||26124 |
|Less: Tax Expense || || |
|Current tax ||5868 ||6023 |
|Adjustment of current tax related to earlier periods ||(140) ||(119) |
|Deferred tax charge/(credit) ||105 ||860 |
|Total tax expense ||5833 ||6764 |
|Profit for the year (after tax) ||17122 ||19360 |
|Other Comprehensive Income (net of tax) ||24 ||(13) |
|Total Comprehensive Income for the year(net of tax) ||17146 ||19347 |
|Opening balance in Retained Earnings ||76853 ||58566 |
|Add: Profit/ (Loss) for the year ||17122 ||19360 |
|Less: || || |
|Items of other Comprehensive Income recognized directly in Retained Earnings- || || |
|Re-measurements of post-employment benefit obligation (net of tax) ||(24) ||13 |
|Dividend paid ||881 ||881 |
|Tax on Dividend ||179 ||179 |
|Total Retained Earnings ||92939 ||76853) |
Your Directors are pleased to recommend a dividend of H1.20 per Equity Share of H10/-each i.e. @ 12% (previous year - H1.20 per Equity Share of H10/- each i.e. @ 12%) for thefinancial year ended on March 312018 and seek your approval for the same.
The proposed equity dividend pay-out (including Corporate Dividend Distribution Tax)would entail an outflow of H1062 Lacs (previous year H1060 Lacs).
The Dividend Distribution Policy framed pursuant to the provisions of Regulation 43A ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Listing Regulations") which appears as"Annexure-A" is also available on the Company's website viz.www.hmvl.in.
COMPANY PERFORMANCE AND FUTURE OUTLOOK
A detailed analysis and insight into the financial performance and operations of yourCompany for the year under review and future outlook is appearing in ManagementDiscussion and Analysis which forms part of the Annual Report.
SCHEME OF ARRANGEMENT
India Education Services Private Limited (IESPL) a fellow subsidiary company isengaged inter-alia in providing higher education programs/courses to students andworking professionals i.e. B2C business. IESPL has not been able to scale its B2C businessand unleash its full potential for growth and profitability. Your Company has deeppresence in Tier II and Tier III cities of north India which can offer a large customerbase with favourable demographics for the growth of the B2C business. Therefore toutilize the expertise and wide-spread reach of the Company in north India the Board ofDirectors during the year under review approved a Scheme of Arrangement under Sections230-232 and other applicable provisions if any of the Companies Act 2013 between IESPLand the Company for demerger and vesting of B2C business from IESPL to and in the Companyon a going concern basis.
The above Scheme of Arrangement is awaiting requisite approvals.
During the year under review the Company has disposed off its entire investment in8587896 equity shares of H10/- each of HT Digital Streams Limited (HTDSL) (constituting42.83% of its equity capital) to Digicontent Limited a fellow subsidiary company for aconsideration of H7675 Lacs. Accordingly HTDSL ceased to be an associate of the Company.
In terms of the provisions of Section 136 of the Companies Act 2013 the financialstatements of HTDSL (Associate Company) for the financial year ended on March 312018 areavailable for inspection by the Members of the Company at the registered office of theCompany during business hours. The same is also available on the Company's website viz.www.hmvl.in.
A report on the performance and financial position of the above Associate Company inprescribed Form AOC-1 is annexed to the Consolidated Financial Statements and hence notreproduced here.
Your Company has a robust risk management framework to identify evaluate and mitigatebusiness risks. A detailed statement indicating development and implementation of the riskmanagement policy including identification of various elements of risk is appearing inthe Management Discussion and Analysis.
ALTERATION OF OBJECTS CLAUSE OF MEMORANDUM OF ASSOCIATION
During the year under review the Company has altered the Objects Clause of Memorandumof Association to enlarge / broaden the existing objects which can be advantageouslycombined with the existing businesses of the Company. Further education business was alsoincorporated in the Objects Clause in view of its synergy with the existing businesses ofthe Company. The Members have accorded their approval to the aforesaid alteration of theObjects Clause of the Memorandum of Association by way of postal ballot with anoverwhelming majority.
EMPLOYEE STOCK OPTION SCHEME
The information required to be disclosed pursuant to the provisions of the Securitiesand Exchange Board of India (Share Based Employee Benefits) Regulations 2014 read withSEBI's circular no. CIR/CFD/ POLICY CELL/2/2015 dated June 16 2015 ("SEBI ESOPRegulations") is available on the Company's website viz. www.hmvl.in. The HTGroup Companies - Employee Stock Option Rules for Listed Companies (of a Parent Company)are in compliance with the SEBI ESOP Regulations. Further during the year under reviewvoting rights on the shares of the Company held by HT Group Companies - Employee StockOptions Trust were not exercised in accordance with SEBI ESOP Regulations.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review Shri Benoy Roychowdhury Whole-time Director tenderedresignation from the Board of Directors of the Company w.e.f. May 24 2018. The Boardplaces on record its sincere appreciation for the valuable contribution made by Shri BenoyRoychowdhury during his tenure on the Board of Directors of the Company.
Further on the recommendation of the Nomination and Remuneration Committee at itsmeeting held on May 24 2018 the Board of Directors have appointed:
1. Shri Praveen Someshwar (DIN: 01802656) as an Additional Director and ManagingDirector w.e.f. August 1 2018 for a period of 5 (five) years subject to approval of theMembers.
2. Shri Tridib Barat (DIN: 08133104) as an Additional Director and Whole-time Directorw.e.f. May 24 2018 for a period of 1 (one) year subject to approval of the Members.
The Board commends for approval of the Members at the ensuing Annual General Meeting(AGM) the appointment of Shri Praveen Someshwar as Managing Director and Shri TridibBarat as Whole-time Director.
During the year Shri Priyavrat Bhartia relinquished office of Managing Director w.e.f.July 17 2018. He continues to be a Non-executive Director of the Company. The Boardplaces on record its sincere appreciation for the valuable contribution made by ShriPriyavrat Bhartia during his tenure as Managing Director on the Board of Directors of theCompany.
In accordance with the provisions of the Companies Act 2013 Smt. Shobhana Bhartiaretires by rotation at the ensuing AGM and being eligible has offered herself forre-appointment. Your Directors commend re-appointment of Smt. Shobhana Bhartia forapproval of the Members at the ensuing AGM.
All the Independent Directors of the Company have confirmed that they meet the criteriaof independence as prescribed under both the Companies Act 2013 and SEBI ListingRegulations. The Independent Directors have also confirmed that they have complied withthe 'Code of Conduct' of the Company.
Brief resume nature of expertise details of directorship held in other Companies ofthe Directors proposed to be appointed / re-appointed at the ensuing AGM along with theirshareholding in the Company as stipulated under Secretarial Standard-2 and Regulation 36of the SEBI Listing Regulations is provided in the Notice of the ensuing AGM.
Key Managerial Personnel
During the year under review following changes in the Key Managerial Personnel havetaken place:
1. Shri Ratul Bhadhuri ceased to be Chief Financial Officer w.e.f. November 5 2017.Further on the recommendation of the Nomination and Remuneration Committee and AuditCommittee the Board of Directors appointed Shri Sandeep Gulati as Chief Financial Officer(Key Managerial Personnel) w.e.f. January 112018.
2. Shri Vivek Khanna ceased to be Chief Executive Officer w.e.f. October 23 2017.Further on the recommendation of the Nomination and Remuneration Committee the Board ofDirectors appointed Shri Rajeev Beotra as Chief Executive Officer (Key ManagerialPersonnel) w.e.f. March 1 2018. In the interim Shri Priyavrat Bhartia Managing Directorwas designated as a Key Managerial Personnel between January 112018 and February 282018.
In line with the requirements under the Companies Act 2013 and the SEBI ListingRegulations the Board undertook an annual evaluation of its own performance and that ofits Committees & Directors.
The Nomination and Remuneration Committee framed questionnaires for evaluation ofperformance of the Board as a whole Board Committees (viz. Audit CommitteeStakeholders Relationship Committee Corporate Social Responsibility Committee andNomination and Remuneration Committee); Directors and the Chairperson on various criteriaoutlined in the 'Guidance Note on Board Evaluation' issued by SEBI on January 5 2017.
The Directors were evaluated on various parameters such as value addition todiscussions level of preparedness willingness to appreciate the views of fellowDirectors commitment to processes which entail amongst other matters risk managementcompliance and control commitment to all stakeholders (shareholders employees vendorscustomers etc.) familiarization with relevant aspects of company's business / activitiesetc. Similarly the Board as a whole was evaluated on parameters which included itscomposition strategic direction focus on governance risk management and financialcontrols.
A summary report of the feedback of Directors on the questionnaire(s) was considered bythe Nomination and Remuneration Committee and the Board of Directors. The Board wouldendeavour to use the results of the evaluation process constructively to improve its owneffectiveness and deliver superior performance.
In compliance of the requirement under the Companies Act 2013 in relation to mandatoryrotation of Auditors the Members of the Company at their 7th Annual General Meeting(post-IPO) held on September 20 2017 have appointed Price Waterhouse & Co CharteredAccountants LLP (PwC) [Firm Registration No. 304026E/E-300009] as Statutory Auditors ofthe Company to hold office for a term of 5(five) consecutive years.
The Auditors' Report of PwC on Annual Financial Statements (Standalone) for thefinancial year ended on March 31 2018 is unmodified opinion i.e. it does not contain anyqualification reservation or adverse remark.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Board of Directors had appointed Shri Arun Kumar Soni CompanySecretary-in-Practice (C.P. No. 1726) as Secretarial Auditor to conduct the SecretarialAudit for financial year 2017-18. The Secretarial Audit Report is annexed herewith as"Annexure -B". The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
During the year under review the Statutory Auditors and the Secretarial Auditor havenot reported any instance of fraud to the Audit Committee pursuant to Section 143(12) ofthe Companies Act 2013 and rules made thereunder.
RELATED PARTY TRANSACTIONS
All contracts / arrangements / transactions entered into by the Company with relatedparties during the year under review were in ordinary course of business of the Companyand on arm's length terms. The related party transactions were placed before the AuditCommittee for review and approval. During the year the Company did not enter into anycontract / arrangement / transaction with related party which could be consideredmaterial in accordance with the Company's Policy on 'Materiality of and dealing withRelated Party Transactions' and accordingly the disclosure of related party transactionsin Form AOC-2 is not applicable. The aforesaid policy is available on Company's website viz.www.hmvl.in.
Reference of the Members is invited to Note no. 34 of the Standalone Annual FinancialStatements which sets out the related party disclosures as per Ind AS - 24.
CORPORATE SOCIAL RESPONSIBILITY
As a responsible corporate citizen your Company is committed to undertake sociallyuseful programmes for welfare and sustainable development of the community at large. TheCompany has in place the Corporate Social Responsibility (CSR) Committee of Directors interms of Section 135 of the Companies Act 2013. The composition and terms of reference ofthe CSR Committee are provided in the Report on Corporate Governance which forms part ofthe Annual Report. The CSR Committee has formulated and recommended to the Board a CSRPolicy outlining CSR projects/activities to be undertaken by the Company during the yearunder review. The CSR Policy is available on the Company's website viz.www.hmvl.in.
The Annual Report on CSR for FY 18 is annexed herewith as "Annexure - C".
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 your Directors state that:
i) in the preparation of the annual accounts for the financial year ended on March312018 the applicable Accounting Standards have been followed and there are no materialdepartures;
ii) such accounting policies have been selected and applied consistently and judgmentsand estimates have been made that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as on March 312018; and of the profit ofthe Company for the year ended on March 312018;
iii) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv) the annual accounts have been prepared on a 'going concern' basis;
v) proper internal financial controls were in place and that such internal financialcontrols were adequate and operating effectively; and
vi) systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
DISCLOSURES UNDER THE COMPANIES ACT 2013
Borrowings and Debt Servicing: During the year under review your Company has metall its obligations towards repayment of principal and interest on loans availed.
Particulars of loans given investments made guarantees / securities given: Thedetails of investments made and loans/ guarantees/securities given as applicable aregiven in the notes to the Annual Standalone Financial Statements.
Board Meetings: A yearly calendar of meetings is prepared and circulated in advanceto the Directors. During the financial year ended on March 31 2018 the Board met sixtimes on May 18 2017 July 17 2017 August 24 2017 October 16 2017 January 11 2018and February 20 2018. For further details of these meetings Members may please referReport on Corporate Governance which forms part of this Annual Report.
Committees of the Board: At present five standing committees of the Board are inplace viz. Audit Committee Nomination and Remuneration Committee CSR CommitteeInvestment and Banking Committee and Stakeholders' Relationship Committee. During the yearunder review recommendations of the aforesaid Committees were accepted by the Board.
Remuneration Policy: The Remuneration Policy of the
Company on appointment and remuneration of Directors Key Managerial Personnel &senior management as prescribed under Section 178(3) of the Companies Act 2013 and theSEBI Listing Regulations is available on the Company's website viz. www.hmvl.in.The Remuneration Policy includes inter-alia the criteria for appointment ofDirectors KMPs and senior management personnel their remuneration structure anddisclosure(s) in relation thereto.
Vigil Mechanism: The Vigil Mechanism as envisaged in the Companies Act 2013 &rules made thereunder and the SEBI Listing Regulations is addressed in the Company's"Whistle Blower Policy". In terms of the Policydirectors/employees/stakeholders of the Company may report concerns about unethicalbehaviour actual or suspected fraud or any violation of the Company's Code of Conduct.The Policy provides for adequate safeguards against victimization of the Whistle Blower.The Policy is available on the Company's website viz. www.hmvl.in.
Particulars of employees and related disclosures: In accordance with the provisionsof Section 197(12) of the Companies Act 2013 and Rule 5(2) & (3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 details of employeesremuneration are set out in "Annexure - D" to this Report. In terms of theprovisions of Section 136(1) of the Companies Act 2013 the Board's Report is being sentto the Members without this annexure. However the same is available for inspection by theMembers at the Registered Office of the Company during business hours 21 days before theensuing AGM. Members interested in obtaining a copy of the said Annexure may write to theCompany Secretary at the Registered Office of the Company.
Disclosures under Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedherewith as "Annexure - E".
Extract of Annual Return: Extract of the Annual Return in Form MGT-9 is annexedherewith as "Annexure - F".
Corporate Governance: The report on Corporate Governance in terms of the SEBIListing Regulations forms part of this Annual Report. The certificate issued by CompanySecretary-in-Practice is annexed herewith as "Annexure - G".
Conservation of energy technology absorption and foreign exchange earnings &outgo: The information on conservation of energy technology absorption and foreignexchange earnings & outgo is annexed herewith as "Annexure - H".
Your Directors state that the Secretarial Standards i.e. SS-1 and SS-2 relating to'Meetings of the Board of Directors' and 'General Meetings' respectively have been dulyfollowed by the Company.
Your Directors state that no disclosure is required in respect of the followingmatters as there were no transactions/events in relation thereto during the year underreview:
1. Details relating to deposits covered under Chapter V of the Companies Act 2013.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme of the Company.
4. There was no change in the share capital of the Company during the year underreview.
5. The Company has not transferred any amount to the General Reserve for the year underreview.
No material changes/commitments of the Company have occurred after the end of thefinancial year 2017-18 and till the date of this report which would affect the financialposition of your Company.
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the 'going concern' status and Company's operations in future.
Your Company has in place adequate internal financial controls with reference to thefinancial statements. The internal control system is supplemented by an extensive programof internal audits and their reviews by the management. The in-house internal auditfunction supported by professional external audit firms conduct comprehensive riskfocussed audits across locations and functions in order to maintain a proper system ofcontrol.
Your Directors place on record their sincere appreciation for the co-operation extendedby all stakeholders including government authorities shareholders investors readersadvertisers customers banks vendors and suppliers. Your Directors also place on recordtheir deep appreciation of the committed services of the executives and employees of theCompany.
| ||For and on behalf of the Board |
| || |
| ||(Shobhana Bhartia) |
|Place: New Delhi ||Chairperson |
|Date: July 17 2018 ||DIN: 00020648 |
| || |