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Howrah Mills Company Limited | Annual Report 2012-2013

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Howrah Mills Company LimitedRegistered & Administrative Office

‘Howrah House’, 135, Foreshore Road, Howrah - 711 102

keen on green!

InsideWho we are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .02Corporate information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .05Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .06Directors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .09Management Discussion & Analysis Report . . . . . . . . . . . . . . . . . . . . . . .14Corporate Governance Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28Statement of Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29Summary of Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . .30Notes to and forming integral part of Financial Statements . . . . . . . . .32Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46Consolidated Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48Details of subsidiaries as on 31.03.2013 . . . . . . . . . . . . . . . . . . . . . . . . .70

Forward-looking statementIn this Annual Report we have disclosed forward-looking information toenable investors to comprehend our prospects and take informedinvestment decisions. This report and other statements – written and oral– that we periodically make contain forward-looking statements that setout anticipated results based on the management’s plans andassumptions. We have tried wherever possible to identify suchstatements by using words such as ‘anticipate’, ‘estimate’, ‘expects’,‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance inconnection with any discussion of future performance.

We cannot guarantee that these forward-looking statements will berealized, although we believe we have been prudent in assumptions. Theachievement of results is subject to risks, uncertainties and eveninaccurate assumptions. Should known or unknown risks or uncertaintiesmaterialise, or should underlying assumptions prove inaccurate, actualresults could vary materially from those anticipated, estimated orprojected. Readers should bear this in mind. We undertake no obligationto publicly update any forward-looking statements, whether as a result ofnew information, future events or otherwise.

Howrah Mills is truly keen on green!

The value of being

green

This is the fourth annual report of the company

in which we have adopted the ‘green’ theme.

There is only one reason for doing so.

Green is the guiding principle for the company –

be it operations, philosophy, responsibility

initiatives or infrastructure.

Preserves and protectsthe environment

Spreads awarenessof preserving the

environment

Improves staffproductivity

Increases focuson good causes

Reduces energyconsumption and

costs

Increases access to safe water and

sanitation services;helping deprived areas

Increases greentechnologyabsorption

Improvessustainability

2 | Howrah Mills Company Limited

CredentialsHowrah Mills Company Limited (established in 1890)

is a leading manufacturer and exporter of jute

products in India. The Company’s Mill at Howrah has

been rated as one of the top five jute mills in India.

Core products and servicesThe company has a rich and diverse product mix

and has emerged as the one-stop shop for jute

products over the last few years. Products include

hessian, double warp cloth, sacking cloth, tarpauline

cloth, canvas cloth, scrim cloth, Hessian bags,

sacking bags, double warp bags, yarn, geo textiles,

soil savers, jute tape, nursery liners and sheets and

other specialty downstream products.

CustomersCompanies in the US, Europe, Japan, South Korea,

Turkey, Ghana, Brazil, Argentina, Peru, Mexico,

Sryia and Middle East constitute export sales.

Domestic customers also include the Indian

Government as well as brand-enhancing private

downstream companies.

Who we are!

Annual Report 2012-13 | 3

Certifications ISO 9001:2008 certification from BIS

ISO 14001:2004 certification from SGS

OHSAS 18001:2007 certification from SGS

It is the only Mill to run on 100% IJIRA Certified Food Grade Batching Oil

Star Export House duly recognised by Government of India

Registered under CDM (Clean Development Mechanism, Kyoto Protocol) as

certified by United Nations Framework Kyoto Protocol) as certified by United

Nations Framework Conventions upon Climate Change (UNFCCC)

The only Jute manufacturing unit in the world to have been awarded with Carbon

Credit for its technology of using alternate sources of fuel for the boilers

Public holdingWe are listed with the Calcutta Stock Exchange Limited

Our promoters’ stake was 46.08% as on 31st March, 2013

The weakening of the Indianrupee against the US$ willoffer more opportunity forthe export of jute goods atattractive prices. Jute, beingbiodegradable, is preferredbased on a growingconcern of environmentalissues and global warming.


Statutory Section


Corporate Information

Board of DirectorsSanjay Mall Managing Director

Sitansu Banerjee Whole-time Director

Shankar Lal Jhawar Director

Bhag Chand Jain Director

Sankar Kumar Mukhopadhyay Director

Kamal Hyder Siddique Director

Company SecretaryTuhinangsu Roy

BankersState Bank of India

The Federal Bank Limited

AuditorsS. JaykishanChartered Accountants12, Ho-Chi-Minh Sarani Kolkata – 700 071

Cost AuditorD. Radhakrishnan & Co.Cost Accountants11A, Dover Lane, Flat No. B1/34Kolkata-700029

Solicitor & AdvocateUtpal Majumdar7C, Kiran Shankar Roy RoadHastings Chamber, 3rd Floor Kolkata-700001

Registrar & Share Transfer AgentMaheshwari Datamatics Private Limited6, Mangoe Lane (Surendra Mohan Ghosh Sarani),2nd Floor, Kolkata – 700 001Phone No.: +91 33 2243 5029 / 5809Fax No.: +91 33 2248 4787E-mail: [email protected]

Registered Office & Administrative Office“Howrah House”135, Foreshore Road,Howrah – 711 102Phone No.: +91 33 2641 2402 / 4446 / 4159 / 2748E-mail: [email protected] Fax No.: +91 33 2641 2796 / 1447Website:www.mjindia.com/jute/howrahmill/html/index.html


NoticeNOTICE is hereby given that the One Hundred and Eighty

Seventh Annual General Meeting of the members of Howrah

Mills Company Limited will be held on Friday the 30th August

2013 at 11.30 a.m. at the Registered Office of the Company at

“Howrah House”, 135, Foreshore Road, Howrah – 711 102 to

transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the audited Balance Sheet

as at 31st March 2013, the Statement of Profit and Loss for

the year ended on that date and the Reports of the

Directors and Auditors thereon.

2. To declare a dividend on equity shares.

3. To appoint a Director in place of Mr. Shankar Lal Jhawar

who retires by rotation and being eligible, offers himself for

reappointment.

4. To re-appoint M/s S. Jaykishan, Chartered Accountants,

the retiring Auditors to hold office from the conclusion of

this Annual General Meeting until the conclusion of the next

Annual General Meeting on a remuneration to be mutually

agreed upon with the Board of Directors.

By order of the Board

For Howrah Mills Company Limited

Tuhinangsu Roy

Company Secretary

Registered Office:

"Howrah House",

135, Foreshore Road,

Howrah-711102

Date: 30th May, 2013

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE

MEETING IS ENTITLED TO APPOINT A PROXY TO

ATTEND AND VOTE INSTEAD OF HIMSELF AND THE

PROXY NEED NOT BE A MEMBER OF THE COMPANY.

PROXIES IN ORDER TO BE EFFECTIVE MUST BE

RECEIVED AT THE REGISTERED OFFICE OF THE

COMPANY NOT LESS THAN FORTY-EIGHT HOURS

BEFORE THE COMMENCEMENT OF THE MEETING.

2. Corporate members intending to send their authorised

representatives to attend the meeting are requested to

send to the Company a certified copy of the Board

Resolution authorising their representative to attend and

vote on their behalf at the meeting.

3. The Register of Members and the Share Transfer Books of

the Company shall remain closed from 24th August, 2013

to 30th August, 2013 (both days inclusive).

4. The Company’s Registrar and Share Transfer Agent

M/s. Maheshwari Datamatics Private Limited, 6, Mangoe

Lane (Surendra Mohan Ghosh Sarani), 2nd Floor, Kolkata

– 700 001 should be contacted:

by the Members to notify their change of address, if any,

and for any queries relating to shares and

by the investors to send their documents for transfer/

transmission of shares.

5. Shareholders can get their shares dematerialised by

opening a demat account with a Depository Participant

through National Securities Depository Limited (NSDL) or

Central Depository Services (India) Limited (CDSL).

6. The Register of Directors’ Shareholding kept pursuant to

section 307 of the Companies Act, 1956 shall remain open

for inspection by any member of the Company at the

Registered Office of the Company during 11.00 a.m. to

1.00 p.m. on each working day beginning 14 days before

the date of the Annual General Meeting and ending 3 days

after the date of its conclusion.

7. Dividend, as recommended by the Board of Directors, if

declared at the Annual General Meeting will be paid on or

before 29.09.2013:

to members holding shares in physical form after giving

effect to valid transfers in respect of transfer requests

lodged on or before the close of business hours on

23.08.2013.

to beneficial owners in respect of shares held in

dematerialised form as per the data made available by

NSDL and CDSL as at the end of the business hours on

23.08.2013.

8. Members / Proxies are requested to bring the attendance

slip duly filled in for attending the Meeting. Members who


hold shares in dematerialised form are requested to write

their Client ID and DP ID numbers and those who hold

shares in physical form are requested to write their folio

number in the attendance slip for attending the meeting.

9. Members are also requested to bring their copy of Annual

Report to the Meeting.

10. Members desirous of getting any information about the

accounts or operations of the Company are requested to

forward their queries to the Company at least seven

working days prior to the meeting so that proper

information can be made available at the meeting.

11. Members are entitled to make nominations in respect of

shares held by them in physical form by sending their

request to the Company’s Registrar and Share Transfer

Agent and for shares held in dematerialised form they are

requested to contact their respective DPs.

12. The Ministry of Corporate Affairs has taken a “Green

Initiative in the Corporate Governance” by allowing

paperless compliances by the companies and has issued

circulars stating that service of notice/documents including

Annual Report can be sent by e-mail to its members. To

support this green initiative of the Government, members

who have not registered their e-mail addresses so far are

requested to register their e-mail addresses with the

Company’s Registrar and Share Transfer Agent,

M/s. Maheshwari Datamatics Private Limited, 6, Mangoe

Lane (Surendra Mohan Ghosh Sarani), Kolkata - 700 001,

quoting their folio no.(s). / DP IDs.

13. The Ministry of Corporate Affairs, Government of India vide

General Circular No.2/2011 dated 08.02.2011 has granted

a general exemption from compliance of section 212 of the

Companies Act, 1956, subject to fulfillment of conditions

stipulated in the Circular. The Company has satisfied the

conditions stipulated in the said Circular and hence is

entitled to the exemption. Necessary information relating to

the subsidiaries has been included in this Annual Report. In

terms of the said Circular the Audited Accounts, Directors’

and Auditors’ Reports of the Company’s subsidiaries viz.

(a) HMC Jute Park Enterprises Limited and (b) HMC Power

Companies Limited for the financial year ended 31.03.2013

are not attached with this Annual Report. The Annual

Accounts of the aforesaid subsidiaries are kept at the

Registered Office of Howrah Mills Company Limited

(Holding Company) and at the Registered Office of the

subsidiary companies for inspection by any shareholder

during working days at business hours after prior notice.

14. Members who hold shares in physical form in multiple

folios in identical names or joint accounts in the same

order or names are requested to send their share

certificates to the Company’s Registrar and Share Transfer

Agent for consolidation into a single folio.

15. The Securities and Exchange Board of India (“SEBI”) has

mandated the submission of Permanent Account Numbers

(“PAN”) by every participant in the securities market.

Members holding shares in electronic form are, therefore,

requested to submit their PAN details to their Depository

Participants with whom they maintain their Demat

Accounts. Members holding shares in physical form

should submit their PAN details to the Company’s Registrar

& Share Transfer Agent.

Equity

16. The last dates of claim for the following dividends are as follows:

Dividend for the Date of declaration Last date for claiming To be transferred to IEPF

financial year ended of Dividend unpaid Dividend within 30 days on & from

31-03-2010 21-09-2010 27-10-2017 28-10-2017

31-03-2011 28-09-2011 03-11-2018 04-11-2018

31-03-2012 24-09-2012 30-10-2019 31-10-2019


9.1% Cumulative Redeemable Preference Shares

Dividend for the Date of declaration Last date for claiming To be transferred to IEPF

period of Dividend unpaid Dividend within 30 days on & from

15.06.1993 to 14.06.2008 23-09-2008 05-08-2017 06-08-2017

By order of the Board


Tuhinangsu Roy

Company Secretary

Registered Office:

"Howrah House",

135, Foreshore Road,

Howrah-711102


DETAILS OF DIRECTOR SEEKING RE-APPOINTMENT AT THE FORTHCOMING ANNUAL GENERAL MEETING(IN PURSUANCE OF CLAUSE 49 IV (G) (I) OF THE LISTING AGREEMENT)

Name of Director Mr. Shankar Lal Jhawar

Date of Birth 07.06.1961

Qualification B. Com

Expertise in specific functional area Marketing in jute products, dealing in construction and real estate

business.

Directorships held in other companies Manglam Commercial Private Limited

(excluding foreign companies) Stylish Precast Private Limited

Ritika Commercial Company Private Limited

Sundaram Nirman Private Limited

HMC Power Companies Limited

Shrivali Conmat Industries Private Limited

Committee Membership if any, with position

(other than in Howrah Mills Co. Ltd.) NIL

Shareholding in the Company 750 equity shares


Directors’ Report

Your Directors have pleasure in presenting their 187th Annual Report alongwith the Audited accounts of the Company for theyear ended 31st March 2013.

Financial results (` in lacs)

OPERATIONSThe year under review witnessed acute shortage of workers

and absenteeism for which the production capacity could not

be utilized fully. Apart from this there was a strike for some

days due to labour dispute which also affected the production.

As a result the production during the year was 46050 MT as

compared to 47817 MT in the previous year. This resulted in

reduced turnover from `390.05 crores in the last year to

`357.35 crores in the current year.

The initial forecast of raw jute crop in the new jute season is

good and there will be enough carry over of raw jute stock at

the end of the year. Prices of raw jute in the current year are

likely to be stable.

In view of low production and reduced turnover the Company’s

profit after tax was `3.27 crores in the current year as

compared to `3.53 crores in the previous year.

The Company had allotted 10,00,000 equity shares of `10/-

Year ended Year ended31.03.2013 31.03.2012

Operating Profit before Interest and Depreciation 1,630.90 1,505.53

Other Income 133.92 185.70

1,764.82 1,691.23

Less – Interest 905.75 812.96

859.07 878.27

Less – Depreciation 481.93 439.16

Profit before tax 377.14 439.11

Less – Provision for Tax (net) 50.00 85.68

Profit after tax 327.14 353.43

Less – Proposed Dividend on Equity Shares 32.22 27.22

Less – Corporate Dividend Tax 5.23 4.42

289.69 321.79

Accumulated Profit brought forward from previous year 2,218.88 1,897.09

Accumulated Profit carried forward to next year 2,508.57 2,218.88


each at a premium of `40/- per share totalling to `5.00 croreson preferential basis in terms of section 81(1A) of theCompanies Act, 1956 read with SEBI (ICDR) Regulations,2009. The consent of the members for such allotment wasobtained through Postal Ballot in terms of section 192A of theCompanies Act, 1956 read with Companies (Passing of theResolution by Postal Ballot) Rules, 2011.

MODERNISATIONThe modernisation of plant & machinery is a continuous

process. We are installing high speed shuttle-less looms,

spinning frames and moving towards our target of making your

mill equipped with the most modern machineries.

DIVIDENDYour Board has recommended a dividend of 5% (`0.50) per

equity share for the financial year 2012-2013, as per last year.

SUBSIDIARY COMPANIESHMC Jute Park Enterprises LimitedThe proposal with the National Jute Board to develop the Jute

Park on the basis of a Development Agreement between our

subsidiary HMC Jute Park Enterprises Limited and other

parties who are interested to set up their units in the proposed

Jute Park is still pending with the Government of India.

HMC Power Companies LimitedAs reported earlier the setting up of a 5 MW Bio-mass based

power plant in the District of Hooghly on rice husk fed boiler by

the Company’s subsidiary HMC Power Companies Limited is

been withheld due to the high price and uncertainty of supply

of rice husk.

GREEN HOUSE GAS REDUCTION The 1st commitment period of Kyoto Protocol upto 31.03.2012

for CDM activities, has been extended upto 31.03.2020.

Forward contract for selling the Certified Emission Reduction

(CER) to the existing buyer was extended upto 31.03.2017 as

the performance of your Company has achieved the utmost

satisfaction of the said buyer. Our 2nd CDM project is moving

satisfactorily and has obtained the 1st round clearance after

Technical Review by the Designated Operational Entity

(D.O.E.)

MANAGEMENT DISCUSSION ANDANALYSIS REPORT AND REPORT ONCORPORATE GOVERNANCE As required in terms of the Listing Agreement with the Stock

Exchange, a Management Discussion and Analysis Report

and a Report on Corporate Governance along with a certificate

from the Statutory Auditors on its compliances are annexed

forming part of this Report.

DIRECTORSIn accordance with the provisions of the Companies Act, 1956

and the Articles of Association of the Company Mr. Shankar Lal

Jhawar retires by rotation at the ensuing Annual General

Meeting and is eligible for re-appointment.

DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to Section 217(2AA) of the Companies Act, 1956,

your Directors state as follows:

(a) that in the preparation of the annual accounts, for the

financial year ended 31st March, 2013, the applicable

accounting standards have been followed along with

proper explanation relating to material departures.

(b) that the Directors have selected such accounting policies

and applied them consistently and made judgments and

estimates that are reasonable and prudent so as to give a

true and fair view of the state of affairs of the Company at

the end of the financial year and of the profit of the

Company for the year.

(c) that the Directors have taken proper and sufficient care for

the maintenance of adequate accounting records in

accordance with the provisions of the Companies Act,

1956 for safeguarding the assets of the Company and for

preventing and detecting fraud and other irregularities.

(d) that the Directors have prepared the annual accounts for

the financial year ended 31st March, 2013 on a going

concern basis.

PARTICULARS OF EMPLOYEESYour Company has not paid any remuneration attracting the

provisions of the Companies (Particulars of Employees) Rules,

1975 read with Section 217 (2A) of the Companies Act, 1956.


Hence, no information is appended to this Report in this

regard.

ACCREDITATIONSISO 9001:2008 from BIS for Quality Management Systems,

ISO 14001:2004 from SGS for Environmental Management

Systems for Industrial Production, and

OHSAS 18001:2007 from SGS for Occupational Health and

Safety Management Systems.

AUDITORS AND AUDITORS’ REPORTM/s. S. Jaykishan, Chartered Accountants, the Auditors of your

Company retire at the forthcoming Annual General Meeting

and being eligible offer themselves for re-appointment.

As regards observations contained in the Auditors’ Report, the

respective notes to the accounts are self-explanatory and

therefore, do not call for further comments.

COST AUDITPursuant to section 233B of the Companies Act, 1956 and

revised guidelines issued by the Ministry of Corporate Affairs,

the Company gets its cost accounts audited by

M/s. D. Radhakrishnan & Co., Cost Accountants, of 11A,

Dover Lane, Kolkata – 700 029 were appointed as the Cost

Auditors of the Company for the financial year 2012-2013 with

the approval of the Ministry of Corporate Affairs.

The Cost Audit Report for 2011-2012 filed under XBRL was

signed on 31.01.2013 and was duly filed on 28.02.2013 being

the extended due date for filing the Cost Audit Report for 2011-

2012.

CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNINGS ANDOUTGOParticulars in respect of conservation of Energy and

Technology absorption under Section 217 (1) (e) of the

Companies Act, 1956 read with the Companies (Disclosure of

Particulars in the Report of Board of Directors) Rules, 1988 are

annexed hereto and forms part of the Report.

CONSOLIDATED FINANCIAL STATEMENTSThe Consolidated Financial Statements have been prepared

by your Company in accordance with the requirements of the

Accounting Standards issued by The Institute of Chartered

Accountants of India. The audited Consolidated Financial

Statements together with Auditors’ Report forms part of the

Annual Report.

PUBLIC DEPOSITThe Company has not accepted any deposits from the public

under section 58A of the Companies Act, 1956 and rules

framed there under.

ACKNOWLEDGEMENTYour Directors express their sincere appreciation for the

continued co-operation and support extended to the Company

by the Central Government, Government of West Bengal,

Government Agencies & Local Authorities, Bankers, Financial

Institutions, Business Associates and Shareholders. Your

Directors also place on record their deep appreciation of the

valuable contribution of the employees at all levels for the

progress of your Company during the year and look forward to

their continued co-operation in realisation of the corporate

goals in the years ahead.

For and on behalf of the Board

Sanjay Mall Managing Director


Place: Howrah Shankar Lal Jhawar DirectorDate: 30th May, 2013


Directors’ ReportAnnexure to the

Information pursuant to Section 217 (1) (e) of the Companies Act, 1956

A. Conservation of Energya. Energy conservation measures taken : The Company continues to install energy saving and more efficient

spinning frames, looms, motors and equipments.

b. Additional investments and proposals being : To replace fossil fuel with Bio Mass. implemented for reduction of consumption of energy.

c. Impact : Energy conservation measures continue to reduce the productioncost and reduction of carbon emission.

d. Form A :

Particulars For the year For the yearended on ended on

31.03.2013 31.03.2012

i) Power & Fuel ConsumptionElectricityPurchased Unit 2,23,84,888 2,38,74,947Total Amount 15,45,63,759 13,71,86,081Rate/Unit 6.90 5.75Own Generation through DieselGenerators – Units 7,87,727 4,01,142Unit per Ltr. of Diesel 2.85 2.90Cost per unit ` 16.89 15.90Coal(B & C Grades used mainly for generation of steam boiler)Quantity – Ton – –Total Cost – ` – –Average Rate – ` / Ton – –Consumption per unit of productionProduction – Ton 46,050 47,817Electricity per Ton (Unit) 468 468Coal (B & C grades)/ton of production-(Ton) – –


B. Technology AbsorptionForm B

Research and Development (R&D)1. Specific areas in which R&D was carried out by the Company

R&D activities are carried out for improvement in quality of existing products, development of value-added products and

production process for better productivity.

2. Benefits derived as a result of above R&D

Improvement in quality of the product, cost effectiveness and utilization of waste materials.

3. Future plan of action

The Company is planning to install solar panels for its mill.

4. Expenditure on R&D

a. Capital In accordance with Company’s

b. Recurring consistent practice, expenditure

c. Total R&D expenditure as a percentage of turnover incurred on R&D activities remains merged under various heads.

Technology Absorption, Adaptation and Innovationi) Efforts in brief made towards technology absorption, : Suitable machineries & equipment are procured to conform to the

adaptation & innovation. latest technology.

ii) Benefits derived as a result of above efforts e.g. product : Improvement in productivity & quality of products.

improvement, cost reduction, product development.

iii) Details of imported Technology : No technology has been imported.

C. Foreign Exchange Earnings and Outgoa) Export activities : The Company exported Jute Goods worth `2,187.97 lacs

directly, apart from export through Merchant Shippers, as against

`7,203.08 lacs in the previous year. The Company is exploring

new markets and expects to increase its exports substantially.

b) i) Total foreign exchange used : `646.46 lacs.

ii) Total foreign exchange earned : ` 2,187.97 lacs.






Management Discussionand Analysis ReportINDUSTRY STRUCTURE ANDDEVELOPMENTS The Government of India by a notification during the year

under review has diluted the compulsory packing norms for

food grains and sugar under Jute Packaging Materials

(Compulsory use for Packing Commodities) Act, 1987 (JPMA).

It has been directed that food grains to the extent of 90% of

production and sugar to the extent of 40% of production, shall

be packed in jute packaging material. The said notification is

valid upto June, 2013.

OPPORTUNITIES AND THREATSOPPORTUNITIES

Jute, being a bio-degradable and pollution free commodity,

should continue to get preference over other substitute

products in view of rising concern for environment and

global warming;

Weakening of rupee may offer opportunity for export of jute

products at attractive prices;

Good monsoon forecast in the current year should increase

food grain and sugar crop, thereby increasing requirement

of jute packaging materials.

RISKS AND CONCERNS / THREATSAvailability of Raw jute, being an agricultural produce, may

vary and thereby adversely affect the performance;

Further dilution of compulsory packing of food grains and

sugar in jute packaging will affect market for jute products;

Increased employee cost due to ever increasing dearness

allowance causing regular increase in the cost of

production;

Increased power cost due to revision in power tariff by CESC

from time to time, is another major factor for increased

production cost;

Competition from cheaper substitute synthetic packaging

materials.

SEGMENT WISE OR PRODUCT WISEPERFORMANCEThe Company’s turnover from jute activity has been reduced

as compared to the last year. In the real estate sector there is

some increase in the turnover in the current year as compared

to the last year. Both in the jute and real estate sectors there

are some marginal increase in the profits but due to increase

in interest costs the overall profit has been reduced.

OUTLOOKThe initial forecast of good monsoon will result in bumper

crop of raw jute in the coming season. This should keep the

prices of raw jute checked and barring any unforeseen

circumstances the outlook for the current year appears to be

promising.

The Company continues its thrust to modernize its mill by

installing high speed shuttle-less looms and spinning

frames.

Your Management continues to make all efforts and is

hopeful to be able to improve the overall performance of the

Company in the years to come.

INTERNAL CONTROL SYSTEMS ANDTHEIR ADEQUACY

The Company has adequate internal control system which

provides reasonable assurance with regard to safeguarding

the Company’s assets, promoting operational efficiency by

cost control, preventing revenue leakages, ensuring

adequate financial & accounting controls and compliance

with various statutory provisions;

The services of the Company’s Internal Auditor M/s. Kay &

Kay Associates, Chartered Accountants has been extended

for the Company’s Rajam unit;


The Company had installed a comprehensive ERP system

last year, which has improved the internal control system by

providing timely and detailed information for the

Management;

The audit observations and Action Taken Reports are placed

periodically before the Audit Committee.

DISCUSSION ON FINANCIALPERFORMANCEThe following are the significant areas of financial

performance:

(in `)

Particulars 2012- 2013 2011- 2012

Revenue from operations 3,57,34,66,066 3,90,05,49,447

Cost of materials consumed 2,39,72,73,478 2,79,31,58,080

Finance costs 9,05,75,385 8,12,96,345

Profit after tax 3,27,13,556 3,53,43,051

HUMAN RESOURCESThe Company is continuing its efforts through training to

enhance competence of its manpower to make them more

resourceful in their present job and also to prepare them for

future roles. The Company has received certification for BS

OHSAS 18001:2007 from SGS for Occupational Health and

Safety Management Systems.

CAUTIONARY STATEMENTStatements made in this Report are made on good faith. Many

unforeseen factors may come into play and affect the actual

results, which could be different from what the Directors

envisage in terms of future performance and outlook.






Corporate Governance Reportfor the year 2012-2013

1. COMPANY’S PHILOSOPHY ON CODE OFCORPORATE GOVERNANCEThe Company believes that the principles of sound corporate

governance not only encompass within its purview the

statutory requirements but also that the enterprise is governed

in a manner that it meets its objective of growth and prosperity,

and has the competitive edge in the current market scenario.

The Company recognizes that transparent, credible and

accountable governance is a must in today’s scenario. It

recognizes that procedures, practices and systems require

constant review for improving standards of sound corporate

practices in tandem with the ever changing environment in

which the organization is operating to ensure overall growth -

a product for ensuring customer satisfaction. The activities and

actions are undertaken considering the concern of all the

stakeholders, viz. shareholders, creditors, distributors,

customers, employees and the society at large.

2. BOARD OF DIRECTORS

I. CompositionThe Company’s policy is to maintain optimum combinationof Executive and Non-Executive Directors and half of theBoard comprises of Independent Directors. The presentcomposition of the Board is as follows:

One Managing DirectorOne Whole-time Director Three Non-Executive Independent DirectorsOne Non-Executive Promoter Director

No Director is related to any other Director on the Board interms of the definition of “relative” given under theCompanies Act, 1956.

II. 7 (Seven) Board Meetings were held during the financialyear ended 31st March, 2013. The dates on which theBoard Meetings were held are 14.05.2012, 10.08.2012,23.08.2012, 09.10.2012, 12.11.2012, 31.01.2013 and15.03.2013.

III. Attendance of Directors at Board Meetings / last Annual General Meeting and number of other Directorships and Memberships/Chairmanships of Committees of each Director in other companies:

Attendance of meetings Number of Other Directorships and

during 2012-2013 Committee Memberships / Chairmanships

Name of Directors Category Board Last Other Committee Committee

Meeting AGM Directorship(s) Memberships Chairmanships

Mr. Sanjay Mall Managing Director 7 Yes 4 Nil Nil

Mr. S. Banerjee Whole-time Director 6 No 4 Nil Nil

Mr. S. L. Jhawar Non-Executive Promoter Director 7 Yes 1 Nil Nil

Mr. B. C. Jain Non-Executive Independent Director 6 Yes 2 4 4

Mr. Sankar Kumar Non-Executive Independent Director 6 Yes Nil Nil Nil

Mukhopadhyay

Mr. Kamal Hyder Siddique Non-Executive Independent Director 7 Yes Nil Nil Nil

Notes:The Directorships held by Directors as mentioned above, do not include Directorships in Foreign Companies, Companies registered under

section 25 of the Companies Act, 1956, Directorship in Howrah Mills Company Limited and Private Limited Companies.

In accordance with clause 49 of the Listing Agreement, membership / chairmanship of only Audit Committee and Shareholders’ / Investors’

Grievance Committees in all Public Limited Companies (excluding Howrah Mills Company Limited) are considered.


3. AUDIT COMMITTEEThe Audit Committee comprises of Messrs B.C. Jain, SankarKumar Mukhopadhyay and Kamal Hyder Siddique. Mr. B.C.Jain a Non-Executive Independent Director, having adequatefinancial, accounting qualification and expertise, is theChairman of the Audit Committee. The other members of theCommittee are also financially literate. The Secretary of theCompany is also the Secretary of the Committee.

The role and terms of reference of the Audit Committee coversthe areas mentioned under clause 49 of the Listing Agreement.Brief descriptions of the terms of reference of the AuditCommittee are as follows:

I. Overseeing the Company’s financial reporting process andthe disclosure of its financial information to ensure that thefinancial statements are correct, sufficient and credible.

II. Recommending to the Board, the appointment, re-appointment and if required, the replacement or removal ofthe statutory auditor and the fixation of audit fees, and alsoapproval of payment for any other services rendered by thestatutory Auditor.

III. Reviewing with the management, the annual financialstatements before submission to the Board for approvalwith particular reference to:

Matters required to be included in the Directors’Responsibility Statement to be included in the Board’sReport in terms of Clause (2AA) of Section 217 of theCompanies Act, 1956.

Changes, if any, in accounting policies and practices andthe reasons for the same.

Major accounting entries involving estimates based on theexercise of judgment by management.

Significant adjustments made in the financial statementsarising out of audit findings.

Reviewing compliances with listing and other legalrequirements relating to financial statements.

Qualifications in the draft audit report.

Discussion with the statutory auditor before the auditcommences, about the nature and scope of audit as well aspost-audit discussion to ascertain any area of concern.

Reviewing with the management, performance of statutoryand internal auditors, and adequacy of the internal controlsystems.

Reviewing with the management, the quarterly financialstatements before submission to the Board for approval.

Discussion with internal auditor of any significant findingsand follow up thereon.

The particulars of meetings attended by the members of the Audit Committee during the financial year ended 31st March, 2013are given below:

Name of Members Status Category Meetings held during the financial year ended on

31st March, 2013 and attendance of members

4. REMUNERATION COMMITTEEI. Brief description of terms of reference and Remuneration

PolicyThe Remuneration Committee has been constituted torecommend / review remuneration to the ExecutiveDirector(s) based on qualification, experience and thefinancial position of the Company.

II. Composition, name of members and ChairpersonThe Remuneration Committee of the Board comprises ofMessrs B.C. Jain, Sankar Kumar Mukhopadhyay and KamalHyder Siddique. Mr. B.C. Jain a Non-Executive IndependentDirector is the Chairman of the Committee. The Committeemet on 14.05.2012 where all the members were present.

14.05.12 10.08.12 23.08.12 12.11.12 31.01.13

Mr. B. C. Jain Chairman Non-Executive Independent Director Yes Yes Yes Yes YesMr. S. L. Jhawar Member Non-Executive Promoter Director Yes – – – –

(ceased to be amember afterre-constitution of Audit Committee on 14.05.2012)

Mr. S. Banerjee Member Whole-time Director Yes – – – –(ceased to be amember afterre-constitution of Audit Committee on 14.05.2012)

Mr. Sankar Kumar Member Non-Executive Independent Director – Yes Yes Yes NoMukhopadhyayMr. Kamal Hyder Member Non-Executive Independent Director – Yes Yes Yes YesSiddique


III. Details of Remuneration of Directors for the year ended on 31st March, 2013 (In `)

5. SHARE TRANSFER & INVESTORS’ GRIEVANCE COMMITTEEI. Composition of the Committee and non-executive Director heading the Committee

The Share Transfer & Investors’ Grievance Committee of the Board comprises of Messrs S. Banerjee, S.L. Jhawar and Sankar

Kumar Mukhopadhyay as members. Mr. S. L. Jhawar a Non-Executive Director is the Chairman of the Committee.

II. Brief description of the terms of reference

The terms of reference of the Committee are to approve transfer / transmission of shares, dematerialisation and

re-materialisation of shares, approving the split and consolidation request, other matters relating to transfer and registration of

shares and further to look into the redressal of shareholders’ and investors’ complaints relating to non receipt of notices, share

certificates, dividends, annual reports and other grievances.

III. Meetings and attendance during the year

During the financial year ended 31st March, 2013, 12 (Twelve) meetings of the Share Transfer & Investors’ Grievance Committee

were held on 16.04.2012, 31.07.2012, 31.08.2012, 17.09.2012, 11.10.2012, 22.11.2012, 06.12.2012, 13.12.2012, 10.01.2013,

31.01.2013, 14.02.2013 and 07.03.2013.

The particulars of meetings attended by the members of the Share Transfer & Investors’ Grievance Committee during the financial

year ended 31st March, 2013 are given below:

IV. Name and designation of the Compliance Officer

Mr. Tuhinangsu RoyCompany SecretaryHowrah Mills Company Limited“Howrah House”, 135, Foreshore Road,Howrah-711102

V. During the year ended 31st March, 2013 all complaints received from the shareholders / investors were sorted out.There were no pending complaints as on 31st March, 2013.

Name of Directors Salary & Commission Other Sitting Fees Total

Allowances Perquisites

Mr. Sanjay Mall 10,00,000 – 1,00,000 600 11,00,600

Mr. S. Banerjee 8,40,000 – 1,60,725 – 10,00,725

Mr. S. L. Jhawar – – – 11,400 11,400

Mr. B. C. Jain – – – 7,800 7,800

Mr. Sankar Kumar Mukhopadhyay – – – 12,000 12,000

Mr. Kamal Hyder Siddique – – – 7,200 7,200

Total 18,40,000 – 2,60,725 39,000 21,39,725

Name of Members Status Category No. of No. of

Meetings held Meetings attended

Mr. B. C. Jain Chairman Non-Executive 12 1(ceased w.e.f. 14.05.2012) Independent Director

Mr. S. L. Jhawar Chairman Non–Executive 12 12(appointed w.e.f. 14.05.2012) Promoter Director

Mr. S. Banerjee Member Whole-time Director 12 11

Mr. Sankar Kumar Mukhopadhyay Member Non-Executive 12 10(appointed w.e.f. 14.05.2012) Independent Director


d) Postal Ballot:I) The Company at its meeting held on 15.03.2013 had

approved the issue of 10,00,000 equity shares of `10/-each at a premium of `40/- per share on preferential basisin terms of section 81(1A) of the Companies Act, 1956read with SEBI (ICDR) Regulations,2009 subject to theconsent of the members and other concerned authorities.

The Board had also decided that the approval of themembers was to be obtained by means of Postal Ballot interms of section 192A of the Companies Act, 1956 readwith the Companies (Passing of the Resolution by PostalBallot) Rules, 2011.

Accordingly the Board appointed Mr. Babu Lal Patni,Practicing Company Secretary as the Scrutinizer for

conducting the Postal Ballot.

Postal Ballot Notices were sent to the shareholders on21.03.2013. The last date for receipt of Postal Ballot Formswas upto the close of working hours on 20.04.2013.

The Postal Ballot process was carried out in a fair andtransparent manner. The postal ballot forms had beenkept under the safe custody of the Scrutinizer beforecommencing the scrutiny of such postal ballot forms.

The result of the Postal Ballot based on the Scrutinizer’sReport dated 24.04.2013 was announced by Mr. S.Banerjee the Whole-time Director of the Company on25.04.2013 at 3.00 p.m. at the Registered Office of theCompany which is as follows:-

The Special Resolution as set out in the postal ballotnotice dated 20.03.2013 was accordingly approved by themembers with requisite majority and passed as a SpecialResolution.

The postal ballot results were published in thenewspapers and displayed in the Company’s website.

Subsequently, The Calcutta Stock Exchange Limited hadissued to the Company the In-Principle Approval pursuantto clause 24(a) of the Listing Agreement. Thereafter, the

Board of Directors at its meeting held on 15.05.2013 hadallotted the said 10,00,000 equity shares to the proposedallottees.

II) Save and except what has been reported above no otherspecial resolution was passed in the last year that wasrequired to be put through postal ballot. None of thebusinesses proposed to be transacted in the ensuingAnnual General Meeting require passing of a specialresolution through postal ballot.

AGM held on Special Resolutions passed

21.09.2010 Yes. The following Resolution was passed:

A Special Resolution pursuant to section 198, 269, 309 read with Schedule XIII of the Companies Act, 1956 for

re-appointment of Mr. S. Banerjee as the Whole-time Director of the Company.

28.09.2011 None.

24.09.2012 Yes. The following Resolution was passed:

A Special Resolution pursuant to section 198, 269, 309 read with Schedule XIII of the Companies Act, 1956 for re-appointment

of Mr. S. Banerjee as the Whole-time Director of the Company.

6. GENERAL BODY MEETINGSa) Location, date and time of last three Annual General Meetings are given below:

Year Location Date Time

2009 – 2010 Registered Office, ‘Howrah House’, 135, Foreshore Road, Howrah – 711 102. 21.09.2010 11.30 A.M.

2010 - 2011 Registered Office, ‘Howrah House’, 135, Foreshore Road, Howrah – 711 102. 28.09.2011 11.30 A.M.

2011 - 2012 Registered Office, ‘Howrah House’, 135, Foreshore Road, Howrah – 711 102. 24.09.2012 11.30 A.M.

b) No Extra-Ordinary General Meeting of the shareholders was held during the year.

c) Special resolutions passed in the last three Annual General Meetings are given below:

Particulars No. of Postal No. of As a percentage of Ballot Forms Equity Shares total valid votes

(a) Total Postal Ballot Forms received 33 4604858 100%

(b) Less: invalid Postal Ballot Forms NIL NIL NIL

(c) Net valid Postal Ballot Forms (as per Statement) 33 4604858 100%

(d) Postal Ballot Forms with assent for the Resolution 27 4604848 99.9998%

(e) Postal Ballot Forms with dissent for the Resolution 6 10 0.0002%


7. DISCLOSURESRelated party transactions are set out in the Notes to

Accounts, forming part of the Annual Report for the year ended

on 31st March, 2013. There is no other pecuniary relationship

or transactions with the non-executive independent directors.

During the last three years there were no strictures or penalties

imposed on the Company by the Stock Exchange or SEBI or

any statutory authority for non-compliance of matter related to

Capital Markets. Details of adoption of non-mandatory

requirements are shown separately.

8. MEANS OF COMMUNICATIONQuarterly, half yearly and annual results are published in

prominent dailies such as Business Standard (English), Arthik

Lipi / Sokal Bela / Newz Bangla (Bengali) and are also posted

in the Company’s website www.mjindia.com/jute/howrahmill

/html/index.html in the form prescribed under clause 41 of the

Listing Agreement.

9. GENERAL SHAREHOLDER INFORMATION

I. Company Registration Details

The Company is registered in the State of West Bengal,

India. The Corporate Identity Number (CIN) allotted to the

Company by the Ministry of Corporate affairs (MCA) is

L51909WB1918PLC000625.

II. Annual General Meeting

Date and Time: Friday, 30th August, 2013, at 11.30 a.m.

Venue: “Howrah House”, 135, Foreshore Road,

Howrah – 711102.

III. Financial calendar for 2013-2014

Financial year 1st April to 31st March

1st quarterly results – on or before 14.08.2013

2nd quarterly/half yearly results – on or before 14.11.2013

3rd quarterly results – on or before 14.02.2014

4th quarterly results – on or before 30.05.2014

Annual results – on or before 30.05.2014

IV. Date of Book Closure

24.08.2013 to 30.08.2013 (both days inclusive).

V. Dividend Payment Date

On or before 29.09.2013.

VI. Listing on Stock Exchange

The Calcutta Stock Exchange Limited

7, Lyons Range, Kolkata – 700 001.

VII. Stock Codes

The Calcutta Stock Exchange Limited: 10018016

Demat ISIN Number for NSDL and CDSL – INE964C01015

VIII. Market Price Data

During the year under review the share prices were not

quoted regularly.

IX. Performance in comparison to BSE Sensex

Presently the Company is not listed with BSE.

X. Annual Fees

Annual listing fee for the financial year 2013-2014 has been

paid by the Company to the CSE and annual custody fees

for the financial year 2013-2014 have been paid to NSDL

and CDSL.

XI. Registrar and Share Transfer Agent

Maheshwari Datamatics Private Limited

6, Mangoe Lane (Surendra Mohan Ghosh Sarani),

2nd Floor, Kolkata – 700 001.

Phone No.: +91 33 2243 5809 / 5029

Fax No.: +91 33 2248 4787.

E-mail: [email protected]

XII.Share Transfer System

Trading in equity shares of the Company is permitted only

in dematerialised form. The applications for transfer of

shares in physical form are processed by the Company’s

Registrar and Share Transfer Agent, M/s. Maheshwari

Datamatics (P) Ltd. The Share Transfer & Investors’

Grievance Committee constituted for transfer/transmission

of shares and for other allied matters has during the year

approved all good deliveries of transfer and transmission

of shares and has also approved other allied matters. In

case of bad deliveries the relevant documents were sent

immediately after specifying the defects through a covering

letter. The Company obtains from a Company Secretary in

Practice half yearly certificate of compliance pursuant to

clause 47(c) of the Listing Agreement and files a copy of

the certificate with the CSE. The Company carries out a

quarterly reconciliation of share capital audit pursuant to

Regulation 55A of SEBI (Depositories & Participants)

Regulation, 1996 which is carried out by a Company

Secretary in Practice and the same is also filed with CSE.


XVI. Outstanding GDRs / ADRs / Warrants or anyConvertible InstrumentsThe Company has not issued any GDRs / ADRs /Warrants or any other convertible instruments.

XVII. Works Location493/C/A, G. T. Road (S), Howrah – 711 102.

XVIII. Address for CorrespondenceAny assistance regarding Share transfers, transmissions,change of address, non-receipt of sharecertificate/duplicate share certificate, demat and othermatters and also for redressal of all share related

complaints and grievances, the members are requestedto write or contact the Registrar and Share Transfer Agentor the Secretarial Department of the Company at theaddresses given below:

a) Secretarial DepartmentHowrah Mills Company Limited“Howrah House”, 135, Foreshore Road,Howrah – 711 102Phone No.: +91 33 2641 2402 / 4446 / 4159Fax No.: +91 33 2641 1447 / 2796E-mail: [email protected]

Number of Shares Shareholders Shares

Number % of Total Number % of Total

Upto 500 1276 90.5607 131217 2.4102

501 – 1000 48 3.4067 35671 0.6552

1001 – 2000 14 0.9936 22401 0.4115

2001 – 3000 4 0.2839 10500 0.1929

3001 – 4000 4 0.2839 16000 0.2939

4001 – 5000 23 1.6324 115000 2.1123

5001 – 10000 16 1.1356 153500 2.8195

10001 and above 24 1.7033 4960018 91.1047

Grand Total 1409 100.0000 5444307 100.0000

XIII. Distribution of equity shareholding as on 31.03.2013

XIV. Category of Equity Shareholders as on 31.03.2013

Particulars Holders No. of Shares % of Total

Physical 1130 586045 10.7644

NSDL 193 4775343 87.7126

CDSL 86 82919 1.5230

Grand Total 1409 5444307 100.0000

XV. Dematerialisation of Equity Shares & Liquidity as on 31.03.2013

Category Number of Shares Held % of Total

Promoters’ Group 2508864 46.0823

Financial Institutions/Banks 115007 2.1124

Central / State Governments 530 0.0097

Insurance Companies 27575 0.5065

Foreign Nationals 2675 0.0491

Foreign Companies 900 0.0165

Custodian of Enemy Property 1025 0.0188

Non-Resident Individuals 1588 0.0292

Bodies Corporate 2182213 40.0826

Individuals 603930 11.0929

Grand Total 5444307 100.0000


b) Registrar & Share Transfer AgentMaheshwari Datamatics Pvt. Ltd.6, Mangoe Lane, (Surendra Mohan Ghosh Sarani),2nd Floor, Kolkata–700 001Phone No.: +91 33 2243 5809 / 5029Fax No.: +91 33 2248 4787E-mail: [email protected]

XIX. SEBI Complaints Redress System (SCORES):The investor complaints are processed in a centralizedweb based complaints redress system. The salientfeatures of this system are: Centralized data base of allcomplaints, online upload of Action Taken Reports(ATRs) by the concerned companies and online viewingby investors of actions taken on the complaint and itscurrent status.

10. CODE OF CONDUCTThe Company has adopted a code of conduct for itsBoard of Directors and senior management personneland the same has been posted on the Company’swebsite.

Compliance of Non Mandatory Requirements(i) The Board

The Independent Directors of the Company have therequisite qualifications and experience which in theopinion of the Company would enable them to contributeeffectively to the Company in their capacity asIndependent Directors.

(ii) Remuneration CommitteeThe Company has a Remuneration Committeecomprising of Messrs B.C. Jain, Sankar KumarMukhopadhyay and Kamal Hyder Siddique as members.

(iii) Shareholder RightsThe quarterly, half-yearly and annual financial results ofthe Company are published in prominent dailies such asBusiness Standard (English), Arthik Lipi / Sokal Bela /Newz Bangla (Bengali) and are also posted in theCompany’s website www.mjindia.com/jute/howrahmill/html/index.html.

(iv) Audit QualificationThe Company is taking steps to move toward a regime ofunqualified financial statements.

(v) Training of Board MembersThe Company has not yet adopted any trainingprogramme for its Directors.

(vi) Mechanism for evaluating non-executive BoardMembersThere is no mechanism for evaluating non - executiveBoard Members at present. All the non-executive BoardMembers are having requisite qualification and expertisein their respective functional areas.

(vii) Whistle Blower PolicyThere is no Whistle Blower Policy at present.






CERTIFICATE BY THE MANAGING DIRECTOR UNDER CLAUSE 49 (V) OF THE LISTING AGREEMENT


The Board of Directors,Howrah Mills Company Limited,“Howrah House”,135, Foreshore Road,Howrah - 711102.

I, Sanjay Mall, Managing Director of Howrah Mills Company Limited certify to the Board that I have reviewed the financial statementand cash flow statement of the Company for the financial year ended 31st March, 2013 and to the best of my knowledge andbelief, I certify that:-

1. These statements do not contain any materially untrue statement or omit any material fact or contain statements that might bemisleading; that the statements together present a true and fair view of the Company’s affairs and are in compliance withexisting Accounting Standards; applicable laws and regulations;

2. There are no fraudulent or illegal transactions;

3. I accept responsibility for establishing and maintaining internal controls for financial reporting and I have evaluated theeffectiveness of the internal control systems of the Company pertaining to financial reporting. Deficiencies in the design oroperation of such internal controls, if any, of which I am aware, have been disclosed to the Auditors and the Audit Committeeand steps have been taken to rectify these deficiencies.

4. i) There has not been any significant change in internal control over financial reporting during the year under reference;

ii) There has not been any significant change in accounting policies during the year requiring disclosure in the notes to thefinancial statements; and

iii) There have been no instances of frauds of which I am aware during the year.

Sanjay MallManaging Director

DECLARATION – CODE OF CONDUCT

All Board Members and the Senior Management Personnel have, for the year ended 31st March, 2013, affirmed compliance withthe Code of Conduct laid down by the Board of Directors in terms of the Listing Agreement entered into with The Calcutta StockExchange Limited.


Place: Howrah Sanjay MallDate: 30th May, 2013 Managing Director


CERTIFICATE OF CORPORATE GOVERNANCE

To The Members of Howrah Mills Company Limited

We have examined the compliance of the conditions of Corporate Governance by Howrah Mills Company Limited for the yearended on March 31, 2013 as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchange.

The compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination was limitedto procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of CorporateGovernance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given and representations made by theDirectors and the management to us, we certify that the Company has complied with the conditions of Corporate Governance asstipulated in Clause 49 of the above mentioned Listing Agreement.

We state that as per the records maintained by the Registrar and Share Transfer Agent of the Company and presented to theShareholders / Investor Grievance Committee no investor grievances are pending for a period exceeding one month against theCompany.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency oreffectiveness with which the management has conducted the affairs of the Company.

For S. JaykishanChartered Accountants

FRN: 309005E

CA Y. GuptaPlace: Kolkata PartnerDate: 30th May, 2013 Membership No. 060539


Independent Auditors’ Report

Report on the Financial Statements We have audited the accompanying financial statements of Howrah MillsCompany Limited. (the Company) which comprise the Balance Sheet asat 31st March 2013, the Statement of Profit and Loss and the Cash FlowStatement for the year then ended and a summary of significantaccounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation of these financialstatements that give a true and fair view of the financial position, financialperformance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including AccountingStandards referred to in sub-section (3C) of section 211 of theCompanies Act, 1956 (the Act). This responsibility includes the design,implementation and maintenance of internal control relevant to thepreparation and presentation of the financial statements that give a trueand fair view and are free from material misstatement, whether due tofraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these financial statementsbased on our audit. We conducted our audit in accordance with theStandards on Auditing issued by the Institute of Chartered Accountantsof India. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from materialmisstatements.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and disclosures in the financial statements. Theprocedures selected depend on the auditor’s judgement, including theassessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to theCompany’s preparation and fair presentation of the financial statementsin order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accountingestimates made by management, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.

Opinion In our opinion and to the best of our information and according to theexplanations given to us, the aforesaid financial statements give theinformation required by the Act in the manner so required and subjectto:-

i) Note No. 29(i) regarding non ascertainment and provision of accruedgratuity liability.

ii) Note No. 29(ii) regarding non ascertainment and provision of intereston delay payments of statutory dues such as Gratuity etc.

iii) Note No. 30 regarding future uncertainability regarding realizations oftrade receivables and export incentives and non-provision againstthe same.

iv) Note No. 31 regarding non ascertainment and provisions of interestand charges for non/ delay payments of service tax and sales tax.

v) Note No. 32 regarding writing back of loan liability amounting to `257lacs payable to WBIDC Limited, in absence of approval of the samefrom the said WBIDC Limited

give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

(i) in the case of the balance sheet, of the state of affairs of theCompany as at 31st March 2013;

(ii) in the case of the statement of profit and loss, of the profit for theyear ended on that date; and

(iii) in the case of the cash flow statement, of the cash flows for theyear ended on that date.

Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report) Order, 2003 (the

Order), as amended, issued by the Central Government of India interms of sub-section (4A) of section 227 of the Act, we give in theAnnexure a statement on the matters specified in paragraphs 4 and5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which tothe best of our knowledge and belief were necessary for thepurpose of our audit except in the case of WBIDC limited loan of`257 lacs written back in the accounts in respect of whichnecessary approval from said WBIDC Ltd was not madeavailable;

b. In our opinion proper books of account as required by law havebeen kept by the Company so far as appears from ourexamination of those books;

c. The Balance Sheet, the Statement of Profit and Loss and theCash Flow Statement dealt with by this Report are in agreementwith the books of account;

d. In our opinion, the Balance Sheet, the Statement of Profit andLoss and the Cash Flow Statement comply with the AccountingStandards referred to in sub-section (3C) of Section 211 of theCompanies Act, 1956 except non compliance with AccountingStandard -15 “Employee Benefits” in respect of nonascertainment and provision of accrued gratuity liability;

e. On the basis of written representations received from thedirectors as on 31st March 2013, and taken on record by theBoard of Directors, none of the directors is disqualified as on 31March 2013, from being appointed as a director in terms ofclause (g) of sub-section (1) of Section 274 of the CompaniesAct, 1956.

For S. Jaykishan

Chartered Accountants

FRN: 309005E

CA Y. Gupta

Place: Kolkata Partner

Date: 30th May, 2013 Membership No.: 060539

To

The Members of

Howrah Mills Company Limited

ANNEXURE TO INDEPENDENT AUDITORS’ REPORT Referred to in Paragraph 1 under the heading on “Report on other Legal and RegulatoryRequirement” of our report of even date

i) (a) The Company has maintained proper records to show full

particulars including quantitative details and situation of

fixed assets subject to the following remarks:

I. In respect of Building, Plant and Machinery, Electric

Installation, Sprinkler Installation, Sundry Equipment

and Furniture acquired prior to 1st April 1960 such

records were compiled allocating the total cost and

depreciation on individual items pro-rata on the basis

of physical verification and valuation carried by Mill

Manager.

II. In respect of Building, Plant and Machinery, Electric

Installation, Sprinkler Installation, Sundry Equipment

and Furniture acquired during the period from 1st

April 1960 to 31st March, 1977 year wise

depreciation has been allocated to individual assets

proportionately on the basis of their written down

values, for purpose of entry in the record.

(b) As explained to us, the fixed assets of significant values

have been physically verified by the management at

reasonable intervals during the year and no material

discrepancies were noticed on such verification.

(c) The Company has not disposed off any substantial part of

fixed assets during the year.

ii) (a) The inventories have been physically verified by the

management at reasonable intervals during the year.

(b) In our opinion, the procedures of physical verification of the

inventories followed by the management are reasonable

and adequate in relation to the size of the Company and

nature of its business.

(c) The Company has maintained proper records of

inventories. No material discrepancy has been noticed on

physical verification as compared to book records.

iii) (a) The Company has provided interest free advances

aggregating to `22,970,964/- to its two subsidiaries

covered in the register maintained u/s 301 of the

Companies Act, 1956.

(b) In our opinion and according to informations and

explanations given to us, the terms and conditions of

interest free advances are prima facie not prejudicial to the

interest of the Company.

(c) In the absence of stipulations regarding repayment of such

advances, we are unable to comment upon the regularity

of repayment of the same.

(d) As stated above, no repayment schedule has been

specified and hence we are unable to comment upon any

overdue amount in excess of `One Lac, in this regard.

(e) The Company has not taken any loans , secured or

unsecured, from companies, firms or other parties

covered in the register maintained U/s. 301 of the

Companies Act , 1956 . Accordingly, clauses (f) & (g) of

para (iii) are not applicable.

iv) In our opinion and according to the information and explanations

given to us, there are adequate internal control procedures

commensurate with the size of the Company and the nature of

its business for the purchase of inventory, fixed assets and for

the sale of goods and services. Further, on the basis of our

examination of the books and records of the Company, we have

neither come across nor have we been informed of any

continuing failure to correct major weakness in the aforesaid

internal control system.

v) (a) According to the information and explanations given to us,

we are of the opinion that the particulars of contracts or

arrangements referred to in Section 301 of the Companies

Act, 1956 that need to be entered into the register required

to be maintained under that Section have been so entered.

(b) In our opinion and according to the information and

explanations given to us, the transactions made in

pursuance of such contracts or arrangements and

exceeding the value of rupees five lacs in respect of each

party during the year have been made at prices which are

reasonable having regard to the prevailing market prices at

relevant time.

vi) The Company has not accepted any deposit during the year

from the public within the meaning of the provisions of Section

58A and 58AA of the Companies Act, 1956 or any other relevant

provisions of the Companies Act, 1956 and the Rules framed

there under.

vii) In our opinion, the Company has an Internal Audit system

commensurate with the size and nature of its business.

viii) We have reviewed the books of account maintained by the

Company pursuant to Rules made by the Central Government

for the maintenance of cost records U/s. 209(1)(d) of the

Companies Act, 1956 and are of the opinion that prima-facie the

prescribed accounts and records have been made and

maintained. However, we have not made a detailed examination

of the same.

ix) (a) According to the books and records of the Company, the

Company is generally regular in depositing undisputed

statutory dues including Provident Fund, Employees’ State

Insurance, Employees’ Pension Scheme, TDS, Sales Tax,


ANNEXURE TO INDEPENDENT AUDITORS’ REPORT (contd...)


Profession Tax and other statutory dues applicable to it

with the appropriate authorities though there has been a

slight delay in a few cases.

(b) According to the information and explanations given to us,

no undisputed amounts payable in respect of Sales Tax,

Provident fund, ESI and other statutory dues were in

arrears as at 31st March, 2013 payable for a period of

more than six months from the date they became payable,

except the following:-

Nature of Amount Period to which Date of

the Dues (`) the amount relates Payment

Service Tax 1,845,684 2007-2008 Not Yet

2,801,843 2012-2013 Not Yet

Fringe Benefit Tax 492,005 2007-2008 Not Yet

Income Tax 305,501 2007-2008 Not Yet

1,629,016 2009-2010 Not Yet

3,826,381 2010-2011 Not Yet

2,109,673 2011-2012 Not Yet

(c) According to information & explanations given to us,

details of Sales Tax & Urban Land Tax, which have not

been deposited on account of dispute are given below :

Particular Amount (`) Forum where appeal

pending

Sales Tax 1,865,171 Sales Tax Appellate

Revision Board

Urban Land Tax 154,759 Urban Land Ceiling

(Disputed) Department

x) The Company has no accumulated losses at the end of the

financial year and it has not incurred cash losses in the financial

year under report and in the immediately preceding financial

year.

xi) On account of Loan from IFCI Ltd. of `1,269,000/- for which

repayment was rescheduled by BIFR in earlier years, no

repayment was made during the year. In case of other loans the

Company has not defaulted in repayment of dues to other banks

and financial institutions.

xii) The Company has not granted any loans or advances on the

basis of security by way of pledge of shares, debentures and

other securities.

xiii) Clause (xiii) of the Order is not applicable to the Company, as the

Company is not a chit fund Company or nidhi / mutual benefit

fund / society.

xiv) Clause (xiv) of the Order is not applicable, as the Company has

not dealt or traded in shares, securities, debentures or other

investments during the year.

xv) The Company has given corporate guarantee for loans taken by

another body corporate from Bank. The terms and conditions

whereof in our opinion are not prima facie prejudicial to the

interest of the Company.

xvi) On the basis of review of utilisation of funds pertaining to term

loan on overall basis and related information as made available

to us, the Company has applied the term loan for the purpose for

which the loan was obtained during the year.

xvii) In our opinion and according to the information and explanations

given to us and on overall examination of the balance sheet of

the company, we report that no funds raised on short-term basis

have been used for long-term investment.

xviii) The Company has not made any preferential allotment of shares

to companies/ firms or other parties covered in the Register

maintained u/s 301 of the Companies Act, 1956.

xix) No debentures have been issued by the Company and hence

the question of creating securities in respect thereof does not

arise.

xx) The Company has not raised any money by way of public issue

during the year.

xxi) According to the information and explanations given to us, no

fraud on or by the Company has been noticed or reported during

the year.

For S. Jaykishan

Chartered Accountants

FRN: 309005E

CA Y. Gupta

Place: Kolkata Partner

Date: 30th May, 2013 Membership No. 060539

Balance Sheet As at 31st March, 2013(Amount in `)

In terms of our attached report of even date.

For S. JAYKISHAN Sanjay MallChartered Accountants Managing DirectorFRN : 309005E

(CA Y. GUPTA) T. Roy S. BanerjeePartner Company Secretary Whole-time DirectorMembership No. 060539

Place: Kolkata S. L. JhawarDate: 30th May, 2013 Director


Particulars Note No. As at As at31st March, 2013 31st March, 2012

I. EQUITY AND LIABILITIES1) SHAREHOLDERS' FUNDS

(a) Share Capital 2 54,443,070 54,443,070 (b) Reserves & Surplus 3 409,068,741 381,037,519(c) Share Application Money pending allotment 50,000,000 –

513,511,811 435,480,589 2) NON-CURRENT LIABILITIES

(a) Long-Term Borrowings 4 136,527,579 72,658,799 (b) Deferred Tax Liabilities (Net) 5 244,756 244,756 (c) Other Long-Term Liabilities 6 18,590,390 14,382,942

155,362,725 87,286,497 3) CURRENT LIABILITIES

(a) Short-Term Borrowings 7 559,153,215 647,963,212 (b) Trade Payables 8 716,635,159 741,301,160 (c) Other Current Liabilities 9 181,506,296 133,236,121 (d) Short-Term Provisions 10 31,050,368 25,469,188

1,488,345,038 1,547,969,680 TOTAL 2,157,219,574 2,070,736,766

II. ASSETS1) NON-CURRENT ASSETS

(a) Fixed Assets 11 (i) Tangible Assets 502,728,380 490,913,450 (ii) Intangible Assets 1,782,215 2,009,230 (iii) Capital Work In Progress 3,373,644 34,706,152 (b) Non Current Investments 12 23,648,204 23,648,204 (c) Long-Term Loans & Advances 13 72,034,636 55,469,909 (d) Other Non Current Assets 14 50,913,294 52,861,504

654,480,372 659,608,448 2) CURRENT ASSETS

(a) Inventories 15 649,973,027 680,357,389 (b) Trade Receivables 16 541,527,462 450,528,970 (c) Cash & Bank Balances 17 30,376,524 30,712,159 (d) Short-Term Loans & Advances 18 232,952,676 145,865,066 (e) Other Current Assets 19 47,909,513 103,664,734

1,502,739,202 1,411,128,318 TOTAL 2,157,219,574 2,070,736,766

Summary of Significant Accounting Policies 1

Notes to & forming integral part of Financial Statements





Statement of Profit and Loss For the year ended 31st March, 2013(Amount in `)

Particulars Note No. For the year ended For the year ended31st March, 2013 31st March, 2012

I. Revenue From Operations 20 3,573,466,066 3,900,549,447

II. Other Income 21 13,391,798 18,569,619

III. Total Revenue 3,586,857,864 3,919,119,066

IV. Expenses:

Cost of Materials Consumed 22 2,397,273,478 2,793,158,080

Changes in Inventories of 23 (881,160) (42,531,315)Finished Goods & Work-In-Progress

Employee Benefits Expense 24 631,993,933 572,946,390

Finance Costs 25 90,575,385 81,296,345

Depreciation and Amortization Expense 26 48,193,307 43,916,066

Other Expenses 27 407,689,365 434,603,238

Total Expenses 3,574,844,308 3,883,388,805

V. Profit Before Exceptional Items and Tax: 12,013,556 35,730,261

VI. Exceptional Items 28 25,700,000 8,181,000

VII.Profit Before Tax 37,713,556 43,911,261

VIII. Tax Expense

a) Current Tax (5,000,000) (8,500,000)

b) Income Tax for Earlier Year – (68,210)

IX. Profit for the Year 32,713,556 35,343,051

X. Earning Per Equity Share

Basic 6.01 7.10

Diluted 5.08 7.10




Summary of Significant Accounting Policies For the year ended 31st March, 2013

1. Basis of preparation of financial statements.a) The financial statements are prepared in accordance with

Generally Accepted Accounting Principles (Indian GAAP)under the historical cost convention on accrual basis and onprinciples of going concern. The accounting policies areconsistently applied by the Company.

b) The financial statements are prepared to comply in allmaterial respects with the accounting standards notified bythe Companies (Accounting Standards) Rules, 2006 (Asamended) and the relevant provisions of the CompaniesAct, 1956.

c) The preparation of the financial statements requiresestimates and assumptions to be made that affect thereported amounts of assets and liabilities on the date of thefinancial statements and the reported amounts of revenuesand expenses during the reporting period. Differencesbetween the actual results and estimates are recognized inthe period in which the results are known / materialize.

2. Revenue Recognitiona) Revenue is recognized to the extent that it is probable that

the economic benefits will flow to the Company and therevenue can be reliably measured.

b) Sales are recognized when the significant risks and rewardsof ownership of the goods have passed to the buyer, whichgenerally coincides with the dispatch of goods. Sales arenet of Cess, VAT, Returns, claims & rate differences. Exportsales are shown at CIF value of exports.

c) Claims related to sales are recognized in the accounts asand when settled

d) Consignment sales are booked on proforma invoice basis atthe time of dispatch of goods. Adjustment if any, of actualsale differential and various expenses such as freight, duty,commission, insurance, taxes etc, arising on receipt ofaccount sales are dealt in during the relevant years in whichAccount Sales are made available.

e) Interest income is recognized on a time proportion basistaking into account the amount outstanding and the rateapplicable.

f) Market Assistance Receivable from JMDC and other exportbenefits are accounted for as soon as the entitlements inrespect thereof fall due.

g) Lease Rent & bonus to employees are accounted for oncash basis.

h) Incomes from certified emission reduction (CERS) & fromvoluntary emission reduction (VERS) are recognized at

estimated realizable value on confirmation of CERS & VERSby the concerned authorities.

i) Scrap sales are accounted for on realization basis.

3. Fixed Assets

(i) Tangible Assets

a) Fixed Assets except for certain assets, which were revaluedas at 31st March 1984, are stated at cost less accumulateddepreciation and impairment losses, if any.

b) Cost includes inward freight, duties, taxes, interest till thedate of installation and expenses incidental to acquisitionand installation. In respect of revalued assets, the resultantnet increase in value is transferred to Revaluation Reserve.Costs of major renovation/ replacement, which in theopinion of the Company enhance the life/ efficiency andproduction capacity of the assets, are capitalized.

c) The carrying amounts of assets are reviewed at eachbalance sheet date if there is any indication of impairmentbased on internal/external factors. An impairment loss isrecognized wherever the carrying amount of an assetexceeds its recoverable amount. The recoverable amount isthe higher of the asset's net selling price and value in use,which is determined by the present value of the estimatedfuture cash flows.

d) Depreciation on assets other than freehold land is providedon written down value method at the rates & in the mannerspecified in Schedule XIV to the Companies Act, 1956.Depreciation on differential increase in values arising out ofthe revaluation is recouped from Revaluation Reserve.

e) Costs of the fixed assets not ready for their intended use atthe Balance Sheet date together with all related expensesand advances paid to acquire fixed assets are shown asCapital Work-in-progress.

(ii) Intangible Assetsa) Intangible assets are stated at cost of acquisition less

accumulated amortization. Amortization is provided on thestraight line method as per rates mentioned below:

Asset Class Rate of Amortization

Software 10%

4. Investmentsa) Current investments are stated at Cost or Market Value

whichever is lower.

b) Long term investments are stated at cost unless there is apermanent diminution in the value of investments.

NOTE 1


Summary of Significant Accounting Policies For the year ended 31st March, 2013

5. InventoriesRaw materials and Stores and Spares are valued at cost,cost being determined on monthly weighted average basis.Finished goods are valued at lower of cost or contract/market rate as applicable. Work-in-Progress is valued atcost, comprising raw materials and conversion cost incurredin bringing the inventory to their present location &condition.

6. Foreign Currency Transactions Transactions in foreign currencies are recorded at the rate ofexchange prevailing at the time of transactions.Transactions remaining unsettled, other than thosecontracts covered under Forward Foreign Exchangecontracts are translated at the rate prevailing at the end ofthe financial year. In case of Forward Exchange Contracts,year-end foreign currency assets & liabilities are translatedat the rate ruling on the date of transaction as increased ordecreased by the proportionate difference between theforward rate and the said exchange rate, such differencehaving been recognized over the life of the contract.Exchange differences arising out of aforesaid transactionsare dealt in the Statement of Profit and Loss.

7. Retirement BenefitsContribution to Provident and Family Pension Fund ischarged to the Statement of Profit & Loss of the year.Accrued liability in respect of retirement gratuities are notprovided in the accounts. Gratuities are accounted for oncash basis. The Company has no practice of paying leaveencashment benefit on retirement.

8. Borrowing CostsBorrowing costs attributable to the acquisition/ constructionof fixed assets are capitalized up to the date when suchassets are ready for its intended use. Other borrowing costsare recognized as an expense for the year in which they areincurred.

9. Subsidy & IncentivesGovernment grants are recognized on a prudent basis whenthere is a reasonable assurance that the Company willcomply with the conditions attached thereto.

Capital Investment Subsidy/Incentives are accounted for inthe accounts as and when actually received. Capital grantrelating to specific fixed assets is reduced from the grossvalue of the respective fixed asset. Incentives/ Subsidyrelated to revenue are recognized on a systematic basis inthe Statement of Profit and Loss over the period to matchthem with the related cost which they are intended tocompensate.

10. Amalgamation & Preliminary ExpensesAmalgamation Expenses are written off over a period of 5years U/s 35DD of the Income Tax Act, 1961.

Preliminary Expenses are written off over a period of 5 yearsU/s 35D of the Income Tax Act, 1961.

11.Taxes On IncomeTax expenses comprises of current tax and deferred tax.

a) Current income tax is measured at the amount expected tobe paid to the tax authorities, computed in accordance withthe applicable tax rates and tax laws. In case of tax payableas per provisions of MAT under section 115JB of the IncomeTax Act, 1961, MAT credit is recognized as an asset onlywhen and to the extent there is convincing evidence that theCompany will pay normal income tax during the specifiedperiod.

b) Deferred Tax resulting from Timing difference between Bookprofits and Taxable Profits is accounted for using the taxrates and Laws that are enacted or substantively enacted ason the Balance Sheet date. Deferred tax assets isrecognized and carried forward to the extent that there is areasonable certainty that the asset will be realized in future.

12.Provisions, Contingent liabilities and ContingentAssetsProvisions involving substantial degree of estimation inmeasurement are recognized when there is a presentobligation as a result of past events and it is probable thatthere will be an outflow of resources. Contingent Liabilitiesare not recognized but are disclosed in the Notes.Contingent assets are neither recognized nor disclosed inthe Financial Statements.

13.Earnings per Share (EPS)a) Basic earnings per share are calculated by dividing the net

profit or loss for the period attributable to equityshareholders by the weighted average number of equityshares outstanding during the period.

b) For the purpose of calculating diluted earnings per share,the net profit or loss for the period attributable to equityshareholders and the weighted average number of sharesoutstanding during the period are adjusted for the effects ofall dilutive potential equity shares.

14.Prior Period items:Prior Period and Exceptional items and Changes inAccounting Policies having material impact on the financialaffairs of the Company are separately disclosed.


Notes to and forming integral part of Financial Statements As at 31st March, 2013

(Amount in `)

(d) Terms/rights attached to Equity Shares

The Company has only one class of equity share having a par value of `10 per share. Each shareholder is eligible for one vote

per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders except in case of interim

dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after

distribution of all preferential amounts, in proportion to the shareholding.

(e) Details of shareholders holding more than 5% shares in the Company

(f) 17,757 Equity Shares of `10/- each were alloted as fully paid up shares on 28/03/2009 ,pursuant to a Scheme of Amalgamation

sanctioned by the Hon'ble High Court at Calcutta, without consideration being received in cash.

As at 31st March, 2013 As at 31st March, 2012

Number of Amount Number of AmountShares (`) Shares (`)

At the Beginning of the Period 5,444,307 54,443,070 4,944,307 49,443,070

Additions During the Year: – – 500,000 500,000

Shares at the end of the Reporting period 5,444,307 54,443,070 5,444,307 54,443,070


Name of Shareholders Number of % of Number of % ofShares Holding Shares Holding

1) HR Global Finance Limited 1,128,369 20.73 1,128,244 20.72

2) HR International Limited 1,014,595 18.64 1,014,595 18.64

3) Vedansh Traders Private Limited 870,000 15.98 870,000 15.98

4) HR Infracon Limited 780,379 14.33 780,379 14.33

5) Alankar Commotrade Private Limited 415,000 7.62 415,000 7.62

As at As at 31st March, 2013 31st March, 2012

NOTE 2

SHARE CAPITAL:(a) Authorised Share Capital

6,737,500 (P.Y 6,737,500) Equity Shares of `10/-each 67,375,000 67,375,000

26,250 (P.Y 26,250) 9.1% Cumulative Redeemable PreferenceShares of `100/- each 2,625,000 2,625,000

70,000,000 70,000,000

(b) Issued ,Subscribed & Paid up Share Capital

5,444,307 (P.Y 5,444,307) Equity Shares of `10/- each fully paid up 54,443,070 54,443,070

54,443,070 54,443,070

(c) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period



(Amount in `)


NOTE 3RESERVES & SURPLUS:(a) Revaluation Reserve

(Created by Revaluation of Land, Buildings & Plant & Machinery)As per last Balance Sheet 56,928,092 57,949,286 Less : Transfer to Profit and Loss Account on account of depreciation on amount added on Revaluation 937,467 1,021,194

55,990,625 56,928,092 (b) Capital Reserve

As per last Balance Sheet 4,073,671 4,073,671 (c) Capital Redemption Reserve

As per last Balance Sheet 2,625,000 2,625,000 (d) Securities Premium Account

As per last Balance Sheet 34,400,000 34,400,000 (e) Amalgamation Reserve

As per last Balance Sheet 1,789,207 1,789,207 (f) Investment Allowance Reserve

As per last Balance Sheet 129,150 129,150 (g) General Reserve

As per last Balance Sheet 59,203,800 59,203,800 (h) Surplus

As per last Balance Sheet 221,888,599 189,709,235 Add: Profit for the year 32,713,556 35,343,051 Less: AppropriationsProposed Final Dividend on Equity Shares 3,222,153 2,722,154 Tax on Proposed Final Dividend 522,714 441,533

250,857,288 221,888,599 Grand Total 409,068,741 381,037,519

NOTE 4

LONG-TERM BORROWINGS:

(a) Secured

i) Term Loans from Banks

a) State Bank of India 49,358,640 64,250,860

b) The Federal Bank Limited 100,000,000 40,319,609

149,358,640 104,570,469

(b) Unsecured

Term Loan from a Body Corporate 16,036,748 –

16,036,748 –

Total 165,395,388 104,570,469

Less: Current maturities of Long-Term Borrowings transferredto Other Current Liabilities 28,867,809 31,911,670

Grand Total 136,527,579 72,658,799



NOTE 4 (Contd...)

(c) Nature of Security:Term Loans are secured by / against:(i) First Pari Passu charge on the entire fixed assets(ii) Hypothecation of all the Stock in Trade, Stores & Book Debts of the Company, ranking Pari-passu(iii) Personal guarantees of Shri Om Prakash Mall, Shri Shree Mohan Mall & Shri Nand Kishore Jhawar(iv) Rent Receivables

(d) Major Terms of repayment of Long-Term Borrowings disclosed in (A) above:

Maturity Profile of Long-Term Borrowings outstanding as at 31 March, 2013

2012-13 2011-12Term Corporate Total Current Current

Loans Loan Maturities Maturities

Loan with residual maturity upto 1 year – – – – 9,614,457Loan with residual maturity between 1 & 3 years 16,036,748 – 16,036,748 6,876,748 – Loan with residual maturity between 3 & 5 years 49,358,640 – 49,358,640 13,000,000 9,297,213 Loan with residual maturity between 5 & 10 years 100,000,000 – 100,000,000 8,991,061 13,000,000 Total 165,395,388 – 165,395,388 28,867,809 31,911,670

(Amount in `)


NOTE 5DEFERRED TAX LIABILITIES: Deferred Tax Liability on Account of Fixed Asset 244,756 244,756

244,756 244,756

Note:As a matter of prudence differential amount of deferred tax asset has not been accounted for in the accounts NOTE 6OTHER LONG-TERM LIABILITIES: Security deposits 18,590,390 14,382,942

18,590,390 14,382,942

NOTE 7SHORT-TERM BORROWINGS: (a) Secured:

(i) Working Capital Loans repayable on demand(a) From State Bank of India 292,378,553 285,940,579 (b) From The Federal Bank Limited 160,457,655 131,872,710

(ii) I.F.C.I Ltd. 1,269,000 1,269,000(iii) WBIDC Ltd. – 25,700,000 (iv) Under Buyer's Credit arrangement 22,636,144 45,559,208

476,741,352 490,341,498 (b) Unsecured:

(i) From Bodies Corporate 72,911,863 148,121,714 (ii) From a Director 9,500,000 9,500,000

82,411,863 157,621,714 Grand Total 559,153,215 647,963,212



(Amount in `)


NOTE 7 (Contd...)

(c) Nature of Security:

Working Capital Loans are secured by :

(i) Hypothecation of all the Stock in Trade, Stores & Book Debts of theCompany, ranking Pari-passu

(ii) First Pari Passu charge on the entire fixed assets

(iii) Personal Guarantees of Shri Om Prakash Mall, Shri Shree Mohan Mall& Shri Nand Kishore Jhawar

NOTE 8

TRADE PAYABLES:

(i) Acceptances 141,463,761 146,285,998

(ii) Other Trade Payables

(a) Dues to micro, medium & small enterprises 2,290,885 5,202,388

(b) Dues to other than micro, medium & small enterprises 572,880,514 589,812,774

716,635,159 741,301,160

NOTE 9

OTHER CURRENT LIABILITIES:

Current Maturities of Long-Term Borrowings 28,867,809 31,911,670

Unpaid Dividends 1,293,442 1,062,630

Preference Shares Redemption amount 427,500 432,500

Advance from Customers 46,892,331 17,752,065

Creditors for Capital Goods – 693,000

Statutory Liabilities 21,658,756 15,529,818

Income Tax and FBT Payable on Assessment 3,783,607 3,783,607

Other Payables 71,041,313 62,070,830

Books Overdrawn with Scheduled Bank on Current Account 7,541,539 –

181,506,296 133,236,121

Note: There are no amounts due for payment to the Investor Education

& Protection Fund u/s 205 C of the Companies Act 1956

NOTE 10

SHORT-TERM PROVISIONS:

Provision for Taxation 27,305,501 22,305,501

Others:

Proposed Final Dividend on Equity Shares 3,222,153 2,722,154

Dividend Distribution Tax on Proposed Final Dividend 522,714 441,533

31,050,368 25,469,188


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(Amount in `)



NOTE 12

NON CURRENT INVESTMENTS:

(A) Investments in Equity Instruments

(i) Investment in Subsidiaries (Unquoted, Trade, at Cost)

a) 30,000 (30,000) Equity shares of HMC Jute Park Enterprises Limited 300,000 300,000 of `10/- each, fully paid up.

b) 44,000 (44,000) Equity shares of HMC Power Companies Limited 440,000 440,000 of `10/- each, fully paid up.

(ii) Others (Unquoted, at Cost)

a) 18,055 (18,055) Nos. of equity shares of West Bengal Agro Textile 22,751,344 22,751,344Corporation Limited of `1,000/- each fully paid up.

b) 3,810 (3,810) Equity Shares of Woodland Multispeciality Hospital 38,100 38,100Limited of `10/- each.

(B) Other Investment ( Non Trade, at Cost)

Gold 118,760 118,760

23,648,204 23,648,204

(C) Aggregate Book Value of Unquoted Equity Instruments 23,529,444 23,529,444

NOTE 13

LONG-TERM LOANS AND ADVANCES:

Unsecured, considered good

(a) Capital Advances – 13,451

(b) Security Deposits 16,891,540 13,506,094

(c) Advances to Related Parties 22,970,964 12,506,464

(d) Other Loans & Advances:

(i) Loans 27,809,331 25,066,099

(ii) Vat Credit Receivable 3,329,846 3,329,846

(iii) ModVat Credit Receivable 314,578 314,578

(iv) Others 718,376 733,376

72,034,636 55,469,909

NOTE 14

OTHER NON-CURRENT ASSETS:

(a) Export Incentives Receivable 44,188,187 46,136,397

(b) Other Receivables 6,725,107 6,725,107

50,913,294 52,861,504


(Amount in `)



NOTE 15

INVENTORIES: (a) Raw Materials 263,978,492 295,498,806 (b) Work- In- Progress 39,608,279 45,480,462 (c) Finished Goods 315,805,540 309,052,197 (d) Stores, Spares & Loose Tools 30,580,716 30,325,924

649,973,027 680,357,389

NOTE 16

TRADE RECEIVABLES:

(a) Outstanding for a period exceeding six months:

Secured, considered good – 137,812 Unsecured, considered good 11,729,614 9,351,963 Doubtful 720,673 720,673

12,450,287 10,210,448 Less: Provision for Doubtful debts 720,673 720,673

11,729,614 9,489,775 (b) Outstanding for a period less than six months:

Secured, considered good – 3,362,596 Unsecured, considered good 529,797,847 437,676,599

529,797,847 441,039,195 541,527,462 450,528,970

NOTE 17

CASH & BANK BALANCES:

(a) Cash & Cash Equivalents

i) Balance With Banks in -

Current Account 2,932,010 1,757,718

ii) Cash in Hand 1,718,461 1,156,751

4,650,471 2,914,468

(b) Other Bank Balances

i) In Unpaid Dividend Account 1,293,330 1,062,519

ii) In Bank Deposits Account

Bank Deposits with original maturity more than 3 monthsand less than 12 months 1,593,553 3,911,724

Bank Deposits with original maturity more than 12 months 22,839,170 22,823,447

25,726,053 27,797,690

TOTAL 30,376,524 30,712,159

Bank deposits amounting to `23,126,110/- (P.Y `26,735,171/-) pledged against borrowings from Banks.


(Amount in `)

(Amount in `)


Year ended Year ended 31st March, 2013 31st March, 2012

NOTE 20

REVENUE FROM OPERATIONS:

(a) Sale of Products 3,496,232,439 3,800,142,043

(b) Rental Income 43,697,070 30,487,336

(c) Other Operating Revenues:

Export Incentives 33,536,557 58,269,724

Credit for Certified Emission Reduction – 2,995,200

Premium on Long-Term Lease of Premises – 8,655,143

3,573,466,066 3,900,549,447

Note:

Details of Sale of Products

Jute Goods 3,496,232,439 3,800,142,043


NOTE 18

SHORT-TERM LOANS & ADVANCES:

Unsecured, Considered good

(a) Advances 179,164,717 103,059,911

(b) Security Deposit 939,267 6,833,365

(c) Prepaid Expenses 9,014,398 5,961,494

(d) Income Tax deducted at source 15,301,874 11,129,653

(e) Income Tax Payments 6,676,636 3,676,636

(f) Service Tax Receivable 11,626,117 7,986,723

(g) Vat Credit Receivable 6,229,667 3,217,284

(h) Mat Credit Entitlement 4,000,000 4,000,000

232,952,676 145,865,066

(i) Of the above advances, dues from officers of the Company is `1,050,400/-(P.Y `947,000/-)

NOTE 19

OTHER CURRENT ASSETS:

(a) Export Incentives Receivables 33,584,645 23,248,369

(b) Claims and other Receivable (Unsecured, Considered good) 12,563,878 79,235,330

(c) Interest accrued on Bank Deposit 1,760,990 1,161,035

(d) Unamortised Cost towards miscellaneous expenditure to the extentnot written off or adjusted – 20,000

47,909,513 103,664,734



(Amount in `)


NOTE 21

OTHER INCOME:

(a) Interest Income

- On Bank Deposits 1,964,386 2,203,300

- Other Deposits 29,762 30,670

- Miscellaneous 54,691 55,094

(b) Net Gain on Sale of Fixed/Discarded Assets 351,686 2,645,782

(c) Miscellaneous Receipts 2,225,808 109,793

(d) Provision for Doubtful Debts Written Back – 284,559

(e) Liability no longer required written back 12,014 13,240,421

(f) Net Profit on Currency Fluctuation and Translation 2,305,784 –

(g) Sale of Scrap 6,447,667 –

13,391,798 18,569,619

NOTE 22

COST OF MATERIALS CONSUMED:

Opening Balance of Stock 295,498,806 338,651,473

Purchase of Raw Materials 2,182,999,477 2,398,135,546

2,478,498,283 2,736,787,019

Less: Closing Balance of Stock 263,106,219 295,498,806

2,215,392,064 2,441,288,213

Purchase of Gunnies 181,881,414 350,243,487

Others – 1,626,381

2,397,273,478 2,793,158,080

NOTE 23

CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK-IN-PROGRESS:

Closing Stock

Finished Goods 315,805,540 309,052,197

Work-In-Progress 39,608,279 45,480,462

355,413,819 354,532,659

Opening Stock

Finished Goods 309,052,197 271,529,919

Work-In-Progress 45,480,462 40,471,425

354,532,659 312,001,344

881,160 42,531,315

NOTE 24

EMPLOYEE BENEFITS EXPENSE:

Salaries, Wages, Bonus and Gratuity 511,885,699 471,704,382

Contribution to Provident & Other Funds 55,358,548 48,849,077

Medical & Welfare Expenses 64,749,686 52,392,931

631,993,933 572,946,390



(Amount in `)


NOTE 25

FINANCE COST:

(a) Interest Expense 88,107,789 69,367,472 {Net of Interest Received / Capitalised `3,048,011/-(P.Y `11,239,784/-)}

(b) Other Borrowing Cost 2,467,596 11,928,873

90,575,385 81,296,345

NOTE 26

DEPRECIATION AND AMORTISATION EXPENSES:

On Tangible Assets 48,903,759 44,717,260

On Intangible Assets 227,015 220,000

49,130,774 44,937,260

Less :Transfer from Revaluation Reserve 937,467 1,021,194

48,193,307 43,916,066

NOTE 27

OTHER EXPENSES:

Consumption of Stores & Spare Parts 96,785,960 86,499,952

Power & Fuel 150,886,327 126,449,688

Rent 1,513,187 20,958,452

Repairs to Building 1,980,358 1,297,605

Repairs to Machinery 3,587,119 2,890,109

Insurance 6,634,170 5,453,421

Rates & Taxes 543,509 1,254,772

Net Loss on Currency Fluctuation and Translation – 10,182,926

Bad debts written off 530,061 8,618,846

Miscellaneous Expenses 145,228,674 170,997,466

407,689,365 434,603,238

NOTE 27.1Details of payments to auditors (included in Miscellaneous expenses)

a) Audit Fees 210,000 210,000

b) Certification matters 67,500 45,000

c) For other services 105,000 50,500

382,500 305,500

NOTE 28

EXCEPTIONAL ITEMS:a) Interest payable to WBIDC Ltd. written back – 8,181,000

b) Loan payable to WBIDC Ltd. written back 25,700,000 –

25,700,000 8,181,000


NOTE 29

i. Gratuity is accounted on cash basis. Due to severe financial constraints, provision for future liability of gratuity could not bemade, hence it was not determined actuarially. There is no practice for payment of leave encashment and hence actuarialvaluation not required.

ii. Interest arising out of non-payment in due time of retirement gratuity in respect of retired employees has not been ascertainedand provided for. However, no claim for interest on delayed payments in this account has been received.

NOTE 30

Trade Receivables include `10,436,576/-(P.Y `17,036,816/-), Loans and Advances include `7,815,000/-(P.Y `7,815,000) and ExportIncentive Receivables includes `40,370,615/- (P.Y `40,370,615/-) outstanding for more than three years and are doubtful. However,management is of the opinion that the said dues will be recoverable in full and hence no provision is required in this regard.

NOTE 31

Interest and other charges for Non-Payment/ Delayed payment of Sales Tax and Service Tax, if any, has not been ascertained andprovided for.

NOTE 32

Loan of `257 lacs was sanctioned by the Government of West Bengal to the company as a part of the BIFR revival package on 23rdAugust,1990, through WBIDC Ltd for payment of arrear sales tax. In view of several representations made to the Government of WestBengal for losses suffered by the company due to considerable delay in granting permission for sale of lands as per BIFR revivalpackage, the company has written back the said loan liability on the premise that the same has been waived by the Government ofWest Bengal, although no written approval of the same is available. This being of onetime non-recurring nature has been consideredto be an exceptional item.

NOTE 33

Contingent Liabilities not provided for:

NOTE 34

Certain Borrowings, Sundry Creditors, Sundry Debtors, Loans & Advances are subject to Confirmation/ Reconciliation from therespective parties. The Management however does not expect any material variations.

NOTE 35

Estimated amount of Commitments on Capital Account outstanding as on 31st March 2013 was NIL (P.Y `186.48 Lacs) net ofadvances.

NOTE 36

No provision is considered necessary by the management in respect of claim for damages of `5,008,807/- (P.Y `5,008,807/-) by theESI Authorities for delayed payment of dues for the earlier years, as the company’s application for waiver / reduction thereof is underconsideration of the authorities.

(Amount in `)

Particulars As at As at31st March, 2013 31st March, 2012

a) Bank guarantees given on behalf of the company 36,949,608 40,996,598b) West Bengal and Central Sales Tax assessments under appeal

for the period 1st October, 2002 to 31st March, 2004 1,865,171 1,865,171c) Bills discounted from bank (Since realized) 14,005,096 21,450,897d) Letters of Credit issued in favour of various parties 141,463,761 186,481,920e) Corporate guarantee given to State Bank of India on behalf of

West Bengal Agro Textile Corporation Ltd 31,312,000 33,860,000f) Interest / penalties for non payment of Service Tax realized Amount not Amount not

by the company ascertained ascertainedg) Rent/interest & penalties for non-payment of Lease Rent Amount not Amount not

to Kolkata Port Trust ascertained ascertained





(Amount in `)

Particulars Jute Activity Real Estate Total

Revenue 3,543,160,793 43,697,070 3,586,857,863(3,879,976,587) (39,142,479) (3,919,119,066)

Segment Results 81,770,135 20,818,806 102,588,941(Profit before Interest, tax & Exceptional Items) (97,971,654) (19,054,954) (117,026,608)Interest 77,172,300 13,403,085 90,575,385

(65,179,708) (16,116,637) (81,296,345)Exceptional Items 25,700,000 – 25,700,000

(8,181,000) (–) (8,181,000)Profit Before tax 30,297,835 7,415,721 37,713,556

(40,972,946) (2,938,317) (43,911,263)Less: Income Tax – – 5,000,000

(–) (–) (8,568,210)Profit after tax – – 32,713,556

(–) (–) (35,343,053)Other InformationAssets 1,989,214,122 164,496,452 2,153,710,574

(1,933,762,674) (136,974,094) (2,070,736,768)Liabilities 1,472,014,977 167,939,030 1,639,954,007

(1,525,682,467) (109,328,954) (1,635,011,421)Capital Expenditure 63,874,428 – 63,874,428

(160,870,743) (–) (160,870,743)Depreciation & Amortisation 35,616,732 12,576,575 48,193,307

(33,262,428) (10,653,638) (43,916,066)

NOTE 38

Segmental Reporting as per AS -17 :-

NOTE 39

Earnings Per Share (EPS): (Amount in `)


Net Profit for the period attributable to equity shareholders:(`) (a) 32,713,556 35,343,051Weighted average number of Equity Shares of `10/- each outstanding during the period (b) 5,444,307 4,978,460Add: Dilutive number of Equity Shares outstanding during the year (c) 1,000,000 NILDiluted number of Equity Shares outstanding during the year (d) 6,444,307 4,978,460Earnings Per Share (`):Basic (e) = (a) / (b) 6.01 7.10Diluted (f) = (a) / (d) 5.08 7.10

NOTE 37

There were five parties covered under Micro, Small and Medium Enterprises to whom the Company owes dues, which wereoutstanding for more than 45 days as at 31st March, 2013 to the extent of `2,290,885/-(P.Y `3,585,499/-). No interest was paid /payable to the said party during the year. This information as required to be disclosed under the Micro, Small and MediumEnterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of informationavailable with the Company.



NOTE 40

Related Party Disclosure: (Amount in `)

Relationship Name Transactions during the year

Key Managerial Personnel Mr. S. Banerjee Managerial Remuneration(Whole-time Director) `1,000,725/-

(P.Y `863,315/-)

Mr. S. Mall Managerial Remuneration(Managing Director) `1,100,000/-

(P.Y NIL)

Subsidiary (i) HMC Power Companies Ltd. Advance given `5,272,000/-(P.Y `2,506,464/-)Receivables Closing Balance –`12,778,464/- (P.Y `7,506,464/-)

Subsidiary (ii) HMC Jute Park Enterprises Ltd. Advance given – `5,192,500/-(P.Y NIL)Receivables Closing Balance -`10,192,500/-((P.Y `5,000,000/-)

NOTE 41

a) Value of Raw Materials and Stores (including components & spare parts) consumed:-

Particulars 31st March, 2013 31st March, 2012

Value (`) Percentage Value (`) Percentage

Raw Materials*

Imported 55,114,926 2.49 103,650,888 4.25

Indigenous 2,160,277,138 97.51 2,337,637,325 95.75

Total 2,215,392,064 100.00 2,441,288,213 100.00

Stores & Spare Parts

Imported NIL 0 NIL 0

Indigenous 96,785,960 100 86,499,952 100

Total 96,785,960 100 86,499,952 100

*Raw Material consumed includes cost of packing materials and other materials.

b) Work In Progress:(Amount in `)

Work In Progress as on 31st March, 2013 31st March, 2012

W.I.P of Jute goods 39,608,279 45,480,462

c) Closing finished goods: (Amount in `)

Inventory 31st March, 2013 31st March, 2012

Jute goods 315,805,540 309,052,197



(Amount in `)


d) Earnings in Foreign Exchange:

Export of Finished Goods (CIF Basis) 218,797,541 720,307,552(Excludes export through Merchant Shippers)

Certified Emission Reduction NIL 2,995,200

e) Value of Imports (CIF Basis):

Raw Jute 55,114,926 103,650,888

Gunny & others 2,273,512 26,447,609

f) Expenditure in Foreign Currencies:

Traveling Expenses 1,525,239 505,159

Claims to foreign Buyers 5,732,390 16,054,322

(Amount in `)

31st March, 2013 31st March, 2012

On Equity shares of `10/- each

Amount of dividend proposed 3,222,153 2,722,154

Dividend per Equity share 0.50 0.50

NOTE 42

Proposed Dividend: The final dividend for the year is as follows:

Signatures of the Notes 1 to 42





Cash Flow Statement For the year ended 31st March, 2013(Amount in `)

For the year ended For the year ended


A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax & exceptional items 12,013,556 35,730,261

Adjustments for:

Depreciation and amortization expenses 48,193,307 43,916,066

Interest expense 90,575,385 81,296,345

Interest income (1,994,148) (2,233,970)

Profit on Sale of Fixed Asset (351,686) (2,645,782)

Liability No longer required written back (12,014) (13,524,980)

Preliminary Expenses Written off 20,000 20,000

Amalgamation Expenses Written off – 136,430,844 32,100 106,859,779

Operating Profit Before Working Capital Changes 148,444,399 142,590,040

Adjustments for:

(Increase)/decrease in trade receivables (90,998,492) (86,899,826)

(Increase)/decrease in loans & advances (103,652,337) (35,959,140)

(Increase)/decrease in other assets 57,683,431 (67,974,884)

Increase/(decrease) in trade payables (24,666,000) 253,228,028

Increase/(decrease) in other liabilities 52,250,426 (42,170,585)

(Increase)/decrease in inventories 30,384,362 (78,998,611) (3,157,481) 17,066,112

Cash Generated From / (Used In) Operations 69,445,789 159,656,152

Less: Taxes Paid – 1,518,212

Cash Flow Before Exceptional Items 69,445,789 158,137,940

Exceptional Items 25,700,000 8,181,000

Net Cash From / (Used In) Operating Activities – A 95,145,789 166,318,940

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets (32,541,920) (160,870,743)

Sale proceeds of fixed assets 3,507,425 2,650,000

Purchase of investments – (38,100)

Sale proceeds of investments – 61,243,000

Interest received 1,994,148 2,233,970

Capital Subsidy from J.M.D.C. capitalised – –

Net Cash From / (Used In ) Investing Activities – B (27,040,347) (94,781,873)


For S. JAYKISHAN Sanjay Mall

Chartered Accountants Managing Director

FRN : 309005E

(CA Y. GUPTA) T. Roy S. Banerjee

Partner Company Secretary Whole-time Director

Membership No. 060539

Place: Kolkata S. L. Jhawar

Date: 30th May, 2013 Director

(Amount in `)



C. CASH FLOW FROM FINANCING ACTIVITIES

Dividend paid (2,482,943) (2,238,863)

Corporate Dividend Tax (441,533) (410,600)

Interest paid (90,575,385) (89,449,804)

Share application money received 50,000,000 20,000,000

Increase/ (decrease) in long-term borrowings 63,868,781 (31,165,104)

Increase/ (decrease) in short-term borrowings (88,809,997) 37,706,832

Net Cash From / (Used In) Financing Activities – C (68,441,077) (65,557,539)

Net Increase / (Decrease) in Cash and

Cash Equivalents (A+B+C) (335,635) 5,979,528

Cash & Cash Equivalents at the beginning of the year 30,712,159 24,732,631

Cash & Cash Equivalents at the closing of the year 30,376,524 30,712,159

Note:

1. The Cash Flow Statement has been prepared under the "Indirect method" set out in the Accounting Standard-3 on "Cash Flow

Statement" notified in the companies (Accounting Standards) Rules,2006.

2. Cash and Cash Equivalents include Cash in hand and Bank balances on current account and Fixed deposit Accounts. (Refer

Note 17)

3. Figures in brackets indicate Cash outflow.

4. Previous Year's figures have been regrouped/rearranged, wherever considered necessary to conform to this year's

classification.

Cash Flow Statement For the year ended 31st March, 2013(Amount in `)


Consolidated Financial Section



Independent Auditors’ ReportTo

The Board of Directors,

Howrah Mills Company Limited

Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statementsof Howrah Mills Company Limited. (the Company) and its Subsidiaries(collectively referred to as “the Group”), which comprise theConsolidated Balance Sheet as at 31st March 2013, the ConsolidatedStatement of Profit and Loss and the Consolidated Cash FlowStatement for the year then ended and a summary of significantaccounting policies and other explanatory information.

Management’s Responsibility for the ConsolidatedFinancial Statements Management is responsible for the preparation of these consolidatedfinancial statements that give a true and fair view of the consolidatedfinancial position, consolidated financial performance andconsolidated cash flows of the Group in accordance with accountingprinciples generally accepted in India including Accounting Standardsreferred to in sub-section (3C) of section 211 of the Companies Act,1956 (the Act). This responsibility includes the design, implementationand maintenance of internal control relevant to the preparation andpresentation of the consolidated financial statements that give a trueand fair view and are free from material misstatement, whether due tofraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audit. We conducted our audit inaccordance with the Standards on Auditing issued by the Institute ofChartered Accountants of India. Those Standards require that wecomply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether the consolidated financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidenceabout the amounts and disclosures in the consolidated financialstatements. The procedures selected depend on the auditor’sjudgement, including the assessment of the risks of materialmisstatement of the consolidated financial statements, whether due tofraud or error. In making those risk assessments, the auditor considersinternal control relevant to the Group’s preparation and presentation ofthe consolidated financial statements that gives a true and fair view inorder to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriatenessof accounting policies used and the reasonableness of the accountingestimates made by management, as well as evaluating the overallpresentation of the consolidated financial statements. We believe thatthe audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

Opinion In our opinion and to the best of our information and according to theexplanations given to us and based on consideration of the reports ofthe other auditors on the financial statements of the subsidiaries asnoted below, the consolidated financial statements subject to:

i) Non-compliance with Accounting Standard - 15, “EmployeeBenefits” in respect of non ascertainment and provision of accruedgratuity liability and leave encashment.

ii) Note No. 29(i) regarding non ascertainment and provision ofinterest on delay payments of statutory dues such as Gratuity, etc.

iii) Note No. 30 regarding future uncertainability regarding realizationof trade receivables and export incentives and non provisionagainst the same.

iv) Note No. 31 regarding non ascertainment and provision of interestand charges for non/ delay payments of Service tax and sales tax.

v) Note No. 32 regarding writing back of loan liability amounting to`257 lacs payable to WBIDC Limited, in absence of approval of thesame from the said WBIDC Limited

give a true and fair view in conformity with the accountingprinciples generally accepted in India

(i) In the case of Consolidated Balance Sheet of the State ofAffairs of the group as at 31st March, 2013;

(ii) In the case of Consolidated Statement of Profit and Loss ofthe Profit of the group for the year ended 31st March, 2013;and

(iii) In the case of Consolidated Cash flow statement, of the Cashflows of the group for the year ended 31st March, 2013.

Other MattersWe did not audit the financial statement of the subsidiaries namely,HMC Jute Park Enterprises Limited and HMC Power CompaniesLimited. Total net worth’s as at 31st March, 2013, the total revenuesand net loss (after tax) for the year ended on that date reflected infinancial statements of the subsidiary Companies are as follows:

Amount in `

Particulars HMC Jute Park HMC PowerEnterprises Limited Companies Limited

Net Worth 415,844 497,232

Total Revenues 47,800 50,600

Net Profit/(Loss) After Tax 8,109 25,021

These financial statements have been incorporated in theconsolidated financial statements on the basis of audited accounts ofHMC Jute Park Enterprises Limited and HMC Power CompaniesLimited duly audited by other auditors, certified copies of same, asprovided to us ,by the Management.

We report that the consolidated financial statements have beenprepared by the company in accordance with the requirements ofAccounting Standard-21, ‘Consolidated Financial Statements’ issuedby the Institute of Chartered Accountants of India.

For S. JaykishanChartered Accountants

FRN: 309005E

CA Y. GuptaPlace: Kolkata PartnerDate: 30th May, 2013 Membership No.: 060539


Consolidated Balance Sheet As at 31st March, 2013 (Amount in `)

Particulars Note No. As at As at31st March, 2013 31st March, 2012

I EQUITY AND LIABILITIES1) SHAREHOLDERS' FUNDS

(a) Share Capital 2 54,443,070 54,443,070 (b) Reserves & Surplus 3 409,015,813 380,957,707(c) Share Application Money pending allotment 50,000,000 –

513,458,883 435,400,777 2) MINORITY INTEREST 226,005 219,759 3) NON-CURRENT LIABILITIES

(a) Long-Term Borrowings 4 136,527,579 72,658,799 (b) Deferred Tax Liabilities (Net) 5 244,756 244,756 (c) Other Long-Term Liabilities 6 18,590,390 14,382,942

155,362,726 87,286,497 4) CURRENT LIABILITIES

(a) Short-Term Borrowings 7 559,299,295 647,963,212 (b) Trade Payables 8 716,635,159 741,301,160 (c) Other Current Liabilities 9 182,464,008 134,490,026 (d) Short-Term Provisions 10 31,050,368 25,469,188

1,489,448,830 1,549,223,585 TOTAL 2,158,496,444 2,072,130,619

II ASSETS1) NON-CURRENT ASSETS

(a) Fixed Assets 11(i) Tangible Assets 502,728,380 490,913,450 (ii) Intangible Assets 1,782,215 2,009,230 (iii) Capital Work In Progress 13,215,693 39,122,660

(b) Non Current Investments 12 33,443,348 27,908,204 (c) Long-Term Loans & Advances 13 53,563,672 47,713,445 (d) Other Non Current Assets 14 50,928,906 52,916,527

655,662,213 660,583,517 2) CURRENT ASSETS

(a) Inventories 15 649,973,027 680,357,389 (b) Trade Receivables 16 541,527,462 450,528,970 (c) Cash & Bank Balances 17 30,432,141 31,071,532 (d) Short-Term Loans & Advances 18 232,952,676 145,885,066 (e) Other Current Assets 19 47,948,924 103,704,145

1,502,834,230 1,411,547,102 TOTAL 2,158,496,444 2,072,130,619








Consolidated Statement of Profit and Loss For the year ended 31st March, 2013(Amount in `)






Particulars Note No. For the Year Ended For the Year Ended31st March, 2013 31st March, 2012

I. Revenue From Operations 20 3,573,466,066 4,136,560,051

II. Other Income 21 13,490,198 19,291,246

III. Total Revenue 3,586,956,264 4,155,851,297

IV. Expenses:

Cost of Materials Consumed 22 2,397,273,478 2,902,242,747

Changes in Inventories of Finished Goods &

Work-In-Progress 23 (881,160) (44,754,353)

Purchases of Stock in Trade – 9,024,404

Employee Benefits Expense 24 631,993,933 640,711,267

Finance Costs 25 90,575,385 84,367,328

Depreciation and Amortization Expense 26 48,193,307 47,193,503

Other Expenses 27 407,754,635 478,536,922

Total Expenses 3,574,909,578 4,117,321,818

V. Profit Before Exceptional Items and Tax: 12,046,686 38,529,479

VI. Exceptional Items 28 25,700,000 8,181,000

VII.Profit Before Tax 37,746,686 46,710,479

VIII.Tax Expense

a) Current Tax (5,000,000) (8,500,000)

b) Income Tax for Earlier Year – (68,210)

IX. Profit for the Year before minority interest 32,746,686 38,142,269

Less : Minority Interest 6,246 5,733

Profit for the Period 32,740,440 38,136,536

X. Earning Per Equity Share

Basic 6.01 7.66

Diluted 5.08 7.66



Summary of Significant Accounting Policies of Consolidated FinancialStatements For the year ended 31st March, 2013

1. Basis of ConsolidationThe consolidated financial statements relate to Howrah MillsCompany Limited (the Company) and its subsidiarycompanies. The Company and its subsidiaries constitutethe Group.

a) Basis of Accounting :

I. The financial statements of the subsidiary companies usedin the consolidation are drawn upto the same reporting dateas of the Company, i.e. for the year ended 31st March, 2013.

II. The financial statements of the Group have been preparedin accordance with the applicable Accounting Standards inIndia and other generally accepted accounting principles.

b) Principles of Consolidation:

The consolidated financial statements have been preparedon the following basis:

I. The financial statements of the Company and its subsidiarycompanies have been consolidated on a line-by-line basis

by adding together the book values of like items of assets,liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions and resultingunrealized profit as per applicable Accounting Standards inIndia.

II. The excess of the cost to the Company of its investment insubsidiary over the Company’s portion of equity as at thedates on which the investments in subsidiary companies aremade is recognized in the financial statements as “Goodwillon Consolidation”.

III. The consolidated financial statements are presented, to theextent possible, in the same format as that adopted by theCompany for its separate financial statements. Differences ifany, in accounting policies have been disclosed separately.

IV. The operations of the Company’s subsidiaries areconsidered as non-integral operations for the purpose ofconsolidation.

2. Basis of preparation of financial statements.

a. The financial statements of group are prepared inaccordance with Generally Accepted Accounting Principles(Indian GAAP) under the historical cost convention onaccrual basis and on principles of going concern. Theaccounting policies are consistently applied by theCompany.

b. The financial statements of group are prepared to comply inall material respects with the accounting standards notifiedby the Companies (Accounting Standards) Rules, 2006 (Asamended) and the relevant provisions of the CompaniesAct, 1956.

c. The preparation of the financial statements of grouprequires estimates and assumptions to be made that affectthe reported amounts of assets and liabilities on the dateof the financial statements and the reported amounts ofrevenues and expenses during the reporting period.Differences between the actual results and estimates arerecognized in the period in which the results are known /materialize.

3. Revenue Recognitiona. Revenue is recognized to the extent that it is probable that

the economic benefits will flow to the Group and the revenuecan be reliably measured.

b. Sales are recognized when the significant risks and rewardsof ownership of the goods have passed to the buyer, whichgenerally coincides with the dispatch of goods. Sales arenet of Cess, VAT, CST, returns, claims & rate differences.Export sales are shown at CIF value of exports.

c. Claims related to sales are recognized in the accounts asand when received.

d. Consignment sales are booked on proforma invoice basis atthe time of dispatch of goods. Adjustment if any, of actualsale differential and various expenses such as freight, duty,commission, insurance, taxes etc, arising on receipt ofaccount sales are dealt in during the relevant years in whichAccount Sales are made available.

e. Interest income is recognized on a time proportion basistaking into account the amount outstanding and the rateapplicable.

c) Particulars of subsidiaries:

Name of the Company Country of Incorporation Percentage of Voting Power as at 31st March, 2013

HMC Jute Park Enterprises Limited India 60.00%

HMC Power Companies Limited India 88.00%

NOTE 1



f. Market Assistance Receivable from JMDC and other exportbenefits are accounted for as soon as the entitlements inrespect thereof fall due.

g. Lease Rent and bonus to employees, are accounted for oncash basis.

h. Incomes from certified emission reduction (CERS) & fromvoluntary emission reduction (VERS) are recognized atestimated realizable value on confirmation of CERS & VERSby the concerned authorities.

i. Scrap sales are accounted for on realization basis.

4. Fixed Assets

(i) Tangible Assets

a. Fixed Assets except for certain assets, which were revaluedas at 31st March 1984 by the company are stated at costless accumulated depreciation and impairment losses, ifany.

b. Cost includes inward freight, duties, taxes, interest till thedate of installation and expenses incidental to acquisitionand installation. In respect of revalued assets, the resultantnet increase in value is transferred to Revaluation Reserve.Costs of major renovation/ replacement, which in theopinion of the Company enhance the life/ efficiency andproduction capacity of the assets, are capitalized.

c. The carrying amounts of assets are reviewed at eachbalance sheet date if there is any indication of impairmentbased on internal/external factors. An impairment loss isrecognized wherever the carrying amount of an assetexceeds its recoverable amount. The recoverable amount isthe higher of the asset's net selling price and value in use,which is determined by the present value of the estimatedfuture cash flows.

d. Depreciation on assets other than freehold land is providedon written down value method at the rates & in the mannerspecified in Schedule XIV to the Companies Act, 1956.Depreciation on differential increase in values arising out ofthe revaluation is recouped from Revaluation Reserve.

e. Costs of the fixed assets not ready for their intended use atthe Balance Sheet date together with all related expensesand advances paid to acquire fixed assets are shown asCapital Work-in-progress.

(ii) Intangible AssetsIntangible assets are stated at cost of acquisition lessaccumulated amortization. Amortization is provided on thestraight line method as per rates mentioned below:

Asset Class Rate of Amortization

Software 10%

5. Investmentsa. Current investments are stated at Cost or Market Value

whichever is lower.

b. Long term investments are stated at cost unless there is apermanent diminution in value of investments.

6. InventoriesRaw materials and Stores and Spares are valued at cost,cost being determined on monthly weighted average basis.Finished goods are valued at lower of cost or contract/market rate as applicable. Work-in-Progress is valued atcost, comprising raw materials and conversion cost incurredin bringing the inventory to their present location &condition.

7. Foreign Currency TransactionsTransactions in foreign currencies are recorded at the rate ofexchange prevailing at the time of transactions.Transactions remaining unsettled, other than thosecontracts covered under Forward Foreign Exchangecontracts are translated at the rate prevailing at the end ofthe financial year. In case of Forward Exchange Contracts,year-end foreign currency assets & liabilities are translatedat the rate ruling on the date of transaction as increased ordecreased by the proportionate difference between theforward rate and the said exchange rate, such differencehaving been recognized over the life of the contract.Exchange differences arising out of aforesaid transactionsare dealt in the Statement of Profit and Loss.

8. Retirement BenefitsContribution to Provident and Family Pension Fund ischarged to the Statement of Profit & Loss for the year.Gratuities are accounted for in the group on cash basis. TheCompany has no practice of paying leave encashmentbenefit on retirement.

9. Borrowing CostsBorrowing costs attributable to the acquisition/ constructionof fixed assets are capitalized up to the date when suchassets are ready for its intended use. Other borrowing costsare recognized as an expense for the year in which they areincurred.

10. Subsidy & IncentivesGovernment grants are recognized on a prudent basis whenthere is a reasonable assurance that the Company will


comply with the conditions attached thereto.

Capital Investment Subsidy/Incentives are accounted for inthe accounts as and when actually received. Capital grantrelating to specific fixed assets is reduced from the grossvalue of the respective fixed asset. Incentives/ Subsidyrelated to revenue are recognized on a systematic basis inthe Statement of Profit and Loss over the period to matchthem with the related cost which they are intended tocompensate.

11. Goodwill on ConsolidationGoodwill on Consolidation represents the differencebetween the Group’s share in the net worth of the investeecompanies at the time of acquisition and the carryingamount of investment made. The said goodwill is notamortized. It is tested for impairment at each Balance Sheetdate and impairment loss, if any, is provided for.

12. Amalgamation & Preliminary ExpensesAmalgamation Expenses are written off over a period of 5years U/s 35DD of the Income Tax Act, 1961.

Preliminary Expenses are written off over a period of 5 yearsU/s 35D of the Income Tax Act, 1961.

13. Taxes On IncomeTax expenses comprises of current tax and deferred tax.

a. Current income tax is measured at the amount expected tobe paid to the tax authorities, computed in accordance withthe applicable tax rates and tax laws. In case of tax payableas per provisions of MAT under section 115JB of the IncomeTax Act, 1961, MAT credit is recognized as an asset onlywhen and to the extent there is convincing evidence that theCompany will pay normal income tax during the specifiedperiod.

b. Deferred Tax resulting from Timing difference between Bookprofits and Taxable Profits is accounted for using the taxrates and tax laws that are enacted or substantively enactedas on the Balance Sheet date. Deferred tax assets isrecognized and carried forward to the extent that there is areasonable certainty that the asset will be realized in future.

14. Provisions, Contingent liabilities and Contingent AssetsProvisions involving substantial degree of estimation inmeasurement are recognized when there is a presentobligation as a result of past events and it is probable thatthere will be an outflow of resources. Contingent Liabilitiesare not recognized but are disclosed in the Notes.Contingent assets are neither recognized nor disclosed inthe Financial Statements.

15. Earnings per Share (EPS)

a) Basic earnings per share are calculated by dividing the netprofit or loss for the period attributable to equityshareholders by the weighted average number of equityshares outstanding during the period.

b) For the purpose of calculating diluted earnings per share,the net profit or loss for the period attributable to equityshareholders and the weighted average number of sharesoutstanding during the period are adjusted for the effects ofall dilutive potential equity shares.

16. Prior Period items:Prior Period and exceptional items and Changes inAccounting Policies having material impact on the financialaffairs of the Company are separately disclosed.



Notes to and forming integral part of Consolidated Financial Statements As at 31st March, 2013

(d) Terms / rights attached to Equity SharesThe Company has only one class of equity share having a par value of `10 per share. Each shareholder is eligible for one voteper share. The dividend proposed by the Board of Directors is subject to the approval of shareholders except in case of interimdividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company afterdistribution of all preferential amounts, in proportion to the shareholding.

(e) Details of shareholders holding more than 5% shares in the Company

(f) 17,757 Equity Shares of `10/- each were alloted as fully paid up shares on 28/03/2009, pursuant to a Scheme of Amalgamationsanctioned by the Hon'ble High Court at Calcutta, without consideration being received in cash.

(Amount in `)


NOTE 2

SHARE CAPITAL:(a) Authorised Share Capital

6,737,500 (P.Y 6,737,500) Equity Shares of `10/-each 67,375,000 67,375,000 26,250 (P.Y 26,250) 9.1% Cumulative Redeemable Preference Shares of `100/- each 2,625,000 2,625,000

70,000,000 70,000,000 (b) Issued ,Subscribed & Paid up Share Capital

5,444,307 (P.Y 5,444,307) Equity Shares of `10/- each fully paid up 54,443,070 54,443,070 54,443,070 54,443,070

(c) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period


Number of Amount Number of AmountShares (`) Shares (`)

At the Beginning of the Period 5,444,307 54,443,070 4,944,307 49,443,070

Additions During the Year: – – 500,000 5,000,000 Shares at the end of the Reporting period 5,444,307 54,443,070 5,444,307 54,443,070


Number of % of Number of % ofShares holding Shares holding

1) HR Global Finance Limited 1,128,369 20.73 1,128,244 20.72

2) HR International Limited 1,014,595 18.64 1,014,595 18.64

3) Vedansh Traders Private Limited 870,000 15.98 870,000 15.98

4) HR Infracon Limited 780,379 14.33 780,379 14.33

5) Alankar Commotrade Private Limited 415,000 7.62 415,000 7.62



(Amount in `)


NOTE 3

RESERVES & SURPLUS:(a) Revaluation Reserve

(Created by Revaluation of Land, Buildings & Plant & Machinery)As per last Balance Sheet 56,928,092 57,949,286 Less : Transfer to Profit and Loss Account on account of depreciation on amount added on Revaluation 937,467 1,021,194

55,990,625 56,928,092 (b) Capital Reserve

As per last Balance Sheet 4,073,671 4,073,671 (c) Capital Redemption Reserve

As per last Balance Sheet 2,625,000 2,625,000 (d) Securities Premium Account

As per last Balance Sheet 34,400,000 19,400,000 Addition during the year – 15,000,000

34,400,000 34,400,000 (e) Amalgamation Reserve

As per last Balance Sheet 1,789,207 1,789,207 (f) Investment Allowance Reserve

As per last Balance Sheet 129,150 129,150 (g) General Reserve

As per last Balance Sheet 59,203,800 59,203,800 (h) Surplus

As per last Balance Sheet 221,808,787 185,965,484 Add : Profit for the year 32,740,440 38,136,536 Add: Adjustment – 870,454 Less : AppropriationsProposed Final Dividend on Equity Shares 3,222,153 2,722,154 Tax on Proposed Final Dividend 522,714 441,533

250,804,360 221,808,787 Grand Total 409,015,813 380,957,707

NOTE 4

LONG-TERM BORROWINGS(a) Secured

i) Term Loans from Banksa) State Bank of India 49,358,640 64,250,860 b) The Federal Bank Limited 100,000,000 40,319,609

149,358,640 104,570,469(b) Unsecured

Term Loan from a Body Corporate 16,036,748 –

16,036,748 –

Total 165,395,388 104,570,469

Less: Current maturities of Long-Term Borrowings transferredto Other Current Liabilities 28,867,809 31,911,670

Grand Total 136,527,579 72,658,799



(Amount in `)


NOTE 5

DEFERRED TAX LIABILITIES:

Deferred Tax Liability on Account of Fixed Asset 244,756 244,756 244,756 244,756

Note: As a matter of prudence differential amount of deferred tax asset has not been accounted for in the accounts

NOTE 6

OTHER LONG-TERM LIABILITIES:

Security deposits 18,590,390 14,382,942 18,590,390 14,382,942

NOTE 7

SHORT-TERM BORROWINGS:

(a) Secured:(i) Working Capital Loans repayable on demand

(a) From State Bank of India 292,378,553 285,940,579 (b) From The Federal Bank Limited 160,457,655 131,872,710

(ii) I.F.C.I Ltd. 1,269,000 1,269,000 (iii) WBIDC Ltd. – 25,700,000 (iv) Under Buyer's Credit arrangement 22,636,144 45,559,208

476,741,352 490,341,498 (b) Unsecured:

(i) From Bodies Corporate 73,057,943 148,121,714 (ii) From a Director 9,500,000 9,500,000

82,557,943 157,621,714 Grand Total 559,299,295 647,963,212

NOTE 4 (Contd...)

(c) Nature of Security

Term Loans are secured by / against :

(i) First Pari Passu charge on the entire fixed assets

(ii) Hypothecation of all the Stock in Trade, Stores & Book Debts of the Company, ranking Pari-passu

(iii) Personal guarantees of Shri Om Prakash Mall, Shri Shree Mohan Mall & Shri Nand Kishore Jhawar

(iv) Rent Receivables

(d) Major Terms of repayment of Long Term Borrowings disclosed in (a) above:

Maturity Profile of Long-Term Borrowings outstanding as at 31 March, 2013

2012-13 2011-12Term Corporate Total Current Current

Loans Loan Maturities Maturities

Loan with residual maturity upto 1 year – – – – 9,614,457Loan with residual maturity between 1 & 3 years 16,036,748 – 16,036,748 6,876,748 – Loan with residual maturity between 3 & 5 years 49,358,640 – 49,358,640 13,000,000 9,297,213 Loan with residual maturity between 5 & 10 years 100,000,000 – 100,000,000 8,991,061 13,000,000 Total 165,395,388 – 165,395,388 28,867,809 31,911,670


(c) Nature of Security:

Working Capital Loans are secured by:

(i) Hypothecation of all the Stock in Trade, Stores & Book Debts of the Company, ranking Pari-passu

(ii) First Pari Passu charge on the entire fixed assets

(iii) Personal Guarantees of Shri Om Prakash Mall, Shri Shree Mohan Mall & Shri Nand Kishore Jhawar


(Amount in `)


NOTE 8

TRADE PAYABLES:

(i) Acceptances 141,463,761 146,285,998

(ii) Other Trade Payables

(a) Dues to micro, medium & small enterprises 2,290,885 5,202,388

(b) Dues to other than micro, medium & small enterprises 572,880,514 589,812,774

716,635,159 741,301,160

NOTE 9

OTHER CURRENT LIABILITIES:

Current maturities of Long-Term Borrowings 28,867,809 31,911,670

Unpaid Dividends 1,293,442 1,062,630

Preference Shares Redemption amount 427,500 432,500

Advance from Customers 46,892,330 17,752,065

Creditors for Capital Goods – 693,000

Statutory Liabilities 21,658,756 15,529,818

Income Tax and FBT Payable on Assessment 3,783,607 3,783,607

Other Payables 71,990,054 62,729,675

Book Overdrawn with Scheduled Banks on Current Account 7,550,511 595,060

182,464,008 134,490,026

Note: There are no amounts due for payment to the Investor Education & Protection Fund u/s 205 C of the Companies Act, 1956

NOTE 10

SHORT-TERM PROVISIONS:

Provision for Taxation 27,305,501 22,305,501

Others:

Proposed Final Dividend on Equity Shares 3,222,153 2,722,154

Dividend Distribution Tax on Proposed Final Dividend 522,714 441,533

31,050,368 25,469,188

NOTE 7 (Contd...)


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6,54

391

,268

,779

12

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,492

928,

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141,

701

818,

990

4,26

3,88

131

5,80

11,

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215

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(Amount in `)


NOTE 12

NON CURRENT INVESTMENTS:

(A) Investment in Immovable Property 10,535,144 5,000,000

(B) Investments in Equity Instruments (Unquoted, at Cost)

a) 18,055 (18,055) Nos. of equity shares of West Bengal Agro Textile 22,751,344 22,751,344Corporation Limited of `1,000/- each fully paid up.

b) 3,810 (3,810) Equity Shares of Woodland Multispeciality Hospital Limited 38,100 38,100of `10/- each.

(C) Other Investment (Non Trade, at Cost)

Gold 118,760 118,760

33,443,348 27,908,204

(D) Aggregate Book Value of Unquoted Equity Instruments 22,789,444 22,789,444

NOTE 13

LONG-TERM LOANS AND ADVANCES:

Unsecured, considered good(a) Capital Advances – 13,451 (b) Security Deposits 16,891,540 13,506,094 (c) Other Loans & Advances:

(i) Loans 27,809,331 25,066,099 (ii) Vat Credit Receivable 3,329,846 3,329,846 (iii) ModVat Credit Receivable 314,578 314,578 (iv) Others 5,218,376 5,483,376

53,563,672 47,713,445

NOTE 14

OTHER NON-CURRENT ASSETS:

(a) Export Incentives Receivable 44,188,187 46,136,397 (b) Other Receivables 6,725,107 6,725,107 (c) Unamortised costs towards miscellaneous expenditure

to the extent written off or adjusted 15,612 55,023 50,928,906 52,916,527

NOTE 15

INVENTORIES:

(a) Raw Materials 263,978,492 295,498,806 (b) Work- In- Progress 39,608,279 45,480,462 (c) Finished Goods 315,805,540 309,052,197 (d) Stores, Spares & Loose Tools 30,580,716 30,325,924

649,973,027 680,357,389



(Amount in `)


NOTE 16

TRADE RECEIVABLES:

(a) Outstanding for a period exceeding six monthsSecured, considered good: – 137,812 Unsecured, considered good 11,729,614 9,351,963 Doubtful 720,673 720,673

12,450,287 10,210,448 Less : Provision for Doubtful debts 720,673 720,673

11,729,614 9,489,775 (b) Outstanding for a period less than six months

Secured, considered good – 3,362,596 Unsecured, considered good 529,797,848 437,676,599

529,797,848 441,039,195 541,527,462 450,528,970

NOTE 17

CASH & BANK BALANCES :

(a) Cash & Cash Equivalents i) Balance With Banks in -

Current Account 2,984,227 1,830,691 ii) Cash In Hand 1,721,861 1,443,151

4,706,088 3,273,842 (b) Other Bank Balances i) In Unpaid Dividend Account 1,293,330 1,062,519 ii) In Bank Deposits Account

Bank Deposits with original maturity more than 3 months and less than 12 months. 1,593,553 3,911,724 Bank Deposit with original maturity more than 12 months. 22,839,170 22,823,447

25,726,053 27,797,690 TOTAL 30,432,141 31,071,532

(c) Bank deposits amounting to `23,126,110/- (P.Y `26,735,171/-) pledged against borrowings from Banks.

NOTE 18

SHORT-TERM LOANS & ADVANCES:

Unsecured, Considered good (a) Advances 179,164,717 103,079,911 (b) Security Deposit 939,267 6,833,365 (c) Prepaid Expenses 9,014,398 5,961,494 (d) Income Tax deducted at source 15,301,874 11,129,653 (e) Income Tax Payments 6,676,636 3,676,636 (f) Service Tax Receivable 11,626,117 7,986,723 (g) Vat Credit Receivable 6,229,667 3,217,284 (h) Mat Credit Entitlement 4,000,000 4,000,000

232,952,676 145,885,066

(i) Of the above advances dues from officers of the Company is `1,050,400/- (P.Y `947,000/-)



(Amount in `)

(Amount in `)


NOTE 20

REVENUE FROM OPERATIONS:

(a) Sale of Products 3,496,232,439 4,036,152,648

(b) Rental Income 43,697,070 30,487,336

(c) Other Operating Revenues

Export Incentives 33,536,557 58,269,724

Credit for Certifeid Emission Reduction – 2,995,200

Premium on Long-Term Lease of Premises – 8,655,143

3,573,466,066 4,136,560,051

Note:

Details of Sale of Products

Jute Goods 3,496,232,439 4,036,152,648

NOTE 21

OTHER INCOME

(a) Interest Income:- On Bank Deposits 1,964,386 2,290,178 - Other Deposits 29,762 39,889 - Miscellaneous 54,691 55,094

(b) Agricultural Income 98,400 86,400 (c) Net Gain on Sale of Fixed/Discarded Assets 351,686 2,645,782 (d) Miscellaneous Receipts 2,225,808 648,923 (e) Provision for Doubtful Debts Written Back – 284,559 (f) Liability no longer required written back 12,014 13,240,421 (g) Net Profit on Currency Fluctuation and Translation 2,305,784 –(h) Sale of Scrap 6,447,667 –

13,490,198 19,291,246


NOTE 19

OTHER CURRENT ASSETS:

(a) Export Incentives Receivables 33,584,645 23,248,369 (b) Claims and other Receivable (Unsecured, Considered good) 12,563,878 79,235,330 (c) Interest accrued on Bank Deposit 1,760,990 1,161,035 (d) Unamortised Cost towards miscellaneous expenditure 39,411 59,411

to the extent not written off or adjusted 47,948,924 103,704,145



(Amount in `)


NOTE 22

COST OF MATERIALS CONSUMED:

Opening Balance of Stock 295,498,806 349,621,892

Purchase of Raw-Materials 2,182,999,477 2,525,974,326

2,478,498,283 2,875,596,218

Less: Closing Balance of Stock 263,106,219 308,939,748

2,215,392,064 2,566,656,470

Purchase of Gunnies 181,881,414 333,959,897

Others – 1,626,381

2,397,273,478 2,902,242,748

NOTE 23

CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK-IN-PROGRESS:

Closing StockFinished Goods 315,805,540 311,251,758 Loose Stock – 8,924,640 Work-In-Progress 39,608,279 60,534,582

355,413,819 380,710,980Opening StockFinished Goods 309,052,197 273,039,922 Loose Stock – 9,212,664 Work-In-Progress 45,480,462 53,704,041

354,532,659 335,956,627881,160 44,754,353

NOTE 24

EMPLOYEE BENEFITS EXPENSE:

Salaries, Wages, Bonus and Gratuity 511,885,699 527,200,968 Contribution to Provident & Other Funds 55,358,548 53,566,623 Medical & Welfare Expenses 64,749,686 59,943,676

631,993,933 640,711,267

NOTE 25

FINANCE COST:

(a) Interest Expense 88,107,789 72,438,455 (Net of Interest Received / Capitalised `3,048,011/- (P.Y `11,239,784/-)

(b) Other Borrowing Cost 2,467,596 11,928,873 90,575,385 84,367,328



(Amount in `)


NOTE 26

DEPRECIATION AND AMORTISATION EXPENSES:

On Tangible Assets 48,903,759 47,994,697

On Intangible Assets 227,015 220,000

49,130,774 48,214,697

Less :Transfer from Revaluation Reserve 937,467 1,021,194

48,193,307 47,193,503

NOTE 27

OTHER EXPENSES:

Consumption of Stores & Spare Parts 96,785,960 98,950,768 Power & Fuel 150,886,327 140,845,227 Rent 1,513,187 21,491,776 Repairs to Building 1,980,358 1,324,405 Repairs to Machinery 3,587,119 2,951,174 Insurance 6,634,170 5,753,052 Rates & Taxes 547,959 1,387,574 Net Loss on Currency Fluctuation and Translation – 10,182,926 Bad debt written off 530,061 8,618,846 Miscellaneous Expenses 145,289,494 187,031,174

407,754,635 478,536,922

NOTE 29

i. Gratuity is accounted on cash basis. Due to severe financial constraints, provision for future liability of gratuity could not be made,hence it was not determined actuarially. There is no practice for payment of leave encashment and hence actuarial valuation notrequired.

ii. Interest arising out of non-payment in due time of retirement gratuity in respect of retired employees has not been ascertainedand provided for. However, no claim for interest on delayed payments in this account has been received.

NOTE 30

Trade Receivables include `10,436,576/-(P.Y `17,036,816/-), Loans and Advances include `7,815,000/-(P.Y `7,815,000) and ExportsIncentives Receivables includes `40,370,615/- (P.Y `40,370,615/-) outstanding for more than three years and are doubtful. However,management is of the opinion that the said dues will be recoverable in full and hence no provision is required in this regard.

NOTE 27.1

DETAILS OF PAYMENTS TO AUDITORS (included in Miscellaneous expenses)

a) Audit Fees 221,236 220,000 b) Certification matters 67,500 67,500 c) For other services 105,000 105,000

393,736 392,500

NOTE 28

EXCEPTIONAL ITEMS:

a) Interest payable to WBIDC Ltd. written back – 8,181,000

b) Loan payable to WBIDC Ltd. written back 25,700,000 –

Total 25,700,000 8,181,000



NOTE 31

Interest and other charges for Non-Payment/ Delayed payment of Sales Tax and service tax, if any, has not been ascertained andprovided for.

NOTE 32

Loan of `257 lacs was sanctioned by the Government of West Bengal to the company as a part of the BIFR revival package on 23rdAugust,1990, through WBIDC Ltd for payment of arrear sales tax. In view of several representations made to the Government of WestBengal for losses suffered by the company due to considerable delay in granting permission for sale of lands as per BIFR revivalpackage, the company has written back the said loan liability on the premise that the same has been waived by the Government ofWest Bengal, although no written approval of the same is available. This being of onetime non-recurring nature has been consideredto be an exceptional item.

NOTE 33

Contingent Liabilities not provided for:

NOTE 34

Certain Borrowings, Sundry Creditors, Sundry Debtors, Loans & Advances are subject to Confirmation/ Reconciliation from therespective parties. The Management however does not expect any material variations.

NOTE 35

Estimated amount of Commitments on Capital Account outstanding as on 31st March 2013 was NIL (P.Y `186.48 Lacs) net ofadvances.

NOTE 36

No provision is considered necessary by the management in respect of claim for damages of `5,008,807/- (P.Y `5,008,807/-) by theESI Authorities for delayed payment of dues for the earlier years, as the company’s application for waiver / reduction thereof is underconsideration of the authorities.

NOTE 37

There were five parties covered under Micro, Small and Medium Enterprises to whom the Company owes dues, which wereoutstanding for more than 45 days as at 31st March, 2013 to the extent of `2,290,885/-(P.Y `3,585,499/-). No interest was paid /payable to the said party during the year. This information as required to be disclosed under the Micro, Small and MediumEnterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of informationavailable with the Company.

(Amount in `)


a) Bank guarantees given on behalf of the company 3,69,49,608 40,996,598b) West Bengal and Central Sales Tax assessments under 1,865,171 1,865,171

appeal for the period 1st October, 2002 to 31st March, 2004c) Bills discounted from bank (since realized) 14,005,096 21,450,897d) Letters of Credit issued in favour of various parties 14,14,63,761 186,481,920e) Corporate guarantee given to State Bank of India on behalf 31,312,000 33,860,000

of West Bengal Agro Textile Corporation Ltd.f) Interest / penalties for non payment of Service Tax realized Amount not Amount not

by the company ascertained ascertainedg) Rent/interest & penalties for non-payment of Lease Rent Amount not Amount not

to Kolkata Port Trust ascertained ascertained



NOTE 39

Earnings Per Share (EPS):- (Amount in `)


Net Profit for the period attributable to equity shareholders: (`) (a) 32,740,439 38,136,536

Weighted average number of Equity Shares of `10/- each (b) 5,444,307 4,978,460outstanding during the period

Add: Dilutive number of Equity Shares outstanding during the year (c) 1,000,000 NIL

Diluted number of Equity Shares outstanding during the year (d) 6,444,307 4,978,460

Earnings Per Share (`):

Basic (e) = (a) / (b) 6.01 7.66

Diluted (f) = (a) / (d) 5.08 7.66

(Amount in `)

Particulars Jute Activity Real Estate Total

Revenue 3,543,259,194 43,697,070 3,586,956,264(4,116,708,818) (39,142,479) (4,155,851,298)

Segment Results 81,803,264 20,818,806 102,622,070(Profit before Interest, tax & Exceptional Items) (103,841,852) (19,054,954) (122,896,807)

Interest 77,172,300 13,403,085 90,575,385(68,250,691) (16,116,637) (84,367,328)

Exceptional Items 25,700,000 – 25,700,000(8,181,000) (–) (8,181,000)

Profit Before tax 30,330,965 7,415,721 37,746,686(43,772,162) (2,938,317) (46,710,479)

Less: Income Tax – – 5,000,000(–) (–) (8,568,210)

Profit after tax – – 32,746,686(–) (–) (38,142,269)

Other Information

Assets 1,990,490,992 164,496,452 2,154,987,444(1,935,156,525) (136,974,094) (2,072,130,619)

Liabilities 1,473,118,769 167,939,030 1,641,057,799(1,526,936,371) (109,328,954) (1,636,265,326)

Capital Expenditure 63,874,428 – 63,874,428(160,986,694) (–) (160,986,694)

Depreciation & Amortisation 35,616,732 12,576,575 48,193,307

(36,539,865) (10,653,638) (47,193,503)

NOTE 38

Segmental Reporting as per AS -17 :-



NOTE 40

Related Party Disclosure: (Amount in `)

Relationship Name Transactions during the year

Key Managerial Personnel Mr. S. Banerjee Managerial Remuneration(Whole-time Director) `1,000,725/-

(P.Y `863,315/-)

Mr.S. Mall Managerial Remuneration(Managing Director) `1,100,000/-

(P.Y NIL)

Signatures of the Notes 1 to 40






Consolidated Cash Flow Statement For the year ended 31st March, 2013

(Amount in `)



A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax & exceptional items 12,046,686 38,529,479

Adjustments for:

Depreciation and amortization expenses 48,193,307 47,193,503

Interest expense 90,575,385 84,367,328

Interest income (1,994,148) (2,330,067)

Profit on Sale of Fixed Asset (351,686) (2,645,782)

Liability No longer required written back (12,014) (13,524,980)

Preliminary Expenses Written off 59,411 59,411

Amalgamation Expenses Written off – 136,470,255 32,100 113,151,513

Operating Profit Before Working Capital Changes 148,516,941 151,680,992

Adjustments for:

(Increase)/decrease in trade receivables (90,998,492) (74,528,760)

(Increase)/decrease in loans & advances (92,917,837) (26,115,781)

(Increase)/decrease in other assets 57,683,431 (10,681,853)

Increase/(decrease) in trade payables (24,666,000) 200,169,434

Increase/(decrease) in other liabilities 51,954,234 (48,587,805)

Increase/(decrease) in provisions – (2,182,951)

(Increase)/decrease in inventories 30,384,362 (68,560,303) 39,231,544 77,303,827

Cash Generated From / (Used In) Operations 79,956,638 228,984,820

Less: Taxes Paid – 1,518,216

Cash Flow Before Exceptional Items 79,956,638 227,466,604

Exceptional Items 25,700,000 8,181,000

Net Cash From / (Used In) Operating Activities – A 105,656,638 235,647,604

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets (37,967,461) (160,986,694)

Sale proceeds of fixed assets 3,507,425 2,650,000

Purchase of investments (5,535,144) (5,038,100)

Sale proceeds of investments (Net) – 20,228,064

Interest received 1,994,148 2,330,067

Net Cash From / (Used In) Investing Activities – B (38,001,032) (140,816,663)


Consolidated Cash Flow Statement For the year ended 31st March, 2013

(Amount in `)



C. CASH FLOW FROM FINANCING ACTIVITIES

Final Dividend paid (2,482,943) (2,238,863)

Corporate Dividend Tax on final dividend (441,533) (410,600)

Interest paid (90,575,385) (92,520,787)

Share application money received 50,000,000 20,000,000

Increase/ (decrease) in long-term borrowings 63,868,781 (38,769,984)

Increase/ (decrease) in short-term borrowings (88,663,917) 23,809,306

Net Cash From / (Used In) Financing Activities – C (68,294,997) (90,130,928)

Net Increase / (Decrease) in Cash and

Cash Equivalants (A+B+C) (639,391) 4,700,012

Cash & Cash Equivalents 31,071,532 26,371,519

at the beginning of the year

Cash & Cash Equivalents 30,432,141 31,071,532

at the closing of the year

Note:

1. The Cash Flow Statement has been prepared under the "Indirect method" set out in the Accounting Standard-3 on "Cash Flow

Statement" notified in the companies (Accounting Standards) Rules,2006.

2. Cash and Cash Equivalents include Cash in hand and Bank balances on current account and Fixed deposit Accounts. (Refer

Note 17)

3. Figures in brackets indicate Cash outflow.

4. Previous Year's figures have been regrouped/rearranged, wherever considered necessary to conform to this year's classification.

For S. JAYKISHAN Sanjay Mall

Chartered Accountants Managing Director

FRN : 309005E

(CA Y. GUPTA) T. Roy S. Banerjee

Partner Company Secretary Whole-time Director

Membership No. 060539

Place: Kolkata S. L. Jhawar

Date: 30th May, 2013 Director


The details of subsidiaries as on 31.03.2013, stated in terms of General Circular No.2/2011dated 08.02.2011 issued by the Government of India, Ministry of Corporate Affairs, are asunder:

SL. Particulars HMC Power HMC Jute Park

No. Companies Limited Enterprises Limited

1. Share Capital 5.00 5.00

2. Reserves and Surplus (0.03) (0.84)

3. Total Assets 143.74 106.14

4. Total Liabilities 138.77 101.98

5. Long Term Investments NIL 105.35

6. Turnover NIL NIL

7. Profit / (Loss) before Taxation 0.25 0.08

8. Provision for Taxation NIL NIL

9. Profit / (Loss) after Taxation 0.25 0.08

10. Proposed Dividend NIL NIL

11. Reporting Currency Indian Rupees Indian Rupees


Sanjay Mall Managing DirectorT. Roy Sitansu Banerjee Whole-time Director

Company Secretary Shankar Lal Jhawar DirectorPlace: HowrahDate: 30th May, 2013

(` in lacs)


NOTES


NOTES

HOWRAH MILLS COMPANY LIMITEDRegistered Office: "Howrah House", 135, Foreshore Road, Howrah-711102

Proxy Form

I/ We .............................................................................................................................................................................................................

of .............................................................................................................................................................................................................

.....................................................................................................................................being a Member(s) of the above named Company,

hereby appoint..........................................................................................of................................................................................................

or failing him/her................................................................................ of ...........................................................................................

as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on

Friday, the 30th August, 2013 at 11.30 a.m. and at any adjournment thereof.

Signed this ................................ day of ............................................ 2013

Signature ...........................................................

FOLIO No. ............................................

DP ID No. ............................................

Client ID No. ............................................

Note:

This Proxy form must be deposited at the Registered Office of the Company, “Howrah House”, 135, Foreshore Road,

Howrah - 711102, not less than 48 hours before the time of holding the meeting.

AffixRevenueStamp

HOWRAH MILLS COMPANY LIMITEDRegistered Office: "Howrah House", 135, Foreshore Road, Howrah-711102

Attendance Slip(To be handed over at the entrance of the Meeting Hall)

I hereby record my presence at the Annual General Meeting of the above named Company held at “Howrah House”, 135, Foreshore

Road, Howrah-711102 on Friday, the 30th August, 2013 at 11.30 a.m.

Full Name of Member/ Proxy attending the meeting .................................................................................................................................

Full Name of the First Holder (if joint holder/proxy attending) ...................................................................................................................

FOLIO No. ............................................ ..........................................................................................

DP ID No. ............................................ Signature of the Member/ Proxy

Client ID No. ............................................ (To be signed at the time of handing over this slip)

Members, who come to attend the meeting, are requested to bring their copies of the Annual Report with them.

Howrah Mills Company Limited | Annual Report 2012-2013

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.adv

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.com

Howrah Mills Company LimitedRegistered & Administrative Office

‘Howrah House’, 135, Foreshore Road, Howrah - 711 102

keen on green!

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adva | Mills AR12...projected. Readers should bear this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of