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Harrisons Malayalam Ltd.

BSE: 500467 Sector: Agri and agri inputs
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OPEN 86.00
VOLUME 12032
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P/E 34.63
Mkt Cap.(Rs cr) 154
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Sell Price 0.00
Sell Qty 0.00
OPEN 86.00
CLOSE 86.30
VOLUME 12032
52-Week high 124.90
52-Week low 69.80
P/E 34.63
Mkt Cap.(Rs cr) 154
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Harrisons Malayalam Ltd. (HARRMALAYA) - Director Report

Company director report

Your Directors are pleased to present their 40th Annual Report together withthe Audited Financial Statements Directors Report and Annexures for the year ended 31stMarch 2017

1. Financial Highlights

Rs. in Lacs

Year ended



31.03.2017 31.03.2016 31.03.2017 31.03.2016
Revenue from Operations 36664.02 28485.55 36664.02 28485.55
Other Income 538.41 316.06 538.41 316.06
Income from discontinued operations - 58.28 - (58.28)
Total Income 37202.43 28859.89 37202.43 28859.89
Profit/(Loss) before Tax (521.56) (4568.24) (486.01) (4566.79)
Profit/(Loss) after Tax (521.56) (4568.24) (521.56) (4566.79)
Surplus brought forward from previous year 1307.95 5876.19 1307.95 5874.74
Profit available for appropriation 786.39 1307.95 786.39 1307.95
General Reserve - - - -
Proposed Dividend - - - -
Dividend Tax - - - -
Balance carried forward 786.39 1307.95 1307.95 1307.95

2. Dividend

The Board of Directors has not recommended dividend for the year ended March 312017 inview of the losses incurred by the Company.

3. Transfer to Reserve

No amount was transferred to reserves.

4. Material Changes And Commitments If Any Affecting The Financial Position Of TheCompany

There are no Material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year on 31stMarch 2017 to which the financial statements relate and the date 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 '366.64 crore fromits operations as compared to '284.85 crore for the previous year. The total revenueincluding other income and income from discontinued operations for the financial year2016-17 was '372.02 crore compared to '288.6 crore for the previous year. The lossincurred by the Company for the financial year 2016-17was '5.22 crore as compared to theloss of '45.68 crore for the previous year.


The Tea harvested from own gardens during Financial Year 2016-17 is at 10028 MT (9620MT in the Financial Year 2015-16). Bought leaf operations in tea for Financial Year2016-17 is at 3880 MT (3838 MT in Financial Year 2015-16). Together with the BoughtOperations the total production was 13908 MT as compared to the total production of 13458MT in the Financial Year 2015-16. For the year ended March 2017 the average pricerealized per kg of tea was Rs.123.01 as against '107.05 realized during the Previous Year.Tea exported was 4169 MT as against 3794 MT exported last year.


The Rubber harvested from own gardens stood at 6046 MT during Financial Year 2016-17and is higher than 4666 MT achieved during Financial Year 2015-16. Bought operations inRubber for Financial Year 2016-17 at 6881 MT which is higher than the 4184 MT of FinancialYear 2015-16 by 64%. For the year ended March 2017 the average price realized per kg ofrubber was '142.26 as against '136.66 realized during the previous year. Income fromRubber Tree felling for the season 2015-16 could not be accounted as felling of rubbertrees could not be carried out due to the ban order issued by the Special Officerappointed by the Government of Kerala.

140 hectares in Kumbazha Rubber Estate encroached by trespassers continue to remainuntapped.

Update on HML Land Matters

The writ petition filed by the Company against the proceedings of the Special Officerand Collector appointed by the Government to resume the properties of the Company underthe Kerala Land Conservancy Act is pending before a Division Bench of the Hon'ble HighCourt of Kerala. The order of status quo passed by the Hon'ble High Court is still inforce. We would like to reiterate to all our stakeholders that the Company legitimatelyholds all its lands with valid title deeds and the required approvals. The Company and itspredecessors have been in absolute possession and enjoyment of these lands for over 100years. All these lands were subjected to payment of Land Tax and would never fall underthe Kerala Land Conservancy Act which in any case excludes registered land holders andtax paid lands from the definition therein of "Property of the Government".

The restraints imposed by the Special Officer on company's normal agriculturaloperations including orders banning the felling of rubber trees in estates has seriouslyaffected the replanting activities and also the income generated through these operations.The issues are now pending consideration before a Division Bench of the High Court ofKerala.

We wish to reiterate and assure that all operations of your Company are within theframework of law and that all its lands are supported by valid title deeds. The Company isconfident that it will be able to successfully establish its credentials and legitimacy ofits operations in the Court of law.

7. Listing

The equity shares of the Company are listed in the Bombay Stock Exchange Limited andthe National Stock Exchange of India Limited.

8. Deposits

The Company has not accepted Deposits under Chapter V of the Companies Act 2013.

9. Particulars of Loans Guarantees or Investments

In terms of the provisions of Section 186(11) and Section 186(4) of the Companies Act2013 requiring disclosure in the financial statements of the full particulars of loansgiven investments made or guarantees given or securities provided and purpose thereof isnot applicable to the Company.

10. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

Information relating to conservation of energy research & development technologyabsorption and foreign exchange earnings and outgo as required under Section 134 of theCompanies Act 2013 read with Companies (Accounts) Rules 2014 is given in Annexureforming a part of this Report. (Annexure A)

11. Corporate Governance

A report on Management Discussion and Analysis is attached here with (Annexure B). Aseparate Report on Corporate Governance (Annexure C) along with Additional ShareholderInformation (Annexure D) as prescribed under the Listing Regulations executed with theStock Exchanges is annexed as a part of this Report along with the practicing CompanySecretary's Certificate.

12. Subsidiary Companies

As at March 31 2017 the Company has two wholly owned subsidiary companies namelyEnchanting Plantations Limited (EPL) and Harmony Plantations Limited (HPL). As EPL and HPLwere incorporated specifically to facilitate the Composite Scheme of Arrangement andAmalgamation the investments held by the Company in these companies are treated ascurrent investments and hence have not been considered in the consolidation of financialstatements.

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 ended forthe year ended March 312017 is included as per the prescribed format in this AnnualReport. The Annual Accounts of these subsidiaries are uploaded on the website of theCompany. The Annual Accounts of these subsidiaries and the related detailed informationwill be made available to any Member of the Company seeking such information at any pointof time and are also available for inspection by any Member at the Registered Office ofthe Company.

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.

14. Directors and Key Managerial Personnel

Mr N.Dharmaraj Whole Time Director Mr. Ravi. A CFO (SBU-A) Mr G Satish Pillai CFO(SBU-B) and Mr Binu Thomas Company Secretary cum Compliance Officer are the Key ManagerialPersonnel of the Company.

Changes in Key Managerial Personnel

During the year under review Mr. K. N. Mathew working as CFO (SBU-A) of the Companyretired on April 15th 2016 and in his place Mr. Ravi A. was appointed as theChief Financial Officer of the Company (SBU-A)with effect from 8th April 2016.

Mr. Satish Pillai was appointed as the Chief Financial Officer of the Company (SBU-B)with effect from November 10 2016 consequent to retirement of Mr. PA. Krishnamoorthyfrom the post of CFO.

Mr. Binu Thomas was appointed as the Company Secretary and Compliance Officer of theCompany with effect from June 1 2017 consequent to resignation of Mr. Jose George fromthe post of Company Secretary.


In accordance with the provisions of Companies Act 2013 Memorandum and article 105ofthe Articles of Association ofthe Company Mr. Kaushik Roy Non-executive NonIndependent Director of the Company retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for reappointment.

Mr. N. Dharmaraj wasreappointed as a Whole-time Director inthelast AnnualGeneralMeeting to holdofficefrom October 12016 to September 30 2017. He is proposed to bereappointed as the Whole-time Director to hold office from October 1 2017 to September30 2018 at the ensuing Annual General Meeting

Brief particulars of Mr. Kaushik Roy and Mr N. Dharmaraj his expertise in variousfunctional areas are given in the Notice convening the Annual General Meeting. The Boardof Directors recommends the re-appointment of Mr. Kaushik Roy as mentioned above

In compliance with Regulation 36 of the SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015 brief resume of the Director proposed to be re-appointedis attached along with the Notice to the ensuing Annual General Meeting.

The criteria of making payments to non-executive directors can be accessed website ofthe Company at link http://www.

Six meetings of the Board of Directors were held during the year.

14.1 Declaration by Independent Directors

Pursuant to sub section (6) of Section 149 of the Companies Act 2013 the IndependentDirectors of the Company viz. Mr. Haigreve Khaitan (DIN- 00005290) Mr. G. Momen (DIN-00402662) Mr. J. M. Kothary (DIN- 00015254) and Ms. Surbhi Singhi (DIN- 03275338) havegiven declaration to the Company that they qualify the criteria of independence asrequired under the Act. The details of familiarisation programmes imparted to independentdirectors can be accessed at the website of the company at

14.2 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 information frequency of meetings andlevel of participation in discussions were some of the parameters considered during theevaluation process.

Further the Independent Directors of the Company met once during the year to reviewthe performance of the Non-executive directors Chairman of the Company and performance ofthe Board as a whole.

14.3 Policy on 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.

15. Auditors

The present Auditor M/s Price Waterhouse Chartered Accountants were appointed asStatutory Auditors to hold office from the conclusion of the Thirty-SixthAnnual GeneralMeeting held on September 26 2014 till the conclusion of the ensuing (Fortieth) AnnualGeneral Meeting to be held in 2017. As the term of current Auditor has expired so inaccordance with applicable provisions of Companies Act 2013.

The Board has identified M/s. Walker Chandiok & Co LLP Kochi to be appointed asStatutory Auditors of the Company subject to the approval of the shareholders at theensuing Annual General Meeting for a period of 5 years from the conclusion of the 40thAnnual General Meeting.

The Company has received a letter from the Statutory Auditors to the effect that thetheir appointment if made at the forthcoming Annual General Meeting would be inaccordance with the limits prescribed under 141(3)(g) of the Act.

16. Cost Audit

Messrs. Shome& Banerjee Cost Accountants were appointed as Cost Auditors of theCompany for conducting Cost Audit for the year ended March 31 2018. The CentralGovernment has duly approved their appointment.

Cost Audit Report and the Compliance Report for the year ended March 312016 were filedwith the Central Government within the due date.

17. Secretarial Audit

Secretarial Audit of the secretarial and related records of the Company was conductedduring the year by SVJS & Associates Company Secretaries Kochi and a copy of thesecretarial audit report is annexed as Annexure F which forms part of this report. TheBoard has re-appointed M/s SVJS & Associates a firm of Company Secretaries inPractice to undertake the Secretarial Audit of the Company for the financial year 2017-18

18. Explanation and Comments on Auditor's and Secretarial Audit Report

There is no qualification disclaimer reservation or adverse remark made by theStatutory Auditors in the Auditors' Report. Further there is no qualificationdisclaimer reservation or adverse remark made by the Company Secretary in practice in theSecretarial Audit Report. During the period under review the suggestions put forth by theAudit Committed were duly considered and accepted by the Board of Directors There were noinstances of non-acceptance of such recommendations.

19. 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 haveany three year average profit and hence not required to incur any expenditure on CorporateSocial Responsibility under the provisions of the Act. The members of the Committee areMr. Golam Momen Mr. Sachin Nandgaonkar Mr. P Rajagopalan and Mr. N Dharmaraj. Thedetails of CSR Committee is detailed in Corporate Governance Report. The CSR Policy can beaccessed at the website of the Company at link

20. Whistle Blower Policy

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) fordirectors and employees to report genuine concerns about any instance of any irregularityunethical practice and/or misconduct. The policy has been uploaded on the Company'swebsite

21. Related Parties Transactions

There was no materially significant transaction with the Company's PromotersDirectors Management or their relatives that could have had a potential conflict with theinterests of the Company.

22. 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.

23. Extract of Annual Return

An extract of the Annual Return as required to be attached is annexed as Annexure G andforms a part of this report.

24. Risk Management

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

25. Particulars of Employees

The information as required in accordance with Section 134 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is annexed as Annexure H and forms a part of this report.

The information required under Rule 5(i) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is annexed as Annexure J and forms a part of thisreport.

26. Prospects

Plantation business is largely influenced by external factors like weather andvolatility of primary markets. The company continues to be a strong player in the SouthIndian plantation industry and hopes to enlarge its operations through processingpurchased raw material and trading in both tea and rubber. Sustained efforts to improvelabour productivity should to some extent alleviate escalating labour cost - a majorconcern for all South Indian plantations.

Realizations from both tea and rubber are improving in view of the Company's continuedfocus on product quality coupled with encouraging market outlook for tea in the nexttwelve months. Financial Year 17-18 is expected to be significantly better in terms ofperformance as initiatives started earlier make positive contributions.

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

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

28. Awards and Achievements

Harrisons Malayalam Ltd. has been rated as one of India's best company to work for in2016 and has been ranked as Number 1 in the Agro Based Industry and 73rd overall among allindustries in India.

HMLs Surianalle Estate has receivedthe prestigious TGLIA2017(The Golden Leaf IndiaAward) Award for its superior quality in CTC Teas. Also the Wentworth Lockhart andPattumallay Factories of the Company has secured eight awards in the orthodox Tea categoryin the TGLIA competition.

Environment Protection:

Received CII Excellence Award in Environment Health & Safety (EHS) for the year2016-17 for Wenworth Kumbazha Estates.

Kumbazha CL factory has received special appreciation from Kerala State PollutionControl Board for its sustainable efforts for controlling environmental pollution.

29. 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 annexedto this Report.

30. Directors' Responsibility Statement

The Board of Directors would like to affirm that the Financial Statements of theCompany for the year under review conform in their entirety to the requirements of theCompanies Act 2013.

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 financial year ended March 31 2017the applicable accounting standards have been followed along with proper explanationrelating to material departures;

ii. The Directors had selected such accounting policies and applied consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at March 31 2017and of the loss for theperiod from April 1 2016 to March 312017;

iii. The Directors 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 financial year ended March31 2017on a going concern basis;

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

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

31. Industrial Relations

The industrial relations has improved to a greater extent after the unrest inSeptember 2015. A section on the Company's Human Resource Initiatives is a part of theManagement Discussion & Analysis forming part of this report.

32. Internal Control Systems & their Adequacy

Notes on Internal financial control and its adequacy forms part of ManagementDiscussion and Analysis 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.

For and on behalf of the Board of Directors

Sachin Nandgaonkar Kaushik Roy
May 29 2017 (DIN- 03410739) (DIN- 06513489)
Kolkata Director Director

Particulars as required under Section 134(m) of the Companies Act 2013 (Annexure‘A' to the Directors' Report)

Pursuant to Rule 8(3) of the Companies (Accounts) Rules 2014 particulars ofConservation of Energy Technology Absorption etc. for the year ended March 31 2016

A) Conservation of Energy

i) Steps taken or impact on conservation of energy

Multiple energy conservation measures were taken across all manufacturing facilitiessuch as strong vigilance employee awareness etc. The significant energy conservationmeasures undertaken by the Company during the year were Introduction of transparentroofing in factories to get day light to reduce electricity consumption at SurianalleChundale Arrapetta and Sentinel Rock. LED lighting is used in Surianalle factory and itwill be implemented in all factories to reduce energy consumption in a phased manner. Allfactories are maintaining power factor at the specified levels with correct monitoring andaddition of capacitors. . Energy meters provided at all process areas of tea factories forregular monitoring of energy consumption. Grate area reduction in Surianalle HWG to reduceenergy consumption.

ii) Steps taken by the Company to utilize alternate sources of energy

The Scope of implementing the Boot system of solar energy is under study. The datacollection of Effective intensity of light rays roof top area funding from third partyetc. is under progress.

Instead of using firewood & coal which leads to deforestation and pollutionrespectively the Company uses environment friendly Briquettes made from Agri-waste in itsfactories. Trenching in tea fields is used for water harvesting; one field per estate iscovered in phase one.

Earthen dams are built in Sentinel Rock Estate for water harvesting.

1303 small tea growers are covered under sustainability certification (RA UTZ andTrustea) by HML covering an area of 2476.42 Ha of land. This is an increase of 400% fromthe previous year.

B) Technology Absorption

i) Efforts made towards technology absorption and benefits derived thereupon

Conveyorization was one of the key activities initiated during the year to reducemanpower usage and is implemented in Arrapetta and Achoor factories. Pre-cut system inCTC was introduced at Surianalle factory ISO 9001-2015 certification was received byAchoor factory.

Green tea manufacturing started in Sentinel Rock factory .Micro lite harvestingmachines are introduced in place of shear in Achoor. Fuel saving is achieved by using hotwater generator.

Old re-winded motors in factories would be replaced with the latest technology EEmotors in a phased manner which would result in lower power consumption. Conventionalsteel chimneys in tea factories would be replaced with concrete chimneys in a phasedmanner. This would reduce the maintenance costs.

Replacing the existing bulbs/lamps with energy efficient LED lamps across allfactories offices and bungalows in a phased manner would help reduce electricityconsumption and thereby power cost.

ii) Expenditure incurred on R & D

We have initiated studies and are trying to move into the area of Biotechnology awayfrom Chemistry and Biochemistry which will entail a greener foot print. Trials which arebeing conducted using enzymes and beneficial microbes to replace acids and otherchemicals. We have achieved partial success in area of de-proteinisation chemistry andwork is on.

C) Foreign Exchange earnings and Outgo

During the year 2016-17 the foreign exchange earned in terms of actual inflows was4907.94 lacs and foreign exchange outgo in terms of actual outflow was 61.84 lacs.





Twelve Months ended Twelve Months ended Twelve Months ended Twelve Months ended
31-03-2017 31-03-2016 31-03-2017 31-03-2016
(a) Purchased
Units (KWH) 9569876 9722476 1953822 1659208
Total Amount (Rs.) 63484036 64801528 12907869 11501228
Rate/Unit (Rs./KWH) 13.3 6.67 13.47 6.93
(b) Own Generation
Through Diesel Generator
Units (KWH) 395008 594937 116307 137549
Units per litre of Diesel Oil (KWH) 4.99 2.59 13.4 2.15
Fuel - Cost/Unit (Rs./KWH) 53.49 19.39 27.37 23.92
Total Quantity of Firewood (Cu.Mtr) 28273 32107 2858 1855
Total Amount (Rs.) 35422741 38389543 2702331 2414610
Rate/Cu.Mtr (Rs.) 2493 1195.67 1913 1301.51
HSD Oil for Transport & Material Handling etc.
Quantity (K.Ltr) 25573.19 77.74 32145.62 55.88
Total Cost (Rs.) 5461445 4145728 3300021 3002221
Rate/Unit Cost (Rs./K.Ltr 58420 53325 57140 53725
Consumption per Unit of Production
TEA/RUBBER (Kgs.) 13128332 13458000 8878465 8850000
Energy Used:
Electricity (incl. own generation) (KWH/Kg) 1.52 0.77 0.48 0.20
Briquetted Fuel (Kgs.) 6496713 4874981 - -
Veneer Waste (Kgs.) 3495530 3425950 - -
Coconut Shells (Kgs.) - - - -
Wood Waste (Kgs.) 21280 65724 - -