DIRECTORS' REPORT Dear Members
Your Directors present the Fortieth Annual Report together with the Audited Statementof Accounts for the Financial Year ended 31st March 2017.
The Financial Results are set out below :
The summarized Standalone and Consolidated results of your Company and its Subsidiariesare given in the table below:
| ||Financial Year ended (Rs.) |
|Particulars ||Standalone ||Consolidated |
| ||31/03/2017 ||31/03/2016 ||31/03/2017 ||31/03/2016 |
|Income ||2164774677 ||3030069242 ||2163222135 ||3030612088 |
|Profit / (loss) before Interest Depreciation || || || || |
| ||(187298877) ||142144827 ||(189025558) ||141442032 |
|Exceptional Items & Tax || || || || |
|Interest and Finance Charges ||346254566 ||580580127 ||373277471 ||633808479 |
|Depreciation ||132588738 ||94634278 ||132591104 ||94702541 |
|Profit / (loss) before Extraordinary Items & Tax ||(666142181) ||(533069578) ||(694894133) ||(587068988) |
|Extraordinary Item ||0 ||0 ||0 ||17843992 |
|Profit / (loss) before Tax ||(666142181) ||(533069578) ||(694894133) ||(604912980) |
|Provision for Income Tax || || || || |
| ||(41734637) ||0 ||41736689 ||0 |
|(including for earlier years) || || || || |
|Profit / (Loss) after Tax before Minority Interest ||(707876818) ||(533069578) ||(736630822) ||(604912980) |
|Minority Interest ||0 ||0 ||(160849) ||(113164) |
|Profit / Loss for the year ||(707876818) ||(533069578) ||(736469973) ||(604799816) |
|Balance brought forward from previous year ||473429698 ||1032032727 ||(798194437) ||(146600060) |
|Adjustment to balance brought forward on inclusion of AONGCL / AONGL ||0 ||0 ||0 ||(21261110) |
|Adjustment for depreciation ||0 ||(25533451) ||0 ||(25533451) |
|Available for Appropriation ||(234447120) ||473429698 ||(1534664410) ||(798194437) |
|Balance carried forward ||(234447120) ||473429698 ||(1534664410) ||(798194437) |
Extract of Annual Return
As per the provisions of Section 92(3) of the Companies Act 2013 (the Act') readwith Rule 12(1) of the Companies (Management and Administration) Rules 2014 the extractof the Annual Return in Form MGT-9 is given in Annexure 1 forming part of thisReport.
Details of Board meetings
During the year 5 meetings of the Board of Directors were held which includes aMeeting of the Independent Directors as required under the Act the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (the Listing Regulations) and the Secretarial Standard I. The details of themeetings are furnished in the Corporate Governance Report.
Directors' Responsibility Statement
In accordance with the provisions of Section 134(3) (c) of the Companies Act 2013("the Act") and based upon the representations from the Management the Boardstates that : (a) in the preparation of the Annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;
(b) the Directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the Financial Year and ofthe profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficientcare for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis; and
(e) the Directors in the case of a listed company had laid down InternalFinancial Controls to be followed by the Company and that such Internal Financial Controlsare adequate and were operating effectively.
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Declaration by Independent Directors
Mr. Amit Halder and Mr. Sanjay Khandelwal are the Independent Directors on the Board ofyour Company. In the opinion of the Board and as confirmed by these Directors theyfulfill the conditions specified in Section 149(6) of the Act and the Rules madethereunder about their status as Independent Directors of the Company.
Nomination and Remuneration Committee of the Company
Your Company has a Nomination and Remuneration Committee of the Board and has adoptedthe Remuneration Policy for the appointment and remuneration of the Directors KeyManagerial Personnel and other Senior Executives of the Company along with other relatedmatters which has been formulated in terms of the requirement of the Companies Act 2013the Listing Agreement and the Listing Regulations. The Policy is uploaded on the Company'sWebsite (URL:www.assamco.com).
Particulars of Loans Guarantees or Investments:
Particulars of Loans Guarantees or Investments made during the year as required underSection 186 of the Companies Act 2013 are provided in the notes to the FinancialStatements.
Related Party Transactions
All Related Party Transactions are in compliance with the applicable provisions of theAct and the Listing
Regulations. There are no materially significant Related Party Transactions made by theCompany with related parties. Details of the transactions with related parties areprovided in the Form AOC 2 (as annexed to this Report as Annexure 2')and also in the Note no. 49 of the Financial Statements in accordance with the AccountingStandards.
All Related Party Transactions are presented to the Audit Committee and the Board. Astatement of all Related Party Transactions is presented before the Audit Committee on aquarterly basis specifying the nature value and terms and conditions of thetransactions.
Your Company has also adopted a Related Party Transactions Policy. The Policy isuploaded on the Company's Website (URL:www.assamco.com). The objective is to ensure properapproval disclosure and reporting of transactions as applicable between the Company andany of its related parties.
Summary of Operations
The Company performed quite well during the Financial Year 2016-17 with an increase inthe harvest of green leaf. The March rainfall was very useful for the initial stage of theharvest and the harvest was conducive for manufacture of good teas across the group. Thepurchasing market too was buoyant and the same reflected in the realized prices initially.
Whilst everything issue seemed fully stitched when the Pan India Auction came intoforce during the quality period and this resulted in utter chaos across the system. Thisalso led to quite a few buyers withdrawing for purchasing tea from the new system whichdepressed prices at a crucial juncture. This also led to the unwanted stockpile of which afair quantity was sold at very low prices hence depressing the realization of prices.
Demonetization was the second whammy that hit the industry as a whole resulting in theabsence of buyers from the entire wholesale and secondary markets and this occurred justpost the heavy cropping months resulting in the stockpile compulsorily sold again at lowprices. The Company during its 12 months year ended on 31st March 2017 produced 10.86Million Kgs. of tea as against 11.62 Million Kgs. during its 15 months period ended on31st March 2017. The Company during its 12 months year ended on 31st March 2017 sold10.73 Million Kgs. of tea at an average price of Rs. 197.25/Kg. as against 12.46 MillionKgs. sold during its 15 months period ended on 31st March 2016 at an average price of216.90/Kg.
The Management Discussion and Analysis Report given in Annexure 3' forms a partof this Report and covers amongst other matters the performance of the Company duringthe Financial Year 2016-17.
Dividend and Reserves
Considering the continued weak operating performance in the business your Directors donot recommend any Dividend for the Financial Year 2016-17.
Accordingly your Company does not propose to carry any amount to the Reserves also.
Material changes and commitment if any affecting financial position of the Companyfrom the end of Financial Year and till the date of this Report
There has been no material change and commitment affecting the financial position ofthe Company occurred between the end of the Financial Year of the Company to which theFinancial Statements relate and the date of this Report.
Details of Conservation of Energy Technology Absorption Foreign Exchange Earnings andOutgo
The particulars as prescribed under Section 134 (3) (m) of the Act read with Rule 8(3)of the Companies (Accounts) Rules 2014 relating to Conservation of Energy TechnologyAbsorption Foreign Exchange Earnings and Outgo are given in Annexure 4'forming part of this Report.
Corporate Social Responsibility (CSR)
In accordance with Section 135 of the Act and Rules framed thereunder your Company hasadopted a Policy of CSR and the Board has constituted a Committee for implementing the CSRActivities. Composition of the Committee are provided in the Corporate Governance Report.Expenditure on CSR activities are not applicable to your Company.
In compliance with the Companies Act 2013 and the Listing Regulations the Board hascarried out the Annual Performance Evaluation of the Directors individually as well asevaluation of the working of the Board and the Committees of the Board by way ofindividual and collective feedback from the Directors.
The following were the Evaluation Criteria :
(a) For Independent Directors:
- Knowledge and Skills
- Professional conduct
- Duties Role and functions
(b) For Executive Director:
- Performance as Team Leader / Member
- Evaluating Business Opportunity and analysis of Risk Reward Scenarios
- Key Set Goals and Achievements
- Professional Conduct and Integrity
- Sharing of Information with the Board
The Directors expressed their satisfaction with the evaluation process.
The Board of the Company has formed a Risk Management Committee to frame implement andmonitor the Risk Management plan for the Company. The Committee is responsible forreviewing the Risk Management plan and ensuring its effectiveness. The Audit Committee hasadditional oversight in the area of financial risks and controls. The Policy is uploadedon the Company's Website (URL:www.assamco.com).
Pursuant to sub-section (3) of Section 129 of the Act a statement containing thesalient features of the Financial Statement of each of the Subsidiary in the prescribedForm AOC 1 is annexed to this Report as Annexure 5'. The FinancialStatements of the Subsidiaries are also available on the Website of the Company(www.assamco. com).
Directors and Key Managerial Personnel
Pursuant to Section 149 (10) of the Act read along with the Rules framed thereunderthe Members had at the 38th Annual General Meeting (AGM) of the Company held on 24th June2015 approved the appointment of Independent Directors (viz Mr. Amit Halder and Mr.Sanjay Khandelwal) to hold office for a term upto 5(five) consecutive years from theconclusion of that AGM until the conclusion of the 43rd AGM. Further pursuant to theSections 149(13) and 152 of the Act provisions for the retirement of rotation ofDirectors shall not apply to such Independent Directors.
Pursuant to Section 197 and 196 read with Schedule V and other applicable provisions ofthe Act the Members had at the 38th Annual General Meeting (AGM) of the Company held on24th June 2015 approved the re-appointment of Mr. A. K. Jajodia ManagingDirector of the Company to hold office for a term upto 3 (three) consecutive years fromthe conclusion of that AGM until the conclusion of the 41st AGM. Necessary resolutionsrelating to the Director who is seeking re-appointment is included in the Notice of theAGM. The relevant details of the said Director is given in the annexure to the Notice ofthe AGM.
As on date Mr. A. K. Jajodia Managing Director Mr. Sanjay Sharma Chief FinancialOfficer and Ms. Sreya Mitra
Company Secretary are the Key Managerial Personnel of the Company.
Committees of Board
The details pertaining to composition of the Board Committees and terms of referenceare included in the Corporate Governance Report which forms part of this Report as Annexure6'.
(i) Statutory Auditors
In the 38th Annual General Meeting (AGM) held on June 24 2015 M/s. De Chakraborty& Sen Chartered Accountants had been appointed as Statutory Auditors of the Companyfor a period of 5 years.
Ratification of appointment of Statutory Auditors is being sought from the Members ofthe Company at this AGM. Further they have under Section 139(1) of the Act and the Rulesframed thereunder furnished a certificate of their eligibility and consent forappointment.
A resolution seeking ratification of their appointment forms part of the Noticeconvening the40th Annual General Meeting and the same is recommended for yourconsideration and approval.
Further the Report of the Statutory Auditors along with notes is enclosed to thisReport. The remarks in the Standalone Report are already explained in the Notes toAccounts and as such does not call for any further explanation or elucidation. Thecomments on the Consolidated Report are given as under : (a) Details of AuditQualification :Attention is drawn to one of the Subsidiaries namely Duncan MacneillPower India Limited where the Standalone Financial Statements of these companies havebeen prepared and disclosures made in accordance with Accounting Standard 1 on the basisof assumption that the business will continue in near future; how ever there have beencash losses in the preceding years resulting into complete erosion of net worth.
Management is of the view that going concern concept is applicable hence no need toquantify at this point of time. The Auditors of the Subsidiary has not clearly recordedtheir disagreement with the view of the Management.
(b) Details of Audit Qualification : Attention is drawn to one of theSubsidiaries namely Duncan Macneill Power India Limited where the Holding Company hasinvested in Compulsory Convertible Preference Share of its Foreign Subsidiary amounting toRs. 24.95 Crores. The documents relating to investment made in Compulsory ConvertiblePreference Share of Foreign Subsidiary and details about terms & condition of theinvestment were not provided by the Management.
Management is of the view that this investment is existing and the value has notimpaired. The Auditor of the Subsidiary has not clearly indicated that the investment isnon-existent.
(c) Details of Audit Qualification : Attention is drawn to the Financial Statementsof one of the Subsidiaries namely Gujarat Hydrocarbons and Power SEZ Limited (GHPSL)under the head "Current Maturities of Long Term Borrowings" includes a borrowingwhere the Principal amount is Rs. 100.00 Crores and Interest on the same is Rs. 37.50Crores. The Subsidiary Company could not comply with the terms of agreement of Term Loantaken by it from the lender and defaulted in making the payment. Considering thesituation the Board of Directors of GHPSL at its Meeting held on 31st March 2015decided not to make provisions for the related interest expense of Rs. 16.50 Crores forthe current Financial Year on the Loan amount.
Management's views is not to over burden the Account in view of possible one-timesettlement with the Lender.
(ii) Cost Audit
Pursuant to Section 148 of the Act the Central Government has made it mandatory forthe Company to conduct a Cost Audit and accordingly the Company is required to have theaudit of its cost records conducted by a Cost Accountant in practice. The Board ofDirectors of the Company has on the recommendation of the Audit Committee approved theappointment of M/s BCD & Associates having Registration No. 100410 as the CostAuditors of the Company to conduct Cost Audits pertaining to relevant products prescribedunder the Companies (Cost Records and Audit) Rules 2014 as amended from time to time forthe year ended 31st March 2018.
M/s BCD & Associates have vast experience in the field of Cost Audit and haveconducted the audit of the cost records of the Company for the past several years underthe provisions of the erstwhile Companies Act 1956.
A resolution seeking Members' ratification for the remuneration payable to CostAuditors forms part of the Notice of the 40th Annual General Meeting of the Company andthe same is recommended for your consideration and approval.
(iii) Secretarial Audit
In terms of Section 204 of the Companies Act 2013 and Rules made there under M/s. S.Sarkar & Associates Practicing Company Secretaries have been appointed as theSecretarial Auditors of the Company. The Report of the Secretarial Auditors is annexed toand forms a part of this Report as Annexure 7'. The comments on the Reportare given as under : (a) Constitution of the Board of Directors Nomination andRemuneration Committee and non-appointment of a Woman Director in the Board - Due tonon-availability of suitable persons we are yet to appoint other Director(s) in theBoard a Non-Executive Director in the Nomination and Remuneration Committee and a WomanDirector in the Board of your Company.
(b) Non charging of the interest on Inter-Corporate Loan according to Section 186of the Companies Act 2013 As most of the Companies are yet to start theirrevenue activities or does not have sufficient profit / working capital your Company didnot charge any interest on the Inter-Corporate Loan.
(c) Charges appeared in the MCA Website in relation to the Secured Debt which sincehas been repaid The Company have taken necessary steps to remove the charges whichhave been repaid but are still appearing in the MCA Website.
(d) Irregularities in depositing Provident Fund with the Authority and payment ofGratuity Due to the subdued business performance during the year the liquidity ofthe Company has been severely affected. This is the reason behind our failing to depositthe arrear Provident Fund and Gratuity.
Your Company treats its "human resources" as one of its most importantassets.
Your Company continuously invest in attraction retention and development of talent onan ongoing basis. A number of programs that provide focused people attention are currentlyunderway. Your Company thrust is on the promotion of talent internally through jobrotation and job enlargement.
Internal Financial Controls
The Internal Financial Controls with reference to the Financial Statements are includedin the Management Discussion and Analysis Report which forms part of this Report.
Transfer of amounts to Investor Education and Protection Fund
The Company has transferred a sum of Rs. 440774 during the Financial Year 2016-17 tothe Investor Education and Protection Fund (IEPF) established by the Central Governmentin compliance with Section 124 of the Act. The said amount represents unclaimed dividendswhich were lying with the Company for a period of seven years from their respective duedates of payment. Prior to transferring the aforesaid sum the Company has sent remindersto shareholders for submitting their claims for unclaimed dividend. Further in accordancewith the provisions of Section 124(6) of the Companies Act 2013 and IEPF Rules 2016shares on which dividend has not been paid or claimed for seven consecutive years or moreare liable to be transferred to IEPF Suspense Account. Members who have not claimeddividend for previous year(s) are requested to claim the same by approaching the Companyor the R & T Agents of the Company.
The Company has not accepted any deposits from the public/members under Section 73 ofthe Companies Act 2013 read with Companies (Acceptance of Deposits) Rule 2014 duringthe year.
Particulars of Employees
The statement under Rule 5(2) and Rule 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and particulars required under Section197 (12) of the Act are given in Annexure 8' forming a part of this Report.
The said Annexure shall be provided to the Members on a specific request made inwriting to the Company. The said information is available for inspection by the Members atthe Registered Office of the Company on any working day of the Company up to the date ofthe Annual General Meeting.
Significant and Material Orders passed by the Regulators or Courts or Tribunalsimpacting the Going
Concern Status of the Company
There has been no significant and material order passed by the Regulators or Courts orTribunals impacting the Going Concern Status of the Company's operations.
Disclosure as per the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has zero tolerance towards sexual harassment at the workplace and has setup Internal Complaints Committee (ICC) for prevention prohibition and redressal of sexualharassment at workplace in line with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder.During the year 2016-17 the Company has not received any complaint of sexual harassment.
Your Company has complied with the Corporate Governance requirements under theCompanies Act 2013 and the Listing Regulations. A separate section on CorporateGovernance under the Listing Regulations along with a Certificate from M/s. S. Sarkar& Associates Practicing Company Secretaries are given in Annexure 6'forming part of this Report.
Familiarization programme for Independent Directors
The details of the programme for familiarization of Independent Directors with theCompany in respect of their roles rights responsibilities in the Company nature of theindustry in which the Company operates business model of the Company and related mattersare put up on the Website of the Company (www.assamco.com)
The Company has adopted a Whistle Blower Policy establishing Vigil Mechanism toprovide a formal mechanism to the Directors and employees to report their concerns aboutunethical behaviour actual or suspected fraud or violation of the Company's Code ofConduct or ethics policy. The Policy provides for adequate safeguards againstvictimization of employees who avail of the mechanism. The Policy of Vigil Mechanism isavailable on the Company's Website (www.assamco.com)
As per our Green Initiative the electronic copies of this Annual Report including theNotice of the Fortieth AGM are sent to all members whose e-mail addresses are registeredwith the Company. For Members who have not registered their e-mail addresses physicalcopies of this Annual Report including the Notice are being sent by permitted mode.
The Company is providing e-voting facility to all its members to enable them to casttheir votes electronically on all resolutions set forth in the Notice. This is pursuant toSection 108 of the Companies Act 2013 and Rule 20 of the Companies (Management andAdministrative) Rules 2014. The instruction for e-voting is provided in the Notice.
Your Directors place on record their appreciation for employees at all levels who havecontributed to the growth and performance of your Company. Your Directors also thank theclients vendors bankers shareholders and advisers of the Company for their continuedsupport. Your Directors also thank the Central and State Governments and other statutoryauthorities for their continued support.
| ||On behalf of the Board of Directors |
| ||A. K. Jajodia Managing Director |
| ||(DIN - 00056074) |
| ||Amit Halder Director |
| ||(DIN - 05231811) |
|Kolkata ||Sanjay Khandelwal Director |
|30th May 2017 ||(DIN - 00193472) |