Bengal Tea & Fab Director Discussions


Dear Members,

The Directors of the Company present their 40th Annual Report and Companys Audited Accounts for the year ended 31st March, 2023. FINANCIAL SUMMARY/HIGHLIGHTS

The financial results for the year ended 31st March, 2023 and the corresponding figures for the last year are as under:

(Amount in Rs Lakhs)

2022-23 2021-22
Profit before Interest, Depreciation, Exceptional Item and Tax 278.85 1131.54
Less: Finance Cost 42.94 43.15
Depreciation & Amortization Expense 177.92 180.00
220.86 223.15
Profit/(Loss) after Interest & Depreciation but before Exceptional Item and Tax 57.99 908.39
Add: Exceptional Item -- 3003.40
Less: Tax Expense for Current Year -- 281.55
Income Tax for Earlier Years (226.02) 1.82
Deferred Tax Provision/(Written Back) 404.93 (369.96)
178.91 (86.59)
Profit/(Loss) from continuing operations (120.91) 3998.38
Profit/(Loss) before Tax from Discontinued operations 170.09 (1028.98)
Loss arising due to impairment of assets pertaining to Disposal group -- (1115.90)
Less: Tax Expense of Discontinued operations 26.94 25.00
Profit/(Loss) afterTax from Discontinued operations 143.15 (2169.88)
Other Comprehensive Income for the year ( net of tax) (100.62) 66.59
Total Comprehensive income for the year (78.39) 1895.09

TRANSFER TO RESERVES

The Balance in Other Equity stands at Rs 10,433.18 Lakhs (Previous year Rs 10,601.62 Lakhs). The Company has transferred Rs NIL Lakhs to General Reserve.

DIVIDEND

Your Directors are pleased to recommend a payment of Dividend of Rs 1.00 per Equity Share (Previous year Rs 1.00 per Equity Share) on face value of Rs 10/- each for the year ended 31st March, 2023 amounting to Rs 90.06 lakhs subject to the approval of members at the ensuing Annual General Meeting.

CERTIFICATIONS & RECOGNITIONS

Ananda Tea Estate has been accredited with ISO 9001:2015, ISO 22000 : 2018 and HACCP certifications by KVQA. Ananda Tea Estate has also been issued verification certificate bearing no. TSVC/CB/00000889/2022 under trustea code for sustainable tea in India by Control Union.

Your Company is registered as a Medium Enterprise bearing UDYAM Registration No. UDYAM- WB-10-C0037886 under Micro, Small and Medium Enterprieses Development (MSMED) Act, 2006.

OPERATIONS Tea Division

During the year under review, all India crop for the financial year 2022-23 was 1371 million kgs against 1344 million Kgs for the financial year 2021-22, an increase of about 2%. The Company produced 20.40 Lakh Kgs for the financial year 2022-23 as against 20.80 Lakh Kgs for the financial year 2021-22. However, the average realization fell by about 9.9%. Lower production coupled with lower realization adversely affected the profit of the Tea Division.

Modernization of withering, drying and sorting machines have been implemented wich would improve the quality of Tea. This will lead to improved profitability of the Tea Division.

TEXTILE DIVISION

The sale of all fixed assets and equipment situated at the Textile Division- Discontinued Operations i.e. Asarwa Mills, Ahmedabad, Gujarat have been completed. The demolition of the factory building situated at Ahmedabad, Gujarat is nearing completion, after which steps will be taken for the sale of the aforeasaid land.

Subsidiary of Rydak Enterprises & Investment Limited

The Company is a subsidiary of Rydak Enterprises & Investment Limited, (CIN: U15491WB1983PLC036235), Promoter with a holding of 50,60,870 equity shares i.e. 56.19% of the total Share Capital of the Company.

MATERIAL CHANGES OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR UNDER REVIEW AND THE DATE OF THE REPORT

Your Board has approved the transfer of the companys Property situated at GIDC, Dholka District, Ahmedabad ("Dholka Property"), Gujarat for a consideration of Rs 16.21 Crores (Rupees Sixteen Crores and Twenty One Lakhs Only) and accordingly the written down value of inventory of Rs 4.10 Crores (Rupees Four Crores and Ten Lakhs Only) has been given effect. Apart from this, there were no material changes and commitments, affecting the financial position of the Company wich has occurred between the end of the financial year to which the financial statements relate and the date of the report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under the Listing Regulations is set out in the annexure forming part of the Annual Report marked as Annexure - "A".

CORPORATE GOVERNANCE REPORT

The Report on Corporate Governance in accordance with the Listing Regulations, approved by the Board together with a Certificate from Mrs. Swati Bajaj, (CP No. 3502, Membership No. ACS 13216) of M/s Bajaj Todi & Associates, Practising Company Secretaries of 225D, A.J.C.Bose Road, 3rd Floor, Kolkata 700 020 regarding compliance with the conditions of Corporate Governance are set out in the annexure forming part of the Annual Report marked as Annexure - "B".

Your Company has taken adequate steps for strict compliance with Corporate Governance guidelines, as amended from time to time. ANNUAL RETURN

In terms of Section 92(3) of the Act, the draft Annual Return for the financial year ended 31st March, 2023 is displayed on the website of the Company www.bengaltea.com and forms an integral part of this Annual Report. The weblink for the same is https://www.bengaltea. com/wp-content/uploads/2023/07/DRAFT_Form_BTFL_MGT-7_31.3.2023.pdf.

BOARD MEETINGS

During the year under review 4 (four) meetings of the Board of Directors were held on 14th May, 2022, 12th August, 2022, 12th November, 2022 and 11th February, 2023.

Apart from meeting of the Board of Directors, different committees met several times during the financial year ended 31st March, 2023. DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 134(3)(c) OF THE COMPANIES ACT, 2013

The Directors hereby confirm that -

a) in the preparation of the annual accounts for the Financial Year ended 31st March, 2023, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) they 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 loss of the company for that period;

c) they 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) they had prepared the annual accounts on a going concern basis;

e) they had laid down internal financial controls relating to financial matters to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

SECRETARIAL STANDARDS

The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government u/s 118 (10) of the Act.

DECLARATION BY INDEPENDENT DIRECTORS

Independent Directors namely, Mr. Dhirendra Kumar (DIN: 00153773), Mr. Navin Nayar (DIN: 00136057) and Mr. Ashutosh Bhagat (DIN: 00059842) have given declaration confirming that they comply with the requirements of Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of the Listing Regulations. In the opinion of the Board of Directors, the Independent Directors, fulfil the conditions of independence specified in Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with the Companys Code of Conduct.

DIRECTORS

Mr. Kailash Prasad Khandelwal, (DIN: 00914834), Wholetime Director of the Company resigned from the Board of Directors w.e.f 1st January, 2023 due to his advancing age and Mr. Golam Momen, Independent Director of the Company ceased to be a Director w.e.f. 29th January, 2023 due to his demise. Your Board of Directors places on record its sincere appreciation for the services rendered by them.

In accordance with the provisions of Section 152 of the Act and the Companys Articles of Association, Mr. Samveg A Lalbhai (DIN: 00009278) retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers himself, for re-appointment in compliance with the provisions of the Companies Act, 2013.

Brief resume of Mr. Samveg A Lalbhai, nature of his expertise in specific functional areas and details of his directorship and membership/ chairmanship of Board/ Committees, as stipulated under Listing Regulations has been provided in the Annexure to the Notice of the 40th AGM of the Company.

KEY MANAGERIAL PERSONNELS

The following persons were the Key Managerial Personnels (KMP) of the Company in compliance with the provisions of the Companies Act, 2013:

a) Mr. Adarsh Kanoria, (DIN: 00027290), Managing Director

b) Mr. Kailash Prasad Khandelwal, (DIN: 00914834), Wholetime Director* (till 31.12.2022)

c) Mr. Atul Doshi, Chief Financial Officer

d) Mrs. Sunita Shah, Company Secretary *Resigned from the Board w.e.f. 01.01.2023

Remuneration and other details of the KMPs for the year ended 31st March, 2023 are mentioned in the Annual Return which forms an integral part of this Report and is available on the Companys website viz., www.bengaltea.com

NOMINATION & REMUNERATION POLICY

Pursuant to Section 178(3) of the Companies Act, 2013, Nomination and Remuneration Committee ("NRC") formulated the criteria for determining qualification, positive attributes and independence of a director. The Committee has also recommended to the Board a policy relating to the remuneration for directors, key managerial personnel, Senior Management of the Company and other employees.The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to Executive and Non-executive Directors (by way of sitting fees and commission), Key Managerial Personnel, Senior Management and other employees. The policy also provides for appointment of Key Managerial Personnel / Senior Management and performance evaluation which are considered by the Nomination and Remuneration Committee and the Board of Directors while making selection of the candidate.

The details of the Nomination and Remuneration Policy is available at the website of the company www.bengaltea.com. The weblink for the same is https://www.bengaltea.com/wp-content/uploads/2017/08/Nomination-Remuneration-Policy_6.02.2016-min.pdf

BOARD EVALUATION

The Companies Act, 2013 states that formal evaluation needs to be done by the Board of its own performance and that of its Committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. Listing Regulations vide Regulation 25(3) requires a meeting of Independent Directors to evaluate the performance of the Non Independent directors.

Accordingly, a meeting of the Independent Directors was held on 11th February, 2023 wherein the performance of the non-independent directors, including the Chairman were evaluated. The annual performance evaluation of all the directors and the Board as a whole were conducted based on the criteria and framework adopted by the Board. The Board of Directors expressed their satisfaction with the evaluation process. The evaluation process has been explained in the Corporate Governance Report section in this Annual Report. The NRC has also reviewed the performance of individual directors based on their knowledge, preparation, effective participation in meetings, understanding of their roles as director etc.

PUBLIC DEPOSITS

During the year 2022-23, your Company did not accept/renew any deposits and as such, no amount of principal or interest was outstanding as on 31st March, 2023.

AUDITORS AND AUDITORS REPORT

M/s. Jain & Co., (Firm Regn. No. 302023E) Chartered Accountants,. were appointed as the Statutory Auditors of the Company in place of M/s Singhi & Co., (Firm Regn. No. 302049E) , the retiring Statutory Auditors on 14th May, 2022 by the Board of Directors for a period of 5 years from the conclusion of the 39th AGM to the conclusion of the 44th AGM of the Company which was approved by the Shareholders at the 39th AGM of the Company. M/s. Jain & Co. is a Peer Reviewed Firm. The Company has received letter from the Auditors to the effect that their appointment, is within the prescribed limits under the Companies Act, 2013 and that they are not disqualified.

The Notes on Financial Statements referred to in the Auditors Report are self-explanatory and do not call for any further comments. There is no qualification, adverse remarks or disclaimer made by the Statutory Auditors.

SECRETARIAL AUDIT REPORT

A report made by Mrs. Swati Bajaj, (CP No. 3502, Membership No. ACS 13216) of M/s Bajaj Todi & Associates. Practising Company Secretaries of 225D, A.J.C.Bose Road, 3rd Floor, Kolkata 700 020, pursuant to Section 204(1) of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure - "C". The report is free of any qualification, adverse remarks or disclaimer.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the statutory auditors nor the secretarial auditors has reported to the Audit Committee under Section 143(12) of the Companies Act, 2013 any fraud committed against the Company by its officers or employees, the details of which need to be mentioned in the Boards Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or provided any guarantees under Section 186(1) of the Companies Act, 2013. However, the details of Investments under Section 186(1) of the Companies Act, 2013 have been provided at Note No. 12 of the Financial Statements for the year ended 31st March, 2023.

PARTICULARS OF RELATED PARTY TRANSACTIONS

During the year there were no material related party transactions with the promoters, the directors or the management, their subsidiaries or relatives etc. by your Company that may have a potential conflict with the interest of the Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable to your Company. All Related Party Transactions are placed before the Audit Committee for approval. Omnibus approval is obtained on a yearly basis for transactions which are of repetitive nature.

The Company has formulated a policy on Related Party Transactions. The weblink of the policy is https://www.bengaltea.com/wp-content/ uploads/2022/10/Related-party.pdf

All related party transactions entered during the Financial Year 2022-23 were in the ordinary course of the business and on arms length basis, details of which have been provided in the Notes to the Accounts.

Disclosures of transactions of the Company with any person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the Company

The disclosures of transactions of the Company with any person or entity belonging to the promoter/ promoter group which hold(s) 10% or more shareholding in the Company is given in Note No. 47 of the Notes to the Financial Statements.

COST AUDIT

In accordance with the provisions of Section 148 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 the Company was required to appoint Cost Auditor to audit the cost records of the applicable products of the Company relating to the Tea Division and accordingly, such accounts are made and records have been maintained relating to Tea Division every year.

PARTICULARS OF COST AUDITOR APPOINTED FOR THE FINANCIAL YEAR 2022-23

The Company has appointed the following Cost Auditor for Tea Division for the year ended 31st March, 2023:

Details of Cost Auditor Unit Audited
Name: D. Radhakrishnan & Co. Tea Division-
Address: 11A Dover lane Bengal Tea & Fabrics Limited.
Flat B1/34, Kolkata- 700029 Ananda Tea Estate- Assam
Registration No. allotted by ICMAI: 000018

The Board of Directors, on the recommendation of Audit Committee, have re-appointed M/s. D. Radhakrishnan & Co. as the Cost Auditor to audit the cost accounts relating to the Tea Division the Company for the financial year 2023-24. As required under the Act, a resolution seeking members approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their approval.

PARTICULARS OF EMPLOYEES

The Company had no employee who were in receipt of more than Rs 1.02 Crores per annum during the year ended 31st March, 2023 or of more than Rs 8.5 Lakhs per month during any part thereof. However, the information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1), 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been annexed as Annexure - "D".

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

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as per Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 (3) of Companies (Accounts) Rules, 2014, is set out in the annexure forming part of the Annual Report marked as Annexure - "E".

RISK MANAGEMENT POLICY

Risk management is embedded in your Companys operating framework. Your Company believes that managing risks helps in maximizing returns. The Companys approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. As per requirement of Section 134(3)(n) of the Companies Act, 2013 the Board of Directors in its meeting held on 10th May, 2014 had approved the Risk Management Policy. As of now, the Directors do not envisage any element of risk which may threaten the existence of the Company.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an adequate system of internal control procedures which are constantly assessed and strengthened with new/revised standard operating procedures.The Companys internal control system is commensurate with the size and nature of business. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry. Detailed procedural manuals are in place to ensure that all the assets are safeguarded, protected against losses and all transactions are authorized, recorded and reported correctly. The internal control systems of the Company were monitored and evaluated by the internal auditor and their audit report was periodically reviewed by the Audit Committee. The observations and comments of the Audit Committee are placed before the Board and suitable steps are taken to strengthen the controls.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to Section 135 of the Companies Act, 2013, the Company has formed a CSR Committee and formulated a Corporate Social Responsibility Policy (CSR Policy) indicating the activities that can be undertaken by the Company and the same can be viewed at https:// www.benealtea.com/wp-content/uploads/2022/10/corporatesocialresponsibilitypolicv.pdf . The details on the CSR Committee are provided in the Report on Corporate Governance. The Company does not fall under the criteria mentioned under Section 135 of the Companies Act,2013 for making CSR Contribution in the financial year 2022-23. Accordingly, there were no CSR expenditure for the financial year ended 31st March , 2023 and hence annual report on CSR has not been provided.

TRANSFER OF UNPAID DIVIDEND AND SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 124 of the Companies Act, 2013, the declared dividends which remain unpaid or unclaimed for a period of seven years have been duly transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government under Section 125 of the said Act.

The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 31st March, 2023 on the Companys website viz., www.bengaltea.com. The dividend for the undernoted years, if unclaimed for seven years, will be transferred by the Company to IEPF:

Financial Year Date of Declaration of Dividend Unclaimed Dividend as on 31.03.2023 (Rs)
2015-16 01.08.2016 187483.50
2016-17 NIL NIL
2017-18 NIL NIL
2018-19 NIL NIL
2019-20 NIL NIL
2020-21 31.08.2021 2,20,968.00
2021-22 05.08.2022 2,01,324.00

Pursuant to the provision of Section 124 (6) read with Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the "IEPF Rules") as amended, all shares in respect of which dividend has/have remained unpaid or unclaimed for consecutive seven years the corresponding shares shall also be transferred in the name of Demat Account of IEPF Authority.

Accordingly 39,903 equity shares against 632 folios corresponding to the dividend for the year ended on 31st March, 2016 which remains unclaimed for seven consecutive years will be transferred to Demat Accout no. 1204720013676780 of IEPF Authority maintained with SBI CAP Securities Limited through Central Depository Services (India) Limited under IEPF RULES, 2017 on 6th September, 2023. Notice to the concerned shareholders and advertisement in Newspapers has been given to make an application to the Company / Registrar & Share Transfer Agents latest by 14th August, 2023 with a request for claiming the unpaid dividend so that the shares are not transferred to IEPF. The Company has uploaded the details of all shares transferred to Demat account of IEPF Authority as on 31st March, 2023 on the Companys website www.bengaltea.com.

OPENING OF SUSPENSE ESCROW DEMAT ACCOUNT

In accordance with SEBI Circular dated 25th January, 2022 a separate Suspense Escrow Demat Account has been opened with a Depository Participant for crediting shares which have not been dematerialized by the shareholders within 120 days from the date of issue of Letter of Confirmation to them. There are 200 equity shares lying in the aforesaid account as on 31st March, 2023.

INSIDER TRADING & STRUCTURED DIGITAL DATABASE

The Company has implemented the Code of Internal Procedure & Conduct as required under the extant SEBI (Prohibition of Insider Trading) Regulations, 2015. The Company has also in existence a Structured Digital Database as mandated under the above Regulations.

NAME OF COMPANIES WHICH HAVE CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

None

DISCLOSURE UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place Internal Complaints Committee for the Registered Office and Tea Division. The following is the summary of Sexual Harassment complaints received and disposed off during the year 2022-23:

No. of Complaints pending as on 1st April, 2022: NIL

No. of Complaints received : NIL

No. of Complaints Disposed off : NIL

DETAILS OF APPLICATION MADE OR PROCEEDINGS PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year under review, there were no proceedings, either filed by the Company or against the Company, pending under the Insolvency and Bankruptcy Code, 2016 as amended, before National Company Law Tribunal or other courts .

ONE-TIME SETTLEMENT WITH BANKS OR LENDING INSTITUTIONS, IF ANY

During the year under review, the Company has not entered into any one-time settlement with Banks or lending institutions. ACKNOWLEDGEMENT

The Directors place on record their sincere appreciation for the assistance and co-operation extended by Banks, its employees, its investors and all other associates and look forward to continue fruitful association with all business partners of the Company.

For & on behalf of the Board
Bengal Tea & Fabrics Limited
Sd/-
Place: Kolkata Adarsh Kanoria
Dated:25th May, 2023 Chairman & Managing Director
(DIN: 00027290)