Norben Tea & Exports Ltd Directors Report.

TO THE MEMBERS

Your Directors are pleased to present the Twenty Ninth Annual Report together with the Companys Audited Accounts for the Financial Year ended 31st March, 2019.

1. FINANCIAL SUMMARY OR HIGHLIGHTS

The financial performance of the Company for the year ended on 31st March, 2019 is summarized below:-

FINANCIAL SUMMARY
Year Ended March 31, 2019 Year Ended March 31, 2018
Rs. in thousand Rs. in thousand
Total Revenue 54860 54072
Profit before Finance Cost, Depreciation and Taxation 7558 8126
Less : Finance Cost 5846 5126
Profit/ (Loss) before Depreciation and Tax 1712 3000
Less : Depreciation 4338 3767
Profit/ (Loss) before Exceptional Items and tax (2626) (767)
Prior Period Expenditure 1191
Profit/ (Loss) before Tax (3817)
Less/(Add) : Current Tax 200 610
Provision of Deferred Tax (Credit) 476 (848)
Profit/(Loss) after tax (4493) (529)
Other Comprehensive Income
Item that will not be reclassified to profit or loss (161) (133)
Income tax relating to these items 41 34
Total Comprehensive Income for the period (4613) (628)

2. STATE OF COMPANYS AFFAIRS

During the year there is again some increase in value of own production of tea crop and this trend should continue as the Companys plantations mature and yield more leaves. Price realizations for Norben teas have increased alongwith the market. The production from small tea growers category has become larger than the organized sector in this year.

A meeting of the minimum wages advisory board for tea workers was held again, which decided to fix mininum wages of tea garden workers very soon. The amount includes both cash and kind component. Such increase is abnormally high and may result in many estates closing down.

Tea prices have not kept pace with the growing input costs, resulting in economic stress across the industry.

3 . CHANGE IN THE NATURE OF BUSINESS, IF ANY

There has been no change in the nature of Business of the Company during the reported financial year.

4. DIVIDEND

The Board has not recommended any dividend for the financial year 2018-19 in view of retaining cash for your Companys growth prospects.

5. TRANSFER TO GENERAL RESERVE

Appropriation amount proposed to be transferred to General Reserve : NIL

6. MATERIAL CHANGES COMMITTMENTS

There are no material changes or commitments affecting the financial position of the company which has occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

7. SHARE CAPITAL

During the year under review the Company has not altered its share capital.

8. INTERNAL CONTROL SYSTEM

Your Company has in place, an adequate system of internal controls commensurate with its size, requirements and the nature of operations. These systems are designed keeping in view the nature of activities location and various business operation.

9. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Being a listed entity, the financial statements are passing through the Audit Committee and the processes of Internal and External (Tax, Cost and Statutory) Audits, before being approved at the meeting of the Board of Directors of the Company. The financial statements are regularly updated on the Companys website and available to all stakeholders.

10. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

As on 31st March, 2019, your company has no subsidiaries, joint ventures or associate Companies.

11. PUBLIC DEPOSITS

Your Company has not accepted/renewed any deposits covered under Chapter V of the Companies Act, 2013.

12. STATUTORY AUDITOR

M/s. L. K. Bohania & Co., Chartered Accountants were appointed as Statutory Auditors of the Company at the Annual General Meeting held on 2nd September, 2016 to hold office till the conclusion of the Annual General Meeting for the financial year 2020-21.

The members may note that consequent to the changes made in the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 by the Ministry of Corporate Affairs (MCA) by notification dated May 7, 2018 the proviso to Section 139 (1) of the Companies Act, 2013 read with explanation to sub-rule 7 of Rule 3 of the Companies (Audit and Auditors) Rules, 2014, requirement of ratification of appointment of Auditors by the Members at every AGM has been done away with. Therefore, the Company is not seeking any ratification of appointment of M/s. L. K. Bohania & Co., Chartered Accountants as the Auditors of the Company, by the Members at the ensuing AGM.

13. AUDITORS REPORT

The report by the Auditors is self explanatory and has no qualification, reservation, adverse remark or disclaimer; hence no explanation or comments by the Board were required.

14. SECRETARIAL AUDIT REPORT

Pursuant to provisions of Section 204 of the Companies Act, 2013, and the Companies (Apointment and Remuneration of Managerial Personnel) Rules, 2014 the Board has appointed CS Ajay Kumar Agarwal, Proprietor of Agarwal A & Associates, Company Secretaries, Practicing Company Secretary as its secretarial auditor to undertake Secretarial Audit for the FY 2018-19. The Secretarial Audit Report in the specified form MR-3 is annexed herewith as Annexure A in the Annexure forming part of this Report. The Secretarial Audit Report has a qualification, reservation, adverse remark relating to suspension in trading of equity shares of the Company due to non compliance of the eligibility requirement for continuous listing and the Company has made an application on 28th May, 2018 to BSE for revocation of suspension of Company with Bombay Stock Exchange and awaiting for their approval.

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

The information pursuant to Section 134(3)(m) of the Companies Act, 2013 and Rule 8 of Companies (Accounts) Rules, 2014, is given as Annexure B in the Annexure forming part of this Report.

16. EXTRACT OF THE ANNUAL RETURN

In terms of provisions of Section 92, 134(3), read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure C in the Annexure forming part of this Report.

17. POLICY ON CORPORATE SOCIAL RESPONSIBILITY

The level of operations of the Company does not conform to the minimum threshold of Corporate Social Responsibility reporting.

18. DIRECTORS

At present your Board is duly constituted comprising of 4 (Four) Directors, Mr. Manoj Kumar Daga (DIN: 00123386), Mr. Ranjan Kumar Jhalaria (DIN: 05353976), Mrs. Swati Agarwal (DIN: 06804522) and Mrs. Sweta Patodia (DIN: 06869426). In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mrs. Sweta Patodia, retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

19. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

There has been no change in the composition of the Board of Directors during the financial year. The details of Key Managerial Personnel who were appointed or have resigned during the financial year are also covered under the Report on Corporate Governance.

20. NO. OF MEETINGS OF THE BOARD

The Board of Directors have met 5 (five) times during the financial year on 29-05-2018, 10-08-2018, 12-11-2018, 22-12-2018 and 11-02-2019. The maximum time gap between any two meetings was less than 120 days as stipulated under SEBIs Listing Requirements, 2015. Details of meeting are given in the "Corporate Governance Report" of the Annual Report.

21. SEPARATE MEETING OF INDEPENDENT DIRECTORS

A Separate meeting of the Independent Directors was held on 12-11-2018, Mr. Ranjan Kumar Jhalaria the lead Independent Director presided the meeting. The Independent Directors at said meeting review the performance of the non Independent Directors.

Details of the separate meeting of the independent Directors held and attendance of Independent Directors therein are provided in the report on corporate governance forming part of this report.

22. DECLARATION BY INDEPENDENT DIRECTORS

Every Independent Director has, at the first meeting of the Board and also at the first meeting of the Board after his/her appointment, in the financial year 2018-2019, given a declaration as required u/s.149 of the Companies Act, 2013 that he/she meets the criteria of Independence.

23. AUDIT COMMITTEE AS REQUIRED U/S 177(8) OF COMPANIES ACT, 2013

Further, during the year there was no recommendation of the Audit Committee which had not been accepted by the Board.

24. VIGIL MECHANISM (WHISTLE BLOWER POLICY)

In pursuance to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and employees of the Company, to report genuine concerns has been established. The Vigil Mechanism (Whistle Blower Policy) has been uploaded on the Companys website at www.norbentea.com/pdf/vigil-blower.pdf.

25. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION ETC.

The Companys policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided u/s.178(3) of the Companies Act, 2013 is given as Annexure D in the Annexure forming part of this Report.

26. RELATED PARTY TRANSACTION

All the related party transaction are entered on arms length basis and are in compliance with the applicable provisions of the Act and the SEBI (LODR) Regulations, 2015.There are no materially significant related party transactions made by the Company during the year.

27. DETAILS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY

During the year there was no loans, guarantees or investments made by the company u/s.186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

28. FORMAL ANNUAL EVALUATION OF BOARD

Formal annual evaluation by the Board of its own performance and that of its committees and individual directors had been done during the year in the manner stated in the Criteria for Performance Evaluation of the Directors of the Company as framed by the Nomination and Remuneration Committee of the Company.

29. MANAGEMENT DISCUSSION AND ANALYSIS

a) Industry Structure & Developments

Global black tea production was 2103 million kgs.in 2018 as compared to 2039 million kgs. in 2019, an increase of 64 million kgs. marking a growth of 3.14% due to rise in Keneyas output. Indian tea crop was approximately 1312 million kgs. lower than last year by 10.2 million kgs. The production was impacted by the unprecedented floods in Kerala and lower harvest in South India. Crop output in North India was higher by 6 million kgs. despite deficits in the later part of the calendar year due to an early closure of production in December following a directive issued by the Tea Board to curb the supply of low quality end of season teas and to lend price support.

Global consumption of tea is likely to grow on the back of changing consumer habits towards natural health and wellness beverages. More importantly, the pace of consumption expansion within India is likely to be strong. Tea will remain a durable everyday beverage choice especially in a developing economy and face limited competition from other alternatives.

b) Opportunities, Threats, Risks & Concerns

Because of the very small size of production the Companys teas are readily accepted in niche market for "NORBEN" created over the years.

All the plantations of Norben are of high yielding clones producing bright liquoring teas.

The age of the plantations is very young and provides a great advantage in terms of cost due to less disease and low maintenance cost due to vigorous health of the bush.

The Company has in place systems of Internal Control commensurate with the size of the Company and the nature of its business, which ensures that transactions are recorded, authorized and reported correctly apart from safeguarding its assets against loss from wastage, unauthorized use and removal.

The Internal Control System is supplemented by documented policies, guidelines and procedures. An extensive programme of review is carried out by the Companys Management cum Internal Audit team which submits detailed reports periodically to the Management.

Tea continues to enjoy the status of being the most popular beverage in the World.

The Tea Industry is largely dependent on the vagaries of nature. The Industry is highly labour intensive and is subject to stringent labour laws. Comparatively high labour costs, high social cost over most other tea producing countries, high infrastructure costs remain the major problems for the Indian Tea Industry. Shortage of labour during peak season is also a cause for concern.

These problems need to be addressed by improved productivity. The Tea Industry both in Assam and in West Bengal have discussed with the Trade Unions and implemented productivity linked wages for the tea workers with a view to regain the Industrys competitiveness in the global market.

The small tea growers and bought leaf factories form a considerable part of the Industry in North India. There is a need to regulate these factories to maintain the quality.

c) Segment wise or product wise performance

The Company is a Single Business Segment Company

d) Outlook

Tea sale prices are likely to remain under pressure although consumption of tea has increased. India needs to take a number of initiatives to strengthen its position in the global market and address emerging markets by further improving the quality as well as packaging standards, thereby enhancing product quality.

e) Risks and concerns

The Tea Industry is largely dependent on the vagaries of nature. The Industry is highly labour intensive and is subject to stringent labour laws. Comparatively high labour costs, high social cost over most other tea producing countries, high infrastructure costs remain the majour problems for the Indian Tea Industry. Shortage of labour during peak season is also a cause for concern.

These problems need to be addressed by improved productivity. The Tea Industry both in Assam and in West Bengal have discussed with the Trade Unions and implemented productivity linked wages for the tea workers with a view to regain the Industrys competitiveness in the global market.

The small tea growers and bought leaf factories are now a larger part of the Industry in North India. There is a need to regulate these factories to maintain the quality.

f) Internal control system and their adequacy

The Company implemented internal control systems to ensure that all assets are safeguarded and protected against loss and that transactions are recorded and reported correctly. The internal control system is commensurate with the size and nature of the Companys business. The systems are regularly reviewed for effectiveness.

g) Discussion on financial performance with respect to operational performance

This has been covered in the Directors report specifically under the section on financial results and performance. The financial review for the year has also been separately covered in this Annual Report.

h) Material developments in human resources/industrial relations front, including number of people employed

The Company emphasizes training and development for optimum results. The Company strives to maintain healthy industrial relations across its various locations and employees. The number of persons employed by the Company as on March 31, 2019 was 92.

i) Cautionary Statement

Statements in the Management Discussions and Analysis Report in regard to projections, estimates and expectations have been made in good faith. Many unforeseen factors may come into play and affect the actual results which could be different from what the Directors envisage in terms of future performance and outlook. Market data and product information contained in this Report have been based on information gathered from various published and unpublished reports, and their accuracy, reliability and completeness cannot be assured.

30. RISK MANAGEMENT POLICY

The Board of Directors of the Company has developed and implemented a risk management policy for the Company including identification therein of elements of risk, which in the opinion of the Board, may threaten the existence of the Company. The Board monitors and reviews periodically various aspects of Risk Management policy. At present no particular risk whose adverse impact may threaten the existence of the Company is visualized.

31. PREVENTION OF SEXUAL HARASSMENT AT WORKSHOP

Your Company is committed to provide a work environment which ensures that very women employee is treated with dignity, respect and equality. There is zero- tolerance towards sexual harassment invites serious disciplinary action.

The Company has established a policy against sexual harassment for its employee. The policy allows every employee to freely report any such act and promote action will be taken thereon. The policy lays down severe punishment for any such act. Further, your Directors state that during the year under review, there were no cases of sexual harassment reported to the Company pursuant to the sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/TRIBUNALS

During the year under review, there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.

33. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of the Section 134(3)(c) & 134(5) of the Companies Act, 2013, your Directors confirm that:

1. Applicable accounting standards have been followed in the preparation of the Annual Accounts for the year ended 31st March, 2019 with proper explanation relating to material departures, if any.

2. Accounting policies have been selected and applied consistently and judgments and estimates have been made which are reasonable and prudent and have been applied so as to give a true and fair view of the state of affairs of the Company in respect of the financial year ended 31st March, 2019 and of the losses of the Company for that period.

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. Annual Accounts for the year ended 31st March, 2019 have been prepared on the basis of going concern concept.

5. The Directors have laid down the internal financial controls to be followed by the Company detailing the policies and procedures and these internal financial controls are adequate and are being operated effectively.

6. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

34. PARTICULARS OF DIRECTORS REMUNERATION U/S.197 (12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

S.No. Name Designation % increase in remuneration Ratio of the remuneration of each director : median remuneration of the employees
1 Manoj Kumar Daga Mg.Director NIL 5.50 : 1
2 Ranjan Kumar Jhalaria Director NIL 0.22 : 1
3 Swati Agarwal Director NIL 0.20 : 1
4 Sweta Patodia Director NIL 0.02 : 1
5 Dipa Chatterjee Sarkar CFO 11.38 -
6 Mira Halder Company Secretary 20.23 -

The Company has 92 employees as on 31st March, 2019.

Percentage increase in the median remuneration of employees in the financial year : 14.69%

Average percentile increase in the salaries of employees compared with percentile increase in managerial remuneration is 1.03:1.

Wages of the Tea Garden employees are decided through a Tripartite Agreement between Workers Associations, State Government and Representatives of the Tea Industry. Remuneration paid to other Employees are fixed. No variable remuneration is paid. Remuneration paid is as per the Remuneration Policy of the Company.

35. PARTICULARS OF EMPLOYEES

As on March 31, 2019 the Company did not have any employee in the category specified in Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

36. AUDITORS CERTIFICATE REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

Certificate regarding compliance of conditions of corporate governance is given as Annexure E in the Annexure forming part of this report.

37. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

During the year under review, the Company has duly complied with the applicable provisions of the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India (ICSI).

38. STOCK EXCHANGE(S)

The application for revocation of suspension in trading of Equity Shares of the Company at Bomnay Stock Exhange is awaiting their approval. The Equity Shares of the Company are traded at the National Stock Exchange of India Limited.

39. APPRECIATION

The Directors wish to place on record their appreciation for the support received from the Local Gram Panchayat, Government Departments, Banks, Stakeholders and all others.

By Order of the Board
For NORBEN TEA & EXPORTS LTD.
Regd.Office:
15B, Hemanta Basu Sarani, Manoj Kumar Daga
3rd Floor, Kolkata-700001. (Chairman & Mg.Director)
Date : 28th May, 2019. DIN : 00123386

ANNEXURE: "B"

STATEMENT OF PARTICULARS UNDER THE COMPANIES (ACCOUNTS) RULES 2014

A. Conservation of energy

i) The steps taken or impact on conservation of energy;

Companys operations involve substantial consumption of energy when compared to the cost of production. Wherever possible energy conservation and efficiency measures have been undertaken.

The Companys business involves use of energy only for final processing of Tea leaves. For growing of Tea leaves, the reliance is more on natural resources of energy than on fossil fuels.

ii) The steps taken by the company for utilizing alternate sources of energy; The Company constantly considers up-gradation of existing machineries and processes to optimise use of alternate sources of energy for processing of Tea leaves. Availability of natural gas through pipeline or bullet tanker is eagerly awaited, which the Company can readily use at a much lower cost to both the Company and the environment.

iii) The capital investment on energy conservation equipments; For all new equipments purchased, weightage is given to conservation of electrical energy to reduce long term running costs.

B. Technology absorption

i) The efforts made towards technology absorption;

The Company subscribes to the Tea Research Association and implements their guidance and recommendations. The Company has no R&D Unit as such.Further more, the Company is moving in the direction of certifications such as Rain Forest Alliance and follows the Plant Protection Code, Maximum Residue Levels and the Trustea Code.

ii) The benefits derived like product improvement, cost reduction, product development or import substitution ; The per hectare cost of insecticides and pesticides used for spraying in tea growing areas has reduced. Only the items appearing in the approved list are used, by which the Companys produced has become compliant with more markets having different approval parameters. iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) –

a) The details of technology imported NIL
b) The year of import NIL
c) Whether the technology been fully absorbed NA
d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and NA

iv) The expenditure incurred on Research and Development; As covered under item (i) above.

C. Foreign exchange earnings and Outgo

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange Outgo during the year in terms of actual outflows. : Nil

ANNEXURE D REMUNERATION POLICY

Introduction

The Remuneration Policy of Norben Tea & Exports Ltd. (the "Company"), is designed to attract, motivate and retain exceptional employees in a competitive market. The policy reflects the Companys objectives for good corporate governance as well as sustained long-term value creation for shareholders.

Remuneration to Directors, Key Managerial Personnel and other employees involving a balance between fixed and incentive pay which reflect short and long term performance objectives appropriate to the working of the Company and its goals.

APPOINTMENT OF DIRECTORS

Appointment of Director(s) are being done as per the applicable provisions and schedules of the Companies Act. 2013.

BOARD REMUNERATION

Efforts are made to ensure that the remuneration of the Board of Directors matches the level with comparable companies, whilst also taking into consideration board members required competencies, efforts and the scope of the board function, including the number of meetings.

Fixed remuneration

Whole Time Director(s) of the Board of Directors will receive a fixed salary, alongwith basic perquisites which is approved by the shareholders of the Company at a General Meeting.

Sitting Fees

The Board shall fix the sitting fees for the Directors and Members of the various Committees, taking into account the extent of responsibilities and time commitment, the results of the Company keeping in view fees paid by other peer companies, which are similar in size and complexity.

Incentive programme, bonus pay, etc.

Presently, the Company does not have any incentive programme. Reimbursement of expenses

Expenses in connection with board and committee meetings are reimbursed as per account rendered. Pension scheme The Board of Directors is not covered by any pension scheme or a defined benefit pension scheme.

REMUNERATION TO OTHER KEY MANAGERIAL PERSONNEL

The Nomination & Remuneration Committee submits proposals concerning the remuneration of the other Key Managerial Personnel to ensure that the remuneration is in line with the conditions in comparable companies.

Other Key Managerial Personnel are entitled to a competitive remuneration package consisting of the following components: Fixed salary Bonus Benefits, e.g. use of company car, telephone, broadband, etc.

Fixed salary

The fixed salary shall be based on the market level and increase therein shall be periodically reviewed based on performance appraisal.

Variable components

Presently, the Company does not have a fixed policy for any incentive based pay or any variable component in the salary structure.

Personal benefits

Other Key Managerial Personnel will have access to a number of work-related benefits, including company car, free telephone, broadband at home, and work-related newspapers and magazines. The extent of individual benefits are not necessarily same for each individual member of the Executive Management.

Other Key Managerial Personnel may be covered by insurance policies:

Accident insurance

Health insurance

Directors and Officers Liability Insurance

Notice of termination

The employment relationship is terminable by giving a months notice on either side. Redundancy pay As per the prevailing laws of the State Government.

Retirement Benefits

Other Key Managerial Personnel are not covered by any employer administered pension plan or a defined benefit pension scheme. However, pension scheme under provident fund is provided. Gratuity is covered as per the Act.

Disclosure

The total remuneration of the Key Managerial Personnel is stated in the Annual Report.

REMUNERATION TO OTHER EMPLOYEES

The Nomination & Remuneration Committee submits proposals concerning the remuneration of other employees and ensures that the remuneration is in line with the conditions in comparable companies.

Other Employees entitled to a competitive remuneration package consisting of the following components: Fixed salary Bonus Fixed salary

The fixed salary shall be based on the market level and increase therein shall be periodically reviewed based on performance appraisal.

Variable components

Presently, the Company does not have a fixed policy for any incentive based pay or any variable component in the salary structure.

Other benefits

Housing/Housing Repair Allowance. Notice of termination

As per the prevailing laws of the State Government. Redundancy pay As per the prevailing laws of the State Government. Retirement Benefits

Other Key Managerial Personnel are not covered by any employer administered pension plan or a defined benefit pension scheme. However, pension scheme under provident fund is provided. Gratuity is covered as per the Act.

Criteria for determining qualifications, positive attributes and independence of director

The Company will follow the guidelines as mentioned in Schedule IV of the Companies Act, 2013 and under Regulation 19(4) of the Listing Regulation with the Stock Exchange(s) in determining qualifications, positive attributes and independence of director.