The Directors have pleasure in presenting their Fortieth Annual Report and Accounts forthe period ended 31st March 2016.
| ||15 months Period ended ||Year ended |
| ||(31.3.2016) ||(31.12.2014) |
| || |
(Rs. in millions)
|GROSS SALES ||7427.03 ||6001.63 |
|PROFIT BEFORE EXCEPTIONAL ITEM & TAX ||(333.43) ||290.39 |
|Exceptional Item ||370.38 || |
|Profit before Tax ||36.95 ||290.39 |
|Less: Tax Expense ||165.85 ||68.00 |
|PROFIT/(LOSS) AFTER TAX ||(128.90) ||222.39 |
|Add: Profit brought forward from last year ||43.61 ||47.85 |
| ||(85.29) ||270.24 |
|APPROPRIATIONS: Dividend ||86.40 ||97.20 |
|Tax on Dividend ||17.59 ||19.43 |
|Transfer to General Reserve || ||110.00 |
|Transfer from General Reserve ||200 || |
|Balance carried forward ||10.72 ||43.61 |
The above Financial Results for the fifteen months period ended 31st March 2016 havebeen prepared to comply with Section 2 (41) of the Companies Act 2013 and hence theprevious year figures are not comparable.
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 asper the provisions of Clause 41 of Section 2 of the Companies Act 2013. The Company willrevert to a full twelve months accounting year from 1st April 2016 and thereafter. Thenecessary approval was obtained from the Registrar of Companies West Bengal for extensionof time for holding this Annual General Meeting vide their order dated 16th May 2016.
During the year under review:
a. No Equity shares have been issued with differential voting rights. Hence nodisclosure is required in terms of Rule 4 (4) of the Companies (Share Capital andDebentures) Rules 2014.
b. No issue of Sweat Equity Share has been made. Hence no disclosure is required interms 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 interms 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 ownshares by employees or by trustees for the benefit of employees. Hence no disclosure isrequired in terms of Rule 16 (4) of the Companies (Share Capital and Debentures) Rules2014.
e. The issued subscribed and paid up share capital of the Company as on 1st January2015 stood at Rs. 216 million divided into 21600000 Equity Shares of Rs.10/- each remainedunchanged as on 31st March 2016.
TRANSFER FROM RESERVE
Due to absence of profit during the financial period the Company has decided to meetthe dividend payment obligation out of the accumulated profits from previous years incompliance with Section 123 of the Companies Act 2013 and other applicable Rules thereto.
Your Directors have recommended a dividend of Rs. 4 per share (40%). Such dividend ondeclaration will be paid to those members whose names are recorded in the Register of theCompany at the close of business on 21st July 2016 subject however to the provision ofSection 126 of the of the Companies Act 2013.
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 millionkgs. of 2014. The shortfall was on account of the early season drought and due to the factthat five of your Dooars gardens were lashed by a severe hail storm in the month of Aprilresultant of which the harvested crop in those gardens were drastically reduced.
The outsourced leaf segment also registered marginally lower volumes compared to 2014on account of the fact that the Company as a whole resorted to an improved quality profilein manufacture in order to enhance price realization and thereby record adequate marginin the operation.
November rainfall unprecedented in 2013 & 2014 shored up harvest levels towardsthe end of the year and enabled some of the gardens who had recorded lower levels ofharvest in the first half of the season to record harvests more in line with the potentialof the tea areas. This combined with the overall improved quality of manufacture andimprovement of recorded price levels of most of the gardens thereby improving their saleprice averages by the end of the year. But what really impinged adversely on theprofitability of the gardens was the quantum jump up to 39% spread over three years in thelabour 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) incomparison to 1184 million kgs. in 2014 (12 months).
The markets remained buoyant for good quality teas and the price levels attained by thebetter quality teas ensured that a number of gardens switched to quality manufactureeschewing crop. However with some level of satisfaction that it is recorded here that allgardens of Goodricke Group Limited in Dooars featured in the top 20 position in pricerealization. Likewise Thurbo was one of the most sought after marks in Darjeeling andOrangajuli & Nonaipara occupied positions 6 & 7 in the Orthodox price realizationladder in Assam.
The markets remained extremely buoyant for Assam Orthodox on account of export demandfrom Iran and Germany and the market for Darjeeling Orthodox also remained fairly upbeatfor 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 wouldrecord here that Company succeeded in breaking the "glass ceiling" by exportingone of the Dooars estates produce to UK. Needless to say the Company as a whole hasenhanced its export levels over the levels attained in 2014.
The Company continued to avail of Tea Boards replanting / rejuvenation subsidyscheme for replanting of old moribund tea areas post rejuvenation with quality and highyielding clones and biclonal seed stocks. This has enabled the company to ensure slow yetsustained enhancement of yields in its tea areas along with lowering and rejuvenationpruning which is followed by large scale infilling of tea areas in its estates whichensures 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 continueto 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 directorresigned from the Board of Directors w.e.f. close of business hours 30th July 2015. TheBoard noted his resignation and appreciated the contribution made by Mr. A. K. Mathurduring his association with the Company.
In terms of Section 161 of the Companies Act 2013 Mrs. S. A. Walker was inducted tothe Board as an additional director in the category of non executive director on and from30th July 2015.
Pursuant to Section 203 of the Companies Act 2013 the Company has appointed thefollowing 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 theIndependent Directors of the Company confirm that they meet the criteria of independenceas prescribed in Section 149 (6) of the Companies Act 2013 as well as per ListingRegulations 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 andAnnexure 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 socialresponsibilities and the environment in which it operates. For several years the Companyhas increased its welfare activities in the area of health and safety educationenvironment Waste management etc. to the people in and around the tea estates and otherestablishments of the Company. Since as per Section 135 of the Companies Act 2013Corporate Social Responsibility has become an obligation under the Act the Company hastaken up several specific projects to comply with the requirements of the Companies Act2013 and Rules made thereunder. The Board of Directors have formed a CSR Committee andadopted a CSR Policy for the Company and the same can be accessed at the Company's weblinkwww/goodricke.com/corporate/corporate-social- responsibility. The details of the projectsundertaken are given in Annexure IV in the form prescribed under the Companies (CorporateSocial Responsibility Policy) Rules 2014. The CSR Committee of the Board as on 31st March2016 consist of three directors namely Dr. (Mrs) S. Kaul Chairperson and IndependentDirector Mr. A. N. Singh Managing Director and CEO and Mr. K. Sinha IndependentDirector.
DETAILS OF BOARD MEETINGS
The Board of Directors met 7 (seven) times during the period on various dates as givenhere in below:
|Date of the meeting ||No. of Directors attended the meeting |
|20th February 2015 ||4 |
|30th March 2015 ||5 |
|12 th May 2015 ||4 |
|30th July 2015 ||6 |
|9th November 2015 ||3 |
|7th December 2015 ||6 |
|11th February 2016 ||6 |
Further details on Board of Directors are provided in the Corporate Governance Report.
COMMITTEES OF THE BOARD
a. Audit Committee
The Board has constituted the Audit Committee which comprises of the followingDirectors :
|Name ||Category of Director ||Chairman/Members |
|Mr. K. Sinha ||Independent ||Chairman |
|Mr. A. K. Mathur ||Non-Executive- Non Independent (Resigned)** ||Member |
|Mr. P. K. Sen ||Independent ||Member |
|Mrs. S. A. Walker ||Non-Executive - Non-Independent * ||Member |
*Appointed as Additional Director by the Board on and from 30 th July 2015.
** Resigned with effect from 30 th July 2015
The Company has established a vigil mechanism / whistle blower policy whichoversees through the Audit Committee and addresses genuine concerns expressed by theemployees and other Directors. The Company has also made provisions for adequatesafeguards against victimisation of its employees and Directors who express theirconcerns. The Chairman Audit Committee can be directly accessed by any employee forreporting issues which need to be brought to the notice of the Board. The vigil mechanism/ whistle blower policy of the Company has been uploaded on the website of the Company andcan be accessed at Company's weblink www.goodricke.com/corporate/Goodricke- whistle-blower - policy.
b. Nomination & Remuneration Committee
|Name ||Category of Director ||Chairman/Members |
|Mr. K. Sinha ||Independent ||Chairman |
|Mr. PJ. Field ||Non-Executive ||Member |
|Mr. P. K. Sen ||Independent ||Member |
|Dr. (Mrs.) S. Kaul ||Independent ||Member |
Further details of Nomination and Remuneration Committee are given in the CorporateGovernance Report. c. Corporate Social Responsibility Committee
|Name ||Chairperson /Members |
|Dr. (Mrs.) S. Kaul ||Chairperson |
|Mr. K. Sinha ||Member |
|Mr. A. N. Singh ||Member |
Further details of Corporate Social Responsibility are available in the Report onCorporate Governance.
The Committee has approved the Corporate Social Responsibilities (CSR) Policy and theBudget for the Financial Period 2015 - 16 prepared in accordance with the provisions ofSection 135 (5) of the Companies Act 2013. The ear marked funds was fully spent on orbefore 31st March 2016.
d. Stakeholders Relationship Committee
|Name ||Chairperson/Members |
|Dr. (Mrs.) S. Kaul ||Chairperson |
|Mr. K. Sinha ||Member |
|Mr. A. N. Singh ||Member |
Further details of Stakeholders Relationship Committee are available in the Report onCorporate Governance. e. Risk Management Committee
Your Board at its meeting dated 14th November 2014 has constituted the following RiskManagement Committee of the Board as per Listing Regulations.
|Name ||Chairman/Members |
|Mr. K. Sinha ||Chairman |
|Mr. P.K. Sen ||Member |
|Mr. A. N. Singh ||Member |
|Mr. S. Banerjee ||Member |
Further details of Risk Management Committee are available in the Report on CorporateGovernance.
ANNUAL PERFORMANCE EVALUATION
The Board formulated and adopted a Board Evaluation Framework for evaluating theperformance of the Board as a whole Committees of the Board and also performance of theIndividual Directors.
As per the said Evaluation Framework the Board evaluated the performance of the Boardits Committees and the Individual Directors for the period 2015-16. The Board and theNomination and Remuneration Committee reviewed the performance of the individual directorsbased on the criteria such as attendance and participation in the meetings preparednesson the issues to be discussed suggestions on how risk factors may be handled etc. Inaddition the chairman was also evaluated on the above aspects by the independentdirectors.
The Independent Directors also carried out the performance evaluation in terms of PartVII (3) (c) of Schedule IV of the Companies Act 2013 in their Meeting held on 30th March2015.
The extract of Annual Return pursuant to the provisions of Section 92 of the CompaniesAct 2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014forming 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 theCompanies Act 2013 your Directors confirm that :
(a) in the preparation of the annual accounts for the financial period ended 31stMarch 2016 the applicable accounting standards has been followed alongwith the properexplanations relating to material departure if any.
(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company for the financial period ended 31st March2016 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 adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(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.
AUDITORS AND AUDIT REPORT
M/s. Lovelock and Lewes Chartered Accountants were appointed as the Statutory Auditorsof the Company in the last Annual General Meeting held on 30 th March 2015. Section 139 ofthe Companies Act 2013 contains the provisions related to appointment and retirement ofAuditors. In view of the provisions of the said section the existing Statutory AuditorsM/s. Lovelock & Lewes Chartered Accountants were entitled to continue as theStatutory Auditors of the Company upto 31st March 2016.
The Board of Directors in their meeting held on 23rd May 2016 recommended appointmentof 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 setout in Section 139 of the Companies Act 2013 and rules made thereunder.
In terms of Sub Section (3) of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 M/s. Shome & Banerjee CostAccountants (Firm Registration No. 000001) has been appointed by the Board of Director inits meeting held on 23rd May 2016 as the Cost Auditor of the Company for the financialyear 2016-17 based on the recommendation of the Audit Committee. The remuneration to beratified by the Members in the ensuing Annual General Meeting.
In terms of Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 M/s. A. K. Roy & Co.Practicing Company Secretaries FCS 5684 CP No. 4557 had been appointed SecretarialAuditors of the Company for the financial period ended 31st March 2016. The report of theSecretarial Auditors is enclosed as Annexure- VI to this report. The Report does notcontain any qualification reservation or adverse remark or disclaimer which requires anyfurther 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 ofbusiness and also on arm's length basis in compliance with the applicable provisions ofthe Companies Act 2013 and Listing Regulations. There are no materially significantrelated party transactions made by the Company with Promoters Directors or Key ManagerialPersonnel etc. which may have potential conflict of the interest with the Company atlarge. All related party transactions are presented to the Audit Committee and the Boardif required for approval. Omnibus approval is obtained for the transactions which areforeseen and repetitive in nature. The Policy on Related Party Transactions as approved bythe Board is uploaded on the Companys 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 subsection (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 relatedparties as per requirements of Accounting Standard are disclosed in the notes to theaccounts annexed to the financial statements.
LOANS GUARANTEES OR INVESTMENTS
The particulars of loans guarantees or investments made under section 186 of theCompanies Act 2013 are covered in the notes of the Financial Statement for the periodended 31st March 2016.
The Company has a large work force employed at the tea estates. There were no majordisruptions of work at the garden or any other establishment of the Company during theperiod under review. The correct recruitment practices are in place to attract besttalent. Industrial Relations at all the units remained satisfactory.
The total remuneration drawn by MD & CEO and other Key Managerial Personnel formpart of Extract of the Annual Return in Form MGT - 9 to this Reports enclosed as AnnexureV.
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 InternalComplaints Committee for its workplaces. During the year no complaint regarding sexualharassment was received by the said Committee.
RISK MANAGEMENT POLICY
In terms of the requirement of the Companies Act 2013 and Listing Regulations theCompany has developed and implemented the Risk Management Policy. The Risk ManagementCommittee of the Board reviews the same periodically.
The Company has taken adequate measures to mitigate various risk encountered. In theopinion of the Board there is no such risk which may threaten the present existence of theCompany.
NOMINATION AND REMUNERATION POLICY
The Company's Policy relating to appointment of Directors payment of managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 andListing 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 orTribunals impacting the going concern status and Companys operations in future.
INTERNAL FINANCIAL CONTROL
Your Company has adequate Internal Financial Control System at all levels of Managementand they are reviewed from time to time. The Internal Audit is carried out in house aswell as by firm of Chartered Accountants. The Audit Committee of the Board looks intoAuditors review which is deliberated upon and corrective action taken whereverrequired.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Your Company transferred such amount of dividend lying unpaid or unclaimed for a periodof seven years from the date of such dividend become due for payment to Investor Educationand Protection Fund (IEPF).
Your Company has not accepted any deposits from public in terms of provisions containedin Chapter V of the Companies Act 2013 or in terms of corresponding provisions of theCompanies Act 1956.
PARTICULARS OF EMPLOYEES
The ratio of the remuneration of each Director to the median employeesremuneration and other particulars or details of employees pursuant to Section 197(12) ofthe Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial 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 asAnnexure I forming part of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
|(a) Conservation of energy || |
|(i) The steps taken or impact on conservation of energy ||1) Online Conveyorisation of manufacturing Processes which resulted in reduction of idle running of machineries less time consumption thereby saving energy and increasing efficiency. |
| ||2) Installation of Coal Ratio Controller to reduce consumption of Coal. Approx. 20% saving of coal achieved. |
| ||3) Installation of new 7 Pass High Efficiency Coal Heater in New VFBD to dry Teas. To reduce coal consumption. |
| ||4) Installation of low wattage LED Lights to reduce power consumption. |
| ||5) Installation of Rain Water Harvesting System to reduce pumping of ground water. To reduce power consumption. |
| ||6) Installation of High Efficiency CTC Roller Sharpening Equipment to increase speed of sharpening and thus reduce power cost. |
|(ii) The steps taken by the company for utilizing alternate sources of energy ||1) Proposed upgradation of 100 KW Hydel Project at Thurbo Tea Garden. |
| ||2) Use of Firewood in Boiler at Aibheel Tea Garden and Gandrapara Tea Garden to reduce consumption of Coal. |
| ||3) Installation of CPC Water Heating System at ITP. Successful installation and implementation of this solar power system helped the Company to be rewarded with an appreciation award presented by the Honble Coal & Power Minister Shri Puyish Goel at New Delhi on 29th April 2016. Your Company was the only Company in the entire Tea Industry to be presented with this award. |
|(iii) The capital investment on energy conservation equipments ||i) Proposed upgradation of 100 KW Hydel Project in Thurbo T.G. = Rs. 5 million |
| ||ii) Installation of Solar Panel water heater in ITP = Rs. 10 million |
| ||iii) Installation of LED lights to replace LCD lights = Rs. 3 million |
|(b) Technology absorption || |
|(i) The efforts made towards ||1) Dependence on Hydel Project to run our Factories. |
|technology absorption ||2) Dependence on Solar Water Heating system to reduce dependence on conventional Energy. |
| ||3) Usage of Low wattage LED lights in place of high wattage CFLs. |
| ||4) Conversion of Coal Firing system into Gas Firing System using LPG Cylinders in Darjeeling gardens. |
| ||5) Use of Hygienic Ucrete Flooring System . |
| ||6) Online new conveyorisation of flow processes. |
| ||7) Introduction of online Green Tea Panning system to produce Green Tea at Leesh River Tea Garden. |
| ||8) Introduction of Variable Frequency Drier System in Fluid Bed Driers to save power |
|(ii) The benefits derived like product ||1) Reduction of Power Cost in Thurbo Tea Garden by 25%. |
|improvement cost reduction product development or import ||2) Due to online conveyorisation Factory achieved higher Worker's outturn which ultimately led to reduction in Cost of Production. |
|substitution ||3) With the introduction of Boiler and Coal Ratio Controller uniform temperature could be maintained which resulted in better quality of produce and reduction in coal consumption. |
| ||4) With the introduction of VFD in VFBD the power cost has been reduced in firing of Teas. |
| ||5) In our prestigious Instant Tea Plant using of Solar parabolic panels has helped us to cut down on Coal Consumption by approx. 25% |
|(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year). ||N I L |
|(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 || |
|(iv) the expenditure incurred on Research and Development ||Revenue Rs. 16.05 million and Capital Rs. 1.94 million |
(c) Foreign exchange earnings and Outgo
During the period the foreign exchange outgo was Rs. 58.71 million and the foreignexchange earning was Rs. 1000.28 million.
MATERIAL CHANGES AND COMMITMENTS
Your Directors confirm that there are no material changes and commitments affectingthe financial position of the company which has occurred between the end of the financialyear of the company and the date of this report
Your Directors place on record their appreciation for employees at all levels who havecontributed to the growth and performance of your Company.
Your Directors also thank the business associates shareholders and other stakeholdersof the Company for their continued support.
| ||On behalf of the Board |
| ||A. N. Singh |
| ||Managing Director & CEO |
| ||S. Kaul |
| ||K. Sinha |
|Place : Kolkata ||P.K. Sen |
|Dated : 23rd May 2016 ||Directors |