Your Directors have the pleasure in presenting this Forty SixthDirectors' Report together with the audited Annual Accounts of the Company for thefinancial year ended March 31 2018.
The highlights of the financial position for the year under review ascompared to the corresponding period in the previous year are given below:
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Your Directors are pleased to recommend Dividend at 30% ( Rs 0.60/- perEquity Share of Rs 2/- each) on equity shares for the year ended March 31 2018 subjectto the approval of shareholders at the ensuing annual general meeting of the Company. The
Dividend distribution would result in cash outflow of Rs 220.68 Lakhs(including Dividend Distribution Tax).
OPERATIONS AND FINANCE
Your directors have analyzed Company's operations and financials indetail in Management's Discussion and Analysis.
Printing industry slowed down with the global economic meltdown &inflation. Due to digital media the paper printing industry weakened. The worldwidenewspaper industry is facing year after year of shrinking advertising and circulationrevenues of printed newspapers. Publishers are moving out of the traditional newsgatheringrole by adopting an online-first' approach. This shift has caused the decline in thedemand of printing machineries.
Maintaining existing customer base servicing them with the goal ofretaining their business is imperative.
Motivating management practices excellent leadership highly skilledworkforce and a well focused approach has led Manugraph to achieving the goal of being theleader in the niche 4-page Newspaper Offset Printing Press market. Manugraph developsstrong business partnerships with clients providing most satisfactory after-sale serviceson a continuous basis.
In India Manugraph ranks as Numero Uno in the manufacture of weboffset presses. With a whopping 60% market share and quality presses ranging in speedsfrom 35000 - 70000 copies per hour Manugraph presses are present in nearly all majorpublication houses.
Manugraph has significant presence in the international market too.Leading publishers from South America Europe Middle East Asia & the CIS countrieshave all invested in Manugraph presses.
Operations for the year was affected due to strike by workmen for about4 months which has severely impacted the financials. Your Company continues to facechallenging external scenario including demand.
Your Company successfully entered into the business of CI Flexopackaging printing machine during the year. The Company foresees a very good demand ofpackage printing machines in India.
MANAGEMENT'S DISCUSSION AND ANALYSIS
In terms of the provisions of Regulation 32 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred to as 'SEBI Listing Regulations') the management's discussionand analysis is set out in this Annual Report.
PUBLIC / FIXED DEPOSITS
Your Company has not accepted any public / fixed deposits during theyear and as such no amount of interest and principal deposit was outstanding as on thebalance sheet date.
Manugraph Americas Inc.
The Printing industry in America has been going through verychallenging times over the last decade mainly due to the spread of electronic media andgreen initiatives coupled with pricing disadvantages.
Under the circumstances there has been severe strain in the operationsand financials of the wholly owned subsidiary company Manugraph Americas Inc. over theyears. The operations were substantially scaled down and were carried out on a cashneutral basis. Over the years we also managed to reduce the exposure to debtssignificantly. However considering that there were no new orders for presses over thepast 12 months and no clear visibility of any forthcoming cases the management decided tovoluntarily wind up the operations. Accordingly a petition under Chapter 11 was filed atthe US Bankruptcy court middle district of Pennsylvania on June 1 2017. Presently theproceedings are managed as a debtor in possession under the supervision of the court. Asof March 2018 substantially all the movable assets have been disposed off. A realtor hasbeen appointed for sale of the property and the same has been listed. Accounts for theyear ended March 2018 has been prepared on a discontinued operations basis. Accordinglythe equity value has been fair valued and necessary provision for impairment has been madein the accounts.
Constrad Agencies (Bombay) Pvt. Ltd.
During the year there was no major business activity in the Company.The Holding Company viz. Manugraph India Limited invested Rs 20 Lakhs in this subsidiarycompany to enable the subsidiary company to meets is routine administrative expenses. Areport on the performance and financial position of each of the subsidiaries associatesand joint ventures as per the Companies Act 2013 is provided after Consolidated FinancialStatements. The policy for determining material subsidiaries as approved by the Board maybe accessed on the Company's website viz. www.manugraph.com.
In accordance with the provisions of Section 129(3) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 as amended theConsolidated Financial Statements forms part of this Annual Report. The financial positionand performance of each of the said subsidiary companies are given in the statementcontaining the salient features of the financial statements of the said subsidiarycompanies of the Company which is annexed to this report.
In accordance with the third proviso to Section 136(1) of the CompaniesAct 2013 the Annual Report of the Company containing therein its standalone financialstatements and the consolidated financial statements and all other documents required tobe attached thereto has been hosted on its website www.manugraph.com. Further inaccordance with the fourth proviso to the said section the audited annual accounts ofeach of the said subsidiary companies of the Company have been hosted on the Company'swebsite www.manugraph.com.
Any shareholder interested in obtaining a physical copy of theaforesaid financial statements may write to the Company Secretary at the Registered Officeof the Company. Further please note that the said financial statements will also beavailable for inspection by the Members of the Company at the Registered Office of theCompany during business hours from 11.00 a.m. to 1.00 p.m. on all working days exceptSaturdays Sundays Bank Holidays and National Holidays.
BOARD OF DIRECTORS
The Board of Directors on the recommendation of the Nomination &Remuneration Company appointed Mrs. Basheera Indorewala as an Additional IndependentDirector of the Company w.e.f. February 7 2018. A brief profile of Mrs. Indorewala isprovided in the notice convening the ensuing Annual General Meeting (AGM').
Mrs. Indorewala holds office only upto the date of the forthcoming AGMand a Notice under Section 160(1) of the Act has been received from a Member signifyingits intention to propose Mrs. Indorewala's appointment as a Director.
Necessary declaration has been received from Mrs. Basheera Indorewalathat she meets the criteria of Independence prescribed under Section 149(6) of the Act andthe Companies (Appointment and Qualification of Directors) Rules 2014 and Regulation25(8) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended. Your Directors recommend the appointment ofMrs. Basheera Indorewala as an Independent Director for a period of 5 years not liable toretire by rotation.
In accordance with the provisions of the Companies Act 2013 andCompany's Articles of Association Mr. Sanjay S. Shah retires by rotation and is eligiblefor re-appointment. The Board recommends his re-appointment. None of the independentdirectors are due for retirement.
Brief profile of Mr. Sanjay S. Shah proposed to be re-appointed asDirector of the Company is provided in the notice convening the ensuing AGM.
Declaration of Independence
All the Independent Directors of the Company have given theirrespective declarations stating that they meet the criteria prescribed for independenceunder the applicable laws and in the opinion of the Board all the Independent Directorsof the Company meet the said criteria.
Evaluation of performance of all Directors is undertaken annually. TheCompany has implemented a system of evaluating performance of the Board of Directors andof its Committees and individual Directors on the basis of a structured questionnairewhich comprises evaluation criteria taking into consideration various performance relatedaspects. The Board of Directors has expressed their satisfaction with the evaluationprocess. The evaluation parameters and the process have been explained in the CorporateGovernance Report.
Independent Directors also reviewed the performance of non-independentDirectors and the Board as a whole in line with the Company's policy on Board Evaluation.
Appointment & Remuneration Policy
The Board of Directors had reviewed Policy for Appointment of Directorsand Senior Management and Evaluation of Directors' Performance copy of which is placed onthe website of the Company viz. www.maugraph.com.
Non Executive Directors
The Non Executive Directors (NED') are paid remuneration by wayof Sitting Fees. During the year the Company paid sitting fees of Rs 15000/- per meetingto the NEDs for attending meetings of the Board & Audit Committee and Rs 9000/- permeeting to the
NEDs for attending Nomination & Remuneration Committee meeting.
Executive Directors are paid remuneration by way of salaryperquisites allowances and commission. Salary is paid within the range fixed by themembers of the Company.
Remuneration of employees largely consists of basic remunerationperquisites allowances and performance incentives. The components of the totalremuneration vary for different grades and are governed by industry patternsqualifications and experience of the employee responsibilities handled by him his annualperformance etc.
Meetings of the Board
Four Board Meetings were held during the year and the gap between anytwo Board Meetings was not more than one hundred and twenty days thereby complying withapplicable statutory requirements. The meetings were held on May 26 2017 September
14 2017 November 23 2017 and February 7 2018.
As on March 31 2018 the Board had four committee viz. AuditCommittee Stakeholders Relationship Committee Nomination & Remuneration Committeeand Corporate Social Responsibility (CSR) Committee. A detailed note on compositionfunctions and roles of each of the Committees are provided separately under CorporateGovernance Report of this Annual Report.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during thefinancial year were on an arm's length basis and were in the ordinary course of business.There are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons or entitieswhich may have a potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee asalso the Board for approval. Attention of members is drawn to the disclosure oftransactions with related parties set out in Note No. 31 of Standalone FinancialStatements forming part of the Annual Report.
The policy on Related Party Transactions as approved by the Board isavailable on website of the Company viz.: www.manugraph. com.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company aims to further the socio economic welfare to the lesserprivileged and to those in need through its CSR activities. Your Company lays specialemphasis on education and vocational training of youth including females in the localcommunity for their economic empowerment. In order to achieve this objective your Companycontinues to support Industrial Training Institutes. Apart from the above the Companyprovides education and other loans to employees which enable their children for highereducation.
Since the Company has not earned profits in the previous financialyear the Company is not mandatorily required to contribute towards CSR activities. TheAnnual Report on our CSR Activities is appended as 'Annexure A' to this report.
EXTRACTS OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in FormMGT 9 is available on the website of the Company viz. www. manugraph.com.
The members of the Company at its Annual General Meeting held on August27 2014 have appointed M/s. Natvarlal Vepari & Co. Chartered Accountants as theStatutory Auditors of the Company to hold office upto the conclusion of the fifthconsecutive annual general meeting of the Company.
M/s. Natvarlal Vepari & Co. has confirmed their eligibility asStatutory Auditors. M/s. Natvarlal Vepari & Co. has also confirmed that they hold avalid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India.
The report of the auditors to the shareholders is a part of the AnnualReport. The notes to the Accounts that are a part of the financial statements areself-explanatory and need no further clarifications or explanations.
During the year under review neither the Statutory Auditors nor theSecretarial Auditors has reported to the Audit Committee any instances of fraud committedagainst the Company by its officers or employees of the Company.
Pursuant to the provisions of Section 204 of the Companies Act 2013and the relevant provisions of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Company had appointed M/s. Aashish K. Bhatt & Associatesa Company Secretary in Practice to act as Secretarial Auditor of the Company for thefinancial year 2017-18. The Report of the Secretarial Audit is annexed herewith as'Annexure C'. The Secretarial Audit Report does not contain any qualification reservationor adverse remark.
Pursuant to the provisions of Section 148 of the Companies Act 2013read with Notifications / Circulars issued by the Ministry of Corporate Affairs from timeto time the Board has appointed M/s. C.S. Adawadkar & Co. Cost Accountants toconduct the audit of the cost records of the Company for the financial year 2017-18.
The Cost Audit Report is required to be filed within 180 days from theend of the financial year. The Cost Audit Report for the financial year ended March 312017 was filed within the due date and for March 31 2018 will be filed within theprescribed period.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with Secretarial Standards issued by theInstitute of Company Secretaries of India on Board Meetings and Annual General Meetings.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013: (i) that in thepreparation of the annual financial statements for the year ended March 31 2018 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any.
(ii) that such accounting policies have been selected and appliedconsistently and judgment and estimates have been made that are reasonable and prudent soas to give a true and fair view of the state of affairs of the Company as at March 312018 and of the loss of the Company for the year ended on that date; (iii) that proper andsufficient care has been taken for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; (iv) that theannual financial statements have been prepared on a going concern basis; (v) that properinternal financial controls were in place and that the financial controls were adequateand were operating effectively; and (vi) that systems to ensure compliance with theprovisions of all applicable laws were in place and were adequate and operatingeffectively.
The Company believes that sound corporate governance is a key elementfor enhancing and retaining the trust of investors and various other stakeholders. TheCompany observes high standards of corporate governance in all areas of its functioningwith strong emphasis on transparency integrity and accountability. Corporate Governanceis a journey for constantly improving sustainable value creation.
As required under the provisions of Regulation 34(3) read with ScheduleV of the SEBI Listing Regulations a separate report on Corporate Governance forms part ofthis Annual Report together with a Certificate from the Auditors of the Company regardingcompliance of conditions of Corporate Governance.
Employees are vital to the Company. Your Company considers that 'thepower of knowledge engineering' is powered by its people. To achieve its aim ofattracting retaining and developing a committed workforce your Company sustained variousgrowth and developments initiatives during the year. However Long-term settlementagreement with workers has delayed because of very high demand for hike in already highwage levels. The Company is at advance stage of negotiations for settlement with theLabour
Your Company is committed to provide a healthy and safe workenvironment free from accidents injuries and occupational health hazards.
The Company had a total of 996 permanent employees as on March 312018.
Particulars of Employees
Disclosures with respect to the remuneration of Directors and employeesas required under Section 197 of the Act and Rule 5 (1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 (Rules) have been appended as Annexure Bto this report. Details of employee remuneration as required under provisions of Section197 of the Companies Act 2013 and Rule 5(2) and 5(3) of the Rules are available at theRegistered Office of the Company during working hours 21 days before the Annual GeneralMeeting and shall be made available to any shareholder on request. Such details are alsoavailable on your Company's website www.manugraph.com.
The Company states that there are no employees (other than ManagingDirectors) employed throughout the financial year 2017-18 and drawing a salary ofRs 1.02 crore per annum or more or employed for part of the year and in receipt ofremuneration of Rs 8.50 Lakhs or more per month as required under Section 197 of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. The details of salary paid to Managing Directors arepart of Corporate Governance Report forming part of this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.
In a rapidly changing business environment companies in printingindustry face numerous risks that impact their businesses. It is therefore imperative toidentify and address these risks and at the same time leverage opportunities for achievingbusiness objectives.
To establish and maintain a system of risk management and internalcontrol the Board periodically reviews the risk management system and maintenance of arisk profile (both financial and non-financial risks).
A brief report on risk evaluation and management is provided underManagement's Discussion and Analysis Report forming part of this Annual Report.
INTERNAL FINANCIAL CONTROLS
The Company has a well placed proper and adequate IFC system whichensures that all assets are safeguarded and protected and that the transactions areauthorised recorded and reported correctly. The Company's IFC system also comprises duecompliances with Company's policies and Standard Operating Procedures (SOPs).
The Company has appointed Internal Auditors who report to AuditCommittee of the Board. The Audit Committee reviews internal audit reports periodicallybased annual internal audit plan.
WHISTLE BLOWER POLICY
The Company has in place a whistleblower policy to support the Code ofBusiness Ethics. This policy documents the Company's commitment to maintain an open workenvironment in which employees consultants and contractors are able to report instancesof unethical or undesirable conduct actual or suspected fraud or any violation ofCompany's Code of Business Ethics at a significantly senior level without fear ofintimidation or retaliation.
The Whistle Blower Policy has been posted on the website of the Companyviz. www.manugraph.com.
DISCLOSURE IN TERMS OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has set up an Internal Complaints Committee for providing aredressal mechanism pertaining to sexual harassment of women employees at workplace.During the year there were no complaints relating to sexual harassment.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 is annexed as 'Annexure D'.
Statements in the Directors' Report & Management Discussion andAnalysis describing the Company's objectives projections estimates expectations orpredictions may be forward looking statements. Actual results could differ materially fromthose expressed or implied. Important factors that could make difference to the Company'soperations include cyclical demand changes in government regulations tax regimeseconomic development and other ancillary factors.
Your Directors would like to thank all stakeholders namely customersshareholders dealers suppliers bankers employees and all other business associates forthe continuous support given by them to the Company and its Management.
For and on behalf of the Board
Place : Mumbai Date : May 24 2018