To the Members
Your Directors present their 26th Annual Report together with the audited statement ofaccounts of the Company for the financial year ended 31st March 2016.
| || ||(Rs in Lakhs) |
|PARTICULARS ||2015-16 ||2014-15 |
|SALES AND OTHER INCOME ||8529.61 ||9635.60 |
|PROFIT BEFORE INTEREST DEPRECIATION ft TAXES ||675.20 ||886.73 |
|INTEREST ||604.74 ||664.05 |
|DEPRECIATION ||168.72 ||170.84 |
|PROFIT/ (LOSS) BEFORE TAX ||(98.26) ||51.84 |
|EXCEPTIONAL ITEMS / CONTINGENCIES ||- ||(200.00) |
|TAX (DEFERRED TAX FOR 2015-16)/INCOME TAX ||31.45 ||13.44 |
|PROFIT/ (LOSS) AFTER TAX ||(66.81) ||(134.72) |
|PROFIT OF EARLIER YEARS ||- ||286.70 |
|DEPRECIATION CHARGED OF PREVIOUS YEARS (AS PER NEW COMPANIES ACT) ||- ||236.11 |
|INCOME TAX CHARGED OF PREVIOUS YEAR ||- ||9.88 |
|PROFIT AVAILABLE FOR APPROPRIATION ||(66.81) ||(94.01) |
OPERATIONS AND FINANCIAL PERFORMANCE:
The consolidated revenue of Jumbo Bag Limited stands at Rs. 84.43 Crores for thefinancial year ended 31st March 2016 as compared to the revenue of Rs 96.36crores in the previous year. Your Company has incurred a loss amounting to Rs. 66.81 Lakhsin the current year as against the loss of Rs. 134.72 Lakhs in the previous year.
While the first two quarters of the financial year saw losses the Company began torecover from the third quarter onwards. The after effects of the major fire accidenttowards the end of financial year 2013-14 had implications in the financial year 2015-16as well. However it is heartening to note that the last two quarters for the financialyear have been profitable. Also various measures have been put in place to improve theoverall operational efficiency and therefore we expect improved performance in the yearsto come. It is also pertinent to mention that the production quantity has increased from5133.95 MT (FY 2014-15) to 5694.61 MT (FY 2015-16) which reflects an increase of 11%.
Your Company has been persistently interacting with the Insurance Company to resolvethe outstanding claims. We are glad to inform that we have received a sum of Rs. 1.03crores against fixed assets claim and together with the advance of Rs. 70 lakhs receivedin the past the total claim received is Rs. 1.73 crores against the claim of Rs. 3.74crores. We have made a representation for re-assessment of claim based on certain apparentdiscrepancies noticed and we are confident of the same being considered positively.
Your Company's performance in the trading sector as a distributor for Indian OilCorporation Limited has been good. The volumes during the year 2015-16 have grown by10.15% over the year. Indian Oil Corporation Limited is located in Panipat the Company isenhancing its focus in northern India. Supplies to southern India is now restricted. Wetherefore expect slightly lower volumes until IOCL expansion happens in Paradip.
DIRECTORS & KEY MANAGERIAL PERSONNELS:
Sri GP N Gupta's tenure as Managing Director expired on 31st March 2016post which he has been appointed as a Whole-time Director. The Board of Directors in theirmeeting held on 29th March 2016 has acknowledged the resignation and expressedtheir sincere appreciation for his contribution to the Company during his tenure asManaging Director. Sri G P N Gupta will continue in the Board as an executive Directorwith effect from 01st April 2016.
The Board of Directors has appointed Sri G S Anil Kumar as Managing Director and Sri GP Ramraj as Chief Financial Officer with effect from 01st April 2016 subject tothe approval of Shareholders. The above business forms part of Notice of the 26thAnnual General Meeting for approval of shareholders.
Sri G Radhakrishna Director retires by rotation at the ensuing Annual General Meetingand being eligible offers himself for re-appointment. The subject forms part of theordinary business in the Notice of the 26th Annual General Meeting.
The Board of Directors have not recommended any dividend for the financial year ended31st March 2016.
ANNUAL EVALUATION OF BOARD'S PERFORMANCE:
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually and thesame was based on questionnaire and feedback from all the Directors on the Board as awhole and self-evaluation.
A structured questionnaire was prepared after taking into consideration of the inputsreceived from the Directors covering various aspects of the Board's functioning such asadequacy of the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance. A separate exercise wascarried out to evaluate the performance of individual Directors including the Chairman ofthe Board who were evaluated on parameters such as level of engagement and contributionindependence of judgment safeguarding the interests of the Company and its minorityshareholders etc.
NUMBER OF MEETINGS OF BOARD AND AUDIT COMMITTEE:
The Board meets at regular intervals to discuss and decide on business strategies /policies and review the financial performances of the Company. The Board Meetings arepre-scheduled and a tentative annual calendar of the Board is circulated to the Directorswell in advance to facilitate the Directors to plan their schedules. The details of numberof board meetings and other committee meetings held during the Financial Year 2015-16 areas follows:
No. of Board Meetings: 6
|26th May 2015 ||14th August 2015 ||23rd September 2015 |
|14th November 2015 ||12th February 2016 ||29th March 2016 |
The interval between two Board Meetings was well within the maximum period mentionedunder section 173 of the Companies Act 2013 and SEBI Listing (Disclosures andObligations Requirements) Regulations 2015.
No. of Audit Committee Meetings: 4
|26th May 2015 ||14th August 2015 |
|14th November 2015 ||12th February 2016 |
No. of Nomination & Remuneration Committee Meetings: 3
|28th May 2015 ||11th February 2016 |
|29th March 2016 || |
Stakeholder Relationship Committee:
As required under Section 178(5) of the Companies Act 2013 Stakeholders' GrievancesCommittee was constituted with Sri G P N Gupta as Chairman and Sri G Radhakrishna asMember. There were no investors' grievances received and hence no meeting was held duringthe year.
Share Transfer Committee:
During the year your Directors have constituted Share transfer Committee with Sri G PN Gupta as Chairman and Sri G Radhakrishna as Member.
No. of meetings: 2
|9th October 2015 ||3rd March 2016 |
DECLARATION OF INDEPENDENCE:
All independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 of the Companies Act 2013 which has beenrelied on by the Company and placed at the Board Meeting of the Company. As required underSchedule IV of the Companies Act 2013 the Independent Directors held a meeting on 12thFebruary 2016 without the attendance of the non- independent directors and members of themanagement.
NOMINATION AND REMUNERATION POLICY:
Pursuant to Section 178(3) of the Companies Act 2013 the Board of Directors hasframed a policy which lays down a framework in relation to remuneration of Directors KeyManagerial Personnel and Senior Management of the company. The policy also lays down thecriteria for selection and appointment of Board Members.
Nomination & remuneration Policy:
In accordance with the Nomination and Remuneration Policy the Nomination andRemuneration Committee has inter alia the following responsibilities:
1. The Committee shall formulate the criteria for determining qualifications positiveattributes and independence of a director.
2. The Committee shall identify persons who are qualified to become Director andpersons who may be appointed in Key Managerial and Senior Management positions inaccordance with the criteria laid down in this policy.
3. Recommend to the Board appointment and removal of Director KMP and SeniorManagement Personnel.
4. The Committee shall carry out evaluation of performance of every Director KMP andSenior Management Personnel at regular interval (yearly).
5. The remuneration/ compensation/ commission etc. to the Whole-time Director KMP andSenior Management Personnel will be determined by the Committee and recommended to theBoard for approval. The remuneration/ compensation/ commission etc. shall be subject tothe prior/ post approval of the shareholders of the Company and Central Governmentwherever required.
6. Increments to the existing remuneration/ compensation structure may be recommendedby the Committee to the Board which should be within the slabs approved by theShareholders in the case of Whole-time Director.
7. Where any insurance is taken by the Company on behalf of its Whole-time DirectorChief Executive Officer Chief Financial Officer the Company Secretary and any otheremployees for indemnifying them against any liability the premium paid on such insuranceshall not be treated as part of the remuneration payable to any such personnel. Providedthat if such person is proved to be guilty the premium paid on such insurance shall betreated as part of the remuneration.
8. The Non- Executive/ Independent Director may receive remuneration by way of fees forattending meetings of Board or Committee thereof provided that the amount of such feesshall not exceed Rs. One lakh per meeting of the Board or Committee or such amount as maybe prescribed by the Central Government from time to time.
9. Commission to Non-Executive/ Independent Directors may be paid within the monetarylimit approved by shareholders subject to the limit not exceeding 1% of the net profitsof the Company computed as per the applicable provisions of the Companies Act 2013.
Pursuant to the provisions of Section 139 of the Companies Act 2013 the appointmentof M/s. M Srinivasan & Associates Chartered Accountant (Firm Registration No.004050S) as Statutory Auditors of the Company have been approved in the 24thAnnual General Meeting of the Company. They shall hold office until the conclusion of the27th Annual General Meeting of the Company subject to ratification of their re-appointmentby the Shareholders at every AGM. A resolution ratifying the re-appointment of StatutoryAuditors forms part of the notice.
'Emphasis of matter' of the Independent Auditor's Report
We draw attention to Note No. 12 of Schedules forming part of accounts forming part ofthe financial statements in respect of the status of the insurance claim which is selfexplanatory. Our opinion is not modified in respect of the matter.
As mentioned in Note No. 12 of Schedules forming part of accounts the company hasapproached the insurance company for reconsideration of the surveyor report. As far asstock claim is concerned the company had made various representations to the insurancecompany towards recovery of the claim amount with respect to loss of stock. However theinsurance company is yet to give us an opportunity to present our case to them. Yourcompany is taking all remedial measures and is confident of recovering the remaining claimamount. Based on the facts available on record the company is confident of recovering theremaining claim amount.
Pursuant to notification of Companies (Cost Records and Audit) Rules 2014 read withCompanies (Cost Records and Audit) amendment rules 2014 the Company's product does notfall under the purview of Cost Audit from previous financial year 2014-15. The Company hadalso intimated the non-applicability of Cost Audit to the Registrar of Companies.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed Messrs Lakshmmi Subramanian & AssociatesPractising Company Secretaries to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report for the year 2015-16 is included as Annexure IV and forms anintegral part of this Report.
There is no secretarial audit qualification for the year under review.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT- 9 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are set out herewith as "Annexure[II]" to this Report.
RELATED PARTY TRANSACTIONS:
During the financial year 2015-16 your Company has entered into transactions withrelated parties as defined under Section 2(76) of the Companies Act 2013 read withCompanies (Specification of Definitions Details) Rules 2014 which were in the ordinarycourse of business and on arms' length basis and in accordance with the provisions of theCompanies Act 2013 Rules issued thereunder. There are no materially significant relatedparty transactions made by the Company with Promoters Directors Key Managerial Personnelor other designated persons which may have a potential conflict with the interest of theCompany at large. Thus disclosure in Form AOC-2 is not required.
The details of the related party transactions as required under Accounting Standard -18 are set out in Note
to the standalone financial statements forming part of this Annual Report.
LOANS AND INVESTMENTS:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to financial statement.
Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors has formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177 (10) of the Companies Act 2013. Thepolicy provides for a framework and process whereby concerns can be raised by itsemployees against any kind of discrimination harassment victimization or any otherunfair practice being adopted against them. The policy has been uploaded in the website ofthe Company at www.jumbobaglimited.corn.
AUDIT COMMITTEE RECOMMENDATION:
During the year all the recommendations of the Audit Committee were accepted by theBoard. Pursuant to Section 177(8) of the Companies Act 2013 the Composition of AuditCommittee is given as under:
Composition of Audit Committee: .
The Composition of the Audit Committee as on 31st March 2016 is as follows:
| Sri K J M Shetty ||- Chairman cum Member |
| Sri M V Ananthakrishna ||- Member |
| Sri G P N Gupta ||- Member |
| Sri. M Rama Rao ||- Member |
Secretary of the Company shall be the Secretary of the Committee.
During the financial year 2015-16 your Company has not accepted any depositwithin the meaning of Sections 73 and 74 of the Companies Act 2013 read together with theCompanies (Acceptance of Deposits) Rules 2014.
The total amount of Fixed Deposits from the Public and Shareholders of the Company asat 31st March 2016 was Rs. 1600000/-. There was no default in repayment ofdeposits or interest thereon on the due dates and there was no overdue/unclaimed depositat the end of the year.
INTERNAL COMPLAINTS COMMITTEE:
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. The Internal Complaints Committee ("ICC") has been set up to redressthe complaints received regarding sexual harassment. All employees are covered under thispolicy. No Complaints were received and disposed off during the year under review.
Further In the meeting held on 29th March 2016 the Board has approved thereconstitution of the Committee with the following members:
|1. Ms. M. Jagadeeshwari (Sonia) ||- Presiding Officer |
|2. Sri Satish K. Shenoy ||- Member |
|3. Sri Thalamuthu Natarajan ||- Independent Member |
|4. Ms. R Kavitha ||- Member cum Secretary1 |
|Ponneri and Athipedu Units || |
|1. Ms. Bonfi Joseph ||- Presiding Officer |
|2. Sri Satish K. Shenoy ||- Member |
|3. Sri Thalamuthu Natarajan ||- Independent Member |
|4. Ms. R Kavitha ||- Member cum Secretary |
The disclosures as required under proviso IV in Part II Section II of Schedule V ofthe Companies Act 2013 with regard to appointment of Managing Director Whole-timeDirector & Chief Financial Officer are set out in detail in form MGT 9 - Extract ofthe Annual Return.
As prescribed under the provisions of Regulation 15(2) of SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 your Company does not fall under the purviewof complying with the provisions of Corporate Governance. During the year with theapproval of Board of Directors your Company has informed the non-applicability provisionto the Bombay Stock Exchange.
Since the provision of Corporate Governance is not applicable for the entire FinancialYear 2015-16 a separate report of Corporate Governance is not disclosed in the AnnualReport 2015-16.
The Company confirms that it has paid the annual listing fees for the year 2016-17before the due date to the Bombay Stock Exchange.
CLOSURE OF REGISTER OF MEMBERS AND SHARE TRANSFER BOOKS:
The Register of Members and Share Transfer books of the company will be closed witheffect from 16th September 2016 to 23rd September 2016 (both daysinclusive).
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors confirm that:
(a) in the preparation of the annual accounts for the financial year ended 31st March2016 the applicable accounting standards and Schedule III of the Companies Act 2013have been followed and there are no material departures from the same;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company as at 31st March 2016 and ofthe statement of profit and loss of the Company for the financial year ended 31st March2016;
(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the annual accounts have been prepared on a 'going concern basis;
(e) proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
None of the employees of the Company drew remuneration which in the aggregate exceededthe limits fixed under Section 134(3)(q) read with Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014
REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Companies(Particulars of Employees) Rules 1975 in respect of employees of the Company andDirectors is furnished hereunder:
| || || || || ||(Rs. in lakhs) |
|S. No Name ||Designation ||Remuneration paid FY 2015-16 ||Remuneration paid FY 2014-15 ||Increase in remuneration from previous year ||Ratio / times per median of employee remuneration |
| || ||(Rs. in lakhs) ||(Rs. in lakhs) || || |
|1 G.P.N. Gupta ||Managing Director ||22.65 ||22.47 ||0.80 ||15.09 |
|2 G.S. Anilkumar ||Chief Financial Officer (KMP) ||14.18 ||16.54 ||(2.36) ||9.40 |
|3 G.P. Ramraj ||Whole Time Director - Operations ||13.50 ||16.97 ||(3.27) ||9.08 |
|4 Ms. R Kavitha* ||Company Secretary (KMP) ||0.40 ||NA ||- ||- |
1. The remuneration payable to the KMP / Whole time directors are in accordance withthe Industry and Geographical standards and as per the Remuneration policy of the Company.
2. The percentage increase in the median remuneration of employees in the financialyear is 26%
3. The number of permanent employees on the rolls of company as on 31stMarch 2016 is 254
4. No remuneration is paid to the Independent Directors of the Company other than thesitting fees of Rs. 10000/- for attending Board / Committee Meetings. The details ofsitting fees paid to the Directors are set out in Extract of Annual Return (Annexure II)
5. * The Company Secretary was appointed only on 24th February 2016 andhence salary comparison is not done.
ENERGY TECHNOLOGY AND FOREIGN EXCHANGE:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is set out herewith as "Annexure [III]" tothis Report.
SIGNIFICANT/MATE RIAL ORDERS PASSED BY THE REGULATORS:
During the year the Company has not received any significant and material orderspassed by the Regulators or courts or tribunals which would affect the going concernstatus of the Company and its future operations.
INTERNAL FINANCIAL CONTROLS:
The company has in place Internal Financial Control system commensurate with size& complexity of its operations to ensure proper recording of financial and operationalinformation & compliance of various internal controls & other regulatory &statutory compliances. During the year under review no material or serious observationhas been received from the Statutory Auditors of the Company for inefficiency orinadequacy of such controls.
The industrial relations in respect of all other manufacturing facilities and divisionsof your Company are normal. Your company determines to take the relationship with theworkers at cordial levels and is committed to provide necessary support for the welfare ofits staff.
Integration of social environmental ethical and human rights makes an enterprise meetthe fullest level of social responsibility. Keeping this in mind Jumbo Bag Limitedcommits itself to the environment by meeting the environmental regulation bestutilization of natural resources and creating awareness on prevention of pollution throughtraining and communication.
Your company continues to support Gorantla Ramalingaiah Vivekananda Vidyalaya invarious ways. This school has strength of over 1094 students at present and manyemployees' children are enjoying the benefits of concessional fees studying in theabove-mentioned school.
Shareholders and Readers are cautioned that in the case of data and informationexternal to the Company/ no representation is made on its accuracy orcomprehensiveness though the same are based on sources believed to be reliable. Utmostcare has been taken to ensure that the opinions expressed by the management herein containits perceptions on the material impacts on the Company's operations but it is notexhaustive as they contain forward-looking statements which are extremely dynamic andincreasingly fraught with risk and uncertainties. Actual results performancesachievements or sequence of events may be materially different from the views expressedherein.
Your Directors place on record their appreciation for the continued co-operationsupport and assistance extended to the Company by Government of India Government of TamilNadu State Bank of India & State Bank of Hyderabad and the Shareholders.
Your Directors also place on record their appreciation for the continued and dedicatedperformance and commitment by Officers and Staff of the Company.
| ||For and on behalf of the Board |
|Place: Chennai ||K.J.M. SHETTY |
|Date : 09.08.2016 ||Chairman |