Mar 31, 2019
Dear Members,
The Board of directors are pleased to present their report on the business and operations of the Company together with the audited standalone financial statements for the financial year ended 31st March, 2019.
1. FINANCIAL SUMMARY
For the year ended 31st March, 2019 |
For the year ended 31st March, 2018 |
|
Revenue from operations |
39,455.96 |
37,611.67 |
Operating profit after depreciation and amortisation |
4,945.41 |
4,999.12 |
Add: Other income |
2,211.43 |
2,398.49 |
Profit before tax |
7,156.84 |
7,397.61 |
Tax expense |
2,139.04 |
1,990.00 |
Profit for the year |
5,017.80 |
5,407.61 |
2. DIVIDEND
The Board of directors have recommended a dividend of Rs. 1/- per ordinary share of the face value of Rs. 10/- each (i.e.10%) for the year ended 31st March, 2019, aggregating to Rs. 64.67. Proposed dividend will be recognised as liability after approval of the members at the ensuing annual general meeting.
3. TRANSFER TO GENERAL RESERVE
The Board of directors propose to transfer an amount of Rs. 3,800 to General Reserve out of the profit for the year.
4. OPERATIONS AND STATE OF COMPANYâS AFFAIRS
Revenue from operations, profitability and earnings per share show under noted position during the year under review as compared to previous year :
For the year ended 31st March, 2019 |
For the year ended 31st March, 2018 |
|
Revenue from operations |
39,455.96 |
37,611.67 |
Export sales (C.I.F. value) |
13,991.62 |
13,029.12 |
Operating profit |
4,945.41 |
4,999.12 |
Other income |
2,211.43 |
2,398.49 |
Profit before tax |
7,156.84 |
7,397.61 |
Profit after tax |
5,017.80 |
5,407.61 |
Earnings per share (EPS) of face value of Rs. 10/- (In Rs.) |
77.59 |
82.43 |
âPursuant to issue of bonus shares, the earnings per share of previous year has been accordingly restated.
The overall performance of the Company during the year under review was similar to last year. The year witnessed good demand of Jute Goods both in domestic and overseas markets. CIF value of Export Sales was higher by Rs. 962.50, being Rs. 13,991.62 as against Rs. 13,029.12 in the previous year. By and large, operations yielded better returns and the Company was able to maintain the operating profit at â4,945.41 even after absorbing additional expenses.
Other income from Companyâs investments in capital markets was affected due to unprecedented situation arising on account of crisis in debt market. Moreover, an amount of Rs. 204 was charged in the accounts in respect of impairment of investment in preference shares of Infrastructure Leasing and Financial Services Limited, as a conservative policy.
During the year under review, the Companyâs export oriented unit at Falta Special Economic Zone has achieved satisfactory growth in Sales through better utilisation of the installed capacity. The Company is taking effective steps to further increase the capacity utilisation and to broad base the overseas market.
5. SHARE CAPITAL
The Company has one class of Shares - Ordinary shares of face value of Rs. 10/- each.
During the year, the Company allotted 21,55,625 fully paid-up bonus ordinary shares of face value of Rs. 10/- each on 31st August, 2018 in the ratio of 1 (one) ordinary share for every 2 (two) ordinary shares held by the members. Accordingly, the issued, subscribed and fully paid-up ordinary share capital of the Company as at 31st March, 2019 stood at Rs. 646.69 consisting of 64,66,875 fully paid up ordinary shares of Rs. 10/- each.
The shares of Cheviot Company Limited are listed on BSE Limited. The Company has paid the Annual Listing Fees for the year 2019 - 2020 to BSE Limited.
6. CORPORATE GOVERNANCE
In terms of Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on corporate governance together with a certificate from M/s SJAB & Associates, a firm of practising company secretaries, confirming compliance thereof is given in Annexure-I forming part of this report.
7. EXTRACT OF THE ANNUAL RETURN
The extract of the annual return in the prescribed format (Form MGT-9) is annexed hereto as Annexure-II forming part of this report. The annual return would be available on the website of the Company (http://www.groupcheviot.net/investors-jute/corporate-governance-jute/).
8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of investments made by the Company have been disclosed in Note 8 and Note 14 to the financial statements for the financial year ended 31st March, 2019. The Company has not given any loan during the year.
9. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY
The Board has developed a risk management policy for the Company identifying therein the elements of risk and concern that may threaten the existence of the Company. Risk evaluation and management is an ongoing process within the organisation and is periodically reviewed by the Board of directors. The senior management adopts a systematic approach to mitigate or reduce the impact of risk elements. Discussion on risks and concerns have been made in this report under the head âmanagement discussion and analysisâ.
10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Board of directors have formulated a Policy on dealing with related party transactions which has been disclosed on the website of the Company. All transactions entered into with related parties as defined under the Companies Act, 2013 read with Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the year, were in the ordinary course of business and at armâs-length price. There was no materially significant related party transaction made by the Company with its promoters, directors or key managerial personnel which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders. Therefore, disclosure in Form AOC-2 is not required.
All related party transactions were placed before the audit committee for approval on a quarterly basis and prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature.
11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are provided in Annexure-III forming part of this report.
12. CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year, your Company has spent Rs. 110 towards CSR activities. The annual report on CSR activities as required under Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014 is given in Annexure-IV, forming part of this report. Corporate Social Responsibility Policy of the Company is available on Companyâs website (http://www.groupcheviot.net/ investors-jute/corporate-governance-jute/).
13. ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has formulated a vigil mechanism / whistle blower policy in terms of Section 177 of the Companies Act, 2013 and as per Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the employees and directors to report their grievances / concerns about instances of unethical behaviour, actual or suspected fraud or violation of Companyâs code of conduct to the vigilance officer or the chairman of the audit committee. During the year under review, no complaint was reported. The whistle blower policy is available on the Companyâs website (http:// www.groupcheviot.net/investors-jute/corporate-governance-jute/).
14. ANNUAL PERFORMANCE EVALUATION
In terms of the provisions of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Guidance Note issued by SEBI, annual performance evaluation was conducted by the Board of its own performance, its committees and independent directors. The nomination and remuneration committee carried out annual performance evaluation of individual directors. The outcome of the annual performance evaluation showed an overall effectiveness in the performance of the Board, its committees and individual directors.
The performance evaluation of the Board was based on criteria such as appropriateness of Board composition and structure, decisions passed by the Board, awareness on Industry operations, compliance with applicable laws, succession planning, strategic planning, implementation of guidelines or strategies decided by the Board, etc.
The performance evaluation of the committees was based on composition, functioning, competencies of the members, frequency of meetings, procedures, monitoring role, advisory role, timely reporting to Board, etc.
The performance evaluation of directors was based on criteria such as preparedness for board meetings, attendance, judgements, contribution to risk management, adherence to Companyâs code of conduct and corporate governance, pro-activeness in highlighting areas of concern, sharing of knowledge and business information, disclosure of interest and lists of relatives in timely manner etc.
15. DIRECTORS
Mr. Utkarsh Kanoria (holding DIN 06950837) retires from the Board by rotation at the forthcoming AGM, and being eligible, offers himself for re-appointment.
Mrs. Rashmi Prashad (Mrs. Prashad) (holding DIN 00699317) was appointed as an Additional Director in the category of Independent Director w.e.f. 1st April, 2019 pursuant to the provisions of Section 161(1) of the Companies Act, 2013 (the Act) and Article 131 of the Articles of Association of the Company and holds office up to the date of the ensuing annual general meeting. In terms of Section 160 of the Act, the Company has received a notice from a member proposing the candidature of Mrs. Prashad for the office of director.
Mr. Nawal Kishore Kejriwal (holding DIN 00060314) has been re-appointed as Wholetime Director of the Company by the Board for a period of one year with effect from 1st June, 2019, subject to approval of the members at the forthcoming annual general meeting, whose period of office shall be liable to determination by retirement of directors by rotation.
The information about the directors seeking appointment/re-appointment as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard - 2 on General Meetings have been given in the Notice convening the ensuing annual general meeting.
All the independent directors have declared that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 read with Regulation 16(1)(b) and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
16. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Companyâs Anti-Sexual Harassment Policy is in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees are covered under this Policy which is gender neutral and is being monitored by a committee constituted by the Company for the said purpose. During the year under review, no complaint of sexual harassment has been received by the Company.
17. COMPANYâS POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS
In compliance with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the nomination and remuneration committee (NRC) follow the laid down criteria for identification of persons who are eligible to hold the office of director, key managerial personnel and senior management personnel of the Company including determining qualifications, positive attributes and independence of the person and their remuneration and other matters provided under Section 178 of the Companies Act, 2013. The NRC has affirmed that the remuneration paid to directors, key managerial personnel and senior management personnel are as per the remuneration policy of the Company.
The remuneration policy including criteria for determining qualifications, positive attributes and independence of a director is available at the web link: (http://www.groupcheviot.net/investors-jute/corporate-governance-jute/).
18. AWARDS AND RECOGNITION
During the year under review, the Company has received two prestigious awards, Silver Export Award 2017-18 for conventional jute products and Silver Export Award 2017-18 for jute diversified products from the Ministry of Textiles, Government of India.
19. DIRECTORSâ RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013, it is hereby stated to the best of our knowledge and belief that:-
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made judgements 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 had 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 had prepared the annual accounts on a going concern basis;
(e) the directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
20. NUMBER OF MEETINGS OF THE BOARD
The Board of directors met 5 (five) times during the year under review. More details are available in the report on corporate governance.
21. COMPOSITION OF AUDIT COMMITTEE
The audit committee having three Independent Directors was re-constituted with effect from 1st April, 2019 by appointing Mr. Utkarsh Kanoria, Wholetime Director as a member in place of Mr. Parag Keshar Bhattacharjee, who retired from the Board of directors on completion of his term of office on 31st March, 2019. More details on the audit committee are given in the report on corporate governance.
22. KEY MANAGERIAL PERSONNEL
During the year under review, all the key managerial personnel continue to hold their offices.
23. PARTICULARS OF EMPLOYEES
Information required pursuant to Section 197(12) of the Companies Act, 2013 (the Act) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been provided in Annexure-V forming part of this report.
The details of employees prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Annual Report. However with regard to the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding the said information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the company secretary and the same will be furnished on request.
24. PUBLIC DEPOSITS
The Company has not accepted deposits from Public under Section 73 of the Companies Act, 2013 read with Rules framed thereunder.
25. CREDIT RATING
Crisil has assigned long-term rating of A /stable and short-term rating of A1 to the Company for the working capital and term loan facilities availed by the Company. There has been no revision in the credit rating during the year under review.
26. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 124 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the IEPF Rules) all unpaid or unclaimed dividend are required to be transferred by the Company to the IEPF authority, after the completion of seven years. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholdersâ for seven consecutive years or more shall be transferred to the demat account of the IEPF authority.
Accordingly, the Company has transferred the unclaimed and unpaid dividend of Rs. 9.70 for the Financial Year 2010-11 to the IEPF Authority. Further, 7,451 corresponding shares were transferred to the IEPF Authority as per the IEPF Rules. The details are available at the web link: (http://www.groupcheviot.net/investors-jute/unclaimed-dividends-jute/)
27. DISCLOSURE
Following disclosures are made under the Companies (Accounts) Rules, 2014:-
(i) The financial summary or highlights are discussed at the beginning of this report;
(ii) There is no change in the nature of business;
(iii) There is no company which has become or ceased to be the Companyâs subsidiary, joint venture or associate company during the year;
(iv) No significant and/or material order was passed by the regulators or courts or tribunals which impact the going concern status and its future operations.
(v) There have been no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this report.
28. STATUTORY AUDITORS
M/s Singhi & Co., Chartered Accountants (ICAI Registration No. 302049E), was appointed as statutory auditors of the Company by the members at the AGM of the Company held on 25th August, 2017 to hold office for a term of 5 (five) consecutive years from the conclusion of that AGM until the conclusion of the sixth consecutive AGM on a remuneration to be mutually agreed upon with the Board of directors.
There are no qualifications, reservations or adverse remarks made by Singhi & Co., Statutory Auditors, in their report for the financial year ended 31st March, 2019. Pursuant to the provisions of section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incidence of fraud to the audit committee during the year under review.
29. COST AUDITORS
The cost accounting records maintained by the Company for the current financial year ending on 31st March, 2020 are required to be audited pursuant to Section 148 of the Companies Act, 2013 read with Rules framed thereunder. In this regard, the Board of directors, on the recommendation of audit committee, had re-appointed M/s D. Radhakrishnan & Co., Cost Accountants (Registration No. 000018), to carry out the cost audit at a remuneration of â40,000/- (Rupees Forty Thouand only) plus applicable taxes and re-imbursement of out of pocket expenses incurred by them. The resolution included at agenda Item No. 11 of the Notice convening the ensuing annual general meeting seeks membersâ ratification to the remuneration payable to the cost auditor.
30. SECRETARIAL AUDIT
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 MR & Associates, a firm of practising company secretaries (CoP 2551) to conduct Secretarial Audit of the Company.
In terms of SEBI Circular dated 8th February, 2019, the Secretarial Audit Report for the financial year ended 31st March, 2019 in Form MR-3 is enclosed as Annexure VI to this report as required under Section 204 of the Companies Act, 2013 read with Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in his report.
Further, the Company has received the Annual Secretarial Compliance Report from M/s MR & Associates, a firm of practising company secretaries on compliance of all applicable SEBI Regulations and circulars/guidelines issued thereunder.
31. ACKNOWLEDGEMENTS
Your Directors take this opportunity to express their sincere appreciation for the co-operation received from financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their appreciation for the committed services rendered by all the employees across the organisation.
For and on behalf of the Board
CHEVIOT COMPANY LIMITED
Harsh Vardhan Kanoria
Chairman and Managing Director,
Place : Kolkata Chief Executive Officer
Date : 27th May, 2019 DIN : 00060259
Mar 31, 2018
Dear Members,
The Board of directors present their report on the business and operations of the Company along with the Audited Standalone Financial Statements for the financial year ended 31st March, 2018.
1. FINANCIAL SUMMARY (Rs. in Lakhs)
Particulars |
For the year ended 31st March, 2018 |
For the year ended 31st March, 2017 |
Revenue from operations |
37,611.67 |
39,354.15 |
Operating profit after depreciation and amortisation |
4,999.12 |
3,506.84 |
Add: Other income |
2,398.49 |
3,075.43 |
Add: Exceptional items: Indirect taxes for earlier year |
- |
60.51 |
Profit before tax |
7,397.61 |
6,642.78 |
Tax expense |
1,990.00 |
1,694.73 |
Profit for the year |
5,407.61 |
4,948.05 |
Other comprehensive income |
277.99 |
228.56 |
Total Comprehensive Income for the year |
5,685.60 |
5,176.61 |
Retained earnings - opening balance |
2,643.29 |
2,090.53 |
Add/(Less): |
||
Profit for the Year |
5,407.61 |
4,948.05 |
Transfer from other comprehensive income (remeasurement gain/loss net of tax) to retained earnings |
125.21 |
155.67 |
Reclassification from other comprehensive income to retained earnings |
63.93 |
(50.96) |
Amount available for appropriation |
8,240.04 |
7,143.29 |
Out of above: |
||
Transfer to special economic zone re-investment reserve account |
- |
(300.00) |
Transfer to general reserve |
(4500.00) |
(4,200.00) |
Dividend including dividend distribution tax paid |
(54.29) |
- |
Retained earnings - closing balance |
3.685.75 |
2,643.29 |
The financial statements for the year ended 31st March, 2018 have been prepared in accordance with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015, as amended. The financial statements for the year ended 31st March, 2017 have been restated in accordance with IND AS for comparative information. For the purposes of transition to IND AS, the Company has followed the guidance prescribed in IND AS 101 âFirst-time adoption of Indian Accounting Standardsâ with 1st April, 2016 as the transition date.
2. DIVIDEND
The Board of directors recommend a dividend of Rs. 1/- per ordinary share of face value of Rs. 10/- each (i.e. 10 %) for the financial year ended 31st March, 2018, aggregating to Rs. 43.11. Proposed dividend will be recognised as liability after approval of the members at the ensuing annual general meeting.
3. TRANSFER TO GENERAL RESERVE
We propose to transfer an amount of Rs. 4,500 to the general reserve out of the profit for the year.
4. OPERATIONS AND STATE OF COMPANYâS AFFAIRS
Revenue from operations, profitability and earnings per share show under noted position during the year under review as compared to previous year :
(Rs. in Lakhs)
For the year ended 31st March, 2018 |
For the year ended 31st March, 2017 |
|
Revenue from operations |
37,611.67 |
39,354.15 |
Export sales (C.I.F. value) |
13,029.12 |
11,519.41 |
Operating profit |
4,999.12 |
3,506.84 |
Other income |
2,398.49 |
3,075.43 |
Profit before tax |
7,397.61 |
6,642.78 |
Profit for the year |
5,407.61 |
4,948.05 |
Earnings per ordinary share of face value of Rs. 10 (in Rs.) |
122.76 |
109.68 |
The overall performance of the Company during the year under review was much better than the previous year. The demand for Jute Goods remained good and steady. We witnessed substantial growth in production with better capacity utilisation during the year. There was significant growth in exports. However, revenue from operations was down mainly due to lower prices of raw jute having consequential impact in prices of finished goods.
We are pleased to report that the Company achieved highest ever operating profit in its history which was higher by Rs. 1,492.28 being Rs. 4,999.12 during the year under review as compared to Rs. 3,506.84 in the previous year. Such excellent jump in operating profit is attributed to better margins on goods sold coupled with higher production due to better capacity utilisation and operational efficiency, despite shortage of workers.
The bottom line was further improved by other income which was restricted to Rs. 2,398.49 on account of lower interest rates. Consequently, profit for the year was higher by Rs. 459.56 being Rs. 5,407.61 as compared to Rs. 4,948.05 during the previous year.
The Companyâs export oriented unit at Falta Special Economic Zone has been running smoothly. Efforts are being made to increase customer base in conventional and diversified hessian fabrics and jute shopping bags.
5. BUY BACK OF ORDINARY SHARES
Pursuant to the approval of the Board at its meeting held on 24th May, 2017, your Company completed Buy Back of 2,00,000 fully paid-up ordinary shares of Rs. 10/- each (representing 4.43% of the total number of Ordinary Share capital of the Company as at 31st March, 2017) at the Buy Back price of Rs. 1,500/- per ordinary share in September, 2017 for an aggregate amount of Rs. 3,000. The Buy Back was made from all shareholders of the Company holding shares as on record date for the Buy Back, being 16th June, 2017 on a proportionate basis under the tender offer route in accordance with the applicable provisions of Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998, the Companies Act, 2013 and the rules framed thereunder.
6. SHARE CAPITAL
During the year, the Company extinguished 2,00,000 fully paid up ordinary shares consequent to Buy Back of 2,00,000 ordinary shares in September, 2017. Accordingly, the issued, subscribed and fully paid up ordinary share capital of the Company as at 31st March, 2018 stood at Rs. 431.13 consisting of 43,11,250 fully paid up ordinary shares of Rs. 10/- each.
7. CORPORATE GOVERNANCE
In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), a separate report on corporate governance together with a certificate from Ms. Aditi Jhunjhunwala, practising company secretary, confirming compliance thereof is given in Annexure-I forming part of this report.
8. EXTRACT OF THE ANNUAL RETURN
The extract of the annual return in the prescribed format (Form MGT-9) is annexed hereto as Annexure-II forming part of this report. The annual return of the Company is available on the website of the Company (http://www.groupcheviot.net/investors-jute/corporate-governance-jute/).
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of investments made by the Company have been disclosed in Note 9 and Note 15 to the financial statements for the financial year ended 31st March, 2018.
10. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY
The Board of directors has developed a risk management policy for the Company and identified therein the elements of risk and concern that may threaten the existence of the Company. The audit committee and the Board of directors periodically review the risk elements and adopt a systematic approach to mitigate or reduce its impact. Discussion on risks and concerns have been made in this report under the head âmanagement discussion and analysisâ.
11. PARTICULARS OF CONRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All transactions with related parties were carried out in the ordinary course of business and on armâs length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. No materially significant related party transaction was made by the Company with its promoters, directors or key managerial personnel etc. which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders. All related party transactions were placed before the Audit Commitiee for approval on a quarterly basis. Prior omnibus approval of the audit commitiee was obtained for the transactions which were of a repetitive nature.
There was no material contract or arrangement or transactions at armâs length basis with a related party during the year under review. Therefore, disclosure in Form AOC-2 is not required.
12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are provided in Annexure-III forming part of this report.
13. CORPORATE SOCIAL RESPONSIBILTY (CSR)
During the year under review, your Company had spent Rs. 90.56 towards CSR activities. The annual report on CSR activities as required under Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014 is given in Annexure-IV, forming part of this report. The contents of Corporate Social Responsibility Policy of the Company are available on Companyâs website (hâp://www.groupcheviot.net/investors-jute/corporate-governance-jute/).
14. ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism / whistle blower policy and encourages the affected persons to report any genuine concern or misconduct for prompt redressal. Under the vigil mechanism / whistle blower policy, the Company allows direct access to the Chairman of the audit commitiee in appropriate or exceptional cases to investigate the complaints on an anonymous basis with adequate safeguards. During the year, no complaint was reported to the audit commitiee. The whistle blower policy is available on the Companyâs website (hâp://www.groupcheviot.net/ investors-jute/corporate-governance-jute/).
15. ANNUAL PERFORMANCE EVALUATION
In terms of the provisions of the Companies Act, 2013, Listing Regulations and the Guidance Note issued by Securities and Exchange Board of India, annual performance evaluation was conducted by the Board of directors of its own performance, its Commitiees and independent directors. The nomination and remuneration commitiee carried out annual performance evaluation of individual directors. The outcome of the annual performance evaluation showed an overall effectiveness in the performance of the Board of directors, its commitiees and individual directors.
The evaluation of the Board of directors was based on criteria such as appropriateness of Board composition and structure, decisions passed by the Board of directors, awareness on Industry operations, compliance with applicable laws, succession planning, strategic planning, implementation of guidelines or strategies decided by the Board of directors etc.
The evaluation of the Commitiees was based on composition, functioning, competencies of the members, frequency of meetings, procedures, monitoring role, advisory role, timely reporting to Board of directors, etc.
The evaluation of directors was based on criteria such as preparedness for board meetings, atiendance, judgments, contribution to risk management, adherence to Companyâs code of conduct and corporate governance, pro-activeness in highlighting areas of concern, sharing of knowledge and business information, disclosure of interest and lists of relatives in timely manner, etc.
16. DIRECTORS
The members at the annual general meeting of the Company held on 25th August, 2017 appointed Mr. Utkarsh Kanoria (aged 25 years), (holding DIN 06950837), as the Wholetime Director of the Company, for a period of five years with effect from 24th May, 2017, whose office shall be liable to determination by retirement of directors by rotation.
Mr. Nawal Kishore Kejriwal (Mr. Kejriwal) (holding DIN 00060314) retires from the Board of directors by rotation at the forthcoming annual general meeting and, being eligible, offers himself for re-appointment.
Mr. Kejriwal has been re-appointed as Wholetime Director of the Company by the Board of directors for a period of one year with effect from 1st June, 2018 subject to the approval of the members at the forthcoming annual general meeting whose period of office shall be liable to determination by retirement of directors by rotation.
The present term of office of all the Independent Directors of the Company, namely, Mr. Navin Nayar (DIN 00136057), Mr. Sushil Kumar Dhandhania (DIN 00484489), Mr. Padam Kumar Khaitan (DIN 00019700) and Mr. Parag Keshar Bhaâacharjee (DIN 00081899) is due to expire on 31st March, 2019.
Based on the recommendation of nomination and remuneration commitiee and performance report of the independent directors, the Board of directors at its meeting held on 23rd May, 2018, decided to re-appoint Mr. Navin Nayar (DIN 00136057), Mr. Sushil Kumar Dhandhania (DIN 00484489) and Mr. Padam Kumar Khaitan (DIN 00019700) as independent directors of the Company for a second term of five consecutive years to hold office from 1st April, 2019 to 31st March, 2024 on the same terms and conditions subject to approval of the members at the ensuing annual general meeting.
Mr. Parag Keshar Bhattacharjee (DIN 00081899), who has attained the age of 79 years, shall retire from the Board of directors on completion of his term of office on 31st March, 2019. The Board of directors places on record its appreciation to the services rendered by Mr. Parag Keshar Bhattacharjee during his association with the Company.
Brief details of directors seeking re-appointment have been given in the notice convening the annual general meeting.
All the independent directors have declared that they meet the criteria of independence laid down in Section 149(6) the Companies Act, 2013 and Regulation 16(b) and Regulation 25 of Listing Regulations.
17. COMPANYâS POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS
In compliance with the requirements of the Companies Act, 2013 and Listing Regulations, the nomination and remuneration committee follow the criteria laid down for identification of persons who are eligible to hold the office of directorship, key managerial personnel and senior management personnel of the Company including determining qualifications, positive attributes and independence of the person and their remuneration and other matters provided under Section 178 of the Companies Act, 2013. The nomination and remuneration committee has affirmed that the remuneration paid to directors, key managerial personnel and senior management personnel are as per the remuneration policy of the Company.
The remuneration policy including criteria for determining qualifications, positive attributes and independence of a director is available on the website of the Company (http://www.groupcheviot.net/investors-jute/corporate-governance-jute/).
18. DIRECTORSâ RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013, it is hereby stated to the best of our knowledge and belief that :
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made judgements 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 had 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 had prepared the annual accounts on a going concern basis;
(e) the directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
19. NUMBER OF MEETINGS OF THE BOARD
The Board of directors met 4 times during the year under review. More details are available in the report on corporate governance.
20. COMPOSITION OF AUDIT COMMITTEE
The audit committee is constituted with three independent directors of the Company. More details on the audit committee are given in the report on corporate governance.
21. KEY MANAGERIAL PERSONNEL
During the year under review, Mr. Utkarsh Kanoria (holding DIN 06950837), was appointed as wholetime director of the Company. All the other key managerial personnel continue to hold their offices.
22. PARTICULARS OF EMPLOYEES
Information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been provided in Annexure-V forming part of this report.
The details of employees prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Annual Report. However with regard to the provisions of the second proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the said information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.
23. PUBLIC DEPOSITS
The Company has not accepted deposits from Public under Section 73 of the Companies Act, 2013 read with Rules framed thereunder.
24. DISCLOSURE
Following disclosures are made under the Companies (Accounts) Rules, 2014:-
(i) The financial summary or highlights are discussed at the beginning of this report;
(ii) There is no change in the nature of business;
(iii) There is no company which has become or ceased to be the Companyâs subsidiary, joint venture or associate company during the year;
(iv) No significant and material order was passed by the regulators or courts or tribunals which impact the going concern status and its future operations;
(v) There have been no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this report.
25. STATUTORY AUDITORS
M/s Singhi & Co., Chartered Accountants (Firm Registration No. 302049E), was appointed as statutory auditors of the Company by the members at the annual general meeting of the Company held on 25th August, 2017 to hold office for a term of five consecutive years from the conclusion of that annual general meeting until the conclusion of the sixth consecutive annual general meeting on a remuneration to be mutually agreed upon with the Board of directors.
There are no qualifications, reservations or adverse remarks made by Singhi & Co., Statutory Auditors, in their report for the financial year ended 31st March, 2018. Pursuant to the provisions of section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud to the audit committee during the year under review.
26. COST AUDITORS
The cost accounting records maintained by the Company for the current financial year ending on 31st March, 2019 are required to be audited pursuant to Section 148 of the Companies Act, 2013 read with Rules framed thereunder. In this regard, the Board of directors on the recommendation of audit committee, had re-appointed M/s D. Radhakrishnan & Co., Cost Accountants (Registration No. 000018), to carry out the cost audit at a remuneration of Rs. 40,000/- plus applicable taxes and re-imbursement of out of pocket expenses incurred by them. The resolution included at Item No. 9 of the Notice convening the annual general meeting seek membersâ ratification to the remuneration payable to the cost auditor.
27. SECRETARIAL AUDIT
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 had appointed M/s MR & Associates, a firm of practising company secretaries (CoP 2551) to conduct Secretarial Audit of the Company. Report of the Secretarial Audit in Form MR-3 for the financial year ended 31st March, 2018 is enclosed as Annexure VI to this report. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in his report.
28. ACKNOWLEDGEMENTS
Your directors take this opportunity to convey their sincere gratitude to all the customers, shareholders, suppliers, bankers, financial institutions and the Government for their consistent support to the Company. The directors place on record their appreciation to all employees of the Company for their hard work and valued contribution.
For and on behalf of the Board
CHEVIOT COMPANY LIMITED
Harsh Vardhan Kanoria
Chairman and Managing Director,
Place : Kolkata Chief Executive Officer
Date : 23th May, 2018 DIN : 00060259
Mar 31, 2017
Dear Members
The directors have pleasure in presenting their Annual Report on the business and operations of the Company together with the Audited Standalone Financial Statements for the financial year ended 31st March, 2017.
1. FINANCIAL SUMMARY , (Rs, in Lakhs)
Particulars |
For the year ended |
For the year ended |
31st March, 2017 |
31st March, 2016 |
|
Operating results after charging depreciation and amortization show a profit of |
3,760.07 |
3,826.64 |
Add : Other income |
2,334.79 |
1,271.66 |
Add: Exceptional item: Indirect taxes for earlier year |
60.51 |
- |
Profit before tax |
6,155.37 |
5,098.30 |
From which have been deducted : |
||
Current tax |
1,465.00 |
1,453.00 |
Tax for earlier years (net) |
(0.06) |
(0.39) |
Deferred tax |
134.79 |
(1.78) |
Profit after tax |
4,555.64 |
3,647.47 |
Surplus as per last balance sheet |
584.50 |
535.07 |
Making a total of |
5,140.14 |
4,182.54 |
Which has been appropriated by the directors as under: |
||
Interim dividend |
- |
766.91 |
Tax on interim dividend |
- |
156.13 |
Transferred to SEZ re-investment reserve account |
300.00 |
25.00 |
Transferred to general reserve |
4,200.00 |
2,650.00 |
Balance surplus carried to balance sheet |
640.14 |
584.50 |
5,140.14 |
4,182.54 |
2. DIVIDEND
The Board of Directors have recommended a dividend of Rs, 1/- per ordinary share of face value of Rs, 10/- each (i.e. 10%) for the financial year ended 31st March, 2017, aggregating to Rs, 45.11. Proposed dividend will be recognized as liability after approval of the members at the ensuing annual general meeting.
3. BUY BACK OF ORDINARY SHARES
After considering several factors and benefits to the members, the Board of directors have approved the proposal to Buy Back of up to 2,00,000 fully paid up ordinary shares of Rs, 10/- each (representing 4.43% of the total number of ordinary share capital of the Company as at 31st March, 2017 at the Buy Back price of Rs, 1,500/- per ordinary share aggregating to Rs, 3,000. The Board is of the view that Buy Back will help the Company to return surplus cash to the members of the Company, holding shares broadly in proportion to their shareholding, thereby enhancing the overall return to the members.
4. TRANSFER TO RESERVES
Your directors propose to transfer an amount of Rs, 300 to the SEZ re-investment reserve account and Rs, 4,200 to the general reserve out of the profit for the year.
5. OPERATIONS AND STATE OF COMPANY''S AFFAIRS
Sales, profitability and earnings per ordinary share show under noted position during the year under review as compared to previous year :
Particulars |
For the year ended 31st March, 2017 |
For the year ended 31st March, 2016 |
Gross sales Export sales (C.I.F. value) Operating profit Other income Profit before tax Profit after tax Earnings per ordinary share of face value of Rs, 10 (in Rs,) |
38,532.74 11,519.41 3,760.07 2,334.79 6,155.37 4,555.64 100.98 |
33,880.62 10,553.34 3,826.64 1,271.66 5,098.30 3,647.47 80.85 |
The overall performance of the Company during the year under review was satisfactory. The demand in domestic sector particularly from government was regular and Company was able to run the plant on all working days. However, due to non-availability of adequate labour force, the plant could not run at full capacity. The operating profit was marginally lower by Rs, 66.57 due to increase in cost of other inputs, being Rs, 3,760.07 as compared to Rs,3,826.64 in the previous year. However, profit after tax was higher at Rs, 4,555.64 as compared to Rs, 3,647.47 during the previous year mainly on account of increase in other income which was largely in the nature of ad-hoc income from sale of old bonds as also income derived from few investments matured during the year. Such ad-hoc increase in other income may not be sustainable.
On export front, CIF value of export sales was higher by Rs, 966.07, being Rs, 11,519.41 during the year under review as against Rs, 10,553.34 during previous year. The Company''s export oriented unit at Falta SEZ has taken several initiatives to inter-alia export conventional and diversified hessian fabrics and has been able to register growth both in terms of quantity and value mainly by widening the customer base. Export of shopping bag is also showing signs of improvement and Company has been getting repeat orders and making efforts to penetrate all around in overseas markets.
6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
a) Industry structure and developments
As per current norms under Jute Packaging Materials (Compulsory use in packing commodities) Act, 1987 (JPMA), 90% of total food grains and 20% of sugar are to be packed in Jute bags. Of late, Jute Industry is surprised to note the recommendation made by the Standing Advisory Committee on jute to Government of India for dilution of compulsory packaging norm for food grains from 90% to 85% in the 2017-18 procurement season. Industry earnestly pleads to the Government to consider continuation of existing norms of packaging without any dilution in the larger interest of Jute Industry which has been providing livelihood to large number of farmers and workers.
In the wake of good weather conditions, the availability of raw jute was comfortable due to better crop in Jute Season 2016-17 and prices which were prevailing at unprecedented higher levels, gradually settled down to reasonable level.
In order to promote the exports of Jute Goods from India, Government is continuing the rewards in the form of duty free scrips of 5% of realized FOB value in free foreign currency under Merchandise Exports from India Scheme (MEIS). Besides, National Jute Board is also continuing with various workers'' welfare schemes. Incentive scheme for acquisition of plant and machinery valid up to 31st March, 2017 is expected to be further extended.
b) Opportunities and threats
Opportunities
- Jute products being environmental friendly and having bio-degradable characteristics of natural jute fiber have an edge over other packing materials;
- Use of Jute goods in floor coverings, jute geo-textiles, shopping bags will provide ample opportunity to boost the demand.
Threats
- Attempt initiated for dilution of JPMA may lead to its phase out in future;
- Paucity of workers preventing optimum utilization of capacity;
- Lack of incentive to farmers to take up jute cultivation on regular basis affects the jute crop.
c) Segment-wise or product-wise performance
The Company is engaged in a single business segment i.e. manufacturing and sale of Jute Goods. Hence, disclosure requirements as required by Accounting Standard -17 are not applicable in respect of business segment. However, the geographical segments considered for disclosure are as under :
Within India |
Outside India |
Total |
||||
31st March, 2017 |
31st March, 2016 |
31st March, 2017 |
31st March, 2016 |
31st March, 2017 |
31st March, 2016 |
|
Sales |
27,013.33 |
23,327.28 |
11,519.41 |
10,553.34 |
38,532.74 |
33,880.62 |
Carrying amount of segment assets |
49,574.75 |
45,078.37 |
- |
- |
49,574.75 |
45,078.37 |
Capital expenditure |
1,030.90 |
663.42 |
- |
- |
1,030.90 |
663.42 |
d) Outlook
Jute crop for the season 2017-18 is expected to be better mainly on account of good weather conditions. Moreover, the carryover from last season being comfortable would provide more availability of raw jute. These positive factors are expected to keep the prices of raw jute under check and marginally lower than last year. However, import of raw jute will depend mainly on export policy of Bangladesh Government and various other allied factors.
Demand of Jute Goods is likely to remain good. The efforts being made by the Company to increase its customer base in overseas markets are expected to fetch reasonable export orders.
The Company will continue its business strategy of catering to demand from both domestic and overseas markets and will strive to control costs with focus on all round business development. Barring unforeseen circumstances, the outlook for the current year appears to be promising.
e) Risks and concerns
We reiterate the key elements of business risks identified by the Company and its mitigation measures taken by the Company :
- Competition risk and mitigation measures
Bangladesh jute manufacturers enjoy substantial cost advantage in the form of lower wage and power cost vis a vis Indian manufacturers of jute products. Thus they continue to provide strong competition in the international market. In order to survive and mitigate the said risk, the Company is making continuous efforts to improve operational efficiency and reduce costs in all possible areas.
- Economic environment and market conditions risk and mitigation measures
Alternate packaging materials like HDPE/Polypropylene being cost effective are used as substitute in the packaging market. To mitigate this risk, the Company is making efforts to develop light products of jute goods with less jute content, manufacture diversified jute products including shopping bags.
- Fluctuations in foreign exchange risk and mitigation measures
Fluctuation in currency does impact margins of the Company. Recent rupee appreciation has impacted the exports adversely. To mitigate this risk, foreign exchange exposure against exports and imports are hedged by entering into forward contract.
- Business operation risk and mitigation measures
Few business operation risks and their mitigation plan are stated below :
Revenue concentration : The Company generates revenue from domestic as well as export sales. Demand in domestic market is largely dependent on government orders. In export market, India face severe competition from Bangladesh. To overcome this risk, the Company is making efforts to increase its customer base by establishing contacts and visiting foreign buyers, focusing on manufacture of value added and diversified jute products including shopping bags.
Raw Materials : Availability of raw jute depends on crop size which in turn largely depends on weather conditions. The Company follows a policy of regular procurement of raw jute in a planned manner linked with production and order position to mitigate the risk of shortage of raw jute, if any.
Manpower : Shortage of workers and the rate of absenteeism continue to provide challenge leading to idle capacity. To mitigate such risk, the Company is continuously providing required in-house training to fresherâs and suitably incentivizing good performers from time to time. Besides, the Company also carry out modernization and automation of manufacturing process, wherever possible.
f) Internal control systems and their adequacy
The Company has implemented adequate procedures and internal controls which provide reasonable assurance for reliability of financial reporting. The audit committee periodically reviews such procedures and controls and ensures that internal controls operate effectively.
The internal auditor of the Company carries out necessary checking in accordance with the aforesaid procedures and controls and submits their reports. The observations of the internal auditor are circulated to the senior managerial personnel for their perusal and taking corrective measures, wherever required. The audit committee reviews the findings of the internal auditor and statutory auditors and monitors the action taken report.
g) Discussion on financial performance with respect to operational performance
The following are the significant areas of financial performance during the year under review :
- Revenue from sale of jute goods was at '' 38,532.74 during the year as compared to '' 33,880.62 during previous year;
- Operating profit of the Company have marginally decreased by '' 66.57 due to increase in cost of other inputs, being '' 3,760.07 during the year under review as against '' 3,826.64 in previous year;
- Finance cost was '' 61.85 during the year under review as against '' 81.63 in previous year;
- Inventories were valued at '' 6,004.57 as at 31st March, 2017 as against '' 5,928.92 as at 31st March, 2016. Increase in inventories is mainly due to higher stock of raw material;
- The Company has invested '' 1,030.90 in fixed assets inclusive of capital advances given during the year.
h) Material developments in Human Resource / Industrial Relations front, including number of people employed
Industrial relations remained cordial during the year under review. Shortage of labour and absenteeism continue to remain areas of concern.
The Company''s efforts to impart training to workers employed at new scale of pay to bring about all round development in their working knowledge continues as per planned programmes and policies. The Company also provides benefits and facilities to deserving staffs under its various staff welfare schemes.
As on 31st March, 2017, the Company had 3883 employees on its rolls.
The Company''s policy on prevention, prohibition and redressal of complaints / grievances on the sexual harassment of women at work places is being monitored by a committee constituted by the Company for the said purpose. During the year under review, no complaint of sexual harassment has been received by the Company.
i) Cautionary statement
Statement made in this section of the report is based on the prevailing position in the jute industry and market conditions. Actual results might differ from what we perceive with respect to Company''s outlook and performance.
7. CORPORATE GOVERNANCE
The Company has complied with the corporate governance requirements as stipulated in Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Corporate Governance Report and a certificate received from the statutory auditors M/s. Jain & Co., Chartered Accountants confirming compliance is given in Annexure-I, forming part of this report.
8. EXTRACT OF THE ANNUAL RETURN
In compliance with Section 92(3) of the Companies Act, 2013, the extract of the annual return in Form MGT-9 is given in Annexure-II, forming part of this report.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of investments made by the Company have been disclosed in Note 12 and Note 15 to the financial statements for the financial year ended 31st March, 2017.
10. PARTICULARS OF CONRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All transactions with related parties were carried out in the ordinary course of business and on arm''s length basis and are in compliance with the applicable provisions of the Act and the Listing Regulations. There are no materially significant related party transaction made by the Company with promoters, directors or key managerial personnel etc. which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders. All related party transactions are placed before the Audit Committee. Omnibus approval is obtained for the transactions which are repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.
There was no material contract or arrangement or transaction at arm''s length basis with a related party during the year under review. Therefore, disclosure in Form AOC-2 is not required.
11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as required in terms of Section 134(3)(m) of the Companies Act, 2013 and the Rules framed there under, are provided in Annexure-
III, forming part of this Report.
12. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY
The Board has formulated a risk management policy identifying therein the elements of risk and concern that may threaten the existence of the Company. Audit Committee and the Board review the risk elements including business risks and mitigation procedures periodically. Areas relating to risks/concern/threat have been disclosed in this report under the head ''management discussion and analysis report''.
13. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has undertaken activities in accordance with CSR Policy (available on Company''s website: www.groupcheviot.net) directly and through eligible trusts having established track records. The annual report on CSR activities and expenditure particulars as required under Sections 134 and 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014 are given in Annexure IV, forming part of this report.
14. ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
Vigil mechanism / whistle blower policy as formulated by the Company allows intimation by the affected person in good faith of concern or misconduct through a written communication. Audit Committee reviews the vigil mechanism for redressal of the complaint and also allows direct access to the Chairman of the Audit Committee in exceptional cases. The Whistle Blower Policy is available on the Company''s website (www.groupcheviot.net).
15. DIRECTORS
There was no change in the composition of the Board of directors during the year under review.
Mrs. Malati Kanoria (holding DIN 00253241) retires from the Board by rotation at the forthcoming AGM, and being eligible, offers herself for re-appointment.
Mr. Utkarsh Kanoria (holding DIN 06950837), who has been associated with the Company since 8th August, 2014 in the position of President was appointed by the Board as an additional director on 24th May, 2017, whose term of office expires at the ensuing annual general meeting. His candidature has been proposed by a member for the position of a Director of the Company, whose period of office shall be liable to determination by retirement of directors by rotation. Moreover, the Board has also appointed Mr. Utkarsh Kanoria as Wholetime Director of the Company with effect from 24th May, 2017.
The appointment of Mr. Utkarsh Kanoria is subject to approval of the members at the ensuing annual general meeting for which appropriate resolutions have been included at Item No 5 and 6 of the Notice convening the annual general meeting. The Board recommends passing of the same.
Brief details of said directors seeking appointment/re-appointment have been given in the notice convening AGM.
The Company has received necessary declarations from each independent director under Section 149(7) of the Companies Act, 2013 (the Act) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") confirming that they meet the criteria of independence laid down in the Act and Listing Regulations.
In terms of the provisions of the Act and Listing Regulations and the Guidance Note on the Board Evaluation issued by SEBI vide circular dated 5th January, 2017, the performance evaluation of the members of the Board, the Board level committees and Board as a whole were carried out at the meeting of the Independent Directors and the Board. The criteria for said evaluation has been stated in the corporate governance report annexed hereto.
16. COMPANY''S POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS
In compliance with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the nomination and remuneration committee (NRC) evaluate the composition and diversity of the Board and identify persons who are qualified to become directors in accordance with the criteria laid down by the Board of directors of the Company. NRC recommend to the Board about the appointment/reappointment of eligible candidates including their terms of appointment and remuneration. The remuneration policy including criteria for determining qualifications, positive attributes, independence of a director have been disclosed in Annexure-V, forming part of this Report.
17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS
During the year under review, there is no significant and material order passed by the regulators or courts impacting the going concern status of the Company and its future operations.
18. DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013, it is hereby stated to the best of our knowledge and belief that :
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had 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 had 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 had prepared the annual accounts on a going concern basis;
(e) the directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
19. NUMBER OF MEETINGS OF THE BOARD
The Board of directors met 5 (five) times during the year under review. More details are available in the corporate governance report.
20. COMPOSITION OF AUDIT COMMITTEE
The Board has constituted the audit committee with three independent directors. More details on the audit committee are given in the corporate governance report.
21. KEY MANAGERIAL PERSONNEL
There was no change in the Key Managerial Personnel during the year under review. Mr. Utkarsh Kanoria was appointed as Whole time Director of the Company w.e.f. 24th May, 2017.
22. PARTICULARS OF EMPLOYEES
The ratio of the remuneration of each director to the median employee''s remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rules framed there under have been disclosed in Annexure-VI, forming part of this Report.
23. PUBLIC DEPOSITS
The Company has not accepted deposits from Public under Section 73 of the Companies Act, 2013 read with Rules framed there under.
24. DISCLOSURE
Following disclosures are made under the Companies (Accounts) Rules, 2014 :
(i) The financial summary or highlights are discussed at the beginning of this report;
(ii) There is no change in the nature of business;
(iii) There is no company which has become or ceased to be the Company''s subsidiary, joint venture or associate company during the year;
(iv) No significant and material order was passed by the regulators or courts or tribunals which impact the going concern status and its future operations.
25. STATUTORY AUDITORS
The term of office of M/s Jain & Co., Chartered Accountants (Firm Registration No. 302023E) as statutory auditors of the Company will complete at the conclusion of the ensuing annual general meeting of the Company.
Accordingly, the Board of directors of the Company have recommended the appointment of M/s Singhi & Co, Chartered Accountants (Firm Registration No. 302049E) as the statutory auditors of the Company, subject to approval of the members for which a resolution has been included at Item No 4 of the Notice convening the annual general meeting. The Board recommends passing of the same.
A certificate from M/s Singhi & Co. has been received to the effect that they meet the criteria laid down under Section 141 of the Companies Act, 2013 and are willing to be appointed as statutory auditors of the Company. Moreover, they have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
The Board places on record its appreciation to the services rendered by M/s Jain & Co., during their tenure as the statutory auditors of the Company.
26. COST AUDITORS
The cost accounting records maintained by the Company for the current financial year ending on 31st March, 2018 are required to be audited pursuant to Section 148 of the Companies Act, 2013 read with Rules framed there under. In this regard, the Board of directors on the recommendation of audit committee, had re-appointed M/s D. Radhakrishnan & Co., Cost Accountants (Registration No. 000018), to carry out the cost audit at a remuneration of '' 40,000/- plus applicable taxes and re-imbursement of out of pocket expenses incurred by them.
The resolution included at Item No. 7 of the Notice convening the annual general meeting seek members'' ratification to the remuneration payable to the cost auditor.
27. SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules framed there under, the Company has appointed M/s MR & Associates, a firm of practicing company secretaries (CoP 2551) as the secretarial auditor for the year ended 31st March, 2017. The secretarial audit report dated 24th May, 2017 is attached as Annexure-VII to this report.
28. ACKNOWLEDGEMENTS
The directors place on record their appreciation for the valued contribution made by the employees at all levels. The Directors also sincerely thank its customers, suppliers, financial institutions, banks, government authorities, business associates and all stakeholders for their continued co-operation and support and faith reposed in the Company.
For and on behalf of the Board
Harsh Vardhan Kanoria
Chairman and Managing Director,
Chief Executive Officer
Kolkata, 24th May, 2017 DIN : 00060259
Mar 31, 2013
The Directors have great pleasure in presenting the Annual Report and
Audited Accounts of your Company for the year ended 31st March, 2013.
FINANCIAL RESULTS
Particulars For the year
ended For the year
ended
31st March,
2013 31st March, 2012
Operating results after charging
depreciation and amortisation show a
profit of 3,310.55 3,129.94
Add : Exceptional item - Indirect
taxes for earlier years 73.01 213.13
{net of provision Rs. 105.16
(previous year Rs. Nil)}
Add : Other income 784.96 528.64
Profit before tax 4,168.52 3,871.71
From which have been deducted:
Current tax 1,001.00 845.00
Tax for earlier years (net) (7.30) 30.78
Deferred tax 103.40 109.02
Profit after tax 3,071.42 2,886.91
Surplus as per last balance sheet 431.60 426.29
Making a total of 3,503.02 3,313.20
Which has been appropriated
by the Directors as under:
Proposed dividend 676.69 586.46
Tax on proposed dividend 115.00 95.14
Transferred to SEZ re-investment
reserve account 400.00
Transferred to general reserve 1,850.00 2,200.00
Balance surplus carried
to balance sheet 461.33 431.60
3,503.02 3,313.20
DIVIDEND
Your Directors are pleased to recommend for your consideration payment
of dividend of Rs. 15/- per ordinary share of the face value of Rs. 10/-
each for the year ended 31st March, 2013.
OPERATIONS
Production, sales, profitability and earnings per share show under
noted position during the year under review as compared to previous
year:
Particulars For the year
ended For the year
ended
31st March,
2013 31st March,
2012
Production (in M. Tonnes)
Sales (in M. Tonnes) 47,381 49,103
Total sales 28,604.82 29,144.50
Export sales (C.I.F. Value) 11,529.68 12,575.30
Operating profit 3,310.55 3,129.94
Other income 784.96 528.64
Profit before tax 4,168.52 3,871.71
Profit after tax 3,071.42 2,886.91
Earnings per share of face
value of Rs. 10 (in 68.08
The year under review witnessed an acute shortage of workers and
absenteeism as a result of which capacity could not be fully utilised
and consequently, there was loss of production, being 46,650 M.T.
during the year under review as compared to 48,518 M.T. during the
previous year. Besides, export sales were greatly affected due to
unfavourable conditions in overseas market. Accordingly, overall sales
were lower both in terms of value and quantity.
It is, however, a matter of satisfaction that on account of planned
procurement of raw materials and overall better margin, the operating
profit was higher in comparison to previous year despite lower
production and sales. Bottom line was also improved due to increase in
other income mainly on account of profit on sale of investments. Thus,
profit after tax was higher by Rs. 184.51 being Rs. 3071.42 for the year as
compared to Rs. 2886.91 during previous year.
The Company''s export oriented unit at Falta Special Economic Zone has
been continuing its operations at reduced capacity due to lower demand
of Jute fabrics. Besides, the initiative taken by the Company to
venture into export of jute shopping bag could not make much progress
so far. Efforts are on to explore possibilities of manufacturing other
items of jute fabrics in tune with requirements of international market
as also to examine alternate ways and options to establish market for
export of jute shopping bag.
CORPORATE GOVERNANCE
The Company has complied with the Corporate Governance as required
under clause 49 of the Listing Agreement with the BSE Limited. A
separate report on Corporate Governance along with a certificate from
the statutory auditors of the Company confirming the compliance with
the conditions of Corporate Governance is set out in the Annexure which
forms part of this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, it is hereby
confirmed :
i. that in the preparation of annual accounts for the year ended 31st
March, 2013, the applicable accounting standards have been followed and
there are no material departures from the same;
ii. that 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 31st March, 2013 and of the profit of
the Company for the year ended on that date;
iii. that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
iv. that the Directors have prepared the annual accounts on a going
concern basis.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information as required under sub section 1 (e) of Section 217 of the
Companies Act, 1956, read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988, are provided in the
Annexure forming part of this Report.
PARTICULARS OF EMPLOYEES
Particulars in terms of provisions of Section 217 (2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, in respect of the employees of the Company, are
provided in the Annexure forming part of this Report.
DIRECTORS
In accordance with Article 97 of the Articles of Association of the
Company, Mr. Parag Keshar Bhattacharjee, a non-executive director,
retires from the Board by rotation at the ensuing Annual General
Meeting and being eligible, offers himself for re-appointment. The
Board recommends his re-appointment. Brief particulars of Mr.
Bhattacharjee have been given in the Notice convening ensuing Annual
General Meeting.
STATUTORY AUDITORS
M/s Jain & Co., Chartered Accountants, statutory auditors of the
Company retires at the conclusion of the forthcoming Annual General
Meeting and offer themselves for re-appointment. A certificate from the
Auditors has been received to the effect that their re-appointment, if
made, would be within the limits prescribed under Section 224(1B) of
the Companies Act, 1956. The Audit Committee and the Board recommend
the re-appointment of M/s Jain & Co., Chartered Accountants, as
statutory auditors of the Company.
COST AUDITORS
As per directives of the Central Government and in pursuance to
provisions of Section 233B of the Companies Act, 1956 read with rules
framed thereunder, your Company is required to carry out an audit of
the cost accounts maintained by the Company in respect of each
financial year. Accordingly, the Central Government, in pursuance to
Company''s application has approved the appointment of M/s D.
Radhakrishnan & Co., Cost Accountants, to conduct the said cost audit
for the financial year ended 31st March, 2013.
As per The Companies (Cost Audit Report) Rules, 2011, the due date for
filing the cost audit report for the previous financial year ended 31st
March, 2012 with the Central Government was extended till 28th
February, 2013 and the said report was filed by the cost auditor on
27th February, 2013.
ACKNOWLEDGEMENT
The Directors take this opportunity to express deep sense of gratitude
to the financial institutions, banks, government authorities, business
associates, and all stakeholders for their continued support and faith
reposed on the Company.
The Directors place on record their appreciation and acknowledge the
commitment and contribution made by the employees at all levels.
For and on behalf of the Board
H.V.KANORIA
Chairman and Managing Director,
Kolkata, 14th May, 2013 Chief Executive Officer
Mar 31, 2012
The Directors have great pleasure in presenting the Annual Report and
Audited Accounts of your Company for the year ended 31st March, 2012.
FINANCIALRESULTS
Particulars Year ended Year ended
31st March, 31st March
2012 2011
Operating results after charging depreciation
and amortisation show a profit of 3,129.94 2,959.74
Add : Other income 741.77 862.31
Profit before tax 3,871.71 3,822.05
From which have been deducted :
Current tax 845.00 1,013.30
Tax for earlier years(net) 30.78 6.98
Deferred tax 109.02 (81.85)
Profit after tax 2,886.91 2,883.62
Surplus as per last balance sheet 426.29 371.84
Making a total of 3,313.20 3,255.46
Which has been appropriated by the Directors
as under:
Proposed dividend 586.46 541.35
Tax on proposed dividend 95.14 87.82
Transferred to general reserve 2,200.00 2,200.00
Balance surplus carried to balance sheet 431.60 426.29
3,313.20 3255.46
DIVIDEND
Your Directors are pleased to recommend for your consideration payment
of dividend of Rs 13/- per ordinary share of the face value of Rs 10/-
each for the year ended 31st March, 2012.
OPERATIONS
Production, sales, profitability and earnings per share show under
noted position during the year under review as compared to previous
year:
Particulars Year ended Year ended
31st March,2012 31st March,2011
Production (in M.Tonnes) 48,518 47,769
Total sales 29,144.50 30,244.33
Export sales(C.I.F. Value) 12,575.30 17,887.07
Operating profit 3,129.94 2,959.74
Other income 741.77 862.31
Profit before tax 3,871.71 3,822.05
Profit after tax 2,886.91 2,883.62
Earnings per share off ace value of Rs10(in Rs) 63.99 63.92
Slump in export of jute yarn as reported last year continued throughout
the year under review. It is heartening to report that by having
adequate in-house infrastructure and full flexibility to cater to both
domestic and overseas markets, your Company shifted its focus from
manufacturing jute yarn to traditional jute products like sacking. It
was precisely due to this flexibility in operational facilities that
your Company, by operating in the domestic market was able to achieve
satisfactory results during the year under review, despite declining
exports and increase in costs of other inputs. Moreover, total sales
for the year under review was higher in terms of quantity, albeit the
same was decreased value wise mainly due to lower rate of sales
realisation per M. Tonne of goods, triggered due to decrease in prices
of rawjute as compared to previous year.
The operating profit was better in comparison to previous year due to
operational efficiency and better margins. However, the bottom line was
affected due to lower other income largely attributable to sale of
investments. Accordingly, profit after tax was maintained almost around
same level as that of last year.
The Company's Export Oriented Unit at Falta Special Economic Zone
continue to operate at reduced scale due to lack of orders for
industrial fabrics on account of recession in Europe. However, during
the year under review, the Company has created required infrastructure
at its Falta unit to venture into export of jute shopping bags, the work
on which continues.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT a) Industry structure and
developments
The compulsory packing at 100% for both food grains and sugar under
Jute Packaging Materials (Compulsory use for Packing Commodities) Act,
1987 (JPMA) is presently valid up to 30.06.2012. However, the ongoing
litigations to frustrate the provisions of JPMA are hurting the jute
industry. It is expected that better sense will prevail and JPMA will
be continued beyond the said period in the interest of large workforce
engaged in the jute industry.
The demand of jute goods in domestic market was generally good. The year
witnessed declining trend in prices of rawjute. However, export of jute
yarn from India has declined and prices have become un-remunerative.
The proposal of Government of India to resume Export Promotion
Assistance Scheme (EMA) renamed as "Scheme to incentivise Social and
Environment Compliance in the Jute Sector - For promotion of Exports"
was welcomed by the Industry but the same is yet to be implemented. We
once again urge the government to expedite resumption of EMA scheme in
some form or other for promotion of exports.
Modernisation and development of infrastructure by availing government
grants under the Jute Technology Mission is sine qua non for the
Industry so as to manufacture cost effective quality products and meet
the competition effectively.
b) Opportunities and Threats
Opportunities
- In the backdrop of rising global awareness to use more natural
fiber products to keep the environment free from pollution, Government
and Industry are making concerted efforts to promote the advantages
of jute especially the environment friendly attributes in enhancing the
diversified uses of these fibers;
- Considerable progress has been made in developing diversified jute
products for various end uses like jute geo-textiles, floor coverings
and many more projects are being taken up to develop products with
promising market prospects and consumer needs.
Threats
- Competition from Bangladesh is increasing rapidly. Its low cost
jute products are putting pressure on Indian jute goods in
International market;
- Availability of comparatively cheaper alternate packaging
materials.
c) Risks and concerns
Following are the major areas of risks and concerns for the Jute
Industry :
- Continuous increase in wage cost by way of upward revision in
dearness allowance as also increase in power cost due to frequent
revision in power tariff by CESC;
- Improper agricultural strategy responsible for erosion in jute
cultivation area;
- Reduced capacity utilisation due to shortage of workers;
- Unbridled rise in cost of major inputs.
d) Segment-wise or product-wise performance
The Company continues to operate through two business segments namely,
a) Jute goods and b) Captive power generation. However, captive power
generation is not a reportable segment in terms of the criteria laid
down in paragraph 27 of the Accounting Standard - 17 as the
revenue/results/assets of this segment are not more than the threshold
limit of 10% of the total segment revenue/results/assets.
The following disclosure under Geographical segment has, however, been
considered :
Year ended Year ended
31st March, 2012 31stMarch,2011
Particulars Within India Outside India Within India Outside
India
Sales 16,569.20 12,575.30 12,357.26 17,887.07
Carrying amount of segment
assets 33,438.06 - 31,461.57 -
Capital expenditure 858.66 - 741.87 -
e) Outlook
The Company is closely monitoring the international jute yarn market by
remaining in touch with overseas customers and respond to the
profitable offers. It is a matter of satisfaction that yarn market has
presently started showing signs of improvement which is expected to
revive export demands. Moreover, demand for jute goods in domestic
market is expected to remain reasonably good. Rawjute prices are
presently stable. However, movement in prices of raw jute would be
governed by the size of the new crop for the season 2012-13, which
depends on overall weather conditions. It is widely believed that
rawjute prices will be higher than those of prevailing during later
part of the previous year due to impact of enhancement in minimum
support price of rawjute for the crop season 2012-13 by the Government.
The Company is steadfast in its endeavour to control costs in all
possible areas and explore new areas where jute goods can be
economically used. The outlook for the current year appears to be
positive.
f) Internal control systems and their adequacy
The Company has an adequate system of internal control towards
achieving optimum utilisation of resources, cost control, compliance
with statutory requirements and safeguarding the assets from loss. The
Audit Committee of the Board plays a significant role in the internal
control systems and reviews the internal audit reports, financial
performance of the Company and suggests improvements in internal
control system, wherever required.
g) Discussion on financial performance with respect to operational
performance
The accounts for the year under review have been prepared as per the
requirements of the revised Schedule VI to the Companies Act, 1956.
Accordingly, figures for the previous year have been
regrouped/reclassified to conform to the current year's classification.
The following are the significant areas of financial performance during
the year under review :
- Sale of jute goods was Rs 29,144.50 during the year as compared to Rs
30,244.33 during previous year. Decrease in value of sales was mainly
due to lower sales realisation per M. Tonne of goods sold;
- Operating profit of the Company have increased by Rs 170.20 during
the year from Rs 2,959.74 in previous year to Rs 3,129.94 during the year
largely on account of better operational efficiency;
- Finance costs were lower at Rs 77.78 during the year as against Rs
95.86 in previous year. The reduction in finance costs was mainly due
to availability of better liquidity;
- Inventories have decreased by Rs 304.87, being Rs 4,427.09 as at
31.03.2012 as against Rs 4,731.96 as at 31.03.2011, partly due to lower
stocks of finished goods and work-in-progress and partly due to lower
average rates of stocks.
- The Company has invested Rs 858.66 in fixed assets inclusive of
capital advances given during the year.
h) Material developments in Human Resources/Industrial Relations front,
including number of people employed Industrial relations remained
cordial during the year under review.
As on 31.03.2012, the Company had 4321 employees on its rolls. The
Company is continuing efforts to make its workforce competent to
operate efficiently by providing in-house training and thereby enhance
their knowledge and efficiency. Financial assistance and other
benefits are provided to deserving staff under Company's various staff
welfare schemes.
i) Cautionary statement
Statement made in this section of the report is based on the prevailing
position in the jute industry and market conditions. Actual results
might differ from what we perceive with regard to Company's outlook and
performance.
CORPORATE GOVERNANCE
The report on corporate governance as required under clause 49 of the
listing agreement with the Bombay Stock Exchange Limited has been
included and forms part of the Annual Report. Besides, a certificate
from the statutory auditors of the Company certifying compliance with
the conditions of corporate governance is attached to this report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, it is hereby
confirmed :
i. that in the preparation of annual accounts for the year ended 31st
March, 2012, the applicable accounting standards have been followed and
there are no material departures from the same;
ii. that 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 31st March, 2012 and of the profit of
the Company for the year ended on that date;
iii. that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
iv. that the Directors have prepared the annual accounts on a going
concern basis.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information as required to be disclosed under Section 217 (1) (e) of
the Companies Act, 1956, read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988, are
provided in annexure which forms part of this report.
PARTICULARS OF EMPLOYEES
Particulars in terms of provisions of Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended are set out in annexure to this report.
DIRECTORS
In accordance with Article 97 of the Articles of Association of the
Company, Mr. Navin Nayar, a non executive director, retires from the
Board by rotation at the ensuing Annual General Meeting and being
eligible, offers himself for re-appointment. The Board recommends his
re-appointment.
Mr. Nawal Kishore Kejriwal has been re-appointed as Wholetime Director
of the Company by the Board on the terms and conditions as mentioned in
the resolution which is being placed before you at the ensuing Annual
General Meeting and your Directors recommend passing of the same.
Brief particulars of the said directors have been given in the Notice
convening Annual General Meeting.
STATUTORY AUDITORS
The statutory auditors, M/s Jain & Co., Chartered Accountants, retire
at the conclusion of the forthcoming Annual General Meeting and offer
themselves for re-appointment. The Company has received a certificate
from the said Auditors to the effect that their re-appointment, if
made, would be within the prescribed limits under Section 224(1B) of
the Companies Act, 1956 and that they are not disqualified for
re-appointment under the provisions of the said Act. The Audit
Committee and the Board recommend the re-appointment of M/s Jain & Co.,
Chartered Accountants, as Auditors of the Company.
COSTAUDITORS
As per directives of the Central Government and in pursuance to
provisions of Section 233B of the Companies Act, 1956 read with rules
framed there under, your Company is required to carry out an audit of
the cost accounts maintained by the Company in respect of each
financial year. Accordingly, the Central Government, in pursuance to
Company's application has approved the appointment of M/s D.
Radhakrishnan & Co., Cost Accountants, to conduct the said cost audit
for the financial year ended 31st March, 2012.
As per The Companies (Cost Audit Report) Rules, 2011, the due date for
filing the cost audit report for the previous financial year ended 31st
March, 2011 with the Central Government was 30th September, 2011 and
the said report was filed by the cost auditor on 26th September, 2011.
ACKNOWLEDGEMENT
Your Directors express their gratitude for the whole hearted assistance
and persistent co-operation received from the financial institutions,
banks, government authorities, customers, suppliers and members of the
Company.
The Directors place on record their sincere appreciation for the
continuous support and sustained efforts put in by the employees at all
levels through their hard work and sheer dedication.
For and on behalf of the Board
H. V. KANORIA
Chairman and Managing Director;
Kolkata, 30th May, 2012 Chief Executive Officer
Mar 31, 2011
The Directors have pleasure in presenting their Annual Report and
Audited Accounts of the Company for the year ended 31st March, 2011.
(Amount in Rs. Lakhs)
FINANCIAL RESULTS
Particulars Year ended Year ended
31st March 2011 31st March 2010
Operating results after charging
depreciation show a profit of 2,999.13 1,307.38
Add: Other Income 825.30 745.00
Resulting in profit before tax
and exceptional item 3,824.43 2,052.38
Add : Exceptional item :
Depreciation for earlier years
written back - 59.02
Profit before tax 3,824.43 2,111.40
From which have been deducted:
Provision for current tax 1,015.00 505.68
Provision for deferred tax (81.85) (38.51)
Tax for earlier years (net) 7.66 3.25
Profit after tax 2,883.62 1,640.98
Profit brought forward from last
account 371.84 351.70
Making a total of 3,255.46 1,992.68
Which has been appropriated by the
directors as under:
Proposed dividend 541.35 360.90
Corporate dividend tax 87.82 59.94
Transfer to general reserve 2,200.00 1,200.00
Surplus carried to reserves & surplus 426.29 371.84
3,255.46 1,992.68
DIVIDEND
Your Directors are pleased to recommend for your consideration payment
of dividend of Rs. 121- per ordinary share of the face value of Rs. 10/-
each for the year ended 31 st March, 2011.
OPERATIONS
Production, sales, profitability and earnings per share show under
noted position during the year under review as compared to previous
year:
(Amount in Rs. Lakhs)
Particulars 2010-11 2009-10
Production (in M. Tonnes) 47,769 35,397
Total sales 30,244.33 17,189.02
Export sales (C.I.F. value) 17,887.07 8,288.56
Operating profit 2,999.13 1,307.38
Other income 825.30 745.00
Profit before tax 3,824.43 2,111.40
Profit after tax 2,883.62 1,640.98
Earnings per share of face value
of RS.10/- (in Rs.) 63.92 36.38
Production during the year under review was 47769 M.Tonnes as compared
to 35397 M.Tonnes during the previous year when the working was
severely affected due to 62 days long industry wide strike.
The increase in profitability is attributed to higher production and
sales coupled with better sales realisation mainly on account of steep
increase in jute yarn selling prices triggered by bumper overseas
demand during first half of the year under review.
The euphoria of aforesaid favourable overseas market conditions started
waning during second half of the year and the yarn market condition
became tough and competitive resulting in decrease in overall demand
and fall in its selling prices. In the wake of overall market
scenario, your Company as a conscious policy shifted its focus to
manufacture and sale more sacking products, as it was more profitable
to operate in domestic market.
It is a matter of satisfaction that your Company has created adequate
in-house infrastructure to cater to both domestic and overseas markets
with full flexibility.
CORPORATE GOVERNANCE DISCLOSURE
The report on corporate governance as required under clause 49 of the
listing agreement with the stock exchange along with a certificate from
the statutory auditors certifying compliance with the conditions of
corporate governance are attached to this report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, your directors
make the following statement to the best of their knowledge and belief
that:
i. in the preparation of annual accounts for the year ended 31st March,
2011, the applicable accounting standards have been followed and there
are no material departures from the same;
ii. they have made judgement and estimates that are reasonable and
prudent and have selected such accounting policies and applied them
consistently to give true and fair view of the state of affairs of the
Company for the year ended 31st March, 2011 and of the profit of the
Company for that period;
iii. they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv. they have prepared the annual accounts on a going concern basis.
PARTICULARS OF CONSERVATION OF ENERGY ETC.
Particulars in terms of sub-section(1 )(e) of Section 217 of the
Companies Act, 1956, read with the Companies (Disclosure of particulars
in the Report of Board of Directors) Rules, 1988, are set out in
annexure to this report.
PARTICULARS OF EMPLOYEES
Information as required under Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, is given in annexure forming part of this report.
DIRECTORS
Under Article 97 of the Articles of Association of the Company, Mr. P.
K. Khaitan, a Non-executive director, retires from the Board by
rotation at the ensuing Annual General Meeting and being eligible,
offers himself for re-appointment. Brief particulars of Mr. Khaitan
have been given in the Notice convening Annual General Meeting.
AUDITORS
The statutory auditors, Messers Jain & Co., Chartered Accountants,
retire at the conclusion of the forthcoming Annual General Meeting and
offer themselves for re-appointment. The Company has received a
certificate from the said Auditors to the effect that their
re-appointment, if made, would be within the prescribed limits under
Section 224(1 B) of the Companies Act, 1956. The audit committee and
the Board recommends the re-appointment of M/s Jain & Co., Chartered
Accountants, as auditors of the Company.
Pursuant to provisions of Section 233B of the Companies Act, 1956,
Messers D. Radhakrishnan & Co., Cost Accountants, have been appointed,
subject to requisite approval of the Central Government, to conduct an
audit of the Cost Accounts maintained by the Company for the year
ending 31st March, 2012, as per directives of the Central Government.
ACKNOWLEDGEMENT
The Directors express their appreciation for assistance and
co-operation received from Export Import Bank of India, State Bank of
India, Axis Bank Ltd., customers, vendors and shareholders of the
Company.
The Directors also wish to place on record their appreciation and
acknowledge the commitment and dedication made by the employees at all
levels.
On behalf of the Board
H.V. KANORIA
Chairman and Managing Director,
Kolkata, 12th May, 2011 Chief Executive Officer
Mar 31, 2010
The Directors are pleased to present their Annual Report and Audited
Accounts of the Company for the year ended 31st March, 2010.
Amount in Rs. Lakhs
FINANCIAL RESULTS
Year ended March 31 2010 2009
Operating results after charging depreciation
show a profit of 1307.38 2259.50
Add: Other lncome/(Loss) 745.00 (374.19)
Resulting in profit before tax andl exceptional
Item 2052.38 1885.31
Add : Exceptional item :
Depreciation for earlier years written back 59.02 -
Profit before taxation 2111.40 1885.31
From which have been deducted :
Provision for taxation 505.68 608.10
Provision for deferred taxation (38.51) (13.30)
Provision for Fringe benefit fax - 8.50
Taxation for earlier years (net) 3.25 84.45
Profit after taxation 1640.98 1197.56
Balance brought forward from previous year 351.70 370.82
Making a total of 1992.68 1568.38
Which has been appropriated by the Directors
as under:
Proposed dividend 360.90 270.68
Tax on distributed profits 59.94 46.00
Transfer to General Reserve 1200.00 900.00
Balance to be carried forward 371.84 351.70
1992.68 1568.38
DIVIDEND
The Directors are pleased to recommend for your consideration payment
of dividend of Rs. 8/- per ordinary share of the face
value of Rs. 10/- each for the year ended 31st March, 2010.
OPERATIONS
Production, sales, profitability and earnings per share show under
noted position during the year under review as compared to previous
year:
(Rs. in Lakhs)
Current year Previous year
Production (in M. Tonnes) 35397 42874
Total Sales 17189.02 18669.18
Export Sales (C.I.F. Value) 8288.56 11306.60
Operating Profit 1307.38 2259.50
Other Income/(Loss) 745.00 (374.19)
Profit before Taxation 2111.40 1885.31
Profit after Taxation 1640.98 1197.56
Earnings per share of face value of
Rs.10/- (Rs.) 36.38 26.55
Slump in export on account of severe recession as reported last year
continued for most part of the year under review. The Company, due to
inadequate inhouse infrastructure to manufacture traditional jute
products like sacking to cater to domestic demands, was forced to
manufacture exportable goods which were sold in the overseas markets at
unremunerative prices. Besides, the Jute Industry witnessed 62 days
long strike from 14.12.2009 to 13.02.2010 which not only resulted in
loss of production but also led to steep increase in labour cost
following Tripartite Settlement. Moreover, the unprecedented high price
of raw jute further pushed the cost of production.
Consequent to adverse impact of above factors, the operating profit
during the year under review was severely affected, being Rs. 1307.38
lakhs for the year as against Rs. 2259.50 lakhs during previous year.
Profit under the head of other income is attributable to sale of
investments in better capital market scenario as compared to last year
and interest income.
CORPORATE GOVERNANCE DISCLOSURE
In compliance with the requirement of clause 49 of the Listing
Agreement with the Stock Exchange, a separate report on the Corporate
Governance along with a certificate from the statutory auditors on its
compliance is set out in the Annexure, which forms part of this report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
make the following statement to the best of their
knowledge and belief that:
i. in the preparation of annual accounts, the Company has followed all
the applicable accounting standards for the year under review;
ii. they have made judgement and estimates that are reasonable and
prudent and have selected such accounting policies and applied them
consistently, unless specifically stated to be otherwise, to give true
and fair view of the state of affairs of the Company for the year ended
31st March, 2010 and of the profit of the Company for that period;
iii. they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv. they have prepared the annual accounts on a going concern basis.
PARTICULARS OF CONSERVATION OF ENERGY ETC.
The information required under Section 217(1)(e) of the Companies Act,
1956, read with the Companies (Disclosure of particulars in the Report
of Board of Directors) Rules, 1988, are given in Annexure which forms
part of this report.
PARTICULARS OF EMPLOYEES
The particulars as required under Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, are given in Annexure forming part of this report.
DIRECTORS
In accordance with Article 97 of the Articles of Association of the
Company, Mr. S. Dhandhania, a Non Executive Director, retires from the
Board by rotation and being eligible, offers himself for re-appointment
at the ensuing Annual General Meeting.
Mr. H.V. Kanoria has been re-appointed as Chairman and Managing
Director of the Company by the Board on the terms and conditions as
mentioned in the resolution which is being placed before you at the
ensuing Annual General Meeting and your Directors recommend passing of
the same.
Brief particulars of the said directors have been given in the Notice
convening Annual General Meeting.
AUDITORS
The statutory auditors, Messers Jain & Co., Chartered Accountants,
retire at the conclusion of the forthcoming Annual General Meeting and
offer themselves for re-appointment. Certificate from the Auditors has
been received to the effect that their re-appointment, if made, would
be within the prescribed limits under Section 224(1 B) of the Companies
Act, 1956. The Board recommends that Messers Jain & Co., Chartered
Accountants be appointed as Auditors of the Company and Board be
authorised to fix their remuneration.
Messers D. Radhakrishnan & Co., Cost Accountants, have been appointed,
subject to requisite approval of the Central Government, to conduct an
audit of the Cost Accounts maintained by the Company for the year
ending 31st March, 2011, as per directives of the Central Government.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank State Bank of India, Axis
Bank Ltd., Export Import Bank of India, the customers
and the shareholders for their continued co-operation and support to
the Company.
The Directors also express their deep sense of appreciation to
employees at all levels for their dedicated service.
On behalf of the Board
H.V. KANORIA
Chairman and Managing Director,
Kolkata, 7th May, 2010 Chief Executive Officer