BOARD'S REPORT TO THE MEMBERS, Your Directors have pleasure in presenting their Sixteenth Annual Report of your company with the Audited Financial Statements for the year ended 31st March, 2015. Compuage is a leading distribution of technology products Company in India. We act as a vital link between the manufacturers of technology products and the Resellers who in turn fulfill the needs of the end user. Our customers include Value Added Resellers, Corporate Resellers, Retailers and Direct Marketing Companies. The Company's objective is to grow at a rate higher than industry growth rate. Execution is key to our business. We support our customer through 44 offices, 48 Warehouses and 50 Service Centers. Our strategy is to operate at optimum product mix that will give us the necessary stability, higher growth and returns. We firmly believe that our value added approach with vendors, resellers and industry at large shall enable your company to sustained and profitable growth. FINANCIAL PERFORMANCE: The consolidated revenue of your company for the year was Rs 238888.96 Lacs as against Rs 236187.86 in the previous year. The consolidated net profit after tax for the year was Rs 1210.22 Lacs as against Rs. 1172.23. DIVIDEND: Considering the improved performance of the Company, your Directors are pleased to recommend a final dividend of Rs 2.00 per share for the year ended 31st March, 2015 which is 20% on face value of Rs 10 per share each, subject to the approval of members at the ensuing Annual General Meeting. In terms of Section 123 of the Companies Act, 2013 and section 205C of the Companies Act, 1956; the Company is required to transfer the amount of dividend remaining unclaimed for a period of seven years from the date of transfer to the unpaid dividend account to the Investor Education and Protection Fund (IEPF). Shareholders are requested to ensure that they claim the dividend(s) from the Company before transfer of the said amounts to the IEPF. A detailed description of the same is provided under point no. 11 of the notes forming part of Notice convening the AGM as well as the Corporate Governance Report. FUTURE OUTLOOK: While 2014 - 15 was a challenging year with PC showing a flat to low sign digit growth. It was a year in which the PC industry consolidated with some brands exiting the PC business. And post elections, while sentiments remained positive, momentum was yet to pickup. However, the future is very promising. With the Digital India Campaign, Smart cities and Broadband penetration plans, and the low PC penetration in India, it is bound to create lot of opportunities in the industry. Your Company with its nationwide operations and strong relationships with Resellers is well positioned to benefit out of it. Further, with its focus on strengthening its Smartphones portfolio will give further impetus to the growth plans of the company LISTING OF SECURITIES: The Company's shares are listed on Bombay Stock Exchange Limited, Mumbai (BSE) and applicable listing fees for the year 2015-2016 have been paid. The Securities and Exchange Board of India (SEBI) vide its Exit order no. WTM/RKA /MRD/47/2015 dated 14th May, 2015 has now granted exit to Madras Stock Exchange ("MSE"). Subsequently, the securities of Company are no longer listed on MSE SHARE CAPITAL: The Company at its meeting held on 28th March, 2015 had approved the proposal for issue of bonus shares in the ratio of ratio 3:5 i.e three bonus shares for every 5 shares held subject to the approval of members. For seeking members approval Postal Ballot will be conducted in the year 2015-16 and the bonus shares will be issued to shareholders as on the record date as determined by the Board. SUBSIDIARY OPERATIONS The year 2014 - 15 was a very good year for its wholly owned subsidiary-Compuage Infocom (S) Pte. Ltd. Its year on year grew by 187.61 %, while its profits grow by 409.08 %. Future continues to be promising. INFORMATION TECHNOLOGY: Compuage continues to upgrade its IT infrastructure and has a solid backbone to support the business. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has a vigil mechanism/whistle blower policy to deal with instance of fraud and mismanagement, if any. The details of the vigil mechanism/whistle blower policy is explained in the Corporate Governance Report and also posted on the website of the Company. CORPORATE SOCIAL RESPONSIBILITY The Company is committed to discharging its social responsibility as a good corporate citizen. As part of its initiatives under "Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Livelihood and Health. These projects are largely in accordance with Schedule VII of the Companies Act, 2013. The Annual Report on CSR activities is annexed herewith as "Annexure A" and forms part of the Boards' Report. DIRECTORS: The Board consists of executive and non-executive directors including independent directors who have wide and varied experience in different disciplines of corporate functioning. Your Company has Five Directors including Three Independent Directors in consonance with Corporate Governance norm specified in the Clause 49 of the Listing Agreement with the Stock Exchanges. During the year, no director has been appointed or resigned from the Board of Directors of the Company. Mr. Atul H. Mehta retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The brief resume of the said Director and other related information has been detailed in the Notice convening the 16th AGM of your Company. Accordingly, your Directors recommend his re-appointment in ensuing AGM. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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. Also Independent Directors of the Company has met separately during the year without the attendance of non-independent directors and members of management, whereby they reviewed the following - 1. Reviewed the performance of Non-Independent Directors and the Board as a whole; 2. Reviewed the performance of the Chairperson of the Company; 3. Assessed the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. MEETINGS Notice of Meetings is prepared and circulated in advance to the Directors. During the year, Twelve Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. 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 both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. DISCLOSURE UNDER SECTION 164 (2) None of the Directors of the Company are disqualified from being appointed as directors as specified under sub-section (2) of Section 164 of the Companies Act, 2013 and any other applicable provisions of the Companies Act, 2013 and the Rules made there under. AUDITORS' REPORT : At the 15th AGM of your Company held on 23rd August, 2014, M/s B.V Dalal & Co., Chartered Accountant (Firm Registration No. 114214W), were appointed as the Statutory Auditors of the Company to hold office till the conclusion of the third consecutive Annual General Meeting (AGM) of the Company. The said Auditors are now eligible for being reappointed as the Statutory Auditors to hold office till conclusion of next AGM. Accordingly, the Board of Directors recommend their appointment. The report of the Auditor and notes forming part of Accounts are attached along with the Annual Report. There is no qualification in the Audit report and Notes are self explanatory and need no comments. INTERNAL AUDIT: Compuage has further strengthened its internal audit team. This team monitors the entire business operations from its centralized database in Mumbai. It reports directly to the Audit Committee which is chaired by a Non Executive Independent Director. During the year under review, the Company has also appointed M/s. Verma Mehta & Associates (Firm Registration Number 112118W) as the internal auditors of the Company in accordance with section 138 of the Companies Act, 2013 and rules framed thereunder. This has further added to the internal control and audit systems. DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS Compuage's well defined organization structure, policy guidelines, predefined authority levels, and an extensive system of internal controls ensure optimal utilization and protection of resources, IT security, accurate reporting of financial transactions and compliance with applicable laws and regulations. • Compuage has adequate system of internal control in place to ensure that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are authorized, recorded, and reported correctly. • Compuage's internal audit function is empowered to examine the adequacy, relevance and effectiveness of control systems, compliance with laws, regulations & policies, plans and statutory requirements. • Compuage has an exhaustive budgetary control system. Actual performance is reviewed with reference to the budget by the management on an ongoing basis. • Compuage's Audit Committee of the Board reviews the findings and recommendations of the internal auditor. The system is improved and modified continuously to meet changes in business conditions, statutory and accounting requirements. SECRETARIAL AUDIT AND THE APPOINTMENT OF THE SECRETARIAL AUDITORS The Company has appointed Mr. Virendra G. Bhatt, Practising Company Secretary to hold the office of the Secretarial Auditors and to conduct the Secretarial Audit for the financial year 2014-2015. The Secretarial Audit Report is annexed herewith as "Annexure B" and forms part of the Boards' Report. The said report is self explanatory and needs no comments. INSURANCE & RISK MANAGEMENT The assets of the Company are adequately insured against the loss of fire, riot, earthquake, terrorism, loss of profits, etc. and other risks which considered necessary by the management. DEPOSITS: During the financial year 2014-15, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014. The details of the same are as under: (a) accepted during the year- Nil (b) remained unpaid or unclaimed as at the end of the year- Nil (c) whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved- (i) at the beginning of the year - Rs. 7,95,39,600/- (ii) repaid during the year - Rs. 7,95,39,600/-(iii)at the end of the year - Nil 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 dematerialization of the physical shares lodged for transfer. STATUS OF DEMATERIALISATION OF SHARES: NSDL and CDSL have allotted ISIN No. INE070C01029 for compulsorily Dematerialization of Shares. 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 Section 134(3)(c) and 134(5) of the Companies Act, 2013: i. That in preparation of the Annual Accounts for the year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any; ii. 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 31st March, 2015 and the profit of the Company for the year under review; iii. 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; iv. That the annual accounts for the year ended 31st March, 2015 have been prepared on a 'going concern basis'. v. That proper internal financial controls were in place and that such internal financial controls are adequate and were operating effectively. vi. 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. EXTRACT OF THE ANNUAL RETURN: The Extract of the Annual Return for the year 2014-2015 is annexed herewith as "Annexure C" and forms part of the Boards' Report. CONSOLIDATED FINANCIAL STATEMENTS: A separate statement containing the salient features of financial statements of the said subsidiary forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours 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 (www.compuaqeindia.com). The financial performance of the said subsidiary included in the consolidated financial statements of your Company is set out in the "Annexure D" to this Report. The Consolidated Net Worth of the company and its subsidiary as on 31st March, 2015 is Rs. 8022.82 Lacs. The Consolidated Net Profit of the company and its subsidiary amounted to Rs. 1210.22 Lacs for the financial year ended 31st March, 2015. MANAGEMENT DISCUSSION AND ANALYSIS A Management discussion and Analysis as required under the Clause 49 of the Listing Agreement is annexed herewith as "Annexure E" and forms part of the Boards' Report. CORPORATE GOVERNANCE: Your Company is committed to good Corporate Governance Practices and following to the guidelines prescribed by the SEBI and Stock Exchanges from time to time. The Company has implemented all of its major stipulations as applicable to the Company. The Statutory Auditor's Certificate in accordance with Clause 49 of the Listing Agreement and report on Corporate Governance is annexed as Annexure "F" and forms part of the Boards' Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTIONS 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. The particulars relating to conservation of energy and techniques are not relevant to the Company since the Company is not engaged in any manufacturing activities and hence there is not much scope and concern to this matter for the company to take any meaningful action. B. Earning And Outgo in Foreign Exchange: Mercantile Trade Sales as on 31st March, 2015 is Rs. 12747.01 Lacs as against Rs. 8840.39 Lacs in the previous year. The payment of foreign exchange outgoes are as under: 1. Valuation of Imports calculated on C.I.F. basis for one year period ended 31st March, 2015 is Rs. 27,798.69 Lacs. (Rs. 43,133 Lacs in previous year) 2. Expenditure in Foreign currency: (? in Lacs) (Current Year) (Previous Year) Traveling 13.16 24.79 Mercantile Trade Purchase 12627.19 8723.02 DISCLOSURES RELATIONG TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES Statement of disclosures relating to remuneration of Directors, Key Managerial Per- sonnel and particulars of Employees for the period ended 31st March, 2015 as per the provisions by the Companies Act, 2013 and rules made thereunder which needs to be disclosed in the Directors report. LOANS AND INVESTMENTS: The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 are set out in Note no. 5 & 7 (Loans), Note no. 2(1)(r) (Guarantees) and Note no. 12 (Investments) to the financial statements forming part of this Annual Report. TRANSFER TO RESERVES: Your Company proposes to transfer Rs. 102.00 lacs to the general reserve. An amount of Rs. 5837.48 lacs is proposed to be retained in the Statement of Profit and Loss. SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS: There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future. ACKNOWLEDGEMENT Your Directors takes this opportunity to express their deep sense of gratitude to the shareholders, employees, customers, vendors and banks for the support and faith reposed in the company. We also thank the Central and State Government and their department and local authorities for their continued guidance and support. We also like to place on record our sincere appreciation for the commitment, dedication and hard work put in by every member of Compuage Family. By order of the Board of Directors For Compuage Infocom Limited Atul Mehta Chairman & Managing Director Date : 15th May, 2015 Place : Mumbai Registered Office: D- 601/602 & G - 601/602, Lotus Corporate Park, Graham Firth Steel Compound, Western Express Highway, Goregaon (E), Mumbai - 400 063, India CIN: L99999MH1999PLC135914 E-mail: investors.relations@compuageindia.com |