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The Grob Tea Co Ltd.

BSE: 538367 Sector: Agri and agri inputs
NSE: GROBTEA ISIN Code: INE646C01018
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The Grob Tea Co Ltd. (GROBTEA) - Director Report

Company director report

TO THE MEMBERS

Your Directors have pleasure in presenting their Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended March 31 2020.

1. FINANCIAL HIGHLIGHTS

The financial performance of your Company:

FINANCIAL RESULTS 2019-20 (Rs. in Lakhs) 2018-19 (Rs. in Lakhs)
Turnover 8306.41 8067.64
Profit before finance charges Tax Depreciation/Amortization (PBITDA) 677.56 528.63
Less : Finance Charges 147.35 62.21
Profit before Depreciation/Amortization (PBTDA) 530.21 466.42
Less : Depreciation 246.06 284.83
Net Profit before Taxation (PBT) 284.15 181.59
Provision for taxation 119.37 41.98
Profit/(Loss) after Taxation (PAT) 164.78 139.61

2. STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK

During the financial year 2019-20 your Company achieved a production of 47.34 lakhskgs of tea compared to 45.51 lakhs kgs of last year. The 4% crop rise could have been morebut for the 7 days Covid-19 related lockdown in the month of March and the Tea Boardmandated of early closure of the manufacturing season in December 2019. The average saleprice realization for CTC tea for the current year was Rs.174.41 as compared to Rs.173.69of previous year. The slight increase of sale price of Rs. 0.72 is mainly due toimprovement in the quality of tea.

The crop prospect for the year 2020-21 is not bright enough. The lockdown ofMarch/April 2020 badly impacted the first flush crop which resulted in 60% crop loss inApril and 23% crop loss in May. The market so far had been very buoyant and strong - gooddemand for all categories of tea resulted in sharp rise over last year. Your Company iscontinuously emphasizing to improve the quality of tea to fetch the higher realization.

During the last F.Y. the Company had started trading in LED Street Lights in additionto existing core business of cultivation manufacturing of Tea. However during the currentFinancial Year for LED Light products there was no new work orders from the Governmentagencies during the year as Government priorities has been shifted to other economicactivities and this sector gets lower allocation. Further due to COVID-19 pandemic fromthe last quarter of the F.Y. LED Business has also been impacted. However the company ispursuing hard with the concerned agencies and is quite confident to get work ordershortly.

3. CHANGE(S) IN THE NATURE OF BUSINESS IF ANY

There is no changes in the business.

4. IMPACT OF COVID-19

Tea Industry in India cannot remain isolated from the ramifications of this war againstCOVID 19.

The lockdown starting on the evening of 24th of March 2020 which was declared in Indiahas affected the normal life in every sphere and taken away many lives and held tounemployment and put the Global economy into a recession. However The Tea Industry hasbeen comparatively less impacted owning to normal distancing that exists at work placebut the breakdown of supply chain has brought in some disruptions which hopefully shouldbe over by June 2020.

Our Tea Estates in Assam resumed operations from 15th April albeit with only 50%workers. April-May is the Quality tea harvest peak season for the Tea Industry. The Headoffice has remained shut as Kolkata is in the Red zone and all executives are"working from home."

In compliance with various directives of the Government operations of the Company havebeen resumed in the permitted manner in the registered office of the Company situated inWest Bengal w.e.f. from 25th May 2020.

The Company has taken various safety steps such as thermal screening of all employeesmaintaining of social distancing at all work places sanitizing the premises on regularbasis and enforcing wearing of mask etc. A detailed Standard operating procedure forworking in office is being followed.

The crop prospect for the year 2020-21 is not bright enough. The lockdown ofMarch/April 2020 badly impacted the first flush crop which resulted in 60% crop loss inApril and 23% crop loss in May.

However the silver lining is that due to crop shortage market prices has firmed upand present quality Tea is fetching higher than the prices prevailing at this periodduring the last year. This will offset the expected loss due to crop to a large extent.

5. DIVIDEND

The Directors have recommended a dividend of Rs. 2/- Per Equity Share of Rs. 10/- each(Previous Year- Rs. 2/- per Equity Share) for the year ended 31st March 2020 subject toapproval of the shareholders at the ensuing Annual General Meeting.

6. TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND

Shareholders are requested to refer to the Notice of the Annual General Meeting for thedue dates for transfer of unclaimed dividends and corresponding shares for the year ended31st March 2013 to Investor Education and Protection Fund. This information is alsoposted under the investor relation section unclaimed dividend of the Company's websitewww.erobtea.com. Details of shares/shareholders in respect of which dividend has not beenclaimed are provided on our website. The shareholders are therefore requested to verifytheir records and claim their dividends of all the last seven years if not claimed.

During the year under review your Company has transferred a sum of Rs. 132908 beingthe dividend lying unclaimed out of the dividend declared by the Company for the FinancialYear 2011-12 to the Investor Education and Protection Fund on 7th November 2019 pursuantto the provisions of Section 124 (5) of the Companies Act 2013 read with InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016.

During the period under review 2784 shares pertaining to financial year 2011-12 havebeen transferred to IEPF Authorities on 4th December 2019 in compliance with theprovisions of Section 124 of the Companies Act 2013 and Rule 6 of Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 aftersending letters to those Shareholders and also making an advertisement in the newspapersin this regard. Details of these shares on the website of the Company www.grobtea.com.

7. TRANSFER TO RESERVE

No amount was transferred to the reserves during the financial year ended 31st March2020.

8. CHANGES IN SHARE CAPITAL

The Authorized Share Capital of your Company as on March 31 2020 stands at Rs.30000000/- divided into 3000000 equity shares of Rs. 10/- each. The Issued ShareCapital of your Company is Rs. 11623300/- divided into 1162330 equity shares of Rs.10/- each and the Subscribed and Paid-up Share Capital is Rs. 11623300/- divided into1162330 equity shares of Rs. 10/- each fully paid-up.

9. Details pertaining to shares in suspense account

There is no such shares in suspense account.

10. QUALITY INITIATIVES

The Company continues to sustain its commitment to the highest levels of qualitysuperior service management robust information security practices and mature businesscontinuity management.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Your Company's Board is duly constituted and is in compliance with the requirements ofthe Companies Act 2013 the Listing Regulations and provisions of the Articles ofAssociation of the Company. Your Board has been constituted with requisite diversitywisdom and experience commensurate to the scale of operations of your Company.

During the year under review Mr. M K Agarwal (DIN: 00697746) Non-Executive Directoris due to retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment in accordance with the provisions of Companies Act2013. A brief profile along with necessary disclosures of Mr. M K Agarwal has been annexedto the Notice convening the ensuing AGM. Your Board recommends appointment of Mr. M KAgarwal as a Non-Executive Director of the Company liable to retire by rotation.

Pursuant to the provisions of Sections 196 197 & 203 read with Schedule V andother applicable provisions if any of the Companies Act 2013 ("the Act") TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modifications or re-enactment(s) thereof for the time being in force) Mr.Pradeep Kumar Agarwal (DIN: 00703745) Managing Director of the Company is proposed to bereappointed as a Managing Director of the Companynot subject to retirement by rotationfor a period of 3 (Three) Years with effect from 1st April 2020.

Pursuant to the provisions of Sections 149 150 & 152 read with other applicableprovisions if any of the Companies Act 2013 ("the Act") and the rules madethere under (including any statutory modifications or re-enactment(s) thereof for the timebeing in force) subject to approval of members in the Annual General Meeting (AGM) andsuch other consents and permission as may be necessary consent of the Board of Directorsbe and is hereby accorded for the reappointment of Mr Purushottam Jagannath Bhide (DIN:00012326) as an Independent Director for a period of 4 (Four) Years. A brief profile alongwith necessary disclosures of Mr. P J Bhide has been annexed to the Notice convening theensuing AGM. Your Board recommends appointment of Mr. P J Bhide as a Non-ExecutiveIndependent Director of the Company.

Pursuant to the provisions of Sections 149 150 & 152 read with other applicableprovisions if any of the Companies Act 2013 ("the Act") and the rules madethere under (including any statutory modifications or re-enactment(s) thereof for the timebeing in force) subject to approval of members in the Annual General Meeting (AGM) andsuch other consents and permission as may be necessary consent of the Board of Directorsbe and is hereby accorded for the reappointment of Mr Harischandra Parekh Maneklal (DIN00026530) as an Independent Director for a period of 4 (Four) Years. A brief profile alongwith necessary disclosures of Mr. H M Parekh has been annexed to the Notice convening theensuing AGM. Your Board recommends appointment of Mr. H M Parekh as a NonExecutiveIndependent Director of the Company.

Pursuant to Regulation 17(1A) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 other applicable provisionsif any of the Companies Act 2013 and the applicable Rules made there under includingany amendment(s) statutory modification(s) and/or re-enactment thereof for the time beingin force subject to approval of members in the annual general meeting (AGM) and suchother consents and permission as may be necessary consent of the board of directors beand is hereby accorded for the continuation of Mr. Purushottam Jagannath Bhide (DIN:00012326) and Mr. Harischandra Parekh Maneklal (DIN 00026530) who has attained the age ofseventy five (75) years as a Non-Executive Independent Director of the Company up toMarch 2024 being the date of expiry of their current term of office."

Mr. Purushottam Jagannath Bhide Mr. Harischandra Parekh Maneklal Mr. Sanjay KumarAgarwal and Mrs. Priyanka Singhania Independent Directors of your Company have declaredto the Board of Directors that they meet the criteria of Independence as laid down inSections 149(6) and 149(7) of the Companies Act 2013 and Regulation 16(1)(b) of theListing Regulations and there is no change in their status of Independence. Your Boardplaces on records its deep appreciation for their continuous guidance support andcontribution to the Management of the Company in its pursuit to achieve greater heights.

Mr. Pradeep Kumar Agarwal Managing Director Mr. Indu Bhusan Saraf Whole-timeDirector Mr Subrata Dasgupta CEO Mr. Bajrang Lal Patawari Chief Financial Officer andMrs. Kritika Mohata Company Secretary & Compliance Officer are the Key ManagerialPersonnel (KMP) of your Company.

12. NUMBER OF MEETINGS OF BOARD OF DIRECTORS

During the year under review a total of four Meetings of the Board of Directors of theCompany were held i.e. on May 23 2019; August 13 2019; November 14 2019 and February14 2020. Details of Board composition and Board Meetings held during the financial year2019-20 have been provided in the Corporate Governance Report which forms part of thisAnnual Report.

13. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDPARTICULARS OF EMPLOYEES

The prescribed particulars of employees required under Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is set out in Annexure"E" to this Report attached.

The Information as required under Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given in the Annexure forming part ofthe Report. In terms of Section 136(1) of the Act the report and accounts are being sentto members without the aforesaid Annexure. Any member interested in obtaining a copy ofthe same may write to the company. The aforesaid Annexure is also available forinspection by members at the Registered Office of the Company.

14. AUDITORS AND AUDITOR'S REPORT

a) Statutory Auditors

M/s Dhandhania & Associates Chartered Accountants were appointed as the StatutoryAuditor of the Company in the Annual General Meeting held on 5th September 2017 in termsof Sec 139 of the Companies Act 2013 till the conclusion of Annual General Meeting to beheld in 2022.

b) Internal Auditors:

Pursuant to the provisions of Section 138 of the Act and the Companies (Accounts)Rules 2014 on the recommendation of the Audit Committee M/s. A R Maiti & Co isappointed by the Board of Directors to conduct internal audit reviews for the Company.

c) Cost Auditor

In accordance to the provision of Section 148 of the Companies Act 2013 and Companies(Audit & Auditors) Rules 2014 the Company is not required to appoint Cost Auditor toaudit the cost records of the Company.

d) Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhad appointed H M Choraria & Co Practicing Company Secretary for a period of 3 yearsfrom 2019 onwards for conducting the Secretarial Audit of your Company. The SecretarialAudit Report is annexed herewith as Annexure "D" to this Report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.

e) Qualification reservation or adverse remark in the Auditor's Reports andSecretarial Audit Report

There is no qualification reservation or adverse remark made by the Auditors in theirReports to the Financial Statements. There is no qualification reservation or adverseremark made by the Secretarial Auditor in his Secretarial Audit Report for the financialyear ended March 31 2020.

15. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT- 9 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are set out herewith as Annexure"C" to this Report.

The extract of the Annual Return of the Company can also be accessed on the website ofthe Company at http:// www.grobtea.com

16. SECRETARIAL STANDARDS OF ICSI

The Directors have devised proper systems and processes for complying with therequirements of applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and that such systems were adequate and operating effectively.

17. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THEFINANCIAL YEAR AND THE DATE OF REPORT

Subsequent to the end of the financial year on March 31 2020 till date there has beenno material change and / or commitment which may affect the financial position of theCompany.

18. PUBLIC DEPOSIT

During the Financial Year 2019-20 the Company has not accepted any deposit within themeaning of Sec 73 and 74 of the Companies Act 2013.

19. LOANS GUARANTEE OR INVESTMENT

Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.

20. RELATED PARTY TRANSACTIONS

During the financial year 2019-20 the Company has entered into transactions withrelated parties which were in the ordinary course of business and on arms' length basisand in accordance within the provisions of the Companies Act 2013. Further there were notransactions with related parties which qualify as material transactions under the ListingAgreement. Thus disclosure in Form AOC-2 is not required.

The details of the related party transactions as required under IND AS- 24 are set outin Note 34 to the financial statements forming part of this Annual Report.

21. INTERNAL FINANCIAL CONTROLS

The Internal Controls over Financial Reporting are routinely tested and certified byStatutory as well as Internal Auditors to cover key business areas. Significant auditobservations and follow up actions thereon were reported to the Audit Committee.

Further details of the internal controls system are given in the Management Discussionand Analysis Report which forms part of this Annual Report.

22. COMMITTEE OF THE BOARD

During the year in accordance with the Companies Act 2013 and SEBI (ListingObligation and Disclosure Requirements) Regulation 2015 currently the Board has fourCommittees to focus on specific areas and make decision within the authority delegated toeach of the Committees. All decision and recommendations of the Committees are placedbefore the Board either for information or approval. The detail of Committee of the Boardis as follows:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders' Relationship Committee

• CSR Committee

The composition scope and powers of the aforementioned Committees together withdetails of meeting held during the year under review forms part of the CorporateGovernance Report.

23. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act 2013 yourdirectors confirm that:

a) in the preparation of the annual accounts for the financial year ended 31st March2020 the applicable accounting standards had been followed along with proper explanationrelating to material departures;

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 Company as at 31st March 2020 and of the profit/loss of the Company for that period;

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 preventing and detecting fraud and otherirregularities;

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

e) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

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

24. CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Companies Act 2013 the Company has formed a CSRCommittee and approved the CSR Policy. The brief outline of the Corporate SocialResponsibility (CSR) Policy of the Company is available on the Company's website:www.erobtea.com. The initiatives undertaken by the Company on CSR activities during theyear are set out in Annexure I.

25. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013

The Company is committed to provide a safe and conducive work environment to itsemployees. During the year under review no case of sexual harassment was reported.

26. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is set out herewith as Annexure "F" tothis Report.

27. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT

In terms SEBI(LODR) Regulation 2015 with Stock Exchange Report on ManagementDiscussion & Analysis Report and the Report on Corporate Governance along with theCertificate from the Practicing Company Secretary certifying the compliance of CorporateGovernance have been attached and forms part of Annual Report marked as Annexure "A"and "B" respectively.

28. VIGIL MECHANISM

The Company is committed to ethical moral and legal business conduct. Accordingly theBoard of Directors have formulated a Whistle Blower Policy which is in compliance with theprovisions of Section 177 (10) of the Companies Act 2013 and SEBI (Listing Obligation andDisclosure Requirements) Regulation 2015. The detail of Whistle Blower Policy of theCompany has been outlined in the Corporate Governance Report which forms part of thisreport.

29. BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and Regulation 25(3) of SEBI(Listing Obligation and Disclosure Requirements) Regulation 2015 Independent Directors attheir meeting without the participation of the Non independent Directors and Managementconsidered/evaluated the Boards' performance and other Non independent Directors. TheBoard subsequently evaluated its own performance the working of its Committees andindividual directors.

The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of criteria such as board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeeffectiveness of committee meetings etc. the above criteria are broadly based on theGuidance Note on Board Evaluation issued by the Securities and Exchange Board of India onJanuary 5 2017.

The independent directors of the company are expertise and have immense knowledge ofTea.

30. SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of the Company and its operations in future.

31. ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation of the devoted servicesrendered by all the employees of the Company and sincerely convey their appreciation tocustomers shareholders vendors bankers business associates regulatory and governmentauthorities for their continued support. The Directors regret the loss of life due toCOVID-19 pandemic and are deeply grateful and have immense respect for every person whorisked their life and safety to fight this pandemic.

For and on behalf of the Board

Place : Kolkata P. K. AGARWAL I.B.SHARAF
Dated: 29th June 2020 Managing Director Executive Director
(DIN NO. 00703745) (DIN NO. 00047266)

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