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Warren Tea Ltd.

BSE: 508494 Sector: Agri and agri inputs
NSE: WARRENTEA ISIN Code: INE712A01012
BSE 00:00 | 23 Apr 62.90 -0.80
(-1.26%)
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NSE 05:30 | 01 Jan Warren Tea Ltd
OPEN 62.90
PREVIOUS CLOSE 63.70
VOLUME 10
52-Week high 129.50
52-Week low 57.55
P/E
Mkt Cap.(Rs cr) 75
Buy Price 62.90
Buy Qty 59.00
Sell Price 64.00
Sell Qty 108.00
OPEN 62.90
CLOSE 63.70
VOLUME 10
52-Week high 129.50
52-Week low 57.55
P/E
Mkt Cap.(Rs cr) 75
Buy Price 62.90
Buy Qty 59.00
Sell Price 64.00
Sell Qty 108.00

Warren Tea Ltd. (WARRENTEA) - Director Report

Company director report

Directors Rs. Report

The Directors present their Forty-first Annual Report with the Audited FinancialStatements of your Company for the year ended 31st March 2018.

Extract of Annual Return

An extract of the Annual Return as provided under Section 92(3) of the Companies Act2013 read with rule 12(1) of the Companies (Management and Administration) Rules 2014 isgiven in MGT-9 which is attached as Annexure A to this Report.

Board Meetings

The Board of Directors met 5 (Five) times on various dates during the financial year2017-18. The details have been p rovided in the Corpo rate Governance Report pursuant toSecurities and Exchange Board of India (Listing Obligation and Disclosure Requirements)Regulations 2015 which is annexed as Annexure G to this Report.

Directors Responsibility Statement

Pursuant to the requirements of Section 134(3)(c)read with Section 134(5) of theCompanies Act 2013 the Directors would like to state that:

(a) in the preparation of the annual accounts the applicable Indian AccountingStandards (Ind AS) have been followed and there are no material departures therefrom;

(b) the Directors had selected such accounting policies and applied them consistentlyin accordance with applicable provisions and made judgements and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the loss of th e 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 this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(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

Independent Directors Rs. Declaration

All the I ndependent Directo rs have given dec larations required under Section 149(7)of the Companies Act 2013 confirming that they meet the criteria of independence underSection 149(6) of the Companies Act 2013 which were duly received by the Company

Particulars of loans guarantees and investments

The particulars of loans made by the Company are covered in Notes 4 & 12 of theNotes to the Financial Statements.

The Company has not given any guarantee.

Particulars of investments made by the Company is given in Note 3 of the Notes to theFinancial Statements.

Related Party Contracts

The particulars of contracts or arrangements made with related parties is attached tothis Report as Annexuie B.

State of the Company Affairs
Current Year Previous Year
( Rs. in Lakhs) ( Rs. in Lakhs)
Profit/(Loss) before Depreciation and Tax (714.03)

(200836)

Less: Depreciation and Amortization 363.87

36191

Profit/(Loss) for the period (1077.90)

(237027)

Tax Expense
Current Tax
Deferred Tax (288.66)

(74201)

Profit/ (Loss) for the Year (789.24)

(162826)

Other Comprehensive Income 374.64

(131.91)

Total Comprehensive Income (414.60)

(1760.17)

Balance bro ught forward from Previous Year 5687.72

7447.89

Balance carried to Balance Sheet 5273.12

5687.72

The financial statements for the year ended 31st March 2018 are the first financialstatements of the Company under Indian Accounting Standards. Comparative figures relatingto previous year and on the date of transition i.e. 1st April 2016 have also beenprepared in accordance with the Ind AS.

There were no companies which have become/ceased to be Subsidiaries Joint Ventures andAssociate Companies during the year.

Maple Hotels & Resorts Limited ( Rs. Maple Rs. ) continues to remain an AssociateCompany whose financial statements for the year ended 31st March 2018 are the firstfinancial statements of that company under Indian Accounting Standards; comparativefigures relating to previous year and on the date of transition i.e. 1st April 2016 havealso been prepared in accordance with the Ind AS. During the year ended 31 st March 2018Maple recorded an increase of about 21.07% in its turnover to Rs. 1860.88 Lakhs from Rs.1537.08 Lakhs in the previous year which has resulted in profit before Exceptional Itemsand Tax at Rs. 182.87 Lakhs during the year under review as against a loss of Rs. 161.00Lakhs in the previous year.

As required under Section 129(3) of the Companies Act 2013 consolidated Fin ancialStatements together with a statement containing the salient features of the Financ ialStatements of Maple forms a part of this Annual Report.

Deposits

The Company has not accepted any deposits within the meaning of ChapterV of theCompanies Act 2013. Regulatory Orders

There is no significant and material order passed by Regulators/Courts/Tribunalsimpacting the going concern status and Company operations i n future.

Internal Control Systems

Your Company has adequate Internal Financial Control systems at all levels ofManagement and they are reviewed from time to time by firms of practising CharteredAccountants who submit Reports upon completion of audit for consideration by theDirectors. The details of the Internal Control Systems and their adeq uacy are set out inthe Management Discussion and Analysis Report forming part of the Board Rs. s Report. TheAudit Committee of the Board looks into the Auditors Rs. review which is deliberated uponand corrective action taken wherever required.

Auditors Rs. Report

Messrs B M Chatrath & Co LLP Statutory Auditors have submitted their Report inrespect of the financial year 2017-18 under Section 143 of the Companies Act 2013.

The report of the Statutory Auditors during the year under review does not contain anyqualification reservation or adverse remark or disclaimer which requires any furthercomments or explanations in this report.

The Notes to the Financial Statements are also self-explanatory and do not call for anyfurther comments.

Cost Audit

For the year ended 31st March 2017 the Cost Audit had been completed by Messrs Shomeand Banerjee Cost Accountants. The Cost Audit Report had been submitted by the CostAuditors to the appropriate authorities within the stipulated time on 4th October 2017.

Secretarial Audit

In terms of Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 Messrs MKB & AssociatesPractising Company Secretaries had been appointed as the Secretarial Auditor of theCompany to carry out the Secretarial Audit for the year 2017-18.

The Secretarial Audit Report given by Messrs MKB & Associates Company Secretariesin Practice is annexed to this Report as Annexure C which is self-explanatory and does notcontain any qualification reservation or adverse remark or disclaimer which requires anyfurther comments or explanation.

Resume of Performance

During the year under review climatic conditions arising primarily from globalclimatic changes generally remained below the levels desirable to result in augmentedvolume of crop produced which continued to be affected by pest attacks. As your Companycontinues with its emphasis on tea as health drink in consonance with its integrated PestManagement Policy it does not use strong pesticides thereby also maintain Maximum ResidualLevels and accordingly it has adopted appropriate measures to counter pest. Production forthe year has increased resulting in improved bottom-line. You would be happy to note thatthe Company revenue improved to Rs. 12037.54 Lakhs from Rs. 111 55.36 Lakhs in theprevious year and the loss for the year was Rs. 414.60 Lakhs which was a substantialreduction from Rs. 1760.17 Lakhs in the previous year.

Crop

Your Company sal eable crop was higher at 6.71 Million Kgs. as compared to the previousyear Rs. s production of 6.09 Million Kgs.

Comparative Crop figures during the past five years for its seven tea estates are givenbelow:

Year Saleabl e Crop
Ended on In Million Kgs.
31.03.2018 6.71
31.03.2017 6.09
31.03.2016 7.18
31.03.2015 6.58
31.03.2014 7.77

Sales

Proceeds from sale of tea increased to Rs. 11845.39 Lakhs for the year under review asagainst Rs. 10878.26 Lakhs i n the previou s year.

Quality

Your Company policy of manufacture only from its own leaf together with goodagricultural practices continue to contribute to Quality

Your Directors remain steadfast in their endeavour that the teas of your Company areproduced in a socially responsible manner. All tea estates of your Company continue tohave Rainforest Alliance Certification ISO 22000:2005 Certification as well as TrusteaVerification Certification apart from continuing to be participants of the Ethical TeaPartnership Programme of UK. The Company Integrated Pest Management Policy for agro inputsare in consonance with the Plant Protection Code of theTea Board of India. Your Companyandits Management continues to be ever watchful on the issues of Maximum (PermissibleChemicals) Residue Limits.

Exports

Exports for the year was Rs. 479.21 Lakhs against Rs. 953.88 Lakhs for the previousyear.

Prospects

Your Directors have taken diverse steps for improving production both in terms ofquality and quantity and it is expected that with average growing conditions the Companyperformance would improve further. Your Directors are pleased to report that during thecurrent year there is marked improvement in quality resulting in higher unit pricerealizations.

Shareholders

Your Directors are of the view that considering the loss for the year it would not beprudent to declare any dividend for the year under review.

It is proposed to reclassify as public the entities belonging to a former promotergroup. For the purpose necessary approvals would be sought includi ng that of theShareholders at the forthcoming Annual General Meeting.

Material changes and commitments consequent to year end

Your Directors confirmthat there were no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear to which the financial statement relates an d the date of this report .

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:

(A) Conservation of energy

(i) The steps taken or impact on conservation of energy:

The Company is ever sensible on conserving energy and reducing its consumption. TheCompany has been sensitive enough on this issue for several years and continues with itsefforts to regulate consumption and conserve energy. Apart from the ecological impactenergy c ost is one of th e two major inputs in the production cost other being the labour cost. The Company with the view to reduce the major item of cost is continuouslytrying to explore avenues to reduce consumption of energy.

As a policy the old and existing equipment are being replaced with newer/energyefficient equipment. To become more energy efficient the processes are being reviewed andnecessary changes are being carried out wherever possible with a view to conserve and makeefficient use of energy.

Theprocess ofreplacing incandescentbulbs with CFL/LED continues. The Companyiscontinuously replacing the traditional high gas consumption burners with more efficient economical burners which have reduced energy consumption. All the estates of the Company aremaking efforts to optimize machinery output resulting in power savings.

(ii) The steps taken by the Company for utilizing alternate sources of energy:

During the year under review no major steps were initiated for utilizing alternatesources of energy by your Company

(iii) The capital investment on energy conservation equipment:

The Company continues to invest resulting in energy savings. Installation of VFBD andCFM together with economical burners and installation of conveyer system have increasedproduction efficiently which has resulted in overall reduction of both energy consumptionand manpower which has ultimately reduced the cost of production. Daily monitoring of bothgas and electricity are being carried out and immediatecorrective action where necessaryis being taken to become more energy efficient.

(B) Technology absorption:
(i) The efforts made towards technology absorption;
(ii) The benef its derived like product improvement cost reduction product development or import substitution;
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - Not Applicable
(a) the details of technology imported;
(b) the year of import;
(c) whether the technology been fully absorbed;
(d) if not fully absorbed areas where absorption has
not taken place and the reasons thereof; and

(iv) The expenditure incurred on Research and Development:

The Company did not carry out any Research & Developmental activities on its own.However during tie year the Company subscribed a sum of Rs. 24.36 Lakhs to Tea ResearchAssociation (TRA) which has been set up for the purpose of carrying out research aimed atimproving vaious aspects of tea plantations who derive benefit from such detailed workcarried out by TRA. The expenses for such work are collectively borne by TRA from thecontributions made by various tea co mpanies.

(C) Foreign exchange earnings and outgo:

Foreign exchange — Earned (Gross) — Rs. 496.07 Lakhs
Outgo — Rs. 24.64 Lakhs

Risk Management

The Company has developed and implemented a Risk Management Policy.The Risk ManagementCommittee of the Board reviews the risk assessment and minimization procedure in the lightof the Risk Management Policy of the Company. Details of Risk Management Committee aregiven separately in the Corporate Governanc e Report at Annexu re G to this Report. In theopinion of the Board there is no such risk which may threaten the present existence of theCompany.

Corporate Social Responsibility

The Corporate Social Responsibility Committee comprises of Mrs S Barman as Chairpersonand Mrs A K Bindra Mr Vinay K Goenka and Mr S K Ghosh as Members with President-Legal& Company Secretary as its Secretary. The broad terms of reference of the CorporateSocial Responsibility (CSR) Committee are:

— Formulate and recommend to the Board the C SR Policy

— Recommend the amount of expenditure to be incurred on the activities undertaken

— Monitor the CSR Policy of the Company from time to time

— Review the performance of the Company in the area of CSR including theevaluation of the impact of the Company CSR activities

— Review the Company disclosure of CSR matters

The Committee has framed the CSR Policy which is available on Company website at www.warrentea.com The CSR Policy and related matterstogether with details of the Committee have been annexed as Annexure D to this Report.

Board Evaluation

The Nomination and Remuneraton Committee has earlier approved the Board EvaluationPolicy. All the Directors including Independent Directors and the Non-IndependentDirectors have continued to contribute their inputs in the process of evaluation of theDirectors. The Independent Directors and the Nomination and Remuneration Committee Membershave continued to review the performance of all the Directors including the Chairman an dthe Managing Director and thence the performance of the Board as awhole. The Board inturn with such inputs have carried out annual evaluation of its own performance itsCommittees and individual Directors.

Audit Gommittee

The Audit Committee of the Board consists of three Non-executive Independent D irectorswith Mr S Bhoopal as Chairman Mr L K Halwasiya and Mr N Dutta as members. During the yearunder review the Board accepted all the recommendations made by the Audit Committee.Further details of the Committee relating to their terms of reference composition andmeetings held during the year are included in the report on Corporate Governance inAnnexure G to this Report.

Vigi Mechanism Gommittee

The Company has established a Vigil Mechanism for directors and employees to reporttheir genuine concerns about unethical behavior actual or suspected fraud or violation ofCompany Code of Conduct or ethical policy The Audit Committee of the Board monitors an doversees such Vigil Mechanism of the Company. The Vigil Mechanism provides the whistleblower to lodge Protected Disclosure in writing to the Committee in the form of a letterin a closed envelope or by e-mail to the dedicated address; protection to genuine whistleblowers would be given against any unfair treatment and any abuse of this protection willattract disciplinary action. The Company has also provided a direct access to the Chairmanof the Audit Committee on reporting issues concerning the interests of the employees andthe Company The Vigil Mechanism/Whistle Blower Policy of the Company has been uploaded onthe website of the Company and can be accessed at www.warrentea.com.

Nomination and Remuneration Committee and Policy

The Committee consists of Mr S Bhoopal Mrs S Barman and Mr N Dutta all Non-executiveIndependent Directors with Mr S Bhoopal as Chairman. It recommends to the Board interalia the Remuneration Package of Directors and Key Managerial Personnel. Further detailsrelating to the Committee are set out in the Report o n Corporate Governance in Annexure Gto this Report.

The Nomination and Remuneration Committee has formulated a policy for evaluation ofDirectors which contains evaluation criteria; such criteria include contributing tomonitoring and reviewing etc. and has acted upon the same The particulars required to befurnished relating to the Policy on Directors Rs. appointment and remuneraton includingcriteria for determining qualification positve attributes and independence of a Directorand other related matters including remuneration of employees has been uploaded on tiewebsite of the Company which can be accessed under the weblink:htp://www.wanentea.com/Documents/nominaton_remunerajon_policy.pdf .

The Company Policy on Di rector Rs. s appointment and remuneration and other mattersprovided i n Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport.

Stakeholders Relationship Committee

The Committee consists of Mr S Bhoopal as the Chairman and Mrs A K Bindra Mr Vinay KGoenka and Mr S K Ghosh as members. Details of the Commitee are provided in the Report onCorporate Governance in Annexure G to this Report.

Change in nature of Business if any

There has been no change in the nature of business of the Company

Statement of compliance of applicable Secretarial Standards Your Company hascomplied with applicable Secretarial Standards.

Details of Directors/Key Managerial Personnel

In accordance with the Articles of Association of the Company MrVinay K Goenka (DIN00043124) Chairman of the Company retires by rotation and being eligible has offeredhimself for reappointment.

On recommendation of the Nomination and Remuneration Committee the Board of Directorshave approved reappointment of all five Independent Directors of the Company subject toapproval of the shareholders.

Personnel

In accordance with the provisions of Section 197 (12) of the Companies Act 2013 readwith Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the particulars and information of the employees has been set out in Annexure E to this Report.

Your Company treats its human capital as its most important asset. The welfare andwell-being of the workers are monitored closely and the Company maintains harmoniousrelationship with the employees.

Industrial relations remained peaceful throughout the year and your Board of Directorsthank executives staff and workers at all levels for their valuable service and supportduring the year. All estates of your Company are certified under the Rainforest Allianceas well as Trustea indicating firm commitment towards sustainability as well as workersRs. health hygiene and safety. It is your Companys endeavour to provide safe healthy andsustainable work environment in all the estates. The Company has always believed in apolicy against sexual harassment which has also found its place in the governing Codes ofConduct and Ethics applicable to its employees which includes a mechanism to redress suchcomplaints. Further the Company has in place Internal Complaints Committees for Assam andKolkata and during the year under review there were no complaints of sexual harassment atany of the units.

Corporate Governance

The Company has complied with the Corporate Governance requirements under the Act asstipulated under Regulation 17 to Regulation 27 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015. AManagementDiscussion and Analysis Report is provided in Annexure F. A separate Report on CorporateGovernance in terms of Regulation 34(3) of the Securities and Exchange Board of India(Listing Obligation and Disclosure Requirements) Regulations 2015 is also provided inAnnexure G to this Report.

Certifications

A Declaration affirming compliance with the Code of Conduct of the Company an d AuditorRs. s Certificate of compliance with theconditons of Corporate Governance are collectiveyannexed and forms part of this Report.

Auditors

Messrs B M Chatrath & Co LLP Chartered Accountants were appointed as StatutoryAuditors of the Company at the thirty-seventh Annual General Meeting held on 10thSeptember 2014 to hold office till the conclusion of the forty-second Annual GeneralMeeting.

Messrs Shome & Banerjee Cost Accountants have been reappointed for audit of CostAccounts maintained by the Company for the year ending 31st March 2019 and theirremuneration is being placed for approval of the Shareholders at the forthcoming AnnualGeneral Meeting.

Kolkata Vinay K Goenka
26th May 2018 Chairman