DIRECTORS' REPORT To, The Members of Control Print Limited 1.CORPORATE OVERVIEW: Your Company is India's leading player in coding and marking solutions business having its corporate headquarter in Mumbai. Your Company prepares its financial statements in compliance with the requirements of the Companies Act, 2013 and the Generally Accepted Accounting Principles (GAAP) in India. Overall the financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent and reasonable basis, so as to reflect in a true and fair manner the form and substance of transactions and reasonably present your Company's state of affairs, profit and cash flows for the year ended March 31, 2015. Overview of Company's Financial Performance Despite a competitive environment, your Company delivered good results. Your Company's business continues to grow. Income from Sales for the year increased to Rs. 11,292.33 lakh as against Rs. 9105.77 lakh during the previous year. The Profit Before Tax during the year was Rs. 2,794.91 lakh as against Rs. 1,945.07 Lakh during the previous year. The Profit After Tax & Extraordinary Item also increased, standing at Rs. 1,915.25 lakh as against Rs. 1411.20 Lakh during the previous year. Your Company continued to lay emphasis on cash generation driven by strong business performance, focus on efficiencies, cost management and continued efficient collection system. Your Company achieved its goals by focusing on strategic initiatives which are: engaging to build own brands, innovation for growth, being effective and efficient and leading to win. There are no material changes and commitments affecting the financial position of your company which occurred between the end of financial year 2014 -15 and the date of this report. 3. CONSOLIDATED FINANCIAL STATEMENTS: As stipulated by Clause 32 of the listing agreement with the stock exchanges, the consolidated financial statement has been prepared by the Company in accordance with the applicable Accounting Standards. The audited consolidated financial statements together with Auditor's Report forms part of the Annual Report. 4. SUBSIDIARY COMPANY : The Company continues to hold and have control over its wholly owned subsidiary Company viz. "Liberty Chemicals Private Limited". Pursuant to the provisions of Section 129(3) of Companies Act, 2013, a statement containing the salient features of financial statements of Subsidiaries in Form AOC-1 is attached to the Accounts. The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of your Company. The financial statements including the consolidated financial statements, financial statements of subsidiary and all other documents required to be attached to this report have been uploaded on the website of your Company www.controlprint.com. 5.DIVIDEND: During the year, the Company paid an Interim Dividend of 20% i.e. Rs. 2/- (Rupees Two only) per Equity Share of Rs. 10 /- each. Your Directors are pleased to recommend a final dividend of Rs. 2/- (Rupees Two only) per Equity Share making it Rs. 4/- for this year. If approved by the shareholders the total dividend payout will be Rs. 393.93 Lakhs. 6.TRANSFER TO GENERAL RESERVE: The Company proposes to transfer an amount of Rs. 200.00 lakh to the General Reserve. An amount of Rs. 1,206.56 lakh is proposed to be retained in the Statement of Profit and Loss. 7.MANAGEMENT DISCUSSION AND ANALYSIS REPORT: Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, is presented in a separate section forming part of the Annual Report. 8.DIRECTORS & KEY MANAGERIAL PERSONNEL: I. Appointment: Further, in compliance with the provisions of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, Mr. Rakesh Agrawal (DIN: 00057955), Mr. S. S. Jangid (DIN: 01186353) and Mr. Gaurav Himatsingka (DIN: 00050776) were appointed as Independent Directors on the Board of Directors of your Company at the 23rd Annual General Meeting of your Company held on 12th September 2014 to hold office up to five consecutive years up to 31st March, 2019. Ms. Nyana Sabharwal (DIN: 02997515) has been appointed as an Additional Director and designated as Whole-time Director by the Board of Directors w.e.f. 1st October 2014. Ms. Nyana Sabharwal is Post Graduate Diploma in Public Relations and Corporate Communications and Masters of Science in NGOs and Development. As an Additional Director, Ms. Nyana Sabharwal shall hold office up to the date of ensuing Annual General Meeting. The Company has received a written notice as per the provisions of Section 160 of the Companies Act, 2013, from a member proposing her candidature for the office of Director. II.Retirement by rotation: In accordance with the provisions of Section 152(6) of the Companies Act, 2013, Mr. Shiva Kabra (DIN: 00190173) will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment. Further details about the above directors are given in the Notice convening the Annual General meeting. III.Declaration by Independent Directors: All Independent Directors have given declaration that they meet the criteria of independence as laid down under Section 149(7) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. IV .Evaluation of the Boards' Performance: In Compliance with the requirements of provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation on 30th June 2015 of the directors individually as well as the evaluation of the working of the Board as a whole and the Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. V .Remuneration Policy: The Board of Directors have framed a policy which lays down a framework in relation to remuneration of Directors and Key Managerial Personnel as approved by the Nomination and Remuneration Committee of the Board. The policy also lays down the criteria for selection of Directors. Further details of the same forms part of the Corporate Governance Report. 9.DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to Section 134 of the Companies Act, 2013, the Directors to the best of knowledge and belief hereby confirm that: (a)in the preparation of the Annual Accounts for the Financial Year 31st March 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b)the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the 31st March, 2015 and of the profit and loss of the Company for the year ended 31st March, 2015; (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 had prepared Annual Accounts on a going concern basis; (e)the Directors had laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are in place, however they are required to be continuously evaluated and strengthened for 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. 10.CORPORATE GOVERNANCE: As required pursuant to Clause 49 of Listing Agreement of the Stock Exchanges, a separate section containing Corporate Governance, as approved by the Board of Directors, together with the Certificate from the Auditors of the Company confirming the compliance with the requirements of Corporate Governance forms part of this Annual Report. DISCLOSURES UNDER THE COMPANIES ACT, 2013 I. Extract of Annual Return: The details forming part of the extract of the Annual Return in Form MGT - 9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure "A". Number of Board Meetings: During the year, the Board of Directors met five times. The details of board meetings and the attendance of the Directors are provided in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Listing Agreement. Pursuant to Schedule IV of the Companies Act, 2013, a separate meeting of the Independent Directors was also convened during the year. Increase in share capital: During the year, the Company has allotted Equity shares to Promoters and Promoter Group as mentioned below: a. 375,000 Equity Shares on exercise of option to convert 375,000 warrants on 30th May 2014. b.400,000 Equity shares on exercise of option to partly convert 1,000,000 warrants on 10th November 2014. c. Consequently, the paid up Equity share capital of the Company has increased from Rs. 90,732,480/- to Rs. 98,482,480/- comprising of 9,848,248 Equity Shares of Rs. 10/- each. Presently, 600,000 warrants allotted to the Promoters and Promoter Group on preferential basis are pending to be converted. Related Party transactions: All existing transactions with the related parties during the year under review were on arm's length basis. Further, there are no material significant related party transactions with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large. Transactions entered into with Related Parties during the year under review do not attract the provisions of Section 188 of the Companies Act, 2013. Thus, disclosure in Form AOC -2 is not required. The details of the related party transactions as required under Accounting Standard - 18 are set out in notes to accounts to the standalone financial statements forming part of this Annual Report. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature and value of the transactions. The policy on Related Party Transactions as approved by the Board has been uploaded on the website of the Company. The web-link of the same is: www.controlprint.com Utilisation of proceeds of capital raised by public or right issue or preferential allotment as per SEBI (ICDR) Regulations, 2009 During the year, Company has not made public or right issue. Promoters had exercised the option of converting 375,000 warrants issued on 25th February 2013 and 400,000 warrants out of 1,000,000 warrants issued on 27th January 2014 into Equity Shares. 600,000 warrants are pending for conversion as on 31st March, 2015. The proceeds of the preferential issue of warrants was utilized for its main object which was to fund the various growth plans, future investments and other general corporate purpose of the Company. AUDITORS AND AUDITORS' REPORT: I. Statutory Auditors: M/s. Dosi & Jain, Chartered Accountants, the Statutory Auditors of the Company were re-appointed at the 23rd Annual General Meeting for a term of three years till the conclusion of the 26th Annual General Meeting subject to ratification by shareholders at each Annual General Meeting. Your Board recommends the ratification of appointment of the Statutory Auditors. M/s. Dosi & Jain, pursuant to Section 141(3) of the Companies Act, 2013 have furnished written consent and a certificate stating that they are eligible for re-appointment and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules issued there under. In terms of Clause 41(1)(h) / 49 of the Listing Agreement, the Statutory Auditors of your Company are subjected to the Peer Review Process of the ICAI and hold a valid certificate issued by Peer Review Board of ICAI. There is no qualification for the year under review in the Audit Report. II.COST AUDITORS: As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013, and Companies (Cost Records and Audit) Rules, 2014 the Company carries out an audit of cost records. The Board of Directors, on recommendation of Audit Committee, has appointed Mr. Paresh Jaysih Sampat, as Cost Auditors to audit the cost records of the Company for the Financial Year 2015-16. The remuneration proposed to be paid to the Cost Auditor, would not be exceeding Rs. 1,55,000 (Rupees One Lakh Fifty Five Thousand Only) excluding taxes and out of pocket expenses, if any. As required under the Companies Act, 2013, a resolution seeking member's approval for the remuneration payable to Cost Auditor forms part of the Notice convening the Annual General Meeting. Mr. Paresh Sampat has confirmed that his appointment is within the limits of the Section 141 of the Companies Act, 2013, and also has certified that he is free from any disqualifications specified under Section 141 of the Act. The Audit Committee has also received a certificate from the Cost auditor certifying his independence and arm's length relationship with the Company. The Cost Audit Report for the Financial Year 2012-13 was placed before the Board at their meeting held on 30th May 2015. III. Secretarial Auditor: Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed M/s Pradeep Purwar & Associates, Practising Company Secretaries, to carry out Secretarial Audit in terms of Section 204 of the Companies Act, 2013, for the financial year 2014-15. The report of the Secretarial Auditor is annexed to this report as Annexure "B". 13.INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: Your Company has internal controls in place and internal auditors periodically reviews the same and reports on the effectiveness. The Company now also recognizes the need of reviewing the internal control systems to ensure the same is commensurate with its size, scale and ever increasing complexities of its operations. The Audit Committee and the Board of Directors welcomes the change in the Companies Act, 2013 in terms of emphasizing the importance of internal financial controls and shall take all requisite action to ensure a robust control mechanism is put in place through organization structure, policies and processes with manual and automated control built and tested to ensure safeguarding of its assets, accuracy and completeness of the accounting records, timely preparation of reliable financial information and prevention and detection of frauds and errors. 14.BUSINESS RISK MANAGEMENT: Pursuant to the requirement of revised Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The details of the committee forms part of the Corporate Governance Report. The Company has also adopted a Risk Management Plan to assess risk and for laying risk minimization procedures. The Company is laying down a well-defined risk management mechanism covering the risk mapping, risk exposure, potential impact and risk mitigation process. A detailed exercise shall be carried out to identify, evaluate, manage and monitor both business and non-business risks. The Company is re-visiting its approach towards risk and shall periodically review and mitigate them through proper policies in place to manage all types of risk majorly financial risk, business risk, inventory pricing risk, regulatory risk and HR risk through review, audit and reporting mechanism. 15.WHISTLE BLOWER MECHANISM: In compliance with Section 177(9) of Companies Act, 2013 and Clause 49 of Listing Agreement, Company has established Whistle Blower Mechanism. The mechanism provides for adequate safeguards against victimization of persons who use such mechanism and makes provisions for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. The details of vigil mechanism is available in the website of the Company www.controlprint.com. 16.CORPORATE SOCIAL RESPONSIBILITY (CSR): In terms of the provisions of Section 135 of the Companies Act, 2013 the Company has constituted a CSR Committee. The Company has adopted a CSR policy the scope of which includes Education, Innovation, Gender Equality, Health Care and Rural Development. These scopes are in accordance with Schedule VII of the Companies Act, 2013. The CSR policy of the Company is available on its website www.controlprint.com. As part of the CSR initiatives, the Company has supported projects as specified in Annexure "C". During the year the Company could not spend the entire 2% of its average profit of the last three years as there was delay in the process of initiation of the school adoption program as approved by the Board. 17.TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND: The Company sends letters through its RTA to all shareholders whose dividends are unclaimed so as to ensure that they receive their rightful dues. Efforts are also made in co-ordination with the Registrar to locate the shareholders who have not claimed their dues. During the year, the Company has transferred a sum of Rs. 229,963/- (Final dividend for the Financial Year 2005-06) to Investor Education & Protection Fund (IEPF), which was pending to be transferred due to some technical problems. Further the Company had also transferred Rs. 332,958/- (Final dividend for the Financial Year 2006-07) to IEPF, the amount which was due & payable and remained unclaimed and unpaid for a period of seven years, as provided in Section 205C of the Companies Act, 1956. Despite the reminder letters sent to each shareholder, this amount remained unclaimed and hence was transferred. 18.FIXED DEPOSIT: The Company has neither invited nor accepted any deposits from public during the year under review under the Companies (Acceptance of Deposit) Rules, 2014 read with Section 73 of the Companies Act, 2013. 19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: The details of Loans, Guarantees or Investments covered under the provisions of Section 186 of the Companies Act, 2013 forms part of notes to the Financial Statements. 20.PARTICULARS OF EMPLOYEES: The information required under Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, has been given in Annexure - "D" appended hereto and forms part of this report. 21.PARTICULARS OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EARNINGS AND OUTGO: In accordance with the requirements of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014, a statement showing particulars with respect to Conservation of Energy, Technology Absorption and a Foreign Exchange Earning and Outgo is annexed hereto as Annexure "E" and forms part of this Report. 22.SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS: There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations. 23.ENVIRONMENT AND SAFETY: Your Company is conscious of the importance of environmentally clean and safe operations. Your Company endeavors that the conduct of all operations are in such manner so as to ensure safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible. 24.OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: Your Company has a policy for the prevention of sexual harassment. It ensures prevention and deterrence towards the commissioning of acts of sexual harassment and communicates procedures for their resolution and settlement. A Committee has been constituted in accordance with the requirements under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 which ensures implementation and compliance with the law as well as the policy. The Company has not received any complaints relating to sexual harassment at work place from any women employee, during the year. 25.APPRECIATION: Your Directors takes this opportunity to express their deep sense of gratitude to high degree of professionalism, commitment and dedication displayed by employees at all levels. Your Directors also wish to thank its esteemed corporate clients, dealers, agents, suppliers, technology partners, investors, Government Authorities and bankers for their continued support and faith reposed in the Company. Your Directors are deeply grateful to the shareholders for the confidence and faith that they have always reposed in the Company. For and on behalf of the Board of Directors Basant Kabra Managing Director DIN: 00176807 Shiva Kabra Whole-time Director DIN: 00190173 Place : Mumbai, date : 30th June, 2015 |