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Jay Shree Tea & Industries Ltd.

BSE: 509715 Sector: Agri and agri inputs
NSE: JAYSREETEA ISIN Code: INE364A01020
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VOLUME 13507
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OPEN 88.65
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VOLUME 13507
52-Week high 124.00
52-Week low 73.60
P/E
Mkt Cap.(Rs cr) 258
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Jay Shree Tea & Industries Ltd. (JAYSREETEA) - Director Report

Company director report

Dear Shareholders

We present the 76th Annual Report of the Company together with theAudited Statements of Accounts for the year ended 31st March 2022:-

FINANCIAL RESULTS

(Rs in lakh)

31st March 2022 31st March 2021
Total Revenue 74151 80369
Profit before finance costs depreciation and tax 2941 8164
Less : Finance costs 3594 4768
: Depreciation/Amortisation expenses 2229 2373
Profit/(Loss) before tax (2882) 1023
Add/(Less):
a) Deferred Tax credit 3474 (52)
Profit/(Loss) for the year 592 971

AMALGAMATION OF SUGAR

During the year under review the Honb'le NCLT Kolkata has passed thefinal order on 22nd November 2021 to amalgamate Majhaulia Sugar Industries PrivateLimited ("MSIPL") a wholly owned subsidiary with the Company effective from 1stApril 2020. Hence the Financial Statements have been prepared after consolidating thefigures of the Sugar division of the Company.

EQUITY DIVIDEND

In order to conserve the resources the Board has decided not torecommend any dividend for the year.

SHARE CAPITAL

During the year ended 31st March 2022 there is no change in the issuedand subscribed capital of your Company. The outstanding capital as on 31st March 2022 isRs 1443.87 lakh comprising of 28877488 equity shares of Rs 5/- each. During the yearPursuant to the Scheme of Amalgamation approved by the Honb'le NCLT Kolkata theauthorized share capital of the Company increased from Rs 2900 lakh to

Rs 6225 lakh. None of the directors or KMP of the Company holdsinstruments Convertible into equity shares of the Company.

TRANSFER TO RESERVES

As there is no surplus the Board does not propose to transfer anyamount to general reserve.

REVIEW OF PERFORMANCE

The Indian output of tea was 1329 mn Kg compared to 1258 mn kg. lastyear i.e an increase of 6%. With the ever growing presence of unorganized and small teaplayers in the Industry the crop has risen from 945 mn kg in 2005 to 1329 mn kg whichoutstripped consumption of the beverage in the Country leading to stagnant prices of tea.Further these segments always compromise with quality standards resulting in poorrealization of tea prices.

The Chemicals & Fertilizers division of the Company increased itsproduction and despatches by better marketing & maintaining quality standard. TheCompany has strong farmer base who needed support by making SSP available to them inmaximum quantity to keep their production intact. At all levels the management was keen tosupport its farmers in maximum possible ways and ensured un-interrupted supply of SSP tothe farmers in West Bengal.

The sugar production in India was higher at 32 mn tonnes compared to30.2 mn tonnes last year. The supply of sugar in the Country is sufficient to meet thedomestic consumption which is estimated to be at 27 mn tonnes. The outbound shipments washigher at 8.5 mn tonnes even without subsidy. The Government has now capped the exports tomaximum 10 mn tonnes for the season. Last year the Government of India had announced aquota of 6 mn tonnes with a competitive WTO-compliant financial assistance.

India's GDP growth for the year got impacted due to the second &third wave of the pandemic. However recovery was sharp led by a faster opening up.Persistent and unprecedented inflation across consumer categories is a key monitorablegoing forward.

The major factors attributing to the operations of the company are:

i) Increase in Cachar and Assam crop with higher realization of Assam

ii) Reduction in crop of Darjeeling but the price realization washigher by 31%

iii) Increase in input cost of labour & energy raising the cost ofproduction

iv) Decline in exports in both volume & value terms of tea asofftakes of almost all major export destinations were lower in 2021

v) Better performance of the Single Superphosphate Plant at KhardahWest Bengal and Sulphuric Acid plant at Pataudi Haryana

vi) Lower availability of sugarcane affecting the production andviability of sugar mill & ethanol plant

vii) Reduction in debt resulting in saving of financial cost TeaEstates

All India production in 2021 was higher at 1329 million kg. compared to1258 million kg. in 2020. The tea prices in India have come off significantly from thepeak levels. Global black tea output has been estimated to be higher by more than 11%compared to that of previous year. The bulk of the increase has come from India. Kenya wasthe only country where production declined compared with 2020.

Your company's own production was lower at 143.53 lakh kg compared to148.90 lakh kg last year. The bought leaf production was further decreased to 4.67 lakh kgagainst 5.71 lakh kg last yearas the margins were lower. The overall price realization ofyour company was lower by Rs 11/- per Kg. Assam and Darjeeling prices were up by around Rs17/- per kg and Rs 153/- per kg respectively. Dooars and Terai were down by Rs 18/- andCachar down by Rs 21/- per kg. Your Company continued with its policy of good qualityproduction in all of its tea estates which has been appreciated by both Domestic &International buyers.

During the year the Company launched Darjeeling Tea in packets besides"Bagicha-by Jay Shree Tea" launched last year. This launch is being amplifiedthrough online mediums which includes its website www.bagichatea.com various social mediaplatforms besides visibility drives in trade to build excitement. Under the initiativethese teas have been made available to customers at their freshest best - directlydispatched from our gardens to their doorstep. Both Darjeeling and Bagicha teas conform toa multitude of International certifications or standards. Our farm-to-table philosophymakes our teas traceable to each pluck which ensures unadulterated purity.

There is no material change and/or commitment affecting the financialposition of the Company occurred between the end of the financial year and the date ofthis report.

Puttabong Tea Resort Darjeeling

Your Company has developed & renovated its heritage bungalow atPuttabong tea estate Darjeeling which is the longest tea garden in the world with allmodern facilities for tea tourism as a home away from home. The estate has tied up withAMA Stays & Trails by Taj Group of hotels for the said venture and is receivingoverwhelming response.

The Jay Shree Chemicals & Fertilisers Khardah

The sale of Single Super Phosphate (SSP) during the year increased by18% with further increase in market share. The quality being maintained by your Company isalways well received in the market. In the current year the prices of raw materials andfreight have gone up substantially. Further the exchange rate of USD has also moved up.TheGovernment has not yet revised the subsidy on Single Super Phosphate while raising subsidyon other fertilisers. A representation has been made to the fertilizer Ministry to lookinto this in the interest of the farmers.

The figures of production and despatches are as under:

Production (M.T.) Despatch (M.T.)
2021-22 2020-21 2021-22 2020-21
Single Super Phosphate 90111 67315 90862 77187

The Jay Shree Chemicals & Fertilizers Gurugram

There was overall improvement in working of the unit with emphasis onincreased production and sale and the unit made higher production and sales during theyear. The prices of sulphur in International market has gone up substantially and tomaintain the margin the prices may have to be revised if it does not cool down.

The figures of production and despatches are as under:

Production (M.T.) Despatch (M.T.)
2021-22 2020-21 2021-22 2020-21
Sulphuric Acid 30666 25139 30459 25187
Oleum 1772 1435 1778 1412

Sugar Division

Majhaulia Sugar in its sugar mill produced 19568 tonnes of white sugarin the year compared to 17285 tonnes last year. The sugarcane crushed was 317424 tonnes inthe year compared to 223006 tonnes last year. The recovery in sugar season 2021-22 was7.63% (plus ethanol 1.65%) compared to 7.74% in the previous year. The lower production isattributable to lower availability of cane due to flood in earlier year which createdpanic amongst the farmers who opted for short duration crop. The Company has taken up canedevelopment work on war footing basis and started autumn planting to come out of thissituation of lower cane.

The capacity of your distillery plant has been raised from 45 KLPD to56 KLPD and during the season time it diverted sugarcane juice/syrup 59194 tonnes forethanol production. This should translate into increased revenues for your companyfollowing the capacity expansion. During weak sugar markets we can have a strategy tosacrifice sugar in favour of additional ethanol and vice versa when sugar realisationsbecome attractive. This fungible capacity will serve as an insurance against thelong-standing sectorial cyclicality enhancing revenue visibility and corporate stability.

India's 2021-22 sugar production is estimated at around 32 mn tonnescompared to 30.80 mn tonnes last year. Considering a consumption of 27 mn tonnes andexport of 8.50 mn tonnes India could end up with a lesser closing stock of sugar. Recentinterventions by both the Central Government and the State Government reflect a clearshift in the mind-set of policy makers which augurs well for the industry.

The Government set an ambitious target of ethanol blending with petrolof 20% and preponed the year of achieving the target to 2025 from 2030 earlier. Many sugarunits produced ethanol from B heavy molasses and some sugar mills directly from sugarcanejuice. The real transformation is expected from sugar season 2022-23 onwards when moresugar companies produce ethanol directly from sugarcane juice resulting in a substantialsacrifice of sugar production that moderates the problem of surplus sugar production.

The sugar industry in India continues to be dependent on the Governmentintervention and the following measures has been taken by the Government to support theIndustry:-

a) Fair & Remunerative Price (FRP) of sugarcane for the sugarseason 2021-22 revised to Rs. 290 per quintal from Rs.285 per quintal (linked to a basicrecovery of 10%)

b) State Advised Price (SAP) of sugarcane for sugar season 2021-22 forBihar increased by Rs. 20 to Rs.335/- per quintal

c) Minimum Selling Price of sugar was Rs. 29 per kg in June 2018 andRs. 31 per kg in February 2019.

d) Stock holding limits on mills regulates sugar supply supportinglocal prices.

e) Export quota of 6 mn tonnes of sugar from India was announced forSugar Season 2020-21 with a competitive WTO-compliant financial assistance. TheGovernment has capped export quantity to 10 mn tonnes for the current season.

f) Higher customs duty on sugar imports; sugar export attracts zerocustoms duty.

Export of Tea

Tea export during the year 2021 declined to 195.50 million kg from209.72 million kg in 2020. The value of tea exports remained the same at Rs 5200 crore.Exports were lower mainly due to shortage of shipping containers and high ocean freight.Your Company exported tea worth was Rs 55.84 crore as against Rs 59.33 crore last year.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The Balance sheet Statement of Profit & Loss and other documentsof subsidiary companies North Tukvar Tea Company Limited Jayantika Investment &Finance Ltd.Bidhannagar Tea Company Pvt Ltd Divyajyoti Tea Company Pvt Ltd and off-shoreinvestment arm Birla Holdings Limited U.A.E are not being attached with the Balance Sheetof the company. These documents are kept for inspection at the registered office of thecompany and those of respective subsidiary companies. Any member interested to obtain copyof the same may write to the Company separately. These documents shall be made availableeither in physical form or electronic mode as per Green Initiative of the MCA. Pursuant tosection 129(3) of the Companies Act 2013 read with Rule 5 of the Companies (Accounts)Rules 2014 a statement containing salient features of the financial statements ofSubsidiary Companies is given in Form AOC-1 and forms an integral part of the AnnualReport.

Birla Holdings Limited (BHL) is a wholly owned subsidiary of thecompany in Dubai (UAE). Kijura Tea Company LimitedUganda is wholly owned subsidiary ofBHL. Bondo Tea Estates Limited Uganda is a step down subsidiary of BHL. Kijura Tea Estateowned by these companies manufactured 22.50 lakh kg. of tea compared to 24.45 lakh kg.last year. The average sale price realized was USD 1.00 per kg. against USD 1.11 per kg.last year. During the year the company recorded a loss of USD 128 thousand (INR 97 lakh)on sales turnover of USD 2.20 million (INR 1668 lakh) as against last year cash profit ofUSD 349010 (INR 262.83 lakh) on sales turnover of USD 2.86 million (INR 2154 lakh)

CORPORATE GOVERNANCE

As per Regulation 34(3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate report on corporateGovernance is enclosed as a part of this Annual Report. A certificate from the Auditors ofthe Company regarding compliance as per SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed to the Report on Corporate Governance.

The declaration by the Chairperson & Managing Director stating thatall the Board members and Senior Management personnel have affirmed their compliance withthe Company's Code of Conduct for the year ended 31st March 2022 is forming part of thisAnnual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As a part of its initiative under the "Corporate SocialResponsibility" (CSR) drive the Company has undertaken projects in the areas ofeducationsports preventive health care and women empowerment. These projects are inaccordance with Schedule VII of the Act and the Company's CSR policy.

The composition of the members of CSR Committee remains the samenamely: Mrs. Jayashree Mohta Chairperson & Managing Director alongwithMr.S.K.Tapuriah and Mr.Vikash Kandoi as members.

CSR Policy is placed on the website of the company "www.jayshreetea.com". The Report on CSR activities as required under the Companies (CSRPolicy) Rules 2014 along with the brief outline and contents of the CSR policy areannexed and forms an integral part of this Report.

PROSPECTS

The outlook for tea fertilisers and sugar business appears positive.Going ahead the company will focus on capital efficiency enhancing the production of teawith quality standard; improve market share in fertilisers; increase sugar production withmassive cane development work; utilizing full capacity of ethanol production by change inmix of feed stock. We are also planning to put up additional equipments for grain basedethanol production to provide additional feed stock for distillery operations as there isshortage of molasses. We shall also moderate working capital outlay and enhance value inthe hands of all those who own a stake in our Company's progress.

We are positive about the prospects of the Indian tea sugar &fertilizer industry. The world is coming out of a challenging phase triggered by thepandemic but we expect to see a lot of tailwinds going forward particularly from theretail segment. The long term industry fundamentals remain unchanged and tea & sugarwill continue to enjoy major role in every Indian household.

Your Company is a quality tea producer of India and is hopeful thatwith the increased focus on packet tea under new brand names and establishing contactswith old & new overseas customers will fetch better price realization in years tocome. We are continuously monetising non-productive assets to improve liquidity.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors would like to inform members that the audited accountscontaining the financial statements for the year 2021-22 are in conformity with therequirements of the provisions of Section 134(3)(c) read with Section 134(5) and all otherapplicable provision of the Companies Act 2013 and they believe that the financialstatements reflect fairly the form and substance of transactions carried out during theyear and reasonably present the Company's financial condition and results of operations.The Statutory Auditors S.R Batliboi & Co. LLPChartered Accountants Kolkata haveaudited these financial statements.

Based on the same your Directors further confirm that according totheir information:

i. in the preparation of the annual accounts applicable accountingstandards have been followed and there are no material departures;

ii. the accounting policies selected by directors are consistentlyfollowed and applied and judgements and estimates made are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company;

iii. proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

iv. the annual accounts have been prepared on a going concern basis.

v. that there is adequate proper internal financial controls withreference to the financial statement have been laid down for the company and such internalfinancial controls are adequate and were operating effectively.

vi. that proper systems have been devised to ensure compliance with theprovisions of all applicable laws and such systems were adequate and operatingeffectively.

BUSINESS RESPONSIBILITY REPORT (BR)

In terms of SEBI (LODR) Regulations 2015 Top 1000 listed entities arerequired to submit as part of their Annual Reports Business Responsibility Reportsdescribing the initiatives taken by them from an environmental social and Governanceperspective. Your company does not fall under this category. However BR Report onenvironment human resources and principle wise performance in short forms part of theManagement discussion and analysis report.

PARTICULARS OF EMPLOYEES

The Information as required under Section 197(12) of the Companies Act2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are given in the Annexure forming part of the Report.

PUBLIC DEPOSITS

The company has not accepted or renewed any deposit during the year.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Particulars of loans Guarantees and investment covered under theprovisions of Section 186 of the Companies Act 2013 is given in the Standalone FinancialStatement forming part of the Annual Report.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITHREFERENCE TO THE FINANCIAL STATEMENTS

Your Company has an effective internal control and risk- mitigationsystem which is constantly assessed and strengthened with new/revised standard operatingprocedures. The Company's internal control system is commensurate with its size scale andcomplexities of operations.

Business risks and mitigation plans are reviewed on timely intervalsand the internal audit processes include evaluation of all critical and high risk areas.Critical functions are rigorously reviewed and the reports are shared with the Managementfor timely corrective actions if any. The main focus of internal audit is to reviewbusiness risks test and review controls assess business processes besides benchmarkingcontrols with best practices in the industry. During the year under review there were noelements of risk which in the opinion of the Board of Directors threaten the existence ofthe Company. Risks do arise in the businesses of the Company which are mitigated inaccordance with the Risk Management Framework and Policy.

The company's internal control systems are periodically tested andsupplemented by extensive program of internal audit by independent firms of CharteredAccountants. Audits are finalized and conducted based on internal risk management.Significant findings are brought to the notice of the Audit Committee of the Board andcorrective measures are recommended for implementation.

RISK MANAGEMENT

The company has laid down the procedures to inform to

the Board about the risk assessment and minimization procedures whichshall be responsible for framing implementing and monitoring the risk management plan ofthe company. Jay Shree Tea is committed to manage its risk in a proactive manner. Thoughrisks cannot be completely eliminated an effective risk management plan ensures thatrisks are reduced avoided retained or shared.

DISCLOSURE OF PARTICULARS WITH REGARD TO CONSERVATION OF ENERGYTECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Necessary information on conservation of energy technology absorptionforeign exchange earnings and outgo required to be given pursuant to the provisions ofSection 134 of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 ispresented in Annexure to this Report.

ENVIRONMENT AND SAFETY

The company is conscious of clean environment and safe operations. Itensures safety of all concerned compliance with environmental regulations andpreservation of natural resources.

As required by the Sexual Harassment of women at Workplace (PreventionProhibition & Redressal) Act 2013 the company has an internal policy on preventionof sexual harassment at workplace with a mechanism of lodging complaints. During the yearunder review no complaints were reported to the Board.

STATUTORY AUDITORS AND AUDITORS' REPORT

The auditors S.R. Batliboi & Co. LLP Chartered AccountantsStatutory Auditors of the Company are retiring at the conclusion of the ensuing AnnualGeneral meeting of the Company after completion of 5 years in terms of the provisions ofthe Companies Act 2013. For better corporate governance the Board has decided to changeits Statutory Auditors every 5 years. As per the requirement of the Companies Act 2013;Singhi & Co. Chartered Accountants who have filed their eligibility certificate areproposed to be appointed as Statutory Auditors of the Company w.e.f 1st April 2022 for aperiod of 5 years till 31st March 2027 at a remuneration to be fixed by the Board whichwe recommend.

The Auditors Report form part of this Annual report. The Report doesnot contain any qualifications. Other than for non-provision of tax quarterly basis whichis due to the fact the Company operates in seasonal industries.

COST AUDITORS

The Audit Committee in its meeting held on 28th May 2022 hasrecommended the reappointment of D. Sabyasachi & Co. the Cost Auditor to conduct thecost audit of the company for the financial year 2022-23 in terms of section 148(3) of theCompanies Act 2013. Accordingly the Board appointed the said firm of Cost Accountants tocarry out the cost audit for the year 2022-23 on the remuneration as recommended by theBoard to be fixed by members in the ensuing Annual General Meeting of the Company.

INTERNAL AUDIT

The Company continued to engage reputed firms of Chartered Accountantsas its internal auditors at its units and tea estates. Their scope of work and the planfor audit is approved by the Audit Committee. The report submitted by them is regularlyreviewed and their findings are discussed with the process owners and suitable correctiveaction taken on an ongoing basis to improve efficiency in operations.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act 2013and Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thecompany has appointed MR & Associates Practicing Company Secretaries to undertake theSecretarial Audit of the company. The report of the Secretarial Audit is annexed herewith.Regarding observations: The company had a pending case under Section 58(A) of theCompanies Act 1956 with the court relating to acceptance of a small amount during theperiod of approval of form by the Board and its filing with ROC and the matter issubjudice.

INSURANCE

Adequate insurance cover has been taken for properties of the companyincluding buildings plant and machineries and stocks against fire earthquake and otherrisks as considered necessary.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As per the provisions of Section 152 of the Companies Act 2013Mrs.Jayashree Mohta (DIN:01034912) retires by rotation and being eligible offers herselffor reappointment. The Board recommends her reappointment.

The Independent Directors have submitted the declaration ofindependence as required under Section 149 of the Companies Act 2013 and the Board is ofthe opinion that they are independent within the meaning of the said requirement of theAct.

There is no change in the Key Managerial Personnel during the year.

OTHER DISCLOSURES EXTRACT OF ANNUAL RETURN

The details for the financial year ended 31st March 2022 has beenprovided in our website at www.jayshreetea.com

NUMBER OF BOARD MEETINGS

The Board of Directors met four times during the year ended 31st March2022. The details of the Board meetings and the attendance of Directors are provided inthe Corporate Governance Report.

COMPOSITION OF COMMITTEE OF DIRECTORS

The Board has constituted the following Committees of Directors:

(a) Audit Committee

(b) Nomination & Remuneration Committee

(c) Stakeholder relationship Committee

The detailed composition of the above Committees along with number ofmeetings and attendance at the meetings are given in Corporate Governance Report.

(d) Corporate Social Responsibility Committee

The detailed composition of the above Committee is given under the headCorporate Social Responsibility (CSR).

ANNUAL GENERAL MEETING

Annual General Meeting of the Company is scheduled to be held onTuesday the 2nd August 2022.

WHISTLE BLOWER POLICY

The company has formulated Whistle Blower Policy in terms of Section177(9) of the Companies Act 2013 the details of which is being provided in the CorporateGovernance Report. The Whistle Blower Policy has also been posted on the website of theCompany.

RELATED PARTY TRANSACTIONS

All the related party transactions for the year under review areentered on arm's length basis and are in compliance with the Companies Act 2013 and theListing Regulations. There are no materially significant related party transactions madeby the Company with Promoters Directors or Key Managerial Personnel etc which may havepotential conflict with the interest of the Company at large. All related partytransactions are presented to the Audit Committee and the Board for its approval.

The related party transactions policy as approved by the Board isuploaded on the Company's website "www. jayshreetea.com".

The details of the transactions with related party is given in theStandalone Financial Statement forming part of the Annual Report.

EVALUATION OF BOARD'S PERFORMANCE

In compliance with the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the performance evaluation ofthe Board was carried out during the year under review. The Board of Directors expressedtheir satisfaction with the evaluation process. More details on the same is given in theCorporate Governance Report.

AUDITOR'S REPORT & ACCOUNTS

All notes to the Accounts referred to in the Auditors' Report areself-explanatory and therefore do not call for any further comments.

APPRECIATION

The Board wishes to place on record its appreciation of the efforts putin by your company's workers staff and executives.

For and on behalf of the Board
Jayashree Mohta (Chairperson and Managing Director)
Kolkata 28th May 2022 (DIN:01034912)

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