Your Directors have pleasure in presenting the Seventy Fourth Annual Report with theAudited Accounts for the year ended March 31 2017.
The performance of the Company for the financial year ended March 31 2017 issummarized below:
|Particulars ||2016 - 2017 ||2015 - 2016 |
|Income from Operations ||291811837 ||328450017 |
|Other Income ||45213331 ||47749753 |
|Total Income ||337025168 ||376199770 |
|Profit before tax for the year ||19447064 ||40048555 |
|Less : Provision for taxation (inclusive of MAT credit utilized) ||1056000 ||5500000 |
|Profit after tax ||18391064 ||34548555 |
|Add : Surplus brought forward from Previous year ||11825701 ||7479532 |
|Total Amount available for appropriation ||30216765 ||42028087 |
|LESS : || || |
|First Interim Dividend paid on equity shares @ 200% (Rs. 20 per equity share on face value of Rs. 10/-) || ||12547000 |
|Tax on First Interim Dividend || ||2554193 |
|Second Interim Dividend paid on equity shares @ 200% (Rs. 20 per equity share on face value of Rs. 10/-) || ||12547000 |
|Tax on Second Interim Dividend || ||2554193 |
|Transfer to General Reserve || || |
|Final Dividend on Equity Shares ||* || |
|Provision for tax on Final Dividend ||* || |
|Surplus carried to Balance Sheet ||30216765 ||11825701 |
|Total ||30216765 ||42028087 |
*Proposed dividend on equity shares and tax on dividend has not been recognised as adistribution of profit in the current years accounts in accordance with the revisedaccounting standard-4 Contingencies and Events occuring after the Balance SheetDate (effective from 01.04.2016)
Total income dropped from Rs37.62 Crores in 2015-16 to Rs. 33.70Crores in 2016-17resulting in a drop of 10 %. Profit after Tax was Rs. 1.84Crores (previous year :Rs. 3.46Crores).
Tea production during the year was 8.21lacsKgs with an average yield of 1539 kgs. perhectare as against 12.39lacsKgs with an average yield of 2330kgs. per hectare during lastyear. Apart from this there is also a production of 11.41Lacskgs of bought leaf as against11.02LacsKgs during the previous year. The sale average during the year was at Rs. 133.46per Kg as against the last years sale average of Rs. 126.59/- per Kg.
Your Directors are pleased to recommend a dividend of 200% (Rs. 20 per share) on EquityShare Capital for the year ended 31.03.2017 amounting to Rs. 12547000 excludingdividend tax.
LISTING OF SECURITIES ON BSE LTD
The equity shares of the company continued to be listed on BSE Ltd.
The Board of Directors consists of Mr. Ajit Thomas Chairman Mrs. Shanthi ThomasExecutive Director Mr. A.D.Bopana Mr. Raghu Bhale Rao( upto 30.05.2017) & Mr.F.S.Mohan Eddy Independent Directors and Mr. W.D.Nelson Director.
The Board of Directors met four times during this financial year. The details of theBoard meetings are given in Corporate Governance report. The intervening gap between themeetings was within the period prescribed under the Companies Act 2013.
AUDIT COMMITTEE MEETINGS
The constitution of Audit committee during the year was as follows:-
Mr.A.D.Bopana (Independent Director & Chairman of Audit Committee)
Mr. Raghu Bhale Rao (Independent Director) (upto 30.05.2017) Mr. F.S.Mohan Eddy(Independent Director)
The terms of reference stipulated by the Board to the Audit Committee cover the mattersspecified for Audit Committee under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
The Committee met five times during this financial year. The details of the Committeemeetings are given in Corporate Governance report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism / Whistle Blower Policy in place pursuant to Section177 (9) of the Companies Act 2013 and as per Regulation 22 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. The said policy is available in thewebsite of the company.
NOMINATION & REMUNERATION COMMITTEE
The constitution of the Nomination & Remuneration Committee are given as follows:-
|Mr. A.D.Bopana ||Independent Director |
|Mr. Ragu BhaleRao (upto 30.05.2017) ||Independent Director |
|Mr. F.S.Mohan Eddy ||Independent |
NOMINATION & REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management KeyManagerial Personnel and their remuneration.
PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS
The Company has not given any loans or guarantees covered under the provisions ofSection 186 of the Companies Act 2013.
The details of investments made by Company is given in the note nos. 7 &8 to thefinancial statements.
The Company is not accepting deposits and all deposits accepted earlier have beenrepaid. As such there are no unclaimed deposits in the books of the company as on March31 2017.
PARTICIPATING AS PROMOTER IN THE EXIT OFFER OF THE NELLIAMPATHY TEA & PRODUCECOMPANY LTD.
SEBI vide its circular No. SEBI/HO/MRD/DSA/ CIR/P/ 2016/110 dated October 10 2016issued for Exclusively Listed Companies (ELCs) in De-recognized / Non-operational / ExitedStock Exchanges placed on the Dissemination Board (DB) had stipulated the ELCs to indicateits intention regarding the listing on nationwide Stock Exchanges or to provide exit tothe public shareholders of the Company and submit its plan of action to the designatedStock Exchange (NSE) within 3 months from the date of this Circular (i.e. on or beforeJanuary 9 2017).SEBI vide circular dated 5th January 2017 had extended the timeline tocomply with the above circular by 31st March 2017 for submitting the plan of action.
The Nelliampathy Tea & Produce Company Limited in which the Company is one of thePromoters is required to comply with the SEBI circular No.SEBI/HO/MRD/DSA/ CIR/P/2016/110dated October 10 2016. Your Boardof Directors decided that the company shall participateas promoter in this Exit Offer to the public shareholders of The Nelliampathy Tea &Produce Company Limited.As on the date of the report the Company has acquired 25225Equity Shares of The Nelliampathy Tea & Produce Company Limited @ Rs. 400/- equityshares through Exit Offer from the public shareholders of The Nelliampathy Tea &Produce Company Limited.
IEPF (ACCOUNTING AUDIT TRANSFER AND REFUNDS) AMENDMENTRULES 2017
Pursuant to the applicable provisions of the Companies Act 2013 read with IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 ( the Rules)as amended from time to time all unpaid or unclaimed dividends are required to betransferred by the Company to the IEPF established by the Central Government after thecompletion of seven years. Further according to the Rules the shares in respect of whichdividend has not been paid or unclaimed by the shareholders for seven consecutive years ormore shall also to be transferred to the demat account created by the IEPF Authority.Accordingly the Company has transferred the unclaimed and unpaid dividends. Further thecorresponding shares will also be transferred as per the requirements of the IEPF rulesdetails of which are provided on our website.
In compliance to the above the Company has sent the intimation to those shareholderswhose dividend stand unclaimed for 7 years and given public notice in two newspapers. Alsothe details were uploaded in the website of the company.
DIRECTORS & KEY MANAGERIAL PERSONNEL
1. Executive Director
Mrs. Shanthi Thomas is the Executive Director of the Company.The provisions of theCompanies Act 2013 pertaining to appointment of WomanDirector under Section 149(1)havebeen complied with.
2. Independent Directors
Mr. A.D.Bopana& Mr. F.S.Mohan Eddy are the Independent Directors of the company.
Mr. Raghu BhaleRao Independent Director has resigned from the Board of Directors witheffect from the close of business hours on May 30 2017 due to personal reasons. YourDirectors place on record their appreciation for the valuable services rendered byMr.RaghuBhaleRao during his tenure as Independent Director of the company.
During the year Mr. W. D. Nelson has been inducted as Director w.e.f 15.04.2016.
4. Director retiring by rotation
In accordance with the provisions of Companies Act 2013 and the Articles ofAssociation of the Company Mr. W.D.Nelson Director retires by rotation at the 74thAnnual General Meeting and being eligible offer himself for re-appointment.
5. Key Managerial Personnel
Mrs. Shanthi Thomas has been appointed as the Executive Director of the Company and Mr.T.M.Harikumar has been appointed as Company Secretary & Chief Financial Officer of thecompany in accordance with the provisions of Section 203 of the Companies Act 2013.
6. Declaration from Independent Directors on Annual Basis The Company has receivednecessary declaration from all the Independent Directors of the Company under Section149(7) of the Companies Act 2013 that the Independent Directors of the Company meet withthe criteria of their Independence laid down in Section 149(6)of the Companies Act 2013.
INFORMATION ABOUT THE FINANCIAL PERFORMANCE/FINANCIAL POSITION OF THESUBSIDIARIES/ASSOCIATES/JOINT VENTURE
The company has no subsidiary companies.
As required under Section 129(3) of the Companies Act 2013 the Company has prepared aConsolidated Financial Statement in respect of its Associates/Joint Venture companiesalongwith its own financial statements. Further details of financialperformance/financial position of the associate companies as required under first provisoto Section 129(3) of the Companies Act 2013 read with Rule 5 of Companies (Accounts)Rules 2014 are annexed in Form AOC 1 (Annexure 1).
CONSERVATION OF ENERGY
The company has taken adequate steps for conservation of energy by utilizing alternatesources and by investing on energy conservation equipments. The particulars prescribed bythe Section 134 (3) (m) of the Companies Act 2013 read with Rule 8 of the Companies(Accounts) Rules 2014 relating to Conservation of Energy and Technology Absorption arefurnished in the Annexure 2 to this Report.
FOREIGN EXCHANGE EARNINGS AND OUTGO
During the year under review the Companys Foreign Exchange Earnings amounted toRs. 200628223/-. The total outgo on Foreign Exchange amounted to Rs.1837841/-.Details are set out in Notes 23 & 24 of the Accounts. The Company has continued tomaintain focus and avail of export opportunities based on economic considerations.
The information required under section 197 (12) of the Companies Act 2013 read withrule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of the Company have been given in the Annexure - 3
The information under section 197 of Companies Act 2013 and pursuant to Rule 5 (2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are notrequired as none of the employees falls under this category.
The statement containing remuneration paid to employees and other details as requiredunder Section 197 (12) of the Companies Act 2013 read with Rule 5 (2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided in aseparate annexure forming part of this report. Further the report and the accounts arebeing sent to the members excluding the aforesaid annexure. In terms of Section 136 of theAct the said annexure is open for inspection at the Registered Office of the Companyduring business hours on working days of the Company upto date of the forthcoming AnnualGeneral Meeting. Any member interested in obtaining a copy of the same may write to theCompany Secretary & CFO and the same will be provided free of cost to the member.
M/s. Suri & Co. Chartered Accountants Chennai - 600017 (Firms RegistrationNo. 004283S) the present Statutory Auditors of the Company have completed their term asper Sec. 139 of the Companies Act 2013. They will be holding the office of StatutoryAuditors up to the conclusion of the forthcoming Annual General Meeting.
In their place the Company is proposing to appoint M/s. PKF Sridhar & SanthanamLLP Chartered Accountants KRD Gee Gee Crystal 7th Floor 91-92 Dr. RadhakrishananSalai Mylapore Chennai - 600004 (Firms Registration No. 003990S / S200018) asStatutory Auditors for a period of 5 years commencing from the conclusion of the 74thAnnual General Meeting till the conclusion of the 79th Annual General Meeting. They havealso consented to the said appointment and confirmed that their appointment if madewould be within the limits mentioned under Section 141 (3) (g) of the Companies Act 2013and the Companies (Audit and Auditors) Rules 2014.
The Audit Committee and the Board of Directors recommed the appointment of M/s. PKFSridhar & Santhanam LLP Chartered Accountants KRD Gee Gee Crystal 7th Floor 91-92Dr. Radhakrishanan Salai Mylapore Chennai - 600004 as Statutory Auditors of the Companyfrom the conclusion of the 74th Annual General Meeting.
There are no qualifications or adverse remarks mentioned in the Auditors report.The notes to accounts forming part of financial statements are self-explanatory and needsno further clarification.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. V. Suresh Practising Company Secretary( C.P.No. 6032) Chennai to undertakethe Secretarial Audit of the Company. The Secretarial Audit Report in Form MR-3 is annexed(Annexure 4) to this report.
There is no Secretarial Audit qualification for the year under review.
The provisions of Cost Audit under Section 148 of the Companies Act 2013 are notapplicable to the Company.
During the year under review M/s. PSDY& Associates Chartered AccountantsErnakulamcarried out the internal audit of the company and submitted their reports.
Pursuant to Regulation 34(3) read with Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Management Discussion & AnalysisReport and Report on Corporate Governance with Certificate on compliance with conditionsof Corporate Governance have been annexed to this report( Annexures 5 & 6).
The Company continues to carry adequate insurance coverage for all assets.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arms length basis and were in the ordinary course of business and that theprovisions of Section 188 of the Companies Act 2013 are not attracted. Details of thetransactions are provided in Form AOC 2 which is attached as Annexure 7to thisreport.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant material orders passed by the Regulators/ Courts which wouldimpact the going concern status of the Company and its future operations.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexed(Annexure 8)
During the year under review your company enjoyed cordial relationship with workersand employees at all levels.
CORPORATE SOCIAL RESPONSIBILITY
The company does not fall within the ambit of the provisions of Section 135 of theCompanies Act 2013 regarding Corporate Social Responsibility and hence Annual Report onCorporate Social Responsibility (CSR) Activities is not annexed.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Board has constituted a Stakeholders Relationship Committee comprising of Mr.AjitThomas as Chairperson and Mr.A.D.Bopana as Member of the Committee. The Board hasdesignated Mr.T.M.Hari Kumar Company Secretary & CFO of the Company as the ComplianceOfficer.
RISK MANAGEMENT PLAN
Pursuant to Section 134 (3) (n) of the Companies Act 2013 and as per Regulation 17(9)(a) of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company had laid down the procedures to inform Boardmembers about the risk assessment and mitigation procedures.
Regarding the general risk the company follows a minimal risk business strategy asgiven below:-
|Particulars ||Risk Minimizing steps |
|Fixed Assets and Current Assets ||The company has taken adequate in- surance coverage of its fixed assets and current assets which will mini- mize the impact of another event or development |
|Financial Risk ||The company has a conservative debt policy. The debt component is very marginal |
|Foreign Exchange Risk ||Whenever there is an export the Foreign Exchange is covered at the time of confirmation of order so as to negate any fluctuation in the exchange rate |
|Credit risk on exports ||The credit is insured through Export Credit and Guarantee Corporation Limited (ECGC) |
Mr. T.M.Harikumar Company Secretary & CFO has been assigned the task of informingthe Board about the various risks and its mitigation by the Company from time to time.
At present the company has not identified any element of risk which may threaten theexistence of the Company.
As per provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the evaluation process for the performance ofthe Board its Committees and individual Directors were carried out internally. Each Boardmember completed a questionnaire providing feedback on the functioning and overall levelof engagement of the Board and its committees on the parameters such as the compositionexecution of specific duties contribution of new ideas/insights quality quantity andtimeliness of flow of information deliberations at the meeting independent approach indecision making etc.
The Independent Directors in their meeting held on February 10 2017 reviewed theperformance of the Board as a whole and noted that the Board has been meeting regularly asper requirements of the Companies Act 2013 and has been fulfilling all functions anddischarging the various requirements. The Board has also been ensuring compliance of theprovisions of all laws and rules and regulations framed thereunder as applicable to thecompany.
The Independent Directors also reviewed and were satisfied with the performance of theNon- Independent Director. The performance of the Chairperson of the company taking intoaccount the views of Executive Director and Non-Executive Director was also reviewed bythe Independent Directors and they were satisfied with the performance of the Chairpersonunder whose leadership and guidance the company has made great progress over the years.
DISCLOSURE OF ACCOUNTING TREATMENT
In the preparation of the financial statements the Company has followed the AccountingStandards referred to in Section 133 of the Companies Act 2013. The significantaccounting policies which are consistently applied are set out in the Note 1 to theFinancial Statements.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Act and that an Internal Complaints Committee has been set up for redressal ofcomplaints and that all employees (permanent contractual temporary trainees) arecovered under this policy.
During the year the company has not received any compliant under Sexual Harassment ofWomen at the Workplace (Prevention Prohibition &Redressal) Act 2013.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (3) ( c) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed that:
1. In the preparation of the accounts for the financial year ended 31st March 2017 theapplicable accounting standards had been followed along with proper explanation relatingto material departures;
2. The Directors have selected such accounting policies and applied them consistentlyand made judgments 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 of the Company for that period;
3. The Directors had taken proper and sufficient care 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;
4. The Directors have prepared the accounts for the financial year ended 31st March2017 on a going concern basis.
5. The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
6. The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
INTERNAL CONTROL SYSTEMS
The company has a proper and adequate system of internal controls to ensure that allassets are safeguarded and protected against loss from unauthorised use or dispositionand those transactions are authorised recorded and reported correctly. The Company has anextensive system of internal controls which ensures optimal utilization and protection ofresources IT security accurate reporting of financial transactions and compliance withapplicable laws and regulations as also internal policies and procedures. The internalcontrol system is supplemented by extensive internal audits regular reviews bymanagement and well documented policies and guidelines to ensure reliability of financialand all other records to prepare financial statements and other data.
The Directors sincerely acknowledge the contribution and support from customersshareholders Central and State Governments Bankers Securities Exchange Board of IndiaBSE Ltd Cameo Corporate Services Ltd. Central Depository Services Ltd. Registrar ofCompanies Tamil Nadu and other Government Authorities for the co-operation and assistanceprovided to the Company.
The Directors also place on record their gratitude to the employees for their continuedsupport commitment dedication and co-operation.
For and on Behalf of the Board of Directors
| ||Ajit Thomas |
|Chennai ||Chairman |
|30.05.2017 ||DIN : 00018691 |