DIRECTORS' REPORT The Directors have pleasure in presenting their Fortieth Annual Report and Accounts for the period ended 31st CHANGE IN ACCOUNTING YEAR The Accounts under review are drawn up for fifteen month period ending 31st March 2016. This change has been effected in order to align with the definition of financial year as per the provisions of Clause 41 of Section 2 of the Companies Act 2013. The Company will revert to a full twelve months accounting year from 1st April 2016 and thereafter. The necessary approval was obtained from the Registrar of Companies, West Bengal for extension of time for holding this Annual General Meeting vide their order dated 16th May, 2016. SHARE CAPITAL During the year under review: a. No Equity shares have been issued with differential voting rights. Hence, no disclosure is required in terms of Rule 4 (4) of the Companies (Share Capital and Debentures) Rules, 2014. b. No issue of Sweat Equity Share has been made. Hence, no disclosure is required in terms of Rule 8 (13) of the Companies (Share Capital and Debentures) Rules, 2014. c. There was no issue of Employee Stock Option. Hence, no disclosure is required in terms of Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014. d. There was no provision made by the Company for any money for purchase of its own shares by employees or by trustees for the benefit of employees. Hence, no disclosure is required in terms of Rule 16 (4) of the Companies (Share Capital and Debentures) Rules, 2014. e. The issued, subscribed and paid up share capital of the Company as on 1st January, 2015 stood at Rs. 216 million divided into 21600000 Equity Shares of Rs.10/- each remained unchanged as on 31st March, 2016. TRANSFER FROM RESERVE Due to absence of profit during the financial period the Company has decided to meet the dividend payment obligation out of the accumulated profits from previous years in compliance with Section 123 of the Companies Act, 2013 and other applicable Rules thereto. DIVIDEND Your Directors have recommended a dividend of Rs. 4 per share (40%). Such dividend, on declaration, will be paid to those members whose names are recorded in the Register of the Company at the close of business on 21st July, 2016, subject, however to the provision of Section 126 of the of the Companies Act, 2013. OPERATIONS The total manufactured crop for the Company in all the three regions of operation i.e. Dooars, Darjeeling and Assam was 21.84 million kgs in 12 months vis-a-vis 22.09 million kgs. of 2014. The shortfall was on account of the early season drought and due to the fact that five of your Dooars gardens were lashed by a severe hail storm in the month of April resultant of which the harvested crop in those gardens were drastically reduced. The outsourced leaf segment also registered marginally lower volumes compared to 2014 on account of the fact that the Company as a whole resorted to an improved quality profile in manufacture, in order to enhance price realization and thereby record adequate margin in the operation. November rainfall, unprecedented in 2013 & 2014 shored up harvest levels towards the end of the year and enabled some of the gardens who had recorded lower levels of harvest in the first half of the season to record harvests more in line with the potential of the tea areas. This combined with the overall improved quality of manufacture and improvement of recorded price levels of most of the gardens thereby improving their sale price averages by the end of the year. But what really impinged adversely on the profitability of the gardens was the quantum jump up to 39% spread over three years in the labour wages post the negotiated settlement of the fresh labour wage agreement. The all India tea production as on 31st March, 2016 is 1294 million kgs. (15 months) in comparison to 1184 million kgs. in 2014 (12 months). The markets remained buoyant for good quality teas and the price levels attained by the better quality teas ensured that a number of gardens switched to quality manufacture eschewing crop. However, with some level of satisfaction that it is recorded here that all gardens of Goodricke Group Limited in Dooars featured in the top 20 position in price realization. Likewise, Thurbo was one of the most sought after marks in Darjeeling and Orangajuli & Nonaipara occupied positions 6 & 7 in the Orthodox price realization ladder in Assam. The markets remained extremely buoyant for Assam Orthodox on account of export demand from Iran and Germany and the market for Darjeeling Orthodox also remained fairly upbeat for the Goodricke gardens. The demand for medium and poor teas continued the tepid trends experienced in 2014. Export markets continued to be selective and it is with some satisfaction that we would record here that Company succeeded in breaking the "glass ceiling" by exporting one of the Dooars estates produce to UK. Needless to say the Company as a whole has enhanced its export levels over the levels attained in 2014. The Company continued to avail of Tea Board's replanting / rejuvenation subsidy scheme for replanting of old moribund tea areas post rejuvenation with quality and high yielding clones and biclonal seed stocks. This has enabled the company to ensure slow yet sustained enhancement of yields in its tea areas along with lowering and rejuvenation pruning which is followed by large scale infilling of tea areas in its estates which ensures yield levels above the economic threshold levels. CHANGE IN NATURE OF BUSINESS, IF ANY There has been no change in any business and all the Divisions of the Company continue to concentrate on their own business with growth plans in short to medium terms. DIRECTORS AND KEY MANAGERIAL PERSONNEL During the period under review Mr. A. K. Mathur who was a non executive director resigned from the Board of Directors w.e.f. close of business hours 30th July, 2015. The Board noted his resignation and appreciated the contribution made by Mr. A. K. Mathur during his association with the Company. In terms of Section 161 of the Companies Act, 2013, Mrs. S. A. Walker was inducted to the Board as an additional director in the category of non executive director on and from 30th July, 2015. Pursuant to Section 203 of the Companies Act, 2013 the Company has appointed the following Key Managerial Personnel with effect from 1st April 2014. Mr. A. N. Singh, Managing Director & CEO Mr. A. Sengupta, Vice President and CFO Mr. S. Banerjee, Company Secretary STATEMENT OF DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS The declaration required under Section 149 (7) of the Companies Act 2013 from the Independent Directors of the Company confirm that they meet the criteria of independence as prescribed in Section 149 (6) of the Companies Act, 2013 as well as per Listing Regulations, were duly received by the Company. REPORT ON CORPORATE GOVERANCE As per Listing Regulations, a Report on Corporate Governance alongwith the Auditors' Certificate regarding Compliance of Corporate Governance are attached as Annexure II and Annexure III respectively, forming part of this Report. CORPORATE SOCIAL RESPONSIBILITY (CSR) Your Company being a constituent of Camellia Plc., U.K., is conscious of its social responsibilities and the environment in which it operates. For several years the Company has increased its welfare activities in the area of health and safety, education, environment, Waste management etc. to the people in and around the tea estates and other establishments of the Company. Since as per Section 135 of the Companies Act, 2013 Corporate Social Responsibility has become an obligation under the Act the Company has taken up several specific projects to comply with the requirements of the Companies Act, 2013 and Rules made thereunder. The Board of Directors have formed a CSR Committee and adopted a CSR Policy for the Company and the same can be accessed at the Company's weblink www/goodricke.com/corporate/corporate-social-responsibility. The details of the projects undertaken are given in Annexure IV in the form prescribed under the Companies (Corporate Social Responsibility Policy) Rules 2014. The CSR Committee of the Board as on 31st March, 2016 consist of three directors namely, Dr. (Mrs) S. Kaul, Chairperson and Independent Director, Mr. A. N. Singh, Managing Director and CEO and Mr. K. Sinha, Independent Director. ANNUAL PERFORMANCE EVALUATION The Board formulated and adopted a Board Evaluation Framework for evaluating the performance of the Board as a whole, Committees of the Board and also performance of the Individual Directors. As per the said Evaluation Framework, the Board evaluated the performance of the Board, its Committees and the Individual Directors for the period 2015-16. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors based on the criteria such as attendance and participation in the meetings, preparedness on the issues to be discussed, suggestions on how risk factors may be handled etc. In addition, the chairman was also evaluated on the above aspects by the independent directors. The Independent Directors also carried out the performance evaluation in terms of Part VII (3) (c) of Schedule IV of the Companies Act 2013 in their Meeting held on 30th March 2015. ANNUAL RETURN The extract of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 forming a part of this Report, attached as Annexure V. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirement of Clause ( c) of sub section 3 of Section 134 of the Companies Act 2013 your Directors confirm that : (a) in the preparation of the annual accounts, for the financial period ended 31st March 2016, the applicable accounting standards has been followed alongwith the proper explanations relating to material departure, if any. (b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial period ended 31st March 2016 and of the profit and loss of the Company for that period; (c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets 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 the Company and that such internal financial controls are adequate and were operating effectively; and (f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. AUDITORS AND AUDIT REPORT M/s. Lovelock and Lewes, Chartered Accountants were appointed as the Statutory Auditors of the Company in the last Annual General Meeting held on 30th March 2015. Section 139 of the Companies Act 2013 contains the provisions related to appointment and retirement of Auditors. In view of the provisions of the said section the existing Statutory Auditors M/s. Lovelock & Lewes, Chartered Accountants were entitled to continue as the Statutory Auditors of the Company upto 31st March 2016. The Board of Directors in their meeting held on 23rd May, 2016 recommended appointment of M/s. Deloitte Haskins & Sells LLP, Chartered Accountants in place of M/s. Lovelock & Lewes as the Statutory Auditors of the Company in compliance to the provision set out in Section 139 of the Companies Act 2013 and rules made thereunder. COST AUDITORS In terms of Sub Section (3) of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, M/s. Shome & Banerjee, Cost Accountants (Firm Registration No. 000001) has been appointed by the Board of Director in its meeting held on 23rd May 2016, as the Cost Auditor of the Company for the financial year 2016-17 based on the recommendation of the Audit Committee. The remuneration to be ratified by the Members in the ensuing Annual General Meeting. SECRETARIAL AUDIT In terms of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. A. K. Roy & Co., Practicing Company Secretaries FCS 5684, CP No. 4557 had been appointed Secretarial Auditors of the Company for the financial period ended 31st March, 2016. The report of the Secretarial Auditors is enclosed as Annexure- VI to this report. The Report does not contain any qualification, reservation or adverse remark or disclaimer, which requires any further comments or explanations. PARTICULARS OF COMPLIANCE OF CONTRACTS OR ARRANGMENTS MADE WITH RELATED PARTIES The related party transactions entered during the year were in ordinary course of business and also on arm's length basis in compliance with the applicable provisions of the Companies Act, 2013 and Listing Regulations. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict of the interest with the Company at large. All related party transactions are presented to the Audit Committee and the Board, if required for approval. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. The Policy on Related Party Transactions as approved by the Board is uploaded on the Company's website at the web link: www.goodricke.com/policy-on-related-party-transactions . Accordingly, disclosures of related party transactions in terms of Clause (h) of sub section (3) of Section 134 of Companies Act 2013 read with Rule 8 (2) of the Companies (Accounts) Rule 2014 in Form AOC - 2, is not applicable. Transactions with related parties, as per requirements of Accounting Standard are disclosed in the notes to the accounts annexed to the financial statements. LOANS, GUARANTEES OR INVESTMENTS The particulars of loans, guarantees or investments made under section 186 of the Companies Act 2013 are covered in the notes of the Financial Statement for the period ended 31st March, 2016. HUMAN RESOURCES The Company has a large work force employed at the tea estates. There were no major disruptions of work at the garden or any other establishment of the Company during the period under review. The correct recruitment practices are in place to attract best talent. Industrial Relations at all the units remained satisfactory. The total remuneration drawn by MD & CEO and other Key Managerial Personnel form part of Extract of the Annual Return in Form MGT - 9 to this Reports enclosed as Annexure V. In terms of requirements of Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formed Internal Complaints Committee for its workplaces. During the year, no complaint regarding sexual harassment was received by the said Committee. RISK MANAGEMENT POLICY In terms of the requirement of the Companies Act, 2013 and Listing Regulations the Company has developed and implemented the Risk Management Policy. The Risk Management Committee of the Board reviews the same periodically. The Company has taken adequate measures to mitigate various risk encountered. In the opinion of the Board there is no such risk which may threaten the present existence of the Company. NOMINATION AND REMUNERATION POLICY The Company's Policy relating to appointment of Directors, payment of managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 and Listing Regulations is attached to this report as Annexure VII. The details of Programme for familiarization of Independent Directors with the Company , nature of Industry and other related matters are available on the weblink www.goodricke.com/corporate/ familiarisation-program-for-independent-directors SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS There is no significant or material order passed by any Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future. INTERNAL FINANCIAL CONTROL Your Company has adequate Internal Financial Control System at all levels of Management and they are reviewed from time to time. The Internal Audit is carried out in house as well as by firm of Chartered Accountants. The Audit Committee of the Board looks into Auditor's review which is deliberated upon and corrective action taken, wherever required. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Your Company transferred such amount of dividend lying unpaid or unclaimed for a period of seven years from the date of such dividend become due for payment to Investor Education and Protection Fund (IEPF). DEPOSITS Your Company has not accepted any deposits from public in terms of provisions contained in Chapter v of the Companies Act, 2013, or in terms of corresponding provisions of the Companies Act, 1956. PARTICULARS OF EMPLOYEES The ratio of the remuneration of each Director to the median employee's remuneration and other particulars or details of employees pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached to this Report as Annexure vIII. MANAGEMENT DISCUSSION AND ANALYSIS REPORT As per Listing Regulations Management Discussion and Analysis Report is attached as Annexure I forming part of this report. (c) Foreign exchange earnings and Outgo During the period, the foreign exchange outgo was Rs. 58.71 million and the foreign exchange earning was Rs. 1000.28 million. MATERIAL CHANGES AND COMMITMENTS Your Directors confirm that there are no material changes and commitments, affecting the financial position of the company which has occurred between the end of the financial year of the company and the date of this report ACKNOWLEDGEMENT Your Directors place on record their appreciation for employees at all levels, who have contributed to the growth and performance of your Company. Your Directors also thank the business associates, shareholders and other stakeholders of the Company for their continued support. On behalf of the Board A. N. Singh Managing Director & CEO S. Kaul K. Sinha Directors P.K. Sen Directors Place : Kolkata Dated : 23rd May, 2016 |