The Directors have pleasure in presenting their Thirty-eighth Annual
Report and Accounts for the year ended 31st December 2013.
FINANCIAL RESULTS For the year ended 31st December
(Rs. in millions)
GROSS SALES 5,783.10 5,383.81
PROFIT BEFORE TAXATION 486.18 274.44
Less: Provision for Taxation (net) 152.61 74.45
PROFIT AFTER TAX 333.57 199.99
Add: Profit brought
forward from last year 48.67 49.10
Dividend 97.20 86.40
Tax on Dividend 17.19 14.02
Transfer to General Reserve 220.00 100.00
Balance carried forward 47.85 48.67
The turnover for the year 2013 increased by over 7.40% to Rs. 5,783
million from Rs.5,383 million in the previous year essentially due to
increased crop and improved prices.
The total manufactured crop was higher at 22.29 million kgs. against
20.73 million kgs in 2012. Favourable weather conditions coupled with
augmented irrigation facilities were the major contributing factors.
Out sourced leaf procurement recorded some decline due to our own high
All India tea production increased by 6.5 percent to 1200 million kgs
in 2013 against 1126.33 million kgs in 2012. Majority of the increase
came from North India although South Indian crop also was ahead of
Average CTC tea prices were lower in all auction centers compared to
previous year. Markets were polarized at the top and bottom with top
teas seeing attractive levels with virtually 100% sales. But medium and
plainer sorts saw outlots with lower prices. Our Group averages however
were higher than last year in both Dooars and Assam. Orthodox prices
were also higher than last year.
All India Bulk tea Export figures were higher than 2012. Exports to
Iran increased substantially with Rupee Letter of Credit being opened.
Our Company''s exports also increased to 4.20 million kgs from 3-28
million kgs in the previous year.
The domestic sales were positive and indicated future growth potential.
In Packet tea division, attractive incentives were offered to maintain
steady growth of business. A new brand named Goodricke Khaass was
launched during the year at Kolkata which was very well accepted in the
market. A new central packaging unit along with storage facility was
inaugurated in Dewas, Madhya Pradesh to strengthen logistics and cut
down on multiple units/inventory.
Our endeavours of converting the three Darjeeling gardens namely
Barnesbeg, Badamtam and Thurbo into organic have been successfully
completed. All three gardens as also the two Assam gardens continue to
be certified under the global Rainforest Alliance.
The Company continues to avail Tea Board''s replanting/ rejuvenation
subsidy schemes for replacement of old tea areas with quality planting
material. These have been helpful in ensuring sustained growth and to
improve productivity along with the quality profile of the Company.
In terms of Corporate Governance disclosure under Clause 49 of the
Stock Exchange Listing Agreement, the Management discussion and
analysis report is given in Annexure E forming part of the report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Companies Act 2013 which has been assented by the President of
India on 29th August 2013 suggests for specific provisions for spending
on Corporate Social Responsibility (CSR), which is yet to come into
effect. It stipulates expenditure of 2% of the average profit of past
three years on CSR activities. It further requires the Board''s report
to give a note on such activities and in the event of shortfall from
the specified quantum, the reasons for the same to be explained
therein. A Committee of the Board has already been constituted with Dr.
Sudha Kaul, an Independent Director as its Chairperson.
Your Company is a constituent of Camellia Pic, U.K., one of the largest
global producer of tea with interests in other plantation crop,
agriculture, engineering and private banking. It is committed to CSR in
its global operation. The Statement of Business Principles of the U. K.
Principal, as well as norms followed by global bodies like Rainforest
Alliance (RA) and Fair Trade Practices (FTP) are in place for
environment sustainability. The policies adopted as standing operating
- Health & Safety - Social
- Waste Management - Environment
Some of the major activities covered under the above groups are:-
- Primary Hospitals at all gardens.
- Group Hospital with specialized equipment at Dooars, North Bengal
- Tracking of family health status at the gardens.
- Camps for sterilization, reconstructive surgery by overseas Doctors,
eye surgery and child immunization programmes.
- Malaria prevention schemes for residents of Garden and adjoining
a Primary schools at all gardens and buses for school children to go to
the Secondary schools.
- Self help centres for vocational training.
- Afforestation / vegetation on non-tea areas.
G Scholarship scheme for meritorious students of the tea garden
- Packing of teas by physically challenged students at The Indian
Institute of Cerebral Palsy (IICP), as part of vocational training.
- Green initiative for sustainable operation through use of dual fired
boilers to use woody biomass instead of coal.
- The third and final phase of expansion of the Goodricke School for
Special Education at Siliguri, North Bengal, was inaugurated on 15th
April 2013, providing for additional classrooms and Hydro therapy
The Board recommends a dividend of Rs. 4.50/- per share (45%). Such
dividend, on declaration, will be paid to those members recorded in the
Registers of the Company at the close of business on the date of Annual
General Meeting, subject, however to the provision of Section 206A of
the Companies Act, 1956.
FINANCE AND ACCOUNTS
The higher crop and overall increase in prices had a favourable effect
on the profitability and cash flow of the company. However, due to the
high utilization of bank borrowings for most of the months, the
interest remained on the higher side. The Debt/Equity and the interest
covers are healthy.
Cost Audit u/s 233 of the Companies Act 1956 is being carried out by
Messrs Shome & Banerjee, Cost Accountants appointed with the approval
of the Minsitry of Corporate Affairs, Government of India.
Tea market is expected to remain strong in 2014 due to negative carry
forward of old season stocks. Good quality CTC teas will continue to
attract premiums and could reach new thresholds in 2014. With easing of
sanctions on Iran, prospect for Orthodox teas also look bright.
The price trends at the auctions and private sales have been attracting
premium prices for quality teas. This is evident from the prices
commanded by the Company''s teas as compared to the auction averages.
Barring unforeseen adverse weather conditions, the Company is expected
to strengthen it''s profitability in future years with upgraded
factories and renewed tea areas.
However, this should be viewed against the backdrop of sharp increase
in wages and cost of inputs together with social costs which are to be
reckoned with in the coming years, the next wage revision is due from
1st April, 2014.
CORPORATE GOVERNANCE & AUDIT COMMITTEE
Clause 49 of the Listing Agreement on Corporate Governance in terms of
quarterly and annual results etc. were complied with during the year.
A certificate from the Statutory Auditors of your Company regarding the
compliance by the Company of the conditions stipulated under Clause 49
of the Listing Agreement is also attached with this report.
The Audit Committee of the Board was set up in 1997 well before it
became mandatory. The Committee has played an important role during the
year. It co-ordinated with the Statutory Auditors, Internal Auditors
and other key personnel of the Company and has rendered guidance in the
areas of Corporate Governance, internal audit, finance and accounts.
The Code of Conduct for the Directors and Senior management personnel
is being complied with and Risk Profile Analysis is being carried out
from time to time. In terms of Clause 49 of the Listing Agreement,
disclosures under Corporate Governance are given in Annexure - ''F'' of
Enterprise Resource Planning (ERP)
The Company has implemented ERP which was the decision of the Board of
Directors. It is a significant paradigm shift for the organization into
a new age of digitilised enterprise.
The successful implementation of ERP was possible only because of the
hard work put in by the Management at Head Office and estates,
especially the computer operators at the up-country level.
ERP integrates the various functions within the organization and
presents in a greater manner the transparency of the transactions of
the organization. It has also brought about better controls and
efficiency in the various processes. This is the first tea Company in
India to use ERP.
SHAREHOLDERS'' / INVESTORS'' GRIEVANCE COMMITTEE
The Committee has met regularly in course of the year. With the
compulsory dematerialization of the Company''s shares and electronic
mode of transfers, postal despatches which led to usual complaints,
have been minimized. At the year end 97.81% of the total shares were
dematerialized with no unresolved pending investor grievances.
The Remuneration Committee met twice during the year to review and
recommend annual increment and payment of commission to Managing
Director within the terms of appointment.
Majority of the gardens are located in remote areas away from towns and
cities. Inspite of these isolated locations and disturbed political
environment in some areas, the morale of the managerial staff and other
personnel were high throughout the year. There were no major
disruptions of work at the garden or any other establishment of the
Company during the year.
Group activities were organized during the course of the year like
football, golf, tennis, flower show and cultural programme for greater
team work in the gardens amongst the Company''s managerial and other
Your Directors place on record the co-operation received and dedication
of all employees at the gardens and other establishments of the
PARTICULARS IN TERMS OF SECTION 217 OF THE COMPANIES ACT, 1956
The particulars of Conservation of Energy and Technology absorption in
terms of Section 217(l)(e) are given in Annexures A and B. The
particulars of employees attracting the provisions of Section 217(2A)
are given in Annexure C. Directors'' Responsibility Statement, in
terms of Section 217(2AA), is given in Annexure D. All the Annexures
form part of the Report.
There has been no change in the Board of Directors of the Company
during the year under report.
Mr. K. Sinha and Mr. P. J. Field, retire by rotation and being eligible
offer themselves for re-appointment subject to approval of the General
Body. Your Board of Directors commends the reappointments.
The Auditors, Messrs Lovelock & Lewes, Chartered Accountants, retire
and are eligible for reappointment.
On behalf of the Board
A. N. Singh
Kolkata P.K. Sen
26th February, 2014 Directors