DIRECTORS' REPORT Your Directors have pleasure in presenting the Seventy Third Annual Report, with the Audited Accounts for the year ended March 31, 2016. OPERATIONS REVIEW Total income increased from Rs 35.20 Crores in 2014-15 to Rs. 37.62 Crores in 2015-16 resulting in an increase of 6.88 %. Profit after Tax was Rs. 3.45 Crores (previous year : Rs. 5.33 Crores). Tea production during the year was 12.39 lacs Kgs with an average yield of 2330 kgs. per hectare as against 12.49 lacs Kgs with an average yield of 2405 kgs. per hectare during last year. Apart from this there is also a production of 11.02 Lacs kgs of bought leaf as against 11.89 Lacs Kgs during the previous year. The sale average during the year was at Rs. 126.59 per Kg as against the last year's sale average of Rs. 121.07/- per Kg. DIVIDEND During the year, the Board declared two Interim Dividends of 200% each (Rs. 20 each per share), amounting to Rs. 1,25,47,000 each, excluding dividend tax. The aggregate of dividend declared during the year was 400% (Rs. 40 per share) amounting to Rs. 2,50,94,000, excluding dividend tax. LISTING OF SECURITIES ON BSE LTD The equity shares of the company continued to be listed on BSE Ltd. BOARD MEETINGS The Board of Directors consists of Mr. Ajit Thomas, Chairman, Mrs. Shanthi Thomas, Executive Director, Mr. A.D.Bopana, Mr. Raghu Bhale Rao & Mr. F.S.Mohan Eddy, Independent Directors and Mr. W.D.Nelson, Additional Director. Mr. G.Vijayaraghavan has resigned from the Board of Directors on account ofpersonal reasons w.e.f 22.07.2015. Mr. S.Rajasekar has ceased to be a Director on account of his death on 24.03.2016. The Board of Directors met five times during this financial year. The details of the Board meetings are given in Corporate Governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. AUDIT COMMITTEE MEETINGS The Audit Committee presently consists of three Independent Directors. The constitution of Audit committee during the year was as follows:- Mr.A.D.Bopana (Chairman) Mr.S.Rajasekar (expired on 24.03.2016) Mr.G.Vijayaraghavan ( upto 22.07.2015) Mr. Raghu Bhale Rao (w.e.f20.10.2015) Mr. F.S.Mohan Eddy ( w.e.f 14.03.2016) The terms of reference stipulated by the Board to the Audit Committee cover the matters specified for Audit Committee under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Committee met four times during this financial year. The details of the Committee meetings are given in Corporate Governance report. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has a Vigil Mechanism / Whistle Blower Policy in place pursuant to Section 177 (9) of the Companies Act 2013 and as per Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said policy is available in the website of the company. NOMINATION & REMUNERATION COMMITTEE The constitution of the Nomination & Remuneration Committee are given as follows:- Mr. A.D.Bopana - Independent Director Mr. G.Vijayaraghavan(up to 22.07.2015) - Independent Director Mr.S.Rajasekar - Non – Executive (expired on 24.03.2016) Non-independent Director Mr. Raghu Bhale Rao (w.e.f 20.10.2015) - Independent Director Mr. F.S.Mohan Eddy( w.e.f 14.03.2016 - Independent Director NOMINATION & REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management, Key Managerial Personnel and their remuneration. PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of investments made by Company is given in the note nos. 7 & 8 to the financial statements. FIXED DEPOSITS The Company is not accepting deposits and all deposits accepted earlier have been repaid. As such there are no unclaimed deposits in the books of the company as on March 31, 2016. DIRECTORS & KEY MANAGERIAL PERSONNEL 1. Executive Director Mrs. Shanthi Thomas is the Executive Director of the Company.The provisions of the Companies Act, 2013 pertaining to appointment of WomanDirector under Section 149(1) have been complied with. 2. Independent Directors Mr. G.Vijayaraghavan has resigned from the Board of Directors on account of personal reasons w.e.f 22.07.2015. Your Directors place on record, their appreciation for the valuable services rendered by Mr. G.Vijayaraghavan during his tenure as Director of the Company. Mr. Raghu Bhale Rao & Mr. F.S.Mohan Eddy, have been appointed as Additonal Directors (Independent ) w.e.f 20.10.2015 & 28.01.2016 respectively. Notices have been received from the shareholders pursuant to Section 160 of Companies Act, 2013 proposing the candidature of Mr. Raghu Bhale Rao & Mr. F.S.Mohan Eddy for Directorship, along with the prescribed fees. 3. Directors Mr. S.Rajasekar has ceased to be a Director on account of his death on 24.03.2016. Your Directors place on record, their appreciation for the valuable services rendered by Mr. S.Rajasekar during his tenure as Director of the Company. Mr. W.D.Nelson has been appointed as Additional Director vide Circular Resolution dated April 15, 2016, to hold office upto the date of the ensuing Annual General Meeting of the Company.The Company has received a notice in writing from a member alongwith the deposit of requisite amount under Section 160(1) of the Act proposing the candidature of Mr. W.D.Nelson for the office of Director of the Company. 4. Director retiring by rotation In accordance with the provisions of Companies Act, 2013 and the Articles of Association of the Company, Mr. Ajit Thomas, Chairman retires by rotation at the 73rd Annual General Meeting and being eligible, offer himself for re-appointment. 5. Key Managerial Personnel Mrs. Shanthi Thomas has been appointed as the Executive Director of the Company and Mr. T.M.Harikumar has been appointed as Company Secretary & Chief Financial Officer of the company, in accordance with the provisions of Section 203 of the Companies Act, 2013. 6. Declaration from Independent Directors on Annual Basis The Company has received necessary declaration from all the Independent Directors of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6)of the Companies Act, 2013. INFORMATION ABOUT THE FINANCIAL PERFORMANCE/FINANCIAL POSITION OF THE SUBSIDIARIES/ASSOCIATES/JOINT VENTURE The company has no subsidiary companies. During the year the Company has repatriated full proceeds on disinvestment of the company's investment of Rs. 90,20,000 equivalent to US$ 2,00,000 in M/s. Midland Natural Pte Ltd., Singapore to India alongwith surplus. As required under Section 129(3) of the Companies Act, 2013, the Company has prepared a Consolidated Financial Statement in respect of its Associates/Joint Venture companies alongwith its own financial statements. Further, details of financial performance/financial position of the associate companies as required under first proviso to Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 are annexed in Form AOC 1 (Annexure 1). CONSERVATION OF ENERGY The company has taken adequate steps for conservation of energy by utilizing alternate sources and by investing on energy conservation equipments. The particulars prescribed by the Section 134 (3) (m) of the Companies Act 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to Conservation of Energy and Technology Absorption are furnished in the Annexure 2 to this Report. FOREIGN EXCHANGE EARNINGS AND OUTGO During the year under review, the Company's Foreign Exchange Earnings amounted to Rs. 21,70,87,298/-. The total outgo on Foreign Exchange amounted to Rs. 19,55,247/-. Details are set out in Notes 23 & 24 of the Accounts. The Company has continued to maintain focus and avail of export opportunities based on economic considerations. PARTICULARS OF EMPLOYEES The information required under Companies Act 2013 and pursuant to Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is not applicable. Further, the information required pursuant to Section 197 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is annexed ( Annexure 3) to this report. AUDITORS In terms of the provisions of Section 139 of the Companies Act, 2013 and the Rules made there under, the appointment of M/s. Suri& Co., Chartered Accountants, Chennai - 600 017, (Firm's registration No. 004283S) as the Statutory Auditors of the Company needs to be ratified by the members at every Annual General Meeting (AGM).Your directors recommend ratifying their appointment at the forthcoming AGM. AUDITORS' REPORT There are no qualifications or adverse remarks mentioned in the Auditors' report. The notes to accounts forming part of financial statements are self-explanatory and needs no further clarification. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed Mr. V. Suresh, Practising Company Secretary (C.P. No. 6032), Chennai to undertake the Secretarial Audit of the Company. The Secretarial Audit Report in Form MR-3 is annexed (Annexure 4) to this report. There is no Secretarial Audit qualification for the year under review. COST AUDIT The provisions of Cost Audit under Section 148 of the Companies Act, 2013 are not applicable to the Company. INTERNAL AUDITORS During the year under review, M/s. Vasanthan Naresh & Associates, Chartered Accountants, Coimbatore carried out the internal audit of the company and submitted their reports. CORPORATE GOVERNANCE Pursuant to Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion & Analysis Report and Report on Corporate Governance with Certificate on compliance with conditions of Corporate Governance have been annexed to this report( Annexures 5 & 6). INSURANCE The Company continues to carry adequate insurance coverage for all assets. 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 and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Details of the transactions are provided in Form AOC — 2 which is attached as Annexure 7 to this report. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There were no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed (Annexure 8) INDUSTRIAL RELATIONS During the year under review, your company enjoyed cordial relationship with workers and employees at all levels. CORPORATE SOCIAL RESPONSIBILITY The company does not fall within the ambit of the provisions of Section 135 of the Companies Act 2013 regarding Corporate Social Responsibility and hence Annual Report on Corporate Social Responsibility (CSR) Activities is not annexed. STAKEHOLDERS' RELATIONSHIP COMMITTEE The Board has constituted a Stakeholders Relationship Committee comprising of Mr.Ajit Thomas, as Chairperson and MrA.D.Bopana as Member ofthe Committee. The Board has designated Mr.T.M.Hari Kumar, Company Secretary & CFO of the Company as the Compliance Officer. RISK MANAGEMENT PLAN Pursuant to Section 134 (3) (n) of the Companies Act, 2013 and as per Regulation 17 (9)(a) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had laid down the procedures to inform Board members about the risk assessment and mitigation procedures. Mr. T.M.Harikumar, Company Secretary & CFO has been assigned the task of informing the Board about the various risks and its mitigation by the Company from time to time. At present the company has not identified any element of risk which may threaten the existence of the Company. BOARD EVALUATION The performance of Board, its Committees and individual directors are evaluated by number of meetings held, time spent in each meeting deliberating the issues, statutory compliance, contribution of each director, the details of decision taken and measures adopted in implementing the decision and monitoring the continuous implementation of the decision and feed back to the Board. DISCLOSURE OF ACCOUNTING TREATMENT In the preparation of the financial statements, the Company has followed the Accounting Standards referred to in Section 133 of the Companies Act, 2013. The significant accounting policies which are consistently applied are set out in the Note 1 to the Financial Statements. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Act and that an Internal Complaints Committee has been set up for redressal of complaints and that all employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year the company has not received any compliant under Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134 (3) ( c) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that: 1. In the preparation of the accounts for the financial year ended 31st March 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures; 2. The Directors have selected such accounting policies and applied them 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 the end of the financial year and of the profit of the Company for that period; 3. The Directors 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; 4. The Directors have prepared the accounts for the financial year ended 31st March 2016 on a 'going concern basis. 5. The directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. 6. The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively INTERNAL CONTROL SYSTEMS The company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition, and those transactions are authorised, recorded and reported correctly. The Company has an extensive system of internal controls which ensures optimal utilization and protection of resources, IT security, accurate reporting of financial transactions and compliance with applicable laws and regulations as also internal policies and procedures. The internal control system is supplemented by extensive internal audits, regular reviews by management, and well documented policies and guidelines to ensure reliability of financial and all other records to prepare financial statements and other data. ACKNOWLEDGEMENT The Directors sincerely acknowledge the contribution and support from customers, shareholders, Central and State Governments, Bankers, Securities Exchange Board of India, BSE Ltd, Cameo Corporate Services Ltd., Central Depository Services Ltd., Registrar ofCompanies, Tamil Nadu and other Government Authorities for the co-operation and assistance provided to the Company. The Directors also place on record their gratitude to the employees for their continued support, commitment, dedication and co-operation. For and on Behalf of the Board of Directors Ajit Thomas Chairman DIN : 00018691 Date : 30.05.2016 Place : Chennai |