Navneet Education Ltd Directors Report.

Dear Shareowners,

Your Directors present their thirty-third Annual Report along with the Audited Statement of Accounts of the Company for the Financial Year ended 31st March, 2019.

(1) FINANCIAL RESULTS :

(र in Lakhs)

Particulars

STANDALONE

CONSOLIDATED

2018-19 2017-18 2018-19 2017-18
Revenue from Operations 1,36,054 1,13,224 1,44,501 1,20,398
Other Income 1,938 2,921 1,692 2,600
Total Revenue 1,37,992 1,16,145 1,46,193 1,22,998
Expenses 1,10,921 92,700 1,22,223 1,01,995
Profit Before Tax 27,071 23,445 23,970 21,003
Tax Expenses 9,324 8,124 9,249 8,253
Profit After Tax 17,747 15,321 14,721 12,750
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 18,139 14,851 15,702 12,285

(2) DIVIDEND :

Your Directors recommended a dividend of ri/- (50%) per share for the Financial Year 2018-19. The dividend so recommended, if declared, works out to about 15.54% (including dividend distribution tax) of net profit as against your Companys policy of distribution of a minimum of 25% of its net profit. The Dividend Distribution Policy of the Company as per Securities and Exchange Board of India (Listing Obligations and Disclosure 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 other income) of र 1,37,992 Lakhs as compared to र1,16,145 Lakhs in the financial year 2017-18.

(ii) EBITDA for the year under review stood at र30,703 Lakhs as against र26,391 Lakhs in the previous year.

(iii) After providing र2,446 Lakhs for depreciation, र9,534 Lakhs for income tax, रi84 Lakhs deferred tax Income, र26 Lakhs as excess provision of tax of earlier years, Net Profit for the year stood at र18,139 Lakhs as against र14,851 Lakhs achieved in the previous year on standalone basis.

(4) PERFORMANCE OF DIVISIONS:

Content Publishing Division:

The content publishing business achieved a turnover of र71,076 Lakhs in financial year 2018-19 as compared to 62,821 Lakhs in the previous financial year. There was a growth of about 13% over the last year.

Stationery Division:

Stationery segment improved by 29% over the previous year from र50,096 Lakhs to र64,812 Lakhs.

(5) DIRECTORS RESPONSIBILITY STATEMENT :

As required under Section 134(3) (c) of the Companies Act, 2013 your Directors hereby state:

• that in the preparation of annual financial statements for the year ended 31st March, 2019, the applicable Indian Accounting Standards had been followed along with proper explanation relating to material departures, if any;

• that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial 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 of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other 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 the Company and that such internal financial controls are adequate and were operating effectively;

• The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

(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 eligible offer 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 at the 28th AGM of the Company. The Board of Directors on the recommendation of Nomination 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 form part 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

46,87,500 Equity Shares of face value of र2/- each at a price of र160/- per Equity Share (including premium of र158/- per Equity Share) amounting to र75,00,00,000/- (Rupees Seventy Five Crore Only) on a proportionate basis through the tender offer as prescribed under Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998. The buyback of 46,87,500 Equity Shares of the face value of र2/- each was completed on 12th October, 2018. The number of Equity Shares post buy back stands reduced to 22,88,70,500 of र2/- each and accordingly, the paid up Equity Share Capital also stands reduced to र45,77,41,000/-.

(8) RISK MANAGEMENT POLICY :

During the year under review, the Company has identified and evaluated elements of business risk. Business risk, inter-alia, includes fluctuations in Foreign Exchange, Regulatory Risk, Competition from other players and High Input Costs. The Risk Management Framework defines the risk management approach of the Company and includes periodic review of such risk and also documentation, mitigating controls and reporting mechanism of such risks. The Board of Directors and senior management team currently assess the operations and operating environment to identify potential risks and take necessary action to mitigate the same.

(9) CORPORATE SOCIAL RESPONSIBILITY:

Navneet Education Ltd. believes that growth is possible when the people of the society are developed and have access to quality community services. Your Company has contributed towards development in the sectors of health and medical care, education improvement, tribal development, sports development and animal welfare.

Health and Medical care

NGOs working in the field of health and medical services are supported to provide quality medical services to the patients. Surgeries, long term treatment of ailments such as cancer, kidney dysfunction, and others are provided with medical aid.

Education improvement

Education aid is provided to orphaned and underprivileged children to enable them to empower themselves through quality learning.

Remedial classes are conducted for children to enable them to cope with the learning gaps and are then mainstreamed in regular schools.

Tribal Development

Income generation program for women in the tribal region helps improve the quality and standard of living. Agriculture development through seed distribution and fruit plants helped the people in the tribal region. Paramedic services were made accessible to the patients.

Community Infrastructure Development

Primary health care center was development and upgraded to provide quality medical services to the community. Medical examination equipment was provided along with redevelopment of infrastructure facilities.

Vocational training

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 develop vocational 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 to remuneration to Directors, Managerial Personnel and senior Management of the Company. The policy lays down the criteria for selection and appointment of Board members. The details of this policy form part of Corporate Governance Report.

(11) MEETINGS :

The details of the number of meetings of the Board held during the Financial Year 2018-19 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 of internal control systems, which provides for automatic checks and balances. Your Company has maintained a proper and adequate system of internal controls. This ensures the safeguarding of assets and properties of the Company and protects against unauthorised use and disposal of the assets. Your Companys internal control systems commensurate with the nature and size of its business operations. Internal Financial Controls are evaluated and internal 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 of independence 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 related party transactions entered into during the financial year were on arms length basis and in the ordinary course of the business. There are no materially significant related party transaction made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. All related party transactions were entered into only with prior approval of the Audit Committee. A statement of all related party transaction is presented before the Audit Committee on quarterly basis, specifying the nature, value and terms and conditions of the transaction. Your Companys Policy on Related Party Transactions, as adopted by your Board is uploaded on the Companys website. Transactions with related parties, as per requirements of Indian Accounting Standard 24 are disclosed in the notes to accounts accompanying to the financial statement. Since all related party transactions entered into by the Company were in the ordinary course of business and at arms length basis, Form AOC-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 is focussed on providing digital education through eLearning solutions to students in India. The revenue of your Companys subsidiary eSense Learning Private Limited stood at र2,361 Lakhs for FY19 as compared to र1,748 Lakhs in the previous year. The loss (before tax and OCI) of the company decreased to र113 Lakhs in FY19 as compared to loss of र510 Lakhs in the previous year. The subsidiary company continues its focus on scaling up quality of revenues with reducing share of hardware revenues and focusing on B2B model for sustainable growth.

b) Indiannica Learning Private Limited

Indiannica Learning Private Limited became wholly owned subsidiary with effect from 30th December, 2016. The Company focuses on enriching the learning experiences in CBSE/ICSE curriculum. The revenue of the subsidiary stood at र6,490 Lakhs for FY19 as compared to र5,759 Lakhs in the previous year. The Company posted a loss (before tax and OCI) of र2,865 Lakhs in FY19 as compared to a loss of र1,939 Lakhs in the previous year.

c) Navneet (HK) Limited

This subsidiary was incorporated in January, 2017. Your Company holds 70% of its paid up equity share capital. This subsidiary commenced its business activities in FY18-19 and achieved turnover of र213 Lakhs in FY19.

(16) CONSOLIDATED FINANCIAL STATEMENT :

Your Directors have pleasure in presenting Consolidated Financial Statement which form part 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 186 of 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 (Listing Obligations and Disclosure Requirements) Regulations, 2015 a structured questionnaire was prepared after taking into consideration various aspects of Boards function, composition of the Board and its committee, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and Non- Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

(19) REPORTING OF FRAUDS :

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and/ or Board under Section 143(2) of the Companies Act, 2013 and Rules framed thereunder.

(20) TRANSFER OF SHARES TO IEPF :

As required under Section 124 of the Companies Act, 2013, 98,663 equity shares, in respect of which dividend has not been encashed by the shareholders for seven consecutive years or more, have been transferred by the Company to Investor Education and Protection Fund Authority (IEPF) during the financial year under review. Details of shares transferred 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. The Whistle Blower Policy of the Company has been hosted on Companys website.

(22) ANNUAL RETURN :

The details forming part of the extract of the Annual Return in the Form MGT-9 as required 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 Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amendments 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 the Secretarial 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 this Report.

(24) SUBSIDIARY COMPANY :

The Company does not have any material subsidiary whose net worth exceeds 20% of the consolidated net worth of the Company in the immediately preceding accounting year or has generated 20% of the consolidated income of the company during the previous financial year. A statement containing salient features of the financial statement of subsidiary company in the prescribed format AOC-1 is included in the report as Annexure D and forms part of this Report.

(25) FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS :

The Company has a familiarisation programme for independent directors with regard to their role, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business models of the Company etc. and the same is available on the website 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 Stock Exchanges. A report on Corporate Governance as stipulated under Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 along with Auditors Certificate annexed as Annexure E on compliance with 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 profits in Retained Earnings.

(28) AUDITORS :

Pursuant to provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s N.A. shah Associates LLP (Firm Registration No.116560W/W100149), Chartered Accountants were appointed as Statutory Auditors of the Company to hold office from the conclusion of 31st Annual General Meeting (AGM) until the conclusion of 36th AGM, subject to ratification by shareholders at every subsequent AGM.

Amended provisions of Section 139 of the Act vide Companies (Amendment) Act, 2017 notified from 7th May, 2018 no longer requires ratification of appointment of Auditors by members at every subsequent Annual General Meeting (AGM). In view of this, appointment of Auditors is not required for ratification at ensuing AGM.

M/s N.A. Shah Associates LLP, (Firm Registration No. 116560W/W100149), Chartered Accountants have confirmed that they are not disqualified from continuing as Statutory Auditors of the Company.

(29) COMMENTS ON AUDITORS REPORT:

There are no qualifications, reservations or adverse remarks or disclaimer made by the Statutory Auditors in their report requiring explanation or comments from the Board of Directors 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, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure F to this report. However, as per the provisions of Section 136(1) of the Companies Act, 2013, this Report is sent to the shareholders excluding the said information. Any shareholder interested in obtaining such information 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 and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis report forms part of this Report.

(32) CREDIT RATING :

During the year under review CRISIL has reassigned CRISIL A1+ (pronounced CRISIL A one Plus) rating to the Commercial Paper programme of the Company. The instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations.

During the year under review CARE Ratings has reaffirmed CARE AA+ (pronounced CARE Double A Plus) rating to the Long/Short Term Bank facilities of the Company. The bank facilities covered with this rating are considered to have very strong degree of safety regarding 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 would impact 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 AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 :

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace 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. The details of number of complaints pending at the beginning of the financial year, received during 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 THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATE AND THE DATE OF REPORT :

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relate and the date of report.

(36) DEPOSITS :

During the year under review, your Company did not accept any deposits within the meaning of the provisions of Chapter V-Acceptance of Deposits by Companies read with the Companies (Acceptance of Deposits) Rules, 2014.

(37) BUSINESS RESPONSIBILITY REPORT (BRR) :

Your Company appeared in the list of top 500 companies based on market capitalization criteria as on 31st March, 2018 and therefore required to prepare and attach Business Responsibility Report (BRR) to the Annual Report of the Company for the Financial Year 2018-19.

The BRR of the Company for the year ended 31st March, 2019, in line with Green initiative, is made available on the website of the Company www.navneet.com and forms part of the Annual Report. The BRR is kept at the Registered Office of the Company for its inspection. A copy of the BRR shall be made available to such of those shareholders who are desirous and interested, upon receipt of a written request from them.

(38) DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO :

(A) CONSERVATION OF ENERGY

Companys 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 are made 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 Company keeps abreast with the advanced Technology Development and through specific programmes introduces, 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 production, accuracy 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 Companys export turnover has been र 37,923 Lakhs.

Total Foreign Exchange earned and used :

(i) Foreign Exchange earned : र 37,813 Lakhs

(ii) Foreign Exchange used : र 2,566 Lakhs

(39) ACKNOWLEDGEMENT :

The Board of Directors take this opportunity to thank Companys shareholders, bankers, financial institutions, customers, suppliers, Central and State Governments, other regulatory authorities and all the employees for their support and co-operation extended to 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