Dhunseri Tea & Industries Limited

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DHUNSERI TEA & INDUSTRIES LIMITED

BOARD OF DIRECTORS
S. L. Dhanuka Chairman S. R. Daga B. D. Beriwala P. L. Agarwat

C. K. Dhanuka
Managing Director

VICE PRESIDENT (F & C) K. K. Tibrewaila VICE PRESIDENT (P & S) I. B. Saraf COMPANY SECRETARY R. Mahadevan AUDITORS Lodha & Co. Chartered Accountants BANKERS State Bank of India Punjab National Bank United Bank of India Bank of Baroda REGISTERED OFFICE "Dhunseri House" 4A, Woodburn Park Kotkata-700 020

TEA ESTATES Dhunseri Tea Estate P.O. Mazbat, Assam. Dilli Tea Estate P.O. Parbatpur, Assam. Namsang Tea Estate P.O. Jeypore, Assam. Bahadur Tea Estate P.O. Tinsukia, Assam. Hatijan Tea Estate P.O. Hoogrijan, Assam. Khagorijan Tea Estate P.O. Sapekhati, Assam. Santi Tea Estate P.O. Hoogrijan, Assam. Khetojan Tea Estate P.O. Tinsukia, Assam. TEA PACKAGING DIVISION SP-534-A, Sitapura Industrial Area Jaipur, Rajasthan BRANCH OFFICES Lamb Road Guwahati - 781 001 Assam 110, Raheja Centre 214, Nariman Point Mumbai - 400 021 Hans Bhawan 1, Bahadur Shah Zafar Marg New Delhi - 110 002

REGISTRARS & SHARE TRANSFER AGENTS

Maheshwari Datamatics Pvt. Ltd. 6, Mango Lane, 2nd Floor, Kolkata-700 001

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PM1< DHUNSERI TEA & INDUSTRIES LIMITED

NOTICE
NOTICE is hereby given that the Eighty-sixth Annual General Meeting of the Members of DHUNSERI TEA & INDUSTRIES LIMITED will be held on Friday, the 20th day of September, 2002 at 'Kala Kunj', Sangit Kala Mandir Trust, 48, Shakespeare Sarani, Kolkata 700 017 at 11.00 a.m. to transact the following business : 1. 2. 3. 4. 5. To receive, consider and adopt the Profit & Loss Account for the year ended 31 st March, 2002, the Balance Sheet as at that date and the Reports of the Directors' and Auditors' thereon. To declare a dividend. To elect a Director in place of Sri S. L. Dhanuka, who retires by rotation and being eligible offers himself for re-appointment. To elect a Director in place of Sri B. D. Beriwala, who retires by rotation and being eligible offers himself for re-appointment. To appoint Auditors and to fix their remuneration.

Registered Office : 4A, Woodburn Park, Koikata-700 020 24th June, 2002 NOTES: i)

By Order of the Board R. MAHADEVAN Company Secretary

A MEMBER ENTITLED TO ATTEND AND VOTE MAY APPOINT A PROXY TO ATTEND AND VOTE ON HIS BEHALF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. A proxy may be sent in the form enclosed and in order to be effective must reach the registered office of the company atleast 48 hours before the meeting. The Register of Members and the Share Transfer Books of the company will remain closed from Thursday, 5th September, 2002 to Friday, 20th September, 2002 both days inclusive. The dividend as recommended by the Board, if approved by the shareholders, will be payable to those shareholders whose names appear on the Register of Members of the company as on 20th September, 2002. The dividend in respect of shares held in the electronic form will be payable to the beneficial owners of shares as on the closing hours of business on 4th September, 2002 as per details furnished by National Securities Depository Ltd. and Central Depository Services (India) Ltd., for this purpose. The said beneficial owners are requested to intimate all changes with respect to their bank details, mandate, nomination, power of attorney, change of address, change in name etc. to their Depository Participant (DP). These changes will be automatically reflected in company's records, which will help the company to provide efficient and better service to the members.

ii) iii) iv)

v)

The Securities and Exchange Board of India has made it mandatory for all companies to use the bank account details furnished by the depositories for depositing dividend through Electronic Clearing Service (ECS) to investors wherever ECS and bank details are available. In the absence of ECS facilities the company will print the bank account details, if available, on the payment instrument for distribution of dividend. No tax at source will be deducted if the dividend payable to an individual shareholder does not exceed Rs. 1,000/-. Other members who are entitled to receive dividend amount more than Rs. 1,0007- during a financial year and their total estimated income from dividend and sources as provided in Section 197A(1B) of the Income Tax Act, during such financial year is not likely to exceed Rs. 50.000/- can claim gross dividend without deduction of tax at source by submitting declaration in Form 15G (in duplicate) with the company on or before 5th September, 2002.

vi)

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DHUNSERI TEA & INDUSTRIES LIMITED

NOTICE (Contd.)
vii) As per sub-section (5A) of Section 139A of the Income-tax Act, 1961, It is mandatory for every person receiving any payment from which tax has been deducted, to intimate his Permanent Account Number (PAN) to the person making such payment. Further, the Company is required to mention the PAN of the person to whom such payment is made on the IDS Certificate to be issued for such deduction. In view of the above, shareholders are requested to intimate their PAN Immediately to the Company Secretary at the Registered Office of the Company. In case, any shareholder has applied for PAN but the same has not yet been allotted, he is requested to provide photocopy of acknowledgement of application for PAN. viii) Shareholders seeking any information with regard to accounts are requested to write to the company atleast 10 days prior to the meeting so as to enable the management to keep the information ready. ix) x) Members are requested to bring their copies of Annual Report to the meeting. Pursuant to Section 205A of the Companies Act, 1956 all unclaimed dividends upto the year ended 31 st December, 1994 have been transferred to the General Revenue Account of the Central Government. Shareholders who have not encashed the dividend warrants for the said period are requested to claim the amount from the Registrar of Companies, Nizam Palace, llnd M. S. O. Bldg., 2nd Floor, 234/4, A. J. C. Bose Road, Kolkata-700020. Under Section 205C of the Companies Act, 1956 the amount of dividend remaining unclaimed for a period of seven years shall be transferred to Investor Education and Protection Fund. Members are requested to send unclaimed/unpaid dividend warrants,- if any, for the years 1995, 1996,1997, 19981999,1999-2000 and 2000-2001 to the Registered Office of the company at their earliest, for payment in lieu thereof. No Claim shall lie against the company or the said Fund in respect of individual amounts which remain unclaimed and unpaid for a period of seven years from the date of payment and no payment shall be made in respect of any such claims.

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MMIDHUNSERI TEA & INDUSTRIES LIMITED DIRECTORS' REPORT

We have pleasure in presenting our Eighty-sixth Annual Report together with the Audited Accounts for the year ended 31st March, 2002 : FINANCIAL RESULTS : For the year ended 31.03.2002 Gross Profit Less : Depreciation (Net) Provision for Taxation (Net) Net Profit for the year Add: Debenture Redemption Reserve written back Add : Provision for dividend written back Add : Balance Brought Forward The Directors recommend this amount to be appropriated as under : Transfer to General Reserve Transfer to Debenture Redemption Reserve Proposed Dividend Tax on Dividend Balance Carried Forward (Rs. in lacs) 374.71 163.94 59.63 151.14 250.00 0.87 215.49 617.50 278.26 69.84 269.40 For the year ended 31.03.2001 (Rs. in lacs) 824.61 158.60 260.45 405.56 7.73 439.18 846.47 415.54 100.00 104.75 10.69 215.49

DIVIDEND : The Directors recommend the payment of dividend @ 10% i.e. Re. 17- per share for the year ended 31st March, 2002. OPERATIONS : The total tea manufacturing & sales during the year under review has been 7.5 & 7.8 million kg as against 7.7 & 7.6 million kg respectively in the previous year. Although the sale of tea quantitatively was more in comparison with the previous year, the realisation being lower, resulted in reduced profitibility for the year under review. The performance of the company's packaging division at Jaipur met with our expectation. The company has already initiated necessary steps for improving the quality of its tea manufactured by it. This is expected to result in better realisation proceeds. The company maintained its efforts for improving the brand image of its product and also for expanding the market share. Efforts are also being made for launching some new/updated brands in the market. ACQUISITION : The Directors are pleased to inform, that, your company acquired 50% ownership of Malbhog Baruah Estates Pvt. Ltd., a company having two tea estates in Assam viz. Madhuting Tea Estate and Kathalguri Tea Estate. The total area under tea plantation is about 437.23 hectares. The annual production of tea from the two estates is expected to be around 7 lac kg including about 1 lac kg of orthodox variety. The estates being located close to your company's tea estates will facilitate better management and control over it. PROJECT: The company's new project viz., South Asian Petrochem Ltd., a hundred percent E.O.U. petrochemical project under technical and financial collaboration with Zimmer AG of Germany, a world leader in polyester technology, is progressing as per schedule. With the allotment of equity shares by M/s. South Asian Petrochem Ltd. to their Co-promoters and The West Bengal Industrial Development Corporation Ltd. on 18th December, 2001, the said company ceased to be a subsidiary of your company with effect from that date. Consequent to the public issue of M/s. South Asian Petrochem Ltd., your company was allotted 25,95,000, 14% fully Convertible Debentures of Rs. 100/- each, which will be converted to 2,59,50,000 equity shares of Rs. 10/- each w.e.f. 18th December, 2003.

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DHUNSERI TEA & INDUSTRIES LIMITED DIRECTORS' REPORT (Contd.)

AUDITORS' REPORT : The notes to the accounts referred to in the Auditors' Report are self-explanatory. PARTICULARS OF EMPLOYEES : The provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies {Particulars of Employees) Rules, 1975 is not attracted and hence no statement is being enclosed. PARTICULARS REGARDING ENERGY ETC. : The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo are attached and form part of this report. DIRECTORS : Sri S. L. Dhanuka and Sri B. D. Beriwala retire by rotation and being eligible offer themselves for re-appointment. The information on the particulars of directors seeking re-appointment as required under Clause 49 of the Listing Agreement have been given under Corporate Governance of this report. DIRECTORS' RESPONSIBILITY STATEMENT : Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed : (i) (ii) that in the preparation of the annual accounts for the financial year ended 31st March, 2002, the applicable accounting standards have been followed ; that they have selected such accounting policies and applied them consistently and made judgements and estimates that were 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 profit of the company for the year ended on that date ;

(iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities ; (iv) that they have prepared the annual accounts for the financial year ended 31st March, 2002 on a 'going concern' basis.

REPORT ON CORPORATE GOVERNANCE :

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance and Management Discussion and Analysts together with a certificate from the Company's Auditors confirming compliance is set out in the Annexure forming part of this report. AUDITORS : M/s. Lodha & Co., C'iartered Accountants, retire and being eligible offer themselves for re-appointment. ACKNOWLEDGEMENT : Your Directors take this opportunity to express their grateful appreciation for the excellent assistance and cooperation received from the Financial Institutions and Consortium of Commercial Banks and other authorities. Your Directors also thank all the employees of the company for their valuable service and support during the year.

S. L. DHANUKA P. L. AGARWAL S. R. DAGA Kolkata, 24th June, 2002 C. K. DHANUKA

Chairman Directors Mg. Director

(Note : Sri B. D. Beriwala being away could not attend the meeting and hence has not signed this Report and accompanying Accounts.)

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DHUNSERI TEA & INDUSTRIES LIMITED

Annexure to the Directors' Report

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO.
Pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. FORM A CONSERVATION OF ENERGY Current year Previous year ended 31.03.2002 ended 31.03.2001 A. POWER & FUEL CONSUMPTION 1. Electricity a) Purchased Units (lakhs KWH) 32.88 34.92 Total Amount (Rs. lakhs) 156.26 157.21 Rate / Unit (Rs. / KWH) 4.75 4.50 b) Own Generation i) Through Diesel Generator Units (lakhs KWH) 12.31 9.60 Units per Ltr. of Diesel Oil 3.25 2.73 Cost / Unit (Rs. / KWH) 5.25 5.43 ii) Through Gas Generator Units (lakhs KWH) 19.60 77.57 Units per cu.m of Gas 4.39 4,69 Cost / Unit (Rs. / KWH) 0.48 0.43

2.

Coal
Quantity (Tonne) Total Cost (Rs. lakhs) Average Rate (Rs. / Tonne) Furnace Oil Quantity (lakhs Ltrs.) Total Cost (Rs. lakhs) Average Rate (Rs../ Ltr.) 2400.50 37.33 1555.21 0.33 4.22 12.71 2620.24 40.46 1544.31 0.53 6.22 11.75

3.

4.

Gas

Quantity (lakhs Cu.m) 31.17 33.46 Total Cost (Rs. lakhs) 64.39 63.67 Average Rate (Rs. / Cu.m) 2.07 1.90 B. CONSUMPTION PER UNIT OF PRODUCTION Product-Tea Tea Produced (lakh kgs.) 75.22 77.41 Electricity (KWH) 0.86 0.80 Furnace Oil (Ltr.) Coal (Kg.) 0.32 0.33 Gas (Cu.m) 0.41 0.42 RESEARCH AND DEVELOPMENT (R & D) The Company has no R & D unit. It subscribes regularly to Tea Research Association which does R & D work for Tea Industry. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 1. Efforts in brief made towards technology absorption, adaptation and innovation : Indigenously developed technologies for the improvement of producion both in field and factory were adopted, required modifications and innovations were done. 2. Benefits derived as a result of the above efforts, e.g. product improvement, Import substitution, etc. : Higher yield, reduction of cost of production and improvement in quality of product. 3. Imported Technology : Nil

FOREIGN EXCHANGE EARNINGS AND OUTGO

Earnings & Outgo of Foreign Exchange as detailed in Notes and in Schedule 18 to the Accounts were as under: Foreign Exchange Earnings : Rs. Nil (Previous year Rs. Nil) Foreign Exchange Outgo : Rs. 23.37 lacs (Previous year Rs. 1.25 lacs)

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DHUNSERI TEA & INDUSTRIES LIMITED I

Report on Corporate Governance

1.

2.

COMPANY'S PHILOSOPHY The Company believes in good corporate governance and will lay emphasis on transparency, accountability and integrity. The Company will endeavour to improve on these aspects on ongoing basis. BOARD OF DIRECTORS (Board) a) Composition of Board The Board comprises of three non-executive independent directors, a non-executive chairman and an executive director as Managing Director. The number of independent directors are more than one third the total strength of the Board. During the year under review there has been no change in the Board of Directors of the company. b) Attendance of each Director at the Board Meetings and at the last AGM and other Directorships / Committee Memberships held During the year under review the Board met five times on the following dates : 12th June, 2001 ; 31st July, 2001 ; 9th November, 2001 ; 30th January, 2002 and 6th March, 2002. The attendance and number of other directorship/committee membership of each Director is given below :
Name of Director Category of Directorship

No. of Board Meetings attended

5 5 5 2 5

Whether attended last AGM on 20.09.2001

No

No, of other Directorships

Other Committee Memberships

Member Chairman

Mr. S. L. Dhanuka

Non-Executive Chairman / Promoter

Mr. P. L. Agarwal Mr. S. R. Daga Mr. B. D. Beriwala Mr. C. K. Dhanuka *

Non-Executive Independent Non-Executive Independent Non-Executive Independent Executive Director / Promoter

Yes Yes
Yes Yes

12* 11 4

_ 4 3

2 1 1

3 13

Includes 1 company in which Chairman and Managing Director, 10 companies in which Chairman and Director and 1 company in which Director. ** Includes 1 company in which Vice-Chairman and 12 companies in which Director.

Remuneration of Directors, sitting fees, salary, perquisites and commissions Details of remuneration paid/payable to Directors :
Name of Director Sitting fees paid For Board Meetings Mr. S. L. Dhanuka * Chairman Mr. P. L. Agarwal Mr. S. R. Daga Mr. B. D. Beriwala Mr. C. K. Dhanuka * Managing Director 2500 2500 2500 1000 Nil For Committee Meetings
Nil

(in Rupees)
Total

Salaries & Perquisites

Nil

Commission

Nil

2500 4500 4500 1500 518147

2000 2000 500 Nil

Nil Nil Nil 518147

Nil Nil Nil

Nil

* Mr. C. K. Dhanuka, Managing Director is a relative of Mr. S. L. Dhanuka, Director. Mr. C. K. Dhanuka was re-appointed as Managing Director of the company for a period of five years with effect from 1st January, 2000.

Audit Committee The Audit Committee constituted by the Board on 31st January, 2001 comprises of (four) 4 member directors, of which three are independent non-executive directors namely, Mr. P. L. Agarwal, Chairman, Mr. S. R. Daga and Mr. B. D. Beriwala alongwith the Managing Director Mr. C. K. Dhanuka as an Executive Director. The constitution of the Audit Committee also meets with the requirements of Section 292A of the Companies Act, 1956 as introduced by the Companies (Amendment) Act, 2000.

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DHUNSERI TEA & INDUSTRIES LIMITED The terms of reference specified by the Board to the Audit Committee are as contained under Clause 49 of the Listing Agreement. The Audit Committee met thrice during the year on 12th June, 2001 ; 9th November, 2001 and 30th January, 2002. All the members of the Audit Committee attended these meetings except Mr. B. D. Beriwala who attended one meeting. Remuneration Committee The Board may, if it considers expedient constitute a Remuneration Committee. Shareholders / Investors Grievance Committee The shareholders / Investors Grievance Committee constituted on 31st July, 2001 comprises of four (4) member directors, of which three are independent non-executive directors namely, Mr. P. L. Agarwal as Chairman, Mr. S. R. Daga and Mr. B. D. Beriwala along with the Managing Director Mr. C. K. Dhanuka as an Executive Director. Mr. R. Mahadevan, Company Secretary is the Compliance Officer of the company. The committee deals with matters relating to shareholders / investors grievances viz., transfer of shares, nonreceipt of balance sheet, non-receipt of declared dividend etc. The committee met once during the year under review on 9.11.2001. All the members of the committee attended this meeting except Mr. B. D. Beriwala. During the year 326 complaints were received from shareholders and investors. All the complaints have been resolved to the satisfaction of the complainants. All valid requests for share transfer received during the year have been acted upon by the company and no such transfer is pending. 6.1 General Body Meetings a) The last three annual general meetings of the company were held as under:Year 2000-2001 Location Kala Kunj Sangit Kalamandir Trust 48, Shakespeare Sarani, Kolkata-700 017 same as above same as above Date 20.09.2001 Time

11.00 a.m

1999-2000 1998-1999 (15 months)

12.09.2000 14.09.1999

11. 00 a.m.

3.00 p.m.

b) No special resolution were put through postal ballot last year. c) No polls are proposed to be conducted through postal ballot this year. 6.2 Information about Directors seeking re-appointment a) Mr. S. L. Dhanuka is the Chairman of the Board of Directors of the company. Mr. S. L. Dhanuka is a well established industrialist having over four decades of industrial experience. He took over control of Dhunseri Tea & Industries Ltd. from erstwhile James Finlay & Co. in 1955. He was appointed as a Director of the company w.e.f. 14th September, 1955 and as Managing Director with effect from 1st January, 1957 which post he continued to occupy till 1980. Thereafter he became the non-executive Chairman from 1980 onwards. His wide knowledge and experience of the tea industry have been of great assistance to the company and his active participation at the meetings of the Board have been very useful and effective. b) Mr. B. D. Beriwala is one of the senior members of the board of directors of the company. He was appointed as a director of the company on 21 st February, 1974 and has since then, been associated as a director of the company. His valuable opinions and suggestions and active participation at the Board and Committee meetings have been greatly beneficial to the company. 6.3 Particulars of Directorship of other companies and Membership of other Committees of the Directors of the company Details as per separate annexure attached. Disclosures There are no materially significant related party transactions made by the company with its Promoters, Directors or Management, their subsidiaries or relatives etc. that may have potential conflict with the interests of the company at large.

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DHUNSERI TEA & INDUSTRIES LIMITED

Transaction with related parties are disclosed in Note No. 13 of Schedule 18 to the Accounts in the Annual Report. During the last three years, there were no strictures or penalties imposed by either SEBI or the Stock Exchanges or any statutory authority for non-compliance of any matter related to the capital markets. 8. Means of Communication The unaudited financial results of the company for each quarter is placed before the Board of Directors in the last week of the succeeding month and is usually published in Business Standard (Kolkata & Mumbai). These results are also being hoisted in the company's website www.dhunseritea.com. The unaudited financial results for half year ended 30th September, 2001 was considered and approved by the Board at the meeting held on 9th November, 2001 and the report on limited review of financial results for half year ended 30th September, 2001 was obtained from the Auditors of the company and filed with the Stock Exchanges. 9. Management Discussions and Analysis Report This forms part of the Annual Report. 10. Shareholders' Information a) Annual General Meeting : Friday, 20th September, 2002 at 11.00 a.m. at Kalakunj, 48, Shakespeare Sarani, Kolkata-700 017 b) Book Closure : The Register of Members and Share Transfer Register will remain closed from Thursday, 5th September, 2002 to Friday, 20th September, 2002 (both days inclusive) on account of annual general meeting and dividend payment. c) Dividend Payment: On or after 20th September, 2002. d) Registered Office : "Dhunseri House", 4A, Woodburn Park, Kolkata-700 020 Ph. No. 280-1950 {six lines) Fax No. 91 33 2408995 e.mail : dtil@vsnl.com e) Listing on Stock Exchanges : Kolkata, Mumbai and Guwahati Exchanges. The Company has paid the listing fees for the year 2001-2002. f) i) Exchange Stock Code : Kolkata14014 Mumbai23736 ii) Demat ISIN Number for NSDL & CDSL : INE 477B01010 g) Stock Market price data for the year 2001-2002 : Stock Exchange Year 2 J01 -2002 High April May June July August September October November December January February March 20.40 20.90
22.00 __ 17.00

Kolkata Low 18.00 19.40

19.40 _ 15.00

Mumbai High
19.75

BSE Sensex Low High 3605.01 3742.07 3557.64

3453.99

Low 3183.77 3494.48 3318.67

3251.53

16.65

17.70 18.50
18.00

16.50 16.80
16.50

15.00 15.40 16.10

15.00 15.40 16.00

16.00 16.90 17.70 16.00 16.90

14.50 16.30 16.20

14.30 14.35 15.00 14.75 13.90

12.50 13.05 12.50

3337.91 3231.60 3061.91 3322.77 3442.89

3437.78

3244.95 2600.12 2754.95 3013.94 3131.78

3246.15

3712.74 3690.27

3311.73 3459.08

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