Diana Tea Co Director Discussions


Dear Members,

The Directors are pleased to present the Hundred and Twelfth (112th) Annual Report of the Company together with Standalone Audited Financial Statements of the Company for the financial year ended on March 31, 2023.

1. Financial Results

The summarized Financial position of the Company are given in the table below:

(Rs in Lakhs)

Particulars Standalone
FY 2022-23 FY 2021-22
Revenue from Operations 7629.14 7517.24
Profit before taxation (322.82) 838.16
Tax Expense (72.68) 105.84
Profit for the year (250.14) 732.32
Other Comprehensive Income (Net of Tax) (33.01) 70.29
Total Comprehensive Income (283.15) 802.61
Other Equity at year end 6004.11 6396.35

Note: The above figures are extracted from the Standalone Financial Statements prepared under IND AS (Indian Accounting Standards) for the Financial Year ended on 31st March, 2023 and 31st March, 2022.

2. REVIEW OF PERFORMANCE

The year under review was extremely challenging from every front starting from natural vagaries in form of draught in initial part of the year followed by incessant rains in the month of June followed by severe pest infestation damaging crop for the entire year. In addition to that cost of major inputs like coal, chemicals and fertilizers shot up drastically having a major impact on overall economy of the Tea Estates. Over and above that wage increase of 30/- was final nail in the coffin for the tea industry. Overall market conditions continued to be sluggish however price differential between quality and non-quality gardens continue to widen. With our cautious approach towards quality making our average price realization for the year was higher by 10/- which went up to 245/- when compared to 235/- last year.

Due to inclement weather conditions followed by excessive pest attack throughout the season our own production was low at 30,23,748 kgs when compared to 32,34,042 kgs last year.

The only grace during the year was that our average price realization was higher than last year in spite of lower average price realization of the district. Your company could not overcome the challenge posed by extremely high cost scenario coupled with lower crop. As such the company posted a loss of 250.14 crore against profit of & 732.32 crore last year.

3. PROSPECTS

Current year looks equally challenging for the tea industry as cost of production continues to spiral upwards in form of higher wages (which has been increased again from 232/- to 250/-) by Government of West Bengal, together with other cost of inputs.

Market sentiments are drifting down due to oversupply situation majority of which is coming from unorganized sector and average price realization continues to be under severe pressure. Orthodox tea has seen major price corrections due to Iran payment crisis compelling producers to produce more CTC thus increasing the availability of the same in the Indian Market. This has further dampened market sentiments. However, demand for quality tea and widening price gap between quality and non-quality tea continues to be there.

Inspite of severe headwinds of high cost coupled with challenging market conditions your company is hopeful of passing this turbulent phase with the backing of our high yielding gardens and over all focus on producing better quality of tea.

4. CHANGE IN NATURE OF BUSINESS, IF ANY

There has been no change in the nature of business and the Company continues to concentrate on their own business.

5. TRANSFER TO RESERVES

The Directors transferred 250.00 Lakhs out of General Reserves to retained earnings to meet up the deficit.

6. DIVIDEND

Due to making loss during the financial year, the Board of Directors have not recommended any dividend for the Financial Year 2022-23.

7. DETAILS OF BOARD MEETINGS

During the Financial Year, Four (4) Board meetings were held, details of which are given below:

Date of the meeting No. of Directors attended the meeting
27.05.2022 5
10.08.2022 5
11.11.2022 4
10.02.2023 4

8. SHARE CAPITAL

During the financial year ended 31st March, 2023 there has been no change in the issued and subscribed capital of the Company. The Issued, Subscribed & paid up Share capital as on 31st March, 2023 is 749.55 Lakhs comprising of 1,49,91,000 equity shares of 5/- each.

9. EXTRACT OF ANNUAL RETURN ee

In accordance with the Companies Act, 2013, the annual return in the prescribed format can be accessed at https://www.dianatea.in/finance.shtml

10. COMMITTEES OF BOARD

The details of composition of the Committees of the Board of Directors are as under:-

a. Audit Committee

Sl. No. Name Chairman/ Members
1. Mr. H.M. Parekh Chairman
2. Mr. SandeepSinghania Member
3. Mr. Gautam Bhalla Member
4. Mr. Kiran Nanoo Desai Member

The Terms of Reference of the Audit Committee has been provided in the Corporate Governance Section forming part of this Report. During the financial year, the Committee had met 4 times as on 27th May, 2022, 10th August, 2022, 11th November, 2022 and 10th February, 2023.

Recommendation by audit committee:

There was no such recommendation of audit committee which has not been accepted by the Board during the said financial year.

Vigil Mechanism/ Whistle Blower Policy

The Company has formulated the codified Vigil Mechanism/Whistle Blower Policy incorporating the provisions relating the Vigil Mechanism in terms of Section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligation & Disclosure Requirements) Regulations , 2015 and SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018 , in order to encourage Directors and Employees of the Company to escalate to the level of the Audit Committee any issues of concern impacting and compromising with the interest of the Company and the Stakeholders in any way and to prevent leak of Unpublished Price Sensitive Information The Company has also made provisions for adequate safeguards against victimization of its employees and Directors who express their concerns.

The Chairman of Audit Committee can be accessed directly by any employee for reporting issues which need to be brought to the notice of the Board. The Vigil Mechanism / Whistle Blower Policy of the Company has been uploaded on the website of the Company chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/ https://www.dianatea.in/20190301_Whistle_Blower. pdf b. Nomination & Remuneration

Sl. No. Name

Chairman/ Members

1. Mr. H.M Parekh Chairman
2. Mr. Gautam Bhalla Member
3. Mr. Kiran Nanoo Desai Member

• The Terms of Reference of the Committee has been provided in the Corporate Governance Section forming part of this Report. During the financial year, the Committee had met 3 times on 10th August, 2022, 11th November 2022 and 10th February, 2023.

c. StakeholdersRelationship Committee

Sl. No. Name

Chairman/Members

1. Mr. Gautam Bhalla Chairman
2. Mr. Sandeep Singhania Member
3. Mrs. Sarita Singhania Member
4. Mr. Kiran Nanoo Desai Member

The Terms of Reference of the Committee has been provided in the Corporate Governance Section forming part of this Report. During the financial year, the Committee had met 5times on 27th May, 2022, 10th August, 2022, 11th November 2022, 24th November, 2022 and 10th February, 2023.

11. MANAGEMENT DISCUSSION AND ANALYSIS

As per SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, Management Discussion and Analysis Report is attached as

Annexure "A" forming part of this report.

12. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company considers Corporate Social Responsibility as an important aspect of doing business. As a good corporate citizen, the Company initiated appropriate action towards various social causes as soon as the provision become applicable to the Company during the Financial Year 2022-2023.

Pursuant to MCA Notification dated 28.09.2020, where the amount to be spent by a company under section 135(5) of the Companies Act 2013 does not exceed fifty lakh rupees, the requirement under section 135(1) of the Companies Act 2013 for constitution of the Corporate Social Responsibility Committee shall not be applicable and the functions of such Committee provided under this section shall, in such cases, be discharged by the Board of Directors of such company. Accordingly the said function is discharged by the Board of Directors of the Company. The Corporate Social Responsibility Policy of the Company as adopted by the Board of Directors is available on Companys websites https://www.dianatea.in/20220802_CSR-Policy-

DTCL-2021.pdf

During the year ended 31st March, 2023, your Company has spent 9.98 Lakhs on various CSR activities as defined under schedule VII of the Companies Act 2013. The Report on Corporate Social Responsibility (CSR) Activities / Initiatives is attached as Annexure "B" forming part of this report.

13. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of clause (c) of sub-section (3) and sub-section (5) of Section 134 of the Act, the Board of Directors of the Company hereby confirm that:

i) 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 except gratuity liability being accounted for, as and when paid/payable;

ii) we have selected such accounting policies and applied 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 the Company as at March 31, 2023 and of the profit of the Company for the year ended on March 31, 2023;

iii) we have 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 preventing for and detecting fraud and other irregularities;

iv) we have prepared the annual accounts for the financial year ended on March 31, 2023 on a going concern basis;

v) we have laid down internal financial controls and the same have been followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi) we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

14. CORPORATE GOVERNANCE

The Company attaches considerable significance to good Corporate Governance as an important step towards building investor confidence, improving investors protection and maximizing long term shareholders value. The certificate of the Auditors confirming compliance of conditions of Corporate Governance as stipulated under Regulation 34 read with Schedule V(E) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 of the Stock Exchange is annexed as Annexure "C".

15. RELATED PARTY TRANSACTIONS

The related party transactions entered during the year were in ordinary course of business and also on arms length basis in compliance with the applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations, 2015. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict of the interest with the Company at large. All related party transactions are presented to the Audit Committee and the Board, if required, for approval. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. The Revised Policy on Related Party Transactions as approved by the Board is uploaded on the Companys web link: https://www.dianatea. in/20220222_RPT_Policy_2022.pdf.

16. DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under sub-section (3)(m) of the Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are given at Annexure "D" to the Directors Report.

17. PARTICULARS OF EMPLOYEES

The ratio of the remuneration of each Director to the median employees remuneration and other particulars or details of employees pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended are attached to this Report as Annexure "E".

The details of employees prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report.

There were no directors who is in receipt of any commission from the company as well as from its holding company as per section 197 (14) of the Companies Act, 2013.

18. ANNUAL EVALUATION OF BOARDS PERFORMANCE

During the financial year, the Board evaluated its own performance as well as that of its Committees and individual Directors. The exercise was carried out covering various aspects of the Boards functioning such as composition of the Board & committees, qualification, experience & competencies, performance of specific duties & obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of Non-Independent Directors. The performance of Independent Directors has been evaluated based on the guidelines as provided under Schedule IV of the Act. The evaluation of the Independent Directors was carried out by the entire Board except by the Director being evaluated. The directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.

19. AUDITORS

Statutory Audit

M/s. B. Nath & Co., Chartered Accountants having registration number FRN No. 307057E were appointed as statutory Auditors of the Company in the 107th Annual General Meeting to hold office for a term of 5(Five) years from the conclusion of 107th Annual General Meeting till the conclusion of the 112th Annual General Meeting. Therefore, their tenure expires this ensuing AGM. The Board proposes to re-appoint M/s.

B. Nath & Co. as the Statutory Auditors of the Company, subject to approval of the shareholders at the ensuing AGM, for a second term of five years to hold office from the conclusion of 112th Annual General Meeting till the conclusion of 117th Annual General Meeting on such remuneration plus taxes and reimbursement of out of pocket expenses as may be incurred by them in connection with audit of accounts of the Company, as may be mutually agreed upon between the Board of Directors and the Statutory Auditors. The Statutory Auditors hold a valid peer review certificate as prescribed under Regulation 33(1)(d) of SEBI Listing Regulations, 2015.

Further, the report of the Auditors along with notes to Schedules is enclosed to this report. The Company is in the regime of unmodified opinions on financial statements. Further, the Statutory Auditors have not reported any incident of fraud during the year under review to the Audit Committee of your Company.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. MR & Associates, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company for the financial year ending 31st March, 2023. The Secretarial Audit Report for the financial year ended 31st March, 2023 is annexed herewith as Annexure "F" to this Report.

The Secretarial Audit Report is self-explanatory and does not contain any adverse qualification, reservation or remark except that they mentioned that the company is non-compliant regarding provision of listing of equity shares listed with the Calcutta Stock Exchange (CSE) and payment of listing fee to CSE as the company is suspended from trading in CSE. Regarding this the management response is that the company had applied for voluntarily delisting with the approval of shareholder in the year 2004. However, no response has been received from the Calcutta Stock Exchange since then. The company is regularly following up for completion of the delisting process and will pay the amount of the listing fee.

Cost Audit

As per Section 148 of the Companies Act 2013 read with Rule 4 of Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost records for the financial year 2022-2023 and accordingly such accounts and records are made and maintained. However the Company is not required to appoint Cost Auditor to conduct the audit of cost records for the financial year 2022-2023.

20. HUMAN RESOURCES

The Company treats its "human resources" as one of its most important assets.

The Company has a large work force employed at the tea estates. There were no major disruptions of work at the garden or any other establishment of the Company during the period under review. The correct recruitment practices are in place to attract best talent. Industrial Relations at all the units remained satisfactory.

21. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION

No material changes and commitments have occurred during the financial year 2022-2023 which might affect the financial position of the company.

22. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Company is committed to provide a work environment which ensures that every woman employee is treated with dignity, respect and equality. There is zero-tolerance towards sexual harassment and any act of sexual harassment invites serious disciplinary action.The Company has adopted a policy in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder.

The Company hereby declares that it has complied with provisions relating to the constitution of Internal Complaints Committee of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No complaint has been brought to the notice of the Management during the financial year ended on 31st March, 2023.

23. RISK MANAGEMENT

In terms of the requirement of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has developed and implemented the Risk Management Policy. The Company has taken adequate measures to mitigate various risk encountered. In the opinion of the Board there is no such risk which may threaten the present existence of the Company

24. DECLARATION BY INDEPENDENT DIRECTORS

Necessary declarations have been obtained from all the Independent Directors that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of SEBI (Listing and Disclosure Requirements) Regulations, 2015 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

25. REMUNERATION POLICY

The remuneration policy of the Company aims to attract, retain and motivate qualified people at the Board levels. The remuneration policy seeks to employ people who not only fulfill the eligibility criteria but also have the attributes needed to fit into the corporate culture of the company.The remuneration policy is consistent with the ‘pay-for-performance principle. The Company has formulated Criteria for making payment to Non Executive Directors which is available in Companys weblink: https://www.dianatea.in/Criteria%20of%20making%20payment%20to%20 non- 20directors_6.pdf

Non-Executive

The Nomination and Remuneration Committee takes into account experience, and prevailing industry practices before giving its recommendation to the Board. On recommendation of the Nomination and Remuneration Committee, the Board decides remuneration to be paid to Executive Directors, subject to approval of shareholders in terms of provisions of the Companies Act, 2013, read with Schedule V thereof. The Committee aims towards rewarding, on the basis of performance and reviews on a periodical basis.

The Company has formulated Criteria for making payment to Non Executive Directors which is available in Companys weblink :

https://www.dianatea.in/Criteria%20of%20making%20payment%20to%20 executiv non- 20directors_6.pdf .

As per the criteria, Non-Executive Directors are paid sitting fees for attending the meetings of the Board of Directors and Committees.

26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/ TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANYS OPERATIONS IN FUTURE.

There were no significant and material orders passed by the regulators or courts or tribunals that would impact the Going concern Status and or will have any bearing on Companys Operations in future. Details of contingent liabilities and commitments (to the extent not provided for) are disclosed in Notes to the financial statements for the financial year ended 31st March, 2023.

27. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

The Company has, subsequent to year end, transferred a sum of 71,233 /- to Investor Education and Protection Fund, in compliance with the provisions of Section 124, 125 and other applicable provisions of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit,Transfer and Refund) Rules, 2016. However, due to some technical glitch in the MCA portal the approval of the form filed is still pending for approval and the payment of the same has been made.

The said amount represents dividend for the year 2013 which remain unclaimed for a period of 7 years from its due date of payment. The details of unpaid dividend and shares transferred to the IEPF are available at the following websites: (http://www.dianatea.in/IEPF. shtml)

28. INTERNAL FINANCIAL CONTROLS SYSTEMS WITH REFERENCE TO THE FINANCIAL STATEMENT

The Company has adequate Internal Financial Control System at all levels of Management and they are reviewed from time to time. The Internal Audit is carried out in house as well as by firm of Chartered Accountants. The Audit Committee of the Board looks into Auditors review which is deliberated upon and corrective action taken, wherever required.

29. SUBSIDIARIES, JOINT VENTURE OR ASSOCIATE COMPANIES

The Company continues to be the Subsidiary of Diana Capital Limited. Further, the Company has no subsidiary, joint venture and associates for the financial year ended 31st March, 2023 therefore, the Statement in Form AOC-1 containing the salient features of the financial statement of the Companys subsidiaries pursuant to first proviso to Section 129(3) of the Companies Act, 2013 (Act) read with Rule 5 of the Companies (Accounts) Rules, 2014, forms part of the Annual Report, is not applicable to the company during the financial year.

30. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees or investments made under section 186 of the Companies Act 2013 are covered in the notes to accounts of the Financial Statement for the year ended 31st March, 2023 forming part of this Annual Report.

31. DIRECTORS & KEY MANAGERIAL PERSONNEL

Directors

As per provisions of Section 152 of the Companies Act, 2013 read with Companies (Appointment and Qualifications of Directors) Rules, 2014, Mr. Sandeep Singhania (DIN 00343837) is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends him re-appointment as a Director liable to retire by rotation.

Pursuant to regulation 36 of SEBI (LODR) Regulation 2015, a brief resume / details relating to Directors who are proposed to be appointed/re-appointed and the details of the director liable to retire by rotation is furnished in the Notice of the ensuing Annual General Meeting (AGM) of the Company.

The Independent Directors have confirmed that they have registered their names in the data bank maintained with The Indian Institute of Corporate Affairs (‘IICA). In terms of Section 150 of the Act read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014, the Independent Directors are required to undertake online proficiency self-assessment test conducted by the IICA within a period of two year from the date of inclusion of their names in the data bank. All the Independent Director of the

Company to whom the provisions of proficiency test is applicable, shall undertake the said online proficiency self-assessment test in due course within the time limit prescribed under the said rule.

The Board of Directors of the Company is of the opinion that the Independent Director appointed during the year under review possess the requisite expertise and experience (including proficiency) and are the persons of high integrity and repute. They fulfill the conditions specified in the Companies Act, 2013 and the Rules made thereunder and are independent of the management.

Key Managerial Personnel

Pursuant to the provisions of sub-section (51) of Section 2 and Section 203 of the Act read with the Rules framed thereunder, the following persons are the Key Managerial Personnel of the Company as on March 31, 2023:

1. Mr. Sandeep Singhania, Managing Director;

2. Mrs. Sarita Singhania, Whole-Time Director and Chief Financial Officer (appointed as CFO w.e.f 29.05.2023);

3. Mr. Ramesh Kumar Jhunjhunwala, Chief Financial Officer (appointed on 10.08.2022 and resigned on 11.11.2022 as compliance officer and resigned as CFO w.e.f. 10th February, 2023)

4. Mrs. Anushree Biswas, Company Secretary (resigned w.e.f. 10th August, 2022)

5. Ms. Kriti Jain, Company Secretary cum Compliance officer (appointed w.e.f. 11.11.2022 resigned w.e.f. 30.06.2023)

During the year under review, the changes made in the Key Managerial Personnel of the Company were duly complied as per the provision of the Companies Act, 2013.

32. DEPOSITS

The Company has not accepted any deposits within the meaning of sub-section (31) of Section 2 and Section 73 of the Companies Act, 2013 ("the Act") and the Rules framed thereunder. As on March 31, 2023, there were no deposits lying unpaid or unclaimed.

33. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

Regulation 34(2)(f) of the Securities and Exchange Obligations Board of India (Listing and Disclosure Requirements) Regulations, 2015 was not applicable to the Company during the year under review, based on the market capitalization.

34. CREDIT RATING

CRISIL has assigned the Credit rating of "BBB-/ Stable" and "A3" respectively to the Company for the working capital and term loan facilities availed by the Company. There has been no/ revision in the credit rating during the year under review.

35. INSOLVENCY AND BANKRUPTCY CODE, 2016

No application or proceeding was made or pending against the Company under the Insolvency and Bankruptcy Code, 2016 during the year under review.

36. VARIATION IN VALUATION

During the year under review, there was no instance of one-time settlement with any bank or financial institution necessitating disclosure or reporting in respect of difference in valuation done by the Company.

37. COMPLIANCE OF SECRETARIAL STANDARDS

The Company complies with all applicable Secretarial Standards as mandated by the Institute of Company Secretaries of India.

38. ACKNOWLEDGEMENT

The Directors take this opportunity to thank the Central and State Government Departments, Organizations and Agencies for their continued support and co-operation. The Directors are also thankful to all valuable stakeholders viz., customers, vendors, suppliers, banks, financial institutions, joint venture partners and other business associates for their continued co-operation and excellent support provided to the Company during the year. The Directors acknowledge the unstinted commitment and valuable contribution of all employees of the Company. The Directors also appreciate and value the trust reposed in them by Members of the Company.

For and on behalf of the Board
Registered Office : Sd/- Sd/-
3B, Lalbazar Street Sandeep Singhania Sarita Singhania
Kolkata - 700 001 Managing Director (Whole-time Director)
Date : 10th August, 2023 (DIN: 00343837) (DIN: 00343786)