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Creative Peripherals & Distribution Ltd.

BSE: 0 | NSE: CREATIVE |

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Series: BE | ISIN: INE985W01018 | SECTOR: Miscellaneous

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Annual Report

For Year :
2018

Director’s Report

The Directors have pleasure in presenting the Fourteenth Annual Report on business and operations along with the Audited Financial Statements for the year ended March 31,2018.

WHERE WE ARE AND WHERE WE WANTTO BE

Founded in 1992, your Company was originally incorporated on September 22,2004 as a Private Limited Company completed its 26 years of journey. Today we are market entry and penetration specialist in the categories of IT, Imaging, Lifestyle and Security Products. Information Technology lies at the core of your Company''s business. The sector has stayed indomitable over the last twenty six years since it emerged after the Government liberalized the Indian economy. It prompted and shaped industrial growth and transformed the lifestyle of the average Indian by successfully changing his notion of a luxury item to one of necessity.

The objective of your Company is to have a sustainable development by staying connected to its roots. Currently, the Company is operating nationwide through its branches, warehouses and service centres. Our strategy is to optimize our core technology solutions business while expanding and investing in higher margin advanced and specialty solutions and high value services. Over last couple of years, we have plugged gaps in our operating model and intend to continue doing so with the objective of cement out reputation as a one-stop shop. CPDL is a broad based distribution model which is based on multiple products and multiple brand strategy. The focus is to capture a considerable market share in each of the product categories that will help in its offerings to channel partners and also spread its market risks arising out of fluctuations in the market share of various brands besides helping it to achieve economies of scale.

Our vision is to become world class distributor and the Board is of firm belief that our value added approach with vendors, resellers and industry at large shall enable your Company to meet its goal.

Our company subsequently converted into a Public Limited Company in January 31,2017. Later, In the beginning of this year, on April 11,2017, Company has introduced Book Build Issue IPO in NSE SME Exchange with issue size of 18,00,000 Equity shares of Rs. 10 each with aggregating up to Rs. 13,50,00,000/- with issue price of Rs. 75 per share with market lot of 1600 shares in one lot.

FINANCIAL HIGHLIGHTS

The highlights of the Financial Results are:

(Amount in Rs.)

Particulars

March 31,2018

March 31,2017

Revenue from Operations and Other Income

2,50,95,84,028

2,12,01,22,461

Less: Expenses

2,46,61,48,786

2,09,90,42,420

Profit Before Tax

4,34,35,242

2,10,80,041

Less: Exceptional Items

NIL

NIL

Less: Extraordinary Items

NIL

NIL

Less: Tax Expenses

1,45,58,465

76,80,860

Profit after Tax

2,88,76,777

1,33,99,181

Balance brought forward

7,56,02,655

8,22,05,654

Amount available for Appropriation

10,44,79,432

9,56,04,835

Add: Share Premium against issue of Shares

11,70,00,000

-

Less: Income Tax for earlier periods

-

2,180

Less: Bonus Shares issued

-

2,00,00,000

Balance carried to Balance Sheet

22,14,79,432

7,56,02,655

Earnings per Share (Basic)

5.02

5.75

Earnings per Share (Diluted)

5.02

5.75

BUSINESS PERFORMANCE

The year gone by has been really good. The Company''s revenue increased to Rs. 250,95.84 Lakhs as compared to Rs. 2,12,01.22 Lakhs in the previous year marking an increase by Rs. 3,894.62 Lakhs. The Company''s Net Profit after Tax stood at Rs. 288.76 Lakhs as compared to Rs. 133.99 Lakhs in the previous year registering an increase of by Rs. 154.77 Lakhs.

DIVIDEND

No dividend was declared for the current financial year due to conservation of Profits by the Company. However, after considering financial growth and future prospects of your Company, Board of Directors in their Board Meeting held on 21st May, 2018, have recommended a Final Dividend of 5% on face value per share for the financial year ending at 31st March, 2018, subject to approval of shareholders in Annual general meeting to be held for Financial Year 2017-18.

Further, keeping in mind for plough back of profit, your promoter directors, holding 68.95% of overall paid up equity share capital of the Company, have opted out from their rights to receive dividend. So, the above said dividend will be provided to Public Shareholders who hold 31.05% of total paid up equity share capital.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The provisions of Section 125(2) of the Companies Act, 2013, do not apply as there was no dividend declared last year.

TRANSFER TO RESERVES

The whole profit after tax has been transferred to Surplus in the Statement of Profit & Loss.

SHARE CAPITAL

At the beginning of the year, the Authorised Share Capital to of the Company was Rs. 8,00,00,000 divided into 80,00,000 Equity Shares of Rs. 10/-which remained same throughout the year.

At the beginning of the year, the Paid up Share Capital of the Company was Rs. 4,00,00,000 divided into 40,00,000 Equity Shares of Rs.10/- each, on April 11,2017, Company has introduced Book Build Issue IPO in NSE SME Exchange with issue size of 18,00,000 Equity shares of Rs. 10 each with aggregating up to Rs. 13,50,00,000/- with issue price of Rs. 75 per share with market lot of 1600 shares in one lot. At the end of year company Paid up Share Capital of the Company was Rs. 5,80,00,000 divided into 58,00,000 Equity Shares of Rs. 10/- each.

DEPOSITORY SYSTEM

The Company has entered into an agreement with the National Securities Depository Limited (NSDL) as well as the Central Depository Services (India) Limited (CDSL) to enable shareholders to hold shares in dematerialized form. The Company also offers simultaneous dematerialisation of the physical shares lodged for transfer.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board consists of Executive and Non-executive Directors including Independent Directors along with Key Managerial Personnel who have vast experience in the core business activity of the Company. The composition of the Board is in consonance with Corporate Governance norm specified in the SEBI Regulations with the Stock Exchange.

During the year under review, there was changes in Directors and Key Managerial Personnel (KMP) which is tabulated as under:

Sr.

No.

Name of Director / Key Managerial Personnel

Particulars of changes towards Appointment / Resignation / Change in Designation

Date

1.

Mr. Nitin Jain

Resignation from Independent Director

03rd August, 2017

2.

Mr. Ketan Patel

Change in Designation to Chairman and Managing Director

03rd August, 2017

3.

Mrs. Purvi Patel

Change in Designation to Whole - time Director

03rd August, 2017

4.

Mr. Vijay Advani

Change in Designation to Whole - time Director

03rd August, 2017

5.

Mr. Mihir Shah

Appointment as an Additional Independent Director

23rd November, 2017

6.

Mr. Ansuya Prasad Purohit

Resignation from Chief Financial Officer

03rd January, 2018

7.

Mr. Abhijit Kanvinde

Appointment as Chief Financial Officer

03rd January, 2018

REMUNERATION TO EXECUTIVE DIRECTORS AND KEY MANAGERIAL PERSONNEL

Details of Remuneration Paid to Directors and Key Managerial Personnel are mentioned in Annexure - E of Corporate Governance Report, along with, details of proposed revised remuneration for Financial Year 2018-19.

BOARD MEETINGS

During the year, Eight Meetings of Board of Directors were convened and held and details of which are given in the Annexure - E of Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

DIRECTORS''RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in accordance with the provisions of Section 134 (3) (c) and 134(5) of the Companies Act, 2013:

1. That in preparation of the Annual Accounts for the year ended March 31, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

2. That the directors had selected such accounting policies and applied consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended March 31, 2018 and the profits of the Company for the year under review;

3. That proper and sufficient care has been taken for the maintenance of adequate accounting records for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the annual accounts for the year ended March 31, 2018, have been prepared on a ''going concern basis.''

5. That proper internal financial controls were in place and that such internal financial controls are adequate and were operating effectively.

6. That proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

STATUTORY AUDITORS

M/s. S. K. Thanawala & Co., Chartered Accountants, Mumbai, having ICAI Firm Registration No. 110951W, have been appointed for period of 5 years commencing from 1st April 2015 to 31st March, 2020, within the purview of Sections 139 and 142 of the Companies Act, 2013, subject to ratification by the members in the each Annual General Meeting during this period. Members are requested to appoint the auditors and to fix their remuneration.

INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROLS

The Company has in place well defined and adequate internal controls commensurate with the size of the Company and the same were operating effectively throughout the year. The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. Apart from in-house Internal Audit function, to strengthen and maintain transparency, the Company has also appointed M/s Somaiya & Co., Chartered Accountants, Mumbai, as Internal Auditors of the Company in accordance with Section 138 of the Companies Act, 2013, to examine the effectiveness of internal control system.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and SEBI Regulations. Further, The Independent Directors are not liable to retire by rotation.

CORPORATE SOCIAL RESPONSIBILITY

The Company has not developed and implemented any Corporate Social Responsibility initiatives as Company does not fall under any applicability of the said provisions as per the Companies Act, 2013.

AUDIT COMMITTEE

During the year, Five Meetings of Audit Committee were convened and held and details of which are given in the Corporate Governance Report. Your Directors ensures that Audit Committee meets regularly to review reports, including significant audit observations and follow-up actions thereon. The Audit Committee also meets the Company''s Statutory Auditors to ascertain their views on financial statements, including the financial reporting system, compliance to accounting policies and procedures.

NOMINATION AND REMUNERATION COMMITTEE

During the year, Two Meetings of Nomination and Remuneration Committee were convened and held and details of which are given in the Corporate Governance Report. Your Directors ensures that the Company follows a Policy on Remuneration of Directors and Senior Management Employees. The policy shall be approved by the Nomination & Remuneration Committee and the Board. The main objective of the said policy is to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate the Directors, KMP and Senior Management employees.

STAKEHOLDERS'' RELATIONSHIP COMMITTEE

During the year, One Meeting of Stakeholders'' Relationship Committee was convened and held and details of which are given in the Corporate Governance Report. The role of the Committee is explained in detail in the Corporate Governance Report enclosed herewith. During the year, under review, Company has complied with all compliances as mandated by various government authorities and Company has not received any complaint from its Investor or shareholders or any individuals.

INSURANCE & RISK MANAGEMENT COMMITTEE

During the year, Four Meeting of Risk Management Committee were convened and held and details of which are given in the Corporate Governance Report. You Director ensures that the assets of the Company are adequately insured against the loss due to fire, theft, riot, earthquake, terrorism, in transit, etc. and such other risks which are considered necessary by the management. Further, the Company identifies and assess key risks and formulate strategies for mitigation of such risks that are identified by the Company.

PREVENTION AND REDRESSALOF SEXUAL HARASSMENT AT WORK PLACE

During the year, Four Meeting of Internal Compliant Committee (under Sexual Harassment Policy) were convened and held and details of which are given in the Corporate Governance Report. The Company has a Policy on Prevention of Sexual Harassment of Women at Work Place and matters connected therewith or incidental thereto covering all the aspects as contained under the ''The Sexual Harassment of Women at Work Place (Prohibition, Prevention and Redressal) Act, 2013''. Your Directors state that during the year under review, no cases were filed pursuant to the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013. The said policy is also available on Company''s website.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy establishing vigil mechanism, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or other policies. The policy provides for adequate safeguards against victimization of employees who avail of mechanism and also provides for direct access to the Chairman of the Audit Committee.

It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The policy of vigil mechanism is available on the Company''s website.

FAMILIARIZATION PROGRAMME

The familiarization programme aims to provide Independent Directors with the industry scenario, the socio-economic environment in which the Company operates, the business model, the operational and financial performance of the Company, significant developments so as to enable them to take well informed decisions in a timely manner. This programme also seeks to update the Directors on the roles, responsibilities, rights and duties under various Acts and other statutes.

FIXED DEPOSIT

The Company has not accepted the Fixed Deposits and therefore the compliance of the same as per the provisions of the Companies Act, 2013 and rules thereon is not required.

HUMAN RESOURCES

A. Employee Relations

We believe that success of Company depends on the talent and dedication of our employees and we strive to attract, hire, develop and retain outstanding employees. In view of this, we have laid down a comprehensive set of policies aiming at attracting, retaining and motivating employees. We believe significant benefits are realized from having a strong and seasoned management team with many years of experience in technology distribution and related industries. We consider relations with our employees to be good.

B. Trade Relations

The Company maintained healthy, cordial and harmonious industrial relations at all levels. Despite severe competition, the enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the Industry. This accord incorporates novel elements such as introducing wide range of products, nurturing healthy competition, giving pocket friendly credit cycles, timely clearance of dues, easy accessibility to product heads, etc. Your Company will continue in its endeavour to build and nurture strong links with trade allies, based on mutuality, respect and co-operation with each other and with consistent consumer interest.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 is given hereunder:

A. Conservation of energy

Your Company is primarily engaged in Marketing and Trading activities and has not consumed energy of any significant level and hence no additional investment is required to be made for reduction of energy consumption. However, the Company will continue with its efforts to conserve the energy.

B. Technology absorption

The Company''s operations do not require significant absorption of technology.

C. Foreign Exchange Earnings and Outgo

Particulars

Current Year (in Rs.)

Previous Year (in Rs.)

Foreign Exchange Earnings

40,39,37,020

25,10,94,399

Foreign Exchange Outgo

1,08,68,47,751

75,29,59,340

ABSTRACT OF THE ANNUAL RETURN

In accordance with Section 134 (3) (a) and as provided under subsection (3) of Section 92 of the Companies Act, 2013 an extract of the Annual Return in prescribed form MGT-9 is appended as Annexure-A to the Board''s Report.

RELATED PARTY TRANSACTIONS

During the year, Company has made several related party transactions at arm''s length basis and the particulars of contracts or arrangements entered into by the Company with related parties as referred in sub-section (1) of section 188 of the Companies Act, 2013, in prescribed Form No. AOC-2, is appended as Annexure-B to the Board''s Report.

MANAGEMENT DISCUSSION AND ANALYSIS

A Management Discussion and Analysis as required under the Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulation is annexed herewith as Annexure - C and forms part of the Boards'' Report.

SECRETARIAL AU DIT

The Board of Directors have appointed M/s. Satyajit Mishra & Co., Practising Company Secretary, Mumbai, to conduct Secretarial Audit for the financial year 2017-18 under Section 204 of the Companies Act, 2013 as part of good corporate governance and transparency. The Secretarial Audit Report in form MR-3, for the financial year 2017-18, forms part of the Directors'' Report as Annexure-D.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements as stipulated under the Listing Regulations. A separate section on corporate governance along with a certificate from the Secretarial Auditor confirming the compliance is annexed as Annexure - E and forms part of this Annual Report.

LOANS, GUARANTEES & INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

MATERIAL CHANGES AND COMMITMENTS

No material changes have taken place affecting the financial position of the Company from the date of closure of financial year till the date of signing of this report.

APPRECIATION

Your Directors are thankful to the Vendors, Customers, Bankers, National Stock Exchange, Registrar and Transfer Agent, Merchant Bankers, Depositories, Central and State governments together with their departments, the local authorities for their continued guidance, support and co-operation. Your Company has been able to operate efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all functions and areas as well as the efficient utilisation of the Company''s resources for sustainable and profitable growth. To them goes the credit for all of the Company''s achievements.

And to you, our Shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

Forand on behalf of the Board of Directors

Creative Peripherals and Distribution Limited

Mr. Ketan Patel

Chairman & Managing Director

DIN 00127633

Date: 21st May, 2018

Place: Mumbai

Director’s Report