The Members of
MT Educare Limited
Your Directors take pleasure in presenting the Thirteenth Annual Report of the Companytogether with Audited Financial Statements for the year ended March 31 2019. This reportstates compliance as per the requirements of the Companies' Act 2013 ("theAct") the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") and other rules andregulations as applicable to the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act 2013 (the Act') in relation to theAudited Financial Statements for the Financial Year 2018-2019 your Directors confirmthat:
a The Financial Statements of the Company - comprising of the Balance Sheet as at March31 2019 and the Statement of Profit & Loss for the year ended on that date have beenprepared on a going concern basis following applicable accounting standards and that nomaterial departures have been made from the same;
b Accounting policies selected were applied consistently and the judgments andestimates related to these financial statements have been made on a prudent and reasonablebasis so as to give a true and fair view of the state of affairs of the Company as atMarch 31 2019 and of the profit of the Company for the year ended on that date;
c Proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 to safeguard theassets of the Company and to prevent and detect fraud and other irregularities;
d Requisite internal financial controls to be followed by the Company were laid downand that such internal financial controls are adequate and operating effectively; and
e Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
The Financial performance of your Company for the year ended March 31 2019 issummarized below:
| || || |
Rs. in lakhs
|Particulars || |
Standalone Year ended
Consolidated Year ended
| ||March 31 2019 ||March 31 2018 ||March 31 2019 ||March 31 2018 |
|Revenue from Operations ||18200.31 ||18111.00 ||22856.12 ||22262.41 |
|Other Income ||1965.00 ||1441.84 ||2078.88 ||1450.10 |
|Total Income ||20165.31 ||19552.84 ||24935.00 ||23712.51 |
|Total Expenses ||16185.74 ||34355.57 ||20007.19 ||39448.74 |
|Operating Profit/Loss ||3979.57 ||(14802.73) ||4927.81 ||(15736.23) |
|Less: Finance Cost ||1632.05 ||2054.64 ||1977.15 ||2297.90 |
|Less: Depreciation ||1433.61 ||1860.98 ||1813.09 ||2136.34 |
|Profit/ (Loss) before Tax ||913.91 ||(18718.35) ||1137.57 ||(20170.47) |
|Tax expense ||183.46 ||(6571.32) ||225.50 ||(6987.91) |
|Profit/Loss after Tax ||730.45 ||(12147.03) ||912.07 ||(13182.56) |
|Less : Appropriations ||0.00 ||0.00 ||0.00 ||0.00 |
|Transferred to debenture Redemption Reserve ||0.00 ||0.00 ||0.00 ||0.00 |
|Interim Equity Dividend ||0.00 ||0.00 ||0.00 ||0.00 |
|Tax on Interim Equity Dividend ||0.00 ||0.00 ||0.00 ||0.00 |
|Balance carried To Balance Sheet ||730.44 ||(12147.03) ||912.07 ||(13182.56) |
|Other comprehensive income carried to balance sheet ||9.95 ||6.68 ||32.11 ||6.96 |
There have been no material changes and commitments that have occurred after close ofthe financial year till the date of this report which affect the financial position ofthe Company. Based on the internal financial control framework and compliance systemsestablished in the Company the work performed by Statutory Internal SecretarialAuditors and reviews performed by the management and/or relevant Audit and otherCommittees of the Board your Board is of the opinion that the Company's internalfinancial controls were adequate and working effectively during financial year 2018-19.
In order to conserve the resources for future growth of the Company your Directors donot recommend dividend for the year under review.
With the objective of GREAT Global Reach in Education and Training your company iscommitted to take Education to every home across India. Teachers + technology =Toppers' has been our ethos. Digital content for learning teaching and assessments alongwith innovative pedagogy has been the hallmark of our exceptional academic laurels yearafter year.
Your company is truly a national player with multi-city presence and a diverse productportfolio standing a class apart due to technology enabled business processes digitalcontent delivery and 24 x 7 online support for the courses offered.
Company has registered Standalone Revenue of Rs.18200.31 Lakhs in FY19 compared to Rs.18111.00 Mn in FY18. Operating EBITDA stood at Rs. 3979.57 Lakhs in FY19 compared toRs. (14802.72) Lakhs in FY18 . PBT stood at Rs. 913.91 Lakhs in FY19 compared to Rs.(18718.35) Lakhs in FY18. PAT stood at Rs.730.45 Lakhs in FY19 compared to Rs.(12147.03) Lakhs in FY18.
Company has registered Consolidated Revenue of 22856.12 Lakhs in FY19 compared to Rs.22262.41 Lakhs in FY18. Operating EBITDA stood at Rs. 4927.81 Lakhs in FY19 compared toRs. (15736.21) Lakhs in FY18. PBT stood at Rs 1137.57 Lakhs in FY18 compared to Rs.(20170.45) Lakhs in FY18. PAT stood at Rs. 912.07 Lakhs in FY19 compared to (13182.54)Lakhs in FY18.
STRATEGIC INVESTMENT BY ZEE LEARN LIMITED
The Board at its meeting held on February 14 2018 had accorded its approval to issueand allot 31964200 Equity Shares as preferential allotment to Zee Learn Limited (ZLL)for an aggregate amount of Rs. 200 crores (Rs. 2000000000) approx. Post preferentialallotment the ZLL holds a 44.53% stake in Company. The subscription to preferentialallotment triggered an open offer under Regulation 3 4 and other applicable provisions ofthe SEBI (Substantial Acquisition of shares and Takeover) Regulation 2011 for theacquisition of 26% from the shareholders of the Company for which ZLL appointed M/s AxisCapital Limited Merchant Bankers as the Manager to the offer for the Open offer process.ZLL had acquired 10736973 Equity Shares of Rs. 10/- each from Company's Shareholders atan open offer price of 72.76/- per Equity Share. The total Shareholding of ZLL in theCompany as on March 31 2019 aggregates to 42701173 Equity shares of Rs. 10/- eachconstituting 59.12% of total paid-up share capital of the Company. As on March 31 2019ZLL is holding Company of the MT Educare Limited.
STRATEGIC INVESTMENT IN LABH VENTURES INDIA PRIVATE LIMITED
During the year under review your company had acquired 108000 Equity shares of LabhVentures India Private Limited (LVIPL) at consideration of Rs. 162800000(Rupees SixteenCrores Twenty Eight Lakhs Only) by executing Share Purchase Agreement. LVIPL is intobusiness of construction and renting of various colleges universities schools coachingclasses residential educational campus play schools preschools day care Institutionsand all kinds of Institutions imparting knowledge language education trainingpersonality Development entertainment vocation computer training etc. LVIPL is a whollyowned subsidiary of the company with effect from September 1 2018.
During the year under review your Company had allotted 443070 Fully paid-up EquityShares of Rs.10/- each to employees under MT Educare ESOP Scheme 2016 on December 202018.
This has resulted an increase in the paid-up equity share capital of the Company fromRs. 717849840 to Rs. 722280540 comprising of 72228054 equity shares of Rs.. 10/-each.
EMPLOYEES STOCK OPTION SCHEME
The Company implemented the Employee Stock Options Scheme "ESOP 2016" and"MT EDUCARE LTD ESOP 2018" in accordance with the Securities and Exchange Boardof India (Share Based Employee Benefits) Regulations 2014. In accordance with ESOP 2016Out of 800000 options 738 450 options were granted on December 18 2017. During thecurrent financial year 443070 options were vested and are allotted on December 20 2018.
The Nomination & Remuneration Committee and the Board of Directors of the Companyapproved and recommended the MT Educare Limited Employee Stock Option Scheme 2018 throughresolutions passed at its meeting held on February 14 2018 which was approved by themembers at the Extra-ordinary General Meeting held on March 12 2018. Further the membersapproved an increase in the number of Stock Options equivalent to 5% of the expanded postpreferential allotment Issued Subscribed and Paid-up Share Capital of the Company whichis 3589249 Stock Options (5% of 71784984 Equity Shares of Rs.10/- each).
The applicable disclosures as stipulated under the said Regulations as at March 312019 are provided in note no.28 of (Standalone) financial statement.
As at March 31 2019 your company had seven subsidiaries namely MT EducationServices Pvt. Ltd. Lakshya Forrum For Competitions Pvt. Ltd. (formerly known as LakshyaEducare Pvt Ltd) Chitale's Personalised Learning Pvt. Ltd. Sri Gayatri EducationalServices Pvt. Ltd. Robomate Edutech Pvt. Ltd. Letspaper Technologies Pvt. Ltd and LabhVentures India Pvt Ltd. The Company does not have any associate or joint venturecompanies.
In compliance with Section 129 of the Companies Act 2013 a statement containingrequisite details including financial highlights of the operations of all subsidiaries isannexed to this report.
In accordance with Indian Accounting Standard AS - 110 Consolidated FinancialStatements read with Indian Accounting Standard AS - 28 Accounting for Investments inAssociates and Indian Accounting Standard - 111 Financial Reporting of Interests in JointVentures the audited Consolidated Financial Statements are provided in and forms part ofthis Annual Report as per Ind As format.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of the subsidiaries are available on the website ofthe Company www.mteducare.com. These documents will also be available for inspectionduring business hours at the Registered Office of the Company.
CORPORATE GOVERNANCE & POLICIES
Your Company is in compliance with the Corporate Governance requirements mentioned inListing Regulations. In terms of Schedule V of Listing Regulations a detailed report onCorporate Governance along with Compliance Certificate issued by the Statutory Auditors ofthe Company is attached and forms an integral part of this Annual Report. All Boardmembers and senior management personnel have affirmed compliance with the Code of Conductfor the year 2018-19. A declaration to this effect signed by the Whole-Time Director ofthe company is contained in this Annual Report. The Whole-Time Director and ChiefFinancial Officer have certified to the Board with regard to the financial statements andother matters as required under Regulation 17(8) of the Listing Regulations and the saidcertificate is contained in this Annual Report. Management Discussion and Analysis Reportas per Listing Regulations are presented in separate sections forming part of the AnnualReport.
In compliance with the requirements of Section 178 of the Companies Act 2013 theNomination & Remuneration Committee of your Board had fixed various criteria fornominating a person on the Board which inter alia include desired size and composition ofthe Board age limits qualification / experience areas of expertise and independence ofindividual. Your Company has also adopted a Remuneration Policy salient features where ofis annexed to this report.
In compliance with the requirements of Companies Act 2013 and Listing Regulationsyour Board has approved various Policies including Code of Conduct for Directors &Senior Management Material Subsidiary Policy Insider Trading Code Document PreservationPolicy Material Event Determination and Disclosure Policy Fair Disclosure PolicyWhistle Blower and Vigil Mechanism Policy Related Party Transaction Policy andRemuneration Policy. All these policies and codes have been uploaded on Company'scorporate website www.mteducare.com. Additionally Directors Familiarisation Programme andTerms and Conditions for appointment of Independent Directors can be viewed on Company'scorporate website www.mteducare.com.
CORPORATE SOCIAL RESPONSIBILITY
As on April 01 2018 the Corporate Social Responsibility Committee comprised of Mr.Uday Lajmi as a Chairman Dr. Chhaya Shastri and Mr. Mahesh Shetty as its Members.Subsequently on June 5 2018 the CSR Committee was reconstituted by induction of Dr.Manish Agarwal as a Chairman Dr. Sangeeta Pandit and Mr. Himanshu Mody as members to theCommittee. Further Mr. Uday Lajmi Dr. Chhaya Shastri and Mr. Mahesh Shetty ceased to bethe members of the CSR Committee w.e.f the closing hours of June 5 2018.
As at March 31 2019 in compliance with requirements of Section 135 read with ScheduleVII of the Companies Act 2013 the Board has constituted Corporate Social ResponsibilityCommittee comprising of Dr. Manish Agarwal as Chairman Dr. Sangeeta Pandit and Mr.Himanshu Mody as members of the Committee.
The said Committee has been entrusted with the responsibility of formulating andrecommending to the Board a Corporate Social Responsibility Policy indicating theactivities to be undertaken by the Company monitoring the implementation of the frameworkof the CSR Policy and recommending the amount to be spent on CSR activities.
As part of its initiative under the Corporate Social Responsibility ('CSR') our aim isto help students to pursue a dignified life. We not only mentor and coach studentsaccording to the syllabus to attain 100% results but also encourage and guide themtowards quality education. We focus on Maths Science and English although other subjectsare also taken up as per the school requirements. We give monthly tests for assessment ofwhat has been taught. Motivation and counselling lectures are conducted with regular doubtsolving sessions to help the students improve their scores. Parent and teacher meeting isheld to keep the parents in loop with the students' progress and help them support theirchild for better academic performance. Special batches for weak students are heldseparately for remedial lectures. Weak students are also helped with special lecturesthrough Robomate+ App. Question Bank of every chapter of all subjects is given to studentsso that they can practice and improve their grades.
In the year 2018-19 we have conducted grade improvement classes for a total of 31704under privileged students which includes 3000 students for standard V VII; 3724students of standard VIII; 12563 students of standard IX and 12417 students of standardX. These figures include 3037 ST/SC students.
The Report on CSR Activities as required under Companies (Corporate SocialResponsibility Policy) Rules 2014 is set out as Annexure 3 forming part of this Report.Apart from the CSR Activities under the Companies Act 2013 the Company continues tovoluntarily support the following social initiatives / NGO's like (a) Aasara (b)AmchaGhar (c) Justice Chainani Old Age Home etc. to name a few.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Based on recommendation of the Nomination and Remuneration Committee the Board ofDirectors at the meeting held on June 05 2018 had approved the appointment of Mr. AjeyKumar as an Executive Director Mr. Himanshu Mody as a Non-Executive Chairman Dr.Manish Agarwal as a Non-Executive Independent Director Dr. Sangeeta Pandit as aNon-Executive Independent Director. Further Mr. Naarayanan Iyer Dr. Chhaya Shastri Ms.Drushti Desai and Mr. Uday Lajmi resigned from Board of the Company w.e.f the closinghours of June 05 2018.
Mr. Debshankar Mukhopadhyay was inducted as an Additional Director on the Board of theCompany w.e.f August 9 2018 in the category of an Executive Director. . At the AnnualGeneral Meeting of the Company held on September 24 2018 the shareholders approved theappointment of Mr. Ajey Kumar and Mr. Debshankar Mukhopadhyay as Executive Directors for aperiod of three years we.f. June 5 2018 and August 9 2018 respectively. Further theshareholders also approved the appointment of Independent Directors Dr. Manish Agarwal andDr. Sangeeta Pandit for a period of three years from June 5 2018. All the ExecutiveDirectors were appointed for the period of 3 years which was approved by the members ofthe Company vide Annual General Meeting held on September 24 2018.
Your Board currently comprises of 6 Directors including 2 (two)Non-Executive-Independent Directors 1(one) other Non-Executive Director and 3(Three)Executive Director. Independent Directors provide their declarations both at the time ofappointment and annually confirming that they meet the criteria of independence asprescribed under Companies Act 2013 and Listing Regulations. During FY 2018-2019 yourBoard met 5 (five) times details of which are available in Corporate Governance Reportannexed to this report.
Mr. Himanshu Mody Chairman and Non-Executive Non-Independent Director is liable toretire by rotation at the ensuing Annual General Meeting and being eligible he hasoffered himself for re-appointment. Your Board recommends his re-appointment with all hisearlier terms and conditions of appointment remaining same. A resolution to the effect isplaced in the Notice for the ensuing Annual General Meeting for consideration / approvalof the members for your consideration and approval. Changes in the Key ManagerialPersonnel (KMP) during the year.
|Name of the KMP ||Appointment / Resignation/ No change ||With effect from |
|Mr. Mahesh R. Shetty ||Appointment (Change in designation from Chairman & Managing Director to Whole-Time Director ||August 09 2018 |
|Mr. Sandesh Naik Chief Financial Officer Mr. Mandar Chavan ||No Change Appointed as Company Secretary ||NA August 09 2018 |
The information as required to be disclosed under the Listing Regulations in case ofre-appointment of the director is provided in Report on Corporate Governance annexed tothis report and in the notice of the ensuing Annual General Meeting.
The disclosure in pursuance of Schedule V to the Companies Act 2013 and SEBI ListingRegulation pertaining to the remuneration incentives etc. to the Directors is given inthe Corporate Governance Report.
In a separate meeting of Independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated. Based on such report of the meeting of Independent Directors and taking intoaccount the views of directors the Board had evaluated its performance on variousparameters such as Board composition and structure effectiveness of board processeseffectiveness of flow of information contributions from each Directors etc.
In compliance with the requirements of Companies Act 2013 and Listing Regulationsyour Board had constituted various Board Committees including Audit Committee Nomination& Remuneration Committee Stakeholders Relationship Committee and Corporate SocialResponsibility Committee. Details of the constitution of these Committees which are inaccordance with regulatory requirements have been uploaded on the website of the Companyviz. www.mteducare.com. Details of scope constitution terms of reference number ofmeetings held during the year under review along with attendance of Committee Memberstherein form part of the Corporate Governance Report annexed to this report.
The Statutory Auditors M/s. MSKA & Associates Chartered Accountants Mumbai (FirmRegistration No. 105047W) (formerly known as M/s. MZSK & Associates) were appointed atthe tenth Annual General Meeting (AGM') of the Company held on September 28 2016.Accordingly M/s. MSKA & Associates Chartered Accountants shall hold office from theconclusion of tenth Annual General Meeting (AGM')for a term of consecutive fiveyears till conclusion of fifteenth Annual General Meeting (AGM') which shall besubject to the ratification of their appointment by the members at every AGM.
Your Company has received confirmation from the Auditors to the effect that theirappointment with the limits specified under the Companies Act 2013 and the firmsatisfies the criteria specified in Section 141 of the Companies Act 2013 read with Rule4 of the Companies (Audit & Auditors) Rules 2014.
In accordance with Section 139 of the Companies Amendment Act 2017 notified w.e.f May7 2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditors isnot required to be ratified at every Annual General Meeting. Hence M/s. MSKA &Associates shall continue as Statutory Auditors for the remaining period of the term untilthe conclusion of fifteenth Annual General Meeting of the Company.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules amended rules 2014 the cost audit records maintained by theCompany in respect of its education services other than such similar services fallingunder philanthropy or as part of social spend which do not form part of any business isrequired to be Audited.
Your Directors had on the recommendation of the Audit Committee and on ratification ofits Members appointed M/s Joshi Apte &Associates Cost Accountants (Firm RegistrationNo 00240) for conduct of audit of the cost records of the Company for the financial year2019-20.
During the year Secretarial Audit was carried out by M/s. R. Bhandari & CoCompany Secretaries Mumbai in compliance with Section 204 of the Companies Act 2013.
The reports of Statutory Auditor Cost Auditor and Secretarial Auditor do not containany qualification reservation or adverse remarks. The reports of Statutory AuditorSecretarial Auditor forming part of this Annual report. During the year the StatutoryAuditors had not reported any matter under Section 143 (12) of the Act therefore nodetail is required to be disclosed under Section 134 (3) (ca) of the Act.
I. Particulars of loans guarantees and investments:
Particulars of loans guarantees and investments made by the Company required undersection 186 (4) of the Companies Act 2013 are contained in Note No. 5 6 and 12 to theStandalone Financial Statements.
ii. Transactions with Related Parties:
None of the transactions with related parties fall under the scope of Section 188(1) ofthe Act. Information on material transactions with related parties pursuant to Section134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014 in FormAOC-2 is annexed to this report.
iii. Risk Management:
The Company's approach to addressing business risks is comprehensive and includesperiodic review of such risks and a framework for mitigating controls and reportingmechanism of such risks.
iv. Internal Financial Controls:
Internal Financial Controls includes policies and procedures adopted by the company forensuring orderly and efficient conduct of its business accuracy and completeness of theaccounting records and timely preparation of reliable financial information.
The Company has in place a proper and adequate Internal Financial Control System withreference to financial statements. During the year such controls were tested and noreportable material weakness in the design or operation was observed.
Your Company has not accepted any public deposits under Chapter V of the Companies Act2013.
vi. Extract of Annual Return:
The extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Actread with Companies (Management & Administration) Rules 2014 is annexed to thisreport.
vii. Sexual Harassment:
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at workplace (PreventionProhibition and Redressal) Act 2013 and the Rules thereunder. During the year underreview no complaints on sexual harassment was received.
viii. Regulatory Orders:
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.
ix. Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
a) Issue of equity shares with differential rights as to dividend voting or otherwise.
b) Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOP referred to in this Report.
c) Neither the Managing Director nor the Whole-time Directors of the Company receivedany remuneration or commission from any of its subsidiaries.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of energy
The particulars as required under the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy have not been provided considering the nature of activitiesundertaken by the Company during the year under review
During the year the Company has not absorbed or imported any technology.
Foreign exchange earnings and outgoings
During the year there were Rs. 34.20 Lakhs Foreign Exchange Earnings and the ForeignExchange outgo stood at Rs. 67.16 Lakhs.
PARTICULARS OF EMPLOYEES
The information required under Section 197 (12) of the Companies Act 2013 read withCompanies (Amendment and remuneration of Managerial Personnel) Rules 2014 and formingpart of the Directors Report for the year ended March 31 2019.
The particulars of employees in compliance of provisions of Section 134(3)(q) read withRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is annexed to this report. The above referred Annexure is also available forinspection by members at the Registered Office of the Company for a period of 21 daysbefore the ensuing 13th Annual General Meeting and up to the date of the AGM between 11.00a.m to 1.00 p.m. on all working days (except Saturday and Public Holidays).
None of the employee listed on the said Annexure is a relative of any Director of theCompany. None of the employee holds (by himself or along with his spouse and dependentchildren) more than two percent of the Equity Shares of the Company.
Your Directors wish to express their appreciation for the assistance and co-operationreceived from the financial institutions banks Government authorities customersvendors and members during the year under review.
Your Directors also express their appreciation to all the visiting faculty lecturersand employees of MT Educare FAMILY for their hard work commitment dedicated services andcollective contribution.
Statements in the Board's Report and the Management Discussion and Analysis describingthe company's objectives projections estimates and expectations may constituteforward looking statements' within the meaning of applicable laws and regulations.Actual results may differ materially from those either expressed or implied. Importantfactors that could affect the company's operations include significant political and / oreconomic environment in India tax laws litigations interest and other costs.
|For and on behalf of the Board || |
|Mahesh Shetty ||Debshankar Mukhopadhyay |
|Whole-Time Director ||Executive Director |
|DIN:01526975 ||DIN:08194567 |
|Place: Mumbai || |
|Date: May 13 2019 || |