The Directors of the Company present their 33rd Annual Report and Company's AuditedAccounts for the year ended 31st March 2016.
The financial results for the year ended 31st March 2016 and the corresponding figuresfor the last year are as under:
(Amount in Rs. Lacs)
| ||2015-2016 ||2014-2015 |
|Profit before Interest Depreciation and Tax ||2083 ||2015 |
|Less: FinanceCost ||617 ||754 |
|Depreciation &Amortization Expense ||1228 ||1018 |
| ||1845 ||1772 |
|Profit after Interest & Depreciation ||238 ||243 |
|Less : Tax Expense for Current Year (Net of MAT Credit Entitlement) ||81 ||49 |
|Income Tax for earlier years ||6 ||4 |
|Deferred Tax Provision/(Written Back) ||(36) ||(4) |
| ||51 ||49 |
|Profit after Tax ||187 ||194 |
|Add : Balance Brought Forward from Last Account ||2312 ||2216 |
|Less : Adjustment in Retained Earnings due to || || |
|Depreciation as per New Companies Act 2013 ||- ||44 |
|Less : Transferred to General Reserve ||100 ||- |
|Less : Proposed Dividend & Tax thereon ||54 ||54 |
|Credit balance carried to Balance Sheet ||2345 ||2312 |
RESERVES & SURPLUS
The Balance in Reserves & Surplus stands at Rs. 9921 Lacs (Previous year Rs.13335Lacs). The Company has transferred Rs.100 Lacs to General Reserve.
Your Directors are pleased to recommend a payment of Dividend of 0.50 per Equity Shareon face value of Rs.10/- each (Previous year Rs. 0.50 per Equity Share) for the year ended31st March 2016 amounting to Rs. 54 lacs (inclusive of tax of Rs. 9 lacs) subject to theapproval of members at the ensuing Annual General Meeting.
OPERATIONS TEA DIVISION
During the year under review your Company achieved a production of 22.17 lac kgs ofBlack Tea as compared to 20.59 lac kgs in the previous year. The production of own greentea leaves was higher by 9.96% the Company procured more outsourced leaves than last yearby 2.40%.
The performance of the Tea Division in the current year is far better than expected dueto increase in production and higher realization from sale of tea.
The average sale price for CTC tea in auction centres was higher as compared toprevious year and accordingly the average realisation of your tea estate was also higherby about Rs 15/- per kg due to production of quality tea which was in good demand in themarket and fetched attractive prices. There has been an all round increase in wages powerand fuel and other input costs.
The current season has seen a mixed weather condition as a result of which the cropintake is similar to that of last year. However oflate there has been improvement inweather condition which has started resulting in good crop. Further there has beenincrease in wage and salary cost following industry vide agreement with unions.
Tea market is expected to remain subdued due to good crop in India and globally. Goodquality CTC tea being in short supply will continue to attract premium and considering theabove scenario the performance of tea division is expected to be satisfactory.
PERFORMANCE AND REVIEW OF OPERATION:
During the year under review in spite of better production and other operationalparameters the Textile Division has incurred loss before tax of Rs. 893 lakhs against Rs.680 lakhs in the previous year. The Division has achieved turnover of Rs. 16802 lakhsagainstRs. 17320 lakhs in the previous year. Continued recession in textile industry hasadversely affected both top and bottom lines of the Division. The demand from domesticmarket as well as from overseas market was very sluggish. Cotton yarn export from India(particularly to China) has registered a negative growth consecutively in second year. Asa result there was a pressure on selling prices and margins of cotton yarn. Cotton priceswere more or less stable throughout the year and were lower than the previous year butreduction in selling prices of cotton yarn was much higher than reduction in cottonprices.
With a view to improve the profitability of the Division the Division has scrapped itsloss making synthetic (polyester/cotton blended) yarn section comprising of 7104 spindleswith effectfrom 1.01.2016. The Division is concentrating on increasing production offabric wherein margins are better. The Division is making all efforts to optimize variouscosts to improve profitability.
Fire broke out in the Cotton Godown of Textile Division on 07.11.2015 and 26.01.2016.The stocks were adequately insured. The Textile division had filed insurance claim of Rs.73.52 lacs with the Insurance Company. Net loss due to fire is estimated to be Rs. 10.60lacs mainly because of deduction on account of 'Excess Clause" as per terms ofpolicy.
MODERNISATION AND PROSPECTS
During the year under review the Division has added one new comber and replaced an oldlap former with a new high speed lap former in its spinning department. This would resultin lower feed on combers leading to reduction in wastage improvement in quality of yarnand consequently reduction of cost of production of yarn.
For the textile industry the global focus is shifting from China to India due to costand stability factors. The government's positive steps are expected to help this shift.The consumption of the textile products in the domestic market is expected to increase inthe years to come. The Indian economy is expected to grow by 7-8% in coming few years. Theworld economy is also on revival path. In view of this the Textile Division is expectedto give better performance in coming years.
RECENT DEVELOPMENTS & FUTURE PLANS
Company's Property at Dholka Gujarat
The land development work and provision of basic amenities is in progress and isexpected to be completed by September 2016. In all 20 plots would be available for saleand would be floated in the market shortly. Sale proceeds therefrom are expected in thenext two financial years.
Company's Land at Kolkata
The Company was exploring the possibility of developing its property at Kolkata.However the plan has been dropped due to regulatory issues. It cannot be commerciallyexploited because of the stipulations imposed by Ministry of Defence. Accordingly theRevaluation Reserve is being written back to reflect the Market value ofland on "asis where is basis."
MATERIAL CHANGES OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR UNDER REVIEW AND THEDATE OF THE REPORT
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year to whichthe financial statements relate and the date of the report.
MANAGEMENT DISCUSSION 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 of the 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.
EXTRACT OF THE 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 of the Board of Directors were held on 8th May2015 8th August 2015 7th November 2015 and 6th February 2016.
Apart from meeting of the Board of Directors different committees met several timesduring financial year ended 31st March 2016.
DIRECTORS' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 134(3)(c) OF THE COMPANIES ACT2013
The Directors hereby confirm that -
a) in the preparation of the annual accounts for the Financial Year ended 31st March2016 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 and madejudgements 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 of theprofit and loss of the Company for 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) and Mr. Abhijit Datta (DIN: 00790029) have given declarations confirmingthat they comply with the requirements of Section 149(6) of the Companies Act 2013.
Mrs. Shubha Kanoria (DIN : 00036489) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers herself for re-appointment in compliance with theprovisions of the Companies Act 2013.
Subjectto the approval of the members in the general meeting the Board ofDirectors on20th May 2016 have proposed to re-appoint Mr. Adarsh Kanoria (DIN : 00027290) as ManagingDirector and Mr. Kailash Prasad Khandelwal (DIN : 00914834) as the Whole-time Director ofthe Company w.e.f. 1st January 2017 for a period of 3 years on such terms as set out inthe Notice dated 20th May 2016.
Mr. Ashutosh Bhagat (DIN : 00059842) and Mr. Navin Nayar (DIN : 00136057) Directors ofthe Company are being proposed to be appointed as Independent Directors for fiveconsecutive years as per the provisions of Section 149 and other applicable provisions ofCompanies Act 2013. The Company has received requisite notices in writing from themproposing their appointment as Independent Directors. The Board recommends theirappointment as Independent Directors.
Brief resume of the Directors nature of their expertise in specific functional areasand details of their directorship and membership/chairmanship of Board/ Committees asstipulated under SEBI (LODR) Regulations 2015 has been provided in the Annexure to theNotice of the 33rd AGM of the Company.
KEY MANAGERIAL PERSONNELS
The following persons are the Key Managerial Personnels (KMP) of the Company incompliance with the provisions of the Companies Act 2013:
a) Mr. Adarsh Kanoria (DIN: 00027290) Managing Director
b) Mr. Kailash Prasad KhandelwaJ (DIN: 00914834) Wholetime Director
c) Mr. Atul Doshi ChiefFinancial Officer
d) Mrs. Sunita Shah Company Secretary
Remuneration and other details of the KMP's for the year ended 31st March 2016 arementioned in the Extracts of the Annual Return attached as Annexure 'C' and formspart of this Report of the 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 of the 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 ofthe Companies Act 2013 states that the performance evaluation of independent directorsshall be done by the entire Board of Directors excluding the director being evaluated.SEBI (LODR) Regulations 2015 vide Regulation 25(3) requires a meeting of IndependentDirectors to evaluate the performance of the Non Independent Directors.
Accordingly a meeting of Independent Directors was held on 6th February 2016 whereinthe performance of the nonindependent directors including the Chairman was evaluated. Theevaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The evaluation process has been explained inthe Corporate Governance Report section in this Annual Report. The Board approved theevaluation results as collated by the Nomination and Remuneration Committee.
During the year 2015-2016 your Company did not accept/renew any deposits and as suchno amount of principal or interest was outstanding as on 31st March 2016.
AUDITORS AND AUDITORS' REPORT
M/s. Jain & Co. (Firm Regn. No. 302023E) CharteredAccountants were appointed asStatutoryAuditors of the 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 of the Company. In terms of the first proviso to Section 139(1) of theCompanies Act 2013 the matter relating to appointment of M/s. Jain & Co. StatutoryAuditors of the Company has been placed for ratification by members.
The Company has received letter from the Auditors to the effect that theirre-appointment is within the prescribed limits under the Companies Act 2013 and thatthey are not disqualified. The Board recommends the ratification of 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 by the Statutory Auditors.
SECRETARIAL AUDIT REPORT
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) of the Companies Act2013 read with Rule 9 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is attached as Annexure-"D". The report is free ofany qualification 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. However the details oflnvestments under Section 186(1) of theCompanies Act 2013 have been provided at Note No. 15 of the Financial Statements for theyear ended 31st March 2016.
PARTICULARS OF RELATED PARTY TRANSACTIONS
During the year there was no material related party transaction with promoters thedirectors or the management their subsidiaries or relatives etc. that may have potentialconflict with the interests of the Company. The Company has formulated a policy on RelatedParty Transactions. The link of the policy is http://bengaltea.com/pdf/BTFL-RELATED PARTYTRANSACTION POLICY-8.11.2014.pdf
All related party transactions entered during the financial year were in ordinarycourse of the business and on arm's length basis which have been disclosed in the Notes tothe Accounts. No material related party transactions were entered during the FinancialYear 2015-16 byyour Company. Accordingly the disclosure of related party transactions asrequired under Section 134(3) of the Companies Act 2013 in Form AOC 2 is not applicableto 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 a CostAuditor to audit the cost records of the applicable products of the Company relating tothe Tea and Textile Division.
PARTICULARS OF COST AUDITORS APPOINTED FOR THE FINANCIAL YEAR 2015-16
The Companyhas appointed the following CostAuditors for Tea &Textile Divisionfortheyear ended 31st March 2016:
|Details of Cost Auditor ||Unit Audited |
|Name: N.D. Birla & Co. || |
|Address: A-3 Nirant Society Opposite Town Hall Near Karnavati Hospital ||Textile Division |
|Ellisbridge Ahmedabad Gujarat- 380006 ||Bengal Tea & Fabrics Ltd. |
|Registration No. allotted by ICWAI: 000028 ||Asarwa Mills-Ahmedabad |
|Name: D. Radhakrishnan & Co. ||Tea Division |
|Address: 11A Dover Lane Flat B1/34 Kolkata- 700029 ||Bengal Tea & Fabrics Ltd. |
|Registration No. allotted by ICWAI: 000018 ||Ananda Tea Estate-Assam |
PARTICULARS OF EMPLOYEES
The Company had no employee who is in receipt of more than Rs. 60 lacs per annum duringthe year ended 31st March 2016 or of more than Rs. 5 Lacs per month during any partthereof so no information under Rule 5(2) of the Companies (Appointment and RemunerationofManagerial Personnel) Rules 2014 is required to be given. However the informationrequired pursuant to Section 197 of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 has beenannexed as Annexure-"E".
CONSERVATION OF ENERGY TECHNOLOGYABSORPTION 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) of the Companies Act 2013 readwith Rule 8 (3) of Companies (Accounts) Rules 2014 is set out in the annexure formingpart of the Annual Report marked as Annexure-"F".
RISK MANAGEMENT POLICY
As per requirement of Section 134(3)(n) of the Companies Act 2013 the Board ofDirectors in its meeting held on 10th May 2014 has approved the Risk Management Policy.As of now the Directors do not envisage any element of risk which may threaten theexistence of the Company.
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 loss and alltransactions are authorized recorded and reported correctly. The internal control systemsof the Company are monitored and evaluated by internal auditors and their audit reportsare periodically reviewed by the Audit Committee of the Board of Directors. Theobservations and comments of the Audit Committee are placed before the Board and suitablesteps have been taken to strengthen the controls.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to Section 135 of the Companies Act 2013 the Company vide its Board Meetingdated 21st June 2014 has formed a CSR Committee and formulated a CSR Policy vide BoardMeeting dated 9th August 2014. The details of the same together with the CSR expenditurehave been annexed in the prescribed format as Annexure-"G".
TRANSFER OF AMOUNTS TO THE INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 124 of the Companies Act 2013 the declareddividends which remain unpaid or unclaimed for a period of seven years have been dulytransferred by the Company to the Investor Education and Protection Fund (IEPFJestablished by the Central Government under Section 125 of the said Act.
Company has uploaded the details of unpaid and unclaimed amounts lying with the Companyas on 8th August 2015 (date of last Annual General Meeting) on the Company's website(www.bengaltea.com ) and also on the Ministry of Corporate Affairs' website. The dividendfor the undernoted years if unclaimed for seven years will be transferred by the Companyto IEPF:
|Financial Year ||Date of Declaration of Dividend ||Unclaimed Dividend as on 31.03.2016 |
|2008-09 ||27.07.2009 ||150377.00 |
|2009-10 ||31.07.2010 ||417889.50 |
|2010-11 ||06.08.2011 ||425394.00 |
|2011-12 ||NIL ||NIL |
|2012-13 ||03.08.2013 ||323831.00 |
|2013-14 ||09.08.2014 ||637848.00 |
|2014-15 ||08.08.2015 ||176748.50 |
NAME OF COMPANIES WHICH HAVE CEASED TO BE ITS SUBSIDIARIES JOINT VENTURES OR ASSOCIATECOMPANIES DURING THE YEAR
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 2015-16.
|No.of Complaints received : ||NIL |
|No.of Complaints Disposed off : ||NIL |
The Directors place on record their sincere appreciation for the assistance andco-operation extended by Banks its employees its investors and all other associates andlook forward to continue fruitful association with all business partners ofthe Company.
| || |
For and on behalf of the Board
| ||Bengal Tea & Fabrics Ltd. || |
| ||ADARSH KANORIA ||KAILASH PRASAD KHANDELWAL |
|Place : Kolkata ||Managing Director ||Whole-time Director |
|Dated : 20th May 2016 ||DIN :00027290 ||DIN :00914834 |
ANNEXURE TO DIRECTORS' REPORT
INFORMATION AS PER SECTION 134 (3) (m) OF THE COMPANIES ACT 2013 READ WITH THE RULE8(3) OF THE COMPANIES (ACCOUNTS) RULES 2014 AND FORMING PART OF THE DIRECTORS' REPORT FORTHE FINANCIAL YEAR ENDED 31ST MARCH 2016
A. CONSERVATION OF ENERGY :
(i) The steps taken or impact on conservation of energy:
1. The Company has taken following steps to conserve the energy :
TEXTILE DIVISION :
(a) Thermax Oil Boiler with fluidise base with Bas filter installed. Installation ofLED tube lights in spinning preparatory department;
(b) Installation of inverters in humidification plant and in stenter fan (processhouse);
(c) Installation of 1 no. 30 HP motor replacing 2 nos. of25HP motors for pump runningin compressor;
(d) Reefed Bucket & vibrating screen with 5HP motors each stopped in6TPH boiler;
(e) Installation of rolling shutter to prevent coal losses due to wind and rain;
(f) Installed energy efficient bore.
TEA DIVISION :
(a) 2 units of Coal Feeding Controlling System has been installed which will monitorand optimize the use of Coal in the Heaters.
2. Pollution Control
(a) Decanter (Heallar make) installed for better handling ofETP sludge.
(b) Installation of rolling shutter at ash storage area for better air environment nearboiler area.
(ii) The steps taken by the company for utilizing alternate sources of energy: Nil
(iii) The Capital Investment on energy conservation equipment: Rs. 18.82 Lacs
(i) Specific areas in which R&D carried out by the Company:
The Division subscribes to Tea Research Association which is registeredU/s 35(1)(ii)ofthe Income TaxAct 1961.
(a) Installation of 1 high speed LK64Z comber;
(b) Installation of 1 high speed Lap Former;
(c) Installation of MAG HVT 1201 make HighVolume Fiber Testing Equipmentin Laboratory;
(d) Installation of Automatic TPI (Twist per Inch) Tester;
(e) Installation of 1 no. high speed LK64Z comber and 1 no. high speed lap former alongwith its waste collection compacting system in spinning preparatory department;
(f) Installation of MAG HVT 1201 make High Volume Fiber Testing Equipment inlaboratory;
(g) Installation of new "COMPUTWIST" automatic TPI tester by replacing oldmanual TPI tester.
(ii) The benefits derived like products improvement cost reduction productdevelopment or import substitution:
The Division benefits from the suggestions received from theTea Research Associationout ofR&D activities.
(a) The additional high speed comber will help in optimizing the process in comberdepartment by reducing noil (waste) % and thereby improving yarn yield %;
(b) The replacement of old lap former by new high speed lap former will give better andbreakdown free working and will increase production of comber;
(c) The High Volume Fiber Testing Equipment ensures accurate fiber testing and helptaking appropriate decision for cotton selection;
(d) The new TPI tester helps in testing of TPI of final yarn and helps reducing TPIvariation and thereby improves quality of yarn;
(e) Improvement in quality of products;
(f) Better working of machineries in subsequent processes.
(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)
- Not Applicable
(iv) The expenditure incurred on Research & Development: Rs. 135.51 Lacs
C. FOREIGN EXCHANGE EARNINGS AND OUTGO :
During the year 2015-16 the Company had contributed about Rs. 1649 lacs (net of outgo)to the exchequer in the form of valuable foreign exchange money.
|i) Foreign Exchange Earnings : ||Rs. 1796 Lacs |
|ii) Foreign Exchange Outgo : ||Rs. 147 Lacs |