DIRECTORS' REPORT Dear Members, Your Directors have the pleasure in presenting this Forty Fourth Directors' Report together with the audited Annual Accounts of the Company for the financial year ended March 31, 2016. DIVIDEND Your Directors are pleased to recommend Dividend at 50% 1.00/- per Equity Share of Rs. 2/- each) on equity shares for the year ended March 31, 2016, subject to the approval of shareholders at the ensuing annual general meeting of the Company. The Dividend distribution would result in cash outflow of Rs. 366.08 Lakhs (including Dividend Distribution Tax). OPERATIONS AND FINANCE Your directors have analyzed Company's operations and financials in detail in Management's Discussion and Analysis. PRINTING INDUSTRY India is one of the largest markets for newspapers. 17 newspapers out of the world's top 100 newspapers (based on circulation) are published in India. However, the printing industry is highly fragmented. The newspapers and magazine publishing section has the large printers mainly apart from a few in package, label and commercial printing. There is an ample opportunity for the printing sector in India because of large english knowing young population, increase in literacy rate, increase in life span (older people read more) and increase in number of smaller households (nuclear families) have led to a revolution in the printing industry. Printing sector has evolved from a manufacturing industry into a service industry in India. The web-offset technique has entrenched itself in the newspaper industry worldwide because of its efficiency and speed and its adaptability to the latest technology and attachments. The Indian printing and newspaper industry has been equipping print plants to meet continuous and constant demand for printed materials in the form of vernacular editions of newspapers/news magazines, textbooks, workbooks, and exercise books. COMPANY The Company's ability to get engaged with its clients at an early stage of their projects/expansion, providing better services and customized programs that help clients communicate more effectively, has resulted in decent growth in the current financial year over the previous financial years. This performance is particularly commendable when viewed against the backdrop of the extremely challenging business context in which it was achieved, namely, a sluggish macro-economic environment. Your Company continues to face challenging external scenario including demand. However, with strengthening of its research, development and technical support mechanism, the Company is striving for more growth by developing new businesses. MANAGEMENT'S DISCUSSION AND ANALYSIS In terms of the provisions of Regulation 32 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (hereinafter referred to as 'SEBI Listing Regulations'), the management's discussion and analysis is set out in this Annual Report. PUBLIC / FIXED DEPOSITS Your Company has not accepted any public / fixed deposits during the year and as such no amount of interest and principal deposit was outstanding as on the balance sheet date. SUBSIDIARIES During the year under review, Company's subsidiary has performed well despite slowdown in the global economies. Performance of the wholly owned subsidiary company Manugraph Americas Inc. has been very satisfactory during the year. The company earned positive EBIDTA and Net profit during the year as a result of a combination of revenue enhancement and cost control measures. A report on the performance and financial position of each of the subsidiaries, associates and joint ventures as per the Companies Act, 2013 is provided after Consolidated Financial Statements. The policy for determining material subsidiaries as approved by the Board may be accessed on the Company's website viz. www.manugraph.com The Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act, 2013, prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, forms part of this Annual Report. The Auditors report to the shareholders does not contain any qualification, observation or adverse comment. BOARD OF DIRECTORS In accordance with the provisions of the Companies Act, 2013 and Company's Articles of Association, Mr. Pradeep S. Shah retires by rotation and is eligible for re-appointment. The Board recommends his re-appointment. Brief profile of Mr. Pradeep S. Shah proposed to be re-appointed as Director of the Company is provided in the notice convening the ensuing Annual General Meeting. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. Independent Directors also reviewed the performance of non-independent Directors 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 Directors and Senior Management and Evaluation of Directors' Performance, annexed as 'Annexure A' Non Executive Directors The Non Executive Directors are paid remuneration by way of Sitting Fees. During the year, the Company paid sitting fees of Rs. 15,000/- per meeting to the NEDs for attending meetings of the Board & Audit Committee and Rs. 9,000/- per meeting to the NEDs for attending Nomination & Remuneration Committee meeting. Executive Directors Executive Directors are paid remuneration by way of salary, perquisites, allowances and commission. Salary is paid within the range fixed by the members of the Company. Management Staff Remuneration of employees largely consists of basic remuneration, perquisites, allowances and performance incentives. The components of the total remuneration vary for different grades and are governed by industry patterns, qualifications and experience of the employee, responsibilities handled by him, his annual performance, etc. DISCLOSURES Meetings of the Board During the financial year, the Board met 5 times. The meetings were held on May 27, 2015, August 13, 2015, October 27, 2015, January 5, 2016 and February 3, 2016. Board Committees Audit Committee Stakeholders Relationship Committee Mr. Hiten C. Timbadia, Chairman Mr. Perses M. Bilimoria, Chairman Mr. Perses M. Bilimoria Mr. Sanjay S. Shah Mr. Abhay J. Mehrotra Mrs. Sohni H. Daswani Nomination & Remuneration Committee CSR Committee Mr. Hiten C. Timbadia, Chairman Mr. Pradeep S. Shah, Chairman Mr. Perses M. Bilimoria Mr. Bhupal B. Nandgave Mr. Abhay J. Mehrotra Mr. Abhay J. Mehrotra The details of various functions / role are provided separately under Corporate Governance Report of this Annual Report. RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial 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 with Promoters, Directors, Key Managerial Personnel or other designated persons or entities which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Attention of members is drawn to the disclosure of transactions with related parties set out in Note No. 33 of Standalone Financial Statements, forming part of the Annual Report. The policy on Related Party Transactions as approved by the Board is available on website of the Company viz.: www.manugraph com. CORPORATE SOCIAL RESPONSIBILITY (CSR) The Company aims to further the socio economic welfare to the lesser privileged and to those in need through its CSR activities. Your Company lays special emphasis on education and vocational training of youth including females in the local community for their economic empowerment. In order to achieve this objective your Company continues to support Industrial Training Institutes. Apart from the above, the Company provides education and other loans to employees which enable their children for higher education. Since the Company does not have average net profits for the last three financial years, the Company is not mandatorily required to contribute towards CSR activities. However, the Company spent Rs. 1 Lakh towards CSR by way of providing financial aid to Prime Ministers' Relief Fund for the victims of earthquake in Nepal. The Annual Report on our CSR Activities is appended as 'Annexure B' to this report. EXTRACTS OF ANNUAL RETURN The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as 'Annexure C'. AUDITORS The members of the Company at its Annual General Meeting held on August 27, 2014 have appointed M/s. Natvarlal Vepari & Co., Chartered Accountants, as the Statutory Auditors of the Company to hold office upto the conclusion of the fifth consecutive annual general meeting of the Company. In terms of the first proviso to Section 139 of the Companies Act, 2013 the appointment of auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Natvarlal Vepari & Co. as statutory auditors of the Company is placed for ratification by the shareholders. M/s. Natvarlal Vepari & Co. has confirmed their eligibility for re-appointment as Statutory Auditors. M/s. Natvarlal Vepari & Co. has also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The report of the auditors to the shareholders is a part of the Annexure. The notes to the Accounts, that are a part of the financial statements, are self-explanatory and need no further clarifications or explanations. 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 terms of Section 134(3)(c) of the Companies Act, 2013: (i) that in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any. (ii) that such accounting policies have been selected and applied consistently and judgment and estimates have been made 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, 2016 and of the profit of the Company for the year ended on that date; (iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (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 financial controls were adequate and were operating effectively; (vi) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. CORPORATE GOVERNANCE The Company's philosophy is based on the values of transparency, customer satisfaction, integrity, professionalism and accountability. The Company adheres to corporate culture of integrity and consciousness. Corporate Governance is a journey for constantly improving sustainable value creation. As required under the provisions of Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a separate report on Corporate Governance forms part of this Annual Report, together with a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance. HUMAN RESOURCES The Human Resource Function plays a key role in the overall business strategy. The Company is committed to creating an environment of learning and development through functional and leadership training programs, promote internal talent and wellbeing of its employees. Your Company takes immense pride in providing an equal opportunity work environment, and places great emphasis on identifying, nurturing and freeing up talent. This involves a practice of encouraging youth, urging experienced colleagues to mentor people and processes, and inculcating a can-do culture that moulds itself to evolving personal aspirations and corporate goals throughout the career of an individual. Your Company believes that qualified and experienced people are its most important assets and follows policies that aim to attract and retain the best talent with a combination of monetary and non-monetary benefits. The Company had a total of 1032 permanent employees as on March 31, 2016. Particulars of Employees The table containing the names and other particulars of employees in accordance with the provisions of Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as 'Annexure D'. The Company states that there are no employees (other than Managing Directors) employed throughout the financial year 2015-16 and drawing a salary of Rs. 60 Lakhs per annum or more or employed for part of the year and in receipt of remuneration of Rs. 5 Lakhs or more per month as required under 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 salary paid to Managing Directors are part of Corporate Governance Report, forming part of this Report. SECRETARIAL AUDIT M/s. Aashish K. Bhatt & Associates, a Company Secretary in Practice was appointed to conduct the secretarial audit of the Company for the financial year 2015-16 as required under Section 204 of the Companies Act, 2013 and Rules framed thereunder. The Report of the Secretarial Audit is annexed herewith as 'Annexure E'. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. COMPLIANCE WITH SECRETARIAL STANDARDS The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. RISK MANAGEMENT To establish and maintain a system of risk management and internal control, the Company has set up a policy which includes a review of the risk management system, and maintenance of a risk profile (both financial and non-financial risks). The Board reviews the effectiveness of the risk management and internal control systems. This system is designed to: • identify, assess, monitor and manage risks. • inform investors of material changes to the Company's risk profile. A brief report on risk evaluation and management is provided under Management's Discussion and Analysis Report forming part of this Annual Report. INTERNAL FINANCIAL CONTROLS An extensive system of internal controls is practiced by the Company to ensure that all its assets are safeguarded and protected against loss from unauthorised use or disposition, and that transactions are authorised, recorded, and reported correctly. The Company has an internal control system that is geared towards achieving efficiency in operations, optimum utilisation of resources, effective monitoring, and compliance with all applicable laws and regulations. An extensive programme of internal audits, reviews by management, and documented policies, guidelines and procedures, supplements the internal control systems that are designed to ensure reliability of financial and all other records to prepare financial statements and other data, and to maintain accountability of assets. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. WHISTLE BLOWER POLICY The Company has in place a Whistleblower Policy / Vigil Mechanism to deal with unethical behavior, victimisation, fraud and other grievances or concerns, if any. The WB Policy also provides for adequate safeguards against victimization of Director(s) / Employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The Whistle Blower Policy has been posted on the website of the Company viz. www.manugraph.com DISCLOSURE IN TERMS OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The policy on Prevention and Redressal of Sexual Harassment is adopted by the Company and the Company had constituted Internal Complaints Committee for redressal of complaints and to prevent sexual harassment. During the year, there were no complaints relating to sexual harassment. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is annexed as 'Annexure F'. CAUTIONARY STATEMENT Statements in the Directors' Report & Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be forward looking statements. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company's operations include cyclical demand, changes in government regulations, tax regimes, economic development and other ancillary factors. APPRECIATIONS The Board wishes to place on record its gratitude for the assistance and co-operation received from the Banks, Government Authorities, Customers, Vendors, and all its members for the trust and confidence reposed on the Company. The Board also expresses its deep sense of appreciation to all employees of the Company for their strong work ethic, teamwork, commitment and initiative, which has led to the Company making commendable progress in today's challenging environment. For and on behalf of the Board Sd/- Sanat Shah Chairman Place: Mumbai Date: 26-May-2016. |