Dear Members,

The Directors of the Company present their 35th Annual Report and Company's Audited Accounts for the year ended 31st March, 2018.

FINANCIAL SUMMARY/HIGHLIGHTS

The financial results for the year ended 31st March, 2018and the corresponding figures for the last year are as under:

(Amount in Rs. Lakhs)

RESERVES & SURPLUS

The Balance in Reserves & Surplus stands at Rs.8784.35 Lakhs (Previous year Rs. 9244.72 Lakhs).The Company has transferred Rs. Nil to General Reserve.

DIVIDEND

In view of the losses incurred by the Company, your Directors have not recommended any dividend for the financial year ended 31st March, 2018.

First year of implementation of Indian Accounting Standards

As mandated, the financial statements for the year ended on 31st March, 2018 have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The financial statements for the year ended on31st March, 2017 have been restated in accordance with Ind AS for comparative information.

OPERATIONS

Tea Division

During the year under review, your Company achieved a production of 21.88 lakh kgs of BlackTea as compared to 21.92 lakh kgs in the previous year. The performance of the Tea Division was better on account of improved demand for quality teas resulting in improved sales realization.

The average sale price for CTC tea in auction centre was marginally higher as compared to previous year. However due to focus on better quality teas, your estate has been able to realize significantly higher sales average of Rs. 20/- per kg .There has been an all round increase in wages, power and fuel and other input costs.

The new tea season has started off with good rainfall, however due to lower temperature growth has remained in check and our production in turn is similar as last year. There will be a big impact on account of increase in wages and other input costs which we hope to more than offset by better prices for quality teas.

TEXTILEDIVISION

PERFORMANCE AND REVIEW OF OPERATION

During the year under review, the Division has incurred loss before tax of Rs. 1356 lakhs against Rs. 1311 lakhs in the previous year. The Division has achieved turnover of Rs. 9128 lakhs against Rs.16179 lakhs in the previous year. The figures are not strictly comparable as the division had closed its spinning section during the year. The continued sluggish demand due to implementation of GST, higher power cost and retrenchment compensation have adversely affected the bottom line of the Division.

The division has closed its Spinning section comprising of 23,952 spindles and related equipment on account of negative contribution. The division has realized Rs. 20.40 crores from sale of machineries and expects to realize about Rs. 3.25 crores from remaining machineries. The division has utilized the sale proceeds for repayment of Term Loans worth Rs. 16.40 crores and by paying retrenchment compensation to 366 employees to the tune of Rs. 6.89 crores. The division has also released 32 staffs and officers of its spinning section.

Management thrust on greater efficiency, capacity utilization, value addition and product mix in processed fabric, declining interest cost and other cost control measures initiated by the management will boost the profitability of the division in the near future.

MODERNISATION AND PROSPECTS

With implementation of GST Act during the year it is expected that the Indian economy will grow at a faster pace and will have positive impact on country's GDP. The Indian economy is expected to keep growing by about 7-8% for next few years. Forecast of normal monsoon and good crop is expected to increase the rural demand of textile products. In view of this and various steps taken by the management, the Textile Division is expecting better performance in the coming years.

RECENT DEVELOPMENTS & FUTURE PLANS

Company property at Dholka, Gujarat

The land development work and provision of basic amenities is in progress. In all 20 plots would be available for sale and would be floated in the market.

The Company became a Subsidiary of Rydak Enterprises & Investments Limited

Rydak Enterprises & Investment Limited, (CIN: U15491WB1983PLC036235), Samrat Industrial Resources Limited (CIN: U51109WB1984PLC060627) and Eskay Udyog Limited (CIN:U51109WB1983PLC036039), Promoter group companies got amalgamated into Rydak Enterprises & Investment Limited as per the Scheme of Amalgamation duly sanctioned by the NCLT resulting in current holding of 5060870 equity shares which is 56.19% of the total Share Capital of the Company. As a result, the Company has become a subsidiary of Rydak Enterprises & Investment Limited.

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

There have been no other material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of the report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under SEBI (LODR) Regulations, 2015 is set out in the annexure forming part of the Annual Report marked as Annexure-"A".

CORPORATE GOVERNANCE REPORT

The Report on Corporate Governance in accordance with the SEBI (LODR) Regulations, 2015 approved by the Board together with a Certificate from Mr. H.M. Choraria, (CP No. 1499, Membership No. FCS 2398) of M/s H..M. Choraria & Co. Practising Company Secretaries of 14/2, Old China Bazar Street, 4th Floor, Room No. 401, Kolkata 700001, regarding compliance with the conditions of Corporate Governance are set out in the annexure forming part of the Annual Report marked as Annexure-"B"

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

EXTRACT OF THE ANNUAL RETURN

Extract of the Annual Return in Form No. MGT-9 is attached pursuant to Section 134(3) of the Companies Act, 2013 as Annexure-"C"

BOARD MEETINGS

During the year under review 6 meetings of the Board of Directors were held on 26th April, 2017,12th May, 2017, 29th July, 2017,14th September,2017,2nd December,2017and 10th February,2018.

Apart from meeting of the Board of Directors different committees met several times during financial year ended 31st March, 2018.

DIRECTORS'RESPONSIBILITY STATEMENT PURSUANT TO SECTION 134(3)(c) OF THECOMPANIES ACT, 2013

The Directors hereby confirm that -

a) in the preparation of the annual accounts for the Financial Year ended 31st March, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) they had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the company for that period;

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

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

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

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

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meeting respectively, have been duly followed by the Company.

DECLARATION BY INDEPENDENT DIRECTORS

Independent Directors namely, Mr. Golam Momen (DIN: 00402662), Mr. Dhirendra Kumar (DIN: 00153773), Mr. Abhijit Datta (DIN: 00790029) Mr. Navin Nayar (DIN: 00136057) and Mr. Ashutosh Bhagat (DIN: 00059842) have given declaration confirming that they comply with the requirements of Section 149(6) of the Companies Act, 2013.

DIRECTORS

Mr. Kailash Prasad Khandelwal (DIN: 00914834) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself, for re-appointment in compliance with the provisions of the Companies Act, 2013.

Mr. Golam Momen (DIN: 00402662), Mr. Dhirendra Kumar (DIN: 00153773), Mr. Abhijit Datta (DIN: 00790029) Independent Directors of the Company, are being re-appointed as Independent Directors for a further period of five consecutive years as per the provisions of Section 149 and other applicable provisions of Companies Act, 2013. The Board recommends their re-appointment as Independent Directors. Brief resume of the Directors, nature of their expertise in specific functional areas and details of their directorship and membership/ chairmanship of Board/ Committees, as stipulated under SEBI (LODR) Regulations, 2015 has been provided in the Explanatory Statement and Annexure to the Notice of the 35th AGM of the Company.

KEY MANAGERIAL PERSONNELS

The following persons are the Key Managerial Personnel’s (KMP) of the Company in compliance with the provisions of the Companies Act, 2013:

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

b) Mr. Kailash Prasad Khandelwal,(DIN:00914834), Whole-time Director

c) Mr. Atul Doshi, Chief Financial Officer

d) Mrs. Sunita Shah, Company Secretary

Remuneration and other details of the KMP's for the year ended 31st March, 2018 are mentioned in the Extracts of the Annual Return attached as Annexure 'C' and forms a part of this Report of the Directors.

NOMINATION & REMUNERATION POLICY

Pursuant to Section 178(3) of the Companies Act, 2013, Nomination and Remuneration Committee formulated the criteria for determining qualification, positive attributes and independence of a director. The Committee has also recommended to the Board a policy relating to the remuneration for directors, key managerial personnel and other employees.

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

BOARD EVALUATION

The Companies Act, 2013 states that formal evaluation needs to be done by the Board of its own performance and that of its Committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. SEBI (LODR) Regulations, 2015 vide Regulation 25(3) requires a meeting of Independent Directors to evaluate the performance of the Non Independent directors.

Accordingly, a meeting of Independent Directors was held on 10th February, 2018 wherein the performance of the non-independent directors, including the Chairman was evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate Governance Report section in this Annual Report. The Board approved the evaluation results as collated by the nomination and remuneration committee.

PUBLICDEPOSITS

During the year 2017-18, your Company did not accept/renew any deposits and as such, no amount of principal or interest was outstanding as on 31st March, 2018.

AUDITORS AND AUDITORS' REPORT

M/s Singhi & Co., (Firm Regn. No. 302049E) Chartered Accountants, were appointed as Statutory Auditors of the Company, to hold office fora period of5years from the conclusion of the 34th Annual General Meeting till the conclusion of the 39th Annual General Meeting of the Company.

The Company has received letter from the Auditors to the effect that their appointment, is within the prescribed limits under the Companies Act, 2013and that they are not disqualified.

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

SECRETARIAL AUDIT REPORT

A report made by Mr. H.M. Choraria, (CP No. 1499, Membership No. FCS 2398) of M/s H. M. Choraria & Co., Practising Company Secretaries of14/2,Old China Bazar Street,4th Floor, Room No. 401, Kolkata 700 001,pursuant to Section 204(1) of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure- "D" The report is free of any qualification, adverse remarks or disclaimer.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or provided any guarantees under Section 186(1)of the Companies Act, 2013. However, the details of Investments under Section 186(1) of the Companies Act, 2013 have been provided at Note No. 12 of the Financial Statements for the year ended 31st March, 2018.

PARTICULARS OF RELATED PARTY TRANSACTIONS

During the year there were no material related party transaction with promoters, the directors or the management, their subsidiaries or relatives etc. that may have a potential conflict with the interests of the Company. The Company has formulated a policy on Related Party Transactions. The link of the policy is : http://bengaltea.com/wp-content/uploads/2017/07/ BTFL_RELATED-PARTY-TRANSACTION-POLICY_8.11.2014.pdf.

All related party transactions entered during the Financial Year were in ordinary course of the business and on arm's length basis which have been provided in the Notes to the Accounts. No material related party transactions were entered during the Financial Year 2017-18 by your Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable to your Company.

COST AUDIT

In accordance with the provisions of Section 148 of the Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014 the Company is required to appoint Cost Auditors to audit the cost records of the applicable products of the Company relating to the Tea and Textile Division.

PARTICULARSOFCOST AUDITORS APPOINTED FORTHEFINANCIAL YEAR 2017-18

The Company has appointed the following Cost Auditors for Tea &Textile Division for the year ended 31st March, 2018:

PARTICULARS OF EMPLOYEES

The Company had no employee who were in receipt of more than Rs. 1.02 Crores per annum during the year ended 31st March, 2018 or of more than Rs. 8.50 Lakhs per month during any part thereof. However the information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1), 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been annexed as Annexure-"E".

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

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

RISK MANAGEMENT POLICY

As per requirement of Section 134(3)(n) of the Companies Act, 2013 the Board of Directors in its meeting held on 10th May, 2014 has approved the Risk Management Policy. As of now the Directors do not envisage any element of risk which may threaten the existence of the Company.

INTERNAL CONTROL SYSTEMS

Your Company has an adequate system of internal control procedures which is commensurate with the size and nature of business. Detailed procedural manuals are in place to ensure that all the assets are safeguarded, protected against losses and all transactions are authorized, recorded and reported correctly. The internal control systems of the Company are monitored and evaluated by internal auditors and their audit reports are periodically reviewed by the Audit Committee of the Board of Directors. The observations and comments of the Audit Committee are placed before the Board and suitable steps have been taken to strengthen the controls.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to Section 135 of the Companies Act, 2013, the Company has formed a CSR Committee and formulated a CSR Policy. The details of the same together with the CSR expenditure have been annexed in the prescribed format as Annexure- "G".

The average net profit for last three financial years to current F.Y. 2017-18was negative. Accordingly, the CSR expenditure for the current Financial Year was NIL. However, balance amount of CSR expenditure which remained unspent as on 31.03.2017 was spent in the current Financial Year with an additional amount of Rs. 1.35 lakhs due to project cost escalation.

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

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

Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 29th July, 2017 (date of last Annual General Meeting) on the Company's website (www.bengaltea.com) and also on the Ministry of Corporate Affairs' website. The dividend for the undernoted years, if unclaimed for seven years, will be transferred by the Company to IEPF:

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

161550 equity shares against 2775 folios corresponding to the dividend for the year ended on 31st March, 2009 which remained unclaimed for seven consecutive years have been transferred to Demat Account no. 1204720013676780 of IEPF Authority maintained with SBI CAP Securities Limited through Central Depository Services (India) Limited under IEPF RULES, 2017 after giving individual notice to concerned shareholders and advertisement in Newspapers. The Company has uploaded the details ofall shares transferred to Demat account of IEPF Authority as on 31st October, 2017 on the Company's website www.bengaltea.com and also on the Ministry of Corporate Affairs' website: www.mca.gov.in.

Again, please note that those shareholders whose dividend for the financial year 2010-11 (Final) has remained unpaid / unclaimed and therefore the corresponding shares of the face value of Rs 10/- each, are due to be transferred to Demat Account of IEPF Authority on 6th August, 2018. All such shareholders are requested to make an application to the Company / Registrar & Share Transfer Agents latest by 20th July, 2018with a request for claiming the unpaid dividend so that the shares are not transferred to IEPF.

Adhering to the various requirements set out in the Rules, the Company has communicated individually to the concerned shareholders whose shares are liable to be transferred to Demat Account of IEPF Authority at their last recorded addresses with the Company for taking appropriate action. The full details of such shareholders having unencashed dividends and shares due for transfer has been given on the website of the Company www.bengaltea.com.

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

None

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

The Company has in place Internal Complaints Committee for the Registered Office, Tea Division and Textile Division. The following is the summary of Sexual Harassment complaints received and disposed off during the year 2017-18:

No. of Complaints received : NIL

No. of Complaints Disposed off: NIL

ACKNOWLEDGEMENT

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

For and on behalf of the Board

Bengal Tea & Fabrics Ltd.

Sd/- Sd/-

ADARSH KANORIA KAILASH PRASAD KHANDELWAL

Place: Kolkata Managing Director Whole-time Director

Dated: 19th May,2018 DIN:00027290 DIN:00914834