Rajesh Exports: Auditor's Report

The points raised by the auditors have been addressed by the management in MDA section and the explanation seems to be acceptable!

However, the practice of accounting for gratuity in cash, raises concerns over the future liablity of gratuity which is not presently ascertainable?

Rajesh Exports: Corporate Governance

Philosophy

Accountability improves decision-making and transparency helps to explain the rationale behind decision-making and reinforces the shareholders' confidence in the company.

Board of Directors

Executive: 2
Non-executive: 3

Board Meetings

Number of Board Meetings: 20
Maximum Board Meeting where all are present: 14

Committees

1. Audit committee
2. Shareholders and Investor Grievance committee

Remuneration to Directors

Executive Directors: Rs.1,20,000/- per annum
Non-executive Directors: nil

Special resolutions

2005: Preferential allotment of 19,48,000 equity shares to Bennett, Coleman & Co Ltd.
2007: Raising of USD 150 million in the overseas market through FCCB

Dividend

Recommended Dividend: 35%

Stock Price

Stock Price (Year High): Rs.510/-
Stock Price (Year Low): Rs.67/-

Shareholding Pattern

Promoters: 54%
FIIs: 17%
Corporates: 7%
Public/Mutual Funds: 21%
NRI's: 0.3%

Rajesh Exports: MDA

Not much has been discussed in the MDA section except that, "the company will further strengthen its position in retail and other high margin businesses to further enhance the profitability in the coming years!"

Rajesh Exports: Director's Report

Green Flags

1. Sales up by 26% from 6893 crores to 8667 crores.
2. Net profit up by 104% from 101 crores to 207 crores.
3. Dividend recommended - 35%
4. No employees are drawing remuneration in excess of 24 lakhs per annum.

Red Flags

1. Auditors P. K. Rungta & Co. have confirmed that their appointment if made, would be in accordance with the limits specified under section 224 (1B) of the Companies Act, 1956.

Rajesh Exports: Notice

The main highlights I think are,

1. To appoint a director in place of Prashant Mehta who is present MD & Rajesh Mehta's i.e. Chairman's brother, who retires by rotation and being eligible, offers himself for re-appointment.

2. To appoint auditors and fix their remuneration.

Rajesh Exports: Contents

1. Notice
2. Report of Directors
3. MDA
4. Corporate Governance
5. Auditor's Report
6. Balance Sheet
7. Profit & Loss Account
8. Schedules to Balance Sheet
9. Cash Flow Statement
10. Balance Sheet Abstract

Case Study 1

Company : Rajesh Exports Ltd.
Sector : Cosumer Durables

Head Office : Bangalore

Auditors : M/s P. K. Rungta & Co.

Listing : NSE & BSE
Year End : 31st March

Annual Report under Focus : 2007-08
http://www.rajeshindia.com/files/annual-reports/14th_Annual%20Report_2007-08.pdf