REPORT OF THE BOARD OF DIRECTORS

DEAR MEMBERS,

The Board of Directors is pleased to present the Forty-Sixth Annual Report along with Audited Financial Statements of the Company for the financial year ended March 31, 2016.

OPERATIONAL PERFORMANCE

MPS delivered another year of steady growth. Revenue from operations for the year ended March 31, 2016 increased to Rs.224.04 crores as against Rs.203.17 crores for the previous year. The Profit After Tax for the year ended March 31, 2016 was Rs.70.53 crores and EPS Rs.37.88 per share as against Rs.58.70 crores and Rs.34.76 per share respectively for the previous year ended March 31, 2015. An amount of Rs.7.05 crores has been transferred to General Reserve during the year ended March 31, 2016 as compared to an amount of Rs.5.87 crores for the previous year ended March 31, 2015.

DIVIDEND

During the year under review, the Board of Directors of your Company declared and paid three interim dividends, viz. first interim dividend of Rs.7 per share declared on July 20, 2015, second interim dividend of Rs.7 per share declared on October 26, 2015 and the third interim dividend of Rs.8 per share declared on January 27, 2016. The Board of Director recommends, these three Interim Dividend, aggregated to Rs.22 per share as the final dividend for the financial year 2015-16. Total cash outflow (including dividend distribution tax thereon) was Rs.49.30 crores. The total distribution of profit after tax as dividend for the financial year 2015-16 stands at 69.90%.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, no amount became due for transfer to the Investor Education and Protection Fund established by the Central Government under the provisions of Section 205C of the Companies Act, 1956.

Your Company updates the details of unclaimed dividend on its website, www.adi-mps.com. The shareholders, who have not yet claimed any of their dividends, are requested to contact the Company’s Registrar and Share Transfer Agent (“RTA”) for timely claiming the same. Contact details of the RTA are provided in this Annual Report as well as available on the Company’s website.

SHARE CAPITAL

The paid up equity share capital as at March 31, 2016 stood at Rs.18.62 crores. During the year, the Company has neither introduced any Stock Option Scheme, nor issued any shares with differential voting rights.

SUBSIDIARY

MPS North America, LLC (MPS North America) continues to be the subsidiary of your Company. The three US-based acquisitions (Element, EPS, and TSI) completed through MPS North America have been neatly integrated into the overall operations. MPS North America is focused on content creation and development, project management, and media asset development for K12, Higher Education, Academic and STM publishers. The subsidiary is gaining traction in these business areas and also contributing to winning offshore revenue for other business areas including content production, transformation, HTML5 development, and platform services.

The subsidiary continues to be the fastest growing part of the Company’s overall business. The revenue of MPS North America for the year ended March 31, 2016 was Rs.37.41 crores as compared to Rs.25.64 crores during the previous year. The profit before tax for the year was Rs.1.27 crores and profit after tax was Rs.0.71 crores as compared to previous year profit before tax of H4.35 crores and profit after tax of Rs.2.74 crores respectively.

CONSOLIDATED FINANCIAL STATEMENT

As per requirement of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) and in accordance with the Accounting Standard (AS) 21 on Consolidated Financial Statement, the Audited Consolidated Financial Statement for the year ended March 31, 2016 is provided in the Annual Report, which includes the assets, liabilities, income, expenses and other details of the Company and its subsidiary.

Pursuant to Section 129 of Companies Act, 2013, (the Act)read with Rule 5 of the Companies (Account) Rules, 2014, a statement containing salient features of the financial statements of subsidiary in Form AOC -1 is attached to Consolidated Financial Statement forming part of this Annual Report.

BOARD MEETINGS

During the financial year 2015-16, four (4) meetings of the Board of Directors were held to transact the business of the Company. The time gap between the two consecutive Board Meetings did not exceed 120 days. The details of the Board meetings, including the attendance of Directors at these meetings are provided in the Corporate Governance Report annexed to this Report.

DEPOSITS

During the year under review, your Company has not accepted any deposits under Chapter V of the Act and hence no amount of principal and interest thereof was outstanding.

LOANS, GUARANTEES AND INVESTMENT

All the investments made by the Company were in accordance with the provisions of Section 186 of the Act and the rules made there under. The Board of Directors of the Company has duly constituted an Investment Committee that after proper evaluation and assessment of all the proposed investment proposals as per specified parameters, provides its recommendation to the Board. The details of all current and non-current investments of the Company are duly disclosed in the Notes to Standalone Financial Statements. During the financial year under review, your Company has not provided any secured / unsecured loan to other Body Corporate or guarantees / securities in respect of any such loan. Your Company has not obtained any secured term loan during the year.

UTILIZATION OF THE PROCEEDS FROM QUALIFIED INSTITUTIONAL PLACEMENT

During the financial year 2014-15, your Company had raised a sum of Rs.150 crores through “Qualified Institutional Placement” (QIP). The net proceeds of the issue (net of issue expenses) are primarily to augment funds for growth opportunities such as acquisitions and strategic initiatives and for general corporate purposes and any other purposes as may be permissible under applicable law. These funds have been temporarily invested in interest / dividend bearing liquid instruments, including money market instrument and will be utilized as per the objects of the QIP as and when a suitable opportunity of acquisition and strategic growth materializes.

DIRECTORS, KEY MANAGERIAL PERSONNEL, AND EMPLOYEES

During the year under review to ensure the seamless implementation of management’s identified succession plan, Mr. Nishith Arora relinquished the position as Managing Director of the Company w.e.f. May 25, 2015. The Board of Directors, on the recommendation of the Nomination and Remuneration Committee, appointed Mr. Nishith Arora, as Whole Time Director and Executive Chairman of the Company for a period of three (3) years w.e.f. May 25, 2015 which has also been approved by the members of the Company at the 45th Annual General Meeting of the Company. Mr. Nishith Arora is now concentrating on the strategic and inorganic growth of the Company.

Mr. Nishith Arora retires at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. Your Board of Directors recommends the appointment of Mr. Nishith Arora, as a Director, liable to retire by rotation at the ensuing 46th Annual General Meeting.

During the year under review, Mr. Rahul Arora was promoted as Chief Executive Officer (CEO) of the Company effective from May 25, 2015.

The CEO and his core strategy team are now based in the United States and all customers have welcomed this development. The Company believes that its primary growth in the future will be from the United States. As publishers identify new areas of outsourcing and consolidate existing business with fewer strategic suppliers, MPS is in a differentiated position by providing its customers local access to senior management. Mr. Rahul Arora continues to be the Whole Time Director of the Company. As Mr. Rahul Arora was not a resident of India for a continuous period of 12 months preceding the date of his appointment as a Whole Time Director, the Company had applied to Central Government (Ministry of Corporate Affairs) as per the provisions of Sections 196 and 197 read with Clause (e), Part I, Schedule V to the Act. Company’s application has been approved by the Central Government (Ministry of Corporate Affairs) vide letter dated July 16, 2015.

Ms. Yamini Tandon was appointed as a Whole Time Director of the Company for a period of 5 (five) years with effect from August 11, 2014. As Ms. Tandon was not a resident of India for a continuous period of 12 months preceding the date of her appointment as a Whole Time Director, the Company had applied to the Central Government (Ministry of Corporate Affairs) pursuant to Sections 196 and 197 read with Clause (e), Part I, Schedule V to the Act. Company’s application has been approved by the Central Government (Ministry of Corporate Affairs) vide letter dated June 19, 2015. Ms. Tandon resigned as Whole Time Director of the Company w.e.f. May 8, 2015.

The Board of Directors, on the recommendation of the Nomination and Remuneration Committee, appointed Ms. Yamini Tandon, as an Additional Director (Non-Executive) of the Company w.e.f. August 03, 2015. As an Additional Director Ms. Yamini Tandon would hold the office of Director up to the date of this ensuing 46th Annual General Meeting. The Company received a notice in writing from a member along with the deposit of requisite amount in accordance with the provisions of Section 160 of the Act, proposing the candidature of Ms. Yamini Tandon for the office of Director, liable to retire by rotation. The Board of Directors, after considering the expertise and performance of Ms. Yamini Tandon, is of the view that her association with the Company as a Director would be of immense help to the Company. Accordingly, your Board of Directors recommends the appointment of Ms. Yamini Tandon as a Non-Executive Director, liable to retire by rotation at the ensuing 46th Annual General Meeting of the Company.

A brief resume of Directors proposed to be appointed at the ensuing Annual General Meeting along with their expertise and directorships in other companies are given in the Notice to the Annual General Meeting.

DECLARATION BY INDEPENDENT DIRECTORS

Independent Directors of the Company have declared to the Company that they meet the criteria of independence as provided under Section 149(6) of the Act and Regulation 17 of the Listing Regulations.

NOMINATION AND REMUNERATION POLICY

As per provisions of Section 178(3) of the Act, on the recommendation of the Nomination and Remuneration Committee, your Company has formulated a Nomination and Remuneration Policy. The policy is formulated for:

 setting criteria with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions of the Company;

 to determine remuneration, based on the Company’s size, financial position, trends and practices on remuneration prevailing in the industry; and

 to carry out evaluation of the performance of Directors, Key Managerial and Senior Management Personnel and to attract, retain, motivate, and promote talent and to ensure long term sustainability of talented Managerial Persons and create competitive advantage.

The Nomination and Remuneration Policy is appended as Annexure A to this Report.

BOARD EVALUATION

As per Section 178 of the Act and the corporate governance requirements as prescribed under Regulation 19 of the Listing Regulations, performance evaluation of the individual Directors, Chairman, Board and Committees thereof is an annual exercise. Based on the criteria set by the Nomination and Remuneration Committee, performance of Independent Directors was carried out by the Board of Directors. Independent Directors in their separate meeting evaluated the performance of non-independent Directors, including the Chairman, Board and Committees thereof. Evaluation results were discussed in the Board Meeting. The Board was satisfied with the evaluation results that reflected the overall engagement of the Directors individually, the Board and its Committees.

PARTICULARS OF DIRECTORS AND EMPLOYEES

Pursuant to Section 197(12) of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, details/information’s related to the remuneration of Directors and Key Managerial Personnel are set out in Annexure B to this Report.

DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Act, the Directors confirm the following:

a. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the Annual Accounts on a going concern basis;

e. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

INTERNAL FINANCIAL CONTROL

The Company has a robust system of internal financial control, commensurate with the size and complexity of its business operations. It ensures that all the business transactions are recorded in a fair and transparent manner. The Company has an external and independent firm of Internal Auditors that scrutinizes the financials and other operations of the Company. The Internal Auditors also checks if the applicable laws have been complied with or not. Internal Auditors directly report to the Audit Committee. Based on the findings of Internal Auditors, process owners undertake corrective actions in their respective areas. During the year and at the year-end, such controls were tested for adequacy and operating effectiveness and no reportable material weakness or significant deficiency was observed in the design or operations.

RISK MANAGEMENT

During the year, your Company has formulated a Risk Management Policy to assist the Board in:

 Overseeing and approving the Company’s enterprise wide risk management framework; and

 Overseeing that all the risks that the organization faces such as strategic, financial, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.

The Company’s management systems, organizational structure, processes, standards, code of conduct, and behaviors together form a System that governs how the Company conducts its business and manage the associated risks.

Your Company carries out a periodical exercise to identify various risks involved in the business and operations of the Company. After identification, such risks are assessed for the degree of risks involved and accordingly steps are taken to mitigate those risks. The objective of such exercise is to mitigate the probable adverse impact on business operations and thus enhance the competitiveness. The risk assessment process of the Company defines the risk management approach at all levels across the organization including determining the degree of risks and suitable steps to be taken to avoid the probable harm.

RELATED PARTY TRANSACTIONS

Your Company has formulated a Policy on Related Party Transaction (available on the Company’s website www.adi-mps.com) as recommended by the Audit Committee to the Board, which defines materiality of related party transactions and sets the procedure for dealing with related party transactions based on the Companies Act, 2013, Regulation 23 of the Listing Regulations, applicable Accounting Standards and other applicable laws and regulations.

All new contracts and arrangements that were entered into during the financial year 2015-16 with related parties were on arm’s length basis and in the ordinary course of business. The Audit Committee has approved all such contracts and arrangements. The Company has not, during the year, entered into any related party transaction that may have a potential conflict with that of the Company at large. During the year, the Company has not entered into any material related party transactions as specified in Section 188(1) of the Act with any of its related parties. Accordingly, the disclosure of related party transactions as per Section 134(3)(h) of the Act in Form AOC-2 is not applicable. The details of related party transactions of the Company are disclosed in Financial Statement of the Company.

AUDIT COMMITTEE

Composition of the Audit Committee of the Company is in accordance with Section 177 of the Act and the Listing Regulations, consisting of majority of Independent Directors. Composition, role, terms of reference, and details of meetings of the Audit Committee are provided in the Corporate Governance Report annexed to this report. The Board has accepted all the recommendations made by the Audit Committee.

VIGIL MECHANISM

The Company has adopted a “Whistle Blower Policy” (Policy) that has been communicated to all the Directors and employees of the Company through intranet site of the Company. MPS is committed to have highest possible transparency in its operations. The objective of the Company’s Whistle Blower Policy is to allow employees an avenue to raise concerns, in line with MPS’ commitments to the highest possible standards of ethical, moral and legal business conduct and its commitment to open communications. Employees can, on a confidential basis, report such matters to ombudsman which may lead to incorrect financial reporting, or of serious nature, unlawful, not in line with the Code of Conduct of the Company or amounts to improper conduct. Employees also have access to the Chairman of Audit Committee. The Policy provides complete confidentiality and safeguard of the employees who raises the whistle against such improper conduct.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACES

The Company has adopted an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. The Company has set up an Internal Complaint Committee to redress the complaints, if any, received. During the year under review, no complaint was received from any employee of the Company involving sexual harassment and thus, no case was filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ANNUAL RETURN

As per the requirements of Section 92(3) of the Act, and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in Form MGT–9, is attached to this Report as Annexure C.

AUDITORS AND AUDIT REPORTS

Statutory Auditors

M/s. Deloitte Haskins & Sells, (Deloitte) Chartered Accountants, are the Statutory Auditors of the Company since more than 10 years. They would hold the office of Statutory Auditors of the Company till the conclusion of the ensuing Annual General Meeting. In terms of requirements of Section 139 of the Act read with Rule 6 of the Companies (Audit and Auditors) Rules, 2014, relating to the rotation of the Statutory Auditors, your Company proposed to appoint M/s BSR & Co. LLP (firm registration no.101248W/W-100022) as the Statutory Auditors of your Company for a term of 5 years commencing from the conclusion of the ensuing Annual General Meeting till the conclusion of the 51st Annual General Meeting of the Company to be held in the calendar year 2021. The Company has received written consent and confirmation from M/s BSR & Co. LLP to the effect that their appointment, if made, would be within the limits prescribed under Section 141 of the Act, and rules framed there under and that they satisfy the criteria provided there under for the appointment as Statutory Auditors of the Company.

The Audit Report of Deloitte, the Statutory Auditors, on the Financials Statements of the Company for the financial year ended March 31, 2016 read with relevant Notes thereon are self-explanatory and do not call for any further explanation. The Auditors Report does not contain any qualification, reservation, or adverse remark. During the year under review, the Statutory Auditors had not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act. Secretarial Audit

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 your Board, during the year, appointed M/s R Sridharan and Associates, Practicing Company Secretaries, as Secretarial Auditors of your Company for the financial year 2015-16. The Secretarial Audit Report, for the financial year 2015-16 prepared by them is annexed to this Report as Annexure D.

The Secretarial Auditors have not expressed any qualification or reservation in their report and the report is self-explanatory During the year under review, the Secretarial Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

CORPORATE SOCIAL RESPONSIBILITY

Your Company’s overarching aspiration to create significant and sustainable societal value, inspired by a vision to sub-serve a larger national purpose and abide by the strong value of trusteeship, is manifested in its CSR initiatives that embrace the most disadvantaged sections of society, especially in rural India. The CSR initiatives undertaken by the Company includes imparting primary highquality education to out-of-school under privileged girls, imparting computer educations to underprivileged children and building intellect and instill higher values of life through education. In terms of the provisions of Section 135 of the Act, and the Companies (Corporate Social Responsibility) Rules, 2014, as amended, the details of the CSR Projects undertaken by the Company during the year are detailed in Annexure E. Your Company has devised proper system to monitor the CSR activities as per its CSR Policy.

MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT

Management’s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the Listing Regulations is presented in a separate section forming part of the Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUT-GO

Pursuant to Section 134(3)(m) of the Act, read with the Rule 8 of the Companies (Accounts) Rules, 2014, the following information is provided:

A. Conservation of Energy:

The provisions regarding disclosure of particulars with respect to Conservation of Energy are not applicable to the publishing services industry as the operations are not energy-intensive. However, constant efforts are being made to make the infrastructure more energy-efficient.

B. Technology Absorption

Particulars regarding Technology Absorption are annexed to this Report as Annexure F.

C. Foreign Exchange Earnings and Outgo

During the year under review, foreign exchange earned through exports was Rs.223.87 crores as against Rs.202.97 crores for the previous year ended March 31, 2015. Foreign exchange outgo was Rs.14.82 crores as against the previous year of Rs.12 crores. Thus, the net foreign exchange earned by the Company during the year ended March 31, 2016 was Rs.209.05 crores. The details of foreign exchange earnings and outgo are given in the Notes forming part of the Audited Accounts for the year ended March 31, 2016.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good Corporate Governance practices. Your Company fully adheres to the standards set out by the Securities and Exchange Board of India for Corporate Governance practices that lays strong emphasis on integrity, transparency and overall accountability.

As stipulated under Regulation 34 of the Listing Regulations, a detailed report on Corporate Governance together with a certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance is annexed to this Report.

SIGNIFICANT DEVELOPMENTS AFTER THE CLOSE OF THE FINANCIAL YEAR

Except the events disclosed elsewhere in the Annual Report, no significant change or development which could affect the Company’s financial position, have occurred between the end of the financial year and the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY ANY REGULATORS OR COURT

There is no significant material order passed by any regulator or court that would impact the going concern status or future business operations of the Company.

APPRECIATION

Your Directors wish to place on record their sincere appreciation for the contributions made by the Company’s employees at all level. The Board also thanks its members, customers, vendors, government, banks and all other business associates for their continuous support

For and on behalf of the Board of Directors

Nishith Arora

Executive Chairman   

Place: Gurgaon

Date: May 17, 2016