DIRECTORS' REPORT To the Members, Your Directors present their 24th Annual Report together with the audited statement of accounts of the Company for the financial year ended 31st March 2014. OPERATIONS AND FINANCIAL PERFORMANCE The consolidated revenue of Jumbo Bag Limited stands at Rs. 83.53 Crores for the fi nancial year ended 31st March 2014 as compared to the revenue of Rs 87.76 crores in the previous year. Your Company has incurred a loss this year amounting to Rs. 221.32 Lacs in the current year as against a Profi t of Rs.9.28 Lacs in the previous year. Your Company had faced a setback in the fi nancial year 2012-13; however, it picked up on its performance gradually and made a profi t of Rs.30 Lacs in the Second Quarter of the year 2013-14. The operation of the company was again affected due to a major fi re accident at Unit II (Athipedu Factory) that occurred on 23rd November 2013. Major portion of the factory was gutted in fire and the company faced huge loss in terms of materials and machinery. The factory was completely shut down till 9th December 2014. Thereafter, the portion that was not damaged operated. Further to the above, there was a strike by the workers in Unit I (Ponneri Factory) that lasted for 25 days from 27th December, 2013 to 20th January, 2014. Despite the unforeseen hurdles, your company took immediate steps to control the damage caused and maintained the production level. Rigorous steps are being taken to fulfi ll the customer obligations on time and to keep the production going up to the maximum capacity with the help of various sources available in the market. Your company would like to inform that despite the hard times, the market and the customer have been understanding to our situation and have given us helping hand in every way possible. Your company is confi dent that it will recover from this setback at the earliest possible time. Your company has been able to withstand two big jolts experienced during the last fi nancial year and it was able to resume its operations at the unaffected part of the Athipedu Unit within a short span of time from the date of incidents. Your company's cordial relationship with the market in general helped in garnering support at the time of adversity from its competitors and vendors. Besides, your company managed to find alternative sources to fi nish the orders on time so that the customers did not suffer due to the setback faced by the company in production. On the brighter aspects, your company has been able to sustain its growth in the trading of IOCL Products in terms of sales and volume. The fi nancial year 2013-14 saw 20% growth in volume of sales. DIVIDEND: The Board of Directors have not recommended any dividend for the fi nancial year ended 31st March 2014. DIRECTORS: Sri Krishnamurthy Grandhy resigned from the Board of Directors with effect from 14th February 2014. The Board places on record its deep sense of appreciation for the outstanding contribution made by Sri Krishnamurthy Grandhy as the Director of the Company. As per the provisions of the Companies Act, 2013, Independent Directors are required to be appointed for a term of fi ve consecutive years and shall not be liable to retire by rotation. Accordingly, resolutions proposing appointment of Independent Directors form part of the Notice of the Annual General Meeting. All the Independent Directors will retire at the ensuing Annual General Meeting and, being eligible, offer themselves for re-election. A brief resume, expertise and details of other directorships of these Directors are attached along with the Notice convening the ensuing Annual General Meeting. AUDITORS: M/s. M. Srinivasan & Associates, Chartered Accountants, Chennai, Statutory Auditors, retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. The Board, subject to the recommendation of the Audit Committee, proposes that M/s. M. Srinivasan & Associates, Chartered Accountants, Chennai bearing registration No.004050S be re-appointed as the Statutory Auditors of the Company to hold offi ce till the conclusion of the fourth consecutive Annual General Meeting of the Company. M/s. M. Srinivasan & Associates, Chartered Accountants, Chennai have forwarded a certificate to the Company, stating that their re-appointment, if made, will be within the limit specifi ed in that behalf in subsection (1) of section 139 of the Companies Act, 2013 (Previously, Section 224(1B) of the Companies Act, 1956). Independent Auditors' Report: Clarifi cation on Auditors observations is given below: 'Emphasis of Matter' of the Independent Auditors' Report: Report: We draw attention to Note No.2.19 of the financial statements with regard to the Claims receivables from the Insurance Companies and outstanding of Rs. 1099.58 lakhs on the balance sheet date. The management is confident of recovery of full amount and therefore no further provision is made. Our opinion is not qualified in respect of this matter. As mentioned in Note no.2.19 of the notes on accounts, the estimates of claim both with regard to loss of stock and capital goods have been prepared in consultation with experts and as per guidelines communicated by them. The estimates were also modified on the basis of discussions with the surveyors appointed by insurance company. The claims estimates submitted have not yet been admitted by the insurance company in the case of stock policy. While in the case of fi xed assets, we have received interim payment of Rs.70 lacs. We believe that estimates of claims preferred are reasonable and accountable considered on the basis of best judgement basis. In absence of claim admission and quantifi cation by insurance company, any variation to the claim preferred will be dealt with at the time of receipt as per accounting guidelines. COST AUDITORS: Ms. S. Subhashini, Cost Accountant was appointed as the Cost Auditor of your Company for the financial year 2013-14 pursuant to Section 233B of the Companies Act, 1956 to carry out the audit of your Company's cost records. DEPOSITS: The total amount of Fixed Deposits from the Public and Shareholders of the Company as at 31st March 2014 was Rs.64,00,000/-. There was no default in repayment of deposits or interest thereon on the due dates and there was no overdue/ unclaimed deposit at the end of the year. With the new provisions of the Companies Act, 2013 coming into effect from 01.04.2014, your company shall repay all the deposits before prescribed due dates as mentioned in Section 74 of the Companies Act, 2013 and the rules notified thereunder. INTERNAL COMPLAINTS COMMITTEE: The Ministry of Women and Child Development have notified The Sexual Harassment at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules 2013 with effect from 09.12.2013. In deference to the aforesaid act and rules as notified, Jumbo Bag Limited has constituted an Internal Complaints Committee as required under Section 4(1) of the above-said act on 24.05.2014. The members of the Committee are as under: Head Office 1. Ms. M. Jagadeeshwari (Sonia) - Presiding Officer 2. Sri Satish K. Shenoy - Member 3. Ms. P. Prema Sona Bharathi - Member cum Secretary 4. Sri Thalamuthu Natarajan - Independent Member Ponneri & Athipedu Units 1. Ms. Bonfi Joseph - Presiding Officer 2. Sri Satish K. Shenoy - Member 3. Ms. P. Prema Sona Bharathi - Member cum Secretary 4. Sri Thalamuthu Natarajan - Independent Member There have been no cases reported since the time of constitution of the committee. CORPORATE GOVERNANCE: Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion & Analysis Report, Corporate Governance Report and Certificate regarding compliance of conditions of Corporate Governance are made part of the Annual Report. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors hereby state that: • In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; • The directors had selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the company for the year under review; • The directors have taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of the companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; • The directors prepared the annual accounts for the fi nancial year on a "going concern" basis. PARTICULARS OF EMPLOYEES: None of the employees of the company were in receipt of remuneration which in the aggregate exceeded the limits fi xed under sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules,1975 as amended. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE: Particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 217(1)(e) of the Companies Act,1956, are attached to form part of the Report. ACKNOWLEDGEMENT: Your Directors place on record their appreciation for the continued co-operation, support and assistance extended to the Company by Government of India, Government of Tamil Nadu, State Bank of India & State Bank of Hyderabad and the Shareholders. Your Directors also place on record their appreciation for the continued and dedicated performance and commitment by Offi cers and Staff of the Company. For and on behalf of the Board K.J.M. SHETTY Chairman Place: Chennai Date : 13.08.2014 |