Mar 31, 2018
The Directors hereby present the 102nd Annual Report of your Company together with the Audited Financial Statements for the year ended March 31, 2018.
Financial Results
(Rs. in Lakhs)
Particulars |
2017-18 |
2016-17 |
Turnover and other income |
96,112.09 |
3,659.42 |
Profit before interest and depreciation |
4,551.15 |
1,514.09 |
Interest |
139.14 |
8.37 |
Profit before depreciation |
4,412.01 |
1,505.72 |
Provision for depreciation |
42.94 |
45.22 |
Profit before exceptional item and tax |
4,369.07 |
1,460.50 |
Exceptional Item |
- |
(18,266.20) |
Profit before tax |
4,369.07 |
(16,805.70) |
Provision for tax |
||
- Current tax |
539.19 |
1,465.65 |
- Deferred tax |
169.08 |
(16,065.57) |
- Adjustment for earlier years |
- |
- |
Profit after tax |
3,660.80 |
(2,205.78) |
Profit/(Loss) for the year |
3,660.80 |
(2,205.78) |
Opening Balance of Retained Earnings (Surplus in Statement of Profit and Loss) |
33,828.05 |
37,703.05 |
Profit/(Loss) for the year |
3,660.80 |
(2,205.78) |
Other Comprehensive Income |
(4.80) |
17.97 |
Total Comprehensive Income for the Year |
3,656.00 |
(2,187.81) |
Dividends paid |
(700.50) |
(1400.99) |
Tax on dividend |
(142.60) |
(286.20) |
Closing Balance in Retained Earnings |
36,640.95 |
33,828.05 |
Note: During the year there are no transfer to the General Reserve.
Operations
The income of the Company during the year under review comprised of income from sale of traded goods, export incentive, dividend income, profit on sale of investment of shares & securities, lease rental income and royalty.
Material changes and commitments affecting financial position of the Company.
There are no material changes and commitment affecting financial position of the Company which has occurred between the end of the financial year of the Company i.e. March 31, 2018 and the date of this Report.
Dividend
Your Directors have recommended a dividend @ ''3.50/- (Previous Year @ ''2.00/-) per equity share of ''10 /- each for the year ended March 31, 2018 subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM).
Directors and Key Managerial Personnel
Mr. Siddhartha Rampuria has been appointed as an Additional
Director of your Company (in the category of Independent Director as a Non-Executive Director) w.e.f. April 11, 2018 and is proposed to be appointed as an Independent Director for a term of five consecutive years at the ensuing AGM. Appropriate resolution for his appointment is being placed for the approval of the members of the Company at the ensuing AGM. The Board of Directors of the Company recommend his appointment as the Independent NonExecutive Director of your Company.
The tenure of Mr. Rajiv Kumar Sharma as the Executive Director (Finance) ceased on March 31, 2018. He was re-designated as Executive Director (Finance) & CFO w.e.f. February 12, 2016 by the Board of Directors at its meeting held on February 12, 2016. He is proposed to be re-appointed as the Executive Director (Finance) & CFO of the Company for a tenure of three years, w.e.f. April 1, 2018, liable to retire by rotation. Your Directors recommend approval of his re-appointment as the Executive Director (Finance) & CFO of the Company, liable to retire by rotation. The particulars required for his re-appointment as aforesaid are contained in the Notice for the AGM of the Company.
Declaration from Independent Directors on Annual Basis
Your Company had received the declaration of Independence u/s 149(7) of the Companies Act, 2013 from all the Independent directors of your Company specifying that they meet the criteria of independence as per Section 149(6) of the Companies Act, 2013.
Directors'' Responsibility Statement Pursuant to Section 134(5) of the Companies Act, 2013
Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, it is hereby confirmed:
(a) That in the preparation of the annual accounts, the applicable accounting standards aligned with IND AS had been followed along with proper explanation relating to material departures, if any;
(b) That the Directors had selected such accounting policies aligned as per IND AS and applied them consistently, 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 FY and of the profit and loss of the Company for that period;
(c) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) That the Directors prepared the annual accounts on a going concern basis;
(e) That the Directors, had laid down Internal Financial Controls for the Company and that such Internal Financial Controls are adequate and were operating effectively; and
(f) That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Holding, Subsidiaries and Joint Ventures:
I. Holding Company:
Dhunseri Investments Limited is holding 55.79% of the equity share capital of your Company as on March 31, 2018.
II. Subsidiary Companies:
A. Dhunseri Infrastructure Limited
The Company had started developing an "Information Technology Park" at Kolkata IT Park, SEZ, Bantala. However, the said project is held up at present due to adverse market conditions.
B. Tastetaria Private Limited
Your Company has entered into a joint venture ("Agreement") on March 29, 2018 with Choicest Enterprises Limited ("CEL") of Ambuja Neotia group to collaborate with each other in the business of seffing up and operating restaurants for making and selling the well known "UNO" Brand of Chicago style deep-dish pizzas and such other business as may be decided in future. The JV Company chosen for this purpose is Tastetaria Private Limited "Tastetaria", which was formed in the year 2016 and was already pursuing such business on its own as a wholly owned subsidiary of your Company. Pursuant to the said agreement, CEL would acquire 75% of the existing share capital of Tastetaria from your Company while your Company would retain 25% of the share capital in Tastetaria.
C. Global Foods Pte. Limited
Global Foods Pte. Limited has become the subsidiary of your Company w.e.f. June 23, 2017 with the conversion of 16,000 Optionally Convertible Debentures of SGD 100 each in Global Foods Pte Limited into equity shares. Your Company has invested SGD 3,65,000 (equivalent to Rs.1.73 Crs.) in the form of 3,65,000 equity shares of SGD 1 each in Global Foods Pte. Limited during the FY 2017-18 and accordingly your Company holds 77.23% in the equity share capital of the said Company as on March 31,2018.
D. Twelve Cupcakes Pte. Limited
Twelve Cupcakes Pte. Limited is a wholly owned subsidiary of Global Foods Pte. Limited and Global Foods Pte. Limited is a subsidiary of your Company. Accordingly, Twelve Cupcakes Pte. Limited has become the step down subsidiary of your Company w.e.f. June 23, 2017. As per the requests for funding from Twelve Cupcakes Pte. Limited in view of its expansion plan, your Company has provided funds amounting to SGD 3,65,000 to Twelve Cupcakes Pte. Limited through Global Foods Pte. Limited in the FY 2017-18 as well has provided Corporate Guarantee for an amount of SGD 1.365 Mn equivalent to Rs.6.76 Crs. and acting as a guarantor in favour of Standard Chartered Bank for the loan taken by Twelve Cupcakes Pte Limited.
III. JointVenture:
A. IVL Dhunseri Petrochem Industries Private Limited (IDPIL)
At present, your Company is holding 50% of the equity share capital in IVL Dhunseri Petrochem Industries Private Limited (IDPIL). Micro Polypet Private Limited alongwith its subsidiaries, Eternity Infrabuild Private Limited and Sanchit Polymers Private Limited has been merged with IVL Dhunseri Petrochem Industries Private Limited w.e.f. December 18, 2017 in pursuance of the order passed by the Hon''ble National Company Law Tribunal, Kolkata Bench dated December 4, 2017 for approving the Scheme of Amalgamation. The appointed date in respect of the aforesaid scheme was April 1, 2016.
B. Overseas Joint Venture - Egyptian Indian Polyester Co. S.A.E. (EIPET) Restructuring
A settlement has reached between your Company, Egyptian Indian Polyester Co. S.A.E. ("EIPET") and EIPET Lenders namely Commercial International Bank (Egypt) S.A.E. ("CIB"), International Finance Corporation ("IFC"), Ahli United Bank Egypt S.A.E. ("AUBE") and Ahli United Bank B.S.C. ("AUBE") vide agreement dated April 19, 2018 for a One Time Settlement of an amount of USD 87 Million (United States Dollars Eighty Seven Million) and discharge all their respective rights and obligations in relation to the Loan Agreements, Project Funds and Share Retention Agreement (the "PFSRA") and the Security Documents executed between the parties in connection with availing financial facilities. In consideration for this settlement and release, it has been agreed to pay the Banks the Settlement amount as full payment in full satisfaction of the claims, subject to the terms and conditions of the agreement entered into amongst the parties. The full amount of USD 87 Mn (United States Dollars Eighty Seven Million) would be paid to Commercial International Bank (Egypt) S.A.E. ("CIB") acting as Security agent on behalf of the EIPET Lenders. To enable EIPET to pay the Settlement amount to the lenders, your Company through internal accruals and short term bridge financing to be raised in India, would infuse the same into EIPET. To facilitate the same, your Company would remit the said fund in the form of shareholder loan. Out of the total shareholder loan, an amount of upto USD 25 Mn would be converted into equity. In this regard, as on date, your Company has already remitted USD 8.8 Mn to EIPET.
Further, your Company has also entered into a Share Purchase Agreement on May 20, 2018 with Egyptian Petrochemicals Holding Company ("ECHEM") for the purchase of 23% stake of our joint venture Company -Egyptian Indian Polyester Company S.A.E ("EIPET") in not more than seven tranches.
Further, your Company has also proposed to purchase the entire shareholding of 39,900 (7%) shares of Engineering for Petroleum & Process Industries Company ("ENPPI") in EIPET.
Information about the Financial Performance/Financial Position of the Subsidiaries, Associate and Joint Venture
A separate statement containing the salient features of Financial Statements of all Subsidiary/Associate/Joint Ventures of your Company forms a part of consolidated Financial Statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. 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 Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Audited Consolidated Financial Statements of your Company are also attached and form part of the Company''s Annual Report.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings/Outgo
There are no particulars in regard to the conservation of energy, technology absorption as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014.
The Foreign exchange outgo in the FY 2017-18 is Rs.6,896.16 Lakhs.
Further, earnings in foreign exchange in the FY 2017-18 is Rs.80,515.20 Lakhs.
Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 as required under Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is attached as"Annexure-A" to this Report.
Corporate Social Responsibility
A Corporate Social Responsibility Committee was constituted on May 22, 2014 with Mr. P.K.Khaitan as the Chairman and Mr. C.K.Dhanuka and Dr. B.Sen as the members.
The updated Corporate Social Responsibility Policy of your Company is available in the Company''s website (weblink: http:// aspetindia.com/wp-content/uploads/2018/03/Corporate-Social-Responsibility-Policy.pdf)
Your Company carried CSR activities mainly through Dhanuka
Dhunseri Foundation (DDF).
The Annual Report on CSR activities in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, is attached as "Annexure-B" to this Report.
Details Relating to Remuneration to Directors, Key Managerial Personnel and Employees
The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/Employees of your Company is attached as "Annexure-C" to this Report.
Auditors and Auditors'' Report Statutory Auditors
M/s B S R & Co. LLP, Chartered Accountants (Registration No. 101248W/W-100022, the present Statutory Auditors of your Company shall hold office till the end of 106th AGM which was approved in the AGM held on August 7, 2017.
The Auditors'' Report for the FY 2017-18 does not contain any qualification, reservation, adverse remark or disclaimer.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mamta Binani & Associates, practising Company Secretaries was appointed as the Secretarial Auditor of your Company for the FY 2017-18.
The Secretarial Audit Report issued by Mamta Binani, practising Company Secretary for the FY ended March 31, 2018 is attached as an "Annexure-D" to this Report.
The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
Adequacy of Internal Financial Controls with reference to Financial Statements
Your Company has in place adequate internal financial controls as required u/s 134(v)(e) of the Companies Act, 2013. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. During the year, such controls were tested with reference to Financial Statements and no material weakness in the design or operation was observed.
Particulars of Loans, Guarantees and Investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
Risk Management
Your Company has established a Risk Management Policy as approved by the Board. The two major mechanisms of risk management are the Internal Audit and Monitoring of Statutory and Legal compliances.
Related PartyTransactions
All the contracts/arrangements/transactions entered by your Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. They were on similar terms as per the terms and conditions of the agreements entered into between the parties.
None of the transactions with any of the related parties was in conflict with the Company''s interest.
Particulars of Contracts or arrangement entered into with Related parties during the year pursuant to the provisions of Section 134 (3) (h) of the Companies Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in "Annexure - E" in form AOC - 2 and the same forms part of this Report.
Few related party transactions in the FY 2017-18 are subject to the approval of the shareholders at the forthcoming Annual General Meeting based on the transactions crossing the materiality threshold as per the Listing Regulations.
The necessary disclosures regarding the transactions are provided in the notes to accounts.
The Company has also formulated a policy on dealing with the Related Party Transactions and necessary approval of the Audit Committee and Board of Directors were taken wherever required in accordance with the Policy.
Formal Annual Evaluation
The Independent Directors of your Company had reviewed the performance of non-independent directors and the Board as a whole along with the performance of the Chairman of your Company at its meeting held on February 14, 2018.
The Board of Directors at its meeting held on May 21, 2018 had evaluated the performance of the Independent Directors based on a list of evaluation criteria for performance evaluation. The effectiveness of the Board was discussed and evaluated based on the evaluation criteria as well as the performance evaluation of the Board Committees was also conducted in the same meeting.
The evaluation process focused on various aspects of the functioning of the Board and Committees such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues, etc. The guidance note issue by SEBI on Board Evaluation was duly considered while conducting the evaluation exercise. Separate exercise was carried out to evaluate the performance of individual directors on parameters such as qualifications, experience, availability and attendance, constructive contribution, knowledge and competency etc.
As an outcome of the above exercise, it was noted that the Board as a whole is functioning as a cohesive body which is well engaged with different perspectives. The Board Members from different backgrounds bring about different complementarities that help Board discussions to be rich and value adding. It was also noted that the Committees are functioning well and besides the Committee''s terms of reference as mandated by law, important issues are brought up and discussed in the Committee Meetings.
Corporate Governance, Management Discussion And Analysis Reports
Your Company has taken adequate steps to adhere to all the stipulations laid down in Regulation 34(3) and Schedule V of the Listing Regulations. A report on Corporate Governance and Management Discussion and Analysis Reports are included as a part of this Report.
Certificate from the Statutory Auditors of the Company confirming the compliance with the conditions of Corporate Governance as stipulated under the Listing Regulations is attached to this Report.
The details of Board Meetings held during the FY 2017-18, details of Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee, Nomination and Remuneration policy and Vigil Mechanism/Whistle Blower Policy are covered in the Corporate Governance Report.
Environment, Health and Safety
Environmental, Health and Safety is of great importance to your Company. Your Company continuously strives to ensure environment sustainable practices and provide a safe and healthy workplace for its employees.
General
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions in regard to the under-mentioned items during the year under review:
(a) Issue of equity shares with differential rights as to dividend, voting or otherwise.
(b) Issue of sweat equity shares to employees of the Company/ Issue of Employees Stock Option Scheme.
Further, your Company has not accepted any deposits from the public. There were no outstanding balances relating to Fixed Deposits as at the beginning and end of the FY 2017-18.
There are no significant material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of your Company and its future operations.
Employees
Your Company believes that ''employees'' are the most valuable assets of any organization. Your Directors wish to place on record their deep sense of appreciation for the co-operation, dedication and committed services by all the employees of your Company who play a pivotal role in the growth of your Company.
Acknowledgement
The Directors wish to place on record their sincere appreciation for the whole-hearted support received from the banks, customers, suppliers, shareholders and all others associated with your Company. The Board of Directors also thank the employees of the Company for their valuable service and support during the year.
For and on behalf of
The Board of Directors
Place: Kolkata C.K.DHANUKA
Date: May 21, 2018 Executive Chairman
Mar 31, 2017
The Directors hereby present the 101st Annual Report of your Company together with the Audited Financial Statements for the year ended March 31, 2017.
Scheme of Arrangement/Restructuring
Your Company has received the certified copy of the Court Order from the Hon''ble High Court at Calcutta on August 8, 2016 affecting the transfer of Polyethylene Terephthalate (PET) resin business of your Company to its Joint Venture Company Dhunseri Petglobal Limited (now known as IVL Dhunseri Petrochem Industries Private Limited). The said Order had been filed with the Registrar of Companies, West Bengal on August 11, 2016 and the Scheme had accordingly become effective on and from the said date. The appointed date in respect of the Scheme was April 1, 2016.
At present, your Company is carrying on the treasury operations and is doing trading business. Further, Your Company is actively exploring new areas of diversification / business.
The Audited Financial Statements for the year ended March 31,2017 has been prepared under INDAS (Indian Accounting Standards) for the first time by your Company. The Audited Financial Statements for the year ended March 31, 2016 and the opening Balance - Sheet as at April 1, 2015 have been restated in accordance with IND AS for comparative information.
Financial Results (Rs. in Lakhs)
Particulars |
2016-2017 |
2015-2016 |
Turnover and other income |
3,659.42 |
3,113.42 |
Profit before interest and depreciation |
1,514.09 |
2,381.22 |
Interest |
8.37 |
- |
Profit before depreciation |
1,505.72 |
2,381.22 |
Provision for depreciation |
45.22 |
44.45 |
Profit before exceptional item and tax |
1,460.50 |
2,336.77 |
Exceptional Item |
(18,266.20) |
- |
Profit before tax |
(16,805.70) |
2,336.77 |
Provision for tax |
||
- Current tax |
1,465.65 |
372.50 |
- Deferred tax |
(16,065.57) |
(53.60) |
- Adjustment for earlier years |
- |
- |
Profit after tax from continuing operations |
(2,205.78) |
2,017.87 |
Profit before tax from discontinuing operations |
- |
2,513.36 |
Tax Expense of Discontinued Operations |
- |
912.28 |
Profit after tax from discontinued operations |
- |
1,601.08 |
Profit/(Loss) for the year |
(2,205.78) |
3,618.95 |
Opening Balance of Retained Earnings (Surplus in Statement of Profit and Loss) |
37,703.05 |
36,267.22 |
Profit/(Loss) for the year |
(2,205.78) |
3,618.95 |
Other Comprehensive Income |
17.97 |
1.36 |
Total Comprehensive Income for the Year |
(2,187.81) |
3,620.31 |
Deduction on account of Foreign Currency Money Item Translation |
- |
(93.08) |
Transfer to General Reserve |
- |
(405.20) |
Dividends paid |
(1400.99) |
(1400.99) |
Tax on dividend |
(286.20) |
(285.21) |
Closing Balance in Retained Earning |
33,828.05 |
37,703.05 |
Note: The figures in the above result for both the years pertain to the Treasury operations.
Operations
The income of the Company during the year under review comprised of dividend income, profit on sale of investment of shares & securities, lease rental income and royalty.
No material changes and commitments have occurred after the close of the FY till the date of this Report, which affect the financial position of the Company.
Dividend
Your Directors have recommended a dividend @ Rs.2.00/-(Previous Year @ Rs.4.00/-) per equity share of Rs.10/- each for the year ended March 31, 2017 subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM).
Directors and Key Managerial Personnel
Mrs. Aruna Dhanuka has been appointed as an Additional Director of your Company w.e.f. December 9, 2016 and subsequently was appointed as the Managing Director of your Company w.e.f. February 10, 2017 for a period commencing from February 10, 2017 and terminating on January 31, 2022 subject to the approval of the members. Appropriate resolutions for her appointment are being placed for the approval of the members of the Company at the ensuing AGM. The Board of Directors of the Company recommend her appointment as the Managing Director of your Company.
Mr. Bharat Jhaver has been appointed as an Additional Director of your Company (in the category of Independent Director) w.e.f. December 9, 2016 and is proposed to be appointed as an Independent Director for a term of five consecutive years at the ensuing AGM. Appropriate resolution for his appointment is being placed for the approval of the members of the Company at the ensuing AGM. The Board of Directors of the Company recommend his appointment as the Independent Director of your Company.
Mr. Mrigank Dhanuka has released the Executive position of Managing Director of your Company w.e.f. June 10,2016 and is continuing in the Board as a Director and Vice Chairman of your Company.
Mr. Biswanath Chattopadhyay has resigned from the post of Managing Director & CEO of your Company w.e.f. September 12, 2016 in view of transfer of his services to Dhunseri Petglobal Limited (now known as IVL Dhunseri Petrochem Industries Private Limited). Your Board of Directors wish to place on record their sincerest appreciation for the contribution made by him during his tenure.
Mr. Raj Narain Bhardwaj has resigned from the office of director (in the category of Independent Director) w.e.f. September 1, 2016. Your Board of Directors wish to place on record their sincerest appreciation for the contribution made by him during his tenure.
Ms. Shraddha Mookim has resigned from the office of director (in the category of Independent Director) w.e.f. December 1, 2016. Your Board of Directors wish to place on record their sincerest appreciation for the contribution made by her during hertenure.
Mr. K.V.Balan, has resigned from the post of Company Secretary & Compliance Officer of your Company w.e.f. September 12, 2016 in view of transfer of his service to Dhunseri Petglobal Limited (now known as IVL Dhunseri Petrochem Industries Private Limited). Your Board of directors wish to place on record their sincerest appreciation for the contribution made by him during his tenure.
Ms. Simerpreet Gulati has been appointed as the Company Secretary & Compliance Officer of your Company w.e.f. September 12, 2016.
Declaration from Independent Directors on Annual Basis
Your Company had received the declaration of Independence u/s 149(7) of the Companies Act, 2013 from all the Independent directors of your Company specifying that they meet the criteria of independence as per Section 149(6) of the Companies Act, 2013.
Directors'' Responsibility Statement Pursuant to Section 134(5) of the Companies Act, 2013
Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, it is hereby confirmed:
(a) That in the preparation of the annual accounts, the applicable accounting standards aligned with IND AS had been followed along with proper explanation relating to material departures, if any;
(b) That the Directors had selected such accounting policies aligned as per IND AS and applied them consistently, made judgments 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 FY and of the profit and loss of the Company for that period;
(c) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) That the Directors prepared the annual accounts on a going concern basis;
(e) That the Directors, had laid down Internal Financial Controls for the Company and that such Internal Financial Controls are adequate and were operating effectively; and
(f) That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Holding, Subsidiaries, Joint Ventures and Associate:
I. Holding Company:
During the FY 2016-17, Dhunseri Investments Limited has become the holding Company of your Company with a stake of 53.88% of the equity share capital of your Company as on March 31, 2017.
II. Subsidiary Companies:
A. Dhunseri Infrastructure Limited
The Company had started developing an "Information Technology Park" at Kolkata IT Park, SEZ, Bantala. However, the said project is held up at present due to adverse market conditions.
B. Tastetaria Private Limited (Company which has become subsidiary during the FY):
Tastetaria Private Limited, a Company incorporated under the provisions of the Companies Act, 2013 during the FY 2016-17, is the subsidiary of your Company. Your Company has invested in the equity share capital of Tastetaria Private Limited, a newly incorporated Company having its Registered Office at Dhunseri House, 4A, Woodburn Park, Kolkata-700020 with a business in Food & Beverages (F&B) Segment. At present, the Company holds 99.99% in the equity share capital of the said Company.
C. Egyptian Indian Polyester Company S.A.E (EIPET) [Company which has ceased to be a Subsidiary during the FY]:
Your Company has disinvested 65% of the equity holding out of the total holding of 70% in Egyptian Indian Polyester Company S.A.E. (EIPET).
III. Joint Ventures:
A. Dhunseri Petglobal Limited (DPGL) [Now known as IVL Dhunseri Petrochem Industries Private Limited (IDPIL)]
Your Company was holding 99.99% of the equity share capital of "Dhunseri Petglobal Limited" (now known as IVL Dhunseri Petrochem Industries Private Limited). Pursuant to a Scheme of Arrangement between the Company, Dhunseri Petglobal Ltd. and its respective shareholders, duly sanctioned by the Hon''ble High Court at Calcutta vide its order dated July 27, 2016, the Polyethylene Terephthalate ("PET resin") business of the Company in India have been transferred to Dhunseri Petglobal Limited w.e.f. April 1, 2016 ("the Appointed Date") being effective from August 11, 2016 (Effective Date). At present, your Company is holding 50% of the equity share capital in the said Company.
B. Micro Polypet Private Limited (MPPL)
Your Company has acquired 50% stake of Micro Polypet Private Limited (MPPL) from Indorama Ventures Global Services Limited. MPPL is engaged in the business of manufacturing PolyethyleneTerephthalate (PET) resin at its Plant at Panipat (Haryana). MPPL has further issued equity shares and Compulsorily Convertible Debentures (CCDs) to your Company during the FY 2016-17. At present, your Company is holding 50% effective control in MPPL.
IV. Associate:
Global Foods Pte Limited
Your Company has invested 32.5% in the equity share capital of a newly incorporated Company in Singapore "Global Foods Pte Limited" engaged in the business of investment in Food and Beverage (F&B) Segment during the FY 2016-17. The Company Global Foods Pte Limited has invested its entire stake in Twelve Cupcakes Pte Ltd., an existing Company in Singapore in the business of cupcakes.
Information about the Financial Performance / Financial Position of the Subsidiaries, Associate / Joint Ventures
A separate statement containing the salient features of Financial Statements of all Subsidiary/Associate/Joint Venture of your Company forms apart of consolidated Financial Statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. 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 Companies Act, 2013 and Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015("Listing Regulations"), the Audited Consolidated Financial Statements of your Company are also attached and form part of the Company''s Annual Report.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings/Outgo
There are no particulars in regard to the conservation of energy, technology absorption as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014
The Foreign exchange outgo in the FY 2016-17 isRs.67.81 Lakhs.
Further, there are no earnings in foreign exchange in the FY 2016-17.
Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 as required under Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is attached as "Annexure-A" to this Report.
Corporate Social Responsibility
A Corporate Social Responsibility Committee was constituted on May 22, 2014 with Mr. P.K.Khaitan as the Chairman and Mr. C.K.Dhanuka and Dr. B.Sen as the members.
The updated Corporate Social Responsibility Policy of your Company is available in the Company''s website (web link: http://aspetindia.com/wp-content/uploads/2017/35/Corporate-Social-Responsibility-Policy.pdf)
Your Company carried CSR activities mainly through Dhanuka Dhunseri Foundation (DDF).
The Annual Report on CSR activities in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, is attached as "Annexure-B" to this Report.
Details Relating to Remuneration to Directors, Key Managerial Personnel and Employees
The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/Employees of your Company is attached as "Annexure-C" to this Report.
Auditors and Auditors'' Report Statutory Auditors
M/s Lovelock & Lewes, Chartered Accountants (Registration No. 301056E), the present Statutory Auditors of your Company shall hold office till the end of 101st AGM which was approved in the AGM held on August 14, 2014.
Your Company has appointed M/s BSR&Co. LLP, Chartered Accountants (Registration No. 101248W/W-100022) as the Statutory Auditors of your Company for a period of 5 years (commencing from the conclusion of 101st AGM till the conclusion of the 106th AGM) of the Company in the Board Meeting held on May 22, 2017 subject to the members approval in the ensuing AGM.
The Auditors'' Report for the FY 2016-17 does not contain any qualification, reservation, adverse remark or disclaimer.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mamta Binani & Associates, practicing Company Secretaries has been appointed as the Secretarial Auditor of your Company for the FY 2017-18.
The Secretarial Audit Report issued by Mamta Binani, practicing Company Secretary for the FY ended March 31, 2017 is attached as an "Annexure-D" to this Report.
The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
Adequacy of Internal Financial Controls with Reference to Financial Statements
Your Company has in place adequate internal financial controls as required u/s 134(v)(e) of the Companies Act, 2013. Your
Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. During the year, such controls were tested with reference to Financial Statements and no material weakness in the design or operation was observed.
Particulars of Loans, Guarantees and Investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
Risk Management
The requirement of Risk Management Committee not being mandatory for your Company as per the Listing Regulations, the same is discontinued as approved in the Board Meeting dated February 7, 2017. Your Company has established a Risk Management Policy which was approved by the Board during the FY 2016-17. The two major mechanisms of risk management are the Internal Audit and Monitoring of Statutory and Legal compliances.
Related Party Transactions
During the year, your Company has sold 65% of the equity shareholding out of its total holding of 70% in Egyptian Indian Polyester Company S.A.E (EIPET) for a consideration ofRs.12.62 crs. on an arm''s length basis with the approval granted by the Audit Committee and Board of Directors on March 14, 2017. All other contracts/arrangements/transactions entered with related parties during the FY were on an arm''s length basis and were in the ordinary course of business. There have been no materially significant related party transactions with the Company''s promoters, directors, the management, their subsidiaries or relatives which may have potential conflict with the interests of the Company at large. Thus, disclosure in form AOC-2 is not required.
The necessary disclosures regarding the transactions are given in the notes to accounts. The Company has also formulated a policy on dealing with the Related Party Transactions and necessary approval of the Audit Committee and Board of Directors were taken wherever required in accordance with the Policy.
Formal Annual Evaluation
The Independent Directors of your Company had reviewed the performance of non-independent directors and the Board as a whole along with the performance of the Chairman of your Company at its meeting held on February 7, 2017.
The Board of Directors at its meeting held on May 22, 2017 had evaluated the performance of the Independent Directors based on a list of evaluation criteria for performance evaluation. The effectiveness of the Board was discussed and evaluated based on the evaluation criteria as well as the performance evaluation of the Board Committees was also conducted in the same meeting.
Corporate Governance, Management Discussion And Analysis Reports
Your Company has taken adequate steps to adhere to all the stipulations laid down in Regulation 34(3) and Schedule V of the Listing Regulations. A report on Corporate Governance and Management Discussion and Analysis Reports are included as a part of this Report.
Certificate from the Statutory Auditors of the Company confirming the compliance with the conditions of Corporate Governance as stipulated under Listing Regulations is attached to this report.
The details of Board Meetings held during the FY 2016-17, details of Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee, Nomination and Remuneration policy and Vigil Mechanism /Whistle Blower Policy are covered in the Corporate Governance Report.
Environment, Health and Safety
Environmental, health and safety is of great importance to your Company. Your Company continuously strives to ensure environment sustainable practices and provide a safe and healthy workplace for its employees.
General
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions in regard to the under-mentioned items during the year under review:
(a) Issue of equity shares with differential rights as to dividend, voting or otherwise.
(b) Issue of sweat equity shares to employees of the Company/Issue of Employees Stock Option Scheme.
Further, your Company has not accepted any deposits from the public. There were no outstanding balances relating to Fixed Deposits as at the beginning and end of the FY 2016 17.
There are no significant material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of your Company and its future operations.
Employees
Your Company believes that ''employees'' are the most valuable assets of any organization. Your Directors wish to place on record their deep sense of appreciation for the co-operation, dedication and committed services by all the employees of your Company who play a pivotal role in the growth of your Company.
Acknowledgement
The Directors wish to place on record their sincere appreciation for the whole-hearted support received from the banks, customers, suppliers, shareholders and all others associated with your Company. The Board of Directors also thank the employees of the Company for their valuable service and support during the year.
For and on behalf of
The Board of Directors
Place: Kolkata C.K.DHANUKA
Date: May 22, 2017 Executive Chairman
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the Ninety Eight Annual
Report of your Company together with the Audited Statement of Accounts
for the year ended March 31, 2014.
Restructuring
Your Company has undertaken restructuring initiatives for (i) demerger
of the Tea Division of your Company to Dhunseri Tea & Industries Ltd.
(DTIL) (formerly known as Dhunseri Services Limited) and (ii)
reorganisation of IT SEZ Division of your Company by its transfer to
Dhunseri Infrastructure Limited (DID (formerly known as Dhanurveda
Infrastructure Private Limited) under a Scheme of Arrangement.
In consideration of the demerger, DTIL will issue and allot to the
shareholders of your Company, 1 Equity Share of Rs. 10/- each in DTIL
credited as fully paid up for every 5 Equity Shares of Rs. 10/- each
fully paid-up held by them in the capital of your Company. The
existing 50,000 Equity shares of Rs. 10/- each in DSL shal stand
cancelled upon issue and allotment of such new shares in DSL to the
shareholders of your Company.
In consideration of the reorganisation, DIL will (i) issue and allot
50,00,000 Equity Shares of Rs. 10/- each credited as fully paid up in DIL
to your Company and (ii) pay to your Company in cash within a period of
five years from the Effective Date, in terms of the Scheme, the net
asset value (book value of assets less liabilities) of the IT SEZ
Division as on the Appointed Date (i.e. April 1, 2014) as reduced by
the aggregate face value of the said shares to be issued and allotted
to your Company.
The appointed date in respect of the Scheme being April 1, 2014, the
report and accounts for the year ended March 31, 2014 contains the
merged figures for all the Divisions of the Company.
The aforesaid Scheme of Arrangement has obtained the approval of the
Stock Exchanges (both NSE & BSE). Further on an application being made,
the Hon''ble High Court at Calcutta has ordered for holding the
Company''s shareholders meeting (to be convened by Court appointed
Chairman) on June 16, 2014 for their consent to the Scheme of
Arrangement.
Accordingly, the Scheme is subject to approval of the requisite
majorities of the members of DPTL, DTIL and DIL and sanction by the
Hon''ble High Court at Calcutta and other relevant authorities.
Financial Results
2013-14 2012-13
Turnover and other income 4082.78 2,452.84
Profit before interest and depreciation 214.49 182.25
Interest 65.10 43.81
Profit before depreciation 149.39 138.44
Profit for the year 100.64 99.85
Provision for tax
-Current tax 15.15 13.06
-Deferred tax 13.71 11.80
- Adjustments of earlier years (2.93) (1.95)
Profit after tax 74.71 76.94
Amount brought forward from previous year 126.17 75.25
Amount available for appropriation 200.88 152.19
Appropriation proposed:
Transfer to General Reserve 7.49 7.70
Dividend proposed on equity shares 15.76 15.76
(Current year @ Rs.4.50/-
and previous year @ Rs.4.50/- per
share of Rs. 10/- each)
Tax on dividend 2.75 2.56
Balance carried to Balance Sheet 174.88 126.17
Note: The figures in the above financial results have been given on a
consolidated basis (i.e. taking into account both Petrochem and Tea
Divisions) for a consistent comparison with the previous year.
Dividend
Your Directors recommended a dividend @ Rs.4.50/- per equity share of Rs.
10 /- each for the year ended March 31, 2014, maintaining the last
year''s rate, subject to the approval of the shareholders at the ensuing
Annual General Meeting.
Performance
Petrochem Division
With the commissioning of Plant II at Haldiathe production of PET resin
increased from 2,69,249 MT in 2012-13 to 4,12,038 MT in 2013-14 thus
achieving more than 100% capacity utilization for both the plants taken
on a combined basis.
The domestic sales volume increased from 138553 MT in 2012-13 to 172732
MT in 2013-14 i.e. an increase by 25%.
The export sales volume increased from 113087 MT in 2012- 13 to 241454
MT in 2013-14 i.e. an increase by 113%.
The margins remained under pressure in the 2nd half of the year in case
of exports in view of price pressure due to competition from certain
countries coupled with the decrease in the export ncentive effective
September, 2013.
Further the MEG pipeline from the port to the plant for transferring
imported MEG from the vessel to the MEG tank inside the Plant was
commissioned in March, 2014.
The 10MW Captive Power Plant (CPP) of the Company at Haldia was
commissioned in May, 2014.
The commissioning of the MEG pipeline and the 10MW CPP are expected to
result in cost savings.
Tea Division
Sporadic attack of pests likes looper, helopeltis, red slug and thrips,
which were evident in most of the gardens, have been controlled by
timely spraying of insecticides. Irrigation was used in all four North
Bank gardens and continued till first week of May, 2014 to mitigate the
ill effects of drought.
The current year''s protracted winter as well as pre-monsoon dry spell
for almost six months may be termed as unprecedented. It has left the
bushes to survive in stressful conditions in the Upper Assam where
there was no irrigation facility barring small young tea areas to be
covered.
Due to radiation and temperature stress, scorching of tea
leaves have been reported in small patches of some of the tea estates.
However, prolonged rainless period coupled with 40°C temperature, 20%
to 50% humidity against a normal of 50% to 90% has severely affected
the bushes with virtually no leaf for plucking towards the end of
April. The visual symptoms of wilting of tea leaves were also noticed
in several patches. Dill and Khagorijan Tea Estates suffered more due
to severe drought, as there was less rainfall since October, 2013. Your
Company is considering irrigation at Dilli T.E for the coming season
due to continuous drought in the area for the past two years.
The overall production has decreased from 109.12 lac kgs in the FY
2012-13 to 100.98 lac kgs in the FY 2013-14 due to sale of Bought Leaf
Factories. Overall sale price increased by Rs.5.35 per kg as compared to
previous year due to overall improvement in quality of teas produced.
Prospects
Petrochem Division
With the commissioning of the Pet Resin plant of the subsidiary in
Egypt, the consolidated Pet Resin manufacturing capacity of your
Company with its subsidiary Egyptian Indian Polyester Company S.A.E.
(ElPET) has become 8,30,000 TPA.
In view of EC''s review of Antidumping and subsequent withdrawal of
Antidumping duty on PET Resin, exports from your Company to Europe
suffered because of withdrawal of price undertaking from February,
2014. Exports to Europe from your Company has thus stopped. Your
Company is required to sell PET Resin in alternative markets and faces
surmountable challenges. However with the commissioning of the Egypt
plant, the supplies to Europe are being made through your Company''s
subsidiary EIPET.
We are having pressure on margins in both domestic and nternational
fronts. In the international front the capacity increase in certain
countries has resulted in price pressure. Further this has also led to
imports of PET Resin into India which has also resulted in pressure on
margins in the domestic market.
The domestic PTA producers have initiated antidumping procedures
against the entire polyester industry. The polyester and textile
industry have represented the matter before appropriate authority and
the decision thereof is in abeyance.
Going forward the FY 2014-15 will be a challengingyear in view of the
increase in the market competition and price realisation.
Tea Division
The crop prospect appears to be good this year after long spel of
drought broken by well-distributed and continuous rainfall from end of
April, 2014. Your Company mitigated the ill effect of drought to a
large extent in North Bank gardens by continuous rrigation.
Your Company''s branded teas got good response from consumers due to its
quality and helped in achieving marginal increase in sale quantity as
compared to previous year and it is expected that there should be at
least 4-5% increase in overall sale of packet teas in Rajasthan.
The tea market is expected to remain good in the coming years
especially for quality teas. Your Company''s current tea production is
10 million kgs and is expected to increase by 5-6%.
Continued emphasis is being given on manufacturing quality teas, which
have yielded favourable results in some gardens. Now 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 your Company
in the Season 2014.
The factories have been renovated by installing new machineries with
increased output. However, the production will depend on availability
of green leaf at competitive price in the area.
Barring unforeseen circumstances, the performance of the Tea Division
in the coming year is expected to be satisfactory.
IT SEZ Division
As was informed in the last Year''s report, the civil construction of
the first phase of ''Dhunseri IT Park'' at Bantala having a built up area
of 3,70,000 sq. ft., had been completed and it was ready for MEP and
other Exterior works. However the work has been kept on hold and would
be taken up only once some favourable response was received.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings/Outgo
The particulars as prescribed under Section 217(l)(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 Section 217(2A) of the Companies Act, 1956
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are set out
in the annexure to the Directors'' Report. Having regard to the
provisions of Section 219(l)(b) (iv) of the said Act, the Annual Report
excluding the aforesaid nformation is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Auditors
M/s Lovelock & Lewes, Chartered Accountants, are the present Statutory
Auditors of your Company and shall hold office till the end of this
Annual General Meeting. They have already completed the term of ten
years of appointment as the Statutory auditors of your Company. Hence
in terms of the Companies Act, 2013 they can now be re-appointed as
auditors for another term of 3 years only (which is the transition
phase). Hence M/s Lovelock & Lewes, Chartered Accountants, who retire
on the conclusion of this Annual General Meeting, being eligible, offer
themselves for reappointment for a period of three years.
Directors
Mr. R.K.Sharma, Director of your Company will retire at this Annual
General Meeting by rotation, and being eligible, offer himself for
reappointment. Your Directors recommends his reappointment as Director
of your Company.
During the year Mr.B.Bajoria ceased to be a Director of your Company
consequent to his resignation. Your Board of Directors wishes to place
on record their sincerest appreciation for the contribution made by him
during his tenure.
In terms of the requirement of the Companies Act, 2013 the ndependent
Directors of the Company, namely Mr. P.K.Khaitan, Mr. J.P. Kundra, Dr.
B.Sen, Mr. A. Bagaria, Mr. R.N.Bhardwaj, Mr. D.P.Jindal will be
appointed for a term of five years w.e.f the date of this Annual
General Meeting once the approval of the shareholders at this Annual
General Meeting is obtained. All these Directors will not be liable to
retire by rotation. Your Directors recommend approval of their
appointment.
In view of the enactment of the Companies Act, 2013 the changes in the
Independent Directors and the Directors liable to retire by rotation
has been reflected in the table under the Composition of Board in the
Corporate Governance report which is set out as separate annexure to
this report.
Mr. C.K.Dhanuka will be re-appointed as the Executive Chairman of the
Company w.e.f. January 1, 2015, based on the approva of the Board at
its meeting held on May 22, 2014, subject to the approval of the
members at this Annual General Meeting. Your Directors recommend
approval of his reappointment as the Executive Chairman of the Company.
Fixed Deposits
The Company has not accepted any deposits from the public. There were
no outstanding balances relating to FDs as at the beginning and end of
the FY 2013-14.
Subsidiary Company
1) Egyptian Indian Polyester Company S.A.E (EIPET):
Production commenced in Line-1 and Line-2 of EIPET''s plant in January,
2014 and May''2014 respectively and quality product had been achieved
immediately.
The cost of EIPET''s project in Egypt increased by USD 9 million, i.e.
from USD 160 million to USD 169 million due to delay in implementation
of the project on account of force majeure situations a number of times
in Egypt.
Your Company''s share in increased project cost of EIPET of USD 9
million was USD 6.3 million. All the shareholders of EIPET have
contributed towards additional equity participation.
2) Dowamara Tea Company Private Ltd. (DTCPL):
During the year your Company had sold its investment in Dowamara Tea
Company Pvt. Ltd. (DTCPL), subsequent to which it had ceased to be a
Wholly Owned Subsidiary (WOS) of your Company.
3) Dhunseri Tea & Industries Ltd. and Dhunseri Infrastructure Ltd.
In view of the Scheme of Arrangement, during the year ended March 31,
2014, the Company has acquired 50,000 equity shares @ Rs. 10/- each in
both M/s Dhunseri Infrastructure Ltd. (formerly M/s Dhanurveda
Infrastructure Pvt. Ltd.) and M/s Dhunseri Tea & Industries Ltd.
(formerly M/s Dhunseri Services Ltd.) i.e. at a total cost of
Rs.5,00,000/- each.
Accordingly the M/s Dhunseri Infrastructure Ltd. and M/s Dhunseri Tea &
Industries Ltd. have become the Wholly Owned Subsidiaries of the
Company.
4) Dhunseri Petrochem & Tea Pte Ltd. (DPTPL):
It was informed in the last report that the Company''s investment in
Egyptian Indian Polyester Company S.A.E. (EIPET) would be transferred
to DPTPL. However in view of the proposed restructuring, post demerger
of the Tea Division of your Company, the said subsidiary along with its
investment in Makandi Tea and Coffee Estates Ltd. & Kawalazi Estate
Company Ltd. will be transferred to Dhunseri Tea & Industries Ltd. and
the investment in EIPET will be held by your Company itself.
5) Makandi Tea and Coffee Estates Ltd. (MTCEL) & Kawalazi Estate
Company Ltd. (KECL):
MTCEL which is the subsidiary of the Company, (being the subsidiary of
DPTPL), accounted for a net profit after tax of USD 3.09 million during
the year ended December 31, 2013. MTCEL produced 5.21 million kgs of
Tea and 1.43 lac kgs of Macadamia kernel during the year ended December
31, 2013.
KECL which is the subsidiary of the Company, (being the subsidiary of
DPTPL), accounted for a net profit after tax of USD 0.55 million during
the year ended December 31, 2013. KECL produced 3.6 million kgs of Tea
and 1.78 lac kgs of Macadamia kernel during the year ended December 31,
2013.
Subsidiary Accounts
Ministry of Corporate Affairs, in accordance with the Genera Circular
issued by it, has granted exemption to the companies, 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 May 22, 2014, has consented for not attaching
the annua accounts of the subsidiaries 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.
The financial year end of Egyptian Indian Polyester Company S.A.E. is
31st December. Accordingly, though the said subsidiary''s operations
have commenced in the quarter ended March, 2014, the revenues derived
therefrom are not included in the Consolidated Financial Statements of
the Company.
Cost Audit
Your Company is under the purview of Cost Audit in respect of
manufacture of Tea and Poly Ethylene Terephthalate (PET) resin. 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 had been followed along with proper explanation
relating to material departures, if any;
(ii) That the Directors had 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 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
basis.
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.
Committees of Directors
The Board of Directors have aligned the existing Committee of the Board
with the provisions of Companies Act, 2013 (Act). Accordingly, the
Company has renamed its existing Remuneration Committee as Nomination
and Remuneration Committee and have delegated to it powers as required
under Section 178 of the Act. The existing Shareholders'' Grievance
Committee has been renamed as "Stakeholders'' Relationship Committee".
The scope of Audit Committee has also been widened so as to bring it in
accordance with the requirement of the Section 177 of the Companies
Act, 2013.
The Company has also constituted a Corporate Socia Responsibility (CSR)
Committee as required under Section 135 of the Companies Act, 2013.
Corporate Social Responsibility
Your Company recognises the needs and expectations of its internal and
external stakeholders. It strives at fulfilling its corporate
responsibilities towards community development. 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.
In pursuance of the Companies Act, 2013, as mentioned above, your
Company has already constituted a CSR Committee and has made its
Corporate Social Responsibility Policy.
As reported in the last year''s report your Company would be routing its
CSR activities through Dhanuka Dhunseri Foundation (DDF) and will
contribute in accordance with the CSR policy of the Company.
DDF acts as the vehicle through which the CSR activities of the Company
are carried out across the various parts of the country. DDF was
formed in 1972 for various charitable objectives. It is nvolved in
various philanthropic activities like building schools, colleges and
girls hostel, providing free medicines through dispensaries and grants
to charitable institutes.
Certifications
Petrochem Division
The Petrochem division of the Company holds quality certifications from
renowned national and international agencies ike the USFDA, EC,
Japanese and Canadian Food and Health Bodies and ITRC and is also ISO
9001:2008, ISO 14001: 2004, BS OHSAS 18001: 2007 and SA 8000: 2008
certified.
Tea Division
Your Directors wish to inform you that the ISO 22000:2005 certification
for Hatijan Tea Estate had also been received. Accordingly all the Tea
Estates of the Company with factories are ISO 22000:2005 certified.
Environment, Health and Safety
Environmental, health and safety is of great importance to your
Company. Your Company continuously strives to ensure environment
sustainable practices and provide a safe and healthy workplace for its
employees. It aims at proper waste management and disposal to ensure
healthy and safe environment.
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 Al (CARE A One plus) assigned to short term
facilities of the Company. At the same time CARE has reaffirmed the
Credit rating of CARE A1 (CARE A One plus) assigned to the Short Term
Debt (STD) programme (including Commercial Paper) of the Company of Rs.
100 crores. for a maturity upto six months.
Further CARE has assigned Credit rating of CARE A (Single A plus) to
Non Convertible Debenture (NCD) issue of Rs. 100 crores of the Company
for a maturity of 10 years.
Further at the request of your Company, CARE has withdrawn the ratings
assigned to the Non-Convertible Debenture issue of Rs. 100 crores, which
your Company had earlier proposed to issue.
Crisil Equities Grading
Your Directors inform that CRISIL Equities vide its Independent
Equity Research report has assigned a CRISIL IER fundamenta 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 Equities has assigned a valuation grade of
5/5 (pronounced five on five).
Employees
Your Company believes that ''employees'' are the most valuable assets of
any organization. Your Directors wish to place on record their deep
sense of appreciation for the co-operation, dedication and committed
services by all the employees of your Company which plays a pivotal
role in the growth of your Company.
Acknowledgement
The Directors wish to place on record their sincere appreciation for
the whole-hearted support received from Allahabad Bank, Axis Bank
Limited, Bank of Baroda, Canara Bank, DBS Bank Limited, Deutsche Bank
AG, Development Credit Bank Limited, HDFC Bank Limited, ICICI Bank
Limited, IDBI Bank Limited, nternational Finance Corporation,
Washington, Punjab Nationa Bank, Standard Chartered Bank, State Bank of
India, The Hongkong and Shanghai Banking Corporation Limited, The
Ratnakar Bank Limited, UCO Bank, United Bank of India, West Bengal
Industrial Development Corporation Limited, 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, Dubai Multi
Commodities Centre, 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: May 22, 2014 Executive Chairman
Mar 31, 2013
The Directors have pleasure in presenting the Ninety Seventh Annual
Report of your Company together with the Audited Statement of Accounts
for the year ended 31st March, 2013.
FINANCIAL RESULTS (Rs.in Crs.)
2012-13 2011-12
Turnover and other income 2,452.84 2,004.53
Profit before interest
and depreciation 182.25 133.26
Interest 43.81 41.22
Profit before depreciation 138.44 92.04
Profit for the year 99.85 59.03
Provision for tax
- Current tax 13.06 7.19
- Deferred tax 11.80 5.26
- Adjustments of earlier years (1.95) (2.91)
Profit after tax 76.94 49.49
Amount brought forward
from previous year 75.25 49.03
Amount
available for appropriation 152.19 98.52
Appropriation proposed:
Transfer to General Reserve 7.70 4.95
Dividend proposed on equity
shares (Current year @
Rs. 4.50/- 15.76
15.76 and previous year @
Rs. 4.50/- per share of Rs.
10/- each)
Tax on dividend 2 .56 2.56
Balance carried to Balance Sheet 126.17 75.25
DIVIDEND
Your Directors recommended a dividend @ Rs. 4.50/- per equity share of
Rs. 10 /- each for the year ended 31st March, 2013, maintaining the
last year''s rate, subject to the approval of the shareholders at the
ensuing Annual General Meeting.
PERFORMANCE
Petrochem Division
The PET resin Plant I at Haldia operated at 107% capacity utilisation.
Your Directors are glad to inform you that the PET resin Plant II has
achieved final acceptance as per the contract with the EPC contractor
and your Company declared commencement of Commercial Production from
15.11.2012. The Plant II at Haldia operated at full capacity
utilization during January- March 2013. The quality of PET Resin
produced in Plant II is of International standard and the product is
exported to various countries.
The production of PET resin increased from 2,08,975 MT in 2011-12 to
2,69,249 MT in 2012-13.
Although the plant operated in excess of 100% capacity utilisation, the
margins remained under pressure throughout the year.
Tea Division
The own crop of your Company suffered due to extreme soil moisture
deficit in March resulting in poor first flush crop. Rain was received
in 2nd week of April after nearly 7 months of long spell. The water
table was down drastically and even all rivers & jhoras dried up.
Although some improvement in weather condition appeared in May, the
hope of harvesting better crop thereafter vanished due to adverse
weather condition in June and remained indifferent till the end of the
season.
Your Company achieved the production of 109.12 lac kg tea made. Crop
was marginally lower mainly because of sale of Namsang Tea Estate and
Four Bought Leaf Factories. South Bank gardens also suffered due to
adverse weather condition and crop was 13% lower than previous year.
The market was selectively buoyant for quality teas. Teas from
non-quality areas continued to be lower priced with preference for
better teas. Your Company''s teas attracted better realisation over the
auction averages.
PROSPECTS Petrochem Division
With the commissioning of the Plant II at Haldia, the Company''s total
production capacity would be more than double in the FY 2013-14 in
comparison to the earlier capacity of the Company of 2,00,000 TPA. The
Company has optimised its existing resources, has created international
sales team, strategically located in various countries and is all
geared up to meet the marketing challenges to sell the added volumes
coming out of the expanded capacity.
Both the PET Resin Plant I and Plant II at Haldia are expected to
operate at full capacity utilisation in the coming year.
The Domestic PET resin market in India is expected to continue its
double-digit growth in the coming years. The demand of FY 2012-13 was
5.85 lac tons and is expected to be 6.70 lac tons in FY 2013-14. With
the commissioning of Plant II and a couple of other new capacities
underway, the FY 2013-14 will be a challenging year for the PET
industry. With our relationship based marketing strategy, we are
confident to retain our existing customers and thrive for increase in
the customer base in future.
Tea Division
The Tea gardens received some useful rain in the last week of March
2013 in South Bank gardens after a prolonged dry spell since October
2012. It was the longest dry spell recorded in this area of Assam.
However, there has been continuous useful rain in April 2013. Bushes
have started recovering from the effect of drought. Your Company
mitigated the ill effects of drought to a large extent by continuous
use of sprinkler irrigation in North Bank gardens, which was supported
by some useful rain in March 2013.
Continued emphasis on manufacturing quality teas have yielded
favourable response in all our gardens from our buyers. Most of the
gardens have been brought under quality manufacturing process for
better price realisation and it is expected that all gardens will
further improve their quality in 2013.
The production at Hatijan Tea Factory has now stabilised and it is
producing good quality teas in this season and will contribute to the
overall profitability of your Company.
Your Company''s packet tea brands LAL GHORA and KALA GHORA continued to
receive good response from consumers due to consistent quality of tea
in the packets. There has been improvement in packaging which has
helped in achieving marginally higher sale quantity and it is expected
that there should be further increase in sale quantity in 2013-14.
Demand for good quality CTC teas is expected to remain buoyant. The
demand at the auctions and private sales has resulted in better prices
for your Company''s tea. Barring unforeseen adverse weather conditions,
your Company is expected to strengthen its profitability in the coming
years.
Your Company has sold and handed over three tea factories in Assam
namely Primax Tea Factory, Sona Assam Tea Factory and Shreemoni Tea
Factory.
As reported last year your Company has sold one of the tea estates
namely Namsang Tea Estate. Further, the possession of the said tea
estate has also been handed over.
Your Company''s current tea production is 10.91 million kg and with the
acquisition of subsidiaries in Malawi, Africa (as detailed in the
Subsidiaries Section), Dhunseri''s consolidated Tea production capacity
will be around 22 million kg per annum.
IT-SEZ Division
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 civil construction has been completed and it is
ready for MEP and other Exterior works, which will begin depending on
market scenario.
Barring unforeseen circumstances, the Company''s performance for the
coming year is expected to be satisfactory.
CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE EARNINGS/
OUTGO
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 217(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.
AUDITORS
M/s Lovelock & Lewes, Chartered Accountants, retire on the conclusion
of this Annual General Meeting, and being eligible, offer themselves
for reappointment.
DIRECTORS
Mr. J.P.Kundra, Mr. P.K.Khaitan and Dr. B.Sen, 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.
FIXED DEPOSITS
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 the Fixed Deposits (FDs) have been repaid
and there is no outstanding balance relating to FDs as at the end of
the FY 2012-13.
SUBSIDIARY COMPANY
1) Egyptian Indian Polyester Company S.A.E (EIPET): EIPET''s project in
Egypt is progressing satisfactorily. Start up of trial run is expected
to commence in September 2013 quarter.
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 7.87 lac kg during the
year ended 31st March, 2013. DTCPL suffered a loss of Rs. 81.55 lacs
during the current year.
3) Dhunseri Petrochem & Tea Pte Ltd. (DPTPL):
The Wholly Owned Subsidiary of your Company in Singapore namely
Dhunseri Petrochem & Tea Pte Ltd. had been incorporated for
transferring the Company''s investment in Egyptian Indian Polyester
Company S.A.E.(EIPET) to DPTPL. The said transfer is under progress
and would be done once all the necessary formalities are completed.
During the year DPTPL has acquired 100% share capital of Makandi Tea
and Coffee Estates Limited and Kawalazi Estate Company Limited, both
companies based in Malawi, Africa.
4) Makandi Tea and Coffee Estates Ltd. & Kawalazi Estate Company Ltd.:
To have a global reach your Company through its Wholly Owned
Subsidiary, Dhunseri Petrochem & Tea Pte Limited (DPTPL) has acquired
two tea estates in Malawi, Africa owned by Makandi Tea and Coffee
Estates Limited and Kawalazi Estate Company Limited by DPTPL acquiring
100% stake in those Companies. The total consideration paid by DPTPL
was US$ 22 million which was funded partly by loan of US$ 12 million
and the balance by equity contribution in DPTPL made by your Company,
which in turn has been funded by your Company through internal accruals
and proceeds from the sale of Namsang Tea Estates/ other Tea factories.
Accordingly, your Company has become the ultimate holding Company of
Makandi Tea and Coffee Estates Ltd. & Kawalazi
Estate Company Ltd. (being the subsidiaries of DPTPL).
Makandi Tea and Coffee Estates Ltd. is engaged in the production of
Tea, Macadamia & Coffee and Kawalazi Estate Company Ltd. in the
production of Tea & Macadamia. The aforesaid two subsidiaries based in
Malawi, Africa in totality produce 94.50 lac kg of Tea and 4 lac kg of
Macadamia.
SUBSIDIARY ACCOUNTS
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 14th May, 2013, has consented for not attaching
the annual accounts of the subsidiaries viz, M/s Egyptian Indian
Polyester Company S.A.E., Dowamara Tea Company Private Ltd., Dhunseri
Petrochem & Tea Pte Ltd., Makandi Tea and Coffee Estates Ltd. and
Kawalazi Estate Company 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.
COST AUDIT
Your Company is under the purview of Cost Audit as per Section
233B of the Companies Act, 1956 in respect of manufacture of
Tea and Poly Ethylene Terephthalate (PET) resin. 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 had been followed along with proper explanation
relating to material departures, if any;
(ii) That the Directors had 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 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
basis.
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 recognises that its
operations impact a wide community of people and that appropriate
attention to the fulfillment of its corporate responsibilities towards
community development can enhance overall performance. 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.
As reported in the last year''s report, your Company contributes 1% of
its profits towards CSR activities, with a maximum ceiling
of Rs. 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 institutes.
CERTIFICATIONS Petrochem division
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, BS OHSAS 18001: 2007 and SA 8000:2008
certified for Plant I at Haldia.
Tea Division
Your Directors wish to inform you that the ISO 22000:2005 certification
for Hatijan Tea Estate is under advanced stages and is expected to be
received soon, after which all the Tea Estates of the Company with
factories will be ISO 22000:2005 certified.
ENVIRONMENT, HEALTH AND SAFETY Environmental stewardship, safety and
health continue to be of paramount importance. Your Company follows the
practices for environmental sustainability and safety in the way of
doing its daily businesses. It continuously strives to aim at energy
efficiency, waste management and disposal to protect the environment
from negative impacts.
Your Directors inform you that your Company has strengthened various
fire safety measures including by way of: equipping itself with a
state-of-the-art fire sensing system and fire station, three numbers of
fire tenders equipped with full fledged fire fighting equipments, fire
hydrant system, etc.
Your Directors inform you that the Department of Environment,
Government of West Bengal under the directions of Ministry of
Environment & Forests had issued a letter dated 11.3.2013 withdrawing
Environment Clearance granted to your Company for the new PET Plant at
Haldia alongwith 10 MW Power Plant (which is still under construction).
Your Company preferred
an appeal against the said order in front of Hon''ble National Green
Tribunal. The Hon''ble Bench upon hearing the plea from all sides, was
pleased to set-aside the said withdrawal of Environment Clearance and
the Authorities have been directed to consider the matter in accordance
with law.
REDEMPTION OF FOREIGN CURRENCY CONVERTIBLE BONDS
Your Directors inform that in respect of the Foreign Currency
Convertible Bonds (FCCBs) issued by erstwhile South Asian Petrochem
Ltd. (since merged with the Company) in 2007- 08, the outstanding FCCBs
amounting to US$ 7.5 million were redeemed on 22.01.2013 at a premium
of 36.86% on the principal amount, i.e. US$ 10,264,598.25.
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 (CARE A One plus) assigned to short term
facilities of the Company. At the same time CARE has reaffirmed the
Credit rating of CARE A1 (CARE A One plus) assigned to the Short Term
Debt (STD) programme (including Commercial Paper) of the Company of Rs.
100 Crs. for a maturity upto six months.
Further CARE has assigned Credit rating of CARE A (Single A plus) to
Non Convertible Debenture (NCD) issue of Rs. 100 Crs. of the Company
for a maturity of 10 years.
EMPLOYEES
Your Company believes that ''people'' are the biggest strength for the
success of any organisation. Your Directors wish to express their
appreciation to all the employees for their valuable contributions,
excellent team spirit, dedication, enthusiasm and commitment in
achieving and sustaining excellence in all areas of the business.
ACKNOWLEDGEMENT
The Directors wish to place on record their sincere appreciation for
the whole-hearted support received from Axis Bank, Allahabad Bank, Bank
of Baroda, Canara Bank, Deutsche Bank, Development Credit Bank, DBS
Bank Limited, HSBC
Limited, HDFC Bank Limited, ICICI Bank Limited, IDBI Bank Limited,
IndusInd Bank Limited, International Finance Corporation, Washington,
Punjab National Bank, State Bank of India, 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, Dubai Multi Commodities
Centre, 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: 28th May, 2013 Executive Chairman
Mar 31, 2012
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)
2011-12 2010-11
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
Amount available
for appropriation 9,852 33,048
Appropriation proposed:
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
Dividend
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.
Performance
Petrochem Division
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
April 2012.
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.
Tea Division
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.
Prospects
Petrochem Division
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
production.
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
existing plant.
Tea Division
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
2012.
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
2012.
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.
IT-SEZ Division
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
Earnings/Outgo
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.
Auditors
M/s Lovelock & Lewes, Chartered Accountants, retire on the conclusion
of this Annual General Meeting, and being eligible, offer themselves
for reappointment.
Audit Report
With regard to the observations of the auditors in paragraph 4 of
Auditors' Report, the relevant notes to accounts are self explanatory.
Directors
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)
again.
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.
Fixed Deposits
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.
Subsidiary Company
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
year 2012-13.
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.
Subsidiary Accounts
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.
Cost Audit
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
self explanatory;
(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
basis.
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
institutes.
Certifications
Petrochem Division
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
markets.
Tea Division
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
Awards
Your Directors have the pleasure to inform you that the following
awards have been received:
Petrochem Division
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
Council, Mumbai.
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
months.
Employees
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.
Acknowledgement
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
Mar 31, 2011
To The Members
The Directors have pleasure in presenting the Ninety Fifth Annual
Report of your Company together with the Audited Statement of Accounts
for the year ended 31st March 2011.
Financial results
(Rs. in Lacs)
2010-11 2009-10
Turnover and other income 1,70,306 1,20,350
Profit before interest and depreciation 25,115 16,928
Interest 2,589 2,330
Profit before depreciation 22,526 14,598
Profit for the year 19,412 11,811
Provision for tax
- Current tax 3,789 1,760
- Deferred tax 2,884 1,143
- Adjustments of earlier years 8 -
- Fringe benefit tax - 3
Profit after tax 12,731 8,905
Amount brought forward from previous year 20,317 849
Balance added pursuant to the scheme of
arrangement - 13,087
Amount available for appropriation 33,048 22,841
Appropriation proposed:
Transfer to General Reserve 26,306 890
Dividend proposed on equity shares (Current
year @ Rs. 4.50/- and previous year
@ Rs. 4/- per share of Rs. 10/- each) 1,577 1,401
Tax on dividend 262 233
Balance carried to Balance Sheet 4,903 20,317
Dividend
Your Directors recommended a dividend @ Rs. 4.50/- per equity share of
Rs. 10/- each for the year ended 31st March 2011 as against a dividend
@ Rs. 4/- per equity share of Rs. 10/- each for the year ended 31st
March 2010, subject to the approval of the shareholders at the ensuing
Annual General Meeting.
Performance
Petrochem division
The PET plant at Haldia is operating at 100% capacity utilisation. The
production of PET resin increased from 168179 MT in 2009- 10 to 200981
MT in 2010-11. Production could have been higher if the plant did not
shut down due to a fire at its raw material store.
Tea division
As reported last year, the crop in Assam was affected due to incessant
rain and increased pest activity. Tea production decreased from 104.77
lac kgs to 103.03 lac kgs. However, the sale price increased by Rs.
11.17 per kg as compared to previous year. Revenue increased by 5.97%
i.e from Rs. 129.75 crores in 2009-10 to Rs.137.50 crores in 2010-11 in
spite of a decrease in volume by 2.86%.
Prospects
Petrochem division
Existing Operations: We expect to operate at full capacity utilisation
for the year 2011-12. Thermax HTM Heater (coal based) has been
successfully commissioned and operational from January 2011. This
together with the commissioning of the captive power plant has resulted
in power and fuel cost savings which is expected to continue in the
coming years.
New Project: With respect to the expansion of the PET plant capacity in
Haldia to 4,10,000 TPA from 2,00,000 TPA, your Company received
environmental clearance from State Level Environment Impact Assessment
Authority, Ministry of Environment and Forests, Government of West
Bengal and consent to establish from the West Bengal Pollution Control
Board. The civil construction at site started in November 2010. The
plant will be on stream by April 2012.
The project cost is appraised by SBI Capital Markets Limited to be Rs.
371 crs. State Bank of India and Allahabad Bank are funding the project
cost upto ECB of USD 51 million and the balance is being funded through
internal accruals.
Development of Barrier Resins: Your Company has entered into an
Exclusive Technology License Agreement with M&G Finanziaria S.R.L.,
Italy (M&G), one of the global leaders in PET bottle resin production,
to produce and market barrier resins in India and Bangladesh using
M&GÃs state of the art BicoPET technology. This will enable your
Company to capture newer customers/products where this technology would
be used for packaging. For the current year 2011-12, the Company will
start seed marketing of this product. Necessary modifications in the
existing plant are being carried out to produce these new chips. The
plant is expected to start production of the aforesaid new chips by 1st
quarter of 2012-13 after stabilisation of new plant.
Tea division
The crop prospect appears to be good at present, after a long spell of
drought broken by well-distributed rainfall in April & May 2011. The
Company mitigated the ill effects of drought to a large extent in the
North Bank gardens through continuous irrigation.
Continued focus on manufacturing quality teas, yielded favourable
results in some gardens; all other gardens will be brought under
similar manufacturing process.
Your Company's branded teas have received good response from consumers
which has helped in achieving substantial increase in sale quantity as
compared to previous year and a similar trend is expected to continue
in 2011-12. The tea market is expected to remain good in the coming
years especially for quality teas.
In the current financial year, the Company purchased four tea factories
in Assam and expects to produce 40 lac kgs tea in these factories in
2011-12. These factories are being renovated by installing new
machineries with increased output. The production can reach up to 60
lac kgs following the expansion in due course and depending on
availability of green leaf at competitive prices in the area. Further,
your Company has acquired 100% shares of Dowamara Tea Company Private
Limited(DTCPL) in May 2011. DTCPL owns a tea manufacturing factory
having capacity of 8 lac kgs per annum. The capacity is planned to be
expanded to 15 lac kgs per annum by adding further machineries.
Further, a new factory at Hatijan tea estate is being constructed,
having an annual capacity of 15 lac kgs and is expected to be
operational in August 2011.
The Company's current tea production is 103 lac kgs & is expected to
reach 150 lac kgs in 2011-12 and 200 lac kgs in the next 2/3 years with
few more acquisitions.
IT-SEZ Division
The construction work of ÃDhunseri IT Parkà at Bantala is progressing
satisfactorily. The first phase having a built up area of 3,70,000 sq.
ft, will be delayed as compared to our earlier target of January 2012,
due to unavoidable circumstances.
Barring unforeseen circumstances, the CompanyÃs performance for the
coming year is expected to be satisfactory.
Conservation of energy, technology absorption, foreign exchange
earnings/outgo
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 Section 217(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.
Auditors
M/s Lovelock & Lewes, Chartered Accountants, retire on the conclusion
of this Annual General Meeting, and being eligible, offer themselves
for reappointment.
Audit Report
With regard to the observations of the auditors in paragraph 4 of
Auditorsà Report, the relevant notes to accounts are self explanatory.
Directors
Your Directors inform that the Central Government has accorded its
approval u/s 259 of the Companies Act, 1956 to increase the total
number of Directors of the Company from 12(Twelve) to 18 (Eighteen),
subject to the condition that the increase in the number of Directors
has to be effected within 19th September 2011, failing which the
approval shall lapse.
Dr. B. Sen, Mr. B. K. Biyani and Mr. B. Bajoria, 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.
Fixed deposits
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 either repaid or
renewed, excepting the deposits from two depositors totaling to Rs.
14,000/- which were not claimed by the depositors, as at 31st March
2011, and has since been paid.
Subsidiary company
1) Egyptian Indian Polyester Company S.A.E (EIPET):
As informed in the last report, the EIPETÃs project in Egypt is being
set up at Ain Sokhna. The 25th January Revolution of 2011 in Egypt,
delayed the signing of the loan agreements. This has resulted in delay
in the project start up date. The IFC loan agreement was signed in
MayÃ11 and the loan agreements with the Egyptian lenders is expected to
be signed shortly. Once the agreements are signed with the Egyptian
lenders, the construction will begin at the project site and the
same is expected to be completed by June 2013.
All major clearances have been received. As at 31st March 2011, an
amount of Rs. 7,951 Lacs has been paid as equity contribution to M/s
Egyptian Indian Polyester Company, S.A.E.
2) Dowamara Tea Company Private Ltd. (DTCPL):
As informed earlier, your Company has acquired 100% shares of Dowamara
Tea Company Private Limited (DTCPL) in May 2011. Consequently, DTCPL
has become a wholly-owned subsidiary of the Company.
Subsidiary Accounts
Ministry of Corporate Affairs has vide its General Circular No: 2 /2011
dated: 8th February 2011, 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 24th May 2011, has consented for not attaching the
annual accounts of the subsidiary, M/s Egyptian Indian Polyester
Company S.A.E., with the accounts of the Company.
Accordingly, the Audited Statements of Accounts, the reports of Board
of Directors and Auditors of the subsidiary company have not been
annexed. The annual accounts of the subsidiary company and the related
detailed information shall be made available to the shareholders of the
Company and subsidiary company seeking such information at any point of
time. Shareholders who wish to have a hard copy of the full reports
and accounts of the subsidiary 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 subsidiary 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 CompanyÃs annual report.
Cost Audit
Your Company is under the purview of Cost Audit as per Section 233B of
the Companies Act, 1956 in respect of manufacture of Tea. M/s Mani &
Co., Cost Accountants, have been appointed as Cost Auditors of the
Company.
Under the provisions of Section 233B of the Companies Act, 1956 the
Central Government did not prescribe any cost audit in respect of
manufacture of Poly Ethylene Terephthalate (PET) resin.
Directorsà 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 Directorsà 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
Auditorsà Report. Proper explanation relating to material departures,
have been clarified in note no. 8 in the notes to accounts (Schedule
18) which is self explanatory;
(ii) That the Directors selected such accounting policies and applied
them consistently except as specified in notes to accounts (Schedule
18) 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 CompanyÃs assets and for
preventing and detecting fraud and other irregularities;
(iv)That the Directors prepared the annual accounts on an Ãon- goingÃ
concern basis.
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 is conscious of its social responsibilities and the
environment in which it operates. It has continued with its welfare
activities for development in the fields of education, culture and
other welfare measures and to improve the general standard of living.
The emphasis is on improvement of health, development of education,
culture and sports.
Your Directors wish to inform that Dhanuka Dhunseri Foundation Trust
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 institutes.
Certifications
Petrochem Division
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. The Petrochem
Division is ISO 9001:2008, ISO 14001: 2004 and BS OHSAS 18001: 2007
certified.
Further, the implementation of SA 8000 certification in the Petrochem
division of the Company is in process and the same is expected to be
received by end of July 2011.
Tea Division
The Santi and Dilli tea estates of the Tea division of the Company are
ISO 22000:2005 certified. The same will also be implemented in the
remaining gardens having existing factories latest by September 2011.
Awards
Your Directors have the pleasure to inform you that the following
awards have been received:
Petrochem Division
Award for Best EOU: The CompanyÃs Petrochem division has received the
award for the best EOU (Other than MSME: Plastic Products) for
outstanding export performance for the year 2008- 09 from Export
Promotion Council for EOUs & SEZs, Ministry of Commerce & Industry,
Government of India.
Tea Division
Hatijan Tea Estate has surpassed the earlier record and achieved a
yield of 3,806 kgs per hect, the highest yield in Assam and is eligible
for the Tea Board award for the same.
Human Resources Management & Environment, Health and Safety
Health and safety of all employees has always been a matter of major
concern and importance. Your Company continuously strives to ensure
that our operations are safe. The Company recognises 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.
There has been an unfortunate incidence of fire due to electrical short
circuit in the raw material godown, at Haldia plant on 14th March 2011.
However, there has been no loss of life in this incident. Raw material
and other assets aggregating to Rs. 64.63 crs was lost in the fire. The
stocks and other assets are adequately insured and the comprehensive
insurance policies are in full force. An appropriate claim has been
lodged with M/s United India nsurance Company Ltd, for reimbursement
which is under its consideration. The Directors are reasonably certain
about the settlement of the claim. Meanwhile, the Company has also
taken appropriate steps to avoid such incidents in future.
Share Capital
During the year under review, your Company allotted 2,33,13,859 equity
shares of Rs. 10/- each fully paid up to the members of erstwhile South
Asian Petrochem Ltd (SAPL), pursuant to the sanction of the scheme of
arrangement, comprising interalia amalgamation of South Asian Petrochem
Ltd with the Company. Consequently, the share capital of the Company
has increased, to comprise of 3,50,24,754 equity shares of Rs. 10/-
each.
Utilisation of Proceeds from Preferential Issue
Erstwhile SAPL had made an allotment of equity shares, warrants and
FCCBs in 2007-08. Consequently, during the year 2007- 08, erstwhile
SAPL raised Rs. 7,416.23 Lacs by preferential allotment of equity
shares and equity share warrants and Rs. 7,864 Lacs from the issue of
the FCCBs.
The money raised out of such issue was to be utilised 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 and equity share warrants
have been fully utilised towards equity participation/other expenses in
the overseas project in Egypt.
The net outstanding of FCCB proceeds (after meeting issue expenses) as
reduced by redemption in 2009-10, is Rs. 2,517.96 Lacs which remains
invested as fixed deposit with banks. The said amount will be utilised
towards equity participation in the overseas project in Egypt.
Crisil Equities Grading
Your Directors inform that CRISIL Equities vide its press release dated
8th November 2010 has assigned a CRISIL IER fundamental grade of 3/5
(pronounced three on five) to the Company. The grade indicated that the
Company's fundamentals were ÃgoodÃ, relative to other listed equity
securities in India. CRISIL Equities has assigned a valuation grade of
5/5, indicating that the stock has a strong upside as compared to the
market price of Rs. 155/- (as on 21st February, 2011). CRISILÃs
one-year fair value of the CompanyÃs stock was Rs. 266/-.
Employees
Your Company believes that Ãpeopleà are the biggest strength for the
success of any organisation. Your Directors wish to express their
appreciation to all the employees for their valuable contributions,
dedication and commitment, as well as their support in attaining the
objectives of the Company.
Acknowledgement
The Directors wish to place on record their sincere appreciation for
the whole-hearted support received from Allahabad Bank, Bank of Baroda,
Bank of India, Canara Bank, Deutsche Bank, Development Credit Bank,
Export-Import Bank of India, ICICI Bank Limited, IDBI Bank Limited,
International Finance Corporation, Washington, Punjab National Bank,
State Bank of ndia, State Bank of Travancore, Syndicate Bank, United
Bank of ndia, 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
C. K. Dhanuka
Executive Chairman
Place: Kolkata
Date: 24th May 2011
Mar 31, 2010
The Directors take pleasure in presenting the ninety-fourth annual
report of your Company, together with the audited statement of accounts
for the year ended 31st March 2010.
Restructuring
The Scheme of Arrangement between Dhunseri Tea & Industries Limited
(DTIL), DI Marketing Limited (DIML), South Asian Petrochem Limited
(SAPL) and Dhunseri Polycarbonate Limited (DPL) and their respective
shareholders for demerger of Jaipur Packet Factory and Investment
Division (Demerged Undertaking) of DTIL to DIML and amalgamation of
SAPL and DPL with DTIL was approved by the Honble High Court at
Calcutta, by an order passed on 6th May 2010. The appointed date in
respect of the Scheme being 1st April 2009, the report and accounts for
the year ended 31st March 2010, are inclusive of the figures relating
to the merged companies and exclusive of the figures relating to the
demerged undertaking.
The Board will allot 2,33,13,859 equity shares of Rs. 10/- each, fully
paid-up to the members of erstwhile SAPL after necessary permission
from the concerned authorities are received.
The entire share capital of DPL is held by SAPL. Hence, all shares held
by SAPL in the share capital of DPL have been cancelled consequent to
the amalgamation and, in lieu thereof, no allotment of any new shares
shall be made to any person whatsoever.
All existing shares held by the Company in DIML shall stand cancelled
upon the new equity shares being issued by DIML to the Companys
shareholders as on the record date for demerger shares in terms of the
Scheme and until such cancellation shall continue to be held by the
Company.
Pursuant to the Scheme of Arrangement, the name of the Company has been
changed from Dhunseri Tea & Industries Ltd. to Dhunseri Petrochem &
Tea Ltd. Further, the Company has also received the fresh certificate
of incorporation in the new name from the Registrar of Companies, West
Bengal.
Financial results (Rs. in lacs)
2009-10 2008-09
Turnover and other income 1,20,350 11,830
Profit before interest and depreciation 16,928 2,849
Interest 2,330 426
Profit before depreciation 14,598 2,423
Profit for the year 11,811 2,164
Provision for tax
- Current tax 1,760 252
- Deferred tax 1,143 232
- Fringe benefit tax 3 14
Profit after tax 8,905 1,666
Amount brought forward from previous year 849 976
Balance added pursuant to the Scheme of Arrangement 13,087 -
Amount available for appropriation 22,841 2,642
Appropriation proposed:
Transfer to general reserve 890 1,500
Dividend proposed on equity shares (Current year
@ Rs. 4/- per share and previous year 1,401 293
@ Rs. 2.50 per share of Rs. 10/- each)
Tax on dividend 233 -
Balance carried to balance sheet 20,317 849
As mentioned earlier, SAPL merged with the Company w.e.f. 1st April
2009 and as such the figures for the year under review are not
comparable with the figures in the previous year.
Dividend
Your Directors recommended a dividend @ Rs. 4/- per equity share of Rs.
10/- each for the year ended 31st March 2010, as against the dividend @
Rs. 2.50 per equity share of Rs. 10/- each for the year ended 31st
March 2009, subject to the approval of the shareholders at the ensuing
Annual General Meeting.
Performance
Petrochem division
The production of PET resin of erstwhile SAPL decreased from 1,92,655
MT in 2008-09 to 1,68,179 MT in 2009-10. Th production was low owing to
reduced availability of raw material. Consequently, the sales quantity
of PET resin decreased.
Tea division
Production increased from 98.58 lac kgs to 104.77 lac kgs, the highest
ever production achieved by the Company. The sale price increased by
Rs.17/- per kg as compared with last year. Revenue increased by 23% i.e
from Rs.105.84 crores in 2008-09 to Rs.129.75 crores in 2009-10.
Prospects Petrochem division
We expect that the capacity utilisation in 2010-11 will be better than
that of 2009-10, resulting in improved performance. The captive power
plant of 8 MW was commissioned in June 2010, and would result in
savings in power and fuel costs from 2010- 11. PTA chain conveyer
system has been commissioned successfully. Erection work on coal-based
HTM heater from Thermax is under progress. Commissioning of this heater
is expected in early September 2010, and is expected to further reduce
energy cost.
Further, there is a plan to expand the plant capacity in Haldia to
4,10,000 TPA. The process of obtaining necessary clearances from the
concerned authorities for the same is under progress. Financial
closure is achieved for the project with the approval of ECB of USD 51
million.
Tea division
The crop in Assam was severely affected owing to incessant rain and
increased pest activity. However, the Company gardens mitigated the ill
effect of adverse climatic conditions to a large extent and were able
to minimise crop loss with modern cultivation practices.
A continuing focus on quality yielded favourable results in some
gardens; the same process was initiated in other gardens for quality
improvement this season.
Barring unforeseen circumstances, the Companys performance for the
coming year is expected to be satisfactory.
Conservation of energy, technology absorption, foreign exchange
earnings/outgo
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 Section 217(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.
Auditors
M/s Lovelock & Lewes, Chartered Accountants, retire on the conclusion
of this Annual General Meeting and, being eligible, offer themselves
for reappointment.
Directors
Your Directors wish to inform you that in view of the amalgamation of
erstwhile SAPL with the Company, some Directors of erstwhile SAPL were
to be inducted on the Board of the Company. Consequently, the Company
has made necessary application to the Central Government to increase
the number of Directors to 18. The shareholders approval for the same
was received through postal ballot, the results of which were declared
on 27th May 2010. The approval of the Central Government is pending.
During the year, Mr. Haigreve Khaitan, Mr. Sitaram Daga, Mr. Ashok
Kumar Lohia, Mr. Robindra Nath Deogun, Mr. Purushottam Lal Agarwal, Mr.
Basudeo Beriwala ceased to be Directors of the Company, consequent to
their resignation. The Board of Directors wishes to place on record its
sincerest appreciation for the contribution made by the aforesaid
Directors during their tenure.
Mr. Y.F. Lombard has been appointed as a Director of your Company in
the casual vacancy created by the resignation of Mr. Basudeo Beriwala.
Mr. Y.F. Lombard shall hold office till the term Mr. Basudeo Beriwala
would have held office, which is expiring at the ensuing Annual General
Meeting. Hence, Mr. Y.F. Lombard will retire at this Annual General
Meeting by rotation, and being eligible, offer himself for
re-appointment. The Board recommends his re-appointment as Director of
your Company.
Mr. J.P. Kundra has been appointed as a Director of your Company in the
casual vacancy created by the resignation of Mr. Ashok Kumar Lohia.
Mr. J.P. Kundra shall hold office till the term Mr. Ashok Kumar Lohia
would have held office, which is expiring at the ensuing Annual General
Meeting. Hence Mr. J.P. Kundra will retire at this Annual General
Meeting by rotation, and being eligible, offer himself for
re-appointment. The Board recommends his re-appointment as Director of
your Company.
Mr. P.K. Khaitan has been appointed as a Director of your Company in
the casual vacancy created by the resignation of Mr. Haigreve Khaitan.
Mr. P.K. Khaitan shall hold office till the term Mr. Haigreve Khaitan
would have held office, which is expiring at the ensuing Annual General
Meeting. Hence, Mr. P.K. Khaitan will retire at this Annual General
Meeting by rotation, and being eligible, offer himself for
re-appointment. The Board recommends his re-appointment as Director of
your Company.
Dr. B. Sen has been appointed as a Director of your Company in the
casual vacancy created by the resignation of Mr. Robindra Nath Deogun.
Dr. B. Sen shall hold office till the term Mr. Robindra Nath Deogun
would have held office.
Mr. Anurag Bagaria has been appointed as a Director of your Company in
the casual vacancy created by the resignation of Mr. Purushottam Lal
Agarwal. Mr. Anurag Bagaria shall hold office till the term Mr.
Purushottam Lal Agarwal would have held office.
Mr. Raj Narain Bhardwaj has been appointed as a Director of your
Company in the casual vacancy created by the resignation of Mr. Sitaram
Daga. Mr. Raj Narain Bhardwaj shall hold office till the term Mr.
Sitaram Daga would have held office.
Mr. Sanjay Kumar Pai was the Nominee Director of IDBI Bank Ltd., on the
Board of erstwhile SAPL. Mr. Sanjay Kumar Pai has been appointed as the
Nominee Director of IDBI Bank Ltd on the Board of the Company. Mr. S.K.
Pai has been in service and is presently the Chief General Manager in
IDBI Bank Ltd.
Mr. C.K. Dhanuka was appointed as the Managing Director and CEO of the
Company w.e.f. 1st January 2010, by the Board, subject to the approval
of the members at this Annual General Meeting. The Board, at its
meeting held on 3rd July 2010 has redesignated, Mr. C.K. Dhanuka as the
Executive Chairman w.e.f. 1st July 2010. Your Directors recommend
approval of his reappointment as the Executive Chairman of the Company.
The particulars required for reappointment as the Executive Chairman
are contained in the Notice for the Annual General Meeting.
Mr. M. Dhanuka is proposed to be appointed as the Vice Chairman &
Executive Director of the Company w.e.f. 1st July 2010. Your Directors
recommend approval of his appointment as the Vice Chairman & Executive
Director of the Company. The particulars required for appointment as
the Vice Chairman & Executive Director are contained in the Notice for
the Annual General Meeting.
Mr. B.K. Biyani is proposed to be appointed as the Executive Director
(Corporate) of the Company, liable to retire by rotation, w.e.f. 1st
July 2010. Your Directors recommend the approval of his appointment as
the Executive Director (Corporate) of the Company, liable to retire by
rotation. The particulars required for appointment as the Executive
Director (Corporate), liable to retire by rotation are contained in the
Notice for the Annual General Meeting of the Company.
Mr. B. Chattopadhyay has been appointed as the Additional Director of
your Company w.e.f. 3rd July 2010. Mr. B. Chattopadhyay was the
Executive Director & CEO of erstwhile SAPL. Consequent to the
amalgamation of SAPL with the Company, Mr. B. Chattopadhyay has been
appointed as the Executive Director & CEO of the Company w.e.f. 1st
July 2010. In terms of Section 260 of the Companies Act, 1956, he
shall hold office only up to 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. Your Directors feel that Mr. B.
Chattopadhyay, with his vast experience, shall contribute significantly
to the achievement of the corporate goal of your Company. Your
Directors recommend approval of his appointment as the Executive
Director & CEO of the Company. The particulars required for appointment
as the Executive Director & CEO are contained in the Notice for the
Annual General Meeting.
Change in Chief Finance Officer
Mr. R.K. Sharma was the Senior Vice President (Finance) and Chief
Finance Officer of erstwhile SAPL. Consequent to the amalgamation of
SAPL with the Company, Mr. R.K. Sharma has been appointed as the Senior
Vice President (Finance) and Chief Finance Officer of the Company
w.e.f. 1st July 2010.
Change in Company Secretary
Mr. K.V. Balan was the Company Secretary and Compliance Officer of
erstwhile SAPL. Consequent to the amalgamation of SAPL with the
Company, Mr. K.V. Balan has been appointed as the Company Secretary and
Compliance Officer of the Company w.e.f. 1st July 2010.
Fixed deposits
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. There are no overdue/unclaimed deposits as at 31st March 2010.
Associate Company
Madhuting Tea Private Ltd.
Pursuant to the demerger of Jaipur Packet Factory and Investment
Division of the Company to DI Marketing Limited (DIML) from 1 April
2009 as part of the Scheme of Arrangement, the Companys investment in
Madhuting Tea Private Ltd. has been transferredto DIML. Hence the said
Company is no longer an Associate Company.
Subsidiary company
Egyptian Indian Polyester Company S.A.E. (EIPET):
Your Directors inform that, owing to additional cost towards shifting
defense equipment and putting up watch towers, as a precondition to
Ministry of Defense (MOD) approval, EIPET rejected the proposal and
decided to shift the project to another location at Ain Sokhna, where
MOD approval, for heights up to 100 m from sea-level, were available.
Land Sale Contract (LSC) and Infrastructure Contracts (Infra.C) were
signed for 34.84 acres of land at Ain Sokhna. Advance in respect of the
same was paid and registration with the Suez Governorate was done. The
site was located very near to the Ain Sokhna Port and on the Sokhna
Cairo highway. Hence, the Companys Head Office, legal domicile and
place for practicing its activity has been shifted from Port Said to
Ain-El Sokhna City, the Economic and Industrial Zone, North- West Suez
Gulf.
All major clearances, except two matters which are still pending, were
received.
The revised project cost as estimated by the Company is USD 160 million
which will be funded on a debt-equity ratio of 2:1. In the project,
your Company will hold 70% equity.
As at 31st March 2010, an amount of Rs. 1,319 lacs was paid as an
advance against equity contribution to M/s Egyptian Indian Polyester
Company, S.A.E. Further, an amount of Rs. 183 lacs was paid as an
advance towards expenses to M/s Egyptian Indian Polyester Company,
S.A.E. In the current year, an additional amount of Rs. 1,355 lacs has
been paid towards equity contribution.
The Company applied to the Central Government seeking exemption under
Section 212(8) of the Companies Act, 1956, from attaching the reports
and accounts of the subsidiary company. The approval for the same is
expected to be received shortly. Accordingly, the audited statement of
accounts, the reports of the Board of Directors and Auditors of the
subsidiary company will not be annexed if such approval is received.
Shareholders who wish to have a copy of the full reports and accounts
of the subsidiary will be provided the same on receipt of a written
request from them. These documents will also be available for
inspection by any shareholder at the Registered Office of the Company
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 Companys annual report.
Promoters holding in the Company
Consequent to the merger of SAPL with the Company, the Promoters
holding in the Company will be reduced from 75% to 62.61%.
Cost audit
Your Company is under the purview of cost audit as per Section 233B of
the Companies Act, 1956, in respect of manufacture of tea. M/s Mani &
Co., Cost Accountants, have been appointed as Cost Auditors of the
Company.
Under the provisions of Section 233B of the Companies Act, 1956, the
Central Government did not prescribe any cost audit in respect of
manufacture of Poly Ethylene Terephthalate (PET) resin.
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 responsiblity statement, it is hereby confirmed:
(i) That in the preparation of the annual accounts, the applicable
accounting standards were followed along with proper explanation
relating to material departures, if any
(ii) That the Directors selected such accounting policies and applied
them consistently, except as specified in notes to accounts (Schedule
18) and made judgements and estimates that were reasonable and prudent
so as to give a true and fair view of state of affairs of the Company
at the end of the financial year and 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 Companys assets and for
preventing and detecting fraud and other irregularities
(iv) That the Directors prepared the annual accounts on an Ãon going
concern basis
Corporate Governance and Management discussion and analysis reports
Corporate Governance and Management discussion and analysis reports are
set out as a separate annexure to this Report.
Corporate social responsibility
Your Company recognises that its operations impact a wide community of
stakeholders including investors, employees, customers, business
associates and local communities, and that appropriate attention to the
fulfillment of its corporate responsibilities can enhance overall
performance. In structuring its approach to the various aspects of
corporate social responsibility, the Company takes account of
guidelines and statements issued by stakeholder representatives and
other regulatory bodies.
Certifications
Petrochem division
Erstwhile SAPL received the ISO 9001:2008 accredition by TUV NORD
certification body for manufacture and sale of PET resin in
international and domestic markets.
Tea division
Implemented ISO-22000: 2005 in Santi and Dilli Tea Estates. Three
other gardens namely, Bahipookri, Bettybari and Orang T.Es à earlier
covered under ISO: 9000 Ã are now in the final stage of upgradation to
ISO: 22000. Balance gardens will be covered under ISO: 22000 in
2010-11.
Santi and Dilli Tea Estates were the participants in Ethical Tea
Partnership Programme during 2009-10.
Awards
Your Directors take pleasure in informing you that the following awards
have been received:
Petrochem division
Award for Best EOU
Based on the outstanding export performance of erstwhile SAPL for the
year 2007-08, erstwhile SAPL had been given the award of the best EOU
(Non SSI Category: Plastic Products) by the Export Promotion Council
for EOUs & SEZs, Ministry of Commerce & Industry, Government of India.
Export Award
Erstwhile SAPL had received the second prize for the Export Award for
the years 2007-08 and 2008-09 in the product category of plastic
polymers by the Plastics Export Promotion Council, Mumbai.
The National Energy Conservation Award
Erstwhile SAPL had been awarded Commendation Certificate for efforts in
energy conservation in the petro chemical sector for the year 2009, by
the Ministry of Power, New Delhi.
Tea division
Hatijan Tea Estate achieved a yield of 3,585 kg per hect, the highest
yield in Assam, and has applied for the Tea Board Award for the same.
Khagorijan and Orang Tea Estates got special appreciation from M/s.
J.Thomas & Co. Private Limited for having achieved attractive prices of
Rs.1,350 per kg for orthodox teas and Rs.158 per kg for CTC teas in the
2009-10 season.
Human resource management and environment, health and safety
Health and safety of all employees remains of paramount importance.
Over the past few years, much work has gone into making our operations
safer and managing our environment impact.
These are matters of priority and therefore, caring for the environment
and responsible disposal of wastes are some of the ongoing initiatives.
Listing information
The equity shares of your Company are presently listed on the National
Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
The unsecured foreign currency convertible bonds (issued by erstwhile
SAPL) are listed on the Singapore Exchange Securities Trading Limited
(SGX-ST).
Utilisation of proceeds from preferential issue
Erstwhile SAPL had made an allotment of equity shares, warrants and
FCCBs in 2007-08. Consequently, during the year 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 money raised out of such issue was to be utilised for:
i) Equity participation in overseas subsidiaries
ii) Retirement of high cost borrowings
iii) Other business purposes including working capital requirements
Out of the net proceeds after meeting issue expenses, Rs. 1,502 lacs
was utilised as an advance towards equity participation/other expenses
in the overseas project in Egypt. In the current year, an additional
amount of Rs. 1,355 lacs was paid towards equity contribution in the
overseas project in Egypt.
The balance unutilised money remains in bank deposits.
Redemption of foreign currency convertible bonds
Your Directors inform that erstwhile SAPL (since merged with the
Company), had allotted 200 zero coupon unsecured foreign currency
convertible bonds (FCCBs) of USD 100,000 each for an aggregate amount
of USD 20,000,000 (i.e., Rs. 7,864.00 Lacs) in 2007-08. Out of this,
FCCBs amounting to USD 12,500,000 have already been bought back at a
discount on the face value. Hence, bonds amounting to USD 7,500,000 are
outstanding as on date.
Non-exercise of the option for conversion of convertible warrants to
equity
Your Directors inform that erstwhile SAPL had issued 1,40,64,273
convertible warrants on preferential basis. The period for exercising
the option for the conversion of the aforesaid convertible warrants
expired on 19th June 2009. None of the allottees exercised the option
for conversion.
Conversion from a 100% Export Oriented Unit (EOU) to a Domestic Tariff
Area (DTA) unit
Erstwhile SAPL was a 100% EOU. Owing to better sales realisation in the
domestic market, a decision was taken to convert from a 100% export
oriented unit (EOU) to a domestic tariff area (DTA) unit. SAPL finally
debonded from the 100% EOU scheme from 1st April 2010 (cut-off date for
debonding was 16th October 2009) pursuant to the order received from
Development Commissioner, Falta Special Economic Zone.
Credit Analysis & Research Ltd (CARE) rating
Your Directors inform that CARE had issued a Credit rating of CARE A to
Dhunseri Tea and Industries Ltd., prior to amalgamation.
Further, CARE had issued a Credit rating of CARE A (Is) [Single A
(Issuer Rating)] to erstwhile SAPL. At the same time CARE had also
issued the short-term debt rating of PR1+ (PR One Plus) for the
short-term debt (STD) programme (including Commercial Paper) of
erstwhile SAPL for an amount of Rs. 50 crores (increased from Rs. 25
crores earlier) for a maturity up to six months.
Your Directors further wish to inform that these credit ratings were
obtained in the name of erstwhile South Asian Petrochem Ltd. and
Dhunseri Tea & Industries Ltd., prior to amalgamation and are
valid as on date. However, credit ratings for the merged entity will be
obtained.
Employees
People continue to be the centre of your Companys winning strategy.
Your Companys employees constitute the core of what we offer to our
customers. Your Directors wish to acknowledge the dedication and
commitment of all employees, as well as their support and valuable
contributions, in achieving and sustaining excellence in all areas of
the business.
Acknowledgements
The Directors wish to place on record their sincere appreciation for
the whole-hearted support received from Bank of Baroda, Bank of India,
Canara Bank, Deutsche Bank, Development Credit Bank, Export-Import Bank
of India, ICICI Bank Limited, IDBI Bank Limited, International Finance
Corporation, Washington, Punjab National Bank, State Bank of India,
State Bank of Travancore, Syndicate 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), Egypt, the customers, the suppliers, the
shareholders and all others associated with the Company.
For and on behalf of the Board of Directors
Place: Kolkata C. K. Dhanuka
Date: 3rd July 2010 Executive Chairman
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