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Harrisons Malyalam Ltd.

BSE: 500467 | NSE: HARRMALAYA |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE544A01019 | SECTOR: Plantations - Tea & Coffee

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

The Directors are pleased to present their 41st Annual Report together with the Audited Financial Statements, Directors Report and Annexures for the year ended March 31, 2018

1. Financial Highlights Rs. in Lacs

Particulars

31.03.2018

31.03.2017

31.03.2018

31.03.2017

Standalone

Consolidated

Revenue from Operations

38331.36

36664.02

38,331.36

36,664.02

Other Income

872.65

538.41

873.03

538.62

Total Income

39204.01

37202.43

39,204.39

37,202.64

Profit before tax from continuing operations

445.06

444.87

444.77

444.51

Loss from discontinued operations

(35.55)

(35.55)

Profit for the year

445.06

409.32

444.77

408.96

Re-measurement of Gains/Losses

(312.00)

(360.27)

(312.00)

(360.27)

Total Comprehensive Income

133.06

49.05

132.77

48.69

General Reserve

-

-

-

-

Proposed Dividend

-

-

-

-

Dividend Tax

-

-

-

-

Balance carried forward

133.06

49.05

132.77

48.69

Note:

Previous year figures have been re-stated to confirm to Ind AS requirements. Notes to the financial statement provides further explanation on the transition to Ind AS

2. Dividend

The Board of Directors has not recommended dividend for the year ended March 31, 2018.

3. Transfer to Reserve

During the year under review the Company has not transferred any amount to the General reserve.

4. Material Changes and Commitments, If Any Affecting the Financial Position of the Company

There are no Material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year on March 31, 2018 to which the financial statements relates and the date of signing of this report.

5. Change in the Nature of Business

During the year under review, there was no change in the nature of the business.

6. Performance

During the year under review, the Company has recorded a revenue of Rs. 383.31 crore from its operations as compared to 366.64 crore for the previous year. The total revenue, including other income for the financial year 2017-18 was Rs.392.04 crore as compared to Rs.372.02 crore for the previous year. The profit made by the Company for the financial year 2017-18 was '' 4.45 crore as compared to the profit of Rs.4.09 crore for the previous year.

Tea:

The Tea harvested from own gardens during Financial Year 2017-18 is at 11,054 MT (10,028 MT in the Financial Year 201617). Bought leaf operations in tea for Financial Year 2017-18 is at 4741 MT (3880 MT in Financial Year 2016-17). Together with the Bought Operations, the total production was 15,795 MT as compared to the total production of 13908 MT in the Financial Year 2016-17. For the year ended March 31, 2018, the average price realized per kg of tea was Rs.122.09 as against Rs.123.01 realized during the Previous Year. Tea exported was 4051 MT as against 4169 MT exported last year.

Rubber:

The Rubber harvested from own gardens stood at 5815 MT during Financial Year 2017-18 and is lower than 6046 MT achieved during Financial Year 2016-17. Bought operations in Rubber for the financial Year 2017-18 is at 6184 MT which is lower than the 6881 MT of Financial Year 2016-17. For the year ended March 2018, the average price realized per kg of rubber was Rs.142.69 as against Rs.142.26 realized during the previous year. Felling of rubber trees could not be carried out due to the ban order issued by the Special Officer appointed by the Government of Kerala.

140 hectares in Kumbazha Rubber Estate encroached by trespassers, continue to remain untapped.

7. LEGAL UPDATES

Kerala Land Conservancy Act: W.P(C) No.33122 of 2014 and connected cases

Pursuant to the Reference Order passed by a Single Bench in the above Writ Petition, the matter was listed before a Division Bench of the High Court of Kerala.

The Land Conservancy cases were finally heard by a Division Bench of the High Court on 30.01.2018 and continuously for 10 days. Senior Counsel from Supreme Court of India along with Menon & Pai, Advocates, Ernakulam addressed arguments on behalf of HML. The Government was represented by a Senior Counsel of Supreme Court. Counsels for the Public Interest Litigants were also heard by the Division Bench.

After detailed arguments, the Division Bench delivered a common judgment in the matter on 11.04.2018. Along with the main Writ Petitions filed by hMl and its assignees, the High Court also considered the conservancy proceedings initiated against Koney Estate in 2013 by the Additional Tahsildar, the notice issued for inspection of Waynad Estates and also the Public Interest Cases seeking CBI enquiry into the affairs of HML.

In its 200 page judgment, the High Court allowed the Writ petitions filed by HML and its assignees. The Order passed by the Special Officer under the Kerala Land Conservancy Act (KLC Act) to resume the Company''s lands was set aside, holding the same as without jurisdiction. The Court also allowed HMLs Writ Petitions challenging the proceedings against Koney and Waynad Estates. The Public Interest Cases also were dismissed by the High Court holding that the Special Officer has gone beyond the ambit of powers and authority conferred on him under the KLC Act.

The major findings are as detailed below:

- Maintainability of HMLs Writ Petition: HMLs Writ Petition is maintainable - Rejected Government''s contention that the Writ Petition is not maintainable as HML has not availed the alternative remedies of Appeal/Revision to the Government and filing a Civil Suit, as provided under the KLC Act.

- Kerala Land Conservancy Act (KLC Act), 1957: HML lands are not Government lands falling within the definition of “Property of the Government” under the KLC Act. Rejected the Special Officer''s inference that HML lands are Government lands illegally held. Company has produced title deeds and land tax receipts for its lands - any dispute on title to a land could be adjudicated only by a Civil Court. Special Officer has no jurisdiction to adjudicate on HML lands and his actions are therefore legally unsustainable.

- Kerala Land Reforms Act (KLR Act), 1963: Special Officer''s inference and the observations in the Single Judge''s Reference Order expressing doubts on foreign companies falling under the purview of the KLR Act and being entitled to the benefits of the kLr Act are wrong and legally unsustainable. “Person” defined under the KLR Act includes a Company - a foreign company also. HML and its predecessors are therefore entitled to the benefits under the KLR Act. Observations/findings to the contrary were rejected.

- Indian Independence Act, 1947: No violation of the Indian Independence Act as alleged. There is no restriction for foreign companies having properties in India after 1947. Title deeds of lands are not political “treaties and agreements” covered by the Act.

- Foreign Exchange Regulation Act, 1973 (FERA): No violation of FERA as alleged - required RBI approvals were obtained by HML and its predecessors as and when needed.

- Special Officer not competent to adjudicate Indian Independence Act & FERA: The Special Officer is not competent to adjudicate provisions of the Indian Independence Act or FERA anyway.

HML has lodged a Caveat Application in the Supreme Court of India so that HML will be notified on listing of Appeal, if any, preferred by the State Government. As directed by the Division Bench in the application filed by HML, Vigilance Department has returned the original of Document No.1600/1923 to the Registrar General of the High Court. The High Court has directed not to release the document without the permission of the High Court.

8. Equity Share Capital

The paid up Equity Share Capital of the Company as on March 31, 2018 was Rs.1845.43 Lakhs. There was no change in the share capital during the year under review .The equity shares of the Company are listed in the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited.

9. Deposits

The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013 and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

10. Particulars of Loans, Guarantees or Investments

The Company has not given any Loans, Guarantees, Investments and Security as per the provisions of Section 186 of the Companies Act, 2013 during the Financial Year ended March 31, 2018.

11. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is annexed to this Report (-Annexure A).

12. Corporate Governance

A separate Report on Corporate Governance (Annexure C) along with Additional Shareholder Information (Annexure D) as prescribed under the Listing Regulations executed with the Stock Exchanges is annexed as a part of this Report along with the practicing Company Secretary''s Certificate.

13. Subsidiary Companies

As at March 31, 2018 the Company has two wholly owned subsidiary companies, namely Enchanting Plantations Limited (EPL) and Harmony Plantations Limited (HPL) and have been considered in the consolidation of financial statements.

As per sub section (3) of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements and performance of the Company''s subsidiaries for the year ended March 31, 2018, is included as per the prescribed format in this Annual Report. The Annual Accounts of these subsidiaries are uploaded on the website of the Company at www.harrisonsmalayalam.com. The Annual Accounts of these subsidiaries and the related detailed information will be made available to any Member of the Company seeking such information at any point of time and are also available for inspection by any Member at the Registered Office of the Company.

14. Consolidated Financial Statements

In accordance with Section 129(3) of the companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 entered into with the Stock Exchanges, the Consolidated Financial Statements of the Company including the financial details of all the subsidiary companies of the Company, forms part of this Annual Report. The Consolidated Financial Statements have been prepared in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India.

15. Directors and Key Managerial Personnel

Also on March 31, 2018 Mr N. Dharmaraj, Whole Time Director, Mr. Ravi. A CFO (SBU-A), Mr G Satish Pillai, CFO (SBU-B), Mr V. Venugopal, Manager of the Company and Mr Binu Thomas Company Secretary cum Compliance Officer are the Key Managerial Personnel of the Company.

Changes in Key Managerial Personnel

During the year under review Mr. N. Dharmaraj was re-appointed as a Whole-time Director in the last Annual General Meeting held on 3rd August 2017 to hold office from October 1, 2017, to September 30, 2018. Mr. BInu Thomas was appointed in place of Mr. Jose George w.e.f. June 1, 2017.

Directors

Mr. N. Dharmaraj was reappointed as a Whole-time Director in the last Annual General Meeting held on 3rd August 2017 to hold office from October 1, 2017, to September 30, 2018.

During the year under review Mr. Kaushik Roy (DIN: 06513489) who was liable to retire by rotation was reappointed, in the last Annual General Meeting.

In accordance with the provisions of Companies Act 2013, Memorandum and article 105 of the Articles of Association of the Company. Mr. P Rajagopalan, Non-executive Non Independent Director of the Company retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment.

Under sub-regulation (1A) of Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, which would be effective from April 01, 2019, it is required to avail approval of Members by way of Special Resolution to appoint or continue the directorship of Non-Executive Directors who have attained the age of seventy five years. In compliance with the same approval of members is sought vide special resolution for continuation of Directorship of Mr Golam Momen and Mr JM Kothary Non-Executive independent Directors, who are more than 75 years old.

In compliance with Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, brief resume of the Directors proposed to be re-appointed is attached along with the Notice to the ensuing Annual General Meeting.

The Board recommends the reappointment of Mr. P Rajagopalan and continuation of Directorship of Mr Golam Momen and Mr JM Kothary

Non-Executive Independent Directors

The criteria of making payments to non-executive directors can be accessed on the website of the Company at http://www. harrisonsmalayalam.com

Meetings of the Board of Directors

During the year under review 6 meetings of the Board of Directors were held. The company has complied with all the applicable Secretarial Standards (SS-1).

Declaration by Independent Directors

The Independent Directors have submitted their declaration of independence, as required pursuant to sub-section (7) of Section 149 of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section (6) of Section 149. The details of familiarization programmes imparted to independent directors can be accessed at the website of the company at www.harrisonsmalayalm.com

a. Board Evaluation

The Board has carried out an annual evaluation of its own performance, the directors and also committees of the Board based on the guidelines formulated by the Nomination & Remuneration Committee. Board composition, quality and timely flow of information, frequency of meetings, and level of participation in discussions were some of the parameters considered during the evaluation process. Further, the Independent Directors of the Company met once during the year to review the performance of the Non-executive directors, Chairman of the Company and performance of the Board as a whole.

b. Policy on Remuneration to Directors, KMP and Senior Management Personnel

The Board based on the recommendation of the Nomination and Remuneration Committee has formulated a policy on remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy covers the appointment, including criteria for determining qualification, positive attributes, independence and remuneration of its Directors, Key Managerial Personnel and Senior Management Personnel. The Nomination and Remuneration Policy is annexed as Annexure E to this report.

16. Auditors

Statutory Auditors

Walker Chandiok & Co LLPKochi, Chartered Accountants, Chartered Accountants (Firm''s Registration No. 001076N/ N500013) were appointed as the Statutory Auditors of the Company to hold office for a period of five years from the conclusion of the fortieth Annual General Meeting until the conclusion of the forty fifth Annual General Meeting. The said appointment of the Statutory Auditors was required to be ratified at every Annual General Meeting. However, pursuant to the amendment in the proviso to Section 139 which has been made effective on May 07, 2018, the requirement of ratification of appointment of Statutory Auditors at every Annual General Meeting has been omitted. In view of such omission of proviso, permission of shareholders are sought to continue their appointment without ratification till the completion of their term.

Cost Audit

Maintenance ofcost records as requiredby provisions of Companies Act 2013 ismaintainedby Company. M/s. Shome &Banerjee, Cost Accountants, 5A, Nurulla Doctor Lane, (West Range), 2nd Floor, Kolkata - 700 017 (Firm registration No.000001) were appointed as cost auditor of the company to conduct audit of the cost records for the FY 2017-18. Cost Audit Report and the Compliance Report for the year ended March 31, 2017 were filed with the Central Government within the due date.

Secretarial Audit

In terms of the provisions of Section 204 of the Act and Rule9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. SVJS & Associates, Practicing Company Secretaries, as Secretarial Auditors to conduct Secretarial Audit for the FY 2017-18. The Secretarial Audit Report in Form MR-3 is annexed to this report as Annexure ‘F''.

Explanation and Comments on Auditor’s and Secretarial Audit Report

There is no qualification, disclaimer, reservation or adverse remark made by the Statutory Auditors in the Auditors'' Report. In response to observations made by secretarial auditor in their report our response are stated below:

For the Board Meeting held on 29.05.2017 Trading Window communication to stock exchange gave the date of opening of trading window as 30th May 2017 instead of 31st May 2017 -We wish to inform that it was an in advertent error in the date due to oversight it went unnoticed.

Company has not filed Form IEPF 4 for the year 2009-10- We wish to inform that the company was not able to file IEPF form pertaining to 2009-2010 due to technical issues in receiving data from the depository, we will file it in due course.

During the period under review, the suggestions put forth by the Audit Committed were duly considered and accepted by the Board of Directors, There were no instances of non-acceptance of such recommendations

17. Significant and material Orders passed by the Regulators/Courts, if any:

There are no significant or material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of your Company and its future operations.

18. Awards and Achievements

During the year under review, the Company was recognized as a “Great Place to Work - Certified'' by the Great Place to Work Organisation. HML''s Wentworth, Lockhart estates have won 3 awards each and Pattumallay estate have won 2 awards in the presigious TGLIA (TEA GOLDEN LEAF INDIA AWARDS).

19. Management Discussion and Analysis

Management Discussion and Analysis in terms of Regulation 34 of SEBI (Listing Agreement and Disclosure Requirements) Regulations 2015 forms a part of this Report and is annexed as Annexure ‘B'' to this Report.

20. Directors’ Responsibility Statement

In terms of clause (c) of sub-section (3) and sub-section (5) of Section 134 of the Companies Act, 2013, the Directors of the Company hereby state and confirm that:

i. In the preparation of annual accounts for the financial year ended March 31, 2018, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

ii. we have selected such accounting policies and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at March 31, 2018 and of the profit for the period from April 1, 2017 to March 31, 2018;

iii. 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;

iv. The Directors had prepared the annual accounts for the financial year ended March 31, 2018 on a going concern basis;

v. Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

21. Industrial Relations

Plantation is highly labour intensive and your Company considers people as its biggest assets.During the year under review, the Company was recognised as a “Great Place to Work - Certified'' by the Great Place to Work Organisation. A section on the Company''s Human Resource Initiatives is a part of the Management Discussion & Analysis forming part of this report

22. Internal Control Systems & their Adequacy

Notes on Internal financial control and its adequacy forms part of Management Discussion and Analysis Report.

23. Other Disclosure:

Extract of annual return is attached as annexure ‘G’ to this report.

Disclosure of the details of employees in compliance with the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure ‘H'' to this report.

Whistle Blower Policy / Vigil Mechanism

Pursuant to Section 177 of the Companies Act, 2013 the rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 with the Stock Exchanges, the Company has established a Whistle Blower Policy (Vigil Mechanism) for directors and employees to report genuine concerns about any instance of any irregularity, unethical practice and/or misconduct. The policy has been uploaded on the Company''s website www.harrisonsmalayalam.com

Corporate Social Responsibility

In accordance with Section 135 of the Act and the rules made thereunder, the Company has formulated a Corporate Social Responsibility Policy. However the company does not have any three year average profit and hence not required to incur any expenditure on Corporate Social Responsibility under the provisions of the Act. The members of the Committee are Mr. Golam Momen, Mr. Sachin Nandgaonkar, Mr. P Rajagopalan and Mr. N Dharmaraj. The details of CSR Committee is detailed in Corporate Governance Report. The CSR Policy can be accessed at the website of the Company at link http://www.harrisonsmalayalam. com

Anti-Sexual Harassment Policy

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 covering all employees of the Company. Internal complaints committee set up for the purpose did not receive any complaint for redressal during the year. Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Audit Committee

Audit Committee consists of Mr. Haigreve Khaitan, Mr. Golam Momen, Mr. J.M. Kothary, Mr. Sachin Nandgaonkar and Ms. Surbhi Singhi. Mr. Haigreve Khaitan, Independent Director, is the Chairman of the Committee. All members of the Audit Committee have accounting and financial management expertise. There has been no instance of non-acceptance of Audit Committee recommendation.

Risk Management

The Company has adopted a Risk Management Policy in accordance with the provisions of the Companies Act 2013 and in terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015.

Related Party Transactions

Details regarding related party transaction are detailed in notes to financial statements

Acknowledgements

The Board wishes to place on record its sincere appreciation for the continued assistance and support extended to the Company by its customers, vendors, bankers, Government authorities and employees.

Your Directors are also grateful for your continued encouragement and support.

On behalf of the Board of Directors

Sachin Nandgaonkar Kaushik Roy

May 25, 2018 (DIN- 03410739) (DIN- 06513489)

Mumbai Director Director

Director’s Report