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Ledo Tea Company Ltd.

BSE: 508306 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE643B01017
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NSE 05:30 | 01 Jan Ledo Tea Company Ltd
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Buy Price 28.50
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Sell Price 28.50
Sell Qty 109.00
OPEN 29.90
CLOSE 29.90
VOLUME 1
52-Week high 43.70
52-Week low 28.50
P/E
Mkt Cap.(Rs cr) 3
Buy Price 28.50
Buy Qty 1.00
Sell Price 28.50
Sell Qty 109.00

Ledo Tea Company Ltd. (LEDOTEA) - Director Report

Company director report

Your Directors have pleasure in presenting 35th Annual Report with theAudited Financial Statements of your Company for the financial year ended 31st March2018.

1. SUMMARISED FINANCIAL RESULTS

Current Year

Previous Year

Rs in Lacs

Rs in Lacs

Profit/(loss) before Financial cost Depreciation & Taxes

(10.25)

(38.56)

Less : Financial Cost

71.97

69.52

Less: Depreciation

26.85

26.42

Profit /(loss) before Tax

(109.07)

(134.50)

Less/(Add) : Provision for Taxation (Net)

(29.92)

(20.20)

Profit/(loss ) after Taxation

(79.15)

(114.30)

2. PERFORMANCE HIGHLIGHT

Your company produced 7.38 lac kgs. of tea for the year under review asagainst 9.42 lacs kgs. in the previous year and achieved a net turnover of Rs 932.25 lacsby selling 7.45 lac Kgs. of tea as compared to Rs 1224.76 lacs by selling 9.70 lac Kgs. oftea in the previous year. The operation of the Company during the year under review hasresulted in a loss of Rs 10.25 lacs before Interest Depreciation and Taxes as againstloss of Rs 38.56 lacs in the previous year. Thus your company incurred a net loss of Rs79.15 lacs as against net loss of Rs. 114.30 lacs in the previous year.

3. DIVIDEND

In view of losses incurred by the Company your Directors do notrecommend any Dividend for the year ended 31st March 2018.

4. MODERNIZATION & EXPANSION

The Uprooting and Replanting programme is being carried out in a phasedmanner. Your Company has spent Rs 44.34 lacs on extension & re-plantation and Rs 32.89lacs on plant & machineries during the year under review.

5. FUTURE PROSPECT

The current season has started with favourable rainfall resulting ingood crop at the start of the season. However as the season progressed weather becameunfavourable due to continuous rainfall resulting in heavy infestation of insect attacki.e. looper & helopeltis due to which the crop declined to a large extent during May& June 2018. From July the weather became normal as such at the end of July productionwas almost equivalent to previous season. There has been demand for premium quality teabut the overall demand scenario is not remunerative due to availability of common varietyof tea which is largely being procured by packeteers to offer priced packet tea. Costs areincreasing every year due to increase of salary wages electricity and other input cost.This year there has been interim wage increase of Rs 30/- per day with effect from 1stMarch 2018 which will have larger impact on cost in year under review. In spite of allodds your company is trying its level best to keep the cost under control to overcomethis difficult period.

6. SHARES

a. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the yearunder review.

b. SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the yearunder review.

c. BONUS SHARES

No Bonus Shares were issued during the year under review.

d. EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

e. SHARES WITH DIFFERENTIAL RIGHTS

No equity shares with differential rights were issued during the yearunder review.

7. TRANSFER OF UNCLAIMED/UNPAID DIVIDEND AND SHARES TO THEINVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In accordance with the provisions of Section 124 125 and otherapplicable provisions if any of the Companies Act 2013 read with the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 (including any statutory modification(s) or re-enactment(s) thereof for the timebeing in force) the amount of dividend remaining unclaimed or unpaid for a period of sevenyears from the date of transfer to the unpaid dividend account is required to betransferred to the IEPF maintained by the Central Government. In pursuance of this thedividend remaining unclaimed or unpaid in respect of dividends for the financial year2009-10 have been transferred to the IEPF. In accordance with the provisions of Section124(6) of the Act read with IEPF Rules all the shares in respect of which dividend haveremained unclaimed or unpaid for seven consecutive years or more are required to betransferred to the demat account of the IEPF Authority. Accordingly all the shares inrespect of which dividends were remained unclaimed or unpaid for the financial year2009-10 have been transferred to the demat account of IEPF Authority. The shares andunclaimed dividend transferred to the IEPF can however be claimed back by the concernedshareholders from IEPF Authority after complying with the procedure prescribed under theIEPF Rules.

8. CORPORATE GOVERNANCE

As the paid-up Share Capital of the Company is less than Rs 10 Croresand its Reserves are less than Rs 25 Crore provisions of the Corporate Governance is notapplicable to your Company. However adequate steps have been taken for better corporategovernance.

9. CORPORATE SOCIAL RESPONSIBILITY

The Company is not required to adopt Corporate Social Responsibilitypolicy and to incur expenditure on it.

10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Company has not entered into any contract or arrangement withrelated parties referred in the Section(1) of Section 188 of the Companies Act 2013 duringthe year under review

11. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION186 OF THE COMPANIES ACT 2013. The Company has not made any loans or investments orgiven guarantees under Section 186 of the Companies Act 2013 during the year underreview and hence the said provisions is not applicable. Details of investments are givenin the Notes forming part of financial statements.

12. EXTRACT OF THE ANNUAL RETURN

The extract of the Annual Return in Form No. MGT 9 is furnished inAnnexure 1 and is attached to this Report.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Act and the Articles ofAssociations of the company Mr. Nirmit Lohia (DIN 03591937) retires by rotation at theensuing Annual General Meeting and being eligible offers himself for reappointment.

The company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independent directorsas prescribed under the Act.

14. BOARD EVALUATION

Securities Exchange Board of India (SEBI) vide its circular no.SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5th January 2017 had issued a guidance note on BoardEvaluation which inter alia contains indicative criterion for evaluation of the Board ofDirectors its Committees and the individual members of the Board.

Pursuant to the new Evaluation Framework adopted by the Board theBoard adopted a formal mechanism for evaluating its performance and as well as that of itsCommittees and individual Directors for the financial year 2017-18. The exercise wascarried out through a structured evaluation process covering various aspects of the Boardsfunctioning such as composition of the Board & Committees experience &competencies performance of specific duties & obligations attendance of themeetings governance issues etc. Separate exercise was carried out to evaluate theperformance of individual Directors who were evaluated on parameters such as attendancecontribution at the meetings and otherwise independent judgment safeguarding of minorityshareholders interest etc. The individual Director's performance was also evaluated andthe Board was of the view that the Directors fulfilled their applicable responsibilitiesand duties as laid down by the Listing Regulations and the Companies Act 2013 and at thesame time contributed with their valuable knowledge experience and expertise to grab theopportunity and counter the adverse challenges faced by the Company during the year

15. NOMINATION AND REMUNERATION POLICY

The Board has on the recommendation of the Nomination and Remunerationcommittee framed a policy for selection and appointment of Directors Senior Managementand their remuneration. The company is having a Nomination and Remuneration committeecomprising of following directors :

Name Category Status
Mr. S. K. Chatterjee Non Executive Independent Director Chairman
Mr. Anil Choudhury Non Executive Independent Director Member
Mr. Nirmit Lohia Non Executive Director Member

No meeting of the Nomination and Remuneration Committee held during theyear.

16. AUDIT COMMITTEE

The company is having an audit committee comprising of followingdirectors;

Name Category Status
Mr. S. K. Chatterjee Non Executive Independent Director Chairman
Mr. Anil Choudhury Non Executive Independent Director Member
Mr. Nirmit Lohia Non Executive Director Member

During the year 4 meetings of the Audit Committee was held on30.05.2017 10.08.2017 14.12.2017 and 14.02.2018.

17. MEETINGS

The details of the Board Meeting and General Meeting are given inAnnexure ‘2'.

18. DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION197(12) OF THE COMPANIES ACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014.

The required details are provided in Annexure ‘3'annexed to thisReport.

19. DISCLOSURE UNDER RULE 5(2) AND 5(3) OF THE COMPANIES (APPOINTMENTAND REMUNERATION OF

MANAGERIAL PERSONNEL) RULES 2014

The required details are provided in Annexure ‘4' annexed to thisReport.

20. DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act 2013 with respect toDirectors Responsibility Statement it is hereby confirmed that: (a) in thepreparation of the annual accounts the applicable accounting standards had been followedalong with proper explanation relating to material departures; (b) the directorshad selected such accounting policies and applied them consistently and made judgementsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the company at the end of the financial year and of the profit andloss of the company for that period; (c) the directors had taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities; (d) the directors had prepared the annualaccounts on a going concern basis; and (e) the directors had laid down internalfinancial controls to be followed by the company and that such internal financial controlsare adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.

21. CODE OF CONDUCT

The Company has a Code of Conduct which is applicable to directors andmanagement personnel of the Company. The Company believes in conducting business inaccordance with the highest standards of business ethics and complying with applicablelaws rules and regulations.

The Code lays down the standard procedure of business conduct which isexpected to be followed by the directors and management personnel in their businessdealings and in particular on matters relating integrity in the work place in businesspractices and complying with applicable laws etc. All the directors and managementpersonnel have submitted declaration confirming compliance with the code.

22. RISK MANAGEMENT POLICY

Pursuant to Section 134(3) (n) of the Companies Act 2013 the Board ofdirectors of the Company has adopted a Risk Management Policy of the Company. The Companymanages monitors and reports on the principal risks and uncertainties that can impact itsability to achieve its strategic objectives. The Company has introduced severalimprovements to Integrated Enterprise Risk Management Internal Controls Management andAssurance Frameworks and processes to drive a common integrated view of risks optimalrisk mitigation responses and efficient management of internal control and assuranceactivities. This integration is enabled by all three being fully aligned across Group wideRisk Management Internal Control and Internal Audit methodologies and processes.

23. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company promotes ethical behaviour in all its business activitiesand has put in place a mechanism for reporting illegal or unethical behaviour. The Companyhas a Vigil mechanism and Whistle blower policy under which the employees are free toreport violations of applicable laws and regulations and the Code of Conduct. Thereportable matters may be disclosed to the Ethics and Compliance Task Force which operatesunder the supervision of the Audit Committee. Employees may also report to the Chairman ofthe Audit Committee. During the year under review no employee was denied access to theAudit Committee.

24. PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of InsiderTrading with a view to regulate trading in securities by the Directors and designatedemployees of the Company. The Code requires pre-clearance for dealing in the Company'sshares and prohibits the purchase or sale of Company shares by the Directors and thedesignated employees while in possession of unpublished price sensitive information inrelation to the Company and during the period when the Trading Window is closed. All theBoard of Directors and designated employees have confirmed compliance with the Code.

25. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls withreference to financial statements. During the year such controls were tested and noreportable material weakness in the design or operation was observed. During the year thecompany appointed M/s Sanjeev Agarwal & Associates Chartered Accountants Kolkata asan Internal Auditor. The firm is authorized to by the Audit Committee to access theadequacy and compliance of internal control process statutory requirements etc. The AuditCommittee met regularly to review reports submitted by the Internal Auditor. The AuditCommittee upon discussion with Internal Auditor set up applicable control measures for theCompany.

26. INDIAN ACCOUNTING STANDARDS

Your Company has adopted Indian Accounting Standards i.e. Ind-AS witheffect from 1st April 2017 pursuant to the notification issued by the Ministry ofCorporate Affairs notification dated 16th February 2015 notifying the Companies (IndianAccounting Standard) Rules 2015. The Financial Statements for the year ended 31st March2018 provided in this Annual Report have been prepared following the Ind-AS. The financialStatements for the year ended 31st March 2017 have been restated to comply with Ind-AS tomake them comparable.

27. SIGNIFICANT AND MATERIAL ORDERS BY REGULATORS

There are no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and Company's operations infuture.

28. MATERIAL CHANGES

There are no material changes and commitments affecting the financialposition of the company have accured between the date of financial year of the Company anddate of the report. There is no change in the nature of business of the Company.

29. STATUTORY AUDITORS

At the 34th Annual General Meeting of the Company held on 20.09.2017M/s. B. Nath & Company Chartered Accountants (Firm Registration No. 307057E) wereappointed as Statutory Auditor of the Company to hold office from the conclusion of 34thAnnual General Meeting till the conclusion of 39th Annual General Meeting. They haveconfirmed that they are eligible to continue as Auditors of the Company.

The Notes on financial statement referred to in the Auditors' Reportare self-explanatory and do not call for any further comments. The Auditors' Report doesnot contain any qualification reservation or adverse remark.

30. SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANY

The Company has no Subsidiary. Associate or Joint Venture Company.

31. SECRETARIAL AUDIT

The Company has appointed Mr. Babu Lal Patni (FCS 2304) a PractisingCompany Secretary to conduct secretarial audit pursuant to Section 204 of the CompaniesAct 2013. Their report in form MR3 is attached to this report as annexure ‘5' Asregards his observation made in the Secretarial Audit we are to state that the necessarysteps are being taken to comply with the requirements.

32. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO

The information pertaining to Conservation of Energy TechnologyAbsorption Foreign Exchange Earnings and outgo as required under Section 134 (3)(m) ofthe Companies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 isfurnished in Annexure ‘6' and is attached to this report.

33. DEPOSITS

During the year under review your Company did not accept any depositswithin the meaning of Section 73 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014.

34. SOCIAL OBLIGATION

Your Company has taken up and is constantly in touch with the varioussocio-economic projects for uplifting standards of living of the people in and around itsestate where it operates.

35. LISTING ARRANGEMENTS

The Equity Shares of the Company are continued to be listed on theStock Exchange Mumbai (BSE). The Annual Listing Fees of BSE have been paid up to date

36. GENERAL

Your Director further state that during the year under review therewere no cases filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

37. ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankersbusiness associates consultants and various Government Authorities for their continuedsupport extended to your Company's activities during the year under review. Your Directorsalso acknowledge gratefully the shareholders for their support and confidence reposed onyour Company

Registered Office : By Order of the Board
Sir R. N. M. House
3-BLal Bazar Street N. K LOHIA

NIRMIT LOHIA

Kolkata - 700 001 Chairman-Cum-Managing Director

Director

Dated the 30th May 2018 DIN:00435485

DIN:03591937