Your Directors have the pleasure in presenting this Forty Seventh Directors' Reporttogether with the audited Annual Accounts of the Company for the financial year endedMarch 31 2019.
The highlights of the financial position for the year under review as compared to thecorresponding period in the previous year are given below:
| || || || ||(Rs. in Lakhs) |
|Particulars || |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Total Income ||25644.24 ||19915.40 ||25644.24 ||19913.80 |
|Total Expenses ||26596.73 ||20266.86 ||26596.73 ||20265.97 |
|Profit / (Loss) before Taxation ||(952.49) ||(351.46) ||(952.49) ||(352.17) |
|Exceptional Items ||(632.52) ||(1500.00) ||(232.52) ||- |
|Tax Expense ||54.26 ||210.12 ||54.26 ||210.12 |
|Profit/(Loss) from Discontinued Operations after Tax ||- ||- ||(502.99) ||(862.63) |
|Profit / (Loss) after Taxation ||(1530.77) ||(2061.58) ||(1633.75) ||(1424.92) |
|Other Comprehensive Income ||(10.60) ||139.35 ||55.44 ||139.73 |
|Total Comprehensive Income for the year Net of Taxes ||(1541.37) ||(1922.23) ||(1578.31) ||(1285.19) |
|Earnings Per Share (in Rs.) (basic & considering exceptional items) ||(5.03) ||(6.78) ||(3.72) ||(1.85) |
* based on re-stated accounts after considering Scheme of Merger by Absorption(refer note 12(g) of standalone accounts)
Your Directors are pleased to recommend Dividend at 25% (Re. 0.50/- per Equity Shareof Rs. 2/- each) on equity shares for the year ended March 31 2019 subject to theapproval of shareholders at the ensuing annual general meeting of the Company. TheDividend distribution would result in cash outflow of Rs. 183.90 Lakhs (including DividendDistribution Tax).
TRANSFER TO RESERVES
The Directors do not propose to transfer any amount to reserve.
OPERATIONS AND FINANCE
Your directors have analyzed Company's operations and financials in detail inManagement's Discussion and Analysis.
Globally the print media industry has been on a decline in terms of business.Newspapers in developed markets have been over the last few years losing customers andadvertisement revenues to alternative mediums. The Indian newspaper industry has facedmultiple headwinds especially in the last two-three years in the form of demonetisationimplementation of GST and slow economic development and unemployment. Industry is oftenimpacted by fluctuations in newsprint prices and is constantly under threat from rapiddigitisation of content.
In India Manugraph ranks as Numero Uno in the manufacture of web offset presses. Witha whopping 60% market share and quality presses ranging in speeds from 25000 - 85000copies per hour Manugraph presses are present in nearly all major publication houses.Manugraph has significant presence in the international market too. Leading publishersfrom South America Europe Middle East Asia & the CIS countries have all invested inManugraph presses.
Over the years Manugraph has emerged as a thriving nimble printing machinerymanufacturing enterprise because of its ability to adapt itself rapidly to meet thechallenges of a competitive economy and its commitment to be a supplier of choice bydelighting customers with its excellent services and cutting edge technology. Manugraphbelieves that the key to maintaining sustained success is choosing the right technologiesand applying them to build cost-Effective quality machines. Constant modernization andemployment of state-of-the-art technology has enabled Manugraph to stay ahead in theindustry always. In terms of recent technical collaborations Manugraph tied-up withCarraro SRL of Italy to manufacture Central Impression Flexo presses for the packagingindustry. A first of its kind in India where European technology is now manufactured inIndia. This successful collaboration has given the world MANUFLEX a new generation 8colour gearless C.I. Flexo press. It comes with the home advantage of saving on foreignexchange duty & shipping and best of all after-sales service by a dedicated team ofIndian engineers trained in Italy giving Indian customers the added advantage of prompt& timely local service support. In early 2019 a live demonstration was given at theINDIAPLAST exhibition at the India Expo Centre New Delhi. Operations during the year2018-19 were slow. Due to growing raw material and labour costs the Company is facingdifficulty in recovering the same from customers which is beginning to affect runningcosts.
MANAGEMENT'S DISCUSSION AND ANALYSIS
In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafterreferred to as SEBI Listing Regulations') the management's discussion and analysisis set out in this Annual Report.
Your Company has not accepted any public deposits during the year and as such no amountof interest and principal deposit was outstanding as on the balance sheet date.
Manugraph Americas Inc.
Petition under Chapter 11 was filed at the US Bankruptcy court middle district ofPennsylvania on June 1 2017. Presently the proceedings are managed as a debtor inpossession under the supervision of the court. Accounts for the year ended March 2019 hasbeen prepared on a discontinued operations basis. The assets and liabilities have beenconsidered at their fair values.
Constrad Agencies (Bombay) Pvt. Ltd.
During the year there was no business activity in the Company.
The policy for determining material subsidiaries as approved by the Board may beaccessed on the Company's website viz. www. manugraph.com.
In accordance with the provisions of Section 129(3) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 as amended the ConsolidatedFinancial Statements forms part of this Annual Report. The financial position andperformance of each of the said subsidiary companies are given in the statement containingthe salient features of the financial statements of the said subsidiary companies of theCompany which is annexed to this report.
In accordance with the third proviso to Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its standalone financial statements andthe consolidated financial statements and all other documents required to be attachedthereto has been hosted on its website www.manugraph.com. Further in accordance with thefourth proviso to the said section the audited annual accounts of each of the saidsubsidiary companies of the Company have been hosted on the Company's websitewww.manugraph.com.
Any shareholder interested in obtaining a physical copy of the aforesaid financialstatements may write to the Company Secretary at the Registered office of the Company.Further please note that the said financial statements will also be available forinspection by the Members of the Company at the Registered office of the Company duringbusiness hours from 11.00 a.m. to 1.00 p.m. on all working days except Saturdays SundaysBank Holidays and National Holidays.
Events occurring after the Balance Sheet date:
There were no significant events that occurred after the Balance Sheet date till dateof this Report which affect the financial statements of the Company in respect of thereporting year save and except as disclosed hereunder.
Scheme of Merger by Absorption
The Scheme for Merger by Absorption of Constrad Agencies (Bombay) Private Limited(wholly owned subsidiary company) Manu Enterprises Limited and Santsu Finance andInvestment Private Limited (part of the Promoter/ Promoter Group) with the Company wasapproved by the Board subject to approval by National Company Law Tribunal (NCLT')under section 230-232 of the Companies Act 2013 and other regulatory approvals (theScheme'). The same has been approved by the NCLT via order delivered on October 14 2019and filed with the Registrar of Companies on October 17 2019. The appointed date foracquisition is April 1 2018 and Effective date is October 17 2019.
CHANGES IN SHARE CAPITAL
Manu Enterprises Limited and Santsu Finance and Investment Private Limited were holding2316500 and 2537000 equity shares of face value of Rs. 2/- each. Pursuant to Clause 6of the Scheme (as aforesaid) the cross holding of Manu Enterprises Limited and SantsuFinance and Investment Private Limited in the Company shall be cancelled and accordinglythe issued subscribed and paid up capital of the Company is reduced by 4853500 equityshares of face value of Rs. 2/- each.
Pursuant to Clause 5 of the said Scheme (as aforesaid) the Company will have to issue2316500 equity shares and 2537000 equity shares of Rs. 2 each fully paid up to ManuEnterprises Limited and Santsu Finance and Investment Private Limited respectively. Noconsideration is payable on Amalgamation of the erstwhile wholly owned subsidiary ConstradAgencies (Bombay) Private Limited. The said shares to be issued have been disclosed asShare Suspense account under Equity.
BOARD OF DIRECTORS
During the year Mrs. Sohni H. Daswani Independent Director resigned as a Director ofthe Company w.e.f. July 19 2018. The resignation was due to her personal reasons.
In accordance with the provisions of the Companies Act 2013 and Company's Articles ofAssociation Mr. Pradeep S. Shah retires by rotation and is eligible for re-appointment.The Board recommends his re-appointment. None of the independent directors are due forretirement.
Brief profile of Mr. Pradeep S. Shah proposed to be re-appointed as Director of theCompany is provided in the notice convening the ensuing AGM.
Section 149(10) of the Companies Act 2013 provides that an Independent Director shallhold office for a term of up to five consecutive years on the Board and shall be eligiblefor reappointment on passing a Special Resolution by the Company and disclosure of suchappointment in its Board's report. In terms of the explanation to Sections 149(10) and149(11) of the Companies Act 2013 the first term of Mr. Hiten C. Timbadia (DIN:00210210) Mr. Amit N. Dalal (DIN: 00297603) Mr. Perses M. Bilimoria (DIN: 00781535) Mr.Abhay J. Mehrotra (DIN: 01673801) and Mr. Jai S. Diwanji (DIN: 00910410) as IndependentDirectors of the Company will be expiring on March 2 2020. The Board of Directors at itsmeeting held on November 8 2019 after considering the recommendations of the Nominationand Remuneration Committee and on the basis of the report of performance evaluation ofIndependent Directors and their respective consents recommended reappointment of Mr.Hiten C. Timbadia (DIN: 00210210) Mr. Perses M. Bilimoria (DIN: 00781535) and Mr. AbhayJ. Mehrotra (DIN: 01673801) as Independent Directors of the Company for a term of threeyears commencing from March 3 2020. Mr. Amit N. Dalal (DIN: 00297603) and Mr. Jai S.Diwanji had expressed their unwillingness to be reappointed for another term due to theirpersonal pre-occupation.
The Company had received notices in writing from a member under Section 160 of the Actproposing the candidature of Mr. Hiten C. Timbadia Mr. Perses M. Bilimoria and Mr. AbhayJ. Mehrotra for the office of Independent Directors of the Company.
The Company did not appoint any Independent Director during the year. Accordinglyopinion of the Board with regard to integrity expertise and experience (including theproficiency) of the independent directors appointed during the year is not applicable.
Key Managerial Personnel
Mr. Suresh Narayan Chief Financial Officer resigned from the services of the Companywith effect from March 31 2019. The Board of Directors upon recommendation of theNomination and Remuneration Committee appointed / designated Mr. Amit Jain as a ChiefFinancial Officer with effect from August 13 2019.
Declaration of Independence
All the Independent Directors of the Company have given their respective declarationsstating that they meet the criteria prescribed for independence under the applicable lawsand in the opinion of the Board all the Independent Directors of the Company meet thesaid criteria.
Evaluation of performance of all Directors is undertaken annually by the Board. 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 in their meeting held during the financial year also reviewedthe performance of non-independent Directors and the Board as a whole in line with theCompany's policy on Board Evaluation.
Appointment & Remuneration Policy for Directors Key Managerial Personnel andSenior Management Employees
The Vice Chairman and Managing Director Managing Director and Whole Time Director(Works) are paid remuneration by way of salary benefits perquisites and allowances.Annual compensation changes are decided by the Nomination and Remuneration Committee afterconsidering overall business performance within the salary scale approved by the Board andShareholders.
The Board of Directors had reviewed Policy for Appointment of Directors Key ManagerialPersonnel and Senior Management and Evaluation of their Performance copy of which isplaced on the website of the Company viz. www.maugraph.com. The salient features of thispolicy are outline in the Corporate Governance Report.
Non Executive Directors
The Non Executive Directors (NED') are paid remuneration by way of Sitting Fees.During the year the Company paid sitting fees of Rs. 15000/- per meeting to the NEDs forattending meetings of the Board & Audit Committee and Rs. 9000/- per meeting to theNEDs for attending Nomination & Remuneration Committee meeting.
Executive Directors are paid remuneration by way of salary perquisites and allowances.Salary is paid within the range fixed by the members of the Company.
Remuneration of employees largely consists of basic remuneration perquisitesallowances and performance incentives. The components of the total remuneration vary fordifferent grades and are governed by industry patterns qualifications and experience ofthe employee responsibilities handled by him his annual performance etc.
Meetings of the Board:
Five Board Meetings were held during the year the details of which are given in theCorporate Governance Report forming part of the Annual Report. The gap between any twoBoard Meetings was not more than one hundred and twenty days thereby complying withapplicable statutory requirements.
With a view to have a more focused attention on business and for better governance andaccountability the Board has four mandatory committees viz. Audit Committee StakeholdersRelationship Committee Nomination & Remuneration Committee and Corporate SocialResponsibility (CSR) Committee. A detailed note on composition functions and roles ofeach of the Committees are provided separately under Corporate Governance Report of thisAnnual Report.
RELATED PARTY TRANSACTIONS
All contracts or arrangements entered into by the Company with its related partiesduring the financial year were in accordance with the provisions of the Companies Act2013 and the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015. All such contracts or arrangements have been approved bythe Audit Committee as applicable.
The Company has not entered into any transaction of a material nature with thepromoters directors or the management their subsidiaries or relatives etc. that mayhave potential conflict with the interests of the Company at large. All transactions withrelated parties are in ordinary course of business and at arms's length.
Attention of members is drawn to the disclosure of transactions with related partiesset out in Note No. 32 of Standalone Financial Statements forming part of the AnnualReport.
The policy on Related Party Transactions as approved by the Board is available onwebsite of the Company viz.: www.manugraph. com.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has been involved in social welfare activities from time to time andfirmly believes in making lasting impact towards creating a just equitable humane andsustainable society. The Company lays special emphasis on education and vocationaltraining of youth including females in the local community for their economic empowerment.
The CSR Committee has confirmed that the implementation and monitoring of CSR Policy isin conformity with CSR objectives and policy of the Company and in compliance with Section135 of the Companies Act 2013. The CSR policy may be accessed on the Company's websitewww.manugraph.com.
Since the Company has not earned Profits in the previous three financial year theCompany is not mandatorily required to contribute towards CSR activities. The AnnualReport 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 Form MGT 9 is providedas Annexure E' to this report and also available on the website of the Company viz.www.manugraph.com.
In terms of Section 139 of the Companies Act 2013 ("the Act") and theCompanies (Audit and Auditors) Rules 2014 made thereunder the present StatutoryAuditors of the Company M/s. Natvarlal Vepari & Co. Chartered Accountants Mumbai(Firm Regn. No. 106971W) (NVC') will hold office until the conclusion of theensuing Annual General Meeting.
NVC was first appointed as Statutory Auditors for the financial year 2010-11.Considering the provisions of Section 139(2) of the Companies Act 2013 as amended fromtime to time the last financial year for NVC to act as Statutory Auditors will be FY2019- 20 . Accordingly NVC can be re-appointment as a Statutory Auditor for one morefinancial year i.e. 2019-20.
NVC has confirmed their eligibility as Statutory Auditors. NVC has also confirmed thatthey hold a valid certificate issued by the Peer Review Board of the Institute ofChartered Accountants of India.
The Board of Directors of the Company (the Board') on the recommendation of theAudit Committee (the Committee') recommended the Members for their approval theappointment of NVC as the Auditors of the Company for one more financial year i.e. fromthe conclusion of this AGM till the conclusion of the next AGM. On the recommendation ofthe Committee the Board also recommended for the approval of the Members theremuneration of NVC for the financial year 2019-20 as set out in the Resolution relatingto their appointment.
Appropriate resolution seeking your approval to the appointment and remuneration of NVCas the Statutory Auditors is appearing in the Notice convening the 47th AGM ofthe Company.
The report of the auditors to the shareholders is a part of the Annual Report. Thenotes to the Accounts that are a part of the financial statements are self-explanatoryand need no further clarifications or explanations. There were no qualificationsreservation or adverse remark or disclaimer in the Auditors report.
During the year under review neither the Statutory Auditors nor the SecretarialAuditors has reported to the Audit Committee any instances of fraud pursuant to section143(12) of the Companies Act 2013 committed against the Company by its Officers oremployees of the Company.
The Board had appointed M/s. Aashish K. Bhatt & Associates a Company Secretary inPractice to act as Secretarial Auditor of the Company for the financial year 2018-19. TheReport of the Secretarial Audit is annexed herewith as Annexure C'. The SecretarialAudit Report does not contain any qualification reservation or adverse remark.
Pursuant to the provisions of Section 148 of the Companies Act 2013 read withNotifications / Circulars issued by the Ministry of Corporate Affairs from time to timethe Board has appointed M/s. C.S. Adawadkar & Co. Cost Accountants to conduct theaudit of the cost records of the Company for the financial year 2018-19.
The Cost Audit Report is required to be filed within 180 days from the end of thefinancial year. The Cost Audit Report for the financial year ended March 31 2019 wasfiled within the due date.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings and Annual General Meetings.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(i) that in the preparation of the annual financial statements for the year ended March31 2019 the applicable accounting standards have been followed along with properexplanation relating to material departures if any.
(ii) that such accounting policies have been selected and applied consistently andjudgment and estimates have been made that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as at March 31 2019 and of the lossof the Company for the year ended on that date;
(iii) that proper and sufficient care has been taken 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;
(iv) that the annual financial statements have been prepared on a going concern basis;
(v) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating Effectively;
(vi) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating Effectively.
The Company strives to evolve and follow the corporate governance guidelines and bestpractices sincerely not only to boost long-term shareholder value but also to respectminority rights. We consider it our inherent responsibility to disclose timely andaccurate information regarding our operations and performance as well as the leadershipand governance of the Company. The Company believes in achieving business excellence andoptimizing longterm value for its shareholders on a sustained basis through ethicalbusiness conduct.
As required under the provisions of Regulation 34(3) read with Schedule V of the SEBIListing Regulations a separate report on Corporate Governance forms part of this AnnualReport together with a Certificate from the Auditors of the Company regarding complianceof conditions of Corporate Governance.
The relations with workers during the year were cordial. The Company is striving hardto negotiate with its workers union for settlement.
Your Company is committed to provide a healthy and safe work environment free fromaccidents injuries and occupational health hazards.
The Company had a total of 943 permanent employees as on March 31 2019.
Particulars of Employees
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 of the Act and Rule 5 (1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 (Rules) have been appended as Annexure B to thisreport. Details of employee remuneration as required under provisions of Section 197 ofthe 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 areno employees (other than Managing Directors) employed throughout the financial year2018-19 and drawing a salary of Rs. 1.02 crore per annum or more or employed for part ofthe year and in receipt of remuneration of Rs. 8.50 Lakhs or more per month as requiredunder Section 197 of the Companies Act 2013 read with Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. The details of salarypaid to Managing Directors are part of Corporate Governance Report forming part of thisReport.
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.
In a rapidly changing business environment companies in printing industry facenumerous risks that impact their businesses. It is therefore imperative to identify andaddress these risks and at the same time leverage opportunities for achieving businessobjectives.
To establish and maintain a system of risk management and internal control the Boardperiodically reviews the risk management system and maintenance of a risk profile (bothfinancial and non-financial risks).
A brief report on risk evaluation and management is provided under Management'sDiscussion and Analysis Report forming part of this Annual Report.
INTERNAL FINANCIAL CONTROLS
The Company has an adequate system of internal controls commensurate with the natureof its business and the size and complexity of its operations. These have been designed toprovide reasonable assurance with regard to recording and providing reliable financial andoperational information complying with applicable statutes safeguarding assets fromunauthorised use executing transactions with proper authorisation and ensuring complianceof corporate policies. The Internal Control Systems are being constantly updated with new/ revised standard operating procedures.
The Company has appointed Internal Auditors who report to Audit Committee of the Board.The Audit Committee reviews internal audit reports periodically based on annual internalaudit plan.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company's vigil mechanism /Whistle blower Policy aims to provide the appropriateplatform and protection for Whistle blowers to report instances of any actual or suspectedincidents of unethical practices violation of applicable laws and regulations includingthe Integrity Code Code of Conduct for Prevention of Insider Trading in Company'ssecurities Code of Fair Practices and Disclosure.
The Vigil Mechanism / Whistle Blower Policy has been posted on the website of theCompany viz. www.manugraph.com.
DISCLOSURE IN TERMS OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has in place policy on Sexual Harassment at workplace in line with therequirements of The Sexual Harassment of Women at workplace (Prevention Prohibition andRedressal) Act 2013. Internal Complaint Committee (ICC) has been set up to redresscomplaints received if any regarding sexual harassment. All employees are covered underthis policy. The Company is in compliance of the provisions of the said Act. The detailsof complaints are as under:
(a) number of complaints filed during the financial year - Nil
(b) number of complaints disposed of during the financial year - Nil
(c) number of complaints pending as on end of the financial year - Nil
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is annexed as Annexure D'.
Statements in the Directors' Report & Management Discussion and Analysis describingthe Company's objectives projections estimates expectations or predictions may beforward looking statements. Actual results could differ materially from those expressed orimplied. Important factors that could make difference to the Company's operations includecyclical demand changes in government regulations tax regimes economic development andother ancillary factors.
Your Directors would like to thank all stakeholders namely customers shareholdersdealers suppliers bankers employees and all other business associates for thecontinuous support given by them to the Company and its Management.
| ||For and on behalf of the Board |
| ||Sd/- |
| ||Sanat Shah |
|Place: Mumbai ||Chairman |
|Date: 08-11-2019 ||(DIN: 00248499) |