Your Directors are pleased to present their Forty Second Annual Report together withthe Audited Financial Statements Directors Report and Annexures for the year ended March31 2019.
|1. Financial Highlights || || || ||Rs in Lakhs |
|Particulars ||31.03.2019 ||31.03.2018 ||31.03.2019 ||31.03.2018 |
| ||Standalone ||Consolidated |
|Revenue from operations ||35374.84 ||38331.36 ||35374.84 ||38331.36 |
|Other Income ||615.29 ||872.65 ||615.41 ||873.03 |
|Total Income ||35990.13 ||39204.01 ||35990.25 ||39204.39 |
|Profit/(Loss) before Tax ||(2408.95) ||445.06 ||(2409.47) ||444.77 |
|Profit/(Loss) after Tax ||(2408.95) ||445.06 ||(2409.47) ||444.77 |
|Re-measurement of Gains/(Losses) ||(103.67) ||(312.00) ||(103.67) ||(312.00) |
|Total Comprehensive Income/(Loss) ||(2512.62) ||133.06 ||(2513.14) ||132.77 |
The Board of Directors has not recommended dividend for the year ended March 31 2019.
3. Transfer to Reserve
During the year under review the Company has not transferred any amount to the Generalreserve.
4. Material Changes and Commitments If Any Affecting the Financial Position ofthe Company
There are no Material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financialyear on March 31 2019 towhich 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.
During the year under review the Company has recorded revenue of Rs 353.74 crores fromits operations as compared to Rs 383.31 crores for the previous year. The totalrevenue including other income for the FY 2018-19 was Rs 359.90 crores as compared to Rs392.04 crores for the previous year. The floods during August 2018 affected the Tea andRubber crops resulting in drastic drop in production volumes. The loss made by the Companyfor the FY 2018-19 was Rs 24.08 crore as compared to the profit ofRs 4.44 crore for theprevious year.
The Tea harvested from own gardens during FY 2018-19 is at 9613 MT (11054 MT in the FY2017-18). Bought leaf operations in tea for FY 2018-19 is at 3788 MT (4741 MT in FY2017-18). Together with the Bought Operations the total production was 13401 MT ascompared to the total production of 15795 MT in the FY 2017-18. For the year ended March2019 the average price realized per kg of tea was Rs 125.40 as against Rs 122.09 realizedduring the Previous Year. Tea exported was 4431 MT as against 4051 MT exported last year.
The Rubber harvested from own gardens stood at 4922 MT during FY 2018-19 and is lowerthan 5815 MT achieved during FY 2017-18. Bought operations in Rubber for the FY 2018-19are at 5127 MT which is lower than the 6184 MT of FY 2017-18. For the year ended March2019 the average price realized per kg of rubber was Rs 144.70 as against Rs 142.69realized during the previous year. Company could commence with Felling of rubber treesfrom February end. 140 hectares in Kumbazha Rubber Estate encroached by trespasserscontinue to remain untapped.
7. Legal Updates
Kerala Land Conservancy Act: W.P (C) No.33122 of 2014 and connected cases.
The High Court of Kerala by judgment dated 11.04.2018 allowed the Writ Petitions ofHML and had set aside all actions initiated by the Special Officer to resume theproperties belonging to the Company under the Kerala Land Conservancy Act. The StateGovernment had preferred an Appeal before the Supreme Court of India challenging thejudgment of the High Court. On 17.09.2018 the Supreme Court dismissed the Appeal filed bythe Government and thus the judgment passed by the Division Bench of the High Court ofthe Kerala has become final. With regard to the proceedings initiated by the SpecialOfficer against properties of the Company in Wayanad District as per directions in aReview Petition filed by the State Government in the High Court Of Kerala the Companyfileddetailed objections along with supporting documents before the Special Officer on16.10.2018 to establish not been any further action in this regard
8. Equity Share Capital
The paid up Equity Share Capital of the Company as on March 31 2019 was Rs 1845.43Lakhs. There was no change in the share capital during the year under review .The equityshares of the Company are listed in the BSE Limited and the National Stock Exchange ofIndia Limited. There was no Issue of equity shares with differential rights as todividend voting or otherwise;
The Company has not accepted any deposits from the public in terms of Section 73 of theCompanies Act 2013 and as such no amount on account of principal or interest on publicdeposits was outstanding as on the date of the balance sheet.
9. Particulars of Loans Guarantees or Investments
The Company has not given any Loans Guarantees Investments and Security as per theprovisions of Section 186 of the Companies Act 2013 during the Financial Year ended March31 2019.
10. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
Information with respect to conservation of energy technology absorption foreignexchange 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).
11. Corporate Governance
A separate Report on Corporate Governance (Annexure C) along with AdditionalShareholder Information (Annexure D) as prescribed under the Listing Regulations executedwith the Stock Exchanges is annexed as a part of this Report along with the practicingCompany Secretary's Certificate.
12. Subsidiary Companies
As at March 31 2019 the Company has two wholly owned subsidiary companies namelyEnchanting Plantations Limited (EPL) and Harmony Plantations Limited (HPL) and have beenconsidered in the consolidation of financial statements.
As per sub section (3) of Section 129 of the Companies Act 2013 read with Rule 5 ofthe Companies (Accounts) Rules 2014 a statement containing salient features of thefinancial statements and performance of the Company's subsidiaries for the year endedMarch 31 2019 is included as per the prescribed format in this Annual Report. The AnnualAccounts of these subsidiaries are uploaded on the website of the Company atwww.harrisonsmalayalam.com. The Annual Accounts of these subsidiaries and the relateddetailed information will be made available to any Member of the Company seeking suchinformation at any point of time and are also available for inspection by any Member atthe Registered Office of the Company.
The consolidated performance of the Company and its subsidiaries has been referred towherever required and salient features of subsidiaries are annexed as annexure to theAnnual Report in Form AOC-1
13. Consolidated Financial Statements
In accordance with Section 129(3) of the companies Act 2013 and Regulation 34 of theSEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 entered into withthe Stock Exchanges the Consolidated Financial Statements of the Company including thefinancial details of all the subsidiary companies of the Company forms part of thisAnnual Report. The Consolidated Financial Statements have been prepared in accordance withthe Accounting Standards issued by the Institute of Chartered Accountants of India. Therewere no revisions in the financial statements;
14. Directors and Key Managerial Personnel
As on March 31 2019 Mr Venkitraman Anand & Mr. Cherian M George WholeTimeDirectors Mr. Ravi. A CFO (SBU-A) Mr V. Venugopal Manager of the Company and MrBinu Thomas Company Secretary cum Compliance Officer are the Key Managerial Personnel ofthe Company.
Changes in Directors & Key Managerial Personnel
During the year under review Mr. Venkitraman Anand(Din: 07446834) was appointed asWhole Time Director and Mr.N Dharmaraj (Din: 00912004) was appointed as Whole TimeDirector of the Company by the Members of the Company by passing of Ordinary Resolution byway of Postal Ballot and E-voting on February 1 2019. During the year under review Mr.Cherian M George (Din: 07916123) was appointed as Whole Time Director by passing ofOrdinary Resolution by way of Postal Ballot and E-voting on April 152019. Mr V. Venugopalwas reappointed as Manager of the Company in the last Annual General Meeting held onSeptember 262018 as Manager of the Company w.e.f August 14 2018 to August 13 2019.
Mr.P Rajagopalan (Din: 02817068)and Ms Kusum Dadoo (Din: 06967827)was appointed asIndependent Directors of the Company by the Members of the Company by passing of OrdinaryResolution by way of Postal Ballot and E-voting on April 152019.
As per provisions of Sections 149 150 152 178 and any other applicable provisions ofthe Act and the Rules made thereunder your Directors are seeking re-appointment of Mr.Golam Momen (Din : 00402662)and Mr. J M Kothary (Din:00015254) whose current period ofoffice is expiring on September 30 2019 as an Independent Director of the Company notliable to retire by rotation for a second term of 5 (five) consecutive years with effectfrom October 12019
In terms of Regulation 17(1A) of the Listing Regulations as amended and as dulyrecommended by the Nomination and Remuneration Committee the appointment of Mr. PRajagopalan who is currently at the age of 72 (seventy-two) years is proposed by theBoard of Directors seeking Members' approval by way of Special Resolution for hiscontinuation as a Non-Executive IndependentDirectorevenafterattainingageof75(seventy-five)years as an Independent Director notliable to retire by rotation till expiry of his extant term upto February 12 2024
Mr. Kaushik Roy (DIN: 06513489) retires by rotation at the forthcoming AGM and beingeligible offers himself for re-appointment.
Details of the proposal of appointment/re-appointment/continuation of theafore-mentioned Directors are mentioned in the Explanatory Statement u/s 102 of the Act inthe Notice of the 42nd AGM of the Company.
Ms. Surbhi Singhi (DIN: 03275338) Non Executive independent Director resigned from theBoard with effect from December 03 2018 due to other professional obligation andcommitments. Mr.Sachin Nandgaonkar (Din: 03410739 ) Non Executive Director resigned fromdirectorship with effect February 13 2019 due to personal reasons. Mr.Haigreve Khaitan(Din: 00005290) Non Executive independent Director resigned from the Board with effectfrom June 12 2019 due to other professional obligation andcommitments.Hehavealsoconfirmed that there is no other material reason other than thoseprovided.
Meetings of the Board of Directors
During the year under review 5 meetings of the Board of Directors were held. Thecompany has complied with all the applicable Secretarial Standards.
Declaration by Independent Directors
The Independent Directors have submitted their declaration of independence as requiredpursuant to sub-section (7) of Section 149 of the Companies Act 2013 stating that theymeet the criteria of independence as provided in sub-section (6) of Section 149. Thedetails of familiarization programmes imparted to independent directors can be accessed atthe website of the company at www.harrisonsmalayalm.com
a. Board Evaluation
The Board has carried out an annual evaluation of its own performance the directorsand also committees of the Board based on the guidelines formulated by the Nomination& Remuneration Committee. Board composition quality and timely flow of informationfrequency of meetings and level of participation in discussions were some of theparameters considered during the evaluation process. Further the Independent Directors ofthe Company met once during the year to review the performance of the Non-executivedirectors Chairman of the Company and performance of the Board as a whole. b. Policyon Remuneration to Directors KMP and Senior Management Personnel
The Board based on the recommendation of the Nomination and Remuneration Committee hasformulated a policy on remuneration of Directors Key Managerial Personnel and SeniorManagement of the Company. The policy covers the appointment including criteria fordetermining qualification positive attributes independence and remuneration of itsDirectors Key Managerial Personnel and Senior Management Personnel. The Nomination andRemuneration Policy is annexed as Annexure E to this report. Neither the Managing Directornor the Whole-time Directors of the Company receive any remuneration or commission fromany of its subsidiaries; Non-Executive Independent Directors The criteria of makingpayments to non-executive directors can be accessed on the website of the Company at http://www.harrisonsmalayalam.com
Walker Chandiok & Co LLPKochi Chartered Accountants Chartered Accountants(Firm's Registration No. 001076N/ N500013) were appointed as the Statutory Auditors of theCompany to hold office for a period of fiveyears from the conclusion of the fortiethAnnual General Meeting (AGM). until the conclusion of the forty fifth Annual GeneralMeeting. The said appointment of the Statutory Auditors was required to be ratified atevery Annual General Meeting. However pursuant to the amendment in the proviso to Section139 which has been made effective on May 07 2018 the requirement of ratification ofappointment of Statutory Auditors at every Annual General Meeting has been omitted. Inview of such omission of proviso permission of shareholders was sought in the last AGM tocontinue their appointment without ratification till the completion of their m.
M/s. Shome & Banerjee Cost Accountants 5A Nurulla Doctor Lane (West Range) 2ndFloor Kolkata 700 017 (Firm registration No.000001) were appointed as cost auditorof the company to conduct audit of the cost records for the FY 2018-19. Cost Audit Reportand the Compliance Report for the year ended March 31 2019 were filed with the CentralGovernment within the due date. Maintenance of cost records as specified by the CentralGovernment under sub-section (1) of section 148 of the Companies Act 2013 is required bythe Company and accordingly such accounts and records are made and maintained
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 hadappointed M/s. SVJS & Associates Practicing Company Secretaries as SecretarialAuditors to conduct Secretarial Audit for the FY 2018-19. The Secretarial Audit Report inForm MR-3 is annexed to this report as Annexure F'.
QUALIFICATION RESERVATION OR ADVERSE REMARK IN THE AUDIT REPORTS
There is no qualification reservation or adverse remark made by the Statutory and CostAuditors in their Audit Reports issued by them. With regard to Observation/remarkcontained in the Secretarial Auditors' Report your Directors' wish to inform that Dir-12and MR-1 in respect of Whole Time Director will be filed as required by the provisions ofthe Companies Act rules thereunder. There were no frauds reported by the auditors underprovisions of the Companies Act 2013.
16. Significant and material Orders passed by the Regulators/Courts if any:
There are no significant or material orders passed by the Regulators concern status ofyour Company and its future operations.
17. Awards and Achievements
During the year under review the Company Received CII-SR EHS Excellence Awards 2018with 3 star Rating for Best environment Health and Safety practices at NagamallayKumbazhaMooply Moongalaar Wallardie Pattumallay Lockhart and Wentworth Estates. UpperSurianalle Tea factory has bagged the Kerala state Safety Award 2018 in category III-Medium factories. Wentworth & Lockhart Estates won Tea Golden Leaf India Awards.
During the year under review the Company was recognized as a "Great Place to WorkCertified' by the Great Place to Work Organization. HML has also bagged the first runnerup National award for outstanding achievement for Industrial relations in a reviewconducted by All India organization of Employers ( AIOE an allied body of FICCI ) NewDelhi.
18. Management Discussion and Analysis
Management Discussion and Analysis in terms of Regulation 34 of SEBI (Listing Agreementand Disclosure Requirements)
Regulations 2015 forms a part of this Report and is annexed as Annexure A' tothis Report. Key Financial Ratios for the financial year ended 31st March 2019 areprovided in the Management Discussion and Analysis Report given in Annexure-A'which is annexed hereto and forms a part of the Board's Report.
19. Directors' Responsibility Statement
In terms of clause (c) of sub-section (3) and sub-section (5) of Section 134 of theCompanies Act 2013 the Directors of the Company hereby state and confirm that:
(i) In the preparation of annual accounts for the FY ended March 31 2019 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any; (ii) we have selected such accounting policies and appliedconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at March 31 2019 and ofthe loss for the period from April 1 2018 to March 31 2019;
(iii) we had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; (iv) The Directors had prepared the annual accounts for the FY ended March31 2019 on a going concern basis;
(v) Directors have laid down internal financial controls to be followed by the Companyand are adequate and are operating effectively; and (vi) The Directors have devised propersystems to ensure compliance with the provisions of all applicable laws and that suchsystems are adequate and operating effectively.
21. Industrial Relations
Plantation is highly labour intensive and your Company considers people as its biggestassets. The welfare and wellbeing of workers are monitored closely. Industrial relationsremained cordial throughout the year
22. Internal Control Systems & their Adequacy
Notes on Internal financial control and its adequacy forms part of ManagementDiscussion and Analysis Report.
23. Other Disclosure: Extract of annual return
Extract of annual return as per Section 92 (3) of the Companies Act 2013 and Rulesframed thereunder is attached as annexure G' to this report and also posted onwebsite of company at https://www.harrisonsmalayalam.com/investor_info.htm
Whistle Blower Policy / Vigil Mechanism
Pursuant to Section 177 of the Companies Act 2013 the rules made thereunder and theSEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 with the StockExchanges the Company has established a Whistle Blower Policy (Vigil Mechanism)for directors and employees to report genuine concerns about any instance of anyirregularity unethical practice and/or misconduct. The policy has been uploaded on theCompany's website https://www.harrisonsmalayalam.com/investor_info.htm
Corporate Social Responsibility
In accordance with Section 135 of the Act and the rules made thereunder the Companyhas formulated a Corporate Social
Responsibility Policy. However the company does not have any three year average profitand hence not required to incur any expenditure on Corporate Social Responsibility underthe provisions of the Act. The members of the Committee are Mr. Golam Momen Mr. PRajagopalan and Mr. N Dharmaraj. The details of CSR Committee is detailed in CorporateGovernance Report. The CSR Policy can be accessed at the website of the Company at linkhttps://www.harrisonsmalayalam.com/investor_info.htm
Anti-Sexual Harassment Policy
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof 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 forthe purpose did not receive any complaint for redressal during the year and there are nocomplaints which were required to be disposed off or pending as at the end of thefinancial year. Company has complied with provisions relating to the constitution ofInternal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
Committees of the Board
Currently the Board has five committees: Audit Committee Nomination and RemunerationCommittee Stakeholders
Relationship Committee Corporate Social Responsibility Committee and the RiskManagement Committee. A detailed note on the composition of the Board and its Committeesis provided in the Corporate Governance Report Section of this Report There have been nosituations where the Board has not accepted any recommendation of the Audit Committee.
Risk Management is the process of identification assessment and minimise monitor andmitigate/control the probability and/or impact of unfortunate events or to maximise therealisation of opportunities. The Company has adopted a Risk Management Policy inaccordance with the provisions of the Companies Act 2013 and in terms of the SEBI (ListingObligations and Disclosure Requirements) Regulation 2015.
Related Party Transactions
All Related Party Transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. Hence the provisionsof Section 188 of the Act are not attracted. Thus disclosure in Form AOC-2 is notrequired. Further there are no materially significant Related Party
Company with its Promoters Directors Key Managerial Personnel or other designatedpersons which may have a potential conflict with the interest of the Company at large.All Related Party Transactions are placed before the Audit Committee for approval.
The Policy on Related Party Transactions duly approved by the Board of Directors of theCompany is posted on the Company's website and may be accessed at the link:https://www.harrisonsmalayalam.com/investor_info.htm
KEY MANAGERIAL PERSONNEL AND EMPLOYEES
Disclosure pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial personnel) Rules 2014 is marked as Annexure I' which is annexedhereto and forms a part of the Board's Report.
The Board wishes to place on record its sincere appreciation for the continuedassistance and support extended to the Company by its customers vendors bankersGovernment authorities and employees.
Your Directors are also grateful for your continued encouragement and support.
| ||On behalf of the Board of Directors || |
| ||Venkitraman Anand ||Cherian M. George |
|Kolkata ||Whole Time Director ||Whole Time Director |
|May 29 2019 ||(DIN: 07446834) ||(DIN: 07916123) |