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MPS Ltd.

BSE: 532440 Sector: Services
NSE: MPSLTD ISIN Code: INE943D01017
BSE 00:00 | 21 Aug 525.85 -2.45
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NSE 00:00 | 21 Aug 525.55 -0.10
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OPEN 529.50
PREVIOUS CLOSE 528.30
VOLUME 1132
52-Week high 716.35
52-Week low 495.10
P/E 14.49
Mkt Cap.(Rs cr) 979
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 529.50
CLOSE 528.30
VOLUME 1132
52-Week high 716.35
52-Week low 495.10
P/E 14.49
Mkt Cap.(Rs cr) 979
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

MPS Ltd. (MPSLTD) - Director Report

Company director report

The Board of Directors hereby submits their Forty-Eighth Annual Report on the businessand operations of your Company along with Audited Financial Statements for the financialyear ended March 312018.

FINANCIAL HIGHLIGHTS

The summary of the financial performance of the Company during the financial year2017-18 is as under: (Hin lacs)

Standalone

Consolidated

Particulars

For the year ended 31.03.2018

For the year ended 31.03.2017

For the year ended 31.03.2018

For the year ended 31.03.2017

Gross Income 24343.33 24161.73 29001.23 30811.96
Profit Before Interest Depreciation and Tax (Excluding Exceptional Income) 10822.98 10540.42 11003.22 11272.24
Finance Charges 12.66 17.46 12.66 17.46
Provision for Depreciation 753.72 459.69 804.53 588.45
Profit Before Tax (Excluding Exceptional Item) 10056.60 10063.27 10186.03 10666.33
Exceptional Cost - - - 411.40
Provision for Tax 3235.41 3149.23 3165.09 3213.01
Net Profit After Tax 6821.19 6914.04 7020.94 7041.92
Other Comprehensive Income (62.69) (38.43) 28.04 (268.26)
Total comprehensive income for the year net of tax 6758.50 6875.61 7048.98 6773.66
Retained Earnings brought forward from previous year 15161.25 8942.22 15747.08 9400.17
Retained Earnings available for appropriation 21982.44 15856.26 22768.02 16442.09
Transfer to General Reserve - 695.01 - 695.01
Surplus Carried to Balance Sheet 21982.44 15161.25 22768.02 1 5747.08

OPERATIONAL HIGHLIGHTS Standalone

The revenue from operations on standalone basis for the year ended March 31 2018 stoodat H218.34 crores as against H223.56 crores for the previous year. The standalone Profitafter tax and before other comprehensive income for the year ended March 31 2018 wasH68.21 crores and EPS H36.64 per share as against H69.14 crores and H37.14 per sharerespectively for the previous year. No amount has been transferred to General Reserveduring the year ended March 31 2018 as compared to an amount of H6.95 crores for theprevious year.

Consolidated

The consolidated revenue from operations for the year ended March 312018 stood atH267.03 crores as against H288.70 crores for the previous year. The consolidated Profitafter Tax and before other comprehensive income for the year ended March 312018 wasH70.21 crores and EPS H37.71 per share as against H70.42 crores and H37.83 per sharerespectively for the previous year. Nil amount has been transferred to General Reserveduring the year ended March 31 2018 as compared to an amount of H6.95 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 applicable Accounting Standards and Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (the "Listing Regulations") have been followed.

DIVIDEND

Based on the Company's performance the Board of Directors have recommended a dividendof H12 per equity share (face value H10 per equity share) amounting to H26.93 Croresincluding dividend distribution tax for the financial year 2017-2018. The dividend issubject to the approval of shareholders at the ensuing Annual General Meeting of theCompany and will be paid within statutory period to the members whose names appear in theRegister of Members as on Tuesday July 24th 2018.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

During the year under review an amount of H83434 was transferred to the InvestorsEducation 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 Company www.mpslimited.com. The shareholders who have not yet claimed any of their previous dividends arerequested to contact the Company's Registrar and Share Transfer Agent (the "RTA")for claiming the same. The contact details of the RTA are provided in the Annual Report aswell as on the Company's website.

CONSOLIDATED FINANCIAL STATEMENT

Consolidated Financial Statement prepared in accordance with Indian AccountingStandards (Ind AS) as per the Companies (Indian accounting Standards) Rules 2015 notifiedunder Section 133 of Companies Act 2013 is separately disclosed in the Annual Report.Your Company has adopted Indian Accounting Standards for the first time.

The consolidated financial statement up to and for the year ended 31 March 2017 wereprepared in accordance with the Companies (Accounting Standards) Rules 2006 (previousGAAP) notified under Section 133 of the Act and other relevant provisions of the Act.

As per the requirements of Section 129 of the Act read with Rule 5 of the Companies(Account) Rules 2014 a statement containing salient features of the financial

statements of subsidiaries in Form AOC -1 is attached to the Consolidated FinancialStatement.

STATUTORY AUDITORS 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) hadbeen appointed as the Statutory Auditors of the Company for a term of 5 years to holdoffice till the conclusion of the 51st AGM of the Company to be held in the calendar year2021.

The Audit Report on the Financial Statements of the Company for the financial yearended March 31 2018 read with relevant Notes thereon are self-explanatory and do not callfor any further explanation. The Auditors Report does not contain any qualificationreservation or adverse remark.

During the year under review the Statutory Auditors have not reported any matter underSection 143(12) of the Act and therefore no details are required to be disclosed underSection 134 (3)(ca) of the Act.

SHARE CAPITAL

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.

ACQUISITION

Think Subscription: During the year the Company acquired THINK Subscription (ProvoUtah) from Digital River on April 1 2017. The Company migrated technical operations andsupport to Noida and integrated Business Development and Marketing with MPS North AmericaLLC and Noida Office. The THINK Subscription platform has been integrated with MPS'platforms Scholar Stor and MPS Insight and the three are now offered as a platform suite- THINK360. The suite architecture is in a modular manner allowing our customers to pickand choose depending on their legacy systems and current investments.

TATA Interactive Systems: After the close of the financial year the Company andTata Industries Limited have entered into definitive agreements on April 24 2018 for theacquisition of E-Learning business of TATA Industries Limited. Over the last 27 yearsTata Interactive Systems (TIS) has established itself as a pioneer in this area. Thecompany's innovative products and services are driven

by excellence in learning and development and process efficiency. Through thisacquisition MPS will acquire:

Tata Interactive Systems India: High end custom digital learning delivery includingweb-based learning simulations serious games custom apps and micro learning

Tata Interactive Systems AG: Assessment Engine Learning Management Platform andcustom digital learning services

Tata Interactive Systems GmbH: Multiplayer workshop- based simulations platform formanagement education.

The Company is confident that the transaction will close in the near future onfulfillment of customary closing conditions. This acquisition willprovide the platform toyour company to enter into the Enterprise Learning Solutions market and add a global salesand marketing engine.

SCHEME OF AMALGAMATION

Your Company is one layer subsidiary of ADI BPO Services Limited and any acquisition(s)by the Company involving two layers of Indian subsidiaries would not be possible as perthe notified Companies (Restriction on number of layers) Rules 2017. Therefore to provideflexibility for the Company to consider acquisition opportunity of an Indian entity havingan existing subsidiary at India the Board of Director of the Company at its meeting heldon 22nd January 2018 had approved the Scheme of Amalgamation of ADI BPO Services Limited(post demerger of its infrastructure Management Business Undertaking) with the Company asper Section 230 to 232 read with section 66 of the Companies Act 2013. This scheme has noimpact on the financial structure or the public shareholding in the Company.

SUBSIDIARIES

MPS North America LLC (MPS North America) wholly owned subsidiary of your Company isfocused on content creation and development project management and media assetdevelopment for K12 Higher Education and Academic and STM publishers.

The revenue of MPS North America for the year ended March 31 2018 was H71.27 crorescompared to H79.69 crores during the previous year. The Profit Before Tax for the year wasH3.60 crores and Profit after Tax and before other comprehensive income was H2.69 croresas compared to the previous year's Profit Before Tax

of H1.53 crores and Profit After Tax and before other comprehensive income of H0.86crores respectively.

Pursuant to the provisions of Section 129(3) of the Act a statement containing thesalient features of financial statements of the Company's subsidiaries in Form AOC-1 isattached to the financial statements of the Company.

Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited accounts in respect of subsidiaries are available on the website of theCompany.

Restructuring or closure of subsidiaries during the year

MagPlus Inc - MagPlus Inc step down foreign subsidiary of the company merged withMPS North America LLC a wholly owned Subsidiary Company of the Company with effect fromAugust 10 2017.

Mag+AB - Mag+AB wholly owned foreign subsidiary of the Company was dissolved witheffect from December 21 2017 by transfer of Software and Intellectual Propertiesregistered in its name to MPS Limited.

BOARD MEETINGS

The Board met four (4) times during the financial year 2017-18 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

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.

BOARD EVALUATION

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 including the Chairman the Board as awhole and its Committees based on the criteria set out by the Nomination and RemunerationCommittee. The performance of the

Board was evaluated after seeking inputs from individual Directors on the basis of thecriteria such as the Board composition and structure effectiveness of Board processesinformation and functioning quality of relationship between the Board and the managementetc.

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 Board evaluated the performance of the Committees after seeking inputs from theCommittee 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-IndependentDirectors Board as a whole and the Chairman were evaluated taking into account the viewsof Executive Directors and NonExecutive Directors. This was discussed in the Boardmeeting at which the performance of the Board its Committees and individual Directorswere also discussed. The entire Board excluding the Independent Director being evaluatedcompleted the performance evaluation of Independent Directors.

DIRECTORS KEY MANAGERIAL PERSONNEL AND EMPLOYEES Director Retiring by Rotation

In accordance with the provisions of the Act and the Articles of Association of theCompany Ms. Yamini Arora retires by rotation at the ensuing AGM and being eligibleoffers herself for re-appointment. Accordingly a resolution is included in the Notice ofthe forthcoming 48th Annual General Meeting of the Company for seeking approval of membersfor his appointment as a director of the Company.

Changes in the Board and Key Managerial Personnel

Board

Mr. Nishith Arora was appointed as Non - Executive Director of the Company w.e.f. May15 2017

Mr. Ashish Dalal resigned as Independent Director of

the Company with effect from March 9 2018. The Board appointed Mr. AmbarishRaghuvanshi as an Independent Director to hold office with effect from May 01 2018 and upto April 30 2023 subject to the approval of shareholders at the ensuing Annual GeneralMeeting of the Company.

A brief resume details of expertise and other Directorships/Committee memberships heldby the above Directors form part of the Notice convening the 48th AGM of the Company.

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.

Key Managerial Personnel

Mr. Hitesh Jain Company Secretary resigned from the Company with effect from September12 2017. The Board of Directors on recommendation of the Nomination and RemunerationCommittee at its meeting held on October 23 2017 appointed Mr. Sunit Malhotra as theCompany Secretary of the Company with effect from October 23 2017. Mr. Malhotra has beenworking as Chief Financial officer of the Company since November 2012.

SECRETARIAL AUDIT

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 2017-18. The Secretarial Audit Report for the financialyear 2017-18 prepared by them is annexed to this Report as Annexure A.

The SecretarialAuditors have not expressed any qualification or reservation in theirreport and their report is self-explanatory.

Secretarial Auditors had also not reported any matter under Section 143 (12) of theAct and therefore no details are required to be disclosed under Section 134 (3)(ca) ofthe Act.

DEPOSITS

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 the Company 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 securedterm loan nor provided any secured/unsecured loan to other bodies corporate orguarantees/securities with respect to any such loan.

UTILIZATION OF THE PROCEEDS FROM QUALIFIED INSTITUTIONAL PLACEMENT

Your Company had raised a sum of H 150 crores through "Qualified InstitutionalPlacement" (the "QIP") during the financial year 2014-15. The net proceedsof the issue (net of issue expenses) are primarily to augment funds for growthopportunities such as acquisitions and strategic initiatives and for general corporatepurposes and any other purposes as may be permissible under applicable law.

Details of the funds utilized and remaining unutilized as on March 31 2018 is asfollows :-

(Figures in Lakhs)

QIP Fund (net of expenses) 14780
Acquisition of Mag+ companies (net of working (2328)
capital adjustments)
Acquisition of Think Subscription business (428)
Expenses incurred on acquisition opportunity (28)
QIP Fund pending unutilization 11996

NOMINATION AND REMUNERATION POLICY

The Board has on the recommendation of the Nomination and Remuneration Committeeframed criteria for appointment performance evaluation and for determining remunerationof Directors 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/information related to the

remuneration of Directors and Key Managerial Personnel are set out in Annexure C tothis Report.

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 Accounts for the financial year ended March 312018 the applicable Accounting Standards have been followed along with proper explanationrelating to material departures;

b. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;

c. The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared these Annual Accounts on a going concern basis;

e. The Directors have laid down internalfinancial controls to be followed by theCompany and that such internal financialcontrols are adequate and were operatingeffectively; and

f. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

INTERNAL FINANCIAL CONTROLS

The Company has an external and independent firm of Internal Auditors that scrutinizesthe financials 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 financialreporting 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 2017-18.

RISK MANAGEMENT

The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Identification of the business risks and theirmitigation is a continuing process. Based on the diversified scale of business operationsyour Company has formulated a Risk Management Policy to assist the Board in:

• overseeing and approving the Company's enterprise wide risk managementframework; and

• overseeing that all the risks that the organization faces such as strategicfinancial market liquidity security property IT legal regulatory reputational andother risks have been identified and assessed and there is an adequate risk managementinfrastructure in place capable of addressing those risks.

The Company's management systems organizational structure processes standards codeof conduct and behavior together form a system that governs how the Company conducts itsbusiness and manage the associated risks.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year2017-18 were on arm's length basis and in the ordinary course of business. The AuditCommittee reviews all the related party transactions and approves wherever such approvalis required as per the provisions of Section 188 of the Act rules made thereunderRegulation 23 of the Listing Regulations and applicable Accounting Standards. The Companyhas not during the year entered into any related party transaction that may have apotential conflict with that of the Company at large. During the year the Company has notentered into any material related party transactions as specified in Section 188(1) ofthe Act with any of its related parties. Accordingly the disclosure of related partytransactions as per Section 134(3)(h) of the Act in Form AOC-2 is not applicable. Thedetails of related party transactions of the Company are disclosed in financialsstatements of the Company.

Your Company has formulated a Policy on Related Party Transaction disseminated on theCompany's website www.mpslimited.com .

VIGIL MECHANISM

The Company has adopted a "Whistle Blower Policy"

(the "Policy") through which employees are provided a platform toraise concerns in line with MPS' commitments to the highest possible standards ofethical moral and legal business conduct and its commitment to open communications.Directors and employees can report to the Chairman of the Audit Committee and CompanySecretary or Ombudsman on a confidential basis any practices or actions believed to beinappropriate or illegal. It is affirmed that no person has been denied access to theAudit Committee. The Policy provides complete confidentiality and safeguard of theemployees who raises the whistle against such improper 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 Complaint Committees have 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.

ANNUAL RETURN

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 the CSR 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.mpslimited.com .

Your Company has during the year evolved various CSR initiatives which includesimparting primary high- quality education to out-of-schoolunder 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 devised proper system to monitorthe CSR activities as per its CSR Policy.

In terms of the provisions of Section 135 of the Act and the Companies (CorporateSocial Responsibility) Rules 2014 as amended the details of the CSR Projects undertakenby the Company during the year are detailed in Annexure E.

CORPORATE GOVERNANCE

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 of Regulation34 of the Listing Regulations forms part of the Annual Report together with a certificatefrom the Statutory Auditors of the Company confirming compliance with the conditions ofCorporate Governance.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the Listing Regulations is presented in a separate section formingpart 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 infrastructure moreenergy-efficient.

B. Technology Absorption

Particulars regarding Technology Absorption are annexed to this Report as AnnexureF.

C. Foreign Exchange Earnings and Outgo

During the year under review foreign exchange earned through exports was H218.18crores as against H223.36 crores for the previous year ended March 312017. Foreignexchange outgo was H17.04 crores as against H12.56 crores for the previous year. Thus thenet foreign exchange earned by the Company during the year ended March 312018 was H201.14crores.

SIGNIFICANT DEVELOPMENTS AFTER THE CLOSE OF THE FINANCIAL YEAR

Except the events disclosed elsewhere in the Annual Report no significant change ordevelopment that could affect the Company's financial position has occurred between theend of the financial year and the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY ANY REGULATORS OR COURT

During the year under review no significant material order was passed by any regulatoror court that would impact the going concern status or future business operations of theCompany.

APPRECIATION

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 23 2018 Chairman