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To the Members,
The Directors are pleased to present 27th Annual Report of the Company along with Audited Accounts for the financial year ended March 31, 2018.
Your Company’s financial for the year ended March 31, 2018 as compared to the previous financial year ended March 31, 2017 is summarized below:
Rs. in Lakhs
Current Year 2017-18
Previous Year 2016-17
Revenue from Operations Other Income
Net Profit before Exceptional Items and Tax
Profit Before Tax
Profit After Tax
Other Comprehensive Income (Net of Tax) Total Comprehensive Income for the year
REVIEW OF OPERATIONS AND STATE OF AFFAIRS:
The total income of the Company for the year ended as on March 31, 2018 is Rs. 17,437.04 lakhs which is higher by about 17.41% over that for the previous year which was Rs. 14,851.71 lakhs, on account of considerable progress in various projects/ activities. Total Comprehensive Income increased to Rs. 3,170.56 lakhs in the current year from Rs. 1,963.52 lakhs in the previous year, registering a growth of61.47%.
On January 08, 2018, the Company has issued and allotted 659,340 Equity Shares of Rs. 10/- each at an issue price of Rs. 455 per share to raise Rs. 30 Crore by way of Qualified Institutional Placement (“QIP”) under Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities Rules, 2014). Expenses related to the issue amounting to Rs. 63.22 lakhs have been adjusted against Securities Premium. Use of the net proceeds of the Qualified Institutional Placement is intended for business purposes such as capital expenditure for ongoing and future expansion projects, acquisition, working capital and general corporate purposes and any other purposes as may be permissible under applicable law. The proceeds (net of issue expenses) has been utilised towards reduction of short term bank borrowing for working capital.
Your Company is India’s one of the leading player in manufacturer of Coding and Marking Machines and Consumables thereof.
Your Company is looking to expand its global foot print by exploring other international markets, and will be launching the Control Print Brand of Coding and Marking Machines and Consumables thereof in other countries with high growth potential. This will be 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 date of this report which affects the financial position of the Company.
DIVIDEND AND RESERVE
During the year, the Board of Directors of the Company at their meeting held on January 31, 2018, declared Interim Dividend of Rs. 3.00 per equity shares, which has been paid in February, 2018. Total outflow on account of interim dividend payout including dividend distribution tax amounted to ‘ 589.69 lakhs.
In line with the good performance during the year, your Directors are pleased to recommend for approval of members, a final dividend of Rs. 3.50 per equity share of face value of Rs. 10/- each for the year ended March 31, 2018.
The dividend will be paid in compliance with the applicable Rules and Regulations. The total dividend forthe financial year, including the proposed Final Dividend, amounted to Rs. 6.50 per equity share and will absorb Rs. 1,278.82 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 Institutional Buyers (“QIBs”) on preferential allotment basis through Qualified Institutions Placement (“QIP”), in accordance with Chapter VIII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. Accordingly, 659,340 Equity Shares ofRs. 10/- each were allotted to QIBs in January, 2018 at an issue price of Rs. 455/- per Equity Share (including premium of Rs. 445/- per Equity Share). Post issuance of Equity Shares under QIP, the issued, subscribed and paid-up capital of your Company has increased from Rs. 156,723,720/- in FY 2016-17 to Rs. 163,317,120/- in FY 2017-18.
As on March 31, 2018, 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”), a statement containing salient features of the financial statements of the Company’s subsidiary in Form AOC-1 is annexed as “Annexure - A” and forms an integral part of this Report. Pursuant to the provisions of Section 136 of the Act, the financial statements along with the relevant documents and separate audited financial statements in respect ofsubsidiary is available on the website of the Company.
The financial statements of the subsidiary company and related information are available for 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 of the 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 to the Company Secretary at the Registered Office of your Company. The financial statements including the consolidated financial statements, financial statements of subsidiary and all other documents required to be attached to this report have been uploaded on the website 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 with the relevant rules, your Company has not accepted any fixed deposits during the year under review.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
A Separate reports on Corporate Governance Report and Management Discussion and Analysis as required by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [“SEBI (LODR), 2015”] forms part of this Annual Report along with the required Certificate from the Statutory Auditors of the Company confirming the compliance of requirements of Corporate Governance as stipulated in the SEBI (LODR), 2015.
BOARD OF DIRECTORS
The Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, appointed Ms. Ritu Joshi as a Non-Executive Director of the Companyw.e.f. December 25, 2017.
Mr. Basant Kabra (DIN: 00176807) was appointed as Managing Director of the Company for a period of three years with effect from January 01, 2016 upto December 31, 2018. On the recommendation of the Nomination & Remuneration Committee, the Board of Directors at its meeting held on May 25, 2018, has recommend re-appointment of Mr. Basant Kabra as a Managing Director of the Company for a further period ofthree years with effect from January 01, 2019.
During the year, Ms. Nyana Sabharwal, Whole-time Director of the Company resigned from the services of the Company with effective from October 01, 2017.
Retiring by Rotation
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company’s Articles of Association, Mr. Shiva Kabra, Director, retires by rotation at the forthcoming Annual General Meeting and, being eligible offers himself for re-appointment.
The Board recommends his re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.
Declaration of Independence by Independent Directors
The Independent Directors ofyour Company have submitted declaration confirming thatthey meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation16(1)(b) of the SEBI (LODR), 2015 and there has been no change in the circumstances which may affect their status as Independent Director during the year.
The Company has formulated a Familiarization Programme for Independent Directors with an aim to familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc., to provide them with better understanding of the business and operations of the Company and so as to enable them to contribute significantly to the Company.
The details of programme for familiarization of Independent Directors with the Company are disclosed on the website of the Company under the web link https://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 the size, scale and complexity of its operations to ensure proper recording of financial and operational information and compliance of various internal control and other regulatory and statutory compliances. Internal Audit Control System ensures that the regular internal audits are conducted at the factories and other functional areas. The findings are then taken up by audit committee along with management response for suitable action. The Company has also implemented SAP ERP system, it helps to minimize human errors and plugging the loopholes. The Company also has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly. The Company has adequate and effective internal audit system, covering on a continuous basis, the entire gamut of operations and services spanning all locations, business and functions. The Audit Committee monitors the Internal Audit System on regular intervals 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 details, please refer Report on Corporate Governance.
DIRECTORS’ RESPONSIBILITY STATEMENT
Your Directors to the best of the knowledge and belief and according to the information, explanations and representations obtained by them and after due enquiry, make the following 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 31, 2018, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets 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 the Company and that such internal financial controls are adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of 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 in relation to Remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The Nomination and Remuneration Committee has designed the Remuneration Policy in order to attract, motivate and retain the executive talent needed to achieve superior performance in a competitive market. The Nomination and Remuneration Policy is available at website of the Company under web link https://www.controlprint. com/wp/wp-content/uploads/Nomination and Remuneration-Policy.pdf
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (LODR), 2015, the Board has carried out an annual evaluation of its own performance, the individual Directors (including the Chairman) as well as an evaluation of the Board Committees. The Nomination and Remuneration Committee (NRC) of the Company approved a checklist for evaluation of the performance of the Board, the Committees of the Board and the Individual Directors, including the Chairman of the Board.
The Board adopted the checklist for performance evaluation as approved by NRC. The performance of the Board and Committee was evaluated on the basis of the criteria approved. The Board and the NRC reviewed the performance of the individual Directors. In addition, the Chairman was also evaluated on the key aspects ofhis role.
In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and the individual Directors was discussed.
The Board of Directors expressed their satisfaction with the evaluation process.
Statutory Auditors and Auditors’ Report
M/s. Jhawar Mantri & Associates, Chartered Accountants (Firm Registration No. 113221W), were appointed as Statutory Auditors of the Company, for a term of5 (five) consecutive years, at the 26th AGM held on September 15, 2017. They have confirmed that they are not disqualified from continuing as Auditors of the Company.
Pursuant to the notified section of Companies (Amendment) Act, 2017, the Company shall not require to seekthe approval of Members for the ratification of Statutory Auditors at every AGM; the relevant amendment made effective on May 07, 2018. Hence, the ratification of Statutory Auditors at the ensuing 27th AGM is not sought.
The Notes on financial statement referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation, adverse remark or disclaimer.
As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, your Company carries out an audit of cost records. The Board of Directors, on recommendation of Audit Committee, has appointed, M/s. Paresh Jaysih Sampat (Membership No. 33451). Cost Accountants (Firm Registration No. 102421), as Cost Auditors of the Company for the Financial Year 2018-19.
In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with the Rule 14(a)(ii) of the Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors has to be ratified by the members. Accordingly, necessary resolution is proposed at the ensuing AGM for ratification of the remuneration payable to the Cost Auditors for the Financial Year 2018-19.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s. Nilesh Shah & Associates, Company Secretaries in Practice, to undertake the Secretarial Audit of the Company.
The Secretarial Audit Report is annexed as “Annexure - B” and forms an integral part of this Report.
There were no qualifications, reservation or adverse remark or disclaimer made by Secretarial Auditor in its report.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act, 2013 (‘the Act’) and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is Annexed as “Annexure - C” and forms an integral part of this Report.
RELATED PARTY TRANSACTIONS
All contracts/arrangements/transactions entered by the Company during the financial year with related party were on arm’s length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC-2 is not applicable.
Your Directors draw attention of the members to Notes to accounts of the financial statements which sets out related party disclosures.
A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature and value of the transactions.
Your Company has formulated a Policy on Related Party Transactions and policy on the same as approved by the Board is uploaded on the Company’s web link viz. https://www.controlprint.com/wp/wp-content/uploads/Related-Party-Transactions-Policy.pdf
VIGIL MECHANISM / WHISTLE BLOWER
Your Company has a Vigil Mechanism in place as required under Section 177 of the Act and the SEBI (LODR), 2015. The mechanism provides for adequate safeguards against victimization of persons who use such mechanism and makes provisions for direct access to the Chairman of the Audit Committee. More details in this regard have been outlined in the Corporate Governance Report annexed to this report. The Policy is disclosed on the Company’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 the organization, identifying potential threats to the organization and the likelihood of their 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 and mitigate them through proper policies in place to manage all types of risk majorly financial risk, business risk, inventory pricing risk, regulatory risk and HR risk through review, audit and reporting mechanism.
During the year under review, following ratings reviewed by CRISIL, a Credit Rating Agency on the Long-Term and Short- Term bank facility(ies) of the Company.
Bank Loan Facilities Rated
CRISIL A- /Stable
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 the Company’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 schools situated at Nalagarh and Pune.
2. To equip children from marginalized communities with high quality, value based education to enable them to develop their limitless potential.
3. Providing holistic nutritional intervention to underprivileged children afflicted with cancer in Kolkata and Hyderabad.
The Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as “Annexure -D” and forms an integral part of this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of Loans, Guarantees or Investments covered under the provisions of Section 186 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 regarding employees 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 Rule 8 of the Companies (Accounts) Rules, 2014, regarding conservation of energy, technology absorption, foreign exchange earnings and outgo, are given in “Annexure F” and forms 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/Tribunals impacting the going concern status and Company’s operations in future.
ENVIRONMENT AND SAFETY
Your Company is conscious of the importance of environmentally clean and safe operations. Your Company endeavors that the conduct of all operations are in such manner so as to ensure safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a formal policy for the prevention of sexual harassment of its women employees in line with “The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013”. During the year, there were no complaints received relating to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Your Directors takes this opportunity to express their deep sense of gratitude to high degree of professionalism, commitment and dedication displayed by employees at all levels. Your Directors also wish to thank its esteemed corporate clients, dealers, agents, suppliers, technology partners, investors, Government Authorities and bankers for their continued support and faith reposed in the Company. Your Directors are deeply grateful to the shareholders for the confidence and faith that they have always reposed in the Company.
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)