Directors Report of Duncans Industries Ltd.

Sep 30, 2014

Dear Members,

The Board of Directors of the Company submits the Twentieth Annual Audited Accounts for the year ended 30th September, 2014 :

FINANCIAL RESULTS (Rs. in lacs)

Current Year Previous Period (18th Months)

Profit / (Loss) before, interest, depreciation, exceptional items and tax (969) 405

Finance Cost (1802) (2575)

Depreciation (298) (448)

Profit / (Loss) before tax (3069) (2618)

Tax expenses - -

Profit / (Loss) for the year (3069) (2618)

DIVIDEND

The Company is a sick industrial company within the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and the Rehabilitation Scheme sanctioned by the Hon''ble BIFR, is under the process of implementation. As per the provisions of the Scheme, no dividend on Preference and Equity Share capital is permissible.

REHABILITATION SCHEME :

The Rehabilitation Scheme of the Company as sanctioned by the Hon''ble BIFR vide its order dated 16th January, 2012 is under implementation. As reported in the earlier accounts, pursuant to the said Scheme, the Fertilizer Undertaking had been de-merged and transferred to Kanpur Fertilizers & Cement Ltd (KFCL) with effect from 1st October, 2010, leaving the tea operations with the Company.

PERFORMANCE OF THE COMPANY

In view of a severe drought in North Bengal during the beginning of the season this year, the Company was lagging behind its estimated production. The first significant rainfall was received as late as in the first week of May, 2014 and that too it was not widespread. Plucking was suspended at almost all the Company''s tea gardens during the month of April, 2014 due to non-availability of leaf.

The revenue from operations for the year ended 30th September, 2014 was Rs.184.58 crones as against Rs.262.10 crones in the previous eighteen months period. Own crop during the year was 129.80 lac kgs of tea as against production of 220.81 lac Kgs. of tea in the eighteen months of the previous period. 127.81 lac kgs of tea was sold at an average price of about Rs.144.42 per kg in the current year as compared to sales of 181.29 lac kgs in the previous eighteen months period at an average price of Rs.144.71 per kg. Continuing adverse weather conditions in successive years in the Dooars and Terai areas caused the crop of the Company to be behind the targets. The increase in selling price did not improve the profitability due to lower production of tea, hike in the wage cost of labour pursuant to Memorandum of Settlement (MOS) arrived at amongst the Tea Association, Tea Plantation Workers Unions and the West Bengal Government on 4 th November, 2011 and adverse impact of the steep increase in the cost of coal, fuel oil, electricity, fertilizers, agro chemicals, etc. The MOS with the workers, which was executed for three years period, is now due for a fresh agreement effective from 1st April, 2014 onwards.

Overall prospect of the tea business appears to be encouraging with a strong demand for CTC teas in which the Company is engaged predominantly.

The management has taken steps to revamp the operations of the tea business. Working capital is being augmented and the current year capital expenditure will improve long term prospects in generating future profitability. The Company is in the process of replacing high cost coal with alternative fuels i.e. waste wood / biomass, etc. Modernization of spraying equipments are under process which will reduce pest control cost. Application of organic fertilizers is under consideration. Priority is also given for uprooting and replanting of age old tea bushes in the tea estates of the Company to improve long term prospects. Extensive replanting done over the last three years will have a large bearing on crop in the immediate future.

With the efforts already undertaken, barring unforeseen circumstances, it is expected that performance of the tea business of the Company will improve significantly.

FIXED DEPOSITS

Pursuant to the Scheme sanctioned by the Hon''ble BIFR, the Company has refunded fixed deposits in settlement of the dues of fixed deposits holders and as on 30th September, 2014, refund warrants for 5428 fixed deposit holders aggregating to Rs.608.98 lacs remain un-encashed and requisite amounts are lying with the Bank for this purpose.

BOARD OF DIRECTORS

In terms of the provisions of the Companies Act and the Company''s Articles of Association, Mr. Shrivardhan Goenka shall retire by rotation and being eligible, offers himself for re-appointment. The Board has appointed Mr. Rajesh Sharma as Managing Director of the Company for a period of three years with effect from 27th September, 2014. Mr. M.H. Chinoy who was appointed as Wholetime Director of the Company with effect from 1st January, 2014, will cease to be a Wholetime Director at the close of business hours on 31st December, 2014 being unable to continue as such. However, considering his long association with the Company, the Board will retain his service as Non-Executive Director of the Company effective from 1st January, 2015. The Board recommends the appointment / re-appointment of the aforesaid Directors at the ensuing Annual General Meeting.

Pursuant to Section 149 and other applicable provisions of the Companies Act, 2013, the Board of Directors is seeking appointment of Mr. T. S. Broca, Mr. R. K. Bhargava, Mr. D. Sengupta and Dr. A. L. Ananthanarayanan as Independent Directors for a term of five consecutive years i.e. upto the conclusion of the Twenty Fifth (25th) Annual General Meeting to be held in the calendar year 2019. Details of the proposal for appointment of Mr. Broca, Mr.Bhargava, Mr. Sengupta and Dr. Ananthanarayanan have been mentioned in Statement pursuant to Section 102 of the Companies Act, 2013 in the Notice of Annual General Meeting. The aforesaid directors fulfill the conditions specified in the Companies Act, 2013 and rules made thereunder for their appointment as Independent Directors.

The Board is of the opinion that their continued association as Independent Directors shall immensely benefit the Company. The Board recommends their appointment as Independent Directors by the shareholders.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Vide General Circular No. 2/2011 dated 8th February, 2011, the Ministry of Corporate Affairs (MCA), Government of India, has granted a general exemption to companies from attaching the Balance Sheet, Statement of Profit and Loss and other documents referred to in Section 212(1) of the Companies Act, 1956. Accordingly, the said documents are not being attached with the Balance Sheet of the Company. A statement containing brief financial details of the subsidiary companies for the year ended 31st March, 2014 is included in the Annual Report.

As required under the Listing Agreement entered into with the Stock Exchange, a Consolidated Financial Statement of the Company along with all its subsidiaries is attached. The Consolidated Financial Statement has been prepared in accordance with the relevant Accounting Standards. These Financial Statements disclose the assets, liabilities, income, expenses and other details of the Company and its subsidiaries.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, is presented in a separate section forming part of this Report.

CORPORATE GOVERNANCE

A Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchange, is annexed forming part of this Report. A certificate from the Statutory Auditors, confirming compliance of conditions of Corporate Governance as stipulated under the said Clause 49, is annexed forming part of this Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo 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, has been provided in the Annexure forming part of this Report.

PARTICULARS OF EMPLOYEES

The Company continued to have cordial and harmonious relations with its employees at all levels.

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, are given in the Annexure to this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that :

(i) in the preparation of the Annual Accounts for the year ended 30th September, 2014 the applicable Accounting Standards have been followed along with proper explanations and there are no material departures ;

(ii) such accounting policies as were reasonable and prudent were selected in preparing the accounts and these were applied consistently. Further judgments and estimates that were reasonable and prudent were also applied in the course of preparing the accounts so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the loss of the Company for the year ended 30th September, 2014;

(iii) proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

MAINTENANCE OF A WEBSITE

The Website of the Company is functioning.

LISTING OF EQUITY SHARES

The Company''s equity shares are listed with The National Stock Exchange of India Ltd (NSE) as well as traded in the BSE Ltd. The Company has paid the requisite listing fee to the Stock Exchange where the shares of the Company are listed.

AUDITORS

The Statutory Auditors, Messrs Lodha & Co., Chartered Accountants, who were appointed at the last Annual General Meeting held on 30th December, 2013 have expressed their willingness for re-appointment as Statutory Auditors at the ensuing AGM.

The Board, on the recommendation of the Audit Committee, has recommended the re-appointment of Messrs Lodha & Co., Chartered Accountants as Statutory Auditors for a consecutive period of three years in accordance with Section 139 of the Companies Act, 2013. The said Auditors have confirmed that their appointment, if made, shall be within the limit laid down under the relevant provisions of the Companies Act. Appropriate resolution seeking approval of the members to the said re-appointment is appearing in the Notice convening 20th AGM of the Company.

The observations in the Auditors Report have already been explained in the Notes forming part of the Financial Statements and further clarified as under :

Para 4(I)(a)-Outstanding long term loans and Advances have been explained in Notes 10(a)(i) and 10(b)(i) to the financial statements. These are group company advances given for strategic reasons and can only be dealt with in terms thereof. Para 4(I)(b)-Regarding non-ascertainment of impact of wage revision pending negotiation thereof has been explained in Note 19(i) to the financial statements. Para 4(I)(c)-Pursuant to the decision of the Hon''ble High Court at Calcutta in similar matter with regard to levy of salami, under certain circumstances the Company has filed an appeal against the imposition of salami before the appropriate authority, has been explained in Note 26 to the financial statements. Para 4(I)(d)-As regards managerial remuneration, necessary applications are pending for approval before MCA, as explained in Note 27 to the financial statements. Pending approval, the note and qualification is consequential in nature. Para 4(I)(e)-We are in the process of obtaining confirmations of debit and credit balances including advances, trade receivables, trade payables and other liabilities and necessary effects will be given on reconciliation thereof as explained in Note 28 to the financial statements.

ACKNOWLEDGEMENTS

The Directors of the Company wish to place on record their gratitude to the various departments of the Central Government, Government of West Bengal, banks, shareholders, vendors, customers and employees for their continued support.

For and on behalf of the Board

Place : Kolkata G. P. Goenka Dated : 18th November, 2014 Executive Chairman

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Mar 31, 2012

The Board of Directors of the Company submits Eighteenth Annual Audited Accounts for the financial year ended 31st March, 2012 :

FINANCIAL RESULTS (Rs. in Lacs)

Current Year Previous Year

Profit/(Loss) before, interest, depreciation,

exceptional items and tax (1474) 2124

Finance Cost (1786) (1427)

Depreciation (297) (1335)

Exceptional Items 865 (3106)

Profit/(Loss) from continuing operations (2692) (3744)

Profit/(Loss) from discontinuing operations 70781 -

Tax expenses - -

Profit/(Loss) for the year 68089 (3744)

DIVIDEND

The Company is a sick industrial Company within the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and the Rehabilitation Scheme sanctioned by the BIFR is under implementation. As per the provisions of the Scheme, no dividend on Preference and Equity Share capital is permissible.

REHABILITATION SCHEME AND DE-MERGER OF FERTILISER UNDERTAKING:

The Hon'ble Board for Industrial and Financial Reconstruction ("the BIFR"), has sanctioned the Rehabilitation Scheme of the Company vide its order dated 16th January, 2012. The Scheme inter allia, provides corporate restructuring of the Company by way of de-merger of the assets and liabilities of its Fertiliser Undertaking to Kanpur Fertilizers & Cement Ltd (KFCL).

Pursuant to the sanctioned Scheme, Fertiliser Undertaking has been de-merged and transferred to KFCL with effect from 1st October, 2010 and the same has become effective on filing of the Scheme with the Registrar of Companies of the respective States on 24th January, 2012, leaving tea operation with the Company. Consequent to this all assets and liabilities, rights, obligations, contingent liabilities, employees and all legal proceedings and operations of the said undertaking with effect from the said date have been transferred to and vested with KFCL.

Amount payable in terms of the Scheme for the One Time Settlement (OTS), as arrived at with the secured creditors, has been deposited by the KFCL with State Bank of India (Operating Agency appointed by the BIFR). All lenders, excepting ARCIL and few other minority creditors, have accepted OTS amount and released the securities. Dues of the fixed deposits from shareholders and public have also been repaid fully in terms of the Scheme.

The Scheme also envisages reduction of the Equity Share Capital and 8.25% Redeemable Cumulative Preference Share Capital by 60% and writing back fully of the 0.001% Cumulative Redeemable Preference Share Capital held by the secured creditors. The Scheme further provides issuance of equity shares of Rs. 4182 lacs to the promoters including conversion of interest free unsecured loans into equity on post reduction and consolidation of the existing Equity Share Capital and also transfer of capital redemption reserve to the surplus account. KFCL is also to issue one equity share of Rs. 10/- each fully paid up for every 40 (forty) equity shares of Rs. 10/- each fully paid up held by a member in the Company post reduction and consolidation of the existing equity share capital. The Company has preferred an appeal for rectification of certain inadvertent errors in the Scheme issued by the BIFR which has since been admitted by the Appellate Authority for Industrial and Financial Reconstruction (AAIFR). Effect of these measures shall be given on disposal of the appeal by the AAIFR and on completion of the necessary formalities.

On giving effect of the above measures, it is expected that the net worth will become positive and accumulated losses of the Company will also wipe out gradually.

PERFORMANCE OF THE COMPANY

Dry weather conditions and sparse rainfall has affected the production of tea during the season but shortfall in production both in Dooars and Assam coupled with almost nil pipeline stocks, has helped the tea prices to remain dearer. The new season tea of the year 2012 has opened on a buoyant note with increase in price by about Rs. 40/- per kg of tea over the previous year.

The revenue from operations for the financial year ended 31st March, 2012 was Rs. 173.90 crores as against Rs. 175.58 crores in the previous year. Own crop during the year was 129.92 lacs kgs of tea as against production of 140.07 lacs Kgs. of tea in the previous year. 132.48 lac kgs of tea was sold at an average price of about Rs. 132 per kg in the current financial year compared to selling of 141.30 lac kgs in the same period of the previous financial year at an average price of Rs. 124 per kg. But increase in selling price of tea did not contribute in enhancing revenue to the Company due to lower production of tea and hike in the wage cost of labour pursuant to Memorandum of Settlement (MOS) arrived at amongst the Tea Associations, Tea Plantation Workers Unions and the West Bengal Govt. on 4th November, 2011 and further steep increase in the cost of fertilizers, coal, fuel oil, electricity etc.

All India crop for the season 2011 was 22 million kgs higher than the previous season. North India crop was up by 24 million kgs and South India crop was lower by 2 million kgs. Total exports for the year 2011 was lower by 6 million kgs over the previous year.

Overall prospect of the tea business appears to be encouraging with a strong demand for CTC tea in which the company is engaged predominantly.

The management has given a thrust for extension of irrigation facilities to more areas including up-gradation and modernization of the machinery and other assets and priority has also been given for uprooting and replanting of age old tea bushes in the tea estates of the Company with a long term prospective.

With the efforts already undertaken, barring unforeseen circumstances, it is expected that the tea business of the Company will sustain on standalone basis.

FIXED DEPOSITS

Pursuant to the Scheme sanctioned by the Hon'ble BIFR, the Company has despatched all refund warrants in settlement of the dues of fixed deposits holders.

BOARD OF DIRECTORS

In terms of the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. T.S. Broca, Mr. R.K. Bhargava, and Mr. M.H. Chinoy shall retire by rotation and being eligible, offer themselves for re-appointment.

The Board has, subject to the approval of shareholders in the forthcoming Annual General Meeting, appointed Mr. G.P. Goenka, the Chairman of the Board, also as Wholetime Director for a period of three years with effect from 1st April, 2012 at a remuneration as recommended by the Remuneration Committee.

Mr. S.P. Gupta, Executive Director of the Company, has conveyed his decision not to offer himself for re-appointment as director. The Directors place on record their appreciation for the valuable contribution made by Mr. Gupta.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs (MCA) vide its circular dated 8th February, 2011 has granted general exemption from attaching the Balance Sheet, Statement of Profit and Loss Account of the subsidiary Companies with the Balance Sheet of the Company. A statement containing brief financial details of the subsidiary companies for the financial year ended 31st March, 2012 is included in the Annual Report.

As required, under the Listing Agreement entered into with the Stock Exchange, a Consolidated Financial Statement of the Company and of all its subsidiaries is attached. The Consolidated Financial Statements have been prepared in accordance with the relevant Accounting Standards as prescribed under Section 211(3C) of the Companies Act, 1956. These financial statements disclose the assets, liabilities, income, expenses and other details of the Company and of its subsidiaries.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion and Analysis Report, as stipulated under Clause 49 of the Listing Agreement entered with the Stock Exchange, for the financial year under review is presented in a separate section forming part of this Report.

CORPORATE GOVERNANCE

A Report on Corporate Governance as stipulated under Clause - 49 of the Listing Agreement is annexed forming part of this Report. A certificate from the Statutory Auditors, confirming compliance of conditions of Corporate Governance as stipulated under the said Clause - 49, is annexed forming part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING S AND OUTGO

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo 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, have been provided in Annexure forming part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that :

(i) in the preparation of the Annual Accounts for the financial year 2011-12, the applicable Accounting Standards have been followed along with proper explanations and there are no material departures ;

(ii) such accounting policies as were reasonable and prudent were selected in preparing the accounts and these were applied consistently. Further judgments and estimates that were reasonable and prudent were also applied in the course of preparing the accounts so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the financial year ended 31st March,2012;

(iii) proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

EMPLOYEES

The Company continued to have a cordial and harmonious relation with its employees at all levels.

None of the employees of the Company was in receipt of Rs. 60 lacs per annum or Rs. 5 lacs per month during the financial year ended 31st March, 2012 and hence information pursuant to Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended in 2011, is not annexed to the Director's Report.

MAINTENANCE OF A WEBSITE

The Company is in the process of implementation of its Website pursuant to the requirement of clause 54 of the Listing Agreement.

LISTING OF EQUITY SHARES

The Company's equity shares are listed with National Stock Exchange of India Ltd (NSE) as well as traded in BSE Ltd. The Company has paid the requisite listing fee to the listed Stock Exchange for the financial year 2012-2013.

AUDITORS

Messrs Lodha & Co., Chartered Accountants, the Auditors of the Company, will retire at the ensuing Annual General Meeting. They have expressed their willingness to continue in office, if re-appointed, and have furnished the requisite certificate of their eligibility pursuant to section 224(1B) of the Companies Act, 1956.

The observations in Auditors Report have already been explained in the Notes forming part of the Financial Statements and it is further clarifies as under: Para 1 (XI) -interest payable on cash credit is now being paid to the bank ; Para 1 (XVII) -losses suffered by the Company due to non operation of the erstwhile fertilizer plant, funds raised on short term basis were used for funding losses of the Company; Para 3(a) -outstanding long term and short term loans and advances have been explained in Note 10 to the financial statements; Para 3(b) – pursuant to the decision of Hon'ble High Court at Calcutta in similar other matter with regard to levy of salami, under certain circumstances, the Company has filed appeal against the imposition of levy of salami before the Appropriate Authority, as explained in Note 32 to the financial statements; Para 3(c) -as regards managerial remuneration, necessary applications are pending for approval before MCA as explained in Note 34 to the financial statements;

ACKNOWLEDGEMENTS

The Directors of the Company wish to place on record their gratitude to the various departments of the Central Government, Governments of West Bengal, banks, financial institutions, shareholders, vendors and employees for their continued support.

For and on behalf of the Board

G. P. Goenka Chairman

Place : Kolkata Dated : 27th July, 2012

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Mar 31, 2010

The Board of Directors presents the Sixteenth Annual Report together with Audited Accounts of the Company for the financial year ended 31st March, 2010.

FINANCIAL RESULTS

(Rs. in Lacs)

Current Year Previous Year

Profit/(Loss) before Interest, Depreciation & Tax 3120 (2892)

Interest (753) (504)

Depreciation (1366) (1360)

Provision for Taxation

– Current Year — —

– Deferred Year — —

– Fringe Benefit Tax — (34)

Prior Period expenses (11) (19)

Profit / (Loss) after Tax 990 (4809)

Loss Brought forward from Previous Year (144164) (139355)

Balance carried to Balance Sheet (143174) (144164)

DIVIDEND

In view of the Company being a Sick Industrial Company within the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and accumulated losses, the Directors regret their inability to recommend dividend on the preference and equity capital of the Company.

OPERATIONS AND PERFORMANCE

Fertiliser Division

After a great deal of efforts, your Company has entered into an Investment Agreement with Jaypee Fertilizers & Industries Limited (JFIL) (a Jaypee Group company) as a strategic investor for revival and rehabilitation of the Fertiliser Division of the Company on18th June, 2010. Rehabilitation measures of the Company, inter alia, envisage corporate restructuring of the Company by way of de-merger of all its assets and liabilities relating to Fertiliser Undertaking and transfer and vesting of the said Undertaking into a new company leaving tea business in the Company, infusion of fresh funds into the new company by a Joint Venture Company (JV Co.) of the strategic investor and ISG Traders Limited, a part of promoter group of the Company, One Time Settlement (OTS) of the dues of the secured lenders, conversion of the feedstock of the Fertiliser Plant, settlement of the dues of the unsecured lenders including fixed deposits and other unsecured creditors/liabilities in terms of the Rehabilitation Scheme.

New Pricing Scheme Stage –III (NPS-III) Policy of the Government of India (GOI) dated 8th March, 2007 (valid till 31st March, 2010) for manufacture of Urea has been extended till further orders on provisional basis by the Department of Fertilisers (DOF). It is expected that DOF will allow required time for conversion of Naphtha based feedstock of the Fertiliser Plants including Duncanss Plant to Naphtha cum Gas based feedstock in the new policy. Pending announcement of new Fertiliser Policy, the Company has submitted updated proposal entailing the above measures for rehabilitation and revival of the Company to the Honble Board for Industrial and Financial Reconstruction (BIFR) and Operating Agency (OA) for their consideration and sanction.

Tea Division

Due to non operation of the Fertiliser Plant, the company has been continuously incurring huge losses and as a result, performance of the tea business in the past has also suffered adversely due to inadequate focus on upkeep of the tea estates. Management is confident that on sanction of the scheme by BIFR and separation of Fertiliser Undertaking, the state of affairs of the Company is expected to improve significantly on reduction of various debts and liabilities and infusion of fresh funds and the tea Undertaking will grow on its own strength.

Tea industry continued to harvest lower crop due to inadequate rainfall from last two years, Assam had little rain in the beginning of the season while Dooars had dry spell as well. Your Company has produced 143.86 lacs kg of tea for the financial year ended 31st March, 2010 compared to 149.53 lacs kg of tea in the previous year and sold 131.99 lac kgs of tea at an average price of Rs. 118..41 per kg in the year 2009-10 compared to 148.48 lac kgs sold at an average price of Rs. 93.36 per kg in the corresponding period of previous year. The Siliguri auction average price of tea for the season 2009 was Rs. 107.36 a kg compared to Rs.87.58 a kg in 2008. The resultant increase in the selling price has contributed an increase in turnover by Rs. 17.71 crores to the Company during the year under review. However, increase in the cost of production of tea arising due to abnormal increase in the price of essential inputs i.e. diesel oil, coal, agro chemicals etc. as well as employees cost has offset significant increase in the selling price.

Companys gardens during the first quarter of the current year has also been affected adversely. As a result of extension of irrigation facilities to more areas, it is expected that over all tea production for the current season is likely to be at par with the previous year. The Company has always given thrust for production of quality tea and accordingly priority is given for replacement of old CTC banks and conventional dryers in the tea factories and extension of further more areas under irrigation.

REFERENCE TO BIFR

As mentioned hereinabove, Draft Rehabilitation Scheme (DRS) has been submitted to BIFR and Operating Agency on 24th June, 2010 and discussions with CDR Members are in progress for their revalidation of One Time Settlement (OTS) sanctioned by CDR Cell vide letter dated 29th May, 2008. To expedite the process for sanction of the Scheme under the aegis of BIFR, the Company has executed a Memorandum of Understanding on 6th June, 2010 with the workmen of the Fertiliser Division for smooth re-opening and restart of the Fertiliser Plant and discussions have also been initiated with other concerned parties for their consent to the rehabilitation proposal.

FIXED DEPOSITS

Due to retrospective downward revision of Fertiliser Retention Price Support (RPS) and withholding of RPS of about Rs.446 crores on Urea production by the GOI, the Company faced acute working capital crisis, resulting in operations of the Fertiliser Plant of the Company remain suspended since March, 2002. Consequently, the cash flow envisaged could not materialise to meet the repayment obligations and unable to comply with the order of the Honble Company Law Board (CLB) dated 18th June, 2002. The Company has also filed another application before the CLB for re-schedulement of payment which is pending. As mentioned herein before, the Company is a Sick Industrial Company within the meaning of SICA and in an appeal against the directions of Honble BIFR, the Honble Appellate Authority for Industrial and Financial Reconstruction (AAIFR) has set aside said directions and also directed that liability to the Fixed Deposit Holders will form part of the Rehabilitation Scheme, accordingly dues of the Fixed Deposit Holders will be addressed in terms of the Rehabilitation Scheme to be sanctioned under the aegis of Honble BIFR.

DIRECTORS

Mr. A. K. Goel, Whole-time Director of the Company has been re-appointed for a further period of three years with effect from 9th August, 2010 by the Board.

Remuneration payable to Mr. S. P. Gupta, Executive Director of the Fertiliser Division of the Company, who was re-appointed for a further period of three years with effect from 15th May, 2009, has been revised with effect from 1st April, 2010.

In terms of the provisions of the Articles of Association of the Company, Mr. R.K. Bhargava and Mr. M.H. Chinoy will retire by rotation and being eligible, offer themselves for re-appointment as Directors.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The Company has been granted exemption for the year ended 31st March, 2010 by the Ministry of Corporate Affairs vide its letter ref. 47/533/2010-CL -III dated 7th June,2010 (“Exemption Letter”) from attaching to its Balance Sheet, the Annual Report and Accounts of its subsidiary companies, viz. Dail Consultants Limited, North India Fertilisers Limited, Leyden Leasing & Financial Services Limited and Pentonville Software Limited as in earlier years. In terms of the Exemption Letter, a statement containing brief financial details of the aforesaid subsidiary companies for the year ended 31st March, 2010 are attached in this Annual Report. The Annual Accounts of the subsidiary companies will be made available for inspection to the Members of the Company at the Registered office and those of the respective subsidiary companies.

As required under the Listing Agreement, the Consolidated Financial Statements of the Company together with its subsidiary companies prepared in accordance with Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India are attached.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion and Analysis Report, as stipulated under Clause 49 of the Listing Agreement, for the year under review is presented in a separate section forming part of this Report.

CORPORATE GOVERNANCE

A Report on Corporate Governance as required under Clause - 49 of the Listing Agreement forms part of this Report. The Auditors Certificate confirming compliance, is attached to the Report on Corporate Governance.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXHCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are forming part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

(i) in the preparation of the accounts in respect of the year under report, the applicable accounting standards have been followed along with proper explanations relating to material departures;

(ii) such accounting policies as were reasonable and prudent were selected in preparing the

accounts and these were applied consistently. Further judgments and estimates that were reasonable and prudent were also made in the course of preparing the accounts so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the year ended 31st March, 2010;

(iii) proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

EMPLOYEES

The Company continued to have a cordial and harmonious relation with its employees at all levels.

The information in accordance with Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees, is annexed forming part of this Report.

LISTING OF EQUITY SHARES

The Companys equity shares are listed with National Stock Exchange of India Ltd (NSE) as well as traded in Bombay Stock Exchange Ltd (BSE). The Company has paid the requisite listing fee to the Stock Exchange for the financial year 2010-2011.

AUDITORS

Messrs Lodha & Co., Chartered Accountants, the Auditors of the Company, retire at the ensuing Annual General Meeting. They have expressed their willingness to continue in office, if re-appointed and have furnished the requisite certificate of their eligibility pursuant to section 224(1B) of the Companies Act, 1956.

The observations in the Auditors Report have already been explained in the Schedule of Notes and further explanations of the Management are as under :

Para 1(I) - Fertiliser Division maintains records showing full particulars of fixed assets but due to inherent limitations and constraints consequent to suspension of operation since October, 2005, Fixed assets records could not be accessed due to non-operation of the Computer System (SAP) and also could not be physically verified. However, exercise for physical verification is yet to be undertaken/carried out on resumption of operation at the Plant as explained in Note 9 (a) & 9 (c)(ii) of Schedule 12; Para 1 (II) – physical verification of the inventories in Fertiliser Division has since been undertaken and adjustments on account of discrepancies, obsolescence, if any, will be carried out on ascertainment thereof after completion of the exercise as explained in Note 9 (c)(i) of Schedule 12; Para I (III) (a) & (b) - interest free loan was given to Andhra Cements Ltd, a Sick Industrial Company in terms of the order of Honble BIFR and subsequent to this, it has been stipulated to be repaid in terms of the term loans sanctioned by financial institutions to the said Company as explained in note 20 of Schedule 12; Para 1 (VI) – as explained in note 10 of Schedule 12, under the situation beyond control, the Company could not meet the repayment obligations of Fixed Deposits but the liabilities towards fixed deposits will be dealt with in terms of the Rehabilitation Scheme on approval by BIFR ; Para 1 (VII) – since the Fertilizer Plant is not in operation, internal audit in respect of Fertilizer Plant could not be carried out; Para1 (IX) - installment facilities for the payments of Provident Fund dues have been granted by the P.F. Authorities and the same are being complied with as explained in Note 11 of Schedule 12; Para 1 (XI) - the Company has envisaged one time settlement (OTS) of dues to the Banks,

Financial Institutions and term lenders including Debenture holders as explained in the notes 8.1 and 8.3 of Schedule 12, the amount payable to Banks/Financial Institutions will be determined on sanction of the Rehabilitation Scheme under the aegis of Honble BIFR; Para 1 ( XVII) – consequent to RPS written off as well as losses suffered by the Company due to non-operation of the Fertilizer Plant, funds raised on short term basis in earlier years have been used for funding of losses of the Company; Para 2 - the Company is a Sick Industrial Company within the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 and the accounts have been prepared on a going concern basis as explained in note 7 of Schedule 12; Para 3 - loan given to a the then Sick Industrial Company as explained in note 20 of Schedule 12, is considered good and recoverable; Para 4 – status of the Fertiliser Division has been explained in note 9 of Schedule 12, further various debit and credit balances including advances, debtors, creditors are subject to reconciliation and confirmation. Necessary adjustments will be made on ascertainment of the amounts thereof as explained in note 24 of Schedule 12 and this exercise will be done after recommencement of the operation. Further, contingent liabilities of Fertiliser Division have been ascertained and disclosed appropriately in note 3.1 of Schedule 12 on updating the same based on available documents; Para 5 (a) & (c) – In view of non-operation of Fertiliser Division, liability towards employees related various cost and liability relating to employees benefits in terms of AS –15 have not been provided/determined as explained in notes 12 and 23(b) of Schedule 12; Para 5 (b) – non provision of interest on certain loans, liabilities debentures, deposits, etc. along with further claim of interest including differential, additional, penal, etc. have been explained in notes 4, 8.1(a), 8.1(b), 22.1 and 22.2 of Schedule 12; Para 6(a) – the matter pertaining to liability of surcharge on electricity is sub-judice before the Honble Allahabad High Court and waiver of the claim has also been sought from KESCO in the DRS as explained in note 3.2 of Schedule 12 ; Para 6(b) - the Company is in the process of identifying suppliers covering under “ The Micro Small and Medium Enterprises Development Act, 2006” but due to non availability of data especially relating to Fertiliser Division, the details could not be compiled/furnished as explained in note 6.2 of Schedule 12; Para 6(c) – full effect of the various proposals in the DRS would be given after sanction of the Scheme by BIFR as explained in various notes in Schedule – 12; Para 6(d) pursuant to the decision of Honble High Court of Calcutta in similar other matter with regard to levy of Salami under certain circumstances, the Company has filed appeal against the imposition of levy of Salami before the Appropriate Authority as explained in note 18.5 of Schedule 12; Para 6(e) as regards managerial remuneration, necessary applications are pending for approval before MCA/Central Government.

ACKNOWLEDGEMENTS

The Directors wish to place on record their gratitude to the Department of Fertilizers - Ministry of Chemicals & Fertilizers and other departments of the Central Government, Governments of West Bengal and Uttar Pradesh, Banks, Financial Institutions, Shareholders and Employees for their continues support to the Company.

For and on behalf of the Board

Place:Kolkata G. P. Goenka

Dated : 28th July, 2010 Chairman