Cheviot Company Ltd Directors Report.

Dear Members, (Rs. in Lakhs) Your 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, 2020.

1. FINANCIAL SUMMARY

For the year ended 31st March, 2020 For the year ended 31st March, 2019
Revenue from operations 45,804.59 39,455.96
Operating profit after depreciation and amortisation 5,213.09 4,945.41
Add: Other income 971.61 2,211.43
Profit before tax 6,184.70 7,156.84
Tax expense 1,372.58 2,139.04
Profit for the year 4,812.12 5,017.80

2. DIVIDEND

During the year, Board of directors have declared special interim dividend of Rs. 48/- per ordinary share on 64,66,875 ordinary shares of face value of Rs. 10/- each, aggregating to Rs. 3,104.10 (P.Y. Rs. 1/- per ordinary share was declared as final dividend). The special interim dividend was paid on and from 2nd March, 2020. Having declared the special interim dividend, the Board do not recommend any final dividend for the financial year ended 31st March, 2020.

3. TRANSFER TO GENERAL RESERVE

The Board of directors have decided to keep the net profit for financial year ended 31st March, 2020 in the retained earnings.

4. OPERATIONS AND STATE OF COMPANYS AFFAIRS

Revenue from operations, profi tability and earnings per share show under noted position during the year under review as compared to previous year:-

For the year ended 31st March, 2020 For the year ended 31st March, 2019
Revenue from operations 45,804.59 39,455.96
Export sales (C.I.F. value) 16,152.23 13,991.62
Operating profit 5,213.09 4,945.41
Other income 971.61 2,211.43
Profit before tax 6,184.70 7,156.84
Tax expense 1,372.58 2,139.04
Profit after tax 4,812.12 5,017.80
Earnings per share (EPS) of face value of Rs. 10 (In Rs.) 74.41 77.59

During the year under review, your Company achieved higher operating profit compared to previous year through increase in sale volume and better operational efficiency although the manufacturing units were shutdown from 23rd March, 2020 in view of the nationwide lockdown declared by the Government to prevent the outbreak of novel coronavirus (COVID-19) in India.

The plunge in other income was largely attributable to lower yields on debt instruments and negative returns on capital market investments in view of panic caused by COVID-19 pandemic. These instruments are measured on fair value basis as per IND AS 109.

The Company decided to opt for concessional rate of taxation as per the provisions of Section 115BAA of the Income Tax Act, 1961 made effective from financial year 2019-2020 which resulted in a lower tax outflow compared to previous year.

5. MANAGEMENT DISCUSSION AND ANALYSIS a) Industry structure and developments

Jute textiles are covered under the Essential Commodities Act, 1955 as it is predominantly used for packaging of food grains which are essential commodities. In spite of the above, Jute Industry was not allowed to operate by the concerned Government authority in their efforts to control the spread of novel coronavirus (COVID-19).

One of the major factors going against the Jute Industry in not allowing to operate during lockdown was the huge workforce and most of them not residing in companys labour colony.

In view of the upcoming crops and harvesting, the Government of India has diluted the norms for packaging of food grains in jute bags and instead permitted the use of plastic bags (HDPE woven sacks). Precisely, Jute Industry has lost the market share on production of jute bags for packaging of food grains. The Jute Industry can only hope to regain the market in future when operations become stable.

The unit operated at low capacity at uneconomic levels during May 2020 as per Government of West Bengal guidelines and has been recently permitted to operate at full capacity. The Company is in the value added export segment and tried the best to retain the Export Markets in view of COVID-19 effect on deliveries. The Company was unable to meet its commitments due to lockdown and reduced capacity working. Raw Jute consumption was affected due to COVID-19 lockdown. The prices of raw jute have also reduced. Jute crop for the new season seems to be reasonable and availability does not appear to be a challenge in view of low utilisation by the Jute Industry at present.

Your directors stand in solidarity with the nation in such challenging times.

b) Opportunities and threats Opportunities

Greater awareness among the people about the demerits of using plastic is leading to a higher demand for natural bio-degradable jute goods.

????? The diversified use of jute in floor coverings, jute geo-textiles, shopping bags and other industrial purposes is giving a boost in the demand for jute goods.

Threats

COVID 19 is a major threat to the Jute Industry and a matter of concern as the operations could affect anytime.

????? Foodgrains market have shifted to plastics and it will be a challenge to get it back in favour of Jute.

????? Issue of wages for lockdown period is before the Honble Supreme Court of India. Wages is a major component of our costs.

c) Segment-wise or product-wise performance

The Company is engaged in a single business segment i e. manufacturing and sale of jute goods. Hence disclosure requirement as required by IND AS - 108 are not applicable in respect of business segment. However, the geographical segments considered for disclosure are as under :

Particulars

For the year ended 31st March 2020

For the year ended 31st March 2019
India Overseas Total India Overseas Total
Revenue 28,472.67 16,152.23 44,624.90 24,320.38 13,991.62 38,312.00
Non-current assets other than financial instruments * 24,938.89 - 24,938.89 23,482.35 - 23,482.35

* Non-current assets other than financial instruments include property, plant and equipment, capital work-in-progress, right of use assets, investment property, other intangible assets, non-current tax assets (net) and other non-current assets.

d) Outlook

In this challenging time, it is our duty to appraise you with true situation. Heavy losses have already been incurred in the current year and still continuing. COVID 19 is still a threat to us. Situation is still uncertain and we cannot predict. We have borne severe damage to our factory buildings at the Budge Budge unit due to cyclone AMPHAN on 20th May, 2020. It will take us time to commission full unit. The factory situated at Budge Budge is presently under suspension of work from 27th May 2020. We are saddled with several issues at this time and to be honest situation ahead looks tough for the current year.

e) Risks and concerns

The major areas of risk and concern for the Jute Industry :

• Availability of Raw Jute: The jute crop can highly fluctuate depending on area under cultivation and weather conditions. The Company procures raw jute in planned manner from various locations and gradually built up inventory to mitigate this risk.

• Shortage of workers: To overcome this issue, measures are being taken to provide a healthy working environment with proper amenities inside the factory. New generation workers are being developed with adequate in-house training. Workers are also incentivised from time to time.

• Revenue concentration: The Jute Industry is mostly dependent on government procurement orders for packaging of food grains. Efforts are being made to create diversified jute products to increase the customer base.

• Alternate packaging materials – The availability of alternate packaging materials at cheaper rate had always been detrimental to the growth of Jute Industry. Steps are being taken to bring down the cost of production through modernisation.

f) Internal control systems and their adequacy The Company has adequate internal control systems commensurate with the size and the nature of operations. The Board of directors have designed the internal control systems to provide reasonable assurance with regard to recording and generating reliable financial and operational information, protecting assets from unauthorised use or losses, executing financial transactions with proper authorisation and ensuring compliance with corporate policies and applicable laws. The entire procedure covering all financial and operating functions are documented and audited by the auditors.

The audit committee periodically reviews the internal audit report and the Companys policies and procedures to ensure that internal control systems are operating effectively. During the year under review, the Statutory Auditors and Internal Auditors of the Company had reviewed the laid down policies and procedures for prevention and detection of frauds and errors in the conduct of business. No fraud was detected by the auditors.

g) Discussion on financial performance with respect to operational performance

The following are the significant areas of financial performance :

Particulars For the year ended 31st March, 2020 For the year ended 31st March, 2019 % Increase / (Decrease)
Revenue from operations 45,804.59 39,455.96 16.09%
CIF value of Export Sales 16,152.23 13,991.62 15.44%
Finance cost 36.70 72.21 (49.18%)
Inventories 8,160.03 8,033.29 1.58%
Fixed assets inclusive of capital advances 1,431.07 1,433.66 (0.18)%

Revenue from operations have improved substantially and the Company has been able to achieve better capacity utilisation. Export sales had increased significantly during the year under review. There had been a substantial fall in other income due to lower interest rate regime and fall in value of investments due to panic in markets caused by COVID-19 pandemic.

h) Material developments in human resource / industrial relations front, including number of people employed

Industrial relations remained harmonious during the year under review. There is shortage of new entrants in the Jute Industry. Besides, there has been high rate of worker absenteeism owing to migration. The Company is working on all possible measures to overcome the issue of availability of skilled workers. The Company continues to impart in-house training to new entrants to bring about all round improvement in their working knowledge and skills. The Company also continues its various staff welfare schemes. As on 31st March, 2020, there were 4,201 employees on the roll of the Company.

i) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor :

For the year ended 31st March 2020 For the year ended 31st March, 2019 % Change
Interest Coverage Ratio 169.52 100.11 69.33%

The interest expenses has reduced mainly due to less utilisation of working capital credit facilities during the year under review. Except interest coverage ratio, there has been no significant change (i.e. change of 25% or more as compared to the immediately previous financial year) in any other key financial ratios viz. debtors turnover, inventory turnover, current ratio, debt-equity ratio, operating profit margin and net profit margin.

j) Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

For the year ended 31st March 2020 For the year ended 31st March, 2019
Return on Net Worth 10.62% 12.00%

Return on Net Worth is calculated by dividing profit for the year by average net worth during the year. The Return on Net Worth has declined due to lower profit after tax as stated in this report.

k) Cautionary statement

Statements made in this section of the report on future expectation, performance and outlook are based on the current perception of the Board. Actual results may differ from those expressed in the statements.

6. SHARE CAPITAL

The Company has one class of share i.e. ordinary share of face value of Rs. 10/- each. There was no change in the share capital of the Company during the year under review. The issued, subscribed and fully paid up ordinary share capital of the Company as at 31st March, 2020 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 2020 – 2021 to BSE Limited.

7. 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.

8. 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/).

9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of investments made by the Company have been disclosed in Note 9 and Note 15 to the financial statement for the financial year ended 31st March, 2020. The Company has not given any loan during the year.

10. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

The Board of directors have developed a risk management policy for the Company, identifying therein the elements of risk and concern that may threaten the existence of the Company. The senior management continuously evaluates the risk elements through a systematic approach to mitigate or reduce the impact of risk elements. The elements of risks and concerns are periodically reviewed by the Board of directors. Discussion on risks and concerns have been made in this report under the head ‘management discussion and analysis.

11. 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 arms-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.

12. 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, is provided in Annexure-III forming part of this report.

13. CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year, your Company has spent Rs. 118.03 on various CSR activities. The annual report on CSR activities, in terms of Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014, is provided in Annexure-IV forming part of this report. The Corporate Social Responsibility Policy of the Company as adopted by the Board is available on Companys website (http://www.groupcheviot.net/investors-jute/corporate-governance-jute/). More information on CSR Committee is given in the report on corporate governance.

14. ANNUAL PERFORMANCE EVALUATION

The Board evaluated its own performance, its Committees and the performance of independent directors. The nomination and remuneration committee carried out annual performance evaluation of individual directors. The overall performance of the Board, its committees and individual directors was found adequate and effective in terms of the criteria set out by the nomination and remuneration committee. The 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 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 evaluation of directors was based on criteria such as preparedness for board meetings, attendance, judgements, contribution to risk management, adherence to Companys 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. 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 Companys 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 Companys website (http://www.groupcheviot.net/investors-jute/corporate-governance-jute/).

16. DIRECTORS

Mrs. Malati Kanoria (holding DIN 00253241) retires from the Board by rotation at the forthcoming AGM and, being eligible, offers herself for re-appointment. The existing term of appointment of Mr. Harsh Vardhan Kanoria (Mr. H.V. Kanoria) (holding DIN 00060259) is expiring on 31st July, 2020. The Board of directors at their meeting held on 5th June, 2020 have re-appointed Mr. H.V. Kanoria as Chairman and Managing Director, Chief Executive Officer of the Company for a period of five years with effect from 1st August, 2020 subject to approval of the members at the forthcoming annual general meeting.

Mr. Nawal Kishore Kejriwal (DIN 00060314), who has attained the age of 77 years, has retired from the Board of directors on completion of his term of office on 31st May, 2020. The Board of directors places on record its appreciation to the services rendered by Mr. Nawal Kishore Kejriwal during his long association with the Company.

The information about the directors seeking re-appointment as required by 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. All the independent directors have registered themselves on Independent Directors Databank.

17. COMPANYS 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 & RECOGNITION

Your Company is a proud recipient of 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. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has an Internal Complaint Committee as required to be formed under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder. The Company has adopted a policy in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. During the year under review, no complaint of sexual harassment has been received by the Internal Complaint Committee. More details are available in the report on corporate governance.

20. 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.

21. NUMBER OF MEETINGS OF THE BOARD

The Board of directors met 6 (six) times during the year under review. More details are available in the report on corporate governance.

22. COMPOSITION OF AUDIT COMMITTEE

The Board has constituted the audit committee with three directors as members, all of whom are financially literate. Two-thirds of the members of audit committee are independent directors. More details on the audit committee are given in the report on corporate governance.

23. KEY MANAGERIAL PERSONNEL / SENIOR MANAGERIAL PERSONNEL

During the year under review, the following key managerial personnel / senior managerial personnel retired from the services of the Company : a) Mr. Nawal Kishore Kejriwal (aged 77 years), whole time director of the Company, retired from the Board of directors on completion of his term of office on 31st May, 2020. b) Mr. Deo Kishan Mohta (aged 67 years), President (corporate affairs) of the Company, retired from the services of the Company at the close of business on 31st December, 2019. All the other Key Managerial Personnel continued to hold their offices.

24. 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 has 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 and any member interested in obtaining such information may write to the company secretary and the same will be furnished on request.

25. PUBLIC DEPOSITS

The Company has not accepted deposits from Public under Section 73 of the Companies Act, 2013 read with Rules framed thereunder.

26. CREDIT RATING

Crisil Limited 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.

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 Companys 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.

28. 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.

The outbreak of novel coronavirus (COVID-19) in India has witnessed a sudden halt in operations across the nation. As per Government directives, both the manufacturing units of the Company situated at Budge Budge and Falta SEZ in the state of West Bengal were temporarily shut down from 23rd March, 2020. Jute Mill situated at Budge Budge was under complete lockdown from 23-Mar-2020 to 2-May-2020. The Jute Mill gradually resumed operations based on the permission granted by Government of West Bengal strictly adhering to the social distancing norms and hygiene measures. Notice for suspension of work at the Jute Mill situated at Budge Budge, West Bengal was issued on 27th May, 2020 in view of the breach of Covid SOPs. Staggered tiffin breaks were not followed in night shift by the workers.

Cyclone "Amphan" hit West Bengal on Wednesday, 20th May, 2020 and caused severe damage to the Companys factory buildings and factory sheds particularly on the roofs/sheets and even on the supporting trusses and structures. The Company has lodged for insurance claim. The restoration work is estimated to take several months. Production will be affected for a period which cannot be ascertained at this stage. Operations can resume only partially in present condition. The dual effect of COVID-19 pandemic and cyclone have posed a major challenge on the business operations in near future. In view of the above factors, we are unable to meet to our order commitments and incurring heavy losses between the end of the financial year to which the financial statements relate and the date of this report.

29. BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility Report of the Company for the financial year ended on 31st March, 2020, describing the initiatives taken by the Company from an environmental, social and governance perspective, in the prescribed format is enclosed as Annexure VI to this report.

30. 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 Rules) all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF Authority established by the Government of India, after the completion of seven years. Further, according to the 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 had made online remittance of Rs. 11.27 lying in the unpaid dividend account for the financial year 2011-12 to the bank account of IEPF Authority on 3rd September, 2019. Further, 4,960 ordinary shares were transferred to the IEPF Authority during the year. Due to certain technical error, filing of Form IEPF-1 and Form IEPF-4 along with investor-wise details could not be completed. The Company has reported the matter to the IEPF Authority for early resolution. The details of unpaid dividend and shares transferred to the IEPF Authority are available at the following web link : (http://www.groupcheviot.net/investors-jute/unclaimed-dividends-jute/)

31. STATUTORY AUDITORS

M/s Singhi & Co., Chartered Accountants (ICAI Registration No. 302049E), was appointed as Statutory Auditors of the Company at the annual general meeting held on 25th August, 2017 for a term of five consecutive years. There has been no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditors in their report for the financial year ended 31st March, 2020 other than the unresolved issue with IEPF Authority which has already been discussed in this report. Pursuant to the provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud to the audit committee during the year under review.

32. COST AUDIT

The Company is required to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and accordingly such accounts and records are made and maintained by the Company. The Board of directors have re-appointed M/s D. Radhakrishnan & Co., Cost Accountants (Registration No. 000018), as Cost Auditors for the financial year 2020-2021 to conduct the audit of the cost accounting records maintained by the Company pursuant to Section 148 of the Companies Act, 2013 read with Rules framed thereunder. The resolution included at Item No. 5 of the Notice convening the annual general meeting seek members ratification to the remuneration payable to the cost auditor. M/s D. Radhakrishnan & Co., have long experience in the field of cost audit and have been conducting the audit of the cost records of the Company for the past several years. The Cost Audit Report of the Company for the Financial Year ended March 31, 2019 was filed by the Company in XBRL mode on 16th December, 2019.

33. SECRETARIAL AUDIT

The Board of directors have appointed M/s MR & Associates, a firm of practicing company secretaries (CoP 2551) to carry out the Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 read with Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The report of the Secretarial Auditor in Form MR-3 is enclosed as Annexure VII to this report. The Secretarial Auditors Report for the financial year 2019-20 does not contain any qualification, reservation or adverse remarks other than the unresolved issue with IEPF Authority which has already been discussed in this report.

Further, the Company has received the Annual Compliance Report for the year ended 31st March, 2020 regarding compliance of all applicable SEBI Regulations and circulars/guidelines issued thereunder from M/s MR & Associates, a firm of practicing company secretaries.

34. ACKNOWLEDGEMENTS

Your directors wish to express their sincere gratitude towards the financial institutions, banks, government authorities, regulatory authorities, customers, vendors and members for their continued support and co-operation. Your directors also convey their appreciation for the dedication and commitment displayed by the employees at all levels.

Kolkata, 5th June, 2020 For and on behalf of the Board
CHEVIOT COMPANY LIMITED
Harsh Vardhan Kanoria
Chairman and Managing Director,
Chief Executive Officer
DIN : 00060259