DIRECTORS' REPORT TO THE SHAREHOLDERS Your Directors are pleased to present the Annual Report of your Company and the Company's Audited Financial Statements for the financial year ended 31 March 2016. DIVIDEND In view of loss, your Directors do not recommend any dividend on 2% Preference Shares and on Equity Shares. OPERATIONS Sales / Income from operation was Rs. 216.16 Crores compared to Rs. 301.78 Crores in the previous year and the decline was mainly because of curtailment of production due to acute shortage of raw Jute leading to abnormally high raw jute prices. Production & sales also suffered because of temporary suspension of work at Anglo India Jute Mill (Middle Mill) from 26.05.15 to 13.09.15, Yarn Unit Rishra since 20.06.15 till date, Wellington Jute Mill since 26.03.16 till date and Weaving Unit Rishra since 23.05.15 till date. Export sales were at Rs. 49.74 Crores as against Rs. 60.80 Crores in previous year. Incidentally due to shortage and high raw jute prices, working was affected mostly in all mills. Mills adopted different methods of adjusting their production i.e. working 4 or 5 days / week running 2 shifts / day etc. Overall operating performance was adversely affected for the reasons mentioned in the Management Discussion and Analysis Report annexed hereto. CHANGE IN THE NATURE OF BUSINESS, IF ANY There have been no change in the nature of business of the Company EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS As approved by way of special Resolution passed by share holders on 14.03.2014 by way of Postal Ballot, the Company sold its Anglo India Jute Mill (Middle Mill) located at Jagatdal, Dist. 24 Parganas (North), West Bengal w.e.f 01.05.2016 to M/S. P & A Distilleries Private Limited. (subsequently name changed to Anglo India Jute & Textile Industries Private Limited w.e.f. 14.05.2016). RISK MANAGEMENT FRAMEWORK Your company has a Risk Management Framework approved by the Board of Directors. The Risk Management Framework provides the mechanism for risk assessment and its mitigation .The Risk Management framework is being periodically reviewed by the Audit Committee and the Board of Directors. DISCLOSURE ON SEXUAL HARRASSMENT OF WOMEN IN WORKPLACE The Company has received no complaints from any women employee during the year regarding Sexual Harassment of Women in Workplace (Prevention Prohibition & Redressal) Act, 2013. PARTICULARS OF EMPLOYEES There was no employee in receipt of remuneration of Rs. 60 lacs or more per annum during the year as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. CHANGES IN KEY MANAGERIAL PERSONNEL COMPANY SECRETARY During the year, on resignation of Mr. Swaroop Saha from 30th May, 2015, Mr. Sandip Mandhana was appointed as the Company Secretary and Compliance Officer from 01st June, 2015. Subsequently on resignation of Mr. Sandip Mandhana from 31st January, 2016, Mr. Binod Kumar Chowdhury Sr. General Manager (Accounts) of the Company was appointed as the Company Secretary and Compliance Officer from 01st April, 2016. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 particulars regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are set out in a separate statement attached to this report and forms part of it. DIRECTORS In accordance with the provisions of the Companies Act 2013 and the Articles of Association of the Company, Shri D. J. Wadhwa, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. The company has received declarations from all the independent directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act 2013 and Regulation 16 (b) of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 ("Listing Regulations") DISCLOSURES ON MANAGERIAL REMUNERATION Details of Managerial Remuneration as required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as Annexure I of this Report. STATUTORY AUDITORS At the 97th Annual General Meeting held on 14th August, 2015, the members had appointed M/s D. P. Sen & Co., Chartered Accountants, having registration number 301054E as the Statutory Auditors of the Company till the conclusion of the next Annual General Meeting. The Company has received a consent letter from M/s D. P. Sen & Co., Chartered Accountants, to the effect that their appointment, if made, at the ensuing AGM would be in terms of Sections 139 and 141 of the Companies Act, 2013 and the rules made thereunder. The Board proposes to appoint M/s D. P. Sen & Co., Chartered Accountants as the Statutory Auditors of the Company from the conclusion of ensuing 98th AGM till conclusion of 99th AGM. COST AUDITORS M/s N Radhakrishnan & Co, Cost Accountants has been appointed as Cost Auditor for auditing the cost accounts of the Company for the year ended 31 March 2017 by the Board of Directors. The remuneration proposed to be paid to the Cost Auditor requires ratification of the shareholders of the Company. In view of this, your ratification for payment of remuneration to the Cost auditor is being sought at the ensuing Annual General Meeting. M/s N. Radhakrishnan & Co., Cost Accountants, has given his consent to act as Cost Auditor of the Company confirming that his appointment is within the limits of Section 139 and certified that he is free from any disqualifications specified under Section 148(5) and all other applicable provisions of the Companies Act, 2013. The Cost Audit Report for the year 2014-15 has been filed with the Ministry of Corporate Affairs within the due date of filing. DIRECTORS' RESPONSIBILITY STATEMENT To the best of knowledge and belief and according to the information and explanation received from the day to day operating management, your Directors make the following statements pursuant to Sub-Section (5) of Section 134 of the Companies Act, 2013: a) that in the preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) 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 at the end of the financial year and of the loss of the Company for that period; c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) that the Directors have prepared the annual accounts for the financial year ended 31st March, 2016, on a going concern basis; e) that the Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and; f) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively; EXTRACT OF ANNUAL RETURN As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 is annexed as Annexure II. SECRETARIAL AUDIT REPORT Pursuant to the provisions of section 204 of the Companies Act 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report submitted by M/s K. Arun & Co., Company Secretaries, is enclosed as part of this report as Annexure III. EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION,RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BY THE STATUTORY AUDITOR IN HIS REPORT AND BY THE COMPANY SECRETARY IN PRACTICE IN HIS SECRETARIAL AUDIT REPORT Qualified opinion by the Statutory Auditors in their Report have been adequately dealt with in the Note 44 of the Accounts, which is explained hereunder. "The Company is providing Gratuity Liability on accrual basis for all its units and only in respect of one unit i.e. Jagatdal it was accounted for on cash basis for the intervening period of 1996-97 to 2006-07 as explained in Note No.44 to the Accounts. However this qualification will not appear from Annual Accounts of current FY 2016-17 onwards as the Unit for which this qualification was appearing has been hived off to the new buyer w.e.f. 01.05.2016 with all its Gratuity Liability both past & future." The Secretarial Auditor have not given any qualification, reservation or adverse remark or disclaimer in their Audit Report. The Cost Auditor has not given any qualification, reservation or adverse remark or disclaimer in their Audit Report. MEETINGS OF THE BOARD Four Meetings of the Board of Directors were held during the year. For further details please refer to report on Corporate Governance annexed in this Annual Report. CONSOLIDATED FINANCIAL STATEMENT In accordance with the Companies Act 2013 and the Accounting Standard (AS21), the Consolidated Financial Statement is provided in the Annual Report. STATEMENT CONTAINING SALIENT FEATURES OF FINANCIAL STATEMENTS OF SUBSIDIARY Pursuant to sub-section (3) of section 129 of the Act, the statement containing the salient feature of the financial statement of a company's subsidiary i.e. Champdany Construction Ltd is presented in a separate section in Form AOC 1 as Annexure IV. LISTING WITH THE STOCK EXCHANGES The Company's shares are listed on the Bombay Stock Exchange and National Stock Exchange and annual listing fees for financial year 2016-17 has been paid to the BSE and NSE. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS No significant & Material Orders relating to settlement of tax liabilities, operation of patent rights, depression in market value of investments, institution of cases by or against the company, sale or purchase of capital assets or destruction of any assets etc. were passed by the Regulators for or against the Company during the financial year ended 31st March 2016. INTERNAL FINANCIAL CONTROL SYSTEM AND ITS ADEQUACY The Company has Internal Financial Control system commensurate with the size, scale and complexity of its operations. The system encompasses the major processes to ensure reliability of financial reporting, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources. The internal Auditors continuously monitor the efficacy of Internal Financial Control system with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the Company's risk management with regard to the Internal financial Control system. The Audit Committee meets regularly to review reports submitted by the Internal Auditors. The Audit Committee also meet the Company's Statutory Auditors to ascertain their views on the financial statements, including the financial reporting system and compliance to accounting policies and procedures followed by the Company. In order to strengthen further our existing internal financial control system, the Company has engaged Ernst & Young to study and suggest improvements in our system. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT 2013 During the year, the Company has not given any loans, provided any guarantees or made any investments as covered under Section 186 of the Companies Act, 2013. PARTICULARS OF CONTRACTS, ARRANGEMENTS ENTERED INTO WITH RELATED PARTIES During the financial year, the Company had not entered into any contract / arrangement / transactions with related parties which are materially significant. All contracts/transactions/arrangements entered by the Company with Related parties during the financial year were in the ordinary course of business and on arm's length basis and the provisions of Section 188 are not attracted. Thus, disclosure in Form AOC-2 is not required. PREVENTION OF INSIDER'S TRADING In terms of provisions of SEBI (Prohibition of Insider Trading) Regulations, 1992 and its subsequent Amendments in 2008 and 2015, the Company has adopted a model Code of Conduct for prevention of Insider Trading in the shares and securities of the Company. The Code, inter alia, prohibits purchase, sale of the shares of the Company by the Directors, Officers and Designated Employees while in possession of the unpublished price sensitive information in relation to the Company. The Company secretary is the Compliance Officer for the purpose of these Regulations. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management discussion and Analysis Report for the year under review as stipulated under Regulation 34 of the Listing Regulations is presented in a separate section forming part of this Annual Report CORPORATE GOVERNANCE The Company has implemented the procedures and adopted practices in conformity with the Code of Corporate Governance as prescribed by SEBI. The Corporate Governance Report and a Certificate from the Auditors of the Company certifying compliance with the conditions of Corporate Governance are attached hereto and form part of the Directors' Report. ENVIRONMENT AND SAFETY The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires the conduct of all operations in such manner so as to ensure safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible. INDUSTRIAL RELATIONS Industrial Relations in all units and branches of the Company remained generally cordial and peaceful throughout the year, except Units under suspension of work, etc. as mentioned in Management Discussion & Analysis Report annexed herewith. ACKNOWLEDGEMENTS Your Directors take this opportunity to place on record their appreciation of the continuous support, encouragement and co-operation received from the Company's bankers, the Government of West Bengal, customers, employees, shareholders and other business associates. On Behalf of the Board B. Wadhwa Directors N. Pujara Directors Dated: 14th June'2016 Place: Kolkata |