Your Directors are pleased to present their Report together with the Audited FinancialStatements for the financial year ended on March 31 2019.
Your Company's performance during the financial year ended on March 31 2019 alongwith previous year's figures is summarized below:
(H in Lacs)
|Particulars ||2018-19 ||2017-18 |
|Total Income ||95591 ||95956 |
|Earnings before interest tax depreciation and amortization (EBITDA) ||14063 ||26054 |
|Less: Depreciation ||2076 ||1966 |
|Less: Finance cost ||1758 ||1133 |
|Profit/ (Loss) before tax ||10229 ||22955 |
|Less: Tax Expense || || |
| Current Tax ||2295 ||5728 |
| Deferred tax charge/ (Credit) ||744 ||105 |
|Total tax expense ||3039 ||5833 |
|Profit for the year ||7190 ||17122 |
|Add: Other Comprehensive Income (net of tax) || || |
|a) Items that will not be re-classified to profit or loss ||(7) ||24 |
|b) Items that will be re-classified to profit or loss ||(286) ||- |
|Total Comprehensive Income for the year (Net of tax) ||6897 ||17146 |
|Opening balance in Retained Earnings ||92939 ||76853 |
|Add: Profit/(loss) for the year ||7190 ||17122 |
|Less: Item of other Comprehensive Income recognized directly in Retained || || |
|Earnings || || |
|Re-measurement of post employment benefit obligation (net of tax) ||7 ||(24) |
|Less: Dividend paid ||881 ||881 |
|Less: Tax on Dividend ||180 ||179 |
|Total Retained Earnings ||99061 ||92939 |
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 the financial year ended on March 31 2019 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 H1062 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") is appearing as"Annexure-A" and 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 togainfully utilize the expertise and wide-spread reach of the Company in North India theBoard of Directors approved a Scheme of Arrangement under Sections 230-232 and otherapplicable provisions if any of the Companies Act 2013 between IESPL and the Companyfor demerger and vesting of B2C business from IESPL to and in the Company on a goingconcern basis (Scheme). In the said connection pursuant to the order(s) of NationalCompany Law Tribunal Kolkata (NCLT) meetings of the Equity Shareholders and UnsecuredCreditors of the Company were convened wherein the Scheme was approved with requisitemajority. The petition seeking sanction of the Scheme is pending before NCLT.
Your Company has a robust risk management framework to identify evaluate and mitigatebusiness risks. A detailed statement indicating development and implementation of a riskmanagement policy for the Company including identification of various elements of riskis appearing in the Management Discussion and Analysis.
EMPLOYEE STOCK OPTION SCHEME
The information required to be disclosed pursuant to the provisions of the SEBI (ShareBased Employee Benefits) Regulations 2014 read with SEBI's circular no. CIR/CFD/ POLICYCELL/2/2015 dated June 16 2015 ("SEBI ESOP Regulations") is available on theCompany's website viz. www.hmvl.in. The HT Group Companies - Employee Stock OptionRules for Listed Companies (of a Parent Company) is in compliance with the SEBI ESOPRegulations. Further in accordance with SEBI ESOP Regulations voting rights on theshares of the Company held by HT Group Companies - Employee Stock Options Trust were notexercised during the year under review.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review on the recommendation of Nomination and RemunerationCommittee the Board of Directors accorded its approval to the appointment of:
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 which was approved by theMembers at the Annual General Meeting (AGM) held on September 18 2018.
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 which was approved by the Members at theAnnual General Meeting (AGM) held on September 18 2018.
Shri Priyavrat Bhartia (DIN: 00020603) relinquished office of Managing Director w.e.f.July 17 2018. However he continues to be Non-executive Director of the Company. AlsoShri Benoy Roychowdhury and Shri Tridib Barat Whole-time Directors of the Companytendered their resignation from the Board of Directors of the Company w.e.f. May 24 2018and August 9 2018 respectively. Shri Tridib Barat continues to be Company Secretary(KMP) of the Company.
Shri Shardul S. Shroff (DIN:00009379) and Shri Piyush G. Mankad (DIN:00005001) ceasedto be Directors of the Company upon completion of their term on March 31 2019. On theirrequest the Board did not consider their re-appointment for second term.
The Board places on record its sincere appreciation for the valuable contribution madeby Shri Benoy Roychowdhury Shri Shardul S. Shroff and Shri Piyush G. Mankad during theirtenure on the Board of Directors of the Company.
Further on the recommendation of Nomination & Remuneration Committee the Board ofDirectors accorded its approval to the following:
(a) Re-appointment of Shri Ajay Relan (DIN: 00002632) and Shri Ashwani Windlass(DIN:00042686) as Non-executive Independent Directors w.e.f. April 1 2019 for a secondterm of 5 (five) consecutive years upto March 31 2024 which was approved by the Membersby way of Postal Ballot.
(b) Appointment of Ms. Savitri Kunadi (DIN: 00958901) as Non-Executive (Woman)Independent Director w.e.f. May
9 2019 for a term of 3 (three) consecutive years upto March 31 2022 subject toapproval of the Members by way of Postal Ballot.
In accordance with the provisions of the Companies Act 2013 Shri Priyavrat Bhartiaretires by rotation at the ensuing AGM and being eligible has offered himself forre-appointment. Your Directors commend re-appointment of Shri Priyavrat 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 Director(s) proposed to be appointed / re-appointed at the ensuing AGM along withtheir shareholding in the Company as stipulated under Secretarial Standard-2 andRegulation 36 of the SEBI Listing Regulations is provided in the Notice of the ensuingAGM.
There was no change in Key Managerial Personnel during the year under review.
In line with the requirements under the Companies Act 2013 and the SEBI ListingRegulations the Board undertook a formal annual evaluation of its own performance andthat of its 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 52017.
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 include risk management compliance and controlcommitment to all stakeholders (shareholders employees vendors customers etc.)familiarization with relevant aspects of Company's business / activities amongst othermatters. 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 & Remuneration Committee and the Board of Directors. The
Board would endeavour to use the outcome of the evaluation process constructively toimprove its own effectiveness and deliver superior performance.
AUDIT & AUDITORS
Price Waterhouse & Co Chartered Accountants LLP (PwC) [Firm Registration No.304026E/E-300009] were appointed as Statutory Auditor of the Company for a term of 5(five) consecutive years at the Annual General Meeting held on September 20 2017.
The Auditors' Report of PwC on Annual Financial Statements for the financial year endedon March 31 2019 is an unmodified opinion i.e. it does not contain any qualificationreservation or adverse remark.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Board of Directors had appointed M/s RMG & Associates CompanySecretaries (Firm Reg. No. P2001DE016100) as Secretarial Auditor to conduct theSecretarial Audit for financial year 2018-19. The Secretarial Audit Report is annexedherewith as "Annexure - B". The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.
During the year under review the Statutory Auditor 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 therefore no detail is required to bedisclosed under Section 134(3)(ca).
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 arms' length terms. The related party transactions were placed before the AuditCommittee for review and/or approval. During the year the Company did not enter into anycontract /arrangement /transaction with related party which could be considered materialin accordance with the Company's Policy on Materiality of and dealing with RelatedParty Transactions' and accordingly the disclosure of related party transactions in FormAOC-2 is not applicable. The aforesaid Policy is available on the Company's website viz.www.hmvl.in.
Reference of the Members is invited to Note nos. 34 and 34A of the Annual FinancialStatements which set out the related party disclosures as per Ind AS-24.
CORPORATE SOCIAL RESPONSIBILTY (CSR)
As a responsible corporate citizen your Company is committed to undertake sociallyuseful programmes for welfare and sustainable development of the community at large. TheCorporate Social Responsibility (CSR) Committee of Directors is in place in terms ofSection 135 of the Companies Act 2013. The composition and terms of reference of the CSRCommittee are provided in the Report on Corporate Governance' which forms part ofthis 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 19 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 March 312019 the applicable Accounting Standards have been followed and there are no materialdepartures; ii. such accounting policies have been selected and applied consistently andjudgments and estimates have been made; that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as on March 31 2019; and of theprofit of the Company for the year ended on March 31 2019; iii. proper and sufficientcare has been taken for the maintenance of adequate accounting records in accordance withthe provisions of the Companies Act 2013 for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; iv. the annual accounts havebeen prepared on a going concern' basis; v. proper internal financial controls werein place and that such internal financial controls were adequate and operatingeffectively; and vi. systems have been devised to ensure compliance with the provisions ofall applicable 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 met allits 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 Note no. 44A of the Annual Financial Statements.
Board Meetings: A yearly calendar of meetings is prepared and circulated in advance tothe Directors. During the financial year ended on March 31 2019 the Board met five timeson May 1 2018 May242018July172018October262018andJanuary152019. For furtherdetails of these meetings Members may please refer Report on Corporate Governance'which forms part of this Annual Report.
Committees of the Board: At present five standing committees of the Board are in placeviz. 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 andremuneration of Directors Key Managerial Personnel & Senior Management as prescribedunder Section 178(3) of the Companies Act 2013 and the SEBI Listing Regulations isavailable on the Company's website viz. www.hmvl.in. The Remuneration Policyincludes inter-alia the criteria for appointment of Directors KMPs SeniorManagement Personnel and other employees their remuneration structure and disclosure(s)in relation thereto. In view of a recent amendment in the SEBI Listing Regulations(effective from April 1 2019) the role of Nomination and Remuneration Committee (NRC)includes recommendation to the board all remuneration in whatever form payable to SeniorManagement. Accordingly upon recommendation of NRC the Board of Directors have approvedrevision in the Remuneration Policy to incorporate the aforesaid amendment.
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 Policy directors/employees/stakeholders of the Company may report concerns about unethical behaviour actual orsuspected fraud or any violation of the Company's Code of Conduct. The Policy provides foradequate safeguards against victimization of the Whistle Blower. The Policy is availableon the Company's website viz. www.hmvl.in.
Particulars of employees and related disclosures: In accordance with the provisions ofSection 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 for a period of 21days before the ensuing AGM. Members interested to obtain a copy of the said Annexure maywrite to the Company 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 annual return in Form MGT-9 is annexed herewith as"Annexure F" and is also available on the website of the Company viz.www.hmvl.in.
Corporate Governance: The report on Corporate Governance in terms of the SEBI ListingRegulations 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 toMeetings of the Board of Directors' and General Meetings' respectively havebeen duly followed 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.
There was no change in the share capital of the Company during the year under review.
The Company has not transferred any amount to the General Reserve during the year underreview.
No material changes/commitments of the Company have occurred after the end of thefinancial year 2018-19 and till the date of this report which 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 riskfocused audits and evaluate the effectiveness of the internal control structure acrosslocations and functions on a regular basis. In addition to internal audit activitiesCompany has also developed an internal financial control framework to periodically reviewthe effectiveness of controls laid down across all critical processes. The Company hasinstituted an online compliance management tool with a centralized repository to cater toits statutory compliance requirements.
Your Company adheres to a strict policy to ensure the safety of women employees atworkplace. The Company is fully compliant with the provisions of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and has constitutedan Internal Committee to redress complaints received regarding sexual harassment. TheCompany's policy in this regard is available on the employee intranet portal. The Companyconducts regular classroom training sessions for employees and members of InternalCommittee and has also rolled-out an online module for employees to increase awareness.No complaint was reported during the year under review.
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: 09-05-2019 ||DIN: 00020648 |