Equity Analysis

Dear Members,

Your Directors are pleased to present the 53^rd Annual Report together with Audited Financial Statements of the Company for the financial year ended March 31, 2024.

The Company has reported revenue from operations of ' 2,505.56 million in comparison to the previous year's revenue from operation of ' 2,276.47 million (restated post restructuring), an increase in revenue by 10% YoY. The Company has reported a strong increase in the net profit (after tax) to '147.93 million as compared to a net profit (after tax) of ' 42.45 million (restated post restructuring) in the previous year. The increase in sales was on the back of a of volume growth during the year. The increase in profitability was driven by improved gross margins, operating leverage, reduced finance costs and reduced tax expenses (one-time tax benefit of ' 87.01 million) due to the restructuring.

The Company was able to increase efficiency in working capital through better trade receivable management. The Company reported year-end receivables of ' 1,276.34 million vs. ' 1,205.14 million in the last year which is higher by ' 71.20 million in spite of ' 229.09 million higher sales during the year. Year ending Inventories increased to ' 698.81 million from ' 514.46 million in the last year on the back of higher raw material inventory at the year end. The Company reduced Total borrowings drastically during the year to ' 627.77 million from ' 1,325.42 million last year. The Company has adequate liquidity of ' 544.06 million in the form of Cash and Bank Balances, Deposits and Current Investments.

The Company expects to achieve higher revenue and profitability growth in the next financial year driven by the announcement of new books based on the National Curriculum Framework (NCF) which has already been announced. This should provide us with a runway of strong growth for the next 2-3 years. Increase in sales volumes, product pricing, controlled operating expenses, reduced sales returns and reduction in working capital should drive the cash flows for the financial year 2024-25

Pursuant to Regulation 43A of The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") (as amended), the Board of Directors of your Company has formulated a Dividend Distribution Policy ("Dividend Policy"). The Dividend Policy is available on web-link https://schandgroup.com/wp- content/uploads/Dividend-Distribution-Policy.pdf.

After considering the parameters as specified in Divided Policy and performance of the Company, the Board of Directors of the Company at its meeting held on May 24, 2024 have recommended a final dividend of ' 3/- (Rupees

Three Only) per share to the equity shareholders of the Company for the financial year 2023-24. Final dividend if approved by the shareholders in the ensuing Annual General Meeting will be paid to all the shareholders whose names are appearing in the list of beneficial owners as on the record date fixed for payment of dividend after deducting applicable withholding tax.

Pursuant to Rule 7(2A) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (as amended), Mr. Jagdeep Singh has been appointed as the Nodal Officer of the Company. The details of the Nodal Officer and the unpaid and unclaimed amounts are available on the website of the Company at www.schandgroup.com/investors/.

The Board of Directors of your Company has not proposed to transfer any amount to the Reserves.

There have been no material changes and commitments which affect the financial position of the Company and have occurred between the end of the financial year 2023-24 and the date of this Report.

During the year under review, there has been no change in the nature of business.

The Hon'ble National Company Law Tribunal, New Delhi Bench III vide its order dated July 24, 2023 approved the Composite Scheme of Arrangement amongst Blackie, Nirja, DS Digital, Safari and the Company, its respective members and creditors under the provisions of Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 read with the rules framed thereunder. The said scheme of arrangement is effective from the appointed date (i.e. April 01, 2017) but was operative from September 04, 2023 i.e., the date of filing of certified true copy of the order of the Hon'ble NCLT with the jurisdictional Registrar of Companies by the transferor and transferee companies. Accordingly, after the order became operative, Blackie, Nirja and DS Digital were stand dissolved with effect from September 04, 2023 (i.e., the date of filing of order with the Registrar of Companies, Delhi).

Scheme involves the following restructuring:

- Amalgamation of Nirja and Blackie with and into the Company;

- Demerger of educational Business of DS Digital and Safari with and into the Company;

- Amalgamation of DS Digital with residual business (business remaining after demerger of education business) with and into Safari.

There are no other significant and material orders passed by any Regulator/Court/Tribunal against the Company which would impact the going concern status of the Company and its future operations.

The Company has adequate internal financial control system and processes. Internal Control policies and procedures have been adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Internal Auditors of the Company M/s. Haribhakti & Co. LLP, Chartered Accountants, audited and reviewed the internal controls, operating systems, internal processes and procedures of the Company. The reports on findings of Internal Auditors have been reviewed by the Audit Committee periodically.

Blackie and Nirja, wholly owned subsidiaries of the Company, have been amalgamated with the Company, and DS Digital has been amalgamated with Safari, subsidiary of the Company vide order of the Hon'ble National Company Law Tribunal, Delhi dated July 24, 2023 ("NCLT Order"). The scheme of amalgamation was effective from the appointed date (i.e. April 01, 2017) but operative with effect from September 04, 2023 (i.e. the date of filing the certified copy of NCLT Order by Blackie, Nirja, DS Digital, Safari and the Company with the Registrar of Companies, Delhi). Accordingly, pursuant to the same, Blackie, Nirja, DS Digital dissolved and ceased to exist from the date of filing of the NCLT Order and Safari, which were earlier a wholly owned subsidiary became subsidiary of the Company with effect from September 04, 2023.

As on March 31, 2024, the Company had 9 (Nine) subsidiaries. The Board of Directors reviewed the affairs of its subsidiaries for the financial year 2023-24. The Consolidated Financial Statements of your Company for the financial year 2023-24 are prepared in compliance

with the applicable provisions of The Companies Act, 2013 ("the Act"), The Companies (Indian Accounting Standards) Rules, 2015 and the Listing Regulations, as amended from time to time, which shall be placed before the members in the ensuing Annual General Meeting ("AGM").

BPI (India) Private Limited reported total revenue from operations of ' 29.97 million in the financial year 2023-24 as compared to total revenue from operations of ' 43.18 million in the previous financial year and reported a net loss (after tax) of ' 8.87 million in the financial year 2023-24 as compared to a net profit (after tax) of ' 7.20 million in the previous financial year.

Chhaya Prakashani Limited reported total revenue from operations of ' 1,137.63 million in the financial year 2023-24 as compared to total revenue from operations of ' 1,153.89 million in the previous financial year and reported a net profit (after tax) of ' 187.55 million in the financial year 2023-24 as compared to a net profit (after tax) of ' 268.53 million in the previous financial year.

Convergia Digital Education Private Limited reported total revenue from operations of ' 180.09 million in the financial year 2023-24 as compared to total revenue from operations of ' 116.55 million in the previous financial year and reported a net loss (after tax) of ' 84.10 million in the financial year 2023-24 as compared to a net loss (after tax) of ' 135.66 million in the previous financial year.

Edutor Technologies India Private Limited reported total revenue from operations of ' 21.94 million in the financial year 2023-24 as compared to total revenue from operations of ' 17.35 million in the previous financial year and reported a net loss (after tax) of ' 16.08 million in the financial year 2023-24 as compared to a net loss (after tax) of ' 31.78 million in the previous financial year.

I ndian Progressive Publishing Co Pvt Ltd reported total revenue from operations of ' 12.30 million in the financial year 2023-24 as compared to total revenue from operations of ' 18.79 million in the previous financial year and reported a net profit

(after tax) of ' 7.60 million in the financial year 2023-24 as compared to a net profit (after tax) of ' 10.48 million in the previous financial year.

New Saraswati House (India) Private Limited reported total revenue from operations of ' 1268.65 million in the financial year 2023-24 as compared to total revenue from operations of ' 1,131.62 million in the previous financial year and reported a net profit (after tax) of ' 91.46 million in the financial year 2023-24 as compared to a net profit (after tax) of ' 96.80 million in the previous financial year.

N. Chand Edutech Private Limited reported total revenue from operations of ' 34.15 million in the financial year 2023-24 as compared to total revenue from operations of ' 35.18 million in the previous financial year and reported a net loss (after tax) of' 25.98 million in the financial year 2023-24 as compared to a net loss (after tax) of ' 13.00 million in the previous financial year.

As per the scheme of arrangement as approved by Hon'ble National Company Law Tribunal, Delhi vide its order dated July 24, 2023 the financial of Safari has been re stated, therefore, Safari Digital Education Initiatives Private Limited reported total revenue from operations of ' 34.99 million in the financial year 2023-24 as compared to total revenue from operations of ' 34.96 million in the previous financial year and reported a net loss (after tax) of ' 14.48 million in the financial year 2023-24 as compared to a net profit (after tax) of ' 85.80 million in the previous financial year.

Vikas Publishing House Private Limited reported total revenue from operations of ' 2,132.69 million in the financial year 2023-24 as compared to total revenue from operations of ' 1,829.69 million in the previous financial year and reported a net profit (after tax) of ' 277.78 million in the financial year 2023-24 as compared to a net profit (after tax) of ' 141.09 million in the previous financial year.

I n accordance with section 129(3) of the Act, a statement containing salient features of financial statements of each of the subsidiary in the prescribed Form AOC-1 is enclosed as Annexure-A. In accordance with Section 136 of the Act, the audited financial statements, including the consolidated

financial statements and related information of the Company and audited financial statements of each of its subsidiary will be available on the website of the Company (www.schandgroup.com/investors/). These documents will also be available for inspection during business hours at the registered office of the Company.

The policy for determining material subsidiaries is available on the website of the Company at www. schandgroup.com/investors/#corporate-policies.

For contribution of the subsidiaries in the overall performance of the Company, please refer note 52 of the consolidated financial statements of the Company forming part of this Annual Report.

The Company has neither accepted nor renewed any deposits during the year under review within the purview of section 73 of the Act read with The Companies (Acceptance of Deposits) Rules, 2014. There are no unclaimed or unpaid deposits lying with the Company.

M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013), were appointed as Statutory Auditors of the Company at the annual general meeting held on September 28, 2021, for a term of 5 (Five) consecutive years. Accordingly, M/s. Walker Chandiok & Co LLP, Chartered Accountants, will hold office till the conclusion of 55^th annual general meeting of the Company to be held in the year 2026.

The Statutory Auditors has 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 and no comment of Board on the audit report is required to be given.

The auditor's report submitted by the Statutory Auditors on the standalone and consolidated financial statements of the Company for the year ended March 31, 2024 forms part of the Annual Report. There is no qualification / reservation or adverse remark in the Audit report.

During the year under the review, to ensure better governance, compliances and internal control over financial reporting and financial processes, the Company appointed M/s. Haribhakti & Co. LLP as an Internal Auditors of the Company, with effect from July 01, 2023 for a period of 1 (One) year.

The Board had appointed Mr. R.S. Bhatia, Company Secretary in Practice (CP No. 2514) as the Secretarial Auditor. The secretarial audit report submitted by the Secretarial Auditor for the financial year 2023-24 is annexed as Annexure-B and forms an integral part of this Annual Report.

During the year under review, the Secretarial Auditor has 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.

There is no qualification / reservation or adverse remark in the Secretarial Audit report for the financial year 2023-24.

As per the requirements of the Listing Regulations, Secretarial Auditors of the respective material subsidiaries of the Company have undertaken secretarial audits ofthese subsidiaries for financial year 2023-24. Their audit reports confirm that the material subsidiaries have complied with the provisions of the Act, Rules, and guidelines and that there were no deviations or non-compliances.

The Annual Return for the financial year 2023-24 will be made available on the website of the Company at www. schandgroup.com/investors/#annual-report.

The Company is in the business of publishing and printing of books. The brief details about conservation of energy and technology absorption are mentioned below:

(i) The steps taken or impact on conservation of energy -

- The Company has rationalized the use of Generators and structured the working hours of its warehouse facilities in such a manner where dependence on Generator Sets is reduced. Further the process of using PNG Gensets is in process.

- I n its offices lighting system has been efficiently used and overall use of electricity has been minimized.

(ii) t he steps taken by the Company for utilizing alternate sources of energy: The Company is in the process of shifting its warehouse to facilities which will have Solar Panels to meet the energy demands. The Corporate Office already has such facilities.

(iii) the capital investment on energy conservation equipment's; Nil

(i) the efforts made towards technology absorption- The company has upgraded its ERP from SAP ECC 6.0 to SAP S4 HANA.

(ii) the benefits derived like product improvement, cost reduction, product development or import substitution; The efficiency of processing transactions has improved due to this upgrade.

(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- Nil

(iv) t he expenditure incurred on Research and Development. Nil

During the year under review, the Foreign Exchange

earnings and outgo are as follows:

i) Foreign Exchange earnings: ' 26.83 million

ii) Foreign Exchange outgo: ' 13.14 million

The Company is managed and controlled by the Board comprising an optimum blend of Executives and NonExecutive Professional Directors. The Chairman of the Board is a Non-Executive, Independent Director. As on March 31, 2024, the Board of Directors consists of 7 (Seven) Directors consisting of a Managing Director, a Whole-time Director and 5 (Five) Non-Executive Directors, out of which 3 (Three) are Independent Directors. The composition of the Board is in conformity with Regulation 17 of the Listing Regulations and the relevant provisions of the Act.

All the Directors possess requisite qualifications and experience in corporate management, finance, banking, publishing and other allied fields which enable them to contribute effectively to the Company in their capacity as Directors.

During the year under review, there was no change in the composition of Board of Directors and Key Managerial Personnels.

The details relating to skills, competencies and expertise of Independent Directors are given in the Corporate Governance Report that forms part of this Annual Report.

I n terms of section 152 of the Act, Mr. Dinesh Kumar Jhunjhnuwala (DIN: 00282988) will retire by rotation at the ensuing AGM and being eligible offers himself for re-appointment. The Board recommended his reappointment and the same is included in the notice of the ensuing AGM.

Further, sub-section (13) of Section 149 ofthe Act, provides that the provisions of retirement by rotation as defined in sub-sections (6) and (7) of Section 152 of the Act shall not apply to the Independent Directors. Hence, none of the Independent Directors will retire at the ensuing AGM.

Mr. Himanshu Gupta (DIN: 00054015) has been reappointed as Managing Director of the Company with effect from May 22, 2019 for a period of 5 (Five) years i.e upto May 21, 2024. The Nomination and Remuneration Committee of the Directors of your Company after taking into account the performance of Mr. Himanshu Gupta during his term of 5 (Five) years and considering his knowledge, acumen, expertise, experience and the substantial contribution, has recommended to the Board his re-appointment as Managing Director of the Company for a further period of 5 (Five) years. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors in its meeting held on February 06, 2024 re-appointed him as Managing Director of the Company for a further period of 5 (Five) years with effect from May 22, 2024, subject to the approval of the members in the ensuing AGM.

M r. Dinesh Kumar Jhunjhnuwala (DIN: 00282988) has been re-appointed as Whole-time Director of the Company with effect from March 28, 2019 for a period of 5 (Five) years i.e upto March 27, 2024. The Nomination and Remuneration Committee of the Directors of your Company after taking into account the performance of Mr. Dinesh Kumar Jhunjhnuwala during his term of 5 (Five) years and considering his knowledge, acumen, expertise, experience and the substantial contribution, has recommended to the Board his re-appointment as Whole-time Director of the Company for a further period of 5 (Five) years. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors in its meeting held on February 06, 2024 reappointed him as Whole-time Director of the Company for

a further period of 5 (Five) years with effect from March 28, 2024, subject to the approval of the members in the ensuing AGM.

M s. Savita Gupta, Non-Executive Non-Independent Director, was appointed on the Board of the Company on October 20, 1989. Pursuant to Regulation 17(1A) of the Securities Exchange Board of India (Listing Regulation and Disclosure Requirements), 2015 or as amended from time to time, for continuation of office of any NonExecutive Director who has attained the age of 75 (Seventy Five) years, approval of shareholders by way of a Special Resolution is required. Based on the recommendations of Nomination and Remuneration Committee, the Board of Directors in its meeting held on August 12, 2024 approved the continuation of her directorship in the Company, subject to the approval of the members in the ensuing AGM.

The Independent Directors have given a declaration that they meet the criteria of independence as prescribed under section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. Further, pursuant to Sub-rule (1) of Rule 6 of The Companies (Appointment & Qualifications of Directors) Rules, 2014, the Independent Directors have successfully registered their names in the Data Bank of Independent Directors. The Independent Directors have also complied with the Code of Conduct for Directors and senior management personnel. The Independent Directors have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact the ability to discharge their duties with an objective independent judgment and without any external influence and that they are independent of the management.

I n compliance with the Act and Regulation 17 (10) of the Listing Regulations, the Board has carried out an evaluation of its own performance, its Committees and performance of individual Directors for the year under review. The aspects covered in the evaluation includes adherence of code of conduct and corporate governance practices of the Company, professional qualification and experience especially experience to relevant industry, attendance and participation in the Board / Committee Meetings etc. The evaluation of the individual Director was done by all the Directors other than the Director being evaluated and evaluation of the Board was done by all the

Directors. The evaluation of the Independent Directors was based on their performance and fulfillment of criteria of independence as per the Act and independence from the management.

Complete details of such evaluation are given in the Corporate Governance Report that forms part of this Annual Report. The Board of Directors expressed their satisfaction with the evaluation process.

During the year under review, the Board of Directors met 6 (Six) times, details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations.

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act along with the purpose for which the loans or guarantees or securities are proposed to be utilized by the recipient are provided in the Note No. 8, 9, 14 and 42 of the standalone financial statements of the Company for the year ended March 31, 2024.

During the year under review, all related party transactions entered by the Company were in ordinary course of the business and on arm's length basis. No material related party transaction was entered during the financial year by the Company.

Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Act, in Form AOC 2 is not applicable to your Company.

The Policy on materiality of related party transactions and policy on dealing with the related party transactions are available on the Company's website at www.schandgroup. com/investors/#corporate-policies.

The information required under Section 197 of the Act read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Annual Report and annexed as Annexure-C.

Pursuant to Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing, inter alia, the names of top ten

employees in terms of remuneration drawn and every employee employed throughout the financial year and in receipt of remuneration of ' 1.02 crores or more, and every employee employed for part of the year and in receipt of remuneration of ' 8.50 lakhs or more per month is attached as Annexure-D of this report.

The Nomination and Remuneration Committee by passing resolution by circulation on August 26, 2021 and Board of Directors at its meetings held on August 31, 2021 and the members at the annual general meeting held on September 28, 2021 approved the remuneration of Mr. Himanshu Gupta, Managing Director, and Mr. Dinesh Kumar Jhunjhnuwala, Whole-time Director of the Company effective from July 01, 2021 till the expiry of their respective terms.

During the financial year 2023-24, the following remuneration was paid to the Managerial Personnel:

Mr. Himanshu Gupta - ' 22.75 million

Mr. Dinesh Kumar Jhunjhnuwala - ' 16.90 million

The Company has zero tolerance for sexual harassment at the work place and has adopted a Policy on "Prevention of Sexual Harassment of Women at Workplace" in line with the provisions of "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013" ("POSH"). The Company has an Internal Complaints Committee which has been constituted as per the provisions of POSH and this Committee deals with all the sexual harassment matters. The disclosures in relation to POSH have been provided in the Corporate Governance Report.

The underlying objectives of Employees Stock Option Scheme 2012, Employees Stock Option Plan 2018 and Employees Stock Option Plan 2023 (collectively refer as "ESOP Schemes") are to attract, motivate, retain and reward employees for high levels of individual performance and share the wealth that they have created for the Company and its members. ESOP Schemes are in line with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB Regulations").

Pursuant to the Regulation 13 of the SBEB Regulations, a Certificate has been issued by the Secretarial Auditor of the Company, certifying that the ESOP schemes of the Company are being implemented in accordance with the

SBEB Regulations and in accordance with the resolutions passed by the members of the Company in this respect. The said certificate shall be made available for inspection by the members at the ensuing Annual General Meeting.

The relevant disclosures pursuant to Rule 12(9) of The Companies (Share Capital and Debentures) Rules, 2014 and the Regulation 14 of the SBEB Regulations are given as Annexure-E. Relevant disclosures pursuant to Regulation 14 read with Part F of Schedule of I of SBEB Regulations are available on the website of the Company at www. schandgroup.com.

During the year under review, the Company has identified and evaluated elements of risk. The business risks inter- alia impact of increase in raw material and printing cost, change in curriculum, change in education framework, implementation ofNEP, higher borrowing cost, competition from other players and violation of intellectual property rights of the Company and current regulatory framework in the country. The risk management framework defines the risk management approach of the Company which includes periodic review of such risks, mitigation controls and reporting mechanism of such risks. The Risk Management Committee, Board of Directors, Audit Committee and the senior management evaluates the operations to identify potential risks and take necessary actions to mitigate the same. The Company also has in place a Risk Management Policy and the Risk Management Committee ensures implementation of appropriate risk management framework for the Company.

The details relating to composition and terms of reference of Risk Management Committee are given in Corporate Governance Report that forms part of this Annual Report.

Pursuant to section 135 of the Act, the Company has a Corporate Social Responsibility Committee ("CSR Committee"), which comprises of Mr. Desh Raj Dogra (Chairman- Non-Executive, Independent Director), Mr. Himanshu Gupta - (Member-Managing Director) and Mr. Dinesh Kumar Jhunjhnuwala - (Member-Whole-time Director). The terms of references of the CSR Committee are provided in the Corporate Governance Report which forms part of this Annual Report. The CSR policy of the Company is available on the Company's website at www. schandgroup.com/investors/#corporate-policies.

Since, the Company has reported net loss (as computed

as per provisions of Section 198 of the Act) during the financial year 2020-21. The average net profit (as computed as per provisions of Section 198 of the Act) of the Company made during the preceding three financial year (i.e. 2020-21, 2021-22 & 2022-23 (restated)) is negative . In view of the same, the Company did not spend on CSR activities during the financial year 2023-24.

The Annual Report on the CSR for the financial year 2023-24 is attached as Annexure-F and forms part of this Annual Report.

The Company has adopted the vigil mechanism by way of formulating a Whistle Blower Policy. The policy provides a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees and also provides for direct access to the Chairperson of the Audit Committee. The Whistle Blower Policy is available on the website of the Company at www.schandgroup.com/ investors/#corporate-policies.

Your Company is committed to maintain the high standards of Corporate Governance and adhere to the Corporate Governance requirements set out by The Securities and Exchange Board of India. In terms of Regulation 34 of the Listing Regulations, a report on the Corporate Governance along with a certificate of practicing company secretary on compliance of conditions of Corporate Governance is attached as Annexure-G and forms an integral part of this Annual Report.

The Management discussion and analysis report, highlighting the performance of the Company and its business prospects, is provided in a separate section and forms an integral part of this Annual Report.

The Audit Committee comprises of 3 (Three) NonExecutive, Independent Directors, namely Ms. Archana Capoor (Chairperson-Non-Executive, Independent Director), Mr. Desh Raj Dogra (Member-NonExecutive, Independent Director) and Mr. Rajagopalan Chandrashekar (Member-Non-Executive, Independent Director). The details of the Audit Committee are included in the Corporate Governance Report.