Your Directors present their thirty-first Annual Report along with the AuditedStatement of Accounts of the Company for the Financial Year ended 31st March2017.
|(1) FINANCIAL RESULTS : || ||(Rs. In lakh) |
|Particulars ||Current Year ||Previous Year |
|A Total Comprehensive Income before Interest Depreciation & tax ||27444 ||22609 |
|B Less: Finance Cost ||347 ||348 |
|C Total Comprehensive Income before Depreciation & tax ||27097 ||22261 |
|D Less: Depreciation ||2499 ||2676 |
|E Total Comprehensive Income before Tax ||24598 ||19585 |
|F Add/(Less) (i) Provision for Tax ||8700 ||6875 |
|G (ii) Deferred tax charge / (credit) ||(218) ||35 |
|H (iii) (Excess) / Short Provision of Earlier Year wW.back/off ||(47) ||61 |
|I (iv) Deferred tax charge/(credit) on OCI ||45 ||96 |
|J Total Comprehensive Income After Tax ||16115 ||12626 |
(2) DIVIDEND :
Your Directors recommended dividend of Rs. 2.50 (125%) per share for the Financial Year2016-17. The dividend so declared works out to about 43.61% (including dividenddistribution tax) of Total Comprehensive Income as against your Company's policy ofdistribution of minimum of 25% of its net profit. The Board of Directors has approved aDividend Distribution Policy as per SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 which is available at the link : http://bit.ly/2spdDhO
(3) OPERATIONS :
(i) During the year under review the Company achieved a total turnover of Rs. 111453lakh as compared to Rs. 95298 lakh in Financial Year 2015-16.
(ii) Total Comprehensive Income before depreciation and income tax for the year underreview stood at Rs. 27097 lakh as against Rs. 22261 lakh in the previous year.
(iii) After providing Rs. 2499 lakh for depreciation Rs. 8700 lakh for income tax(L 218 lakh) deferred tax Income Rs. 47 lakh as short provision of tax of earlier yearswritten off and Deferred tax charge on Other Comprehensive Income of Rs. 45 lakh TotalComprehensive Income for the year stood at Rs. 16115 lakh as against Rs. 12626 lakhachieved in the previous year on standalone basis.
(4) PERFORMANCE OF DIVISIONS :
Content Publishing Division
The content publishing business achieved a turnover of Rs. 59592 lakh in FinancialYear 2016-17 as compared to Rs. 51604 lakh. There was growth about 15.4% over the lastyear. Similar growth in the business is envisaged in the ensuing Financial Year based onthe syllabus changes.
Stationery segment improved by 20.2% over the previous year from Rs. 41038 lakh to Rs.49332 lakh. The growth can be attributed to Exports Business. The Stationery Exports grewat the rate of 33.4%. The Company envisages a good growth in the ensuing year as well.
(5) DIRECTORS' RESPONSIBILITY STATEMENT :
As required under Section 134(3) (c) of the Companies Act 2013 your Directors herebystate:
that in the preparation of annual financial statements for the year ended 31stMarch 2017 the applicable Indian Accounting Standards had been followed along withproper explanation relating to material departures if any;
that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of theFinancial Year and of the profit and loss of the Company for that period;
that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
that the Directors had prepared the annual accounts on a going concern basis;
the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
(6) BUY BACK OF SHARES & SHARE CAPITAL :
During the year under review the Company bought back 4657000 Equity Shares offace value of Rs. 2/- each at a price of Rs. 125/- per Equity Share (including premium ofRs. 123/- per Equity Share) amounting to Rs. 582125000/- (Rupees Fifty Eight CroreTwenty One Lakh Twenty Five Thousand Only) on a proportionate basis through the tenderoffer as prescribed under SEBI Buyback Regulations. The buyback of 4657000 Equity Sharesof face value of Rs. 2/- each was completed on 12th January 2017. The numberof Equity Shares post buy back stands reduced to 233558000 of Rs. 2/- each andaccordingly the paid up Equity Share Capital also stands reduced to Rs. 467116000/-.
(7) ACQUISITION :
Your Directors are pleased to inform you that during the year under review yourCompany acquired Indiannica Learning Pvt. Ltd.(Formerly known as Encyclopaedia Britannica(India) Pvt. Ltd.) making it Company's Wholly Owned Subsidiary Company'. IndiannicaLearning Pvt. Ltd. designs and develops text books (Print and Digital) for the CBSE andICSE schools and is used by nearly 5 million students across India and Indian schoolsabroad. This acquisition will help expand your Company's range of curricular offerings inthe Indian school market nationally. The acquisition will help enhance Company'sfootprint and access to newer markets and also significantly augment its intellectualproperty.
(8) ACCOLADES :
During the year under review DNV- GL Business Assurance Chennai confirmed yourCompany by issuing Management System Certificate namely ISO 9001:2008 OHSAS180001:2007 and ISO140001:2004. These certification confirms your Company with theQuality Management System standard Occupational Health and Safety Management Systemstandard and Environmental Management System standard respectively for design developmentand manufacturing of stationery & printed educational books.
Your Company received the National CSR Leadership Award' on September 1 2016 atBangaluru from "World CSR Day" for its outstanding contribution in the field ofCSR.
(9) DIRECTORS :
Shri Shailendra J. Gala (DIN: 00093040)Shri Atul J. Shethia(DIN: 00094108) and ShriKamlesh S. Vikamsey (DIN:00059620) Directors of the Company retire by rotation and beingeligible offer themselves for re-appointment. Your Directors recommend theirre-appointments.
(10) RISK MANAGEMENT POLICY :
During the year under review the Company has identified and evaluated elements ofbusiness risk. Business risk inter-alia includes fluctuations in Foreign ExchangeRegulatory Risk Competition from other players and High Input Costs. The Risk ManagementFramework defines the risk management approach of the Company and includes periodic reviewof such risk and also documentation mitigating controls and reporting mechanism of suchrisks. The Board of Directors and senior management team currently assess the operationsand operating environment to identify potential risks and take necessary action tomitigate the same.
(11) CORPORATE SOCIAL RESPONSIBILITY :
Navneet Group has played a leadership role in fields of healthcare disaster reliefaffordable housing education tribal welfare and other areas of public service.
During FY 17 your Company initiated two flagship programs which are bridging essentialgaps in the society:
Tribal Medical Service
Your Company has started the Tribal Medical Service which provides free healthcare in5 villages of Khaniwade Panchayat in Maharashtra. 4168 tribal villagers across 5 villagestook benefit of the project in FY17.
Your Company has taken up the mantle to support progressive educational policiesintroduced by the Government of Maharashtra. As part of this the Company conceptualizedand administered Training Workshops for teachers of Std. IX & X on activity-basedchild-centred learning.
Your Company conducted 80 Krutipatrika workshops across Maharashtra and trained 3500teachers on activity-based and child-centred teaching.
Last year the state of Bihar bore the brunt of floods. As with every natural calamityin the past your Company was on the forefront to provide relief to flood affectedfamilies of Bihar. Your Company also established Flood Relief Camps in three villages ofBalua Ara and Laxminiya in Bihar and provided essential supplies of food and clothing to500 flood affected families.
Other flagship programs
Navneet Chhas Kendra (Buttermilk distribution centre)
Navneet Chhas Kendra' (Buttermilk distribution centre) in the village of MotiRayan Kutch Gujarat has been serving more than 300 families for past several decades.This Chhas (buttermilk) is a major source of nutrition for the beneficiary families andhas been instrumental in keeping Vitamin A deficiency and night blindness at bay.
Your Company recognizes the right of existence of every animal on this planet. Lastyearit supported scores of animal shelters which cater to thousands of animals duringsummers and times of drought.
Olympic Sports Support
Your Company has partnered with Olympic Gold Quest to groom a promising Table Tennisplayer Diya Chitale. She is the upcoming star of Indian table tennis. In October 2016Diya became the youngest ever Indian Table Tennis player to play the German Table TennisLeague. She played for Langstadt Club Germany in the 4th Division League (open agegroup). Diya won the Gold in singles and doubles - Under 15 - National Championship. Shealso won Gold in singles - 3rd under-15 national ranking tournament.
(12) NOMINATION AND REMUNERATION POLICY:
The Board of Directors has framed a policy which lays down a framework in relation toremuneration to Directors Managerial Personnel and senior Management of the Company. Thepolicy lays down the criteria for selection and appointment of Board members. The detailsof this policy form part of Corporate Governance Report.
(13) MEETINGS :
The details of the number of meetings of the Board held during the Financial Year2016-17 forms part of the Corporate Governance Report.
(14) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
Your Company has laid down policies guidelines and procedures that form part ofinternal control systems which provides for automatic checks and balances. Your Companyhas maintained a proper and adequate system of internal controls. This ensures thesafeguarding of assets and properties of the Company and protects against unauthorised useand disposal of the assets. Your Company's internal control systems commensurate with thenature and size of its business operations. Internal Financial Controls are evaluated andinternal auditors' reports are reviewed by the audit committee.
(15) STATEMENT OF DECLARATION BY INDEPENDENT DIRECTORS :
All independent directors have given declaration that they meet the criteria ofindependence as laid down under Section 149 (6) of the Companies Act 2013.
(16) RELATED PARTY TRANSACTION:
All related party transactions that were entered into during the Financial Year were onarm's length basis and in the ordinary course of the business. There are no materiallysignificant related party transaction made by the Company with Promoters Key ManagerialPersonnel or other designated persons which may have potential conflict with interest ofthe Company at large. All related party transactions are presented to the audit committee.Omnibus approval is obtained for the transactions which are foreseen and repetitive innature. A statement of all related party transaction is presented before the auditcommittee on quarterly basis specifying the nature value and terms and conditions of thetransaction. The related party transaction policy is uploaded on the Company's website.The details of the related party transactions are provided in the accompanying financialstatements. Since all related party transaction entered into by the Company were in theordinary course of business and at arm's length basis Form AOC- 2 is not applicable tothe Company.
(17) PERFORMANCE OF SUBSIDIARIES :
The revenue of your Company's subsidiary eSense Learning Private Limited stood at Rs.2213 lakh for FY17 as compared to Rs. 1962 lakh in the previous year showing plateauinggrowth of 12.8%. This subsidiary Company could manage to grow on account of the classroommodel and is now poised that B2B model is the future of digital learning business growth.It incurred loss of Rs. 669 lakh for FY 17 as against loss of Rs. 471 lakh incurred in FY16.
Similarly the revenue of the subsidiary Indiannica Learning Private Limited (formerlyEncyclopedia Britannica (India) Private Limited) was Rs. 6392 lakh and Profit Before taxof Rs. 2539 lakh only of Quarter 4 since it was acquired on 30th December 2016. Hencethe consolidated results for the whole year of the company do not reflect the full yearresults of the subsidiary. It may be noted that the Total Revenue for the full year stoodat Rs. 7146 lakh and the loss before tax was Rs. 1458 lakh.
(18) CONSOLIDATED FINANCIAL STATEMENTS :
Your Directors have pleasure in presenting Consolidated Financial Statements which formpart of the Annual Report and Accounts.
(19) PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS :
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the financial statements.
(20) BOARD EVALUATION :
Pursuant to the provisions of SEBI (Listing Obligations and Disclosure Regulations)Requirements 2015 a structured questionnaire was prepared after taking intoconsideration various aspects of Board's function composition of the Board and itscommittee culture execution and performance of specific duties obligations andgovernance.
The performance evaluation of the Independent Directors was completed. The performanceevaluation of the Chairman and Non- Independent Directors was carried out by theIndependent Directors. The Board of Directors expressed their satisfaction with theevaluation process.
(21) WHISTLE BLOWER POLICY :
The Company has a whistle blower policy to report genuine concerns or grievances. Thewhistle blower policy of the company has been hosted on Company's website.
(22) ANNUAL RETURN :
The details forming part of the extract of the Annual Return in the Form MGT-9 asrequired under Section 92 of the Companies Act 2013 is included in the report as AnnexureB' and forms part of this report.
(23) SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of the Companies Act2013 and rules madethereunder the Company has appointed CS Sunil M. Dedhia (COP No.2031) Proprietor ofSunil M. Dedhia & Co. Company Secretary in Practice to undertake the SecretarialAudit of the Company.
The Secretarial Audit Report is included as Annexure C' and forms an integralpart of this Report. The said report does not contain any observation or qualificationrequiring explanation or comments from the Board of Directors as required under Section134(3) of the Companies Act 2013.
(24) SUBSIDIARY COMPANY:
During the year under review your Company incorporated Navneet (HK) Ltd. on 24thJanuary 2017 in Hong Kong and holds 70% of its paid up equity share capital. AccordinglyNavneet (HK) Ltd. has become your Company's subsidiary company. The incorporation ofsubsidiary would enable in sourcing and supplying of products to facilitate and supportCompany's international business. However no financial transactions were made in thissubsidiary Company and hence its financials are not consolidated with financials of yourCompany.
The Company does not have any material subsidiary whose net worth exceeds 20% of theconsolidated net worth of the Company in the immediately preceding accounting year or hasgenerated 20% of the consolidated income of the company during the previous FinancialYear. A statement containing salient features of the financial statements of subsidiarycompany in the prescribed format AOC-1 is included in the report as Annexure D' andforms part of this Report.
(25) FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The Company has a familiarisation programme for independent directors with regard totheir role rights responsibilities in the Company nature of the industry in which theCompany operates the business models of the Company etc. and the same is available on thewebsite of the Company.
(26) PARTICULARS OF EMPLOYEES :
Disclosure pertaining to remuneration as per Section 197 (12) of the Companies Act2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is attached as Annexure E' to this report. However as perthe provisions of Section 136(1) of the Companies Act 2013 this Report is sent to theshareholders excluding the said information. Any shareholder interested in obtaining suchinformation may write to the Company Secretary at the Registered Office of the Company.
(27) TRANSFER TO GENERAL RESERVE :
The Company has transferred Rs. 93.14 lakh to Capital Redemption Reserve Account asrequired under the provisions of
Section 69 of the Companies Act 2013 in view of the buyback of Equity Shares made bythe Company.
(28) AUDITORS :
Under Section 139 of the Companies Act 2013 and rules made thereunder it is mandatoryto rotate the statutory auditors on completion of the maximum term permitted under thesaid section. Accordingly at the 28th Annual General Meeting (AGM) of theCompany held on 29th September 2014 M/s GBCA & Associates (Formerly knownas Ghalla & Bhansali) Chartered Accountants (Firm Registration No.103142W) wereappointed as Statutory Auditors of the Company for a period up to 3 (three) years to holdoffice from the conclusion of the 28th AGM until the conclusion of the 31st AGMof the Company. The Audit Committee of the Company has proposed and the Board of Directorsof the Company has recommended to the members the appointment of M/s N.A. Shah AssociatesLLP (Firm Registration No. 116560W/W100149) Chartered Accountants as Statutory Auditorsof the Company for a period of five years from the conclusion of 31st AnnualGeneral Meeting (AGM) until the conclusion of 36th AGM.
(29) COMMENTS ON AUDITORS' REPORT:
There are no qualifications reservations or adverse remarks or disclaimer made by theStatutory Auditors in their report requiring explanation or comments from the Board ofDirectors as required under Section 134(3) of the Companies Act 2013.
(30) CORPORATE GOVERNANCE :
Your Company has complied with Regulation 34 of SEBI (Listing Obligations andDisclosure Regulations) Requirements 2015 of the stock exchanges. A report on CorporateGovernance as stipulated under Regulation 34 of SEBI (Listing Obligations and DisclosureRegulations) Requirements 2015 along with Independent Auditor's Certificate on compliancewith the Corporate Governance forms part of this Annual Report.
(31) MANAGEMENT DISCUSSION AND ANALYSIS :
As per Regulation 34 of SEBI (Listing Obligations and Disclosure Regulations)Requirements 2015 Management Discussion and Analysis report forms part of this AnnualReport.
(32) CREDIT RATING:
During the year under review CRISIL has reassigned CRISIL A1+ (pronounced CRISIL A onePlus) rating to the short term debt programme (including Commercial Paper) of the Company.The instruments with this rating are considered to have very strong degree of safetyregarding timely payment of financial obligations.
During the year under review CARE Ratings has reaffirmed CARE AA+ (pronounced CAREDouble A Plus) rating to the Long /Short Term Bank facilities of the Company. The bankfacilities covered with this rating are considered to have very strong degree of safetyregarding timely payment.
(33) MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITIONOF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENTS RELATE AND THE DATE OF REPORT :
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the Financial Year to which this financial statements relateand the date of report.
(34) SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS :
There are no significant or material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
(35) NUMBER OF CASES FILED AND THEIR DISPOSAL UNDER SECTION 22 OF THE SEXUALHARRASMENT OF WOMEN AT WORK PLACE (PREVENTION PRHIBITION ND REDRESSAL) ACT 2013 :
|Particulars ||Number of Complaints |
|Number of complaints pending as on the beginning of the Financial Year ||Nil |
|Number of complaints filed during the Financial Year ||Nil |
|Number of complaints pending as on the end of the Financial Year ||Nil |
(36) DEPOSITS :
Your Company has neither accepted nor renewed any deposits during the year underreview. The Company does not have any deposits which are not in compliance with therequirements of Chapter V of the Companies Act 2013.
(37) BUSINESS RESPONSIBILITY REPORT (BRR) :
Your Company appeared in the list of top 500 companies based on market capitalizationcriteria as on 31st March 2016 and therefore required to prepare and attach BusinessResponsibility Report (BRR) to the Annual Report of the Company for the Financial Year2016-17. The BRR of the Company for the year ended 31st March 2017 in line with Greeninitiative is made available on the website of the Company www.navneet.com and forms partof the Annual Report. The BRR is kept at the Registered Office of the Company for itsinspection. A copy of the BRR shall be made available to such of those shareholders whoare desirous and interested upon receipt of a written request from them.
(38) DETAILS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO :
(A) CONSERVATION OF ENERGY
Company's plant was designed to achieve high efficiency in the utilisation of energy.The key areas with regards to reduction of energy are identified and constant efforts aremade towards energy conservation.
(B) TECHNOLOGY ABSORPTIONADOPTATION AND INNOVATION
Research & Development
(1) Efforts in brief towards technology absorption adaptation & innovation
Through visits of technical personnel to developed Western countries your Companykeeps abreast with the advanced Technology Development and through specific programmesintroduces adopts and absorbs these sophisticated technologies.
(2) Benefits derived as a result of the above efforts
In view of the above your Company has been able to achieve a higher productionaccuracy and perfection in printing.
(3) In case of Imported Technology
|(i) Technologies Imported ||None your Company has not imported any Technology |
|(ii) Year of Import || |
|(iii) Has the technology been fully absorbed? || |
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company's export turnover has been Rs. 24043 lakh.
Total Foreign Exchange earned and used :
|(i) Foreign Exchange earned ||: L 24144 lakh |
|(ii) Foreign Exchange used ||: L 2644 lakh |
(39) ACKNOWLEDGEMENT :
Your Directors express their gratitude to the shareholders bankers financialinstitutions customers suppliers government and other regulatory authorities for theircontinued assistance and support extended to the Company. Your Directors also sincerelyappreciate the commitment and dedications displayed by the employees at all levels therebycontributing to the growth and success of the Company.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place : Mumbai ||Kamlesh S. Vikamsey |
|Date : 26th May 2017 ||Chairman |