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MPS Ltd.

BSE: 532440 Sector: Services
NSE: MPSLTD ISIN Code: INE943D01017
BSE 00:00 | 27 Sep 676.40 -7.15
(-1.05%)
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692.65

HIGH

695.20

LOW

673.25

NSE 00:00 | 27 Sep 676.85 -6.95
(-1.02%)
OPEN

698.70

HIGH

700.00

LOW

672.50

OPEN 692.65
PREVIOUS CLOSE 683.55
VOLUME 670
52-Week high 805.00
52-Week low 340.50
P/E 18.94
Mkt Cap.(Rs cr) 1,221
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 692.65
CLOSE 683.55
VOLUME 670
52-Week high 805.00
52-Week low 340.50
P/E 18.94
Mkt Cap.(Rs cr) 1,221
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

MPS Ltd. (MPSLTD) - Director Report

Company director report

To the Members

On behalf of the Board of Directors ('the Board') of the Company itgives me immense pleasure to present the 51st Directors' Report along withBalance Sheet Profit and Loss Account and Cash Flow Statements for the financial yearended March 31 2021.

FINANCIAL HIGHLIGHTS

Key highlights of the financial performance of your Company for thefinancial year 2020-21 is summarized below:

(INR in lakhs)

Standalone

Consolidated

Particulars For the year ended 31.03.2021 For the year ended 31.03.2020 For the year ended 31.03.2021 For the year ended 31.03.2020
Gross Income 28791.24 20606.61 43242.01 35163.10
Profit Before Interest Depreciation and Tax (Excluding Exceptional Income) 10172.20 7851.40 11664.75 9893.39
Finance Charges 136.05 138.01 203.77 214.87
Provision for Depreciation 1245.99 744.72 2121.58 1536.66
Profit Before Tax (Excluding Exceptional Item) 8790.16 6968.67 9339.39 8141.86
Exceptional Cost - - - -
Provision for Tax 2736.79 1691.80 3483.43 2156.02
Net Profit After Tax 6053.37 5276.87 5855.96 5985.84
Other Comprehensive Income (155.46) (15.67) (220.59) 646.66
Total comprehensive income for the year net of tax 5897.91 5261.20 5635.37 6632.50
Retained Earnings brought forward from previous year 14876.42 26652.53 16526.88 27638.06
Transition impact of Ind AS 116 in Retained Earnings - (204.55) - (224.56)
Retained Earnings available for appropriation 20931.75 31709.18 22434.79 33359.64
Surplus Carried to Balance Sheet 20931.75 14876.42 22434.79 16526.88

OPERATIONAL HIGHLIGHTS

Standalone

Revenue from operations for the year ended March 31 2021 stood at INR279.02 crores as against INR 187.65 crores for the previous year. Profit after tax andbefore other comprehensive income for the year ended March 31 2021 was INR 60.53 croresand EPS INR 33.00 per share as against INR 52.77 crores and INR 28.34 per sharerespectively for the previous year.

Standalone Ind AS Financial Statements ("financialstatements") have been prepared in accordance with Indian Accounting Standards (IndAS) as prescribed under Section 133 of the Companies Act 2013 ("the Act") readwith Companies (Indian accounting standard) rules as amended from time to time and otherrelevant provisions of the Act.

Consolidated

Revenue from operations for the year ended March 31 2021 stood at INR422.55 crores as against INR 331.65 crores for the previous year. Profit after tax andbefore other comprehensive income for the year ended March 31 2021 was INR 58.56 croresand EPS INR 31.92 per share as against INR 59.86 crores and INR 32.15 per sharerespectively for the previous year.

Consolidated Ind AS Financial Statements ("financialstatements") have been prepared in accordance with Indian Accounting Standards (IndAS) as prescribed under section 133 of the Companies Act 2013 ("the Act") readwith Companies (Indian accounting standard) rules as amended from time to time and allother relevant provisions of the Act are separately disclosed in the Annual Report.

As per the requirements of Section 129 of the Act read with Rule 5 ofthe Companies (Account) Rules 2014 a statement containing salient features of thefinancial statements of subsidiaries in Form AOC - 1 is attached to the ConsolidatedFinancial Statement.

DIVIDEND

The Board of Directors has not recommended any dividend on the equityshares for the FY 2020-21.

SHARE CAPITAL AND BUY BACK

During the financial year 2020-21 your Company has bought back566666 (Five Lakhs Sixty Six Thousand Six Hundred and Sixty Six) fully paid equityshares of face value of INR 10 each at a price of INR 600 (Rupees Six Hundred only) for anamount not exceeding INR 340000000 (Rupees Thirty Four Crores only) under tender offerroute representing 3.04% of the paid up share capital of the Company.

The Buyback was completed on 7th October 2020. Pursuant tothe completion of buyback paid up share capital of the company stands reduced from INR18.62 crores to INR 18.05 crores.

ACQUISITION & NEW SUBSIDIARY

During the financial year ended 31st March 2021 your Company acquiredthe business of HighWire.

The acquisition of US Business of HighWire was carried out through theCompany's US branch and newly incorporated wholly owned subsidiary namely HighWire NorthAmerica LLC Delaware USA by way of forward merger at a purchase price consideration ofUSD 6100000 (US Dollars six million and one hundred thousand only).

The HighWire business at Northern Ireland and United Kingdom wascarried out by way of purchase of 100% shares of HighWire Press Limited based at NorthernIreland ("NI Entity") through its wholly owned subsidiary company MPS NorthAmerica LLC USA ("MPS NA LLC") at a purchase consideration of USD 1000000(US Dollars One Million only). NI Entity owns 100% shareholding of Semantico Limited("UK Entity"). Pursuant to this acquisition NI Entity has become subsidiary ofMPS NA LLC and UK Entity has become the step down subsidiary of MPS NA LLC.

STATUTORY AUDITORS AND AUDIT REPORT

At the 46th Annual General Meeting ("AGM") 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 thecalendar year 2021.

The Audit Report on the Financial Statements of the Company for thefinancial year ended March 31 2021 read with relevant Notes thereon is self-explanatoryand does not call for any further explanations. The Auditor's Report does not contain anyqualification reservation or adverse remark.

During the year under review the Statutory Auditors have 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.

SUBSIDIARIES

MPS North America LLC (MPS North America) wholly owned subsidiary ofthe Company is focused on content creation and development project management and mediaasset development for K12 Higher Education Academic and STM publishers.

The revenue of MPS North America LLC for the year ended March 31 2021was INR 84.16 crores compared to INR 65.70 crores during the previous year. The Profitbefore tax for the year was INR 7.25 crores and Profit after tax and before othercomprehensive income was INR 5.35 crores as compared to the previous year's Profit beforetax of INR 7.88 crores and Profit after tax and before other comprehensive income of INR5.85 crores respectively.

MPS Interactive Systems Limited wholly owned subsidiary of yourCompany is focused on high end custom digital learning delivery including web-basedlearning simulations serious games custom apps and micro learning.

The revenue of MPS Interactive Systems Limited for the year ended March31 2021 was INR 47.38 crores compared to INR 64.32 crores during the previous year. Theloss before tax for the year was INR 0.79 crores and loss after tax and before othercomprehensive income was INR 6.54 crores as compared to the previous year's profit beforetax of INR 4.86 crores and profit after tax and before other comprehensive income of INR3.06 crores respectively.

TOPSIM GmbH: The Company is focused on multiplayer workshop-basedsimulations platform for management education.

The revenue of TOPSIM GmbH for the financial year ended March 31 2021was INR 15.59 crores compared to INR 17.32 crores during the previous year. The profit forthe financial year ended 31st March 2021 was INR 0.62 crores as compared tothe loss for the period ended 31st March 2020 of INR 3.14 crores.

MPS Europa AG: The Company is focused on Assessment Engine LearningManagement Platform for management education.

The revenue of MPS Europa AG for the year ended March 31 2021 was INR11.07 crores compared to INR 12.09 crores during the previous year. The loss before taxfor the year was INR 3.17 crores and loss after tax and before other comprehensive incomewas INR 3.03 crores as compared to the previous year's Profit before tax of INR 0.71crores and Profit after tax and before other comprehensive income of INR 0.72 croresrespectively.

Highwire North America LLC: This wholly owned subsidiary Company wasincorporated for acquisition of HighWire US Business as detailed above.

The Company also has two downstream subsidiaries named as HighwirePress Limited and Semantico Limited. Highwire Press Limited is a wholly owned subsidiaryof MPS North America LLC. Semantico Limited is a wholly owned subsidiary of Highwire PressLimited.

Pursuant to the provisions of Section 129(3) of the Act a statementcontaining the salient features of financial statements of the Company's subsidiaries inForm AOC-1 is attached to the financial statements of the Company.

Further pursuant to the provisions of Section 136 of the Act thefinancial statements of the Company consolidated financial statements along with relevantdocuments and separate audited accounts in respect of subsidiaries are available on thewebsite of the Company.

BOARD MEETINGS

The Board met Five (5) times during the financial year 2020-21 totransact the business of the Company. Details of the Board Meetings including theattendance of Directors at these meetings are covered in the Corporate Governance Reportforming part of the Annual Report. The maximum interval between any two consecutive Boardmeetings did not exceed 120 days.

AUDIT COMMITTEE

Audit Committee of your Company is constituted in accordance with theprovisions of Section 177 of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. Composition role terms of reference anddetails of meetings of the Audit Committee are provided in the Corporate Governance Reportforming part of the Annual Report.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its ownperformance board committees and individual directors pursuant to the provisions of theAct and SEBI Listing Regulations.

The Performance of the Individual Directors was reviewed based oninputs from the Board Members covering the inputs on the contribution of the individualDirector to the Board and Committee meetings.

The performance of the Committees was evaluated based on inputs fromthe Committee Members covering the inputs on the composition of Committees effectivenessof Committee meetings degree of fulfillment of key responsibilities Committee dynamicsquality of relationship of the Committee with the Board and the management.

The performance of the Board was evaluated based on inputs from theBoard Members on composition of the Board effectiveness of Board processes informationand functioning areas and quality of review establishment and delineation ofresponsibilities to Committees.

The performance of the Chairman was evaluated based on inputs from theBoard Members on his leadership stakeholder management vision and strategy.

In a separate meeting of independent directors performance ofnon-independent directors the Board as a whole and the Chairman of the Company wasevaluated taking into account the views of executive directors and non-executivedirectors.

The Board in its meeting reviewed the performance of the IndependentDirectors and the performance of the Committees.

DIRECTORS KEY MANAGERIAL PERSONNEL AND EMPLOYEES

Director Retiring by Rotation

In accordance with the provisions of the Act and the Articles ofAssociation of the Company Mr. Nishith Arora retires by rotation at the ensuing AGM.Accordingly a resolution is included in the Notice of the forthcoming 51stAnnual General Meeting of the Company.

Changes in the Board

The Board of Directors in its Meeting held on November 10 2020re-appointed Dr. Piyush Kumar Rastogi (DIN: 02407908) as an Independent Director of theCompany not liable to retire by rotation for a term of three (3) years with effect fromJanuary 29 2021 to January 28 2024.

Board opinion in regard to integrity expertise and experience of Dr.Piyush Kumar Rastogi Independent Director who was appointed during the year 2020-21

The Board of Directors is of the opinion that with the expertise &experience of Dr. Piyush Kumar Rastogi in accounting taxation legal and financialmanagement the Company would continue to get his advice in growth of the Company bestaccounting practices and regulatory compliances.

During the year under review the non-executive directors of theCompany had no pecuniary relationship or transactions with the Company other than sittingfees.

Pursuant to the provisions of Section 149 of the Act the independentdirectors have submitted declarations that each of them meet the criteria of independenceas provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Listing Regulations"). There has been nochange in the circumstances affecting their status as independent directors of theCompany.

A resolution seeking shareholders' approval for the above appointmentforms a part of the Notice. The brief details of expertise and otherDirectorship/Committee memberships held by the above Director form part of the Noticeconvening the 51st Annual General Meeting of the Company.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnel of the Company as on March 31 2021 are: Mr. Rahul Arora CEO &Managing Director and Mr. Sunit Malhotra Chief Financial Officer and Company Secretary.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s RSridharan and Associates Practicing Company Secretaries carried out the SecretarialAudit of the Company for the financial year 2020-21.

Pursuant to the provisions of Regulation 24A of SEBI (ListingObligation and Disclosure Requirement) Regulations 2015 the Secretarial audit report ofmaterial unlisted subsidiary is also to be annexed with the Annual Report of the Company.

The Secretarial Audit Report of the Company and its material unlistedsubsidiary MPS Interactive Systems Limited for the financial year 2020-21 is annexed tothis Report as Annexure A.

The Secretarial Auditors have not expressed any qualification orreservation in their report and their report is self-explanatory.

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

DEPOSITS

Your Company has not accepted any deposits from public and as such noamount on account of principal or interest on public deposits was outstanding as on thedate of the balance sheet.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENT

Details of Loans Guarantees advances Securities and Investmentscovered under the provisions of Section 186 of the Act are given in the Notes to theStandalone Financial Statements. AH the investments made by the Company were in accordancewith the provisions of Section 186 of the Act and the rules made thereunder.

NOMINATION AND REMUNERATION POLICY

To comply with the provisions of Section 178 of the Act and Rules madethereunder and Regulation 19 of SEBI (LODR) Regulations the Company's updated Nominationand Remuneration Policy for Directors Key Managerial Personnel and Senior ManagementPersonnel is available on website of the Company at www.mpsiimited.com. The Policyincludes inter aiia the criteria for appointment and remuneration of Directors KMPs andSenior Management Personnei of the Company.

PARTICULARS OF DIRECTORS AND EMPLOYEES

Pursuant to Section 197(12) of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014detaiis/information's related to the remuneration of Directors Key Managerial Personneland Employees are set out in Annexure B to this Report.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Act the Board of Directors tothe best of their knowledge and ability confirm the following:

a. In the preparation of the Annuai Accounts for the financial yearended March 31 2020 the applicable Accounting Standards have been followed along withproper explanation relating to material departures;

b. The Directors have selected such accounting poiicies and appiiedthem consistentiy and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and ioss of the Company for that period;

c. The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irreguiarities;

d. The Directors have prepared these Annuai Accounts on a going concernbasis;

e. The Directors have laid down internal financial controis to befoiiowed by the Company and that such internai financiai controis are adequate and wereoperating effectively; and

f. The Directors have devised proper systems to ensure compiiance withthe provisions of aii appiicabie iaws and that such systems were adequate and operatingeffectiveiy.

INTERNAL FINANCIAL CONTROLS

The Act emphasizes the need for an effective Internal Financiai Controisystem in the companies which shouid be adequate and shaii operate effectiveiy. Ruie8(5)(viii) of Companies (Accounts) Rules 2014 requires the information regarding adequacyof Internai Financiai Controls with reference to the financial statements to be disciosedin the Board's Report.

The Company's internai controi systems are commensurate with the natureof its business and the size and complexity of its operations. These are routinely coveredby Internal Auditors and cover aii offices and key business areas. Significant auditobservations and foiiow up actions thereon are reported to the Audit Committee. The AuditCommittee reviews adequacy and effectiveness of the Company's internai controi environmentand monitors the impiementation of audit recommendations inciuding those reiating tostrengthening of the Company's risk management poiicies and systems.

RISK MANAGEMENT

The Company has in piace a mechanism to identify assess monitor andmitigate various risks to key business objectives. Identification of the business risksand their mitigation is a continuing process. Based on the

diversified scale of business operations your Company has formulated aRisk Management Policy to assist the Board in:

> overseeing and approving the Company's enterprise wide riskmanagement framework; and

> overseeing that all the risks that the organization faces such asstrategic financial market liquidity security property IT legal regulatoryreputational and other risks have been identified and assessed and there is an adequaterisk management infrastructure in place capable of addressing those risks.

The Company's management systems organizational structure processesstandards code of conduct and behavior together form a system that governs how theCompany conducts its business and manage the associated risks.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during thefinancial year 2020-21 were on arm's length basis and in the ordinary course of business.The Audit Committee reviews all the related party transactions and approves wherever suchapproval is required as per the provisions of Section 188 of the Act rules madethereunder Regulation 23 of the Listing Regulations and applicable Accounting Standards.The Company has not during the year entered into any related party transaction that mayhave a potential conflict with that of the Company at large. During the year the Companyhas not entered into any material related party transactions as specified in Section188(1) of the Act with any of its related parties. Accordingly the disclosure of relatedparty transactions as per Section 134(3)(h) of the Act in Form AOC-2 is not applicable.The details of related party transactions of the Company are disclosed in financialsstatements of the Company.

Your Company has formulated a Policy on Related Party Transactiondisseminated on the Company's website viz. www.mpslimited.com.

VIGIL MECHANISM

The Vigil Mechanism as envisaged in the Act and the Rules prescribedthereunder and the Listing Regulations is implemented through the Whistle Blower Policy.This Policy provides for adequate safeguards against victimisation of persons who use suchmechanism and make provision for direct access to the Chairperson of the Audit Committee.

The Whistleblower Policy of the Company is available on the website ofthe Company and can be accessed at the web link: https://d12ux7ql5zx5ks.cloudfront.net/wp-content/uploads/Signed-Whistle-Blower-Policy.pdf

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has a zero tolerance towards sexual harassment at theworkplace and has adopted a Policy on Prevention and Prohibition of Sexual Harassment atWorkplace and has also put in place a redressal mechanism for resolving complaintsreceived with respect to sexual harassment. Internal Complaint Committees have beenconstituted at all the locations of the Company in India to redress the complaints ifany received.

The details of the complainant are kept confidential. During the yearunder review no complaint was received from any employee of the Company involving sexualharassment and thus no case was filed pursuant to the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.

ANNUAL RETURN

As per the requirements of Section 92(3) of the Act and Rule 12(1) ofthe Companies (Management and Administration) Rules 2014 an extract of Annual Return inForm MGT-9 is annexed to this Report as Annexure-C.

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 theCompany has constituted a CSR Committee. The composition and terms of reference of the CSRCommittee are provided in the Corporate Governance Report forming part of this AnnualReport. The Company has also formulated a CSR Policy which is available on the website ofthe Company viz. www.mpslimited.com.

During the year under review your Company spent INR 163 Lakhs on CSRactivities i.e. 2% of the average of the net profits of the Company for the past threefinancial years. In accordance with the provisions of Section 134(3)(o) of the Act andRule 9 of the Companies (Corporate Social Responsibility) Rules 2014 a report onCorporate Social Responsibility covering brief extract of the CSR policy of the Companyand the CSR projects undertaken during the financial year 2020-21 is annexed as Annexure- D to this Report.

Composition role and terms of reference of the CSR Committee arestated in the Corporate Governance Report forming part of this Annual Report.

CORPORATE GOVERNANCE

Your Company believes in adopting best practices of corporategovernance and adheres to the standards set out by the Securities and Exchange Board ofIndia. Corporate governance is about maximizing shareholder's value legally ethically andsustainably. Our Board exercises its fiduciary responsibilities in the widest sense of theterm. We also endeavor to enhance longterm shareholder value and respect minority rightsin all our business decisions.

A detailed report on Corporate Governance pursuant to the requirementsof Regulation 34 of the Listing Regulations forms part of the Annual Report together witha certificate from the Statutory Auditors of the Company confirming compliance with theconditions of Corporate Governance.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under reviewas stipulated under Regulation 34 of the Listing Regulations is presented in a separatesection forming part of the Annual Report.

BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report for the year under review as stipulatedunder Regulation 34(2)(f) of SEBI (LODR) Regulations is presented in a separate sectionforming part of the Annual Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUT-GO

Pursuant to Section 134(3)(m) of the Act read with the Rule 8 of theCompanies (Accounts) Rules 2014 the following information is provided:

A. Conservation of Energy

The provisions regarding disclosure of particulars with respect toConservation of Energy are not applicable to the publishing services industry as theoperations are not energy-intensive. However constant efforts are being made to make theinfrastructure more energy-efficient.

B. Technology Absorption

Particulars regarding Technology Absorption are annexed to this Reportas Annexure E.

C. Foreign Exchange Earnings and Outgo

During the year under review foreign exchange earned through exportswas INR 276.68 crores as against INR 186.38 crores for the previous year ended March 312020. Foreign exchange outgo was INR 65.23 crores as against INR 16.50 crores for theprevious year. Thus the net foreign exchange earned by the Company during the year endedMarch 31 2021 was INR 211.45 crores.

SIGNIFICANT DEVELOPMENTS AFTER THE CLOSE OF THE FINANCIAL YEAR

Except for the events disclosed elsewhere in the Annual Report nosignificant change or development that could affect the Company's financial position hasoccurred between the end 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 passedby any regulator or court that would impact the going concern status or future businessoperations of the Company.

APPRECIATION

Your Directors take this opportunity to thank the customersshareholders suppliers bankers business partners / associates and Central and StateGovernments for their consistent support and encouragement to the Company. We place onrecord our appreciation for the contribution made by our employees at all levels. Ourconsistent growth was made possible by their hard work solidarity cooperation andsupport.

For and on behalf of the Board of Directors
Place:Gurugram Nishith Arora
Date: May 26 2021 Chairman

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