Compuage Infocom Ltd.
|BSE: 532456||Sector: Consumer|
|NSE: COMPINFO||ISIN Code: INE070C01037|
|BSE LIVE 10:33 | 28 Mar||39.50||
|NSE LIVE 05:30 | 01 Jan||Stock Is Not Traded.|
|Mkt Cap.(Rs cr)||232.06|
|Mkt Cap.(Rs cr)||232.06|
Compuage Infocom Ltd. (COMPINFO) - Director Report
Company director report
COMPUAGE INFOCOM LIMITED
Your Directors have pleasure in presenting the Seventeenth Annual Report on businessand operations along with the Audited Financial Statements for the year ended March312016.
The highlights of the Financial Results are: (Rs. in Lakh)
The year gone by has been good. The Company's revenue increased to Rs.269001.08 Lakh ascompared to Rs.213887.37 Lakh in the previous year marking an increase by Rs.55113.71Lakh. The Company's Net Profit After Tax stood at Rs.1402.08 Lakh as compared toRs.1168.57 Lakh in the previous year registering an increase of 19.98%.
Our consolidated revenue has grown to Rs.311700.23 Lakh as compared to Rs.238888.96Lakh in the previous year. The Company's Net Profit After Tax stood at Rs.1490.57 Lakh ascompared to Rs.1210.22 Lakh in the previous year and thus Net Profit recorded a growthrate of 23.16%.
The Board at its meeting held on May 2 2016 recommended a dividend of Rs.2/- pershare on face value of Rs.10/- per share amounting to Rs.282.79 Lakh (inclusive ofdividend tax) for the year ended March 31 2016. This comes to 20% on face value ofRs.10/- per share.
The dividend on Equity Shares is subject to the approval of the shareholders at theAnnual General Meeting (AGM). The total dividend pay-out including dividend tax works outto 20% of the net profit for the standalone results.
TRANSFER TO RESERVES:
The whole profit after tax has been transferred to Surplus in the Statement of Profit& Loss.
WHERE WE ARE AND WHERE WE WILL:
Information Technology lies at the core of your Company's business. The sector hasstayed indomitable over the last twenty- five years since it emerged in 1990 after theGovernment liberalized the Indian economy. It prompted and shaped industrial growth andtransformed the lifestyle of the average Indian by successfully changing his notion of aluxury item to one of necessity.
The objective ofyour Company is to have a sustainable development by staying connectedto its roots. Currently the Company is operating nationwide through its brancheswarehouses and service centers. Our strategy is to optimize our core technology solutionsbusiness while expanding and investing in higher margin advanced and specialty solutionsand high value services.
Your Company is entering into tie-ups and partnership with all major brands in theenterprise and retail verticals even those with an existing presence in the country arekeenly looking at ways to increase partnership modes for distribution of their products.
Our vision is to become world class distributor and the Board is of firm belief thatour value added approach with vendors resellers and industry at large shall enable yourCompany to meet its goal.
Compuage Infocom (S) Pte. Ltd.:
Your Company continued to hold it's holding in Compuage Infocom (S) Pte. Ltd. a whollyowned subsidiary of the Company which was formed to expand the Company's businessoperation.
During the year under review the Board of Directors reviewed the accounts of thesubsidiary. In accordance with the Companies Act 2013 we have prepared ConsolidatedFinancial Statements of the Company which forms part of this Annual Report. Further astatement containing the salient features of the financial statement of our subsidiary inthe prescribed format AOC-1 is appended as Annexure A to the Board's Report.
Further there were no new subsidiaries included or ceased their status as thesubsidiary of the Company.
CONSOLIDATED FINANCIAL STATEMENTS:
As stipulated by Regulation 33 of the Listing Regulations the consolidated financialstatements have been prepared by the Company in accordance with the applicable AccountingStandards. The audited consolidated financial statements together with Auditors' Reportform part of the Annual Report.
Pursuant to Section 136 of the Companies Act 2013 the financial statements of thesubsidiary is kept for inspection of the shareholders at the Registered Office of theCompany.
SHARE CAPITAL (BONUS AND PREFERENTIAL ISSUE):
At the beginning of the year the paid up Share Capital of the Company was Rs.665.50Lakh divided into 6655000 Equity Shares of Rs.10/- each.
During the year Postal Ballot was conducted and Members approval was obtained on May19 2015 for issue of Bonus Shares in the ratio of 3:5. Under the scheme 3992999 wereallotted under bonus issue.
Further 1100000 Equity Shares were allotted on June 30 2015 to shareholder KitaraIndia Micro Cap Growth Fund on Preferential Basis.
Thus during the year 5092999 Equity Shares were allotted and the paid up capital ofthe Company on March 31 2016 stands at Rs.117479990/- divided in to 11747999 EquityShares of Rs.10/- each.
LISTING OF SECURITIES:
The Equity Shares of the Company are listed at BSE Limited (BSE) and applicable listingfees for the year 2016-2017 have been paid. The Securities and Exchange Board of India(SEBI) vide its Exit order no. WTM/RKA /MRD/47/2015 dated May 14 2015 had granted exit toMadras Stock Exchange ("MSE"). Subsequently the securities of Company are nolonger listed on MSE. Thereafter the Company has made an application to list itssecurities on National Stock Exchange of India Limited.
The National Stock Exchange of India Limited vide its Circular Download Ref no.NSE/CML/32725 and Ref. No: NSE/ LIST/C/2016/0515 dated July 4 2016 admitted listing anddealing in Equity Shares of the Company on National Stock Exchange of India Limited witheffect from July 07 2016.
The Company has entered into an agreement with the National Securities DepositoryLimited (NSDL) as well as the Central Depository Services (India) Limited (CDSL) to enableshareholders to hold shares in dematerialized form. The Company also offers simultaneousdematerialisation of the physical shares lodged for transfer.
NSDL and CDSL have allotted ISIN No. INE070C01029 for compulsory dematerialization ofshares.
DIRECTORS AND KEY MANAGERIAL PERSONNEL: Directors:
The Board consists of Executive and Non-executive Directors including IndependentDirectors who have vast experience in the core business activity of the Company. Thecomposition of the Board is in consonance with Corporate Governance norm specified in theSEBI Regulations with the Stock Exchange.
In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Bhavesh Mehta retires by rotation and being eligible offers his candidaturefor re-appointment as a Director.
During the year there was no change in the composition of the Board.
Key Managerial Personnel:
During the year under review there was change in Key Managerial Personnel (KMP) whichis tabulated as under:
Pursuant to the provisions of the Companies Act 2013 and SEBI Regulations the Boardhas carried out an annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Audit Nomination &Remuneration and other Committees. The same is found to be satisfactory.
At a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of Directors. The same was discussed at the BoardMeeting that followed the meeting of the Independent Directors at which the performanceof the Board its Committees and individual Directors was also discussed.
During the year twelve Board Meetings were convened and held. The details of which aregiven in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
DECLARATION BY INDEPENDENT DIRECTORS:
The Independent Directors hold office for a period of 5 years and are not liable toretire by rotation.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed undersub-section (6) of Section 149 of the Companies Act 2013 and SEBI Regulations.
CORPORATE SOCIAL RESPONSIBILITY:
As a responsible corporate citizen the Company has been implementing societalactivities which promote education livelihood and health of the underprivileged in lineswith the Corporate Social Responsibility policy framed by the Company. Detailed layout ofactivities undertaken during the year is covered under Annexure - B
ABSTRACT OF THE ANNUAL RETURN:
In accordance with Section 134 (3) (a) and as provided under subsection (3) of Section92 of the Companies Act 2013 an extract of the Annual Return in prescribed form MGT - 9is appended as Annexure C to the Board's Report.
The Company has complied with the corporate governance requirements as stipulated underthe Listing Regulations. A separate section on corporate governance along with acertificate from the auditors confirming the compliance is annexed as Annexure - D andforms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS:
A Management Discussion and Analysis as required under the
Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements)Regulation is annexed herewith as Annexure E and forms part of the Boards' Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 is given hereunder:
A. Conservation of energy:
Your Company is primarily engaged in Marketing and Trading activities and has notconsumed energy of any significant level and hence no additional investment is required tobe made for reduction of energy consumption. However the Company will continue with itsefforts to conserve the energy.
B. Technology absorption
The Company's operations do not require significant absorption of technology.
C. Earnings And Outgo in Foreign Exchange: (Rs. In Lakh)
PREVENTION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE:
The Company has a Policy on "Prevention of Sexual Harassment of Women at WorkPlace" and matters connected therewith or incidental thereto covering all the aspectsas contained under the 'The Sexual Harassment of Women at Work Place (ProhibitionPrevention and Redressal) Act 2013'. Your Directors state that during the year underreview no cases were filed pursuant to the Sexual Harassment of Women at Work Place(Prevention Prohibition and Redressal) Act 2013.
We believe that success of Company depends on the talent and dedication of ouremployees and we strive to attract hire develop and retain outstanding employees. Inview of this we have laid down a comprehensive set of policies aiming at attractingretaining and motivating employees. We believe significant benefits are realized fromhaving a strong and seasoned management team with many years of experience in technologydistribution and related industries. We consider relations with our employees to be good.
The Company maintained healthy cordial and harmonious industrial relations at alllevels. Despite severe competition the enthusiasm and unstinting efforts of the employeeshave enabled the Company to remain at the forefront of the Industry.
This accord incorporates novel elements such as introducing wide range of productsnurturing healthy competition giving pocket friendly credit cycles timely clearance ofdues easy accessibility to product heads etc. Your Company will continue in itsendeavour to build and nurture strong links with trade allies based on mutuality respectand co-operation with each other and with consistent consumer interest.
PERFORMANCE OF EMPLOYEES:
A. The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
i) Details of the ratio of the remuneration of each director to the median remunerationof the employees for the financial year:
ii) The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the financial year:
* Appointed w.e.f. December 12015
iii) The percentage increase in the median remuneration of employees in the financialyear: 11.96%
iv) The number of permanent employees on the rolls of Company: 642
v) The explanation on the relationship between average increase in remuneration andCompany performance:
The increase in remuneration is based on the policy of the Company and various factorssuch as individual performance competitive market practices cost considerationsbusiness results achieved during the year. The Company prefers increase as per industrystandards after undertaking detailed surveys for same profile. The salary increases thatwere made during the year were in line with both the Company's performance as well as theCompany's market competitiveness.
vi) Comparison of the remuneration of the Key Managerial Personnel (KMP) against theperformance of the Company:
(Rs. In Lakh)
vii) Variations in the market capitalisation of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:
viii) Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last publicoffer:
The closing share price of the Company at BSE Limited on March 312016 being Rs.107.65per equity share of face value of Rs.10/- each has grown 10 times since the last publicoffer by the Company.
ix) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: Themedian percentage increase made in the salaries of employees other than the managerialpersonnel was 11.15%.
These increases are a function of the Company's market competitiveness based on thesalary benchmarked survey the Company undertakes annually.
During the year under review there has been no change in the remuneration ofmanagerial personnel except that of Chief Finance Officer which is 34.21%. This increaseis on account of business performance.
x) Comparison of each remuneration of the key managerial personnel against theperformance of the Company:
*Appointed w.e.f. December 12015
xi) The key parameters for any variable component of remuneration availed by theDirectors: It is based on targets achieved.
xii) The ratio of the remuneration of the highest paid Director to that of theemployees who are not Directors but receive remuneration in excess of the highest paidDirectors during
the year: Not applicable
xiii) It is hereby affirmed that the remuneration is as per the remuneration policy ofthe Company.
B. Details of the every employee of the Company as required pursuant to 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014
1. Nature of employment is contractual.
2. The above amount does not include provision of gratuity and leave encashment.
*3. As the service contract had expired during the year 2014 Company sought Membersapproval for reappointment and increase in remuneration to Rs.18000000/- p.a. each toMr. Atul H. Mehta and Mr. Bhavesh H. Mehta. On receipt of Members approval an applicationpursuant to Section 197 of the Companies Act 2013 read with Schedule V of the Act wasfiled with Central Government seeking their approval. However the Central Government hasclosed the file on technical grounds for which the Company has made an application aftercomplying with necessary corrections and requested to reopen the same. Confirmation forthe same is awaited till then the excess remuneration will be held in trust by theDirectors.
INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROLS:
The Company has in place well defined and adequate internal controls commensurate withthe size of the Company and the same were operating effectively throughout the year.
The Company has an in-house Internal Audit (IA) function. To maintain its objectivityand independence the IA function reports to the Chairman of the Audit Committee of theBoard. The IA department evaluated the efficacy and adequacy of the internal controlsystem its compliance with operating systems and policies of the Company and accountingprocedures at all locations of the Company.
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. Apart from in-house Internal Audit function to strengthenand maintain transparency the Company has also appointed M/s. Verma Mehta &Associates (Firm Reg. No. 112118W) as Internal Auditors of the Company in accordance withSection 138 of the Companies Act 2013 to examine the effectiveness of internal controlsystem.
M/s. B.V. Dalal & Co. Chartered Accountants Mumbai having ICAI Firm RegistrationNo.114214W being eligible offer themselves for re-appointment. If re-appointed it willbe within the purview of Sections 139 and 142 of the Companies Act 2013. Members arerequested to appoint the auditors and to fix their remuneration.
AUDITORS' REPORT DISCLAIMER AND MANAGEMENT'S REPLY:
SECRETARIAL AUDIT REPORT AND OBSERVATION
The Board of Directors have appointed Mr. Virendra G. Bhatt Practising CompanySecretary Mumbai to conduct Secretarial Audit for the financial year 2015-16 asrequired under Section 204 of the Companies Act 2013 and the rules framed thereunder. TheSecretarial Audit Report in form MR-3 for the financial year 2015-16 forms part of theDirectors' Report as Annexure F.
SECRETARIAL AUDITOR'S OBSERVATION AND MANAGEMENT'S REPLY:
Your Company has formulated a policy on related party transactions which is alsoavailable on Company's website at www.compuageindia.com. This policy deals with the review and approval of related party transactions. TheBoard of Directors of the Company has approved the criteria for making the omnibusapproval by the Audit Committee within the overall framework of the policy on relatedparty transactions. Prior omnibus approval is obtained for related party transactionswhich are of repetitive nature and entered in the ordinary course of business and at arm'slength. All related party transactions are Placed before the Audit Committee for reviewand approval.
The particulars of contracts or arrangements entered into by the Company with relatedparties as referred in sub-section (1) of section 188 of the Companies Act 2013 inprescribed Form No. AOC-2 is appended as Annexure G to the Board's Report.
LOANS GUARANTEES & INVESTMENTS:
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
The Audit Committee meets regularly to review reports including significant auditobservations and follow-up actions thereon. The Audit Committee also meets the Company'sStatutory Auditors to ascertain their views on financial statements including thefinancial reporting system compliance to accounting policies and procedures.
The details pertaining to Audit Committee and its composition are included in theCorporate Governance Report which forms part of this report.
NOMINATION AND REMUNERATION COMMITTEE:
The Company follows a Policy on Remuneration of Directors and Senior ManagementEmployees. The policy is approved by the Nomination & Remuneration Committee and theBoard. The main objective of the said policy is to ensure that the level and compositionof remuneration is reasonable and sufficient to attract retain and motivate theDirectors KMP and Senior Management employees. The Remuneration Policy for the Directorsand Senior Management employees is given in the Corporate Governance Report.
STAKEHOLDER'S RELATIONSHIP COMMITTEE:
The details pertaining to composition of the Committee is included in the CorporateGovernance Report which forms part of this report. The role of the Committee is explainedin detail in the Corporate Governance Report enclosed herewith.
The familiarization programme aims to provide Independent Directors with the industryscenario the socio-economic environment in which the Company operates the businessmodel the operational and financial performance of the Company significant developmentsso as to enable them to take well informed decisions in a timely manner. This programmealso seeks to update the Directors on the roles responsibilities rights and duties undervarious Acts and other statutes.
The policy on Company's familiarization programme for Independent Directors is postedon the Company's website at: www.compuageindia.com
DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in accordancewith the provisions of Section 134 (3) (c) and 134(5) of the Companies Act 2013:
i. That in preparation of the Annual Accounts for the year ended March 31 2016 theapplicable accounting standards had been followed along with proper explanation relatingto material departures if any;
ii. That the directors had selected such accounting policies and applied consistentlyand made judgments and estimates that were reasonable and prudent so as to give true andfair view of the state of affairs of the Company at the end of the financial year endedMarch 31 2016 and the profits of the Company for the year under review;
iii. That proper and sufficient care has been taken for the maintenance of adequateaccounting records for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
iv. That the annual accounts for the year ended March 31 2016 have been prepared on a'going concern basis'.
v. That proper internal financial controls were in place and that such internalfinancial controls are adequate and were operating effectively.
vi. That proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems were adequate and operating effectively.
INSURANCE & RISK MANAGEMENT:
The assets of the Company are adequately insured against the loss due to fire theftriot earthquake terrorism in transit etc. and such other risks which are considerednecessary by the management. Further the Company identifies and assess key risks andformulate strategies for mitigation of such risks that are identified by the Company.
The Company has not accepted the Fixed Deposits and therefore the compliance of thesame as per the provisions of the Companies Act 2013 and rules thereon is not required.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has adopted a Whistle Blower Policy establishing vigil mechanism toprovide a formal mechanism to the Directors and employees to report their concerns aboutunethical behaviour actual or suspected fraud or violation of the Company's Code ofConduct or other policies. The policy provides for adequate safeguards againstvictimization of employees who avail of the mechanism and also provides for direct accessto the Chairman of the Audit Committee. It is affirmed that no personnel of the Companyhas been denied access to the Audit Committee. The policy of vigil mechanism is availableon the Company's website.
MATERIAL CHANGES AND COMMITMENTS IF ANY:
No material changes have took Place affecting the financial position of the Companyfrom the date of closure of financial year till the date of signing of this report.
Your Directors are thankful to the Vendors Customers Bankers Central and Stategovernments together with their departments and the local authorities for their continuedguidance support and co-operation.
Your Company has been able to operate efficiently because of the culture ofprofessionalism creativity integrity and continuous improvement in all functions andareas as well as the efficient utilisation of the Company's resources for sustainable andprofitable growth. To them goes the credit for all of the Company's achievements.
And to you our Shareholders we are deeply grateful for the confidence and faith thatyou have always reposed in us.
For and on behalf of the Board of Directors
Compuage Infocom Limited
Atul H. Mehta
Chairman and Managing Director
Date: August 5 2016
D-601/602 & G-601/602
Lotus Corporate Park
Graham Firth Steel Compound
Western Express Highway
Mumbai - 400 063.