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Cheviot Company

BSE: 526817|ISIN: INE974B01016|SECTOR: Miscellaneous
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Directors Report Year End : Mar '19    Mar 18

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 COMPANY’S 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

“Pursuant 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 ‘4,945.41 even after absorbing additional expenses.

Other income from Company’s 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 Company’s 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 ‘management discussion and analysis’.

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 arm’s-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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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. 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) 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. 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 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 shareholders’ 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 Company’s 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 ‘40,000/- (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 members’ 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

Source : Dion Global Solutions Limited
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