On behalf of the Board of Directors, I take pleasure in presenting the 38th Annual Report on the performance of your Corporation together with the Audited Reports and Audited Accounts for the year 31st March, 2009 and the Report thereon by the Comptroller and Auditor General of India. The salient features on the workings of your Corporation are given below :

The jute crop year 2008-09 started with less carryover of stock and the raw jute production during the year are also less than consumption. Therefore, raw jute prices were initially low at the start of season but gradually increased during off season months and reached to its highest level of Rs. 3000 per qntls. during 2009. Incidentally, your Corporation procured a quantity of 184059 qntls. (102255 bales of 180 kgs.of each) under MSP for the year 2008-09. The consumption of raw jute is gradually increasing, it is, therefore, expected that the raw jute prices will again remain higher during the year 2009-10 and there will be no chances of MSP. Therefore, it is necessary for your Corporation to undertake commercial operations judiciously to generate revenue to meet its overhead cost.

2.1. Minimum Support Price Operation: The Office of the Jute Commissioner, fixed the Minimum Support Price of different varieties and grades, based on the recommendation of the Commission for Agricultural Costs and Price(CACP),Department of Agriculture & Co-operation, Govt. of India, which recommended the Minimum Support Price(MSP) for TD-5 ex-Assam and accordingly Government of India has declared MSP Rupees 1250/-per quintal for 2008-09,which is higher by Rupees 195 /- per quintal than MSP of 2007-08. JCI has only purchased 1.02 lac bales of 180 kgs each of raw jute under MSP during initial period of harvesting months of the Jute season 2008-09 but subsequently raw jute prices were gone up and reached up to record level of Rupees 3000 per quintal during June 2009.The Government of India has declared MSP of Rs. 1375/- for the year 2009-10 which is higher by Rs. 125/- per quintal over MSP of 2008-09. The raw jute prices has gone down with the start of the season but there are no chances of MSP during 2009-10 in view of over all higher demand of raw jute.

2.2. Commercial Operation:JCI has not purchased any raw jute under Commercial Operation during the crop year 2008-09.

Summary of the Financial Position of Commercial Purchases for the years 2005-06 and 2006-07 as per Annual Account as on 31st March, 2009 is as under:

3.1 During the year under review, the Corporation could procure only 1.02 lakh bales of raw jute under MSP.

3.2 The total Turnover of the Corporation during 2008-09 is Rs. 166.93 Crores. The Operating result shows a Profit of Rs.108.48 Crores after charging Overhead cost, Rent, Insurance, Interest, depreciation and provision for leave encashment benefit of retired employees. After transferring the above Profit the carried over amount as shown in the Balance Sheet is Rs.57.82 Crores at the end of the year after adjustment of cumulative loss and income tax.

3.3 The financial results for the year under review have been summarized in Financial Results for 2008-09 financial year.

3.4 The Cabinet in their meeting date 28th January 2009 approved the proposal to provide subsidy towards its overhead cost of the Corporation irrespective of quantum of MSP every year. This is considered towards its expenditure within the limit of Rs. 36.59 crores per annum incurred to maintain infrastructure for MSP operation. In addition to this, the policy for reimbursement of MSP losses (the difference between purchase and sale price of raw jute ), if any, shall continue .The Cabinet also regularized the amount paid towards subsidy with effect from 2003-04 to 2007-08.Normally, there is no losses in purchase and sale price of MSP jute (except overhead cost) because of its supply to Jute Mills under B.Twill linkage. Therefore, this is a big achievement for your corporation to strengthen its accounts with proper reflection of profit earned by them with generation of income through its turnover under MSP or Commercial operations.

3.5 The Corporation has infrastructure, necessary working capital and bank limits to achieve turnover of more than Rupees 200 crores every year. There were no major MSP operations after 2002-03. The Corporation started commercial operations during 2005-06 but could not be successful due to opposition of Jute Industries. The Corporation again tried in 2006-07 which was again opposed by Jute Industries and Corporation had to carry the stock. However, subsequently this stock was sold and Corporation generated profit but JCI could not conduct any commercial operations during 2007-08 and in 2008-09 because of conflict in business interest with the Jute Industries who are the only consumer of raw jute.

3.6 The turnover of JCI is gradually reduced and maybe even nominal during next year because there are no chances of MSP during 2009-10 and Jute Industries again opposing the commercial operations. Although during recent meeting held on 2nd September 09 at MOT, your Corporation is advised to take prudent decision to undertake commercial operations which can serve dual purpose that is to arrest downward trend in raw jute prices during heavy arrivals in harvesting months which will help the farmers in getting remunerative price. This will serve other purpose of Corporation to generate profit because normally the raw jute prices are lower in harvesting months thus Corporation can buy the jute and keep the stock and sale it when there is increase in raw jute prices during off season months as is evident from the trend of 2008-09. But because of opposition by Jute Industries your Corporation is again facing a problem to achieve MOU turnover targets.

3.7 Under the circumstances, the role of your Corporation must be clearly defined by the government regarding commercial operations. The only time of purchases in lower price is September, October and November (Peak arrival months) and sale in subsequent months to generate profit. This is necessary for the Corporation to generate income to meet its shortfall in yearly wages and salary during non MSP year. Otherwise, the profit making status of the Corporation can not be maintained and its wide infrastructure of 171 DPCs,16 Regional Offices and HO with more than 1600 employees will remain idle through out the year. The Jute mills are getting support from government in various ways like compulsory 100% Jute Packaging, B Twill supply orders from government food procuring agencies where in actual cost of raw jute and production cost is reimbursed to Jute Mills. All these are for the benefit of workers and more than 4 millions of jute farmers. Therefore, a mechanism must be planned by Ministry of Textiles for compulsory purchases of some quantity of raw jute by Jute Industries through JCI on competitive terms which will help your Corporation to generate income during non-MSP year and farmers can also be benefited through JCI purchases. Otherwise, JCI has to prune down its permanent DPCs and Regional offices with introduction of MSP purchases through mobile purchase centres with minimum expenditure as and when required. The MSP is not regular and its chances in future is also low because of policy of economic liberalization, thus appropriate policy decision is necessary for future growth of your Corporation.

The principal activity of the Corporation is to undertake procurement operation of jute under the Minimum Support Price (MSP) announced by the Govt. of India on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP) for raw jute TD5 grade ex-Assam. The office of the Jute Commissioner, based on this price, notifies prices of all the grades(TD1 to TD8) for Tossa and other varieties of Mesta and Bimli grown in different parts of the country. It's a fact that the MSP, on an average, takes place once in a cycle of three years which means the Corporation virtually remains idle in the non-MSP years.

As per DPE Guidelines every CPSU has to execute a MOU with their respective Ministry and JCI also executed a MOU with MOT for the year 2009-10 under which the target turnover for 2009-10 is Rs.60 crores.

The Corporation has ventured upon commercial operation in the year 2005-06 and 2006-07 but the same had to face a lot of difficulties therefore the Corporation did not go for a commercial operation in the year 2007-08 and 2008-09. A Committee under the chairmanship of AS&FA was constituted with Joint Secretary, Jute Commissioner and CMD, JCI as member. This Committee submitted its Report to Ministry of Textiles during April 2008 with its recommendations to improve its Infrastructure, Man Power Planning etc to effectively undertake its MSP and Commercial Operations. The Ministry of Textiles accepted the Report and accordingly Cabinet regularized the subsidy w e f 2003-04 to 2007-08 with the approval of subsidy towards its Infrastructure Cost for MSP be maintained as Rs. 36.59 crores per annum.

The overhead cost of the Corporation will be around Rs.42-44 crores per annum. In view of this, the Audit Committee/Board of Directors of the Corporation advised that a plan should be prepared in order to generate further fund in each year to the tune of at least Rs. 6-8 crore whether there is MSP or Commercial operation.

As reported in the last year that JCI implemented the Cabinet Decision which was approved in April 2005 and accordingly the Balance Sheet of JCI was restructured w.e.f 2003-04. A reserve of Rs.22.96 crores was created but it was subsequently eroded because of non-reimbursement of its full overhead cost incurred for maintaining its infrastructure towards preparedness for MSP operation every year. This is because of the following clause included in the Cabinet Approval in April 2005:

“"To provide subsidy to JCI on a continuous basis from the year 2003-04 to off-set the losses on account of MSP operations by JCI. The quantum of subsidy will include the difference between the purchase and sale prices of raw jute by JCI. While calculating MSP losses the reimbursement of overhead costs to JCI should not exceed 10% of the value of the purchases under MSP in a particular financial year”.

In order to overcome this problem, the matter was referred by MOT to the Cabinet Committee on Economic Affairs (CCEA) for approval to regularize the subsidy given to JCI during 2003-04 to 2007-08 and release the balance amount due (for these years) during 2008-09. Subsequently, CCEA in its meeting dated 28th January, 2009 approved that (i) the current year's ceiling for re-imbursement of overhead cost be maintained at Rs.36.59 crore ; and (ii) grants already released amounting to Rs.147.067 crores during 2003-04 to 2007-08 be regularized.

In view of the above, results showed in the Profit & Loss Accounts of the Corporation for the year 2003-04 to 2007-08 are now in the profit based on the referred Cabinet approval dated 28th January, 2009 and made the Corporation a profitable one for the said period.

Statement of Revised Profit position after regularization of Subsidies as per Cabinet approval dated 28.01.2009

(Rs. in Lakhs)

The Ministry of Heavy Industries and Public Enterprises, Deptt. of Public Enterprises, Govt. of India, vide Office Memorandum No. 2(54)/2008-DPE(WC)-GL-XL/08 dated 14.10.2008 recommended for the 6th Pay Revision of CDA governed employees, as well as 2nd Pay Revision vide Office Memorandum No. 2(70)/08-DPE(WC) of 26th November, 2008 for the Pay of IDA governed employees of CPSE. As advised by the Board in its 202nd Meeting held on 12.6.09, the matter has been referred to the Ministry of Textiles for their kind approval.

The present era may be regarded as an era of new generation having a different outlook which substantially differs from their predecessors in every sphere of life. In this backdrop, there is a plethora of innovative ideas amongst the manufacturers of domestic products based on the study made in respect of the outlook of this generation. It's a fact that the latest craze is not only for the sophisticated electronic gadgets but also goods made of soil, stone and logs in order to decorate their daily life style and to satisfy there self esteem. If this be the latest scenario, the jute diversified commercial activities cannot be far behind. The resultant effect is ‘SONALI’, the sales outlet of jute-diversified product and the gateway to new entrepreneurs of diversified products. A good number of entrepreneurs, both from the city as well as urban areas, are coming up with their modern innovative products. ‘SONALI’ provides them a lunching pad to draw attention of the interested consumers of diversified jute and other products in the market to pave the way to encourage more entrepreneurs with new imagination to contribute to this arena as well as mitigates unemployment problem through the increase of small/cottage industries, a backbone of our economy. Apart from this, ‘SONALI’ participates in different fairs/exhibitions in order to promote the budding talented entrepreneurs and broaden the customer's base of such jute and other diversified products. Now, ‘SONALI’ needs no introduction but established itself as a household name.

The Corporation has also signed an agreement with JMDC and Pantaloon to exhibit and sale the products of different entrepreneurs to promote the use of Jute Diversified Products.

JCI was set up more on social considerations as an outfit of the Government of India to implement its policy of securing the raw jute farmers with the minimum support price in particular and bring about stability in raw jute prices in general. Different expert Committees and working groups constituted by the Government over the years have vocally reiterated that JCI should be strengthened and given all support for uninterrupted procurement operation at support level or on commercial basis as the situation demands. It has been observed that procurement/sales operations by JCI on a regular basis have served the objective of arresting the downward trend in raw jute so that farmers are able to get remunerative price. Thus, JCI always protects the interest of more than four Million jute growers from exploitation in the hands of the middlemen. In order to infuse more pace in the stride of development of jute growers, the Govt. of India with the help of State Governments have undertaken Jute Technology Mission MM-III through which the new method of retting technology of jute is being demonstrated to the jute growers to enhance the quality as well as the value of their produce. Besides, the jute growers are also invited to different training schemes as well as interactive sessions with a view to understand their problems as well as to inculcate latest techniques in jute cultivation activities since the ultimate result will go to them as well as the jute sector as a whole.

The association of Self Help Groups in marketing of raw Jute is another new initiative of your Corporation where one success can bring another big change in improvement of the economic condition of the farmers and their families.

In the Financial Year 2008-09, the Audit Committee (the Committee) held two Meetings. The Committee reviewed the financial results for the relevant period and also examined the functioning and recommendation of the Internal Audit.

Your Directors do not consider recommending the payment of any dividend for the year-ended 31st March, 2009.

A scanning of the financial performance of the Corporation during 38 years since inception to 2008-09 with reference to Profit & Loss and Subsidy Account is given in Profit and Loss Account of JCI.

In terms of Section 217(2AA) of the Companies Act. 1956, as amended, the Directors confirmed that :-

Observations of Statutory Auditors and No Comments of C & AG U/S 619(4) of the Companies Act, 1956, as amended, on the Accounts of the Corporation for the year under review are submitted.

Fresh recruitment in JCI has been stopped since 1991 in all categories except the Post of Company Secretary. However, the Board earlier considered for appointment to few key Posts based on which one post of Finance Manager, one post of Personnel Manager and one post of Dy. Marketing Manager have been filled up through direct recruitment. But gradually a vacuum is created in the senior level positions due to superannuation, specially, for the posts of Regional Managers, Deputy Managers and Managers in all the departments like Marketing, Personnel & Administration. Management made all efforts to fill- up the vacancies with the existing employees. Since, eligible internal candidates for the referred posts are not available in one hand and the immediate need to fill up those posts on the other, the subject was again considered by the Board who principally agreed for direct recruitment in Finance, Marketing, Computer Division and Personnel & Administration. Besides, the industrial relation in the corporation is cordial.

JCI has successfully developed and hosted its software through BSNL server this year. This is another milestone achieved in the history of Corporation. All the Regional Offices and other senior officers of the Corporation can access and feed the data on line on day to day basis . This has connected all DPCs and Regional Offices with Head office and vice versa and will help in day-to-day exchange of market rates and other data. This is beginning of a new era in a public enterprise which will go a long way for the growth of your Corporation in this competitive scenario.

There are 172 No. of SCs, 26 No. of STs and 23 No. of OBCs employees are in the Corporation during the period under Report.

The Corporation made every effort to comply with instructions issued by the Government of India from time to time on family welfare measures.

There was no complaint referred to the Committee as on date.

Any fresh appointment in this Corporation is banned since 1991 due to the decision taken by the Ministry/Board of Directors of the Corporation for which no physically handicapped person has been recruited in this Corporation during this period. Although, there is no budgetary allocation for the physical handicapped persons, expenditure on conveyance allowance is being allowed for them which is double the amount of conveyance allowance paid in normal cases and as a result 14 (Fourteen) number of physically handicapped employees of the Corporation are being benefited.

The Corporation has been implementing the Official Language Policy according to the Annual Programme drawn up by the Department of Official Language, Ministry of Home Affairs. The employees of the Corporation at Regional Offices are undergoing training in Hindi. The Corporation celebrated Hindi Day on Monday, the 15th September, 2008 and Hindi fortnight was also observed when competitions and programme in Hindi were organised in the H.O. and the ROs of the Corporation and prizes were given to the participants to encourage use of Hindi in the Corporation. In addition, a Hindi Cultural Programme was also organised at the Head Office on Monday, the 15st September, 2008. Quarterly Review Meetings are being held on regular basis to review the progress of implementation of Hindi as an Official Language of the Corporation and the progress is being reported to the Board regularly in its Meeting.

Vigilance Awareness Programme was observed from 03.11.2008 to 07.11.2008. During the said week, pledge was taken by the Employees to bring transparency in all spheres of activities and work for eradication of corruption in all spheres. Festoons were displayed highlighting the evils of corruption.

There was no employee in the Corporation who was in receipt of remuneration in excess of limit prescribed pursuant to the provisions of Section 217(2A) of the Companies Act, 1956, as amended, read with the Companies (Particulars of Employees) Rules, 1975, as amended.

There is no foreign tour.

Sri B. Singh, Joint Secretary(Jute) has been inducted in the Board of Directors of the Corporation w.e.f 13.05.09 The Board welcomed Sri Singh for his joining the Board of the Corporation.

Sri R.K. Chaturvedi, Ex-Joint Secretary (Jute) who joined the Board of Directors of the Corporation on 30.9.2008 relinquished the Office of the Directors of the Corporation w.e.f. 13.5.2009. The Board placed on record its appreciation for the valuable services rendered by Sri Chaturvedi during his tenure as a Director of the Corporation.

M/s. Bhattacharya, Sengupta & Co., Chartered Accountants, Kolkata, has been appointed as the Statutory Auditors of the Corporation for the Year 2009-10 by the Comptroller & Auditor General of India Under Section 619(2) of the Companies Act, 1956, as amended, at a remuneration of Rs.55,000/- (Rupees Fifty Five Thousand only) and out of pocket expenses.

Your Directors are grateful to various Ministries of the Government of India particularly the Ministry of Textiles, the Ministry of Finance, the Department of Public Enterprises and the Office of the Jute commissioner for their support and guidance to the Corporation from time to time. They are also grateful for the co-operation received from the Commission for Agricultural Cost and Prices, State Governments, Agriculture and Co-operation Departments, State Apex Co-operative Organisations, Central and State Warehousing Corporations, the Directorate of Jute Development, National Centre for Jute Diversification and the Jute Manufactures Development Council. The Directors thank the Reserve Bank of India, the State Bank of India, the Central Bank of India, The Punjab National Bank, The United Commercial Bank Ltd., The Canara Bank, The Vijaya Bank and other bankers for their association and necessary support. The Directors are also thankful to M/s. Bhattacharya, Sengupta & Co., the Statutory Auditors, the Principal Director of Commercial Audit and the Office of the Registrar of Companies and the Ministry of Corporate Affairs for their support and guidance.

Finally, your Directors wish to place on record their appreciation for the co-operation shown by the Staff and Officers of the Corporation.