DIRECTORS' REPORT The Board of Directors of your Company have pleasure in presenting their 42nd Annual Report together with Audited Balance Sheet and statement of Profit & loss for the year ended 31st March, 2015. REVIEW OF PERFORMANCE Indian Economy During 2014-15 In a bid to make India's GDP data more accurate, relevant and globally comparable a new series of GDP data has been released where the new base year is 2011-12 instead of 2004-05 used earlier. Previously, India’s GDP implied GDP at factor cost, but from now onwards the calculation will be on the basis of globally accepted GDP at market Prices. India’s revised GDP growth rate now stands revised upwards at 5.1 % (4.7%) for FY 13-14 and 6.9 % (from 5%) for FY 14. This year's Economic Survey suggests that GDP growth for FY 15 is likely to 7.4% in FY 16, the growth rate is likely to go up further to any thing between 8.1 to 8.5% making India world's fastest growing large economy. IMF also expects India to overtake China in terms of growth rate in 2016. Tea Production in India was down compared to last year. The market continued to remain buoyant for the qualities teas. Price concertina between best, good, and medium varieties of teas widened further across all segments of teas. During the year under review, the Company has produced 57.16 lacs kgs of teas as compared to 51.07 lacs kgs. in the previous year. Your company continued to focus on making quality teas which is visible in our price realization which was - 93.35 per kg against realization of - 92.91 per kg in previous year. It is worthwhile to mention that the average realization shows our commitment to make good quality teas. During the current financial year your Company's turnover has grown to - 11986.01 lacs as against - 8449.04 lacs in the previous year, an increase of 41.86%. The Company has achieved better profit after tax during the current financial year of - 59.86 lacs as against - 40.97 lacs in the previous year, a increasing of 46.11%. Your company is committed for regular developmental work in the field through uprooting & replanting of old bushes and modernizing its factories by replacing obsolete plant & machineries with latest technology, plant & machineries with a view of making quality tea and to optimise the cost. Every effort is being made by your company to improve its performance in the coming years. Your Directors are glad to inform you that during the current financial year under review your company has ventured into trading of various merchandise viz Raw Jute and yellow peas etc which has substantially contributed to top line growth of the company. Your company is glad to inform you that in the matter against acquisition of land by Defence Department in the year 1962, Sole Arbitrator has already been appointed by the Central Government and the Arbitration proceedings are already in progress. The award in the matter is expected within a short period of time. As regards other litigations for compensation against Indian Air Force and Airport Authority of India, all efforts are being made to expedite the proceedings in the respective Courts of Law and your directors are hopeful of positive outcome in the near future. PROSPECTS The Tea Industry is doing well for the past many years due to demand and good price realisation for the better quality Tea. A good amount of rain fall in current Tea season shall spurt the prices and therefore, your Directors expect an another good year for the Tea Industry. DIRECTORS. In Accordance with the provisions of the Article of Association of the Company read with section 152 of the Companies Act, 2013, Dr. Ajit Kumar Agarwala (DIN: 00265775) is liable to retire by rotation and offers himself for reappointment, based on the recommendation of Nomination and Remuneration Committee , subject to the approval of the members at the ensuing Annual General Meeting. All the Directors of the Company have confirmed that they are not disqualified from being appointed as directors in terms of section 164 of the Companies Act, 2013. KEY MANAGERIAL PERSONNEL Dr. Ajit Kumar Agarwala (DIN:00265775) Managing Director and Mr. Rajendra Kanodia CFO and Mr. Roshan Dave Company Secretary of the Company, were designated as Key Managerial Personnel during the financial year 2014-15 as per provisions of Section 203 under Companies Act, 2013. No appointment/ resignation of KMPs were made during the year. DECLARATION BY INDEPENDENT DIRECTORS Dr. Jayantakumar Natwarlal Raja, Shri Milan Krishna Sarkar and Shri Hemant Kumar Agarwal, are Independent Directors on the Board of the Company. The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchange. COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION Pursuant to provisions of Section 178 of Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors of the Company, based on the recommendation of the Nomination and Remuneration Committee, has formulated a Remuneration Policy. The criteria for identification of the Board Member including that for determining the qualification, positive attributes, independence etc. are summarily given hereunder: a) The Board Member shall possess appropriate skills, qualification, characteristics and experience. The objective is to have a Board with diverse background and experience in business, government, academics, technology, human resources, social responsibilities, finance, law etc. and in such other area as may be considered relevant or desirable to conduct the Company's business in a holistic manner. b) Independent Director shall be person of integrity and possess expertise and experience and/or someone who the Committee/Board believes could contribute to the growth/philosophy/strategy of the Company. c) In evaluating the suitability of individual Board Members, the Committee takes into account many factors, including general understanding of the Company's business dynamics, global business, social perspective, educational and professional background and personal achievements. d) Director should possess high level of personal and professional ethics, integrity and values. He should be able to balance the legitimate interest and concerns of all the Company's stakeholders in arriving at decisions, rather than advancing the interests of a particular constituency. e) Director must be willing to devote sufficient time and energy in carrying out their duties and responsibilities effectively. He must have the aptitude to critically evaluate management's working as part of a team in an environment of collegiality and trust. f) The Committee evaluates each individual with the objective of having a group that best enables the success of the Company's business and achieve its objectives. EXTRACT OF THE ANNUAL RETURN An extract of Annual Return as on the financial year ended on March 31st, 2015 in Form MGT-9 as required under section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management & Administration) rules 2014, is set out as an "Annexure A" to the Director's Report. DETAILS RELATING TO REMUNERATION OF DIRECTORS. KEY MANAGERIAL PERSONNEL AND EMPLOYEES Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is marked as Annexure - A(VI) which is annexed hereto and forms part of the Directors' Report. DIVIDEND Considering the financial requirements towards the funding of the ongoing expansion plan, which we believe will enhance the shareholder's value in the long term, no dividend is recommended by the Directors of your company for the year ended 31st March, 2015. DEPOSITS The Company has not accepted any kind of deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. AUDITORS Messrs P.K.Shah & Co., Chartered Accountants and Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting, and have confirmed their eligibility and willingness to accept the office of Auditors, if re-appointed. The Company has also received a confirmation that their appointment, if made will be within the limit as prescribed under Section 139 of the Companies Act, 2013 and the rules therein. The reappointment of Statutory Auditor by the Audit Committee and the Board of Directors will be at such remuneration as mutually decided. The Members are requested to confirm the re-appointment of M/s. P.K.Shah & Co., Chartered Accountants as the Statutory Auditors of the Company, subject to the ratification by the members at each Annual General Meeting. The same would be also duly approved by the Audit Committee and the Board of directors in their duly convened meetings. AUDITORS' OBSERVATIONS. AUDITO'S REPORT The notes to the Accounts referred to in the Auditors' Report are self-explanatory and therefore do not call for any further comments. The Statutory Auditor P.K.Shah & Co., has submitted an Un-Qualified Audit Report for the financial year 2014-15. SECRETARIAL AUDIT REPORT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Mohan Ram Goenka a partner of M/s. M.R. & Associates, 46 B.B. Ganguly Street Kolkata - 700012, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Auditor has submitted an unqualified Secretarial Audit Report for the Financial year 2014-15. The Report of the Secretarial Audit is annexed herewith as "Annexure C". COST AUDIT Pursuant to Section 148 of the Companies Act, 2013, in terms of the Central Government's approval, the Board of Directors on the recommendation of the Audit Committee appointed Shri Debabroto Banerjee, Cost Accountant, Kolkata, as the Cost Auditor of the Company for the year under review relating to manufacturing activities by the Company. The remuneration proposed to be paid to the Cost Auditor requires ratification of the shareholders of the Company. In view of this, your ratification for payment of remuneration to the Cost Auditor is being sought at the ensuring Annual General Meeting. Shri Debabroto Banerjee has confirmed that his appointment is within the limits of Section 139 of the Companies Act, 2013 and has certified that he is free from any disqualifications specified under Section 148(5) and all other applicable provisions of the Companies Act, 2013. The Audit Committee has also received a certificate from the Cost Auditor certifying his independence and arm's length relationship with the Company. The Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period. FINANCE The present bankers of the Company are Central Bank of India, Bank of India, Corporation Bank, Yes Bank and Indusind Bank providing credit facilities to the company. The Directors express their appreciation for the assistance and co-operation provided by them. CREDIT RATING The Company continues to have the domestic credit rating of BBB -/stable from CRISIL which means sufficient safety with regard to timely payment of financial obligations. DIRECTORS RESPONSIBILITY STATEMENT As required by Section 134(3)(c) of the Companies Act, 2013 your Directors state that a) In the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed with proper explanation relating to material departures, if any; b) The accounting policies adopted in the preparation of the annual accounts have been applied consistently except as otherwise stated in the Notes to Financial Statements and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2014-15 and of the profit for the year ended 31st March, 2015; c) Proper and sufficient care has been taken 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 annual accounts for the year ended 31st March, 2015, have been prepared on a going concern basis. e) That proper internal financial control were in place and that the financial controls were adequate and were operating effectively. f) That system to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. INSURANCE Adequate insurance cover has been taken for properties of the company including Buildings, Plant and Machineries and Stocks against fire, earthquake and other risks as considered necessary. DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES Pursuant to sub-section (3) of Section 129 of the Act, read with Rule 5 of the Companies (Accounts) Rule, 2014, the statement containing the salient feature of the financial statement of a company's subsidiary or subsidiaries (including Associates & Joint Venture) is given in AOC-I as Annexure-E . INTERNAL CONTROL SYSTEMS AND AUDIT Responsibility for the internal control system lies with the Board of Directors as a whole, which establishes policies and periodically verifies its adequacy and effective functioning. The internal control system is first of all a "management" tool, in that it is useful and necessary for the Board of Directors, Executive Directors and managers in general for correctly and effectively performing the tasks assigned them. The internal control system permits monitoring of compliance with the rules and procedures governing performance of all the Company's business activities. Your 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. The Systems have been laid to ensure that all transactions are executed in accordance with management's general and specific authorization. No assets of the Company are allowed to be used for personal purposes, except in accordance with terms of employment or except as specifically permitted. Your Company has appointed an Internal Auditor as Independent Auditor who directly report to Audit Committee of the Board. an Internal Auditor constantly evaluates the risk management and Internal Control system and also suggest the ways to improve the same. The Report of the Internal Auditor facilitate to take corrective action in respective areas and thereby strengthen the controls. PARTICULARS OF EMPLOYEES The prescribed particulars of remuneration of employees pursuant to Section 134(3)(q) and Section 197(12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out as Annexure 'D' to the Director's Report. ENVIRONMENT The Company is conscious of clean environment and safety operations. It ensures safety of all concerned, compliance with environmental regulations and preservation of natural resources. DISCLOSURE OF PARTICULARS WITH REGARD TO CONSERVATION OF ENERGY. TECHNOLOGY AND FOREIGN EXCHANGES AND OUTGO The particulars as prescribed under sub-section (3) of the Section 134 of the Companies Act, 2013 read with Rule 5(3) of the Companies (Accounts) Rules, 2014, are given at "Annexure B" to the Directors' Report. NUMBER OF MEETINGS OF BOARD OF DIRECTORS The details of the number of meetings of the Board held during the financial year 2014-15 forms part of the Corporate Governance Report. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS /COURTS / TRIBUNALS No significant and material order passed by the regulators, courts. Tribunal impacting the going concern status and company's operations in future. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, the Directors individually as well as the evaluation of the working of various Committees. The Independent Directors also carried out the evaluation of the Chairman and the Non-Independent Directors, the details of which are covered in the Corporate Governance Report. FAMILIARISATION PROGRAMME FOR BOARD MEMBERS The Company is required to conduct the Familiarisation Programme for Independent Directors (IDs) in terms of Clause 49(II)(B)(7) of the Listing Agreement, to familiarize them about the Company and their roles, rights, responsibilities in the Company. The Familiarisation Programme is stated in the Corporate Governance Report forming part of this Annual Report. The details of such Familiarisation Programme for directors may be referred to, at the website of the Company www.teraiaroup.com VIGIL MECHANISM / WHISTLE BLOWER POLICY In compliance with provisions of Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has framed a Vigil Mechanism/ Whistle Blower Policy to deal with unethical behaviour, actual or suspected fraud or violation of the company's code of conduct or ethics policy, if any. The Vigil Mechanism/Whistle Blower Policy has also been uploaded on the website of the Company www.teraiaroup.com DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE Your Company is committed to provide and promote safe, healthy and congenial atmosphere irrespective of gender, caste, creed or social class of the employees. Your company has put in place a "Policy on Prevention of Sexual Harassment" as per The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The said Policy is available on your Company's website www.teraigroup.com <http://www.teraigroup.com> and a link to the said Policy has been provided. No cases have been filed under the Act as the Company is keeping the working environment healthy. AUDIT COMMITTEE The Audit Committee presently comprises of Mr. Hemant Kumar Agarwal - Independent Director and Chairman of the committee, Dr. Jayantakumar Natwarlal Raja, Mr. Milan Krisna Sarkar- as other members and Mr. Roshan Dave, Company Secretary acts as secretary to the committee. The terms of reference of the Audit Committee has been provided in the Corporate Governance forming part of this report. STAKEHOLDERS RELATIONSHIP COMMITTEE The Stakeholders Relationship Committee comprises of Dr. Jayanta Kumar Natwarlal Raja - Independent Director and Chairman of the committee, Mr. Milan Krisna Sarkar, Mr. Hemant Kumar Agarwal as other members and Mr. Roshan Dave Secretary of the company who act as the Secretary of the Committee. This Committee additionally monitors the relationship with Stakeholders including Shareholders, Employees, Customers, Vendors, Government and Society. Such meetings are held on quarterly basis and the Shareholders' complaints and grievances are reviewed in detail by the Committee and prompt and effective directions are given to the Registrars for proper disposal. During the Financial Year 2014 -15 the Company has not received any complaint from the Shareholders / Investors of the Company and no complaint is pending to be resolved as on date. NOMINATION AND REMUNERATION COMMITTEE (NRC1 The Nomination & Remuneration Committee comprises of Mr. Milan Krisna Sarkar - Independent Director and Chairman of Committee, DR. Jayanta Kumar Natwarlal Raja and Mr. Hemant Kumar Agarwal as other members. This Committee recommends and reviews the Compensation packages of the individuals. The key points of the policy formulated by nomination and remuneration committee on directors' and remuneration including criteria for determining qualifications, positive attributes, independence of director and other matters provided under section 178(3) of Companies Act, 2013 is uploaded on the website of the Company www.teraiaroup.com CORPORATE SOCIAL RESPONSIBILITY (CSR1 COMMITTEE During the year the Company has not come under the purview to form Corporate Social Responsibility Committee Pursuant to Section 134 of the Companies Act and Companis (Corporate Social Resposibility) Rules 2014, But Your Company has continued to play its role as a responsible corporate, adding value to Society , and addressing the contemporary societal needs and challenges. The Company continues to support the "Amit Agarwala Foundation", a Public Charitable Trust with a vision of creating permanent institutes for use by the needy masses in the field of education, medical facilities, and other public utilities and to provide quality services in all such institutes in affordable cost. The following projects are going on as detailed below : a) "Shree Shree Mahamaya Kalibari Naat Mandir. Desbandhu Para" Opposite Amit Agarwala Bang Bhawan which is due for inauguration on 13th Sept. 2015. b) Constructed first school for blind in north Kolkata, i,e "Amit Aaarwala School for Blind" to provide the sphere of education to blind boys and girls, and art, activities for free of cost to blind boys and girls. This was inaugurated by the Hon'ble Governor of West Bengal, Shri M.K.Narayanan on 27th day of January, 2013. c) "Amit Aaarwala Smrity Bhawan" a multipurpose facility which provides various facilities for attendants of patients Admitted at North Bengal Medical College & Hospital. The same provides accommodation and food to attendants of such patients at a reasonable cost on per day basis. d) "Amit Aaarwala Bana Bhawan" constructed on a land approximately 8,500sq.ft.having constructed area near 17,000 sq. ft. The Bhawan has multifarious facilities for the residents of the under privileged society of Siliguri. It is located in the heart of city Siliguri Town. This was inaugurated by Shri Pranab Mukherjee the then Hon'ble Finance Minister of India, and now the Hon'ble President of India on 13th September, 2011. e) "Amit Aaarwala Old Aae Recreation Centre" with facilities to the weaker and under privileged citizens of the city of Siliguri and entire North Bengal. There is a library and a reading room basically to provide a meeting Place for elderly persons, who meet, enjoy company of each other reading news paper and books etc. There are other units namely "Amit Aaarwala Table Tennis Academy" and "Amit Aaarwala Vocational Trainina Centre" in the said premises. PREVENTION OF INSIDER TRADING The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code. RELATED PARTY TRANSACTIONS All transactions entered with Related Parties during the financial year were on an arm's length basis and were in the ordinary course of business and the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in Form AOC-2 is not required. Further, there are no materially significant related party transactions during the year under review made by the Company with Promoters, Directors, Key Managerial Personnel or the other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted along with a statement giving details of all related party transactions is placed before the Audit Committee. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website www.teraiaroup.com RISK MANAGEMENT The Company has laid down the procedures to inform to the Board about the risk assessment and minimization procedures, which shall be responsible for framing, implementing and monitoring the risk management plan of the company. PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS UNDER SECTION 186 Details of Loans, Gurantees and Investment covered under the provision of section 186 of the Companies Act, 2013 is given in the Financial Statement forming parts of the Annual Report. REPORT ON CORPORATE GOVERNANCE In terms of requirements of clause 49 of the Listing Agreement with the Stock Exchanges, a Report on Corporate Governance together with Practising Company Secretary Certificate regarding Compliance of Conditions of Corporate Governance are attached as Annexure- F, forming part of this report. MANAGEMENT DISCUSSION & ANALYSIS REPORT As required in terms of clause 49 of the Listing Agreement with the stock exchange, a Management Discussion and Analysis Report is attached as Annexure-G forming part of this report. APPRECIATION The Board of Directors take this opportunity to express their sincere appreciation for the excellent support and co-ordination received from Banks, Financial Institutions and Tea Board authorities for continued enthusiasm, total commitment, dedication and efforts of the executives and employees of the Company at all levels, who contributed to the efficient operation and management of the Company. We are also deeply grateful for the continued confidence and faith reposed on us by the shareholders. By order of the Board For Terai Tea Company Limited Sd/- Ajit Kumar Aaarwala Manaaina Director Reaistered Office : 10,Government Place (East) Kolkata - 700 069 Dated : 14th day of August, 2015 |