The Directors of the Company present their 37th Annual Report and Company's AuditedAccounts for the year ended 31st March 2020.
The fiFinancial results for the year ended 31st March 2020 and the correspondingfigures for the last year are as under:
(Amount in Rs. Lakhs)
| || |
|2018-19 ||2018-19 |
|Pro t before Interest Deprecia on and Tax || ||481.80 || ||544.61 |
|Less: Finance Cost ||238.27 || ||245.42 || |
|Deprecia on & Amor za on Expense ||460.37 ||698.64 ||476.56 ||721.98 |
|Pro t/(Loss) a er Interest & Deprecia on but before Tax || ||(216.84) || ||(177.37) |
|Less: Tax Expense for Current Year ||- || ||- || |
|Income Tax for Earlier Years ||- || ||(1.32) || |
|Deferred Tax Provision/(Wri en Back) ||(77.24) ||(77.24) ||(105.12) ||(106.44) |
|Pro t/(Loss) from con nuing opera ons || ||(139.60) || ||(70.93) |
|Pro t/(Loss) before Tax from Discon nued opera ons ||22.69 || ||52.97 || |
|Less: Tax Expense of Discon nued opera ons ||17.07 || ||14.34 || |
|Pro t/(Loss) a er Tax from Discon nued opera ons || ||5.62 || ||38.63 |
|Other Comprehensive Income for the year (net of tax) || ||(52.37) || ||(65.49) |
|Total Comprehensive income for the year || ||(186.35) || ||(97.79) |
TRANSFER TO RESERVES
The Balance in Other Equity stands at Rs. 8500.21 Lakhs (Previous year Rs. 8686.56Lakhs). The Company has transferred Rs. Nil to General Reserve.
In view of the losses incurred by the Company your Directors have not recommended anydividend for the fiFinancial year ended 31st March 2020.
Impact of COVID-19 Pandemic
COVID-19 Pandemic has caused unprecedented economic disruption globally and in India.The Company is sensitive about the impact of the Pandemic not only on the human life buton businesses and industrial activity across the globe which will be realised only overnext few months. The Company has been monitoring the situation closely and has takenproactive measures to comply with various directions / regulations / guidelines issued bythe Government and local bodies to ensure safety of workforce across all its factories andoffices. The Company has taken various safety for the safety of all employees..
The Central Government the State Governments and the local Municipal Authorities havebeen announcing lockdowns to contain COVID-19 outbreak and the same has been adhered to.
The extent to which the COVID-19 pandemic will impact the Company's results will dependon future developments which are highly uncertain including among other thingsevolving impact on bill collections from consumers and support from respective StateGovernments and banks & fiFinancial institutions. The Company has incurred substantiallosses due to lockdown. However the impact of Covid-19 situation on the Company'sbusiness is not immediately ascertainable at this stage. It is difficult to ascertain theactual loss but the Company has incurred heavy cash losses.
During the year under review your Company achieved a production of 23.06 lakh kgs ofBlack Tea as compared to 21.06 lakh kgs in the previous year due to the closure of teaestate on account of National Lockdown with effect from 24th March 2020. The salesrealization for the year under review were sluggish as supply was high and correspondinglydemand did not move up.
The production of teas during the current year is expected at about 20 Lakh Kgs whichis down due to the lockdown which continued upto 11th April 2020 restricted deploymentof workforce as per Government directive and skiffing and pruning of overgrown tea busheswhich yielded no crop for the next 3-4 weeks post lock down. Requisite steps have beentaken by the management to minimize the crop loss.
Your Company is taking necessary steps for manufacturing Quality teas . The tea marketshave been very buoyant due to shortage of teas and have led to favourable demands frompacketers in the domestic market. The division is expected to perform significantly betterin the coming year.
The Textile unit i.e. Asarwa Mills in Ahmedabad remained closed w.e.f. 24th March 2020due to the impact of CoVID-19 in Gujarat. The Textile unit has resumed work as per theState Government directives w.e.f. 1st June 2020 and detail assessment of loss is beingundertaken.
The year under review has been a difficult one for this division. The markets for ourproducts were extremely sluggish due to which the capacity utilization went down andaffected the margins of the the division adversely. Currently the effects of COVID -19 arestill being felt as garments sales are down to around one third of normal levels. It willtake time for markets to stabilize and this will have adverse impact on our operations. Wehave taken steps to shut the weaving division and also reduce costs and other overheads tominimize the losses of this division.
Land & Building at Asarwa House
In order to strengthen the Cashflows of the Company we have entered into a contractwith Shivalik Group of Companies for purchase of company's bunglow situated at AsarwaHouse Dr. Balwantrai Mehta Marg Shahibaug Ahmedabad Gujarat at a price of 31 Croreswhich was placed before the Board of Directors at their meeting held on 8th February2020. However no material progress could be achieved due to the current situations. Asand when the COVID 19 situation in India improves we are hoping for progress on thisfront.
Subsidiary of Rydak Enterprises & Investment Limited
The Company is a subsidiary of Rydak Enterprises & Investment Limited (CIN:U15491WB1983PLC036235) Promoter with a holding of 5060870 equity shares i.e. 56.19% ofthe total Share Capital of the Company.
MATERIAL CHANGES OCCURRED BETWEEN THE END OF THE FIFINANCIAL YEAR UNDER REVIEW AND THEDATE OF THE REPORT
Except those disclosed in this Annual Report there are no material changes andcommitments affecting the fiFinancial position of the Company which have occurred betweenthe end of the fiFinancial year to which the fiFinancial statements relate and the date ofthe report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder the "Listing Regulations" is set out in the annexure forming part of theAnnual Report marked as Annexure "A".
CORPORATE GOVERNANCE REPORT
The Report on Corporate Governance in accordance with the Listing Regulations approvedby the Board together with a Certificate from Mr. H.M. Choraria (CP No. 1499 MembershipNo. FCS 2398) of M/s H.M. Choraria & Co. Practising Company Secretaries of 14/2 OldChina Bazar Street 4th Floor Room No. 401 Kolkata 700 001 regarding compliance withthe conditions of Corporate Governance are set out in the annexure forming part of theAnnual Report marked as Annexure "B".
Your Company has taken adequate steps for strict compliance with Corporate Governanceguidelines as amended from time to time.
EXTRACTS OF THE ANNUAL RETURN
An extract of the Annual Return in Form MGT-9 as required under Section 92 of theCompanies Act 2013 ("the Act") is annexed as Annexure "C" whichforms an integral part of this Report and is also available on the Company's website viz.www.bengaltea.com
During the year under review 4 (four) meetings of the Board of Directors were held on25th May 2019 10th August 2019 9th November 2019 and 8th February 2020.
Apart from meeting of the Board of Directors different committees met several timesduring fiFinancial year ended 31st March 2020.
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 FiFinancial Year ended 31st March2020 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 fiFinancial year and of theloss 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 fiFinancial controls relating to fiFinancial matters tobe followed by the company and that such internal fiFinancial controls are adequate andwere 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.
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectivelyhave been duly followed by the Company.
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) andMr. Ashutosh Bhagat (DIN: 00059842) have given declaration confirming that they complywith the requirements of Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the Listing Regulations. In the opinion of the Board the Independent Directorsfulfill the conditions of independence specified in Section 149(6) of the Act andRegulation 16(1) (b) of the Listing Regulations. The Independent Directors have alsoconfirmed that they have complied with the Company's Code of Conduct.
Mr. Samveg A Lalbhai (DIN: 00009278) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment in compliance with theprovisions of the Companies Act 2013.
Mr. Navin Nayar (DIN: 00136057) and Mr. Ashutosh Bhagat (DIN: 00059842) IndependentDirectors of the Company are being re-appointed as Independent Directors for a furtherperiod of five consecutive years as per the provisions of Section 149 and other applicableprovisions of Companies Act 2013. The Board recommends their re-appointment asIndependent 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 Listing Regulations has been provided in the Explanatory Statement andAnnexure to the Notice of the 37th 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 Khandelwal (DIN: 00914834) Wholetime Director
c) Mr. Atul Doshi Chief FiFinancial Officer
d) Mrs. Sunita Shah Company Secretary
Remuneration and other details of the KMP's for the year ended 31st March 2020 arementioned in the Extracts of the Annual Return attached as Annexure "C" andforms a part of the Report of the Directors.
NOMINATION & REMUNERATION POLICY
Pursuant to Section 178(3) of the Companies Act 2013 Nomination and RemunerationCommittee ("NRC") formulated the criteria for determining qualificationpositive attributes and independence of a director. The Committee has also recommended tothe Board a policy relating to the remuneration for directors key managerial personnelSenior Management of the Company and other employees. The Policy broadly lays down theguiding principles philosophy and the basis for payment of remuneration to Executive andNon-executive Directors (by way of sitting fees and commission) Key Managerial PersonnelSenior Management and other employees. The policy also provides for appointment of KeyManagerial Personnel / Senior Management and performance evaluation which are consideredby the Nomination and Remuneration Committee and the Board of Directors while makingselection of the candidate.
The details of the Nomination and Remuneration Policy is available at the website ofthe company www.bengaltea.com. The weblink for the same ishttp://bengaltea.com/wp-content/uploads/2017/08/Nomination-Remuneration-Policy_6.02.2016-min.pdf
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.Listing Regulations vide Regulation 25(3) requires a meeting of Independent Directors toevaluate the performance of the Non Independent directors.
Accordingly a meeting of the Independent Directors was held on 8th February 2020wherein the performance of the non-independent directors including the Chairman wasevaluated. The annual performance evaluation of all the directors and the Board as a wholewas conducted based on the criteria and framework adopted by the Board. The Board ofDirectors expressed their satisfaction with the evaluation process. The evaluationprocess has been explained in the Corporate Governance Report section in this AnnualReport. The NRC has also reviewed the performance of individual directors based on theirknowledge of preparation effective participation in meetings understanding of theirroles as director etc.
During the year 2019-20 your Company did not accept/renew any deposits and as such noamount of principal or interest was outstanding as on 31st March 2020.
AUDITORS AND AUDITORS' REPORT
M/s Singhi & Co. (Firm Regn. No. 302049E) Chartered Accountants were appointed asStatutory Auditors of the Company to hold office for a period of 5 years from theconclusion of the 34th Annual General Meeting till the conclusion of the 39th AnnualGeneral Meeting of the Company. The Company has received letter from the Auditors to theeffect that their appointment is within the prescribed limits under the Companies Act2013 and that they are not disqualified.
The Notes on FiFinancial 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.
REPORTING OF FRAUDS BY AUDITORS
During the year under review neither the statutory auditors nor the secretarialauditors has reported to the Audit Committee under Section 143(12) of the Companies Act2013 any fraud committed against the Company by its officers or employees the details ofwhich need to be mentioned in the Board Report.
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 of Investments under Section 186(1) of theCompanies Act 2013 have been provided at Note No. 12 of the FiFinancial Statements forthe year ended 31st March 2020.
PARTICULARS OF RELATED PARTY TRANSACTIONS
During the year there were no material related party transactions with promoters thedirectors or the management their subsidiaries or relatives etc. by your Company that mayhave a potential conflict with the interest of the Company. Accordingly the disclosure ofrelated party transactions as required under Section 134(3)(h) of the Companies Act 2013in Form AOC 2 is not applicable to your Company. All Related Party Transactions are placedbefore the Audit Committee for approval. Omnibus approval is obtained on a yearly basisfor transactions which are of repetitive nature.
The Company has formulated a policy on Related Party Transactions. The link of thepolicy is http://bengaltea.com/wp-content/uploads/2019/03/Related-Party-Transaction-policy_OCR.pdf
All related party transactions entered during the FiFinancial Year 2019-20 were in theordinary course of the business and on arm's length basis which have been provided in theNotes to the Accounts.
Disclosures of transactions of the Company with any person or entity belonging to thepromoter/promoter group which hold(s) 10% or more shareholding in the Company.
The disclosures of transactions of the Company with any person or entity belonging tothe promoter/ promoter group which hold(s) 10% or more shareholding in the Company isgiven in Note No. 46 of the Notes to the FiFinancial Statements.
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 and accordingly such accounts are made and records have beenmaintained relating to Tea and Textile Divisions every year.
PARTICULARS OF COST AUDITORS APPOINTED FOR THE FIFINANCIAL YEAR 2019-20
The Company has appointed the following Cost Auditors for Tea & Textile Divisionfor the year ended 31st March 2020:
|Details of Cost Auditor ||Unit Audited |
|Name: N.D. Birla & Co. ||Texle Division- |
|Address: A-3 Nirant Apartment Opposite Town Hall ||Bengal Tea & Fabrics Ltd. |
|Near Karnava Hospital Ellisbridge Ahmedabad Gujarat- 380006 ||Asarwa Mills- Ahmedabad |
|Registraon No. alloed by ICWAI: 000028 || |
|Name: D. Radhakrishnan & Co. ||Tea Division- |
|Address: 11A Dover lane ||Bengal Tea & Fabrics Ltd. |
|Flat B1/34 Kolkata- 700029 ||Ananda Tea Estate- Assam |
|Registraon No. alloed by ICWAI: 000018 || |
The Board of Directors on the recommendation of Audit Committee have re-appointed theCost Auditors to audit the cost accounts relating to the Tea and Textile Division theCompany for the fiFinancial year 2019-20. As required under the Act a resolution seekingmember's approval for the remuneration payable to the Cost Auditor forms part of theNotice convening the Annual General Meeting for their ratification.
PARTICULARS OF EMPLOYEES
The Company had no employee who were in receipt of more than Rs. 1.02 Crores perannum during the year ended 31st March 2020 or of more than Rs. 8.5 Lakhs permonth during any part thereof. However the information required pursuant to Section 197of the Companies Act 2013 read with Rule 5(1) 5 (2) and 5 (3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 has been annexed 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) 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
Risk management is embedded in your Company's operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Company's approach toaddressing business risks is comprehensive and includes periodic review of such risks anda framework for mitigating controls and reporting mechanism of such risks. As perrequirement of Section 134(3)(n) of the Companies Act 2013 the Board of Directors in itsmeeting held on 10th May 2014 has approved the Risk Management Policy. As of now theDirectors do not envisage any element of risk which may threaten the existence of theCompany.
INTERNAL FIFINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has an adequate system of internal control procedures which are constantlyassessed and strengthened with new/revised standard operating procedures. The Company'sinternal control system is commensurate with the size and nature of business. The mainthrust of internal audit is to test and review controls appraisal of risks and businessprocesses besides benchmarking controls with best practices in the industry. Detailedprocedural manuals are in place to ensure that all the assets are safeguarded protectedagainst losses and all transactions are authorized recorded and reported correctly. Theinternal control systems of the Company were monitored and evaluated by the internalauditors and their audit reports were periodically reviewed by the Audit Committee. Theobservations and comments of the Audit Committee are placed before the Board and suitablesteps are taken to strengthen the controls.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to Section 135 of the Companies Act 2013 the Company has formed a CSRCommittee and formulated a CSR Policy. The details of the same have been annexed in theprescribed format as Annexure "G". The average net profit for last threeyears to current fiFinancial year 2019-20 was negative. Accordingly there was no CSRexpenditure for the current fiFinancial year.
TRANSFER OF UNPAID DIVIDEND AND SHARES 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 (IEPF)established by the Central Government under Section 125 of the said Act.
The Company has uploaded the details of unpaid and unclaimed amounts lying with theCompany as on 31st March 2020 on the Company's website (www.bengaltea.com) and also onthe Ministry of Corporate Affairs' website. The dividend for the undernoted years ifunclaimed for seven years will be transferred by the Company to IEPF:
|FiFinancial Year ||Date of Declaraon of Dividend ||Unclaimed Dividend as on 31.03.2020 (Rs.) |
|2012-13 ||03.08.2013 ||327903.00 |
|2013-14 ||09.08.2014 ||637958.00 |
|2014-15 ||08.08.2015 ||176878.50 |
|2015-16 ||01.08.2016 ||188796.00 |
|2016-17 ||NIL ||NIL |
|2017-18 ||NIL ||NIL |
|2018-19 ||NIL ||NIL |
Pursuant to the provision of Section 124 (6) read with Rule 6 of Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 (the"IEPF Rules") as amended all shares in respect of which dividend has/haveremained unpaid or unclaimed for consecutive seven years the corresponding shares shallalso be transferred in the name of Demat Account of IEPF Authority.
Accordingly 37939 equity shares against 632 folios corresponding to the dividend forthe year ended on 31st March 2013 which remains unclaimed for seven consecutive yearswill be transferred to Demat Account no. 1204720013676780 of IEPF Authority maintainedwith SBI CAP Securities Limited through Central Depository Services (India) Limited underIEPF RULES 2017 on 8th September 2020. Notice to the concerned shareholders andadvertisement in Newspapers has been given to all such shareholders to make an applicationto the Company / Registrar & Share Transfer Agents latest by 2nd September 2020 witha request for claiming the unpaid dividend so that the shares are not transferred to theIEPF.
The Company has uploaded the details of all shares transferred to Demat account of IEPFAuthority as on 31st March 2020 on the Company's website www.bengaltea.com.
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 2019-20:
No. of Complaints pending as on 1st April 2019: NIL 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 of the Company.