Gloster Ltd(Merged) Directors Report.

TO THE MEMBERS

Your Directors take pleasure in presenting the Ninety Seventh Annual Report of your Company together with the Audited Accounts for the year ended 31st March, 2019.

FINANCIAL RESULTS

The highlights of the financial results of the Company for the year ended 31st March, 2019 are as under:

(Rs. lakhs)

Standalone Consolidated
Particulars Year Ended Year Ended Year Ended Year Ended
31.3.2019 31.3.2018 31.3.2019 31.3.2018
Revenue from operations 50,138.31 46,398.50 50,138.31 46,398.50
Other Income 1,613.00 1,460.31 1,707.43 1,575.03
Total 51,751.31 47,858.81 51,845.74 47,973.53
Profit before Tax 6,764.37 6,520.24 6,853.65 6,629.49
Tax Expense 2,349.02 2,391.70 2,358.48 2,412.04
Profit for the year 4,415.35 4,128.54 4,495.17 4,217.46
Other Comprehensive Income (net of tax) (590.90) 1,497.80 (560.47) 1,490.46
Total Comprehensive Income 3,824.45 5,626.34 3,934.70 5,707.91

LISTING OF EQUITY SHARES

BSE Ltd. vide its letter no. DCS/AMAL/TP/SV/8202/2018-19 dated 28th January, 2019, has admitted to dealings on the exchange equity shares of the Company, effective from 30th January, 2019.

The Calcutta Stock Exchange Ltd. vide its letter no. CSE/LD/ DN/14587/2019 dated 28th March, 2019, has admitted to dealings on the exchange equity shares of the Company, effective from 29th March, 2019.

DIVIDEND AND RESERVES

Your Directors are pleased to recommend for your approval a dividend of 100% i.e Rs.10 per equity share for the year ended 31st March, 2019. The total outflow for dividend will be Rs.659.63 lakhs including Rs.112.47 lakhs by way of dividend tax.

During the year under review, a sum of Rs.2,000 lakhs was transferred to General Reserve.

OPERATIONS & STATE OF COMPANYS AFFAIRS

The production during the year under review has been 49,985 MT in comparison to 48, 588 MT in the previous year. Sales and turnover for the year under review stood at 50,928 MT & Rs. 49,117.56 lakhs as against 48,758 MT & Rs. 45,249 lakhs respectively in the previous year. For the year under review, net profit of the Company stood at Rs. 4,415.35 lakhs as against Rs. 4,128.54 lakhs in the previous year.

Companys continuous research on product develoment coupled with thrust on develoment of new overseas market has resulted increase in its export perfomance from Rs.10,969.09 lakhs in the year 2017-18 to Rs.12,666.43 lakhs in the year 2018-19.

The raw jute crop in the forthcoming jute season is expected to be better than current jute season. Having Carryover stock of approximately about 18 - 19 lakh bales the prices of raw jute in the forthcoming jute season is likely to be soft with a downward bias compared to the previous year.

Demand from Government, other domestic & export markets have been stable. The Company is continuously exploring newer export markets for traditional and diversified jute products.

CREDIT RATING

Various bank facilities of the Company are rated by CRISIL Limited based on Basel II norms followed by the banks under the guidelines of Reserve Bank of India.

All existing & proposed bank facilities have been reviewed and rated by CRISIL Limited vide its letter dated 3rd May, 2019, and rating for long-term bank facilities is ‘CRISIL A+/Stable and for short-term bank facilities rating has been upgraded to CRISIL A1+ from CRISIL A1.

CHANGE IN NATURE OF BUSINESS, IF ANY

During the year, there was no change in the nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

SUBSIDIARY COMPANIES

Gloster Lifestyle Limited and Gloster Specialities Limited continue to be wholly owned subsidiaries of your Company. None of the companies have become or ceased to be subsidiaries, associates and joint ventures during the year.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, and IND AS 110 Consolidated Financial Statements presented by the Company include the financial statement of its subsidiaries.

Further, a separate statement containing the salient features of the financial statements of subsidiaries of the Company in the prescribed Form AOC 1 is attached with this Report.

The Annual accounts of the subsidiary companies and other related detailed information will be kept at the Registered Office of the Company and also at the Registered Office of the subsidiary company and will be available to the investors seeking information at any time during the working hours of the Company except Saturdays.Furtheraspersection136oftheCompaniesAct,2013,the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of the subsidiaries are available at Companys website at www.glosterjute.com/Acctssubco.html/. A Policy has been formulated for determining the Material Subsidiaries of the Company pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations). The said Policy has been posted on the Companys website at the weblink www.glosterjute.com/documents/PDMS/pdf.

PERFORMANCE OF SUBSIDIARY COMPANIES

Gloster Lifestyle Limited

The Gross revenue of the Company stood at Rs.43.78 lakhs (Previous Year Rs.55.49 lakhs). Profit after tax for the year stood at Rs.38.19 Lakhs (Previous Year Rs. 45.55 lakhs) and Total Comprehensive Income stood at Rs. 53.41lakhs (Previous Year Rs.41.71 lakhs).

Gloster Specialities Limited

The Gross revenue of the Company stood at Rs.50.65 lakhs (Previous Year Rs. 59.23 lakhs). Profit after tax for the year stood at Rs.41.62 lakhs (Previous Year Rs. 43.36 lakhs) and Total Comprehensive Income stood at Rs. 56.84 lakhs (Previous Year Rs. 39.86 lakhs)

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements is prepared in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (accounts) Rules, 2014 forms part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report, as required under the Listing Regulation, is attached as Annexure – I and forms part of this Report.

CORPORATE GOVERNANCE

The Company practices principles of good corporate governance and lays strong emphasis on transparency, accountability and integrity.

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the detailed report on Corporate Governance and a certificate from the practising Company Secretary, confirming compliance with the requirements of the Corporate Governance is separately attached and forms part of this Annual Report.

SHARE CAPITAL

The Paid-up share capital of the Company as on 31st March, 2019 stood at Rs. 547.16 lakhs as compared to 200 lakhs as at 31st March, 2018. Pursuant to the scheme of amalgamation the eligible shareholders of erstwhile Gloster Limited have been issued and allotted equity shares of the Company on 10.05.2018 in accordance with the scheme. During the year under review, the Company has not granted any stock options or sweat equity. As on 31st March, 2019, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

NUMBER OF BOARD MEETINGS HELD

During the financial year ended 31st March, 2019, 6 (six) Board Meetings were held on 17th April, 2018, 29th May, 2018, 13th August, 2018, 14th November, 2018, 18th December, 2018 and 14th February, 2019. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

The details of number of meetings of the Board held during the Financial Year 2018-19 and number of meetings attended by Directors forms part of Corporate Governance Report.

MEETINGS OF INDEPENDENT DIRECTORS

During the financial year 2018-19, the Independent Directors met separately on 14th February, 2019, and inter-alia discussed the following:

? Evaluation of performance of Non-Independent Directors and the Board of Directors as a whole.

? Evaluation of performance of the Executive Chairman of the Company, taking into account the views of Executive and Non-Executive Directors.

? Evaluation of the quality, contents and timelines of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors have carried out an annual evaluation of its own performance, of the directors individually along with that of its various committees and details of such evaluation has been mentioned in the Corporate Governance Report.

The Board of Directors expressed their satisfaction with the evaluation process.

COMMITTEES OF THE BOARD

Audit Committee: The composition, terms of reference and other details of the Audit Committee have been furnished in the Corporate Governance Report forming a part of this Annual Report. There has been no instance where the Board has not accepted the recommendations of the Audit Committee.

Nomination and Remuneration Committee: The composition, terms of reference and other details of the Nomination and Remuneration committee have been furnished in the Corporate Governance Report forming part of this Annual Report.

Stakeholders Relationship Committee: The composition, terms of reference and other details of the Stakeholder Relationship committee have been furnished in the Corporate Governance Report forming part of this Annual Report.

Corporate Social Responsibility Committee: The composition and other details of the Corporate Social Responsibility Committee have been furnished in the Corporate Governance Report forming part of this Annual Report.

DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Companys Articles of Association Smt. Pushpa Devi Bangur, Non-Executive Director (DIN - 00695640) retires by rotation at the forthcoming Annual General Meeting and, being eligible offers herself for re-appointment.

As per the provisions of Section 149(1) of the Companies Act, 2013 and Regulation 17(1)(a) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has one Woman Director on its Board.

The independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and also Code of Conduct for Directors and senior management personnel.

A Formal Letter setting out the terms and conditions of appointment has been issued to all the Independent Directors as per the provisions of Companies Act, 2013 and the Listing Regulation. The same has been hosted on the Companys website and can be accessed at http://www.glosterjute.com/documents/ appntdir.pdf.

None of the Directors of the Company are disqualified for being continuing as Directors, as specified in section 164(2) of the Companies Act, 2013 and rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules 2014.

During the year the Company had four Key Managerial Personnel, Sri Hemant Bangur - Executive Chairman, Sri Dharam Chand Baheti - Managing Director, Sri Ajay Kumar Agarwal - Company Secretary and Sri Shankar Lal Kedia - CFO.

NOMINATION & REMUNERATION POLICY

The Nomination and Remuneration Committee has formulated a policy relating to the remuneration for the Directors, Key Managerial Personnel and Senior Managerial Personnel. The philosophy for remuneration is based on the commitment of fostering a culture of leadership with trust. The remuneration policy has been prepared pursuant to the provisions of Section 178(3) of the Companies Act, 2013, Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Nomination & Remuneration Policy is attached as Annexure-II and forms part of this report.

FAMILIARIZATION PROGRAMME

The Independent Directors have been familiarized with the nature of operations of the Company & the industry in which it operates, business model of the Company. Periodical Board Meeting generally once a year is held at the factory, preceded by visit of various processes, operations and general tour of the factory by the Directors. On an ongoing basis as part of Agenda of Board / Committee Meetings, presentations are regularly made to the Independent Directors on various matters inter-alia covering the Companys and its subsidiaries businesses and operations, industry and regulatory updates, strategy, finance, risk management framework, role, rights, responsibilities of the Independent Directors under various statutes and other relevant matters. The details of familiarization programme have been posted in the website of the Company and can be accessed at http://www. glosterjute.com/documents/FPID.pdf.

WHISTLE BLOWER POLICY

The Company has adopted a Vigil Mechanism / Whistle Blower Policy and has established the necessary mechanism, for employees to report concerns about unethical behavior or suspected fraud in violation of Companys Code of Conduct or any other point of concern. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases.

The policy has been uploaded in the website of the Company and can be accessed at http://www.glosterjute.com/documents/ WBPolicy.pdf.

RELATED PARTY TRANSACTIONS

The contracts/arrangements/transactions entered into by the Company with the related parties during the financial year under reporting were in ordinary course of business and were negotiated on an arms length basis with the intention to further the Companys interest. No material Contracts or arrangements with related parties were entered into during the year under review. There are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. Accordingly, no transactions are being reported in Form No. AOC – 2 in terms of section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014.

All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Where required, prior omnibus approval of the Audit Committee is obtained for transactions which are foreseen and repetitive in nature and the corresponding actual transactions become a subject of review at subsequent Audit Committee Meetings.

The policy on Related Party Transactions has been uploaded on the website of the Company and can be accessed at http://www. glosterjute.com/documents/RPTPolicy.pdf.

The details of the transactions with related parties during 2018-19 are provided in the accompanying financial statements.

Smt. Pushpa Devi Bangur is mother of Sri Hemant Bangur. Except for this there is no other pecuniary relationship .

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a CSR Committee and has simultaneously approved and adopted a CSR policy based on the recommendations of the CSR Committee. The said policy is available on the website of your Company and can be accessed at http://www.glosterjute.com/documents/CSRPolicy. pdf.

The Committee consists of three Members, comprising:

Name of the Members Category
Smt. Pushpa Devi Bangur Non-Executive Director
Sri Dharam Chand Baheti Managing Director
Sri Prabir Ray Independent Director

The Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure III and forms part of this Report.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has effective internal controls in place which are constantly reviewed. The Companys internal control system is commensurate with its size, scale and operations. Detailed procedures are in place to ensure that all assets are safeguarded and protected against loss.

The Internal Audit is carried on by M/s. R B S C & Co. Chartered Accountants. The Internal Audit function gives thrust to test and review controls and systems that are in place. The Audit Committee of the Board also reviews the Internal Audit functions.

The Audit Committee of the Board reviews the Internal Audit Report and corrective actions taken on the findings are also reported to the Audit Committee.

Necessary certification by the Statutory Auditors in relation to Internal Financial Control u/s 143(3) (i) of the Companies Act, 2013 forms part of the Audit Report.

RISK MANAGEMENT

Risk management is embedded in your Companys operating framework. Your Company believes that managing risks helps in maximizing returns.

The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risks for the business. The Company has a Risk Management procedure in place. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

AUDITORS & AUDITORS REPORT

Messrs, Price Waterhouse & Co. LLP, Chartered Accountants, (Firm Registration No.- 304026E/E-300009) Statutory Auditors of the Company hold office up to the 100th Annual General Meeting of the Company.

The Auditors Report on the financial statements for the financial year 2018-19 does not contain any qualifications, reservations or adverse remarks.

The auditors have not reported any fraud during the year.

COST AUDITORS

In accordance with Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Board of Directors has appointed M/s D. Radhakrishnan & Co., Cost Accountants as the Cost Auditors of the Company for the Financial Year 2019-20 at a remuneration of Rs.60,000 plus reimbursement of out of pocket expenses at actuals and applicable taxes. The remuneration needs to be ratified by the shareholders at the forthcoming Annual General Meeting and a resolution regarding ratification of remuneration payable to the cost auditor forms part of the notice convening the Annual General Meeting of the Company.

The Company is required to maintain cost records pursuant to an order of the Central Government and accordingly such records and accounts are maintained.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act, 2013, and rules made there under, M/s. M K B & Associates, Company Secretaries, are Secretarial Auditors of the Company for the financial year 2018-19.

The Secretarial Audit Report for the financial year ended 31st March, 2019 is attached as Annexure IV and forms part of this Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The company has complied with Secretarial Standards relating to General Meetings and Board Meetings as issued by Institute of Company Secretaries of India.

EXTRACT OF ANNUAL RETURN

Extracts of the Annual return in Form MGT 9 pursuant to Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is attached as Annexure V and forms part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

Information required under section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is attached as Annexure VI and forms part of this Report.

PARTICULARS OF EMPLOYEES

The information required under section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure VII A and forms part of this Report.

The details of employees who are in receipt of remuneration exceeding the limits prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure VIIB and forms part of this Report.

In terms of Section 136 of the Companies Act, 2013, the annual report is being sent to the members excluding the statement relating to top 10 employees of the Company. The said information is readily available for inspection by the members at the Companys registered office during the business hours on all working days up to the date of ensuing Annual General Meeting and shall also be provided to any member of the Company, who sends a written request to the Company Secretary.

DEPOSITS

Your company has not accepted deposits from public as envisaged under Section 73 to 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. The loans have been advanced by the Company for normal business purposes of the borrower.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of Section 134(3)(c) of the Companies Act, 2013 your Directors confirm that :

i) In the preparation of Annual Accounts, the applicable Standards have been followed and that there are no material departures; ii) 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 profit of the Company for that period; iii) 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; iv) The annual accounts have been prepared on a going concern basis; v) The Directors have laid down internal financial controls for the Company which are adequate and are operating effectively; vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Companys 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.

TRADE RELATIONS

The Board desires to place on record its appreciation for the support and co-operation that the Company has received from suppliers, brokers, customers and others associated with the Company as its enterprise partners. The Company has always looked upon them as partners in its progress and has happily shared with them rewards of growth. It will be Companys endeavor to build and nurture strong links with trade, based on mutuality, respect and co-operation with each other.

DEPOSITORY SYSTEM

The Companys shares are now tradable compulsorily in electronic form. In view of the numerous advantages offered by the Depository system, members are requested to avail of the facility of dematerialization of the Companys shares either in National Securities Depository Ltd or Central Depository Services (India) Ltd.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION &REDRESSAL) ACT 2013

The Company has zero tolerance for sexual harassment at work place and has adopted a policy in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the Rules thereunder for prevention, prohibition and redressal of complaints of sexual harassment at workplace. The company has complied with the provision relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no complaint was lodged with the Internal Complaints Committee.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the contribution made by the employees at all levels but for whose hard work, solidarity and support, your Companys achievements would not have been possible. Your Directors also wish to thank its customers, brokers dealers, agents, suppliers, investors and bankers for their continued support and faith reposed in the Company.

The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry despite increased competition from several existing and new players.

Your Directors take this opportunity to thank all investors, customers, vendors, bankers, regulatory and government authorities and stock exchanges, for their continued support and faith reposed in the Company.

For & on behalf of the Board
Place : Kolkata Hemant Bangur - Executive Chairman
Dated : 14th May, 2019 Dharam Chand Baheti - Managing Director

ANNEXURE-II TO THE DIRECTORS REPORT

NOMINATION & REMUNERATION POLICY

1. Preamble

1.1 The remuneration policy provides a framework for remuneration paid to the members of the Board of Directors ("Board") Key Managerial Personnel ("KMP") and Senior Managerial Personnel ("SMP"). The expression ‘Senior Management Personnel means personnel of the company who are members of its core management team excluding Board of Directors comprising all members of management one level below the executive Directors, including the functional heads. In terms of Section 178 of the Companies Act, 2013 this Policy is being framed and formulated for laying down criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration of Executives.

2. Aims & Objectives

The aims and objectives of this nomination & remuneration policy ("Policy") may be summarized as follows:

2.1 The Policy aims to enable the company to attract, retain and motivate highly qualified members for the Board, KMP and SMP.

2.2 The Policy aims to enable the Company to provide a well-balanced and performance-related compensation package, taking into account shareholders interest, industry standards and relevant Indian corporate regulations.

2.3 The Policy seeks to ensure that the interests of Board members, KMP and SMP are aligned with the business strategy and risk tolerance, objectives, values and long-term interests of the company and will be consistent with the "pay-for-performance" principle.

2.4 The policy will ensure that remuneration to Directors involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

3. Principles of remuneration

3.1 Support for Strategic Objectives: Remuneration and decisions shall be developed in a manner that is consistent with, supports and reinforces the achievement of the Companys vision and strategy.

3.2 Transparency: The process of remuneration management shall be transparent, conducted in good faith and in accordance with appropriate levels of confidentiality.

3.3 Internal equity: The Company shall remunerate the Board members, KMP and SMP in terms of their roles within the organisation.

3.4 External equity: The Company shall strive to pay an equitable remuneration, capable of attracting and retaining high quality personnel. Reference to external market norms will be made using appropriate market sources, including relevant and comparative survey data, as determined to have meaning to the Companys remuneration practices at that time.

3.5 Flexibility: Remuneration shall be sufficiently flexible to meet both the needs of individuals and those of the Company whilst complying with relevant tax and other legislation.

3.6 Performance-Driven Remuneration: The Company shall entrench a culture of performance driven remuneration.

3.7 Affordability and Sustainability: The Company shall ensure that remuneration is affordable on a sustainable basis.

4. Policy for selection and appointment of the Board Members and determining Directors independence

4.1 Board membership criteria

4.1.1 The Nomination & Remuneration Committee, along with the Board shall review on an annual basis, appropriate skills, characteristics and experience required of the Board Members for the better management of the Company. The objective is to have a Board with diverse background and experience in business, government, academics, technology and in areas that are relevant for the Companys global operations.

4.1.2 In evaluating the suitability of individual Board members, the Committee will take into account many factors, including general understanding of the Companys business dynamics, global business and social perspective, educational and professional background and personal achievements.

4.1.3 The policy seeks to ensure that Directors should possess the highest personal and professional ethics, integrity and values. They should be able to balance the legitimate interest and concerns of all the Companys stakeholders in arriving at decisions, rather than advancing the interests of a particular constituency. The Board members are expected to have adequate time and expertise and experience to contribute to effective Board performance.

4.1.4 The Directors must devote sufficient time and energy in carrying out their duties and responsibilities effectively. They must have the aptitude to critically evaluate managements working as part of a team in an environment of collegiality and trust.

4.1.5 The proposed appointee shall also fulfill the following requirements:

4.1.5.1 Shall not be disqualified under the Companies Act, 2013;

4.1.5.2 Shall give his written consent to act as a Director;

4.1.5.3 Shall endeavour to attend all Board Meetings and wherever he is appointed as a Committee Member, the Committee Meetings;

4.1.5.4 Shall abide by the Code of Conduct established by the Company for Directors, KMP and SMP;

4.1.5.5 Shall disclose his concern or interest in any company or companies or bodies corporate, firms, or other association of individuals.

4.1.6 The Nomination and Remuneration Committee shall evaluate each individual with the objective of having a group that best enables the success of the Companys business.

4.1.7 The Nomination and Remuneration Committee shall assess the independence of Directors at the time of appointment / re-appointment and the Board shall assess the same annually. The Board shall re-assess determinations of independence when any new interests or relationships are disclosed by a Director.

4.2 Selection of Board Members/extending invitation to a potential director to join the Board

The Nomination & Remuneration Committee will periodically identify competency gaps in the Board, evaluate potential candidates as per the criteria laid above, ascertain their availability and make suitable recommendations to the Board. The objective is to ensure that the Companys Board is appropriate at all points of time to be able to take decisions commensurate with the size and scale of operations of the Company. The Nomination & Remuneration Committee shall also identify suitable candidates in the event of a vacancy being created on the Board on account of retirement, resignation or demise of an existing Board member. Based on the recommendations of the Committee, the Board will evaluate the candidate(s) and decide on the selection of the appropriate member.

5. Compensation Structure

5.1 Remuneration to Non-Executive Directors

The Non-executive Directors of the Company will be paid remuneration by way of sitting fees for attending the meetings of the Board of Directors and its Committees. The said sitting fees paid to the Non-executive Directors for the Board Meetings and Committee meetings will be fixed by the Board and reviewed from time to time in accordance with applicable law. The Non-executive Directors may be paid such commission as the Board may approve from time to time subject to limits prescribed from time to time in the Act or Rules made thereunder.

5.2 Remuneration to Executive Directors, KMPs & SMP

The Company has a credible and transparent framework in determining and accounting for the remuneration of the Managing Director / Whole Time Directors (MD/ WTDs), KMP and SMP. Their remuneration are governed by the external competitive environment, track record, potential, individual performance and performance of the company as well as industry standards.

The remuneration for Managing Director / Whole Time Directors (MD/WTDs), is determined by the Board of Directors based on the appointment agreement approved, by the members in the general meeting of the Company and by the Central Government, if required.

6. Supplementary provisions

6.1 Any matters not provided for in this Policy shall be handled in accordance with relevant State laws and regulations and the Companys Articles of Association. If this Policy conflict with any laws or regulations subsequently promulgated by the state or with the Companys Articles of Association as amended pursuant to lawful procedure, the relevant State laws and regulations and the Companys Articles of Association shall prevail, and this Policy shall be amended in a timely manner and submitted to the Board of Directors for review and adoption.

6.2 The right to interpret this Policy vests in the Board of Directors of the Company.

ANNEXURE-VI TO THE DIRECTORS REPORT

Information under Section 134(3)(m) of the Companies Act, 2013 read with rule 8 of the Companies (Accounts) Rules, 2014:

A. Conservation of Energy

The steps taken towards Conservation of Energy are enumerated below:

i) All electric motors have been standardised with high efficiency & optimum capacity.

ii) Replaced 20 watt GSL lamp by 14 watt LED light.

iii) Installed another 100 NR Turbo Ventilators on Mill roof (Selection and Ring Spinning).

iv) High efficiency energy efficient Feed water Pump installed.

The steps taken by the Company for utilizing alternate sources of energy:

i) Using Jute Waste in Boiler as a Fuel.

ii) Installed safe light for using natural day light at Selection and Bale godown.

The capital investment on energy conservation equipment

i) Rs.95.18 lakhs

B. Technology Absorption

Efforts made towards technology absorption

i) Effimax installed at both Boilers for efficient running.

ii) Installed more 300 KVAR automatic power factor controller at our 33 kv distribution system.

iii) Dust suppression and humidification system installed at different departments.

iv) Installed PLC controlled high efficiency washing machine in process House.

Benefits derived

i) Improvement in productivity & efficiency

ii) Improvement in product quality

iii) Minimization of energy wastage

C. Foreign exchange earnings and outgo :

(i) Foreign exchange earned in terms of actual inflow : Rs.12,666.43 lakhs

(ii) Foreign exchange outgo in terms of actual outflow : Rs.780.73 lakhs

ANNEXURE-VII A TO THE DIRECTORS REPORT

PARTICULARS OF EMPLOYEES

The information required under section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

(a) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year :

Executive Directors Ratio to median remuneration
Sri Hemant Bangur – Executive Chairman 205.36
Sri Dharam Chand Baheti – Managing Director 194.98
Non-Executive Directors Ratio to median remuneration
Smt. Pushpa Devi Bangur 5.76
Sri S.B. Mainak 5.76
Sri S.N. Bhattacharya 5.76
Sri Prabir Ray 5.76

Median salary computation is based on a total employee head count of 4,387 employees out of which approximately 4,199 employees are within collective bargaining process.

(b) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Name % increase / (decrease) in remuneration in the financial year 2018-19
Sri Hemant Bangur – Executive Chairman (4.00%)
Sri Dharam Chand Baheti – Managing Director (10.54%)

Note: Sri Ajay Kumar Agarwal - Company Secretary and Sri S.L. Kedia - CFO have been appointed effective from 01.04.2018.

(c) The percentage increase in the median remuneration of employees in the financial year is 4.35%

(d) The number of permanent employees on the rolls of company as on 31st March, 2019 is 4,387

(e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof – Average percentage increase for other than managerial personnel works to around 11.88%, average percentage increase for managerial personnel works out to around 14.66% ; average percentage increase for all employees works out to 12.45%. Percentage increase for different categories / grades are made based on market trends and performance criteria.

(f) Affirmation that the remuneration is as per the remuneration policy of the company

The Company affirms that the remuneration is as per the Remuneration Policy of the Company.

ANNEXURE-VII B TO THE DIRECTORS REPORT

Information pursuant to Rule5(2) of Chapter XIII of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

The following persons were employed during the financial year and were in receipt of remuneration for that year which, in the aggregate was not less than Rs.1.02 crores (one crore and two lakh rupees) :-

Name Designation Remuneration Received ( lakhs) Nature of employment, whether contractual or otherwise Qualifications and experience of the employee Date of commencement of employment Age (Years) Last employment held % of equity shares held Relationship with any other Director / Manager with name of such Director / Manager
Sri Hemant Bangur Executive Chairman 321.08 Contractual Post Graduate in International Trade,19 Years 01.09.2015 47 Tea & Industries Limited, 6.84% Son of Smt. Pushpa Devi Bangur
Sri Dharam Chand Baheti Managing Director 304.85 Contractual B.Com, 51 years 01.04.1992 71 Executive Vice-Chairman Fort Gloster Industries Limited, Works Manager 0.04% None

Notes:

(a) All appointment are contractual and terminable by notice on either side.

(b) Remuneration shown above is subject to tax and comprises of basic salary, allowances & monetary value of perquisites

(c) Information about qualification and last employment is based on particulars furnished by the concerned employee.

There are no employees in the company who have been employed for a part of the financial year and are in receipt of remuneration for any part of the year which is not less than eight lakh and fifty thousand rupees per month.