The Directors of the Company present their 34th Annual Report and Company's AuditedAccounts for the year ended 31st March 2017. FINANCIAL SUMMARY/HIGHLIGHTS
The financial results for the year ended 31st March 2017 and the corresponding figuresfor the last year are as under:
| || || || |
(Amount in ^ Lakhs)
| || |
|Profit before Interest Depreciation and Tax || ||987 || ||2083 |
|Less: Finance Cost ||548 || ||617 || |
|Depreciation ^Amortization Expense ||1195 ||1743 ||1228 ||1845 |
|(Loss) / Profit after Interest & Depreciation || ||(756) || ||238 |
|Less : Tax Expense for Current Year (Net of MAT Credit Entitlement) ||- || ||81 || |
|Income Tax for earlier years ||(20) || ||6 || |
|Deferred Tax Provision/(Written Back) ||(283) ||(263) ||(36) ||51 |
|(Loss) / Profit after Tax || ||(493) || ||187 |
|Add : Balance Brought Forward from Last Account || ||2345 || ||2312 |
|Less : Transferred to General Reserve || ||- || ||100 |
|Less : Proposed Dividend &Tax thereon || ||- || ||54 |
|Credit balance carried to Balance Sheet || ||1852 || ||2345 |
RESERVES & SURPLUS
The Balance in Reserves & Surplus stands at ^ 9419 Lakhs (Previous year ^ 9921Lakhs). The Company has transferred ^ Nil to General Reserve.
In view of the losses incurred by the Company your Directors have not recommended anydividend for the financial year ended 31st March 2017.
OPERATIONS TEA DIVISION
During the year under review your Company achieved a production of 21.92 lakh kgs ofBlack Tea as compared to 22.17 lakh kgs in the previous year. The production of own greentea leaves was lower by 6.71% the Company procured more outsourced leaves than last yearby 6.06%.
The performance ofthe Tea Division was adversely affected by both lower output andsales realization due to restricted demand forqualityteas.
The average sale price for CTC tea in auction centre's was lower as compared toprevious year and accordingly the average realisation ofyourtea estate was also lower byabout^ 20/- per kg.There has been an all round increase in wages power and fuel and otherinput costs.
The current season has seen a mixed weather condition as a result of which the cropintake is similar to that of last year. Further there has been increase in Wage andsalary cost following industryvide agreementwith unions.
Good quality CTC tea being in short supply is likely to attract premium and consideringthe above scenario the performance of tea division is expected to be satisfactory.However overall tea market is expected to remain range bound due to expected good cropin India
PERFORMANCE AND REVIEW OF OPERATION:
During theyear under review the Division has incurred loss before tax of ^ 1311 lakhsagainst^ 893 lakhs in the previous year.The Division has achieved turnover of ^16179 lakhsagainst ^16802 lakhs in the previous year.The continued sluggish demand increase incotton prices and increase in power cost have mainly adversely affected the bottom line ofthe Division. The Division could hardly pass on about half of the impact of increase incotton prices to the market.
The division could not pass on increase in various costs as the demand was tepid.Further the newly set up units under Gujarat Textile Policy 2012 enjoy various subsidiesand therefore are more competitive.
With a view to improve profitability of the Division the management is taking allefforts to increase production of value added items like processed fabric which havebetter margins The Division has decided to curtail yarn production wherein margins werenegative.
In order to capture loss in profitability the division implemented the followingsteps:
a. the Division has closed 6336 spindles w.e.f. 01.10.2016.
b. during the current year also the Division has closed 9600 spindles w.e.f.01.05.2017.
The above steps coupled with reduction in fixed costs like interest and depreciation isexpected to improve the profitability ofthe division in the near future.
In line with the policy of producing value added goods the Textile Division duringthe year under review has installed one(1) 400 kgs/hourjet Dyeing Machine in FabricProcess Department re-placing old model of200 Kgs/hourjet Dyeing Machine.This wouldincrease the productivity and quality of dyed fabrics.
The introduction of GST Act during the year is expected to boost the overall Indianeconomy and to have positive impact on country's GDP. The Indian economy is expected tokeep growing by about 7-8% for next few years. Good rain and good crop in consecutivesecond year is expected to increase the demand oftextile products. The world economy isalso on revival path. In view ofthis and ofvarious steps taken bythe managementtheTextile Division is expected to give better performance in coming years. RECENTDEVELOPMENTS & FUTURE PLANS Tea Division
The Company is contemplating to introduce packet tea for domestic market.
MATERIAL CHANGES OCCURRED BETWEEN THEEND OFTHE FINANCIAL YEAR UNDER REVIEW ANDTHE DATEOFTHE REPORT
During the current yearthe Textile Division ofthe Company located at Asarwa MillsAhmedabad has closed 9600 spindles along with back process and winding in spinning sectionw.e.f. 1st May 2017. The said reduction in capacity would result in reduction in the topline of the Company by about ^ 30 Crores on an annualized basis. The sale proceeds of themachineries to be scrapped would be utilized for payment of retrenchment compensation toworkers and balance for augmentation of working capital and repayment ofterm loans oftheTextile Division ofthe Company. Dueto this step 74 permanent workers ofthe TextileDivision will be retrenched.
Apart from this there have been no other material changes and commitments affectingthe financial position of the Company which have occurred between the end ofthe financialyearto which the financial statements relate and the date ofthe report. MANAGEMENTDISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder SEBI (LODR) Regulations 2015 with the Stock Exchange is set out in the annexureforming part ofthe Annual Report marked as Annexure - "A".
CORPORATE GOVERNANCE REPORT
The Report on Corporate Governance in accordance with the SEBI (LODR) Regulations 2015with the Stock Exchange approved by the Board together with a Certificate from StatutoryAuditors M/s Jain & Co. Chartered Accountants regarding compliance with theconditions of Corporate Governance are set out in the annexure forming part of the AnnualReport marked as Annexure - "B".
Your Company has taken adequate steps for strict compliance with Corporate Governanceguidelines as amended from time to time.
EXTRACTOFTHE ANNUAL RETURN
Extract of the Annual Return in Form No. MGT-9 is attached pursuant to Section 134(3)of the Companies Act 2013 as Annexure - "C".
During the year under review 4 meetings ofthe Board of Directors were held on 20th May20161st August 2016 5th November 2016 and 4th February 2017.
Apart from meeting ofthe Board of Directors different committees met several timesduring financial year ended 31st March 2017. DIRECTORS' RESPONSIBILITY STATEMENTPURSUANTTO SECTION 134(3)(c) OFTHE COMPANIES ACT 2013
The Directors hereby confirm that -
a) in the preparation ofthe annual accounts for the Financial Year ended 31st March2017 the applicable accounting standards had been followed along with proper explanationrelating to material departures;
b) they had selected such accounting policies and applied them consistently andmadejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and oftheloss ofthe Companyfor that period;
c) they had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
d) they had prepared the annual accounts on a going concern basis;
e) they had laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and
f) they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
DECLARATION BY INDEPENDENT DIRECTORS
Independent Directors namely Mr. Golam Momen (DIN: 00402662) Mr. Dhirendra Kumar(DIN: 00153773) Mr. Abhijit Datta (DIN: 00790029) Mr. Navin Nayar (DIN: 00136057) and Mr.Ashutosh Bhagat (DIN: 00059842) have given declaration confirming that they comply withthe requirements ofSection 149(6) ofthe Companies Act 2013.
Mr. Samveg A Lalbhai (DIN: 00 0 09278) retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offer himself for re-appointment in compliance withthe provisions ofthe Companies Act 2013.
Brief resume of the Director nature of his expertise in specific functional areas anddetails of his directorship and membership/chairmanship of Board/ Committees asstipulated under SEBI (LODR) Regulations 2015 has been provided in the Annexure to theNotice ofthe 34th AGM ofthe Company.
KEY MANAGERIAL PERSONNELS
The following persons are the Key Managerial Personnels (KMP) ofthe Company incompliance with the provisions ofthe Companies Act 2013:
a) Mr. Adarsh Kanoria (DIN: 00027290) Managing Director
b) Mr. Kailash Prasad Khandelwal (DIN: 00914834) Wholetime Director
c) Mr. Atul Doshi Chief Financial Officer
d) Mrs. Sunita Shah Company Secretary
Remuneration and other details of the KMP's for the year ended 31st March 2017 arementioned in the Extracts of the Annual Return attached as Annexure C' andforms part ofthis Report ofthe Directors.
NOMINATION & REMUNERATION POLICY
Pursuant to Section 178(3) of the Companies Act 2013 Nomination and RemunerationCommittee formulated the criteria for determining qualification positive attributes andindependence of a director. The Committee has also recommended to the Board a policyrelating to the remuneration for directors key managerial personnel and other employees.
The details ofthe Nomination and Remuneration Policy is given in the CorporateGovernance Report.
The Companies Act 2013 states that formal evaluation needs to be done by the Board ofits own performance and that of its Committees and individual directors. Schedule IV oftheCompanies Act 2013 states that the performance evaluation of independent directors shallbe done by the entire Board of Directors excluding the director being evaluated. SEBI(LODR) Regulations 2015 vide Regulation 25(3) requires a meeting of Independent Directorsto evaluate the performance ofthe Non Independent Directors. Accordingly a meeting ofIndependent Directors was held on 4th February 2017 wherein the performance ofthenon-independent directors including the Chairman was evaluated. The evaluation of all thedirectors and the Board as a whole was conducted based on the criteria and frameworkadopted by the Board. The evaluation process has been explained in the CorporateGovernance Report section in this Annual Report. The Board approved the evaluation resultsas collated by the Nomination and Remuneration Committee.
During the year 2016 - 2017 your Company did not accept/renew any deposits and assuch no amount of principal or interest was outstanding as on 31st March 2017.
AUDITORS AND AUDITORS' REPORT
M/s.Jain & Co. (Firm Regn. No. 302023E) Chartered Accountants were appointed asStatutory Auditors ofthe Company to hold office for a period of 3 years from theconclusion of the 31st Annual General Meeting till the conclusion of the 34th AnnualGeneral Meeting ofthe Company.Theirterm is expiring atthe ensuing AGM.
The Directors have proposed to appoint M/s Singhi & Co. in terms ofthe firstproviso to Section 139(1) ofthe Companies Act 2013 as the Statutory Auditors oftheCompany in place ofthe retiring Statutory Auditors at their meeting held on 12th May 2017for a period of 5 years from the conclusion of the 34th AGM to the conclusion of the 39thAGM ofthe Company subject to the approval ofthe Shareholders at the 34th AGM oftheCompany. The matter relating to appointment of M/s Singhi & Co. as the StatutoryAuditors ofthe Company has been placed for approval by members.
The Company has received letter from the Auditors to the effect that their appointmentis within the prescribed limits under the Companies Act 2013 and thatthey are notdisqualified. The Board recommends their appointment.
The Notes on Financial Statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. There is no qualificationadverse remarks or disclaimer made bythe Statutory Auditors.
A report made by Mr. H.M. Choraria (CP No. 1499 Membership No. FCS 2398) of M/s H..M.Choraria & Co. Practising Company Secretaries of 14/2 Old China Bazar Street 4thFloor Room No. 401 Kolkata 700 001 pursuant to Section 204(1) ofthe Companies Act 2013read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is attached as Annexure - "D". The report is free of anyqualification adverse remarks or disclaimer.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loans or provided any guarantees under Section 186(1)ofthe Companies Act 2013. Howeverthe details of Investments under Section 186(1) oftheCompanies Act 2013 have been provided at Note No. 15 ofthe Financial Statements for theyear ended 31st March 2017.
PARTICULARS OF RELATED PARTYTRANSACTIONS
During the year there were no material related party transaction with promoters thedirectors or the management their subsidiaries or relatives etc. that may have potentialconflict with the interests ofthe Company. The Company has formulated a policy on RelatedParty Transactions. The link ofthe policy is http://bengaltea.com/pdf/STFL_RELATED%20PARTY%20TRAN5ACTION%20POUCY_8.ll.2014.pdf
All related partytransactions entered during the Financial Yearwere in ordinary courseofthe business and on arm's length basis which have been provided in the Notes to theAccounts. No material related party transactions were entered during the Financial Year2016-17 by your Company. Accordingly the disclosure of related party transactions asrequired under Section 134(3)(h) of the Companies Act 2013 in Form AOC 2 is notapplicable to your Company.
In accordance with the provisions of Section 148 of the Companies Act 2013 and theCompanies (Audit & Auditors) Rules 2014 the Company is required to appoint CostAuditors to audit the cost records of the applicable products of the Company relating tothe Tea and Textile Division.
PARTICULARS OF COST AUDITORS APPOINTED FORTHE FINANCIALYEAR 2016-17
The Company has appointed the following Cost Auditors for Tea & Textile Divisionfor the year ended 31st March 2017:
|Details of Cost Auditor ||Unit Audited |
|Name: N.D. Birla & Co. |
Address: A-3 Nirant Apartment Opposite Town Hall Near Karnavati Hospital Ellisbridge Ahmedabad Gujarat- 380006 Registration No. allotted by ICWAI: 000028
|Textile Division Bengal Tea & Fabrics Ltd. Asarwa Mills - Ahmedabad |
|Name: D. Radhakrishnan & Co. |
Address: 11A Dover Lane Flat B1/34 Kolkata- 700029 Registration No. allotted by ICwAi : 000018
|Tea Division |
Bengal Tea & Fabrics Ltd. Ananda Tea Estate - Assam
PARTICULARS OF EMPLOYEES
The Company had no employees who were in receipt of more than ^ 60 lakhs per annumduring the year ended 31st March 2017 or of more than ^ 5 Lakhs per month during anypartthereof so no information under Rule 5(2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is required to be given. However the informationrequired pursuant to Section 197 ofthe Companies Act 2013 read with Rule 5(1) oftheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 has beenannexed as Annexure - "E".
CONSERVATION OF ENERGY.TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information relating to conservation of energy technology absorption and foreignexchange earnings and outgo as per Section 134 (3)(m) ofthe Companies Act 2013 read withRule 8 (3) of Companies (Accounts) Rules 2014 is set out in the annexure forming partofthe Annual Report marked as Annexure - "F".
RISK MANAGEMENT POLICY
As per requirement ofSection 134(3)(n) ofthe Companies Act 2013 the Board of Directorsin its meeting held on 10th May 2014 has approved the Risk Management Policy. As of nowthe Directors do not envisage any element of risk which may threaten the existence oftheCompany.
INTERNAL CONTROL SYSTEMS
Your Company has an adequate system of internal control procedures which iscommensurate with the size and nature of business. Detailed procedural manuals are inplace to ensure that all the assets are safeguarded protected against losses and alltransactions are authorized recorded and reported correctly. The internal control systemsofthe Company are monitored and evaluated by internal auditors and their audit reports areperiodically reviewed by the Audit Committee ofthe Board of Directors. The observationsand comments ofthe Audit Committee are placed before the Board and suitable steps havebeen taken to strengthen the controls.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to Section 135 ofthe Companies Act 2013 the Company has formed a CSRCommittee and formulated a CSR Policy. The details ofthe same together with the CSRexpenditure have been annexed in the prescribed format as Annexure - "G".TRANSFER OF UNPAID DIVIDEND AND SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND Pursuantto the provisions of Section 124 of the Companies Act 2013 the declared dividends whichremain unpaid or unclaimed for a period of seven years have been duly transferred by theCompany to the Investor Education and Protection Fund (IEPF) established by the CentralGovernment under Section 125 ofthe said Act.
The Company has uploaded the details of unpaid and unclaimed amounts lying with theCompany as on 1st August 2016 (date of last Annual General Meeting) on the Company'swebsite (www.bengaltea.com ) and also on the Ministry of Corporate Affairs' website. Thedividend for the undernoted years if unclaimed for seven years will be transferred bythe Company to IEPF:
|Financial Year ||Date of Declaration of Dividend ||Unclaimed Dividend as on 31.03.2017 |
|2009-10 ||31.07.2010 ||417439.50 |
|2010-11 ||06.08.2011 ||425319.00 |
|2011-12 ||NIL ||NIL |
|2012-13 ||03.08.2013 ||323381.00 |
|2013-14 ||09.08.2014 ||636848.00 |
|2014-15 ||08.08.2015 ||176373.50 |
|2015-16 ||01.08.2016 ||191034.00 |
Pursuant to the provision of Section 124 (6) read with Rule 6 of Investor Educationand Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 (the"IEPF Rules") as amended provides that all shares in respect of whichdividend has/have remained unpaid or unclaimed for consecutive seven years thecorresponding shares shall also be transferred in the name of Demat Account of IEPFAuthority.
Please note that those share holders whose dividend for the financial year 2009-10(Final) onwards has remained unpaid /unclaimed and therefore the corresponding shares ofthe face value of ^ 10/- each will also be due to be transferred to Demat Account of IEPFAuthority on 31st July 2017.
Adhering to the various requirements set out in the Rules the company has communicatedindividually to the concerned shareholders whose shares are liable to be transferred toDemat Account of IEPF Authority at their last recorded addresses with the Company fortaking appropriate action. The full details of such shareholders having unencasheddividends and shares due for transfer has been given on thewebsite oftheCompanywww.bengaltea.com .
NAME OF COMPANIES WHICH HAVE CEASED TO BE ITS SUBSIDIARIES.JOINT VENTURES ORASSOCIATECOMPANIES DURING THEYEAR
DISCLOSURE UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place Internal Complaints Committee for the Registered Office TeaDivision and Textile Division. The following is the summary of Sexual Harassmentcomplaints received and disposed off during the year 2016-17.
No. of Complaints received : NIL No.ofComplaintsDisposedoff : NIL ACKNOWLEDGEMENT
The Directors place on record their sincere appreciation for the assistance andco-operation extended by Banks its employees its investors andall other associates andlook forward to continue fruitful association with all business partners of the Company.
|Place: Kolkata |
|Dated : 12th May 2017 |
|Forand on behalf ofthe Board |
|Bengal Tea & Fabrics Ltd. |
|ADARSH KANORIA |
|Managing Director |
|DIN : 00 027290 |
|KAILASH PRASAD KHANDELWAL |
|Whole-time Director |
|DIN : 00914834 |