You are here » Home » Companies » Company Overview » Dhunseri Tea & Industries Ltd

Dhunseri Tea & Industries Ltd.

BSE: 538902 Sector: Agri and agri inputs
NSE: DTIL ISIN Code: INE341R01014
BSE LIVE 15:29 | 16 Aug 290.00 7.05
(2.49%)
OPEN

290.85

HIGH

291.00

LOW

287.00

NSE 15:31 | 16 Aug 289.20 4.20
(1.47%)
OPEN

285.00

HIGH

294.10

LOW

285.00

OPEN 290.85
PREVIOUS CLOSE 282.95
VOLUME 3526
52-Week high 348.95
52-Week low 250.25
P/E 20.45
Mkt Cap.(Rs cr) 203
Buy Price 287.50
Buy Qty 8.00
Sell Price 290.00
Sell Qty 17.00
OPEN 290.85
CLOSE 282.95
VOLUME 3526
52-Week high 348.95
52-Week low 250.25
P/E 20.45
Mkt Cap.(Rs cr) 203
Buy Price 287.50
Buy Qty 8.00
Sell Price 290.00
Sell Qty 17.00

Dhunseri Tea & Industries Ltd. (DTIL) - Director Report

Company director report

We have pleasure in presenting the 19th Annual Report together with the FinancialStatements of the Company for the year ended 31st March 2016.

1. Financial Results

(Rs. In Lakhs)

STANDALONE

CONSOLIDATED

Particulars

Accounting year ended

Accounting year ended

31.03.2016 31.03.2015 31.03.2016 31.03.2015
1 Income from Operations
a. Net Sales/ Income from Operations 18261.39 16379.21 27307.93 26754.58
b. Other Operating Income 47.63 42 .71 47.63 42.71
Total Income from Operations 18309.02 16421.92 27355.56 26797.29
2 Expenses
a. Cost of Materials Consumed 3464.95 3397.29 3464.95 3397.29
b. Changes in Inventories of finished goods and stock in trade (510.41) (320.62) (433.02) (8.75)
c. Employee Benefits Expense 5779.18 4644.42 6962.15 5762.53
d. Depreciation Expense 538.56 612.36 888.78 979.88
e. Freight Delivery & Selling Expenses 1193.35 896.70 1882.93 1400.30
f. Power & Fuel 1721.34 1774.50 3536.00 3000.31
g. Other Expenses 3403.50 3283.94 8264.56 9001.72
Total Expenses 15590.47 14288.59 24566.35 23533.28
3 Profit from Operations before Other Income Finance costs and Exceptional items (1-2) 2718.55 2133.33 2789.21 3264.01
4 Other Income 342.62 297.54 1284.98 778.69
5 Profit from Ordinary activities before Finance costs (3+4) 3061.17 2430.87 4074.19 4042.70
6 Finance costs 280.71 358.98 873.03 818.57
7 Profit from Ordinary activities before tax (5-6) 2780.46 2071.89 3201.16 3224.13
8 Tax Expense :
Current Year 615.00 435.00 640.35 435.00
Adjustment for earlier years 33.98 (67.99) 37.24 (67.99)
Deferred Tax (90.27) (51.76) (7.31) 26.27
9 Net Profit after Tax (7 - 8) 2221.75 1756.64 2530.88 2830.85
10 Paid up Equity Share Capital (Face Value C10/- per share) 700.50 700.50 700.50 700.50
11 Reserve Excluding Revaluation Reserve 15925.01 14377.74 11356.36 11481.28
12 Earnings per share (of D10/- each):
(a) Basic (C) 31.72 25.08 36.13 40.41
(b) Diluted (C) 31.72 25.08 36.13 40.41

2. Dividend

The Directors recommend a dividend of C8.00 per equity share i.e. @ 80% for thefinancial year ended 31st March 2016 subject to approval of the shareholders at theensuing Annual General Meeting. The dividend on equity shares if approved by the memberswould involve a cash outflow of C674.48 lakhs including dividend tax.

3. Transfer to reserves

The Company proposes to transfer Rs.1000.00 lakhs to the general reserve out of theamount available for appropriation and an amount of Rs. 1171.79 lakhs is proposed to beretained in the profit and loss account.

4. Operations

The total tea manufacturing and sales in respect of the Indian operations for the yearunder review was 10.18 and 9.62 mn kg. as against 9.74 and 9.35 mn kg. respectively in theprevious year. The production for the year under review was comparatively more by about4.60%. The sales in terms of volume were more by about 2.94% and the average realizationswere also more by about 8.00% for the year under review in comparison to the previousyear.

The total tea manufacturing and sales in respect of the African operations for the yearunder review was about 7.47 and 7.41 mn kg. as against 8.50 and 9.15 mn kg. respectivelyin the previous year. The manufacture and sale of tea were less for the year under review. The tea sales in terms of volume were also less by about 19% although the averagerealization was marginally better in comparison to the previous year.

The production and sale of macadamia in terms of volume was about 0.58 and 0.60 mn. Kgas against 0.61 and 0.60 mn kg respectively in the previous year. The production ofmacadamia in terms of volume was less by about 5% whereas the sales in terms of volume wasalmost similar in comparison to the previous year.

5. Subsidiary Companies

The Company has following three wholly owned subsidiaries as on March 31 2016 :

i) Dhunseri Petrochem & Tea Pte Ltd (DPTPL):

ii) Makandi Tea & Coffee Estates Ltd (MTCEL) &

iii) Kawalazi Estate Company Ltd (KECL)

The entire share capital of the subsidiaries i.e. MTCEL and KECL are held by DPTPL andthat of DPTPL are held by the Company making them 100% wholly owned subsidiaries of theCompany.

There has been no material change in the nature of the business of the subsidiaries.

There are no associate companies within the meaning of Section 2(6) of the CompaniesAct 2013 ("Act").

Pursuant to provisions of Section 129(3) of the Act a statement containing salientfeatures of the financial statements of the Company's subsidiaries in Form AOC-1 isattached to the financial statements of the Company.

Pursuant to the provisions of Section 136 of the Act the financial statements of theCompany consolidated financial statements along with relevant documents and separateaudited accounts in respect of subsidiaries are available on the website of the Company.

6. Listing

The equity shares of the Company are listed on BSE and NSE.

7. Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors confirm:

(i) that in the preparation of the annual accounts the applicable accounting standardshave been followed and no material departures have been made from the same;

(ii) that they have selected such accounting policies and applied them consistently andmade 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;

(iii) that they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(iv) that they have prepared the annual accounts on a 'going concern' basis.

(v) that they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and are operating effectively.

(vi) that they have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively.

The work performed by the internal auditor statutory auditor and secretarial auditorand the reviews performed by management and the audit committee the Board is of theopinion that the Company's internal financial controls were adequate and effective duringthe financial year 2015-16.

8. Directors & Key Managerial Personnel

Mr. Rajiv Kumar Sharma who was appointed as a director of the Company on 9thSeptember 2014 in a casual vacancy retires by rotation at the ensuing 19th AnnualGeneral Meeting and being eligible offers himself for reappointment. The Board recommendshis reappointment.

Mr Basudeo Beriwala Ms. Nandini Khaitan and Mr. Ashok Kumar Lohia were appointed atthe last AGM as independent directors of the Company for a term of five consecutive yearsw.e.f. 9th September 2014. Mr. Bharat Bajoria was earlier appointed as an independentdirector for five consecutive years w.e.f. 8th September 2014.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under the Act.

There has been no change in the Key Managerial Personnel of the Company during theyear.

9. Number of Meetings of the Board

The Board met four times during the financial year 2015-16. The details have beenprovided in the Corporate Governance Report in terms of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 which is annexedto this Report.

10. Board evaluation

An annual evaluation of the performances of the Board its committees and individualdirectors was undertaken during the year.

11. Policy on directors' appointment and remuneration and other details

The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which forms part of the Directors' Report.

12. Internal financial control systems and their adequacy

The details in respect of internal financial control and their adequacy are included inthe Management Discussion & Analysis which forms part of this Report.

13. Audit committee

The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this Report.

14. Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s. Lovelock & Lewes Chartered Accountants were appointed as Statutory Auditors ofthe Company for a period of five years at the 17th Annual General Meeting (AGM) of theCompany held on 8th September 2014 subject to ratification of their appointment at everyAGM. Their reappointment for the year 2016-17 is required to be ratified by theshareholders at the ensuing 19th AGM of the Company.

16. Auditors' report and secretarial auditors' report

The auditors' report and secretarial auditors' report does not contain anyqualifications reservations or adverse remarks and have been annexed to the Report.

17. Risk management

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. Major risks identifiedby the businesses and functions are systematically addressed through mitigating actions ona continuing basis.

The development and implementation of risk management policy has been covered in theManagement Discussion and Analysis which forms part of this Report.

18. Particulars of loans guarantees and investments

The particulars of loans guarantees and investments have been disclosed in thefinancial statements.

19. Transactions with Related Parties

All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into anycontract/arrangement/transaction with related parties which could be considered materialin accordance with the policy of the Company on materiality of related party transactions.

Your Directors draw attention of the members to Note No. 32 to the financial statementwhich sets out related party disclosures.

20. Management's Discussion and Analysis Report

The Management's Discussion and Analysis Report for the year under review asstipulated under the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 is presented in a separate section formingpart of the Annual Report.

21. Corporate social responsibility

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure I of this report in the format prescribed in the Companies (CorporateSocial Responsibility Policy) Rules 2014. The policy is available on the Company'swebsite:www.dhunsertea.com .

22. Extract of annual return

As stipulated under Section 92(3) of the Act an extract of annual return is given inAnnexure II in the prescribed Form MGT-9 which forms part of this Report.

23. Particulars of employees

The information required under Section 197 of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:

Non-executive directors Remuneration for the Year ended 31.03.2016 (D) Ratio to median remuneration
1. Mr. Mrigank Dhanuka 20000 0.38 :1
2. Mr. R.K. Sharma 30000 0.57 :1
3. Mr. Bharat Bajoria 65000 1.23 :1
4. Mr. Basudeo Beriwala 80000 1.51 :1
5. Ms. Nandini Khaitan 40000 0.75 :1
6. Mr. Ashok Kumar Lohia 20000 0.38 :1
Executive director
1. Mr. C.K. Dhanuka 9898147 186.76 :1

The median renumeration of employees for financial year 2015-16 is C0.53 Lacs.

b. The percentage increase in remuneration of each director chief executive officerchief financial officer company secretary in the financial year:

Directors Chief Executive Officer Chief Financial Officer and Company Secretary % increase in remuneration in the financial year
1 Mr. C. K. Dhanuka Managing Director# 37
2. Mr. Mrigank Dhanuka# No increase
3. Mr. Bharat Bajoria# 333
4. Mr. Basudeo Beriwala# 300
5. Ms. Nandini Khaitan# 166
6. Mr. Ashok Kumar Lohia# (43)
7. Mr. R.K. Sharma 50
8. Mr. P. C. Dhandhania Chief Executive Office No change
9 Ms. Bhavna Khemka Chief Financial Officer 11
10. Mr. R. Mahadevan Company Secretary# 70

# During previous year the remuneration paid to directors & KMP were for part ofthe year.

c. The percentage increase in the median remuneration of employees in the financialyear: 25%.

d. The number of permanent employees on the rolls of Company: 5144

e. The explanation on the relationship between average increase in remuneration andCompany performance:

On an average employees received an annual increase of about 25%. The individualincrements varied from about 10% to 25% based on individual performance.

The increase in remuneration is in line with the market trends. In order to ensure thatremuneration reflects Company performance the performance pay is also linked toorganization performance apart from an individual's performance.

f. Comparison of the remuneration of the key managerial personnel (KMP) against theperformance of the Company:

Aggregate remuneration of KMP in FY16 (Rs. Lakhs) 136.42
Revenue (Rs. Lakhs) 18261
Remuneration of KMPs (as % of revenue) 0.74
Profit before Tax (PBT) (Rs. Lakhs) 2221
Remuneration of KMP (as % of PBT) 6.05

g. Variations in the market capitalisation of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:

Particulars March 31 2016 March 31 2015* % Change
Market Capitalisation (C lakhs)# 17162.13 14402.18 19.16
Price Earnings Ratio# 7.72 8.20 (0.48)

(# Based on BSE figures)

h. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

Average percentile increase already made in the salaries of employees other than themanagerial personnel in the financial year 2015-16 was 19.83% and in the case ofmanagerial remuneration the increase was 30.10%. The remuneration payable to executivedirector has variable component which is dependent on the profit of the Company and otheremployees remuneration has fixed pay which depends on his/ her performance.

i. Comparison of each remuneration of the key managerial personnel against theperformance of the Company:

(Rs. In lakhs)

Mr. C.K. Dhanuka Managing Director Mr. P.C. Dhandhania Chief Executive Officer Ms. Bhavana Khemka Chief Financial Officer Mr. R. Mahadevan Company Secretary
Remuneration in FY16 98.98 17.30 9.92 8.13
Revenue 18261
Remuneration (% of revenue) 0.54 0.09 0.05 0.04
Profit before Tax (PBT) 2221
Remuneration (% of PBT) 4.46 0.78 0.45 0.37

j. The key parameters for any variable component of remuneration availed by thedirectors:

There is no variable component of remuneration in case of non-executive directors asonly sitting fees is paid to them for attending Board/Committee Meetings. But in case ofexecutive director the variable component is commission which depends on the profit of theCompany.

k. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year: None.

l. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.

m. The statement containing particulars of employees as required under Section197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is set out in Annexure IV forming part of this Report.

24. Disclosure requirements

As stipulated under the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 the Corporate Governance Report along with theauditors' certificate thereon and Management Discussion and Analysis are attached whichform part of this Report.

The code of conduct for the Board of Directors and the senior management adopted by theCompany is available on the Company's website (http://dhunseritea.com/investors-investors/code-of-conduct/)

Details of the familiarization programme of the independent directors are available onthe Company's website (http:// dhunseritea.com/wp-content/uploads/2015/06/Familiarisation-Programme-of-Independent-Directors.pdf).

Policy for determining material subsidiaries of the Company is available on theCompany's website (http://dhunseritea.com/wp-content/uploads/2015/03/policy-for-determining-material- subsidiary.pdf).

Policy on dealing with related party transactions is available on the Company's website(http://dhunseritea.com/wp-content/ uploads/2015/04/Related-party-transaction-policy.pdf).

The Company has formulated and published a Whistle Blower Policy to provide VigilMechanism for employees including directors of the Company to report genuine concerns. Theprovisions of this policy are in line with the provisions of Section 177(9) of theCompanies Act 2013 and SEBI (LODR) Regulations 2015 and the said policy is available onthe Company's website (http://dhunseritea.com/wp-content/uploads/2015/03/vigil-mechanism.pdf ).

25. Deposits from public

The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.

26. State of Company's affairs

The present state of the Company's affairs is progressive enough viz-a-viz the industryand there is no other development which could result in an adverse situation for theCompany in the near future. There is neither any change in the nature of business of theCompany nor any significant and material orders was passed by any regulator or court ortribunals impacting the going concern status affecting the Company's operation in future.

27. Material changes and commitments if any affecting the financial position of theCompany

There are no such material changes and commitments which have occurred between the endof the financial year of the Company to which the financial statements relate and the dateof the Report.

28. Particulars regarding conservation of energy & technology absorption etc.

The particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo are given in Annexure III which forms part of this Report.

29. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013

The Company has set up Internal Complaints Committee (ICC) under The Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013. There were nocomplaints received and /or disposed off during 2015-16.

30. Green Initiatives

As part of our green initiative the electronic copies of this Annual Report includingthe Notice of the 19th AGM are sent to all members whose email addresses are registeredwith the Company/Depository Participant(s). For members who have not registered theiremail addresses physical copies of this Annual Report including the Notice of the 19thAGM are 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 andAdministration) Rules 2014. The instructions for e-voting is provided in Note 10 annexedto the Notice.

31. Acknowledgement

Your Directors take this opportunity to express their grateful appreciation for theexcellent assistance and cooperation received from the banks and other authorities. YourDirectors also thank the employees of the Company for their valuable service and supportduring the year. Your Directors also gratefully acknowledge with thanks the cooperationand support received from the shareholders of the Company.

For and on behalf of the Board of Directors
Kolkata C.K. Dhanuka
27th May 2016 Chairman

Annexure III

Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 and forming part of the Directors Report forthe year ended 31st March 2016

A. Conservation of Energy

i) Steps taken or impact on conservation of energy:

Phased replacement of old Generator sets with fuel efficient new Generator setsresulted in more KWH per litre of diesel at Dhunseri Bahipookri & Hatijan TeaEstates. It has helped to contain the cost at Hatijan Tea Estate.

Condensed Bulbs is gradually replaced with CFL/ LED Bulbs in the factories andbungalows to reduce the energy consumption.

Coal saver has been installed in coal-fired heaters for maintaining the temperature andoptimizing the consumption of coal.

Supply of high calorific value coal from North-East Coalfields (Marghereta) with lessash content has been supplied to maintain the temperature and also reduction in coalconsumption.

Automatic Voltage Regulator has been installed at Dhunseri Tea Estate to utilizeefficiently the grid supply as there had been serious problem of low voltage supply forthe past 2 years due to severe drought in Assam.

The energy conservation measures have resulted in saving of about 3% in overallelectricity consumption. It is expected that there will be further saving in coalconsumption with full year operation of 2016-17.

Capacitors are used to improve the power factor to 90 and above in most of thefactories.

Interlocking of machineries to reduce the connected load in Dilli to save energy cost.

ii) Steps taken by the Company for using alternate sources of energy:

Tuflite sheets are used for natural light to reduce the consumption of electricity inall the factory buildings.

iii) Capital investment on energy conservation equipment:

During the year the company had invested an amount of about C83.12 lakhs towardscapital equipment comprising of energy efficient electric motors sprinklers generatorsets electrical installations etc. mainly for electricity generation and irrigation atthe tea estates.

B. Technology Absorption

(i) The efforts made towards technology absorption:

Indigenously developed technologies for the improvement of production both in field andfactory were adopted and required modifications and innovations were done on continuousbasis.

(ii) The benefits derived like product improvement cost reduction product developmentor import substitution:

Garden has used pruning machines to save on manpower and utilise the saved manpower forother development works.

Augor machines are used for digging pits for planting to save manpower and also speedup the planting work.

Trial of machine plucking harvester is done and it would be taken up in larger areaduring the Season 2016.

(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)

(a) The details of technology imported: Nil

(b) The year of import: Nil

(c) Whether the technology been fully absorbed: Not applicable

(d) If not fully absorbed areas where absorption has not taken place and the reasonstherefor: Not applicable.

(iv) The expenditure incurred on Research and Development:

The Company subscribes to Tea Research Associations which does R & D work for itstea industries and their expert advice is also being obtained through visits by theirAdvisory Officers to the garden from time to time.

Gramin Krishi Unnayan Prakalpa is implemented for agricultural development as well asoverall improvement of socio-economic development of the area through various teaassociations.

C. Foreign Exchange earnings and outgo

Earnings in foreign exchange: Rs.38.19 lac (previous year Rs.51.79 lac)

Foreign exchange outgo: Rs.5.85 lac (previous year Rs.14.02 lac)