The Directors have pleasure in presenting the Ninety Sixth Annual
Report of your Company together with the Audited Statement of Accounts
for the year ended 31st March 2012.
FINANCIAL RESULTS (Rs.in lacs)
Turnover and other income 2,00,453 1,70,306
Profit before interest and depreciation 13,326 25,115
Interest 4,122 2,589
Profit before depreciation 9,204 22,526
Profit for the year 5,903 19,412
Provision for tax
-Current tax 719 3,789
- Deferred tax 526 2,884
- Adjustments of earlier years (291) 8
Profit after tax 4,949 12,731
Amount brought forward from
previous year 4,903 20,317
for appropriation 9,852 33,048
Transfer to General Reserve 495 26,306
Dividend proposed on equity
shares (Current year @ X 4.50/-
and previous year
@ X 4.50/- per share of X 10/- each) 1,576 1,577
Tax on dividend 256 262
Balance carried to Balance Sheet 7,525 4,903
Your Directors recommended a dividend @ X 4.50/- per equity share of X
10/- each for the year ended 31st March 2012, maintaining the last
year''s rate, subject to the approval of the shareholders at the ensuing
Annual General Meeting.
The PET plant at Haldia operated at 105% capacity utilization. The
production of PET resin increased from 2,00,981 MT in 2010-11 to
2,08,975 MT in 2011-12.
Although the plant operated in excess of 100% capacity utilization the
margins remained under pressure throughout the year. Further the
unexpected and steep decline in the value of Indian Rupee against other
foreign currencies also affected the bottom-line.
Your Directors take satisfaction to inform you that all the term loans
pertaining to the first PET project of the Company have been fully
repaid in the financial year 2011-12. The pledge of 53,04,700 shares in
the Company held by Dhunseri Investments Ltd., provided as a security
in respect of the aforesaid term loans, have since been released on 3rd
As reported in last year''s Directors'' Report in respect to the
unfortunate incidence of fire due to electrical short circuit in the
raw materials go down at Haldia plant on 14th March 2011, your Directors
wish to inform you that the claims under the Stock Policy towards
destruction of raw materials & packing materials and reimbursement of
expenses aggregating to Rs 51.82 crores have been settled by the
insurance company to the tune of Rs 36.26 crores (net of salvage of Rs
5.32 crores) in the current year. The shortfall on this account
amounting to Rs 10.24 crores has been charged off in the books of
accounts for the year ended 31st March 2012.
Further, during the current year your Company restored to operation
some fire damaged fixed assets valuing Rs 2.89 crores in the books and
as on 31st March 2012 is carryingRs 9.82 crores in the books of accounts
towards amount receivable from insurance company on account of loss
incurred on damage/ destruction of fixed assets & spares under
Industrial All Risk (IAR) policy. Your Company expects to receive
the claim amount under IAR policy shortly.
Crop in Assam was affected due to early close of season due to no rain
from end September 2011 till first week of April 2012 resulting in
severe drought. There was increased pest activity due to very
unfavorable weather condition.
The production of your Company increased from 103.03 lac kgs tea made
to 134.81 lac kgs tea made mainly due to addition from new bought leaf
factories. However, price realization was substantially lower due to
poor market condition for medium quality teas especially from new
bought leaf factories where quality parameters could not be stabilized
in the first year. Orthodox market was also substantially lower by Rs
20/- due to fall in prices of orthodox teas as compared with Rs 17.16
lower for our teas.
The existing plant is running at full capacity utilization and is
expected to operate likewise in the coming year.
The project for expansion of the PET plant capacity in Haldia to
4,10,000 TPA from 2,00,000 TPA is progressing satisfactorily.
Mechanical completion is expected to be achieved around middle of May
2012. Start up of trial run is expected around middle of June 2012.
Delay in the project completion is due to delay in civil construction
caused by heavy rains during construction.
With this the capacity of the Company''s total production will increase
to around 3,50,000 tonnes for the financial year 2012-13. The Company
appointed marketing representatives in various international markets
and is gearing up to meet marketing challenges to sell enhanced
As already reported in the last report, your Company plans to produce
and market barrier resins using M&G''s state of the art Bico PET
technology, after carrying out necessary modifications in the existing
plant. All the equipments for this purpose have been procured. The
erection of these equipments will be done after the commissioning of
the new plant. After the erection of the plant and machinery, the
commissioning will be synchronized with the maintenance shutdown of the
Tea garden received some useful rain in the second week of April (after
prolonged drought for the past six months) and now crop prospects
appears to be good from the month of May 2012 onwards. Your Company
mitigated the ill effect of drought to a large extent by continuous use
of sprinkler irrigation. Some gardens in South Bank also suffered this
year due to less rainfall up to February 2012 where irrigation
facilities are provided only for newly planted tea areas.
Continued emphasis given on manufacturing quality teas yielded
favorable results in some gardens. However, all the gardens have been
brought under similar manufacturing process to improve the quality as
well as grade mix and there should be substantial improvement in
overall quality of teas to be produced by the Company in the Season
Company''s packet tea brands LAL GHORA and KALA GHORA continued to
receive good response from consumers due to overall improvement in
quality and also packaging which helped in achieving the targeted sale
quantity and it is expected that there should be substantial increase
in sale quantity in 2012-13 as the trend shows for the month of April
The tea market is expected to remain good during the year and
difference in prices would be maintained for quality teas.
The Company has sold and handed over one tea factory in Assam and
negotiation for another tea factory is under progress and expected to
be completed shortly.
The operations of the remaining two bought leaf factories are being
stabilized and is expected to achieve the targeted quantity of 3 mn kg
tea made depending on availability of quality green leaf at competitive
rates in the area. A new factory at Hatijan Tea Estate is being
constructed having an annual capacity of 1.5 mn kg production and
commercial production will start from the first week of May 2012.
Further subsequent to the end of financial year 2011-12, the Company
has entered into an agreement for sale of one of the tea estates namely
Namsang Tea Estate, having around 5% of the production of the Company,
at a consideration of Rs 28.29 crores.
The Company''s current tea production is 13.5 mn kg and is expected to
reach 20 mn kg in the next 2/3 years if negotiations to acquire tea
gardens abroad fructifies.
The construction work of ''Dhunseri IT Park'' at Bantala is progressing
gradually. In respect of the first phase having a built up area of
3,70,000 sq. ft., the construction is expected to be completed in the
last quarter of financial year 2012-13.
Barring unforeseen circumstances, the Company''s performance for the
coming year is expected to be satisfactory.
Conservation of Energy, Technology Absorption, Foreign Exchange
The particulars as prescribed under Section 217(1 )(e) of the Companies
Act, 1956 read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988 are attached as an
annexure to this report.
Disclosure Under Sec 21 7(2A) of the Companies Act, 1956
The particulars of employees whose salary exceed the limits as
prescribed under Section 217(2A) of the Companies Act, 1956 are given
as an annexure to this report.
M/s Lovelock & Lewes, Chartered Accountants, retire on the conclusion
of this Annual General Meeting, and being eligible, offer themselves
With regard to the observations of the auditors in paragraph 4 of
Auditors'' Report, the relevant notes to accounts are self explanatory.
As already informed in the last report, the Central Government had
accorded its approval u/s 259 of the Companies Act, 1956 to increase
the maximum number of Directors of the Company from 12(Twelve) to 18
(Eighteen), subject to the condition that the increase in the number of
Directors had to be effected within 19th September 2011, failing which
the approval would lapse.
Since the Company has not affected the increase in the number of
Directors by 19th September 2011, the approval lapsed. Hence the
maximum number of directors of the Company has come down to 12(Twelve)
During the year Mr. S. K. Pai ceased to be a Director of the Company
consequent to the withdrawal of nomination by IDBI Bank Limited
following the full repayment of its term loan. The Board of Directors
wish to place on record their sincerest appreciation for the
contribution made by Mr. S. K. Pai during his tenure.
Further, during the year the tenure of Mr. B. K. Biyani as the
Executive Director (Corporate) of the Company ended on 31st March 2012
and simultaneously he has resigned from the post of Director with
effect from close of 31st March, 2012. The Board of Directors wish to
place on record their sincerest appreciation for the contribution made
by Mr. B. K. Biyani during his tenure. Mr. R. K. Sharma, has been
appointed as a Director of your Company in the casual vacancy created
by the resignation of Mr. B. K. Biyani with effect from 1st April 2012.
Mr. R. K. Sharma shall hold office till the term Mr. B. K. Biyani
would have held office.
Mr. A. Bagaria, Mr. R. N. Bhardwaj and Mr. Y. F. Lombard, Directors of
your Company will retire at this Annual General Meeting by rotation,
and being eligible, offer themselves for reappointment. The Board
recommends their reappointment as Directors of your Company.
The tenure of Mr. M. Dhanuka as the Vice Chairman & Executive Director
has ceased on 31st March 2012. He is proposed to be reappointed as the
Vice Chairman & Managing Director of the Company with effect from 1st
April 2012. Your Directors recommend approval of his reappointment as
the Vice Chairman & Managing Director of the Company. The particulars
required for reappointment as the Vice Chairman & Managing Director are
contained in the Notice for the Annual General Meeting of the Company.
The tenure of Mr. B.Chattopadhyay as the Executive Director & CEO
ceased on 31st March 2012. He is proposed to be reappointed as the
Managing Director & CEO of the Company with effect from 1st April 2012.
Your Directors recommend approval of his reappointment as the Managing
Director & CEO of the Company. The particulars required for
reappointment as the Managing Director & CEO are contained in the
Notice for the Annual General Meeting of the Company.
Mr. R. K. Sharma is presently the CFO of the Company. He is proposed to
be appointed as the Executive Director (Finance) of the Company, liable
to retire by rotation, with effect from 1st April 2012. Your Directors
recommend the approval of his appointment as the Executive Director
(Finance) of the Company, liable to retire by rotation. The particulars
required for appointment as the Executive Director (Finance), liable to
retire by rotation are contained in the Notice for the Annual General
Meeting of the Company.
Mr. D.P.Jindal has been appointed as the Additional Director of your
Company with effect from 2nd May, 2012. In terms of Section 260 of the
Companies Act, 1956 he shall hold office only upto the date of this
Annual General Meeting. The required notice pursuant to provisions of
Section 257 of the Companies Act, 1956 has been received from a member
proposing his appointment as a Director of your Company, liable to
retire by rotation. Your Directors recommend approval of his
appointment as a Director of your Company, liable to retire by
rotation. The particulars required for appointment as Director are
contained in the Notice for the Annual General Meeting of the Company.
The Company has not accepted any deposits from the public. However the
Companies (Acceptance of Deposits) Rules, 1975 were complied with in
view of the deposits being accepted from the employees of the Company.
All deposits which matured during the year were repaid.
1) Egyptian Indian Polyester Company S.A.E (ElPET):
ElPET''s project in Egypt is progressing satisfactorily. Start up of
trial run is expected to be achieved by fourth quarter of financial
2) Dowamara Tea Company Private Ltd. (DTCPL):
Dowamara Tea factory belonging to Dowamara Tea Company Private Limited
(DTCPL), which is a wholly - owned subsidiary of the Company, produced
5.25 lac kgs during the year ended 31st March 2012. DTCPL suffered a
loss ofRs 112.64 lacs during the current year.
3) Dhunseri Petrochem & Tea Pte Ltd. (DPTPL):
Your Directors wish to inform you that a wholly owned subsidiary has
been incorporated in Singapore on 28th December, 2011 under the name
and style of Dhunseri Petrochem & Tea Pte Ltd. for the purpose of
transferring the investment of the Company in Egyptian Indian Polyester
Company S.A.E.(EIPET) to the aforesaid subsidiary in Singapore.
Upon receipt of the approvals and other statutory permissions, the
investment of the Company in EIPET would be transferred to DPTPL.
Ministry of Corporate Affairs has granted general exemption to the
companies under Section 212 of the Companies Act, 1956, from attaching
the reports and accounts of the subsidiary company, subject to
fulfillment of certain conditions, which amongst others include the
consent of the Board of Directors for not attaching the annual accounts
of the subsidiary. Accordingly, the Board of Directors of the Company,
at its meeting held on 2nd May 2012, has consented for not attaching
the annual accounts of the subsidiaries viz, M/s Egyptian Indian
Polyester Company S.A.E. and Dowamara Tea Company Private Ltd. with
the accounts of the Company.
Accordingly, the Audited Statements of Accounts, the reports of Board
of Directors and Auditors of the subsidiary companies have not been
annexed. The annual accounts of the subsidiary companies and the
related detailed information shall be made available to the
shareholders of the Company and subsidiary companies seeking such
information at any point of time. Shareholders who wish to have a hard
copy of the full reports and accounts of the subsidiaries will be
provided the same on receipt of written request from them. These
documents will also be available for inspection by any shareholder at
the registered office of the Company and that of the subsidiaries on
any working day during business hours, except on Saturdays.
As required under the listing agreement with the stock exchanges, the
audited consolidated financial statements of your Company are also
attached and form a part of the Company''s annual report. However, the
consolidated financial statements do not include the operations of
Dhunseri Petrochem & Tea Pte Ltd. as the first financial year of the
said Company will end only on 31st March 2013.
Your Company is under the purview of Cost Audit as per Section 233B of
the Companies Act, 1956 in respect of manufacture of Tea. Further with
effect from financial year 2012-13 Poly Ethylene Terephthalate (PET)
resin has also been covered for Cost Audit. M/s Mani & Co., Cost
Accountants, have been appointed as Cost Auditors of the Company.
Directors'' Responsibility Statement Pursuant to Section 217 (2AA) of
the Companies Act, 1956 Pursuant to the requirement under Section 217
(2AA) of the Companies Act, 1956, with respect to Directors''
Responsibility Statement, it is hereby confirmed:
(i) That in the preparation of the annual accounts, the applicable
accounting standards were followed, except as specified in Para 4 of
Auditors'' Report. Proper explanation relating to material departures,
have been clarified in note no. 35 in the notes to accounts which is
(ii)That the Directors selected such accounting policies and applied
them consistently except as specified in note no. 38 in notes to
accounts and made judgments and estimates that were 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 the Directors took proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the Company''s assets and for
preventing and detecting fraud and other irregularities;
(iv) That the Directors prepared the annual accounts on a going concern
Corporate Governance and Management Discussion and Analysis Reports
Corporate Governance and Management Discussion and Analysis Reports are
set out as separate annexure to this report.
Corporate Social Responsibility
Your Company understands that the expectations of society from industry
is constantly changing and is conscious of its social responsibilities.
It has continued with its welfare activities for development in the
fields of education, health, culture and other welfare measures and to
improve the general standard of living.
Your Directors have decided that 1% of the profits of the Company would
be used towards CSR activities, with a maximum ceiling of X 1 crore
including contributions to Dhanuka Dhunseri Foundation Trust (DDFT). As
reported in the last year''s report, DDFT acts as the vehicle through
which the CSR activities of the Company are carried out across the
various parts of the country. The Trust was formed in 1972 for various
charitable objectives. It is involved in various philanthropic
activities like building schools, colleges and girls hostel, providing
free medicines through dispensaries and grants to charitable
As already informed in the last report, the Petrochem division of the
Company holds quality certifications from renowned national and
international agencies like the USFDA, EC, Japanese and Canadian Food
and Health Bodies and ITRC and is also ISO 9001:2008, ISO 14001: 2004
and BS OHSAS 18001: 2007 certified.
Further during the year the Petrochem division of the Company has
received SA 8000: 2008 certification (i.e. Certificate of Social
Accountability) from TUV NORD for its plant at Haldia in respect of
manufacture and sale of PET resin in International and domestic
As informed in the last report, your Company was already having the ISO
22000:2005 certification for Dilli & Santi Tea Estates. Further during
the year your Company has also received the ISO 22000:2005
certifications from DNV Business Assurance in respect of Food Safety
System for the following Tea Estates:
i) Bahadur Tea Estate
ii) Bahipookri Tea Estate
iii) Bettybari Tea Estate
iv) Dhunseri Tea Estate
v) Khagorijan Tea Estate
vi) Namsang Tea Estate (agreement for sale executed)
vii) Orang Tea Estate
Your Directors have the pleasure to inform you that the following
awards have been received:
Second Best Exporter Award: The Company''s Petrochem division has
received the second best exporter award for the year 2009-10 in the
product category of Plastic Polymers by The Plastics Export Promotion
Environment, Health and Safety
Health and safety has always been a matter of major concern and
importance. Your Company continuously strives to ensure that our
operations are safe. The Company recognizes the importance of managing
its environmental impact. These are matters of priority and therefore
caring for the environment and responsible disposal of wastes are some
of the ongoing initiatives undertaken by the Company.
Utilization of Proceeds from Preferential Issue
Erstwhile SAPL had made an allotment of equity shares, warrants and
FCCBs in 2007-08. Consequently, during 2007-08, erstwhile SAPL raised Rs
7,416.23 lacs by preferential allotment of equity shares and equity
share warrants and Rs 7,864.00 lacs from the issue of the FCCBs. The
FCCB proceeds as at 31st March 2012 (as reduced by redemption in
2009-10) is Rs 2949 lacs.
The money raised out of such issue was to be utilized for:
i) Equity participation in overseas subsidiaries
ii) Retirement of high cost borrowings
iii) Other business purposes, including working capital requirements
The amount raised by issue of equity shares, equity share warrants and
FCCB''s have been fully utilized towards equity participation/issue
related expenses in the overseas project in Egypt.
CRISIL EQUITIES GRADING
Your Directors inform that CRISIL vide its independent equity research
report dated 16th February, 2012 has assigned a CRISIL fundamental
grade of 3/5 (pronounced three on five) to the Company. The grade
indicated that the Company''s fundamentals were ''good'', relative to
other listed equity securities in India. CRISIL has assigned a
valuation grade of 5/5, indicating that the stock has a strong upside
as compared to the market price of Rs122/- (as on 16th February, 2012).
CRISIL''s fair value of the Company''s stock was Rs 243/-.
Credit Rating by Credit Analysis & Research Ltd. (Care)
Your Directors inform that CARE has reaffirmed the Credit rating of
CARE A (Single A plus) assigned to long term bank facilities of the
Company and CARE A1 (A One plus) assigned to short term facilities of
the Company. At the same time CARE has reaffirmed the Credit rating of
CARE A1 (A One plus) assigned to the Short Term Debt (STD) programme
(including Commercial Paper) of the Company for a maturity up to six
Your Company believes that ''people'' are the most prized asset for
the success of any organization. Your Directors wish to express their
appreciation to all the employees for their exemplary contributions and
excellent team spirit. Their dedicated efforts, enthusiasm and
commitment have played a pivotal role in the growth of the Company.
The Directors wish to place on record their sincere appreciation for
the whole-hearted support received from Axis Bank, Allahabad Bank, Bank
of Baroda, Bank of India, Canara Bank, Deutsche Bank, Development
Credit Bank, DBS Bank Limited, Export- Import Bank of India, HSBC
Limited, HDFC Bank Limited, ICICI Bank Limited, IDBI Bank Limited,
International Finance Corporation, Washington, Punjab National Bank,
State Bank of India, State Bank of Travancore, Syndicate Bank, Standard
Chartered Bank, United Bank of India, West Bengal Industrial
Development Corporation Ltd, Tea Board, Haldia Development Authority,
Office of the District Magistrate of East Midnapore, West Bengal
Pollution Control Board, West Bengal State Electricity Board, Ministry
of Environment & Forest, Government of West Bengal, Government of
Assam, Government of Egypt, Governorate of Suez, General Authority for
Investment and Free Zones (GAFI), Egyptian Petrochemicals Holding
Company (ECHEM), Engineering for the Petroleum and Process
Industries(ENPPI), Ahli United Bank (Egypt) S.A.E, Commercial
International Bank (Egypt) S.A.E, Egypt, the customers, suppliers,
shareholders and all others associated with the Company.
For and on behalf of
The Board of Directors
Place: Kolkata C. K. Dhanuka
Date: 2nd May, 2012 Executive Chairman