To the Members
Your Directors are pleased to present 27th Annual Report of the Companyalong with Audited Accounts for the financial year ended March 312018.
Your Company's financial for the year ended March 312018 as compared to the previousfinancial year ended March 31 2017 is summarized below:
Rs in Lakhs
|Particulars ||Current Year 2017-18 ||Previous Year 2016-17 |
|Revenue from Operations ||17393.48 ||14782.57 |
|Other Income ||43.56 ||69.14 |
|Total Income ||17437.04 ||14851.71 |
|Net Profit before Exceptional Items and Tax ||4244.53 ||2363.74 |
|Exceptional Items ||(393.31) ||240.96 |
|Profit Before Tax ||3851.22 ||2604.70 |
|Tax Expenses ||688.51 ||629.30 |
|Profit After Tax ||3162.71 ||1975.40 |
|Other Comprehensive Income (Net of Tax) ||7.85 ||(11.88) |
|Total Comprehensive Income for the year ||3170.56 ||1963.52 |
REVIEW OF OPERATIONS AND STATE OF AFFAIRS:
The total income of the Company for the year ended as on March 312018 is ' 17437.04lakhs which is higher by about 17.41% over that for the previous year which was '14851.71 lakhs on account of considerable progress in various projects/ activities.Total Comprehensive Income increased to ' 3170.56 lakhs in the current year from '1963.52 lakhs in the previous year registering a growth of61.47%.
On January 08 2018 the Company has issued and allotted 659340 Equity Shares of '10/- each at an issue price of ' 455 per share to raise ' 30 Crore by way of QualifiedInstitutional Placement ("QIP") under Chapter VIII of the Securities andExchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009and Section 42 of the Companies Act 2013 read with Rule 14 of the Companies (Prospectusand Allotment of Securities Rules 2014). Expenses related to the issue amounting to '63.22 lakhs have been adjusted against Securities Premium. Use of the net proceeds of theQualified Institutional Placement is intended for business purposes such as capitalexpenditure for ongoing and future expansion projects acquisition working capital andgeneral corporate purposes and any other purposes as may be permissible under applicablelaw. The proceeds (net of issue expenses) has been utilised towards reduction of shortterm bank borrowing for working capital.
Your Company is India's one of the leading player in manufacturer of Coding and MarkingMachines and Consumables thereof.
Your Company is looking to expand its global foot print by exploring otherinternational markets and will be launching the Control Print Brand of Coding and MarkingMachines and Consumables thereof in other countries with high growth potential. This willbe a good growth opportunity for the Company in the coming few years.
No material changes and commitments have occurred after the close of the year till dateof this report which affects the financial position ofthe Company.
DIVIDEND AND RESERVE
During the year the Board of Directors ofthe Company at their meeting held on January312018 declared Interim Dividend of ' 3.00 per equity shares which has been paid inFebruary 2018. Total outflow on account of interim dividend payout including dividenddistribution tax amounted to ' 589.69 lakhs.
In line with the good performance during the year your Directors are pleased torecommend for approval of members a final dividend of ' 3.50 per equity share of facevalue of ' 10/- each for the year ended March 312018.
The dividend will be paid in compliance with the applicable Rules and Regulations. Thetotal dividend forthe financial year including the proposed Final Dividend amounted to '6.50 per equity share and will absorb ' 1278.82 lakhs.
During the year under review no amount from profit was transferred to General Reserve.
CHANGE IN CAPITAL STRUCTURE
During FY 2017-18 your Company offered Equity Shares to the Qualified InstitutionalBuyers ("QIBs") on preferential allotment basis through Qualified InstitutionsPlacement ("QIP") in accordance with Chapter VIII of SEBI (Issue of Capital andDisclosure Requirements) Regulations 2009. Accordingly 659340 Equity Shares of' 10/-each were allotted to QIBs in January 2018 at an issue price of ' 455/- per Equity Share(including premium of ' 445/- per Equity Share). Post issuance of Equity Shares under QIPthe issued subscribed and paid-up capital of your Company has increased from '156723720/- in FY 2016-17 to ' 163317120/- in FY 2017-18.
As on March 312018 the Company has only one wholly-owned subsidiary company namely"Liberty Chemicals Private Limited".
As per the provisions of Section 129(3) of the Companies Act 2013 ("Act") astatement containing salient features of the financial statements of the Company'ssubsidiary in Form AOC-1 is annexed as "Annexure - A" and forms an integral partof this Report. Pursuant to the provisions of Section 136 of the Act the financialstatements along with the relevant documents and separate audited financial statements inrespect ofsubsidiary is available on the website ofthe Company.
The financial statements ofthe subsidiary company and related information are availablefor inspection by the members at the Registered Office ofyour Company between 11.00 a.m.to 4.00 p.m. on all days except Saturdays Sundays and public holidays upto the date ofthe 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 tothe Company Secretary at the Registered Office of your Company. The financial statementsincluding the consolidated financial statements financial statements of subsidiary andall other documents required to be attached to this report have been uploaded on thewebsite of your Company under the weblink: https://www.controlprint.com/investors/
In terms of the provision of Sections 73 and 74 of the Companies Act 2013 read withthe relevant rules your Company has not accepted any fixed deposits during the year underreview.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
A Separate reports on Corporate Governance Report and Management Discussion andAnalysis as required by Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ["SEBI (LODR) 2015"] forms part ofthis Annual Report along with the required Certificate from the Statutory Auditors of theCompany confirming the compliance ofrequirements ofCorporate Governance as stipulated inthe SEBI (LODR) 2015.
BOARD OF DIRECTORS
The Board of Directors based on the recommendation ofthe Nomination and RemunerationCommittee appointed Ms. Ritu Joshi as a Non-Executive Director ofthe Companyw.e.f.December 25 2017.
Mr. Basant Kabra (DIN: 00176807) was appointed as Managing Director ofthe Company for aperiod of three years with effect from January 012016 upto December 312018. On therecommendation ofthe Nomination & Remuneration Committee the Board of Directors atits meeting held on May 25 2018 has recommend re-appointment of Mr. Basant Kabra as aManaging Director ofthe Company for a further period ofthree years with effect fromJanuary 012019.
During the year Ms. Nyana Sabharwal Whole-time Director of the Company resigned fromthe services of the Company with effective from October 012017.
Retiring by Rotation
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Mr. Shiva Kabra Director retires by rotation at theforthcoming Annual General Meeting and being eligible offers himself for re-appointment.
The Board recommends his re-appointment for the consideration of the Members of theCompany at the ensuing Annual General Meeting.
Declaration of Independence by Independent Directors
The Independent Directors ofyour Company have submitted declaration confirming thattheymeet the criteria of independence as laid down under Section 149(6) of the Act andRegulation16(1)(b) of the SEBI (LODR) 2015 and there has been no change in thecircumstances which may affect their status as Independent Director during the year.
The Company has formulated a Familiarization Programme for Independent Directors withan aim to familiarize the Independent Directors with the Company their roles rightsresponsibilities in the Company nature ofthe industry in which the Company operatesbusiness model of the Company etc. to provide them with better understanding of thebusiness and operations ofthe Company and so as to enable them to contribute significantlyto the Company.
The details of programme for familiarization of Independent Directors with the Companyare disclosed on the website of the Company under the web linkhttps://www.controlprint.com/investors/details-of-familarisation-programme/
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Company has an adequate Internal Financial Control System commensurate with thesize scale and complexity of its operations to ensure proper recording of financial andoperational information and compliance of various internal control and other regulatoryand statutory compliances. Internal Audit Control System ensures that the regular internalaudits are conducted at the factories and other functional areas. The findings are thentaken up by audit committee along with management response for suitable action. TheCompany has also implemented SAP ERP system it helps to minimize human errors andplugging the loopholes. The Company also has a proper and adequate system of internalcontrols to ensure that all assets are safeguarded and protected against loss fromunauthorized use or disposition and those transactions are authorized recorded andreported correctly. The Company has adequate and effective internal audit system coveringon a continuous basis the entire gamut of operations and services spanning all locationsbusiness and functions. The Audit Committee monitors the Internal Audit System on regularintervals and directs necessary steps to further improve the Internal Control system.
MEETINGS OF THE BOARD
Six meetings of the Board of Directors were held during the year. For further detailsplease refer Report on Corporate Governance.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors to the best ofthe knowledge and belief and according to the informationexplanations and representations obtained by them and after due enquiry make thefollowing statements in terms of Sections 134(3)(c) and 134(5) of the Act that:
a) in the preparation of the annual accounts for the year ended March 312018 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
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 as at March 312018 and ofthe profitofthe Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The Board of the Directors has framed the policy which lays down a framework inrelation to Remuneration of Directors Key Managerial Personnel and Senior Management ofthe Company. This policy also lays down criteria for selection and appointment of BoardMembers. The Nomination and Remuneration Committee has designed the Remuneration Policy inorder to attract motivate and retain the executive talent needed to achieve superiorperformance in a competitive market. The Nomination and Remuneration Policy is availableat website of the Company under web link https://www.controlprint.com/wp/wp-content/uploads/Nomination and Remuneration-Policv.pdf
PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and the SEBI (LODR) 2015 theBoard has carried out an annual evaluation of its own performance the individualDirectors (including the Chairman) as well as an evaluation of the Board Committees. TheNomination and Remuneration Committee (NRC) of the Company approved a checklist forevaluation of the performance of the Board the Committees of the Board and the IndividualDirectors including the Chairman of the Board.
The Board adopted the checklist for performance evaluation as approved by NRC. Theperformance of the Board and Committee was evaluated on the basis of the criteriaapproved. The Board and the NRC reviewed the performance of the individual Directors. Inaddition the Chairman was also evaluated on the key aspects ofhis role.
In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance ofthe Chairman wasevaluated. The same was discussed in the Board meeting that followed the meeting oftheIndependent Directors at which the performance ofthe Board its committees and theindividual Directors was discussed.
The Board of Directors expressed their satisfaction with the evaluation process.
StatutoryAuditors and Auditors' Report
M/s. Jhawar Mantri & Associates Chartered Accountants (Firm Registration No.113221W) were appointed as Statutory Auditors ofthe Company for a term of5 (five)consecutive years atthe 26th AGM held on September 15 2017. They haveconfirmed that they are not disqualified from continuing as Auditors ofthe Company.
Pursuant to the notified section ofCompanies (Amendment) Act 2017 the Company shallnot require to seekthe approval of Members for the ratification of Statutory Auditors atevery AGM; the relevant amendment made effective on May 07 2018. Hence the ratificationof Statutory Auditors at the ensuing 27th AGM is not sought.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.
As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 yourCompany carries out an audit of cost records. The Board of Directors on recommendation ofAudit Committee has appointed M/s. Paresh Jaysih Sampat (Membership No. 33451). CostAccountants (Firm Registration No. 102421) as Cost Auditors of the Company for theFinancial Year 2018-19.
In terms of the provisions of Section 148(3) of the Companies Act 2013 read with theRule 14(a)(ii) of the Companies (Audit and Auditors) Rules 2014 the remuneration oftheCost Auditors has to be ratified by the members. Accordingly necessary resolution isproposed at the ensuing AGM for ratification ofthe remuneration payable to the CostAuditors for the Financial Year 2018-19.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed M/s. Nilesh Shah & Associates CompanySecretaries in Practice to undertake the Secretarial Audit of the Company.
The Secretarial Audit Report is annexed as "Annexure - B" and forms anintegral part of this Report.
There were no qualifications reservation or adverse remark or disclaimer made bySecretarial Auditor in its report. EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act 2013 (the Act') and rule 12(1) ofthe Companies (Management and Administration) Rules 2014 extract of annual return isAnnexed as "Annexure - C" and forms an integral part of this Report.
RELATED PARTY TRANSACTIONS
All contracts/arrangements/transactions entered by the Company during the financialyear with related party were on arm's length basis and were in the ordinary course of thebusiness. There are no materially significant related party transactions made by theCompany with Promoters Key Managerial Personnel or other designated persons which mayhave potential conflict with interest of the Company at large. Accordingly the disclosureof Related Party Transactions as required under Section 134(3) (h) of the Companies Act2013 in Form AOC-2 is not applicable.
Your Directors draw attention of the members to Notes to accounts of the financialstatements which sets out related party disclosures.
A statement of all related party transactions is presented before the Audit Committeeon a quarterly basis specifying the nature and value of the transactions.
Your Company has formulated a Policy on Related Party Transactions and policy on thesame as approved by the Board is uploaded on the Company's web link viz.https://www.controlprint.com/wp/wp-content/uploads/Related-Partv-Transactions- Policv.pdf
VIGIL MECHANISM / WHISTLE BLOWER
Your Company has a Vigil Mechanism in place as required under Section 177 of the Actand the SEBI (LODR) 2015. The mechanism provides for adequate safeguards againstvictimization of persons who use such mechanism and makes provisions for direct access tothe Chairman of the Audit Committee. More details in this regard have been outlined in theCorporate Governance Report annexed to this report. The Policy is disclosed on theCompany's website with the following link:https://www.controlprint.com/wp/wp-content/uploads/Viail-Mechanism-or-Whistle-Blower-Policv.pdf
Risk Management within the organization involves reviewing the operations of theorganization identifying potential threats to the organization and the likelihood oftheir occurrence and then taking appropriate actions to address the most likely threats.
The Company is re-visiting its approach towards risk and shall periodically review andmitigate them through proper policies in place to manage all types of risk majorlyfinancial risk business risk inventory pricing risk regulatory risk and HR risk throughreview audit and reporting mechanism.
During the year under review following ratings reviewed by CRISIL a Credit RatingAgency on the Long-Term and Short- Term bank facility(ies) of the Company.
|Bank Loan Facilities Rated ||Rating |
|Long-Term Rating ||CRISIL A- /Stable |
|Short-Term Rating ||CRISIL A2+ |
CORPORATE SOCIAL RESPONSIBILITY
As a part of its initiative under the "Corporate Social Responsibility" (CSR)drive the Company has undertaken projects in the promoting health care and education.These projects are in accordance with Schedule VII of the Companies Act 2013 and theCompany's CSR policy.
The Company has undertaken the following CSR Projects in the current financial year:
1. Improving quality of education and skill development at two government schoolssituated at Nalagarh and Pune.
2. To equip children from marginalized communities with high quality value basededucation to enable them to develop their limitless potential.
3. Providing holistic nutritional intervention to underprivileged children afflictedwith cancer in Kolkata and Hyderabad.
The Report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed as "Annexure -D" and forms anintegral part of this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The details of Loans Guarantees or Investments covered under the provisions of Section186 of the Companies Act 2013 forms part of notes to the Financial Statements.
PARTICULARS OF EMPLOYEES
In accordance with the requirements of Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended regardingemployees is given in "Annexure-E" and forms an integral part of this Report.
PARTICULARS OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EARNINGS AND OUTGO
Particulars required under Section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 regarding conservation of energy technologyabsorption foreign exchange earnings and outgo are given in "Annexure F" andforms an integral part of this Report.
SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS
No significant and material orders have been passed by the Regulators/Courts/Tribunalsimpacting the going concern status and Company's operations in future.
ENVIRONMENT AND SAFETY
Your Company is conscious of the importance of environmentally clean and safeoperations. Your Company endeavors that the conduct of all operations are in such mannerso as to ensure safety of all concerned compliance of statutory and industrialrequirements for environment protection and conservation of natural resources to theextent possible.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a formal policy for the prevention of sexual harassment ofits women employees in line with "The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013". During the year there were nocomplaints received relating to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
Your Directors takes this opportunity to express their deep sense of gratitude to highdegree of professionalism commitment and dedication displayed by employees at all levels.Your Directors also wish to thank its esteemed corporate clients dealers agentssuppliers technology partners investors Government Authorities and bankers for theircontinued support and faith reposed in the Company. Your Directors are deeply grateful tothe shareholders for the confidence and faith that they have always reposed in theCompany.
| || ||For and on behalf of the Board |
| ||Basant Kabra ||Shiva Kabra |
|Place: Mumbai ||Managing Director ||Joint Managing Director |
|Date: May 25 2018 ||(DIN:00176807) ||(DIN :00190173) |