Grob Tea Co Ltd Directors Report.

TO THE MEMBERS

Your Directors have pleasure in presenting their Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2019.

1. FINANCIAL HIGHLIGHTS

The financial performance of your Company:

FINANCIAL RESULTS 2018-19 2017-18
(Rs. in Lacs) (Rs. in Lacs)
Turnover 8067.64 7772.64
Profit before finance charges, Tax, Depreciation/Amortization (PBITDA) 528.63 632.84
Less : Finance Charges 62.21 39.39
Profit before Depreciation/Amortization (PBTDA) 466.42 593.45
Less : Depreciation 284.83 334.36
Net Profit before Taxation (PBT) 181.59 259.09
Provision for taxation 41.98 74.56
Profit/(Loss) after Taxation (PAT) 139.61 184.53

2. STATE OF COMPANYS AFFAIRS AND FUTURE OUTLOOK

During the financial year 2018-19, your Company achieved a production of 45.51 lacs kgs of tea compared to 45.00 lacs kgs of last year. The crop is marginally higher over last year but could have been little more if Tea Board mandated of early closure of the manufacturing season did not take place. The average sale price realization for the CTC tea for the current year was Rs.173.69 as compared to Rs.170.55 of previous year. The increase of sale price of Rs. 3.14 is mainly due to improvement in the quality of tea.

The crop prospect for the year 2019-20 is uncertain due to extremely inclement weather condition. The season started off well with favourable weather condition but prolonged wet spell from 4th week of April with limited sunlight effected leaf growth. The market so far has been very subdued with a drop of Rs.12-15/kg compared to last year. Your Company is continuously emphasizing to improve the quality of tea to fetch the higher realization.

3. CHANGE(S) IN THE NATURE OF BUSINESS, IF ANY

The Company is pursuing growth opportunities in various fields of business and always consider new business proposals which have good future prospects and potentials to increase the shareholders return. To facilitate such initiative, the Company has diversified into the business of LED Street light, Indoor lights and all other LED light products and entered into a consortium agreement with Larica LED Product Pvt. Ltd. to attain the said objective of manufacturing the LED lights.

4. DIVIDEND

The Directors have recommended a dividend of Rs. 2/- Per Equity Share of Rs. 10/- each (Previous Year- Rs. 2/- per Equity Share) for the year ended 31st March, 2019, subject to approval of the shareholders at the ensuing Annual General Meeting.

5. TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND

Shareholders are requested to refer to the Notice of the Annual General Meeting for the due dates for transfer of unclaimed dividends and corresponding shares for the year ended 31st March, 2012 to Investor Education and Protection Fund. This information is also posted under the investor relation section, unclaimed dividend of the Companys website www.grobtea.com. Details of shares/shareholders in respect of which dividend has not been claimed, are provided on our website. The shareholders are therefore requested to verify their records and claim their dividends of all the last seven years, if not claimed.

During the year under review, your Company has transferred a sum of Rs. 1,25,633, being the dividend lying unclaimed out of the dividend declared by the Company for the Financial Year 2010-11 to the Investor Education and Protection Fund on 1st November, 2018 pursuant to the provisions of Section 124 (5) of the Companies Act, 2013 read with I nve stor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

During the period under review, 58,000 shares pertaining to financial year 2010-11 have been transferred to IEPF Authorities on 24th November, 2018 in compliance with the provisions of Section 124 of the Companies Act, 2013 and Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 after sending letters to those Shareholders and also making an advertisement in the newspapers in this regard. Details of these shares is on the website of the Company www.grobtea.com.

6. TRANSFER TO RESERVE

No amount was transferred to the reserves during the financial year ended 31st March, 2019.

7. CHANGES IN SHARE CAPITAL

The Authorized Share Capital of your Company as on March 31, 2019 stands at Rs. 3,00,00,000/- divided into 30,00,000 equity shares of Rs. 10/- each. The Issued Share Capital of your Company is Rs. 1,16,23,300/- divided nt i o 11,62,330 equity shares of Rs. 10/- each and the Subscribed and Paid-up Share Capital is Rs. 1,16,23,300/-divided into 11,62,330 equity shares of Rs. 10/- each, fully paid-up.

8. DETAILS PERTAINING TO SHARES IN SUSPENSE ACCOUNT

There is no such shares in suspense account.

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Your Companys Board is duly constituted and is in compliance with the requirements of the Companies Act, 2013, the Listing Regulations and provisions of the Articles of Association of the Company. Your Board has been constituted with requisite diversity, wisdom and experience commensurate to the scale of operations of your Company. During the year under review, Mr. M K Agarwal (DIN: 00697746), Non-Executive Director, is due to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment in accordance with the provisions of Companies Act, 2013. A brief profile along with necessary disclosures of Mr. M K Agarwal has been annexed to the Notice convening the ensuing AGM. Your Board recommends appointment of Mr. M K Agarwal as a Non-Executive Director of the Company, liable to retire by rotation.

Pursuant to the provisions of Sections 149, 150 & 152 read with other applicable provisions, if any, of the Companies Act, 2013 ("the Act"), and the rules made there under (including any statutory modifications or re-enactment(s) thereof for the time being in force), subject to approval of members in the Annual General Meeting (AGM) and such other consents and permission as may be necessary, consent of the board of directors be and is hereby accorded for the reappointment of Mr Sanjay Kumar Agarwal (DIN : 00189691) as an Independent Director for a period of 5 (Five) Years. A brief profile along with necessary disclosures of Mr. S K Agarwal has been annexed to the Notice convening the ensuing AGM. Your Board recommends appointment of Mr. S K Agarwal as a Non-Executive Independent Director of the Company.

Pursuant to Regulation 17(1A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, other applicable provisions, if any, of the Companies Act, 2013 and the applicable Rules made thereunder, including any amendment(s), statutory modification(s) and/or re-enactment thereof for the time being in force, subject to approval of members in the Annual General Meeting (AGM) and such other consents and permission as may be necessary, consent of the Board of Directors be and is hereby accorded for the continuation of. Mr. Purushottam Jagannath Bhide (DIN: 00012326) and Mr. Harischandra Maneklal Parekh (DIN 00026530), who has attained the age of seventy five (75) years, as Non-Executive Independent Director of the Company up to March, 2022, being the date of expiry of their current term of office."

Mr. Purushottam Jagannath Bhide, Mr. Harischandra Maneklal Parekh, Mr. Sanjay Kumar Agarwal and Mrs. Priyanka Singhania, Independent Directors of your Company have declared to the Board of Directors that they meet the criteria of Independence as laid down in Sections 149(6) and 149(7) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations and there is no change in their status of Independence. Your Board places on records its deep appreciation for their continuous guidance, support and contribution to the Management of the Company in its pursuit to achieve greater heights.

Mr. Pradeep Kumar Agarwal, Managing Director, Mr. Indu Bhusan Sharaf, Whole-time Director, Mr. Bajrang Lal Patawari, Chief Financial Officer and Mrs. Kritika Mohata, Company Secretary & Compliance Officer are the Key Managerial Personnel (KMP) of your Company.

10. NUMBER OF MEETINGS OF BOARD OF DIRECTORS

During the year under review, a total of four Meetings of the Board of Directors of the Company were held, i.e., on May 29, 2018; August 9, 2018; November 14, 2018 and February 13, 2019. Details of Board composition and Board Meetings held during the financial year 2018-19 have been provided in the Corporate Governance Report which forms part of this Annual Report.

11. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

The prescribed particulars of employees required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is set out in Annexure "E" to this Report attached.

The Information as required under Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given in the Annexure forming part of the Report. In terms of Section 136(1) of the Act, the report and accounts are being sent to members without the aforesaid Annexure. Any member interested in obtaining a copy of the same, may write to the company. The aforesaid Annexure is also available for inspection by members at the Registered Office of the Company.

12. AUDITORS AND AUDITORS REPORT

a) Statutory Auditors

M/s Dhandhania & Associates, Chartered Accountants, were appointed as the Statutory Auditor of the Company in the Annual General Meeting held on 5th September, 2017 in terms of Sec 139 of the Companies Act 2013 till the conclusion of Annual General Meeting to be held in 2022.

b) Internal Auditors:

Pursuant to the provisions of Section 138 of the Act and the Companies (Accounts) Rules, 2014, on the recommendation of the Audit Committee, M/s. A R Maiti & Co is appointed by the Board of Directors to conduct internal audit reviews for the Company.

c) Cost Auditor

In accordance to the provision of Section 148 of the Companies Act, 2013 and Companies (Audit & Auditors) Rules, 2014 the Company is not required to appoint Cost Auditor to audit the cost records of the Company.

d) Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed H M Choraria & Co, Practicing Company Secretary, for a period of 3 years from 2019 onwards for conducting the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as Annexure "D" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. e) Qualification, reservation or adverse remark in the Auditors Reports and Secretarial Audit Report

There is no qualification, reservation or adverse remark made by the Auditors in their Reports to the Financial Statements or by the Secretarial Auditor in his Secretarial Audit Report for the financial year ended March 31, 2019.

13. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT- 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 are set out herewith as Annexure "C" to this Report.

The extract of the Annual Return of the Company can also be accessed on the website of the Company at http:// www.grobtea.com.

14. SECRETARIAL STANDARDS OF ICSI

The Company have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems were adequate and operating effectively.

15. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND THE DATE OF REPORT

Subsequent to the end of the financial year on March 31, 2019 till date, there has been no material change and / or commitment which may affect the financial position of the Company.

16. PUBLIC DEPOSIT

During the Financial Year 2018-19, the Company has not accepted any deposit within the meaning of Sec 73 and 74 of the Companies Act, 2013.

17. LOANS GUARANTEE OR INVESTMENT

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

18. RELATED PARTY TRANSACTIONS

During the financial year 2018-19, the Company has entered into transactions with related parties which were in the ordinary course of business and on arms length basis and in accordance within the provisions of the Companies Act, 2013. Further, there were no transactions with related parties which qualify as material transactions under the Listing Agreement. Thus, disclosure in Form AOC-2 is not required.

The details of the related party transactions as required under IND AS- 24 are set out in Note 29 to the financial statements forming part of this Annual Report.

19. INTERNAL FINANCIAL CONTROLS

The Internal Controls over Financial Reporting are routinely tested and certified by Statutory as well as Internal Auditors to cover key business areas. Significant audit observations and follow up actions thereon were reported to the Audit Committee.

Further details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of this Annual Report.

20. COMMITTEE OF THE BOARD

During the year, in accordance with the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015, currently the Board has four Committees to focus on specific areas and make decision within the authority delegated to each of the Committees. All decision and recommendations of the Committees are placed before the Board either for information or approval. The detail of Committee of the Board is as follows:

–– Audit Committee

–– Nomination and Remuneration Committee

–– Stakeholders Relationship Committee

–– Corporate and Social Responsibility Committee

The composition, scope and powers of the aforementioned Committees together with details of meeting held during the year under review, forms part of the Corporate Governance Report.

21. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act 2013, your directors confirm that:

a) in the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors 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 the Company as on 31st March, 2019 and of the profit /loss of the Company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

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

f) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

22. CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Companies Act, 2013, the Company has formed a CSR Committee and approved the CSR Policy. The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company is available on the Companys website: www.grobtea.com. The initiatives undertaken by the Company on CSR activities during the year are set out in Annexure "G".

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

The Company is committed to provide a safe and conducive work environment to its employees. During the year under review, no case of sexual harassment was reported.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out herewith as Annexure "F" to this Report.

25. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT

In terms SEBI(LODR), Regulation, 2015 with Stock Exchange, Report on Management Discussion & Analysis Report and the Report on Corporate Governance along with the Certificate from the Practicing Company Secretary certifying the compliance of Corporate Governance have been attached and forms part of Annual Report marked as Annexure "A" and "B" respectively.

26. VIGIL MECHANISM

The Company is committed to ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015. The detail of Whistle Blower Policy of the Company has been outlined in the Corporate Governance Report which forms part of this report.

27. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(3) of SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015, Independent Directors at their meeting without the participation of the Non-independent Directors and Management, considered/evaluated the Boards performance and other Non-independent Directors. The Board subsequently evaluated its own performance, the working of its Committees and Independent Directors.

28. SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

29. ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation of the devoted services rendered by all the employees of the Company and sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board
Place : Kolkata P. K. AGARWAL I.B.SHARAF
Dated: 23rd May, 2019 Managing Director Executive Director
(DIN NO. 00703745) (DIN NO. 00047266)