htel report 2017

HAILEYBURIA TEA ESTATES LTD.

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CONTENTS

Board of Directors ………………………………

Performance & Perspective……………….……..

Notice………………………………………...….

Directors Report………………………….…..….

Secretarial Audit Report…………………………

Accounts…………………………………………

Cash Flow Statements…………………..……….

Auditors Report………………………….………

Location Map ………………………….………

COMMITTEES OF THE BOARD BOARD OF DIRECTORS

Audit Committee Mr. Vinod Kumar Dugar (Chairman)

Mr. Vinod Kumar Dugar (Chairman) Mr. Ashok Kumar Dugar (Managing Director)

Mr. Chacko Ittyara Palathingal Mr. Sudhir Prakash

Mr. Zacharias Pazhayachira Thekkathu Mr. Koshy Mathew

Mr. Chacko Ittyara PalathingalNomination and Remuneration Committee

Mr. Zacharias Pazhayachira Thekkathu

Mr. Vinod Kumar Dugar (Chairman) Mrs. Sarita Dugar

Mr. Chacko Ittyara Palathingal

Mr. Zacharias Pazhayachira Thekkathu

AUDITORS BANKERS

M/S. KrishnaMoorthy & Krishnamoorthy Indian Bank

Chartered Accountants State Bank of Travancore

Paliam Road,Cochin -682016 State Bank of India

REGISTERED OFFICE

24/432, Marar Road

Willingdon Island

Cochin-682003


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2012-13 2013-14 2014-15 2015-16 2016-17

CROP AND YIELD : TEA

Crop plus bought leaf in Kilograms ( Total Made Tea Produced) 1357451 1257788 1348345 1205702 1086974

Yield in Kgs per Hectare 1638 1730 1694 1515 1717

COST, PRICE & MARGIN : TEA

Estate cost : Paise per Kg. 9533.78 10253.18 10773.69 12739.19 14339.00

All in cost : Paise per Kg. 10362.80 11080.93 13991.81 15333.91 15622.00

Average sale price : Paise per Kg 9891.13 9987.30 8787.50 10537.00 12358.00

Margin : Paise per Kg. (471.67) (1093.63) (5204.31) (4796.91) (3264.00)

WORKING RESULTS:

Gross sale proceeds ( Rupees) 135995234 127128782 152688385 146,546,513 202,044,571

Operating Profit/Loss (Rupees) (9959291) (4849348) (35969472) (38334706) (15214573)

Net profit before taxation (Rupees) (7112806) 356743 (22854550) (30660723) (26397625)

Provision for taxation - FBT (Rupees) - - - - -

Profitability of sales (%) (5.23) 0.28 (14.97) (20.92) (13.07)

Net sales per Equity share (Rupees) 86.35 80.72 96.95 93.05 128.28

Earning per Equity Share (Rupees) (4.52) 0.23 (14.51) (19.47) (16.76)

DISTRIBUTION OF INCOME

Government -Excise duties & taxes (%) 5.12 1.06 1.28 2.09 3.48

Employees Emoluments & Benefits (%) 54.17 59.67 54.66 64.99 57.00

Materials, Fuel & Power (%) 22.66 21.85 20.61 20.13 31.04

Other expenses & Overheads (%) 24.49 20.04 41.13 35.56 27.60

Depreciation (%) 1.97 2.70 5.88 3.40 1.86

Reserves (%) ------ ------ ------ ------ ------

Shareholders - Dividends (%) ------ ------ ------ ------ ------

Total 108.41 105.32 123.56 126.17 120.98

GENERAL

Book value per Equity Share (Rupees) 575.81 575.86 561.04 541.57 541.57

Debt Equity ratio (%) 2.01 2.46 2.59 5.00 5.00

Dividend on Equity Shares: Amount (Rs.) Nil Nil Nil Nil Nil

Rate(%) Nil Nil Nil Nil Nil

PERFORMANCE & PERSPECTIVE

524.00


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HAILEYBURIA TEA ESTATES LIMITED(CIN: L01132KL1923PLC000415)

Regd. Office: 24/432, Marar Road, Willingdon Island, Cochin – 682 003

E-mail: [email protected] Phone: 0484-2667653

NOTICE

Notice is hereby given that the Ninety forth Annual General Meeting of HaileyburiaTea Estates Limited

will be held at Regd Office of the Company at 24/432, Marar Road, Willingdon Island, Cochin-682003

on the 16th day of September 2017 at 2.00 PM to transact the following business.

Ordinary Business

1. To receive, consider and adopt the audited financial statements of the Company for the financial

year ended 31st March 2017, the reports of the Board of Directors and Auditors thereon.

2. To appoint a Director in the place of Mrs. Sarita Dugar (DIN.00141933) who retires at this

Annual General Meeting, and being eligible, offers herself for re-appointment.

3. To appoint Auditors and fix their remuneration and in this regard to consider and if thought fit,

to pass with or without modification(s), the following resolution as an Ordinary Resolution:

RESOLVED THAT pursuant to the provisions of Section 139, 142 and other applicable

provisions, if any, of the Companies Act, 2013 and the rules made thereunder as amended from

time to time, M/s Kumbat & Company, Chartered Accountants (Registration No.001609S)

be and are hereby appointed as Statutory Auditors of the Company to hold office from the

conclusion of this 94th Annual General Meeting for the financial year ended 31st March 2017

until conclusion of 99th Annual General Meeting of the Company for the financial year ended

31st March 2022 (subject to ratification of the appointment by the members at every Annual

General Meeting held after this Annual General Meeting) and that the Board of Directors be and

is hereby authorized to fix the remuneration in consultation with the Auditors.

By order of the Board

Place: Cochin

Date: 29.06.2017 (Ashok Kumar Dugar)

Managing Director


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Notes:-

1. A member entitled to attend and vote is entitled to appoint proxy to attend and vote on a

poll on his/her behalf and the proxy need not be a member of the Company. The proxy

form duly completed, stamped and signed must be deposited at the registered office of the

company not less than 48 hours before the commencement of the meeting. A proxy form

is enclosed.

2. Proxies submitted on behalf of limited companies, societies etc must be supported by

appropriate resolutions/authority, as applicable. A person can act as proxy on behalf of

members not exceeding fifty and holding in the aggregate not more than ten percent of the

total share capital of the company carrying voting rights. A member holding more than

ten percent of the total share capital of the company carrying voting rights may appoint a

single person as proxy and such person shall not act as a proxy for any other person or

shareholder.

3. The Register of Members and Transfer Books of the Company will be closed from 9th

September 2017 to 16th September 2017. (Both days inclusive)

4. Members can avail of the facility of nomination in respect of shares held by them in

physical form pursuant to section 72 of the Company’s Act, 2013. Members desiring to

avail this facility may send their nominations in the prescribed form SH-13 duly filled in

to the Company.

5. Pursuant to sections 101 and 136 of the Companies Act, 2013 read with the Rules framed

there under, the Notice calling the Annual General Meeting (AGM) along with the Annual

Report 2016-17 would be sent by electronic mode to those Members whose e-mail addresses

are registered with the Company, unless the Members have requested for a physical copy

of the same. For Members who have not registered their e-mail addresses, physical copies

would be sent by the permitted mode.

6. Members are requested to:-

Intimate to the Company changes, if any, in their registered addresses at an early date.

Quote their folio numbers in all correspondence and;

Consolidate their holdings in to one folio in case they hold shares under multiple folios in

the identical order of names.

7. Members are requested to bring their copy of the Annual Report to the Annual General

Meeting.

8. In accordance with provisions of Section 108 of the Companies Act, 2013 read with the

Companies (Management and Administration) Rules, 2014 and the provisions of Securities

and Exchange Board of India (Listing Obligations and Disclosure Requirements)

Regulations, 2015, the company has provided a facility of casting the votes by the members

using an electronic voting system from a place other than venue of Annual General Meeting

(AGM) (“remote e-voting”) through the electronic voting service facility arranged by

Central Depository Services (India) Ltd. (CDSL).


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The facility for voting, through polling paper, will also be made available at the AGM and the

members attending the AGM who have not already cast their votes by remote e-voting shall be

able to exercise their right at the AGM through polling paper. The Members who have cast

their vote by remote e-voting prior to the meeting may attend the meeting but shall not be

entitled to cast their vote again.

The voting rights of shareholders shall be as per the number of equity shares held by members

as on the cut-off date of 9th September 2017.

The Board of Directors appointed Mr. K.O. Kuriachan, Practising Company Secretary, Cochin,

as the Scrutinizer for conducting the e-voting process in a fair and transparent manner.

The instructions for shareholders voting electronically (by remote E-Voting) are as under:

(i) The voting period begins on 13th September 2017, 9.00 AM and ends on 15thth September 2017

05.00 PM. During this period shareholders’ of the Company, holding shares in physical form,

as on the cut-off date (RECORD DATE) of 9th September 2017 may cast their vote electronically.

The e-voting module shall be disabled by CDSL for voting thereafter.

(ii) Shareholders who have already voted prior to the meeting date would not be entitled to vote at

the meeting venue.

(iii) The shareholders should log on to the e-voting website www.evotingindia.com.

(iv)Click on Shareholders.

(v) Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID,

b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,

c. Members holding shares in Physical Form should enter Folio Number registered with

the Company.

(vi)Next enter the Image Verification as displayed and Click on Login.

(vii) If you are a first time user follow the steps given below:

For Members holding shares in Physical Form

PAN Enter your 10 digit alpha-numeric PAN issued by Income Tax Department ·

• Members who have not updated their PAN with the Company are requested to

use the first two letters of their name and the 8 digits of the sequence number in

the PAN field.·

• In case the sequence number is less than 8 digits enter the applicable number of

0’s before the number after the first two characters of the name in CAPITAL

letters. Eg. If your name is Ramesh Kumar with sequence number 1 then enter

RA00000001 in the PAN field.

Dividend

Bank Details

OR Date of

Birth (DOB)

Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in

the company records in order to login.·

• If both the details are not recorded with the company please enter the member id /

folio number in the Dividend Bank details field as mentioned in instruction (iv).


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(viii) After entering these details appropriately, click on “SUBMIT” tab.

(ix) Members holding shares in physical form will then directly reach the Company selection

screen.

(x) For Members holding shares in physical form, the details can be used only for e-voting

on the resolutions contained in this Notice.

(xi) Click on the EVSN for the relevant HAILEYBURIA TEA ESTATES LIMITED on

which you choose to vote.

(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the

same the option “YES/NO” for voting. Select the option YES or NO as desired. The

option YES implies that you assent to the Resolution and option NO implies that you

dissent to the Resolution.

(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution

details.

(xiv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A

confirmation box will be displayed. If you wish to confirm your vote, click on “OK”,

else to change your vote, click on “CANCEL” and accordingly modify your vote.

(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify

your vote.

(xvi) You can also take a print of the votes cast by clicking on “Click here to print” option on

the Voting page.

(xvii) Note for Non – Individual Shareholders and Custodians

v Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian

are required to log on to www.evotingindia.com and register themselves as Corporates.

v A scanned copy of the Registration Form bearing the stamp and sign of the entity should

be emailed to [email protected].

v After receiving the login details a Compliance User should be created using the admin

login and password. The Compliance User would be able to link the account(s) for which

they wish to vote on.

v The list of accounts linked in the login should be mailed to

[email protected] and on approval of the accounts they would be able to

cast their vote.

v A scanned copy of the Board Resolution and Power of Attorney (POA) which they have

issued in favour of the Custodian, if any, should be uploaded in PDF format in the system

for the scrutinizer to verify the same.

(xviii) In case you have any queries or issues regarding e-voting, you may refer the Frequently

Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com, under help

section or write an email to [email protected].

By order of the Board

Place: Cochin

Date: 29.06.2017

(Sd-)

(Ashok Kumar Dugar)

Managing Director


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Haileyburia Tea Estates Limited(CIN No: L01132KL1923PLC000415)

Regd. Office:24/432, Marar Road,Willingdon Island, Kochi-682003

Ph: 0484-2667653, e-mail: [email protected]

BOARD’S REPORT

To

The Members of

Haileyburia Tea Estates Limited

Dear Share Holders,

Your Directors have pleasure in presenting their 94th Report on the business and operations of the

Company together with the audited statements of accounts for the financial year ended 31st March 2017.

Financial Highlights:

(Rs in lakhs)

Particulars 2016-17 2015-16

Turn Over‘ 1998.62 1516.85

Gross Profit/Loss before Int./ Depreciation and Tax (152.15) (229.83)

Interest 74.25 52.30

Depreciation 37.57 49.84

Profit/Loss before Tax and Other Income (285.80) (331.97)

Add. Other Income 21.82 25.36

Profit/Loss Before Tax (263.98) (306.61)

Income Tax — -

Net Profit/Loss after Tax (263.98) (306.61)

Brief description of the Company’s working during the year/state of Company’s affairs

The Production/Traded Tea during the year is recorded as under:-

Particulars Production in Production in Average Price per Kg.

2015-16 2016-17

(Qty.in Kgs.) (Qty.in Kgs.) 2015-16 2016-17

Production from Estates

Own Leaf 1055152 1073009

Bought Leaf 150550 13965

Traded Tea 190450 263442

Total 1396152 1350416 105.37 120.63


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The production of tea during the year 2016-17 was 12,05,702 Kg against 10,86,974 Kg during the

previous year ended 31.03.2016 resulting an increase in made tea of 1,18,728 kgs or by approx 11

percent. The sale average during current year has also improved from Rs.105.37 per kg to Rs. 120.63 per

kg. or by Rs. 15.36 per kg resulting into an increase of 14.57%.

The company has during the year under review suffered a loss of Rs.263.98 lacs as compared to the loss

of Rs 306.61 lacs resulting into a reduction of loss by Rs 39.63 lacs or by 15%

Your company made all efforts to improve all round in field, factory and marketing but has to suffer the

above significant loss of 263.98 lacs for which the following major factors may be attributed :

1. The wages were increased by almost 30% as per state wise wages settlement initially implemented

w.e.f. 1st Nov.2015. The year 2015-16, experienced the burden of increased wages from Nov.15

i.e. for 5 months only, However, the year under review has borne the impact for full 12 months,

plus quarterly revision in variable DA.

2. As the formal wages notification was only issued in May 2016, the above increase was made

with retrospective effect from 1st July 2015 resulting into additional burden of Rs.32.38 lacs,

paid and accounted for in August 2016.

3. The year under review experienced below average rainfall which was lower by almost 41 percent

for South- West and almost 62% for North-East Monsoons resulting into draught conditions and

lower crop.

4. The demonetization effect from Nov.16 to March 2017, had created set back in up country tea

markets resulting into lower off take and higher inventory.

5. Interest cost has significantly increased from 52.30 lacs to 74.25 lacs, an increase of Rs. 21.95

lacs; ie; 42%. Due to under financing of company working capital requirements by company’s

principal bankers M/s Indian Bank, the company had to resort to high cost outside borrowing,

resulting into higher capital outgo. Company intends to take up sanction of need based working

capital limit from other commercial bankers.

Outlook :

The new financial year 2017-18 has started in a favourable note both in terms of improvement in yields

and stabilization of prices. The company has during the period of April to July 2017 produced 554523

kgs of made tea and the average selling prices recorded is Rs129.54 per kg;. As per the provisional profit

and loss figures for 1st Quarter i.e. April to June 2017, company has achieved a profit of Rs. 72.45 lacs

against Rs. 4.60 lacs for the same period last year.

The company has taken steps to cover larger area under mechanized harvesters, which is also resulting

into higher pluckers productivity.

The company has on expiry of 12 years lease terms on an area of 110.35 hectares of planted coffee and

black pepper, reclaimed the above land with effect from 25th July 2017 which is likely to result into a

revenue of 85 lacs during current year.

The company is constantly working to establish and increase market space of its Chinnars brand retail

packs, which is likely to result into value addition and building brand image.


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Major Fire at Haileyburia Tea Factory :

A major fire broke out at our Haileyburia Tea factory on 30th April 17. The entire factory structure,

machinery and stocks were totally damaged, inspite of best efforts by the Fire Brigade Team, workers

and neighboring population. The company has preferred claim with the insurance company and expect

settlement as total loss for insured amount of Rs.306 lacs. The current estimated cost of reconstruction

of a new factory will be higher approximately in range of Rs. 10 crores, which the Board, will deliberate

in details and take investment decision.

A. Reports pursuant to Section 134(3) of the Companies Act, 2013.

(a) Extract of Annual Return

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies

(Management and administration) Rules, 2014 is furnished in Annexure 1 and is attached to this Report.

(b) Number of meetings of the Board of Directors

During the Financial Year 2016-17, the Company held four meetings of the Board of Directors.

(c) Directors’ Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms

that –

(a) in the preparation of the annual accounts, the applicable accounting standards had been

followed along with proper explanation relating to material departures;

(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 this Act 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 devised proper systems to ensure compliance with the provisions of

all applicable laws and that such system were adequate and operating effectively; and

(f) 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.

(d) Details in respect of frauds reported by Auditors under Sub section (12) of Section 143

other than those which are reportable to the Central Government

Auditors have not reported any fraud during the year under review.

(e) A statement on declaration given by Independent Directors

Declaration from the Independent Directors that they meet the criteria of independence as provided in

sub-section (6) of Section 149 of the Companies Act, 2013 have been obtained.

(f) Company’s policy on directors’ appointment and remuneration including criteria for

determining qualifications, positive attributes, independence of a director and other matters

as provided under sub-section (3) of Section 178.


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The Company’s Nomination and Remuneration Committee comprises of three Directors, as given below:

(i) Mr. Vinod Kumar Dugar Member (Non Executive Director)

(ii) Mr. P I Chacko Member (Non Executive Independent Director)

(iii)Mr. P Zacharias Member (Non Executive Independent Director)

The remuneration of Director and Key managerial Personal are fixed based on the recommendation of

Nomination and Remuneration Committee. (Remuneration policy is attached as Annexure V).

(g) Explanation or comments by the Board on every qualifications, reservation or adverse

remark or disclaimer made:

(a) by the Auditor in his report;

(b) by the Secretarial Auditor in his report.

There are no qualifications or adverse remarks in the Auditors’ Report which require any clarification/

explanation. The Notes on financial statements are self-explanatory, and needs no further explanation.

The observations made in the Secretarial Audit Report are self explanatory.

The Auditors’ Report and the Secretarial Audit Report for the financial year ended 31st March 2017 are

annexed.

(h) Particulars of loans, guarantees or investments under Section 186.

During the year under report, your company has not directly or indirectly:

(a) given any loan to any person or other body corporate other than usual advances envisaged in

supply of materials, if any;

(b) given any guarantee or provided security in connection with a loan to any other body corporate

or person; and

(c) acquire by way of subscription, purchase or otherwise, the securities of any other body corporate.

(i) Particulars of contracts or arrangements with related parties.

The particulars of contracts or arrangements entered into by the company with related parties

referred to in sub-section (1) of Section 188 of the Companies Act, 2013 read with Rule 8(2) of the

Companies (Accounts) Rules, 2014 in form AOC-2 is attached as Annexure II to this report.

(j) The state of Company’s affairs

The Company at present is engaged only in production of tea and sales in bulk through Cochin Auction.

The cost of production of tea has increased substantially without matching increase in demand for the

tea has resulted in net loss of Rs.2.64 Crores in the current year. This can be seen as a general trend.

There is signs of improvement in production and sales realization in the current year. Company’s plan to

venture in to other segments like sale of packet tea, Tourism etc is a welcome move to improve the

income.

(k) The amounts, if any, which it proposes to carry to any reserves.

There is no net profit to be transferred to any reserve during the year.

(l) The amount, if any, which it recommends should be paid by way of dividend

Due to accumulated loss and inadequacy of profits, payment of dividend does not arise.


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Transfer of unclaimed dividend to investor education and protection fund

In terms of Section 125(2) of the Companies Act, 2013, no unclaimed or unpaid Dividend relating to the

financial year is due for remittance to the Investor Education and Protection Fund established by the

Central Government.

However, a sum of Rs.45,200/- is lying outstanding on account of redemption of Preference Shares

which is kept deposited in a separate bank account but has not been transferred to Investor Education

and Protection Fund pending availability of details.

(m) Material changes and commitments, if any, affecting the financial position of the Company

which have occurred between the end of the financial year of the Company to which the

financial statements relate and the date of the report.

No material changes and commitments affecting the financial position of the Company occurred between

the end of the financial year to which these financial statements relate and the date of this report.

(n) Conservation of energy, technology absorption, foreign exchange earnings and outgo.

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings

and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the

Companies (Accounts) Rules, 2014 is furnished in Annexure-III and is attached to this report.

(o) Statement indicating development and implementation of a Risk Management Policy for

the Company including identification therein of elements of risk, if any, which in the opinion

of the Board may threaten the existence of the company

The Company has a proper risk management policy towards operations and administrative affairs of the

Company. The Managing Director will review the Policy at regular intervals of time and ensure proper

implementation of the policy formulated.

(p) Details about the policy developed and implemented by the Company on Corporate Social

Responsibility initiative taken during the year

CSR activity is not applicable to the Company.

(q) Statement indicating the manner in which formal annual evaluation has been made by the

Board of its own performance and that of its committees and individual directors.

The performance evaluation of the Board, its Committees and individual directors was conducted and

the same was based on questionnaire and feedback from all the Directors on the Board as a whole,

Committees and self-evaluation.

The criteria of evaluation is exercise of responsibilities in a bona fide manner in the interest of the

company, striving to attend meetings of the Board of Directors/Committees of which he is a member/

general meetings, participating constructively and actively in the meetings of the Board/Committee of

the Board etc.

A separate meeting of the independent directors was convened during the year under report, which

reviewed the performance of the Board (as a whole), the non-independent directors and the Chairman.

B. Reports pursuant to other provisions of the Companies Act, 2013.

(a) Composition of Audit Committee

According to Section 177 of the Companies Act, 2013 the company’s Audit Committee comprised of the

following directors:


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(i) Mr. Ashok Dugar Chairman (Executive Director)

(ii) Mr. P Zacharia Member (Independent Director)

(iii)Mr. P I Chacko Member (Independent Director)

The Board has accepted the recommendations of the Audit Committee.

(b) Report on Vigil Mechanism

As per Section 177(9) and (10) of the Companies Act, 2013, the Company has established Vigil Mechanism

for directors and employees to report genuine concerns and made provisions for direct access to the

Chairperson of the Audit Committee. Company has formulated the present policy for establishing the

vigil mechanism/Whistle Blower Policy to safeguard the interest of its stakeholders, directors and

employees to freely communicate and address to the Company their genuine concerns in relation to any

illegal or unethical practice being carried out in the Company.

(c) Share Capital

The Company has not issued any Equity Shares, Sweat Equity Shares, employee Stock option and not

called for Buy back of Shares during the current financial Year.

A) Issue of equity shares with differential rights – NIL

B) Issue of sweat equity shares – NIL

C) Issue of employee stock options – NIL

D) Provision of money by company for purchase of its own shares by employees or by

trustees for the benefit of employees – NIL

(d) Ratio of Remuneration pursuant to Section 197(12)

The statement of particulars attached as Annexure- IV.

(e) Corporate Governance Certificate

Corporate governance as stipulated in the Listing agreement is not applicable to the Company presently.

(f) Statutory Auditors

M/s Krishnamoorthy & Krishnamoorthy, Auditors of the company, retires at the ensuing annual general

meeting and, having completed their term of office, are not eligible for reappointment. M/s Kumbat &

Company, Chartered Accountants (Registration No.001609S) have expressed their willingness to take

up the auditing works of the company and forwarded their Certificate and undertaking to the company

stating that their appointment, if made, will be in accordance with the provisions of Section 139 read

with Section 141 of the Companies Act, 2013. Necessary resolution is being proposed for their

appointment.

It is proposed to appoint M/s Kumbat & Company, Chartered Accountants (Registration No.001609S)

as Statutory Auditors of the Company for a period of five years as required under the provisions of the

Companies Act, 2013 at the remuneration as fixed by the board of Directors in consultation with the

Auditors.

C. Matters required to be disclosed in accordance with Rule 8 & 9 of the Companies (Accounts)

Rules, 2014.

(1) Financial Performance

Already given above.


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(2) Contracts or arrangements with related parties

Given above.

(3) Conservation of energy, Technology absorption, Foreign exchange earnings and Outgo

Given above.

(4) Statement indicating the manner in which formal annual evaluation has been made by the

Board of its own performance and that of its committees and individual directors

Already discussed above.

(5) (i) Financial summary or highlights;

Already given above.

(ii) Change in the nature of business, if any;

There is no change in the nature of the company’s business during the financial year

under review.

(iii) Details of directors or key managerial personnel who were appointed or have

resigned during the year;

Mrs. Sarita Dugar, Director who retires at this Annual General Meeting and being eligible offers

herself for re-appointment.

(iv) Names of companies which have become or ceased to be its subsidiaries, joint

ventures or associate companies during the year;

The Company has no subsidiaries/joint ventures/ associates

(v) Details relating to deposits, covered under Chapter V of the Act,-

(a) accepted during the year: Nil

(b) remained unpaid or unclaimed as at the end of the year: Nil

(c) whether there has been any default in repayment of deposits

or payment of interest thereon during the year and if so, number of such cases

and the total amount involved

(i) at the beginning of the year: Nil

(ii) maximum during the year: Not Applicable

(iii) at the end of the year: Not Applicable

(vi) Details of deposits which are not in compliance with the requirements of Chapter

V of the Act.

NIL

(vii) Details of significant and material orders passed by the regulators or courts or

tribunals impacting the going concern status and company’s operations in future.

There are no significant orders by Regulators, courts or tribunals impacting the going concern

status of the company and company’s operations in future;

(viii) Details in respect of adequacy of internal controls with reference to the financial

statements

The company has adequate internal financial controls such as defining authority to authorize

financial transactions, Internal Audit and monthly review of financial statement mechanism in

vogue.


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(6) Disclosure about CSR Policy - Rule 9

CSR activity is not applicable to the company.

D General

(a) Disclosure under the Sexual Harassment of Women at Workplace (Provision, Prohibition

and Redressal) Act, 2013.

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 & Redressal) Act, 2013. Internal

Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.

All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following

is a summary of sexual harassment complaints received and disposed off during each calendar year.

l No of complaints received: Nil

l No of complaints disposed off: NA

(b) Acknowledgement

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and

various Government Authorities for their continued support extended to your Companies activities during

the year under review. Your Directors also acknowledges gratefully the shareholders for their support

and confidence reposed on your Company.

For and on behalf of the Board of Directors

Sd/- Sd/-

(Ashok Kumar Dugar) (Sarita Dugar)

MANAGING DIRECTOR DIRECTOR

Place: Cochin

Date: 29.06.2017


15

�

ANNEXURE - I

Form No. MGT-9 EXTRACT OF ANNUAL RETURN

As on the financial year ended on [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the

Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i. CIN : L01132KL1923PLC000415

ii. Registration Date : 23.08.1923

iii. Name of the Company :HAILEYBURIA TEA ESTAES LTD.

iv. Category / Sub-Category of the Company :Public Company (Limited by Shares)

v. Address of the Registered office and contact details: 24/432 MARAR ROAD,

WILLINGDON ISLAND, KOCHI-682003

vi. Whether listed company : Yes

vii. Name, Address and Contact details of Registrar and Transfer

Agent, if any : NIL

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Sl. No. Name and Description of main products / services

NIC Code of the Product/ service

% to total turnover of the company

1. CTC TEA 1104 100

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

NOT APPLICABLE

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total

Equity)

i. Category-wise Share Holding

Category of Shareholders

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Change during

the year

Demat Physical Total % of Total

Shares

Demat Phy sical Total % of Total

Shares

A. Promoter s (1) Indian


16

a) Individual/HUF 283185 283185 17.98% 283185 283185 17.98%

b. Central Govt

c. State Govt

d. Bodies

Corporate 889383 889383 56.47% 889383 889383 56.47%

e. Banks/FI

f.Any other

Sub Total (A) (1) 1172568 1172568 74.45% 1172568 1172568 74.45%

(2) Foreign

a)NRIs-individuals

b)Other Individuals

c)Bodies Corporate

d)Banks/FI

e)Any other

Total Share holding

of Promoter

(A)= (A)(1)+(A)(2)

1172568 1172568 74.45% 1172568 1172568 74.45%

B. Public Share

Holding 1. Institutions

a)Mutual Funds

b)Banks/ FI 2218 2218 0.14% 2218 2218 0.14%

c)Central Govt

d)State Govt

e)Venture Capital

f)Insurance Companies 83451 83451 5.30% 83451 83451 5.30%

G)FIIs

h)Foreign Venture

Capital

i)Others

Sub-total (B)(1) 85669 85669 5.44% 85669 85669 5.44%

2.Non-Institutions

a)Bodies Corp 26127 26127 1.66% 26127 26127 1.66%

i)Indian

ii)Overseas


17

Total 1172568 74.45 1172568 74.45

Individual share

holders holding

nominal share

capital upto Rs.1

lakhs

207096 207096 14.80% 205710 205710 12.95%

Individual share

holders holding over

Rs.1 lakhs

83540 83540 5.30% 84926 84926 5.50%

c)Others - - - - - -

(B)(2) Sub Total 316763 316763 20.11 316763 316763 20.11

Total Shares 1575000 1575000 100% 1575000 1575000 100%

ii. Shareholding of Promoters

l N o. Shareholder’s Name Shareholding at the beginning

of the year

Share holding at the end of

the year

No. of

Shares % of

total

Shares of

the

company

%of Shares

Pledged /

encumbere

d to total

shares

No. of

Shares % of

total

Shares of

the

company

%of Shares

Pledged /

encumbered

to total

shares

%

change

in share

holding

during

the year

1. �� -

2. � �� -

3. �� -

4. ��!�� -

5. "�� -

6. "� ��#�� -

7. $�#�%�� -

8. &�� ' �� ' �� -

9. (�� ' �� ' �� -

10. ��!��)*+,-� �� -

11. .�� -

12. (�/�� -

13. "��)��-� �� -

14. 0��1�2�� -

15. �� !�� '�� '�� -

16. 34�� /�� -

17. (��2�5 �!�� '� �� '� �� -

18. (��"��/��5�� -

19. ��!�� -

20. .��%��"��#�#� �� -

21. .��.�3��(�� -

22. "�� '�� '�� -

23. +��2�5 �!�� -


18

iii. Change in Promoters’ Shareholding ( please specify, if there is no change)

Sl.

No.

Shareholding at the

beginning of the year

Cumulative Shareholding

during the year No. of

shares

% of total

shares of

the

company

No. of

shares

% of total shares

of the company

At the

beginning of

the year

1172568 74.45

Date wise

Increase /

Decrease in

Promoters

Share holding

during the

year

specifying the

reasons for

increase

/ decrease

-

-

(e.g.

allotment /

transfer /

bonus/ sweat

- -

At the End of

the year

1172568 74.45

iv. Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and

Holders of GDRs and ADRs):

Sl.

No.

Shareholding at the



during the year

For Each of the Top 10

Shareholders

No. of

share

s

% of total

shares of

the

company

No. of

shares

% of total

shares of the

company

At the beginning of the

year

1

2

3

Life Insurance Corp

P.P Zibi Jose

Mahindra Giridhar lal

77151

30100

28077

4.90%

1.91%

1.72%

77151

30100

28077

4.90%

1.91%

1.72%


19

4

5

6

7

8

9

10

Ahinsha Properties

Chimanlal S Shah

Pinakin C Shah

Ram Valliammaiachi

Oriental Insurance Co

Veera jal nanji

Y.John Peter

20332

13885

11223

8058

6300

4712

2600

1.30%

0.88%

0.71%

0.51%

0.40%

0.30%

0.17%

20332

13885

11223

8058

6300

4712

2600

1.30%

0.88%

0.71%

0.51%

0.40%

0.30%

0.17%

Date wise Increase /

Decrease in Share

holding during the year

specifying the reasons for

increase /

decrease (e.g. allotment /

transfer / bonus / sweat

equity etc):

1.

P.P Zibi Jose

P.P Zibi Jose

P.P Zibi Jose

P.P Zibi Jose

100(15.05.16)

672(09.06.16)

174(09.06.16)

360(09.06.16)

100(15.05.16)

672(09.06.16)

174(09.06.16)

360(09.06.16)

At the End of the year (

or on the date of

separation, if separated

during the year)

1

2

3

4

5

6

7

8

9

10

Life Insurance Corp

P.P Zibi Jose

Mahindra Giridhar lal

Ahinsha Properties

Chimanlal S Shah

Pinakin C Shah

Ram Valliammaiachi

Oriental Insurance Co

Veera jal nanji

Y.John Peter

77151

31406

28077

20332

13885

11223

8058

6300

4712

2600

4.90%

1.99%

1.72%

1.30%

0.88%

0.71%

0.51%

0.40%

0.30%

0.17%

77151

31406

28077

20332

13885

11223

8058

6300

4712

2600

4.90%

1.99%

1.7%

1.30%

0.88%

0.71%

0.51%

0.40%

0.30%

0.17%


20

v. Shareholding of Directors and Key Managerial Personnel:

Sl.

No.

Shareholding at the



during the year For Each of

the Directors

and KMP

No. of shares % of total

shares of

the

company

No. of

shares

% of total

shares of the

company

At the

beginning of

the year

Vinod Dugar- 28933

Ashok Dugar-52007

Sarita Dugar- 21000

1.84

3.31

1.33

101940 6.47

Date wise

Increase /

Decrease in

Share holding

during the year

specifying the

reasons for

increase /

decrease (e.g.

allotment /

transfer / bonus /

sweat equity

-

-

-

-

At the End of

the year

Vinod Dugar- 28933

Ashok Dugar-52007

Sarita Dugar- 21000

1.84

3.30

1.33

101940 6.47

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loans

excluding

deposits

Unsecured

Loans

Deposits Total

Indebtedness

Indebtedness at the beginning

of the financial year i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due

20690028

12551901

33241929

Total( i +ii + iii) 20690028 12551901 33241929

Change in Indebtedness

during the financial year

• Addition

• Reduction

--

5688431

14107838

---

14107838

5688431

Net Change (-)5688431 14107838 8419407


21

Indebtedness at the end of the

financial year i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due

15001597

26659739

41661336

Total( i +ii + iii) 15001597 26659739 41661336

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

Sl.

no.

Particulars of Remuneration Name of MD/WTD/ Manager

Total

Amount

��

��

��

1. Gross salary

(a) Salary as per provisions

contained in section 17(1)

of the Income-tax Act,

1961

(b) Value of perquisites

u/s17(2) Income-tax Act,

1961

Rs.8,40,000.

PA

Rs.840000/-

PA

2. Stock Option

3. Sweat Equity

4. Commission

- as % of profit

- Others, specify…

5. Others, please specify

� Total (A) Rs.8,40,000 Rs.8,40,000

� Ceiling as per the Act


22

�

Total (B)=(1+2) 4000/- 16,000/- 16,000/- 4000/- 40,000/-

Total Managerial

Remuneration

Overall Ceiling as per the Act

C. Remuneration to key managerial personnel other than MD/Manager/WTD

Sl. no. Particulars of

Remuneration

Key Managerial Personnel

CEO Company

Secretary

CFO Total

1. Gross salary

(a) Salary as per

provisions

contained in

section 17(1) of

the Income-tax

Act, 1961

(b) Value of

perquisites u/s

17(2) Income-tax

Act, 1961

(c) Profits in lieu of

salary under

section17(3)

--

6,90,000PA

6,90,000/- PA

Sl.

no.

Particulars of Remuneration Name of Directors Total

Amount

��

��

� � ��

1. Independent Directors and

Woman Director

• Fee for attending board

committee meeting

• Commission

4000/-

16000/-

16000/-

4000/-

40,000/-

Total (1) 4000/- 16000/- 16000/- 4000/- 40,000/-

2. Other Non-Executive Directors

• Fee for attending board

committee meetings

• Commission

Total (2)

B. Remuneration to Other Directors


23

4. Commission

• as % of profit

• Others, specify…

5. Others, please

specify

Total 5,65,000/- 5,65,000/-

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the

Companies Act

Brief

Description

Details of Penalty/

Punishment

/Compounding fees

imposed

Authority

[RD/NCLT/

COURT]

Appeal

made, if

any (give

details)

NIL

5,90,000/- 5,90,000/-


24

ANNEXURE –II

Form AOC – 2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies

(Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related

parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms

length transactions under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arm’s length basis: NIL

2. Details of material contracts or arrangement or transactions at arm’s length basis

(a) Name(s) of the related party and nature of relationship M/s Rishabchand Sohanlal Ltd

where Sri Vinod Kumar is a

director.

(b) Nature of contracts/arrangements/transactions Short term loan of Rs.72 lakhs

on various occasions (over all

exposure at one point of time

was maximum of Rs.50 lakhs)

(c) Duration of the contracts / arrangements / transactions -

(d) Salient terms of the contracts or arrangements or transactions

including the value, if any Normal commercial terms

Short term loan on interest

(e) Date(s) of approval by the Board, if any 08.02.2017

(a) Name(s) of the related party and nature of relationship M/s Lookard India Ltd

Sri. Ashok Kumar Dugar is a

Director

(b) Nature of contracts/arrangements/transactions Company has given paper

publications worksto M/s

Lookard India Ltd. Payment

made wasRs.361717/=


(a) Name(s) of the related party and nature of relationship M/s Herbicides India Ltd

Sri. Ashok Kumar Dugar is the

MD of the Company as well.

(b) Nature of contracts/arrangements/transactions Borrowal of Rs.25.50 lakhs

during the financial year

(c) Duration of the contracts / arrangements / transactions One time

(d) Salient terms of the contracts or arrangements or transactions

including the value, if any Normal commercial terms

As short term Fund--


(a) Name(s) of the related party and nature of relationship M/s R K Commercial Ltd

Sri. Sudhir Prakash is a Director.

(b) Nature of contracts/arrangements/transactions Short term loan of Rs.20 lakh on

interest

(c) Duration of the contracts / arrangements / transactions One time


(f) Amount paid as advances, if any --

(Form shall be signed by the persons who have signed the Board’s report.)

�


25

ANNEXURE-III

(Pursuant to Section 134(3)(m) and Rule 8(3) of the Companies (Accounts) Rules, 2014)

(A) Conservation of energy- (i) the steps taken or impact on conservation of

energy; Employees are trained to save electricity.

(ii) the steps taken by the company for utilizing alternate sources of energy;

Steps are being taken to keep energy consumption at optimum levels.

(iii) the capital investment on energy conservation equipments;

NIL

(B) Technology absorption- (i) the efforts made towards technology

absorption; NIL

(ii) the benefits derived like product improvement, cost reduction, product development or import substitution;

N.A

(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-

N.A

(a) the details of technology imported; N.A (b) the year of import; N.A (c) whether the technology been fully

absorbed;

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and

N.A

(iv) the expenditure incurred on Research and Development.

N.A

(C) Foreign exchange earnings and Outgo- The Foreign Exchange earned in terms of

actual inflows during the year. The Foreign Exchange outgo during the year in terms of actual outflows.

NIL NIL

For and on behalf of the Board of Directors

Managing Director�

(Sd/-)


26

ANNEXURE IV

Details of Ratio of Remuneration of Director

(Section 197(12),r/w Rule 5 of Companies ( Appointment and Remuneration of Managerial

Personnel),Rules,2014)

(i) The ratio of the remuneration of each director to the median

remuneration of the employees of the company for the financial year;

Ashok Kumar Dugar-4.84

(ii) The percentage increase in remuneration of each director, Chief

Financial Officer, Chief Executive Officer, Company Secretary or

Manager, if any, in the financial year;

NIL

(iii) The percentage increase in the median remuneration of

employees in the financial year;

The percentage increase in the

median remuneration is 22.41%

for the financial year 2016-17

(iv) The number of permanent employees on the rolls of company; 29

(v) The explanation on the relationship between average increase in

remuneration and company performance;

Not Applicable

(vi) Comparison of the remuneration of the Key Managerial

Personnel against the performance of the company;

--

(vii)Variations in the market capitalisation of the company, price

earnings ratio as at the closing date of the current financial year and

previous financial year and percentage increase over decrease in the

market quotations of the shares of the company in comparison to the

rate at which the company came out with the last public offer in case

of listed companies, and in case of unlisted companies, the variations

in the net worth of the company as at the close of the current

financial year and previous financial year;

The shares are listed in Kolkata

stock exchange. No trading took

place in the current Year

(viii) Average percentile increase already made in the salaries of

employees other than the managerial personnel in the last financial

year and its comparison with the percentile increase in the

managerial remuneration and justification thereof and point out if

there are any exceptional circumstances for increase in the

managerial remuneration;

The average % of salary of

employees and executives other

than KMPs have marginally

increased

(ix) Comparison of the each remuneration of the Key Managerial

Personnel against the performance of the company

The Company had a net loss of

Rs.2.63 crores.

(x) The key parameters for any variable component of remuneration

availed by the directors;

NA

(xi) The ratio of the remuneration of the highest paid director to that

of the employees who are not directors but receive remuneration in

excess of the highest paid director during the year;

NA

(xii) Affirmation that the remuneration is as per the remuneration

policy of the company.

Yes ,the remuneration is as per

the remuneration policy of the

Company

STATEMENT SHOWING DETAILS OF EMPLOYEES OF THE COMPANY: NA

PLACE : Cochin ASHOK KUMAR DUGAR

DATE: 29th June 2017 MANAGING DIRECTOR

DIN: 00559035�


27

Annexure V

NOMINATION AND REMUNERATION POLICY

Introduction:

This policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior

Management has been formulated by the Committee and approved by the Board of Directors.

Objectives of the Committee:

The Committee shall:

i. Formulate the criteria for determining qualifications, positive attributes and independence of a director

and recommend to the Board a policy relating to the remuneration of Directors, key managerial

personnel and other employees.

ii. Formulation of criteria for evaluation of performance of Independent Director and the Board

iii. Devising a policy on Board diversity.

iv. Identify persons who are qualified to become Director and persons who may be appointed in Key

Managerial and Senior Management positions in accordance with the criteria laid down in this policy.

v. Recommend to the Board, appointment and removal of Director, KMP and Senior Management

Personnel.

vi. Identify whether to extend or continue the term of appointment of the Independent Director on the

basis of the report of their performance evaluation.

Effective Date:

The following policy has been formulated by the Nomination and Remuneration Committee and adopted by

the Board of Directors at its meeting held on 14-11-2014. The policy shall be operational with immediate

effect.

Definitions:

• “Board”:-Board means Board of Directors of the Company.

• “Director”:-Directors means Directors of the Company.

• “Committee”:-Committee means Nomination and Remuneration Committee of the Company as

constituted or reconstituted by the Board, from time to time.

• “Company”:- Company means Haileyburia Tea Estates Limited.

• “Independent Director”:- As provided under clause 16 of the Securities and Exchange Board of

India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as

“Listing Obligations”)and/or under the Companies Act, 2013, ‘Independent director’ shall mean a

non-executive director, other than a nominee director of the company:

a. who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience;

b. (i) who is or was not a promoter of the company or its holding, subsidiary or associate company;

(ii) who is not related to promoters or directors in the company, its holding, subsidiary or associate company;

c. apart from receiving director’s remuneration, has or had no pecuniary relationship with the company, its

holding, subsidiary or associate company, or their promoters, or directors, during the two immediately

preceding financial years or during the current financial year;

d. none of whose relatives has or had pecuniary relationship or transaction with the company, its holding,

subsidiary or associate company, or their promoters, or directors, amounting to two per cent. or more

of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed,


28

whichever is lower, during the two immediately preceding financial years or during the current financial

year;

e. who, neither himself nor any of his relatives —

i. holds or has held the position of a key managerial personnel or is or has been employee of the company

or its holding, subsidiary or associate company in any of the three financial years immediately preceding

the financial year in which he is proposed to be appointed;

ii. is or has been an employee or proprietor or a partner, in any of the three financial years immediately

preceding the financial year in which he is proposed to be appointed, of —

iii. a firm of auditors or company secretaries in practice or cost auditors of the company or its holding,

subsidiary or associate company; or

iv. any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary

or associate company amounting to ten per cent or more of the gross turnover of such firm;

v. holds together with his relatives two per cent or more of the total voting power of the company; or

vi. is a Chief Executive or director, by whatever name called, of any non-profit organization that receives

twenty-five per cent or more of its receipts or corpus from the company, any of its promoters, directors

or its holding, subsidiary or associate company or that holds two per cent or more of the total voting

power of the company;

vii. is a material supplier, service provider or customer or a lessor or lessee of the company;

f. who is not less than 21 years of age.

• “Key Managerial Personnel”:- Key Managerial Personnel (KMP) means-

(i) the Chief Executive Officer or the managing director or the manager;

(ii) the Company Secretary;

(iii) the Whole-Time Director;

(iv) the Chief Financial Officer; and

(v) such other officer as may be prescribed under the applicable statutory provisions / regulations

• “Senior Management”:- The expression ‘‘senior management’’ means personnel of the company who are

members of its core management team excluding Board of Directors comprising all members of management

one level below the executive directors, including the functional heads. Unless the context otherwise requires,

words and expressions used in this policy and not defined herein but defined in the Companies Act, 2013 as

may be amended from time to time shall have the meaning respectively assigned to them therein.

Applicability:-

The Policy is applicable to

• Directors (Executive and Non Executive)

• Key Managerial Personnel

• Senior Management Personnel

Constitution of the Nomination and Remuneration Committee:

The Board has the power to constitute/ reconstitute the Committee from time to time in order to make it

consistent with the Company’s policy and applicable statutory requirement. At present, the Nomination and

Remuneration Committee comprises of following Directors:

i. Mr. Zacharias Pazhayachira Thekkathu, Chairman (Independent Director)

ii. Mr. Chacko Ittyara Palathingal, Member (Independent Director)

iii.Mr. Vinod Kumar Dugar, Member.


29

General Appointment Criteria:

i. The Committee shall consider the ethical standards of integrity and probity, qualification, expertise

and experience of the person for appointment as Director, KMP or at Senior Management level and

accordingly recommend to the Board his / her appointment.

ii. The Company should ensure that the person so appointed as Director/ Independent Director/ KMP/

Senior Management Personnel shall not be disqualified under the Companies Act, 2013, rules made

thereunder, Listing Obligations or any other enactment for the time being in force.

iii. The Director/ Independent Director/ KMP/ Senior Management Personnel shall be appointed as per

the procedure laid down under the provisions of the Companies Act, 2013, rules made thereunder,

Listing Obligations or any other enactment for the time being in force.

Additional Criteria for Appointment of Independent Directors:

The Committee shall consider qualifications for Independent Directors as mentioned in herein earlier under

the head ‘Definitions’ and also their appointment shall be governed as per the provisions of Listing Obligations

(as amended from time to time ) and Companies Act, 2013.

Term / Tenure:

The Term / Tenure of the Directors shall be governed as per provisions of the Companies Act, 2013 and

rules made thereunder as amended from time to time.

Removal:

Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made thereunder or

under any other applicable Act, rules and regulations or any other reasonable ground, the Committee may

recommend to the Board for removal of a Director, KMP or Senior Management Personnel subject to the

provisions and compliance of the said Act, rules and regulations.

Criteria for Evaluation of Independent Director and the Board:

Following are the Criteria for evaluation of performance of Independent Directors and the Board:

1. Executive Directors:

The Executive Directors shall be evaluated on the basis of targets / Criteria given to executive Directors by

the board from time to time

2. Non Executive Director:

The Non Executive Directors shall be evaluated on the basis of the following criteria i.e. whether they:

(a) act objectively and constructively while exercising their duties;

(b) exercise their responsibilities in a bona fide manner in the interest of the company;

(c) devote sufficient time and attention to their professional obligations for informed and balanced decision

making;

(d) do not abuse their position to the detriment of the company or its shareholders or for the purpose of

gaining direct or indirect personal advantage or advantage for any associated person;

(e) refrain from any action that would lead to loss of his independence

(f) inform the Board immediately when they lose their independence,

(g) assist the company in implementing the best corporate governance practices.

(h) strive to attend all meetings of the Board of Directors and the Committees;

(i) participate constructively and actively in the committees of the Board in which they are chairpersons

or members;


30

(j) strive to attend the general meetings of the company;

(k) keep themselves well informed about the company and the external environment in which it operates;

(l) do not to unfairly obstruct the functioning of an otherwise proper Board or committee of the Board;

(m) moderate and arbitrate in the interest of the company as a whole, in situations of conflict between

management and shareholder’s interest.

(n) abide by Company’s Memorandum and Articles of Association, company’s policies and procedures

including code of conduct, insider trading guidelines etc.

Policy on Board diversity:

The Board of Directors shall have the optimum combination of Directors from the different areas /fields like

production, Management, Quality Assurance, Finance, Sales and Marketing, Human Resources etc or as

may be considered appropriate.

Remuneration:

The Committee will recommend the remuneration to be paid to the Managing Director, Whole-time Director,

KMP and Senior Management Personnel to the Board for their approval. The level and composition of

remuneration so determined by the Committee shall be reasonable and sufficient to attract, retain and motivate

directors, Key Managerial Personnel and Senior Management of the quality required to run the company

successfully. The relationship of remuneration to performance should be clear and meet appropriate

performance benchmarks. The remuneration should also involve a balance between fixed and incentive pay

reflecting short and long-term performance objectives appropriate to the working of the company and its

goals:

1. Director/ Managing Director

Besides the above Criteria, the Remuneration/ compensation/ commission etc to be paid to Director/ Managing

Director etc shall be governed as per provisions of the Companies Act, 2013 and rules made thereunder or

any other enactment for the time being in force.

2. Non executive Independent Directors

The Non- Executive Independent Director may receive remuneration by way of sitting fees for attending

meetings of Board or Committee thereof. Provided that the amount of such fees shall be subject to ceiling/

limits as provided under Companies Act, 2013 and rules made thereunder or any other enactment for the

time being in force.

3. KMPs / Senior Management Personnel

The Remuneration to be paid to KMPs/ Senior Management Personnel shall be based on the experience,

qualification and expertise of the related personnel and governed by the limits, if any prescribed under the

Companies Act, 2013 and rules made thereunder or any other enactment for the time being in force.

4. Other Employees

The remuneration to be paid to other employees shall be decided and approved by Head of Human Resource

department and managing Director of the Company jointly.

5. Directors and Officers’ Insurance

Where any insurance is taken by the Company on behalf of its Directors, KMPs/ Senior Management

Personnel etc. for indemnifying them against any liability, the premium paid on such insurance shall not be

treated as part of the remuneration payable to any such personnel.

Conformity with the Act/Listing Obligations

This policy is in conformity with the provisions of the Companies Act, 2013 and Listing Obligations. However,

if due to subsequent changes in the Act, a particular clause or any part of this policy becomes inconsistent

with the Act/Listing Obligations, the provisions of the Act / Listing Obligations shall prevail.


31

Form No. MR-3[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies

(Appointment and Remuneration Personnel) Rules, 2014]

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2017

To

The Members,


Cochn 682 003.

I have conducted the secretarial audit of the compliance of applicable statutory provisions and

the adherence to good corporate practices by HAILEYBURIA TEA ESTATES LIMITED (hereinafter

called the company). Secretarial Audit was conducted in a manner that provided me a reasonable

basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of the Company’s books, papers, minute books, forms and returns

filed and other records maintained by the company and also the information provided by the Company,

its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby

report that in my opinion, the company has, during the audit period covering the financial year

ended on March 31, 2017 complied with the statutory provisions listed hereunder and also that the

Company has proper Board-processes and compliance-mechanism in place to the extent, in the

manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records

maintained by the Company for the financial year ended on 31st March 2017 according to the

provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

(iii) The following Regulations and Guidelines prescribed under the Securities and Exchange

Board of India Act, 1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and

Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)

Regulations, 1992;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure

Requirements) Regulations, 2009;

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and

Employee Stock Purchase Scheme) Guidelines, 1999;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)

Regulations, 2008;

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer

Agents) Regulations, 1993 regarding the Companies Act and dealing with client.


32

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations,

2009; and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations,

1998;

As per SEBI Circular No.CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014, and

Clause 15(2) of The Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations 2015, compliance with the provisions relating to Corporate Governance

shall not be mandatory in respect of companies having paid up equity share capital not exceeding

Rs.10 crore and Net Worth not exceeding Rs.25 crore, as on the last day of the previous financial

year. Accordingly, the provisions relating to Corporate Governance are not presently applicable to

this company and hence the compliance of the Listing Agreement and SEBI Regulations are limited

to that extent.

(iv) The other laws, as informed and certified by the management of the Company, which

are specifically applicable to the Company based on their sector/industry are:

1. The Tea Act 1953 and the Tea Rules, 1954;

2. Tea Board Regulations;

3. The Tea Waste (Control) Order, 1959;

4. The Tea Warehouse (Licensing) Order, 1989;

5. The Tea (Marketing) Control Order, 1984;

6. The Tea (Distribution & Export) Control Order, 2005.

(v) I have also examined compliance with the applicable clauses of the following:

(a) Secretarial Standards issued by the Institute of Company Secretaries of India;

(b)The Listing Agreement entered into by the Company with the Stock Exchange and

The Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015.

During the period under review the Company has complied with the provisions of the Act,

Rules, Regulations, Guidelines, Standards, etc. mentioned above (to the extent applicable) subject

to the following observations:

(1) Appointment of Key Managerial Personnel (Section 203) – During the year under report, the

company was having two Key Managerial Personnel, viz: the Managing Director and Chief

Financial Officer. Managing Director was reappointed for a period of three years with effect

from 29.11.2015 and the approval of Central Government is being obtained. Since the paid up

share capital of the company is less than the limit prescribed under the Companies Act, 2013

for appointment of a Company Secretary, the Company has not appointed a Company Secretary.

However, as per the provisions of The Securities and Exchange Board of India (Listing

Obligations and Disclosure Requirements) Regulations 2015, a listed entity shall appoint a

Company Secretary as the Compliance Officer. Further, payment of listing fee is pending.

(2) A sum of Rs. Rs.45,200/- is lying outstanding on account of redemption of Preference Shares

which is kept deposited in a separate bank account but has not been transferred to Investor

Education and Protection Fund pending the availability of details.

(3) Non-payment of gratuity as per The Payment of Gratuity Act, 1972.


33

I further report that:

Subject to the above observations, the Board of Directors of the Company is duly constituted

with proper balance of Executive Directors, Non-Executive Directors and Independent Directors.

The changes in the composition of the Board of Directors that took place during the period under

review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed

notes on agenda were sent / tabled at the meeting.

All decisions at Board Meetings are carried out unanimously as recorded in the minutes of

meetings of the Board of Directors.

I further report that there are adequate systems and processes in the company commensurate

with the size and operations of the company to monitor and ensure compliance with applicable

laws, rules, regulations and guidelines.

I further report that during the audit period the company has no specific events/actions

having a major bearing on the Company’s affairs in pursuance of the above referred laws, rules,

regulations, guidelines and standards.

Place: Cochin

Date: 29th June, 2017

Signature: Sd/-

Name of the Practising Company Secretary: K. O. KURIACHAN

FCS No. 2591; C.P. No. 4112

(Note: This report is to be read with my letter of even date which is annexed as Annexure A and forms an

integral part of this report.)


34

ANNEXURE-A

To

The Members,


Cochin

My report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the company. My

responsibility is to express an opinion on these secretarial records based on my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance

about the correctness of the contents of the Secretarial records. The verification was done on test

basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and

practices, I followed provide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and Books of Accounts

of the company.

4. Where ever required, I have obtained the Management representation about the compliance of laws,

rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards

is the responsibility of management. My examination was limited to the verification of procedures

on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of

the efficacy or effectiveness with which the management has conducted the affairs of the company.

Place: Cochin

Date: 29th June, 2017

Signature: Sd/-

Name of the Practising Company Secretary: K. O. KURIACHAN

FCS No. 2591; C.P. No. 4112


35

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Place: KolkattaDate: 29.06.2017

Place: KochiDate: 29.06.2017


37

Significant accounting policies and Notes on account for the year ended 31st March, 2017

1. Corporate Information

The company is engaged in tea plantation and in the manufacturing of made tea with two greenleaf processing factories and three estates. The Tea Plantations of the company is situated in thehigh range region of East Kerala. The Company is having its presence in the packet tea opera-tions and trading in tea but main focus is on auction tea sales

2. Significant Accounting Policies

2.1 Basis of Accounting:

The Financial Statements are prepared under historical cost convention, on accrual basis of ac-counting in conformity with the accounting principles generally accepted in India comprises ofmandatory accounting standards as prescribed under section 133 of the Companies Act, 2013read with Rule 7 of the Companies (Accounts) Rules,2014.

2.2 Use of estimates:

The preparation of financial statements in conformity with the generally accepted account-ing principles (GAAP) requires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent liabilities as at the date offinancial statements and reported amounts of revenues and expenses during the reporting pe-riod. Actual results could differ from these estimates. Any revision to accounting estimates isrecognised prospectively in the current and future periods.

2.3 Property, Plant and Equipment and Depreciation:

Property, Plant and equipment except land are recognised as per Cost model that is assets arestated at historical cost less accumulated depreciation and any accumulated impairment losses.Land has been recognised under revaluation model that is revalued amount less subsequent im-pairment losses. Items such as spare parts, stand-by equipment and servicing equipment arerecognised in accordance with Accounting Standard 10 when they meet the definition ofproperty,plant and equipment. Otherwise, such items are classified as inventory.

Depreciation on Tangible Fixed Assets has been provided based on the useful life of theassets prescribed in Part C of Schedule II of the Companies Act, 2013 after retaining 5% of theoriginal cost as residual value. In the case of depreciable assets which were revalued, the depre-ciation is provided including for the revalued amount and the revaluation reserve is transfered toGeneral Reserve at the time of retirement/disposal of the revalued asset. Written down Valuemethod is applied as Depreciation method. The depreciation method applied, residual value ofasset and useful life of an asset are reviewed at each financial year end.

2.4 Impairment of Assets:

Impairment of assets has been recognized for assets for which indications of impairmentdo exist. Impairment loss is recognized only in cases where the Recoverable Amount is less thancarrying cost.

2.5 InvestmentsNon Current Investments are stated at cost of acquisition. In case of persisting decline in

the market value of such investments, a provision for diminution in value is made wherevernecessary. Decline in value, if any, which is not considered temporary in nature, is provided for.


38

2.6 Inventories:

Inventories are consistently valued as under:

i. Stores — At lower of cost or net realizable value whichever is lower.

ii. Stock-in-trade — valued at lower of cost or at net realizable value (i.e. price since realized

after the date of Balance Sheet up to the date of finalization of accounts and if any unsold stock

still remains, the same is valued at estimated realizable price.)

2.7 Sundry Debtors and Loans and Advances:

Sundry Debtors and loans and Advances are stated after making due provisions for doubtful

balances.

2.8 Research and Development:

The Company is a member of UPASI and avails the benefit of guidance from the Research

Wing of UPASI. The Expenditure by way of subscription to UPASI Tea Research is charged

to revenue.

2.9 9 Employee Benefits:

(A) Long Term Employee Benefits

(a) Defined Contribution Plans

The company has defined contribution plans for employees comprising of Provident Fund

and Family Pension Fund. The contributions paid/payable to these plans are charged to

Profit & Loss Account for the period to which they are related.

(b) Defined Benefit Plan

The company makes contributions to the Trust towards Gratuity. The net present value of

the obligation for gratuity benefits as determined on actuarial valuation, conducted annually

using the projected unit cost method, as adjusted for unrecognised past service cost, if any

and as reduced by fair value of plan assets, if any, is recognized in the accounts. Actuarial

gains and losses are recognized in full in the profit and loss account for the period in which

they occur.(B) Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the service are

classified as short-term employee benefits and recognised in the period in which the employee

renders the related service.

2.10 Income Tax:

Income tax is accounted in accordance with Accounting Standard on Accounting for taxes

on Income (AS 22), which includes current taxes and deferred taxes. Deferred tax assets/

liabilities representing timing differences between accounting income and taxable income

are recognised to the extent considered capable of being reversed in subsequent years.

Deferred tax assets are recognised only to the extent there is reasonable certainty that

sufficient future taxable income will be available, except that deferred tax assets arising due


39

to unabsorbed depreciation and losses are recognised if there is a virtual certainty that

sufficient future taxable income will be available to realise the same.

2.11 Sales: -i) Sales are recorded at invoice/sale note values, but excluding sales tax collections.

ii) Sale of Tea income are recognized on the following basis:

Auction Sale On receipt of Broker’s Sale Notes.

Consignment Sales On receipt of concerned SalesStatement from Consignment Agents.

Local Sales On raising the Bills.

Tea Waste Accounted as and when sold.

2.12 Borrowing cost:

Borrowing cost attributable to the acquisition / construction of a qualifying asset is capitalized

as part of the cost of the asset. Other borrowing costs are recognized as expense in the

period in which they are incurred.

2.13 Earnings per share:

The earnings considered in ascertaining the company’s EPS comprise the net profit /loss

after tax (includes the effect of any extra ordinary items). The number of shares used in

computing the basic EPS is the weighted average number of shares outstanding during the

year.

2.14 Provisions and Contingent liabilities

Provisions are recognised when the company has a present obligation as a result of past

events, for which it is probable that a cash outflow will be required and reliable estimate

can be made of the amount of obligation. Provisions are not discounted to their present

value except in case of decommissioning, restoration and similar liabilities that are

recognissed as cost of Property, Plant and Equipment. Value of Provisions are determined

based on best estimate required to settle the obligation at the balance sheet date. These are

reviewed at each balance sheet date and adjusted to reflect current management estimates.

2.15 Segment Accounting:

The accounting policies applicable to the reportable segments are the same as those used in

the preparation of financial statements as set out above.

2.16 Government Grants:

Subsidy/Grants received from Government are treated as revenue in cases it relates to

revenue expenditure and credited to concerned capital asset in case it relates to capital asset.


40

NOTES ATTACHED TO AND FORMING PART OF THE BALANCE SHEET FOR THE YEAR ENDED 31ST MARCH 2017

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46

28 Basic and Diluted Earnings per share:

For the purpose of calculation of Basic and Diluted Earnings per Share, the following amounts are

considered:


a) Net Profit/ (Loss) (26,397,625) (30,660,723)

b) Weighted average no: of Equity Shares 15,75,000 15,75,000

c) Earnings Per Share (16.76) (19.47)

29 The Company has adopted Cost model as recognition criteria of Property, Plant and Equipment exceptLand. The carrying amount of the Property, Plant and Equipment reflects previous revaluation. TheCompany should have transferred the surplus in the Revaluation Reserve when the asset is used by theCompany as per para 36 of Guidance note on Schedule II of Companies Act,2013. The surplus was nottransfered for previous 2 years. By applying para 91 of Accounting Standard 10, the amount outstandingin the Revaluation Reserve has been adjusted against the Carrying amount of that item amounting toRs.12,69,932/-. Excess of amount oustanding as Revaluation Reserve over carrying amount of that itemhas been adjusted to Revenue Reserve amounting to Rs.32,27,803/-.

30 Land have been recognised under Revaluation model based on technical revaluation and the consequentincrease in value of the assets aggregates to Rs.90,43,68,358/- with a corresponding credit having beentaken under Revaluation Reserve Account. In respect of assets sold, the corresponding amount has beenwithdrawn there from. In respect of Estates, the cost of extension of cultivable land including cost ofdevelopment is capitalized net of subsidy received.

31 On 30 April 2017, a major fire broke out at Haileyburia Tea Factory at Elappara resulting in destruction ofentire 3 storied structure with plant and machinery and entire stock of made tea, green leaves, packingmaterial, fuel and stores. Stock of 17876Kg, estimated at Rs.24,49,012 was destroyed by fire, out of which750Kg were recovered. The value of loss of plant and machinery and other assets lost by fire is pending tobe assessed.

32 The Board of Directors of the Company reappointed Sri. Ashok Kumar Dugar as Managing Director of theCompany for a period of three years with effect from 29.11.2015 at Remuneration as approved by theRemuneration Committee. Approval was sought from Central Government for re-appoinment in E- form,MR2 and the same is still pending.

33 Local self Government Department, Trivandrum under MLA-ADF scheme, issued Government order on24/12/2014 for metalling and tarring the private road of 8Km in Haileyburia Estate at an estimated cost of100 lakhs to Kerala State Nirmithi Kendra (KSNS) with out consent from the company. The work wasstarted without Company’s permission on 30.07.2015. KSNS entered Company’s estate on 30.07.2015with support from local people and start widening the road. They have mass destructed the estate propertyby destroying the revetments or retaining walls, uprooted plants or trees etc. The Company had approachedHigh Court of Kerala. High court had injected to restrict the work to metalling and tarring to the existing6 meters width. The Company has taken up with the Government for an investigation about illegal andunauthorised mass destruction and sought for compensation of loss on account of the episode.

34 Disclosure required under Accounting Standard 15 “Employees Benefits” (Revised 2005)

a) Defined Contribution Plans:

During the year, the following amounts have been recognized in the Profit and Loss account onaccount of

defined contribution plan.


Employers contribution to Provident Fund 6,745,243 5,549,160

b) Defined Benefit Plans: Gratuity Funded Obligation

Particulars Gratuity (Funded)2016-17 2015-16

Discounted rate (p.a) 6.85% 7.75%

Rate of increase in compensation Levels (p.a) 6.00% 6.00%

Rate return of plan assets (p.a) 7.50% 7.50%


47

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Liability recognized in balance sheet as on31.03.17

The above disclosures are based on the information furnished by the independent Actuary and relied upon by the Auditors.

(A) Companies and Firms in which Directors/or their relatives exercise control or significant influence:

35 Disclosure of transactions with related parties (as identified by Management) as required

by Accounting Standard-18 on related party disclosures as prescribed by Companies (Ac-

counting standards) Rules, 2006 are set out in the table below.


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36 Information pursuant to provisions of Paragraphs 5 (viii) (c) of general instruction for preparation of

the statement of profit and loss as per schedule III to the Companies Act, 2013. (As certified by the

Management)

a. Production: (in Kg.)

(Value in Rs.)


49

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37 Earning and Expenditure in foreign Currency.

a. There were no earnings in foreign exchange during this year

b. Expenditure in foreign currency during the financial year is – Nil.

38. The extended ten-year period of lease of 35.66 Cents of land, which the company has taken on lease from Cochin Port

Trust, had expired on 31/03/2002. In response to the Company’s letter for extension, Cochin Port Trust had temporarily

extended the lease period up to 31/03/2012. During the current year, the Company has given tender for renewal of leases

of land with existing buildings/ Structures for 30 years on annual lease rent basis and same has been accepted on 18.05.2016

by the Cochin Port Trust. The Security deposit payable on revised lease rent is Rs.5,13,504/- equivalent to two years lease

rent. The security deposit remitted by the company for allotment is Rs.39156 and the differential amount to be paid is

Rs.4,74,348/-. The Godown and Office building constructed therein is continued to be included in fixed assets.

39. Investment in Govt. Securities consists of 6 year NSC VIII issue, which is pledged with Sales Tax Authorities.

40. The Company has made available on lease basis 110.35 hectares of cultivated land having coffee, pepper, vanilla and

cardamom plantations to another Company on long-term lease basis. Current year the lease agreement expired and the

lease rent mutually agreed has been recognized as income till the period of expiry.

41. No adjustments in accounts have been made in respect of 83.94 hectares of land in Company’s possession for which

petition for assignment thereof in favour of the Company is still pending before the Govt. of Kerala. Notice to vacate part

of the area has been received from the Revenue Department against which action has been taken up with appropriate

Authority.

42. Segment reporting: The Company’s operations primarily comprise of only one segment, i.e. Planting, Manufacturing and

sale of tea. In the opinion of the Management, this is the only primary reportable segment within the meaning of Accounting

Standard 17 (AS 17) notified by the Companies Accounting Standard Rules 2006.

43. The computation of Deferred Tax in accordance with Accounting Standards- 22 results in deferred tax asset. Since there is

no virtual certainty that there will be sufficient future profits to absorb the deferred tax assets based on the present

future projections, the deferred tax asset has not been taken into books of accounts.

44. Short term loans and advances include Rs.58,57,230/- being the balance of the amount advanced to a plantation concern

based on an agreement for supply of Green leaves for a period of five years, with a view to increase the bought leaf

operation volume. The advance given is in the nature of trade advance to carry out pruning and development of the

estate, so as to increase the yield. However, regular supply of green leaves was disrupted due to internal disputes in the

management of the concern and the subsequent stay order issued by the trial Court. Currently the decision of court was

not in favour of the Company. Therefore, provision has been made for the enitre amount of advance.

45 There is no applicability of CSR compliance to the Company, since the Networth, turn over and the net profit of the

Company is below the limit fixed as per section 135 of the Companies Act, 2013.

46 The Management had made an effort to identity components having significant cost to the total cost of the asset and is

having different useful life than that of the whole of the asset. Based on a technical evluation no components having

these charateristicts had been identified, which is having a meterial impact on the measurement of depreciation.

47. The details of Contingent liabilities are as under. Disclosed in terms of Accounting Standard–29 on Provisions, Contingent

Liabilities & Contingent Assets notified by Companies (Accounting Standard) Rules, 2006.

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50

48. Previous year figures have been re-grouped and recast wherever necessary to be in conformity with the current year’s

classification and rounded off to the nearest rupees.

Signatories to Notes 1 to 48 which form integral part of accounts.

As per our Report of even date annexed For and on behalf of Board of Directors

For Krishnamoorthy and Krishnamoorthy

Chartered Accountants

FIRM REG NO: 001488S Ashok Kumar Dugar Saritha Dugar

Managing Director Director

C Krishnamoorthy

Partner Yash Dugar

Membership No: 5957 Chief Fiancial Officer

Place: Kochi Place: Kolkatta

Date: 29.06.2017 Date: 29.06.2017


51

For the year ended For the year ended

31/3/2017 31/3/2016

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�� 7,425,289 5,229,997

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�� 13,568,184 (8,625,091)

��"�!�� 18,695,480 14,398,691

#�$%�&'�'�� '��(��'�� $ 12,187,597 (15,106,726)

�� (7,425,289) (5,229,997)

�' �#�$%�(��'�� &��# �)� �'$ 4,762,308 (20,336,723)

*� ��

��(� �� (9,128,661) (2,937,443)

$��(� ��+�� 2,750 654,761

��+�� - -

,#��-�$�!��"��(��"�*��.+��" - -

�� 823,107 241,966

�� 212,961 551,752

�� 180,371 1,074,599

�� - 507,810

�' �#�$%�/$'��)'$ ��&��# �)� �'$ (7,909,472) 93,445

#� ��

��!��0��.� 4,314,031 19,725,295

�' �#�$%�/$'�+&'�'�� '��(��(��#��&��# �)� �'$� 4,314,031 19,725,295

� �� 1,166,867 (517,983)

Cash & Cash equivalents at beginning of year. 114,732 632,716

Cash & Cash equivalents at close of year. 1,281,599 114,732

NOTES :-

1, The cash flow statement has been prepared following the indirect method except in case of Interest received/paid, Dividend

paid/received, purchase and sale of investments and taxes paid which have been considered on the basis of actual movements

of cash, with necessary adjustments in Receivables and Payables.

2. Previous year's figures have been regrouped/reclassified wherever deemed necessary

��

��

��

��

HAILEYBURIA TEA ESTATE LIMITED

CASH FLOW STATEMENT

(Amount in Rupees)

As per our Report of even date annexed For and on behalf of Board of Directors

For Krishnamoorthy and Krishnamoorthy


FIRM REG NO: 001488S Ashok Kumar Dugar Saritha Dugar

Managing Director Director

C. Krishnamoorthy

Partner Yash Dugar

Membership No: 5957 Chief Fiancial Officer

Place: Kochi Place: Kolkatta

Date: 29.06.2017 Date: 29.06.2017


52

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF

M/S HAILEYBURIA TEA ESTATES LIMITED

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying Financial Statements of Haileyburia Tea Estates Limited

(“the Company”), which comprise the Balance Sheet as at 31st March 2017, the Statement of Profit

and Loss, the Cash Flow Statement for the year then ended and a summary of significant accounting

policies and other explanatory information.

MANAGEMENT RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of

the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements

that give a true and fair view of the financial position, financial performance and cash flows of the

Company in accordance with the accounting principles generally accepted in India, including the

Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies

(Accounts) Rules, 2014.This responsibility also includes maintenance of adequate accounting records

in accordance with the provisions of the Act for safeguarding the assets of the Company and for

preventing and detecting frauds and other irregularities; selection and application of appropriate

accounting policies; making judgments and estimates that are reasonable and prudent; and design,

implementation and maintenance of adequate internal financial controls, that were operating

effectively for ensuring the accuracy and completeness of the accounting records, relevant to the

preparation and presentation of the financial statements that give a true and fair view and are free

from material misstatement, whether due to fraud or error.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards

and matters which are required to be included in the audit report under the provisions of the Act and

the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing issued by the Institute

of Chartered Accountants of India as specified under Section 143(10) of the Act. Those Standards

require that we comply with ethical requirements and plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the

disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,

including the assessment of the risks of material misstatement of the financial statements, whether

due to fraud or error. In making those risk assessments, the auditor considers internal financial

control relevant to the Company’s preparation of the financial statements that give a true and fair

view in order to design audit procedures that are appropriate in the circumstances. An audit also

includes evaluating the appropriateness of the accounting policies used and the reasonableness of


53

the accounting estimates made by the Company’s Directors, as well as evaluating the overall

presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion on the financial statements.

OPINION

In our opinion and to the best of our information and according to the explanations given to

us, the aforesaid financial statements give the information required by the Act in the manner so

required and give a true and fair view in conformity with the accounting principles generally accepted

in India,

i) in the case of balance sheet, of the state of affairs of the Company as at 31st March, 2017;

ii) in the case of Statement of Profit and Loss, of the loss of the Company for the year ended on

that date and

iii) in the case of Cash Flow Statement of the cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following, disclosed as Contingent Liability in the Notes to the

Financial Statements:

a. Note No.47 to the financial statements which, describes the uncertainty relating to, i)

case pending before Hon’ble High Court of Kerala for workmen compensation aggregating to

Rs.3,31,484/-, ii) Demand notice issued of Kerala Water Authority aggregating to Rs.42,01,698/

- which is disputed by the Company, iii) Disputed sales tax demand aggregating to Rs.12,95,559/

- which is pending before Appellate authorities iv) the case pending before Hon’ble High

Court of Kerala for payment of value of improvements on land belonging to the company by

another party amounting to Rs.4,11,862/- v) TDS defaults on short deduction and short payments

Rs.3,95,099/- The ultimate outcome of the above claims cannot presently be determined and

no provision for liability that may result has been made in the financial statements.

Our opinion is not modified in respect of these matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the order”), as amended,

issued by the Central Government of India in terms of sub-section (11) of section 143 of the

Act, we give in the “Annexure A” a statement on the matters specified in the paragraph 3 and

4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of

our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company

so far as it appears from our examination of those books.


54

c. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt

with by this report are in agreement with the books of account.

d. In our opinion, the aforesaid financial statements comply with the Accounting Standards

specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts)

Rules, 2014.

e. On the basis of the written representations received from the Directors of the Company

and taken on record by the Board of Directors, none of the directors is disqualified as on

31st March, 2017 from being appointed as a Director in terms of Section 164 (2) of the

Act.

f. With respect to the adequacy of the internal financial controls over financial reporting

of the Company and the operating effectiveness of such controls, refer to our separate

report in “Annexure B”; and

g. With respect to the other matters to be included in the Auditor’s Report in accordance

with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to

the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial

position in the financial statements – Refer Note No.47 to the financial statements;

ii) The Company did not have any long-term contracts including derivative contracts

for which there were any material foreseeable losses.

iii) There were no amounts which were required to be transferred to the investor

education and protection fund by the Company except for the non-transfer of

Rs.44,863/- being the amount of redemption of Preference Shares which is kept

deposited in a separate account but has not been transferred to Investor Education

and Protection Fund pending the availability of details, as informed to us.

For Krishnamoorthy & Krishnamoorthy


FIRM REG. NO. 001488S

C. Krishnamoorthy

Kochi – 16 (Partner)

29.06.2017 Membership No.5957


55

“ANNEXURE A” REFFERED TO IN PARAGRAPH 1 UNDER THE HEADING “REPORT

ON OTHER LEGAL AND REGULATORY REQUIREMENTS” OF OUR INDEPENDENT

AUDIT REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF

HAILEYBURIA TEA ESTATES LIMITED FOR THE YEAR ENDED 31ST MARCH 2017

(i) a) The Company has maintained proper records showing full particulars, including

quantitative details and situation of fixed asset.

b) As explained to us the fixed assets have been physically verified by the management

during the year in a phased manner, which, in our opinion, is reasonable having regard

to the size of the company and nature of its assets. It is reported that no material

discrepancies between the book records and physical fixed assets have been noticed.

c) According to the information and explanations given to us and on the basis of our

examination of the records of the Company, the title deeds of immovable properties are

held in the name of the Company except for 83.94 hectres of land in Company’s

possession, the assignment of the same in favour of the Company is pending with

Government of Kerala, as reported in Note No.41 being the Note on accounts forming

part of annual accounts.

(ii) We are informed that physical verification of inventory has been conducted at reasonable

intervals by the management and it is reported that no material discrepancies were noticed on

such physical verification.

(iii) The company has not granted any loans, secured or unsecured to companies, firms, limited

liability partnerships or other parties covered in the register maintained under section 189 of

the Companies Act 2013. Accordingly, paragraphs (iii) (a), (b) and (c) of CARO 2016 are not

applicable.

(iv) The Company has not given loan, made investments, guarantees or security. Hence provisions of

section 185 and section 186 of the Companies Act, 2013 is not applicable.

(v) The Company has not accepted deposits from the public during the year and hence, the directives

issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other

relevant provisions of the Act and the Companies (Acceptance of deposit) Rules, 2015 with

regard to the deposits accepted from the public are not applicable.

(vi) As per the information and explanations given to us, the Central Government has prescribed

the maintenance of cost records u/s 148 (1) of the Companies Act, 2013, in respect of plantation

products. We have broadly reviewed the accounts and records of the Company in this connection

and are of the opinion, that prima facie, the prescribed accounts have been made and maintained.

We have not however made a detailed examination of the same.

(vii) a) According to the information and explanations furnished to us and according to the

examination of the records, the company is regular in depositing undisputed statutory

dues including provident fund, income-tax, sales-tax, service tax, duty of customs, duty

of excise, value added tax, cess and any other statutory dues with the appropriate


56

authorities during the year. There are no arrears of outstanding statutory dues as at the

last day of the financial year concerned for a period of more than six months from the

date they became payable except Professional tax payable amounting to Rs. 27,110.

b) According to the information and explanations given to us and based on the records of

the Company examined by us, disputed amounts of statutory dues which are outstanding

as on 31st March, 2017 are as given below:

Employees

Provident Fund

Act

KVAT Act

KVAT Act

KVAT Act

KVAT Act

Demand of

damages, etc

Demand as per

Assmt. Order

Demand as per

Assmt. Order

Demand as per

Assmt. Order

Demand as per

Assmt. Order

29,41,577*

5,83,928

5,03,867

156,339

51,425

1999-2016

2006-2007 &

2007-2008

2008-2009

2010-2011

2012-2013

Appeal before Tribunal

and is fully provided for

in the accounts.

1st Appellate Authority.




*Net of payments made

(viii) Based on our audit procedures performed for the purpose of reporting the true and fair view of

the financial statements and according to the information and explanations given to us, the

Company has not defaulted in the repayment of dues to banks except for the delay in the

payment of installment of interest recompense amounting to Rs.10,83,747/- as mentioned in

Note No.10.1 being the Notes forming part of annual accounts, which is remaining overdue

since April 2015. The Company has not taken any loan either from any financial institution or

from the Government and has not issued any debentures.

(ix) Based on our audit procedures performed for the purpose of reporting the true and fair view of

the financial statements and according to the information and explanations given to us, we

Name of the

Statute Nature of dues

Amount

involved (Rs.)

Period to

which the

amount relate

Forum where the

dispute is pending


57

report that the term loan availed by the Company, have been applied for the purpose for which

they were obtained. The Company has not raised money by way of initial public offer or

further public offer including debt instruments during the year.

(x) Based on our audit procedures performed for the purpose of reporting the true and fair view of

the financial statements and according to the information and explanations given to us, no

fraud either by the Company or on the company by its officers/ employees, has been noticed or

reported during the year.

(xi) Based on our audit procedures performed for the purpose of reporting the true and fair view of


Company has paid/provided for managerial remuneration in accordance with the requisite

approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us, the Company is

not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) Based on our audit procedures performed for the purpose of reporting the true and fair view of

the financial statements and according to the information and explanations given to us,

transactions with related parties are in compliance with sections 177 and 188 of the Companies

Act 2013 and details of such transactions have been disclosed in the financial statements as

required by the applicable accounting standards.

(xiv) According to the information and explanations give to us and based on our examination of the

records of the Company, the Company has not made any preferential allotment or private

placement of shares or fully or partly convertible debentures during the year. Accordingly the

paragraph 3(xiv) of the order is not applicable to the Company and hence not commented

upon.

(xv) Based on our audit procedures performed for the purpose of reporting the true and fair view of


Company has not entered into non-cash transactions with directors or persons connected with

him. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company and hence

not commented upon.

(xvi) In our opinion, the Company is not required to be registered under section 45-IA of the Reserve

Bank of India Act 1934 and accordingly the provisions of paragraph 3(xvi) of the Order is not

applicable to the Company and hence not commented upon.




C. Krishnamoorthy


29.06.2017 Membership No. 5957


58

“ANNEXURE B” REFFERED TO IN PARAGRAPH 2 (f) UNDER THE HEADING

“REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS” OF OUR

INDEPENDENT AUDIT REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS

OF HAILEYBURIA TEA ESTATES LIMITED FOR THE YEAR ENDED 31ST MARCH

2017

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section

143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Haileyburia Tea

Estates Limited (“the Company”) as of March 31, 2017 in conjunction with our audit of the

financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial

controls based on, the internal control over financial reporting criteria established by the Company

considering the essential components of internal control stated in the Guidance Note on Audit of

Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants

of India. These responsibilities include the design, implementation and maintenance of adequate

internal financial controls that were operating effectively for ensuring the orderly and efficient conduct

of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention

and detection of frauds and errors, the accuracy and completeness of the accounting records, and the

timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over

financial reporting based on our audit. We conducted our audit in accordance with the Guidance

Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and

the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the

Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable

to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants

of India. Those Standards and the Guidance Note require that we comply with ethical requirements

and plan and perform the audit to obtain reasonable assurance about whether adequate internal

financial controls over financial reporting was established and maintained and if such controls operated

effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the

internal financial controls system over financial reporting and their operating effectiveness. Our

audit of internal financial controls over financial reporting included obtaining an understanding of

internal financial controls over financial reporting, assessing the risk that a material weakness exists,

and testing and evaluating the design and operating effectiveness of internal control based on the

assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment

of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion on the Company’s internal financial controls system over financial

reporting.


59

Meaning of Internal Financial Controls over Financial Reporting:

A company’s internal financial control over financial reporting is a process designed to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of financial

statements for external purposes in accordance with generally accepted accounting principles. A

company’s internal financial control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect

the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that

transactions are recorded as necessary to permit preparation of financial statements in accordance

with generally accepted accounting principles, and that receipts and expenditures of the company

are being made only in accordance with authorisations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised

acquisition, use, or disposition of the company’s assets that could have a material effect on the

financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting,

including the possibility of collusion or improper management override of controls, material

misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation

of the internal financial controls over financial reporting to future periods are subject to the risk that

the internal financial control over financial reporting may become inadequate because of changes in

conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls

system over financial reporting and such internal financial controls over financial reporting were

operating effectively as at March 31, 2017, based on, the internal control over financial reporting

criteria established by the Company considering the essential components of internal control stated

in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by

the Institute of Chartered Accountants of India.




C. Krishnamoorthy


29.06.2017 Membership No. 5957


60


57

Route Map to the venue of the AGM

1234567123456712345671234567123456712345671234567123456712345671234567

123456789123456789123456789123456789123456789123456789123456789123456789

Police

Station

(Willingdon

Island)

1234123412341234

Port Trust

Hospital

Haileyburia

Tea Estates

(Regd. O

ffice)

Marar Road

M.G. Road JOS Junction

Thevara

Ven

duru

thi

Bri

dge

Bristo road

123123123123123

123412341234123412341234123412341234

CASINO

Hotel

→

→→

→→

→

→

→

→

→


60

htel report 2017

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