Your Directors present their thirty-third Annual Report along with the AuditedStatement of Accounts of the Company for the Financial Year ended 31st March2019.
(1) FINANCIAL RESULTS :
| || || |
(र in Lakhs)
|Particulars || |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Revenue from Operations ||136054 ||113224 ||144501 ||120398 |
|Other Income ||1938 ||2921 ||1692 ||2600 |
|Total Revenue ||137992 ||116145 ||146193 ||122998 |
|Expenses ||110921 ||92700 ||122223 ||101995 |
|Profit Before Tax ||27071 ||23445 ||23970 ||21003 |
|Tax Expenses ||9324 ||8124 ||9249 ||8253 |
|Profit After Tax ||17747 ||15321 ||14721 ||12750 |
|Share of Profit/(Loss) of Associate || || ||561 ||(14) |
|Other Comprehensive Income/(Expense) (net of tax) ||392 ||(470) ||421 ||(451) |
|Total Comprehensive Income for the year ||18139 ||14851 ||15702 ||12285 |
(2) DIVIDEND :
Your Directors recommended a dividend of ri/- (50%) per share for the FinancialYear 2018-19. The dividend so recommended if declared works out to about 15.54%(including dividend distribution tax) of net profit as against your Company's policy ofdistribution of a minimum of 25% of its net profit. The Dividend Distribution Policy ofthe Company as per Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 is available at the link www.bit.ly/2WUCCu3.
(3) OPERATIONS :
(i) During the year under review the Company achieved a total revenue (including otherincome) of र 137992 Lakhs as compared to र116145 Lakhs in the financialyear 2017-18.
(ii) EBITDA for the year under review stood at र30703 Lakhs as against र26391Lakhs in the previous year.
(iii) After providing र2446 Lakhs for depreciation र9534 Lakhs for income taxरi84 Lakhs deferred tax Income र26 Lakhs as excess provision of tax of earlier yearsNet Profit for the year stood at र18139 Lakhs as against र14851 Lakhs achieved inthe previous year on standalone basis.
(4) PERFORMANCE OF DIVISIONS:
Content Publishing Division:
The content publishing business achieved a turnover of र71076 Lakhs in financialyear 2018-19 as compared to '62821 Lakhs in the previous financial year. There was agrowth of about 13% over the last year.
Stationery segment improved by 29% over the previous year from र50096 Lakhs toर64812 Lakhs.
(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 2019 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) DIRECTORS :
Shri Bipin A. Gala (DIN:00846625) Shri Anil D. Gala (DIN:00092952) and Shri Kamlesh S.Vikamsey (DIN: 00059620) Directors of the Company retire by rotation and being eligibleoffer themselves for re-appointment. Your Directors recommend their re-appointments.
The Independent Directors of the Company namely Shri Mohinder Pal Bansal(DIN:01626343) Shri Tushar K Jani (DIN:00192621) Smt. Usha Laxman (DIN:02765647) and Dr.Vijay B. Joshi (DIN:06705634) were appointed for a term of five (5) consecutive years atthe 28th AGM of the Company. The Board of Directors on the recommendation ofNomination and Remuneration Committee propose to re-appoint them for a second term of five(5) consecutive years. and therefore necessary Special Resolutions in this regard formpart of the notice convening 33rd AGM for your consideration and approval.
(7) BUY BACK OF SHARES & SHARE CAPITAL :
During the year under review the Company bought back
4687500 Equity Shares of face value of र2/- each at a price of र160/- per EquityShare (including premium of र158/- per Equity Share) amounting to र750000000/-(Rupees Seventy Five Crore Only) on a proportionate basis through the tender offer asprescribed under Securities and Exchange Board of India (Buyback of Securities)Regulations 1998. The buyback of 4687500 Equity Shares of the face value of र2/- eachwas completed on 12th October 2018. The number of Equity Shares post buy backstands reduced to 228870500 of र2/- each and accordingly the paid up Equity ShareCapital also stands reduced to र457741000/-.
(8) 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.
(9) CORPORATE SOCIAL RESPONSIBILITY:
Navneet Education Ltd. believes that growth is possible when the people of the societyare developed and have access to quality community services. Your Company has contributedtowards development in the sectors of health and medical care education improvementtribal development sports development and animal welfare.
Health and Medical care
NGOs working in the field of health and medical services are supported to providequality medical services to the patients. Surgeries long term treatment of ailments suchas cancer kidney dysfunction and others are provided with medical aid.
Education aid is provided to orphaned and underprivileged children to enable them toempower themselves through quality learning.
Remedial classes are conducted for children to enable them to cope with the learninggaps and are then mainstreamed in regular schools.
Income generation program for women in the tribal region helps improve the quality andstandard of living. Agriculture development through seed distribution and fruit plantshelped the people in the tribal region. Paramedic services were made accessible to thepatients.
Community Infrastructure Development
Primary health care center was development and upgraded to provide quality medicalservices to the community. Medical examination equipment was provided along withredevelopment of infrastructure facilities.
Skill development that would improve the employability of the youth was initiated.Training in repairs and maintenance of white goods and motors was designed to help developvocational skills.
CSR annual report is annexed as Annexure 'A' and forms an integral part of this Report.
(10) 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.
(11) MEETINGS :
The details of the number of meetings of the Board held during the Financial Year2018-19 forms part of the Corporate Governance Report.
(12) 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.
(13) 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.
(14) RELATED PARTY TRANSACTION :
The Board of Directors has adopted a policy on Related Party Transactions. All relatedparty transactions entered into during the financial year were on arm's length basis andin the ordinary course of the business. There are no materially significant related partytransaction made by the Company with Promoters Key Managerial Personnel or otherdesignated persons which may have potential conflict with interest of the Company atlarge. All related party transactions were entered into only with prior approval of theAudit Committee. A statement of all related party transaction is presented before theAudit Committee on quarterly basis specifying the nature value and terms and conditionsof the transaction. Your Company's Policy on Related Party Transactions as adopted byyour Board is uploaded on the Company's website. Transactions with related parties as perrequirements of Indian Accounting Standard 24 are disclosed in the notes to accountsaccompanying to the financial statement. Since all related party transactions entered intoby the Company were in the ordinary course of business and at arm's length basis FormAOC-2 is not applicable to the Company.
(15) PERFORMANCE OF SUBSIDIARIES :
a) eSense Learning Private Limited
The subsidiary was incorporated on 24th April 2008. The subsidiary isfocussed on providing digital education through eLearning solutions to students in India.The revenue of your Company's subsidiary eSense Learning Private Limited stood at र2361Lakhs for FY19 as compared to र1748 Lakhs in the previous year. The loss (before taxand OCI) of the company decreased to र113 Lakhs in FY19 as compared to loss of र510Lakhs in the previous year. The subsidiary company continues its focus on scaling upquality of revenues with reducing share of hardware revenues and focusing on B2B model forsustainable growth.
b) Indiannica Learning Private Limited
Indiannica Learning Private Limited became wholly owned subsidiary with effect from 30thDecember 2016. The Company focuses on enriching the learning experiences in CBSE/ICSEcurriculum. The revenue of the subsidiary stood at र6490 Lakhs for FY19 as compared toर5759 Lakhs in the previous year. The Company posted a loss (before tax and OCI) ofर2865 Lakhs in FY19 as compared to a loss of र1939 Lakhs in the previous year.
c) Navneet (HK) Limited
This subsidiary was incorporated in January 2017. Your Company holds 70% of its paidup equity share capital. This subsidiary commenced its business activities in FY18-19 andachieved turnover of र213 Lakhs in FY19.
(16) CONSOLIDATED FINANCIAL STATEMENT :
Your Directors have pleasure in presenting Consolidated Financial Statement which formpart of the Annual Report and Accounts.
(17) PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS :
Details of loans guarantees or investments covered under the provisions of Section 186of the Companies Act 2013 are given in the note number 46 to the financial statement.
(18) BOARD EVALUATION :
Pursuant to the provisions of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 a structured questionnaire wasprepared after taking into consideration various aspects of Board's function compositionof the Board and its committee culture execution and performance of specific dutiesobligations and governance.
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.
(19) REPORTING OF FRAUDS :
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and/ or Board under Section 143(2) ofthe Companies Act 2013 and Rules framed thereunder.
(20) TRANSFER OF SHARES TO IEPF :
As required under Section 124 of the Companies Act 2013 98663 equity shares inrespect of which dividend has not been encashed by the shareholders for seven consecutiveyears or more have been transferred by the Company to Investor Education and ProtectionFund Authority (IEPF) during the financial year under review. Details of sharestransferred have been uploaded on the website of IEPF as well as Company.
(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 Annexure'B' and forms part of this Report.
(23) SECRETARIAL AUDIT :
Pursuant to the provisions of Section 204 of the Companies Act 2013 and read with Rule9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andamendments thereto your Company engaged the services of CS Sunil M. Dedhia (COP No.2031)Proprietor of Sunil M. Dedhia & Co. Company Secretary in Practice to conduct theSecretarial Audit of the Company for the Financial Year ended 31st March 2019.The Secretarial Audit Report in Form MR-3 is attached as Annexure 'C' forming part of thisReport.
(24) SUBSIDIARY COMPANY :
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 statement of subsidiarycompany in the prescribed format AOC-1 is included in the report as Annexure 'D' and formspart 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) CORPORATE GOVERNANCE :
Your Company has complied with Regulation 34 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 of the StockExchanges. A report on Corporate Governance as stipulated under Regulation 34 ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 along with Auditor's Certificate annexed as Annexure 'E' on compliancewith the Corporate Governance forms part of this Report.
(27) TRANSFER TO GENERAL RESERVES :
The Company has not transferred any amount to General Reserves and retained the profitsin Retained Earnings.
(28) AUDITORS :
Pursuant to provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 M/s N.A. shah Associates LLP (FirmRegistration No.116560W/W100149) Chartered Accountants were appointed as StatutoryAuditors of the Company to hold office from the conclusion of 31st AnnualGeneral Meeting (AGM) until the conclusion of 36th AGM subject to ratificationby shareholders at every subsequent AGM.
Amended provisions of Section 139 of the Act vide Companies (Amendment) Act 2017notified from 7th May 2018 no longer requires ratification of appointment ofAuditors by members at every subsequent Annual General Meeting (AGM). In view of thisappointment of Auditors is not required for ratification at ensuing AGM.
M/s N.A. Shah Associates LLP (Firm Registration No. 116560W/W100149) CharteredAccountants have confirmed that they are not disqualified from continuing as StatutoryAuditors of the Company.
(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) PARTICULARS OF EMPLOYEES :
Disclosure pertaining to remuneration as per Section 197(12) of the Companies Act 2013read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is attached as Annexure 'F' to this report. However as per theprovisions 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.
(31) MANAGEMENT DISCUSSION AND ANALYSIS :
As per Regulation 34 of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 Management Discussion and Analysis reportforms part of this Report.
(32) CREDIT RATING :
During the year under review CRISIL has reassigned CRISIL A1+ (pronounced CRISIL A onePlus) rating to the Commercial Paper programme of the Company. The instruments with thisrating are considered to have very strong degree of safety regarding timely payment offinancial 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) 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.
(34) NUMBER OF CASES FILED AND THEIR DISPOSAL UNDER THE SEXUAL HARASSMENT OF WOMEN ATWORK PLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013 :
The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules made there under. Thedetails of number of complaints pending at the beginning of the financial year receivedduring the financial year and pending as on end of financial year is as under:
|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 |
(35) MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTRELATE 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 statement relateand the date of report.
(36) DEPOSITS :
During the year under review your Company did not accept any deposits within themeaning of the provisions of Chapter V-Acceptance of Deposits by Companies read with theCompanies (Acceptance of Deposits) Rules 2014.
(37) BUSINESS RESPONSIBILITY REPORT (BRR) :
Your Company appeared in the list of top 500 companies based on market capitalizationcriteria as on 31st March 2018 and therefore required to prepare and attachBusiness Responsibility Report (BRR) to the Annual Report of the Company for the FinancialYear 2018-19.
The BRR of the Company for the year ended 31st March 2019 in line withGreen initiative is made available on the website of the Company www.navneet.comand forms part of the Annual Report. The BRR is kept at the Registered Office of theCompany for its inspection. A copy of the BRR shall be made available to such of thoseshareholders who are desirous and interested upon receipt of a written request from them.
(38) DETAILS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS 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 ABSORPTION ADOPTATION 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 र || |
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company's export turnover has been र 37923 Lakhs.
Total Foreign Exchange earned and used :
(i) Foreign Exchange earned : र 37813 Lakhs
(ii) Foreign Exchange used : र 2566 Lakhs
(39) ACKNOWLEDGEMENT :
The Board of Directors take this opportunity to thank Company's shareholders bankersfinancial institutions customers suppliers Central and State Governments otherregulatory authorities and all the employees for their support and co-operation extendedto the Company during the year.
| ||For and on behalf of the Board of Directors |
| ||sd/- |
|Place : Mumbai ||Kamlesh S. Vikamsey |
|Date : 15th May 2019 ||Chairman |