REPORT OF THE DIRECTORS Your Directors have pleasure in presenting the Eighteenth Annual Report with the Audited Financial Statements of your Company, for the financial year ended 31st March 2016. During the year under review, the production of saleable tea was higher by around 7%. The profit however was under pressure primarily on account of substantial increase in salaries and wages in terms of industry wide agreements with the workers' and employees' unions. The costs further increased on account of rise in prices of various other inputs. On the other hand, sale price increase on an average was only marginal due to oversupply from the other tea producing countries in the last quarter which impacted realisations. The average price for the Company's tea for the year was Rs.173.97 per kg as compared to Rs.172.38 per kg realized in the earlier year. The marginal increase in sale price was not enough to offset the increase in costs. DIVIDEND Your Directors have recommended a dividend of Rs.2/- per equity share being 40 % on 109455735 fully paid up equity shares of Rs. 5/- each, for the year ended 31st March 2016 for your approval. REVIEW OF OPERATIONS During the Financial year under review, your Company had saleable production of 857 Lakh Kgs tea as compared to 801 Lakh Kgs in the previous year. The Company could have achieved better production but for inclement weather which played a spoilsport, especially during the early part of the year. After a prolonged dry spell, rainfall was received in late April. Thereafter, unprecedented heavy rainfall continued till end June, resulting in drop in temperatures and excessive wet conditions which are not entirely conducive to good leaf growth. Heavy rainfall continued over july and August causing flooding and water-logging on many estates. Weather conditions changed completely from September onwards, when it turned dry, resulting in a decline in harvests during a period which is otherwise high cropping. Though the total rainfall for the year was marginally higher than the previous year, uneven distribution impeded good flushing and adversely affected harvests. Fortunately, favorable weather from November onwards and over the winter with moderate to heavy precipitation helped to sustain the tea bushes and cropping was good over the early part of the season 2016.Pest activity was a matter of concern in most districts of Assam and Dooars. All estates are now strictly following the Tea Boards "Plant Protection Code" with a restricted choice of chemicals for effective pest management. Efforts to control pest infestation were largely successful. The Uprooting and Replanting Policy of your Company continued to remain an area of focus and has further increased the percentage of tea under fifty years which is approximately 75% of the total area. All tea estates established good Clonal Tea nurseries with requisite, approved Clonal Blends. Afforestation programs to create improved micro-climates were also enhanced. With the growing trend of migration of workers from the estates and the resulting shortage of hands to work on the estates, your company has taken initiatives to mechanize some field operations, namely introduction of Plucking Machines, Plucking Shears and Pruning Machines. Earth Movers and Excavators are also being extensively used. Considerable work on upgrading of existing irrigation equipment has been undertaken and additional sets provided. Most estates are now adequately equipped and more projects will continue over the next few years as irrigation has now become critical with changing weather patterns and prolonged dry winters. During the year the Company has incurred capital expenditure to the tune of Rs. 9738 lakhs the benefits of which will be derived in the years to come. Your Company's focus to produce Quality teas was given further impetus and our teas continued to command a premium both in the domestic and international market. Modernization and upgradation programs for our manufacturing units have remained an area of priority to improve the process of tea manufacture and produce better quality teas. Continued introduction of energy efficient machinery and infrastructure is your Company's priority and useful steps were taken in this direction. The Company has forty seven ISO 22000 certified Factories. Your Company also has four estates certified under "Fairtrade" and forty five estates certified under "Rainforest Alliance." The Nilpur Blending Unit is a HACCP Certified unit. Your Company also participates in Ethical Tea Partnership, a global initiative. The Company saw a total export quantum of 188.57 lakh Kgs during the year with an overall turnover of over Rs. 40529 lakhs. Favourable feedback was received from the buyers both in terms of quality and deliveries. MANAGEMENT DISCUSSION AND ANALYSIS REPORT In terms of requirements of Regulation 34(2)(e) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), a Management Discussion and Analysis Report is attached as Annexure - I forming part of this Report. REPORT ON CORPORATE GOVERNANCE In terms of requirements of Regulation 34(3) of the Listing Regulations, a Report on Corporate Governance together with the Auditors' Certificate regarding Compliance of Conditions of Corporate Governance are attached as Annexure II and Annexure III respectively, forming part of this Report. The disclosure in terms of item (iv) of sub clause (iv) of second proviso of clause (B) of Section II of Part II of Schedule V of the Companies Act, 2013 has been provided in the Report on Corporate Governance attached to this Report. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS The Company has one wholly owned subsidiary namely, Borelli Tea Holdings Limited, U.K. (Borelli) and seven step down Subsidiaries. Borelli is inter alia engaged in the business of investing funds in various Companies engaged in tea production, blending, marketing and investment activities. As at the end of the year on 31st March 2016 Borelli had the following Subsidiaries in different countries:- (i) Phu Ben Tea Company Limited, Vietnam -controlling stake of Borelli being 100% (ii) Rwenzori Tea Investments Limited, Uganda - controlling stake of Borelli being 100% (iii) McLeod Russel Uganda Limited - 100% subsidiary of Rwenzori (iv) Gisovu Tea Company Limited, Rwanda - controlling stake of Borelli being 60% (v) McLeod Russel Middle East DMCC - controlling stake of Borelli being 100% (vi) McLeod Russel Africa Limited, Kenya - controlling Stake of Borelli being 100% (vii) Pfunda Tea Company Limited, Rwanda - controlling stake of Borelli being 90% The performances of the major Subsidiaries are summarised below for your information. As required under Section 129(3) of the Companies Act, 2013 and Regulations 33 and 34(2)(b) of the Listing Regulations, Consolidated Financial Statements of the Company, its eight Subsidiaries and one Associate Company namely, D1 Williamson Magor Bio Fuel Limited prepared in accordance with the applicable Accounting Standards issued by The Institute of Chartered Accountants of India are appended in the Annual Report. A statement containing the salient features of the financial statements of the Company's eight Subsidiaries and the Associate Company pursuant to the first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 prepared in Form AOC-1 is attached to the financial statements of the Company for your information. The Company has formulated a Policy for determining "Material Subsidiary" and the same is disclosed on the website of the Company and can be accessed at <http://www.mcleodrussel.com/> investors/pdf/material.pdf BORELLI TEA HOLDINGS LIMITED Borelli Tea Holdings Limited ('Borelli') has invested in its subsidiaries in Vietnam, Uganda, Rwanda, Dubai and Kenya. During the year under review, Borelli earned a profit after tax equivalent to Indian Rs. 2094 lakhs and its Board of Directors has recommended payment of dividend at the rate of 150% on its equity capital entirely held by your Company. PHU BEN TEA COMPANY LIMITED The year 2015 was a difficult year for Phu Ben Tea Company Limited. The Company produced 86.64 lakh kgs of tea during the year as compared to 71.39 lakh kgs in the earlier year. The tea market in 2015 continued to be depressed and a surplus in the world market suppressed prices in spite of the good standard of teas produced. Sales in 2015 concluded at 100.21 lakh kgs compared to 55.15 lakh kgs for 2014 which was encouraging, considering the circumstances. The average selling price was USD 1.43 per kg as compared to USD 1.63 per kg realised in the earlier year. During the year the Company has incurred a loss equivalent to Indian Rs. 2033 lakhs on a Sales Turnover of Rs. 9447 lakhs. The newly acquired Tai Trung' and 'Ngoc Hai' factories were upgraded and produced a good standard of Green and Black Orthodox teas respectively. The CTC teas produced in the other factories were of a much improved standard and efforts on the front of EU compliance have increased the demand for our teas. All Phu Ben estatesand factories including Tai Trung and Ngoc Hai are accredited ISO 9000: 2008 and ISO 22000: 2005, GMP & Halal certified. Phu Tho, Ha Hoa and Doan Hung estates are Rainforest Alliance certified. Five factories, including Phu Tho, Ha Hoa, Doan Hung, Van Linh and Khanh Hoa are also Rainforest Alliance Chain of Custody certified. Weather conditions saw a change from the usual patterns, with late rains and very hot and dry weather during the season. Cropping consequently changed in spite of which the year's production estimates were achieved. The Company celebrated its "20 Years Establishment Anniversary" on 26th November and was also recognized with the following awards: 1. Enterprise for Farmers 2015 which is a Vietnamese Central Government recognition. 2. Gold Medal for Best Jasmine Green Tea in the North American Tea Competition. 3. Hung Vuong Memorial Medal, a prestigious award from the Phu Tho Province where the company's operations are located. McLEOD RUSSEL UGANDA LIMITED The year 2015 was a favourable year for McLeod Russel Uganda Limited (MRUL).During the said year the Company earned a post-tax profit equivalent to Indian Rs. 2994 lakhs as compared to Rs. 457 lakhs earned in the earlier year. Although the selling price remained almost static at USD 1.56 per kg, the Company effected a significant reduction in cost and thereby increasing the profitability. The Company's turn-over for the year 2015 was equivalent to Indian Rs. 18027 lakhs compared to Rs.14604 lakhs in the previous year. Weather conditions during the first half of the year were not entirely conducive to good cropping due to dry conditions. However, during the second half of the year, conditions improved and our estates produced a total crop of 184.10 lakh kgs of tea by the year end, which is an all-time record. Intake of out-growers' leaf has also increased to a record of 57.27 lakh kgs with the aim of utilizing full factory capacities. A healthy yield of 3841 kgs per hectare was achieved from our own plantations. Several initiatives were taken on the field to enhance the quality of leaf plucked and results were encouraging. An additional 45 hectares of tea was planted out at Mwenge, Kisaru and Bugambe estates (18.5, 20 & 6.5 hectares, respectively). Furthermore, 54.8 hectares of eucalyptus was planted at Kisaru and Kiko in the newly purchased land, 9.3 hectares at Bugambe and 5.5 hectares at Mwenge. Production in the Company's factories increased by 176 tons as a result of increased intake of out-growers' leaf. A good quality of teas was produced in all the factories and was well received by the market in spite of a decline in demands. Initiatives were taken to run the factories more efficiently and cost effectively, namely in fuel consumption and effective use of manpower, resulting in a saving in production costs. Direct sales of our teas increased by 41% over 2014 and several buyers have shown a renewed interest in our teas. Internal and external audits for Rainforest Alliance, Food Safety Management System and Fairtrade were successfully carried out. The Rainforest Alliance Certification for out growers was also obtained. More farmers at Muzizi and Ankole were added under this certification. Good industrial relations were maintained with all categories of workers and staff. New initiatives have been taken on welfare works, both within the estate and in local areas adjacent to the estates, namely support to the Good Shepard School for children with special needs, reconstruction of Primary School adjacent to Kisaru, support on briquette making to the New Nature Foundation. In house, for employee welfare, a Credit and Savings Co-operative was developed and sports and cultural activities received regular support. GISOVU TEA COMPANY LIMITED In the year 2015, Gisovu Tea Company Limited turned out a much improved performance compared to the previous year. The production was higher, sales prices improved and cost was reduced during the year resulting in improved profitability. The post-tax profit of the Company for the year was equivalent to Indian Rs. 1412 lakhs compared to Rs. 593 lakhs in the previous year. The Company declared a dividend of Rs. 720 lakhs compared to Rs. 184 lakhs declared in the earlier year. The Annual Production for the year was 22.4 lakh Kgs compared to 20.30 lakh Kgs made in the earlier year. Gisovu continued to manufacture tea of the highest standard in East Africa. The early part of the year saw a decline in prices for Gisovu teas but picked up considerably from mid-season, mainly due to direct sales. The Average Sales realization for Gisovu Tea Estate was USD 3.51 per kg against the previous year's price of USD 2.95 per kg. Weather patterns varied with the season and cropping patterns reflected the same. Harvests during the dry months of July and August 2015 were however better as compared to the previous year. This was mainly due to good rainfall received in the preceding months. Harvests dropped again over the period September to November. The early part of the season 2016 saw resurgence in cropping and this is encouraging. On the field, efforts continue to be made to improve cultivation practices which were lacking mainly in plantations run by the cooperatives. Newly planted fields in the Kabira area are complete and this will contribute further to the crop of Gisovu estate. A new Clonal Nursery has been set up and is producing plants of very good quality. In the factory, the expansion project to enhance Withering capacity was completed and the estate is now equipped to handle 63000 kgs of green leaf per day. NewCTC'sand Rotorvanes were installed and this enhancement of machinery has contributed towards the better quality of teas produced. The factory is being equipped to produce Orthodox Teas from season 2016 and installation of new machinery is complete. This will further enhance the quality and value of the teas produced at Gisovu. Repair and upgradation of infrastructure and staff and workers housing was taken up as an area of priority. Sanitation infrastructure is being constructed with eco-friendly toilets and bathing enclosures and this programme is being carried over into 2016. A new Honey Production Project has been installed on the estate and is progressing well. Good Industrial relations were maintained with all employees. The Estate is ISO 22000:2005 and Rain forest Alliance certified. McLEOD RUSSEL MIDDLE EAST DMCC McLeod Russel Middle East DMCC registered an improved performance in the year 2015 and the Company recorded a profit for the first time. The performance for the year 2015 resulted in a post-tax profit equivalent to Indian Rs. 93 lakhs compared to a loss of Rs. 56 lakhs in 2014. The Company's revenue in 2015 was equivalent to Rs. 2650 lakhs compared to Rs. 1535 lakhs in the previous year. The Company purchased 1452 tonnes of tea in 2015 compared to 969 tonnes in the earlier year. It sold 1554 tonnes of tea compared to 1043 tonnes in the previous year. The company is expected to continue to do well in the future. McLEOD RUSSEL AFRICA LIMITED Year 2015 was McLeod Russel Africa Limited's first full year of trading operation after receiving the trading license from Tea Board of Kenya and the Company did well to record a profit in its maiden year of operations. The profit after tax for the year 2015 was equivalent to Indian Rs.36 lakhs compared to a loss of Rs. 98 lakhs in 2014. The Company's revenue for the year 2015 was equivalent to Rs.3438 lakhs. During the year 2015 the Company purchased 1589 tonnes of tea against 50 tonnes for the year 2014. The Company is expected to do well in the years to come. PFUNDA TEA COMPANY LIMITED The Pfunda Tea Company Limited completed a year under the management of Borelli Tea Holdings Limited, U.K., The period saw major changes in management practices and development of infrastructure with an aim to enhance the production of teas and improve quality. The production for 2015 was 24.37 lakh kgs as compared to 23.59 lakh kgs for 2014. This is the highest annual production recorded by Pfunda Tea Estate, which included teas made from increased intake of Out-growers' Leaf. Climatic conditions were generally favourable, especially during the 2nd half of the year and harvests were particularly good during the months of July, August and September. During the year the Company achieved a profit equivalent to Indian Rs. 1293 lakhs compared to Rs.265 lakhs earned in the previous year. The revenue from operations also went up from Indian Rs. 3060 lakhs to Rs. 4736 lakhs in 2015. The Estate continued with its programme of planting out new areas and an additional 27.28 Hectares was put under new tea plantation in the Rushubi sector. This is in addition to the 235 Hectares planted over the last few years. Large scale infilling of vacant areas was also carried out in the vacant areas of the Muguba, Rushubi and Kigeyo sectors and this will contribute to better cropping for the estate in the years to come. A further 76 Hectares is due to be planted out under the agreement between the Company and COOPT which will be taken up shortly. In the Factory, new Processing Machinery was installed and the unit now has 4 CTC lines which will reduce manufacturing hours and produce a better quality of teas. A new Continuous Fermenting Machine and Dryer was also installed along with additional Sorting Machinery. The quality of teas produced during the season has improved over the previous years and our teas fetched better prices. Pfunda teas were sold at USD 3.05 per kg as compared to USD 2.27 per kg in the previous year. Relations with the Staff and workers of the estate was good and considerable development work to improve housing, welfare activities, health & hygiene were undertaken. The Company made considerable contributions towards rehabilitation from the effects of genocide and also undertook river erosion protection works along with other welfare measures in the locality. The Estate is ISO 22000:2005 and RainforestAlliance certified. CORPORATE SOCIAL RESPONSIBILITY The philosophy of your Company towards fair governance going hand-in hand with social responsibilities is deeply embedded in its day to day working. The Company has, over the years, successfully formulated a methodology aimed towards improving the life of the people and the environment, which surround the units of the Company and thereby enriching the society. Like earlier years it continued its welfare activities for development in the field of education, culture and other welfare measures to improve the general standard of living in and around the Tea Estates. After Corporate Social Responsibility became an obligation under the Companies Act, 2013 the Company has taken up several specifie projects to comply with the requirements of section 135 of the Companies Act, 2013 and the Rules made thereunder. The details of the said projects are given in the Annexure IV in the form prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Board of Directors has formed a CSR Committee and adopted a CSR Policy for the Company which can be accessed at <http://www>. mcleodrussel.com/investors/pdf/csr-policy.pdf . The Corporate Social Responsibility Committee of the Board as on 31st March 2016 consisted of 3 Executive Directors, namely, Mr. R. Takru, Mr. A. Monem, Mr. K. K. Baheti and Mr. R. Sen, an Independent Director. Mr. R. Takru is the Chairman of the CSR Committee. The Company has spent Rs. 435.19 lakhs in the year under review on the CSR projects adopted by the Company representing over 2% of the average net profits of the Company for the last three financial years. In addition to the above, like the earlier years, the Company was also associated with various other Social Welfare activities which include the following: • Facilitating Cataract Operation Camps in association with Shankardev Netralaya where good number of patients have undergone successful eye surgeries. • Supported Moran Blind School like earlier years. • Associated with Williamson Magor Education Trust in awarding scholarships to deserving students. • Associated with Williamson Magor Education Trust in awarding the Assam Valley Literary Award which was conferred this year on Shri Apurba Sarma, an eminent figure of the literary world of Assam. • Involved in preservation of ecosystem and natural habitats. • Supporting heritage conservation. • Supporting a recognized institution in Kolkata which addresses the needs of children challenged with cerebral palsy. BUSINESS RESPONSIBILITY REPORT Your Company being one of the top five hundred listed entities, Regulation 34(2)(f) of the Listing Regulations has become applicable to itwith effeetfrom 1st April 2016. In line of the requirements, the Company has adopted a Business Responsibility Policy and formed a Business Responsibility Committee to oversee and monitor the initiatives taken from an environmental, social and governance perspective some of which are being followed by the Company for quite some time in the past. The implementation of the policy based on the nine prescribed principles, is under process. DIRECTORS' RESPONSIBILITY STATEMENT The Board acknowledges the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 for the year ended 31st March 2016 and state that: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed with no material departure. (b) the Directors had 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 and loss of the Company for that period; (c) the Directors 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; (d) the Directors had prepared the annual accounts on a going concern basis; (e) 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. (f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such Systems were adequate and operating effectively. DIRECTORS & KEY MANAGERIAL PERSONNEL Since the last Report there has been no change in the Board of Directors. In accordance with the provisions of the Articles of Association of the Company read with Section 152 of the Companies Act, 2013, Mr. B. M. Khaitan and Mr. A. Monem will retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. During the year, the Company had five Key Managerial Personnel, being Mr. Aditya Khaitan, Vice-Chairman and Managing Director, 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 Board that they meet the criteria as stipulated in Section 149(6) of the Companies Act, 2013. The Board met four times during the year on 28th May 2015, 3rd August 2015, 3rd November 2015 and 25th January 2016. The intervening gap between any two Board Meetings was within the period prescribed by the Companies Act, 2013. The Company has adopted a Familiarization Programme for Independent Directors and the same is disclosed on the website of the Company and can be accessed at <http://www.mcleodrussel>. com/investors/pdf/familiarisation-programme.pdf. BOARD EVALUATION Pursuant to the Evaluation Framework adopted by the Board, the Board evaluated the performance of the Board, its Committees and the Individual Directors for the financial year 2015-16. After the evaluation process was complete, the Board was of the view that the performance of the Board as a whole was adequate and fulfilled the parameters stipulated in the evaluation framework in its pro-growth activity and facing challenging operational, climatic and economic adversities during the year. The Board also ensured that the Committees functioned adequately and independently in terms of the requirements of the Companies Act, 2013 and the Listing Regulations and at the same time supported as well as coordinated with the Board to help in its decision making. The individual Directors' performance was also evaluated and the Board was of the view that the Directors fulfilled their applicable responsibilities and duties as laid down by the Listing Regulations and the Companies Act, 2013 and at the same time contributed with their valuable knowledge, experience and expertise to grab the opportunity and counter the adverse challenges faced by the Company during the year. AUDIT COMMITTEE The Audit Committee of the Board as on 31st March 2016 consisted of Dr. R. Srinivasan, Mr. B. Bajoria, Mr. R. Sen and Mr. Aditya Khaitan. Dr. R. Srinivasan, a Non-Executive Independent Director, is the Chairman of the Audit Committee. The Company has established a Vigil Mechanism / Whistle Blower Policy and oversees through the Audit Committee, the genuine concerns, if any, expressed by the employees and the Directors. The Company has also made provisions for adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of the employees and the Company. The Vigil Mechanism / Whistle Blower Policy of the Company has been uploaded on the website of the Company and can be accessed at <http://www.mcleodrussel.com/investors/pdf/whistle.pdf>. NOMINATION AND REMUNERATION COMMITTEE The Nomination and Remuneration Committee of the Board as on 31st March 2016 comprised Mr. B. Bajoria, a Non-Executive Independent Director, as its Chairman and Dr. R. Srinivasan and Mr. R. Sen, Non-Executive Independent Directors as its Members. The Compan/s Policy relating to appointment of Directors, payment of managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 and Regulation 19 of the Listing Regulations is attached to this report as Annexure V. LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013 The particulars of loans, guarantee or investment made under Section 186 of the Companies Act, 2013 are furnished in the Notes to the Financial Statements for the year ended 31st March 2016. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES The Related Party Transactions entered into by the Company during the year under review were on arm's length basis in the ordinary course of business for mutual benefits. There was no contract, arrangement or transaction with Related Parties which could be consideree! as material andwhich may havea potential conflictwith the interest of the Company. The Company has formulated a Related Party Transaction Policy and the same is disclosed on the website of the Company and can be accessed at <http://www.mcleodrussel>. com/investors/pdf/related-party-transaction-policy.pdf. DEPOSITS The Company has neither accepted nor renewed any deposits during the year under review. GOING CONCERN STATUS No significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operation in the future. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS Financial statements (i.e. Balance Sheet, Profit & Loss Statement and Cash-Flow Statement, together with notes) are prepared through the process which has automated as well as manual controls to ensure accuracy of recording all transactions which have taken place during any accounting period, and the resultant financial position at period end. Ail data pertaining to payroll, purchases, agricultural activities, plucking, manufacturing, dispatch, selling and other activities are recorded through ERP Systems operating in tea estates as well as head office. Ail data/ transactions entered in systems are checked by various functional personnel on the basis of supporting documents & records, then the accounting entries are checked by accounts personnel and finally those are validated by managerial personnel. At periodic intervals, the accounting data are compiled and financial statements are prepared. While preparing the financial statements, it is ensured that all transactions pertaining to the accounting period are recorded. Fixed assets, stock of tea, all significant items of stores and monetary assets are physically verified. Balance confirmations are obtained for ail significant items of trade receivable and advances. After preparation of the financial statements, ail items appearing in the statements are analysed in order to ensure overall reasonableness. The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Compan’s policies, safeguarding of its assets, prevention and detection of fraud and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. ANNUALRETURN The extract of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is attached to this Report as Annexure VI. SECRETARIAL AUDIT In terms of the requirements of Section 204 of the Companies Act, 2013, the Secretarial Audit of the Company for the year ended 31st March 2016 was conducted by Messrs. A. K. Labh & Co, Company Secretaries. The Secretarial Auditors' Report is attached to this Report as Annexure VII and forms part of the Directors' Report. There is no qualification or reservation or adverse remark or disclaimer made by the Secretarial Auditor in the Report. COST AUDIT In accordance with the requirements of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors of the Company has appointed the following firms of Cost Accountants to conduct audit of Cost Records maintained by the Company for the Tea Plantations of the Company for the year ending 31st March 2017; (i) M/s Mani & Company (ii) M/s SPK Associates (iii) M/s Kumar & Associates (iv) M/s DGM & Associates. Pursuant to the provisions of Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors is required to be ratified by the Members of the Company, a resolution for which will be placed before the Members at the ensuing Annual General Meeting. AUDITORS AND AUDIT REPORT Messrs. Price Waterhouse, Chartered Accountants, hold office as the Auditors of the Company upto the conclusion of the forthcoming Annual General Meeting and are eligible, for re-appointment. The Company has received a letter from them to the effect that their appointment, if made, would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for the appointment. There is no qualification, reservation or adverse remark made by Messrs. Price Waterhouse, the Statutory Auditors of the Company in their Report pertaining to the year ended 31st March 2016. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION A statement giving details of conservation of energy and technology absorption in accordance with Rule 8 (3), of the Companies (Accounts) Rules, 2014, is attached to this Report as Annexure VIII. RISK MANAGEMENT The Company has adopted and implemented a Risk Management Policy after identifying various risks which the Company encounters with during the course of its business none of which in the opinion of the Board may threaten the very existence of the Company itself. The Company maintains a Risk Register where the particulars of the risks identified are entered. The Company has taken adequate measures to mitigate various risks encountered by the Company. PARTICULARS OF EMPLOYEES The ratio of the remuneration of each Director to the median employee's remuneration and other particulars or details of employees pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached to this Report as Annexure IX. EMPLOYEE RELATIONS The Company's large work force continues to remain the backbone of its operations and their welfare has remained a prime area of focus. Upgradation and introduction of new housing facilities, water supply and sanitation, medical infrastructure etc. have been given priority. The new Wage/ Salary agreement for workers and Staff was implemented during the year. In terms of requirements of Section 4 of the Sexual harassment of women at the workplace (Prevention, prohibition and rehabilitation) Act, 2013, the Company has formed Internal Complaints Committees for its workplaces. During the year, no complaint regarding sexual harassment was received by the said Committees. Your Board of Directors wish to place on record its sincere appreciation for the dedicated services rendered by the executives, staffand workers atall levels and forsmooth functioning ofall the estates. For and on behalf of the Board of Directors A. Khaitan Managing Director K. K. Baheti Wholetime Director & CFO Place: Kolkata Date: 30th May 2016 |