To the Members
Your Directors present their 27th Annual Report together with the audited statement ofaccounts of the Company for the financial year ended 31st March 2017.
|FINANCIAL RESULTS: || || |
| || ||(Rs in Lakhs) |
|PARTICULARS ||2016-17 ||2015-16 |
|SALES AND OTHER INCOME ||9732.04 ||8436.70 |
|PROFIT BEFORE INTEREST DEPRECIATION & TAXES ||707.85 ||582.29 |
|INTEREST ||433.02 ||511.83 |
|DEPRECIATION ||169.08 ||168.72 |
|PROFIT/ (LOSS) BEFORE TAX ||105.75 ||(98.26) |
|TAX EXPENSES ||18.14 ||31.45 |
|PROFIT/ (LOSS) AFTER TAX ||87.61 ||(66.81) |
|PROFIT AVAILABLE FOR APPROPRIATION ||87.61 ||(66.81) |
OPERATIONS AND FINANCIAL PERFORMANCE:
Your Company has made a profit amounting to Rs. 87.61 Lakhs in the current year asagainst the loss of Rs. 66.81 Lakhs in the previous year. The consolidated revenue of yourcompany has also increased by 15.35% at Rs. 97.32 Crores for the financial year ended 31stMarch 2017 compared to the revenue in the previous year.
After three financial years of loss your company has recovered from the aftermath ofthe damage caused by the major fire accident in the financial year 2013-14. With thecommercial production starting off at the new unit from the month of May 2017 onwards theperformance of the Company is set to improve further. The Company has shifted theproduction that was outsourced to satellite units after the fire accident into this newunit and with this lost capacity in the accident has been added back.
Despite the fact that the manufacturing sector has been more sluggish in 2016 comparedto 2015 due higher input cost and weaker domestic demand your company was able to putforward a better performance by achieving over 80% of the production targeted and also thesales turnover increasing by 13% in 2016-17 compared to the previous year.
With regard to the claims made with insurance companies on the fire accident happenedin year 2013 your company pursued with them through various platforms to recover the claimamount. But with respect to fixed assets after the initial payment of Rs.173 lacs out ofRs.374 lacs by the insurance company there has been no further progress. The Company hadraised some queries on the survey report and the need for its re-consideration while thesame was not taken up by the surveyor and hence it has been decided by the management tofile a plea for arbitration as a next course of action. On the claim on stocks which wasrepudiated by the insurance company the company in response clarified the claim and alsotook the same at all avenues available to have it resolved. Since the effort didn'tprovide the desired outcome now the management has decided to file a suit in the court oflaw and are confident that there is a strong case in companies favour.
With regard to the performance in the trading sector as a distributor for Indian OilCorporation Limited the sales of the division has dropped by around 38% in the year2016-17 compared to the previous year 2015-16. This was expected since the allocations forthe Southern region has been reduced considerably over the period. However there is achange in approach with the imminent commencement of the Paradip plant by IOCL in 2018 andthe need to cater to this market in a better way the allocations have improved to someextent in 2017-18 year.
The Board of Directors have not recommended any dividend for the financial year ended31st March 2017.
TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES ACT 2013:
For the financial year ended 31st March 2017 the Company has proposed to carry anamount of Rs.5.82 Lakhs to General Reserve Account.
COMMISSION RECEIVED BY DIRECTOR FROM HOLDING OR SUBSIDIARY COMPANY
The Company neither has any holding nor is any subsidiary company thereforedisclosure under Section 197 (14) of the Companies Act 2013 not applicable.
MATERIAL CHANGES AND COMMITMENTS:
Your Company has commenced a new manufacturing unit at Thiruvallur District in TamilNadu in the month of May 2017. The new unit will gradually take over the productionoutsourced to the satellite units. The unit will also enable reduction in the cost ofproduction for the Company.
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 and the directors individually.
The Board was evaluated on various criteria including conducting of board meetings atregular intervals Proper transaction of agenda items in the meeting Co-ordinationbetween independent Directors and other committees of board.
The Directors were individually evaluated on various criteria like Contribution toboard discussion maintaining confidentiality of important decisions taken at the BoardCommunication with other Board members adhering to Companies policies and procedures.
Pursuant to the provisions of the Companies Act 2013 a Separate Meeting of IndependentDirectors was held during the year in which the Independent Directors evaluated theperformance of the non-independent Directors the Board as a whole and the Chairman of theCompany.
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 2016-17 areas follows:
1. No. of Board Meetings: 6
|30th May 2016 ||9th August 2016 ||23rd September 2016 |
|14th November 2016 ||9th February 2017 ||29th March 2017 |
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.
2. No. of Audit Committee Meetings: 4
|30th May 2016 ||9th August 2016 |
|14th November 2016 ||9th February 2017 |
3. No. of Nomination & Remuneration Committee Meetings: 2
|14th November 2016 ||9th February 2017 |
Stakeholder Relationship Committee:
As required under Section 178(5) of the Companies Act 2013 Stakeholders' RelationshipCommittee was constituted with Sri G Radhakrishna as the Chairman and Sri G P N Gupta asthe member. There were no investors' grievances received and hence no meeting was heldduring the year.
Share Transfer Committee:
The Committee overseas share transfers share transmission issue of duplicate sharecertificates etc. The Committee constitutes of Sri G Radhakrishna as the Chairman and SriG P N Gupta as the member. During the year the committee meeting was held on below dates.
No. of meetings: 6
|09th July 2016 ||15th November 2016 |
|5th December 2016 ||15th December 2016 |
|10th February 2017 ||15th February 2017 |
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 9thFebruary 2017 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. The Remuneration Policy isavailable on the website of the company.
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.
Your Company has implemented a risk management policy into its system and the mainobjective of the policy is to ensure the effective identification and reporting of riskexposures involvement of all departments and employees in risk management to ensurecontinuous growth of business and protect all the stakeholders of the Company. With thisin view your company is maintaining a strong risk management system through the process ofinternal audit.
Your Company periodically informs the Board of Directors about the risk assessment andminimization procedures. Company has a strong internal audit system in place coveringvarious departments and the report of the audit with deviations if any are placed beforethe board for risk assessment minimization and to take corrective steps. These auditscope are periodically reviewed to ensure that executive management controls risk throughmeans of a properly defined framework.
M/s. M. Srinivasan & Associates Chartered Accountant (Firm Registration No.004050S) retires at the conclusion of the Annual General Meeting. The Board proposed toappoint J.V. Ramanujam & Associates (Firm Registration No. 002947S) as auditors ofthe company at the ensuing Annual General Meeting.
Emphasis of Matter' of the Independent Auditors' 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.
With respect to both the claims the Company has decided to seek legal course of actionsince all possible grievance redressal mechanisms has been exhausted. As far stock claimis concerned Management believes that there is strong case in favor of the Company andhence it has been decided to file a suit against the repudiation of the claim by theinsurance company. With regard to claim against Machinery only part of the claim wasaccepted and paid by the insurance company and there is no response to the queries raisedon the report of the surveyor. The Management believes that arbitration is the best way toresolve the claim for the unsettled portion and is filing a plea for arbitration. Theaccounts have already been appropriately dealt with and therefore no provisioning requiredto be made.
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.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed M/s Lakshmmi Subramanian & AssociatesPractising Company Secretaries to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report for the year 2016-17 is included as "Annexure [IV]" andforms an integral part of this Report.
There is no secretarial audit qualificationfortheyear 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 2016-17 your Company has entered into transactions withrelated parties as defined under Section 2(76) of the Companies Act 2013 read withCompanies(Specification Definitions Details) of 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 disclosure in Form AOC-2is not required.
The details of the related party transactions as required under Accounting Standard 18 are set out in Note to the standalone financial Report. statements forming partof this Annual
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.com.
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 2017 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. Ms. Renuka Mohan Rao(DIN: 07542045) Independent Director in the Board has been appointed as the member ofAudit Committee with effect from 30.05.2017.
The company has not accepted any deposits from the public during the period 2016-2017within the meaning of Sections 73 and 74 of the Companies Act 2013 read together with theCompanies (Acceptance of Deposits) Rules 2014. All the outstanding deposits were repaidalong with interest without any default and as such there are no outstanding at the endof 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 27th April 2017 the Board has approved thereconstitution of the Committee with the following members:
|1. ||Ms. Meena Vijayaraghavan ||Presiding Officer |
|2. ||Ms. Rathi Kumari ||Independent Member |
|3. ||Sri R. Pramod Kumar ||Member |
|4. ||Ms. Chitra ||Member |
Ponneri & Athipedu Units
|1. ||Ms. Chitra ||Presiding Officer |
|2. ||Ms. Rathi Kumari ||Independent Member |
|3. ||Sri R. Pramod Kumar ||Member |
|4. ||Ms. Chandrakala N ||Member |
The disclosures as required under proviso IV in Part II Section II of Schedule V ofthe Companies Act 2013 with regard to appointment of Whole-time Director & ChiefFinancial Officer are set out in detail in form MGT 9 Extract of the 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 2016-17 a separate report of Corporate Governance is not disclosed in the AnnualReport 2016-17.
The Company confirms that it has paid the annual listing fees for the year 2017-18 tothe 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 2nd September 2017 to 8th September 2017 (both days inclusive).
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(C) of the Companies Act 2013 the Directors confirm that:
In the preparation of the annual accounts for the financial year ended 31stMarch 2017 the applicable accounting standards and Schedule III of the Companies Act2013 have been followed and there are no material departures from the same;
The Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of your Company as at 31st March 2017and of the statement of profit and loss of the Company for the financial year ended 31stMarch 2017;
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;
The annual accounts have been prepared on a going concern' basis;
Proper internal financial controls laid down by the Directors were followed bythe Company and that such internal financial controls are adequate and wereoperatingeffectively; and
Proper systems to ensure compliance with the provisions of all applicable lawswere in 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 in respect of employeesof the Company and Directors is furnished hereunder:
|S. No ||Name ||Designation ||Remuneration paid FY 2016-17 ||Remuneration paid FY 2015-16 ||Increase in remuneration from previous year ||Ratio / times per median of employee remuneration |
|1 ||G.S. Anilkumar ||Managing Director ||14.42 ||14.18 ||0.24 ||8.70 |
|2 ||G.P.N. Gupta ||Whole-time Director Cum CFO ||12.00 ||22.65 ||-10.65 ||7.24 |
|3 ||G.P. Ramraj ||Whole Director & CFO ||9.13 ||13.50 ||-4.37 ||5.5 |
|4 ||**R. Kavitha ||Company Secretary ||2.77 ||0.40 ||- ||- |
|5 ||**R. Pramod Kumar ||Company Secretary ||1.40 ||- ||- ||- |
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 10.5%.
3. The number of permanent employees on the rolls of company as on 31st March 2017 is234.
4. The average increase in salaries of employees other than managerial personnel in2016-17 was 15.8%.
5. 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)
6. *Sri. GP Ramraj Whole Director & CFO resigned from the Directorship of theCompany with effect from 14 November 2016.
7. **Ms. R Kavitha Company Secretary resigned from the services of the Company witheffect from 15 December 2016. Mr. R. Pramod Kumar was appointed as the Company Secretarywith effect from 1 December 2016. Accordingly the disclosures with respect to median andincrease in remuneration is not made.
CONSERVATION OF ENERGY AND TECHNOLOGY OBSORPTION:
The information on conservation of energy technology absorption as stipulated underSection 134 of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 isset out herewith as "Annexure [III]" to this Report.
SIGNIFICANT/MATERIAL 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 Internal Auditors of the Company for inefficiency or inadequacyof such controls.
The Internal Audit monitors and evaluates the efficacy and adequacy of internal controlsystem in the company its compliance with operating systems accounting procedures andpolicies at all locations of the company. Based on the report of internal audit functionprocess owners undertake corrective action in their respective areas and therebystrengthen Significant audit observations and corrective actions the controls. thereon arepresented to Board.
PARTICULARS OF EMPLOYEES
There are no employees falling within the provisions of section 197 of the CompaniesAct 2013 read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014
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 1100 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 or comprehensivenessthough the same are based on sources believed to be reliable. Utmost care has been takento ensure that the opinions expressed by the management herein contain its perceptions onthe material impacts on the Company's operations but it is not exhaustive as they containforward-looking statements which are extremely dynamic and increasingly fraught with riskand uncertainties. Actual results performances achievements or sequence of events may bematerially different from the views expressed herein
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 : 30.05.2017 ||Chairman |