Mcleod Russel (India)

The Directors have pleasure in presenting the Annual Report with the
 audited Accounts of your Company, for the financial year ended 31st
 March 2008.
 
 AMALGAMATION OF THE MORAN TEA COMPANY (INDIA) LIMITED WITH THE COMPANY
 
 During the year under review your Company pursuant to a Share Purchase
 Agreement dated 18th January 2007 entered into with Moran Holdings Pic
 acquired 15,20,000 equity shares of Rs.10/- each of The Moran Tea
 Company (India) Limited (Moran India). In connection with this
 acquisition, the Company also acquired further 3,00,493 equity shares
 which were tendered in an Open Offer made to the Shareholders of Moran
 India pursuant to Securities and Exchange Board of India (Substantial
 Acquisition of Shares and Takeovers) Regulations, 1997. As a result of
 acquisition of 18,20,493 equity shares in aggregate of Moran India
 representing 86.69% of the paid-up share capital of the said Company,
 Moran India became a subsidiary of your Company. With a view to derive
 economies of scale and synergy benefits, the Boards of Directors of
 your Company and Moran India considered it prudent to merge Moran India
 with your Company with effect from 1 st April 2007. Accordingly, an
 Application was made to the Honble High Court at Calcutta for
 approving the Scheme of Amalgamation (the Scheme). The Honble High
 Court, after following the legal procedure and obtaining the approval
 of the Members of the Companies, sanctioned the Scheme on 16th April
 2008. Upon completion of the legal requirements the Scheme has became
 effective on 16th May 2008 with retrospective effect from the
 Appointed Date i.e. 1st April 2007. The amalgamation is expected to
 strengthen the position of the Company and should have beneficial
 results for the shareholders, employees and all concerned.
 
 Pursuant to the Scheme, the Company will allot 11,18,028 equity shares
 of Rs.5/- each to the eligible shareholders of Moran India in the ratio
 of 4 shares of Rs.5/- each in the Company for every share of Rs.10/-
 held by them in Moran India as on the Record Date fixed for the
 purpose. After such allotment the paid up share capital of the Company
 will stand increased to Rs.54,72,78,675/- divided into 10,94,55,735
 equity shares of Rs.5/- each.
 
 REVIEW OF PERFORMANCE
 
 The Financial Results of the Company for the year ended 31st March 2008
 are summarized below:
  
                                              2007-08          2006-07
                                             Rs.ln Lakhs    Rs.ln Lakhs
 
 Profit before Interest, Depreciation 
 and Taxation                                 11092.01       10,921.67
 Less: Interest and Exchange Fluctuation (Net) 3721.58        4,179.88
                                              7,370.43        6,741.79
 Less: Depreciation & amortisation            2,182.29        2,303.13
 Profit before Taxation                       5,188.14        4,438.66
 Taxation Charge / (Credit) Current Tax         152.68          148.10
 Deferred-Tax                                   187.00         (570.00)
 Fringe Benefit Tax                             127.40          113.50
 Profit after Taxation                        4,721.06        4,747.06
 Balance brought forward from previous year   3,040.75        2,061.18
 Balance added pursuant to 
 Scheme of Amalgamation                         510.35               -
 Balance available for Appropriations         8,272.16        6,808.24
 Proposed Dividend                            1,094.56        1,083.37
 Tax on Proposed Dividend                       186.02          184.12
 Transfer to General Reserve                  3,000.00        2,500.00
 Balance carried forward                      3,991.58        3,040.75
 
 As mentioned earlier, The Moran Tea Company (India) Limited was
 amalgamated with the company with retrospective effect from 1st April
 2007 and as such the figures for the year under review are not
 comparable with the figures in the previous year.
 
 The operations of the Company during the year under review have
 resulted in a Profit before Interest, Depreciation and Taxation (PBIDT)
 of Rs.11092 lakhs as compared to Rs.10922 lakhs in the previous year.
 The current years figures include profit of Rs.1899 lakhs from sale of
 a property and Rs. 850 lakhs from acquisition of land by Government.
 
 The improvement in Tea prices during the year under review by Re.0.97
 per kg. as compared to last year was not commensurate with increase in
 costs.
 
 DIVIDEND
 
 Your Directors are pleased to recommend for approval of the
 shareholders, maintenance of dividend of 20% (Re.1/- per equity share
 of Rs.5/-) on the paid up equity Capital of the company (including the
 shares to be alloted pursuant to the Scheme of Amalgamation of Moran
 India with the Company) for the financial year ended 31st March 2008.
 
 REVIEW OF OPERATIONS
 
 During the Financial year, your Company produced 743.82 lakh kgs tea as
 compared to 701.24 lakh kgs. in the previous year. A high standard of
 field maintenance was achieved.
 
 A good standard of young tea was established. Comparative high yields
 against an Industry average was maintained by the Company. The age
 profile of the tea has improved as a result of an ongoing Uprooting and
 Replanting Policy. All tea estates have a good standard of nursery with
 the required clonal blend.
 
 Your Companys focus has always been to produce quality teas, which
 commanded a premium both in the domestic as well as in the
 international markets. As part of the upgradation and modernization
 programme of tea factories, 26 factories in North Bank and Dooars
 estates installed coal stoves in withering trough replacing oil fired
 heaters. This will contribute to a major saving in cost. To increase
 the production of orthodox in 2008-09, withering facilities were
 enhanced in eleven factories and additional orthodox manufacturing and
 sorting machines were also installed in most factories. In some
 factories, extension of the building was necessary to accommodate
 additional machinery. Seven colour sorters for orthodox manufacture
 were imported and installed. A Bi-fuel genset, which runs on natural
 gas and HSD oil, was put on trial with successful results.  A new
 Hazardous Analysis and Critical Control Point (HACCP) certified
 blending unit was made operational at Nilpur division of Pertabghur Tea
 Estate.
 
 The Company now has 14 HACCP certified factories. More factories are
 being prepared to undertake the certification in the coming financial
 year. Your Company also has four factories certified as Fair-trade.
 Other compliance certification as per specific customer requirement is
 also being followed.
 
 The average price realization for the Companys tea for the year was
 Rs.87.16 per kg. which is higher by Re. 0.97 as compared to last year.
 
 The Company handled a total export (both direct as well as deemed)
 quantum of 274 lakh kgs in 2007-08 with an overall export turnover of
 over Rs. 25508 Lakhs. Favourable feedback was received from the buyers
 both in terms of quality and deliveries.
 
 CORPORATE SOCIAL RESPONSIBILTY
 
 Your Company is sensitive towards the environment in which it operates
 and is conscious of its social responsibilities.  It has continued its
 welfare activities for all round development in the field of education,
 culture and welfare activities and to improve the general standard of
 living in and around the tea estates of the Company.
 
 The Assam Valley School has emerged as a premier public school of the
 country and continues to provide excellent opportunity to the children
 of the planting community and the North East in terms of academics and
 overall development.
 
 With the Companys continued support The Assam Valley Literary Award
 has gained wide recognition. This year the award was conferred on
 eminent Assamese writer Sri Nagen Saikia in acknowledgement of his
 contribution in the field of Assamese literature. Scholarship was
 provided to meritorious students from the North East and this was
 funded by Williamson Magor Education Trust.
 
 Your Company continued with welfare activities around its area of
 operation. The emphasis was on improvement of health, development of
 education, literature, culture and sports. Medical assistance was also
 provided to the nearby villages through medical camps.
 
 A high standard of medical care is provided to the work force through
 well-equipped individual estate hospitals and specialized treatment at
 the Central hospitals. The company continued to support the Mothers
 club.
 
 The Tea Tourism at Balipara in Assam, in partnership with River
 Journeys and Bungalows of India, attracted increased stream of
 tourists. Your Company is studying the possibility of developing more
 such opportunities in other areas of Assam.
 
 SUBSIDIARY COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS
 
 As required under the Listing Agreements with the Stock Exchanges,
 Consolidated Financial Statements of the Company and its subsidiary
 Borelli Tea Holdings Limited prepared in accordance with Accounting
 Standard 21 issued by the Institute of Chartered Accounts of India are
 attached.
 
 The Company has been granted exemption for the year ended 31st March
 2008 by the Ministry of Corporate Affairs vide its letter dated 9th
 April 2008 (Exemption Letter), from attaching to its Balance Sheet,
 the Annual Report and Accounts of its subsidiary company. As per the
 terms of the Exemption Letter, a statement containing brief financial
 details of the Companys subsidiary for the year ended 31st March 2008
 is included in the Annual Report. The annual accounts of the subsidiary
 and the related detailed information will be made available to any
 member of the Company / its subsidiary seeking such information at any
 point of time and are also available for inspection by any member of
 the Company / its subsidiary at the Registered / Head Office of the
 Company. The annual accounts of the said subsidiary is also available
 for inspection, as above, at the Registered / Head Office of the
 subsidiary company.
 
 DIRECTORS
 
 Since the last Report Mr. R. S. Jhawar resigned from the Board of
 Directors with effect from close of business on 31st March 2008. The
 Board wishes to place on record its appreciation for the valuable
 contributions made by Mr. R. S.  Jhawar during his tenure as a
 Director.
 
 The term of appointment of Mr. A. Khaitan as the Managing Director and
 Mr. R. Takru, Mr. A. Monem and Mr. K. K. Baheti as the Wholetime
 Directors had expired on 31st March 2008. Considering their
 satisfactory performance the Board of Directors at its Meeting held on
 1st April 2008 re-appointed Mr. A. Khaitan as the Managing Director and
 Mr. R. Takru, Mr. A. Monem and Mr. K. K. Baheti as Wholetime Directors
 for a fresh term of three years in each case commencing from 1st April
 2008. Approval of the Members to the said re-appointments as also to
 the remuneration payable to the Managing Director and the Wholetime
 Directors will be sought at the ensuing Annual General Meeting.
 
 In accordance with the provisions of the Articles of Association of the
 Company, Mr. B. M. Khaitan, Mr. Utsav Parekh and Mr. A. Monem will
 retire by rotation at the forthcoming Annual General Meeting and being
 eligible, offer themselves for re-appointment.
 
 COST AUDIT
 
 The Ministry of Corporate Affairs, Government of India by an Order
 directed audit of the Cost Accounts maintained by the Company under
 Section 209(1 )(d) of the Companies Act, 1956 in respect of the
 Plantation Product on a yearly basis.  In terms of the said Order Cost
 Audit is being conducted by four firms of Cost Accountants appointed
 with the approval of the Ministry of Corporate Affairs.
 
 AUDITORS
 
 Messrs. Price Waterhouse retire as the Auditors at the conclusion of
 the forthcoming Annual General Meeting and, being eligible, offer
 themselves for re-appointment.
 
 AUDITORS REPORT
 
 With regard to the observation made by the Auditors in their Report
 relating to non-ascertainment of value of green leaf consumed,
 reference is made to Note No.21(b) of Schedule 17 to the Accounts,
 which is self-explanatory.
 
 MANAGEMENT DISCUSSION & ANALYSIS REPORT AND REPORT ON CORPORATE
 GOVERNANCE
 
 As required in terms of the Listing Agreement with the Stock Exchanges,
 a Management Discussion and Analysis Report and a Report on Corporate
 Governance are annexed forming part of this Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
 state as follows :
 
 1.  That in the preparation of the annual accounts for the financial
 year ended 31st March, 2008, the applicable accounting standards had
 been followed with no material departures;
 
 2.  That 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 or loss of the Company for that period;
 
 3.  That the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities;
 
 4. That the Directors had prepared the annual accounts on a going
 concern basis.
 
 CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
 
 A statement giving details of conservation of energy and technology
 absorption in accordance with the Companies (Disclosure of Particulars
 in the Report of the Board of Directors) Rules, 1988, is annexed.
 
 EMPLOYEE RELATIONS
 
 As a result of acquisition of three tea companies during the last three
 years your Company now has a very large workforce in its Tea Estates.
 The Company continued to have a very cordial and harmonious relation
 with its employees at all levels.
 
 The Board wishes to place on record its sincere appreciation of the
 efforts put in by the Companys workers, staff and executives for
 achieving growth and satisfactory results.
 
 Particulars of employees required under Section 217(2A) of the
 Companies Act, 1956 are given in the Annexure forming part of this
 Report.
 
                                      For and on behalf of the Board
 
                                       A. Khaitan - Managing Director
 Kolkata, 2nd June 2008              K. K. Baheti - Wholetime Director