Your Directors are pleased to present their Forty Second Annual Report together with the Audited Financial Statements Directors Report and Annexures for the year ended March 31 2019.
|1. Financial Highlights||Rs in Lakhs|
|Revenue from operations||35374.84||38331.36||35374.84||38331.36|
|Profit/(Loss) before Tax||(2408.95)||445.06||(2409.47)||444.77|
|Profit/(Loss) after Tax||(2408.95)||445.06||(2409.47)||444.77|
|Re-measurement of Gains/(Losses)||(103.67)||(312.00)||(103.67)||(312.00)|
|Total Comprehensive Income/(Loss)||(2512.62)||133.06||(2513.14)||132.77|
The Board of Directors has not recommended dividend for the year ended March 31 2019.
3. Transfer to Reserve
During the year under review the Company has not transferred any amount to the General reserve.
4. Material Changes and Commitments If Any Affecting the Financial Position of the Company
There are no Material changes and commitments affecting the financial position of the Company which have occurred between the end of the financialyear on March 31 2019 to which the financial statements relates and the date of signing of this report.
5. Change in the Nature of Business
During the year under review there was no change in the nature of the business.
During the year under review the Company has recorded revenue of Rs 353.74 crores from its operations as compared to Rs 383.31 crores for the previous year. The total revenue including other income for the FY 2018-19 was Rs 359.90 crores as compared to Rs 392.04 crores for the previous year. The floods during August 2018 affected the Tea and Rubber crops resulting in drastic drop in production volumes. The loss made by the Company for the FY 2018-19 was Rs 24.08 crore as compared to the profit ofRs 4.44 crore for the previous year.
The Tea harvested from own gardens during FY 2018-19 is at 9613 MT (11054 MT in the FY 2017-18). Bought leaf operations in tea for FY 2018-19 is at 3788 MT (4741 MT in FY 2017-18). Together with the Bought Operations the total production was 13401 MT as compared to the total production of 15795 MT in the FY 2017-18. For the year ended March 2019 the average price realized per kg of tea was Rs 125.40 as against Rs 122.09 realized during the Previous Year. Tea exported was 4431 MT as against 4051 MT exported last year.
The Rubber harvested from own gardens stood at 4922 MT during FY 2018-19 and is lower than 5815 MT achieved during FY 2017-18. Bought operations in Rubber for the FY 2018-19 are at 5127 MT which is lower than the 6184 MT of FY 2017-18. For the year ended March 2019 the average price realized per kg of rubber was Rs 144.70 as against Rs 142.69 realized during the previous year. Company could commence with Felling of rubber trees from February end. 140 hectares in Kumbazha Rubber Estate encroached by trespassers continue to remain untapped.
7. Legal Updates
Kerala Land Conservancy Act: W.P (C) No.33122 of 2014 and connected cases.
The High Court of Kerala by judgment dated 11.04.2018 allowed the Writ Petitions of HML and had set aside all actions initiated by the Special Officer to resume the properties belonging to the Company under the Kerala Land Conservancy Act. The State Government had preferred an Appeal before the Supreme Court of India challenging the judgment of the High Court. On 17.09.2018 the Supreme Court dismissed the Appeal filed by the Government and thus the judgment passed by the Division Bench of the High Court of the Kerala has become final. With regard to the proceedings initiated by the Special Officer against properties of the Company in Wayanad District as per directions in a Review Petition filed by the State Government in the High Court Of Kerala the Company fileddetailed objections along with supporting documents before the Special Officer on 16.10.2018 to establish not been any further action in this regard
8. Equity Share Capital
The paid up Equity Share Capital of the Company as on March 31 2019 was Rs 1845.43 Lakhs. There was no change in the share capital during the year under review .The equity shares of the Company are listed in the BSE Limited and the National Stock Exchange of India Limited. There was no Issue of equity shares with differential rights as to dividend voting or otherwise;
The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act 2013 and as such no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.
9. Particulars of Loans Guarantees or Investments
The Company has not given any Loans Guarantees Investments and Security as per the provisions of Section 186 of the Companies Act 2013 during the Financial Year ended March 31 2019.
10. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
Information with respect to conservation of energy technology absorption foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules 2014 is annexed to this Report (-Annexure A).
11. Corporate Governance
A separate Report on Corporate Governance (Annexure C) along with Additional Shareholder Information (Annexure D) as prescribed under the Listing Regulations executed with the Stock Exchanges is annexed as a part of this Report along with the practicing Company Secretary's Certificate.
12. Subsidiary Companies
As at March 31 2019 the Company has two wholly owned subsidiary companies namely Enchanting Plantations Limited (EPL) and Harmony Plantations Limited (HPL) and have been considered in the consolidation of financial statements.
As per sub section (3) of Section 129 of the Companies Act 2013 read with Rule 5 of the Companies (Accounts) Rules 2014 a statement containing salient features of the financial statements and performance of the Company's subsidiaries for the year ended March 31 2019 is included as per the prescribed format in this Annual Report. The Annual Accounts of these subsidiaries are uploaded on the website of the Company at www.harrisonsmalayalam.com. The Annual Accounts of these subsidiaries and the related detailed information will be made available to any Member of the Company seeking such information at any point of time and are also available for inspection by any Member at the Registered Office of the Company.
The consolidated performance of the Company and its subsidiaries has been referred to wherever required and salient features of subsidiaries are annexed as annexure to the Annual Report in Form AOC-1
13. Consolidated Financial Statements
In accordance with Section 129(3) of the companies Act 2013 and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 entered into with the Stock Exchanges the Consolidated Financial Statements of the Company including the financial details of all the subsidiary companies of the Company forms part of this Annual Report. The Consolidated Financial Statements have been prepared in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India. There were no revisions in the financial statements;
14. Directors and Key Managerial Personnel
As on March 31 2019 Mr Venkitraman Anand & Mr. Cherian M George WholeTime Directors Mr. Ravi. A CFO (SBU-A) Mr V. Venugopal Manager of the Company and Mr Binu Thomas Company Secretary cum Compliance Officer are the Key Managerial Personnel of the Company.
Changes in Directors & Key Managerial Personnel
During the year under review Mr. Venkitraman Anand(Din: 07446834) was appointed as Whole Time Director and Mr.N Dharmaraj (Din: 00912004) was appointed as Whole Time Director of the Company by the Members of the Company by passing of Ordinary Resolution by way of Postal Ballot and E-voting on February 1 2019. During the year under review Mr. Cherian M George (Din: 07916123) was appointed as Whole Time Director by passing of Ordinary Resolution by way of Postal Ballot and E-voting on April 152019. Mr V. Venugopal was reappointed as Manager of the Company in the last Annual General Meeting held on September 262018 as Manager of the Company w.e.f August 14 2018 to August 13 2019.
Mr.P Rajagopalan (Din: 02817068)and Ms Kusum Dadoo (Din: 06967827)was appointed as Independent Directors of the Company by the Members of the Company by passing of Ordinary Resolution by way of Postal Ballot and E-voting on April 152019.
As per provisions of Sections 149 150 152 178 and any other applicable provisions of the Act and the Rules made thereunder your Directors are seeking re-appointment of Mr. Golam Momen (Din : 00402662)and Mr. J M Kothary (Din:00015254) whose current period of office is expiring on September 30 2019 as an Independent Director of the Company not liable to retire by rotation for a second term of 5 (five) consecutive years with effect from October 12019
In terms of Regulation 17(1A) of the Listing Regulations as amended and as duly recommended by the Nomination and Remuneration Committee the appointment of Mr. P Rajagopalan who is currently at the age of 72 (seventy-two) years is proposed by the Board of Directors seeking Members' approval by way of Special Resolution for his continuation as a Non-Executive Independent Directorevenafterattainingageof75(seventy-five)years as an Independent Director not liable to retire by rotation till expiry of his extant term upto February 12 2024
Mr. Kaushik Roy (DIN: 06513489) retires by rotation at the forthcoming AGM and being eligible offers himself for re-appointment.
Details of the proposal of appointment/re-appointment/continuation of the afore-mentioned Directors are mentioned in the Explanatory Statement u/s 102 of the Act in the Notice of the 42nd AGM of the Company.
Ms. Surbhi Singhi (DIN: 03275338) Non Executive independent Director resigned from the Board with effect from December 03 2018 due to other professional obligation and commitments. Mr.Sachin Nandgaonkar (Din: 03410739 ) Non Executive Director resigned from directorship with effect February 13 2019 due to personal reasons. Mr.Haigreve Khaitan (Din: 00005290) Non Executive independent Director resigned from the Board with effect from June 12 2019 due to other professional obligation and commitments.Hehavealsoconfirmed that there is no other material reason other than those provided.
Meetings of the Board of Directors
During the year under review 5 meetings of the Board of Directors were held. The company has complied with all the applicable Secretarial Standards.
Declaration by Independent Directors
The Independent Directors have submitted their declaration of independence as required pursuant to sub-section (7) of Section 149 of the Companies Act 2013 stating that they meet the criteria of independence as provided in sub-section (6) of Section 149. The details of familiarization programmes imparted to independent directors can be accessed at the website of the company at www.harrisonsmalayalm.com
a. Board Evaluation
The Board has carried out an annual evaluation of its own performance the directors and also committees of the Board based on the guidelines formulated by the Nomination & Remuneration Committee. Board composition quality and timely flow of information frequency of meetings and level of participation in discussions were some of the parameters considered during the evaluation process. Further the Independent Directors of the Company met once during the year to review the performance of the Non-executive directors Chairman of the Company and performance of the Board as a whole.
b. Policy on Remuneration to Directors KMP and Senior Management Personnel
The Board based on the recommendation of the Nomination and Remuneration Committee has formulated a policy on remuneration of Directors Key Managerial Personnel and Senior Management of the Company. The policy covers the appointment including criteria for determining qualification positive attributes independence and remuneration of its Directors Key Managerial Personnel and Senior Management Personnel. The Nomination and Remuneration Policy is annexed as Annexure E to this report. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries; Non-Executive Independent Directors The criteria of making payments to non-executive directors can be accessed on the website of the Company at http://www. harrisonsmalayalam.com
Walker Chandiok & Co LLPKochi Chartered Accountants Chartered Accountants (Firm's Registration No. 001076N/ N500013) were appointed as the Statutory Auditors of the Company to hold office for a period of fiveyears from the conclusion of the fortieth Annual General Meeting (AGM). until the conclusion of the forty fifth Annual General Meeting. The said appointment of the Statutory Auditors was required to be ratified at every Annual General Meeting. However pursuant to the amendment in the proviso to Section 139 which has been made effective on May 07 2018 the requirement of ratification of appointment of Statutory Auditors at every Annual General Meeting has been omitted. In view of such omission of proviso permission of shareholders was sought in the last AGM to continue their appointment without ratification till the completion of their m.
M/s. Shome & Banerjee Cost Accountants 5A Nurulla Doctor Lane (West Range) 2nd Floor Kolkata - 700 017 (Firm registration No.000001) were appointed as cost auditor of the company to conduct audit of the cost records for the FY 2018-19. Cost Audit Report and the Compliance Report for the year ended March 31 2019 were filed with the Central Government within the due date. Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act 2013 is required by the Company and accordingly such accounts and records are made and maintained
In terms of the provisions of Section 204 of the Act and Rule9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board had appointed M/s. SVJS & Associates Practicing Company Secretaries as Secretarial Auditors to conduct Secretarial Audit for the FY 2018-19. The Secretarial Audit Report in Form MR-3 is annexed to this report as Annexure `F'.
QUALIFICATION RESERVATION OR ADVERSE REMARK IN THE AUDIT REPORTS
There is no qualification reservation or adverse remark made by the Statutory and Cost Auditors in their Audit Reports issued by them. With regard to Observation/remark contained in the Secretarial Auditors' Report your Directors' wish to inform that Dir-12 and MR-1 in respect of Whole Time Director will be filed as required by the provisions of the Companies Act rules thereunder. There were no frauds reported by the auditors under provisions of the Companies Act 2013.
16. Significant and material Orders passed by the Regulators/Courts if any:
There are no significant or material orders passed by the Regulators concern status of your Company and its future operations.
17. Awards and Achievements
During the year under review the Company Received CII-SR EHS Excellence Awards 2018 with 3 star Rating for Best environment Health and Safety practices at Nagamallay KumbazhaMooply Moongalaar Wallardie Pattumallay Lockhart and Wentworth Estates. Upper Surianalle Tea factory has bagged the Kerala state Safety Award 2018 in category III- Medium factories. Wentworth & Lockhart Estates won Tea Golden Leaf India Awards.
During the year under review the Company was recognized as a Great Place to Work Certified' by the Great Place to Work Organization. HML has also bagged the first runner up National award for outstanding achievement for Industrial relations in a review conducted by All India organization of Employers ( AIOE an allied body of FICCI ) New Delhi.
18. Management Discussion and Analysis
Management Discussion and Analysis in terms of Regulation 34 of SEBI (Listing Agreement and Disclosure Requirements) Regulations 2015 forms a part of this Report and is annexed as Annexure `A' to this Report. Key Financial Ratios for the financial year ended 31st March 2019 are provided in the Management Discussion and Analysis Report given in `Annexure-A' which is annexed hereto and forms a part of the Board's Report.
19. Directors' Responsibility Statement
In terms of clause (c) of sub-section (3) and sub-section (5) of Section 134 of the Companies Act 2013 the Directors of the Company hereby state and confirm that:
(i) In the preparation of annual accounts for the FY ended March 31 2019 the applicable accounting standards have been followed along with proper explanation relating to material departures if any;
(ii) we have selected such accounting policies and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at March 31 2019 and of the loss for the period from April 1 2018 to March 31 2019;
(iii) we had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors had prepared the annual accounts for the FY ended March 31 2019 on a going concern basis;
(v) Directors have laid down internal financial controls to be followed by the Company and are adequate and are operating effectively; and
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
21. Industrial Relations
Plantation is highly labour intensive and your Company considers people as its biggest assets. The welfare and wellbeing of workers are monitored closely. Industrial relations remained cordial throughout the year
22. Internal Control Systems & their Adequacy
Notes on Internal financial control and its adequacy forms part of Management Discussion and Analysis Report.
23. Other Disclosure: Extract of annual return
Extract of annual return as per Section 92 (3) of the Companies Act 2013 and Rules framed thereunder is attached as annexure `G' to this report and also posted on website of company at https://www.harrisonsmalayalam.com/investor_info.htm
Whistle Blower Policy / Vigil Mechanism
Pursuant to Section 177 of the Companies Act 2013 the rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 with the Stock Exchanges the Company has established a Whistle Blower Policy (Vigil Mechanism) for directors and employees to report genuine concerns about any instance of any irregularity unethical practice and/or misconduct. The policy has been uploaded on the Company's website https://www.harrisonsmalayalam.com/investor_info.htm
Corporate Social Responsibility
In accordance with Section 135 of the Act and the rules made thereunder the Company has formulated a Corporate Social Responsibility Policy. However the company does not have any three year average profit and hence not required to incur any expenditure on Corporate Social Responsibility under the provisions of the Act. The members of the Committee are Mr. Golam Momen Mr. P Rajagopalan and Mr. N Dharmaraj. The details of CSR Committee is detailed in Corporate Governance Report. The CSR Policy can be accessed at the website of the Company at link https://www.harrisonsmalayalam.com/investor_info.htm
Anti-Sexual Harassment Policy
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal) Act 2013 covering all employees of the Company. Internal complaints committee set up for the purpose did not receive any complaint for redressal during the year and there are no complaints which were required to be disposed off or pending as at the end of the financial year. Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013
Committees of the Board
Currently the Board has five committees: Audit Committee Nomination and Remuneration Committee Stakeholders Relationship Committee Corporate Social Responsibility Committee and the Risk Management Committee. A detailed note on the composition of the Board and its Committees is provided in the Corporate Governance Report Section of this Report There have been no situations where the Board has not accepted any recommendation of the Audit Committee.
Risk Management is the process of identification assessment and minimise monitor and mitigate/control the probability and/or impact of unfortunate events or to maximise the realisation of opportunities. The Company has adopted a Risk Management Policy in accordance with the provisions of the Companies Act 2013 and in terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015.
Related Party Transactions
All Related Party Transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. Hence the provisions of Section 188 of the Act are not attracted. Thus disclosure in Form AOC-2 is not required. Further there are no materially significant Related Party Company with its Promoters Directors Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee for approval.
The Policy on Related Party Transactions duly approved by the Board of Directors of the Company is posted on the Company's website and may be accessed at the link: https://www.harrisonsmalayalam.com/investor_info.htm
KEY MANAGERIAL PERSONNEL AND EMPLOYEES
Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial personnel) Rules 2014 is marked as `Annexure - I' which is annexed hereto and forms a part of the Board's Report.
The Board wishes to place on record its sincere appreciation for the continued assistance and support extended to the Company by its customers vendors bankers Government authorities and employees.
Your Directors are also grateful for your continued encouragement and support.
|On behalf of the Board of Directors |
|Venkitraman Anand||Cherian M. George|
|Kolkata||Whole Time Director||Whole Time Director|
|May 29 2019||(DIN: 07446834)||(DIN: 07916123)|