The Directors have pleasure in presenting the 28^th Annual Report along with the Accounts for the year ended March 31, 2018.

Working Results (Rs. in Lacs)

OPERATIONS

The standalone turnover of your Company during the year was Rs. 11023 Lacs. Out of this around 25% of revenue were from exports and rest from domestic sales. The year under review has been a challenging year due to initial hiccups in GST implementation in H1FY18. The momentum picked up in H2FY18 making up for the subdued H1 and we ended the year with a flattish revenue growth and a volume growth of approximately 5%.

DIVIDEND

The Board of Directors have recommended interim dividend @ Rs.1.50 per Equity Share of Rs.10/- each on 27.11.2017. The Board of Directors have recommended final dividend @ Rs.1.50 per Equity Share of Rs.10/- each making a total dividend of Rs.3.00/- per Equity Share for the Financial Year 2017-18. The final dividend is subject to approval of shareholders at the Annual General Meeting.

FUTURE OUTLOOK AND PLANS

Domestic Business continues to do good with Imaging industry expected to flourish on back of increasing demand for offices especially in tier 2 and tier 3 cities. India still remains a largely under-penetrated market as compared to the developed countries giving us the visibility for long term growth. With 600 dealers spread throughout the country we are at fore-front to satisfy this huge gap.

Our wholly owned subsidiary “Indian Toners USA Company” has been gaining traction in the U.S. market thereby opening up opportunity in the overseas market. Our focus in U.S.A is to create a product positioning, known for its high quality compatible toners and establish ourselves as a trusted supplier.

Efforts are going on to develop more products of toner and your Company is hopeful to achieve the desired results with the help of the research team.

The Management of your Company is actively exploring opportunities to invest in some new projects and other activities as part of diversification plan.

AMALGAMATION OF ITDL IMAGETEC LIMITED (A SUBSIDIARY CO.) AND OTHER GROUP COMPANIES WITH INDIAN TONERS & DEVELOPERS LTD.

The Scheme of Arrangement for amalgamation of ITDL Imagetec Limited including four group companies with the Company has been approved by Hon’ble National Company Law Tribunal (NCLT), Allahabad and Hon’ble NCLT, Principal Bench, New Delhi vide their order dated 9.5.2017 and 26.7.2017 respectively.

WHOLLY OWNED SUBSIDIARY

In order to cover the untapped markets of North and South America, your Company has incorporated a Wholly Owned Subsidiary of the Company in the State of Florida (USA) with an investment of upto $2,50,000- only which has already become operational. However, so far the results are not as per expectations but all out efforts are being made to improve the same.

RESEARCH AND DEVELOPMENT ACTIVITIES

Your Company continued the research and development activities during the year in the key areas of product, process and material development. Your Company has always given prime importance to Research & Development which is the basis of your Company’s success. With the help of the Pilot Plant, your Company has successfully developed new quality products at competitive prices to face the global competition and is very optimistic to develop many more products in the times to come.

Continuing recognition by the Department of Scientific and Industrial Research, Ministry of Science & Technology to your In - House R & D Unit is a moral boosting and an encouraging feature for the team of your Research & Development Centre.

During the year the Company has incurred R & D expenses of Rs. 37.51 Lacs in various heads in addition to Rs. 13.73 Lacs for purchase of capital items. Your Company has exhaustive programme of R & D activities in the coming years.

CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in “Zero Tolerance” against bribery, corruption and unethical dealings/behaviours of any form and the Board has laid down the directives to counter such acts. The Code has been posted on the Company’s website www.indiantoners.com.

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed as Annexure “1”.

NUMBER OF BOARD MEETINGS HELD

The Board of Directors duly met 5 times during the financial year from 1st April, 2017 to 31st March, 2018. The dates on which the meetings were held are as follows:

20^th May, 2017, 31^st August, 2017, 11^th September, 2017, 27^th November, 2017 and 2^nd February, 2018.

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, have been duly followed by the Company.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, based upon the management representation Directors of your Company hereby state and confirm that:

a) in the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

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 at the end of the financial year and of the profit of the company for that period;

c) the directors have taken proper and sufficient care 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;

d) the directors have prepared the annual accounts on a going concern basis;

e) the directors have laid down internal financial controls in the company that are adequate and were operating effectively.

f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and are operating effectively.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report and also available on the Company website www.indiantoners.com.

PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company’s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

All Board Directors and the designated employees have confirmed compliance with the Code.

Requirements of Regulation 8 (Code of Fair Disclosure) & Regulation 9 (Code of Conduct) of SEBI (Prohibition of Insider Trading) Regulations, 2015 have been noted and complied with by the Company.

STATUTORY AUDITORS & AUDITORS’ REPORT

The Statutory Auditors of the Company were appointed by the Members at the 27th Annual General Meeting of the Company for an initial term of 5 years i.e. from the conclusion of 27th Annual General Meeting till the conclusion of 32nd Annual General Meeting of the Company pursuant to Section 139 of the Companies Act, 2013. They have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Notes on Financial Statements referred to in the Auditors’ Report are self-explanatory and do not call for any further comments.

The consolidated accounts along with the Statement pursuant to Section 129 of the Companies Act, 2013 are annexed.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Mukesh Agarwal & Co. (CP No.:3851, FCS: 5991), Company Secretaries to undertake the Secretarial Audit of the company. The Secretarial Audit Report is annexed as Annexure “2”.

INTERNAL AUDIT & INTERNAL AUDITORS

The Company has well-structured Internal Audit function. Pursuant to the provisions of Section 138 of the Companies Act, 2013 and other applicable provisions, if any, the Board of Directors on the recommendations of the Audit Committee have appointed M/s B.K. Shroff & Co., Chartered Accountants as Internal Auditors of the Company for the year 2018-19.

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.

RELATED PARTY TRANSACTIONS:

Related party transactions that were entered during the financial year were on an arm’s length basis and were in the ordinary course of business. There was no materially significant related party transactions with the Company’s Promoters, Directors, Key Managerial Personnel or other designated persons or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its approval.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013, the Rules framed thereunder and the Listing Agreement. This Policy as considered and approved by the Board has been uploaded on the website of the Company at www.indiantoners.com.

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY:

Pursuant to Section 134 (3) (n) of the Companies Act, 2013 & Regulation 21 of SEBI (LODR) Regulations, 2015, the Board of Directors of a listed Company are required to constitute Risk Management Committee. However, the provisions of this regulation are applicable to top 100 listed entities, determined on the basis of market capitalization, as at the end of the immediate previous financial year. Our Company does not fall under this category.

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

Your directors have already constituted the Corporate Social Responsibility (CSR) Committee comprising of Shri Sanjeev Goel as the Chairman, Shri Sushil Jain and Shri Arun Kumar Garg as other members.

As part of its initiatives under “Corporate Social Responsibility” (CSR), the company has contributed almost entire funds (calculated in terms of Section 198 of the Act) to the Prime Minister’s National Relief Fund.

The Annual Report on CSR Activities is annexed as Annexure “3”.

BOARD EVALUATION

Pursuant to the provisions of Companies Act, 2013 and Regulation 17 of SEBI (LODR) Regulations, 2015, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the Chairman and the working of its Audit, Nomination & Remuneration, Corporate Social Responsibility and Stakeholders Committees. The manner in which the evaluation has been carried out has been explained in Corporate Governance Report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour the company has adopted a vigil mechanism policy. This policy is posted on the website of company.

DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 REMUNERATION RATIO OF THE DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP)/ EMPLOYEES:

(i) The percentage increase in remuneration of each Director, Chief Executive Officer, Company Secretary and Chief Financial Officer during the financial year 2017-18, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2017-18 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

Note: Current year Standalone Figures are not comparable with the previous year Standalone figures due to amalgamation of its subsidiary company with the company w.e.f. 1.4.2016.

ii) The median remuneration of employees of the Company during the financial year was Rs.1.62 Lacs.

iii) There were 276 permanent employees on the rolls of the Company as on March 31, 2018;

v) Relationship between average increase in remuneration and company performance:- The Profit before Tax for the financial year ended March 31, 2018 was Rs. 2986 Lacs whereas the median remuneration was Rs. 1.62 Lacs. The average median remuneration was in line with the performance of the Company.

vi) Comparison of Remuneration of the Key Managerial Personnel(s) against the performance of the Company:

The total remuneration of Key Managerial Personnel increased by 20.72% from Rs.167.29 Lacs in 2016-17 to Rs.201.95 Lacs in 2017-18 whereas the Profit before Tax was Rs.2986 Lacs in 2017-18.

vii) a) Variations in the market capitalization of the Company : The market capitalization as on March 31, 2018 was Rs. 314.76 Crores (Rs. 126.93 Crores as on March 31, 2017).

b) Price Earnings ratio of the Company was 18.39 as at March 31, 2018 and was 8.55 as at March 31, 2017.

c) Percent increase over decrease in the market quotations of the shares of the company as compared to the rate at which the company came out with the last public offer in the year - The closing share price of the Company at BSE Limited on 31st March, 2018 being Rs.239.15 per equity share of face value of Rs.10 each has grown more than 24 times since the last public offer by the Company, which was made in the year 1992.

viii) Average percentage increase made in the salaries of employees other than the managerial personnel in the current financial year i.e. 2017-18 was 9.61% whereas the increase in the managerial remuneration for the same financial year was 21.03%.

ix) The key parameters for the variable component of remuneration availed by the directors are considered by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

x) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year - Not Applicable; and

xi) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)

Sh. Sushil Jain, Sh. S.C. Singhal and Sh. Naresh Kumar Maheshwari are the Chief Executive Officer (CEO), Company Secretary and Chief Financial Officer (CFO) of the Company respectively.

During the year under review, Sh. Vikram Prakash, Director of the company has ceased to be Director w.e.f. 10.8.2017 as he has left for heavenly abode. Sh. K.K. Dhiman, Director of the Company has resigned from the Directorship w.e.f. 11.9.2017.

On the recommendation of Nomination & Remuneration Committee’s meeting held on 1.2.2018, the Board of Directors in its meeting held on 2.2.2018, has appointed Sh. Akshat Jain as Whole time Director of the Company w.e.f. 1^st April, 2018 subject to the approval of shareholders in the forthcoming Annual General Meeting.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Sh. Sushil Jain, Chairman & Managing Director, will retire at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment.

The Company has received declaration from all the Independent Directors confirming that they meet with the criteria of Independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013.

INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION & REDRESSAL) ACT, 2013

The Company has a policy against sexual harassment and a formal process for dealing with complaints of harassment or discrimination. The Company seeks to ensure that all such complaints are resolved within defined timelines. During FY 2017-18, the Company has not received any complaint. The Company is conducting workshops/awareness programs on prevention of sexual harassment from time to time.

PERSONNEL

Cordial Industrial relations continue to prevail thereby further strengthening employees’ commitment to the growth of the Company.

The Board wishes to express its deep appreciation to all sections of the Employees for their whole hearted efforts, cooperation and outstanding contribution to the growth of the Company during the year.

Particulars of employees as required under the provisions contained in Rule 5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report. However, the information is not being sent alongwith the Annual Report as per proviso of the above rule. Any shareholder interested in obtaining such particulars may write to the Company at its Corporate/Registered Office.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

Additional information to the extent applicable on conservation of energy, technology absorption, foreign exchange earning and outgo is required to be disclosed in terms of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure ‘A’ and forms part of this report.

MANAGEMENT’S DISCUSSIONS AND ANALYSIS REPORT

Management’s Discussion and Analysis Report for the year under review as stipulated under Regulation 34 of SEBI (LODR) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

DISCLOSURES UNDER LISTING AGREEMENT

Your Company is now listed only with BSE Limited. The Company is regular in paying the listing fees on demand and it has paid fee upto the current financial year.

DEMATERIALISATION OF SECURITIES

As informed earlier, the shares of your Company were included in the compulsory list for trading in dematerialization form with effect from 30.10.2000 and your company had entered into necessary agreements with both the Depositories i.e. NSDL (National Securities Depository Limited) and CDSL (Central Depository Securities Limited). It is, therefore, advisable to trade in the shares of the company in dematerialization form which is convenient and safe.

CORPORATE GOVERNANCE

In terms of Regulation 4 of SEBI (LODR) Regulations, 2015, a Report on Corporate Governance alongwith a certificate from the Auditors of the Company on the compliance of the conditions of Corporate Governance is provided elsewhere in this Annual Report.

ACKNOWLEDGEMENT

Your Directors acknowledge the cooperation and assistance extended by various agencies of the Central and State Governments, State Bank of India and its valued Customers. Your Directors also thank the shareholders for their continued support. You Directors thank all the dedicated employees including executives for all their services rendered to the Company.

For & on behalf of the Board

Place : New Delhi (SUSHIL JAIN)

Date : 17^th May, 2018 Chairman & Managing Director