The Members of the Company.
The Board of Directors of the Company submits the Twentieth Annual Audited Accounts forthe year ended 30th September 2014 :
|FINANCIAL RESULTS || ||(Rs. in lacs) |
| ||Current Year ||Previous Period (18th Months) |
|Profit/(Loss) before interest depreciation exceptional items and tax ||(969) ||405 |
|Finance Cost ||(1802) ||(2575) |
|Depreciation ||(298) ||(448) |
|Profit/(Loss) before tax ||(3069) ||(2618) |
|Tax expenses ||- ||- |
|Profit/(Loss) for the year ||(3069) ||(2618) |
The Company is a sick industrial company within the provisions of the Sick IndustrialCompanies (Special Provisions) Act 1985 (SICA) and the Rehabilitation Scheme sanctionedby the Hon'ble BIFR is under the process of implementation. As per the provisions of theScheme no dividend on Preference and Equity Share capital is permissible.
REHABILITATION SCHEME :
The Rehabilitation Scheme of the Company as sanctioned by the Hon'ble BIFR vide itsorder dated 16th January 2012 is under implementation. As reported in the earlieraccounts pursuant to the said Scheme the Fertilizer Undertaking had been de-merged andtransferred to Kanpur Fertilizers & Cement Ltd (KFCL) with effect from 1st October2010 leaving the tea operations with the Company.
PERFORMANCE OF THE COMPANY
In view of a severe drought in North Bengal during the beginning of the season thisyear the Company was lagging behind its estimated production. The first significantrainfall was received as late as in the first week of May 2014 and that too it was notwidespread. Plucking was suspended at almost all the Company's tea gardens during themonth of April 2014 due to non-availability of leaf.
The revenue from operations for the year ended 30th September 2014 was Rs.184.58crores as against Rs.262.10 crores in the previous eighteen months period. Own crop duringthe year was 129.80 lac kgs of tea as against production of 220.81 lac Kgs. of tea in theeighteen months of the previous period. 127.81 lac kgs of tea was sold at an average priceof about Rs.144.42 per kg in the current year as compared to sales of 181.29 lac kgs inthe previous eighteen months period at an average price of Rs.144.71 per kg. Continuingadverse weather conditions in successive years in the Dooars and Terai areas caused thecrop of the Company to be behind the targets. The increase in selling price did notimprove the profitability due to lower production of tea hike in the wage cost of labourpursuant to Memorandum of Settlement (MOS) arrived at amongst the Tea Association TeaPlantation Workers Unions and the West Bengal Government on 4th November 2011 and adverseimpact of the steep increase in the cost of coal fuel oil electricity fertilizers agrochemicals etc. The MOS with the workers which was executed for three years period isnow due for a fresh agreement effective from 1st April 2014 onwards.
Overall prospect of the tea business appears to be encouraging with a strong demand forCTC teas in which the Company is engaged predominantly.
The management has taken steps to revamp the operations of the tea business. Workingcapital is being augmented and the current year capital expenditure will improve long termprospects in generating future profitability. The Company is in the process of replacinghigh cost coal with alternative fuels i.e. waste wood/biomass etc. Modernization ofspraying equipments are under process which will reduce pest control cost. Application oforganic fertilizers is under consideration. Priority is also given for uprooting andreplanting of age old tea bushes in the tea estates of the Company to improve long termprospects. Extensive replanting done over the last three years will have a large bearingon crop in the immediate future.
With the efforts already undertaken barring unforeseen circumstances it is expectedthat performance of the tea business of the Company will improve significantly.
Pursuant to the Scheme sanctioned by the Hon'ble BIFR the Company has refunded fixeddeposits in settlement of the dues of fixed deposits holders and as on 30th September2014 refund warrants for 5428 fixed deposit holders aggregating to Rs.608.98 lacs remainun-encashed and requisite amounts are lying with the Bank for this purpose.
BOARD OF DIRECTORS
In terms of the provisions of the Companies Act and the Company's Articles ofAssociation Mr. Shrivardhan Goenka shall retire by rotation and being eligible offershimself for re-appointment. The Board has appointed Mr. Rajesh Sharma as Managing Directorof the Company for a period of three years with effect from 27th September 2014. Mr. M.H.Chinoy who was appointed as Wholetime Director of the Company with effect from 1stJanuary 2014 will cease to be a Wholetime Director at the close of business hours on31st December 2014 being unable to continue as such. However considering his longassociation with the Company the Board will retain his service as Non-Executive Directorof the Company effective from 1st January 2015. The Board recommends theappointment/re-appointment of the aforesaid Directors at the ensuing Annual GeneralMeeting.
Pursuant to Section 149 and other applicable provisions of the Companies Act 2013 theBoard of Directors is seeking appointment of Mr. T.S. Broca Mr. R.K. Bhargava Mr. D.Sengupta and Dr. A.L. Ananthanarayanan as Independent Directors for a term of fiveconsecutive years i.e. upto the conclusion of the Twenty Fifth (25th) Annual GeneralMeeting to be held in the calendar year 2019. Details of the proposal for appointment ofMr. Broca Mr.Bhargava Mr. Sengupta and Dr. Ananthanarayanan have been mentionedin Statement pursuant to Section 102 of the Companies Act 2013 in the Notice of AnnualGeneral Meeting. The aforesaid directors fulfill the conditions specified in the CompaniesAct 2013 and rules made thereunder for their appointment as Independent Directors.
The Board is of the opinion that their continued association as Independent Directorsshall immensely benefit the Company. The Board recommends their appointment as IndependentDirectors by the shareholders.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
Vide General Circular No.2/2011 dated 8th February 2011 the Ministry of CorporateAffairs (MCA) Government of India has granted a general exemption to companies fromattaching the Balance Sheet Statement of Profit and Loss and other documents referred toin Section 212(1) of the Companies Act 1956. Accordingly the said documents are notbeing attached with the Balance Sheet of the Company. A statement containing brieffinancial details of the subsidiary companies for the year ended 31st March 2014 isincluded in the Annual Report.
As required under the Listing Agreement entered into with the Stock Exchange aConsolidated Financial Statement of the Company along with all its subsidiaries isattached. The Consolidated Financial Statement has been prepared in accordance with therelevant Accounting Standards. These Financial Statements disclose the assetsliabilities income expenses and other details of the Company and its subsidiaries.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder Clause 49 of the Listing Agreement with the Stock Exchange is presented in aseparate section forming part of this Report.
A Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreemententered into with the Stock Exchange is annexed forming part of this Report. Acertificate from the Statutory Auditors confirming compliance of conditions of CorporateGovernance as stipulated under the said Clause 49 is annexed forming part of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy technology absorption and foreignexchange earnings and outgo under Section 217(1)(e) of the Companies Act 1956 read withthe Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules1988 has been provided in the Annexure forming part of this Report.
PARTICULARS OF EMPLOYEES
The Company continued to have cordial and harmonious relations with its employees atall levels.
Particulars of employees as required under Section 217 (2A) of the Companies Act 1956read with the Companies (Particulars of Employees) Rules 1975 as amended are given inthe Annexure to this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217 (2AA) of the Companies Act 1956 theDirectors hereby confirm that :
(i) in the preparation of the Annual Accounts for the year ended 30th September 2014the applicable Accounting Standards have been followed along with proper explanations andthere are no material departures ;
(ii) such accounting policies as were reasonable and prudent were selected in preparingthe accounts and these were applied consistently. Further judgments and estimates thatwere reasonable and prudent were also applied in the course of preparing the accounts soas to give a true and fair view of the state of affairs of the Company as at the end ofthe financial year and of the loss of the Company for the year ended 30th September 2014;
(iii) proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 1956 for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;
(iv) the annual accounts have been prepared on a going concern basis.
MAINTENANCE OF A WEBSITE
The Website of the Company is functioning.
LISTING OF EQUITY SHARES
The Company's equity shares are listed with The National Stock Exchange of India Ltd(NSE) as well as traded in the BSE Ltd. The Company has paid the requisite listing fee tothe Stock Exchange where the shares of the Company are listed.
The Statutory Auditors Messrs Lodha & Co. Chartered Accountants who wereappointed at the last Annual General Meeting held on 30th December 2013 have expressedtheir willingness for re-appointment as Statutory Auditors at the ensuing AGM.
The Board on the recommendation of the Audit Committee has recommended there-appointment of Messrs Lodha & Co. Chartered Accountants as Statutory Auditors fora consecutive period of three years in accordance with Section 139 of the Companies Act2013. The said Auditors have confirmed that their appointment if made shall be withinthe limit laid down under the relevant provisions of the Companies Act. Appropriateresolution seeking approval of the members to the said re-appointment is appearing in theNotice convening 20th AGM of the Company.
The observations in the Auditors Report have already been explained in the Notesforming part of the Financial Statements and further clarified as under :
Para 4(I)(a)-Outstanding long term loans and Advances have been explained in Notes10(a)(i) and 10(b)(i) to the financial statements. These are group company advances givenfor strategic reasons and can only be dealt with in terms thereof. Para 4(I)(b)-Regardingnon-ascertainment of impact of wage revision pending negotiation thereof has beenexplained in Note 19(i) to the financial statements. Para 4(I)(c)-Pursuant to the decisionof the Hon'ble High Court at Calcutta in similar matter with regard to levy of salamiunder certain circumstances the Company has filed an appeal against the imposition ofsalami before the appropriate authority has been explained in Note 26 to the financialstatements. Para 4(I)(d)-As regards managerial remuneration necessary applications arepending for approval before MCA as explained in Note 27 to the financial statements.Pending approval the note and qualification is consequential in nature. Para 4(I)(e)-Weare in the process of obtaining confirmations of debit and credit balances includingadvances trade receivables trade payables and other liabilities and necessary effectswill be given on reconciliation thereof as explained in Note 28 to the financialstatements.
The Directors of the Company wish to place on record their gratitude to the variousdepartments of the Central Government Government of West Bengal banks shareholdersvendors customers and employees for their continued support.
| ||For and on behalf of the Board |
|Place : Kolkata ||G. P. Goenka |
|Dated : 18th November 2014 ||Executive Chairman |
DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
| ||Year ended 30th September 2014 (12 months) ||Period ended 30th September 2013 (18 months) |
|Power and Fuel Consumption || || |
|Electricity || || |
|a) Purchased Units ('000 kwh) ||15179.73 ||23671.57 |
|Total Amount (Rs./Lakhs) ||1503.86 ||2166.11 |
|Rate/Unit (Rs./kwh) ||9.91 ||9.15 |
|b) Own Generation || || |
|Unit ('000 kwh) ||842.31 ||3448.97 |
|Units per Litre of Diesel ||2.62 ||2.63 |
|Cost/Unit (Rs.) ||23.17 ||19.78 |
|Coal || || |
|Quantity (In Tonnes) ||10561.78 ||17415.60 |
|Total Cost (Rs./Lakhs) ||920.74 ||1469.02 |
|Average Rate (Rs./Tonne) ||8717.70 ||8435.08 |
|Fuel Oil || || |
|Quantity (K.Ltr.) ||321.85 ||1310.52 |
|Total Amount (Rs./Lakhs) ||207.19 ||682.14 |
|Average Rate (Rs./Ltr.) ||64.37 ||52.05 |
|Consumption per Unit || || |
|of Production || || |
|Electricity (Kwh/Qtl) ||121.39 ||108.22 |
|Coal (Qtl/Qtl) ||0.84 ||0.80 |
FORM - B
DISCLOSURE OF PARATICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION
|RESEARCH AND DEVELOPMENT (R & D) || |
|1 Specific areas in which R & D carried out by the Company ||None |
|2 Benefits derived as a result of the above R & D ||- |
|3 Future Plan of Action ||None |
|TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION || |
|1 Efforts in brief made towards technology absorption adoptation and innovation ||None |
|2 Benefits derived as a result of the above efforts e.g. product improvement cost reduction product development import substitution etc. ||- |
|3 Imported Technology ||None |
FOREIGN EXCHANGE EARNINGS AND OUTGO
| ||Year Ended 30th Sept 2014 ||Period ended 30th Sept 2013 |
| ||(12 months) ||(18 months) |
|Total Foreign Exchange Used and Earned || || |
|Expenditure in Foreign Currency (Rs. In lacs) ||23.16 ||9.59 |
|Earnings in Foreign Exchange ||- ||- |
ANNEXURE TO THE DIRECTORS' REPORT
PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
(a) The Company has taken the following measures for conservation of Energy :
(i) Continuation of installation of Power Capacitors at the factories in Tea Gardens.
(ii) Satisfactory trial usage of Briquettes for replacement of coal. In the long termprogramme intend to set up briquetting plants generated from green matter/saw dust.
(b) Additional investments and proposals if any being implemented for reduction inconsumption of energy :
(i) To install more Power Capacitors at factories in the gardens to achieve minimumpower Factor of 0.95.
(ii) To replace phase-wise electrical old motors of CTC machines and dyers.
(iii) Part replacement of coal with biomass in rest of the Gardens.
(iv) Conversion of Engine driven irrigation sets to Electric motor driven Irrigationsets.
(c) Impact of measures (a) and (b) above for reduction of energy consumption andconsequent impact on the cost of production
Lower energy and fuel consumption.