COMPUAGE INFOCOM LIMITED
Your Directors have pleasure in presenting 18th Annual Report of CompuageInfocom Limited (the "Company" or "CIL") on the business andoperations of the Company along with the audited financial statements for the financialyear (FY) ended 31st March 2017.
The highlights of the Financial Results are:
Rs. in Lakh
|Particulars || |
| || |
|31st March 2017 || |
31st March 2016
| || |
31st March 2017
|31st March 2016 |
|Revenue from Operations & Other Income ||357047.91 || |
| || |
|Less: Expenses ||349442.79 || |
| || |
|Profit before Interest Taxation & Depreciation ||7605.12 || |
| || |
|Less: Finance Costs ||4490.58 || |
| || |
|Less: Depreciation ||340.61 || |
| || |
|Profit before Tax ||2773.93 || |
| || |
|Less: Provision for taxation ||1006.49 || |
| || |
|Profit after Tax Provision ||1767.44 || |
| || |
|Balance brought forward ||6434.32 || |
| || |
|Amount available for Appropriation: ||8201.76 || |
| || |
|Less: Bonus Shares issued ||- || |
| || |
|Less: Dividend || || || || || |
|Dividend for Financial year 2015-2016 ||- || |
| || |
|Dividend Tax for Financial year 2015-2016 ||- || |
| || |
|Interim Dividend ||- || |
| || |
|Proposed Dividend ||234.96 || |
| || |
|Dividend Distribution Tax ||47.83 || |
| || |
|Less: Unrealised Profit ||- || |
| || |
|Less: Foreign Currency Translation Reserve ||- || |
| || |
|Less: Minority Interest ||- || |
| || |
|Balance Carried to Balance Sheet ||7918.97 || |
| || |
|EPS (Basic) ||3.01 || |
| || |
|EPS (Diluted) ||3.01 || |
| || |
The Company registered significant increase in revenue by 32.73%. The Company's revenueincreased to ' 357047.91 Lakh as compared to ' 269001.08 Lakh in the previous year markingan increase by ' 88046.83 Lakh. The Company's net profit after tax stood at ' 1767.44 Lakhas compared to ' 1402.08 Lakh in the previous year recording an increase of 26.06%.
The consolidated increase in revenue was 14.55%. Our consolidated revenue has grown to' 357047.97 Lakh as compared to ' 311700.23 Lakh in the previous year. The Company's netprofit after tax stood at ' 1762.64 Lakh as compared to ' 1490.57 Lakh in the previousyear and thus net profit recorded a growth rate of 18.25%. Overall the year gone by hasbeen good and your Directors are hopeful of favourable time in future too.
For the financial year 2016-17 your Directors have recommended a dividend of ' 0.40paisa per share on face value of ' 2/- per share of the Company i.e. 20 per cent. Thesaid dividend on Equity Shares is subject to the approval of the Shareholders at theAnnual General Meeting (AGM).
TRANSFER TO RESERVES:
The whole profit after tax has been transferred to Surplus in the Statement of Profit& Loss. No amount is transferred to General Reserves Account.
Compuage is a leading technology products distribution company in India by technologyproducts primarily we carry the IT and mobility products. During the year under reviewCompany has signed up new relationships with vendors for distribution of products inIndia. Its business strategy is based on following principles:
Partnering up new viable businesses and build lasting relationships withexisting new and potential partners.
To reach rural market penetrate deeper in the current markets and trying togrow the business in the existing product line.
Launch of online purchase model for Channel Partners which will help to taplarger market share.
To deliver differentiated offerings to the clients which in turn will enhancetheir productivity and thus brings overall efficiency and effectiveness of the business
Periodically optimise various operational parameters to bring in effectivenessof organizational structure and processes which helps in aligning and meeting strategicgoals.
To meet its theme line Connect Partner and Grow Company had adopted a strategy ofAccelerated Compuage Transformation. This transformation is based on 3 factors viz. SpeedProcess and Automation and Numbers.
Basically the Board is fairly bullish about future and working on the targets forupcoming years. Your Directors are making all good efforts to achieve the better resultsin years to come.
Compuage Infocom (S) Pte. Ltd.:
Compuage Infocom (S) Pte. Ltd. is a Wholly Owned Subsidiary of the Company. There wasno business activity in the Subsidiary Company during the year since Company hastransferred its business to Singapore Branch.
In accordance with Section 129(3) of the Companies Act 2013 a statement containingsalient features of the
financial statements of the subsidiary companies in Form AOC-1 is appended as AnnexureA to the Board's Report.
Further no new subsidiary was acquired nor any subsidiary ceased to exist.
Your Company's overseas operations are carried out through branch office established inSingapore. It has served as a medium to manage business more effectively. This overseaspresence has enabled to achieve economies of scale.
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' Reportforms part of the Annual Report.
Pursuant to Section 136 of the Companies Act 2013 the financial statements of thesubsidiary are kept for inspection of the shareholders at the Registered Office of theCompany.
SHARE CAPITAL (SUB-DIVISION OF EQUITY SHARES):
Your Board of Directors recommended for sub-division of Equity Shares which wasapproved by the Shareholders through Postal Ballot passed on 21st January 2017and the results of the same were declared on 24th January 2017. Accordinglythe Equity Shares of face value ' 10/- (Rupees Ten only) each were sub-divided into 5Equity Shares of face value of ' 2/- (Rupees Two only) each. Consequently the number ofissued subscribed and paid- up Equity Shares increased from 11747999 Equity Shares to58739995 Equity Shares. Pursuant to sub-division new ISIN No. INE070C01037 was allottedby NSDL and CDSL for compulsory dematerialization of shares.
The Board of Directors at its meeting held on 15th December 2016 approved aproposal to sub-divide the face value of Equity Shares of the Company from ' 10 (RupeesTen only) to ' 2 (Rupees Two only) per share. The Company received approval of theShareholders through Postal Ballot for subdivision of shares on 21st January2017 and the results of the same were declared on 24th January 2017. The recorddate fixed for sub-division of shares was 17th February 2017. Shareholders withEquity Shares of ' 10/- each of the Company in electronic form received direct credit ofthe sub-divided shares of ' 2/- each of the Company to their depository account. TheCompany issued new share certificate of ' 2/- each in place of the old share certificatesfor shareholders holding shares in physical form. 11747999 Equity Shares of face value '10/- each were sub-divided into 58739995 equity shares of face value ' 2/- each and thereis no change in the paid-up share capital of the Company consequent upon sub-division ofthe face value of the equity shares.
Pursuant to sub-division new ISIN No. INE070C01037 was allotted by NSDL and CDSL forcompulsory dematerialization of shares.
We maintain sufficient cash to meet our strategic and operational requirements. Weunderstand that liquidity in the Balance Sheet has to balance between earning adequatereturns and the need to cover financial and business risks. We are agile and prepared tomeet unforeseen business needs if any.
DIRECTORS AND KEY MANAGERIAL PERSONNEL: Directors:
The current policy is an appropriate mix of Executive and Non-executive Directors tomaintain the independence of the Board and separate its function of governance andmanagement. On 31st March 2017 the Board consists of 5 members 2 of whom areExecutive Directors and 3 are Non-executive Directors.
In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Atul Mehta retires by rotation and being eligible offers his candidature forreappointment as a Director.
There has been no change in the composition of the Board since the last financial year.
Key Managerial Personnel:
Pursuant to the provisions of Section 203 of the Companies Act 2013 following personsare Key Managerial Personnel of the Company:
Mr. Atul H. Mehta - Managing Director
Mr. Bhavesh H. Mehta - Whole Time Director
Mr. Sunil Mehta - Chief Financial Officer and
Mrs. Disha Shah Gandhi - Company Secretary
There has been no change in the Key Managerial Personnel during the year.
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and Individual Directors pursuant to the provisions of the Act and theCorporate Governance requirements as prescribed by Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations").
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee Members on the basis of the criteria such as the composition of Committeeseffectiveness of Committee Meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theIndividual Directors on the basis of the criteria such as the contribution of theIndividual Director to the Board and Committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc.
In 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 Executive Directors and Non-ExecutiveDirectors. The same was discussed at the Board Meeting that followed the meeting of theIndependent Directors at which the performance of the Board its Committees andIndividual Directors was also discussed. Performance evaluation of Independent Directorswas done by the entire Board excluding the Independent Director being evaluated.
The Board met twelve times during this financial year the details of which are givenin Corporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013 and Regulation 17 of SEBI (LODR)Regulations 2015.
DECLARATION BY INDEPENDENT DIRECTORS:
All the Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
CORPORATE SOCIAL RESPONSIBILITY:
The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year is set outat Annexure B of this report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014. For other details regarding the CSR Committee pleaserefer to the Corporate Governance Report which forms part of this report. The policy isavailable on the website of the Company.
ABSTRACT OF THE ANNUAL RETURN:
As provided under Section 92(3) and Section 134 (3) (a) of the Companies Act 2013 theextract of annual return is given in Annexure C in the prescribed Form MGT-9 which formspart of this report.
Report on Corporate Governance duly approved by the Board of Directors in accordancewith Listing Regulations along with a certificate from the Statutory Auditors confirmingthe compliance is given separately in this Annual Report Annexure D.
MANAGEMENT DISCUSSION AND ANALYSIS:
A report on Management Discussion and Analysis which includes details on the state ofaffairs of the Company as required under the Regulation 34(2) (e) of SEBI (ListingObligations Disclosure Requirements) Regulations 2015 is annexed herewith as Annexure Eand forms part of the Boards' Report.
C. Earnings And Outgo in Foreign Exchange:
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.
|Particulars ||Current Year ||Previous Year ||Current Year ||Previous Year |
| ||(in Rs. ) || |
(in Rs. ) 9521.26 9449.62
|(in Rs. ) ||(in Rs. ) |
|Foreign Exchange Earnings Foreign Exchange Outgo ||14777.74 14742.18 ||14777.74 14742.18 ||9521.26 9449.62 |
PREVENTION AND REDRESSAL OF SEXUAL HARASSEMENT 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".
Your Company considers people as its biggest assets. It has put concerted efforts intalent management and succession planning practices strong performance managementlearning and training initiatives to ensure that your Company consistently developsinspiring strong and credible leadership. The Company has a structured induction processat all locations. During the year your Company has ensured that rewards and recognitionare commensurate with performance and that employees have the opportunity to develop andgrow.
The enthusiasm and unstinting efforts of employees have enabled the Company to improveproductivity across organization.
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:
|Name of the Directors ||Designation ||Ratio to median remuneration of the employees |
|Mr. Atul H. Mehta ||Chairman and Managing Director ||55.02:1 |
|Mr. Bhavesh H. Mehta ||Whole-time Director ||55.02:1 |
|Mr. Ganesh Shiva Ganesh ||Non-Executive & Independent Director ||NA |
|Mrs. Preeti Trivedi ||Non-Executive & Independent Director ||1.18:1 |
|Mr. Vijay Agarwal ||Non-Executive & Independent Director ||1.18:1 |
ii) The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the financial year:
|Name of the Directors ||Designation ||Ratio to median remuneration of the employees |
|Mr. Atul H. Mehta ||Chairman and Managing Director ||NIL |
|Mr. Bhavesh H. Mehta ||Whole-time Director ||NIL |
|Mr. Ganesh Shiva Ganesh ||Non-Executive & Independent Director ||NIL |
|Mrs. Preeti Trivedi ||Non-Executive & Independent Director ||5.26% |
|Mr. Vijay Agarwal ||Non-Executive & Independent Director ||11.11% |
|Mr. Sunil Mehta ||Chief Finance Officer ||No change |
|Ms. Disha Shah ||Company Secretary ||No change |
iii) The percentage increase in the median remuneration of employees in the financialyear: 13.72%
iv) The number of permanent employees on the rolls of Company: 697
v) Average percentile increase already made in the salaries of employees other than themanagerial 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:
The median percentage increase made in the salaries of employees other than themanagerial personnel was 15.09%. These increases are a function of the Company's marketcompetitiveness based on the salary benchmarked survey the Company undertakes annually.
vi) 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
|Name (Age) ||Designation Nature of duties & Date of commencement of Employment ||Qualification /Experience ||Gross Remuneration ||Nature of employment ||Relationship |
|Atul H. Mehta ||Chairman & Managing Director ||MBA - U.S.A. ||16800000/- ||Contractual ||Brother of Mr. Bhavesh |
|(56) ||Specialized in Finance & Strategic Planning (16.06.2000) ||(27) ||(w.e.f. 08.09.2014) || ||Mehta Whole-time Director |
|Bhavesh H. Mehta ||Whole-time Director Specialized in ||M.Com ||16800000/- ||Contractual ||Brother of Mr. Atul |
|(44) ||Imports & Logistics (18.10.2000) || ||(20) ||(w.e.f. 18.10.2014) || |
|Mehta Managing || || || || || |
| || || || || ||Director |
1. Nature of employment is contractual.
2. The above amount does not include provision of gratuity provident fund and leaveencashment.
INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROLS:
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.
Additionally the Board has appointed M/s. Agarwal Desai & Shah CharteredAccountants (Firm Reg. No. 124850W) as Internal Auditors of the Company in accordance withSection 138 of the Companies Act 2013 to have financial control checks and ensureadequate transparency.
The Audit Committee of the Board of Directors periodically reviews the audit plansinternal audit reports and adequacy of internal controls.
Under Section 139 of the Companies Act 2013 and the rules framed thereunder it ismandatory to rotate the Statutory Auditors on completion of the maximum term permittedunder the said Section. The Audit Committee at its meeting held on 14th August2017 proposed and the Board of Directors recommended the appointment of M/s. Bhogilal
C. Shah & Co. having Firm Registration No. 101424W as the Statutory Auditors whowill hold the office for a period of 5 consecutive years from the conclusion of 18thAnnual General Meeting till the conclusion of 23rd Annual General Meeting ofthe Company to be held in 2022 subject to approval of Shareholders.
A resolution to that effect forms part of notice of the 18th Annual GeneralMeeting sent along with this Annual Report.
AUDITORS' REPORT DISCLAIMER AND MANAGEMENT'S REPLY:
There are no qualifications reservations or adverse remarks made by M/s. B.V. Dalal& Co. Statutory Auditors in their report for the financial year ended 31stMarch 2017. Hence the report is self-explanatory.
SECRETARIAL AUDIT REPORT AND OBSERVATION
The Board of Directors have appointed Mr. Virendra G. Bhatt Practicing CompanySecretary Mumbai to conduct Secretarial Audit for the financial year 2016-17 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 2016-17 forms part of theDirectors' Report as Annexure F.
SECRETARIAL AUDITOR'S OBSERVATION AND MANAGEMENT'S REPLY:
There are no qualifications reservations or adverse remarks made by Practicing CompanySecretary in their report for the financial year ended 31st March 2017. Hencethe report is self-explanatory.
As a part of its philosophy of adhering to ethical standards transparency andaccountability and in line with the provisions of the Companies Act 2013 and the ListingRegulations the Board has adopted a policy on Related Party Transactions which is placedon the Company's website. All the Related Party Transactions are in the ordinary andnormal course of business and at arm's length.
All Related Party Transactions are periodically placed before the Audit Committee andalso before the Board for approval. Prior omnibus approval of the Audit Committee isobtained for the transactions which are of a foreseeable and repetitive nature.
The particulars of contracts or arrangements with related parties referred to inSection 188(1) and applicable rules of the Companies Act 2013 in Form AOC-2 is providedas Annexure G of this Annual 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 for the Independent Directors aims to provide them anopportunity to familiarize with the Company its Management and its operations so as togain a clear understanding of their roles rights and responsibilities and contributesignificantly towards the growth of the Company. They have full opportunity to interactwith Senior Management Personnel and are provided all the documents required and sought bythem for enabling them to have a good understanding of the Company its business model andvarious operations and the industry of which it is a part.
The policy undertaken by the Company in this respect has been disclosed on the websiteof the Company.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (3) (c) and 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm:
i. That in preparation of the Annual Accounts for the year ended 31st March2017 the applicable accounting standards had been followed along with proper explanationrelating to 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 ended 31stMarch 2017 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 31st March 2017 have beenprepared 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:
Business risks exist for any enterprise having national and international exposure.Your Company also faces some such risks the key ones being - a longer than anticipateddelay in economic revival unfavorable exchange rate fluctuations emergence ofinflationary conditions rise in counterfeits and look-alikes and any unexpected changesin regulatory framework.
The Company is well aware of these risks and challenges and has put in place mechanismsto ensure that they are managed and mitigated with adequate timely actions.
The Company has not accepted Fixed Deposits and therefore the compliance of the same asper the provisions of Companies Act 2013 and rules thereon is not required. However theBoard vide its meeting held on 6th June 2017 recommended the Members via PostalBallot to obtain Unsecured Fixed Deposits to an amount not exceeding 10% of the aggregatepaid-up share capital and free reserves of the Company from Members and 25% of theaggregate paid-up share capital and free reserves of the Company from Public. Pursuant toapplicable provisions the Company shall follow the prescribed procedure.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company promotes ethical behaviour in all its business activities and in line withthe best governance practices. For this purpose a policy has been laid down through whichDirectors employees and business associates can report unethical behavior malpracticeswrongful conduct fraud violation of Company's Code of Conduct without fear of reprisal.The Whistle- Blower Protection Policy aims to:
Allow and encourage stakeholders to bring to the Management notice concernsabout unethical behavior malpractice wrongful conduct actual or suspected fraud orviolation of policies.
Ensure timely and consistent organizational response.
Build and strengthen a culture of transparency and trust.
Provide protection against victimization.
The above mechanism has been appropriately communicated within the Company across alllevels and has been displayed on 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 Business PartnersCentral and State Governments together with their departments and the local authoritiesEmployees for their valuable support and co-operation.
The Directors also wish to express their gratitude to investors for the faith that theycontinue to repose in the Company.
For and on behalf of the Board of Directors Compuage Infocom Limited
Atul H. Mehta
Chairman and Managing Director
Mumbai 14th August 2017
D-601/602 & G-601/602
Lotus Corporate Park
Graham Firth Steel Compound
Western Express Highway
Mumbai - 400 063.