Minutes of the Meeting of the Executive Committee of the Board held ...

TEA BOARD14, B.T.M. Sarani ( Brabourne Road ),Kolkata - 700 001.P.O. Box No. 2172 :: STD Code : 033 :::::::::::::::::::::::::::::::::::::::::::::::::::::: Tele-fax No. :: (033) 2221—5715.Tel. No : 2235-1411-12, 2235-1414-16 :: Website: www.teaboard.gov.in :: E-mail: secytboard@gmail.comRef. No.4(3)/Sectt/2012/ Date : 05-11-2012.To :1. Shri M.G.V.K. Bhanu, Chairman, Tea Board, Kolkata,2. Shri D.K.Sarmah,Vice Chairman,Tea Board,Lachit Nagar,P.O.Rupai Siding-786153,Tinsukia, Asaam,3. Shri Rajen Gohain, MP (Lok Sabha), Tilak Deka Road, Itachali, Nagaon-782 001, Assam,4. Shri D.P. Roy, MLA, Natun Para, P.O. & District Jalpaiguri, PIN-735 101, West Bengal,5. Shri C.S.Bedi,Chairman,Indian Tea Association,“Royal Exchange”,6,N.S.Road,Kolkata-700001,6. Shri J.L.Butail,Chairman,Kangra Tea Planters Association,Kangra-176059,Himachal Pradesh,7. Shri Shankar Malakar, MLA, Babupara, Siliguri-734 001, Darjeeling, West Bengal,8. Shri Koshy Baby,11/157,Puthuman,Calicut Road, Gudalur Bazar-643212, Nilgiris, T.N.,9. Shri Anshuman Kanoria, 10, Princep Street, Kolkata-700 072.Sir,Sub:- Minutes of the Meeting of the Executive Committee of the Boardheld in Kolkata, West Bengal on 25 th September, 2012.I am directed to forward herewith a copy of minutes of the meeting of theExecutive Committee of the Board held in Kolkata, West Bengal on 25 th September, 2012.In case you have any comments to offer on the minutes, please communicatethe same by 20 th November, 2012, to this office.Yours faithfully,Enclo: As stated.Copy forwarded to:Sd/-( Kaushik Halder )Secretary.1. The Secretary to the Govt. of India, Ministry of Commerce & Industry, Deptt. of Commerce,Udyog Bhawan, New Delhi – 110 011.2. The Addl. Secretary to the Govt. of India, Ministry of Commerce & Industry, Deptt. ofCommerce, Udyog Bhawan, New Delhi – 110 011.3. The Addl. Secretary & Financial Adviser to the Govt. of India, Ministry of Commerce &Industry, Udyog Bhawan, New Delhi – 110 011.4. The Director(Plantation) to the Govt. of India, Ministry of Commerce & Industry, Plantation(A)Section, Udyog Bhawan, New Delhi – 110 011.5. All Heads of the Board in H.O./Regional/Sub-Regional Offices and DTPs’ abroad.[ By E-mail & by Post ]6. Board’s Website [ www.teaboard.gov.in ]Sd/-Secretary.

MINUTES OF THE MEETING OF EXECUTIVE COMMITTEE OF THE BOARD HELD INKOLKATA, WEST BENGAL ON 25 th SEPTEMBER, 2012.Present1. Shri M.G.V.K. Bhanu, Chairman, Tea Board, Kolkata,2. Shri D.K. Sarmah, Vice Chairman, Tea Board3. Shri Rajen Gohain, MP (Lok Sabha), Tilak Deka Road, Itachali, Nagaon-782 001, Assam,4. Shri D.P. Roy, MLA, Natun Para, P.O. & District Jalpaiguri, PIN-735 101, West Bengal,5. Shri C.S.Bedi,Chairman,Indian Tea Association,“Royal Exchange”,6,N.S.Road,Kolkata-700001,6. Shri J.L.Butail,Chairman,Kangra Tea Planters Association,Kangra-176059,Himachal Pradesh,7. Shri Shankar Malakar, MLA, Babupara, Siliguri-734 001, Darjeeling, West Bengal,8. Shri Koshy Baby,11/157, Puthuman,Calicut Road, Gudalur Bazar-643212, Nilgiris, T.N.,9. Shri Anshuman Kanoria, 10, Princep Street, Kolkata-700 072.Chairman welcomed the members to the meeting.Item No.1To confirm the minutes of the Meeting of the Executive Committee of theBoard held at Kumarakkom, Kerala on 22 nd June, 2012.Secretary said that the minutes of the meeting of the Executive Committee of theBoard held at Kumarakkam, Kerala on 22 nd June, 2012, were circulated to allmembers of the Executive Committee of the Board vide this Office CircularNo.4(2)/Sectt/2012/2439 dated 17 th July, 2012. No comments have since beenreceived by this office from any members. The minutes could be confirmed, if agreed to.The Executive Committee confirmed the minutes as circulated.Item No.2To note the action taken by the office on the main decision/conclusionreached by the Executive Committee at its meeting held atKumarakkom, Kerala on 22 nd June, 2012.Secretary explained the action taken by the office on the maindecisions/conclusions reached at its meeting held at Kumarakkam, Kerala on 22 nd June,2012.Chairman said that earlier it was decided that a Regulatory Laboratory be set upin the Tea Board building in Kolkata. It was examined further. It was found that forsetting up such laboratory clearance from the Fire & Emergency Services of theGovernment of West Bengal and approval from the Kolkata Corporation and otherauthorities were required which were very difficult to obtain.On a rethinking of the issue, it was felt that such laboratory was not necessary.Already another laboratory under TRA is being established in Kolkata with funding fromthe Board. Board has its own laboratory at DTRD&C at Kurseong. One more laboratoryis being established at Siliguri at the Tea Park. TRA has its own laboratory at Tocklaiand the UPASI TRI has laboratories at Valparai and Coonoor. As such it might not beideal for the Board to duplicate the work in Kolkata.Shri Hiranya Bora said that the Board might think of establishing anotherlaboratory in Assam.

Chairman directed the Director(Research) to submit a status paper before the nextBoard meeting as to the need for another laboratory in Assam in consultation with theTRA. It may also be ascertained, if needed whether TRA would be able to set up andhandle the same. To a query of Shri Samir Roy, he was informed that infrastructure forsetting up of a laboratory at the Tea Park, Siliguri has already been completed andmachineries and equipments needed for the laboratory are being procured.Shri Samir Roy said that he wanted to meet the consultants from IIM while ontheir visit to North Bengal. He could not discuss with the consultants on issuespertaining to the Board as he was told by the consultants that they had no mandate tomeet the Board members on their visit to field offices. Chairman said since IIM has beenengaged on the organization structure and management of the Board and to suggestsuitable measures for improving the working efficiency of the Board. The issue waspurely administrative action. However, Board members are welcome to offer theirsuggestions to them. If need be a meeting with the different stake holders of the teaindustry could be arranged so that views of all interested persons are taken intoconsideration by the consultant while submitting their report and recommendations.The Executive Committee noted the action taken by the office on the maindecision/conclusion reached by the Executive Committee at its meeting held atKumarakkom, Kerala on 22 nd June, 2012.Item No. 3To ratify sanction of an expenditure of Rs.43.00 lakhs towardsengagement of M/s. Chunder Khator & Associates (CharteredAccountants Firm) for preparation of Board’s Accounting Manual andInternal AuditChairman said that the proposal was to engage a consultant to prepare anAccounting Manual for Tea Board including all its subordinate offices and offices abroadand to provide hand holding support for successful implementation of the manual over aperiod of one year. However, it was felt that the amount of Rs.43 lakhs charged by theconsultant for the work was exorbitant which needed thorough deliberation beforeapproval.FA&CAO that practically no comprehensive Accounting Manual was available withthe Board to cover all the transactions. There was standard internal-audit procedurewithin the organization. There were no guidelines as to how to treat various types oftransactions with the result transactions were interpreted differently at different timesand passed. CAG while auditing the Accounts of the Board had commented on this issueat several times. Accounts were drawn up differently and had to be changed on theinstructions of the audit on several occasion. Basically the Board’s accounts are drawnup on commercial accounting practice. However instructions under GFR have also to betaken into consideration. The consultants will consider all the transactions encounteredin the Board and will provide guidelines to handle them. A standard Accounting Manualwill be prepared by them not only for the Head Office but also for the Zonal, RegionalOffices and also offices abroad. They would prepare internal audit questionnaire, providea planning for Internal Audit and also provide manpower support for successfulimplementation of Accounting Manual over a period of one year. The idea was that withthe procedures laid down in the Manual, the consultant would help the Board to getatleast one audit report cleared by the CAG. All these are long drawn work. Theconsultant was selected after following the due procedure. Tenders were published in onenewspaper in Hindi, English and Bengali. Bids were received from 7 firms which wereevaluated by a Technical Committee and also Finance Committee and the L1 applicantwas selected. The rates of the successful candidate seemed to be on the higher side but

the task involved was also massive. Replying to the suggestion of Shri Hiranya Bora thatthe rates could be negotiated, FA&CAO informed that as per CVC guidelines nonegotiations could be done on the tender process is over.Shri Samir Roy wondered as to how the Accounts were prepared without theprocess of internal audit and proper guidelines. Chairman said that there were alwayssome guidelines available on various schemes but a printed Accounting Manual was notavailable.FA&CAO said that there was also problem of availability of competent and trainedmanpower. As per the R&P Rules of the Board, an officer appointed in the Accounts Wingneed not have accounting background. This had also complicated the issue. Theconsultant would also provide training to a core team of officers in the Finance Wing tohandle the situation.Shri Chandrakant said that it would be better a professional CharteredAccountant firm could be appointed for internal audit work of the Board. The internalaudit should be continuous process. Over a period of one year, such an Auditor couldpinpoint the defects in the procedure and provide guidelines which could then compiledinto a manual.Shri Sanjiv Sarin that Accounting procedures are complicated issue. A proceduralmanual was therefore necessary. However, training for one year may not serve thepurpose as an Accountant to become fully competent and to know the system andprocedure would take 4/5 years. Appointment of an Internal Audit with out set ofprocedure would not help the Board.Chairman said that for the organization study, IIM, Kolkata was being paid anamount of Rs.39.33 lakhs and the fees proposed for preparation of Accounting Manualand other activities were proposed at Rs.43 lakhs.FA&CAO reiterated that the Consultant would provide manpower for one yearmanagement of the system with the Manual prepared by them and get the accounts ofthat particular year audited by the CAG. They would also provide training to the staff tohandle each and every transaction based on the procedure laid down in the Manual.Shri C.S.Bedi said that mere appointment internal audit will not serve thepurpose. A well laid down procedure and guidelines in the form of a Manual wasessential. Based on such manual only the internal audit would be effective.Chairman wanted to know the specific view of the Board on the agenda. If it wasfelt that the rate agreed to for the Consultant was not acceptable, the contract could beterminated and fresh tender process could be taken up.Shri Rajen Gohain said that the contract could be modified to include onlypreparation of Accounting Manual and providing man power support for a period of oneyear for successful implementation of the Accounting Manual. This suggestion wasunanimously agreed to by the members.The Executive Committee recommended to the Board to approve the agenda withmodification that Consultant’s contract could be restricted to include onlypreparation of Accounting Manual and providing man power support for a period ofone year for successful implementation of the Accounting Manual.

Item No.4 To accord ex-post-facto sanction for an amount of Rs.5,19,323/- towardspayment to different tie-up hospitals for inpatient treatment of followingemployees and their dependent family members of the Board’s Kolkataoffice.The Executive Committee recommended to the Board to accord ex-post-factosanction for an amount of Rs.5,19,323/- (Rs.3,18,476/- + Rs.2,00,857/-) towardspayment to AMRI Hospital, Salt Lake for inpatient treatment of Shri Hriday Mullick, anemployee of Tea Board, Kolkata, now deceased, during the period from 14-1-12 to 29-2-12 and Desun Hospital & Heart Institute, Kolkata for inpatient treatment of Smt. RebaMitra (now deceased) mother of Shri Dipak Mitra, an employee of Tea Board, Kolkataduring the period 19-5-12 to 7-6-2012.Item No.5 To accord approval for extension of the tenure of Shri Amar Nath Das asTechnical Adviser (part time) of the Board for a period of 06(six) monthswith effect from 1 st November, 2012.Secretary explained the agenda note. He said that the service of Shri Amar NathDas was found to be satisfactory. Members suggested that the tenure could be extendedfor a period of two years. Chairman said that suggestion would be ideal.Shri D.P.Roy referred to the decision taken at the earlier meeting where extensionof service were granted to two officers for a period of two years and wanted to knowwhether there was any ceiling on age. Chairman informed that basically he was not infavour of granting such extension but difficulties being faced by the office to handlevarious issues were given due consideration.The requirements of the office had to be met and based on the necessities onlyextensions of service were granted. There were some lacunae on the R&P Rules of theBoard also. Certain posts had to be filled up primarily on promotion even if theincumbent would not be able to do justice to the work. Wherever possible he haddirected that direct recruitment be done to man the posts.The Executive Committee recommended to the Board to accord approval forextension of the tenure of Shri Amar Nath Das as Technical Adviser (part time) of theBoard for a period of two years with effect from 01 st November, 2012 under existingterms and conditions.Item No.6To accord approval for extension of the tenure of Smt. SuparnaChattopadhyay as Part Time Physician of the Board for another term of06(six) months from 1 st October, 2012.Secretary said that Dr.(Smt.) Suparna Chattopadhyay was engaged as PartTime Physician and her service was found to be useful for attending the ailing employeesand their family members including pensioners. Members suggested that in her casealso, the tenure could be extended for a period of 02(two) years.The Executive Committee recommended to the Board to accord accordapproval for extension of the tenure of Smt. Suparna Chattopadhyay as Part TimePhysician of the Board for another term of 02 (two) years from 01 st October, 2012,under the existing terms and conditions.

Item No.7To consider and approve of engaging ICWAI Management AccountingResearch Foundation, Kolkata for undertaking an exercise for updatingcost of production of tea for suitable revision of Price Sharing Formulaunder TMCO.DTD said that under the Tea Marketing (Control) Order, a price sharing formulahas been notified for ensuring equitable sharing of the net price realized for tea betweenthe BLFs and the small tea growers on the basis of study undertaken by the ICWAI in2007. Since then there had been considerable growth in area and production of smallholdongs and also the cost of production have gone up. It was therefore felt necessary torevision on the Price Sharing Formula to make it more relevant to the present context.The Board also needed a data base as to the cost of production under the big tea estatesector, estate factories, BLFs and also the small growers.Shri Samir Roy said that implementation aspect of the Price Sharing Formulashould also be looked into. A study should be undertaken as to how many factories hadimplemented the formula and paid the due price to the small growers. Chairman saidthat monitoring Committee has been set up for different areas and they were looking onthe implementation of the price sharing formula.Shri B.G.Chakraborty waned that ICWAI should also study and recommendminimum support price to the small growers. Chairman said that it would not be idealto consider MSP at the current situation. MSP could be announced only when there areprocurement mechanism available to purchase green tea leaf if other BLFs were notinterested to purchase the same. In the absence of such a machinery the MSP for tea leafcannot be announced.Shri Barkhakoty said that in the district of Golaghat there are large number ofsmall growers and the price sharing formula has been implemented there and workingsuccessfully.Dr.Ramu said that the proposed sample size for the small growers was inadequateand needed enlargement. He further said that ICWAI should interact with the Small TeaGrowers Associations for cost data etc. Chairman said that directives would be given tothem in this regard.The Executive Committee recommended to the Board to accord approval to theproposal for engaging ICWAI Management Accounting Research Foundation, Kolkata forundertaking an exercise for updating cost of production of tea needed for suitablerevision of Price Sharing Formula under TMCO and sanction Rs.23.50 lakhs towards thecost of the study.Item No.8 To accord ex-post- facto approval for the payment made to the StateGovernments of West Bengal and Assam for conducting survey of small teagrowers in Assam and North Bengal.Shri D.P.Roy said that the survey conducted by the Government of West Bengalwere not proper. Based on the survey they were supposed to issue NOC to the smallgrowers so that they become eligible for bank loan and other facilities. It has nothappened so far. Shri B.G.Chakraborty also endorsed the views of Shri D.P.Roy.Chairman said that the issue was discussed by the then Dy. Chairman with thePrincipal Secretary, Land and Land Reforms Department of the Government of WestBengal. Govt. of West Bengal was requested to expedite submission of the report.

Board was informed that the data collected were being uploaded and a report would beavailable soon. Chairman said that he would again meet the Principal Secretary of theLand and Land Reforms Department and discuss the issue. To a request of memberChairman assured that soft copy of the report would be made available to the members.DTD said that in the case of Assam, the survey was conducted initially in 14districts out of 27 districts covering nearly 67,000 growers. Assam Government wantedto undertake survey in the remaining 13 districts and also to update in the 14 districts tocover small growers, who have left out during the first phase of the survey.Dr. Ramu said that in the case of small growers in Nilgiris, similar survey shouldbe conducted and Tamil Nadu Government should be approached.ED, Coonoor said that the issue was taken up with the Revenue Department but itwas found that the records were very old dating back to 20 years. They were notinterested to update the records and issue new pattas. This had prompted the Board totake up the survey on its own. The applications have already been distributed. Copieshave been given to BLFs also to distribute amongst its suppliers. 29000 applicationsalong with photograph of individual grower have been received and the data are beinguploaded.The Executive Committee recommended to the Board to accord ex-post-factoapproval for the payment already made (Rs.60 lakhs) and approve further payments to bemade amounting to Rs.28.5 lakhs to the State Governments of West Bengal and Assamfor conducting survey work on small tea growers.Item No.9Issue of iron filings in tea.Chairman said that the agenda was included on a specific request of a Boardmember. He asked Director(Research) to make a presentation on the current status.Director (R) made a presentation on issue of iron filings in tea. It elaborated thepossible causes of iron filings in tea. The limit fixed by various countries like Kenya 40mg/kg, Sri Lanka 500 mg/kg, Egypt 150 mg/kg, Poland 100 mg/kg and Britishstandards 120 mg/kg.Till 2005, the Ministry of Health, Government of India vide an order dt. 5-4-1984had mentioned provisional limit of tolerance at 250 ppm. This order was withdrawn in2005. The latest FSSAI order dt. 2-8-12 states that iron filings should be absent in tea.The issue was discussed in the MOC&I, Govt. of India at a meeting chaired by AS(P) on13-7-2010. A Core Committee was constituted on 12-10-2010 to study the issue. TheCore Committee met thrice. The Committee recommended to reinstate the limit of ironfiling at 250 mg/kg which was withdrawn in 2005 and directed to continue monitoringdata in order to make data base for future use and industry should follow the guidelinescirculated by the Research Institutes and the GoI to minimize the occurrence of ironfilings. The Board has been continuously pursuing the matter with FSSAI, GoI bysubmitting iron filing monitoring data. Toxicological studies are being undertaken at theInstitute of Post Graduate Medical Education & Research, Kolkata and also NationalInstitute of Nutrition, Hyderabad.Chairman, ITA said that industry was make all efforts to make the tea free frommetallic contents by using magnets etc, there are certain iron particles which could notbe removed through magnets. In the case of CTC manufacture, if the iron particles areembedded into the granules could not be removed through magnets. In view of thecurrent notification by FSSAI, the manufacturers, sellers and dealers could beprosecuted. The issue needed to be taken up at the highest level in FSSAI.

Shri Sanjiv Sarin said that the issue should be viewed seriously.whether the Government could be moved to stay the operation of the order.He enquiredChairman said that the Board has no power to seek stay on the operation of theorder. The matter needed to be taken up with the FSSAI and the Ministry of Health. TheState Governments have to be addressed not to take any action on the issue till thematter is resolved. He suggested that a delegation from ITA, DTA, FAITTA could meet theofficials in the Commerce Ministry, Health Ministry and the DG of FSSAI to convincethem to revise the order. He agreed to participate in the delegation. Suitable date couldbe obtained for a meeting before the Puja Holidays.Shri Sanjiv Sarin further said that other than iron filings, rampant adulteration oftea with colouring agents are prevailing in certain markets particularly in Tamilnadu,Karnataka and Kerala. Efforts should be made to curb this menace in collaboration withthe Food Authorities of the State Governments.Chairman said that the Board had earlier taken up the issue with the StateGovernments and the Enforcement Authorities in the State had conducted raids inseveral places. Advertisements were also issue in leading news papers on the colouring toeducate the consumers. Efforts to curb the menace would be continued. He further saidit has been reported that even sugar is added while processing tea in order gain weight.Shri Koshi Baby said that nearly 10/11 factories in Nilgiris are doing such work. Thematter was brought to the attention of the authorities but no action has been taken.Chairman asked ED,Coonoor to take up the issue with the concerned authorities.The Executive Committee noted the position.Item No.AOB-I To consider and if found suitable nominate eminent personalities whohave contributed for the development of the tea industry for award ofPadma Shri.Chairman said that nobody from the tea fraternity has been given the Padma Shriaward and the Board had not nominated any name in the near future. The proposal wasto regularly consider such eligible candidates and recommend their names for theAwards. To begin with two names viz., Shri Swaraj Kumar Banerjee of Makaibari TeaEstate and Dr.T.C.Chaudhuri, ex-Director (Research), Tea Board may be considered bythe Board for nomination. On approval their names would be forwarded to the MOC&I fortheir recommendation.While members unanimously welcomed the suggestion, Shri D.P.Roy said that therecommendation of the State Government would be necessary. Chairman said that copyof the letter to MOC&I would be endorsed to the State Government for theirrecommendation.The Executive Committee recommended to the Board to nominate the names of ShriSwaraj Kumar Banerjee of Makaibari Tea Estate and Dr.T.C.Chaudhuri, ex-Director(Research), Tea Board for consideration of award of Padma Shri by the Government ofIndia.Item No.AOB-II To note the current tea availability and prices and the impact it has onthe industryChairman said that the agenda was put up on a specific request of a member.DTD said that the Board had compiled the data on production, import, export andretention of tea within the country and average price per kg, during the last 10 years i.e.,

from 2001 to 2011. The estimated domestic consumption based on the projections madeby IIM, Kolkata and ORG Marg has also been indicated. It may be seen from the datawhile production over the last 10 years had registered a compounded growth rate of1.47%, the domestic consumption as estimated through professional studies hadregistered a CGR of 2.43%. The gap in production and domestic demand led to a shortsupply which had a positive impact on prices. The current situation and medium termoutlook presented by the Secretariat of FAO-IGG had also indicated that after longperiods of sustained growth, black tea production declined in 2009 and demandexceeded supply and the trend continued in 2010 and 2011 also.Shri C.S.Bedi said that after a long gap the industry had witnessed someimprovement in prices. But the cost of production had also increased manifold duringthis period. However, the price raise was not such to cause a concern.Shri Sanjiv Sarin said that efforts should be made to match demand with supply.Chairman said that the current increase in prices were not high enough to have animpact on domestic demand. The price of tea per cup might be still insignificantly low ascompared to other ingredients. There was no cause to worry on the supply. The smallgrowers are coming up in big way all over the tea growing areas. They had planted tea inevery land available to them. These young plants would start giving yields in 2/3 yearstime and our production would jump to such level that there would be sufficient teaavailable to meet the domestic demand. We should continue our endeavour to producemore Orthodox teas so that enough exportable teas are available to sustain the industry.Shri Samir Roy said that the Board used to publish Tea Directory and TeaStatistics but the publications are not available now.DTD said that for the first time the Board had undertaken base line survey of thetea industry. Board’s own officers have conducted the survey. The data on the survey arebeing compiled. It covers all gamut of the tea industry like, details of the owners, theiraddress, area, production, productivity, number of workers, amenities provided to them,drinking water, toilets, schools, crèches, housing etc. Once this data is compiled, theBoard would be in a position to public the Tea Directory. This would also help the Boardto bring out the Tea Statistics.Shri Tarini Kanta Roy said that export during 2011 has been indicated at 192.87m.kgs against 222.02 m.kgs during 2010. During the current year, upto July put at 85m.kgs. Efforts should be made to improve our exports.Chairman said that exports are being reviewed.The Committee noted the position.There being no other item for discussion, the meeting ended with a vote of thanksto the Chair.Sd/-(Kaushik Halder)SecretarySd/-(M.G.V.K. Bhanu)Chairman.