Your Directors have pleasure in presenting the 27thAnnual Report alongwiththe Accounts for the year ended March 31 2017.
| || || |
Rs. in Lacs
| ||For the year ended 31st March 2017 ||For the year ended 31st March 2016 |
| ||Standalone ||Consolidated ||Standalone ||Consolidated |
|Turnover (net of Excise Duty) ||3384 ||11897 ||3504 ||10913 |
|Operating Gross Profit ||925 ||3172 ||860 ||2572 |
|Add/Financial Charges ||(9) ||(36) ||(7) ||(24) |
|(Less): Depreciation & Other || || || || |
|Amortizations ||(130) ||(321) ||(129) ||(306) |
|Profit before tax ||786 ||2815 ||724 ||2242 |
|Add / Provision for tax || || || || |
|(Less) Current Year & MAT Cr. Ent. ||(69) ||(599) ||(155) ||(494) |
|Previous Year Tax Adjustment ||(10) ||(22) ||13 ||13 |
|Net profit before Deferred Tax ||707 ||2194 ||582 ||1761 |
|Deferred Tax Assets (Liabilities) ||(18) ||(26) ||7 ||(93) |
|Surplus Available for appropriation ||689 ||2168 ||589 ||1668 |
|Less : Minority Interest || ||(812) || ||(604) |
|Transfer to General Reserve ||689 ||1356 ||589 ||1064 |
The turnover of your Company during the year was lower by Rs.120 Lacs than the previousyear. More than 85.25% of sales amounting to Rs.2932.05 Lacs were from exports. Howeverexports were lower by 15.79% against the previous year exports of Rs.3482 Lacs. Net profitafter deferred tax during the year was Rs.689 Lacs as against Rs.589 Lacs in the precedingyear i.e. higher by 16.97%.
The consolidated financial results during the year including that of its SubsidiaryCompanieswere better i.e. sales Rs.11897 Lacs profit before tax Rs.2815 Lacs and profitafter tax Rs.2168 Lacs as compared to Rs.10913 Lacs Rs.2242 Lacs and Rs. 1668 Lacsrespectively for the previous year.
Your Directors do not recommend any dividend for the year under review considering thefund requirements for future business expansion.
FUTURE OUTLOOK AND PLANS
Your Company foresees a good scope for the export of its products. In order to give aboost to the exports during the year your Company incorporated a Wholly Owned Subsidiaryof the
Company in Florida (USA) which has already become operational since June 2016. It willmainly cater to the needs of North and South America as these have been the untappedmarkets so far. However frequent and wide fluctuations in foreign currency unstablepolitical/ economical situation in some countries and tough competition in theinternational market continues to be a challenge for your Company. However so far theresults are not as per expectations but all out efforts are being made to improve thesame.
Efforts are going on to develop more products of toner and your Company is hopeful toachieve the desired results with the help of the research team. Some other value addedproducts have been introduced and upgraded during the year.
The Management of your Company is actively exploring opportunities to invest in somenew projects and other activities as part of diversification plan.
AMALGAMATION OF ITDL IMAGETEC LIMITED (A SUBSIDIARY CO.) AND OTHER GROUP COMPANIES WITHINDIAN TONERS & DEVELOPERS LTD.
The Scheme of Arrangement for amalgamation of ITDL Imagetec Limited including fourgroup companies with the Company has been approved by Hon'ble National Company LawTribunal (NCLT) Allahabad and order has been reserved.
ITDL Imagetec Limited has filed 2nd motion petition with Hon'ble NCLTPrincipal Bench New Delhi which has been accepted and Hon'ble NCLT has passed the orderwith the instructions to serve the notice to ROC RD Income Tax Department and OfficialLiquidator. The next date of hearing has been fixed for 5.7.2017.
WHOLLY OWNED SUBSIDIARY
In order to cover the untapped markets of North and South America your Company hasincorporated a Wholly Owned Subsidiary of the Company in the State of Florida (USA) withan investment of upto $250000- only which has already become operational. However sofar the results are not as per expectations but all out efforts are being made to improvethe same.
EXPANSION PROGRAMME IN ITDL IMAGETEC LIMITED
ITDL IMAGETEC LIMITED a Subsidiary Company in Sitarganj (Uttarakhand) with themanufacturing capacity of 1800 MT of toner is doing very well and giving satisfactoryresults. The expansion in the Subsidiary Company will increase the manufacturing capacityfrom 1800 MT to 2400 MT which will better the performance of your subsidiary Companyduring the year.
RESEARCH AND DEVELOPMENT ACTIVITIES
Your Company continued the research and development activities during the year in thekey areas of product process and material development. Your Company has always givenprime importance to Research & Development which is the basis of your Company'ssuccess. With the help of the Pilot Plant your Company has successfully developed newquality products at competitive prices to face the global competition and is veryoptimistic to develop many more products in the times to come.
Continuing recognition by the Department of Scientific and Industrial ResearchMinistry of Science & Technology to your In House R & D Unit is a moralboosting and an encouraging feature for the team of your Research & DevelopmentCentre.
During the year the Company has incurred R & D expenses of Rs. 55.23 Lacs invarious heads in addition to Rs. 28.80 Lacs for purchase of capital items. Your Companyhas exhaustive programme of R & D activities in the coming years.
The Company has one subsidiary viz. ITDL Imagetec Limited and having its manufacturingfacility at D-11 Phase-II Eldeco-Sidcul Industrial Park Sitarganj 262405 Distt.Udham Singh Nagar Uttarakhand.
WHOLLY OWNED SUBSIDIARY COMPANIES:
The Company has one wholly owned subsidiary viz. Indian Toners USA Company and havingits operational activities at 7401 Wiles Road Suite#123Coral Springs FL 33067.
CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings/ behaviours of any form and the Board has laid down thedirectives to counter such acts. The Code has been posted on the Company's websitewww.indiantoners.com.
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code. All Management Staff were given appropriate training in this regard.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedas Annexure "1".
NUMBER OF BOARD MEETINGS HELD
The Board of Directors duly met 5 times during the financial year from 1st April 2016to 31st March 2017. The dates on which the meetings were held are as follows:
25th May 2016 5th August 2016 27th August 201611thNovember 2016 and 4th February 2017.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 based upon the managementrepresentation Directors of your Company hereby state and confirm that:
a) in the preparation of the annual accounts for the year ended 31st March 2017 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;
b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for that period;
c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
d) the directors have prepared the annual accounts on a going concern basis;
e) the directors have laid down internal financial controls in the company that areadequate and were operating effectively.
f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems are adequate and are operating effectively.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report andalso available on the Company website www.indiantoners.com.
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code. All Board Directors and the designated employees haveconfirmed compliance with the Code. Requirements of Regulation 8 (Code of Fair Disclosure)& Regulation 9 (Code of Conduct) of SEBI (Prohibition of Insider Trading) Regulations2015 have been noted and complied with by the Company.
STATUTORY AUDITORS & AUDITORS' REPORT
As per Section 139 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 the term of M/s. K.N. Gutgutia& Co. (Firm Registration No.304153E) Chartered Accountants New Delhi as theStatutory Auditors of the Company expiresat the conclusion of the ensuing Annual General Meeting of the Company.
The Board of Directors of the Company at their meeting held on 20th May 2017 on therecommendation of the Audit Committee have made its recommendation for appointment ofM/s. M.L. Garg & Co. Chartered Accountants (Firm Registration No.001604N) as theStatutory Auditors of the Company by the Members at the 27th Annual General Meeting of theCompany for an initial term of 5 years. Accordingly a resolution proposing appointmentof M/s. M.L. Garg & Co. Chartered Accountants as the Statutory Auditors of theCompany for a term of five consecutive years i.e. from the conclusion of 27th AnnualGeneral Meeting till the conclusion of 32ndAnnual General Meeting of the Company pursuantto Section 139 of the Companies Act 2013 forms part of the Notice of the 27thAnnualGeneral Meeting of the Company. The Company has received their written consent and acertificate that they satisfy the criteria provided under Section 141 of the Act and thatthe appointment if made shall be in accordance with the applicable provisions of the Actand rules framed thereunder.
The Notes on Financial Statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments.
The consolidated accounts along with the Statement pursuant to Section 129 of theCompanies Act 2013 are annexed.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Mukesh Agarwal & Co. (CP No.:3851 FCS: 5991) Company Secretaries toundertake the Secretarial Audit of the company. The Secretarial Audit Report is annexed asAnnexure "2".
INTERNAL AUDIT & INTERNAL AUDITORS
The Company has well-structured Internal Audit function. Pursuant to the provisions ofSection 138 of the Companies Act 2013 and other applicable provisions if any the Boardof Directors on the recommendations of the Audit Committee have appointed M/s B.K. Shroff& Co. Chartered Accountants as Internal Auditors of the Company for the year 2017-18.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
RELATED PARTY TRANSACTIONS:
Related party transactions that were entered during the financial year were on an arm'slength basis and were in the ordinary course of business. There was no materiallysignificant related party transactions with the Company's Promoters Directors KeyManagerial Personnel or other designated persons or their relatives which could have hada potential conflict with the interests of the Company. Transactions with related partiesentered by the Company in the normal course of business are periodically placed before theAudit Committee for its approval. The Board of Directors of the Company has on therecommendation of the Audit Committee adopted a policy to regulate transactions betweenthe Company and its Related Parties in compliance with the applicable provisions of theCompanies Act 2013 the Rules framed thereunder and the listing regulations. This Policyas considered and approved by the Board has been uploaded on the website of the Company atwww.indiantoners.com.
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY:
Pursuant to Section 134 (3) (n) of the Companies Act 2013 &Regulation 21 of SEBI(LODR) Regulations 2015 the Board of Directors of a listed Company are required toconstitute Risk Management Committee. However the provisions of this regulation areapplicable to top 100 listed entities determined on the basis of market capitalizationas at the end of the immediate previous financial year. Our Company does not fall underthis category.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
Your directors have already constituted the Corporate Social Responsibility (CSR)Committee comprising of Shri Sanjeev Goel as the Chairman Shri Sushil Jain and Shri ArunKumar Garg as other members.
As part of its initiatives under "Corporate Social Responsibility" (CSR) thecompany has contributed entire funds (calculated in terms of Section 198 of the Act) tothe Prime Minister's National Relief Fund.
The Annual Report on CSR Activities is annexed as Annexure "3".
Pursuant to the provisions of Companies Act 2013 and Regulation 17 of SEBI (LODR)Regulations 2015 the Board has carried out annual performance evaluation of its ownperformance the directors individually as well the evaluation of the Chairman and theworking of its Audit Nomination & Remuneration Corporate Social Responsibility andStakeholders Committees. The manner in which the evaluation has been carried out has beenexplained in Corporate Governance Report.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
In order to ensure that the activities of the Company and its employees are conductedin a fair and transparent manner by adoption of highest standards of professionalismhonesty integrity and ethical behaviour the company has adopted a vigil mechanism policy.This policy is posted on the website of company.
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014 REMUNERATION RATIO OF THE DIRECTORS/KEY MANAGERIAL PERSONNEL(KMP)/EMPLOYEES:
(i) The percentage increase in remuneration of each Director Chief Executive OfficerCompany Secretary and Chief Financial Officer during the financial year 2016-17 ratio ofthe remuneration of each Director to the median remuneration of the employees of theCompany for the financial year 2016-17 and the comparison of remuneration of each KeyManagerial Personnel (KMP) against the performance of the Company are as under:
|SL. NO. ||NAME ||DESIGNATION ||REMUNERATION PAID IN FY 2016- 17 (RS. IN LACS) ||REMUNERATION PAID IN FY 2015- 16 (RS. IN LACS) ||% INCREASE IN REMUNERATION FROM PREVIOUS YEAR ||RATIO/ TIMES PER MEDIAN OF EMPLOYEE REMUNERATION ||COMPARISON OF THE REMUNERATION OF KMP AGAINST THE PERFORMANCE OF THE COMOPANY |
|1. ||SH. SUSHIL JAIN ||CHAIRMAN & MANAGING DIRECTOR CEO(KMP) ||132.46 ||123.74 ||7.05 ||132.46 : 2.15 ||Profit before tax increased by 8.57% and Profit after tax increased by 16.90% in FY 2016-17 |
|2. ||SH.S.C. SINGHAL ||COMPANY SECRETARY(KMP) ||24.54 ||20.65 ||18.83 ||N.A. || |
|3. ||SH. N.K. MAHESHWARI ||CHIEF FINANCIAL OFFICER(KMP) ||10.29 ||8.34 ||23.38 ||N.A. || |
| || || ||167.29 ||152.73 ||9.53 || || |
ii) The median remuneration of employees of the Company during the financial year wasRs.2.15Lacs.
iii) In the financial year there was an increase of 10.26% in the median remunerationof employees;
iv) There were 88 permanent employees on the rolls of the Company as on March 31 2017;
v) Relationship between average increase in remuneration and company performance:- TheProfit before Tax for the financial year ended March 31 2017 increased by 8.57% whereasthe increase in median remuneration was 10.26%. The average increase in medianremuneration was in line with the performance of the Company.
vi) Comparison of Remuneration of the Key Managerial Personnel(s) against theperformance of the Company: The total remuneration of Key Managerial Personnel increasedby 9.53% from Rs.152.73 Lacs in 2015-16 to Rs.167.29 Lacs in 2016-17 whereas the Profitbefore Tax increased by 8.57% to Rs.786.01 Lacs in 2016-17 (Rs.723.92 in 2015-16).
vii) a) Variations in the market capitalization of the Company : The marketcapitalization as on March 31 2017 was Rs.126.93 Crores (Rs.111.45 Crores as on March 312016).
b) Price Earnings ratio of the Company was 8.55 as at March 31 2017 and was 7.31 as atMarch 31 2016.
c) Percent increase over decrease in the market quotations of the shares of the companyas compared to the rate at which the company came out with the last public offer in theyear- The closing share price of the Company at BSE Limited on 31st March 2017 beingRs.162.25 per equity share of face value of Rs.10 each has grown more than 16 times sincethe last public offer by the Company which was made in the year 1992.
viii) Average percentage increase made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2016-17 was 9.60% whereas theincrease in the managerial remuneration for the same financial year was 7.05%.
ix) The key parameters for the variable component of remuneration availed by thedirectors are considered by the Board of Directors based on the recommendations of theNomination and Remuneration Committee as per the Remuneration Policy for Directors KeyManagerial Personnel and other Employees.
x) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year Not Applicable; and
xi) It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employees.
DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)
Sh. Sushil Jain Sh. S.C. Singhal and Sh. Naresh Kumar Maheshwari are the ChiefExecutive Officer (CEO) Company Secretary and Chief Financial Officer (CFO) of theCompany respectively.
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. Kewal KrishanDhiman Director will retire at the forthcoming Annual General Meeting and being eligibleoffers himself for re-appointment.
The Company has received declaration from all the Independent Directors confirming thatthey meet with the criteria of Independence as prescribed both under sub-section (6) ofSection 149 of the Companies Act 2013.
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT. 2013
The Company has a policy against sexual harassment and a formal process for dealingwith complaints of harassment or discrimination. The Company seeks to ensure that all suchcomplaints are resolved within defined timelines. During FY 2016-17 the Company has notreceived any complaint. The Company is conducting workshops/awareness programs onprevention of sexual harassment from time to time.
Cordial Industrial relations continue to prevail thereby further strengtheningemployees' commitment to the growth of the Company.
The Board wishes to express its deep appreciation to all sections of the Employees fortheir whole hearted efforts co-operation and outstanding contribution to the growth ofthe Company during the year.
Particulars of employees as required under the provisions contained in Rule 5(2) andrule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014form part of this Report. However the information is not being sent alongwith the AnnualReport as per proviso of the above rule. Any shareholder interested in obtaining suchparticulars may write to the Company at its Corporate/Registered Office.
ENERGY TECHNOLOGY & FOREIGN EXCHANGE
Additional information to the extent applicable on conservation of energy technologyabsorption foreign exchange earning and outgo is required to be disclosed in terms ofSection 134 (3) (m) of the Companies Act 2013 read with Rule 8 of the Companies(Accounts) Rules 2014 is given as Annexure A' and forms part of this report.
MANAGEMENT'S DISCUSSIONS AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of SEBI (LODR) Regulations 2015 is presented in a separate sectionforming part of the Annual Report.
DISCLOSURES UNDER LISTING REGULATIONS
Your Company is now listed only with BSE Limited. The Company is regular in paying thelisting fees on demand and it has paid fee upto the current financial year.
DEMATERIALISATION OF SECURITIES
As informed earlier the shares of your Company were included in the compulsory listfor trading in dematerialization form with effect from 30.10.2000 and your company hadentered into necessary agreements with both the Depositories i.e. NSDL (NationalSecurities Depository Limited) and CDSL (Central Depository Securities Limited). It istherefore advisable to trade in the shares of the company in dematerialization form whichis convenient and safe.
In terms of Regulation 4 of SEBI (LODR) Regulations 2015 a Report on CorporateGovernance alongwith a certificate from the Auditors of the Company on the compliance ofthe conditions of Corporate Governance is provided elsewhere in this Annual Report.
Your Directors acknowledge the cooperation and assistance extended by various agenciesof the Central and State Governments State Bank of India and its valued Customers. YourDirectors also thank the shareholders for their continued support. You Directors thank allthe dedicated employees including executives for all their services rendered to theCompany.
| ||For & on behalf of the Board |
|Place : New Delhi ||(SUSHIL JAIN) |
|Date : 20thMay 2017 ||Chairman & Managing Director |
ANNEXURE "A " TO DIRECTORS' REPORT
Information pursuant to Rule 8 of Companies (Accounts) Rules 2014
(A) Conservation of Energy
Regular Supervision and controls are being maintained in areas where steps have alreadybeen taken for the conservation of energy.
|(B) Technology Absorption || |
|1. Specific areas in which R&D carried out by the Company. ||:: Development & Introduction of new Toners compatible for the upcoming Photocopiers digital machines & laser printers. |
|2. Benefits derived as a result of the above R&D. ||:: Availability of extended range of products resulting in procurement & servicing of orders for additional products in the export & domestic markets. |
|3. Further plan of action ||:: Development of more toner formulations as well as their packaging. |
| ||:: Re-sourcing of raw materials from other economical sources. |
| ||:: Import substitution of plant/machinery items by developing indigenous ones for economy in working. |
| ||:: Development of Colour Toner formulations as well as their packaging. |
|4. Expenditure on R&D ||:: Charged under the respective head of accounts Rs. 55.23 lacs and Rs. 28.80 lacs on capital items. |
|Technology Absorption Adaption and Innovation || |
|1. Efforts in brief ||:: The technology & know-how given by the collaborator has been absorbed. The Company is in continuous touch with the developments taking place world wide in this field. |
|2. Benefits derived ||:: Efficient plant operation achieving international product quality self development of products and their packaging substituting raw materials from economical sources. |
(C) Foreign Exchange Earnings / Outgo
1. Activities Relating to Exports
Exports were lower by 15.79% during the year ending 31st March 2017 ascompared to 31st March 2016.
2. Total Foreign Exchange used and earned
| ||Rs. in Lacs |
| ||2016-17 ||2015-16 |
|a) Total Foreign Exchange used || || |
|i) Import of Raw Materials ||1290.68 ||1504.23 |
|ii) Import of Stores & Spares and Packing material ||1.52 ||1.98 |
|iii) Foreign Travel ||8.06 ||39.30 |
|iv) Consultancy Charges ||NIL ||NIL |
|v) Others (Exhibition Adv.) ||37.29 ||19.67 |
|TOTAL ||1337.55 ||1563.20 |
|b) Total Foreign Exchange earned (on FOB basis) ||2797.02 ||2979.66 |