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Mcleod Russel India Ltd.

BSE: 532654 Sector: Agri and agri inputs
BSE 00:00 | 24 Apr Mcleod Russel India Ltd
NSE 05:30 | 01 Jan Mcleod Russel India Ltd
OPEN 4.02
VOLUME 40047
52-Week high 84.85
52-Week low 1.84
Mkt Cap.(Rs cr) 42
Buy Price 4.02
Buy Qty 129206.00
Sell Price 4.00
Sell Qty 200.00
OPEN 4.02
CLOSE 3.83
VOLUME 40047
52-Week high 84.85
52-Week low 1.84
Mkt Cap.(Rs cr) 42
Buy Price 4.02
Buy Qty 129206.00
Sell Price 4.00
Sell Qty 200.00

Mcleod Russel India Ltd. (MCLEODRUSS) - Director Report

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Company director report

For the year ended 31st March 2018

Your Directors have pleasure in presenting the Twentieth Annual Reportwith the Audited Financial Statements of your

Company for the financial year ended 31st March 2018.


The financial results of the Company for the year ended 31st March 2018are summarized below:

Rs. In lakhs



Revenue from Operations



Other Income



Total Revenue



Profit before Finance Costs Depreciation Exceptional Items and Taxation



Less : Finance Costs



Less : Depreciation and Amortization Expenses



Profit before Exceptional Items and Tax



Less : Exceptional Items



Profit before Tax



Tax Expense



Profit for the year




The Company registered an improved financial performance during theyear under review. The revenue from operation was higher at Rs. 159634 lakhs as comparedto Rs. 148540 lakhs in the previous year. The total income during the year stood at Rs.191919 lakhs which is higher by Rs. 24935 lakhs. The higher income is primarilyattributable to higher income from operations and higher dividend income. The profit aftertax was

Rs. 6726 lakhs as against Rs. 3053 lakhs achieved in the previous year.The profit could have been higher but for substantial increase in employee benefitsexpense which was higher by Rs.7075 lakhs as also increase in certain other input costs.


Your Directors decided to transfer Rs.15000 lakhs to the GeneralReserve from the Retained Earnings of the Company and after such transfer Rs.3618 lakhswill remain in the Retained Earnings of the Company.


Your Directors have recommended a dividend of Re. 0.50 per equityshare being 10% on 109455735 fully paid up equity shares of Rs. 5/- each for the yearended 31st March 2018 for your approval.


During the Financial year under review saleable production of yourCompany was 888.71 Lakh Kgs tea as compared to 846.10 Lakh Kgs in the previous year.Favourable weather with better distribution of rainfall through the year contributedtowards a better cropping pattern and ultimately increased harvests. Pests and diseasewere better controlled in spite of the restrictions on use of many key chemicals by therecently imposed Plant Protection Code.

The Uprooting and Replanting Policy of your Company continued to remainin focus and has further improved the percentage of tea under fifty years which isapproximately 75% of the area. All tea Estates established good Clonal Tea nurseries withrequisite approved Clonal Blend. The Shade Nurseries are also of a good standard which isa key factor in developing a healthy plantation.

The Afforestation programme was enhanced along with creation of newwater-bodies to improve "micro-climate" in select areas which has becomeessential to counter the effects of climate change.

It has always been Your Company's endeavor to produce Qualityteas which has continued to command a premium both in the domestic and internationalmarket. Production of premium Orthodox Teas was increased with an aim to fetch betterprices and factory infrastructure and machinery was enhanced to meet the requirements. Aspart of a continuous up-gradation and modernization programme of factories witheringcapacity was increased on some estates. With positive results from the trial of ContinuousWithering Machine undertaken during 2013-14 another such machine was installed. Inaddition the factories were provided with additional Rotorvanes where required CTCMachines

65 Khari Sifters 2 Orthodox ECP Dryers 3 Milling/ Chasing MachinesCoal Stoves and 7 Colour Sorters. To improve quality and grade mix 45 Sorting Machines and

3 De-humidifiers for tea storage bins were installed. In some factoriesextension of building was undertaken to accommodate additional sorting machinery. Toaugment the standby generating capacity 4 Diesel Generating Sets and 15 new transformerswere also installed. To facilitate weighment and recording of bought leaf an additional 10Weighing Machines and 40 Easy Weigh

Machines were provided. To improve fieldoperations and overcome theacute shortage of workers 2300 Plucking Shears and 157 Pruning Machines were madeavailable. With prevailing drought conditions every year additional irrigation equipmentwas augmented on 25 Estates along with creation of new Water Bodies. The Transport Fleetwas upgraded on Estates with the purchase of 24 new Tractors. Water supply to theresidents of the estates was enhanced with the installation of 14 new Water FiltrationUnits. The increased requirement of Housing and Sanitation infrastructure for our workersand their families are being met under a planned programme and will continue to remain oneof our key commitments.

The Company has forty seven ISO 22000 certified Factories. Your Companyalso has four estates certified as "Fairtrade" and forty five estates certifiedunder

"Rainforest Alliance." Our endeavor to have all our factoriescertified under the new Indian "Trustea" certification is progressingsatisfactorily with several factories already certified. We are also in the process ofassisting our Bought Leaf Suppliers to be compliant under this certification. Your Companyalso participates in the

Ethical Tea Partnership a global initiative. We have over the yearengaged with "UN Women" to build awareness among all levels of our employees on"Violence Against Women." This programme will continue over the next two years."Community Development Forums" have been set up on some of our estates inpartnership with Taylor's of Harrogate and Ethical Tea Partnership to bring aboutbetter awareness and improve the livelihood of our workers and their families.

The Company saw a total export quantum of 195.60 lakh

Kgs in 2017-18 with an overall turnover of over Rs. 41704 lakhs.Favourable feedback was received from the buyers both in terms of quality and deliveries.


The Board of Directors (the "Board") at its Meeting held on30th May 2018 after considering all relevant factors has decided to dispose of certaintea estates to achieve rationalization with the objective to optimize the operationalperformance by way of bringing balance amongst the Company's own productionproduction using bought leaf procured from small growers and the teas produced by theoverseas subsidiaries of the Company. For this purpose the Board has formed a Committeeauthorizing it to identify the tea estates and carry out the process of disposal. TheBoard decided to utilize the sale proceeds in repayment of certain high cost debts forbuying back Company's own shares to the tune not exceeding Rs. 100 Crores being below10% of the Paid up capital and free reserves of the

Company and making investment for diversification into packet teabusiness for which the Company has already agreed in principle to join hands with EvereadyIndustries India Limited for developing packet tea business through a third entity.Earlier during the year under review the Company subject to the approval of theGovernment of West Bengal sold Bhatpara Tea Estate a loss making unit in Dooars.


The Board at its Meeting held on 30th May 2018 decided for buying backshares of the Company for an amount not exceeding Rs. 100 Crores at a maximum price of Rs.210 per share from the existing shareholders from the open market through the stockexchanges. The Promoters of the Company will not participate in the proposed buy back ofshares. The Board feels that the buy back would reduce the outstanding number of equityshares and consequently increase Earnings Per Share over a period of time enableeffective utilisation of available cash and improve key return ratios. The Companybelieves that the buy-back will create long term shareholder value for the continuingshareholders.


In terms of requirements of Regulation 34(2)(e) of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 (‘ListingRegulations') a Management Discussion and Analysis Report is attached as Annexure -I forming part of this Report.


In terms of requirements of Regulation 34(3) of the ListingRegulations a Report on Corporate Governance together with the Auditors' Certificateregarding Compliance of

Conditions of Corporate Governance are attached as Annexure II andAnnexure III respectively forming part of this Report.


The Company has one wholly owned subsidiary namely Borelli TeaHoldings Limited U.K. (Borelli) and six step down Subsidiaries. Borelli is inter aliaengaged in the business of investing funds in various companies engaged in tea productionblending and marketing activities. As at the end of the year on 31st March 2018 Borellihad the following Subsidiaries in different countries:-

(i) Phu Ben Tea Company Limited Vietnam –controlling stake ofBorelli being 100% (ii) McLeod Russel Uganda Limited – controlling stake of Borellibeing 100% (iii) Gisovu Tea Company Limited Rwanda – controlling stake of Borellibeing 60% (iv) McLeod Russel Middle East DMCC UAE – controlling stake of Borellibeing 100% (v) McLeod Russel Africa Limited Kenya – controlling Stake of Borellibeing 100% (vi) Pfunda Tea Company Limited Rwanda – controlling stake of Borellibeing 90% The performances of the Subsidiaries are summarised below for your information.

As required under Section 129 (3) of the Companies range of PhuBen's products

Act 2013 and Regulation 33 and 34(2)(b) of the Listing RegulationsConsolidated Financial Statements of the Company and its seven Subsidiaries prepared inaccordance with the applicable Accounting Standards issued by The Institute of CharteredAccountants of India are appended in the Annual Report. Investments made in D1 WilliamsonMagor Bio Fuel Limited an Associate Company have been fully provided for in the Accountsof the earlier years and as such the Financial Statements of the said Company have notbeen considered for consolidation.

A statement containing the salient features of the financial statementsof the Company's seven Subsidiaries and the Associate Company pursuant to the firstproviso to sub-section (3) of Section 129 of the Companies Act

2013 prepared in Form AOC-1 is attached to the financial statements ofthe Company for your information.

The Company has formulated a Policy for determining "MaterialSubsidiary" and the same is disclosed on the website of the Company and can beaccessed at: http://


Borelli Tea Holdings Limited (‘Borelli') has invested in itssubsidiaries in Vietnam Uganda Rwanda Dubai and Kenya. During the year under reviewBorelli earned a profit after tax equivalent to Indian Rs.26326.61 lakhs which includes aprofit of Rs.19881.74 lakhs on sale of a part of its long-term investments and paidinterim dividends equivalent to Indian Rs.15395.43 lakhs. The Board of Directors ofBorelli has recommended payment of final dividend at the rate of 200% being 2 GBP pershare on its equity capital entirely held by your Company.


The Company produced 73.9 lakh kgs in 2017 as compared to 84.30 lakhkgs in 2016. Sales quantity in 2017 was 74.3 lakh kgs compared to 68.6 lakh kgs for 2016.Inclement weather conditions hampered harvests and production during the peak productionmonths. Cyclones storms heavy rainfall and flooding disrupted operations and alsodamaged some plantation areas and infrastructure. The Company incurred a loss equivalentto Rs.1397 lakh during the year 2017 as compared to a loss of Rs.1708 lakh incurred duringthe year2016.

The diversified

Black CTC Green CTC Green Orthodox & Black Orthodox teas havecontributed to our presence in the market positively and our teas are well sought after.The Company continues to lay stress on quality control in both field and factory andadheres to GAP for plantation activities along with IPM for pest control.

All Phu Ben estates and factories including Tai Trung and Ngoc Hai areaccredited ISO 9000: 2008 and ISO 22000: 2005 GMP & Halal and are also RainforestAlliance certified.


The operating results and the profitability of McLeod

Russel Uganda Limited (MRUL) received a new height in 2017 due toincreased sale price.

The company earned a post-tax profit equivalent to

Indian Rs.7544 Lakh in the year 2017 compared to a profit of Rs.5646Lakhs in 2016. The sale price of MRUL teas improved in 2017 compared to 2016 and the costof production was controlled resulting in higher profits during the year.

During the year 2016 MRUL manufactured 166.7 lakh kgs (2016 –173.1 lakh kgs) a reduction of approximately 4% due to drought weather experienced in teagrowing areas of Africa. The decrease in production in company's own crop was 12.6lakh kgs which was in the first half of the year. However there has been increase in teaproduced from out-growers' leaf by 6.2 lakh kgs.

MRUL paid an interim dividend equivalent to Rs.3561 Lakh for the year2017 (2016 – Rs.3092 Lakh).

The company has expanded its production capacity at Ankole Tea Estateby 1.5 million kg per annum during the year which will be used in processing increasingvolume of green leaf from out growers. The factory has successfully installed ContinuousWithering Machine which will give consistent wither and is cost effective process. It hascommenced setting up a new factory at Kisaru Tea Estate to process additional volume ofleaf.

There has been continuous effort to enhance the quality of tea byimproved plucking technique and it has paid result in terms of better sale priceespecially at Bugambe Tea Estate. The company has received prestigious President'sExporter award of the year for two years in succession.

Development of Sports Activity is the key focus for the company and ithas been holding inter estate soccer tournament with active participation of theemployees. This has resulted in improvement in the moral and has contributed in improvedhuman productivity.


There has been record production of crop in the year 2017 at 27.4 lakhkgs as against 24.1 lakh kgs in 2016 registering an increase of 14%. The sale price of teaalso improved during the year. The cost of sales for the year 2017 was at USD 2.40 per kgas compared to USD 2.31 per kg in the previous year.

The above factors have resulted in a very impressive profit after taxat Rs.2371 Lakh in 2017 as compared to Rs.1229 Lakh in 2016. The company had declareddividend of Rs.1359 Lakh in the year 2017 as compared to Rs.713 Lakh in the previous year.

The strength of the company is to produce high quality tea in Rwandaand it maintained its lead during the year in terms of highest sale price even withincreased volume of crop.

The company has received the charge of development of about 61 Hect ofland given on short term renewable lease by local government. The estate is developing iton a fast pace.

The company has focused its CSR activities in terms of providingimproved housing and drinking water to neighbouring villages. This has gathered themomentum during the year and has completed 10 houses and one water project.


MRME maintained its performance with a post tax profit of Rs.131 Lakh(2016 – Rs.127 Lakh). The total revenue of the company has been Rs 2438 Lakh (2016– Rs.2123 Lakh) The company purchased 15.75 lakh kgs of tea compared to 13.33 lakhkgs in 2016. It sold 16.12 lakh kgs of tea compared to 13.87 lakh kgs in previous year.


There had been decline in the volume of business in MRAL during 2017due to less crop produced in Kenya. The company had purchased and sold 22 lakh kgs of teain 2017 compared to 37 lakh kgs in 2016. The low volume of business had resulted in a netloss of Rs.67

Lakh in 2017 as compared to net profit of Rs.16 lakh in previous year.The business outlook for the year 2018 has brightened and increased volume has beenexperienced in the quarter ended 31st March 2018.


The production of tea in 2017 was less at 24.7 lakh kgs as compared to25.4 lakh kgs in previous year. However improved sale price in 2017 has helped inenhancing post tax profit equivalent to Rs.1415 Lakh as compared to Rs.661 Lakh in 2016.The cost of sales at USD 2.08 in 2017 is marginally higher than previous year. The companydeclared a dividend of Rs.679 Lakh in 2017 (2016 –Rs.238 Lakh).

The company has a young tea plantation on about 254 hectare of landwhich is expected to enhance the volume of crop and bring in new character to the presenttea due to its high elevation. The estate has been undertaking necessary upkeep andconsolidation of the area where harvesting is expected to commence in a couple of years.

The company has developed one basketball court under CSR to enhance thesporting events in the estate.


The philosophy of your Company towards fair governance going hand-inhand with social responsibilities is deeply embedded in its day to day working. TheCompany has over the years successfully formulated a methodology aimed towards improvingthe life of the people and the environment which surround the units of the Company andthereby enriching the society.

In terms of Section 135 (5) of the Companies Act 2013 certain classof companies are required to spend at least 2% of Average Net Profits made during thethree immediately preceding financial years in pursuance of its Corporate SocialResponsibility Policy. Although your

Company did not have Average Net Profit during the above periodcomputed in terms of Section 198 of the Act still like earlier years it continued withits welfare activities for development in the field of education culture and otherwelfare measures to create livelihood and improve the general standard of living in andaround the Tea Estates of the Company and other areas where it operates. The details ofthe said projects pursued by the Company are given in Annexure IV in the form prescribedunder the Companies (Corporate Social Responsibility) Rules 2014.

In addition to the above like the earlier years the Company was alsoassociated with various other Social Welfare activities which include the following:Facilitating Cataract Operation Camps in association with Shankardev Netralaya where goodnumber of patients has undergone successful eye surgeries. Supported Moran Blind Schoollike earlier years. Associated with Williamson Magor Education Trust in awarding the AssamValley Literary Award which was conferred on this year to three eminent persons of theliterary world of Assam namely poet Shri

Sananta Tanti novelists Shri Yeshe Dorjee Thongchi and Dr. RitaChowdhury.

Involved in preservation of ecosystem and natural habitats.

Supporting heritage conservation.

The Company has a CSR Committee and adopted a CSR Policy which can beaccessed at http://www.mcleodrussel. com/investor/policies.aspx. The Corporate SocialResponsibility Committee of the Board as on 31st March 2018 consisted of 3 ExecutiveDirectors namely Mr. R. Takru Mr. A. Monem Mr. K. K. Baheti and Mr. R. Sen anIndependent Director. Mr. R. Takru is the Chairman of the CSR Committee.


In compliance with Regulation 34(2)(f) of the Listing Regulations theBusiness Responsibility Report of the Company for the year ended 31st March 2018 isattached as Annexure V and forms a part of the Directors' Report.


In accordance with the Regulation 43A of the Listing Regulations theCompany has formulated a Dividend Distribution Policy and the same is annexed herewith asAnnexure VI. The Policy is hosted on the website of the Company and can be viewed athttp://www.mcleodrussel. com/investor/policies.aspx.


The Board acknowledges the responsibility for ensuring compliance withthe provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act 2013for the year ended 31st March 2018 and state that:

(a) In the preparation of the annual accounts the applicableaccounting standards had been followed with no material departure.

(b) the Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period; (c) theDirectorshadtakenproperandsufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies

Act 2013 for safeguarding the assets of the Company and for preventingand detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concernbasis; (e) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

(f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively


Since the last Report there has been no change in the Board ofDirectors. In accordance with the provisions of the Articles of Association of the Companyread with Section 152 of the Companies Act 2013 Mr. Amritanshu Khaitan and Mr. AzamMonem will retire by rotation at the forthcoming Annual General Meeting and beingeligible offer themselves for re-appointment.

In terms of Regulation 17(1A) of Listing Regulations as inserted by theSecurities Exchange Board of India (Listing Obligations and Disclosure Requirements)(Amendment)

Regulations 2018 which is effective from 1st April 2019 thecontinuation of the directorship of Mr. B. M. Khaitan and Dr. R. Srinivasan who havealready attained the age of 75 years is recommended for the approval of the Members by wayof Special Resolutions at the forthcoming Annual General Meeting.

During the year the Company had five Key Managerial

Personnel being Mr. Aditya Khaitan Vice-Chairman and ManagingDirector Mr. R. Takru Wholetime Director Mr. A. Monem Wholetime Director Mr. K. K.Baheti Wholetime Director and CFO and Mr. A. Guha Sarkar Company Secretary.

The Independent Directors have submitted their disclosures to the Boardthat they meet the criteria as stipulated in Section 149(6) of the Companies Act 2013.

The Board met four times during the year on 30th May 2017 8th August2017 10th November 2017 and 5th February 2018. The intervening gap between any two BoardMeetings was within the period prescribed by the Companies Act 2013.

The Company has adopted a Familiarization Programme for IndependentDirectors and the same is disclosed on the website of the Company and can be accessed at


In terms of requirement of Schedule IV to the Companies Act 2013 theIndependent Directors had a separate meeting on 30th March 2018 without the attendance ofnon-independent Directors and members of management. All the Independent Directors werepresent at the said meeting. The activities prescribed in paragraph VII of Schedule IV tothe Act were carried out at the said meeting.


The Securities Exchange Board of India (SEBI) vide its circular No.SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5th January 2017 had issued a guidance note on BoardEvaluation which inter alia contains indicative criterion for evaluation of the Board ofDirectors its Committees and the individual members of the Board.

The Board of Directors at its Meeting held on 30th March 2017 hadconsidered and adopted the indicative criterion for evaluation of the Board of Directorsthe Committees of the Board and the individual directors as enumerated in the saidCircular and amended the Board evaluation framework accordingly.

Pursuant to the new Evaluation Framework adopted by the Board theBoard evaluated the performance of the Board its Committees and the Individual Directorsfor the financial year 2017-18. After the evaluation process was complete the Board wasof the view that the performance of the Board as a whole was adequate and fulfilled theparameters stipulated in the evaluation framework in its pro-growth activity and facingchallenging operational climatic and economic adversities during the year. The Board alsoensured that the Committees functioned adequately and independently in terms of therequirements of the Companies Act 2013 and the Listing Regulations and at the same timesupported as well as coordinated with the Board to help in its decision making. Theindividual Directors' performance was also evaluated and the Board was of the viewthat the Directors fulfilled their applicable responsibilities and duties as laid down bythe Listing Regulations and the Companies Act 2013 and at the same time contributed withtheir valuable knowledge experience and expertise to grab the opportunity and counter theadverse challenges faced by the Company during the year.


The Audit Committee of the Board as on 31st March 2018 consisted of Dr.R. Srinivasan Mr. B. Bajoria Mr. R. Sen and Mr. Aditya Khaitan. Dr. R. Srinivasan aNon-Executive Independent Director is the Chairman of the Audit Committee.

The Company has established a Vigil Mechanism/ Whistle Blower Policyand oversees through the Audit Committee the genuine concerns if any expressed by theemployees and the Directors. The Company has also made provisions for adequate safeguardsagainst victimization of employees Directors or any other person who express theirconcerns. The Company has also provided direct access to the Chairman of the AuditCommittee on reporting issues concerning the interests of the employees and the Company.The Vigil Mechanism and material / Whistle Blower Policy of the Company has been uploadedon the website of the Company and can be accessed at


The Nomination and Remuneration Committee of the Board as on 31st March2018 comprised Mr. B. Bajoria a Non-Executive Independent Director as its Chairman andDr. R. Srinivasan and Mr. R. Sen Non-Executive Independent Directors as its Members.

The Company's Policy relating to appointment of Directors paymentof managerial remuneration Directors' qualifications

Directors and other related matters as provided under Section 178(3) ofthe Companies Act 2013 and Regulation 19 of the Listing Regulations is attached to thisreport as Annexure VII.


The particulars of loans guarantee or investment made under Section186 of the Companies Act 2013 are furnished in the Notes to the Financial Statements forthe year ended 31st March 2018.


The Related Party Transactions entered into by the Company during theyear under review were on arm's length basis in the ordinary course of business formutual benefits. There was no contract arrangement or transaction with Related Partieswhich could be considered as material and which may have a potential conflict with theinterest of the Company. The Company has formulated a Related Party Transaction Policy andthe same is disclosed on the website of the Company and can be accessed at policies.aspx.


The Company has neither accepted nor renewed any deposits during theyear under review.


Nosignificant orders have been passed by the Regulators or Courts orTribunals impacting the going concern status of the Company and its operation in thefuture.


Except as disclosed elsewhere in this Annual Report no materialchanges and commitments which could affect the financial position of the Company haveoccurred between the end of the last financial year and the date of this Annual Report.


Financial statements (i.e. Balance Sheet Profit & Loss

Statement and Cash-Flow Statement together with notes) are preparedthrough the process which has automated as well as manual controls to ensure accuracy ofrecording all transactions which have taken place during any accounting period and theresultant financial position at period end. All data pertaining to payroll purchasesagricultural activities plucking manufacturing dispatch selling and other activitiesare recorded through ERP systems operating in tea estates as well as head office.

All data/transactions entered in systems are checked by variousfunctional personnel on the basis of supporting documents & records then theaccounting entries are checked by accounts personnel and finally those are validated bymanagerial personnel.

At periodic intervals the accounting data are compiled and financialstatements are prepared. While preparing the financial statements it is ensured that alltransactions pertaining to the accounting period are recorded. items of storesFixedassets stock of tea all significant and monetary assets are physically verified. Balanceitems of confirmations are obtained for all significant trade receivable and advances.

After preparation of the financial statements all items appearing inthe statements are analysed in order to ensure overall reasonableness.

The Company has adopted policies and procedures for ensuring theorderly and efficient conduct of business including adherence to the Company'spolicies safeguarding of its assets prevention and detection of fraud and errorsaccuracy and completeness of the accounting records and timely preparation of reliablefinancial disclosures.


In terms of Part B of of Listing Regulations the CEO and the CFO ofthe Company certify to the Board regarding review of the financial statements compliancewith the accounting standards maintenance of internal control systems for financialreporting and accounting policies etc.


The Company considers its people as one of the most valuable resourcesand recognises that safe and healthy working environment motivate employees to be moreproductive and innovative. The Company takes adequate measures to keep its field andfactories safe in all respects.

Regular training is imparted to the employees for promoting awarenesson safety and skill enhancement. The Company runs a hospital in each of its Tea Estateswhere the employees of the concerned Estate get regular medical attention. In additionthe Company has set up six central hospitals which are equipped with modern medicalinstruments. These hospitals are accessible to the employees of the surrounding areas. TheCompany also provides facilities for sporting and cultural activities for the employees inthe Tea Estates.


The extract of Annual Return pursuant to the provisions of Section 92of the Companies Act 2013 read with Rule 12 of the Companies (Management andAdministration) Rules 2014 is attached to this Report as Annexure VIII.


In terms of the requirements of Section 204 of the Companies Act 2013the Secretarial Audit of the Company for the year ended 31st March 2018 was conducted byMessrs. A. K. Labh & Co Company Secretaries. The Secretarial Auditors' Report isattached to this Report as Annexure IX and forms part of the Directors' Report. Thereis no qualification or reservation or adverse remark or disclaimer made by the SecretarialAuditor in the Report.


The Board had appointed four firms of Cost Accountants to conduct auditof cost records maintained by the Company for the year ended 31st March 2018 and theremuneration of the said firms were ratified by the shareholders at the 19th AnnualGeneral Meeting of the Company. It is informed with regret that Mr. Ashok KumarProprietor of Messrs. Kumar & Associates one of the said four firms expired inJanuary 2018. In view of this the Board based on the recommendation of the AuditCommittee allocated the Tea Estates which were to be audited by Messrs. Kumar &Associates to the three other Cost Auditors at a revised remuneration. A suitableresolution will be placed before the Members at the ensuing Annual General Meeting forratification of the said remuneration for the year ended 31st March 2018.

In accordance with the requirements of Section 148 of the CompaniesAct 2013 read with the Companies (Cost Records and Audit) Rules 2014 the Board ofDirectors of the Company has appointed the following firms of Cost

Accountants to conduct audit of Cost Records maintained by the Companyfor the Tea Plantations of the Company for the year ending 31st March 2019;

(i) M/s Mani & Company (ii) M/s SPK Associates (iii) M/s DGM &Associates.

Pursuant to the provisions of Rule 14 of the Companies (Audit andAuditors) Rules 2014 the remuneration of the

Cost Auditors is required to be ratified by the Members of the Companya resolution for which will be placed before the Members at the ensuing Annual GeneralMeeting.

The Cost Audit Report furnished by the Cost Auditors in respect of theyear ended 31st March 2017 which did not contain any qualification reservation oradverse remark was filed with the Ministry of Corporate Affairs within the time prescribedunder the Companies Act 2013.


Under Section 139 of the Companies Act 2013 and rules made thereunderit is mandatory to rotate the Statutory Auditors. In line with the requirements of theAct Deloitte Haskins & Sells LLP Chartered Accountants (Firm Registration Number117366W/W-100018) ("Deloitte") was appointed as the Statutory Auditors of theCompany to hold office for a period of 5 consecutive years from the conclusion of the 19thAnnual General Meeting held on 9th August 2017 till the conclusion of 24th Annual GeneralMeeting. Deloitte has conducted Audit for the financial year ended 31st March 2018 andfurnished their report to the Board. There is no qualification reservation or adverseremark made by the Statutory Auditors of the Company in their Report pertaining to theyear ended 31st March 2018.


A statement giving details of conservation of energy technologyabsorption and foreign exchange earnings & outgo in accordance with Section 134(3)(m)of the Act read with Rule 8 (3) of the Companies (Accounts) Rules 2014 is attached tothis Report as Annexure X.


The Company has adopted and implemented a Risk Management Policy afteridentifying various risks which the Company encounters with during the course of itsbusiness none of which in the opinion of the Board may threaten the very existence of theCompany itself. The Company maintains a Risk Register where the particulars of the risksidentified are entered. The Company has taken adequate measures to mitigate various risksencountered by the Company.


Your Company has adopted a Code of Conduct for prevention of InsiderTrading in compliance with the SEBI (Prohibition of Insider Trading) Regulations 2015.All Directors employees and other designated persons who could have access tounpublished price sensitive information of the Company are governed by this Code.

The trading window for dealing with equity shares of the

Company is duly closed during declaration of financial results andoccurrence of any other material events as per the code. During the year under reviewthere has been due compliance with the code.


The ratio of the remuneration of each Director to the medianemployee's remuneration and other particulars or details of employees pursuant toSection 197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are attached to this Report asAnnexure XI.


The Company's large work force continues to remain the backbone ofits operations and their welfare has remained a prime area of focus. Upgradation andintroduction of new housing facilities water supply and sanitation medicalinfrastructure etc. have been given priority.

In terms of requirements of Section 4 of the Sexual Harassment of Womenat Workplace (Prevention prohibition and redressal) Act 2013 the Company has formedInternal Complaints Committees (ICC) for its workplaces. During the year two complaintsregarding sexual harassment in two different Tea Estates were received by one of the saidCommittees. The said complaints were duly handled by the concerned ICC in terms of thePolicy adopted by the Company and were disposed of within the prescribed time.

Your Board of Directors wish to place on record its sincereappreciation for the dedicated services rendered by the executives staff and workers atall levels for smooth functioning of all the estates.

For and on behalf of the Board of Directors

A. Khaitan K. K. Baheti

Managing Director Wholetime Director & CFO

Place: Kolkata Date: 30th May 2018