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Diana Tea Company Ltd.

BSE: 530959 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE012E01035
BSE 12:40 | 29 Jan 10.55 -0.54
(-4.87%)
OPEN

11.10

HIGH

11.10

LOW

10.55

NSE 05:30 | 01 Jan Diana Tea Company Ltd
OPEN 11.10
PREVIOUS CLOSE 11.09
VOLUME 8619
52-Week high 16.00
52-Week low 7.50
P/E 39.07
Mkt Cap.(Rs cr) 16
Buy Price 10.55
Buy Qty 42.00
Sell Price 10.69
Sell Qty 100.00
OPEN 11.10
CLOSE 11.09
VOLUME 8619
52-Week high 16.00
52-Week low 7.50
P/E 39.07
Mkt Cap.(Rs cr) 16
Buy Price 10.55
Buy Qty 42.00
Sell Price 10.69
Sell Qty 100.00

Diana Tea Company Ltd. (DIANATEA) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting their 108th Annual Report along with theAudited Accounts for the financial year ended 31stMarch 2019.

Financial Results

The summarized Financial results of your Company are given in the table below.

(Rs. in Lakhs)

Particulars

31st March 2019

31st March 2018
Revenue from Operations 6230.69 6086.02
Profit before taxation (149.23) 267.35
Tax Expense (30.73) 41.74
Profit for the year (118.50) 225.61
Other Comprehensive Income (net of tax) (11.58) (2.60)
Total Comprehensive Income (130.08) 223.01
Other Equity at year end 5242.38 5524.06

for the financial year ended on 31st March 2019 and 31st March2018.

Review of Performance

The year under review was extremely challenging from every perspective be it cropcost or realization. Our own crop for the year was down by 105814 kilograms whencompared to last year. This is partially due to embargo imposed on plucking as per TeaBoard directive and also due to unfavorable weather condition in the beginning of theyear. Our total crop for the year was 4082400 kilograms when compared to last year4009576 kilograms out of which our own production was 3175373 kilograms. viz a vizlast year was 3281187 kilograms and brought leaf production was 907027 kilograms. viza viz 728389 kilograms last year.

During the year Indian Tea production was approximately

1349 million kilograms against 1278 million kilograms last year. The increase in cropis majorly coming out of small tea growers which are mushrooming every year. This had ledto the poor sentiments prevailing in the market where there was hardly any priceappreciation in the quality segment whereas non quality segment majorly consisting ofBrought Leaf got hit the most. To add to the misery of organized sector of tea industrythe State Government has increased the wages from Rs. 132.50 to Rs. 176.00 that is 33%increase within one year which had major impact on the profitability of the tea companies.Inspite of our focus on producing higher quality of tea made out of our own produce andenhancing the capacity of brought leaf and manufacturing higher quantity of brought leafwe were unable to overcome the cost burden imposed on us due to extremely higher wages.Inspite of having one of the highest yields and favorable average age of the bush coupledwith regular developmental work in field and following prudent agricultural practicesyour company suffered a loss of Rs. 118.50 Lakhs.

Prospects

Current year looks to be equally challenging where North

Indian crop continues to be higher than last year till the month of May again majorcontribution coming from small growers. This has again led to bearish sentiment prevailingin the tea market. In addition to that world tea market is also on a declining trend. Onlypositive takeaway is that higher quantity of orthodox is being made by Assam planters andgood demand for quality tea by the packeters. However there are no major signs ofrerating of tea prices to take care of growing cost structure in organized tea industry.Your Company is leaving no stone unturned to pass through this headwind by followingcontinuous developmental work in field to further enhance our yields together withfocusing on producing quality tea. We also intend to produce higher quantity of Broughtleaf segment to offset the cost burden and optimize operational costs. Your Company hasbeen taking full advantage of various subsidies being provided by the Tea Board and isfollowing PPC code prescribed by the Tea Board. Your Company is also in the process ofgetting Trustee certification done in near future.

With the advantages of having a higher yield coupled with better average salesrealization over most of our peers.

We are hopeful of turning around the company in coming years.

Change in nature of Business if any

There has been no change in the nature of business and the Company continues toconcentrate on their own business.

Transfer to Reserves

Your Directors proposed not to transfer any amount to General Reserves.

Transfer from Reserves

Your Directors proposed to transfer a sum of Rs.150.00 Lakhs from the General Reserves.

Dividend

Due to losses and in order to conserve the resources of the Company for future growthand survive in the tough Industrial scenario the Board of Directors have not recommendedany dividend for the Financial Year 2018-19.

Details of Board meetings

During the Financial Year 4 Board meetings were held details of which are givenbelow:

Date of the meeting No. of Directors attended the meeting
28.05.2018 4
13.08.2018 4
14.11.2018 4
14.02.2019 4

Share Capital

During the financial year ended 31st March 2019 there has been no change in the issuedand subscribed capital of your Company. The outstanding capital as on 31st March 2019 isRs. 749.55 lakhs comprising of 14991000 equity shares of Rs. 5/- each.

Extract of Annual Return

The extract of Annual Return pursuant to the provisions of

Section 92(3) of the Companies Act 2013 read with Rule 12 of the Companies (Managementand Administration) Rules 2014 forming a part of this Report attached as Annexure“A”.

Committees of Board

The details of composition of the Committees of the Board of Directors are as under:-a.Audit Committee

Name Chairman/
Members
1. Mr. H.M. Parekh Chairman
2. Mr. Sandeep Singhania Member
3. Mr. Gautam Bhalla Member
4. Mr. N.F Tankariwala Member

The Terms of Reference of the Audit Committee has been provided in the CorporateGovernance Section forming part of this Report. During the financial year the Committeehad met 4 times as on May 28 2018 August 13 2018 November 14 2018 and February 142019.

Recommendation by audit committee:

There is no such recommendation of audit committee which has not been accepted by theBoard during the said financial year.

Vigil Mechanism

The Company has formulated the codified Whistle Blower Policy incorporating theprovisions the Vigil Mechanism in terms of Section177(9) & (10) of the Companies Act2013 and Regulation 22 of SEBI (Listing Obligation & Disclosure Requirements)Regulations2015 and SEBI (Prohibition of Insider Trading) (Amendment) Regulations 2018 in order to encourage Directors and Employees of the Company to escalate to the level ofthe Audit Committee any issues of concern impacting and compromising with the interest ofthe Company and the Stakeholders in any way and to prevent leak of Unpublished PriceInformation. The Company has also made provisions for adequate safeguards againstvictimization of its employees and Directors who express their concerns. The Chairman ofAudit Committee can directly by any employee for reporting issues which need to be broughtto the notice of the Board. The said policy was revised on 14th February 2019.The VigilMechanism / Whistle Blower Policy of the Company has been uploaded on the website of theCompany: www.dianatea.in .

b. Nomination &

Name Chairman/ Members
1. Mr. H.M Parekh Chairman
2. Mr.N.F. Tankariwala Member
3. Mr. Gautam Bhalla Member

The Terms of Reference of the Committee has been provided in the Corporate GovernanceSection forming part of this Report. During the financial year the Committee had met 2times as on August 13 2018 and February 14 2019.

c. Stakeholders Relationship Committee

Name Chairman/ Members
1. Mr. N.F.Tankariwala Chairman
2. Mr. Gautam Bhalla Member
3. Mr.Sandeep Singhania Member
4. Mrs. Sarita Singhania Member

The Terms of Reference of the Committee has been provided in the Corporate GovernanceSection forming part of this Report. During the financial year the Committee hadmet4timeson May 28 2018 August 13 2018 November 14 2018 and February 16 2019.

Corporate Social Responsibility (CSR)

Your Company considers Corporate Social Responsibility as an important aspect of doingbusiness. As a good corporate citizen your Company shall initiate appropriate actiontowards various social causes in the future. Presently the provisions of Section 135 ofthe Companies Act 2013 are not applicable to the Company.

Management Discussion and Analysis

As per SEBI (Listing Obligations & Disclosure Requirements)

Regulations 2015 Management Discussion and Analysis Report is attached as Annexure“B” forming part of this report.

Directors' Responsibility Statement

Pursuant to the requirement of clause (c) of sub-section (3) and (5) of Section 134 ofthe Companies Act 2013 your Directors confirm that:

(a) in the preparationof the annual accounts for the financial year ended 31st March2019 the applicable accessed accounting standards had been followed along with properexplanation relating to material departures except gratuity liability being accounted foras and when paid/payable;

(b) the directors had 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 Committee company for the financial yearended 31st March 2019 and of the profit and loss of the company for that year;

(c) the directors had 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 preventingand detecting fraud and otherirregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Corporate Governance

Your Company attaches considerable significance to good Corporate Governance as animportant step towards building investor confidence improving investor's protection andmaximizing long term shareholders value.

The certificate of the Auditors confirming compliance of conditions of CorporateGovernance as stipulated under Regulation 34 read with Schedule V(E) of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 of the Stock Exchange is annexed as Annexure “C”.

Related party transactions

The related party transactions entered during the year were in ordinary course ofbusiness and also on arm's length basis in compliance with the applicable provisions ofthe Companies Act 2013 and Listing Regulations. There are no materially significantrelated party transactions made by the Company with Promoters Directors or Key ManagerialPersonnel etc. which may have potential conflict of the interest with the Company atlarge. All related party transactions are presented to the Audit Committee and the Boardif required for approval. Omnibus approval is obtained for the transactions which areforeseen and repetitive in nature. The said policy was revised on 14th February 2019. TheRevised Policy on Related Party Transactions as approved by the Board is uploaded on theCompany's web link: www.dianatea.in/Policy-on-Related-Party-transactions_7.pdf.

Details of conservation of energy technology absorption foreign exchange earnings andoutgo

The particulars as prescribed under sub-section (3)(m) of the Section 134 of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 are givenat Annexure “D” to the Directors' Report.

Particulars of Employees

The ratio of the remuneration of each Director to the median employee's remunerationand other particulars or details of employees pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended are attached to this Report as

Annexure “E”.

There are no directors who is in receipt of any commission from the company as well asfrom its holding company as per section 197 (14) of the Companies Act 2013.

Annual Evaluation of Board's Performance

During the financial year the Board evaluated its own performance as well as that ofits Committees and individual Directors. The exercise was carried out covering variousaspects of the Boards functioning such as composition of the Board & committeesqualification experience & competencies performance of specific duties &obligations governance issues etc. Separate exercise was carried out to evaluate theperformance of Non-Independent Directors. The performance of Independent Directors hasbeen evaluated based on the guidelines as provided under Schedule IV of the Act. Theevaluation of the Independent Directors was carried out by the entire Board except by theDirector being evaluated. The directors were satisfied with the evaluation results whichreflected the overall engagement of the Board and its Committees with the Company.

Auditors and Audit Report

M/s. B. Nath & Co. Chartered Accountants having registration number FRN No.307057Ewere appointed as statutory Auditors of the Company in the 107th Annual General Meeting tohold office for a term of 5(Five) years from the Conclusion of 107th Annual GeneralMeeting till the conclusion of the 112th Annual General Meeting. Pursuant to theamendments made to Section 139 of the Companies Act 2013 by the Companies (Amendment)Act 2017 effective from May 7 2018 the requirement of seeking ratification of theMembers for the appointment of the Statutory Auditors has been withdrawn from the Statute.Hence the resolution seeking ratification of the Members for continuance of theirappointment at this AGM is not being sought. The Statutory Auditors hold a valid peerreview certificate as prescribed under Regulation 33(1)(d) of SEBI Listing Regulations2015.

Further the report of the Auditors along with notes to Schedules is enclosed to thisreport. The observations made in the Auditors' Report are self-explanatory and thereforedo not call for any further comments. Further the Statutory Auditors have not reportedany incident of fraud during the year under review to the Audit Committee of your Company.

Secretarial audit

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 M/s. MR & Associates Company Secretaries In Practice (CP No.2551) toundertake the Secretarial Audit of the Company for the financial year ending 31st March2019. The Secretarial Audit Report for the financial year ended 31st March 2019 isannexed herewith as Annexure “F” to this Report. The Secretarial

Audit Report is self-explanatory and does not contain any adverse qualificationreservation or remark.

Cost Audit

As per Section 148 of the Companies Act 2013 read with Rule 4 of Companies (CostRecords and Audit) Rules 2014 the Company is required to maintain cost records for thefinancial year 2019-2020 and accordingly such accounts and records are made andmaintained. However the Company is not required to appoint Cost Auditor to conduct theaudit of cost records for the financial year 2019-2020.

Human Resources

Your Company treats its “human resources” as one of its most importantassets. The Company has a large work force employed at the tea estates. There were nomajor disruptions of work at the garden or any other establishment of the Company duringthe period under review. The correct recruitment practices are in place to attract besttalent. Industrial Relations at all the units remained satisfactory.

Material changes and commitments if any affecting the Financial Position

No material changes and commitments have occurred during the financial year 2018-19which might affect the financial position of the company.

Disclosure under Sexual Harassment of women at workplace (Prevention Prohibition &Redressal) Act 2013

Your Company is committed to provide a work environment which ensures that every womanemployee is treated with dignity respect and equality. There is zero-tolerance towardssexual harassment and any act of sexual harassment invites serious disciplinary action.

Your Company hereby declares that it has complied with provisions relating to theconstitution of Internal Complaints Committee of Woman at Workplace (PreventionProhibition and Redressal) Act 2013 . No complaint has been brought to the notice of theManagement during the financial year ended on 31st March 2019.

Risk Management

In terms of the requirement of the Companies Act 2013 and Listing Regulations theCompany has developed and implemented the Risk Management Policy. The Company has takenadequate measures to mitigate various risk encountered. In the opinion of the Board thereis no such risk which may threaten the present existence of the Company.

Declaration by independent directors

Necessary declarations have been obtained from all the Independent Directors that theymeet the criteria of Independence as laid down under Section 149(6) of the Companies Act2013 and Regulation 16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (including any statutory modification(s) or re-enactment(s) thereof forthe time being in force).

Remuneration Policy

The remuneration policy of the Company aims to attract retain and motivate qualifiedpeople at the Board levels.

The remuneration policy seeks to employ people who not only fulfill the eligibilitycriteria but also have the attributes needed to fit into the corporate culture of thecompany. The remuneration policy is consistent with the ‘pay-for-performance'principle. The Company has formulated Criteria for making payment to Non ExecutiveDirectors which is available in Company's weblink: http://www.dianatea.in/Criteria%20of%20making% %20to%20non-executive%20directors_6.pdf.

Executive Directors

The Nomination and Remuneration Committee takes into account experience qualificationand prevailing industry practices before giving its recommendation to the Board.

On recommendation of the Nomination and Remuneration Committee the Board decidesremuneration to be paid to Executive Directors subject to approval of shareholders interms of provisions of the Companies Act 2013 read with Schedule V thereof. TheCommittee aims towards rewarding on the basis of performance and reviews on a periodicalbasis.

Non-Executive Directors

The Company has formulated Criteria for making payment to Non Executive Directors whichis available in Company's weblink:http://www.dianatea.in/Criteria%20of%20 making %%20to%20non-executive%20directors_6.pdf. As per the criteria Non-Executive Directors arepaid sitting fees for attending the meetings of the Board of Directors and Committees.

Details of Significant and material orders passed by the Regulators/ Courts/ Tribunalsimpacting the going concern status and the Company's operations in future.

There were no significant and material orders passed by the regulators or courts ortribunals that would impact the Going concern Status and or will have any bearing onCompany's Operations in future.

Transfer to Investor Education and Protection fund

Your Company has subsequent to year end transferred a sum of Rs. 1.88 lacs and 109530shares to Investor Education and Protection Fund in compliance with the provisions ofSection 124 125 and other applicable provisions of the Companies Act 2013 read withInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016.

The said amount represents dividend for the year 2010 which remain unclaimed for aperiod of 7 years from its due date of payment.

Internal financial controls systems with reference to the financial statement

Your Company has adequate Internal Financial Control

System at all levels of Management and they are reviewed from time to time. TheInternal Audit is carried out in house as well as by a firm of Chartered Accountants. TheAudit Committee of the Board looks into Auditor's review which is deliberated upon andcorrective action taken wherever required.

Subsidiaries Joint Venture or Associate Companies

Your Company continues to be the Subsidiary of Diana Capital Limited. Further theCompany has no subsidiaries joint venture and associates for the financial year ended31st March 2019.

Particulars of Loans Guarantees and Investments

The particulars of loans guarantees or investments made under section 186 of theCompanies Act 2013 are covered in the notes to accounts of the Financial Statement for theyear ended 31st March 2019 forming part of this Annual Report.

Directors

As per provisions of Section 152 of the Companies Act 2013 read with Companies(Appointment and Qualifications of Directors) Rules 2014 Mr. Sandeep Singhania (DIN00343837) is liable to retire by rotation at the forthcoming Annual General Meeting andbeing eligible offers himself for reappointment. The Board recommends his reappointmentas a Director liable to retire by rotation. There has been no change in the Composition ofthe Board of Directors during the Financial year 2018-19.

Key Managerial Personnel

There has been no change in the Composition of the Key Managerial Personnel of theCompany during the Financial Year 2018-19.

Ms. Anushree Biswas was appointed as Company Secretary & Compliance Officer of theCompany with effect from 13th August 2019.

Ms. Namrata Jain designated as Company Secretary & Compliance Officer of theCompany resigned from the post with effect from 26th June 2019.

Mr. Ramesh Kumar Jhunjhunwala Chief Financial Officer of the Company was appointed asCompliance Officer of the Company with effect from 27th June 2019.

Deposits

Your Company has not accepted any deposits within the meaning of Section 73 and 76 ofthe companies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014.

Compliance of Secretarial Standards

The Company complies with all applicable Secretarial Standards.

Acknowledgement

Your Directors place on record their appreciation for employees at all levels who havecontributed to the growth and performance of your Company. Your Directors also thank theclients vendors bankers shareholders and advisers of the Company for their continuedsupport. Your Directors also thank the Central and State Governments and other statutoryauthorities for their continued support.

For and on behalf of the Board

Sd/- Sd/-
Sandeep Singhania Sarita Singhania
Managing Director

(Whole-time Director)

(DIN: 00343837)

(DIN: 00343786)

Registered Office

3B Lalbazar Street

Kolkata - 700 001

Date : 13th August 2019