Description
The report for the financial year 2011 - 2012 of navneet publications (India) limited.
Contents
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Corporate Information ............................................................................. 2 Chairman’s Communiqué ........................................................................ 3 Management Discussion and Analysis ................................................... 4 Corporate Governance Report ................................................................ 6 General Shareholders Information ....................................................... 11 Performance Indicators ........................................................................ 15 Financial Highlights .............................................................................. 16 Notice .................................................................................................. 18 Directors’ Report .................................................................................. 22 Section 212 statement of Subsidiary Companies ................................. 26 Auditor’s Report ................................................................................... 27 Balance Sheet ..................................................................................... 30 Statement of Profit & Loss ................................................................... 31 Cash Flow Statement ........................................................................... 32 Significant Accounting Policies ............................................................ 33 Notes forming part of the Balance Sheet ............................................. 35 Notes forming part of the Statement of Profit & Loss ........................... 44 Notes on Financial Statements ............................................................ 47 Consolidated Financial Statements ...................................................... 57
1
Corporate Information
Board of Directors Shivji K. Vikamsey Amarchand R. Gala Jaisinh K. Sampat Dungarshi R. Gala Shantilal R. Gala Jitendra L. Gala Liladhar D. Shah Dr. R. Varadarajan Tushar K. Jani Company Secretary Amit D. Buch Auditors Ghalla & Bhansali Chartered Accountants, Mumbai Bankers ICICI Bank Ltd. The Hongkong and Shanghai Banking Corporation Ltd. DBS Bank Ltd. Kotak Mahindra Bank Ltd. HDFC Bank Ltd. Deutsche Bank AG. The Bank of Nova Scotia Standard Chartered Bank ING Vysya Bank Ltd. Citi Bank N.A. Website www.navneet.com e-mail [email protected] Chairman Managing Director Joint Managing Director Director – Educational Books Publishing Director – Educational Books Publishing Ahmedabad Office Director – Marketing Director Director Director Works Registered Office
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Navneet Bhavan, Bhavani Shankar Road, Dadar (West), Mumbai - 400 028.
Harakhchand R. Gala Director – Sales & Distribution Kamlesh S. Vikamsey Director
Navneet House, Gurukul Road, Memnagar, Ahmedabad - 380 052.
• Village Dantali, Behind Kasturi Nagar, Dist. & Tal. Gandhinagar, Gujarat. • Gokhiware, Chinchpada, Vasai (East), Dist. Thane. • Village Sayali, Silvassa. • Rakanpur, Taluka Kalol, Dist. Mehsana. • Village Khaniwade, Tal. Vasai, Dist. Thane.
2
Chairman’s Communiqué
Dear Shareowners,
At the outset, I take this opportunity to share with you the pride that we all feel at the remarkable haul of medals that our talented sportsmen have brought to our nation at the recently concluded London Olympics. India stands at the threshold of knowledge transformation. Education is the one sector towards which the outlook is fast changing in our country. From being considered an expense, it is now seen as an investment for the future. Students now have a wider choice in selecting their future. Across the country literacy is fast improving year after year. With the perceptible growth in Indian economy, disposable household income and resultantly spending has been increasing. Parents/Students now prefer quality products in all product categories including those of your Company. Various initiatives of the Central Government on increasing the literacy as well as quality education have also contributed to increasing the awareness for quality educational products. The Government’s expenditure on social services and rural development has gone up consistently over the years. The last financial year 2011-2012 was a successful year for your Company in achieving many milestones, both in the physical as well as in the financial fronts. Your Company has maintained a healthy double digit growth. For the year ended 31st March 2012, your Company has crossed the 600 cr. turnover mark led by publication segment. Under the syllabus changing scenario publication business grew by 18% and posted a turnover of ` 354 cr. while stationery segment recorded less than expected growth and stood at ` 249 cr. – a modest growth of 7% on account of severe competition in the domestic market and postponement of export orders. On one hand, the management of your Company believes that being in the non-recessionary business line is the most powerful strength of your Company, on the other, global recession has nearly brought the world to a halt. Developed economies like USA & most of the countries in Europe witnessed virtual turmoil of their financial sector. The slowdown has severely impacted the business of your Company’s subsidiary in Spain, Grafalco Ediciones S.L. As a result, during the current year the Management of your Company had decided to scale down substantially the activities of this subsidiary. It has paid off all its liabilities and made provision for diminution in the value of its investment in this subsidiary.
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Your Company’s other subsidiary, eSense Learning Pvt. Ltd., has completed digitized content for standards 1 to 10 in Science, Mathematics and Social Science. As of March, 2012, our e Learning products have been installed in 925 Institutions covering around 4,500 classrooms. Company is aggressively marketing its products across new schools and is sure of an impressive growth in FY13. The outlook for the coming years looks very promising as the syllabus change scenario in the States of Maharashtra and Gujarat is expected to continue for a couple of years. With our long cherished dream to expand business beyond Gujarat and Maharashtra to other States, we have made a foray in Andhra Pradesh recently. With this, we believe that there will be a robust growth in the publication segment during FY13. Even stationery segment is expected to perform better in FY13 due to confirmed export order book. India, as an emerging economy, envisions a better tomorrow. Today, each strata of society considers education to be the ladder of future growth. The awareness towards quality education is increasing with the time. The ratio of enrollments in private schools is increasing in comparison to public school in rural areas as well. With highest student population in the world, business opportunities in education are increasing at all levels from pre-school to higher education. Government of India’s expenditure on education as a proportion of total expenditure has moved up substantially in the recent times and it has undertaken several initiatives in recent years to promote primary and secondary education. All these speak for the excellent opportunities that your Company is ready to seize and to grow at a rapid pace in the years to come.
Shivji K. Vikamsey
3
Management Discussion and Analysis
Dividend Policy :
The trend of your Company’s policy of rewarding its investors with minimum 25% of its net profits as dividends continues this year as well. Your Company had declared and paid interim dividend of 30% or ` 0.60 ps per share in November 2011. Your Company has proposed a final dividend of 40% or ` 0.80 ps per share which works out to be above 48% payout (including DDT) for FY 12.
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a. Writing off / Diminution in the value of investment amounting to ` 3.26 cr. in its subsidiary viz. Grafalco Ediciones S.L. b. Higher finance cost and c. Pressure on the margins in the stationery segment on account of strong competition from new entrants in this segment New Warehouse : As informed in the last Annual Report, your Company has invested in a warehouse cum manufacturing facility to expand its storage facilities to meet the ever increasing demand and shift manufacturing from Vasai (Near Mumbai) location. Accordingly, the Company has so far invested ` 50 cr. in a warehouse near Virar, Mumbai. The work is being carried out in phases and the Management estimates an additional outlay of around ` 10 cr to complete the second phase. This investment in the new warehouse has already shown significant improvement in the operations of your Company. Investment in Andhra Pradesh based School Management Company : Your Company has been providing indirect education through supplementary books for over 5 decades. It has now ventured into direct education by investing in a School Management Company in Andhra Pradesh. This company runs and manages schools in AP under the brand “Gowtham Model School (GMS)”. As of 31st March 2012, your Company has invested ` 30.5 cr. against the commitment of ` 45 cr. to acquire appx. 24% stake. Spanish Subsidiary : Global recession has brought the world on a halt. Developed economies like USA & Most of the countries in Europe witnessed virtual turmoil of their financial sector. The slowdown has severely impacted the business of your Company’s subsidiary in Spain viz. Grafalco Ediciones S.L. As a result, the Management of your Company has decided during the current year to close down substantially the activities of this subsidiary. It has paid off all its liabilities and made provision for diminution in the value of its investment in this subsidiary. eLearning Segment : Navneet Publications (India) Ltd.’s another subsidiary company viz. eSense Learning Pvt. Ltd. has shown a promising performance in FY12. Not only the acceptance amongst the schools has picked up but also the
Wealth Creation for Shareholders :
Maximizing shareholder wealth is a single most important goal for any profit seeking organization and as such it becomes extremely crucial for it to achieve higher profit. Apart from the liberal policy, your Company has always believed in creating Shareholders’ Wealth. Your Company’s sound business policies and prudent investment decisions have enabled to enhance Shareholders’ value. In just last 4 years, on standalone basis your Company’s net worth has increased by a whopping 66% from ` 230 cr. on 31st March, 2008 to ` 381 cr. on 31st March, 2012. Business Overview : Publication Segment : Syllabus change cycle has started in Maharashtra and Gujarat from FY 12. As a result, your Company has posted strong numbers. As expected, revenue from publication business grew from ` 299 cr. in FY-11 to ` 354 cr. in FY 12, a jump of 18% y-o-y. This segment shall see good double digit growth for the next few years. This segment has maintained its operating margin at 33% and expects to maintain in the current year as well. Stationery Segment : Stationery segment has underperformed during the current year due to severe competition from the new entrants in the domestic market. This segment achieved a growth of 7% from ` 232 cr. in FY 11 to ` 249 cr. in FY 12. With strong export orders in the pipeline for the current year, we anticipate that this segment will show a marked improvement in the top line in FY 13. Net Profit : Net profit after tax for FY12 (on standalone basis) stood at ` 80.26 cr. (13.2% of Total Revenue) as compared to ` 77.55 cr. (14.5 % of Total Revenue) for FY11. The marginal reduction in the profit percentage is on account of :
4
Management Discussion and Analysis
desire for its digital content is reflected amongst students and parents. As of March, 2012, our products have been installed in 925 Institutions covering around 4,500 classrooms. These numbers are still small compared to number of institutions and classrooms in the two States of Gujarat and Maharashtra but our continuous marketing efforts will enable your Company to accomplish decent numbers in the years to come. Future Growth Drivers, Opportunities, Risks : Syllabus changes in the State of Maharashtra and Gujarat which started in 2012 will continue for further 3 years. The Government of India has undertaken several initiatives in recent years to promote primary and secondary education. Navneet has pulled out all stops to capitalize on these emerging opportunities for its publication and e-learning activities. Further, it has also started publishing various publications to market in Northern India and in the State of AP. Risk Factors : Competition from Other Players : The Education Business is one of the high growth and happening industry. The Company operates in highly competitive environment that is subject to innovations, changes and varying levels of resources available to each player in each segment of business. This may be a matter of concern if the Company does not adapt to the changing face of the industry. The Company has been keeping itself abreast of latest changes in the industry to implement the same in its operation to keep itself ahead of competition. High Input Cost : The persisting inflationary pressure could certainly increase the Company’s input costs. With the Company’s policy to keep the prices of its products within affordable range of the masses could adversely affect the Company’s profits. However the Management is keenly monitoring the cost at each level and shall take appropriate steps to limit its cost to the minimum level. Regulatory Risk : Government’s recent pronouncement of removing the export subsidy came as big setback to Company’s export operations. If there is also the pressure of exchange rate from the competitive countries, the Company might need to relook at its export model in future.
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The Company relies on intellectual property rights and proprietary rights which may not be adequately protected under current laws. Further, in view of the kind of business in which Company is, it may be subjected to defamation suits, which may have adverse effect on its business. Regulatory enactments are monitored regularly and the Company shall be de-risking its education business model from time to time. Further, all necessary legal vetting is done by the management to ensure that Intellectual Property Rights relating to contents have requisite protection. Corporate Social Responsibility : Your Company continues to use eco-friendly materials for most of its major products catering to environmental needs and also continues with its corporate social responsibility initiative and donates mainly in areas of medical aid, education and rehabilitation programmes. During FY12 the Company donated ` 2.33 cr. The management will continue to fulfill its social responsibility on an ongoing basis towards society in whatever best possible manner. Internal Controls : The Company has in place adequate internal control systems, commensurate with its size and nature of operations so as to ensure smoothness of operations and compliance with applicable legislation. The Company has a well-defined system of management reporting and periodic review of business to ensure timely decisionmaking. Industrial Relations : Industrial relations were cordial at all locations. In a challenging environment and business conditions, the support from the workforce was positive throughout.
Cautionary Statement : The Management Discussion and Analysis describing the Company’s outlook, projections, expectations and estimates regarding future performance are based on current economic scenario. The management believes this scenario to follow as per its expectation to the best of its knowledge at the time of preparation of this report. However, these economic conditions are subject to uncertainities, which could cause actual results to differ materially from those which may be indicated in the above analysis.
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Corporate Governance Report
(1) COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE
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Corporate Governance is about commitment to values and ethical business conduct. The Company is committed to good corporate governance as it believes that good corporate governance is essential for acheving long term corporate goals and leads to long term shareholder value and enhance interests of all stakeholders. The Company respects and values the rights of its stakeholders to secure information about the Company and its performance. The corporate governance policies followed by the Company are intended to ensure transparency in all its dealings. (2) BOARD OF DIRECTORS 2.1 Composition The Board of Directors comprises of eleven Directors. Since the Company has a Non Executive Chairman, the Board meets the stipulated requirement of atleast one third of the Board of Directors comprising of Independent Directors. 2.2 Attendance / Remuneration of Directors The details of attendance of Directors at the meeting of the Board of Directors of the Company, last Annual General Meeting attended and remuneration for the year is given below :
Sr. No. Name of Director Category Board Meetings during 2011-2012 Held Attended 4 4 4 4 4 4 4 4 4 4 4 4 4 4 2 4 4 4 4 4 4 3 0 3 2 2 Salary (`) 0 Other Benefits (`) 0 Contri. To PF (`) 0 2,98,080 2,98,080 2,98,080 2,98,080 2,98,080 2,98,080 0 0 0 0 0 0 Sitting Total Last Fee* Remuneration AGM (`) (`) attended 34,500 0 0 0 0 0 0 # 47,000 38,000 0 12,000 8,000 13,000 34,500 45,47,100 45,47,100 45,47,100 45,47,100 45,47,100 45,47,100 # 47,000 38,000 0 12,000 8,000 13,000 Yes Yes Yes No No No Yes Yes No No No Yes Yes
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.
Shri S. K. Vikamsey Shri A. R. Gala Shri J. K. Sampat Shri D. R. Gala Shri H. R. Gala Shri S. R. Gala Shri J. L. Gala Shri K. S. Vikamsey Shri L. D. Shah Dr. R. Varadarajan Shri Tushar K. Jani Shri Vijay D. Rai** Shri Mohinder Pal Bansal**
ID PD PD PD PD PD PD ID ID ID ID ID ID
24,84,000 17,65,020 24,84,000 17,65,020 24,84,000 17,65,020 24,84,000 17,65,020 24,84,000 17,65,020 24,84,000 17,65,020 0 0 0 0 0 0 0 0 0 0 0 0
ID – Independent Director
PD – Promoter Director
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* sitting fees of ` 4,000/- was paid for attending each meeting of Board of Directors and ` 2,500/- was paid for attending each meeting of Audit and Investors’ Grievance Committee Meeting till November, 2011. Thereafter, sitting fees of ` 10,000/- is paid for attending each meeting of Board of Directors and ` 5,000/- is paid for attending each meeting of Audit Committee and Investors’ Grievance Committee. # includes ` 2,500/- for 2010-2011. ** upto 4th October, 2011.
Corporate Governance Report
2.3
Sr. No.
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Code of Conduct has been circulated to all the Members of the Board and Senior Management Personnel of the Company and compliance of the same is affirmed by them. A declaration by the Managing Director under Clause 49 of the Listing Agreement regarding compliance with Code of Conduct is given below : In accordance with Clause 49I(D) of the Listing Agreement with the Stock Exchanges, I hereby confirm that all the Members of the Board and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct guideline as applicable to them for the Financial Year ended 31st March, 2012. Amarchand R. Gala Managing Director (4) AUDIT COMMITTEE 4.1 Composition The Audit Committee presently comprises of three Independent Directors namely Shri Kamlesh S. Vikamsey, Shri Shivji K. Vikamsey and Shri Liladhar D. Shah. The Chairman of the Audit Committee is an Independent Director namely Shri Kamlesh S. Vikamsey. 4.2 Shri Amit D. Buch, Company Secretary is Secretary to the Audit Committee. 4.3 Attendance Four Audit Committee Meetings were held during the year on 28th April, 2011, 28th July, 2011, 2nd November, 2011 and 7th February, 2012. The constitution of the Audit Committee was changed during the year as Shri Mohinder Pal Bansal ceased to be member of the Audit Committee upon his resignation as Director of the Company effective from 4th October, 2011. The composition of the Audit Committee, the number of meetings held and attended are as under :
Name of Director No. of Meetings Held No. of Meetings Attended
Directorships in Other Public Limited Companies of the Directors as at 31st March, 2012 :
Name of Director No. of Directorships No. of No. of Committee Committees Positions Chaired * Held * 7 3 -
1 2 3 4 5 6 7 8 9 10 11
Shri Shivji K. Vikamsey Shri Amarchand R. Gala Shri Jaisinh K. Sampat Shri Dungarshi R. Gala Shri Shantilal R. Gala Shri Harakhchand R. Gala Shri Jitendra L. Gala Shri Kamlesh S. Vikamsey Shri Liladhar D. Shah Dr. R. Varadarajan Shri Tushar K. Jani
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* Committee includes Audit Committee and Investors’ (shareholders’) Grievance Committee. 2.4 Number of Board Meetings held and dates on which held: There were four Board Meetings held during 2011-2012 and gap between two Board Meetings did not exceed four months. The dates of the Board Meetings are - 28th April, 2011, 28th July, 2011, 2nd November, 2011, 7th February, 2012. 2.5 A brief resume of Directors seeking re-appointment: Shri Dungarshi R. Gala Shri Dungarshi R. Gala aged 76 years has vast experience in the field of educational book publishing. Shri Jitendra L. Gala Shri Jitendra L. Gala, a commerce graduate has rich experience in marketing field. 2.6 Shri Dungarshi R. Gala, Shri Amarchand R. Gala, Shri Harakhchand R. Gala and Shri Shantilal R. Gala are related as brothers. (3) CODE OF CONDUCT FOR DIRECTORS & SENIOR MANAGEMENT PERSONNEL The Board of Directors have adopted the Code of Conduct for the Directors and Senior Management Personnel. A copy of Code of Conduct has been put on the Company's Website www.navneet.com
Shri Kamlesh S. Vikamsey 4 4 Shri Shivji K. Vikamsey 4 4 Shri Liladhar D. Shah 4 3 Shri Mohinder Pal Bansal* 4 2 The Chairman of the Audit Committee was present at the last Annual General Meeting held on 15th September, 2011. The Minutes of the Audit Committee are noted at the meeting of the Board of Directors of the Company. * upto 4th October, 2011.
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Corporate Governance Report
4.4 (1) (2) (3) (4) Powers of Audit Committee To investigate any activity within its terms of reference. To seek information from any employee. To obtain outside legal or other professional advice. To secure attendance of outsiders with relevant expertise, if it considers necessary. 4.5 Broad Terms of References of the Audit Committee (1) To review with the management the Management discussion and analysis of financial condition and results of operations. (2) To review Statement of significant related party transactions (as defined by the Audit Committee) submitted by management. (3) To review Management letters / letters of internal control weaknesses issued by the statutory auditors. (4) To review Internal Audit Reports relating to internal control weaknesses. (5) To review appointment, removal and terms of remuneration of the Chief internal auditor. (6) To review with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter. (7) To overview the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible. (8) To recommend to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. (9) To approve payment to statutory auditors for any other services rendered by the statutory auditors. (10) To review with the management, the annual financial statements before submission to the board for approval, with particular reference to: a) Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of Clause (2AA) of Section 217 of the Companies Act, 1956. b) Changes, if any, in accounting policies and practices and reasons for the same. c) Major accounting entries involving estimates based on the exercise of judgement by management. d) Significant adjustments made in the financial statements arising out of audit findings.
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(11) (12) (13) e) Compliance with listing and other legal requirements relating to financial statements. f) Disclosure of any related party transactions. g) Qualifications in the draft Audit Report. To review with the management, the quarterly financial statements before submission to the board for approval. To review with the management, performance of statutory, internal auditors, and adequacy of the internal control system. To review the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Approval of appointment of CFO after assessing the qualifications, experience & background, etc. of the candidate. To discuss with internal auditors any significant findings and follow up there on. To review the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board. To discuss with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors. To carry out any other function as may be added by the Board of Directors in the terms of reference of the Audit Committee, by the Board from time to time.
(14) (15) (16)
(17)
(18)
(19)
(5) SUBSIDIARY COMPANIES The Company does not have a material non-listed Indian subsidiary Company whose turnover or networth exceeds 20% of the consolidated turnover or networth respectively of the holding Company in the immediately preceeding accounting year. The Board of Directors periodically review the investments and transaction of its subsidiary companies. Copies of the minutes of the meeting of Board of Directors of the subsidiary companies are placed at the subsequent Board meeting of the holding Company.
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Corporate Governance Report
(6) INVESTORS’ GRIEVANCE COMMITTEE 6.1 Composition The composition of Investors' Grievance Committee is as under: (a) Shri Liladhar D. Shah (Independent Director) (b) Shri Kamlesh S. Vikamsey (Independent Director) (c) Shri Jaisinh K. Sampat (Executive Director) The Chairman of Investors' Grievance Committee is an Independent Director namely Shri Liladhar D. Shah. 6.2 Terms of Reference Investors' Grievance Committee meets periodically for the redressal of Investors' Grievance related to share transfers, transmissions, transpositions, re-materialisation, split and issue of duplicate share certificates, non-receipt of Annual Report, non-receipt of declared dividends and such other related matters. 6.3 Four Investors' Grievance Committee meetings were held during the year on 28th April, 2011, 28th July, 2011, 2nd November, 2011 and 7th February, 2012. The number of Investors' Grievance Committee Meetings held and attended are as under:
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6.4 Number and nature of complaints received during the year under review are as follows :
Description Transfer / Demat Non-receipt of Share Certificate Non-receipt of Dividend Warrant General Correspondence / Complaints Total Received Resolved Pending 98 1 45 180 324 98 1 45 180 324 0 0 0 0 0
(7) REMUNERATION COMMITTEE 7.1 Composition The Remuneration Committee of the Company was constituted on th 27 April, 2004 comprising of the following Members: • Shri Shivji K. Vikamsey (Chairman) • Shri Kamlesh S. Vikamsey • Shri Liladhar D. Shah Shri Amit D. Buch, Company Secretary is the Secretary of the Remuneration Committee. 7.2 Broad Terms of Reference The broad Terms of Reference of the Remuneration Committee are to evaluate and appraise the performance of the Managing / Executive Directors and Senior Management Personnel, determine and recommend to the Board the compensation payable to them. 7.3 Remuneration Policy The remuneration policy of the Company is based on performance of senior managerial personnels. The remuneration policy is in consonance with the existing industry practice.
Name of Director
No. of Meetings Held
No. of Meetings Attended
Shri Liladhar D. Shah 4 3 Shri Kamlesh S. Vikamsey 4 4 Shri Jaisinh K. Sampat 4 4 Shri Amit D. Buch, Company Secretary is the Compliance Officer. The Minutes of Investors' Grievance Committee Meetings are noted by the Board of Directors of the Company.
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Corporate Governance Report
(8) GENERAL MEETINGS 8.1 The details of last three Annual General Meetings held are given below: Financial Year & Day & Date Meeting No. Time Venue Textile Committee Auditorium, (9) DISCLOSURES
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9.1 There were no transactions of material nature between the Company and its promoters, directors or the management, other subsidiaries or relatives that may have the potential conflict with the interest of the Company. The Register of contracts containing the transactions in which the directors are interested was placed before the Board regularly for its approval and concurrence. 9.2 There were no materially significant related party transactions which have potential conflict with the interest of the Company at large. 9.3 The Company has complied with various rules and regulations prescribed by Stock Exchange and SEBI, relating to the capital markets during the last three years. 9.4 Risk assessment and its minimisation procedures have been laid down by the Company and the same have been informed to the Board Members. These Procedures are periodically reviewed to ensure that the Executive Management controls risk through means of a properly defined framework. 9.5 The Company has fulfilled the following non-mandatory requirements as prescribed in Annexure ID to Clause 49 of the listing agreement with the Stock Exchanges: 9.6 The Company has set up a Remuneration Committee. Please see the Para on Remuneration Committee for the details.
2010-11 Twenty Fifth
Thursday
2009-10 Twenty Fourth
2008-09 Twenty Third
15th 3:30 p.m. Textile Committee Building, September, P. Balu Road, Near Tata Press, 2011 Prabhadevi Chowk, Mumbai – 400 025. Monday Textile Committee Auditorium, 6th 3:30 p.m. Textile Committee Building, September, P. Balu Road, Near Tata Press, 2010 Prabhadevi Chowk, Mumbai – 400 025. Friday Textile Committee Auditorium, 31st July, 3:30 p.m. Textile Committee Building, 2009 P. Balu Road, Near Tata Press, Prabhadevi Chowk, Mumbai – 400 025.
8.2 Special Resolutions passed at last three Annual General Meetings a) b) 25th AGM held on 15th September, 2011 : Nil 24th AGM held on 6th September, 2010 Re-appointment of Shri Amarchand R. Gala as Managing Director. Re-appointment of Shri Dungarshi R. Gala and Shri Harakhchand R. Gala as Wholetime Directors of the Company. c) 23rd AGM held on 31st July, 2009 : Nil
(10) MEANS OF COMMUNICATIONS 10.1 The financial Results and Press Releases are displayed on the Website of the Company at www.navneet.com, after its submission to Stock Exchanges. 10.2 The Company publishes its unaudited/audited quarterly results and audited financial results for the entire financial year in “The Economic Times” and “Maharashtra Times” newspapers in Mumbai. 10.3 Management Discussion and Analysis forms part of the Annual Report, which is being sent to the shareholders of the Company.
8.3 Passing of Resolutions by Postal Ballot No Postal Ballot was conducted during the Financial Year 2011-12. However, resolution(s), if required, shall be passed by postal ballot during the year ending 31st March, 2013 as per prescribed procedure.
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Corporate Governance Report
(11) GENERAL SHAREHOLDERS INFORMATION 11.1 26th Annual General Meeting : Date : 27th September, 2012 Time : 3:30 p.m. Venue : Textile Committee Auditorium, Textile Committee Building, P. Balu Road, Near Tata Press, Prabhadevi Chowk, Mumbai – 400 025. 11.2 Financial Year : 1st April, 2012 to 31st March, 2013 11.3 Financial Calendar : Board Meetings to be held for approving Quarterly Results : Particulars Date Last Week of July/first week of Quarterly Results for 1st Quarter August, 2012 Quarterly Results for 2nd Quarter Last Week of October/first week of November, 2012 Quarterly Results for 3rd Quarter Last Week of January/first week of February, 2013 Last Week of April/first week of Quarterly Results for 4th Quarter May, 2013 11.4 Date of Book Closures : The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, 22nd September, 2012 to Thursday, 27th September, 2012 (both days inclusive) for the purpose of payment of final dividend and Annual General Meeting. 11.5 Dividend paid during the year under review : The Company declared and paid interim dividend of ` 0.60 ps per share during 2011-2012. The final dividend for the financial year 2011-12 recommended by Directors, on approval by the shareholders at the ensuing Annual General Meeting, will be paid to those shareholders whose names appear in Company’s Register of Members/ list of Beneficial Owners provided by National Securities Depository Limited (NSDL) and Central Depository Securities (India) Limited (CDSL) as on 21st September, 2012. 11.6 Company’s Shares are listed on : Shares of the Company are listed on Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd.
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11.8 Volume of Shares traded and Stock Price Movement on a month to month basis :
Month BSE No. of Shares NSE No. of Shares BSE (High) (` ) 70.00 66.60 66.80 69.60 67.90 70.00 68.50 71.00 56.20 63.10 59.80 60.10 BSE (Low) (` ) 55.40 59.25 59.10 62.50 58.70 62.00 62.75 53.20 50.60 51.90 53.55 53.55 NSE NSE (High) (Low) (` ) (` ) 68.30 66.45 69.50 69.00 68.00 70.00 68.00 68.50 56.90 57.35 59.70 60.50 55.05 59.25 59.00 62.10 58.60 61.75 62.35 53.05 50.60 51.50 53.30 53.15
April, 2011 10418908 13466145 May, 2011 3520321 6201242 June, 2011 3391136 4470504 July, 2011 5045778 8568056 August, 2011 1984877 2439474 September, 2011 2621228 4549557 October, 2011 1122177 3505073 November, 2011 1492033 2610331 December, 2011 496312 836754 January, 2012 560964 792772 February, 2012 1823949 2064243 March, 2012 1631131 14310850
Navneet Publications Vs Nifty for year ended 31.03.2012
11.7 Stock Codes on Stock Exchanges : BSE : 508989 NSE : NAVNETPUBL ISIN : INE 060A01024 Listing Fees for FY2012-2013 have been paid to both the Stock Exchanges where the shares of the Company are listed.
11.9 Volume of Shares traded during the year under review as a percentage of the number of Shares outstanding: BSE : 14.32% NSE : 26.79%
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Corporate Governance Report
11.10 Distribution of Shareholding as on 31st March 2012 :
No. of equity shares held 001-500 501-1000 1001-2000 2001-3000 3001-4000 4001-5000 5001-10000 10001&above Total No. of Shareholders 21121 3081 1908 791 923 294 877 814 29809 Percentage of Shareholders 70.85 10.34 6.40 2.65 3.10 0.99 2.94 2.73 100 No. of Shares 3725319 2402079 2778189 2012921 3380820 1393781 5967287 216554604 238215000 Percentage of Shareholding 1.56 1.00 1.17 0.85 1.42 0.59 2.50 90.91 100
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Particulars Held in dematerialised form in NSDL Held in dematerialised form in CDSL Physical form No. of shares 211392858 20269658 6552484 % of total share capital 88.74 8.51 2.75
Total 238215000 100 The Company's shares are regularly traded on Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. in electronic form. 11.14 Share Transfer in Physical Form Share Transfer in physical form can be lodged with the Registrar and Share Transfer Agents namely Link Intime India Private Limited at the address mentioned herein above or at their Branch Offices mentioned in its website. The transfers are normally processed within 15 days if the documents are complete in all respect and thereafter the share certificates duly transferred are dispatched. Investor’s Contact Information : Mr. Mahesh Masurkar Email : [email protected] 11.15 Outstanding GDRs / ADRs / Warrants: The Company has not issued any GDR(s) / ADR(s) / Warrants / Convertible instruments. 11.16 Plant Locations: The Company's Plants are located at the following places : Village Dantali, Behind Kasturi Nagar, Dist. & Tal. Gandhinagar, Gujarat. Gokhiware, Chinchpada, Vasai, Dist. Thane. Village Sayali, Silvassa. Rakanpur, Taluka Kalol, Dist. Mehsana. Village Khaniwade, Tal. Vasai, Dist. Thane. 11.17 Registered Office : Navneet Bhavan, Bhavani Shankar Road, Dadar(West), Mumbai-400 028 Tel. : +91- 22-66626565 Fax : +91- 22-66626470 E-mail : [email protected] 11.18 Compliance Officer : Company Secretary and Compliance Officer : E-mail :
11.11 Category of Shareholders as on 31st March 2012 : Category Promoters FIIs NRIs, OCBs Mutual Funds, Banks, Financial Institutions, Insurance Companies & Trust Bodies Corporate Individual Shareholders Other Clearing members Total 11.12 Registrar and Share Transfer Agents: Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup (West), Mumbai – 400 078 Tel : (91-022) 2594 6970 Fax : (91-022) 2594 6969 E-mail : [email protected] Website : www.linkintime.co.in 11.13 Dematerialisation of Shares and liquidity: The Shares of the Company are in compulsory dematerialisation segment and are available for trading system of both the depositories in India viz. National Securities Depository Limited (NSDL) and Central Depository Securities (India) Limited (CDSL). The status of dematerialisation of shares as on 31st March, 2012 is as under : % to Paid-up Share Capital 61.80 5.68 0.54 6.10 6.07 19.56 0.25 100
Mr. Amit D. Buch [email protected]
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Corporate Governance Report
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Experience in specific functional areas Qualification Directorship held in other companies Committee positions held in other companies Equity Shares held 56,800
12. Details Of Directors Seeking Re-appointment at the forthcoming Annual General Meeting (pursuant to Clause 49 of the Listing Agreement)
Name of Director Date Of Birth Date of Appointment
Shri Dungarshi R. Gala
31/03/1936
30/04/1993
He has very rich and wide experience in the field of educational book publishing.
S.S.C.
NIL
NIL
Shri Jitendra L. Gala
14/01/1942
30/05/1992
He has wide experience in marketing field.
B.Com.
NIL
NIL
29,04,825
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Corporate Governance Report
CEO AND CFO CERTIFICATE
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To The Board of Directors We hereby certify that a) we have reviewed financial statements and the cash flow statements for the year ended 31st March, 2012 and that to the best of our knowledge and belief i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; ii) these statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations. b) there are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the Company's code of conduct. c) we accept responsibility for establishing and maintaining internal controls for financial reporting, we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken to rectify these deficiencies. d) we further certify that i) there have been no significant changes in the internal control over financial reporting during the year, ii) there have been no significant changes in the accounting policies during the year; and iii) there have been no instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company's internal control system over financial reporting. Place Date : Mumbai : 23rd August, 2012 For Navneet Publications (India) Limited sd/sd/Amarchand R. Gala Gnanesh D. Gala Managing Director Chief Financial Officer
CERTIFICATE FROM AUDITORS REGARDING
COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE
To the members of Navneet Publications (India) Ltd.
We have examined the compliance of Corporate Governance by Navneet Publications (India) Limited, for the year ended 31st March, 2012 as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India. The compliance of Corporate Governance is the responsibility of the Company’s management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statement of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the condition of Corporate Governance as stipulated in the above mentioned Listing Agreement. We state that generally no investor grievance is pending for a period exceeding one month against these Company as per the records maintained by the Registrar and Share Transfer Agent of the Company and reviewed by the Investors’ Grievance Committee. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. For Ghalla & Bhansali Chartered Accountants Place : Mumbai sd/Date : 23rd August, 2012 Haresh K. Chheda Partner Membership No. 38262
14
Performance Indicators
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* The Figure are after considering the issue of Bonus Shares.
15
Financial Highlights (Standalone)
2007-08 Revenue PBDT Depreciation PBT Tax Net Profit (PAT) Dividend Dividend (%) (Face Value at ` 2/-) Book Value (Face Value at ` 2/-)* Equity Capital Reserves & Surplus Gross Block Net Block Return on Net Worth (%) PBIT Margin % PAT Margin % Debt-Equity** EPS (Post Tax) (` 2/- per share)* EPS (Pre Tax) (` 2/- per share)* CEPS (Post Tax) (` 2/- per share)* CEPS (Pre Tax) (` 2/- per share)* Dividend Payout% to Net Profits MARKET CAP (` in Cr.) 40,043 8,412 1,022 7,390 2,013 5,377 2,287 120 9.7 1,906 21,148 17,408 8,821 23.3 21.7 13.4 0.1 2.3 3.1 2.7 3.5 49.8 916.0 2008-09 50,490 9,862 1,171 8,691 2,797 5,894 2,477 130 11.0 1,906 24,188 18,506 8,813 22.6 20.3 11.7 0.1 2.5 3.6 3.0 4.1 49.2 474.0 2009-10
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2010-11 53,624 12,935 1,144 11,791 4,036 7,755 3,335 70 14.2 4,764 29,178 23,188 11,431 22.8 24.7 14.5 0.0 3.3 4.9 3.7 5.4 50.1 1313.8 2011-12 60,965 14,062 1,510 12,552 4,200 8,026 3,335 70 16.0 4,764 33,315 28,957 15,999 21.1 23.9 13.2 0.0 3.4 5.3 4.0 5.9 48.3 1380.5 52,221 11,427 1,164 10,264 3,466 6,798 2,382 50 12.6 4,764 25,296 19,338 8,624 22.6 22.2 13.0 0.0 2.9 4.3 3.3 4.8 41.0 1217.0
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NOTES : 1) * The Figure are after considering the issue of Bonus Shares. 2) **Debts consist of Long term borrowings. 3) The figures are ` in Lacs except for EPS, CEPS, Book value and figure in %.
Segmentwise Income from Operations (` in Lacs) `
2009-10 (Mar-10)
Sales Publishing Division Educational Books Children’s and General Books Children’s and General Books Export Stationery Division Exports (including incentives) Paper Stationery (Domestic) Non Paper Stationery (Domestic) Others
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2010-11 (Mar-11) 2011-12 (Mar-12)
25,168 1,569 926
27,663
27,350 1,635 919
29,904
32,662 1,913 827
35,402
6,966 14,493 2,553
24,012 545 52,220
5,379 15,195 2,638
23,212 508 53,624
5,424 16,494 3,009
24,927 636 60,965
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Notice
NOTICE is hereby given that the Twenty-Sixth Annual General Meeting of Navneet Publications (India) Limited will be held on Thursday, 27th September, 2012 at 3:30 p.m. at Textile Committee Auditorium, Textile Committee Building, P. Balu Road, Near Tata Press, Prabhadevi Chowk, Mumbai - 400 025 to transact the following business: ORDINARY BUSINESS : 1) To receive, consider and adopt the Audited Profit and Loss Account for the year ended 31st March, 2012 and the Balance Sheet as at that date together with the Reports of Board of Directors and Auditors thereon. 2) To declare final dividend for the financial year ended 31st March, 2012. 3) To appoint a Director in place of Shri Dungarshi R. Gala, who retires by rotation, and being eligible, offers himself for reappointment. 4) To appoint a Director in place of Shri Jitendra L. Gala, who retires by rotation, and being eligible, offers himself for reappointment. 5) To appoint M/s. Ghalla & Bhansali, Chartered Accountants, as Statutory Auditors of the Company and to fix their remuneration. SPECIAL BUSINESS: 6) To consider and, if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution : “RESOLVED THAT pursuant to the provisions of Section 31 and all other applicable provisions, if any, of the Companies Act, 1956 and Rules framed thereunder (including any statutory modifications or re-enactment thereof for the time being in force) or any law for the time being in force and subject to all other necessary approvals, if any, as may be required in this
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regard from appropriate authorities or bodies, the existing Articles of Association of the Company be amended as under: i. The following Article be inserted after the existing Article 74 as Article 74A : Participation through Electronic Mode 74A Notwithstanding anything contrary contained in the Articles of Association, the Company may provide Video Conference facility and / or other permissible electronic or virtual facilities for the communication to enable Shareholders of the Company to participate in General Meetings of the Company. Such participation by the Shareholders at General Meetings of the Company through Video Conference facility and / or use of other permissible electronic or virtual facilities for communication shall be governed by such legal or regulatory provisions as applicable to the Company for the time being in force. ii. The following Article be inserted after the existing Article 128 as Article 128A : Participation through Electronic Mode 128A Notwithstanding anything contrary contained in the Articles of Association, the Director(s) may participate in Meetings of Board and Committee thereof , through Video Conference facility and/or other permissible electronic or virtual facilities for the communication. Such participation by the Director(s) through Video Conference facility and / or use of other permissible electronic or virtual facilities for communication shall be governed by such legal or regulatory provisions as applicable to the Company for the time being in force. iii. The following proviso be inserted after the existing Article 130: Provided further that a Director participating in a Meeting through use of Video Conference or any other permissible
18
Notice
electronic mode of communication shall be counted for the purpose of quorum, notwithstanding anything contrary contained in the Articles of Association. iv. The following Article be inserted after the existing Article 79 as Article 79 A : 79A Notwithstanding anything contrary contained in the Articles of Association, a document may be served by the Company on any member by any electronic mode of communication and in such manner as is /may be permitted by any law. Where a document is served by any such electronic mode, the service thereof shall be deemed to be effected in the manner as is/ may be provided by any law. v. The following Article be inserted after the existing Article 9 as Article 9 A: Buy Back of Shares 9A Notwithstanding anything contrary contained in the Articles of Association, the Company is hereby authorized to buyback its own shares or securities as it may consider necessary, subject to such limits, upon such terms and conditions, and in accordance with the provisions of Sections 77A, 77AA and 77B of the Companies Act, 1956 or any Statutory Modification thereto and such other regulations and guidelines as applicable in this regard. RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors of the Company be and is hereby authorised to take all such steps and give such directions, as may in its absolute discretion, be deemed necessary and to settle any question or difficulty that may arise in this regard.” By Order of the Board of Directors sd/Place : Mumbai Amit D. Buch Date : 23rd August, 2012 Company Secretary Registered Office: Navneet Bhavan, Bhavani Shankar Road, Dadar( West), Mumbai - 400028 NOTES : [A]
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A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE (ON POLL) INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE INSTRUMENT APPOINTING A PROXY, IN ORDER TO BE EFFECTIVE MUST BE DULY FILLED, STAMPED, SIGNED AND DEPOSITED AT THE COMPANY’S REGISTERED OFFICE NOT LATER THAN 48 HOURS BEFORE THE COMMENCEMENT OF MEETING. The Explanatory Statement pursuant to Section 173(2) of the Companies Act,1956 in respect of the Special Business at Item No. 6 is annexed hereto and forms part of the Notice. Corporate members are requested to send a certified true copy of the Board resolution authorising their representative(s) to attend and vote at the Annual General Meeting. The Register of Members and the Share Transfer Books of the Company will remain closed from 22nd September, 2012 to 27th September, 2012 (both days inclusive). The final dividend as recommended by the Board of Directors, if declared at the Annual General Meeting, will be paid to those persons : (a) Whose names appear as Beneficial Owners as at the end of business hours on 21st September, 2012 in the list of Beneficial Owners to be furnished by National Securities Depository Limited and Central Depository Services (India) Limited in respect of shares held electronic/demat mode; and (b) whose names appear as Members in the Register of Members of the Company after giving effect to valid share transfers in physical form lodged with the Company/ Registrar and Share Transfer Agents M/s. Link Intime India Pvt. Ltd. on or before 21st September,2012. The final dividend, if declared at the Annual General Meeting will be paid on 10th October,2012.
[C]
[D]
[E]
[F]
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Notice
[G] Change of Address/ Bank details: Members holding shares in physical form are requested to inform the Company’s Registrar and Share Transfer Agents M/s. Link Intime India Pvt. Ltd. immediately of any change in their address and bank details. Members holding shares in dematerialised forms are requested to intimate all changes with respect to their address, bank details, mandate etc. to their respective Depository Participants. These changes will then be automatically reflected in the Company’s records which would help the Company to provide efficient and better service to the Members. Members holding shares in dematerialised form are requested to provide their latest Bank Account details (Core Banking Solutions enabled account number, 9 digit MICR and 11 digit IFS code) with their Depository Participants. Members holding shares in physical form are requested to provide their latest Bank Account details (Core Banking Solutions enabled account number, 9 digit MICR and 11digit IFS code) along with their Folio Number to Company’s Registrar and Share Transfer Agents M/s. Link Intime India Pvt. Ltd. Pursuant to provisions of Section 205A and 205C of the Companies Act, 1956, the amount of dividend remaining unclaimed as unpaid for a period of seven years from the date of transfer to the unpaid dividend account is required to be transferred to ‘’Investor Education and Protection Fund “(IEPF) of the Central Government. Accordingly, the Company has transferred unclaimed or unpaid amounts of second interim dividend for the financial year 2003-04, first and second interim dividend for financial year 2004-05 to IEPF. Dividends declared by the Company thereafter, are still lying in the respective unpaid dividend accounts of the Company. Members who have not yet encashed these dividend(s) are requested to contact Company’s Registrar and Share Transfer Agents M/s. Link Intime India Pvt. Ltd. Unclaimed first interim dividend for financial year 200506 is due for transfer to IEPF in November,2012. Kindly note that no claim shall lie against the Company after the transfer of the said dividend amount to IEPF. [J]
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All documents referred to in the accompanying Notice and Explanatory Statement are open for inspection at the Registered Office of the Company on all working days excluding Saturdays between 11.00 a.m. and 1.00 p.m. upto the date of Annual General Meeting. Members desiring any information, as regards the Annual Accounts are requested to write to the Company at least ten days before the date of Annual General Meeting to enable the Management to keep the information ready. By Order of the Board of Directors sd/Amit D. Buch Company Secretary
[K]
[H]
Place : Mumbai Date : 23rd August, 2012 Registered Office: Navneet Bhavan, Bhavani Shankar Road,
Dadar (West), Mumbai -400028
ANNEXURE TO NOTICE Explanatory Statement as required under Section 173(2) of the Companies Act, 1956 in respect of Special Business at Item No. 6 of the Notice. Item No. 6 The Ministry of Corporate Affairs (‘MCA”), Government of India, New Delhi vide General Circulars No. 27/2001 and 28/2001 dated 20th May, 2011 and Circular No. 35/2011 dated 6th June, 2011 has permitted companies to hold Board Meetings and Shareholders Meetings through Video Conference facility, as part of Green initiatives under Corporate Governance. Further, MCA vide Circular No.72/2011 dated 27th December, 2011 made Video Conference facility at the Shareholders Meetings optional to the listed companies.
20
Notice
Section 53 of the Companies Act, 1956 and Article 79 provides for modes of service of documents on a Member of the Company. The MCA has vide Circular No. 17/2011 dated 21st April,2011 stated that a Company would have complied with Section 53 if the service of a document has been made through electronic mode, provided that the Company has obtained e-mail addresses of its Members for sending Notices/ Documents through e-mail addresses with the Company. Clause 32 of the Listing Agreement of the Stock Exchanges also permits a Company to send soft copies of full Annual Reports, Balance Sheet, Statement of Profit & Loss and Directors’ report to all Members who have registered their e-mail addresses for the purpose. Section 77A,77AA and 77B of the Companies Act, 1956 stipulate provisions for purchase of own shares or securities by a Company. However, pursuant to clause (a) of sub-section (2) of Section 77A of the said Act, the Company is required to have necessary authorization in its Articles of Association for buy back of shares or securities. It is proposed to carry out necessary amendments in the existing Articles of Association of the Company by inserting appropriate enabling provisions to give effect to the above Circulars of MCA and for buy back of shares or securities as set out in the Special Resolution under Item No. 6 of the Notice convening this Annual General Meeting. In terms of Section 31 of the Companies Act, 1956 approval of the Members by way of a Special Resolution is required to amend the Articles of Association of the Company. A copy of the existing Memorandum and Articles of Association of the Company alongwith the proposed draft amendments to the Articles of Association is available for inspection by any Member at the Registered Office of the Company between 11.00 a.m. and 1.00 p.m. on all working days excluding Saturdays upto the date of Annual General Meeting. Your Directors recommend for your approval passing of the Special Resolution at Item No. 6 of the Notice.
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None of the Directors of the Company is, in any way, concerned or interested in the said resolution. By Order of the Board of Directors sd/Amit D. Buch Company Secretary
Place : Mumbai Date : 23rd August, 2012 Registered Office: Navneet Bhavan, Bhavani Shankar Road, Dadar (West), Mumbai -400028
Important Communication to Members
The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing paperless compliances by the companies and has issued circular stating that service of notice/ document including Annual Report can be sent by e-mail to its members. To support this green initiative of the Government in full measure, members who have not registered their e-mail addresses, so far, are requested to register their e-mail addresses, in respect of electronic / demat holding with their Depository Participant (DP) and those holding physical shares with the Company or its Registar and Share Transfer Agents.
21
Directors’ Report
Dear Shareowners,
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Your Directors have pleasure in presenting their Twenty-Sixth Annual Report along with the Audited Statement of Accounts of the Company for the year ended 31st March, 2012. (1) FINANCIAL RESULTS: Particulars (a) Profit before Interest, Depreciation and Tax (b) Less : Interest (c) Profit before Depreciation and Tax (d) Less : Depreciation (e) Profit Before Tax (f) Less : (i) Provision for Tax (ii) Provision for deferred Tax (iii) (Add) / Less : Provision of Tax for earlier years (g) Profit After Tax before Extra-ordinary item (h) Less : Extra-ordinary item (i) Profit After Tax (j) Balance brought forward from last year (k) Profit available for Appropriation APPROPRIATIONS : (a) Interim Dividend (b) Final Dividend (c) Corporate Tax on Dividend (d) General Reserve (e) Balance Carried to Balance Sheet 1429 1906 541 1000 22302 27178 1429 1906 547 1000 19152 24034 Current Year 14596 534 14062 1510 12552 4076 124 8352 326 8026 19152 27178 (` In Lac) Previous Year 13229 294 12935 1144 11791 3940 100 (4) 7755 7755 16279 24034
22
Directors’ Report
(2) DIVIDEND : Your Directors are pleased to recommend a final dividend of ` 0.80 ps (40%) per share for the financial year ended 31st March,2012. The Company had declared and paid interim dividend of ` 0.60 ps (30%) per share during the year under review. The interim dividend so paid alongwith final dividend, if declared, work out to above 48% (including dividend distribution tax) as against your Company’s policy of distribution of minimum of 25% of its net profit. (3) OPERATIONS : (i) During the year under review, the Company achieved a turnover of ` 60965 Lac as compared to ` 53624 Lac in FY 11. (ii) Profit before depreciation and income tax for the year under review stood at ` 14062 Lac as against ` 12935 Lac in the previous year. (iii) After providing ` 1510 Lac for depreciation, ` 4200 Lac for income tax, deferred tax and ` 326 Lac for diminution in the value of investment in its subsidiary, profit after tax for the period stood at ` 8026 Lac as against ` 7755 Lac achieved in the previous year on standalone basis. (4) PERFORMANCE OF DIVISIONS : Content Division During the year under review, your Company achieved revenue of ` 35404 Lac (` 29904 Lac), thereby registering a growth of 18%. Your Directors are optimistic to achieve good double digit growth for the next few years also in publication segment. During the year under review, publication segment maintained its operating margin at 33% and is expected to maintain the similar operating margin growth in the current year as well. Your Directors are pleased to inform that during the year under review, the acceptance of the products of one of the subsidiaries of your Company namely eSense Learning Pvt. Ltd. has not only been picked up amongst the schools but also the desire for the product is reflected amongst students and parents as well. Your Directors are pleased to further inform that as of March, 2012 the digital content have been installed in 925 Institutions covering around 4,500 classrooms. As this e-learning module is gaining acceptance from student and teacher community in the State of Maharashtra and Gujarat, your Company has accelerated its efforts on production and marketing. Your Directors are of the view that these efforts would enable your Company to accomplish decent numbers in the years to come.
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Stationery Division During the year under review, the revenues from stationery division grew at 7% on a y- o- y basis at ` 24927 Lac as against revenue of ` 23212 Lac in the previous year. This was mainly on account of severe competition from the new entrants in the domestic market. Your Directors are pleased to inform that during the current year, with strong export order in pipeline, your Company anticipates that this segment would show remarkable improvement in the revenue from export in FY13. (5) SUBSIDIARY COMPANIES : The Ministry of Corporate Affairs (MCA), Government of India has vide its General Circular No.2/11 dated 8th February, 2011 issued directions under Section 212(8) of the Companies Act, 1956 granting general exemption to companies from attaching to their Balance Sheets, the Accounts and other documents of their subsidiaries, subject to fulfilment of specified conditions. In view of this general exemption, the Board of Directors of the Company has given its consent for not attaching the Accounts and other documents of its subsidiary companies with the Annual Accounts of the Company, in relation to the financial year ended 31st March,2012. Further, a statement containing the relevant particulars prescribed under the general exemption for subsidiary companies is enclosed in this Annual Report. The Consolidated Accounts have been prepared in accordance with Accounting Standard (AS-21), on Consolidated Financial Statements notified under the Companies (Accounting Standards) Rules, 2006. The Audited Consolidated Accounts and Cash Flow Statement comprising of the Company and its subsidiary companies forms part of this Annual Report. The Company will make available the Annual Accounts of its subsidiary companies and related information to any Member of the Company who make a written request to the Company Secretary at the Registered Office of the Company. (6) As we (a) DIRECTORS’ RESPONSIBILITY STATEMENT : required under Section 217(2AA) of the Companies Act, 1956, hereby state : that in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; (b) that the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give true and fair view
23
Directors’ Report
of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; (c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) that the Directors have prepared the Annual Accounts on a going concern basis. (7) DIRECTORS : In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, Shri Dungarshi R. Gala and Shri Jitendra L. Gala retire by rotation and being eligible, offer themselves for re-appointment. A brief profile of the Directors proposed to be re-appointed is given as part of Corporate Governance Report. During the year under review, Shri Vijay D. Rai and Shri Mohinder Pal Bansal resigned from Directorship of the Company. The Board of Directors has placed on record its appreciation of the invaluable contribution made by them during their tenure with the Company. (8) SCHEME OF AMALGAMATION : The Board of Directors has approved the Scheme of Amalgamation of Lakheni Publications Pvt. Ltd. with the Company and their respective Shareholders. The said scheme is subject to such consent, approval, sanction of the High Court of Judicature of Bombay and all other regulatory approvals as may be necessary for its implementation. (9) CORPORATE GOVERNANCE : Your Company has complied with Clause 49 of the Listing Agreement entered with the Stock Exchanges. A report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement alongwith the Auditor's Certificate on compliance with the Corporate Governance forms part of this Annual Report. (10) MANAGEMENT DISCUSSION AND ANALYSIS : As per Clause 49 of the Listing Agreement, Management Discussion and Analysis report forms part of this Annual Report. (11) NETWORTH AND BORROWING : Net worth of your Company increased to ` 38080 Lac against ` 33942 Lac in the previous year. Your Company borrowed in foreign
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currency to fund its windmill power project of which ` 1324 Lac is outstanding as at balance sheet date which is classified as long term debt. Further, your Company utilises the credit facilities from the banks and other short term finances for its working capital requirements only. (12) CRISIL RATING : Your Company’s short term debt programme continues to be rated by CRISIL as A1+ (pronounced as A one Plus). This rating indicates very strong degree of safety with regard to timely payment of interest and principal on instrument. (13) CORPORATE SOCIAL RESPONSIBILITY : Your Company continues to use eco friendly material for most of its major products catering to environmental needs and also continues with its corporate social responsibility initiative and donates mainly in areas of medical aid, education and rehabilitation programmes. For the financial year 2012, your Company donated ` 233 Lac. The management will continue to fulfill its social responsibility on an ongoing basis towards society in whatever best possible manner. (14) FIXED DEPOSITS : Your Company has not accepted any fixed deposits during the year under review. (15) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO : The information as required under Section 217 (1) (e) of the Companies Act,1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 is given in Annexure'A' forming part of this Report. (16) PARTICULARS OF EMPLOYEES : The information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this Report and Accounts are being sent to all members of the Company excluding the Statement of Particulars of Employees under Section 217(2A) of the Companies Act, 1956. Any Member interested in obtaining a copy of said statement may write to Company Secretary at the Registered Office of the Company.
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Directors’ Report
(17) AUDITORS : M/s.Ghalla & Bhansali, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a letter from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.
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(B) Technology Absorption FORM - B Form of Disclosure of Particulars with respect to Technology Absorption Research & Development (1) Efforts in brief towards technology absorption, adaptation & innovation Through visits of technical personnel to developed Western countries, the 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, the Company has been able to achieve a higher production, accuracy and perfection in printing. (3) In case of Imported Technology None, The Company has (i) Technologies Imported (ii) Year of Import not imported any (iii) Has the technology been fully absorbed? Technology (C) Foreign Exchange Earnings and Outgo The Company’s export turnover has been ` 5633 Lac. Total Foreign Exchange earned and used: (i) Foreign Exchange earned : ` 5504 Lac (ii) Foreign Exchange used : ` 1157 Lac For and on behalf of the Board of Directors sd/Place : Mumbai Date : 23 August, 2012
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(18) COST AUDITORS : M/s.Ashish S. Bhavsar & Co., Cost Accountants have been duly appointed as Cost Auditors for the stationery division of the Company for current financial year ending 31st March, 2013. The Cost Audit Reports are required to be filed within 180 days from the end of the financial year. The Cost Audit Report for the financial year ended 31st March, 2012 will be filed within the prescribed period.
(19) INDUSTRIAL RELATIONS : During the year under review, cordial and harmonious relationship continued between the management and employees at all levels.
(20) ACKNOWLEDGEMENT : Your Directors take this opportunity to thank all shareholders, valued customers, suppliers, bankers, government and statutory authorities and stock exchanges for their continued support to the Company. Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Company’s employees. For and on behalf of the Board of Directors sd/: Mumbai Shivji K. Vikamsey : 23rd August, 2012 Chairman
Place Date
Shivji K. Vikamsey Chairman
Annexure ‘A’ to Directors’ Report
Particulars required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. (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 are made towards energy conservation.
25
Section 212 Statement of Subsidiary Companies
abcd
Grafalco Ediciones S.L. 31st December, 2011* eSense Learning Pvt. Ltd. 31st March, 2012 3,748,500 Equity shares ` 10/- each 90.69% NIL
Statement pursuant to Section 212 of the Companies Act, 1956, relating to the Subsidiary Companies for the year ended 31st March 2012
Name of the subsidiary company 1. Financial Year of the subsidiary company
2. No. of Equity shares in subsidiary company held by 678,006 Equity Shares Navneet Publications (I) Ltd. at the above date @ Euro 1 each % of holding (Equity) 100% % of holding (Preference) NIL 3. The net aggregate of profits/(losses) of the subsidiary company so far as it concerns the members of Navneet Publications (I) Ltd : (i) Dealt with in the Accounts of the Navneet Publications (I) Ltd. amounted to : a) for the subsidiary’s financial year ended 31st December, 2011 & 31st March, 2012 NIL b) for the previous financial years of the subsidiary since it became a subsidiary of Navneet Publications (I) Ltd. NIL (ii) Not dealt with in the Accounts of the Navneet Publications (I) Ltd. amounted to : a) for the subsidiary’s financial year ended 31st December, 2011 & 31st March, 2012 (` 17,547,254) b) for the previous financial years of the subsidiary since it became a subsidiary of Navneet Publications (I) Ltd. (` 123,099,832) 4. Changes in the interest of the Navneet Publications (I) Ltd; between the end of the financial year of the subsidiary and 31st March, 2012. a) Nos. of shares 30,000 b) Extent of holding 95.58% 5. Material changes between the end of the financial year of the subsidiary and 31st March, 2012. a) Sale of IPR 98,265,000 b) Loan repayment by subsidiary 136,242,784 c) Investments realised 1,124,674 * For consolidation purpose accounts of Grafalco Ediciones S.L. are considered up to 31.03.2012.
NIL NIL
(` 31,927,272) (` 98,275,809)
NIL NIL
NIL NIL NIL
For and on behalf of the Board Place: Mumbai sd/Amit D. Buch Company Secretary sd/A. R. Gala Managing Director sd/S. K. Vikamsey Chairman
26
Date: 23rd August, 2012
Auditor’s Report
AUDITORS’ REPORT TO THE MEMBERS OF NAVNEET PUBLICATIONS (INDIA) LIMITED We have audited the attached Balance Sheet of NAVNEET PUBLICATIONS (INDIA) LIMITED, at 31st March, 2012, the Statement of Profit and Loss and Cash Flow Statement of the Company for the period ended on that date annexed thereto. These financial statements are the responsibility of the Company’s Management. Our Responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on the test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis of our opinion. 1. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of Sub Section 4A of Section 227 of the Companies Act, 1956, we enclose in the annexure attached hereto, a statement on the matter specified in para 4 and 5 of the said order. Further to our comments in the Annexure referred to in para (1) above, we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of the books. Place : Mumbai Date : 23rd August, 2012 c)
abcd
The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report, is in compliance with the Accounting Standards specified by the Institute of Chartered Accountants of India, referred to in sub-section (3C) of section 211 of the Companies Act, 1956; to the extent applicable to the Company. On the basis of the written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. ii. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012. In the case of Statement of Profit and Loss, of the profit for the period ended on that date; and In the case of Cash Flow Statement, of the cash flows for the year ended on that date. For Ghalla & Bhansali Chartered Accountants (Registration No. 103142W) sd/Haresh K.Chheda Partner Membership No. 38262 d)
e)
f)
2.
iii.
b)
27
Annexure to Audit Report U/S 227(4A) of the Companies Act, 1956.
(Referred to in paragraph 1 of our report of even date on the accounts for the year ended 31st March, 2012 of NAVNEET PUBLICATIONS
abcd
given to us, and as it appears from Register maintained under section 301 of the Companies Act, 1956 the company has not taken any loans secured or unsecured from companies, firms or other parties listed in the said register. Consequently, the provisions of clause4(iii) (e), (f), and (g) of the Companies (Auditor’s Report) Order, 2003 are not applicable.
(INDIA) LIMITED)
1. a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. b) All the assets have not been verified by the management during the year but, according to the information and explanations given to us, and in our opinion the intervals for verification are reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification. c) In our opinion, fixed assets disposed off during the year were not substantial and therefore do not affect the going concern assumption. a) In our opinion, the inventory of the Company has been physically verified by the management at reasonable intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them. b) In our opinion and according to the information and explanation given to us, the procedures for physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of its inventories and discrepancies noticed on such physical verification between stock and the book records were not material. a) According to information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Consequently, the provisions of clause 4(iii) (b), (c) and (d) of the Companies (Auditor’s Report) Order, 2003 are not applicable. b) In our opinion and according to the information and explanation
4.
In our opinion and according to the information and explanations given to us, the company has adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have we been informed of any instance of continuing failure to correct major weaknesses in internal control. a) In our opinion and to the best or our knowledge and belief, and according to information and explanation given to us, the particulars of contracts or arrangements referred to in section 301 of the companies Act, 1956 have been entered in the register maintained under section 301 of the companies Act, 1956. b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies Act, 1956 and exceeding value of ` 5,00,000/- in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time. The company has not accepted any deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under. In our opinion, the Company has adequate internal audit system commensurate with the size and nature of its business. We have broadly reviewed the books of account maintained by
2.
5.
3.
6.
7. 8.
28
Annexure to the Auditor’s Report
the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records have been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. 9. a) According to the information and explanation given to us and according to the books and records as produced and examined by us, in our opinion, the undisputed statutory dues in respect of provident fund, investors education and protection fund, employees state insurance, income tax, VAT, wealth tax, service tax, custom duty, excise duty, cess and other as applicable have been regularly deposited by the company during the year with appropriate authorities. b) According to the information and explanation given to us, there are no dues outstanding of VAT, income tax, customs duty, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute, except for the following. Nature of Dues Amount (In Lacs) ` Forum where disputes is Pending 13.
abcd
The Company is not a chit or a nidhi/ mutual benefit fund/ society, therefore, the clause 4(xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities. Hence clause 4(xiv) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company. In our opinion and according to the information and explanations given to us, the terms and conditions of guarantee given by the Company for loans taken by subsidiary company from banks or financial institutions is not, prima facie, prejudicial to the interest of the Company. The Company has obtained term loan during the year, and in our opinion and according to the information and explanations given to us, the term loan obtained are applied for the purpose for which the loans are obtained. According to the information and explanation given to us and on an overall examination of the balance sheet and cash flow of the Company, we report that no funds raised on short-term basis have been used for long-term investment. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year. The Company has not issued any debentures during the year. Hence clause 4(xix) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the company. The company has not raised any money by public issue during the year. Hence clause 4(xx) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the company According to the information and explanations given to us, during the year, no fraud by or on the Company has been noticed or reported during the course of our audit. 14.
15.
16.
17.
18.
Name of the Statute I.T. Act, 1961 I.T. Act, 1961 I.T. Act, 1961 I.T. Act, 1961 10.
19.
Assmt. Dues A.Y. 00-01 26.08 Bombay Hight Court Assmt. Dues A.Y. 01-02 11.17 Bombay Hight Court Assmt. Dues A.Y. 02-03 45.13 Bombay Hight Court Assmt. Dues A.Y. 09-10 2.98 CIT(A)
20.
21. The Company has neither accumulated losses as at March 31, 2012, nor has it incurred any cash loss during the financial year ended on that date and the immediately preceding financial year. According to information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders during the year. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
11.
12.
Place : Mumbai Date : 23rd August, 2012
For Ghalla & Bhansali Chartered Accountants (Registration No. 103142W) sd/Haresh K.Chheda Partner Membership No. 38262
29
Balance Sheet
Particulars EQUITY AND LIABILITIES 1. Shareholders’ Funds a) Share Capital b) Reserves & Surplus 2. Share Application Money Pending Allotment 3. Non-Current Liabilites a) Long-Term Borrowings b) Deferred Tax Liabilities (Net) c) Long-Term Provisions 4. Current Liabilities a) Short-Term Borrowings b) Trade Payables c) Other Current Liabilities d) Short-Term Provisions Total ASSETS 1. Non-Current Assets a) Fixed Assets i) Tangible Assets ii) Intangible Assets iii) Capital work-in-progress b) Non-Current Investment c) Long-Term Loans and Advances d) Other Non-Current Assets 2. Current Assets a) Inventories b) Trade Receivables c) Cash and Bank Balances d) Short-Term Loans and Advances e) Other Current Assets Total Significant Accounting Policies & Notes on Financial Statements
As per our report of even date attached hereto For and on behalf of Ghalla & Bhansali sd/Chartered Accountants (Registration No: 103142W) sd/Haresh K. Chheda Amit D. Buch Partner (Membership No. 38262) Company Secretary Mumbai : 23rd August, 2012
abcd
Note No. As at 31st March, 2012 ` In Lacs 4,764 33,316 38,080 794 452 359 1,605 13,195 1,498 3,026 2,225 19,944 59,629 As at 31st March, 2011 ` In Lacs 1 2 4,764 29,178 33,942 827 328 226 1,381 4,402 706 2,143 2,306 9,557 44,879
3 4 5
6 7 8 9
10 10 11 12 13 14
14,797 1,202 337 16,336 431 6,315 27 23,109 21,715 11,175 396 2945 289 36,520 59,629
11,240 191 983 12,414 766 2,813 129 16,122 17,660 8,068 1,046 1,673 310 28,757 44,879
15 16 17 18 19
1 to 46
For and on behalf of the Board sd/A. R. Gala Managing Director sd/S. K. Vikamsey Chairman
30
Statement of Profit and Loss
For the year ended 31st March, 2012 Particulars Income Revenue from operations Other Income Total Revenue Expenses Cost of Material consumed Purchase of Stock-in-Trade Changes in Inventories of Finished Good, work-in-progress and Stock-in-Trade Employee Benefits Expenses Financial Costs Depreciation and Amortization Expense Other Expenses Note No.
abcd
For the year ended For the year ended 31st March, 2012 31st March, 2011 ` In Lacs 20 21 60,965 859 61,825 ` In Lacs 53,624 827 54,450
22 23 24 25 10 26
30,469 146 (691) 5,408 534 1,510 11,897 49,273 12,552 (326) 12,226
26,260 101 (320) 4,771 294 1,144 10,409 42,659 11,791 11,791
Profit before extraordinary items and tax Extraordinary Items (Note No. 44) Profit before tax Tax Expense : Current Tax Deferred Tax Add/(Less) : (Excess)/Short Provision of Earlier Year W.back/off Profit for the year Earning per equity share of ` 2/- each (` 2/- each) (1) Basic (2) Diluted Significant Accounting Policies and Notes on Financial Statements
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali Chartered Accountants (Registration No : 103142W) sd/Haresh K. Chheda Partner (Membership No. 38262) Mumbai : 23rd August, 2012
4,076 124 4,200 8,026
3,940 100 (4) 4,036 7,755
3.37 3.37 1 to 46
3.26 3.26
For and on behalf of the Board sd/sd/A. R. Gala Managing Director sd/S. K. Vikamsey Chairman
Amit D. Buch Company Secretary
31
Cash Flow Statement for the year 2011-12
Cash Flow from Operating Activities Net profit before tax Adjustments for, Interest & Financial Income (non operational) (Profit) / Loss on sale of fixed assets (Profit) / Loss on sale of Investments Interest and Financial Expense Depreciation Provision for Diminution in the Value of Investments Changes in Current Assets and liabilities (Increase) / Decrease in Inventory (Increase) / Decrease in Debtors (Increase) / Decrease in Loans and advances Increase / (Decrease) in current liabilities and provision Income Taxes Paid Net cash inflow / (outflow) from Operating Activities (A) Cash flow from Investing Activities Purchase of Fixed Asset and change in capital WIP Proceeds from disopal of fixed Asset (Increase) / Decrease in Investment other than Subsidiaries (Increase) / Decrease in Investment in Subsidiaries Profit / (Loss) on sale of Investments Interest & Financial Income Net cash inflow / (outflow) from Investing Activities (B) Cash flow from Financing Activities Increase / (Decrease) in Share Capital Increase / (Decrease) in Loan Fund Interest and Financial Expense Dividend Paid (including Dividend Tax) Net cash inflow / (outflow) from Financing Activities (C)
abcd
2011-2012 2010-2011
` In Lacs 12,226 (354) (118) (24) 534 1,510 326 (4,054) (3,107) (4,527) 1,340 (4,110) (358) (5,400) 157 10 24 354 (4,855) 8,960 (534) (3,863) 4,563 (650) 1,046 396 (650) 47 349
` In Lacs 11,791 (411) (3) (117) 294 1,144 (444) (504) (2,272) (24) (3,959) 5,495 (3,763) 24 117 411 (3,212) (349) (294) (1,679) (2,323) (39) 1,085 1,046 (39) 42 1,004
Net Increase / (Decrease) in Cash and Cash Equivalents Cash and cash equivalent as at the commencement of the year Cash and cash equivalent as at the end of the year Net Increase / (Decrease) as mentioned above Notes: (1) Closing Cash and cash equivalent includes cash, cheques in hand and remittance in transit (2) Balance with banks (includes ` 93 Lacs P.Y. ` 80 Lacs) lying in designated account with the scheduled banks on account of unclaimed dividend which are not available for use by the Company. P.Y. figures have been regrouped / rearranged to confirm to the current year’s presentation, wherever necessary.
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali Chartered Accountants (Registration No :103142W) sd/sd/Haresh K. Chheda Amit D. Buch Partner (Membership No. 38262) Company Secretary Mumbai : 23rd August, 2012
For and on behalf of the Board
sd/A. R. Gala Managing Director
sd/S. K. Vikamsey Chairman
32
Significant Accounting Policies
(A) Accounting Convention The financial statements are prepared under the historical cost convention, on an accrual basis and in accordance with the applicable accounting standards notified by the Company (Accounting Standards Rule, 2006) as amended and relevent Provisions of the Companies Act. (B) Use of Estimates The Preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised. (C) Revenue Recognition Sales are recognised on transfer of significant risks and rewards in connection with the ownership at the time of dispatch of goods. Sales are recorded net of trade discounts. Dividend income is recognised when right to receive is established. (D) Fixed Assets Fixed Assets are stated at cost less accumulated depreciation and impairment loss if any. Cost comprises of the purchase price and all other attributable costs for bringing the asset to its working condition for its intended use. (E) Depreciation (i) Depreciation on Fixed Assets other than intangible assets is provided on Written Down Value Method in accordance with the rates, prescribed in Schedule XIV to the Companies Act,1956. Individual assets acquired for less than ` 5000/- are entirely depreciated in the year of acquisition. (ii) Depreciation on fixed assets added/disposed off during the year has been provided on pro-rata basis. (iii) Lease Premium and related costs are amortised over the lease period. (iv) Cost of registration of Trade Marks and for acquiring Copy Rights are amortised over a period of 10 years in equal installments. (v) Cost of Intangible assets are amortised over a period of 36 months.
abcd
(F) Impairment of Assets Assets are treated as impaired when the carrying cost of assets exceeds their recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an assets are identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. (G) Expenditure during construction period Expenditure during construction period are included under capital work-in-progress and the same are allocated to the respective fixed assets on the completion of construction. (H) Foreign Currency Transactions & Financial Instruments (i) Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year, are restated at the closing rate as applicable. (ii) The differences in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the statement of Profit and Loss. (iii) In respect of forward foreign exchange contract, represented by monetary assets/liabilities and are meant for hedging purposes, the premium or discount arising at the inception of such forwards contract is amortised as expense or income over the life of contract. Exchange differences on such a contract is recognized in the statement of profit and loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognised as income or as expense for the period. (iv) Non - monetary items are carried in terms of historical cost denominated in a foreign currency using the exchange rate at the date of the transactions. (v) Exchange difference arising on a monetary item that, in substance, forms part of an enterprise’s net investments in a non-integral foreign operation are accumulated in a foreign currency translation reserve.
33
Significant Accounting Policies
(vi) The Foreign exchange difference on translation of long term foreign currency monetary items at rate different from those at which they were reported in previous financial statements, in so far as it relates to acquisition of depreciable assets are capitalised. Inventories Inventories are valued at lower of cost and estimated net realisable value. a) Cost of Raw materials, packing materials, stores and spares are determined on weighted average basis. b) The Cost of Finished goods and Work-In-Process includes cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Retirement Benefits (i) Contribution to the provident fund, which is a defined contribution scheme, are charged to the statement of Profit and Loss in the period in which the liability is incurred. (ii) Provision for gratuity, which is a defined benefit plan, is made on the basis of an actuarial valuation carried out by an independent actuary at the balance sheet date and funded through scheme administered by the Life Insurance Corporation of India (‘LIC’). The actuarial valuation is done using the ‘Project Unit Credit Method’. (iii) Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the defined benefit obligation at the balance sheet date based on an actuarial valuation carried out by an independent actuary. Investments Long-term Investments are stated at cost after deducting provision,if any, for other than temperory diminution in the value of Investment. Current Investments are stated at lower of cost and market / fair value. Borrowing Costs The Company capitalises the borrowing costs which are directly attributable to the acquisition or construction of qualifying assets till the said asset is put to use or ready to be put to use. All
abcd
other borrowing cost are expensed in the period they incurred. (M) Leased Assets Operating Lease : Rentals are expensed with reference to lease terms and other considerations. (N) Provision for Tax Tax expense comprises of current and deferred tax. Provision for current tax is determined on the basis of taxable income for the period as per the provisions of Income Tax Act,1961. Deferred tax is recognized, subject to consideration of prudence, on timing differences between book profits and tax profits using the tax rates and laws that have been enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only when there is a reasonable certainty that the assets will be realized in future. (O) Contingent Liabilities and Provision Contingent Liabilities are possible but not probable obligations as on Balance Sheet date, based on the available evidence. Provisions are recongnized when there is a present obligation as a result of past event, and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on the best estimate required to settle the obligation at the Balance Sheet date.
(I)
(J)
(K)
(L)
34
Notes forming part of the Balance Sheet
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 1 SHARE CAPITAL Authorised : 25,00,00,000 (25,00,00,000) Equity Shares of ` 2/- each (` 2/- each) Issued, Subscribed & Paid Up : 23,82,15,000 (23,82,15,000) Equity Shares of ` 2/- each (` 2/- each) fully paid up Total 1.1 Reconciliation of the number of Equity Shares outstanding As at 31st March, 2012 Number of shares Amount 2,382 4,764 2,382 4,764
` In Lacs
5,000 4,764 4,764
5,000 4,764 4,764
Number of Shares at the beginning of the year Add : Shares Issued Less : Shares Forfeited Number of Shares at the end of the year
As at 31st March, 2011 Number of shares Amount 2,382 4,764 2,382 4,764
1.2 Terms / Rights Attached to Equity Shares The company has only one class of equity shares having a par value of ` 2 per share. Each holder of equity shares is entitled to one vote per share and all rank pari passu. 1.3 Aggregate number of bonus shares issued during the period of five years immediately preceding the reporting date Equity shares allotted as fully paid bonus shares during last 5 years by capitalisation of Share Premium & General Reserve : year ended 31.03.2010 : 142,929,000 1.4 Equity Shareholders holding more than 5% of the shares Paticulars Accord Holding Private Ltd. Corsa Holding Private Ltd. Qualis Holding Private Ltd. As at 31st March, 2012 No. of shares % held 40,993,721 17.21% 31,929,631 13.40% 23,577,132 9.90% As at 31st March, 2011 No. of shares % held 36,562,500 15.35% 28,125,000 11,81% 19,687,500 8.26%
The honourable Bombay High Court vide its order dated 29.06.2012 sanctioned the Composite Scheme of Amalgamation and Arrangement w.e.f. appointed date 21.03.2012 pursuant to which the above 3 companies have been Amalgamated with Lakheni Publications Pvt. Ltd. The said scheme was made effective on 13.08.2012.
35
Notes forming part of the Balance Sheet
abcd
As at As at 31st March, 2012 31st March, 2011
2 RESERVES & SURPLUS a) Capital Reserve : Opening Balance Add : Additions during the year Closing Balance b) General Reserve : Opening Balance Add : Transferred from surplus balance in the Statement of Profit and Loss Closing Balance
` In Lacs # #
` In Lacs # #
10,014 1,000 11,014
9,014 1,000 10,014
c) Foreign Currency Translation Reserve : Opening Balance Add : Additions during the year Closing Balance d) Surplus in the Statement of Profit and Loss : Balance as per last Financial Statements Add : Net Profit after tax Balance available for Appropriation Less : APPROPRIATION Dividend (First Interim) ` 0.60 Paise ` 2/- paid up (` 0.60 Paise Rs.2/- paid up) Dividend Final ` 0.80 Paise Rs.2/- paid up (` 0.80 Paise ` 2/- paid up) Corporate Tax on Dividend Transfer to General Reserve
12 (12) -
4 8 12
19,152 8,026 27,178
16,279 7,755 24,034
1,429 1,906 3,335 541 1,000 4,876
1,429 1,906 3,335 547 1,000 4,882
SURPLUS AFTER APPROPRIATION TOTAL (a + b+ c + d)
22,302 33,316
19,152 29,178
36
Notes forming part of the Balance Sheet
abcd
` In Lacs
As at 31st March, 2012 As at As at 31st March, 2011 31st March, 2011
NON CURRENT LIABILITIES 3 LONG TERM BORROWINGS : A) Secured i) Term Loan - Foreign Currency Loans from Bank Less : Amount payable within 12 months
As at 31st March, 2012
1,324 530
794
1,158 331
827
Nature of security and Terms of Repayments for Secured Borrowings : Nature of Security Long term foreign currency loan are exclusively secured by Hypothecation of windmills. The installments due within 12 months from the date of Balance Sheet have been grouped under Other Current Liabilities (Note No. 8)
As at As at 31st March, 2012 31st March, 2011
Terms of Repayments Foreign Curreny Loans from Bank carries interest @ Libor+0.5%. The loan is repayable in 12 half yearly instalments of 41980057 JPY starting from 17th Jan, 2009
` In Lacs 4 Deferred Tax Liabilities (Net) Depreciation Disallowances under section 43B of the Income Tax Act, 1961 572 (120) 452
` In Lacs 433 (105) 328
5 Long Term Provisions Provision for Employee Benefits Provision for Leave Encashment (Refer Note No. 42)
359 359
226 226
37
Notes forming part of the Balance Sheet
abcd
As at 31st March, 2012 As at 31st March, 2011
6 SHORT TERM BORROWINGS A) Secured i) Cash Credit from Bank ii) Working Capital Rupee Loans repayable on demand from banks iii) Foreign Currency Loan All short term Rupee loans and foreign currency loans equivalent to ` 3000 Lacs (Previous year ` 902 Lacs) are secured against : Hypothecation & first charge over stock of raw materials, work-in-process, finished goods, stores and spares not relating to plant and machinery and book debts.
` In Lacs 5,195 3,000 -
` In Lacs 902
8,195 B) Unsecured Form Banks : Rupee Loan 5,000 5,000 TOTAL 13,195
902 3,500 3,500 4,402
7 TRADE PAYABLES - Due to Micro, Small and Medium Enterprises - Due to Others TOTAL Details of the dues to Micro, Small and Medium Enterprises (MSME), as defined in the Micro, Small and Medium Enterprises Development Act, 2006, as on 31st March 2012 based on available information with the Company which are as under : Particulars Principal amount due and remaining unpaid Interest due on above and the unpaid interest Interest paid Payment made beyond the appointed day during the year Interest accrued and remaining unpaid Amount of further interest remaining due and payable in succeeding years
80 1,418 1,498
56 650 706
2011-12 9 1 47 2 -
2010-11 4 # 53 2 -
38
Notes forming part of the Balance Sheet
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 8 OTHER CURRENT LIABILITIES Advances Received Unpaid Dividend Interest Accrued But Not Due Income received in Advance Creditors for capex Current maturities of Foreign Curreny Loans from Bank (Also see note no. 3) Employee Benefits Payable Deposits Provisions for tax (net of advance tax) Statutory Dues - Providend Fund / ESIC / Profession Tax - Tax Deducted At Source - Service tax / WCT / Excise payable - Sales tax payable Provision for Expenses Other Payable / (Receivable) TOTAL 50 73 7 154 720 145 3,026 356 93 8 52 153 530 587 22 76
` In Lacs 245 80 10 21 110 331 500 27 140 48 67 8 105 641 (190) 2,143
9 SHORT TERM PROVISIONS Provision for Employee Benefits - Provision for Leave Encahment Benfits (Refer Note No. 42) Other Provisions - Proposed Dividend - Corporate Tax on Proposed Dividend Total 1,906 309 2,225 1,906 309 2,306 10 91
39
Notes forming part of the Balance Sheet
10 FIXED ASSETS
abcd
` In Lacs Depreciation / Amortization Net Block
Total upto 31.03.2012 52 2,270 8,247 186 942 736 40 8 247 229 12,958 11,757 As on 31.03.2012 983 32 6,851 5,732 100 396 703 19 974 0 209 15,999 11,431 As on 31.03.2011 984 39 4,658 4,610 79 308 562 24 0 167 11,431 -
Gross Block
Sr. Description Tangible 1 2 3 4 5 6 7 8 9 10 11 Land - Freehold Land - Leasehold Building Plant & Machinery Office Equipments Furniture & Fixtures Vehicles Intangible Trade Mark Copy Right SAP Software Total Previous Year 59 247 281 23,188 19,338 983 158 6,117 3,972 348 121 59 983 247 438 28,957 23,188 34 247 114 11,757 10,714 984 84 6,616 12,285 251 1,189 1,193 2,546 1,906 39 152 334 2 41 213 3 2 88 983 84 9,121 13,979 287 1,339 1,439 45 1,958 7,675 172 881 631 Cost As on Additions Deductions / Adjustments Cost As on 31.03.2012 Provided upto 01.04.2011 No. of Assets 01.04.2011 during the year
For the Year
Deductions / Adjustments
6 346 768 16 63 181 6 8 115 1,510 1,144
34 196 1 2 76 309 101
As at 31st March, 2012
As at 31st March, 2011
` In Lacs 11 CAPITAL WORK IN PROGRESS Opening Balance Add : Expenditure during the year Less : Capitalisation / Adjustments during the year Closing Balance 983 329 (975) 337
` In Lacs 470 958 (445) 983
40
Notes forming part of the Balance Sheet
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 12 NON CURRENT INVESTMENTS 1) Other Investment a) Unquoted In Equity Shares of Subsidiary Companies i) Grafalco Ediciones S.L. — 6,48,006 (6,78,006) Equity Shares of Euro 1/- each fully paid up ii) eSense Learning Pvt. Ltd. — 37,48,500 (37,48,500) Equity Shares of ` 10/- each fully paid up Investment in Limited Liability Partnership i) Navneet Learning LLP Total non current investments Less : Provision for diminution in value of Investments in Grafalco Total Net Non current investments Aggregate amount of unquoted investments Aggregate provision for diminution in value of investments 13 LONG TERM LOANS AND ADVANCES Unsecured - Considered Good a) Capital Advance - Advances for Capital Expenditure b) Corporate Deposits c) Security Deposits d) Advance Income Taxes (Net of Provisions) e) Wealth Tax f) Loans and advances to related parties i) Loans to Associates - Navneet Learning LLP g) Loans to Employees h) Loan to Vendors i) Sales Tax receivable j) Advance to Suppliers k) Prepaid Expenses l) Other Loans & Advances
` In Lacs
375 375
391 375
7 757 (326) 431 756 326
766 766 766 -
460 75 174 554 4 3,045 179 12 40 5 6 1,761 6,315
483 75 167 582 5 57 6 27 10 2 1,397 2,813
41
Notes forming part of the Balance Sheet
abcd
As at 31st March, 2012 As at 31st March, 2011
14 OTHER NON CURRENT ASSETS (Unsecured, considered good) Other Income Receivable Total
` In Lacs 27 27
` In Lacs 129 129
15 INVENTORIES Stores, Spares & Consumables Raw Materials Finished Goods Work In Process Stock in Trade (in respect of Goods acquired for Trading) Total
526 8,263 11,685 1,236 5 21,715
378 5,048 11,355 875 5 17,660
16 TRADE RECEIVABLES (Unsecured, considred good) Over six months Other Total
540 10,635 11,175
598 7,470 8,068
17 CASH AND BANK BALANCES Cash and Cash Equivalents Cash on hand Balance with Scheduled Banks - In Current Account Sub Total A Other Bank Balances Fixed Bank deposits with more than twelve months maturity Fixed Bank deposits with less than twelve months maturity Earmarked Balance with Banks In Dividend Account
47 254 301 2 93 95 396
42 922 964 1 1 80 82 1,046
42
Sub Total B Sub Total A + B
Notes forming part of the Balance Sheet
abcd
As at 31st March, 2012 As at 31st March, 2011
18 SHORT TERM LOANS AND ADVANCES (Unsecured, considered good) a) Loans and advances to related parties i) Loans to Subsidiaries b) Loans to Vendors c) Loans to Employees d) Corporate Deposits e) Sales Tax receivable f) CENVAT receivable g) Service Tax Refund receivable h) Prepaid Expenses i) Advance to Suppliers j) Advance to Employee for expenses k) Other Loans & Advances
` In Lacs
` In Lacs
2,217 20 128 23 4 33 1 108 352 14 45 2,945
957 29 209 35 2 33 86 257 31 33 1,673
19 OTHER CURRENT ASSETS a) Export incentive receivable b) Other income receivable 288 1 289 290 20 310
43
Notes forming part of the Profit & Loss
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs
` In Lacs
20 REVENUES FROM OPERATION Sale of products - Finished Goods (Refer Note below 20.1) - Traded Goods Sale of services Other operating revenues Less : Sales Tax Collected Less : Excise Duty
60,601 340 641 709 62,291 (1,053) (273) 60,965
53,323 127 723 585 54,758 (932) (203) 53,624
20.1 SALES OF PRODUCTS - FINISHED GOODS Educational Books Paper Stationery Others
32,064 22,672 5,865 60,601
26,835 21,186 5,302 53,323
21 OTHER INCOME Dividend on Mutual Funds Profit / (Loss) on Sale of Investments Other non-operating Income Interest Income Net gain on foreign currency translation and transaction
12 24 196 627 859
59 117 114 353 183 827
44
Notes forming part of the Profit & Loss
abcd
For the year ended 31st March, 2012 For the year ended 31st March, 2011
` In Lacs 22 COST OF MATERIAL CONSUMED Raw Materials Consumed
` In Lacs
30,469 30,469
26,260 26,260
22.1 COST OF MATERIAL CONSUMED Paper Others
26,703 3,766 30,469
22,718 3,542 26,260
23 (INCREASE) / DECREASE IN STOCK OF FINISHED GOODS AND WIP Closing Stock Work in Process (Refer Note below 23.1) Finished Goods Opening Stock Work in Process Finished Goods
1,236 11,690 12,926 875 11,360 12,235 (691)
875 11,360 12,235 764 11,151 11,915 (320)
23.1 DETAILS OF CLOSING INVENTORY OF WORK IN PROCESS Forms Printed Covers Pasted Sheets Ruled Sheets
390 577 48 221 1,236
299 470 16 90 875
24 EMPLOYEE BENEFITS EXPENSES Salaries, Wages and Bonus Contribution to Provident and Other Funds Staff Welfare 4,590 462 356
5,408
3,979 457 336
4,771
45
Notes forming part of the Profit & Loss
abcd
For the year ended 31st March, 2012 For the year ended 31st March, 2011
25 FINANCE COST Interest on Debentures Other Borrwoing Costs
` In Lacs 534 534
` In Lacs 17 277 294
46
26 OTHER EXPENSES Printing Expenses Binding Expenses Other Manufacturing Expenses Power & Fuel Freight & Octroi Stores & Spares Consumed Repairs to Plant & Machinery Rates & Taxes Sales Tax Expenses Rent Royalty Building Repairs & Maintainance Other Repairs Insurance Transportation Expenses Commission Advertisement Marketing Expenses Sales Promotion Expenses Discount & Rebate Bad debts and other irrecoverable advance written off Donation Bank Charges Prior Period items Legal and Professional Fees Net loss on foreign currency translation and transaction Other Expenses
726 800 810 304 614 304 117 98 10 427 1,208 230 159 74 1,063 27 226 756 1,249 323 13 233 153 7 544 285 1,137 11,897
686 646 715 245 566 185 145 73 6 480 1,015 249 186 73 901 92 288 722 940 311 17 274 133 10 446 1,006 10,409
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
27 Estimated amount of Capital Contracts (net of advance) remaining to be executed and not provided for ` NIL (Previous Year ` 354 Lacs) 28 Contingent Liabilities. (a) For disputed Income-tax matters ` 496 Lacs (Previous Year ` 559 Lacs) against which amount paid is ` 535 Lacs (Previous Year ` 563 Lacs) (b) Against Bond : (i) Import Duty liability of ` 381 Lacs (Previous Year ` 381 lacs) for import of machinery against licences granted under EPCG scheme. (ii) Duty liability amounting to ` 86 lacs (` 29 lacs) for the purchase of excisable inputs without payment of duty under the bonds executed if the export obligation is not fulfilled. (c) In respect of bank guarantees given for subsidiary Company of Euro NIL (Previous Year Euro 2-mn) equivalent to ` NIL (Previous Year ` 1278 Lacs) 29 Financial & Derivative Instruments (a) The Company has sold USD 14.48 Mn equivalent ` 7234 Lacs and EUR 0.11 Mn equivalent ` 78 Lacs (Previous Year USD 9.61 Mn equivalent ` 4598 Lacs and Eur 0.87 Mn equivalent ` 543 Lacs) to cover our export receivables and purchase USD NIL equivalent ` NIL (Previous Year USD 2 Mn equivalent ` 941 Lacs) to cover loan repayment. The Company has entered into USD-JPY derivative option contracts hedging its exposure on ECB availed in JPY for wind power generation project. Option contracts worth of JPY 181-Mn (Previous Year JPY 253-Mn) are open as on balance sheet date, maturing over a period of seven years ending on Jul 2014.
2011-12 ` In Lacs 30. Auditors’ Remuneration Audit Fees Tax Audit Fees Limited Review Representation matters Other Matters 31. Value of Imports on C.I.F. Basis (i) Capital Goods (ii) Raw Material (Including Consumables) (iii) Componets, Store & Spares & others 9 2 1 2 10 24 394 26 414 834 2010-11 ` In Lacs 6 2 1 1 4 14 350 36 641 1,026
47
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
2011-2012 ` In Lacs 2010-2011 ` In Lacs 5 59 100 184 348
32. Expenditure in Foreign Currency on Account of : (i) Royalty (ii) Interest (iii) Professional Fees (iv) Other Matters
2 46 92 183 323
33. Earning in Foreign Exchange Export of Goods on FOB basis Interest Income Other Matters
5,456 9 39 5,504
5,673 9 0 5,683
34. Percentage and Value of Imported and Indigenous Raw Material and Stores & Machinery Spares Consumed. Raw Material Stores & Machinery Spares, etc. % Value (` In Lacs) % Value (` In Lacs) Imported Indigenous Total : 0.10 (0.23) 99.90 (99.77) 100 (100) 31 (62) 30,438 (26,198) 30,469 (26,260) 10.82 (6.74) 89.18 (93.26) 100 (100) 46 (22) 376 (308) 422 (330)
35. Foreign currency translation of ` 223 Lacs (Previous Year credited ` 201 Lacs) arising on account of the exchange difference on non interagal foreign operations is debited to the statement of Profit & Loss.
48
Notes on Financial Statements
For the year ended 31st March, 2012 36. Related party transactions
abcd
(a) Party where control exists : Grafalco Ediciones S.L. – Subsidiary Company 95.58% (P 100%) of whose equity share capital is held by the Company as at 31st March, 2012. .Y. eSense Learning Pvt. Ltd. – Subsidiary Company 90.69% (P 90.69%) of whose equity share capital is held by the Company as at 31st March, 2012. .Y. (b) Associates – Navneet Learning LLP (c) Other related parties with whom transaction have taken place during the year. (i) Enterprises owned or significantly influenced by key management personnel or their relatives Navneet Prakashan Kendra Vikas Prakashan Gala Publishers Sandeep Agency Bigspace Realty Pvt. Ltd The Flagship Advertising Pvt. Ltd. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Shri A.R. Gala Shri D.R. Gala Shri H.R. Gala Shri S.R. Gala Shri J.L. Gala Shri J.K. Sampat Shri N.N. Shah Shri B.A. Gala Shri A.D. Gala Shri G.D. Gala Shri R.H. Gala Shri D.C. Sampat Shri S.J. Gala Shri S.J. Gala Shri K.H. Gala Shri S.S. Gala Shri K.B. Gala
(ii) Key Management Personnel & Relatives
49
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
(` In Lacs)
Transaction with Related Parties : Items / Related Parties Subsidiaries Associates Enterprises owned or significantly influenced by key management personnel or their relatives 1,473 (1,344) -(--) ---(--) -(--) -(--) Key Management Personnel
Total
(i) Purchase,expense and other services from related parties (ii) Purchase of fixed assets
50 (22) 983 (--) 21 (46) 1,530 (628) 270 (--) -(--)
-(--) -(--) -(--) 3,045 (--) -(--) 7 (--)
664 (664) -(--) -(--) -(--) -(--) -(--)
2,187 (2,030) 983 (--) 21 (46) 4,575 (628) 270 (--) 7 (--)
(iii) Sales of goods and Services
(iv) Loans given
(v) Loan received back
(vi) Investments
(vii) Balance outstanding at year end Debtors
-(--) 2,217 (957)
-(--) 3,045 (--)
-(--) -(--)
-(--) -(--)
-(--) 5,262 (957)
Loans and advances given
50
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
2011-2012 ` In Lacs 2010-2011 ` In Lacs 7,755 7,755 2,382 3.26 3.26
37. Earning Per Share :
(a) Net Profit after tax but before extra ordinary items as per statement of profit and loss Less : Extra Ordinary Items Net profit available for Equity Shareholders (b) Weighted Average Number of Equity Shares for basic and diluted EPS (in No.) (c) Basic and Diluted Earning per share of ` 2/- each (i) Before Extra Orinary Items (ii) After Extra Ordinary Items
8,352 326 8,026 2,382 3.51 3.37
38. Details of Loans and Advances and Investments as at the year end and maximum balance thereof as per clause 32 of Listing Agreement with Stock Exchange in compliance with SEBI Circular No.SMD/ Policy / Cir / 2 / 2003 dt.10.1.2003 Loan having Interest Rate Interest Free Loan Maximum Balance at any time during lower than Section 372A of Co.Act and Advances the year (a) Loans & Advances in the nature of Loans : (i) Subsidiaries Grafalco Ediciones S.L. 17 -187 (187) (--) (187) eSense Learning Pvt. Ltd. -2,200 2,200 (770) (--) (770) (ii) Associates Navneet Learning LLP -3,045 3,045 (--) (--) (--) Note : Loans to employees under various schemes of the company have been considered to be outside the purview of the disclosure requirements.
39. Lease Transactions : Accounting standard 19 As a Lessor in an Operating Lease The existing operating lease agreements permit the lessee to cancel the arrangement before expiry of the normal tenure of the lease. As such, no disclosures are required to be made. As a Lessee in an Operating Lease (i) Cancellable Operating Leases : The Company has taken various commercial premises under cancellable operating leases. These are normally renewable on expiry. (ii) Non-Cancellable Operating Leases : The Company has taken various commercial premises under non-cancellable operating leases, the future lease payments in respect of which are:
51
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
2011-12 ` in Lac 31 -53 2010-11 ` in Lac 53 31 -51
(a) The total amount of future minimum lease payments under non cancellable operating leases for each of the following period : (i) Not later than one year : (ii) Later than one year and not later than five years : (iii) Later than five years : (b) Lease payments recognised in the statement of Profit and Loss for the period under review :
40. Details of provisions, utilised, written Back : Particulars Provision for Leave Salary Encashment As at 01.04.2011 318 318 Additions Utilised/Written Back 52 52 0 0 As at 31.03.2012 369 369
41. Segment Reporting The Company’s operations relates to publication of knowledge based information in educational and general books form and manufacturing of paper and other stationery items. It caters to the educational need of Indian as well as Global market. Accordingly ”Publication” and “Stationery” comprise of the primary segments. Secondary segmental reporting is performed on the basis of the geographical location of customers. The accounting principles and policies used in the preparation of the Financial Statements, as set out in the note on significant accounting policies, are also consistently applied to record revenue and expenditure, in individual segments.
52
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
` In Lacs Publication 2012 2011 29,904 – 29,904 42 29,946 9,727 – – – – – – – – 20,809 – – 1,279 – – 2,255 – 498 – – Stationery 2012 24,927 – 24,927 111 25,038 2,577 – – – – – – – – 24,511 – – 2,370 – – 2,718 – 447 – – 2011 23,212 – 23,212 154 23,367 3,314 – – – – – – – – 18,814 – – 1,376 – – 2.066 – 332 – – Others 2012 636 – 636 636 26 – – – – – – – – 1,969 – – 10 – – 808 – 237 – – 2011 508 – 508 (95) 412 (84) – – – – – – – – 1,599 – – 13 – – – – 234 – – Total 2012 60,965 – 60,965 122 61,088 14,195 737 534 1,846 12,552 4,200 8,352 326 8,026 52,970 6,659 59,629 3,720 17,829 21,549 5,375 247 1,360 150 – 2011 53,624 – 53,624 101 53,725 12,957 725 294 1,597 11,791 4,036 7,755 – 7,755 41,222 3,708 44,930 2,669 8,319 10,988 4,321 164 1,064 80 –
[A] Primary - Business Segments
Revenue Less : Inter Segment Revenue Net Revenue Other Income Segment Revenue Segment Results Add : Unallocated Other Income/(Expense) Less : Financial Expenses Less : Unallocable Expenditures Profit Before Taxation Provision for Taxation (Income tax, and deferred tax) Profit after taxation Extraorinary Item (net of tax expense) Net Profit after extraordinary Items Segment Assets Unallocated Assets Total Assets Segment Liabilities Unallocated Liabilities Total Liabilities Capital Expenditure Unallocated Capital Expenditure Depreciation on Segmental Assets Unallocated Depreciation Amortization
35,402
–
35,402 11 35,413 11,592 – – – – – – – – 26,491 – – 1,340 – – 1,849 – 676 – –
53
Notes on Financial Statements
For the year ended 31st March, 2012 Notes : 1
abcd
2 3
Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the respective segment, however, revenue and expenses which can not be identified or allocated reasonably to a segment being related to the enterprise as a whole have been grouped as unallocable. Segment assets and segment liabilities represent assets and liabilities of respective segments, however the assets and liabilities not identifiable or allocable on resonable basis being related to enterprise as a whole have been grouped as unallocable. The business which have been grouped under “Others” segment comprises of revenue from generation of power by windmill, Pre school and trading items, etc.
Secondary - Geographical Segments
North & Central America Africa Europe Australia & Oceania Rest of the world except India India
` in Lacs
Total
Segment Revenue Segment Assets
2,445 (2,439) 135 (69)
1,664 (1534) 301 (264)
539 (1,050) 48 (92)
28 (27) (7)
894 (331) 369 (37)
55,395 (48,243) 58,776 (44,461)
60,965 (53,624) 59,629 (44,930)
42. Disclosure pursuant to Accounting Standard - 15 (Revised) ‘Employee benefits’ (a) The Company adopted Accounting Standard (AS) 15 (revised 2005) on “Employee Benefits” issued by ICAI. The actuarial valuations of the various employee benefits were carried out by using the Projected Unit Credit Method. (b) The Company has recognised the following amount as an expense and included in the Statement of Profit and Loss. ` in Lacs ` in Lacs 2011-12 2010-11 (i) Provident Fund 230 215 (ii) ESIC 54 51 (c) Defined benefit plan and long term employment benefits General description (1) Gratuity (Defined benefit plan) The Company makes annual contribution to the employee group gratuity scheme of the Life Insurance Corporation of India, funded defined benefits plan for qualified employees. The scheme provided for lumpsum payments to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. (2) Accrual for leave encashment benefit is made on the basis of a year-end actuarial valuation in pursuance of the Company’s leave rules.
54
The following table sets out for the status of gratuity / Leave encashment plan :
Notes on Financial Statements
For the year ended 31st March, 2012 Gratuity (Funded) Change in Obligation Opening Present Value of Accrued Gratuity Service Cost including actuarial gain/(loss) Interest Cost Less : Benefits paid Closing Present Value of Accrued Gratuity Change in Plan Asset Opening Fund Balance Return on the plan asset Contribution paid Less : Benefits paid Closing Fund Balance Reconciliation of present value of obligation and plan asset Closing Fund Balance Closing present value of Accrued Gratuity Net Liability Liability recognized in balance sheet Expense recognized in the statement of P & L Current Service Cost Interest Cost Expected Return on Plan Assets Net Actuarial (Gain) / Loss recognized for the period Expense recognized in the statement of P & L Movement in the Liability recognized in Balance Sheet Opening Net Liability Expenses as above Contribution paid Closing Net Liability Assumptions Expected return on plan assets Salary escalation rate Discounting rate 8.00% 7.00% 8.50% 8.00% 7.00% 8.30% 1,117 869 (248) 913 864 (49) 913 87 121 3 1,117 706 67 143 4 913 31/03/12 864 (61) 69 3 869 31/03/11 713 97 57 4 864
abcd
Leave Encashment (Non-Funded) 31/03/12 318 66 25 39 369 39 39 369 369 88 25 (22) 91 318 91 (39) 369 0.00% 4.00% 8.30% 31/03/11 324 7 23 37 318 37 37 318 318 64 23 (57) 30 324 30 (37) 318 0.00% 4.00% 7.50%
55
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
43. During the year, in the line with the notification dated 29th December, 2011 issued by the Ministry of Corporate Affairs, the Company opted for option given in the paragraph 46A of Accounting Standard - 11 The Effects of Changes in foreign exchange rates. Accordingly, the Company with effect from April 1, 2011, has capitalized the forign exchange difference on translation of long term foreign currency monetary item at rates different from those at which they were reported in previous finacial statements, in so far as it relates to acquisition of depreciable assets. Consequently, differences arising due to change in exchange rate on foreign currency loan relating to acquisition of depreciable Capital Asset amounting to ` 670 lacs are added to cost of such Captial Assets. Consequent to the change, the depreciation for the year is higher by ` 36 lacs and profit for the year is higher by ` 634 lacs. 44. Extra ordinary item consist of provision for diminution in the value of long term investments in subsidiary namely Grafalco Ediciones S.L. amounting to ` 326 Lacs. 45. Figure of ` 50,000 or less have been denoted by # 46. The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali Chartered Accountants (Registration No : 103142W) sd/Haresh K. Chheda Partner (Membership No. 38262) Mumbai : 23rd August, 2012007 For and on behalf of the Board
sd/-
sd/A. R. Gala Managing Director
sd/S. K. Vikamsey Chairman
Amit D. Buch Company Secretary
56
abcd
abcd Consolidated Financial Statements
for the year ended 31st March, 2012
57
Auditor’s Report
TO THE BOARD OF DIRECTORS OF NAVNEET PUBLICATIONS (INDIA) LIMITED. 1. We have examined the attached Consolidated Balance Sheet of NAVNEET PUBLICATIONS (INDIA) LIMITED (the Company) and GRAFALCO EDICIONES S.L. (subsidiary) and ESENSE LEARNING PRIVATE LIMITED (subsidiary) collectively referred to as ‘the Group’, as at 31st March 2012, and also the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the period ended on that date annexed thereto. 2. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are prepared in all material respects, in accordance with the financial reporting framework generally accepted in India and are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion. 3. We report that the consolidated financial statements (‘CFS’) have been prepared by the company in accordance with the requirement of Accounting Standard (AS) 21, Consolidated Financial Statements, as notified by the Companies (Accounting Standards) Rules, 2006 and on the basis of separate audited financial statements of the company and its subsidiaries included in the CFS. 4. Attention is invited to note no. a (iii) (3) in Significant Accounting Policies in connection with the consolidation of financial statements of subsidiary.
abcd
5. On the basis of information and explanations given to us, and on consideration of the separate audit reports on individual audited financial statements of the company and its subsidiary, in our opinion the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: a. in case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Group as at 31st March 2012; b. in case of the Consolidated Statement of Profit and Loss, of the consolidated results of operations of the Group for the period ended on that date; and
c. in case of the Consolidated Cash Flow Statement, of the consolidated cash flows of the Group for the period ended on that date.
For Ghalla & Bhansali Chartered Accountants (Registration No. 103142W) sd/Haresh K. Chheda Partner Membership No. 38262
Place: Mumbai Date: 23rd August, 2012
58
Balance Sheet (Consolidated)
Particulars Note No.
abcd
As at 31st March, 2012 As at 31st March, 2011
EQUITY AND LIABILITIES 1. Shareholders’ Funds a) Share Capital b) Reserve & Surplus 2. Share Application Money Pending Allotment 3. Non-Current Liabilites a) Long-Term Borrowings b) Deferred Tax Liabilities (Net) c) Long-Term Provisions 4. Current Liabilities a) Short-Term Borrowings b) Trade Payables c) Other Current Liabilities d) Short-Term Provisions Minority Share of Interest Total ASSETS 1. Non-Current Assets a) Fixed Assets i) Tangible Assets ii) Intangible Assets iii) Capital work-in-progress iv) Intangible Assets under Development b) Non-Current Investment c) Long-Term Loans and Advances d) Other Non-Current Assets 2. Current Assets a) Inventories b) Trade Receivables c) Cash and Bank Balances d) Short-Term Loans and Advances e) Other Current Assets Total Significant Accounting Policies & Notes on Financial Statements
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali Chartered Accountants (Registration No: 103142W) sd/Haresh K. Chheda Partner (Membership No. 38262) Mumbai : 23rd August, 2012
` In Lacs 1 2 4,764 31,381 36,145 794 454 382 1,630 13,195 1,522 3,292 2,225 20,234 (61) 57,948
` In Lacs 4,764 27,500 32,264 827 330 236 1,393 5,472 808 2,228 2,306 10,815 (30) 44,442
3 4 5
6 7 8 9
10 10 11 12 13 14 15
15,626 481 338 21 16,466 56 6,432 27 22,981 21,763 11,640 509 761 294 34,967 57,948
11,330 561 983 12,874 10 2,868 129 15,882 17,709 8,680 1,130 731 310 28,560 44,442
16 17 18 19 20
1 to 40
For and on behalf of the Board sd/Amit D. Buch Company Secretary sd/A. R. Gala Managing Director sd/S. K. Vikamsey Chairman
59
Statement of Profit and Loss (Consolidated)
Note No. Income Revenue from operations Other Income Total Revenue Expenses Cost of Material consumed Purchase of Stock-in-Trade Changes in Inventories of Finished Good, work-in-progress and Stock-in-Trade Employee Benefits Expenses Financial Costs Depreciation and Amortization Expense Other Expenses
abcd
For the year ended For the year ended 31st March, 2012 31st March, 2011 ` In Lacs 21 22 61,894 1,122 63,016 ` In Lacs 54,831 818 55,648
23 24 25 26 10 27
30,483 249 (705) 6,109 576 1,713 12,624 51,049 11,967 11,967
26,409 126 335 5,403 316 1,360 11,020 44,970 10,678 10,678
Profit before extraordinary items and tax Extraordinary Items Profit before tax Tax Expense : Current Tax Deferred Tax Add/(Less) : (Excess)/Short Provision of Earlier Year W.back/off Add/(Less) : Loss of Subsidiary attr. to minority Profit for the year Earning per equity share of ` 2/- each (` 2/- each) (1) Basic (2) Diluted Significant Accounting Policies & Notes on Financial Statements
4,076 124 # (31) 4,169 7,798
3,940 100 (4) (34) 4,003 6,676
3.27 3.27 1 to 40
2.80 2.80
60
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali Chartered Accountants (Registration No: 103142W) sd/Haresh K. Chheda Partner (Membership No. 38262) Mumbai : 23rd August, 2012
For and on behalf of the Board sd/Amit D. Buch Company Secretary sd/A. R. Gala Managing Director sd/S. K. Vikamsey Chairman
Cash Flow Statement for the year 2011-12 (Consolidated)
abcd
2011-2012 2010-2011
Cash Flow from Operating Activities
Net profit before tax Adjustments for Interest & Financial Income (non operational) (Profit) / Loss on sale of fixed assets (Profit) / Loss on sale of Investments Exchange Fluctuation on Consolidation Interest and Financial Expense Depreciation FCTR Changes in Current Assets and liabilities (Increase) / Decrease in Inventory (Increase) / Decrease in Debtors (Increase) / Decrease in Loans and advances Increase / (Decrease) in current liabilities and provision Income Taxes Paid (Increase) / Decrease in Preliminary Expenses (Net) Net cash inflow / (outflow) from Operating Activities (A) Cash flow from Investing Activities Purchase of Fixed Asset and change in capital WIP Proceeds from disposal of Fixed Asset (Increase) / Decrease in Investment other than Subsidiaries (Increase) / Decrease in Investment in Subsidiaries Profit / (Loss) on sale of Investments Interest & Financial Income Net cash inflow / (outflow) from Investing Activities (B) Cash flow from Financing Activities Increase / (Decrease) in Share Capital Increase / (Decrease) in Loan Fund Interest and Financial Expense Dividend Paid (including Dividend Tax) Net cash inflow / (outflow) from Financing Activities (C) Net Increase / (Decrease) in Cash and Cash Equivalents Cash and cash equivalent as at the commencement of the year Cash and cash equivalent as at the end of the year Net Increase / (Decrease) as mentioned above
` In Lacs 11,967
(367) (124) (24) 0 576 1,713 41 (4,053) (2,960) (3,067) 1,181 (4,111) 772 (5,177) 189 (56) 10 24 367 (4,643) 7,690 (576) (3,863) 3,251 (620) 1,130 510 (620) 50 460
` In Lacs 10,678
(399) (26) (117) (3) 316 1,360 87 220 (386) (1,680) (80) (3,959) 6,013 (4,122) 62 7 117 402 (3,534) (464) (316) (1,679) (2,458) 21 1,109 1,130 21 43 1,087
Notes:
(1) Closing Cash and cash Equivalent includes cash, cheques in hand and remittance in transit (2) Balance with banks (includes `93 Lacs P.Y. `80 Lacs) lying in designated account with the scheduled banks on account of unclaimed dividend which are not available for use by the Company. P.Y. figures have been regrouped / rearranged to confirm to the current year’s presentation, wherever necessary.
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali sd/Chartered Accountants (Registration No. 103142W) sd/Haresh K. Chheda Amit D. Buch Partner (Membership No. 38262) Company Secretary Mumbai : 23rd August, 2012007 sd/A. R. Gala Managing Director
For and on behalf of the Board
sd/S. K. Vikamsey Chairman
61
Significant Accounting Policies (Consolidated)
(a) Principles of Consolidation : Consolidated financial Statements relate to Navneet Publications (India) Ltd. and its subsidiaries Grafalco Ediciones S.L. and eSense Learning Pvt. Ltd. The consolidated financial statements have been prepared on the following basis : (i) The financial statements of the company and its subsidiary companies are combined on a line by line basis by adding together the book value of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealized profits or losses in accordance with Accounting Standard (AS) 21 ‘‘Consolidated Financial Statements’’ issued by the Institute of Chartered Accountants of India. (ii) As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the Company’s separate financial statements. (iii) Grafalco Ediciones S.L. (1) Grafalco Ediciones S.L. accounts are drawn considering depreciation at straight line method as against W.D.V.method adopted by NPIL. The same is not aligned with for consolidation purpose considering the negligible impact of the same. (2) During the year Grafalco Ediciones S.L.Balance Sheet as at 31st March, 2012 is drawn for a period of 15 Months i.e. from 01/01/2011 to 31/03/2012. (3) As per the law governing the subsidiary, statutory audit is obligatory only if a) The turnover is above Euro 47,47,996 and
abcd
b) Total employees are more than 50 Since the subsidiary has not met any of the above conditions, accounts of the subsidiary are not subject to audit for the year. Accordingly consolidated financial statements are compiled on the basis of such unaudited accounts.
(iv) eSense Learning Pvt. Ltd. (1) eSense Learning Pvt. Ltd. accounts are drawn considering, depreciation on Computer and hardware, energy saving devices and individual assets acquired for less than ` 5000/- over a period of 5 years on Straightline basis as aginst W.D.V. method adopted by NPIL. Taking into account commercial consideration and bussiness model it is not practical to use uniform accounting policies for the above mentioned assets, the same has not been aligned with for consolidation purpose. (b) Investments other than in subsidiaries and associates have been accounted as per Accounting Standard 13 on Accounting for Investments. (c) Other Significant accounting Policies These are set out under “Significant Accounting Policies” as given in separate financial statements of Parent and subsidiary.
62
Notes forming part of the Balance Sheet
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 1 SHARE CAPITAL Authorised : 25,00,00,000 (25,00,00,000) Equity Shares of ` 2/- each (` 2/- each) 50,00,00,000 (50,00,00,000) Equity Shares of ` 10/- each (` 10/- each) Issued, Subscribed & Paid Up : 23,82,15,000 (23,82,15,000) Equity Shares of ` 2/- each (` 2/- each) fully paid up Total 1.1 Reconciliation of the number of Equity Shares outstanding As at 31st March, 2012 Number of share Amount 2,382 4,764 2,382 4,764
` In Lacs
5,000 500 4,764 4,764
5,000 500 4,764 4,764
Number of Shares at the beginning of the year Add : Shares Issued Less : Shares Forfeited Number of Shares at the end of the year
As at 31st March, 2011 Number of share Amount 2,382 4,764 2,382 4,764
1.2 Terms / Rights Attached to Equity Shares The company has only one class of equity shares having a par value of ` 2 per share. Each holder of equity shares is entitled to one vote per share and all rank pari passu. 1.3 Aggregate number of bonus shares issued during the period of five years immediately preceding the reporting date Equity shares allotted as fully paid bonus shares during last 5 years by capitalisation of Share Premium & General Reserve 1.4 Equity Shareholders holding more than 5% of the shares Paticulars Accord Holding Private Ltd. Corsa Holding Private Ltd. Qualis Holding Private Ltd. 142,929,000
As at 31st March, 2012 No. of share % held 40,993,721 17.21% 31,929,631 13.40% 23,577,132 9.90%
As at 31st March, 2011 No. of share % held 36,562,500 15.35% 28,125,000 11,81% 19,687,500 8.26%
The honourable Bombay High Court wide its order dated 29.06.2012 sanctioned the Composite Scheme of Amalgamation and Arrangement w.e.f. appointed date 21.03.2012 pursuant to which the above 3 companies have been amalgamated with Lakheni Publication Pvt. Ltd. The said scheme was made effective on 13.08.2012.
63
Notes forming part of the Balance Sheet
(Consolidated)
abcd
As at As at 31st March, 2012 31st March, 2011
2 RESERVES & SURPLUS a) Capital Reserve : Opening Balance Add : Additions during the year Closing Balance b) General Reserve : Opening Balance Add : Transferred from surplus balance in the Statement of Profit and Loss Closing Balance
` In Lacs # #
` In Lacs # #
10,014 1,000 11,014
9,014 1,000 10,014
c) Foreign Currency Translation Reserve : Opening Balance Add : Additions during the year Closing Balance d) Surplus in the Statement of Profit and Loss : Balance as per last Financial Statements Add : Net Profit after tax Balance available for Appropriation Less : APPROPRIATION Dividend (First Interim) ` 0.60 Paise ` 2/- paid up (` 0.60 Paise ` 2/- paid up) Dividend Final ` 0.80 Paise ` 2/- paid up (` 0.80 Paise ` 2/- paid up) Corporate Tax on Dividend Transfer to General Reserve
51 (41) 10
(21) 72 51
17,435 7,798 25,233
15,641 6,676 22,317
1,429 1,906 3,335 541 1,000 4,876
1,429 1,906 3,335 547 1,000 4,882
SURPLUS AFTER APPROPRIATION TOTAL (a + b+ c + d)
20,357 31,381
17,435 27,500
64
Notes forming part of the Balance Sheet
(Consolidated)
abcd
` In Lacs
As at 31st March, 2012 As at As at 31st March, 2011 31st March, 2011
NON CURRENT LIABILITIES : 3 LONG TERM BORROWINGS A) Secured i) Term Loan - Foreign Currency Loan from Bank Less : Amount payable within 12 months
As at 31st March, 2012
1,324 530
794
1,158 331
827
Nature of security and Terms of Repayments for Secured Borrowings : Nature of Security Long term foreign currency loan are exclusively secured by Hypothecation of windmills. The Installments due within 12 months from the date of Balance Sheet have been grouped under Other Current Liabilities (Note No. 8)
As at As at 31st March, 2012 31st March, 2011
Terms of Repayments Foreign Curreny Loans from Bank carries interest @ Libor+0.5%. The loan is repayable in 12 half yearly instalments of 41980057 JPY starting from 17th Jan, 2009
` In Lacs 4 Deferred Tax Liabilities (Net) Depreciation Disallowances under section 43B of the Income Tax Act, 1961 574 (120) 454
` In Lacs 435 (105) 330
5 Long Term Provisions Provision for Employee Benefits Provision for Leave Encashment (Refer Note No.37)
382 382
236 236
65
Notes forming part of the Balance Sheet
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
6 SHORT TERM BORROWINGS A) Secured i) Cash Credit from Bank ii) Working Capital Rupee Loans repayable on demand from banks iii) Foreign Currency Loan All short term Rupee loans and foreign currency loans equivalent to ` 3000 Lacs (Previous year ` 902 Lacs) are secured against : hypothecation & first charge over stock of raw materials, work-in-process, finished goods, stores and spares not relating to plant and machinery and book debts.
` In Lacs 5,195 3,000 -
` In Lacs 1,071 902
8,195 B) Unsecured Form Banks : Rupee Loan Total 5,000 5,000 13,195
1,972 3,500 3,500 5,472
7 TRADE PAYABLES - Due to Micro, Small and Medium Enterprises - Due to Others Total Details of the dues to Micro, Small and Medium Enterprises (MSME), as defined in the Micro, Small and Medium Enterprises Development Act, 2006, as on 31st March 2012 based on available information with the Company which are as under : Particulars Principal amount due and remaining unpaid Interest due on above and the unpaid interest Interest paid Payment made beyond the appointed day during the year Interest accrued and remaining unpaid Amount of further interest remaining due and payable in succeeding years
80 1,443 1,522
56 752 808
2011-12 9 1 47 2 -
2010-11 4 # 53 2 -
66
Notes forming part of the Balance Sheet
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 8 OTHER CURRENT LIABILITIES Advances Received Unpaid Dividend Interest Accrued But Not Due Income received in Advance Creditors for capex Current maturities of Foreign Curreny Loans from Bank (Also see note no. 3) Employee Benefits Payable Deposits - Provisions for tax (net of advance tax) Statutory Dues - Providend Fund / ESIC / Profession Tax - Tax Deducted At Source - Service tax / WCT / Excise payable - Sales tax payable Provision for Expenses Other Payable/ (Receivable) 76 78 7 157 738 146 3,292 370 93 8 129 256 530 606 22 76
` In Lacs 253 80 10 47 115 331 507 27 140 65 72 8 106 658 (190) 2,228
9 SHORT TERM PROVISIONS Provision for Employee Benefits - Provision for Leave Encashment Benefits (Refer Note No. 37) Other Provisions - Proposed Dividend - Corporate Tax on Proposed Dividend Total 1,906 309 2,225 1,906 309 2,306 10 91
67
Notes forming part of the Balance Sheet
10 FIXED ASSETS
(Consolidated)
abcd
` In Lacs Depreciation / Amortization Net Block
Total upto 31.03.2012 52 2,270 8,437 191 949 737 160 309 247 266 13,618 12,215 As on 31.03.2012 983 32 6,851 6,545 112 400 703 80 132 0 269 16,107 11,891 As at 31st March, 2011 As on 01.04.2011 984 39 4,658 4,678 93 317 562 97 213 0 251 11,891 -
Gross Block
Sr. Description Tangible 1 2 3 4 5 6 7 8 9 10 11 Land - Freehold Land - Leasehold Building Plant & Machinery Office Equipment Furniture & Fixtures Vehicles Intangible Intellectual Property Trade Mark SAP Software Total Previous Year 210 441 247 371 24,107 19,864 164 5,979 4,397 398 155 242 441 247 535 29,725 24,106 113 228 247 119 12,215 10,973 984 84 6,616 12,476 280 1,205 1,193 2,546 2,743 40 152 334 2 41 238 17 12 88 983 84 9,121 14,981 303 1,349 1,439 45 1,958 7,798 187 888 632 Cost As on Additions Deductions / Adjustments Cost As on 31.03.2012 Provided upto 01.04.2011 No. of Assets 01.04.2011 during the year
For the Year
Deductions / Adjustments
6 346 839 18 66 181 28 81 146 1,711 1,360
34 201 14 8 76 333 118
As at 31st March, 2012
` In Lacs 11 CAPITAL WORK IN PROGRESS Opening Balance Add : Expenditure during the year Less : Capitalisation / Adjustments during the year Closing Balance 983 330 (975) 338
` In Lacs
470 958 (445) 983
12 INTANGIBLE ASSETS UNDER DEVELOPMENT Opening Balance Add : Expenditure during the year 21 21 Closing Balance
68
Notes forming part of the Balance Sheet
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 13 NON CURRENT INVESTMENTS 1) Other Investment a) Unquoted Wings Intellect Pvt Ltd. 8333(NIL) Equity Shares of ` 600/- each Investment in Limited Liability Partnership Navneet Learning LLP b) Long Term Financial Investments Total Non current investments Aggregate amount of unquoted investments
` In Lacs
50
-
6 56 56
10 10 10
14 LONG TERM LOANS AND ADVANCES Unsecured - Considered Good a) Capital Advance - Advances for Capital Expenditure b) Corporate Deposits c) Security Deposits d) Advance Income Taxes (Net of Provisions) e) Wealth Tax f) Loans and advances to related parties i) Loans to Associates - Navneet Learning LLP g) Loans to Employees h) Loan to Vendors i) Sales Tax receivable j) Advance to Suppliers k) Prepaid Expenses l) Equity Shares application money m) Deposit with Others n) Other Loans & Advances
474 75 174 555 4 3,045 181 12 47 5 25 35 29 1,771 6,432
496 75 167 583 5 58 6 27 10 2 29 1,409 2,868
69
Notes forming part of the Balance Sheet
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
15 OTHER NON CURRENT ASSETS (Unsecured, considered good) Other Income Receivable
` In Lacs
` In Lacs
27 27
129 129
16
INVENTORIES 528 8,265 11,651 1,236 83 21,763 379 5,065 11,361 875 30 17,709
Stores, Spares & Consumables Raw Materials Finished Goods Work In Process Stock in Trade (in respect of Goods acquired for Trading)
17 TRADE RECEIVABLES (Unsecured, considred good) Over six months Others
807 10,833 11,640
775 7,905 8,680
18 CASH AND BANK BALANCES Cash and Cash Equivalents Cash on hand Balance with Scheduled Banks - In Current Account Sub Total A Other Bank Balances Fixed Bank deposits with more than twelve months maturity Fixed Bank deposits with less than twelve months maturity Earmarked Balance with Banks In Dividend Account
50 364 414 2 # 93 95 509
43 996 1,039 10 1 80 91 1,130
70
Sub Total B Sub Total A + B
Notes forming part of the Balance Sheet
19 SHORT TERM LOANS AND ADVANCES (Unsecured, considered good) a) Loans to vendors b) Loans to Employees c) Deposits - Security Deposits - Corporate Deposits d) Sales Tax receivable e) CENVAT receivable f) Service Tax Refund receivable g) Prepaid Expenses h) Advance to Suppliers i) Advance to Employee for expenses j) Other Loans & Advances
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs
` In Lacs
20 131 2 23 10 33 1 126 356 14 45 761
29 211 35 4 33 97 257 31 33 731
20 OTHER CURRENT ASSETS a) Export incentive receivable b) Other income receivable 288 6 294 290 20 310
71
Notes forming part of Statement of P & L
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 21 REVENUES FROM OPERATION Sale of products - Finished Goods (Refer Note below 21.1) - Traded Goods Sale of services Other operating revenues Less : Sales Tax Collected Less : Excise Duty
` In Lacs
61,288 340 919 728 63,275 (1,108) (273) 61,894
54,442 127 836 585 55,990 (956) (203) 54,831
21.1 SALES OF FINISHED GOODS PRODUCTS Educational Books Paper Stationery Others
32,064 22,672 6,552 61,288
26,835 21,186 6,421 54,442
22 OTHER INCOME Dividend on Mutual Funds Profit / (Loss) on Sale of Investments Other non-operating Income Profit / (Loss) on Sale of Asset Exchange Fluctuation on Consolidation Interest Income Net gain on foreign currency translation and transaction
12 24 346 124 (#) 616 1,122
59 117 125 26 3 305 183 818
72
Notes forming part of Statement of P & L
(Consolidated)
abcd
For the year ended 31st March, 2012 For the year ended 31st March, 2011
` In Lacs 23 COST OF MATERIAL CONSUMED Raw Materials Consumed 23.1 COST OF MATERIAL CONSUMED Paper Others 24 (INCREASE) / DECREASE IN STOCK OF FINISHED GOODS AND WIP Closing Stock Work in Process (Refer Note below 24.1) Finished Goods Opening Stock Work in Process Finished Goods
` In Lacs
30,483 30,483 26,703 3,780 30,483
26,409 26,409 22,718 3,691 26,409
1,236 11,735 12,971 875 11,391 12,266 (705) 390 577 48 221 1,236
875 11,391 12,266 764 11,837 12,601 335 299 470 16 90 875
24.1 DETAILS OF CLOSING INVENTORY OF WORK IN PROCESS Forms Printed Covers Pasted Sheets Ruled Sheets
25 EMPLOYEE BENEFITS EXPENSES Salaries, Wages and Bonus Contribution to Provident and Other Funds Staff Welfare 5,222 496 391 6,109 4,523 474 406 5,403
73
Notes forming part of Statement of P & L
(Consolidated)
abcd
For the year ended 31st March, 2012 For the year ended 31st March, 2011
26 FINANCE COST Interest on Debentures Other Borrwoing Costs
` In Lacs 576 576
` In Lacs 17 299 316
74
27 OTHER EXPENSES Printing Expenses Binding Expenses Other Manufacturing Expenses Power & Fuel Freight & Octroi Stores & Spares Consumed Repairs to Plant & Machinery Rates & Taxes Sales Tax Expenses Rent Royalty Building Repairs & Maintainance Other Repairs Insurance Transportation Expenses Commission Advertisement Marketing Expenses Sales Promotion Expenses Discount & Rebate Bad debts and other irrecoverable advance written off Donation Bank Charges Prior Period items Legal and Professional Fees Net loss on foreign currency translation and transaction Other Expenses Total
726 800 1,067 304 614 304 117 100 7 455 1,208 234 186 76 1,079 31 232 834 1,299 326 102 234 161 5 604 281 1,238 12,624
686 646 980 245 566 185 145 75 9 534 1,015 252 198 78 953 102 297 796 953 311 20 274 139 4 453 1,105 11,020
Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
abcd
28 Estimated amount of Capital Contracts (net of Advances) remaining to be executed and not provided for ` NIL (Previous Year ` 739 Lacs) 29 Contingent Liabilities. (a) For disputed Income-tax matters ` 496 Lacs (Previous Year ` 559 Lacs) against which amount paid is ` 535 Lacs (Previous Year ` 563 Lacs) (b) Against Bond : (i) Import Duty liability of ` 381 Lacs (Previous Year ` 381 Lacs) for import of machinery against licences granted under EPCG scheme. (ii) Duty liability amounting to ` 86 Lacs (` 29 Lacs) for the purchase of excisable inputs without payment of duty under the bonds executed if the export obligation is not fulfilled. (c) In respect of bank guarantees given for subsidiary Company of Euro NIL (Previous Year Euro 2-mn) equivalent to ` NIL (Previous Year ` 1278 Lacs) 30 Financial & Derivative Instruments (a) The Company has sold USD 14.48 Mn equivalent ` 7234 Lacs and EUR 0.11 Mn equivalent ` 78 Lacs (Previous Year USD 9.61 Mn equivalent ` 4598 Lacs and Eur 0.87 Mn equivalent ` 543 Lacs) to cover our export receivables and purchase USD NIL equivalent ` NIL (Previous Year USD 2 Mn equivalent ` 941 Lacs) to cover loan repayment. The Company has entered into USD-JPY derivative option contracts hedging its exposure on ECB availed in JPY for wind power generation project. Option contracts worth of JPY 181-Mn (Previous Year JPY 253-Mn) were open as on balance sheet date, maturing over a period of seven years on Jul 2014.
31. Foreign Currency Translation of ` 219 Lacs (Previous Year credited ` 202 Lacs) arising on account of the exchange difference on non
integral foreign operations is debited to the Statement of Profit & Loss.
75
Notes on Financial Statements
For the year ended 31st March, 2012 32. Related party transactions (a) Associates – Navneet Learning LLP
(Consolidated)
abcd
(b) Other related parties with whom transaction have taken place during the year.
(i) Enterprises owned or significantly influenced by key management personnel or their relatives
Navneet Prakashan Kendra Vikas Prakashan Gala Publishers Sandeep Agency Bigspace Realty Pvt. Ltd The Flagship Advertising Pvt. Ltd.
(ii) Key Management Personnel & Relatives
(ii) Key Management Personnel & Relatives 1. Shri A.R. Gala 2. Shri D.R. Gala 3. Shri H.R. Gala 4. Shri S.R. Gala 5. Shri J.L. Gala 6. Shri J.K. Sampat 7. Shri N.N. Shah 8. Shri B.A. Gala 9. Shri A.D. Gala 10. Shri G.D. Gala 11. Shri R.H. Gala 12. Shri D.C. Sampat 13. Shri S.J. Gala 14. Shri S.J. Gala 15. Shri K.H. Gala 16. Shri S.S. Gala 17. Shri K.B. Gala 18. Shri T. R. Shah 19. Smt. H. T. Shah 20. Shri H. A. Gala
76
Notes on Financial Statements
For the year ended 31st March, 2012 Transaction with Related Parties : Items / Related Parties
(Consolidated)
abcd
Key Management Personnel Relative of Key Management Personnel 8 (5) -(--) -(--) -(--) Total
Enterprises owned or significantly influenced by key management personnel or their relatives 1,486 (1,344) -(--) -(--) -(--)
Associates
(i) Purchase,expense and other services from related parties (ii) Sales of goods and Services
-(--) -(--) 3,045 (--) 7 (--)
669 (669) -(--) -(--) -(--)
2,163 (2,018) -(--) 3,045 (--) 7 (--)
(iii) Loans given
(iv) Investments
(v) Balance outstanding at year end Loans and advances given
-(--)
3,045 (--)
-(--)
-(--)
3,045 (--)
77
Notes on Financial Statements
For the year ended 31st March, 2012 33. Earning Per Share :
(Consolidated)
abcd
2011-2012 ` In Lacs 2010-2011 ` In Lacs 6,676 6,676 2,382 2.80 2.80
(a) Net Profit after tax but before extra ordinary item as per statement of profit and loss Less : Extra Ordinary Items Net profit available for Equity Shareholders (b) Weighted Average Number of Equity Shares for basic and diluted EPS (in No.) (c) Basic and Diluted Earning per share of ` 2/- each (i) Before Extra Ordinary Items (ii) After Extra Ordinary Items
7,798 7,798 2,382 3.27 3.27
34 Lease Transactions : Accounting Standard 19 As a lessor in an Operating Lease Fixed Assets: Plant & Machinery (Computer & Hardware) include assets costing ` 627 Lac (` 107 Lac), (Gross Block) on operating lease contract. The details of the assets given on operating lease as on 31.03.2012 are
Computers & Hardware Computers & Hardware 2011-2012 (` In Lacs) Gross carrying amount Accumulated Depreciation Depreciation recognised in Profit & Loss account for year 627 135 82 2010-2011 (` In Lacs) 107 77 67
Maturity Pattern of the Gross/Present Value of MLP receivables.
78
Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
abcd
2011-2012 (` In Lacs) 2010-2011 (` In Lacs) 26 34 60 213 403 616
Not Later than one year Later than one year and not later than five years Later than five years Total As a Lessee in an Operating Lease
2011-2012 (` In Lacs) (a) The total amount of future minimum lease payments under non cancellable operating leases for each of the following period : (i) Not later than one year : (ii) Later than one year and not later than five years : (iii) Later than five years : (b) The total of future minimum sublease payments expected to be received under non cancellable sublease at the Balance Sheet date : (c) Lease payments recognised in the Statement of Profit and Loss for the period, with separate amounts for minimum lease payments and contigent rents : (d) Sub-Lease payments received (or receivable) recognised in the Statement of Profit & Loss for the period : (e) A general description of the lessee’s significant leaseing arrangements including, but not limited to the following : (i) The basis on which contingent rent payments are determind : (ii) The existence and terms of renewal or purchase options and escalation clauses; and (iii) Restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leaseing.
2010-2011 (` In Lacs)
172 36 119 182 108
193 208 250 156 92
-
-
79
Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
abcd
35. Details of provisions, utilised, written Back : Particulars Provision for Leave Salary Encashment Provision for Gratuity
As at 01.04.2011 320 8 328
Additions 55 9 64
Utilised/ Written Back -
As at 31.03.2012 375 17 392
36. Segment Reporting The Company’s operations relates to publication of knowledge based information in educational and general books form as well as in electronic media and manufacturing of paper and other stationery items. It caters to the educational need of Indian as well as Global market. Accordingly ”Publication” and “Stationery” comprise of the primary segments. Secondary segmental reporting is performed on the basis of the geographical location of customers. The accounting principles and policies used in the preparation of the Financial Statements, as set out in the note on significant accounting policies, are also consistently applied to record revenue and expenditure, in individual segments.
80
Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
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` In Lacs Stationery 2012 24,927 – 24,927 111 25,038 2,577 – – – – – – – – – 24,511 – – 2,370 – – 2,718 – 447 – – 2011 23,212 – 23,212 154 23,367 3,314 – – – – – – – – – 18,814 – – 1,376 – – 2,066 – 332 – – Others 2012 636 – 636 – 636 26 – – – – – – – – – 1,969 – – 10 – – 670 – 237 – – 2011 509 – 509 (95) 413 (84) – – – – – – – – – 1,599 – – 13 – – – – 234 – – Total 2012 61,894 – 61,894 385 62,279 13,652 737 576 1,846 11,967 4,200 (31) 7,798 – 7,798 51,290 6,659 57,948 3,975 17,829 21,804 6,082 247 1,564 149 – 2011 54,831 – 54,831 93 54,924 11,865 725 316 1,597 10,678 4,036 (34) 6,676 – 6,676 40,785 3,708 44,492 3,909 8,319 12,228 4,746 164 1,281 80 –
[A] Primary - Business Segments Publication 2012 Revenue Less : Inter Segment Revenue Net Revenue Other Income Segment Revenue Segment Results Add : Unallocated Other Income/(Expense) Less : Financial Expenses Less : Unallocable Expenditures Profit Before Taxation Provision for Taxation (Income tax, and deferred tax) Minority Interest Profit after taxation Extraorinary Item (net of tax expense) Net Profit after extraordinary Items Segment Assets Unallocated Assets Total Assets Segment Liabilities Unallocated Liabilities Total Liabilities Capital Expenditure Unallocated Capital Expenditure Depreciation on Segmental Assets Unallocated Depreciation Amortization 36,331 – 36,331 274 36,605 11,049 – – – – – – – – – 24,810 – – 1,595 – – 2,694 – 880 – – 2011 31,110 – 31,110 34 31,143 8,635 – – – – – – – – – 20,372 – – 2,519 – – 2,680 – 715 – –
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Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
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Notes : 1 Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the respective segment, however, revenue and expenses which can not be identified or allocated reasonably to a segment being related to the enterprise as a whole have been grouped as unallocable. 2 3 Segment assets and segment liabilities represent assets and liabilities of respective segments, however the assets and liabilities not identifiable or allocable on resonable basis being related to enterprise as a whole have been grouped as unallocable. The business which have been grouped under “Others” segment comprises of revenue from generation of power by windmill, Pre school and trading items, etc.
Secondary - Geographical Segments
North & Central America Africa Europe Australia & Oceania Rest of the world except India India
` in Lacs
Total
Segment Revenue Segment Assets
2,445 (2,439) 135 (69)
1,664 (1,534) 301 (264)
560 (2,136) 117 (965)
28 (27) (7)
894 (331) 369 (37)
56,303 (48,364) 57,026 (43,150)
61,894 (54,831) 57,948 (44,492)
37. Disclosure pursuant to Accounting Standard - 15 (Revised) ‘Employee benefits’ (a) The Company adopted Accounting Standard (AS) 15 (revised 2005) on “Employee Benefits” issued by ICAI. The actuarial valuations of the various employee benefits were carried out by using the Projected Unit Credit Method. (b) The Company has recognised the following amount as an expense and included in the Statement of Profit and Loss. ` in Lacs ` in Lacs 2011-12 2010-11 (i) Provident Fund 244 223 (ii) ESIC 63 57 (c) Defined benefit plan and long term employment benefits General description (1) Gratuity (Defined benefit plan) The Company makes annual contribution to the employee group gratuity scheme of the Life Insurance Corporation of India, funded defined benefits plan for qualified employees. The scheme provided for lumpsum payments to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. (2) Accrual for leave encashment benefit is made on the basis of a year-end actuarial valuation in pursuance of the Company’s leave rules. The following table sets out for the status of gratuity / Leave encashment plan :
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Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
Gratuity (Funded)
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Leave Encashment (Non-Funded) 31/03/12 318 71 25 41 373 41 41 373 373 90 25 115 318 115 (41) 392 8.00% 7.00% 8.00% 8.00% 7.00% 8.00% 0.00% 4.00% 7.30% 31/03/11 324 10 23 39 318 39 39 318 318 66 23 (56) 33 324 33 (39) 318 0.00% 4.00% 7.30% 31/03/12 864 (61) 69 3 869 913 86 121 3 1,117 1,117 869 (248) 31/03/11 713 97 57 4 864 706 67 143 4 913 913 864 (49) -
Change in Obligation Accrued Gratuity Actuarial gain/(loss) Interest Cost Less : Benefits paid Accrued Gratuity Change in Plan Asset Opening Fund Balance Return on the plan asset Contribution paid Less : Benefits paid Closing Fund Balance Reconciliation of present value of obligation and the plan asset Closing Fund Balance Accrued Gratuity Net Liability Balance sheet Expense recognized in the statement of P & L Current Service Cost Interest Cost Expected Return on Plan Assets Net Actuarial (Gain) / Loss recognized for the period Expense recognized in the statement of P & L Movement in the Liability recognized in Balance Sheet Opening Net Liability Expenses as above Contribution paid Closing Net Liability Assumptions Assets Salary escalation rate Discounting rate
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Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
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38. The Loss of Subsidiary attributable to minority is agreed to be funded by them. 39. Figure of ` 50,000 or less have been denoted by # 40. The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali Chartered Accountants (Registration No. 103142W) sd/Haresh K. Chheda Partner (Membership No. 38262) Mumbai : 23rd August, 2012007 For and on behalf of the Board
sd/-
sd/A. R. Gala Managing Director
sd/S. K. Vikamsey Chairman
Amit D. Buch Company Secretary
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Particulars of subsidiaries as at 31st March, 2012 in terms of Circular No. 5/12/2007-CL-III dt. February 8th 2011, General Circular 2/2011 issued by Government of India, Ministry of Corporate Affairs under section 212 (8) of Companies Act, 1956. ` in Lacs Sr. No. Particulars Name of the Subsidiaries eSense Learning Pvt. Ltd. Grafalco Ediciones S.L.* As at 31-03-12 As at 31-03-12 413 1,023 752 1,084 2,200 295 50 922 (352) (352) 469 # 68 438 17 2 18 1236 704 # 704 -
Capital Reserves Total Assets Fixed Assets Current Assets, Loans and advances Profit & Loss account - Debit Balance d Total Liabilities Loans-Secured / Unsecured Deferred Tax Liability (Net) Current Liabilities and Provisions e Details of Investments f Turnover / Other Income g Profit / (Loss) before taxation h Provision for taxation i Profit / (Loss) after taxation j Proposed Dividend *Average exchange rate as on 31-03-2012, Euro 1 = ` 65.3977
a b c
Figure of ` 50,000 or less have been denoted by #
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NAVNEET PUBLICATIONS (INDIA) LIMITED
Registered Office : Navneet Bhavan, Bhavani Shankar Road, Dadar (West), Mumbai – 400028.
ATTENDANCE SLIP
Twenty-Sixth Annual General Meeting - Thursday, 27th September, 2012. Please fill in this Attendance Slip and hand it over at the entrance of the meeting hall. Joint Shareholders may obtain additional Attendance Slip on request. Master Folio No._______________ DPID ______________________ No.of Shares Held __________________ Client ID __________________
Mr. / Ms. / Mrs____________________________________________________________________ Address _________________________________________________________________________ I / We hereby record my / our presence at the TWENTY -SIXTH ANNUAL GENERAL MEETING of the Company held on Thursday, 27th September, 2012 at 3 : 30 p.m. at Textile Committee Auditorium, Textile Committee Building , P. Balu Road, Near Tata Press, Prabhadevi Chowk, Mumbai – 400025.
(Proxy’s Name in Block Letters)
(Member’s / Proxy’s Signature #)
# Strike out whichever is not applicable
-----------------------------------------------------------------TEAR HERE-----------------------------------------------------------------------------
NAVNEET PUBLICATIONS (INDIA) LIMITED
Registered Office : Navneet Bhavan, Bhavani Shankar Road, Dadar (West), Mumbai – 400028.
PROXY FORM
Client ID _________________ DPID ___________________ Master Folio No. __________________ I/We __________________________________ of _____________________ in the district of _____________________ being a member/members of Navneet Publications (India) Limited hereby appoint _________________________________________ of _______________________ in the district of _____________________or failing him ___________________________________________ of __________________________ in the district of _____________________ as my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on Thursday, 27th September, 2012 at 3 : 30 p.m. and at any adjournment(s) thereof. Signed this………... day of ……………….. 2012.
Affix `1
Signature .................. Revenue .....
Stamp
NOTE : The proxy form in order to be effective should be duly completed and deposited at the Registered Office of the Company not less than 48 hours before the time of the meeting.
doc_402157929.pdf
The report for the financial year 2011 - 2012 of navneet publications (India) limited.
Contents
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Corporate Information ............................................................................. 2 Chairman’s Communiqué ........................................................................ 3 Management Discussion and Analysis ................................................... 4 Corporate Governance Report ................................................................ 6 General Shareholders Information ....................................................... 11 Performance Indicators ........................................................................ 15 Financial Highlights .............................................................................. 16 Notice .................................................................................................. 18 Directors’ Report .................................................................................. 22 Section 212 statement of Subsidiary Companies ................................. 26 Auditor’s Report ................................................................................... 27 Balance Sheet ..................................................................................... 30 Statement of Profit & Loss ................................................................... 31 Cash Flow Statement ........................................................................... 32 Significant Accounting Policies ............................................................ 33 Notes forming part of the Balance Sheet ............................................. 35 Notes forming part of the Statement of Profit & Loss ........................... 44 Notes on Financial Statements ............................................................ 47 Consolidated Financial Statements ...................................................... 57
1
Corporate Information
Board of Directors Shivji K. Vikamsey Amarchand R. Gala Jaisinh K. Sampat Dungarshi R. Gala Shantilal R. Gala Jitendra L. Gala Liladhar D. Shah Dr. R. Varadarajan Tushar K. Jani Company Secretary Amit D. Buch Auditors Ghalla & Bhansali Chartered Accountants, Mumbai Bankers ICICI Bank Ltd. The Hongkong and Shanghai Banking Corporation Ltd. DBS Bank Ltd. Kotak Mahindra Bank Ltd. HDFC Bank Ltd. Deutsche Bank AG. The Bank of Nova Scotia Standard Chartered Bank ING Vysya Bank Ltd. Citi Bank N.A. Website www.navneet.com e-mail [email protected] Chairman Managing Director Joint Managing Director Director – Educational Books Publishing Director – Educational Books Publishing Ahmedabad Office Director – Marketing Director Director Director Works Registered Office
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Navneet Bhavan, Bhavani Shankar Road, Dadar (West), Mumbai - 400 028.
Harakhchand R. Gala Director – Sales & Distribution Kamlesh S. Vikamsey Director
Navneet House, Gurukul Road, Memnagar, Ahmedabad - 380 052.
• Village Dantali, Behind Kasturi Nagar, Dist. & Tal. Gandhinagar, Gujarat. • Gokhiware, Chinchpada, Vasai (East), Dist. Thane. • Village Sayali, Silvassa. • Rakanpur, Taluka Kalol, Dist. Mehsana. • Village Khaniwade, Tal. Vasai, Dist. Thane.
2
Chairman’s Communiqué
Dear Shareowners,
At the outset, I take this opportunity to share with you the pride that we all feel at the remarkable haul of medals that our talented sportsmen have brought to our nation at the recently concluded London Olympics. India stands at the threshold of knowledge transformation. Education is the one sector towards which the outlook is fast changing in our country. From being considered an expense, it is now seen as an investment for the future. Students now have a wider choice in selecting their future. Across the country literacy is fast improving year after year. With the perceptible growth in Indian economy, disposable household income and resultantly spending has been increasing. Parents/Students now prefer quality products in all product categories including those of your Company. Various initiatives of the Central Government on increasing the literacy as well as quality education have also contributed to increasing the awareness for quality educational products. The Government’s expenditure on social services and rural development has gone up consistently over the years. The last financial year 2011-2012 was a successful year for your Company in achieving many milestones, both in the physical as well as in the financial fronts. Your Company has maintained a healthy double digit growth. For the year ended 31st March 2012, your Company has crossed the 600 cr. turnover mark led by publication segment. Under the syllabus changing scenario publication business grew by 18% and posted a turnover of ` 354 cr. while stationery segment recorded less than expected growth and stood at ` 249 cr. – a modest growth of 7% on account of severe competition in the domestic market and postponement of export orders. On one hand, the management of your Company believes that being in the non-recessionary business line is the most powerful strength of your Company, on the other, global recession has nearly brought the world to a halt. Developed economies like USA & most of the countries in Europe witnessed virtual turmoil of their financial sector. The slowdown has severely impacted the business of your Company’s subsidiary in Spain, Grafalco Ediciones S.L. As a result, during the current year the Management of your Company had decided to scale down substantially the activities of this subsidiary. It has paid off all its liabilities and made provision for diminution in the value of its investment in this subsidiary.
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Your Company’s other subsidiary, eSense Learning Pvt. Ltd., has completed digitized content for standards 1 to 10 in Science, Mathematics and Social Science. As of March, 2012, our e Learning products have been installed in 925 Institutions covering around 4,500 classrooms. Company is aggressively marketing its products across new schools and is sure of an impressive growth in FY13. The outlook for the coming years looks very promising as the syllabus change scenario in the States of Maharashtra and Gujarat is expected to continue for a couple of years. With our long cherished dream to expand business beyond Gujarat and Maharashtra to other States, we have made a foray in Andhra Pradesh recently. With this, we believe that there will be a robust growth in the publication segment during FY13. Even stationery segment is expected to perform better in FY13 due to confirmed export order book. India, as an emerging economy, envisions a better tomorrow. Today, each strata of society considers education to be the ladder of future growth. The awareness towards quality education is increasing with the time. The ratio of enrollments in private schools is increasing in comparison to public school in rural areas as well. With highest student population in the world, business opportunities in education are increasing at all levels from pre-school to higher education. Government of India’s expenditure on education as a proportion of total expenditure has moved up substantially in the recent times and it has undertaken several initiatives in recent years to promote primary and secondary education. All these speak for the excellent opportunities that your Company is ready to seize and to grow at a rapid pace in the years to come.
Shivji K. Vikamsey
3
Management Discussion and Analysis
Dividend Policy :
The trend of your Company’s policy of rewarding its investors with minimum 25% of its net profits as dividends continues this year as well. Your Company had declared and paid interim dividend of 30% or ` 0.60 ps per share in November 2011. Your Company has proposed a final dividend of 40% or ` 0.80 ps per share which works out to be above 48% payout (including DDT) for FY 12.
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a. Writing off / Diminution in the value of investment amounting to ` 3.26 cr. in its subsidiary viz. Grafalco Ediciones S.L. b. Higher finance cost and c. Pressure on the margins in the stationery segment on account of strong competition from new entrants in this segment New Warehouse : As informed in the last Annual Report, your Company has invested in a warehouse cum manufacturing facility to expand its storage facilities to meet the ever increasing demand and shift manufacturing from Vasai (Near Mumbai) location. Accordingly, the Company has so far invested ` 50 cr. in a warehouse near Virar, Mumbai. The work is being carried out in phases and the Management estimates an additional outlay of around ` 10 cr to complete the second phase. This investment in the new warehouse has already shown significant improvement in the operations of your Company. Investment in Andhra Pradesh based School Management Company : Your Company has been providing indirect education through supplementary books for over 5 decades. It has now ventured into direct education by investing in a School Management Company in Andhra Pradesh. This company runs and manages schools in AP under the brand “Gowtham Model School (GMS)”. As of 31st March 2012, your Company has invested ` 30.5 cr. against the commitment of ` 45 cr. to acquire appx. 24% stake. Spanish Subsidiary : Global recession has brought the world on a halt. Developed economies like USA & Most of the countries in Europe witnessed virtual turmoil of their financial sector. The slowdown has severely impacted the business of your Company’s subsidiary in Spain viz. Grafalco Ediciones S.L. As a result, the Management of your Company has decided during the current year to close down substantially the activities of this subsidiary. It has paid off all its liabilities and made provision for diminution in the value of its investment in this subsidiary. eLearning Segment : Navneet Publications (India) Ltd.’s another subsidiary company viz. eSense Learning Pvt. Ltd. has shown a promising performance in FY12. Not only the acceptance amongst the schools has picked up but also the
Wealth Creation for Shareholders :
Maximizing shareholder wealth is a single most important goal for any profit seeking organization and as such it becomes extremely crucial for it to achieve higher profit. Apart from the liberal policy, your Company has always believed in creating Shareholders’ Wealth. Your Company’s sound business policies and prudent investment decisions have enabled to enhance Shareholders’ value. In just last 4 years, on standalone basis your Company’s net worth has increased by a whopping 66% from ` 230 cr. on 31st March, 2008 to ` 381 cr. on 31st March, 2012. Business Overview : Publication Segment : Syllabus change cycle has started in Maharashtra and Gujarat from FY 12. As a result, your Company has posted strong numbers. As expected, revenue from publication business grew from ` 299 cr. in FY-11 to ` 354 cr. in FY 12, a jump of 18% y-o-y. This segment shall see good double digit growth for the next few years. This segment has maintained its operating margin at 33% and expects to maintain in the current year as well. Stationery Segment : Stationery segment has underperformed during the current year due to severe competition from the new entrants in the domestic market. This segment achieved a growth of 7% from ` 232 cr. in FY 11 to ` 249 cr. in FY 12. With strong export orders in the pipeline for the current year, we anticipate that this segment will show a marked improvement in the top line in FY 13. Net Profit : Net profit after tax for FY12 (on standalone basis) stood at ` 80.26 cr. (13.2% of Total Revenue) as compared to ` 77.55 cr. (14.5 % of Total Revenue) for FY11. The marginal reduction in the profit percentage is on account of :
4
Management Discussion and Analysis
desire for its digital content is reflected amongst students and parents. As of March, 2012, our products have been installed in 925 Institutions covering around 4,500 classrooms. These numbers are still small compared to number of institutions and classrooms in the two States of Gujarat and Maharashtra but our continuous marketing efforts will enable your Company to accomplish decent numbers in the years to come. Future Growth Drivers, Opportunities, Risks : Syllabus changes in the State of Maharashtra and Gujarat which started in 2012 will continue for further 3 years. The Government of India has undertaken several initiatives in recent years to promote primary and secondary education. Navneet has pulled out all stops to capitalize on these emerging opportunities for its publication and e-learning activities. Further, it has also started publishing various publications to market in Northern India and in the State of AP. Risk Factors : Competition from Other Players : The Education Business is one of the high growth and happening industry. The Company operates in highly competitive environment that is subject to innovations, changes and varying levels of resources available to each player in each segment of business. This may be a matter of concern if the Company does not adapt to the changing face of the industry. The Company has been keeping itself abreast of latest changes in the industry to implement the same in its operation to keep itself ahead of competition. High Input Cost : The persisting inflationary pressure could certainly increase the Company’s input costs. With the Company’s policy to keep the prices of its products within affordable range of the masses could adversely affect the Company’s profits. However the Management is keenly monitoring the cost at each level and shall take appropriate steps to limit its cost to the minimum level. Regulatory Risk : Government’s recent pronouncement of removing the export subsidy came as big setback to Company’s export operations. If there is also the pressure of exchange rate from the competitive countries, the Company might need to relook at its export model in future.
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The Company relies on intellectual property rights and proprietary rights which may not be adequately protected under current laws. Further, in view of the kind of business in which Company is, it may be subjected to defamation suits, which may have adverse effect on its business. Regulatory enactments are monitored regularly and the Company shall be de-risking its education business model from time to time. Further, all necessary legal vetting is done by the management to ensure that Intellectual Property Rights relating to contents have requisite protection. Corporate Social Responsibility : Your Company continues to use eco-friendly materials for most of its major products catering to environmental needs and also continues with its corporate social responsibility initiative and donates mainly in areas of medical aid, education and rehabilitation programmes. During FY12 the Company donated ` 2.33 cr. The management will continue to fulfill its social responsibility on an ongoing basis towards society in whatever best possible manner. Internal Controls : The Company has in place adequate internal control systems, commensurate with its size and nature of operations so as to ensure smoothness of operations and compliance with applicable legislation. The Company has a well-defined system of management reporting and periodic review of business to ensure timely decisionmaking. Industrial Relations : Industrial relations were cordial at all locations. In a challenging environment and business conditions, the support from the workforce was positive throughout.
Cautionary Statement : The Management Discussion and Analysis describing the Company’s outlook, projections, expectations and estimates regarding future performance are based on current economic scenario. The management believes this scenario to follow as per its expectation to the best of its knowledge at the time of preparation of this report. However, these economic conditions are subject to uncertainities, which could cause actual results to differ materially from those which may be indicated in the above analysis.
5
Corporate Governance Report
(1) COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE
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Corporate Governance is about commitment to values and ethical business conduct. The Company is committed to good corporate governance as it believes that good corporate governance is essential for acheving long term corporate goals and leads to long term shareholder value and enhance interests of all stakeholders. The Company respects and values the rights of its stakeholders to secure information about the Company and its performance. The corporate governance policies followed by the Company are intended to ensure transparency in all its dealings. (2) BOARD OF DIRECTORS 2.1 Composition The Board of Directors comprises of eleven Directors. Since the Company has a Non Executive Chairman, the Board meets the stipulated requirement of atleast one third of the Board of Directors comprising of Independent Directors. 2.2 Attendance / Remuneration of Directors The details of attendance of Directors at the meeting of the Board of Directors of the Company, last Annual General Meeting attended and remuneration for the year is given below :
Sr. No. Name of Director Category Board Meetings during 2011-2012 Held Attended 4 4 4 4 4 4 4 4 4 4 4 4 4 4 2 4 4 4 4 4 4 3 0 3 2 2 Salary (`) 0 Other Benefits (`) 0 Contri. To PF (`) 0 2,98,080 2,98,080 2,98,080 2,98,080 2,98,080 2,98,080 0 0 0 0 0 0 Sitting Total Last Fee* Remuneration AGM (`) (`) attended 34,500 0 0 0 0 0 0 # 47,000 38,000 0 12,000 8,000 13,000 34,500 45,47,100 45,47,100 45,47,100 45,47,100 45,47,100 45,47,100 # 47,000 38,000 0 12,000 8,000 13,000 Yes Yes Yes No No No Yes Yes No No No Yes Yes
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.
Shri S. K. Vikamsey Shri A. R. Gala Shri J. K. Sampat Shri D. R. Gala Shri H. R. Gala Shri S. R. Gala Shri J. L. Gala Shri K. S. Vikamsey Shri L. D. Shah Dr. R. Varadarajan Shri Tushar K. Jani Shri Vijay D. Rai** Shri Mohinder Pal Bansal**
ID PD PD PD PD PD PD ID ID ID ID ID ID
24,84,000 17,65,020 24,84,000 17,65,020 24,84,000 17,65,020 24,84,000 17,65,020 24,84,000 17,65,020 24,84,000 17,65,020 0 0 0 0 0 0 0 0 0 0 0 0
ID – Independent Director
PD – Promoter Director
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* sitting fees of ` 4,000/- was paid for attending each meeting of Board of Directors and ` 2,500/- was paid for attending each meeting of Audit and Investors’ Grievance Committee Meeting till November, 2011. Thereafter, sitting fees of ` 10,000/- is paid for attending each meeting of Board of Directors and ` 5,000/- is paid for attending each meeting of Audit Committee and Investors’ Grievance Committee. # includes ` 2,500/- for 2010-2011. ** upto 4th October, 2011.
Corporate Governance Report
2.3
Sr. No.
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Code of Conduct has been circulated to all the Members of the Board and Senior Management Personnel of the Company and compliance of the same is affirmed by them. A declaration by the Managing Director under Clause 49 of the Listing Agreement regarding compliance with Code of Conduct is given below : In accordance with Clause 49I(D) of the Listing Agreement with the Stock Exchanges, I hereby confirm that all the Members of the Board and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct guideline as applicable to them for the Financial Year ended 31st March, 2012. Amarchand R. Gala Managing Director (4) AUDIT COMMITTEE 4.1 Composition The Audit Committee presently comprises of three Independent Directors namely Shri Kamlesh S. Vikamsey, Shri Shivji K. Vikamsey and Shri Liladhar D. Shah. The Chairman of the Audit Committee is an Independent Director namely Shri Kamlesh S. Vikamsey. 4.2 Shri Amit D. Buch, Company Secretary is Secretary to the Audit Committee. 4.3 Attendance Four Audit Committee Meetings were held during the year on 28th April, 2011, 28th July, 2011, 2nd November, 2011 and 7th February, 2012. The constitution of the Audit Committee was changed during the year as Shri Mohinder Pal Bansal ceased to be member of the Audit Committee upon his resignation as Director of the Company effective from 4th October, 2011. The composition of the Audit Committee, the number of meetings held and attended are as under :
Name of Director No. of Meetings Held No. of Meetings Attended
Directorships in Other Public Limited Companies of the Directors as at 31st March, 2012 :
Name of Director No. of Directorships No. of No. of Committee Committees Positions Chaired * Held * 7 3 -
1 2 3 4 5 6 7 8 9 10 11
Shri Shivji K. Vikamsey Shri Amarchand R. Gala Shri Jaisinh K. Sampat Shri Dungarshi R. Gala Shri Shantilal R. Gala Shri Harakhchand R. Gala Shri Jitendra L. Gala Shri Kamlesh S. Vikamsey Shri Liladhar D. Shah Dr. R. Varadarajan Shri Tushar K. Jani
2 10 -
* Committee includes Audit Committee and Investors’ (shareholders’) Grievance Committee. 2.4 Number of Board Meetings held and dates on which held: There were four Board Meetings held during 2011-2012 and gap between two Board Meetings did not exceed four months. The dates of the Board Meetings are - 28th April, 2011, 28th July, 2011, 2nd November, 2011, 7th February, 2012. 2.5 A brief resume of Directors seeking re-appointment: Shri Dungarshi R. Gala Shri Dungarshi R. Gala aged 76 years has vast experience in the field of educational book publishing. Shri Jitendra L. Gala Shri Jitendra L. Gala, a commerce graduate has rich experience in marketing field. 2.6 Shri Dungarshi R. Gala, Shri Amarchand R. Gala, Shri Harakhchand R. Gala and Shri Shantilal R. Gala are related as brothers. (3) CODE OF CONDUCT FOR DIRECTORS & SENIOR MANAGEMENT PERSONNEL The Board of Directors have adopted the Code of Conduct for the Directors and Senior Management Personnel. A copy of Code of Conduct has been put on the Company's Website www.navneet.com
Shri Kamlesh S. Vikamsey 4 4 Shri Shivji K. Vikamsey 4 4 Shri Liladhar D. Shah 4 3 Shri Mohinder Pal Bansal* 4 2 The Chairman of the Audit Committee was present at the last Annual General Meeting held on 15th September, 2011. The Minutes of the Audit Committee are noted at the meeting of the Board of Directors of the Company. * upto 4th October, 2011.
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Corporate Governance Report
4.4 (1) (2) (3) (4) Powers of Audit Committee To investigate any activity within its terms of reference. To seek information from any employee. To obtain outside legal or other professional advice. To secure attendance of outsiders with relevant expertise, if it considers necessary. 4.5 Broad Terms of References of the Audit Committee (1) To review with the management the Management discussion and analysis of financial condition and results of operations. (2) To review Statement of significant related party transactions (as defined by the Audit Committee) submitted by management. (3) To review Management letters / letters of internal control weaknesses issued by the statutory auditors. (4) To review Internal Audit Reports relating to internal control weaknesses. (5) To review appointment, removal and terms of remuneration of the Chief internal auditor. (6) To review with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter. (7) To overview the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible. (8) To recommend to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. (9) To approve payment to statutory auditors for any other services rendered by the statutory auditors. (10) To review with the management, the annual financial statements before submission to the board for approval, with particular reference to: a) Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of Clause (2AA) of Section 217 of the Companies Act, 1956. b) Changes, if any, in accounting policies and practices and reasons for the same. c) Major accounting entries involving estimates based on the exercise of judgement by management. d) Significant adjustments made in the financial statements arising out of audit findings.
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(11) (12) (13) e) Compliance with listing and other legal requirements relating to financial statements. f) Disclosure of any related party transactions. g) Qualifications in the draft Audit Report. To review with the management, the quarterly financial statements before submission to the board for approval. To review with the management, performance of statutory, internal auditors, and adequacy of the internal control system. To review the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Approval of appointment of CFO after assessing the qualifications, experience & background, etc. of the candidate. To discuss with internal auditors any significant findings and follow up there on. To review the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board. To discuss with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors. To carry out any other function as may be added by the Board of Directors in the terms of reference of the Audit Committee, by the Board from time to time.
(14) (15) (16)
(17)
(18)
(19)
(5) SUBSIDIARY COMPANIES The Company does not have a material non-listed Indian subsidiary Company whose turnover or networth exceeds 20% of the consolidated turnover or networth respectively of the holding Company in the immediately preceeding accounting year. The Board of Directors periodically review the investments and transaction of its subsidiary companies. Copies of the minutes of the meeting of Board of Directors of the subsidiary companies are placed at the subsequent Board meeting of the holding Company.
8
Corporate Governance Report
(6) INVESTORS’ GRIEVANCE COMMITTEE 6.1 Composition The composition of Investors' Grievance Committee is as under: (a) Shri Liladhar D. Shah (Independent Director) (b) Shri Kamlesh S. Vikamsey (Independent Director) (c) Shri Jaisinh K. Sampat (Executive Director) The Chairman of Investors' Grievance Committee is an Independent Director namely Shri Liladhar D. Shah. 6.2 Terms of Reference Investors' Grievance Committee meets periodically for the redressal of Investors' Grievance related to share transfers, transmissions, transpositions, re-materialisation, split and issue of duplicate share certificates, non-receipt of Annual Report, non-receipt of declared dividends and such other related matters. 6.3 Four Investors' Grievance Committee meetings were held during the year on 28th April, 2011, 28th July, 2011, 2nd November, 2011 and 7th February, 2012. The number of Investors' Grievance Committee Meetings held and attended are as under:
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6.4 Number and nature of complaints received during the year under review are as follows :
Description Transfer / Demat Non-receipt of Share Certificate Non-receipt of Dividend Warrant General Correspondence / Complaints Total Received Resolved Pending 98 1 45 180 324 98 1 45 180 324 0 0 0 0 0
(7) REMUNERATION COMMITTEE 7.1 Composition The Remuneration Committee of the Company was constituted on th 27 April, 2004 comprising of the following Members: • Shri Shivji K. Vikamsey (Chairman) • Shri Kamlesh S. Vikamsey • Shri Liladhar D. Shah Shri Amit D. Buch, Company Secretary is the Secretary of the Remuneration Committee. 7.2 Broad Terms of Reference The broad Terms of Reference of the Remuneration Committee are to evaluate and appraise the performance of the Managing / Executive Directors and Senior Management Personnel, determine and recommend to the Board the compensation payable to them. 7.3 Remuneration Policy The remuneration policy of the Company is based on performance of senior managerial personnels. The remuneration policy is in consonance with the existing industry practice.
Name of Director
No. of Meetings Held
No. of Meetings Attended
Shri Liladhar D. Shah 4 3 Shri Kamlesh S. Vikamsey 4 4 Shri Jaisinh K. Sampat 4 4 Shri Amit D. Buch, Company Secretary is the Compliance Officer. The Minutes of Investors' Grievance Committee Meetings are noted by the Board of Directors of the Company.
9
Corporate Governance Report
(8) GENERAL MEETINGS 8.1 The details of last three Annual General Meetings held are given below: Financial Year & Day & Date Meeting No. Time Venue Textile Committee Auditorium, (9) DISCLOSURES
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9.1 There were no transactions of material nature between the Company and its promoters, directors or the management, other subsidiaries or relatives that may have the potential conflict with the interest of the Company. The Register of contracts containing the transactions in which the directors are interested was placed before the Board regularly for its approval and concurrence. 9.2 There were no materially significant related party transactions which have potential conflict with the interest of the Company at large. 9.3 The Company has complied with various rules and regulations prescribed by Stock Exchange and SEBI, relating to the capital markets during the last three years. 9.4 Risk assessment and its minimisation procedures have been laid down by the Company and the same have been informed to the Board Members. These Procedures are periodically reviewed to ensure that the Executive Management controls risk through means of a properly defined framework. 9.5 The Company has fulfilled the following non-mandatory requirements as prescribed in Annexure ID to Clause 49 of the listing agreement with the Stock Exchanges: 9.6 The Company has set up a Remuneration Committee. Please see the Para on Remuneration Committee for the details.
2010-11 Twenty Fifth
Thursday
2009-10 Twenty Fourth
2008-09 Twenty Third
15th 3:30 p.m. Textile Committee Building, September, P. Balu Road, Near Tata Press, 2011 Prabhadevi Chowk, Mumbai – 400 025. Monday Textile Committee Auditorium, 6th 3:30 p.m. Textile Committee Building, September, P. Balu Road, Near Tata Press, 2010 Prabhadevi Chowk, Mumbai – 400 025. Friday Textile Committee Auditorium, 31st July, 3:30 p.m. Textile Committee Building, 2009 P. Balu Road, Near Tata Press, Prabhadevi Chowk, Mumbai – 400 025.
8.2 Special Resolutions passed at last three Annual General Meetings a) b) 25th AGM held on 15th September, 2011 : Nil 24th AGM held on 6th September, 2010 Re-appointment of Shri Amarchand R. Gala as Managing Director. Re-appointment of Shri Dungarshi R. Gala and Shri Harakhchand R. Gala as Wholetime Directors of the Company. c) 23rd AGM held on 31st July, 2009 : Nil
(10) MEANS OF COMMUNICATIONS 10.1 The financial Results and Press Releases are displayed on the Website of the Company at www.navneet.com, after its submission to Stock Exchanges. 10.2 The Company publishes its unaudited/audited quarterly results and audited financial results for the entire financial year in “The Economic Times” and “Maharashtra Times” newspapers in Mumbai. 10.3 Management Discussion and Analysis forms part of the Annual Report, which is being sent to the shareholders of the Company.
8.3 Passing of Resolutions by Postal Ballot No Postal Ballot was conducted during the Financial Year 2011-12. However, resolution(s), if required, shall be passed by postal ballot during the year ending 31st March, 2013 as per prescribed procedure.
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Corporate Governance Report
(11) GENERAL SHAREHOLDERS INFORMATION 11.1 26th Annual General Meeting : Date : 27th September, 2012 Time : 3:30 p.m. Venue : Textile Committee Auditorium, Textile Committee Building, P. Balu Road, Near Tata Press, Prabhadevi Chowk, Mumbai – 400 025. 11.2 Financial Year : 1st April, 2012 to 31st March, 2013 11.3 Financial Calendar : Board Meetings to be held for approving Quarterly Results : Particulars Date Last Week of July/first week of Quarterly Results for 1st Quarter August, 2012 Quarterly Results for 2nd Quarter Last Week of October/first week of November, 2012 Quarterly Results for 3rd Quarter Last Week of January/first week of February, 2013 Last Week of April/first week of Quarterly Results for 4th Quarter May, 2013 11.4 Date of Book Closures : The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, 22nd September, 2012 to Thursday, 27th September, 2012 (both days inclusive) for the purpose of payment of final dividend and Annual General Meeting. 11.5 Dividend paid during the year under review : The Company declared and paid interim dividend of ` 0.60 ps per share during 2011-2012. The final dividend for the financial year 2011-12 recommended by Directors, on approval by the shareholders at the ensuing Annual General Meeting, will be paid to those shareholders whose names appear in Company’s Register of Members/ list of Beneficial Owners provided by National Securities Depository Limited (NSDL) and Central Depository Securities (India) Limited (CDSL) as on 21st September, 2012. 11.6 Company’s Shares are listed on : Shares of the Company are listed on Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd.
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11.8 Volume of Shares traded and Stock Price Movement on a month to month basis :
Month BSE No. of Shares NSE No. of Shares BSE (High) (` ) 70.00 66.60 66.80 69.60 67.90 70.00 68.50 71.00 56.20 63.10 59.80 60.10 BSE (Low) (` ) 55.40 59.25 59.10 62.50 58.70 62.00 62.75 53.20 50.60 51.90 53.55 53.55 NSE NSE (High) (Low) (` ) (` ) 68.30 66.45 69.50 69.00 68.00 70.00 68.00 68.50 56.90 57.35 59.70 60.50 55.05 59.25 59.00 62.10 58.60 61.75 62.35 53.05 50.60 51.50 53.30 53.15
April, 2011 10418908 13466145 May, 2011 3520321 6201242 June, 2011 3391136 4470504 July, 2011 5045778 8568056 August, 2011 1984877 2439474 September, 2011 2621228 4549557 October, 2011 1122177 3505073 November, 2011 1492033 2610331 December, 2011 496312 836754 January, 2012 560964 792772 February, 2012 1823949 2064243 March, 2012 1631131 14310850
Navneet Publications Vs Nifty for year ended 31.03.2012
11.7 Stock Codes on Stock Exchanges : BSE : 508989 NSE : NAVNETPUBL ISIN : INE 060A01024 Listing Fees for FY2012-2013 have been paid to both the Stock Exchanges where the shares of the Company are listed.
11.9 Volume of Shares traded during the year under review as a percentage of the number of Shares outstanding: BSE : 14.32% NSE : 26.79%
11
Corporate Governance Report
11.10 Distribution of Shareholding as on 31st March 2012 :
No. of equity shares held 001-500 501-1000 1001-2000 2001-3000 3001-4000 4001-5000 5001-10000 10001&above Total No. of Shareholders 21121 3081 1908 791 923 294 877 814 29809 Percentage of Shareholders 70.85 10.34 6.40 2.65 3.10 0.99 2.94 2.73 100 No. of Shares 3725319 2402079 2778189 2012921 3380820 1393781 5967287 216554604 238215000 Percentage of Shareholding 1.56 1.00 1.17 0.85 1.42 0.59 2.50 90.91 100
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Particulars Held in dematerialised form in NSDL Held in dematerialised form in CDSL Physical form No. of shares 211392858 20269658 6552484 % of total share capital 88.74 8.51 2.75
Total 238215000 100 The Company's shares are regularly traded on Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. in electronic form. 11.14 Share Transfer in Physical Form Share Transfer in physical form can be lodged with the Registrar and Share Transfer Agents namely Link Intime India Private Limited at the address mentioned herein above or at their Branch Offices mentioned in its website. The transfers are normally processed within 15 days if the documents are complete in all respect and thereafter the share certificates duly transferred are dispatched. Investor’s Contact Information : Mr. Mahesh Masurkar Email : [email protected] 11.15 Outstanding GDRs / ADRs / Warrants: The Company has not issued any GDR(s) / ADR(s) / Warrants / Convertible instruments. 11.16 Plant Locations: The Company's Plants are located at the following places : Village Dantali, Behind Kasturi Nagar, Dist. & Tal. Gandhinagar, Gujarat. Gokhiware, Chinchpada, Vasai, Dist. Thane. Village Sayali, Silvassa. Rakanpur, Taluka Kalol, Dist. Mehsana. Village Khaniwade, Tal. Vasai, Dist. Thane. 11.17 Registered Office : Navneet Bhavan, Bhavani Shankar Road, Dadar(West), Mumbai-400 028 Tel. : +91- 22-66626565 Fax : +91- 22-66626470 E-mail : [email protected] 11.18 Compliance Officer : Company Secretary and Compliance Officer : E-mail :
11.11 Category of Shareholders as on 31st March 2012 : Category Promoters FIIs NRIs, OCBs Mutual Funds, Banks, Financial Institutions, Insurance Companies & Trust Bodies Corporate Individual Shareholders Other Clearing members Total 11.12 Registrar and Share Transfer Agents: Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup (West), Mumbai – 400 078 Tel : (91-022) 2594 6970 Fax : (91-022) 2594 6969 E-mail : [email protected] Website : www.linkintime.co.in 11.13 Dematerialisation of Shares and liquidity: The Shares of the Company are in compulsory dematerialisation segment and are available for trading system of both the depositories in India viz. National Securities Depository Limited (NSDL) and Central Depository Securities (India) Limited (CDSL). The status of dematerialisation of shares as on 31st March, 2012 is as under : % to Paid-up Share Capital 61.80 5.68 0.54 6.10 6.07 19.56 0.25 100
Mr. Amit D. Buch [email protected]
12
Corporate Governance Report
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Experience in specific functional areas Qualification Directorship held in other companies Committee positions held in other companies Equity Shares held 56,800
12. Details Of Directors Seeking Re-appointment at the forthcoming Annual General Meeting (pursuant to Clause 49 of the Listing Agreement)
Name of Director Date Of Birth Date of Appointment
Shri Dungarshi R. Gala
31/03/1936
30/04/1993
He has very rich and wide experience in the field of educational book publishing.
S.S.C.
NIL
NIL
Shri Jitendra L. Gala
14/01/1942
30/05/1992
He has wide experience in marketing field.
B.Com.
NIL
NIL
29,04,825
13
Corporate Governance Report
CEO AND CFO CERTIFICATE
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To The Board of Directors We hereby certify that a) we have reviewed financial statements and the cash flow statements for the year ended 31st March, 2012 and that to the best of our knowledge and belief i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; ii) these statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations. b) there are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the Company's code of conduct. c) we accept responsibility for establishing and maintaining internal controls for financial reporting, we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken to rectify these deficiencies. d) we further certify that i) there have been no significant changes in the internal control over financial reporting during the year, ii) there have been no significant changes in the accounting policies during the year; and iii) there have been no instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company's internal control system over financial reporting. Place Date : Mumbai : 23rd August, 2012 For Navneet Publications (India) Limited sd/sd/Amarchand R. Gala Gnanesh D. Gala Managing Director Chief Financial Officer
CERTIFICATE FROM AUDITORS REGARDING
COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE
To the members of Navneet Publications (India) Ltd.
We have examined the compliance of Corporate Governance by Navneet Publications (India) Limited, for the year ended 31st March, 2012 as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India. The compliance of Corporate Governance is the responsibility of the Company’s management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statement of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the condition of Corporate Governance as stipulated in the above mentioned Listing Agreement. We state that generally no investor grievance is pending for a period exceeding one month against these Company as per the records maintained by the Registrar and Share Transfer Agent of the Company and reviewed by the Investors’ Grievance Committee. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. For Ghalla & Bhansali Chartered Accountants Place : Mumbai sd/Date : 23rd August, 2012 Haresh K. Chheda Partner Membership No. 38262
14
Performance Indicators
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* The Figure are after considering the issue of Bonus Shares.
15
Financial Highlights (Standalone)
2007-08 Revenue PBDT Depreciation PBT Tax Net Profit (PAT) Dividend Dividend (%) (Face Value at ` 2/-) Book Value (Face Value at ` 2/-)* Equity Capital Reserves & Surplus Gross Block Net Block Return on Net Worth (%) PBIT Margin % PAT Margin % Debt-Equity** EPS (Post Tax) (` 2/- per share)* EPS (Pre Tax) (` 2/- per share)* CEPS (Post Tax) (` 2/- per share)* CEPS (Pre Tax) (` 2/- per share)* Dividend Payout% to Net Profits MARKET CAP (` in Cr.) 40,043 8,412 1,022 7,390 2,013 5,377 2,287 120 9.7 1,906 21,148 17,408 8,821 23.3 21.7 13.4 0.1 2.3 3.1 2.7 3.5 49.8 916.0 2008-09 50,490 9,862 1,171 8,691 2,797 5,894 2,477 130 11.0 1,906 24,188 18,506 8,813 22.6 20.3 11.7 0.1 2.5 3.6 3.0 4.1 49.2 474.0 2009-10
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2010-11 53,624 12,935 1,144 11,791 4,036 7,755 3,335 70 14.2 4,764 29,178 23,188 11,431 22.8 24.7 14.5 0.0 3.3 4.9 3.7 5.4 50.1 1313.8 2011-12 60,965 14,062 1,510 12,552 4,200 8,026 3,335 70 16.0 4,764 33,315 28,957 15,999 21.1 23.9 13.2 0.0 3.4 5.3 4.0 5.9 48.3 1380.5 52,221 11,427 1,164 10,264 3,466 6,798 2,382 50 12.6 4,764 25,296 19,338 8,624 22.6 22.2 13.0 0.0 2.9 4.3 3.3 4.8 41.0 1217.0
16
NOTES : 1) * The Figure are after considering the issue of Bonus Shares. 2) **Debts consist of Long term borrowings. 3) The figures are ` in Lacs except for EPS, CEPS, Book value and figure in %.
Segmentwise Income from Operations (` in Lacs) `
2009-10 (Mar-10)
Sales Publishing Division Educational Books Children’s and General Books Children’s and General Books Export Stationery Division Exports (including incentives) Paper Stationery (Domestic) Non Paper Stationery (Domestic) Others
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2010-11 (Mar-11) 2011-12 (Mar-12)
25,168 1,569 926
27,663
27,350 1,635 919
29,904
32,662 1,913 827
35,402
6,966 14,493 2,553
24,012 545 52,220
5,379 15,195 2,638
23,212 508 53,624
5,424 16,494 3,009
24,927 636 60,965
17
Notice
NOTICE is hereby given that the Twenty-Sixth Annual General Meeting of Navneet Publications (India) Limited will be held on Thursday, 27th September, 2012 at 3:30 p.m. at Textile Committee Auditorium, Textile Committee Building, P. Balu Road, Near Tata Press, Prabhadevi Chowk, Mumbai - 400 025 to transact the following business: ORDINARY BUSINESS : 1) To receive, consider and adopt the Audited Profit and Loss Account for the year ended 31st March, 2012 and the Balance Sheet as at that date together with the Reports of Board of Directors and Auditors thereon. 2) To declare final dividend for the financial year ended 31st March, 2012. 3) To appoint a Director in place of Shri Dungarshi R. Gala, who retires by rotation, and being eligible, offers himself for reappointment. 4) To appoint a Director in place of Shri Jitendra L. Gala, who retires by rotation, and being eligible, offers himself for reappointment. 5) To appoint M/s. Ghalla & Bhansali, Chartered Accountants, as Statutory Auditors of the Company and to fix their remuneration. SPECIAL BUSINESS: 6) To consider and, if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution : “RESOLVED THAT pursuant to the provisions of Section 31 and all other applicable provisions, if any, of the Companies Act, 1956 and Rules framed thereunder (including any statutory modifications or re-enactment thereof for the time being in force) or any law for the time being in force and subject to all other necessary approvals, if any, as may be required in this
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regard from appropriate authorities or bodies, the existing Articles of Association of the Company be amended as under: i. The following Article be inserted after the existing Article 74 as Article 74A : Participation through Electronic Mode 74A Notwithstanding anything contrary contained in the Articles of Association, the Company may provide Video Conference facility and / or other permissible electronic or virtual facilities for the communication to enable Shareholders of the Company to participate in General Meetings of the Company. Such participation by the Shareholders at General Meetings of the Company through Video Conference facility and / or use of other permissible electronic or virtual facilities for communication shall be governed by such legal or regulatory provisions as applicable to the Company for the time being in force. ii. The following Article be inserted after the existing Article 128 as Article 128A : Participation through Electronic Mode 128A Notwithstanding anything contrary contained in the Articles of Association, the Director(s) may participate in Meetings of Board and Committee thereof , through Video Conference facility and/or other permissible electronic or virtual facilities for the communication. Such participation by the Director(s) through Video Conference facility and / or use of other permissible electronic or virtual facilities for communication shall be governed by such legal or regulatory provisions as applicable to the Company for the time being in force. iii. The following proviso be inserted after the existing Article 130: Provided further that a Director participating in a Meeting through use of Video Conference or any other permissible
18
Notice
electronic mode of communication shall be counted for the purpose of quorum, notwithstanding anything contrary contained in the Articles of Association. iv. The following Article be inserted after the existing Article 79 as Article 79 A : 79A Notwithstanding anything contrary contained in the Articles of Association, a document may be served by the Company on any member by any electronic mode of communication and in such manner as is /may be permitted by any law. Where a document is served by any such electronic mode, the service thereof shall be deemed to be effected in the manner as is/ may be provided by any law. v. The following Article be inserted after the existing Article 9 as Article 9 A: Buy Back of Shares 9A Notwithstanding anything contrary contained in the Articles of Association, the Company is hereby authorized to buyback its own shares or securities as it may consider necessary, subject to such limits, upon such terms and conditions, and in accordance with the provisions of Sections 77A, 77AA and 77B of the Companies Act, 1956 or any Statutory Modification thereto and such other regulations and guidelines as applicable in this regard. RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors of the Company be and is hereby authorised to take all such steps and give such directions, as may in its absolute discretion, be deemed necessary and to settle any question or difficulty that may arise in this regard.” By Order of the Board of Directors sd/Place : Mumbai Amit D. Buch Date : 23rd August, 2012 Company Secretary Registered Office: Navneet Bhavan, Bhavani Shankar Road, Dadar( West), Mumbai - 400028 NOTES : [A]
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A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE (ON POLL) INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE INSTRUMENT APPOINTING A PROXY, IN ORDER TO BE EFFECTIVE MUST BE DULY FILLED, STAMPED, SIGNED AND DEPOSITED AT THE COMPANY’S REGISTERED OFFICE NOT LATER THAN 48 HOURS BEFORE THE COMMENCEMENT OF MEETING. The Explanatory Statement pursuant to Section 173(2) of the Companies Act,1956 in respect of the Special Business at Item No. 6 is annexed hereto and forms part of the Notice. Corporate members are requested to send a certified true copy of the Board resolution authorising their representative(s) to attend and vote at the Annual General Meeting. The Register of Members and the Share Transfer Books of the Company will remain closed from 22nd September, 2012 to 27th September, 2012 (both days inclusive). The final dividend as recommended by the Board of Directors, if declared at the Annual General Meeting, will be paid to those persons : (a) Whose names appear as Beneficial Owners as at the end of business hours on 21st September, 2012 in the list of Beneficial Owners to be furnished by National Securities Depository Limited and Central Depository Services (India) Limited in respect of shares held electronic/demat mode; and (b) whose names appear as Members in the Register of Members of the Company after giving effect to valid share transfers in physical form lodged with the Company/ Registrar and Share Transfer Agents M/s. Link Intime India Pvt. Ltd. on or before 21st September,2012. The final dividend, if declared at the Annual General Meeting will be paid on 10th October,2012.
[C]
[D]
[E]
[F]
19
Notice
[G] Change of Address/ Bank details: Members holding shares in physical form are requested to inform the Company’s Registrar and Share Transfer Agents M/s. Link Intime India Pvt. Ltd. immediately of any change in their address and bank details. Members holding shares in dematerialised forms are requested to intimate all changes with respect to their address, bank details, mandate etc. to their respective Depository Participants. These changes will then be automatically reflected in the Company’s records which would help the Company to provide efficient and better service to the Members. Members holding shares in dematerialised form are requested to provide their latest Bank Account details (Core Banking Solutions enabled account number, 9 digit MICR and 11 digit IFS code) with their Depository Participants. Members holding shares in physical form are requested to provide their latest Bank Account details (Core Banking Solutions enabled account number, 9 digit MICR and 11digit IFS code) along with their Folio Number to Company’s Registrar and Share Transfer Agents M/s. Link Intime India Pvt. Ltd. Pursuant to provisions of Section 205A and 205C of the Companies Act, 1956, the amount of dividend remaining unclaimed as unpaid for a period of seven years from the date of transfer to the unpaid dividend account is required to be transferred to ‘’Investor Education and Protection Fund “(IEPF) of the Central Government. Accordingly, the Company has transferred unclaimed or unpaid amounts of second interim dividend for the financial year 2003-04, first and second interim dividend for financial year 2004-05 to IEPF. Dividends declared by the Company thereafter, are still lying in the respective unpaid dividend accounts of the Company. Members who have not yet encashed these dividend(s) are requested to contact Company’s Registrar and Share Transfer Agents M/s. Link Intime India Pvt. Ltd. Unclaimed first interim dividend for financial year 200506 is due for transfer to IEPF in November,2012. Kindly note that no claim shall lie against the Company after the transfer of the said dividend amount to IEPF. [J]
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All documents referred to in the accompanying Notice and Explanatory Statement are open for inspection at the Registered Office of the Company on all working days excluding Saturdays between 11.00 a.m. and 1.00 p.m. upto the date of Annual General Meeting. Members desiring any information, as regards the Annual Accounts are requested to write to the Company at least ten days before the date of Annual General Meeting to enable the Management to keep the information ready. By Order of the Board of Directors sd/Amit D. Buch Company Secretary
[K]
[H]
Place : Mumbai Date : 23rd August, 2012 Registered Office: Navneet Bhavan, Bhavani Shankar Road,
Dadar (West), Mumbai -400028
ANNEXURE TO NOTICE Explanatory Statement as required under Section 173(2) of the Companies Act, 1956 in respect of Special Business at Item No. 6 of the Notice. Item No. 6 The Ministry of Corporate Affairs (‘MCA”), Government of India, New Delhi vide General Circulars No. 27/2001 and 28/2001 dated 20th May, 2011 and Circular No. 35/2011 dated 6th June, 2011 has permitted companies to hold Board Meetings and Shareholders Meetings through Video Conference facility, as part of Green initiatives under Corporate Governance. Further, MCA vide Circular No.72/2011 dated 27th December, 2011 made Video Conference facility at the Shareholders Meetings optional to the listed companies.
20
Notice
Section 53 of the Companies Act, 1956 and Article 79 provides for modes of service of documents on a Member of the Company. The MCA has vide Circular No. 17/2011 dated 21st April,2011 stated that a Company would have complied with Section 53 if the service of a document has been made through electronic mode, provided that the Company has obtained e-mail addresses of its Members for sending Notices/ Documents through e-mail addresses with the Company. Clause 32 of the Listing Agreement of the Stock Exchanges also permits a Company to send soft copies of full Annual Reports, Balance Sheet, Statement of Profit & Loss and Directors’ report to all Members who have registered their e-mail addresses for the purpose. Section 77A,77AA and 77B of the Companies Act, 1956 stipulate provisions for purchase of own shares or securities by a Company. However, pursuant to clause (a) of sub-section (2) of Section 77A of the said Act, the Company is required to have necessary authorization in its Articles of Association for buy back of shares or securities. It is proposed to carry out necessary amendments in the existing Articles of Association of the Company by inserting appropriate enabling provisions to give effect to the above Circulars of MCA and for buy back of shares or securities as set out in the Special Resolution under Item No. 6 of the Notice convening this Annual General Meeting. In terms of Section 31 of the Companies Act, 1956 approval of the Members by way of a Special Resolution is required to amend the Articles of Association of the Company. A copy of the existing Memorandum and Articles of Association of the Company alongwith the proposed draft amendments to the Articles of Association is available for inspection by any Member at the Registered Office of the Company between 11.00 a.m. and 1.00 p.m. on all working days excluding Saturdays upto the date of Annual General Meeting. Your Directors recommend for your approval passing of the Special Resolution at Item No. 6 of the Notice.
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None of the Directors of the Company is, in any way, concerned or interested in the said resolution. By Order of the Board of Directors sd/Amit D. Buch Company Secretary
Place : Mumbai Date : 23rd August, 2012 Registered Office: Navneet Bhavan, Bhavani Shankar Road, Dadar (West), Mumbai -400028
Important Communication to Members
The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing paperless compliances by the companies and has issued circular stating that service of notice/ document including Annual Report can be sent by e-mail to its members. To support this green initiative of the Government in full measure, members who have not registered their e-mail addresses, so far, are requested to register their e-mail addresses, in respect of electronic / demat holding with their Depository Participant (DP) and those holding physical shares with the Company or its Registar and Share Transfer Agents.
21
Directors’ Report
Dear Shareowners,
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Your Directors have pleasure in presenting their Twenty-Sixth Annual Report along with the Audited Statement of Accounts of the Company for the year ended 31st March, 2012. (1) FINANCIAL RESULTS: Particulars (a) Profit before Interest, Depreciation and Tax (b) Less : Interest (c) Profit before Depreciation and Tax (d) Less : Depreciation (e) Profit Before Tax (f) Less : (i) Provision for Tax (ii) Provision for deferred Tax (iii) (Add) / Less : Provision of Tax for earlier years (g) Profit After Tax before Extra-ordinary item (h) Less : Extra-ordinary item (i) Profit After Tax (j) Balance brought forward from last year (k) Profit available for Appropriation APPROPRIATIONS : (a) Interim Dividend (b) Final Dividend (c) Corporate Tax on Dividend (d) General Reserve (e) Balance Carried to Balance Sheet 1429 1906 541 1000 22302 27178 1429 1906 547 1000 19152 24034 Current Year 14596 534 14062 1510 12552 4076 124 8352 326 8026 19152 27178 (` In Lac) Previous Year 13229 294 12935 1144 11791 3940 100 (4) 7755 7755 16279 24034
22
Directors’ Report
(2) DIVIDEND : Your Directors are pleased to recommend a final dividend of ` 0.80 ps (40%) per share for the financial year ended 31st March,2012. The Company had declared and paid interim dividend of ` 0.60 ps (30%) per share during the year under review. The interim dividend so paid alongwith final dividend, if declared, work out to above 48% (including dividend distribution tax) as against your Company’s policy of distribution of minimum of 25% of its net profit. (3) OPERATIONS : (i) During the year under review, the Company achieved a turnover of ` 60965 Lac as compared to ` 53624 Lac in FY 11. (ii) Profit before depreciation and income tax for the year under review stood at ` 14062 Lac as against ` 12935 Lac in the previous year. (iii) After providing ` 1510 Lac for depreciation, ` 4200 Lac for income tax, deferred tax and ` 326 Lac for diminution in the value of investment in its subsidiary, profit after tax for the period stood at ` 8026 Lac as against ` 7755 Lac achieved in the previous year on standalone basis. (4) PERFORMANCE OF DIVISIONS : Content Division During the year under review, your Company achieved revenue of ` 35404 Lac (` 29904 Lac), thereby registering a growth of 18%. Your Directors are optimistic to achieve good double digit growth for the next few years also in publication segment. During the year under review, publication segment maintained its operating margin at 33% and is expected to maintain the similar operating margin growth in the current year as well. Your Directors are pleased to inform that during the year under review, the acceptance of the products of one of the subsidiaries of your Company namely eSense Learning Pvt. Ltd. has not only been picked up amongst the schools but also the desire for the product is reflected amongst students and parents as well. Your Directors are pleased to further inform that as of March, 2012 the digital content have been installed in 925 Institutions covering around 4,500 classrooms. As this e-learning module is gaining acceptance from student and teacher community in the State of Maharashtra and Gujarat, your Company has accelerated its efforts on production and marketing. Your Directors are of the view that these efforts would enable your Company to accomplish decent numbers in the years to come.
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Stationery Division During the year under review, the revenues from stationery division grew at 7% on a y- o- y basis at ` 24927 Lac as against revenue of ` 23212 Lac in the previous year. This was mainly on account of severe competition from the new entrants in the domestic market. Your Directors are pleased to inform that during the current year, with strong export order in pipeline, your Company anticipates that this segment would show remarkable improvement in the revenue from export in FY13. (5) SUBSIDIARY COMPANIES : The Ministry of Corporate Affairs (MCA), Government of India has vide its General Circular No.2/11 dated 8th February, 2011 issued directions under Section 212(8) of the Companies Act, 1956 granting general exemption to companies from attaching to their Balance Sheets, the Accounts and other documents of their subsidiaries, subject to fulfilment of specified conditions. In view of this general exemption, the Board of Directors of the Company has given its consent for not attaching the Accounts and other documents of its subsidiary companies with the Annual Accounts of the Company, in relation to the financial year ended 31st March,2012. Further, a statement containing the relevant particulars prescribed under the general exemption for subsidiary companies is enclosed in this Annual Report. The Consolidated Accounts have been prepared in accordance with Accounting Standard (AS-21), on Consolidated Financial Statements notified under the Companies (Accounting Standards) Rules, 2006. The Audited Consolidated Accounts and Cash Flow Statement comprising of the Company and its subsidiary companies forms part of this Annual Report. The Company will make available the Annual Accounts of its subsidiary companies and related information to any Member of the Company who make a written request to the Company Secretary at the Registered Office of the Company. (6) As we (a) DIRECTORS’ RESPONSIBILITY STATEMENT : required under Section 217(2AA) of the Companies Act, 1956, hereby state : that in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; (b) that the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give true and fair view
23
Directors’ Report
of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; (c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) that the Directors have prepared the Annual Accounts on a going concern basis. (7) DIRECTORS : In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, Shri Dungarshi R. Gala and Shri Jitendra L. Gala retire by rotation and being eligible, offer themselves for re-appointment. A brief profile of the Directors proposed to be re-appointed is given as part of Corporate Governance Report. During the year under review, Shri Vijay D. Rai and Shri Mohinder Pal Bansal resigned from Directorship of the Company. The Board of Directors has placed on record its appreciation of the invaluable contribution made by them during their tenure with the Company. (8) SCHEME OF AMALGAMATION : The Board of Directors has approved the Scheme of Amalgamation of Lakheni Publications Pvt. Ltd. with the Company and their respective Shareholders. The said scheme is subject to such consent, approval, sanction of the High Court of Judicature of Bombay and all other regulatory approvals as may be necessary for its implementation. (9) CORPORATE GOVERNANCE : Your Company has complied with Clause 49 of the Listing Agreement entered with the Stock Exchanges. A report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement alongwith the Auditor's Certificate on compliance with the Corporate Governance forms part of this Annual Report. (10) MANAGEMENT DISCUSSION AND ANALYSIS : As per Clause 49 of the Listing Agreement, Management Discussion and Analysis report forms part of this Annual Report. (11) NETWORTH AND BORROWING : Net worth of your Company increased to ` 38080 Lac against ` 33942 Lac in the previous year. Your Company borrowed in foreign
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currency to fund its windmill power project of which ` 1324 Lac is outstanding as at balance sheet date which is classified as long term debt. Further, your Company utilises the credit facilities from the banks and other short term finances for its working capital requirements only. (12) CRISIL RATING : Your Company’s short term debt programme continues to be rated by CRISIL as A1+ (pronounced as A one Plus). This rating indicates very strong degree of safety with regard to timely payment of interest and principal on instrument. (13) CORPORATE SOCIAL RESPONSIBILITY : Your Company continues to use eco friendly material for most of its major products catering to environmental needs and also continues with its corporate social responsibility initiative and donates mainly in areas of medical aid, education and rehabilitation programmes. For the financial year 2012, your Company donated ` 233 Lac. The management will continue to fulfill its social responsibility on an ongoing basis towards society in whatever best possible manner. (14) FIXED DEPOSITS : Your Company has not accepted any fixed deposits during the year under review. (15) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO : The information as required under Section 217 (1) (e) of the Companies Act,1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 is given in Annexure'A' forming part of this Report. (16) PARTICULARS OF EMPLOYEES : The information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this Report and Accounts are being sent to all members of the Company excluding the Statement of Particulars of Employees under Section 217(2A) of the Companies Act, 1956. Any Member interested in obtaining a copy of said statement may write to Company Secretary at the Registered Office of the Company.
24
Directors’ Report
(17) AUDITORS : M/s.Ghalla & Bhansali, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a letter from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.
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(B) Technology Absorption FORM - B Form of Disclosure of Particulars with respect to Technology Absorption Research & Development (1) Efforts in brief towards technology absorption, adaptation & innovation Through visits of technical personnel to developed Western countries, the 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, the Company has been able to achieve a higher production, accuracy and perfection in printing. (3) In case of Imported Technology None, The Company has (i) Technologies Imported (ii) Year of Import not imported any (iii) Has the technology been fully absorbed? Technology (C) Foreign Exchange Earnings and Outgo The Company’s export turnover has been ` 5633 Lac. Total Foreign Exchange earned and used: (i) Foreign Exchange earned : ` 5504 Lac (ii) Foreign Exchange used : ` 1157 Lac For and on behalf of the Board of Directors sd/Place : Mumbai Date : 23 August, 2012
rd
(18) COST AUDITORS : M/s.Ashish S. Bhavsar & Co., Cost Accountants have been duly appointed as Cost Auditors for the stationery division of the Company for current financial year ending 31st March, 2013. The Cost Audit Reports are required to be filed within 180 days from the end of the financial year. The Cost Audit Report for the financial year ended 31st March, 2012 will be filed within the prescribed period.
(19) INDUSTRIAL RELATIONS : During the year under review, cordial and harmonious relationship continued between the management and employees at all levels.
(20) ACKNOWLEDGEMENT : Your Directors take this opportunity to thank all shareholders, valued customers, suppliers, bankers, government and statutory authorities and stock exchanges for their continued support to the Company. Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Company’s employees. For and on behalf of the Board of Directors sd/: Mumbai Shivji K. Vikamsey : 23rd August, 2012 Chairman
Place Date
Shivji K. Vikamsey Chairman
Annexure ‘A’ to Directors’ Report
Particulars required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. (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 are made towards energy conservation.
25
Section 212 Statement of Subsidiary Companies
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Grafalco Ediciones S.L. 31st December, 2011* eSense Learning Pvt. Ltd. 31st March, 2012 3,748,500 Equity shares ` 10/- each 90.69% NIL
Statement pursuant to Section 212 of the Companies Act, 1956, relating to the Subsidiary Companies for the year ended 31st March 2012
Name of the subsidiary company 1. Financial Year of the subsidiary company
2. No. of Equity shares in subsidiary company held by 678,006 Equity Shares Navneet Publications (I) Ltd. at the above date @ Euro 1 each % of holding (Equity) 100% % of holding (Preference) NIL 3. The net aggregate of profits/(losses) of the subsidiary company so far as it concerns the members of Navneet Publications (I) Ltd : (i) Dealt with in the Accounts of the Navneet Publications (I) Ltd. amounted to : a) for the subsidiary’s financial year ended 31st December, 2011 & 31st March, 2012 NIL b) for the previous financial years of the subsidiary since it became a subsidiary of Navneet Publications (I) Ltd. NIL (ii) Not dealt with in the Accounts of the Navneet Publications (I) Ltd. amounted to : a) for the subsidiary’s financial year ended 31st December, 2011 & 31st March, 2012 (` 17,547,254) b) for the previous financial years of the subsidiary since it became a subsidiary of Navneet Publications (I) Ltd. (` 123,099,832) 4. Changes in the interest of the Navneet Publications (I) Ltd; between the end of the financial year of the subsidiary and 31st March, 2012. a) Nos. of shares 30,000 b) Extent of holding 95.58% 5. Material changes between the end of the financial year of the subsidiary and 31st March, 2012. a) Sale of IPR 98,265,000 b) Loan repayment by subsidiary 136,242,784 c) Investments realised 1,124,674 * For consolidation purpose accounts of Grafalco Ediciones S.L. are considered up to 31.03.2012.
NIL NIL
(` 31,927,272) (` 98,275,809)
NIL NIL
NIL NIL NIL
For and on behalf of the Board Place: Mumbai sd/Amit D. Buch Company Secretary sd/A. R. Gala Managing Director sd/S. K. Vikamsey Chairman
26
Date: 23rd August, 2012
Auditor’s Report
AUDITORS’ REPORT TO THE MEMBERS OF NAVNEET PUBLICATIONS (INDIA) LIMITED We have audited the attached Balance Sheet of NAVNEET PUBLICATIONS (INDIA) LIMITED, at 31st March, 2012, the Statement of Profit and Loss and Cash Flow Statement of the Company for the period ended on that date annexed thereto. These financial statements are the responsibility of the Company’s Management. Our Responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on the test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis of our opinion. 1. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of Sub Section 4A of Section 227 of the Companies Act, 1956, we enclose in the annexure attached hereto, a statement on the matter specified in para 4 and 5 of the said order. Further to our comments in the Annexure referred to in para (1) above, we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of the books. Place : Mumbai Date : 23rd August, 2012 c)
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The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report, is in compliance with the Accounting Standards specified by the Institute of Chartered Accountants of India, referred to in sub-section (3C) of section 211 of the Companies Act, 1956; to the extent applicable to the Company. On the basis of the written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. ii. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012. In the case of Statement of Profit and Loss, of the profit for the period ended on that date; and In the case of Cash Flow Statement, of the cash flows for the year ended on that date. For Ghalla & Bhansali Chartered Accountants (Registration No. 103142W) sd/Haresh K.Chheda Partner Membership No. 38262 d)
e)
f)
2.
iii.
b)
27
Annexure to Audit Report U/S 227(4A) of the Companies Act, 1956.
(Referred to in paragraph 1 of our report of even date on the accounts for the year ended 31st March, 2012 of NAVNEET PUBLICATIONS
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given to us, and as it appears from Register maintained under section 301 of the Companies Act, 1956 the company has not taken any loans secured or unsecured from companies, firms or other parties listed in the said register. Consequently, the provisions of clause4(iii) (e), (f), and (g) of the Companies (Auditor’s Report) Order, 2003 are not applicable.
(INDIA) LIMITED)
1. a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. b) All the assets have not been verified by the management during the year but, according to the information and explanations given to us, and in our opinion the intervals for verification are reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification. c) In our opinion, fixed assets disposed off during the year were not substantial and therefore do not affect the going concern assumption. a) In our opinion, the inventory of the Company has been physically verified by the management at reasonable intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them. b) In our opinion and according to the information and explanation given to us, the procedures for physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of its inventories and discrepancies noticed on such physical verification between stock and the book records were not material. a) According to information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Consequently, the provisions of clause 4(iii) (b), (c) and (d) of the Companies (Auditor’s Report) Order, 2003 are not applicable. b) In our opinion and according to the information and explanation
4.
In our opinion and according to the information and explanations given to us, the company has adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have we been informed of any instance of continuing failure to correct major weaknesses in internal control. a) In our opinion and to the best or our knowledge and belief, and according to information and explanation given to us, the particulars of contracts or arrangements referred to in section 301 of the companies Act, 1956 have been entered in the register maintained under section 301 of the companies Act, 1956. b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies Act, 1956 and exceeding value of ` 5,00,000/- in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time. The company has not accepted any deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under. In our opinion, the Company has adequate internal audit system commensurate with the size and nature of its business. We have broadly reviewed the books of account maintained by
2.
5.
3.
6.
7. 8.
28
Annexure to the Auditor’s Report
the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records have been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. 9. a) According to the information and explanation given to us and according to the books and records as produced and examined by us, in our opinion, the undisputed statutory dues in respect of provident fund, investors education and protection fund, employees state insurance, income tax, VAT, wealth tax, service tax, custom duty, excise duty, cess and other as applicable have been regularly deposited by the company during the year with appropriate authorities. b) According to the information and explanation given to us, there are no dues outstanding of VAT, income tax, customs duty, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute, except for the following. Nature of Dues Amount (In Lacs) ` Forum where disputes is Pending 13.
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The Company is not a chit or a nidhi/ mutual benefit fund/ society, therefore, the clause 4(xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities. Hence clause 4(xiv) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company. In our opinion and according to the information and explanations given to us, the terms and conditions of guarantee given by the Company for loans taken by subsidiary company from banks or financial institutions is not, prima facie, prejudicial to the interest of the Company. The Company has obtained term loan during the year, and in our opinion and according to the information and explanations given to us, the term loan obtained are applied for the purpose for which the loans are obtained. According to the information and explanation given to us and on an overall examination of the balance sheet and cash flow of the Company, we report that no funds raised on short-term basis have been used for long-term investment. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year. The Company has not issued any debentures during the year. Hence clause 4(xix) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the company. The company has not raised any money by public issue during the year. Hence clause 4(xx) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the company According to the information and explanations given to us, during the year, no fraud by or on the Company has been noticed or reported during the course of our audit. 14.
15.
16.
17.
18.
Name of the Statute I.T. Act, 1961 I.T. Act, 1961 I.T. Act, 1961 I.T. Act, 1961 10.
19.
Assmt. Dues A.Y. 00-01 26.08 Bombay Hight Court Assmt. Dues A.Y. 01-02 11.17 Bombay Hight Court Assmt. Dues A.Y. 02-03 45.13 Bombay Hight Court Assmt. Dues A.Y. 09-10 2.98 CIT(A)
20.
21. The Company has neither accumulated losses as at March 31, 2012, nor has it incurred any cash loss during the financial year ended on that date and the immediately preceding financial year. According to information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders during the year. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
11.
12.
Place : Mumbai Date : 23rd August, 2012
For Ghalla & Bhansali Chartered Accountants (Registration No. 103142W) sd/Haresh K.Chheda Partner Membership No. 38262
29
Balance Sheet
Particulars EQUITY AND LIABILITIES 1. Shareholders’ Funds a) Share Capital b) Reserves & Surplus 2. Share Application Money Pending Allotment 3. Non-Current Liabilites a) Long-Term Borrowings b) Deferred Tax Liabilities (Net) c) Long-Term Provisions 4. Current Liabilities a) Short-Term Borrowings b) Trade Payables c) Other Current Liabilities d) Short-Term Provisions Total ASSETS 1. Non-Current Assets a) Fixed Assets i) Tangible Assets ii) Intangible Assets iii) Capital work-in-progress b) Non-Current Investment c) Long-Term Loans and Advances d) Other Non-Current Assets 2. Current Assets a) Inventories b) Trade Receivables c) Cash and Bank Balances d) Short-Term Loans and Advances e) Other Current Assets Total Significant Accounting Policies & Notes on Financial Statements
As per our report of even date attached hereto For and on behalf of Ghalla & Bhansali sd/Chartered Accountants (Registration No: 103142W) sd/Haresh K. Chheda Amit D. Buch Partner (Membership No. 38262) Company Secretary Mumbai : 23rd August, 2012
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Note No. As at 31st March, 2012 ` In Lacs 4,764 33,316 38,080 794 452 359 1,605 13,195 1,498 3,026 2,225 19,944 59,629 As at 31st March, 2011 ` In Lacs 1 2 4,764 29,178 33,942 827 328 226 1,381 4,402 706 2,143 2,306 9,557 44,879
3 4 5
6 7 8 9
10 10 11 12 13 14
14,797 1,202 337 16,336 431 6,315 27 23,109 21,715 11,175 396 2945 289 36,520 59,629
11,240 191 983 12,414 766 2,813 129 16,122 17,660 8,068 1,046 1,673 310 28,757 44,879
15 16 17 18 19
1 to 46
For and on behalf of the Board sd/A. R. Gala Managing Director sd/S. K. Vikamsey Chairman
30
Statement of Profit and Loss
For the year ended 31st March, 2012 Particulars Income Revenue from operations Other Income Total Revenue Expenses Cost of Material consumed Purchase of Stock-in-Trade Changes in Inventories of Finished Good, work-in-progress and Stock-in-Trade Employee Benefits Expenses Financial Costs Depreciation and Amortization Expense Other Expenses Note No.
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For the year ended For the year ended 31st March, 2012 31st March, 2011 ` In Lacs 20 21 60,965 859 61,825 ` In Lacs 53,624 827 54,450
22 23 24 25 10 26
30,469 146 (691) 5,408 534 1,510 11,897 49,273 12,552 (326) 12,226
26,260 101 (320) 4,771 294 1,144 10,409 42,659 11,791 11,791
Profit before extraordinary items and tax Extraordinary Items (Note No. 44) Profit before tax Tax Expense : Current Tax Deferred Tax Add/(Less) : (Excess)/Short Provision of Earlier Year W.back/off Profit for the year Earning per equity share of ` 2/- each (` 2/- each) (1) Basic (2) Diluted Significant Accounting Policies and Notes on Financial Statements
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali Chartered Accountants (Registration No : 103142W) sd/Haresh K. Chheda Partner (Membership No. 38262) Mumbai : 23rd August, 2012
4,076 124 4,200 8,026
3,940 100 (4) 4,036 7,755
3.37 3.37 1 to 46
3.26 3.26
For and on behalf of the Board sd/sd/A. R. Gala Managing Director sd/S. K. Vikamsey Chairman
Amit D. Buch Company Secretary
31
Cash Flow Statement for the year 2011-12
Cash Flow from Operating Activities Net profit before tax Adjustments for, Interest & Financial Income (non operational) (Profit) / Loss on sale of fixed assets (Profit) / Loss on sale of Investments Interest and Financial Expense Depreciation Provision for Diminution in the Value of Investments Changes in Current Assets and liabilities (Increase) / Decrease in Inventory (Increase) / Decrease in Debtors (Increase) / Decrease in Loans and advances Increase / (Decrease) in current liabilities and provision Income Taxes Paid Net cash inflow / (outflow) from Operating Activities (A) Cash flow from Investing Activities Purchase of Fixed Asset and change in capital WIP Proceeds from disopal of fixed Asset (Increase) / Decrease in Investment other than Subsidiaries (Increase) / Decrease in Investment in Subsidiaries Profit / (Loss) on sale of Investments Interest & Financial Income Net cash inflow / (outflow) from Investing Activities (B) Cash flow from Financing Activities Increase / (Decrease) in Share Capital Increase / (Decrease) in Loan Fund Interest and Financial Expense Dividend Paid (including Dividend Tax) Net cash inflow / (outflow) from Financing Activities (C)
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2011-2012 2010-2011
` In Lacs 12,226 (354) (118) (24) 534 1,510 326 (4,054) (3,107) (4,527) 1,340 (4,110) (358) (5,400) 157 10 24 354 (4,855) 8,960 (534) (3,863) 4,563 (650) 1,046 396 (650) 47 349
` In Lacs 11,791 (411) (3) (117) 294 1,144 (444) (504) (2,272) (24) (3,959) 5,495 (3,763) 24 117 411 (3,212) (349) (294) (1,679) (2,323) (39) 1,085 1,046 (39) 42 1,004
Net Increase / (Decrease) in Cash and Cash Equivalents Cash and cash equivalent as at the commencement of the year Cash and cash equivalent as at the end of the year Net Increase / (Decrease) as mentioned above Notes: (1) Closing Cash and cash equivalent includes cash, cheques in hand and remittance in transit (2) Balance with banks (includes ` 93 Lacs P.Y. ` 80 Lacs) lying in designated account with the scheduled banks on account of unclaimed dividend which are not available for use by the Company. P.Y. figures have been regrouped / rearranged to confirm to the current year’s presentation, wherever necessary.
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali Chartered Accountants (Registration No :103142W) sd/sd/Haresh K. Chheda Amit D. Buch Partner (Membership No. 38262) Company Secretary Mumbai : 23rd August, 2012
For and on behalf of the Board
sd/A. R. Gala Managing Director
sd/S. K. Vikamsey Chairman
32
Significant Accounting Policies
(A) Accounting Convention The financial statements are prepared under the historical cost convention, on an accrual basis and in accordance with the applicable accounting standards notified by the Company (Accounting Standards Rule, 2006) as amended and relevent Provisions of the Companies Act. (B) Use of Estimates The Preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised. (C) Revenue Recognition Sales are recognised on transfer of significant risks and rewards in connection with the ownership at the time of dispatch of goods. Sales are recorded net of trade discounts. Dividend income is recognised when right to receive is established. (D) Fixed Assets Fixed Assets are stated at cost less accumulated depreciation and impairment loss if any. Cost comprises of the purchase price and all other attributable costs for bringing the asset to its working condition for its intended use. (E) Depreciation (i) Depreciation on Fixed Assets other than intangible assets is provided on Written Down Value Method in accordance with the rates, prescribed in Schedule XIV to the Companies Act,1956. Individual assets acquired for less than ` 5000/- are entirely depreciated in the year of acquisition. (ii) Depreciation on fixed assets added/disposed off during the year has been provided on pro-rata basis. (iii) Lease Premium and related costs are amortised over the lease period. (iv) Cost of registration of Trade Marks and for acquiring Copy Rights are amortised over a period of 10 years in equal installments. (v) Cost of Intangible assets are amortised over a period of 36 months.
abcd
(F) Impairment of Assets Assets are treated as impaired when the carrying cost of assets exceeds their recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an assets are identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. (G) Expenditure during construction period Expenditure during construction period are included under capital work-in-progress and the same are allocated to the respective fixed assets on the completion of construction. (H) Foreign Currency Transactions & Financial Instruments (i) Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year, are restated at the closing rate as applicable. (ii) The differences in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the statement of Profit and Loss. (iii) In respect of forward foreign exchange contract, represented by monetary assets/liabilities and are meant for hedging purposes, the premium or discount arising at the inception of such forwards contract is amortised as expense or income over the life of contract. Exchange differences on such a contract is recognized in the statement of profit and loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognised as income or as expense for the period. (iv) Non - monetary items are carried in terms of historical cost denominated in a foreign currency using the exchange rate at the date of the transactions. (v) Exchange difference arising on a monetary item that, in substance, forms part of an enterprise’s net investments in a non-integral foreign operation are accumulated in a foreign currency translation reserve.
33
Significant Accounting Policies
(vi) The Foreign exchange difference on translation of long term foreign currency monetary items at rate different from those at which they were reported in previous financial statements, in so far as it relates to acquisition of depreciable assets are capitalised. Inventories Inventories are valued at lower of cost and estimated net realisable value. a) Cost of Raw materials, packing materials, stores and spares are determined on weighted average basis. b) The Cost of Finished goods and Work-In-Process includes cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Retirement Benefits (i) Contribution to the provident fund, which is a defined contribution scheme, are charged to the statement of Profit and Loss in the period in which the liability is incurred. (ii) Provision for gratuity, which is a defined benefit plan, is made on the basis of an actuarial valuation carried out by an independent actuary at the balance sheet date and funded through scheme administered by the Life Insurance Corporation of India (‘LIC’). The actuarial valuation is done using the ‘Project Unit Credit Method’. (iii) Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the defined benefit obligation at the balance sheet date based on an actuarial valuation carried out by an independent actuary. Investments Long-term Investments are stated at cost after deducting provision,if any, for other than temperory diminution in the value of Investment. Current Investments are stated at lower of cost and market / fair value. Borrowing Costs The Company capitalises the borrowing costs which are directly attributable to the acquisition or construction of qualifying assets till the said asset is put to use or ready to be put to use. All
abcd
other borrowing cost are expensed in the period they incurred. (M) Leased Assets Operating Lease : Rentals are expensed with reference to lease terms and other considerations. (N) Provision for Tax Tax expense comprises of current and deferred tax. Provision for current tax is determined on the basis of taxable income for the period as per the provisions of Income Tax Act,1961. Deferred tax is recognized, subject to consideration of prudence, on timing differences between book profits and tax profits using the tax rates and laws that have been enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only when there is a reasonable certainty that the assets will be realized in future. (O) Contingent Liabilities and Provision Contingent Liabilities are possible but not probable obligations as on Balance Sheet date, based on the available evidence. Provisions are recongnized when there is a present obligation as a result of past event, and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on the best estimate required to settle the obligation at the Balance Sheet date.
(I)
(J)
(K)
(L)
34
Notes forming part of the Balance Sheet
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 1 SHARE CAPITAL Authorised : 25,00,00,000 (25,00,00,000) Equity Shares of ` 2/- each (` 2/- each) Issued, Subscribed & Paid Up : 23,82,15,000 (23,82,15,000) Equity Shares of ` 2/- each (` 2/- each) fully paid up Total 1.1 Reconciliation of the number of Equity Shares outstanding As at 31st March, 2012 Number of shares Amount 2,382 4,764 2,382 4,764
` In Lacs
5,000 4,764 4,764
5,000 4,764 4,764
Number of Shares at the beginning of the year Add : Shares Issued Less : Shares Forfeited Number of Shares at the end of the year
As at 31st March, 2011 Number of shares Amount 2,382 4,764 2,382 4,764
1.2 Terms / Rights Attached to Equity Shares The company has only one class of equity shares having a par value of ` 2 per share. Each holder of equity shares is entitled to one vote per share and all rank pari passu. 1.3 Aggregate number of bonus shares issued during the period of five years immediately preceding the reporting date Equity shares allotted as fully paid bonus shares during last 5 years by capitalisation of Share Premium & General Reserve : year ended 31.03.2010 : 142,929,000 1.4 Equity Shareholders holding more than 5% of the shares Paticulars Accord Holding Private Ltd. Corsa Holding Private Ltd. Qualis Holding Private Ltd. As at 31st March, 2012 No. of shares % held 40,993,721 17.21% 31,929,631 13.40% 23,577,132 9.90% As at 31st March, 2011 No. of shares % held 36,562,500 15.35% 28,125,000 11,81% 19,687,500 8.26%
The honourable Bombay High Court vide its order dated 29.06.2012 sanctioned the Composite Scheme of Amalgamation and Arrangement w.e.f. appointed date 21.03.2012 pursuant to which the above 3 companies have been Amalgamated with Lakheni Publications Pvt. Ltd. The said scheme was made effective on 13.08.2012.
35
Notes forming part of the Balance Sheet
abcd
As at As at 31st March, 2012 31st March, 2011
2 RESERVES & SURPLUS a) Capital Reserve : Opening Balance Add : Additions during the year Closing Balance b) General Reserve : Opening Balance Add : Transferred from surplus balance in the Statement of Profit and Loss Closing Balance
` In Lacs # #
` In Lacs # #
10,014 1,000 11,014
9,014 1,000 10,014
c) Foreign Currency Translation Reserve : Opening Balance Add : Additions during the year Closing Balance d) Surplus in the Statement of Profit and Loss : Balance as per last Financial Statements Add : Net Profit after tax Balance available for Appropriation Less : APPROPRIATION Dividend (First Interim) ` 0.60 Paise ` 2/- paid up (` 0.60 Paise Rs.2/- paid up) Dividend Final ` 0.80 Paise Rs.2/- paid up (` 0.80 Paise ` 2/- paid up) Corporate Tax on Dividend Transfer to General Reserve
12 (12) -
4 8 12
19,152 8,026 27,178
16,279 7,755 24,034
1,429 1,906 3,335 541 1,000 4,876
1,429 1,906 3,335 547 1,000 4,882
SURPLUS AFTER APPROPRIATION TOTAL (a + b+ c + d)
22,302 33,316
19,152 29,178
36
Notes forming part of the Balance Sheet
abcd
` In Lacs
As at 31st March, 2012 As at As at 31st March, 2011 31st March, 2011
NON CURRENT LIABILITIES 3 LONG TERM BORROWINGS : A) Secured i) Term Loan - Foreign Currency Loans from Bank Less : Amount payable within 12 months
As at 31st March, 2012
1,324 530
794
1,158 331
827
Nature of security and Terms of Repayments for Secured Borrowings : Nature of Security Long term foreign currency loan are exclusively secured by Hypothecation of windmills. The installments due within 12 months from the date of Balance Sheet have been grouped under Other Current Liabilities (Note No. 8)
As at As at 31st March, 2012 31st March, 2011
Terms of Repayments Foreign Curreny Loans from Bank carries interest @ Libor+0.5%. The loan is repayable in 12 half yearly instalments of 41980057 JPY starting from 17th Jan, 2009
` In Lacs 4 Deferred Tax Liabilities (Net) Depreciation Disallowances under section 43B of the Income Tax Act, 1961 572 (120) 452
` In Lacs 433 (105) 328
5 Long Term Provisions Provision for Employee Benefits Provision for Leave Encashment (Refer Note No. 42)
359 359
226 226
37
Notes forming part of the Balance Sheet
abcd
As at 31st March, 2012 As at 31st March, 2011
6 SHORT TERM BORROWINGS A) Secured i) Cash Credit from Bank ii) Working Capital Rupee Loans repayable on demand from banks iii) Foreign Currency Loan All short term Rupee loans and foreign currency loans equivalent to ` 3000 Lacs (Previous year ` 902 Lacs) are secured against : Hypothecation & first charge over stock of raw materials, work-in-process, finished goods, stores and spares not relating to plant and machinery and book debts.
` In Lacs 5,195 3,000 -
` In Lacs 902
8,195 B) Unsecured Form Banks : Rupee Loan 5,000 5,000 TOTAL 13,195
902 3,500 3,500 4,402
7 TRADE PAYABLES - Due to Micro, Small and Medium Enterprises - Due to Others TOTAL Details of the dues to Micro, Small and Medium Enterprises (MSME), as defined in the Micro, Small and Medium Enterprises Development Act, 2006, as on 31st March 2012 based on available information with the Company which are as under : Particulars Principal amount due and remaining unpaid Interest due on above and the unpaid interest Interest paid Payment made beyond the appointed day during the year Interest accrued and remaining unpaid Amount of further interest remaining due and payable in succeeding years
80 1,418 1,498
56 650 706
2011-12 9 1 47 2 -
2010-11 4 # 53 2 -
38
Notes forming part of the Balance Sheet
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 8 OTHER CURRENT LIABILITIES Advances Received Unpaid Dividend Interest Accrued But Not Due Income received in Advance Creditors for capex Current maturities of Foreign Curreny Loans from Bank (Also see note no. 3) Employee Benefits Payable Deposits Provisions for tax (net of advance tax) Statutory Dues - Providend Fund / ESIC / Profession Tax - Tax Deducted At Source - Service tax / WCT / Excise payable - Sales tax payable Provision for Expenses Other Payable / (Receivable) TOTAL 50 73 7 154 720 145 3,026 356 93 8 52 153 530 587 22 76
` In Lacs 245 80 10 21 110 331 500 27 140 48 67 8 105 641 (190) 2,143
9 SHORT TERM PROVISIONS Provision for Employee Benefits - Provision for Leave Encahment Benfits (Refer Note No. 42) Other Provisions - Proposed Dividend - Corporate Tax on Proposed Dividend Total 1,906 309 2,225 1,906 309 2,306 10 91
39
Notes forming part of the Balance Sheet
10 FIXED ASSETS
abcd
` In Lacs Depreciation / Amortization Net Block
Total upto 31.03.2012 52 2,270 8,247 186 942 736 40 8 247 229 12,958 11,757 As on 31.03.2012 983 32 6,851 5,732 100 396 703 19 974 0 209 15,999 11,431 As on 31.03.2011 984 39 4,658 4,610 79 308 562 24 0 167 11,431 -
Gross Block
Sr. Description Tangible 1 2 3 4 5 6 7 8 9 10 11 Land - Freehold Land - Leasehold Building Plant & Machinery Office Equipments Furniture & Fixtures Vehicles Intangible Trade Mark Copy Right SAP Software Total Previous Year 59 247 281 23,188 19,338 983 158 6,117 3,972 348 121 59 983 247 438 28,957 23,188 34 247 114 11,757 10,714 984 84 6,616 12,285 251 1,189 1,193 2,546 1,906 39 152 334 2 41 213 3 2 88 983 84 9,121 13,979 287 1,339 1,439 45 1,958 7,675 172 881 631 Cost As on Additions Deductions / Adjustments Cost As on 31.03.2012 Provided upto 01.04.2011 No. of Assets 01.04.2011 during the year
For the Year
Deductions / Adjustments
6 346 768 16 63 181 6 8 115 1,510 1,144
34 196 1 2 76 309 101
As at 31st March, 2012
As at 31st March, 2011
` In Lacs 11 CAPITAL WORK IN PROGRESS Opening Balance Add : Expenditure during the year Less : Capitalisation / Adjustments during the year Closing Balance 983 329 (975) 337
` In Lacs 470 958 (445) 983
40
Notes forming part of the Balance Sheet
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 12 NON CURRENT INVESTMENTS 1) Other Investment a) Unquoted In Equity Shares of Subsidiary Companies i) Grafalco Ediciones S.L. — 6,48,006 (6,78,006) Equity Shares of Euro 1/- each fully paid up ii) eSense Learning Pvt. Ltd. — 37,48,500 (37,48,500) Equity Shares of ` 10/- each fully paid up Investment in Limited Liability Partnership i) Navneet Learning LLP Total non current investments Less : Provision for diminution in value of Investments in Grafalco Total Net Non current investments Aggregate amount of unquoted investments Aggregate provision for diminution in value of investments 13 LONG TERM LOANS AND ADVANCES Unsecured - Considered Good a) Capital Advance - Advances for Capital Expenditure b) Corporate Deposits c) Security Deposits d) Advance Income Taxes (Net of Provisions) e) Wealth Tax f) Loans and advances to related parties i) Loans to Associates - Navneet Learning LLP g) Loans to Employees h) Loan to Vendors i) Sales Tax receivable j) Advance to Suppliers k) Prepaid Expenses l) Other Loans & Advances
` In Lacs
375 375
391 375
7 757 (326) 431 756 326
766 766 766 -
460 75 174 554 4 3,045 179 12 40 5 6 1,761 6,315
483 75 167 582 5 57 6 27 10 2 1,397 2,813
41
Notes forming part of the Balance Sheet
abcd
As at 31st March, 2012 As at 31st March, 2011
14 OTHER NON CURRENT ASSETS (Unsecured, considered good) Other Income Receivable Total
` In Lacs 27 27
` In Lacs 129 129
15 INVENTORIES Stores, Spares & Consumables Raw Materials Finished Goods Work In Process Stock in Trade (in respect of Goods acquired for Trading) Total
526 8,263 11,685 1,236 5 21,715
378 5,048 11,355 875 5 17,660
16 TRADE RECEIVABLES (Unsecured, considred good) Over six months Other Total
540 10,635 11,175
598 7,470 8,068
17 CASH AND BANK BALANCES Cash and Cash Equivalents Cash on hand Balance with Scheduled Banks - In Current Account Sub Total A Other Bank Balances Fixed Bank deposits with more than twelve months maturity Fixed Bank deposits with less than twelve months maturity Earmarked Balance with Banks In Dividend Account
47 254 301 2 93 95 396
42 922 964 1 1 80 82 1,046
42
Sub Total B Sub Total A + B
Notes forming part of the Balance Sheet
abcd
As at 31st March, 2012 As at 31st March, 2011
18 SHORT TERM LOANS AND ADVANCES (Unsecured, considered good) a) Loans and advances to related parties i) Loans to Subsidiaries b) Loans to Vendors c) Loans to Employees d) Corporate Deposits e) Sales Tax receivable f) CENVAT receivable g) Service Tax Refund receivable h) Prepaid Expenses i) Advance to Suppliers j) Advance to Employee for expenses k) Other Loans & Advances
` In Lacs
` In Lacs
2,217 20 128 23 4 33 1 108 352 14 45 2,945
957 29 209 35 2 33 86 257 31 33 1,673
19 OTHER CURRENT ASSETS a) Export incentive receivable b) Other income receivable 288 1 289 290 20 310
43
Notes forming part of the Profit & Loss
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs
` In Lacs
20 REVENUES FROM OPERATION Sale of products - Finished Goods (Refer Note below 20.1) - Traded Goods Sale of services Other operating revenues Less : Sales Tax Collected Less : Excise Duty
60,601 340 641 709 62,291 (1,053) (273) 60,965
53,323 127 723 585 54,758 (932) (203) 53,624
20.1 SALES OF PRODUCTS - FINISHED GOODS Educational Books Paper Stationery Others
32,064 22,672 5,865 60,601
26,835 21,186 5,302 53,323
21 OTHER INCOME Dividend on Mutual Funds Profit / (Loss) on Sale of Investments Other non-operating Income Interest Income Net gain on foreign currency translation and transaction
12 24 196 627 859
59 117 114 353 183 827
44
Notes forming part of the Profit & Loss
abcd
For the year ended 31st March, 2012 For the year ended 31st March, 2011
` In Lacs 22 COST OF MATERIAL CONSUMED Raw Materials Consumed
` In Lacs
30,469 30,469
26,260 26,260
22.1 COST OF MATERIAL CONSUMED Paper Others
26,703 3,766 30,469
22,718 3,542 26,260
23 (INCREASE) / DECREASE IN STOCK OF FINISHED GOODS AND WIP Closing Stock Work in Process (Refer Note below 23.1) Finished Goods Opening Stock Work in Process Finished Goods
1,236 11,690 12,926 875 11,360 12,235 (691)
875 11,360 12,235 764 11,151 11,915 (320)
23.1 DETAILS OF CLOSING INVENTORY OF WORK IN PROCESS Forms Printed Covers Pasted Sheets Ruled Sheets
390 577 48 221 1,236
299 470 16 90 875
24 EMPLOYEE BENEFITS EXPENSES Salaries, Wages and Bonus Contribution to Provident and Other Funds Staff Welfare 4,590 462 356
5,408
3,979 457 336
4,771
45
Notes forming part of the Profit & Loss
abcd
For the year ended 31st March, 2012 For the year ended 31st March, 2011
25 FINANCE COST Interest on Debentures Other Borrwoing Costs
` In Lacs 534 534
` In Lacs 17 277 294
46
26 OTHER EXPENSES Printing Expenses Binding Expenses Other Manufacturing Expenses Power & Fuel Freight & Octroi Stores & Spares Consumed Repairs to Plant & Machinery Rates & Taxes Sales Tax Expenses Rent Royalty Building Repairs & Maintainance Other Repairs Insurance Transportation Expenses Commission Advertisement Marketing Expenses Sales Promotion Expenses Discount & Rebate Bad debts and other irrecoverable advance written off Donation Bank Charges Prior Period items Legal and Professional Fees Net loss on foreign currency translation and transaction Other Expenses
726 800 810 304 614 304 117 98 10 427 1,208 230 159 74 1,063 27 226 756 1,249 323 13 233 153 7 544 285 1,137 11,897
686 646 715 245 566 185 145 73 6 480 1,015 249 186 73 901 92 288 722 940 311 17 274 133 10 446 1,006 10,409
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
27 Estimated amount of Capital Contracts (net of advance) remaining to be executed and not provided for ` NIL (Previous Year ` 354 Lacs) 28 Contingent Liabilities. (a) For disputed Income-tax matters ` 496 Lacs (Previous Year ` 559 Lacs) against which amount paid is ` 535 Lacs (Previous Year ` 563 Lacs) (b) Against Bond : (i) Import Duty liability of ` 381 Lacs (Previous Year ` 381 lacs) for import of machinery against licences granted under EPCG scheme. (ii) Duty liability amounting to ` 86 lacs (` 29 lacs) for the purchase of excisable inputs without payment of duty under the bonds executed if the export obligation is not fulfilled. (c) In respect of bank guarantees given for subsidiary Company of Euro NIL (Previous Year Euro 2-mn) equivalent to ` NIL (Previous Year ` 1278 Lacs) 29 Financial & Derivative Instruments (a) The Company has sold USD 14.48 Mn equivalent ` 7234 Lacs and EUR 0.11 Mn equivalent ` 78 Lacs (Previous Year USD 9.61 Mn equivalent ` 4598 Lacs and Eur 0.87 Mn equivalent ` 543 Lacs) to cover our export receivables and purchase USD NIL equivalent ` NIL (Previous Year USD 2 Mn equivalent ` 941 Lacs) to cover loan repayment. The Company has entered into USD-JPY derivative option contracts hedging its exposure on ECB availed in JPY for wind power generation project. Option contracts worth of JPY 181-Mn (Previous Year JPY 253-Mn) are open as on balance sheet date, maturing over a period of seven years ending on Jul 2014.
2011-12 ` In Lacs 30. Auditors’ Remuneration Audit Fees Tax Audit Fees Limited Review Representation matters Other Matters 31. Value of Imports on C.I.F. Basis (i) Capital Goods (ii) Raw Material (Including Consumables) (iii) Componets, Store & Spares & others 9 2 1 2 10 24 394 26 414 834 2010-11 ` In Lacs 6 2 1 1 4 14 350 36 641 1,026
47
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
2011-2012 ` In Lacs 2010-2011 ` In Lacs 5 59 100 184 348
32. Expenditure in Foreign Currency on Account of : (i) Royalty (ii) Interest (iii) Professional Fees (iv) Other Matters
2 46 92 183 323
33. Earning in Foreign Exchange Export of Goods on FOB basis Interest Income Other Matters
5,456 9 39 5,504
5,673 9 0 5,683
34. Percentage and Value of Imported and Indigenous Raw Material and Stores & Machinery Spares Consumed. Raw Material Stores & Machinery Spares, etc. % Value (` In Lacs) % Value (` In Lacs) Imported Indigenous Total : 0.10 (0.23) 99.90 (99.77) 100 (100) 31 (62) 30,438 (26,198) 30,469 (26,260) 10.82 (6.74) 89.18 (93.26) 100 (100) 46 (22) 376 (308) 422 (330)
35. Foreign currency translation of ` 223 Lacs (Previous Year credited ` 201 Lacs) arising on account of the exchange difference on non interagal foreign operations is debited to the statement of Profit & Loss.
48
Notes on Financial Statements
For the year ended 31st March, 2012 36. Related party transactions
abcd
(a) Party where control exists : Grafalco Ediciones S.L. – Subsidiary Company 95.58% (P 100%) of whose equity share capital is held by the Company as at 31st March, 2012. .Y. eSense Learning Pvt. Ltd. – Subsidiary Company 90.69% (P 90.69%) of whose equity share capital is held by the Company as at 31st March, 2012. .Y. (b) Associates – Navneet Learning LLP (c) Other related parties with whom transaction have taken place during the year. (i) Enterprises owned or significantly influenced by key management personnel or their relatives Navneet Prakashan Kendra Vikas Prakashan Gala Publishers Sandeep Agency Bigspace Realty Pvt. Ltd The Flagship Advertising Pvt. Ltd. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Shri A.R. Gala Shri D.R. Gala Shri H.R. Gala Shri S.R. Gala Shri J.L. Gala Shri J.K. Sampat Shri N.N. Shah Shri B.A. Gala Shri A.D. Gala Shri G.D. Gala Shri R.H. Gala Shri D.C. Sampat Shri S.J. Gala Shri S.J. Gala Shri K.H. Gala Shri S.S. Gala Shri K.B. Gala
(ii) Key Management Personnel & Relatives
49
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
(` In Lacs)
Transaction with Related Parties : Items / Related Parties Subsidiaries Associates Enterprises owned or significantly influenced by key management personnel or their relatives 1,473 (1,344) -(--) ---(--) -(--) -(--) Key Management Personnel
Total
(i) Purchase,expense and other services from related parties (ii) Purchase of fixed assets
50 (22) 983 (--) 21 (46) 1,530 (628) 270 (--) -(--)
-(--) -(--) -(--) 3,045 (--) -(--) 7 (--)
664 (664) -(--) -(--) -(--) -(--) -(--)
2,187 (2,030) 983 (--) 21 (46) 4,575 (628) 270 (--) 7 (--)
(iii) Sales of goods and Services
(iv) Loans given
(v) Loan received back
(vi) Investments
(vii) Balance outstanding at year end Debtors
-(--) 2,217 (957)
-(--) 3,045 (--)
-(--) -(--)
-(--) -(--)
-(--) 5,262 (957)
Loans and advances given
50
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
2011-2012 ` In Lacs 2010-2011 ` In Lacs 7,755 7,755 2,382 3.26 3.26
37. Earning Per Share :
(a) Net Profit after tax but before extra ordinary items as per statement of profit and loss Less : Extra Ordinary Items Net profit available for Equity Shareholders (b) Weighted Average Number of Equity Shares for basic and diluted EPS (in No.) (c) Basic and Diluted Earning per share of ` 2/- each (i) Before Extra Orinary Items (ii) After Extra Ordinary Items
8,352 326 8,026 2,382 3.51 3.37
38. Details of Loans and Advances and Investments as at the year end and maximum balance thereof as per clause 32 of Listing Agreement with Stock Exchange in compliance with SEBI Circular No.SMD/ Policy / Cir / 2 / 2003 dt.10.1.2003 Loan having Interest Rate Interest Free Loan Maximum Balance at any time during lower than Section 372A of Co.Act and Advances the year (a) Loans & Advances in the nature of Loans : (i) Subsidiaries Grafalco Ediciones S.L. 17 -187 (187) (--) (187) eSense Learning Pvt. Ltd. -2,200 2,200 (770) (--) (770) (ii) Associates Navneet Learning LLP -3,045 3,045 (--) (--) (--) Note : Loans to employees under various schemes of the company have been considered to be outside the purview of the disclosure requirements.
39. Lease Transactions : Accounting standard 19 As a Lessor in an Operating Lease The existing operating lease agreements permit the lessee to cancel the arrangement before expiry of the normal tenure of the lease. As such, no disclosures are required to be made. As a Lessee in an Operating Lease (i) Cancellable Operating Leases : The Company has taken various commercial premises under cancellable operating leases. These are normally renewable on expiry. (ii) Non-Cancellable Operating Leases : The Company has taken various commercial premises under non-cancellable operating leases, the future lease payments in respect of which are:
51
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
2011-12 ` in Lac 31 -53 2010-11 ` in Lac 53 31 -51
(a) The total amount of future minimum lease payments under non cancellable operating leases for each of the following period : (i) Not later than one year : (ii) Later than one year and not later than five years : (iii) Later than five years : (b) Lease payments recognised in the statement of Profit and Loss for the period under review :
40. Details of provisions, utilised, written Back : Particulars Provision for Leave Salary Encashment As at 01.04.2011 318 318 Additions Utilised/Written Back 52 52 0 0 As at 31.03.2012 369 369
41. Segment Reporting The Company’s operations relates to publication of knowledge based information in educational and general books form and manufacturing of paper and other stationery items. It caters to the educational need of Indian as well as Global market. Accordingly ”Publication” and “Stationery” comprise of the primary segments. Secondary segmental reporting is performed on the basis of the geographical location of customers. The accounting principles and policies used in the preparation of the Financial Statements, as set out in the note on significant accounting policies, are also consistently applied to record revenue and expenditure, in individual segments.
52
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
` In Lacs Publication 2012 2011 29,904 – 29,904 42 29,946 9,727 – – – – – – – – 20,809 – – 1,279 – – 2,255 – 498 – – Stationery 2012 24,927 – 24,927 111 25,038 2,577 – – – – – – – – 24,511 – – 2,370 – – 2,718 – 447 – – 2011 23,212 – 23,212 154 23,367 3,314 – – – – – – – – 18,814 – – 1,376 – – 2.066 – 332 – – Others 2012 636 – 636 636 26 – – – – – – – – 1,969 – – 10 – – 808 – 237 – – 2011 508 – 508 (95) 412 (84) – – – – – – – – 1,599 – – 13 – – – – 234 – – Total 2012 60,965 – 60,965 122 61,088 14,195 737 534 1,846 12,552 4,200 8,352 326 8,026 52,970 6,659 59,629 3,720 17,829 21,549 5,375 247 1,360 150 – 2011 53,624 – 53,624 101 53,725 12,957 725 294 1,597 11,791 4,036 7,755 – 7,755 41,222 3,708 44,930 2,669 8,319 10,988 4,321 164 1,064 80 –
[A] Primary - Business Segments
Revenue Less : Inter Segment Revenue Net Revenue Other Income Segment Revenue Segment Results Add : Unallocated Other Income/(Expense) Less : Financial Expenses Less : Unallocable Expenditures Profit Before Taxation Provision for Taxation (Income tax, and deferred tax) Profit after taxation Extraorinary Item (net of tax expense) Net Profit after extraordinary Items Segment Assets Unallocated Assets Total Assets Segment Liabilities Unallocated Liabilities Total Liabilities Capital Expenditure Unallocated Capital Expenditure Depreciation on Segmental Assets Unallocated Depreciation Amortization
35,402
–
35,402 11 35,413 11,592 – – – – – – – – 26,491 – – 1,340 – – 1,849 – 676 – –
53
Notes on Financial Statements
For the year ended 31st March, 2012 Notes : 1
abcd
2 3
Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the respective segment, however, revenue and expenses which can not be identified or allocated reasonably to a segment being related to the enterprise as a whole have been grouped as unallocable. Segment assets and segment liabilities represent assets and liabilities of respective segments, however the assets and liabilities not identifiable or allocable on resonable basis being related to enterprise as a whole have been grouped as unallocable. The business which have been grouped under “Others” segment comprises of revenue from generation of power by windmill, Pre school and trading items, etc.
Secondary - Geographical Segments
North & Central America Africa Europe Australia & Oceania Rest of the world except India India
` in Lacs
Total
Segment Revenue Segment Assets
2,445 (2,439) 135 (69)
1,664 (1534) 301 (264)
539 (1,050) 48 (92)
28 (27) (7)
894 (331) 369 (37)
55,395 (48,243) 58,776 (44,461)
60,965 (53,624) 59,629 (44,930)
42. Disclosure pursuant to Accounting Standard - 15 (Revised) ‘Employee benefits’ (a) The Company adopted Accounting Standard (AS) 15 (revised 2005) on “Employee Benefits” issued by ICAI. The actuarial valuations of the various employee benefits were carried out by using the Projected Unit Credit Method. (b) The Company has recognised the following amount as an expense and included in the Statement of Profit and Loss. ` in Lacs ` in Lacs 2011-12 2010-11 (i) Provident Fund 230 215 (ii) ESIC 54 51 (c) Defined benefit plan and long term employment benefits General description (1) Gratuity (Defined benefit plan) The Company makes annual contribution to the employee group gratuity scheme of the Life Insurance Corporation of India, funded defined benefits plan for qualified employees. The scheme provided for lumpsum payments to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. (2) Accrual for leave encashment benefit is made on the basis of a year-end actuarial valuation in pursuance of the Company’s leave rules.
54
The following table sets out for the status of gratuity / Leave encashment plan :
Notes on Financial Statements
For the year ended 31st March, 2012 Gratuity (Funded) Change in Obligation Opening Present Value of Accrued Gratuity Service Cost including actuarial gain/(loss) Interest Cost Less : Benefits paid Closing Present Value of Accrued Gratuity Change in Plan Asset Opening Fund Balance Return on the plan asset Contribution paid Less : Benefits paid Closing Fund Balance Reconciliation of present value of obligation and plan asset Closing Fund Balance Closing present value of Accrued Gratuity Net Liability Liability recognized in balance sheet Expense recognized in the statement of P & L Current Service Cost Interest Cost Expected Return on Plan Assets Net Actuarial (Gain) / Loss recognized for the period Expense recognized in the statement of P & L Movement in the Liability recognized in Balance Sheet Opening Net Liability Expenses as above Contribution paid Closing Net Liability Assumptions Expected return on plan assets Salary escalation rate Discounting rate 8.00% 7.00% 8.50% 8.00% 7.00% 8.30% 1,117 869 (248) 913 864 (49) 913 87 121 3 1,117 706 67 143 4 913 31/03/12 864 (61) 69 3 869 31/03/11 713 97 57 4 864
abcd
Leave Encashment (Non-Funded) 31/03/12 318 66 25 39 369 39 39 369 369 88 25 (22) 91 318 91 (39) 369 0.00% 4.00% 8.30% 31/03/11 324 7 23 37 318 37 37 318 318 64 23 (57) 30 324 30 (37) 318 0.00% 4.00% 7.50%
55
Notes on Financial Statements
For the year ended 31st March, 2012
abcd
43. During the year, in the line with the notification dated 29th December, 2011 issued by the Ministry of Corporate Affairs, the Company opted for option given in the paragraph 46A of Accounting Standard - 11 The Effects of Changes in foreign exchange rates. Accordingly, the Company with effect from April 1, 2011, has capitalized the forign exchange difference on translation of long term foreign currency monetary item at rates different from those at which they were reported in previous finacial statements, in so far as it relates to acquisition of depreciable assets. Consequently, differences arising due to change in exchange rate on foreign currency loan relating to acquisition of depreciable Capital Asset amounting to ` 670 lacs are added to cost of such Captial Assets. Consequent to the change, the depreciation for the year is higher by ` 36 lacs and profit for the year is higher by ` 634 lacs. 44. Extra ordinary item consist of provision for diminution in the value of long term investments in subsidiary namely Grafalco Ediciones S.L. amounting to ` 326 Lacs. 45. Figure of ` 50,000 or less have been denoted by # 46. The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali Chartered Accountants (Registration No : 103142W) sd/Haresh K. Chheda Partner (Membership No. 38262) Mumbai : 23rd August, 2012007 For and on behalf of the Board
sd/-
sd/A. R. Gala Managing Director
sd/S. K. Vikamsey Chairman
Amit D. Buch Company Secretary
56
abcd
abcd Consolidated Financial Statements
for the year ended 31st March, 2012
57
Auditor’s Report
TO THE BOARD OF DIRECTORS OF NAVNEET PUBLICATIONS (INDIA) LIMITED. 1. We have examined the attached Consolidated Balance Sheet of NAVNEET PUBLICATIONS (INDIA) LIMITED (the Company) and GRAFALCO EDICIONES S.L. (subsidiary) and ESENSE LEARNING PRIVATE LIMITED (subsidiary) collectively referred to as ‘the Group’, as at 31st March 2012, and also the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the period ended on that date annexed thereto. 2. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are prepared in all material respects, in accordance with the financial reporting framework generally accepted in India and are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion. 3. We report that the consolidated financial statements (‘CFS’) have been prepared by the company in accordance with the requirement of Accounting Standard (AS) 21, Consolidated Financial Statements, as notified by the Companies (Accounting Standards) Rules, 2006 and on the basis of separate audited financial statements of the company and its subsidiaries included in the CFS. 4. Attention is invited to note no. a (iii) (3) in Significant Accounting Policies in connection with the consolidation of financial statements of subsidiary.
abcd
5. On the basis of information and explanations given to us, and on consideration of the separate audit reports on individual audited financial statements of the company and its subsidiary, in our opinion the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: a. in case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Group as at 31st March 2012; b. in case of the Consolidated Statement of Profit and Loss, of the consolidated results of operations of the Group for the period ended on that date; and
c. in case of the Consolidated Cash Flow Statement, of the consolidated cash flows of the Group for the period ended on that date.
For Ghalla & Bhansali Chartered Accountants (Registration No. 103142W) sd/Haresh K. Chheda Partner Membership No. 38262
Place: Mumbai Date: 23rd August, 2012
58
Balance Sheet (Consolidated)
Particulars Note No.
abcd
As at 31st March, 2012 As at 31st March, 2011
EQUITY AND LIABILITIES 1. Shareholders’ Funds a) Share Capital b) Reserve & Surplus 2. Share Application Money Pending Allotment 3. Non-Current Liabilites a) Long-Term Borrowings b) Deferred Tax Liabilities (Net) c) Long-Term Provisions 4. Current Liabilities a) Short-Term Borrowings b) Trade Payables c) Other Current Liabilities d) Short-Term Provisions Minority Share of Interest Total ASSETS 1. Non-Current Assets a) Fixed Assets i) Tangible Assets ii) Intangible Assets iii) Capital work-in-progress iv) Intangible Assets under Development b) Non-Current Investment c) Long-Term Loans and Advances d) Other Non-Current Assets 2. Current Assets a) Inventories b) Trade Receivables c) Cash and Bank Balances d) Short-Term Loans and Advances e) Other Current Assets Total Significant Accounting Policies & Notes on Financial Statements
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali Chartered Accountants (Registration No: 103142W) sd/Haresh K. Chheda Partner (Membership No. 38262) Mumbai : 23rd August, 2012
` In Lacs 1 2 4,764 31,381 36,145 794 454 382 1,630 13,195 1,522 3,292 2,225 20,234 (61) 57,948
` In Lacs 4,764 27,500 32,264 827 330 236 1,393 5,472 808 2,228 2,306 10,815 (30) 44,442
3 4 5
6 7 8 9
10 10 11 12 13 14 15
15,626 481 338 21 16,466 56 6,432 27 22,981 21,763 11,640 509 761 294 34,967 57,948
11,330 561 983 12,874 10 2,868 129 15,882 17,709 8,680 1,130 731 310 28,560 44,442
16 17 18 19 20
1 to 40
For and on behalf of the Board sd/Amit D. Buch Company Secretary sd/A. R. Gala Managing Director sd/S. K. Vikamsey Chairman
59
Statement of Profit and Loss (Consolidated)
Note No. Income Revenue from operations Other Income Total Revenue Expenses Cost of Material consumed Purchase of Stock-in-Trade Changes in Inventories of Finished Good, work-in-progress and Stock-in-Trade Employee Benefits Expenses Financial Costs Depreciation and Amortization Expense Other Expenses
abcd
For the year ended For the year ended 31st March, 2012 31st March, 2011 ` In Lacs 21 22 61,894 1,122 63,016 ` In Lacs 54,831 818 55,648
23 24 25 26 10 27
30,483 249 (705) 6,109 576 1,713 12,624 51,049 11,967 11,967
26,409 126 335 5,403 316 1,360 11,020 44,970 10,678 10,678
Profit before extraordinary items and tax Extraordinary Items Profit before tax Tax Expense : Current Tax Deferred Tax Add/(Less) : (Excess)/Short Provision of Earlier Year W.back/off Add/(Less) : Loss of Subsidiary attr. to minority Profit for the year Earning per equity share of ` 2/- each (` 2/- each) (1) Basic (2) Diluted Significant Accounting Policies & Notes on Financial Statements
4,076 124 # (31) 4,169 7,798
3,940 100 (4) (34) 4,003 6,676
3.27 3.27 1 to 40
2.80 2.80
60
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali Chartered Accountants (Registration No: 103142W) sd/Haresh K. Chheda Partner (Membership No. 38262) Mumbai : 23rd August, 2012
For and on behalf of the Board sd/Amit D. Buch Company Secretary sd/A. R. Gala Managing Director sd/S. K. Vikamsey Chairman
Cash Flow Statement for the year 2011-12 (Consolidated)
abcd
2011-2012 2010-2011
Cash Flow from Operating Activities
Net profit before tax Adjustments for Interest & Financial Income (non operational) (Profit) / Loss on sale of fixed assets (Profit) / Loss on sale of Investments Exchange Fluctuation on Consolidation Interest and Financial Expense Depreciation FCTR Changes in Current Assets and liabilities (Increase) / Decrease in Inventory (Increase) / Decrease in Debtors (Increase) / Decrease in Loans and advances Increase / (Decrease) in current liabilities and provision Income Taxes Paid (Increase) / Decrease in Preliminary Expenses (Net) Net cash inflow / (outflow) from Operating Activities (A) Cash flow from Investing Activities Purchase of Fixed Asset and change in capital WIP Proceeds from disposal of Fixed Asset (Increase) / Decrease in Investment other than Subsidiaries (Increase) / Decrease in Investment in Subsidiaries Profit / (Loss) on sale of Investments Interest & Financial Income Net cash inflow / (outflow) from Investing Activities (B) Cash flow from Financing Activities Increase / (Decrease) in Share Capital Increase / (Decrease) in Loan Fund Interest and Financial Expense Dividend Paid (including Dividend Tax) Net cash inflow / (outflow) from Financing Activities (C) Net Increase / (Decrease) in Cash and Cash Equivalents Cash and cash equivalent as at the commencement of the year Cash and cash equivalent as at the end of the year Net Increase / (Decrease) as mentioned above
` In Lacs 11,967
(367) (124) (24) 0 576 1,713 41 (4,053) (2,960) (3,067) 1,181 (4,111) 772 (5,177) 189 (56) 10 24 367 (4,643) 7,690 (576) (3,863) 3,251 (620) 1,130 510 (620) 50 460
` In Lacs 10,678
(399) (26) (117) (3) 316 1,360 87 220 (386) (1,680) (80) (3,959) 6,013 (4,122) 62 7 117 402 (3,534) (464) (316) (1,679) (2,458) 21 1,109 1,130 21 43 1,087
Notes:
(1) Closing Cash and cash Equivalent includes cash, cheques in hand and remittance in transit (2) Balance with banks (includes `93 Lacs P.Y. `80 Lacs) lying in designated account with the scheduled banks on account of unclaimed dividend which are not available for use by the Company. P.Y. figures have been regrouped / rearranged to confirm to the current year’s presentation, wherever necessary.
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali sd/Chartered Accountants (Registration No. 103142W) sd/Haresh K. Chheda Amit D. Buch Partner (Membership No. 38262) Company Secretary Mumbai : 23rd August, 2012007 sd/A. R. Gala Managing Director
For and on behalf of the Board
sd/S. K. Vikamsey Chairman
61
Significant Accounting Policies (Consolidated)
(a) Principles of Consolidation : Consolidated financial Statements relate to Navneet Publications (India) Ltd. and its subsidiaries Grafalco Ediciones S.L. and eSense Learning Pvt. Ltd. The consolidated financial statements have been prepared on the following basis : (i) The financial statements of the company and its subsidiary companies are combined on a line by line basis by adding together the book value of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealized profits or losses in accordance with Accounting Standard (AS) 21 ‘‘Consolidated Financial Statements’’ issued by the Institute of Chartered Accountants of India. (ii) As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the Company’s separate financial statements. (iii) Grafalco Ediciones S.L. (1) Grafalco Ediciones S.L. accounts are drawn considering depreciation at straight line method as against W.D.V.method adopted by NPIL. The same is not aligned with for consolidation purpose considering the negligible impact of the same. (2) During the year Grafalco Ediciones S.L.Balance Sheet as at 31st March, 2012 is drawn for a period of 15 Months i.e. from 01/01/2011 to 31/03/2012. (3) As per the law governing the subsidiary, statutory audit is obligatory only if a) The turnover is above Euro 47,47,996 and
abcd
b) Total employees are more than 50 Since the subsidiary has not met any of the above conditions, accounts of the subsidiary are not subject to audit for the year. Accordingly consolidated financial statements are compiled on the basis of such unaudited accounts.
(iv) eSense Learning Pvt. Ltd. (1) eSense Learning Pvt. Ltd. accounts are drawn considering, depreciation on Computer and hardware, energy saving devices and individual assets acquired for less than ` 5000/- over a period of 5 years on Straightline basis as aginst W.D.V. method adopted by NPIL. Taking into account commercial consideration and bussiness model it is not practical to use uniform accounting policies for the above mentioned assets, the same has not been aligned with for consolidation purpose. (b) Investments other than in subsidiaries and associates have been accounted as per Accounting Standard 13 on Accounting for Investments. (c) Other Significant accounting Policies These are set out under “Significant Accounting Policies” as given in separate financial statements of Parent and subsidiary.
62
Notes forming part of the Balance Sheet
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 1 SHARE CAPITAL Authorised : 25,00,00,000 (25,00,00,000) Equity Shares of ` 2/- each (` 2/- each) 50,00,00,000 (50,00,00,000) Equity Shares of ` 10/- each (` 10/- each) Issued, Subscribed & Paid Up : 23,82,15,000 (23,82,15,000) Equity Shares of ` 2/- each (` 2/- each) fully paid up Total 1.1 Reconciliation of the number of Equity Shares outstanding As at 31st March, 2012 Number of share Amount 2,382 4,764 2,382 4,764
` In Lacs
5,000 500 4,764 4,764
5,000 500 4,764 4,764
Number of Shares at the beginning of the year Add : Shares Issued Less : Shares Forfeited Number of Shares at the end of the year
As at 31st March, 2011 Number of share Amount 2,382 4,764 2,382 4,764
1.2 Terms / Rights Attached to Equity Shares The company has only one class of equity shares having a par value of ` 2 per share. Each holder of equity shares is entitled to one vote per share and all rank pari passu. 1.3 Aggregate number of bonus shares issued during the period of five years immediately preceding the reporting date Equity shares allotted as fully paid bonus shares during last 5 years by capitalisation of Share Premium & General Reserve 1.4 Equity Shareholders holding more than 5% of the shares Paticulars Accord Holding Private Ltd. Corsa Holding Private Ltd. Qualis Holding Private Ltd. 142,929,000
As at 31st March, 2012 No. of share % held 40,993,721 17.21% 31,929,631 13.40% 23,577,132 9.90%
As at 31st March, 2011 No. of share % held 36,562,500 15.35% 28,125,000 11,81% 19,687,500 8.26%
The honourable Bombay High Court wide its order dated 29.06.2012 sanctioned the Composite Scheme of Amalgamation and Arrangement w.e.f. appointed date 21.03.2012 pursuant to which the above 3 companies have been amalgamated with Lakheni Publication Pvt. Ltd. The said scheme was made effective on 13.08.2012.
63
Notes forming part of the Balance Sheet
(Consolidated)
abcd
As at As at 31st March, 2012 31st March, 2011
2 RESERVES & SURPLUS a) Capital Reserve : Opening Balance Add : Additions during the year Closing Balance b) General Reserve : Opening Balance Add : Transferred from surplus balance in the Statement of Profit and Loss Closing Balance
` In Lacs # #
` In Lacs # #
10,014 1,000 11,014
9,014 1,000 10,014
c) Foreign Currency Translation Reserve : Opening Balance Add : Additions during the year Closing Balance d) Surplus in the Statement of Profit and Loss : Balance as per last Financial Statements Add : Net Profit after tax Balance available for Appropriation Less : APPROPRIATION Dividend (First Interim) ` 0.60 Paise ` 2/- paid up (` 0.60 Paise ` 2/- paid up) Dividend Final ` 0.80 Paise ` 2/- paid up (` 0.80 Paise ` 2/- paid up) Corporate Tax on Dividend Transfer to General Reserve
51 (41) 10
(21) 72 51
17,435 7,798 25,233
15,641 6,676 22,317
1,429 1,906 3,335 541 1,000 4,876
1,429 1,906 3,335 547 1,000 4,882
SURPLUS AFTER APPROPRIATION TOTAL (a + b+ c + d)
20,357 31,381
17,435 27,500
64
Notes forming part of the Balance Sheet
(Consolidated)
abcd
` In Lacs
As at 31st March, 2012 As at As at 31st March, 2011 31st March, 2011
NON CURRENT LIABILITIES : 3 LONG TERM BORROWINGS A) Secured i) Term Loan - Foreign Currency Loan from Bank Less : Amount payable within 12 months
As at 31st March, 2012
1,324 530
794
1,158 331
827
Nature of security and Terms of Repayments for Secured Borrowings : Nature of Security Long term foreign currency loan are exclusively secured by Hypothecation of windmills. The Installments due within 12 months from the date of Balance Sheet have been grouped under Other Current Liabilities (Note No. 8)
As at As at 31st March, 2012 31st March, 2011
Terms of Repayments Foreign Curreny Loans from Bank carries interest @ Libor+0.5%. The loan is repayable in 12 half yearly instalments of 41980057 JPY starting from 17th Jan, 2009
` In Lacs 4 Deferred Tax Liabilities (Net) Depreciation Disallowances under section 43B of the Income Tax Act, 1961 574 (120) 454
` In Lacs 435 (105) 330
5 Long Term Provisions Provision for Employee Benefits Provision for Leave Encashment (Refer Note No.37)
382 382
236 236
65
Notes forming part of the Balance Sheet
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
6 SHORT TERM BORROWINGS A) Secured i) Cash Credit from Bank ii) Working Capital Rupee Loans repayable on demand from banks iii) Foreign Currency Loan All short term Rupee loans and foreign currency loans equivalent to ` 3000 Lacs (Previous year ` 902 Lacs) are secured against : hypothecation & first charge over stock of raw materials, work-in-process, finished goods, stores and spares not relating to plant and machinery and book debts.
` In Lacs 5,195 3,000 -
` In Lacs 1,071 902
8,195 B) Unsecured Form Banks : Rupee Loan Total 5,000 5,000 13,195
1,972 3,500 3,500 5,472
7 TRADE PAYABLES - Due to Micro, Small and Medium Enterprises - Due to Others Total Details of the dues to Micro, Small and Medium Enterprises (MSME), as defined in the Micro, Small and Medium Enterprises Development Act, 2006, as on 31st March 2012 based on available information with the Company which are as under : Particulars Principal amount due and remaining unpaid Interest due on above and the unpaid interest Interest paid Payment made beyond the appointed day during the year Interest accrued and remaining unpaid Amount of further interest remaining due and payable in succeeding years
80 1,443 1,522
56 752 808
2011-12 9 1 47 2 -
2010-11 4 # 53 2 -
66
Notes forming part of the Balance Sheet
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 8 OTHER CURRENT LIABILITIES Advances Received Unpaid Dividend Interest Accrued But Not Due Income received in Advance Creditors for capex Current maturities of Foreign Curreny Loans from Bank (Also see note no. 3) Employee Benefits Payable Deposits - Provisions for tax (net of advance tax) Statutory Dues - Providend Fund / ESIC / Profession Tax - Tax Deducted At Source - Service tax / WCT / Excise payable - Sales tax payable Provision for Expenses Other Payable/ (Receivable) 76 78 7 157 738 146 3,292 370 93 8 129 256 530 606 22 76
` In Lacs 253 80 10 47 115 331 507 27 140 65 72 8 106 658 (190) 2,228
9 SHORT TERM PROVISIONS Provision for Employee Benefits - Provision for Leave Encashment Benefits (Refer Note No. 37) Other Provisions - Proposed Dividend - Corporate Tax on Proposed Dividend Total 1,906 309 2,225 1,906 309 2,306 10 91
67
Notes forming part of the Balance Sheet
10 FIXED ASSETS
(Consolidated)
abcd
` In Lacs Depreciation / Amortization Net Block
Total upto 31.03.2012 52 2,270 8,437 191 949 737 160 309 247 266 13,618 12,215 As on 31.03.2012 983 32 6,851 6,545 112 400 703 80 132 0 269 16,107 11,891 As at 31st March, 2011 As on 01.04.2011 984 39 4,658 4,678 93 317 562 97 213 0 251 11,891 -
Gross Block
Sr. Description Tangible 1 2 3 4 5 6 7 8 9 10 11 Land - Freehold Land - Leasehold Building Plant & Machinery Office Equipment Furniture & Fixtures Vehicles Intangible Intellectual Property Trade Mark SAP Software Total Previous Year 210 441 247 371 24,107 19,864 164 5,979 4,397 398 155 242 441 247 535 29,725 24,106 113 228 247 119 12,215 10,973 984 84 6,616 12,476 280 1,205 1,193 2,546 2,743 40 152 334 2 41 238 17 12 88 983 84 9,121 14,981 303 1,349 1,439 45 1,958 7,798 187 888 632 Cost As on Additions Deductions / Adjustments Cost As on 31.03.2012 Provided upto 01.04.2011 No. of Assets 01.04.2011 during the year
For the Year
Deductions / Adjustments
6 346 839 18 66 181 28 81 146 1,711 1,360
34 201 14 8 76 333 118
As at 31st March, 2012
` In Lacs 11 CAPITAL WORK IN PROGRESS Opening Balance Add : Expenditure during the year Less : Capitalisation / Adjustments during the year Closing Balance 983 330 (975) 338
` In Lacs
470 958 (445) 983
12 INTANGIBLE ASSETS UNDER DEVELOPMENT Opening Balance Add : Expenditure during the year 21 21 Closing Balance
68
Notes forming part of the Balance Sheet
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 13 NON CURRENT INVESTMENTS 1) Other Investment a) Unquoted Wings Intellect Pvt Ltd. 8333(NIL) Equity Shares of ` 600/- each Investment in Limited Liability Partnership Navneet Learning LLP b) Long Term Financial Investments Total Non current investments Aggregate amount of unquoted investments
` In Lacs
50
-
6 56 56
10 10 10
14 LONG TERM LOANS AND ADVANCES Unsecured - Considered Good a) Capital Advance - Advances for Capital Expenditure b) Corporate Deposits c) Security Deposits d) Advance Income Taxes (Net of Provisions) e) Wealth Tax f) Loans and advances to related parties i) Loans to Associates - Navneet Learning LLP g) Loans to Employees h) Loan to Vendors i) Sales Tax receivable j) Advance to Suppliers k) Prepaid Expenses l) Equity Shares application money m) Deposit with Others n) Other Loans & Advances
474 75 174 555 4 3,045 181 12 47 5 25 35 29 1,771 6,432
496 75 167 583 5 58 6 27 10 2 29 1,409 2,868
69
Notes forming part of the Balance Sheet
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
15 OTHER NON CURRENT ASSETS (Unsecured, considered good) Other Income Receivable
` In Lacs
` In Lacs
27 27
129 129
16
INVENTORIES 528 8,265 11,651 1,236 83 21,763 379 5,065 11,361 875 30 17,709
Stores, Spares & Consumables Raw Materials Finished Goods Work In Process Stock in Trade (in respect of Goods acquired for Trading)
17 TRADE RECEIVABLES (Unsecured, considred good) Over six months Others
807 10,833 11,640
775 7,905 8,680
18 CASH AND BANK BALANCES Cash and Cash Equivalents Cash on hand Balance with Scheduled Banks - In Current Account Sub Total A Other Bank Balances Fixed Bank deposits with more than twelve months maturity Fixed Bank deposits with less than twelve months maturity Earmarked Balance with Banks In Dividend Account
50 364 414 2 # 93 95 509
43 996 1,039 10 1 80 91 1,130
70
Sub Total B Sub Total A + B
Notes forming part of the Balance Sheet
19 SHORT TERM LOANS AND ADVANCES (Unsecured, considered good) a) Loans to vendors b) Loans to Employees c) Deposits - Security Deposits - Corporate Deposits d) Sales Tax receivable e) CENVAT receivable f) Service Tax Refund receivable g) Prepaid Expenses h) Advance to Suppliers i) Advance to Employee for expenses j) Other Loans & Advances
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs
` In Lacs
20 131 2 23 10 33 1 126 356 14 45 761
29 211 35 4 33 97 257 31 33 731
20 OTHER CURRENT ASSETS a) Export incentive receivable b) Other income receivable 288 6 294 290 20 310
71
Notes forming part of Statement of P & L
(Consolidated)
abcd
As at 31st March, 2012 As at 31st March, 2011
` In Lacs 21 REVENUES FROM OPERATION Sale of products - Finished Goods (Refer Note below 21.1) - Traded Goods Sale of services Other operating revenues Less : Sales Tax Collected Less : Excise Duty
` In Lacs
61,288 340 919 728 63,275 (1,108) (273) 61,894
54,442 127 836 585 55,990 (956) (203) 54,831
21.1 SALES OF FINISHED GOODS PRODUCTS Educational Books Paper Stationery Others
32,064 22,672 6,552 61,288
26,835 21,186 6,421 54,442
22 OTHER INCOME Dividend on Mutual Funds Profit / (Loss) on Sale of Investments Other non-operating Income Profit / (Loss) on Sale of Asset Exchange Fluctuation on Consolidation Interest Income Net gain on foreign currency translation and transaction
12 24 346 124 (#) 616 1,122
59 117 125 26 3 305 183 818
72
Notes forming part of Statement of P & L
(Consolidated)
abcd
For the year ended 31st March, 2012 For the year ended 31st March, 2011
` In Lacs 23 COST OF MATERIAL CONSUMED Raw Materials Consumed 23.1 COST OF MATERIAL CONSUMED Paper Others 24 (INCREASE) / DECREASE IN STOCK OF FINISHED GOODS AND WIP Closing Stock Work in Process (Refer Note below 24.1) Finished Goods Opening Stock Work in Process Finished Goods
` In Lacs
30,483 30,483 26,703 3,780 30,483
26,409 26,409 22,718 3,691 26,409
1,236 11,735 12,971 875 11,391 12,266 (705) 390 577 48 221 1,236
875 11,391 12,266 764 11,837 12,601 335 299 470 16 90 875
24.1 DETAILS OF CLOSING INVENTORY OF WORK IN PROCESS Forms Printed Covers Pasted Sheets Ruled Sheets
25 EMPLOYEE BENEFITS EXPENSES Salaries, Wages and Bonus Contribution to Provident and Other Funds Staff Welfare 5,222 496 391 6,109 4,523 474 406 5,403
73
Notes forming part of Statement of P & L
(Consolidated)
abcd
For the year ended 31st March, 2012 For the year ended 31st March, 2011
26 FINANCE COST Interest on Debentures Other Borrwoing Costs
` In Lacs 576 576
` In Lacs 17 299 316
74
27 OTHER EXPENSES Printing Expenses Binding Expenses Other Manufacturing Expenses Power & Fuel Freight & Octroi Stores & Spares Consumed Repairs to Plant & Machinery Rates & Taxes Sales Tax Expenses Rent Royalty Building Repairs & Maintainance Other Repairs Insurance Transportation Expenses Commission Advertisement Marketing Expenses Sales Promotion Expenses Discount & Rebate Bad debts and other irrecoverable advance written off Donation Bank Charges Prior Period items Legal and Professional Fees Net loss on foreign currency translation and transaction Other Expenses Total
726 800 1,067 304 614 304 117 100 7 455 1,208 234 186 76 1,079 31 232 834 1,299 326 102 234 161 5 604 281 1,238 12,624
686 646 980 245 566 185 145 75 9 534 1,015 252 198 78 953 102 297 796 953 311 20 274 139 4 453 1,105 11,020
Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
abcd
28 Estimated amount of Capital Contracts (net of Advances) remaining to be executed and not provided for ` NIL (Previous Year ` 739 Lacs) 29 Contingent Liabilities. (a) For disputed Income-tax matters ` 496 Lacs (Previous Year ` 559 Lacs) against which amount paid is ` 535 Lacs (Previous Year ` 563 Lacs) (b) Against Bond : (i) Import Duty liability of ` 381 Lacs (Previous Year ` 381 Lacs) for import of machinery against licences granted under EPCG scheme. (ii) Duty liability amounting to ` 86 Lacs (` 29 Lacs) for the purchase of excisable inputs without payment of duty under the bonds executed if the export obligation is not fulfilled. (c) In respect of bank guarantees given for subsidiary Company of Euro NIL (Previous Year Euro 2-mn) equivalent to ` NIL (Previous Year ` 1278 Lacs) 30 Financial & Derivative Instruments (a) The Company has sold USD 14.48 Mn equivalent ` 7234 Lacs and EUR 0.11 Mn equivalent ` 78 Lacs (Previous Year USD 9.61 Mn equivalent ` 4598 Lacs and Eur 0.87 Mn equivalent ` 543 Lacs) to cover our export receivables and purchase USD NIL equivalent ` NIL (Previous Year USD 2 Mn equivalent ` 941 Lacs) to cover loan repayment. The Company has entered into USD-JPY derivative option contracts hedging its exposure on ECB availed in JPY for wind power generation project. Option contracts worth of JPY 181-Mn (Previous Year JPY 253-Mn) were open as on balance sheet date, maturing over a period of seven years on Jul 2014.
31. Foreign Currency Translation of ` 219 Lacs (Previous Year credited ` 202 Lacs) arising on account of the exchange difference on non
integral foreign operations is debited to the Statement of Profit & Loss.
75
Notes on Financial Statements
For the year ended 31st March, 2012 32. Related party transactions (a) Associates – Navneet Learning LLP
(Consolidated)
abcd
(b) Other related parties with whom transaction have taken place during the year.
(i) Enterprises owned or significantly influenced by key management personnel or their relatives
Navneet Prakashan Kendra Vikas Prakashan Gala Publishers Sandeep Agency Bigspace Realty Pvt. Ltd The Flagship Advertising Pvt. Ltd.
(ii) Key Management Personnel & Relatives
(ii) Key Management Personnel & Relatives 1. Shri A.R. Gala 2. Shri D.R. Gala 3. Shri H.R. Gala 4. Shri S.R. Gala 5. Shri J.L. Gala 6. Shri J.K. Sampat 7. Shri N.N. Shah 8. Shri B.A. Gala 9. Shri A.D. Gala 10. Shri G.D. Gala 11. Shri R.H. Gala 12. Shri D.C. Sampat 13. Shri S.J. Gala 14. Shri S.J. Gala 15. Shri K.H. Gala 16. Shri S.S. Gala 17. Shri K.B. Gala 18. Shri T. R. Shah 19. Smt. H. T. Shah 20. Shri H. A. Gala
76
Notes on Financial Statements
For the year ended 31st March, 2012 Transaction with Related Parties : Items / Related Parties
(Consolidated)
abcd
Key Management Personnel Relative of Key Management Personnel 8 (5) -(--) -(--) -(--) Total
Enterprises owned or significantly influenced by key management personnel or their relatives 1,486 (1,344) -(--) -(--) -(--)
Associates
(i) Purchase,expense and other services from related parties (ii) Sales of goods and Services
-(--) -(--) 3,045 (--) 7 (--)
669 (669) -(--) -(--) -(--)
2,163 (2,018) -(--) 3,045 (--) 7 (--)
(iii) Loans given
(iv) Investments
(v) Balance outstanding at year end Loans and advances given
-(--)
3,045 (--)
-(--)
-(--)
3,045 (--)
77
Notes on Financial Statements
For the year ended 31st March, 2012 33. Earning Per Share :
(Consolidated)
abcd
2011-2012 ` In Lacs 2010-2011 ` In Lacs 6,676 6,676 2,382 2.80 2.80
(a) Net Profit after tax but before extra ordinary item as per statement of profit and loss Less : Extra Ordinary Items Net profit available for Equity Shareholders (b) Weighted Average Number of Equity Shares for basic and diluted EPS (in No.) (c) Basic and Diluted Earning per share of ` 2/- each (i) Before Extra Ordinary Items (ii) After Extra Ordinary Items
7,798 7,798 2,382 3.27 3.27
34 Lease Transactions : Accounting Standard 19 As a lessor in an Operating Lease Fixed Assets: Plant & Machinery (Computer & Hardware) include assets costing ` 627 Lac (` 107 Lac), (Gross Block) on operating lease contract. The details of the assets given on operating lease as on 31.03.2012 are
Computers & Hardware Computers & Hardware 2011-2012 (` In Lacs) Gross carrying amount Accumulated Depreciation Depreciation recognised in Profit & Loss account for year 627 135 82 2010-2011 (` In Lacs) 107 77 67
Maturity Pattern of the Gross/Present Value of MLP receivables.
78
Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
abcd
2011-2012 (` In Lacs) 2010-2011 (` In Lacs) 26 34 60 213 403 616
Not Later than one year Later than one year and not later than five years Later than five years Total As a Lessee in an Operating Lease
2011-2012 (` In Lacs) (a) The total amount of future minimum lease payments under non cancellable operating leases for each of the following period : (i) Not later than one year : (ii) Later than one year and not later than five years : (iii) Later than five years : (b) The total of future minimum sublease payments expected to be received under non cancellable sublease at the Balance Sheet date : (c) Lease payments recognised in the Statement of Profit and Loss for the period, with separate amounts for minimum lease payments and contigent rents : (d) Sub-Lease payments received (or receivable) recognised in the Statement of Profit & Loss for the period : (e) A general description of the lessee’s significant leaseing arrangements including, but not limited to the following : (i) The basis on which contingent rent payments are determind : (ii) The existence and terms of renewal or purchase options and escalation clauses; and (iii) Restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leaseing.
2010-2011 (` In Lacs)
172 36 119 182 108
193 208 250 156 92
-
-
79
Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
abcd
35. Details of provisions, utilised, written Back : Particulars Provision for Leave Salary Encashment Provision for Gratuity
As at 01.04.2011 320 8 328
Additions 55 9 64
Utilised/ Written Back -
As at 31.03.2012 375 17 392
36. Segment Reporting The Company’s operations relates to publication of knowledge based information in educational and general books form as well as in electronic media and manufacturing of paper and other stationery items. It caters to the educational need of Indian as well as Global market. Accordingly ”Publication” and “Stationery” comprise of the primary segments. Secondary segmental reporting is performed on the basis of the geographical location of customers. The accounting principles and policies used in the preparation of the Financial Statements, as set out in the note on significant accounting policies, are also consistently applied to record revenue and expenditure, in individual segments.
80
Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
abcd
` In Lacs Stationery 2012 24,927 – 24,927 111 25,038 2,577 – – – – – – – – – 24,511 – – 2,370 – – 2,718 – 447 – – 2011 23,212 – 23,212 154 23,367 3,314 – – – – – – – – – 18,814 – – 1,376 – – 2,066 – 332 – – Others 2012 636 – 636 – 636 26 – – – – – – – – – 1,969 – – 10 – – 670 – 237 – – 2011 509 – 509 (95) 413 (84) – – – – – – – – – 1,599 – – 13 – – – – 234 – – Total 2012 61,894 – 61,894 385 62,279 13,652 737 576 1,846 11,967 4,200 (31) 7,798 – 7,798 51,290 6,659 57,948 3,975 17,829 21,804 6,082 247 1,564 149 – 2011 54,831 – 54,831 93 54,924 11,865 725 316 1,597 10,678 4,036 (34) 6,676 – 6,676 40,785 3,708 44,492 3,909 8,319 12,228 4,746 164 1,281 80 –
[A] Primary - Business Segments Publication 2012 Revenue Less : Inter Segment Revenue Net Revenue Other Income Segment Revenue Segment Results Add : Unallocated Other Income/(Expense) Less : Financial Expenses Less : Unallocable Expenditures Profit Before Taxation Provision for Taxation (Income tax, and deferred tax) Minority Interest Profit after taxation Extraorinary Item (net of tax expense) Net Profit after extraordinary Items Segment Assets Unallocated Assets Total Assets Segment Liabilities Unallocated Liabilities Total Liabilities Capital Expenditure Unallocated Capital Expenditure Depreciation on Segmental Assets Unallocated Depreciation Amortization 36,331 – 36,331 274 36,605 11,049 – – – – – – – – – 24,810 – – 1,595 – – 2,694 – 880 – – 2011 31,110 – 31,110 34 31,143 8,635 – – – – – – – – – 20,372 – – 2,519 – – 2,680 – 715 – –
81
Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
abcd
Notes : 1 Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the respective segment, however, revenue and expenses which can not be identified or allocated reasonably to a segment being related to the enterprise as a whole have been grouped as unallocable. 2 3 Segment assets and segment liabilities represent assets and liabilities of respective segments, however the assets and liabilities not identifiable or allocable on resonable basis being related to enterprise as a whole have been grouped as unallocable. The business which have been grouped under “Others” segment comprises of revenue from generation of power by windmill, Pre school and trading items, etc.
Secondary - Geographical Segments
North & Central America Africa Europe Australia & Oceania Rest of the world except India India
` in Lacs
Total
Segment Revenue Segment Assets
2,445 (2,439) 135 (69)
1,664 (1,534) 301 (264)
560 (2,136) 117 (965)
28 (27) (7)
894 (331) 369 (37)
56,303 (48,364) 57,026 (43,150)
61,894 (54,831) 57,948 (44,492)
37. Disclosure pursuant to Accounting Standard - 15 (Revised) ‘Employee benefits’ (a) The Company adopted Accounting Standard (AS) 15 (revised 2005) on “Employee Benefits” issued by ICAI. The actuarial valuations of the various employee benefits were carried out by using the Projected Unit Credit Method. (b) The Company has recognised the following amount as an expense and included in the Statement of Profit and Loss. ` in Lacs ` in Lacs 2011-12 2010-11 (i) Provident Fund 244 223 (ii) ESIC 63 57 (c) Defined benefit plan and long term employment benefits General description (1) Gratuity (Defined benefit plan) The Company makes annual contribution to the employee group gratuity scheme of the Life Insurance Corporation of India, funded defined benefits plan for qualified employees. The scheme provided for lumpsum payments to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. (2) Accrual for leave encashment benefit is made on the basis of a year-end actuarial valuation in pursuance of the Company’s leave rules. The following table sets out for the status of gratuity / Leave encashment plan :
82
Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
Gratuity (Funded)
abcd
Leave Encashment (Non-Funded) 31/03/12 318 71 25 41 373 41 41 373 373 90 25 115 318 115 (41) 392 8.00% 7.00% 8.00% 8.00% 7.00% 8.00% 0.00% 4.00% 7.30% 31/03/11 324 10 23 39 318 39 39 318 318 66 23 (56) 33 324 33 (39) 318 0.00% 4.00% 7.30% 31/03/12 864 (61) 69 3 869 913 86 121 3 1,117 1,117 869 (248) 31/03/11 713 97 57 4 864 706 67 143 4 913 913 864 (49) -
Change in Obligation Accrued Gratuity Actuarial gain/(loss) Interest Cost Less : Benefits paid Accrued Gratuity Change in Plan Asset Opening Fund Balance Return on the plan asset Contribution paid Less : Benefits paid Closing Fund Balance Reconciliation of present value of obligation and the plan asset Closing Fund Balance Accrued Gratuity Net Liability Balance sheet Expense recognized in the statement of P & L Current Service Cost Interest Cost Expected Return on Plan Assets Net Actuarial (Gain) / Loss recognized for the period Expense recognized in the statement of P & L Movement in the Liability recognized in Balance Sheet Opening Net Liability Expenses as above Contribution paid Closing Net Liability Assumptions Assets Salary escalation rate Discounting rate
83
Notes on Financial Statements
For the year ended 31st March, 2012
(Consolidated)
abcd
38. The Loss of Subsidiary attributable to minority is agreed to be funded by them. 39. Figure of ` 50,000 or less have been denoted by # 40. The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.
As per our report of even date attached hereto For and on behalf of : Ghalla & Bhansali Chartered Accountants (Registration No. 103142W) sd/Haresh K. Chheda Partner (Membership No. 38262) Mumbai : 23rd August, 2012007 For and on behalf of the Board
sd/-
sd/A. R. Gala Managing Director
sd/S. K. Vikamsey Chairman
Amit D. Buch Company Secretary
84
abcd
Particulars of subsidiaries as at 31st March, 2012 in terms of Circular No. 5/12/2007-CL-III dt. February 8th 2011, General Circular 2/2011 issued by Government of India, Ministry of Corporate Affairs under section 212 (8) of Companies Act, 1956. ` in Lacs Sr. No. Particulars Name of the Subsidiaries eSense Learning Pvt. Ltd. Grafalco Ediciones S.L.* As at 31-03-12 As at 31-03-12 413 1,023 752 1,084 2,200 295 50 922 (352) (352) 469 # 68 438 17 2 18 1236 704 # 704 -
Capital Reserves Total Assets Fixed Assets Current Assets, Loans and advances Profit & Loss account - Debit Balance d Total Liabilities Loans-Secured / Unsecured Deferred Tax Liability (Net) Current Liabilities and Provisions e Details of Investments f Turnover / Other Income g Profit / (Loss) before taxation h Provision for taxation i Profit / (Loss) after taxation j Proposed Dividend *Average exchange rate as on 31-03-2012, Euro 1 = ` 65.3977
a b c
Figure of ` 50,000 or less have been denoted by #
85
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LLY NA TIO EN INT E IS PAG NK HIS BLA T EPT K
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NAVNEET PUBLICATIONS (INDIA) LIMITED
Registered Office : Navneet Bhavan, Bhavani Shankar Road, Dadar (West), Mumbai – 400028.
ATTENDANCE SLIP
Twenty-Sixth Annual General Meeting - Thursday, 27th September, 2012. Please fill in this Attendance Slip and hand it over at the entrance of the meeting hall. Joint Shareholders may obtain additional Attendance Slip on request. Master Folio No._______________ DPID ______________________ No.of Shares Held __________________ Client ID __________________
Mr. / Ms. / Mrs____________________________________________________________________ Address _________________________________________________________________________ I / We hereby record my / our presence at the TWENTY -SIXTH ANNUAL GENERAL MEETING of the Company held on Thursday, 27th September, 2012 at 3 : 30 p.m. at Textile Committee Auditorium, Textile Committee Building , P. Balu Road, Near Tata Press, Prabhadevi Chowk, Mumbai – 400025.
(Proxy’s Name in Block Letters)
(Member’s / Proxy’s Signature #)
# Strike out whichever is not applicable
-----------------------------------------------------------------TEAR HERE-----------------------------------------------------------------------------
NAVNEET PUBLICATIONS (INDIA) LIMITED
Registered Office : Navneet Bhavan, Bhavani Shankar Road, Dadar (West), Mumbai – 400028.
PROXY FORM
Client ID _________________ DPID ___________________ Master Folio No. __________________ I/We __________________________________ of _____________________ in the district of _____________________ being a member/members of Navneet Publications (India) Limited hereby appoint _________________________________________ of _______________________ in the district of _____________________or failing him ___________________________________________ of __________________________ in the district of _____________________ as my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on Thursday, 27th September, 2012 at 3 : 30 p.m. and at any adjournment(s) thereof. Signed this………... day of ……………….. 2012.
Affix `1
Signature .................. Revenue .....
Stamp
NOTE : The proxy form in order to be effective should be duly completed and deposited at the Registered Office of the Company not less than 48 hours before the time of the meeting.
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