DIRECTORS REPORT We have pleasure in presenting the 19th Annual Report together with the Financial Statements of the Company for the year ended 31st March, 2016. 2. Dividend The Directors recommend a dividend of Rs.8.00 per equity share i.e. @ 80% for the financial year ended 31st March, 2016 subject to approval of the shareholders at the ensuing Annual General Meeting. The dividend on equity shares, if approved by the members would involve a cash outflow of Rs.674.48 lakhs including dividend tax. 3. Transfer to reserves The Company proposes to transfer Rs.1,000.00 lakhs to the general reserve out of the amount available for appropriation and an amount of Rs.1,171.79 lakhs is proposed to be retained in the profit and loss account. 4. Operations The total tea manufacturing and sales in respect of the Indian operations for the year under review was 10.18 and 9.62 mn kg. as against 9.74 and 9.35 mn kg. respectively in the previous year. The production for the year under review was comparatively more by about 4.60%. The sales in terms of volume were more by about 2.94% and the average realizations were also more by about 8.00% for the year under review in comparison to the previous year. The total tea manufacturing and sales in respect of the African operations for the year under review was about 7.47 and 7.41 mn kg. as against 8.50 and 9.15 mn kg. respectively in the previous year. The manufacture and sale of tea were less for the year under review . The tea sales in terms of volume were also less by about 19% although the average realization was marginally better in comparison to the previous year. The production and sale of macadamia in terms of volume was about 0.58 and 0.60 mn. Kg as against 0.61 and 0.60 mn kg respectively in the previous year. The production of macadamia in terms of volume was less by about 5% whereas the sales in terms of volume was almost similar in comparison to the previous year. 5. Subsidiary Companies The Company has following three wholly owned subsidiaries as on March 31, 2016 : i) Dhunseri Petrochem & Tea Pte Ltd (DPTPL): ii) Makandi Tea & Coffee Estates Ltd (MTCEL) & iii) Kawalazi Estate Company Ltd (KECL) The entire share capital of the subsidiaries i.e. MTCEL and KECL are held by DPTPL and that of DPTPL are held by the Company, making them 100% wholly owned subsidiaries of the Company. There has been no material change in the nature of the business of the subsidiaries. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). Pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements of the Company. Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company. 6. Listing The equity shares of the Company are listed on BSE and NSE. 7. Directors' Responsibility Statement Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors confirm: (i) that in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same; (ii) that they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period; (iii) that they have 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; (iv) that they have prepared the annual accounts on a 'going concern' basis. (v) that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively. (vi) that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. The work performed by the internal auditor, statutory auditor and secretarial auditor and the reviews performed by management and the audit committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2015-16. 8. Directors & Key Managerial Personnel Mr. Rajiv Kumar Sharma, who was appointed as a director of the Company on 9th September, 2014, in a casual vacancy, retires by rotation at the ensuing 19th Annual General Meeting, and being eligible offers himself for reappointment. The Board recommends his reappointment. Mr Basudeo Beriwala, Ms. Nandini Khaitan and Mr. Ashok Kumar Lohia, were appointed at the last AGM as independent directors of the Company for a term of five consecutive years w.e.f. 9th September, 2014. Mr. Bharat Bajoria, was earlier appointed as an independent director for five consecutive years w.e.f. 8th September, 2014. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act. There has been no change in the Key Managerial Personnel of the Company during the year. 9. Number of Meetings of the Board The Board met four times during the financial year 2015-16. The details have been provided in the Corporate Governance Report in terms of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 which is annexed to this Report. 10. Board evaluation An annual evaluation of the performances of the Board, its committees and individual directors was undertaken during the year. 11. policy on directors appointment and remuneration and other details The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of the Directors' Report. 12. Internal financial control systems and their Adequacy The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this Report. 13. Audit committee The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this Report. 14. Auditors Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. Lovelock & Lewes, Chartered Accountants, were appointed as Statutory Auditors of the Company for a period of five years at the 17th Annual General Meeting (AGM) of the Company held on 8th September, 2014, subject to ratification of their appointment at every AGM. Their reappointment for the year 2016-17 is required to be ratified by the shareholders at the ensuing 19th AGM of the Company. 16. Auditors' report and secretarial auditors' report The auditors' report and secretarial auditors' report does not contain any qualifications, reservations or adverse remarks and have been annexed to the Report. 17. Risk management The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, which forms part of this Report. 18. Particulars of loans, guarantees and investments The particulars of loans, guarantees and investments have been disclosed in the financial statements. 19. Transactions with Related Parties All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Your Directors draw attention of the members to Note No. 32 to the financial statement which sets out related party disclosures. 20. Management's Discussion and Analysis Report The Management's Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 , is presented in a separate section forming part of the Annual Report. 21. Corporate social responsibility The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure I of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the Company's website:www.dhunsertea.com 22. Extract of annual return As stipulated under Section 92(3) of the Act, an extract of annual return is given in Annexure II in the prescribed Form MGT-9, which forms part of this Report. 23. Particulars of employees The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below: b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year: 24. Disclosure requirements As stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Corporate Governance Report along with the auditors' certificate thereon and Management Discussion and Analysis are attached, which form part of this Report. The code of conduct for the Board of Directors and the senior management adopted by the Company is available on the Company's website (<http://dhunseritea.com/investors-investors/> code-of-conduct/) Details of the familiarization programme of the independent directors are available on the Company's website (<http://> dhunseritea.com/wp-content/uploads/2015/06/Familiarisation-Programme-of-Independent-Directors.pdf). Policy for determining material subsidiaries of the Company is available on the Company's website (<http://dhunseritea.com/> wp-content/uploads/2015/03/policy-for-determining-material-subsidiary.pdf). Policy on dealing with related party transactions is available on the Company's website (<http://dhunseritea.com/wp-content/> uploads/2015/04/Related-party-transaction-policy.pdf). The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of Section 177(9) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 and the said policy is available on the Company's website (<http://dhunseritea.com/wp->content/uploads/2015/03/vigil-mechanism.pdf). 25. Deposits from public The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. 26. State of Company's affairs The present state of the Company's affairs is progressive enough viz-a-viz the industry and there is no other development which could result in an adverse situation for the Company in the near future. There is neither any change in the nature of business of the Company nor any significant and material orders was passed by any regulator or court or tribunals impacting the going concern status affecting the Company's operation in future. 27. Material changes and commitments, if any, affecting the financial position of the Company There are no such material changes and commitments which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the Report. 28. Particulars regarding conservation of energy & technology absorption etc. The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure III which forms part of this Report. 29. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has set up Internal Complaints Committee (ICC) under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There were no complaints received and /or disposed off during 2015-16. 30. Green Initiatives As part of our green initiative, the electronic copies of this Annual Report including the Notice of the 19th AGM are sent to all members whose email addresses are registered with the Company / Depository Participant(s). For members who have not registered their email addresses, physical copies of this Annual Report including the Notice of the 19th AGM are sent by permitted mode. The Company is providing e-voting facility to all its members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014. The instructions for e-voting is provided in Note 10 annexed to the Notice. 31. Acknowledgement Your Directors take this opportunity to express their grateful appreciation for the excellent assistance and cooperation received from the banks and other authorities. Your Directors also thank the employees of the Company for their valuable service and support during the year. Your Directors also gratefully acknowledge with thanks the cooperation and support received from the shareholders of the Company. For and on behalf of the Board of Directors C.K. Dhanuka Chairman Date : 27th May, 2016 Place : Kolkata, |