Your Directors are pleased to present the Annual Report of B & A
Limited (hereinafter referred to as the ‘Company) together with the audited
financial statements of the Company for the year ended 31st March 2023. The highlights of
the financial results are set out below:
Financial Results
The summary results are set out below:
(in rs Lac)
| Particulars |
Year ended 31st March 2023 |
Year ended 31st March 2022 |
| Revenue from Operations |
16135.20 |
16338.94 |
| Other Income |
222.00 |
88.84 |
| Total Income |
16357.20 |
16427.78 |
| Total Expenditure after adjustment of
increase/decrease of stock |
15432.02 |
13613.30 |
| Profit from Operations before Depreciation,
Finance Cost and Tax |
925.18 |
2814.48 |
| Depreciation |
313.72 |
306.48 |
| Finance Cost |
232.49 |
300.04 |
| Profit before exceptional Items and Tax |
378.97 |
2207.96 |
| Exceptional Income |
365.79 |
--- |
| Provision for Tax |
|
|
| Current Tax |
85.00 |
455.00 |
| Deferred Tax |
71.00 |
(4.59) |
| Profit for the year |
588.76 |
1757.55 |
Net sales for the year under review is lower by 1.24% over previous
year. Profit after tax is lower by 66.50% over previous year. The Earnings per Share for
the year stood at Rs. 18.99 which is lower by Rs. 37.71 than previous financial year.
Review of Market, Business and Operations
Tea season 2022 was grossly affected due to excessive rainfall
resulting in unfavorable growing conditions during April-Dec, 2022 which negatively
impacted the harvest of crop in our gardens. Notably, overall production of Assam tea in
CY 2022 showed an increase except for the districts of Jorhat and Golaghat. Heavy rainfall
and floods had a direct impact on the tea harvest in these districts, causing a decline in
production. Higher rainfall, rising temperature and intermittent dry spells caused havoc
pest infestation resulting further crop loss. As a result, the made tea produced by the
Company from own leaf was lower by 3.41 lac kgs during FY 22-23 compared to previous
financial year. Your company could increase production from bought out leaf by 1.09 lac
kgs compared to previous year but owing to the shortage in quality leaf, production from
bought leaf was scaled down to a certain extent resulting combined production of made tea
lowering by 2.32 lac kgs compared to previous year.
Like every year your company concentrated on producing quality crop and
in no circumstances let the quality of the produce to deteriorate. The company also
concentrated on the quality of bought leaf so that made tea from bought leaf created a
mark like made tea from own leaf. This was reflected in the prices that we fetched in the
auctions. Market remunerated the Company with a strong start and companys CTC averages
was higher by Rs. 90 per kg in April-June quarter. Market stabilized during July-Sept but
your company continued to reap the benefit of quality produce and sale price of companys
teas from own gardens registered higher prices compared to 2021 levels. However, September
onwards market witnessed lower intake of premium quality teas and medium and starker
category gained over 2021 levels. As a result, price concertina from 2021 level as it was
witnessed in the previous two quarters was not repeated during the rest of the season.
Our average selling price of made tea from own leaf was higher by Rs.
14.67 in FY 22-23 compared to previous year and average selling price of made tea from
bought leaf was higher by Rs. 16.50 compared to previous year. From April 22 onwards our
Gatoonga Tea Estate ranked as no.1 followed by Mokrung Tea Estate at no.5 and Salkathoni
Tea Estate at no. 7 in All India Batting Order in terms of price fetched by in Assam for
CTC teas in the auctions.
Though quality of the production was exceptional during the year and
certain invoices fetched phenomenal prices, combined sales volume of the Company was lower
by 3.12 lac kgs compared to previous year due to lower production. Sales of made tea from
own leaf was lower by 2.49 lac kgs. Though sales volume and prices from bought leaf added
relief to some extent to the revenue, gross income from sale of tea declined by Rs. 203.74
lac compared to previous year owing lower sales of made tea from own leaf.
During the year under review, procurement price of green leaf increased
by Rs. 2.44 per kg on an average which alongwith procurement of additional volume of green
leaf increased the consumption cost by 10% over previous year. The Company had to absorb
13% increase in wages cost on Y-o-Y basis which was mainly due to increase in labour wages
by Rs. 27 per manday. Apart from wages, cost of fertilizers and pesticides increased
considerably due to increase in rounds as well as stiff increase in prices of the PPC
materials. Cost on account of power and fuel increased abnormally by 34% over previous
year due to stiff increase in the prices of gas and diesel. As result of these subtleties
your Company recorded lower surplus.
Development Activities
Development work in all gardens of the Company was impacted due to the
long spell of COVID-19 infection and connected restrictions followed by adverse weather
conditions during FY 22-23. However, development work in the gardens were undertaken on
priority basis.Samaguri, Mokrung and Gatoonga made progress in development work during the
period under discussion.
Accreditations
Three factories of the Company in Gatoonga, Salkathoni and Mokrung are
Trustea certified with regards to own leaf. Salkathoni, Mokrung and Sangsua were
accredited with Trustea for bought tea leaf. All four factories of the Company received
ISO-22000 accreditation for food safety norms.
Finance
Focused capital allocation and steady cash flows resulted in rigid
control over the finances of your Company. Strict working capital controls resulted in
minimal impact on interest burden. The Company met its financial commitments in servicing
its debt and repayment thereof in timely manner. Directors are pleased to inform that your
company continues to enjoy CARE BBB+ rating for its long term bank borrowings.
Information Technology
Digital transformation is a major driver for growth and performance. We
continue to invest in new technologies to create an intelligent workplace. Due to
exceptional length of the Pandemic and physical distancing guidelines dependency on
Information Technology has further increased. The digitization journey so far has
penetrated several key functions of the Company like, sales and service network, supply
chain, human resources and finance. This initiative is helping us immensely to create data
dashboards for real time decision making. Data security continues to be paramount
importance and your company continuously evaluates its cyber security solutions keeping in
mind increased cyber risks. Our efforts are directed towards ensuring business continuity
in case of any unforeseen event.
Changes in return on Capital Employed
The Company registered lower PBT on Y-o-Y basis due to disproportionate
increase in bought out materials and service cost and loss in revenue due to lower
production. As a result, return on capital employed decreased significantly by 63.54%
compared to previous year.
Industry Structure, Developments, Outlook and Prospects
The overall production of Assam tea in CY 2022 showed an increase to
687.93 million kgs from 667.73 million kgs in CY 2021, except for the districts of Jorhat
and Golaghat. However, the heavy rainfall and floods that occurred between June and August
2022 had a direct impact on the tea harvest in these districts, causing a decline in
production.
Despite concerns about disruptions due to the war between Russia and
Ukraine, Indias tea industry managed to maintain its position in the market and even had
increased its share. In 2022, Indias tea exports to Russia reached 41.13 million kg, a
20.7% increase from the previous year. Overall, Indias total tea exports in 2022 amounted
to 226.98 million kg, a 15.49% increase from the previous year.
The North Indian CTC tea markets had a strong start in CY 2022 with
prices for premium category Assam and Dooars averaging Rs.20 to Rs.50 higher than the
previous year. However, prices sharply dropped below 2021 levels in April 2022. During the
second flush period, the market gradually stabilized, and prices rose by Rs.10 to Rs.40
higher than the previous year, which lasted until September.
Medium category Assam teas received a better reception during the
quality period, maintaining higher price levels than in 2021. However, prices in the CTC
leaf market declined from September and continued to fall towards the end of the season,
with premium Assam teas being sold at Rs.10 to Rs.20 lower than the corresponding period
of previous year and better medium and medium Assam was being sold at Rs.10 lower.
In contrast, the CTC dust market received better support and prices for
better-medium to good teas, particularly from major blenders and Packeteers, often
outperforming similar category leaf teas. Better Dooars maintained their price levels,
while the BLF section saw stable price levels from September until the end of the season.
India produced 1278 mkgs of tea during CY 2022 compared to 1277 mkgs
during CY 2021. On the global front, in first seven months CY 2022 aggregate black tea
production (India, Sri Lanka and Kenya) was lower by around 54 million kgs, reflecting a
YoY contraction of 5%, driven primarily by the production loss in Sri Lanka. This allowed
Indian exporters to increase their product offering in the export market. Below average
production in CY 2022 is expected to result a tightness in pipeline stock which is likely
to support prices in the new season. Flattish production and strong demand for quality CTC
teas is expected to augur well for the sustainability of firm realization for North Indian
tea estates till at least first half of CY 2023.
Challenges, Opportunity, Risks and Concerns
Tea industry particularly in Assam is facing multiple challenges which
need a long term strategy involving all its stakeholders to address these challenges.
While soaring production costs without matching price realizations amidst perpetual
increase in input costs has become a retarding factor for growth, climate change issues
such as declining yields, pest infestation and increased dependence on irrigation are
additional worries. Further, cost to the company particularly in the area of composite
value of wages and obligation under social responsibility of a man- day is tending to
reach a point which is an economic impossibility of the industry to remain viable.
The opportunities before the tea industry are its established customer
base and worldwide awareness over the health attributes of tea leading to higher demand
for good quality teas. The domestic consumption of tea is growing at a steady rate of 3%
CAGR and its daily use covers nearly 88% of Indian households.
Amid rising temperature and prolonged rainless periods due to climate
change, large scale pest attacks which has aggravated over the last few years has become
worrisome for planters. TRA estimates that revenue loss due to pest infestation would be
pegged at Rs. 2865 cr. annually which is a major concern for tea growers. Increased cost
of plant protection in northeast region of the country which has reached Rs. 25-30
thousand per hectare has a negative impact on the viability of the operations.
Risk Management
The Board of Directors of the Company ("the Board") and the
Risk Cell constituted with the senior management team led by the Managing Director review
the business risks to which the Company is exposed alongwith mitigation measures at
periodic intervals. The Risk Management Policy and the constitution of risk cell are
available in the Companys website at the following web-link:
https://www.barooahs.com/policy.html.
Transfer to Reserves
The Board does not propose any amount to be transferred to any reserve.
Dividend
The Board has recommended a final dividend of 5% i.e. Re. 0.50 per
equity shares of Rs. 10 each in the Company for the financial year 2022-23. The
distribution of dividend will result in payout of Rs. 15.50 lac if approved by the
Shareholders in the ensuing Annual General Meeting.
Subsidiary Company
The Companys subsidiary, B & A Packaging India Limited, which is
engaged in the production of high quality paper sacks and flexible laminates, performed
satisfactorily during the financial year ended 31st March 2023. During the financial year
ended 31st March 2023 the Company registered a gross turnover of Rs. 13270.64 lac
(previous year Rs. 12894.20 lac) and a pre-tax profit of Rs. 1360.33 lac (previous year
Rs. 1399.01 lac).
Financial Performance and Analysis
The Shareholders fund as on 31st March 2023 was Rs. 7996.69 lac
comprising of Rs. 310 lac as equity share capital and Rs.7686.69 lac as reserves and
surplus. Details of significant changes in the key financial ratios is appended with the
Boards Report and marked as Annexure-1.
Annual Return
The Annual Return of the Company in draft for the financial year ended
31st March 2023 in the prescribed format in accordance with the Act is available at the
website of the Company at the following web-link: https://www.barooahs.com/annual-
return/B&A_MGT-7_22-23.pdf.
Corporate Social Responsibility
The Corporate Social Responsibility (CSR) activities of the Company are
directed by the Board. The CSR Policy of the Company as approved by the Board of Directors
is available at the website of the Company at the web-link:
http://www.barooahs.com/policies/ policy-on-corporate-social-responsibility.pdf.
In terms of rule 9 of the Companies (Accounts) Rules, 2014 read with
rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, Annual
Report on CSR activities containing brief outline of the CSR policy, CSR initiatives
undertaken and expenditure made during the year is attached as Annexure- 2 and
forms part of the Directors Report.
Fixed Deposit
The Company had no outstanding deposit as on 31st March 2023.
Directors and Key Managerial Personnel
As on 31st March 2023, the Companys Directorate consisted of twelve
Directors; six of them are Independent Directors. Mrs. Anuradha Farley continues to be the
Chairman of the Board. The composition of the Directorate is in conformity with the
provisions of the Act, allied rules and Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 [hereinafter SEBI (LODR)]. The
particulars of the Directorate and the Key Managerial Personnel are given under para 1 of
the Corporate Governance Report which forms part of this Annual Report. Mr. Bhramar Kumar
Mahanta, Non-Executive Director resigned from the Board with effect from 25th May 2023.
The Board records the valuable contributions made by Mr. Mahanta in the Board process and
wishes him success in his future endeavors.
By virtue of Section 152 of the Act, Mrs. Anuradha Farley and Mr.
Robin Aidan Farley, Directors, retires by rotation in the Annual General Meeting (AGM) and
are eligible for reappointment.
Mr. Amit Kiran Deb, Independent Director retires on 30th September 2023
on completion of his initial term of directorship. The Board on recommendation made by the
Nomination and Remuneration Committee of Directors proposes to reappoint Mr. Deb with
effect from 1st October 2023 for a 2nd term of five consecutive years to hold office upto
30th September 2028 and seeks approval of the shareholders to reappoint him in the ensuing
AGM. Necessary resolutions to reappoint Mr. Deb is embodied in the notice calling the AGM.
Ms. Simeen Hossain, Independent Director retires on 31st March 2024 on
completion of her initial term of directorship. The Board on recommendation made by the
Nomination and Remuneration Committee of Directors proposes to reappoint Ms. Hossain with
effect from 1st April 2024 for a 2nd term of five consecutive years to hold office upto
31st March 2029 and seeks approval of the shareholders to reappoint her in the ensuing
AGM. Necessary resolutions to reappoint Ms. Hossain is embodied in the notice calling the
AGM.
Further, in terms of Regulation 17 (1A) of SEBI (LODR) consent of the
Members by way of Special Resolution is also required for continuation of the office of a
Non-Executive Director on his attaining the age of seventy-five years. Mr. Amit Kiran Deb,
Non-Executive Independent Director will be attaining the age of seventy-five years on 26th
December 2023 and Mr. Anjan Ghosh, non-executive director will be attaining the age of
seventy-five years on 15th July 2024.
The Board seeks consent of the shareholders to hold offices of Mr. Deb
and Mr. Ghosh as NonExecutive Directors on the Board of the Company on their attaining the
age of seventy-five years till completion of their term of Directorship. Necessary
resolutions seeking consent of the shareholders in this regard are embodied in the notice
calling the AGM.
A brief resume, expertise and shareholding in your Company together
with details of other directorships of Mrs. A. Farley, Mr. R. Farley, Mr. A. Deb and Ms.
S. Hossain are given in the Corporate Governance Section of the Annual Report.
None of the Directors on the Board as on 31st March 2023 has been
debarred or disqualified from being appointed or continuing as Directors by Ministry of
Corporate Affairs, Government of India or Securities and Exchange Board of India or any
such Statutory
Authority of India. A certificate in this regard from a Practicing
Company Secretary is enclosed as Annexure-3 and forms part of this report.
Mr. Somnath Chatterjee, Managing Director; Mr. D. Chowdhury, Company
Secretary and Mr. Tapas Chatterjee, Chief Financial Officer, hold the position of Key
Managerial Personnel in the Company in terms of section 203 of the Act.
Declaration by Independent Directors
All Independent Directors had given declaration to the Company stating
their independence in terms of section 149(6) of the Act and the same were placed and
noted in the meeting of the Board of Directors held on 25th May 2023.
Meeting of The Board of Directors
The particulars of the meetings of the Board of Directors held during
the financial year ended 31st March 2023 are furnished under para 1.4 of the Corporate
Governance Report forming part of the Annual Report.
Committees of The Board of Directors
The Board had constituted Audit Committee, Nomination and
Remuneration Committee, Stakeholders Relationship Committee and Share Transfer
Committee of Directors in terms of respective provisions of the Act and SEBI (LODR). The
constitution, terms of references and policies of these committees have been discussed in
detail in the Corporate Governance section of the Annual Report. There were no instances
where the Board did not accept the recommendations of the Audit Committee.
Compliance with Corporate Governance Norms
In terms of the SEBI (LODR), a certificate from a Practicing Company
Secretary on compliance of corporate governance is attached with the Directors Report as Annexure-4
and forms part of Annual Report.
Directors Responsibility Statement
Pursuant to the provisions of section 134(5) of the Act the Directors
state that:
i) In the preparation of the annual accounts, the applicable accounting
standards had been followed alongwith proper explanation relating to material departures;
ii) They had selected such accounting policies and applied them
consistently, and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of your Company as at 31st March 2023
and of the profit of your Company for the financial year ended 31st March 2023.
iii) They had taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities.
iv) They had prepared the annual accounts on a going concern basis.
v) They had laid down internal financial controls to be followed by the
Company and such internal financial controls are adequate and were operating effectively.
vi) They had devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and were operating
effectively.
Adequacy of Internal Financial Controls
The Company has an Internal Control System commensurate with the size,
scale and complexity of its operations. The objective of such controls is to ensure
efficient usage and protection of companys resources, accuracy in financial reporting and
due compliance of statutes and procedures. The internal financial controls are adequate
and are operating effectively so as to ensure orderly and efficient conduct of the
business operations. The Statutory Auditors have also given an unmodified opinion on the
internal financial controls on the financial reporting process in their report.
The Company has engaged a reputed firm of Chartered Accountants manned
with trained professionals to undertake internal audit functions. The pre-audit and
post-audit checks and reviews are carried out to ensure follow-up on the observations made
by the audit team. The Audit Committee in its periodic meetings reviews the internal audit
reports, progress in implementation of their recommendations and adequacy of internal
controls systems.
Maintenance of Cost Records
The Company has maintained adequate cost accounts and records as
specified under Section 148(1) of the Act with respect to its tea business.
Particulars of Contract and Arrangement with Related Parties
The Board has adopted a policy on related party transactions to
determine the materiality of transactions with related parties and strategy for dealing
with the same. The policy is in conformity with Regulation 23 of SEBI (LODR) and has been
reviewed by the Board. The said policy is available at the website of the Company at the
following web- link: http://www.barooahs.com/policies/policy-on-
related-party-transactions.pdf.
In terms of section 134 of the Act read with rule 8(2) of the
Companies (Accounts) Rules, 2014 particulars of contracts/arrangements with related
parties entered into by the Company during the financial year under review in form AOC-2
is attached as Annexure - 5 and forms part of the Directors Report.
Nomination and Remuneration Policy and Particulars of Employees
The Board of Directors in compliance with the provisions of section
178(3) of the Act, on recommendation made by the Nomination and Remuneration Committee of
Directors formulated the Nomination and Remuneration Policy of the Company. The said
policy is available at the website of the Company at web-link: https://www.barooahs.
com/policies/remuneration-policy.pdf.
The information required pursuant to section 197 of the Act read with
rule 5 of the Companies (Appointment & Remuneration) Rules, 2014 in respect of
employees of the Company will be provided upon request. In terms of section 136 of the
Act the Directors report and Financial Statements are being sent to Members and others
excluding the information on employees particulars which are available on inspection by
the Members of the Company upto the date of the AGM. Any Member interested in obtaining a
copy may write to the Company. Further it is confirmed that there was no employee employed
throughout the financial year or part thereof, who has drawn an aggregate remuneration in
excess of remuneration drawn by the Managing Director of the Company and holds himself or
alongwith his spouse and dependent children not less than two percent of the equity shares
in the Company.
Disclosure in terms of section 197 of the Act read with rule 5 of the
Companies (Appointment and Remuneration) Rules, 2014 regarding remuneration paid to
Directors and Key Managerial Personnel for the financial year ended 31st March 2023 is
given in para 2.2 of the Corporate Governance Section of the Annual Report.
Vigil Mechanism
In terms of section 177(10) of the Act and regulation 22 of the SEBI
(LODR), the Company had established a vigil mechanism to report and deal with genuine
concern raised by a whistle blower. The said policy is available at the website of the
Company at web-link:http://www.barooahs.com/policies/vigil- mechanism.pdf.
Evaluation of Boards Performance
In terms of section 134(3) of the Act read with SEBI (LODR), the
Company had laid down the criteria for reviewing the performance of the Board, its
Committees and individual Directors. The evaluation process of Directors inter alia
considers attendance of the Directors at Board and Committee meetings, acquaintance with
business, communicating inter-se board members, effective participation, domain knowledge,
compliance with code of conduct, vision and strategy etc. The evaluation process and
criteria for evaluating the performance are available in detail in the website of the
Company at web-link: http://www.barooahs.com/policies/remuneration- policy.pdf.
The Board evaluated its own annual performance including that of its
Committees in the meeting of the Board of Directors held on 25th May 2023. The Board in
the same meeting evaluated performance of the individual Directors.
Statutory and Cost Auditors
M/s. Ghosal, Basu & Ray, Chartered Accountants, Kolkata (FRN
315080E) hold the office of the Statutory Auditors in their current term till the
conclusion of the AGM of the Company to be held for the Financial Year 2024-25.
The Report given by the Statutory Auditors on the Financial Statement
of the Company for the financial year ended 31st March 2023 is a part of the Annual
Report. There has been no qualification, reservation, adverse remark or disclaimer in the
report.
M/s. Mou Banerjee & Co., Cost Accountants (FRN 000266) were
appointed as Cost Auditors to carry out the Cost Audit of the applicable business of the
Company for the financial year ended 31 st March 2023. They are eligible for
reappointment.
Secretarial Auditors
M/s T Chatterjee & Associates, Practicing Company Secretaries (FRN
P2007WB067100) carried out the Secretarial Audit of the Company as envisaged under section
204 of the Act read with regulation 24A of the SEBI (LODR) for the financial year 202223.
The Audit Report is attached with the Boards Report as Annexure-6. There was no
qualification, reservation, adverse remark or disclaimer in the report.
None of the Auditors of the Company has reported any fraud as specified
under the second proviso of Section 143 (12) of the Act.
Details of the Material and Significant Orders
There was no material order against the Company by any Regulator, Court
or Tribunal impacting the going concern status of the Company.
A Scheme of Amalgamation between the Company and Buragohain Tea Company
Ltd approved by the respective shareholders of both the Companies has been challenged by a
shareholder and is pending adjudication before appellate side of the Honble Guwahati High
Court.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Pursuant to section 134(3) of the Act read with Companies (Accounts)
Rules, 2014 the information relating to conservation of energy, technology absorption and
foreign exchange earnings and outgo is attached with the Boards Report as Annexure - 7.
Particulars of Loans, Guarantee or Investments
Details of loans, guarantees or investments made by your Company under
section 186 of the Act during the financial year 2022-23 are appended as Annexure - 8 to
this report.
Material Changes and Commitments
Your Directors confirm that there was no material changes and
commitment, affecting the financial performance of the Company which occurred between the
end of the financial year of the Company to which the financial statements relate and the
date of this report.
Employee Relations
One of the key strength of your Company is its people. The Company
employed around 3523 individuals as permanent employees across its gardens and offices who
share a passion for excellence. The key attributes that excelled their performance are
knowledge base, expertise and experience. Human Resorrces (HR) policies of the Company are
focused on developing the potential of each employee. With this premise, a comprehensive
set of HR policies are in place, aimed at attracting, retaining and motivating employees
at all levels.
The Employee Relations remained cordial throughout the year and your
Directors wishes to convey their gratitude and place on record their appreciation for all
executives, staff and workers at all levels for their hard work, solidarity, cooperation
and dedication during the year.
Other Declarations
Your Directors state that during the year under review:
a) The Company complied with Secretarial Standards issued by the
Institute of Company Secretaries of India on Board and General Meetings.
b) The Company made no scheme or provision of money for the purchase of
its own shares by Employees/ Directors or by trustees for the benefit of
Employees/Directors.
c) The Company did not issue any equity shares with differential rights
as to dividend, voting or otherwise; and
d) There was no change in the share capital or nature of business of
the Company.
|
For and on behalf of the Board of Directors |
|
|
|
B & A Limited |
|
Anjan Ghosh |
Somnath Chatterjee |
| Place : Kolkata |
Director |
Managing Director |
| Date : 25th May 2023 |
DIN:00655014 |
DIN: 00172364 |
#DREnd#
+91-9892691696
