McLEOD RUSSEL INDIA LIMITED Registered Office: Four Mangoe Lane, Surendra Mohan Ghosh Sarani, Kolkata-700 001 CIN: L51109WB1998PLC087076 Email: [email protected], Web: www.mcleodrussel.com Telephone: 033-2210-1221,2248-9434/35 NOTICE
Notice is hereby given that the Sixteenth Annual General Meeting of the Members of the Company will be held on Wednesday, 23rd July 2014 at 11.00 a.m. at Kalamandir, 48, Shakespeare Sarani, Kolkata-700 017 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 2014 together with the Reports of the Board of Directors and the Auditors thereon. 2. To declare a dividend for the financial year ended 31st March 2014. 3. To appoint a Director in place of Mr. Deepak Khaitan (holding DIN 00023780), who retires by rotation and, being eligible, offers himself for re-appointment. 4. To appoint a Director in place of Mr. Azam Monem (holding DIN 00023799), who retires by rotation and, being eligible, offers himself for re-appointment. 5. To consider and if thought fit, to pass, with or without modification, the following resolution as an Ordinary Resolution: “RESOLVED THAT in accordance with applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof), Messrs. Price Waterhouse, Chartered Accountants (ICAI Registration No. FRN 301112E), be and are hereby appointed as Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting on the remuneration to be fixed by the Board of Directors.”
SPECIAL BUSINESS: 6. To consider and if though fit, to pass with or without modification(s), the following Resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 149, 150 and 152 read with Schedule IV and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) Mr. Utsav Parekh (holding DIN 00027642), a non- executive Director of the Company who retires by rotation at this Annual General Meeting, be and is hereby appointed as an Independent Director of the Company to hold office from the date of this Annual General Meeting upto the expiry of five consecutive years or the date of the 21st Annual General Meeting, whichever is earlier.”
7. 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 Sections 149, 150 and 152 read with Schedule IV and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) Mrs. Ramni Nirula (holding DIN 00015330), a non-executive Director, who retires by rotation at this Annual General Meeting, be and is hereby appointed as an Independent Director of the Company to hold office from the date of this Annual General Meeting upto the expiry of five consecutive years or the date of the 21st Annual General Meeting, whichever is earlier.”
8. 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 Sections 149, 150 and 152 read with Schedule IV and any
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other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) Dr. Raghavachari Srinivasan (holding DIN 00003968), a non-executive Director, be and is hereby appointed as an Independent Director of the Company to hold office from the date of this Annual General Meeting upto the expiry of five consecutive years or the date of the 21st Annual General Meeting, whichever is earlier.”
9. 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 Sections 149, 150 and 152 read with Schedule IV and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) Mr. Bharat Bajoria (holding DIN 00109241), a non-executive Director, be and is hereby appointed as an Independent Director of the Company to hold office from the date of this Annual General Meeting upto the expiry of five consecutive years or the date of the 21st Annual General Meeting, whichever is earlier.”
10. 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 Sections 149, 150 and 152 read with Schedule IV and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) Mr. Ranabir Sen (holding DIN 00068697), a non-executive Director, be and is hereby appointed as an Independent Director of the Company to hold office from the date of this Annual General Meeting upto the expiry of five consecutive years or the date of the 21st Annual General Meeting, whichever is earlier.”
11. 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 the Sections 196 and 197 and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force), read with Schedule V to the Companies Act, 2013, the approval of the Company be and is hereby accorded to the re-appointment of Mr. Aditya Khaitan (holding DIN 00023788) as the Managing Director of the Company for a period of three years effective from 1st April, 2014, on the terms and conditions of re-appointment and remuneration as contained in the Letter of Re-appointment, a copy whereof initialled by the Chairman for the purpose of identification is placed before the Meeting.”
12. 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 the Sections 196 and 197 and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force), read with Schedule V to the Companies Act, 2013, the approval of the Company be and is hereby accorded to the re-appointment of Mr. Rajeev Takru (holding DIN 00023796) as a Wholetime Director of the Company for a period of three years effective from 1st April, 2014, on the terms and conditions of re-appointment and remuneration as contained in the Letter of Re-appointment, a copy whereof initialled by the Chairman for the purpose of identification is placed before the Meeting.”
13. 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 the Sections 196 and 197 and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force), read with Schedule V to the Companies Act, 2013 the approval of the Company be and is hereby accorded to the re-appointment of Mr. Azam Monem (holding DIN 00023799) as a Wholetime Director of the Company for a period of three years effective from 1st April, 2014, on the terms and conditions of re-appointment and remuneration as contained in the Letter of Re-appointment, a copy whereof initialled by the Chairman for the purpose of identification is placed before the Meeting.” 3
14. 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 the Sections 196 and 197 and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force), read with Schedule V to the Companies Act, 2013 the approval of the Company be and is hereby accorded to the re-appointment of Mr. Kamal Kishore Baheti (holding DIN00027568) as a Wholetime Director of the Company for a period of three years effective from 1st April, 2014, on the terms and conditions of re-appointment and remuneration as contained in the Letter of Re-appointment, a copy whereof initialled by the Chairman for the purpose of identification is placed before the Meeting.”
15. To consider and if thought fit, to pass with or without modification(s), the following Resolution as an Ordinary Resolution:
“RESOLVED THAT in supersession of the Resolution previously passed by the Shareholders in this regard and pursuant to the provisions of Sections 197, 198 and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force), the non-executive Directors of the Company (i.e. Directors other than the Managing Director and / or the Whole-time Directors) be paid remuneration, in addition to the sitting fee for attending the meetings of the Board of Directors or Committees thereof, as the Board of Directors may from time to time determine, not exceeding in the aggregate one percent of the net profits of the Company for each financial year, as computed in the manner laid down in Section 198 of the Companies Act, 2013 or any statutory modification(s) or re-enactment thereof.”
16. To consider and if thought fit, to pass with or without modification(s), the following Resolution as a Special Resolution:
“RESOLVED THAT in supersession of the Resolution passed under Section 293(1)(a) of the Companies Act, 1956, consent of the Company be and is hereby accorded to the Board of Directors of the Company (hereinafter referred to as the “Board”) pursuant to Section 180(1)(a) of the Companies Act, 2013 (‘the Act’) to the creation by the Board of mortgages and charges in addition to the existing mortgages and charges created by the Company as the Board may decide on such of the assets of the Company, both present and future, in such manner as the Board may direct, to or in favour of any one or more of the financial institutions/banks/any other investing agencies/trustees for the holders of debentures/bonds/other instruments which may be issued to and subscribed by any one or more of the financial institutions/banks/any other investing agencies or any other person(s)/bodies corporate by private placement or otherwise, to secure rupee/foreign currency loans, debentures, bonds or other instruments of an aggregate value not exceeding the borrowing limit available to the Board in terms of Section 180(1)(c) of the Act, together with interest thereon at the respective agreed rates, compound interest, additional interest, liquated damages, commitment charges, premia on pre-payment, or on redemption, costs, charges, expenses and all other monies payable by the Company to the aforesaid parties or any of them under the Agreement/Arrangements entered into/to be entered into by the Company in respect of the said loans/debentures/bonds or other instruments.”
17. To consider and if thought fit, to pass with or without modification/s, the following resolution as an Ordinary Resolution: “RESOLVED THAT in terms of Section 148 of the Companies Act, 2013, the remuneration payable to the Cost Auditors namely, Messrs. Mani & Co, Messrs. SPK Associates., Messrs. Kumar & Associates and Messrs. DGM & Associates for conducting Audit of Cost Accounting records maintained by the Company as applicable, for the year ending 31st March, 2015 as approved by the Board of Directors based on the recommendations of the Audit Committee, the details of which are given in the Explanatory Statement in respect of this item of business be and is hereby ratified.” By Order of the Board McLEOD RUSSEL INDIA LIMITED
A. GUHA SARKAR Kolkata, 23rd May 2014 Vice President & Company Secretary 4
NOTes
a) A Member entitled to attend and vote at the Annual General Meeting may appoint a Proxy to attend and vote thereat instead of himself. A Proxy need not be a Member of the Company. Proxies, in order to be effective, must be received at the Company’s Registered Office situated at Four Mangoe Lane, Surendra Mohan Ghosh Sarani, Kolkata-700001 not less than forty-eight hours before the Meeting.
In terms of Rule 19 of the Companies (Management and Administration) Rules, 2014, a person can act as a 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.
b) The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 in respect of the Items of Special Business is annexed hereto.
c) The information as required to be provided in terms of the Listing Agreement with the Stock Exchanges regarding the Directors who are proposed to be appointed/re-appointed is annexed.
d) The Register of Members and Share Transfer Books of the Company will remain closed from 16th July, 2014 to 23rd July, 2014 (both days inclusive).
e) The dividend that may be declared by the Company at the Sixteenth Annual General Meeting will be paid on or after 28th July, 2014 (i) to those Members holding shares in physical mode whose names appear on the Register of members of the Company after giving effect to all valid share transfers in physical form lodged with the Company and its Registrars on or before 15th July, 2014. (ii) In respect of the shares held in electronic form the dividend will be paid to the ‘beneficial owners’ of the shares as at the end of business hours on 15th July, 2014 as per details provided by the Depositories for this purpose.
f) Dividend in respect of shares held in dematerialized form shall be credited to the beneficial owner’s bank account directly through National Electronic Clearing Services (NECS), wherever NECS facility is available subject to availability of bank account details with 9 digit MICR and 11 digit IFS Code. In case the said details have not been provided to the concerned Depository Participant or there is any change, the same may please be intimated to the concerned Depository Participant immediately.
Securities and Exchange Board of India (SEBI) vide its Circular No. CIR/MRD/DP/10/2013 dated 21st March 2013, has mandated usage of electronic mode for making cash payments such as dividend etc. to the investors of Companies whose securities are listed on the Stock Exchanges.
g) Shareholders holding shares in physical form and desirous of having NECS facility, should provide their bank details and 9 digit MICR and 11 digit IFS Code number to the Registrar and Share Transfer Agent of the Company immediately. The shareholders who have already given their bank details should furnish the same only if there is any change.
Members who are holding shares in physical form are requested to notify change in address, if any, to the Company’s Share transfer Agent quoting their Folio Number. Shareholders holding shares in dematerialised form, should intimate change of their address, if any, to their Depository Participant.
h) In accordance with the provisions of Section 205C of the Companies Act, 1956 any amount of dividend which remained unpaid or unclaimed for a period of seven years from the date such dividend became due for payment have been transferred to the investor Education and Protection Fund set up by the Government of India. 5
Members of the Company and the persons who were the Members of the erstwhile The Moran Tea Company (India) Limited (since merged with the Company) who have not yet encashed their dividend warrant(s) for the financial year ended 31.03.2007 and onwards as applicable, are requested to contact the Company forthwith. The Company has uploaded the details of unpaid or unclaimed amounts lying with the Company as on the date of the last AGM (26th July, 2013) on its website www.mcleodrussel.com. i) The Securities and Exchange Board of India (SEBI) vide Circular Ref.No. MRD/DoP/Cir-05/2007 dated April 27, 2007 made PAN mandatory for all securities market transaction. Thereafter, vide Circular No. MRD/DoP/ Cir-05/2009 dated May 20, 2009 it was clarified that for securities market transactions and off market/private transaction involving transfer of shares in physical form of listed Companies, it shall be mandatory for the transferee(s) to furnish copy of PAN Card to the Company/RTAs for registration of such transfer of shares. SEBI further clarified that it shall be mandatory to furnish a copy of PAN in the following cases. i) Deletion of name of the deceased shareholder(s), where the shares are held in the name of two or more shareholder(s). ii) Transmission of shares to the legal heir(s), where deceased shareholder was the sole holder of shares. iii) Transposition of shares – when there is a change in the order of names in which physical shares are held jointly in the names of two or more shareholders. j) A Member desirous of getting any information on the accounts or operations of the Company is requested to forward his queries to the Company at least seven days prior to the Meeting so that the required information can be made available at the Meeting. k) Members who have not registered their e-mail addresses so far are requested to register their e-mail addresses for receiving all communication including Annual Report, Notices, Circulars, etc. from the Company electronically. l) Instructions for e-voting : The business of this Meeting may be transacted through electronic system and the Company is providing facility for voting by electronic means. The process and manner of voting by electronic means, the time schedule including the time period during which the votes may be cast and all other necessary instructions and information in this respect have been given in a separate sheet attached hereto forming part of the notice.
EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 ITEM NOS. 6 TO 10 The Company appointed Dr. Raghavachari Srinivasan, Mr. Ranabir Sen, Mr. Bharat Bajoria, Mr. Utsav Parekh, and Mrs. Ramni Nirula who, besides Mr. Srikandath Narayan Menon, have been discharging the role and functions of Independent Directors in terms of Clause 49 of the Listing Agreement with the Stock Exchanges. The term of office of the aforesaid Directors was liable to determination by retirement of Directors by rotation under the erstwhile applicable provisions of the Companies Act, 1956. In terms of Section 149 of the Companies Act, 2013 (‘the Act’), the Company is required to appoint at least one-third of its total number of Directors as Independent Directors for a fixed term and their office shall not be liable to determination by retirement of Directors by rotation. Accordingly, in compliance of Sections 149, 150 and 152 read with Schedule IV and any other applicable provisions of the Act each of Mr. Utsav Parekh, Mrs. Ramni Nirula, Dr. Raghavachari Srinivasan, Mr. Bharat Bajoria and Mr. Ranabir Sen, is proposed to be appointed as an Independent Director who shall hold office from the date of this Annual General Meeting upto the expiry of five 6
consecutive years or the date of the 21st Annual General Meeting, which ever is earlier. Separate notices have been received from a few Members referring to Section 160 of the Act proposing each of them respectively for appointment as an Independent Director at the forthcoming annual General Meeting of the Company.
The aforesaid persons have the desired qualifications and in depth experience in their respective field and have held very high positions in different renowned organizations. The particulars of the aforesaid Directors namely, age, qualification, past experience and other details are given separately in this Notice.
In the opinion of the Board, each of Mr. Utsav Parekh, Mrs. Ramni Nirula, Dr. Raghavachari Srinivasan, Mr. Bharat Bajoria and Mr. Ranabir Sen fulfills the conditions specified in the Act and meets the criteria of independence specified in Section 149(6) of the Act and Rules made thereunder for appointment as an Independent Director. The Board considers that the continued association of the aforesaid persons would be of immense benefit to the Company and it is desirable to continue to avail their services as Independent Directors. Accordingly, the Board recommends the resolutions set out at Item Nos. 6 to 10 of the convening Notice for approval by the Shareholders of the Company.
Mr. Utsav Parekh, Mrs. Ramni Nirula, Dr. Raghavachari Srinivasan, Mr. Bharat Bajoria and Mr. Ranabir Sen and their relatives may be considered to be interested in the respective Resolution in so far as they relate to them individually. No other Director or the Key Managerial Personnel of the Company or their relatives is concerned or interested, financially or otherwise, in respect of the said resolutions.
ITEM NO. 11 The term of appointment of Mr. Aditya Khaitan as the Managing Director of the Company expired on 31st March, 2014. The Board of Directors (‘the Board’) of your Company by its resolution passed on 28th March,2014 re-appointed Mr. A. Khaitan as the Managing Director of the Company subject to the approval of the members at a general meeting for a period of 3 years with effect from 1st April, 2014 on the following principal terms and conditions: Period: Three years with effect from 1st April 2014 Remuneration: Salary: Rs.15,00,000 per month with such revision as the Board may approve from time to time in the salary grade of Rs.12,50,000 to Rs.20,00,000. Bonus: Equivalent to six months’ salary in a year. Allowances: A special allowance of Rs.1,00,000 per month with such revision as the Board may approve from time to time in the scale of Rs. 1,00,000 – Rs. 2,00,000/- per month. In addition, he will be paid other allowance of Rs. 4,00,000/- per month with such revision as may be approved by the Board from time to time. Perquisites: Housing: Free furnished accommodation will be provided by the Company. In case no accommodation is provided, he will be paid House Rent Allowance at the rate of 60% of his salary. Gas, electricity, water etc. and telephone at residence will be borne by the Company in accordance with the Rules of the Company. Cost of personal long distance calls, however, will be borne by him. Car: Company car with driver under the Company’s Scheme applicable for senior executive staff of the Company. Medical: Reimbursement for self and family at actuals, including cost of medical insurance. Leave Travel Concession: For self and family as per applicable Rules of the Company. Leave Encashment: As per applicable Rules of the Company. Club Fees: Reimbursement of Club Subscription/Fees as per applicable Rules of the Company. Others: Personal Accident Insurance and other perquisites, which are applicable to senior executive staff of the Company, shall also apply to him. Retiral Benefits : Contributions to the Provident Fund, Superannuation/Pension Fund and/or Annuity Fund in accordance with the Rules and Regulations governing the said funds. Gratuity will be payable in accordance with the Rules of the Company and such Gratuity shall not exceed half a month’s salary for each completed year of service. 7
Minimum Remuneration: In the event of loss or inadequacy of profits in any year during the tenure of his office, he shall be paid the remuneration as above as minimum remuneration subject to compliance with the legal provisions as may be applicable. Leave: He will be entitled to leave on full pay, perquisites and allowances as per applicable Rules of the Company. Nature of Duties: He shall have substantial power of management subject to the superintendence, control and direction of the Board. Other Conditions: 1. He shall not be entitled to any sitting fees for attending meetings of the Board or Committees thereof. 2. Each party has the right of terminating the re-appointment by giving three months’ notice on either side.
The aforesaid terms and conditions have been set out in the Company’s letter dated 31st March, 2014, addressed to Mr. A. Khaitan. Pursuant to the provisions of Sections 196 and 197 and any other applicable provisions of the Companies Act, 2013 read with Schedule V to the Companies Act, 2013, the re-appointment of Mr. A. Khaitan as the Managing Director and the terms as to remuneration require the approval of the Members in General Meeting. The above terms as to remuneration have been approved by the Remuneration Committee of the Board at its Meeting held on 28th March, 2014. Mr. A. Khaitan had taken charge as the Managing Director of the Company in 2005 and since then under his leadership and guidance the Company has achieved considerable growth, both in terms of volume of business as well as profitability. The particulars of Mr. A. Khaitan namely, age, qualification, past experience and other details are given separately in this Notice. Keeping in view his vast experience in the tea industry and his high level of performance during his earlier term of appointment, the Board is of the opinion that the re-appointment of Mr. A. Khaitan as the Managing Director will be very beneficial to the Company. The resolution set out in Item No. 11 of the convening Notice is to be considered accordingly and the Board recommends the same. A copy of the Company’s letter dated 31st March, 2014 to Mr. A. Khaitan, re-appointing him as the Managing Director is available for inspection by the Members at the Registered Office of the Company on any working day prior to the date of the Meeting between 3.00p.m and 5.00 p.m and also will be available at the Meeting. Mr. A. Khaitan, himself, and his relatives including Mr. B. M. Khaitan and Mr. D. Khaitan are interested in the resolution under Item No. 11 of the convening Notice. No other Director, Key Managerial Personnel or their relatives are in any way concerned or interested, financially or otherwise in respect of the said resolution.
ITEM NOS. 12 TO 14 In view of expiry of the term of appointment of each of Mr. Rajeev Takru, Mr. Azam Monem and Mr. Kamal Kishore Baheti, as Wholetime Directors of the Company, on 31st March, 2014, the Board of Directors of the Company, by its resolution passed on 28th March, 2014 resolved to re-appoint Mr. R. Takru, Mr. A. Monem and Mr. K. K. Baheti as Wholetime Directors of the Company subject to the approval of the members at a general meeting for a period of 3 years with effect from 1st April, 2014, in each case on the following principal terms and conditions:
Period: Three years with effect from 1st April 2014 Remuneration: Salary : Rs.6,00,000 per month with such revision as the Board may approve from time to time in the salary grade of Rs.5,25,000 to Rs.10,00,000. Bonus: Equivalent to six months’ salary in a year. Allowances: A special allowance of Rs.1,00,000 per month with such revision as the Board may approve from time to time in the scale of Rs. 1,00,000 – Rs. 2,00,000/- per month. In addition, he will be paid other allowance of Rs. 75,000/- per month with such revision as may be approved by the Board from time to time. 8
Perquisites: Housing: Free furnished accommodation will be provided by the Company. In case no accommodation is provided, he will be paid House Rent Allowance at the rate of 60% of his salary. Gas, electricity, water etc. and telephone at residence will be borne by the Company in accordance with the Rules of the Company. Cost of personal long distance calls, however, will be borne by him. Car: Company car with driver under the Company’s Scheme applicable for senior executive staff of the Company. Medical: Reimbursement for self and family at actuals, including cost of medical insurance. Leave Travel Concession: For self and family as per applicable Rules of the Company. Leave Encashment: As per applicable Rules of the Company. Club Fees: Reimbursement of Club Subscription/Fees as per applicable Rules of the Company. Others: Personal Accident Insurance and other perquisites, which are applicable to senior executive staff of the Company, shall also apply to him. Retiral Benefits : Contributions to the Provident Fund, Superannuation/Pension Fund and/or Annuity Fund in accordance with the Rules and Regulations governing the said funds. Gratuity will be payable in accordance with the Rules of the Company and such Gratuity shall not exceed half a month’s salary for each completed year of service. Minimum Remuneration: In the event of loss or inadequacy of profits in any year during the tenure of his office, he shall be paid the remuneration as above as minimum remuneration subject to compliance with the legal provisions as may be applicable. Leave: He will be entitled to leave on full pay, perquisites and allowances as per applicable Rules of the Company. Nature of Duties: He will perform such duties and exercise such powers which may from time to time be entrusted to or vested in him by the Board and/or the Managing Director. Other Conditions: 1. He shall not be entitled to any sitting fees for attending meetings of the Board or Committees thereof. 2. Each party has the right of terminating the re-appointment by giving three months’ notice on either side.
The aforesaid terms and conditions have been set out in the Company’s letters dated 31st March, 2014, addressed to Mr. R. Takru, Mr. A. Monem and Mr. K. K. Baheti respectively.
Pursuant to the provisions of Sections 196 and 197 and any other applicable provisions of the Companies Act, 2013 read with Schedule V to the Companies Act, 2013, the aforementioned re-appointments of Mr. R. Takru, Mr. A. Monem and Mr. K. K. Baheti and the terms as to remuneration require the approval of the members in General Meeting. The above terms as to remuneration have been approved by the Remuneration Committee of the Board at its Meeting held on 28th March, 2014.
The Board is of the opinion that Mr. R. Takru, Mr. A. Monem and Mr. K. K. Baheti very efficiently and successfully managed their respective fields of operations, namely, production, marketing and finance and helped the Company in achieving substantial growth in terms of production and profitability. The particulars of the aforesaid Directors namely, age, qualification, past experience and other details are given separately in this Notice.
The Board is of the view that the re-appointment of Mr. R. Takru, Mr. A. Monem and Mr. K. K. Baheti will prove beneficial to the Company. The resolution set out in Item Nos. 12, 13 and 14 of the convening Notice are to be considered accordingly and the Board recommends the same for acceptance. Copies of the letters dated 31st March, 2014 re- 9 appointing Mr. R. Takru, Mr. A. Monem and Mr. K. K. Baheti as Wholetime Directors are available for inspection by the Members at the Registered Office of the Company on any working day prior to the date of the Meeting between 3.00 p.m and 5.00 p.m and also will be available at the Meeting.
Mr. R. Takru, Mr. A. Monem and Mr. K. K. Baheti and their relatives are interested in the respective resolution in so far as they relate to them individually. No other Director and Key Managerial Personnel of the Company and their relatives is concerned or interested, financially or otherwise, in the resolutions set out at Items Nos. 12, 13 and 14.
ITEM NO. 15 The Shareholders of the Company by a special resolution passed under the Companies Act, 1956 had approved payment of commission to the Non-Executive Directors (Directors other than the Managing and/or Wholetime Directors). In view of the important role played by the Non- Executive Directors who have been entrusted with new responsibilities to make their role more objective and purposeful and keeping in view the enhanced role, responsibilities and duties of the Non- Executive Directors, it is considered appropriate that the Company continues to pay commission to the Non- Executive Directors and pass a suitable resolution in terms of Section 197 and 198 and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and remuneration of Managerial personnel) Rules, 2014 as set out at Item No. 15 of the convening Notice. The said remuneration to the Non-Executive Directors shall be in addition to the sitting fee payable to them for attending meetings of the Board and Committees thereof.
Save and except all the Non-Executive Directors of the Company and their relatives, none of the Directors, Key Managerial Personnel and their relatives are, in any way, concerned or interested, financially or otherwise, in the resolution set out at Item No. 15 of the Notice. The Board recommends the resolution for approval by the Shareholders.
ITEM NO. 16 In the normal course of business, the Company is required, from time to time, to borrow funds by way of rupee/foreign currency loans, issue of deventures, bonds or other instruments from Banks, Financial Institutions and/or other persons/bodies corporate etc. To secure such lendings the lenders usually call for adequate securities which is normally provided in the form of mortgage and charge on certain properties of the Company. In terms of Section 180(1) (a) of the Companies Act, 2013 (‘the Act’) besides sale, to lease or otherwise disposal of any ‘undertaking’ or ‘substantially the whole of any undertaking’ of a company , a consent of its Members by way of a Special Resolution is necessary.
The assets on which the security may be required to be created may come under the ambit of the definition of ‘undertaking’ or ‘substantially the whole of any undertaking’ as explained under Section 180(1)(a) of the Act, necessitating the Members’ Consent by way of passing a Special Resolution. The Resolution set out in Item No. 16 of the convening Notice is to be considered accordingly and the Board recommends the same.
No Director or Key Managerial Personnel of the Company or any of their relatives is concerned or interested, financially or otherwise, in respect of the said Resolution.
ITEM NO. 17 The Company being engaged in tea plantation and manufacturing activities, was required to appoint Cost Auditor/s to audit its cost accounting records in respect of plantation products in terms of Section 233B of the Companies Act, 1956 and the Order issued thereunder.
In terms of Section 148 of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 (‘the Rule’), the Board of Directors of the Company at its Meeting held on 23rd May, 2013 appointed Messrs Mani & Company, Messrs. SPK Associates, Messrs Kumar & Associates and Messrs DGM Associates, Cost Accountants, as the Cost Auditors of the Company for the Financial Year ending on 31st March, 2015 on the recommendation of the Audit Committee of the Company (‘the Audit Committee’). Messrs. Mani & Company has been nominated as the Lead Cost Auditor.
The Board, in terms of the Rule, approved the remuneration of the Cost Auditors as recommended by the Audit 10
Committee, which is subject to ratification by the Shareholders of the Company.
The remuneration fixed by the Board is as under:
Cost Auditors Remuneration Messrs Mani & Company Rs. 96,000/- for auditing the records of 12 Tea Estates Rs. 35,000/ being the lead audit fee. Messrs. SPK Associates Rs. 1,04,000/- for auditing the records of 13 Tea Estates Messrs Kumar & Associates Rs. 1,12,000/- for auditing the records of 14 Tea Estates Messrs DGM Associates Rs. 1,12,000/- for auditing the records of 14 Tea Estates
In addition to above, the Cost Auditors will be reimbursed out of pocket expenses as may be incurred by them on actual basis.
The Resolution set out in Item No. 17 of the convening Notice is to be considered accordingly and the Board recommends the same.
No Director or any Key Managerial Personnel of the Company or any of their relatives is concerned or interested, financially or otherwise, in respect of the said Resolution. 11
PARTICULARS RELATING TO DIRECTORS PROPOSED TO BE APPOINTED/RE-APPOINTED
Name of Director MR. DEEPAK KHAITAN Date of Birth 9th May 1955 Qualification B. Com. (Hons.) MBA. (Geneva) Expertise Mr. D. Khaitan hails from a renowned family of Industrialists. He has indepth exposure to and involvement in steering diverse businesses in India and has gained considerable expertise in management of Tea, Batteries and Engineering Industries. He is a Director of number of Companies having diversified business interests. Directorships held in other Companies Williamson Magor & Co. Limited (excluding foreign Companies) Eveready Industries India Limited Williamson Financial Services Limited McNally Bharat Engineering Company Limited Babcock Borsig Limited McNally Sayaji Engineering Limited Kilburn Engineering Limited Litez India Limited Indivar Commercial Private Limited Turf Properties Private Limited MBE Coal & Mineral Technology India Private Limited Committee Memberships, if any, with position Member of Audit Committee and Remuneration Committee of Babcock Borsig Limited Shareholding in the Company 11,818 Equity Shares of Rs.5/- each
Name of Director MR. AZAM MONEM Date of Birth 22nd November 1959 Qualification B. Com. (Hons.) Expertise During the last 34 years Mr. Monem has gained rich experience in tea tasting and marketing. Mr. Monem has in-depth knowledge in Exports and Domestic Sales of Tea and achieved valuable experience as a buyer, blender and trader. Mr. Monem is the Additional Vice Chairman of ITA and Chairman of ITA’s Export Promotion and Marketing Sub- Committee and also the former Chairman of Calcutta Tea Traders Association. Mr. Monem was a member of a number of tea delegations to various Countries led by the Tea Board and Commerce Ministry. Directorships held in other Companies Nil (excluding foreign Companies) Committee Memberships, if any, with position Nil Shareholding in the Company 500 Equity Shares of Rs.5/- each 12
Name of Director MR. UTSAV PAREKH Date of Birth 28th August 1956 Qualification B. Com. (Hons.) Expertise Mr. U. Parekh, an investment banker, has about 34 years of in-depth experience in merchant banking and financial services. Mr. Parekh is on the Boards of a number of Companies engaged in diverse industries including engineering, capital market services etc. Directorships held in other SMIFS Capital Markets Limited Companies (excluding foreign McNally Bharat Engineering Company Limited Companies) Xpro India Limited Lend Lease Company (India) Limited Bengal Aerotropolis Projects Ltd Texmaco Infrastructure & Holdings Limited Indian Chamber of Commerce Calcutta Committee Memberships, if any, 1. Member of Audit Committee of: with position (a) SMIFS Capital Markets Limited (b) McNally Bharat Engineering Company Limited. 2. Member of Remuneration Committee and Investors’ Grievance Committee of McNally Bharat Engineering Company Limited. Shareholding in the Company Nil
Name of Director MRS. RAMNI NIRULA Date of Birth 27th May 1952 Qualification B.A. (in Economics), MBA. (Delhi University) Expertise Mrs. Nirula had an illustrious career with ICICI Bank Group where she started her career way back in 1976 and retired as Senior General Manager of ICICI Bank Limited. During this period she held various leadership positions in the areas of Project Financing, Strategy, Planning and Resources and Corporate Banking. Mrs. Nirula also held key positions as Managing Director & CEO of ICICI Securities Limited as also the Head of the Corporate Banking Group of ICICI Bank. Mrs. Nirula is also on the Boards of a number of renowned Indian Companies. Directorships held in other DRN Investments and Agriculture Pvt Ltd Companies (excluding foreign Jubilant Food Works Limited, Companies) TAMA Investment and Finance Pvt Ltd Utkarsh Micro Finance Private Limited, Usha Martin Limited IKP Knowledge Park P. I. Industries Limited Avantha Power & Infrastructure Limited Goldman Sachs Trustee Co (India) Pvt Ltd Sona Koyo Steering Systems Limited Avantha Ergo Life Insurance Company Ltd Eveready Industries India Limited Committee Memberships, if any, 1. Chairperson of Audit Committee of Avantha Ergo Life Insurance Company Limited with position 2. Chairperson of Share Holding Relationship Committee of P. I. Industries Limited 3. Chairperson of Share Transfer & Grievance Committee of Jubilant Food Works Limited 4. Member of Audit Committee of: (a) Avantha Power & Infrastructure Limited (b) Sona Koyo Steering System Limited (c) Eveready Industries India Limited (d) Goldman Sachs Trustee Co. (India) Pvt. Ltd. (e) Jubilant Food Works Limited (f) Utkarsh Micro Finance Pvt. Ltd. Shareholding in the Company Nil 13
Name of Director DR. RAGHAVACHARI SRINIVASAN Date of Birth 30th May 1931 Qualification Ph. D. (in Banking & Finance from Bombay University), CAIIB., FIB. Expertise Dr. R. Srinivasan aged 83 years, has more than 40 years of experience in the banking industry. He holds a Doctorate in Banking from Bombay University and is an Associate & Fellow of Indian Institute of Banking & Finance. He held various positions in banks and retired as Chairman and Managing Director of Bank of India. Prior to that he was CMD of New Bank of India which got merged with Punjab National Bank and Allahabad Bank. He was Chairman of Indian Banks Association for nearly four terms, a director of IDBI, Discount & Finance House of India, New India Assurance Co. Ltd. & ECGC. He was also on various high level Committees constituted by RBI. He has been a director of the Company since March 2005 and is a member of the ‘Audit Committee’ and ‘Nomination & Remuneration Committee’ of the Company. He does not hold any shares of the Company. Directorships held in other Companies Graphite India Limited (excluding foreign Companies) Elder Pharmaceuticals Limited Goldiam International Limited Shalimar Paints Limited Williamson Magor & Co. Limited Nayamode Solutions Pvt Ltd Snowcem Paints Pvt Ltd J. Kumar Infraprojects Limited J. M. Financial Trustee Company Pvt Ltd New Turn Consulting Pvt Ltd Committee Memberships, if any, with position 1. Chairman of Audit Committee of: (a) Shalimar Paints Limited (b) J. Kumar Infraprojects Limited. 2. Chairman of Investors’ Grievance Committee of Elder Pharmaceuticals Limited. 3. Chairman of Remuneration Committee of: (a) J. Kumar Infraprojects Limited (b) Elder Pharmaceuticals Limited (c) Williamson Magor & Co. Limited. 4. Member of Audit Committee of: (a) Elder Pharmaceuticals Limited (b) Graphite India Limited (c) Goldiam International Limited (d) Williamson Magor & Co. Limited. 5. Member of Remuneration Committee of Graphite India Limited. Shareholding in the Company Nil 14
Name of Director MR. BHARAT BAJORIA Date of Birth 12th March 1953 Qualification B. Sc. (Hons.) Expertise Mr. Bajoria is associated with tea industry since 1975 and during his long career for about 4 decades has gathered considerable experience in all aspects of tea plantation business. Mr. Bajoria is the Managing Director of Teesta Valley Tea Co. Limited and The Bormah Jan Tea Co. (1936) Limited and he is having directorships in other companies. As a leader of the Indian tea industry, Mr. Bajoria held in the past, the position of Chairman of Indian Tea Association and Consultative Committee of Plantation Association. Mr. Bajoria was also the Chairman of Darjeeling Planters Association and Special Committee for Generic Tea Promotion in India. Directorships held in other Companies Banarhat Investment Co. Private Limited (excluding foreign Companies) Birdie Trading Private Limited Teesta Valley Tea Co. Limited Teesta Valley Exports Limited Speedways International Private Limited McLeod & Co. Limited Trishul Co. Private Limited Globe (India) Limited The Budge Budge Investment Co. Pvt Ltd The Bormah Jan Tea Co. (1936) Limited Williamson Magor & Co. Limited Committee Memberships, if any, with position Member of Remuneration Committee of Williamson Magor & Co. Limited. Shareholding in the Company 1,400 Equity Shares of Rs. 5/- each.
Name of Director MR. RANABIR SEN Date of Birth 18th October 1945 Qualification Graduate from St. Joseph’s College in Darjeeling. Expertise Mr. Sen joined J. Thomas & Co. Private Limited in 1964 and served the Company in various capacities at Kolkata and various branches in India and also abroad. He was the key person in setting up the Siliguri Tea Auctions and also the Singapore Auctions. Inducted into the Board of J. Thomas & Co. Private Limited in 1987 and became the Managing Director in 1995 and Chairman in 2001. He retired from J. Thomas & Co. Private Limited as CMD on 31st March 2004. He was an active member of various tea committees including Tea Board. Directorships held in other Companies DLX Limited (excluding foreign Companies) Committee Memberships, if any, with position Nil Shareholding in the Company 133 Equity Shares of Rs.5/- each. 15
Name of Director MR. ADITYA KHAITAN Date of Birth 30th January 1968 Qualification B.Com. (Hons.) Expertise Mr. Khaitan has had indepth exposure to and involvement in steering diverse businesses and has gained considerable experience and expertise in management, production, marketing, corporate finance and other related areas of Tea Industry and also in the matter of restructuring, mergers, demergers and acquisitions of corporate entities. Mr. Khaitan was the Chairman of the Indian Tea Association for three consecutive years upto 2009-2010. He was a Committee Member of Indian Chamber of Commerce and was a Member of Tea Board. Directorships held in other Companies Williamson Magor & Co. Limited (excluding foreign Companies) Eveready Industries India Limited Williamson Financial Services Limited McNally Bharat Engineering Company Limited Babcock Borsig Limited D1 Williamson Magor Bio Fuel Limited Woodside Parks Limited Prana Lifestyle Private Limited Royal Calcutta Golf Club Committee Memberships, if any, with position 1. Member of Audit Committee and Remuneration Committee of Babcock Borsig Limited. 2. Chairman of Audit Committee and Remuneration Committee of D1 Williamson Magor Bio Fuel Limited Shareholding in the Company 7,272 Equity Shares of Rs.5/- each
Name of Director MR. RAJEEV TAKRU Date of Birth 5th May 1955 Qualification B.A. (Hons.) Expertise Mr. Takru has more than 3 decades of experience in operations of Tea Estate Management. He has had indepth exposure in other administrative functions and human resource development. He has held various senior positions in a number of Companies of Williamson Magor Group. Mr. Takru is also associated with health and educational activities. He is on the Boards of Woodlands Multispeciality Hospital Limited and The Assam Valley School. Directorships held in other Companies Dufflaghur Investments Limited (excluding foreign Companies) Seajuli Developers & Finance Limited Woodlands Multispeciality Hospital Limited Committee Memberships, if any, with position Nil Shareholding in the Company 900 Equity Shares of Rs.5/- each 16
Name of Director MR. KAMAL KISHORE BAHETI Date of Birth 17th January 1963 Qualification B. Com. (Hons.), FCA, ACS, AICWA. Expertise Mr. Baheti has held various important positions in Accounts and Finance of a number of reputed Companies. He is associated with Tea Companies belonging to Williamson Magor Group since 1989 and during this period has gained considerable expertise in the matters pertaining to Accounts and Finance of Tea Companies as also in the matter of Corporate Finance, Capital Market activities, restructuring, mergers and demergers of Corporate entities. Mr. Baheti is a Member of the Finance and Taxation Sub-Committee of Indian Tea Association. Directorships held in other Companies Williamson Financial Services Limited (excluding foreign Companies) Dufflaghur Investments Limited Seajuli Developers & Finance Limited Woodside Parks Limited Majerhat Estates & Developers Limited United Machine Co. Limited Ichamati Investments Limited Queens Park Property Co. Limited Bishnauth Investments Limited ABC Tea Workers Welfare Services Committee Memberships, if any, with position 1. Member of Shareholders’ Grievance Committee and Remuneration Committee of Williamson Financial Services Limited. 2. Member of Audit Committee and Remuneration Committee of Babcock Borsig Limited Shareholding in the Company 5,100 Equity Shares of Rs.5/- each Responsible Leadership McLEOD RUSSEL INDIA LIMITED Annual Report 2013-14 “Tea is not a mere commodity for us. It is heritage based on values and culture full of sentiments and commitments.”
– B M Khaitan, Chairman
CONTENTS
2 Corporate Identity 4 Organisational Structure 5 Highlights (Consolidated) 6 Our Business Model 9 Sense of
Responsibility 19 Corporate Information 20 Report of the Directors 31 Management Discussion and Analysis 34
Report on Corporate Governance 47 Report of the Auditors
52 Balance Sheet 53 Profit and Loss Statement 54 Cash Flow Statement
56 Notes to Financial Statements 88 Consolidated Financial Statements
126 Details of Subsidiaries 127 Particulars of Tea Estates MISSION STATEMENT
“McLeod Russel India Limited follows the tenets of a good corporate citizen, providing equal opportunity to all employees, in a safe and healthy working environment, ensuring social and economic development to sustain and improve quality of life. It is committed to safeguarding the environment by adopting an eco-friendly, transparent and participatory approach in all activities whilst ensuring that the best quality of tea is produced.”
– Aditya Khaitan, Managing Director McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14
CORPORATE IDENTITY
At McLeod Russel, we are driven by a sense of responsibility to each of our stakeholders.
To our customers, we provide a product that is safe, healthy and consistent.
To our employees, we provide a secure, remunerative and balanced work-life scenario.
7RRXU¿QDQFLDOVWDNHKROGHUVZHSURYLGHGH risked sustainable growth.
To our community, we provide a secure buyback and growing incomes.
To our industry, we provide our experience and association.
To the government, we provide consistent compliance and increased taxes.
The reconciliation of these diverse interests has graduated McLeod Russel (including subsidiaries) into the largest private sector tea plantation company in the world.
Lineage Russel Africa Limited in Kenya in LQ9LHWQDPLQ8JDQGDDQG McLeod Russel India Limited DQGUHVSHFWLYHO\ZKLFK in Rwanda). are engaged in tea trading and (McLeod Russel) is a member 7KH*URXSH[SRUWVWHDWR blending. of the Williamson Magor Group countries across the world. engaged in the business of tea production for over 140 years. Promoters Listing McLeod Russel represents a (̆HFWLYH$SULOWKH The shares of the Company are balance of proprietary and bulk tea division of Eveready listed on Calcutta (CSE), Bombay professional interests. The Industries India Limited, another (BSE) and National (NSE) Company is managed by Mr. Brij company in the Group, demerged Stock Exchanges. The Company Mohan Khaitan (Chairman), into McLeod Russel with the enjoyed a market capitalisation of Mr. Deepak Khaitan (Vice objective to focus completely on 5V ODNKVDVRQVW0DUFK Chairman), Mr. Aditya the tea plantation business. Khaitan (Managing Director), ,Q-XO\0F/HRG5XVVHO :KROHWLPH'LUHFWRUVDQG acquired Borelli Tea Holdings Independent Directors. Accreditations and Limited, UK, and gained control awards over its subsidiary Williamson McLeod Russel’s globally Tea Assam Limited owning 17 respected accreditations and WHDHVWDWHVLQ,QGLD,QDQG FHUWL¿FDWLRQVKHOSHGHQKDQFHLWV 0F/HRG5XVVHODFTXLUHG export footprint and realisations.
Doom Dooma Tea Company The Company has been Limited and Moran Tea Company recognised with Fairtrade, India Limited. These acquired Rainforest Alliance, Hazard entities were merged with Analysis Critical Control Point 0F/HRG5XVVHOEHWZHHQ (HACCP), Ethical Tea Partnership DQG and International Organisation Borelli acquired 100% control IRU6WDQGDUGLVDWLRQ ,62 Location of Phu Ben Tea Company Limited FHUWL¿FDWLRQVH[WHQGLQJDFURVVD McLeod Russel is head- RI9LHWQDPLQ0DUFK DQG number of its tea estates. quartered in Kolkata (India) McLeod Russel Uganda Limited ZLWK KHFWDUHVXQGHUWHD LQ-DQXDU\DQGRI cultivation globally. Gisovu Tea Company Limited of 5ZDQGDLQ)HEUXDU\%RUHOOL The estates/production units of formed two more subsidiaries, the Company (and subsidiaries) namely McLeod Russel Middle FRPSULVHHVWDWHVLQ,QGLD East DMCC in Dubai and McLeod LQ$VVDPLQ:HVW%HQJDO 4 McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14
Business The Company (including McLeod Russel Middle The Company is engaged in VXEVLGLDULHV SURGXFHG East DMCC, a subsidiary, was the cultivation, processing and million kilograms of tea in HVWDEOLVKHGDW'XEDLLQWR sale of tea. It mainly produces LWZDVRQHRIWKHODUJHVW serve as a trading and marketing CTC tea in India, Africa and global black tea exporters in hub for multi-origin blends Vietnam, accounting for nearly emerging from the Group’s estates in India, Vietnam and SHUFHQWRILWVSURGXFWLRQ The Company’s state-of-the- Africa. It provides solutions the rest of the tea manufactured art tea blending facility at Nilpur to customers looking for tea by the Company is of the Assam (Assam) catered to the growing varieties in straight line, blended orthodox variety in Assam demand from overseas and or value-added forms. and Vietnam and Green tea in domestic customers for bespoke Vietnam. blends of the Company’s own teas from India.
OUR ORGANISATIONAL STRUCTURE
Domestic acquisitions Subsidiaries (since amalgamated)
Borelli Tea Holding Williamson Tea Moran Tea Co. Doom Dooma Limited, UK (100%) Assam Limited (India) Ltd Tea Co. Ltd
Phu Ben Tea Rwenzori Tea Gisovu Tea McLeod Russel McLeod Russel Co. Ltd (100%) Invt. Ltd (100%) &R/WG Middle East DMCC Africa Limited (100%) (100%)
McLeod Russel Uganda Ltd (100%)
HIGHLIGHTS (CONSOLIDATED)
Saleable Production Sale of Tea (million kilograms) (Rs. in Lakhs)
PAT EBIDTA margin (Rs. in Lakhs) (as a % of sales) McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14
OUR BUSINESS MODEL
Good Good Exclusive HR Agricultural Manufacturing Policy Practices (GAP) Practices(GMP)
High Quality Sustainable CSR – way of Teas Produce life
Good agricultural kilograms/hectare which is well Manufacturing policy practices above industry average formulated by the legendary Selective clonal policy John Trinick (renowned tea developed over years of cutting- Good manufacturing technologist) edge R&D initiatives practices Robust manufacturing Exclusive HR policy Strict maintenance of plucking initiatives rounds Workplace governed by – Capacity geared for peak crop a healthy and safe work Production of quality processing environment UDZPDWHULDO KLJK¿QHOHDI ±$OOIDFWRULHV,62 component) Minimal employee attrition FHUWL¿HG Competent green leaf handling Leadership and personnel – Factories standardized as per and transport capabilities development including succession global norms plan 8SURRWLQJDQGUHSODQWLQJ# Complete compliance in SHU\HDU VLQFH Internal growth of human product safety, traceability and resources (minimal external 3URGXFWLYHDJHSUR¿OH RI product recall recruitment in the middle and DUHDXQGHU\HDUV Standardisation of practices via senior levels) $YHUDJH\LHOGVLQ,QGLDDW our policy manual 7
Training, best practices and Transparent performance CSR – a way of life information exchange through evaluation Extension of health facilities/ exposure visits to global services to neighbouring plantations. Sustainable produce communities. Soil conservation and Transparent reward and management Creation of an educational recognition policy institution (Assam Valley School). Water conservation with High value quality tea an emphasis on rain water Promotion and recognition of %XVLQHVVSODQWKURXJKH̆HFWLYH harvesting literary/scholastic pursuits. discussions Integrated pest and weed Economic empowerment for Targets (commercial and management local/neighbouring communities personal development) covered $̆RUHVWDWLRQDQGSUHVHUYDWLRQ Vocational training for by KPIs (Key Performance of natural habitat communities in and around Indicators) estates. Prudent energy conservation Mid-term target review to encourage ethical and transparent Waste management and behaviour. disposal McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14
At McLeod Russel, we consider ourselves responsible for enhancing value sustainably for our stakeholders.
OVER THE YEARS, THIS SENSE OF RESPONSIBILITY HAS STRENGTHENED OUR BUSINESS MODEL.
We created a business model largely protected from industry cyclicality
:HFUHDWHGDVWHDG\FXVWRPHUSUR¿OHWKDWPDNHVLWSRVVLEOHWRSUHVHOOPRUH than 70 per cent of the teas that we grow
We have grown faster than the industry average through the increased proportion of leaf purchases
2XUFUHGLWUDWLQJKDVJRQHXSE\¿YHQRWFKHVRYHUWKH\HDUVWR$$DVSHU rating done by ICRA
:HFUHDWHGDEDODQFHGVKDUHKROGLQJSUR¿OHFRPSULVLQJ),,VDQGLQVWLWXWLRQDO shareholders
We strengthened our Balance Sheet through high liquidity and low gearing 10 McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14
Responsibility and shareholders
At McLeod Russel, we have demonstrated proactive willingness through a number of initiatives that have relatively de-risked our Company and enhanced long-term shareholder value. 11
To our business model, we operational discipline across corresponding improvements have infused the following gardens and countries through in productivity. The Company’s commitments: the creation of a documented IDFWRULHVUHSRUWHGD manual (standard operating DYHUDJHXWLOLVDWLRQLQ Economies-of-scale: The RIWKHIDFWRULHVZHUHFRYHUHG Company (together with its procedures) with the objective to subsidiaries) has grown its reduce arbitrary interventions, by captive power generation business from a presence in increase process consistency and (DG sets) that helped enhance one country a decade ago to a enhance knowledge sharing. utilisation. SUHVHQFHLQIRXU IURP Rejuvenation: The Company Hedge: The Company pre- hectares under tea cultivation XSURRWVDURXQGRILWV sells nearly 70 per cent of its LQWR KHFWDUHV aggregate bush population each export volumes and 40 per cent JOREDO LQZKLFK year, replenished with a blend of its domestic sales, securing accounts for the largest such of new tea bushes (high quality realisations. coverage by any single company or high quantity). The Company The result is that the industry LQWKHZRUOG IURPDQRXWSXWRI XSURRWHGDFXPXODWLYH cyclicality notwithstanding, the PLOOLRQNLORJUDPVLQ KHFWDUHVIURP RQZDUGV Company outperformed the WRPLOOLRQNLORJUDPVLQ VDFUL¿FLQJVKRUWWHUPSUR¿WVIRU sectoral growth average and ORQJWHUPEHQH¿WV7KLVXSURRWLQJ SDLGDFXPXODWLYH5V notwithstanding, the Company’s Climatic de-risking: The lakhs as dividend over the decade yield is among the highest and Company has widened its HQGLQJ'LYLGHQGV one of the most resistant to presence from one country to URVHIURPLQWR FOLPDWHFKDQJH1HDUO\RIWKH IRXUZLWKFRUUHVSRQGLQJEHQH¿WV LQZKLOHPDUNHW &RPSDQ\¶VEXVKHVDUHOHVVWKDQ in terms of climatic de-risking. capitalisation quintupled over the years old, a period when they are Besides, the volume derived from decade and is being increasingly most productive. the North East Indian gardens as perceived as a defensive holding a proportion of overall volume Capability: McLeod Russel across a number of institutional declined from a high of 100 per LQYHVWHGPRUHWKDQ5V portfolios. We give below the FHQWLQ WRSHUFHQW ODNKVLQ¿[HGDVVHWVLQ,QGLDDQG comparative dividend payout Process orientation: The 5VODNKVJOREDOO\LQWKH ¿JXUHVZKLFKLQFOXGHGLYLGHQG Company strengthened its ¿YH\HDUVOHDGLQJWRZLWK distribution tax.
% Rs. lakhs Rs. lakhs 0DUNHWFDSLWDOLVDWLRQ of shareholding held 'LYLGHQGSD\RXW E\),,V
Rs. lakhs % Rs. lakhs 0DUNHWFDSLWDOLVDWLRQ of shareholding held Dividend payout (proposed), E\),,V McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14
Responsibility and customers
At McLeod Russel, we have brought to our customer engagement process a strong sense of involvement that has helped us service their needs better.
Our customer responsibility has to comply with demanding cost but not necessarily higher EHHQUHÀHFWHGLQWKHIROORZLQJ LQWHUQDWLRQDOFHUWL¿FDWLRQV realisations - increased from initiatives: (FAIRTRADE Mark, Rainforest QLOJDUGHQFRYHUDJHLQ WR Alliance, Hazard Analysis Critical SHUFHQWLQDQGD Trust: The Company has Control Point, Ethical Tea SURMHFWHGSHUFHQWLQ enhanced customer trust by Partnership and International DJRRGWKUHH\HDUVDKHDG providing teas which conform Organisation for Standardisation of schedule. The Company to ethical plant protection DQG,62 7KHSURSRUWLRQ has demonstrated a complete practices as well as national of the Company’s teas conforming compliance with EU norms on and international food safety to the Rainforest Alliance SHVWLFLGHXVH RYHUWKH\HDUV compliance norms. The Company FHUWL¿FDWLRQ±UHVXOWVLQKLJKHU pesticide consumption has ZDVDPRQJWKH¿UVWLQ,QGLD
GHFOLQHGVLJQL¿FDQWO\ZLWKRXW are proximate enough to bring Result: Customer attrition has compromising yield. tea into the factory within the been less than 1 per cent over the shortest time to retain freshness. GHFDGH PRUHWKDQSHUFHQWRI Portfolio: The Company’s The Company’s seven-day customers have been working with extensive product portfolio caters plucking discipline (addressing WKH&RPSDQ\IRUDWOHDVW¿YH\HDUV WRYDULRXVFXVWRPHUVDWGL̆HUHQW 70 per cent of the Company’s the Company has consistently price points. The range of teas peak season plucking) enhances outperformed increase in industry comprises top quality CTC teas quality. The Company’s UHDOLVDWLRQVRYHUWKHODVWGHFDGH from Assam and Rwanda to good pioneering vacuum packing the Company’s premium teas (full quality CTC teas from Dooars and WHFKQRORJ\DFURVVRIWKH compliance with international medium quality CTC teas from &RPSDQ\¶VHVWDWHV±KHOSV MRL and food safety standards) 8JDQGDDQG9LHWQDP IURPKLJK retain processed tea freshness. JHQHUDWHUHDOLVDWLRQVDWOHDVW value Orthodox teas from Assam higher than the Assam regional to value-for-money Orthodox and Nurturing: The Company’s average. Green teas from Vietnam. responsibility towards its FXVWRPHUVLVUHÀHFWHGLQLWV Quality: The Company’s active willingness to enter challenging quality upgradation initiatives The Company was markets passing through social (taste, aroma, size and colour) recognised with the or political unrest, nurturing have emerged as an industry ‘Sustainable Seller’ Award customers and helping scale by Rainforest Foundation in benchmark. The Company demand. For instance, Gujarat New York, which is a global FXVWRPLVHVWHDVDURXQGVSHFL¿F and Maharashtra, two of the recognition of industry customer preferences with the largest tea consuming states of champions who have objective to grow those markets India, accounted for half the demonstrated the vision and enhance realisations. The &RPSDQ\¶VR̆WDNHDWRQHWLPH to make sustainability a Company invested in peak the Company grew its exposure in priority and the dynamism load tea processing capacity to WRSXWLWLQWRH̆HFW7KH other states, growing their share DGGUHVVWKHIDFWWKDWRIWKH past honorees of this to 70 per cent of the Company’s annual tea crop is produced in award have comprised overall Indian volume. just four months, the Company’s HRH, The Prince of processing schedule is structured Service: The Company provides Wales, Ted Turner, Tata to liquidate the day’s plucked a dependable service that Global Beverages, Kraft WHDLQYHQWRU\ZLWKLQKRXUV LVUHÀHFWHGLQVHUYLFLQJDQ\ Foods, Chiquita Brands International, AM Results, ensuring that the produced tea volume, delivery timeliness, Olam International, Mars retains its desired characteristics. product consistency and superior Incorporated and Domtar. The tea processing factories packaging.
lakh kgs % Output of McLeod Russel India output of McLeod Russel India Number of countries serviced covered by Rainforest Alliance, covered by Rainforest Alliance, by the McLeod Russel Group, 14 McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14
Responsibility and employees
At McLeod Russel, we are intrinsically accountable to our employees who are the building blocks of our success.
Our employee responsibility for children, cultural programmes growing workers’ clubs which LVUHÀHFWHGLQWKHIROORZLQJ along with supporting many supports sport (cricket, football, initiatives: other activities. The Company basketball among others) and provides plantation employees other activities. Large payer of Employee with infrastructural support %HQH¿WV McLeod Russel Result: The Company reported (housing, electricity, school, *URXS¶VHPSOR\HHEHQH¿WV among highest productivity hospital, worship places) in line H[SHQVHRI5VODNKVWRLWV standards in the industry. The with the Labour Plantation Act. ODERXUVWD̆DQGRWKHUHPSOR\HHV Company retained its position The Company has extended ±RQHRIWKHODUJHVWLQ as the largest single global tea beyond statutory requirements plantation sector in India - has SODQWDWLRQHPSOR\HU WRFUHDWHDQGPDQDJHIXOOÀHGJHG recharged rural economies in HPSOR\HHV DWD hospitals within the plantation the areas of operation and the time when plantation labour areas along with four state-of- countries of its presence. The availability is steadily declining. the-art hospitals that also cater to Company has complied duly external patients. with all the statutory payments, reinforcing its reputation as a Career growth: The Company responsible employer. practices extensive delegation
Knowledge: Over the years, across management layers, we have enriched our people by enabling its people to grow investing in their knowledge and their roles and competencies. welfare. The Company rotates The Company is a local managers across gardens every employer, enhancing indigenous ¿YH\HDUVRUVREURDGHQLQJWKHLU employment, minimising Rs. terrain knowledge. migration and helping strengthen family structures. Following the (PSOR\HHEHQH¿WVH[SHQVH Employee support: The acquisition of the Vietnamese, (in lakhs) by Company invested a substantial Ugandan and Rwandan gardens, McLeod Russel India, amount in its employee support the local team was extensively programmes (covering education, empowered to grow the Company housing, medical, health and and themselves. hygiene initiatives). The Company also supports a number of Work-life balance: The Assam schools (including the Company aims to maintain a Rs. commissioning and management steady work-life balance marked (PSOR\HHEHQH¿WVH[SHQVH (in lakhs) by of Assam Valley School). The by building golf courses across SODQWDWLRQV RUJDQLVLQJDZHHNO\ McLeod Russel India, Company has also extended its support to the LP schools for Club Day (football, tennis and organising events like sports meet JROI WKHUHE\HQKDQFLQJUDSSRUW McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14
Responsibility and community
At McLeod Russel, we have demonstrated responsibility towards small tea growers in the vicinity of our presence, evolving what would have been a traditionally competitive approach into a win-win collaborative model.
This responsibility has been practice of buying the produce Win-win: Through this model, UHÀHFWHGLQWKHIROORZLQJ of marginal growers for onward we have been able to provide initiatives: SURFHVVLQJ ZHJXLGHWKHPRQ small tea growers with better how to enhance their yields and returns that have reinforced Pioneering: Rather than TXDOLW\ ZHEX\DVPXFKTXDOLW\ their commitment to grow more compete with the small growers leaf as they can give against tea responsibly, harbour quality in the vicinity of our Assam immediate payment that is higher leaves and generate superior tea estates, we entered into than what they would have returns from their holdings. a responsible collaborative realised from the market place. arrangement. We pioneered the 17
Responsibility and government
At McLeod Russel, we have endeavoured to be a responsible corporate citizen, contributing to the country’s exchequer and a host of other causes.
This responsibility has been decade, a major tax payer within The result: The Company is UHÀHFWHGLQWKHIROORZLQJ the country’s tea plantation recognised as a responsible initiatives: sector. Additionally the Company FRUSRUDWHFLWL]HQIXO¿OOLQJLWV paid sizeable amounts with obligations to the community, the Taxes: The Company paid respect to Service Tax, Dividend region and the country. aggregated income tax worth Distribution Tax, Entry Tax and 5V ODNKVGXULQJWKHODVW Green Leaf Cess among others.
Rs. lakhs Rs. lakhs Contribution to exchequer via Central and Contribution to exchequer via Central and $JULFXOWXUDO7D[HV $JULFXOWXUDO7D[HV McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 Responsibility and industry
At McLeod Russel, we have been a responsible industry member, sharing our knowledge to strengthen the sector’s respect, positioning and competitiveness.
Representation: The Company Research: The Company shares LQEULQJLQJWRJHWKHUGL̆HUHQW has played a proactive industry its rich garden management trade sections to discuss and role (through trade associations), insights with the Tea Research resolve industry matters leveraging its rich industry Association (and vice versa), CSR: The Company also shares experience to help the Indian facilitating an active exchange of its CSR insights with the Tea tea industry increase exports best practices. Associations in all the countries of and deepen domestic market Auctions: The Company RSHUDWLRQVEHQH¿WLQJPHPEHUV penetration. A number of the is also actively represented Company’s executives are Result: The Company is widely in the Auction Associations associated in consultative roles respected as a responsible (under which the tea auctions with various industry bodies, FRUSRUDWHFLWL]HQIXO¿OOLQJLWV are conducted). In its areas of KROGLQJSRVLWLRQVRILQÀXHQFHDQG obligations to community, region operations, it plays a leading role responsibility. and the country.
Corporate information
Board of Directors Auditors Brij Mohan Khaitan Chairman Price Waterhouse Deepak Khaitan Vice-Chairman Plot No.Y-14, Block-EP, Sector-V Aditya Khaitan Managing Director Salt Lake Electronic Complex, Bidhan Nagar, Raghavachari Srinivasan .RONDWD Bharat Bajoria Ranabir Sen 5HJLVWHUHG2̇FH Utsav Parekh Four Mangoe Lane Srikandath Narayan Menon Surendra Mohan Ghosh Sarani, Kolkata - 700001 Ramni Nirula Corporate Identity Number (CIN) : Rajeev Takru Wholetime Director / :% 3/& Azam Monem Wholetime Director 3KRQH Kamal Kishore Baheti Wholetime Director & CFO )D[ E-mail: [email protected] Company Secretary Website: www.mcleodrussel.com Amitabha Guha Sarkar Bankers Board Committees Allahabad Bank Audit Committee Axis Bank Ltd. Raghavachari Srinivasan Chairman HDFC Bank Ltd. Aditya Khaitan Bharat Bajoria ICICI Bank Ltd. Ranabir Sen State Bank of India State Bank of Bikaner and Jaipur Stakeholders’ Relationship Committee UCO Bank Ranabir Sen Chairman United Bank of India Bharat Bajoria Utsav Parekh Solicitors Nomination & Remuneration Committee Khaitan & Co LLP Bharat Bajoria Chairman Registrar Raghavachari Srinivasan Maheshwari Datamatics Pvt Ltd. Ranabir Sen 0DQJRH/DQHQG)ORRU Corporate Social Responsibility [CSR] Surendra Mohan Ghosh Sarani Committee Kolkata-700001 Rajeev Takru Chairman 7HO Azam Monem )D[ Kamal Kishore Baheti E-Mail: [email protected] Ranabir Sen
Disclaimer: With a view to enabling the Members of the Company to understand the Company better, certain information KDVEHHQSURYLGHGLQSDJH1RVWRRIWKLV$QQXDO5HSRUWZKLFKLVQRWSXUSRUWHGWREHDSDUWRIDQ\VWDWXWRU\GLVFORVXUH The estimates mentioned and assumptions made therein and the particulars relating to the market and the industry contained therein have been based on information gathered from various published and unpublished reports and their accuracy, reliability and completeness cannot be assured. McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14
Report of the Directors )RUWKH¿QDQFLDO\HDUHQGHGVW 0DUFK
Your Directors have pleasure in presenting the Annual Report with the audited Accounts of \RXU&RPSDQ\IRUWKH¿QDQFLDO\HDUHQGHGVW0DUFK
Review of Performance 7KH¿QDQFLDOUHVXOWVRIWKH&RPSDQ\IRUWKH\HDUHQGHGVW0DUFKDUHVXPPDUL]HGEHORZ 2013-14 2012-13 Rs. in lakhs Rs. in lakhs 3UR¿WEHIRUH¿QDQFHFRVWVGHSUHFLDWLRQ([FHSWLRQDO,WHPVDQG7D[DWLRQ Less : Finance costs Less : Depreciation and amortisation expenses 3UR¿WEHIRUHH[FHSWLRQDOLWHPVDQGWD[ Less : Exceptional items 3UR¿WEHIRUHWD[ Tax expense : Current tax MAT Credit Entitlement Provision/(Write back) relating to earlier years Deferred tax 3UR¿WIRUWKH\HDU Balance brought forward from previous year Balance available for appropriations Proposed Dividend Tax on proposed dividend Transfer to general reserve 10000 11000 Balance carried forward
'XULQJWKH\HDUXQGHUUHYLHZWKH&RPSDQ\DFKLHYHGKLJKHUSURGXFWLRQDWODNKNJVDVFRPSDUHG WRWKHSUHYLRXV\HDU7KHUHYHQXHIURP2SHUDWLRQVZDVDOVRKLJKHUDW5VODNKV7KHSRVWWD[SUR¿W KRZHYHUZDVGRZQDVFRPSDUHGWRWKHSUHYLRXV\HDUSULPDULO\RQDFFRXQWRIORZHUVDOHVUHDOL]DWLRQSHU kg of tea sold, increase in cost of materials consumed, higher employee costs and higher costs of power and fuel.
Dividend “Rainforest Alliance.” The Nilpur Blending Unit is a Your Directors are pleased to recommend maintenance +$&&3&HUWL¿HGXQLW Uprooting and Replanting Policy of the Company was Subsidiary Companies and maintained. This has resulted in an improvement Consolidated Financial Statements RIWKHDJHSUR¿OHRIWHD In accordance with the general circular issued by the FRPSDUHG WR ODNK NJV LQ $YHUDJH VHOOLQJ 0LQLVWU\ RI &RUSRUDWH $̆DLUV *RYHUQPHQW RI ,QGLD SULFHZDV86' NJDVFRPSDUHGWR86' SHU WKH%DODQFH6KHHW6WDWHPHQWRI3UR¿WDQG/RVVDQG kg last year. other documents of the subsidiary companies are not Phu Ben acquired a new factory known as Khanh Hoa being attached with the Balance Sheet of the Company. 7HDIDFWRU\LQ0D\ZKLFKFRQWULEXWHG The Company will make available the Annual NJVRIKLJKTXDOLW\2UWKRGR[EODFNWHDDQGGLYHUVL¿HG Accounts of the subsidiary companies and the related Phu Ben’s range of products including black CTC, detailed information to any member of the Company green CTC, green orthodox & black orthodox teas. who may be interested in obtaining the same. The 'XULQJWKLVSHULRGWKH&RPSDQ\UHFRUGHGDQHWSUR¿W annual accounts of the subsidiary companies will DOVR EH NHSW IRU LQVSHFWLRQ DW WKH 5HJLVWHUHG 2̇FH HTXLYDOHQWWR,QGLDQ5VODNKVRQDVDOHWXUQRYHU RI 5V ODNKV 7KH &RPSDQ\ FRQWLQXHV WR OD\ of the Company and that of the respective subsidiary VWUHVVRQTXDOLW\FRQWUROLQERWK¿HOGDQGIDFWRU\DQG companies. The Consolidated Financial Statements SUHVHQWHG E\ WKH &RPSDQ\ LQFOXGH WKH ¿QDQFLDO adheres to GAP for plantation activities, along with results of its subsidiary companies. A Statement IPM for pest control. FRQWDLQLQJ EULHI ¿QDQFLDO GHWDLOV RI WKH 6XEVLGLDU\ All Phu Ben estates and factories including Van Linh Companies is included in the Annual Report after the DUHDFFUHGLWHG,62 DQG,62 Consolidated Financial Statements. The performance *03 +DODO5DLQIRUHVW$OOLDQFHFHUWL¿FDWHLVJUDQWHG of the major Subsidiaries are summarized below for to all Phu Ben estates i.e. Phu Tho, Ha Hoa and Doan your information. Hung estates. As required under the Listing Agreement with the The Company, which has a dedicated working team of Stock Exchanges, Consolidated Financial Statements IDUPHUVZRUNHUVDQGVWD̆VZDVUHFRJQLVHGIRU of the Company, its six Subsidiaries and one Associate LWVH̆RUWDQGFRQWULEXWLRQLQZLWKWKHIROORZLQJ Company namely, D1 Williamson Magor Bio Fuel awards: Limited prepared in accordance with the applicable The Company was recognized as a model Business Accounting Standards issued by The Institute of Enterprise in Phu Tho province. Chartered Accountants of India are attached. Phu Ben was awarded for good implementation of Borelli Tea Holdings Limited tax policies. Borelli Tea Holdings Limited (Borelli) has invested in Phu Ben received the Golden Leaf Cup in Thai its subsidiaries in Vietnam, Uganda, Rwanda, Dubai 1JX\HQ7HD,QWHUQDWLRQDO)HVWLYDO QGWLPH DQG.HQ\D'XULQJWKH\HDUHQGHGVW0DUFK Phu Ben was felicitated as the Company for %RUHOOLKDVDFKLHYHGKLJKHUSUR¿WDIWHUWD[HTXLYDOHQW community service for its contribution to students WR,QGLDQ5VODNKVDVFRPSDUHGWR5VODNKV and the poor. earned in the earlier year. Its Board has recommended SD\PHQW RI GLYLGHQG DW WKH UDWH RQ LWV HTXLW\ Mcleod Russel Uganda Limited capital held by your Company. 'XULQJWKH¿QDQFLDO\HDURIWKH&RPSDQ\HQGHGVW 'HFHPEHU 0F/HRG 5XVVHO 8JDQGD /LPLWHG Phu Ben Tea Company Limited 058/ HDUQHGDSRVWWD[SUR¿WHTXLYDOHQWWR,QGLDQ Phu Ben Tea Company Limited made a highest ever 5V ODNKVDVDJDLQVW5VODNKVLQWKH\HDU &URSRI ODNKNJVLQFOXGLQJ ODNKNJVIURP 7KH VDOHDEOH 3URGXFWLRQ GXULQJ WKH \HDU ZDV RZQSODQWDWLRQDQG ODNKNJVIURPRXWJURZHUV KLJKHUDWODNKNJVDVFRPSDUHGWRODNK 6DOHV DQG VKLSPHQW LQ HQGHG DW ODNK NJV kgs achieved during the previous year, recording DQ LQFUHDVH RI ODNK NJV +RZHYHU WKH VDOHV of Fuel wood plantations. At both locations ground realisation for the company has gone down by 17 cents rent payment for next ten years has been made to the per kg compared to last year. The sales realisation for treasury. WKH \HDU ZDV 86' SHU NJ DV FRPSDUHG WR ,62DQG5DLQIRUHVW$OOLDQFHFHUWL¿FDWLRQZDV 86' IRU ODVW \HDU 7KH UHGXFWLRQ LQ SUR¿W ZDV PDLQWDLQHGDWDOOORFDWLRQV 0X]L]LDQG%XJDPEH2XW SULPDULO\GXHWRORZHUVDOHVUHDOLVDWLRQGXULQJ JURZHUVZHUHDOVR5$FHUWL¿HG0ZHQJHDQG%XJDPEH The Company has declared a dividend equivalent to DFKLHYHG)DLUWUDGH&HUWL¿FDWLRQH̆HFWLYH0D\ ,QGLDQ 5V ODNKV DJDLQVW D GLYLGHQG HTXLYDOHQW WR,QGLDQ5VODNKVGHFODUHGLQWKHHDUOLHU\HDU The momentum of CSR activities continued with Primary school refurbished at Ankole and Mwenge. 7KH ¿UVW IRXU PRQWKV RI ZLWQHVVHG H[FHOOHQW The company collaborated with Mountains of the rainfall and growth conditions. Thereafter a prolonged Moon University at Fort Portal for the establishment dry spell was experienced, followed by weak second of a Soil Testing Laboratory. A new maternity wing rains. Bought leaf intake was consciously scaled down ZDV DGGHG DW WKH 0ZHQJH &OLQLF IRU WKH EHQH¿W RI to address quality issues. The Yield of Tea averaged residents and the community. NJVKD$VDFRPSDUDWLYHWKHPDLQWHDSURGXFLQJ FRPSDQLHVRI.HQ\DDYHUDJHGD\LHOGRI NJVKD MRUL was appointed onto the Executive Council of The development of Machine Harvesting and Single Federation of Uganda Employers. Salary structure and Operator Harvesters continued as programmed revision of terms was put in place for management and DFFRXQWLQJ IRU RI DOO OHDI KDUYHVWHG ZLWK DERXW wage negotiation conclude with workers union, for a IURPWKHODWWHUPHWKRG RQH \HDU SHULRG H̆HFWLYH -XO\ *RRG UHODWLRQV prevailed with employees as well as with neighboring (QKDQFLQJRIIDFWRU\FDSDFLW\DVFRPPHQFHGLQ communities. allowed for intake of large daily volumes harvested in WKH\HDU¶V¿UVWKDOI7KHIDFWRULHVWKDWZHUHH[SDQGHG Gisovu Tea Company Limited earlier saw improvement in the product, with higher The year experienced weather variables which was absorption at competitive prices. However, overall very wet during the rainy season and with a prolonged prices were severely depressed and Mombasa average dry season. This was further compounded by Hail in Private and Contract sale prices were similarly $XJXVW *LVRYX SURGXFHG ODNK .JV RI WHD DQG D̆HFWHG this was as per trends of the Rwandan crop pattern 7KHIDFWRU\SURMHFWFRPPHQFHGLQDW$QNROHZDV where all factories lost crop. FRPSOHWHGDQGLQWKHFRXUVHRIWKH\HDUWKHUGDQG The African tea market was not supportive and prices ¿QDOOLQHXSJUDGHGWRLQFK&7&ZRUNVKRSVZHUH fell for all marks and continued to slide down through provided with new milling and chasing machinery. the year. Gisovu continued to manufacture teas of Towards year end Processing area expansion was the highest standard in East Africa and realized the undertaken at Mwenge with up-grade of one more KLJKHVW $IULFDQ DYHUDJH VDOHV SULFH RI DJDLQVW OLQHWRLQFK&RQVWUXFWLRQRIQHZZLWKHULQJWURXJK WKHSUHYLRXV\HDU¶VSULFHRIZKLOHWKH5ZDQGDQ building was also commenced. DYHUDJH DXFWLRQ IRUWKH\HDURIRSHUDWLRQZDV The acquisition of additional land for Tea and Fuel 7KLV ZDV DFKLHYHG E\ VHOOLQJ RI WKH SURGXFWLRQ ZRRGH[SDQVLRQFRYHUHGKHFWDUHVDW.LVDUXDQG on a forward contract basis. On a turnover equivalent D \HDUUHQHZDEOHODQGOHDVHJUDQWHGE\WKH'LVWULFW WR,QGLDQ5XSHHV ODNKVWKH&RPSDQ\HDUQHGD /DQG%RDUG$QDGGLWLRQDODUHDRIKDZDVDFTXLUHG SRVWWD[SUR¿WRI5V ODNKVGXULQJWKH\HDUHQGHG near Kiko, on similar lease for the establishment VW 'HFHPEHU 7KH &RPSDQ\ KDV GHFODUHG D McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 GLYLGHQGHTXLYDOHQWWR,QGLDQ5VODNKVDJDLQVWD D1 Williamson Magor Bio Fuel GLYLGHQGHTXLYDOHQWWR,QGLDQ5VODNKVGHFODUHG Limited in the earlier year. D1 Williamson Magor Bio Fuel Limited (D1WML) The Factory expansion project continued. The Factory has abandoned its plantations in the North East QRZ KDV DQRWKHU QHZ ´ &7& PDFKLQH ZLWK D QHZ on account of excessive growth of weed damaging ´ 5RWRUYDQH DQG D QHZ 0F/R\ GULHU RI NJV Jatropha plantation to a great extent. In view of this, capacity. The new workshop has been equipped with the Company has surrendered the land allocated to a new Lathe and an Auto Axis Milling machine. A new it by Assam Industrial Development Corporation for transformer was installed catering for the ultimate setting up oil expeller in Assam. The Plantation carried factory. A new panel board has been installed which out in Jharkhand however, is gradually becoming JLYHV EHWWHU ÀH[LELOLW\ $ QHZ &XPPLQJV $OWHUQDWRU productive. Long gestation period of the Plantation was sourced from Uganda and installed. Withering is a global phenomenon and Jatropha Plantation is ZDVHQKDQFHGE\DGGLQJQHZWURXJKV going through similar phase in all parts. The Company has made appropriate provision in the accounts based *LVRYX ZDV 5DLQIRUHVW $OOLDQFH FHUWL¿HG GXULQJ WKH on the uncertainty ofw the business. \HDU LW LV DOUHDG\ ,62 FHUWL¿HG 7KH )DFWRU\ FOHDUHG WKH ,62 $XGLW DQG LV QRZ GXO\ Change in Company Law FHUWL¿HG 7KH&RPSDQLHV$FW µWKH$FW¶ KDVEHHQSDVVHG Gisovu Tea Company Limited has endeavored to UHSODFLQJ WKH DJH ROG &RPSDQLHV $FW DQG D maintain CSR activities in its area of operation. The ODUJHSRUWLRQRIWKH$FWKDVDOUHDG\EHFRPHH̆HFWLYH Company has been repairing Roads and Bridges, used Several Rules under various Sections of the Act have by the Public, from the Estate to the main road head at DOVREHHQQRWL¿HG Corporate Social Responsibility funded by the Williamson Magor Education Trust. Your Company is conscious of its social responsibilities The Company has tied up with Bhagwan Mahaveer and the environment in which it operates. It has Viklang Sahyata Samiti, Jaipur, an Organization which continued with its welfare activities for development carries out the work of a rubber based prosthetic leg LQ WKH ¿HOG RI HGXFDWLRQ FXOWXUH DQG RWKHU ZHOIDUH more popularly known as ’Jaipur Leg’ for people with measures and to improve the general standard of below-knee amputations by way of organized camps. living in and around the Tea estates. The emphasis is Currently the Company is planning to organize a camp on improvement of health, development of education, with Bhagwan Mahaveer Viklang Sahyata Samiti at culture and sports. Medical assistance was also *XZDKDWLLQWKH¿UVWZHHNRI-XQHZLWKDWDUJHW provided to the nearby villages through medical WRVHUYHDVLJQL¿FDQWQXPEHURISK\VLFDOO\GLVDEOHG camps. Your Company facilitated successful cataract people. RSHUDWLRQFDPSVIRUDURXQGSDWLHQWVIURP1RUWK Bank who were operated at Shankardev Netralaya, Besides the above, the Company has also undertaken *XZDKDWLDQGDURXQGVXFKSDWLHQWVIURP6RXWK DQDFWLYLW\FDOOHG³2SHUDWLRQ6PLOH´LQYROYLQJ¿[DWLRQ Bank operated upon at civil hospitals in Tinsukia and RI&OHIWV3DOOHWVDERYHWKHOLSVRIWKHSHRSOHVX̆HULQJ Dibrugarh. Your Company continues to support the from facial deformation. A few patients have already Moran Blind School like earlier years. been operated upon at the Dooars Hospital at Siliguri, :HVW %HQJDO LQ WKH ODVW \HDU ZLWK DURXQG PRUH Williamson Magor Education Trust with generous such operations to be performed in near future in the GRQDWLRQVIURP\RXU&RPSDQ\KDVDZDUGHGRYHU current year. scholarships to deserving students selected by an Expert Committee and Selection Board. The Company gives importance to preservation of the Eco system and natural habitats around its Tea Estates A high standard of medical care is provided to the and engages in several activities to preserve the bio- work force through well-equipped individual estate diversity in its surrounding areas. Your Company has hospitals and specialized treatment at the Central also been supporting Heritage conservation over a hospitals. The Mother’s club is being given wide long period of time. spread recognition. The Company is continuing with its support to Bodo The Assam Valley School has emerged as a premier Handloom Scheme in Mangaldai, Assam which public school of the country and continues to provide leads to empowerment of women and promotion excellent opportunity to the children of the planting of local handicrafts, both at the Estate and village community and the North East in terms of academics level. The Company also supports a programme for and all round development. The school is now rated ¿QDQFLDO DVVLVWDQFH WRZDUGV HGXFDWLRQ RI XQGHU amongst the best residential schools in India, and the privileged children in Kolkata and also contributes to ¿UVWLQ1RUWK(DVWZLWK3DQ,QGLDQUHFRJQLWLRQ a recognized institution in Kolkata, which addresses With the Company’s continued support The Assam the needs of children challenged by Cerebral Palsy. Valley Literary Award is being felicitated each year. ,Q WHUPV RI WKH UHTXLUHPHQWV RI 6HFWLRQ RI WKH This year the award was conferred on an eminent &RPSDQLHV $FW DQG UXOHV PDGH WKHUHXQGHU Assamese writer Sri. Atulananda Goswami, in DFNQRZOHGJHPHQW RI KLV FRQWULEXWLRQ LQ WKH ¿HOG RI the Board of Directors has formed a CSR Committee and has adopted a CSR Policy for the Company. The Assamese literature. Scholarship was provided to Company will continue with its CSR activities in terms meritorious students from the North East and this was of the CSR Policy. McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 Directors Cost Audit The Company being a listed company, is required to ,Q WHUPV RI DQ RUGHU GDWHG WK -DQXDU\ have at least one third of the total number of Directors LVVXHG E\ 7KH 0LQLVWU\ RI &RUSRUDWH $̆DLUV 0&$ DV,QGHSHQGHQW'LUHFWRUVDFFRUGLQJWR6HFWLRQ Government of India, the Company was required to RIWKH&RPSDQLHV$FW µWKH$FW¶ ,QWKHRSLQLRQRI arrange Audit of the Cost Accounts maintained by it the Board, Dr. R. Srinivasan, Mr. B. Bajoria, Mr. R. Sen, in respect of the Plantation Product. In terms of the Mr. U. Parekh and Mrs. R. Nirula, non-executive VDLG2UGHU&RVW$XGLWIRUWKH\HDUHQGHGVW0DUFK Directors, who besides Mr. S. N. Menon, are also ZDV FRQGXFWHG E\ IRXU )LUPV QDPHO\ 0V Independent Directors in terms of the Listing Mani & Co. (Reg. No. 00004), M/s. SPK Associates. Agreements and meet the criteria of independence (Reg. No. 00040), M/s. Kumar & Associates. (Reg. No. LQ WHUPV RI 6HFWLRQ RI WKH $FW VKRXOG EH 0V '*0 $VVRFLDWHV 5HJ 1R considered for appointment as Independent Directors Cost Accountants, appointed with the approval of RIWKH&RPSDQ\XQGHU6HFWLRQV DQGUHDG 0&$7KHGXHGDWHIRU¿OLQJWKH&RVW$XGLW5HSRUWV with Schedule IV of the Act. Accordingly resolutions IRUWKH)LQDQFLDO the conclusion of the forthcoming Annual General records in accordance with the provisions of the Meeting and are eleigible, for re-appointment. The &RPSDQLHV $FW IRU VDIHJXDUGLQJ WKH DVVHWV Company has received a letter from them to the of the company and for preventing and detecting H̆HFW WKDW WKHLU UHDSSRLQWPHQW LI PDGH ZRXOG EH IUDXGDQGRWKHULUUHJXODULWLHV within the prescribed limits under the Companies 4. That the Directors had prepared the annual $FW DQG WKDW WKH\ DUH QRW GLVTXDOL¿HG IRU accounts on a going concern basis. re-appointment. Conservation of Energy and Management Discussion & Technology Absorption Analysis Report and Report on A statement giving details of conservation of energy Corporate Governance and technology absorption in accordance with the As required in terms of the Listing Agreement with Companies (Disclosure of Particulars in the report of the Stock Exchanges, a Management Discussion WKH%RDUGRI'LUHFWRUV 5XOHV LVDQQH[HG and Analysis Report and a Report on Corporate Governance are annexed forming part of this Report. Particulars of Employees A statement of particulars of employees as required Directors’ Responsibility Statement. XQGHU VHFWLRQ $ RI WKH &RPSDQLHV $FW 3XUVXDQWWR6HFWLRQ $$ RIWKH&RPSDQLHV$FW read with the Rules made thereunder forms a part of WKH'LUHFWRUVVWDWHDVIROORZV this report as a separate Annexure. 1. That in the preparation of the annual accounts IRU WKH ¿QDQFLDO \HDU HQGHG VW 0DUFK Employee Relations the applicable accounting standards had been The Company has a large work force employed on tea IROORZHGZLWKQRPDWHULDOGHSDUWXUHV estates. The welfare and wellbeing of the workers are monitored closely and harmonious relations with its 7KDW WKH 'LUHFWRUV KDG VHOHFWHG VXFK DFFRXQWLQJ employees are being maintained. policies and applied them consistently and made judgments and estimates that are reasonable The Industrial relations remained cordial throughout and prudent so as to give a true and fair view of the year and your Board of Directors wish to place WKHVWDWHRID̆DLUVRIWKH&RPSDQ\DWWKHHQGRI on record its sincere appreciation for the dedicated WKH¿QDQFLDO\HDUDQGRIWKHSUR¿WRUORVVRIWKH VHUYLFHVUHQGHUHGE\WKHH[HFXWLYHVVWD̆DQGZRUNHUV &RPSDQ\IRUWKDWSHULRG at all levels and for the smooth functioning of all estates. The policy of transparency and recognition 7KDWWKH'LUHFWRUVKDGWDNHQSURSHUDQGVẊFLHQW LQVSLUHGWKHHPSOR\HHVWRFRQWULEXWHWKHLUEHVWH̆RUWV care for the maintenance of adequate accounting for the Company. For and on behalf of the Board Place: Kolkata A. Khaitan K. K. Baheti 'DWH UG0D\ Managing Director Wholetime Director & CFO McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 $QQH[XUHWRWKH'LUHFWRUV¶5HSRUW INFORMATION IN ACCORDANCE TO THE COMPANIES (DISCLOSURE OF PARTICULARS ,17+(5(32572)7+(%2$5'2)',5(&7256 58/(6 $1')250,1*3$57 2)7+(',5(&7256¶5(3257)257+(<($5(1'('670$5&+ A. Conservation of Energy 7KH&RPSDQ\KDVLQVWDOOHGGL̆HUHQWHQHUJ\ḢFLHQWPDFKLQHVLQWKH7HD(VWDWHV:LWKHULQJFDSDFLW\KDVEHHQ LQFUHDVHGLQ¿IWHHQ7HD(VWDWHV(LJKWHHQ&7&PDFKLQHVZHUHUHSODFHG¿IWHHQ&)0VIRXU9)9'V¿YH%RLOHUVQLQH Milling machines, nine Chasing Lathes, two Colour Sorters have been installed in various factories. A continuous Withering machine has been put on trial at one of the Tea Estates in Assam. To augment standby power generating FDSDFLW\¿IWHHQ*HQHUDWLQJ6HWVDQGWHQ7UDQVIRUPHUVKDYHEHHQLQVWDOOHG1RQFRQYHQWLRQDOHQHUJ\LQWKHIRUPRI solar power to generate 100 kws is also being installed in one of the Tea Estates in Assam. The energy consumption for domestic purposes has been rationalized through creation of awareness and regular monitoring. B. Power & Fuel Consumption Year ended 31.03.2014 Year ended 31.03.2013 1. Electricity (a) Purchased: -Units (Kwh) - Total Amount (Rs.) - Rate/Unit (Rs.) 7.40 (b) Own Generation: Through Diesel Generator - Units (Kwh) - Units per Litre of Diesel Oil - Cost/Unit (Rs.) (c) Own Generation: Through Gas Generator - Units (Kwh) - Units per (SCUM) of Gas - Cost/Unit (Rs.) 2. Coal - Quantity (Tonnes) - Total Amount (Rs.) - Average Rate (Rs.) 3. Furnace Oil - Quantity (Litres) - Total Amount (Rs.) - Average Rate (Rs.) 4. Gas (excluding used for Generator) - Quantity (SCUM) - Total Amount (Rs.) - Rate/Unit (Rs.) Year ended 31.03.2014 Year ended 31.03.2013 5. Total Power and Fuel consumption Per unit of production of Tea - Saleable Production – Tea (Kgs.) - Electricity (Kwh) (on total production) - Furnace Oil (Litre) (on total production) 0.00 0.00 - Coal (Kgs) for tea dried by coal - Gas (SCUM) for tea dried by gas C. Research and Development The Company continues with the policy of reviewing clone blends to improve the yield and quality of tea estates. The production of Vermicompost was increased by tea estates to improve the organic status of the soil. This will result in improving the yield in all areas of extension and replanted teas. Expenditure on Research & Development Year ended 31.03.2014 Year ended 31.03.2013 (a) Capital (Rs. Lakhs) Nil Nil (b) Revenue (Rs. Lakhs) (c) Total (Rs. Lakhs) (d) Total R&D Expenditure as % of turnover 0.07 D. Technology Absorption, Adaptation & Innovation The Company undertakes modernization and upgradation of factories on a regular basis with improved technology. 6HPLQDUVZRUNVKRSVDQGJURXSGLVFXVVLRQVZLWKUHJXODUÀRZRIIHHGEDFNIURP¿HOGDQGIDFWRU\ZRUNHUVDUH held regularly. (̇FLHQWWUDLQLQJRIVWD̆ZLWKDGH¿QLWHDSSURDFKWRZDUGVLPSURYLQJWKHLUḢFLHQF\DUHFRQGXFWHGUHJXODUO\ Innovative achievements of the operating people in the agriculture and manufacture of tea are highly encouraged in the Company’s interest. E. Foreign Exchange Income & Outgo 'XULQJWKH\HDUWKH&RPSDQ\¶VGLUHFWH[SRUWVZHUHODNKNJV ODNKNJV RI7HD Year ended 31.03.2014 Year ended 31.03.2013 Foreign Exchange Earnings (Rs. Lakhs) Foreign Exchange Outgo (Rs. Lakhs) For and on behalf of the Board Place: Kolkata A. Khaitan K. K. Baheti 'DWH UG0D\ Managing Director Wholetime Director & CFO McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 Statement of particulars of employees pursuant to the Provision of Section 217(2A) of the Companies Act, 1956 Name Designation/ Remune- 4XDOL¿ Experi- Date of Age Previous Nature of ration cations ence Employ- Employment/ Duties (Rs. in Lakhs) (Years) ment Position held A. Khaitan Managing B.Com. N.A. Director (Hons.) R. Takru Wholetime B.A. Eveready Director (Hons.) Industries India Limited Senior Vice- President A. Monem Wholetime B.Com. Eveready Director (Hons.) Industries India Limited Senior Vice- President K.K. Baheti Wholetime B.com. Eveready Director (Hons.) Industries India FCA., ACS., Limited AICWA. Vice-President Notes: 1. Remuneration as shown above includes, inter alia, value of perquisites and Company’s contribution to retiral funds as applicable. 7KHDERYHHPSOR\HHVZHUHWKH:KROHWLPHHPSOR\HHVGXULQJWKH¿QDQFLDO\HDUHQGHGVW0DUFK 1RQHRIWKHDERYHHPSOR\HHVLVUHODWHGWRDQ\'LUHFWRURIWKH&RPSDQ\ZLWKLQWKHPHDQLQJRI6HFWLRQRIWKH &RPSDQLHV$FW H[FHSW0U$.KDLWDQZKRLVDUHODWLYHRI0U%0.KDLWDQDQG0U'.KDLWDQ For and on behalf of the Board Place : Kolkata A. Khaitan K. K. Baheti 'DWH UG0D\ Managing Director Wholetime Director & CFO Management Discussion and Analysis Industry Structure and Development through recovery in crop. Cost of production per kg *OREDOWHDSURGXFWLRQGXULQJFDOHQGDU\HDUZDV for the company remained almost same as compared HVWLPDWHGDWDSSUR[LPDWHO\PLOOLRQNJVRIEODFN to the previous year. WHDDQGPLOOLRQNJVRIJUHHQWHD,QGLDEHLQJ WKH ODUJHVW SURGXFHU RI EODFN WHD SURGXFHG Opportunities and Threats PLOOLRQ NJV RI WHD DV DJDLQVW PLOOLRQ NJV RI WHD India and global tea production has seen an increase RI PLOOLRQ NJV RI WHD GXULQJ RQ WKH EDFN GXULQJ FDOHQGDU \HDU 7KLV UHSUHVHQWV DURXQG RI WRWDO JOREDO EODFN WHD SURGXFWLRQ .HQ\D drop of very favourable weather condition across all PLOOLRQNJV 6UL/DQND PLOOLRQNJV RWKHU tea producing nations. The production is likely to $IULFDQ FRXQWULHV PLOOLRQ NJV %DQJODGHVK be stagnant within a range depending on weather FRQGLWLRQVPDLQO\EHFDXVHRILQVLJQL¿FDQWLQFUHDVHRI million kgs) are the other main black tea producers land under tea cultivation. Global demand, however, globally. China predominantly produces green tea LVOLNHO\WRJURZE\WRWKHUHE\FUHDWLQJVKRUWDJHV ZLWK D SURGXFWLRQ RI PLOOLRQ NJV (Source: International Tea Committee Bulletin and Tea Board and lower inventory levels. Indian exports are likely to of India). remain positive with higher demand of orthodox tea from Iran. These factors should have positive impact :HDWKHUFRQGLWLRQGXULQJZDVYHU\FRQGXFLYHIRU on prices particularly in domestic market. Global tea production in most of black tea producing countries. prices will depend on production levels in Africa. %ODFNWHDSURGXFWLRQGXULQJWKH\HDUZDVKLJKHUE\ 'HSUHFLDWLQJFXUUHQF\OHYHOLQ,QGLDGXULQJKDG million kgs as compared to previous year. This had a positive impact on export realization, however, any a negative impact on prices particularly for African reversal of the trend may have negative impact. FRXQWULHV7HDSULFHVGXULQJWKH\HDUZHUHORZHUE\ The small tea growers form a considerable part of for the teas sold in Mombasa auction. However, tea WKHLQGXVWU\7KHUHFHQWUHYLVHG¿JXUHVVKRZDWRWDO SULFHVLQ,QGLDGHFOLQHGRQO\E\WRPDLQO\GXHWR SURGXFWLRQRIDURXQGPLOOLRQNJVIURPWKHVHVPDOO low inventory and strong consumption growth. growers in North India. This gives an opportunity Increase in cost due to increase in wages, increase to create a segment based more on variable cost as LQ SULFHV RI SRZHU DQG IXHO KDV ODUJHO\ EHHQ R̆VHW FRPSDUHGWR¿[HGFRVWIRURZQSURGXFWLRQ McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 Risks and Concerns To mitigate various types of risks that the Company The Tea Industry is largely dependant on the vagaries has to face, the Board of Directors of the Company has of nature. The Industry is highly labour intensive and adopted a Risk Management Policy and implemented is subject to stringent labour laws. Comparatively WKH VDPH DW WKH 7HD (VWDWHV DQG DW WKH +HDG 2̇FH high labour costs, high social costs over most other RI WKH &RPSDQ\ ,Q YLHZ RI ÀXFWXDWLRQV LQ IRUHLJQ tea producing countries, high infrastructure costs and exchange and interest rates, the Company has adopted increasing energy and other input costs remain major D VSHFL¿F 5LVN 0DQDJHPHQW 3ROLF\ WR DGGUHVV WKH problems for the Indian Tea Industry. Shortage of risks concerning the foreign exchange and derivative labour during peak season in some pockets is also a transactions. The Company has introduced Hazard cause for concern. Analysis and Critical Control Points (HACCP) at all the Tea Factories to ensure better quality product. These problems need to be addressed by improved productivity and energy conservation. The Tea Outlook Industry both in Assam and West Bengal has discussed Normal weather condition in Africa, dry weather with the Trade Unions and implemented productivity condition in India till April as compared to favourable linked wages for the tea workers with a view to regain weather condition during the same period last year the Industry’s competitiveness in the global market. is likely to see lower production as compared to the Labour agreement for revision in wages for tea UHFRUG SURGXFWLRQ ODVW \HDU GXULQJ WKH ¿UVW KDOI RI LQGXVWU\LQ$VVDPDQG:HVW%HQJDOLVGXHH̆HFWLYHVW the year. Tea prices at Mombasa auction during the -DQXDU\DQGVW$SULOUHVSHFWLYHO\ ¿UVWIRXUPRQWKVRIWKH\HDUKDYHGHFOLQHGE\WR The Industry is also subject to taxation from the State PDLQO\ RQ DFFRXQW RI DGGLWLRQDO FDUU\ IRUZDUG Government as well as Central Government and teas from the previous year. Tea prices in India while the level of direct taxes has come down over a IRU WKH QHZ VHDVRQ WHDV KDYH RSHQHG KLJKHU E\ WR period, some of the State levies like cess on green leaf 10% as compared to last year. Prices in India are in Assam and substantial increase in Land Revenue OLNHO\ WR UHPDLQ ¿UP GXULQJ WKH \HDU PDLQO\ GXH WR charges puts the industry at a very disadvantageous stagnant production, lower inventory level and strong position. consumption growth. Marginal increase in input cost DQGLQFUHDVHLQZDJHFRVWXSWR'HFHPEHUDVSHU Finances the last agreement would take the overall cost up by Financial ratios have improved substantially over the DVFRPSDUHGWRODVW\HDURQDVVXPSWLRQRIQRUPDO \HDUV *URVV GHEW FRQVROLGDWHG DV RQ VW 0DUFK production. DPRXQWHGWR5V FURUHVDVFRPSDUHGWR 5VFURUHVDVRQVW0DUFK1HW'HEW Internal Control Systems and (net of NABARD Deposits and Cash & Bank Balances) their Adequacy KDVLQFUHDVHGWR5V FURUHVDVDJDLQVW5V The Company has in place adequate systems of FURUHVODVW\HDU*URVV'HEWWR(TXLW\UDWLRVDVRQVW internal control commensurate with its size and the 0DUFKZDV nature of its operations. These have been designed to provide reasonable assurance with regard to recording Human Resources DQG SURYLGLQJ UHOLDEOH ¿QDQFLDO DQG RSHUDWLRQDO Tea Industry is highly labour intensive. The Company information, complying with applicable statutes, HPSOR\VRYHUSHUVRQQHODWLWV7HD(VWDWHVDQG safeguarding assets from unauthorized use or losses, other establishments in India. Employee relations executing transactions with proper authorization remained satisfactory during the period under review. and ensuring compliance of corporate policies. Three The Company would like to record its appreciation LQGHSHQGHQW¿UPVRI&KDUWHUHG$FFRXQWDQWVFDUU\RXW of the wholehearted support and dedication from the internal audit at the Tea Estates on a regular basis. employees at all levels in maintaining smooth $QRWKHU ¿UP RI &KDUWHUHG $FFRXQWDQWV FRQGXFWV production and manufacture of tea from all the Tea LQWHUQDODXGLWDWWKH+HDG2̇FH Estates during the year. The Company has an Audit Committee, the details Cautionary Statement of which have been provided in the Corporate Statements in the Management Discussion and Governance Report. The Audit Committee reviews Analysis Report in regard to projections, estimates Audit Reports submitted by the Internal Auditors. and expectations have been made in good faith. Suggestions for improvement are considered and Many unforeseen factors may come into play and the Audit Committee follows up the implementation D̆HFW WKH DFWXDO UHVXOWV ZKLFK FRXOG EH GL̆HUHQW of corrective actions. The Committee also meets the from what the Directors envisage in terms of future Company’s Statutory Auditors to ascertain, inter performance and outlook. Market data and product alia, their views on the adequacy of internal control information contained in this Report have been based systems in the Company and keeps the Board of on information gathered from various published and Directors informed of its major observations from unpublished reports, and their accuracy, reliability time to time. The Risk Management Policy adopted and completeness cannot be assured. by the Company has further strengthened the internal control system. For and on behalf of the Board Place: Kolkata A. Khaitan K. K. Baheti 'DWH UG0D\ Managing Director Wholetime Director & CFO McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 Report on Corporate Governance 1. Company’s Philosophy 2. Board of Directors The Company’s philosophy on Corporate Governance i. Composition LV DLPHG DW ḢFLHQW FRQGXFW RI LWV RSHUDWLRQV DQG LQ 7KH %RDUG RI 'LUHFWRUV RI \RXU &RPSDQ\ DV RQ VW meeting its obligations towards various stakeholders 0DUFKFRQVLVWHGRIWZHOYH'LUHFWRUVDVXQGHU such as Customers, Vendors, Employees, Shareholders Two Non-Executive Directors being the Chairman and Financiers and to the Society at large. The Company & Vice Chairman is in the business of cultivation and production of Tea Four Wholetime Directors including the Managing and is one of the major producers of Tea in the world. Director The Company endeavours to produce quality Tea Six Non-Executive Independent Directors. that consistently commands respect, trust and loyalty WKURXJKRXW WKH ZRUOG E\ ZD\ RI VXVWDLQHG H̆RUWV The Board has an optimum combination of Executive research and development in plantation and adoption and Non-Executive Directors and half of the Board of latest technology. The Company strives for successful consisted of Independent Directors. No Director is PDQDJHPHQWRIFRQWLQJHQFLHVOLNHGURXJKWDQGÀRRG related to any other Director on the Board in terms of WKHGH¿QLWLRQRIµUHODWLYH¶JLYHQXQGHUWKH&RPSDQLHV While it is the endeavour of your Company to continue $FW H[FHSW0U'.KDLWDQDQG0U$.KDLWDQ to produce Tea of premium quality to the satisfaction of its Customers worldwide, it also gives due importance who are brothers and are also sons of Mr. B. M. Khaitan. to its obligations to the large workforce that it employs ii. & iii. Attendance at the Board Meetings/ on the Tea Estates. The Company runs a business last AGM, Directorship and Chairmanship/ that has a human face and values the environment, Membership in other Board/Board Committees people, products, plantation practices, customers and Name and category of the Directors on the Board, shareholders. The Company believes in achieving its their attendance at Board Meetings held during goals, which result in enhancement of Shareholders’ WKH ¿QDQFLDO \HDU HQGHG VW 0DUFK QXPEHU value through transparency, professionalism and of Directorships and Committee Chairmanships/ accountability and nurture these core values in all Memberships held by them in other public limited aspects of its operations. companies are given below. Other Directorships do not include alternate Directorships, Directorships in Private Limited Companies and Companies under Section RIWKH&RPSDQLHV$FW DQGRIWKH&RPSDQLHVLQFRUSRUDWHGRXWVLGH,QGLD&KDLUPDQVKLS0HPEHUVKLSRI Board Committees relates to only Audit and Shareholders’/Investors’ Grievance Committees. Name of Category No. Of Committee Directors No. of Board Whether No. Of Positions held in Meetings Attended Directorships other Public Limited Last AGM in other Companies held On Public Held Attended 26th July Limited As As during 2013 Companies Chairman/ Member the year Chairperson (#) Mr. B. M. Khaitan Non-Executive Yes -1 Chairman Mr. D. Khaitan Non-Executive 4No -1 Vice-Chairman Mr. A. Khaitan Managing Director Yes 7 1 Dr. R. Srinivasan Non-Executive & Yes 7 Independent Mr. B. Bajoria Non-Executive & Yes 7 - 1 Independent Mr. R. Sen Non-Executive & Yes 1 - - Independent Mrs. R. Nirula Non-Executive & 4Yes7 7 Independent Mr. U. Parekh Non-Executive & No - Independent Mr. S. N. Menon Non-Executive & -No -- Independent Mr. R. Takru Wholetime Director Yes -- Mr. A. Monem Wholetime Director 4Yes- - - Mr. K.K. Baheti Wholetime Director Yes 10 - (#) Including Chairmanship, if any. None of the Directors on the Board is a Member of more than 10 Committees or Chairman/Chairperson of more WKDQ&RPPLWWHHVDVVSHFL¿HGLQ&ODXVH DFURVVDOOWKH&RPSDQLHVLQZKLFKKHVKHLVD'LUHFWRU7KH'LUHFWRUV have made necessary disclosures regarding Committee positions held in other public limited companies. iv. Number & Dates of Board Meetings/Date of last AGM held a) Six Board Meetings were held during the year and the gap between two meetings did not exceed four months. The dates on which the Board Meetings were held are as follows: WK$SULOWK0D\WK-XO\WK2FWREHUVW-DQXDU\DQGWK0DUFK 7KHODVW$QQXDO*HQHUDO0HHWLQJRIWKH0HPEHUVRIWKH&RPSDQ\ZDVKHOGRQWK-XO\ E 1HFHVVDU\LQIRUPDWLRQZKHUHDSSOLFDEOHDVPHQWLRQHGLQ$QQH[XUH$WR&ODXVH RIWKH/LVWLQJ$JUHHPHQW has been placed before the Board for its consideration. McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 3. Audit Committee Major accounting entries involving estimates based i. The role and terms of reference of the Audit RQH[HUFLVHRIMXGJPHQWE\PDQDJHPHQW Committee covers the areas mentioned under Clause 6LJQL¿FDQW DGMXVWPHQWV PDGH LQ WKH ¿QDQFLDO RIWKH/LVWLQJ$JUHHPHQWDQGLQ6HFWLRQ $RIWKH VWDWHPHQWVDULVLQJRXWRIDXGLW¿QGLQJV &RPSDQLHV$FW %ULHIGHVFULSWLRQVRIWKHWHUPV Compliance with listing and other legal requirements of reference of the Audit Committee are as follows: UHODWLQJWR¿QDQFLDOVWDWHPHQWV D 2YHUVLJKW RI WKH &RPSDQ\¶V ¿QDQFLDO UHSRUWLQJ 'LVFORVXUHRIDQ\UHODWHGSDUW\WUDQVDFWLRQV SURFHVVDQGWKHGLVFORVXUHRILWV¿QDQFLDOLQIRUPDWLRQ 4XDOL¿FDWLRQVLQWKHGUDIWDXGLWUHSRUW WR HQVXUH WKDW WKH ¿QDQFLDO VWDWHPHQW LV FRUUHFW VẊFLHQWDQGFUHGLEOH g) Reviewing the adequacy of internal audit function. K 'LVFXVVLRQZLWKLQWHUQDODXGLWRUVRIDQ\VLJQL¿FDQW b) Recommending to the Board, the appointment, ¿QGLQJVDQGIROORZXSWKHUHRQ re-appointment and, if required the replacement or UHPRYDO RI WKH VWDWXWRU\ DXGLWRU DQG WKH ¿[DWLRQ RI L 5HYLHZLQJ WKH ¿QGLQJV RI DQ\ LQWHUQDO audit fees, and also approval for payment of any other investigations by the internal auditors into matters services rendered by the statutory auditors. where there is suspected fraud or irregularity or a failure of internal control systems of a material nature c) Discussion with the statutory auditors before the and reporting the matter to the Board. audit commences about nature and scope of audit as well as post-audit discussion to ascertain any area of j) Looking into the reasons for substantial defaults concern. in payments to the shareholders and creditors. d) Reviewing, with the management, performance of k) Carrying out any other function as is mentioned in statutory and internal auditors, and adequacy of the the terms of reference of the Audit Committee. internal control systems. ii. Composition e) Reviewing, with the management, the quarterly 7KH$XGLW&RPPLWWHHRIWKH%RDUGDVRQVW0DUFK ¿QDQFLDO5HVXOWVEHIRUHVXEPLVVLRQWRWKH%RDUGIRU FRQVLVWHG RI 'U 5 6ULQLYDVDQ 0HVVUV % approval. Bajoria, R. Sen and S. N. Menon. Dr. R. Srinivasan, a Non-Executive Independent Director, having f) Reviewing, with the management, the annual DGHTXDWH ¿QDQFLDO DQG DFFRXQWLQJ TXDOL¿FDWLRQ DQG ¿QDQFLDOVWDWHPHQWVEHIRUHVXEPLVVLRQWRWKH%RDUG expertise, is the Chairman of the Audit Committee. for approval, with particular reference to: The other members of the Committee are also Matters required to be included in the Directors’ ¿QDQFLDOO\ OLWHUDWH 7KH &RPPLWWHH FRQVLVWV RI IRXU Responsibility Statement to be included in the Non-Executive Independent Directors. Mr. A. Guha %RDUG¶VUHSRUWLQWHUPVRIFODXVH$$RI6HFWLRQ Sarkar, Vice President & Company Secretary acts as RIWKH&RPSDQLHV$FW the Secretary to the Committee. Changes, if any, in accounting policies and practices DQGUHDVRQVIRUWKHVDPH iii. Meetings and attendance during the year 7KHSDUWLFXODUVRIPHHWLQJVDWWHQGHGE\WKHPHPEHUVRIWKH$XGLW&RPPLWWHHGXULQJWKH¿QDQFLDO\HDUHQGHG VW0DUFKDUHJLYHQEHORZ No. of Meetings Name of Directors Category Held during Attended the year Dr. R. Srinivasan, Chairman Non-Executive & Independent Mr. B. Bajoria Non-Executive & Independent Mr. R. Sen Non-Executive & Independent Mr. S. N. Menon Non-Executive & Independent - 6L[0HHWLQJVRIWKH$XGLW&RPPLWWHHZHUHKHOGGXULQJWKH¿QDQFLDO\HDUHQGHGVW0DUFK7KHGDWHVRQ which the Audit Committee Meetings were held are as follows: WK$SULOWK0D\WK-XO\WK2FWREHUVW-DQXDU\DQGWK0DUFK The necessary quorum was present at all the Meetings. 4. Remuneration Committee i. Brief description of terms of reference The broad terms of reference of the Remuneration Committee are as follows: (a) to approve/recommend to the Board of Directors the remuneration package of the Managing Director and Wholetime Directors and also to recommend remuneration payable to the Non-Executive Directors. E WRDSSURYHLQWKHHYHQWRIORVVRULQDGHTXDF\RISUR¿WVLQDQ\\HDUWKHPLQLPXPUHPXQHUDWLRQSD\DEOHWR the Managing Director and Wholetime Directors within the limits and subject to the parameters prescribed in 6FKHGXOH;,,,WRWKH&RPSDQLHV$FW ii. Composition 7KH5HPXQHUDWLRQ&RPPLWWHHRIWKH%RDUGDVRQVW0DUFKFRPSULVHG0U%%DMRULDD1RQ([HFXWLYH Independent Director, as the Chairman, Dr. R. Srinivasan and Mr. R. Sen, Non-Executive Independent Directors as its Members. iii. Attendance during the year 7ZR0HHWLQJVRIWKH5HPXQHUDWLRQ&RPPLWWHHZHUHKHOGRQWK0D\DQGWK0DUFKGXULQJWKH ¿QDQFLDO\HDUHQGHGVW0DUFK Name of Directors Category Attended Mr. B. Bajoria, Chairman Non-Executive & Independent Dr. R. Srinivasan Non-Executive & Independent 1 Mr. R. Sen Non-Executive & Independent iv. Remuneration Policy The Managing Director and Wholetime Directors are appointed by the Board at such remuneration as approved E\WKH5HPXQHUDWLRQ&RPPLWWHHDQGFRQ¿UPHGE\WKH%RDUGVXEMHFWWRWKH6KDUHKROGHUV¶DSSURYDOLQD*HQHUDO Meeting. McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 ,QWHUPVRIWKHGHFLVLRQWDNHQE\WKH%RDUGRQWK-XO\ HDFK1RQ([HFXWLYH'LUHFWRULVHQWLWOHGWRD VLWWLQJIHHRI5VIRUHDFKPHHWLQJRIWKH%RDUGRUDQ\&RPPLWWHHWKHUHRIDWWHQGHGE\KLP Besides the sitting fees as aforesaid, the approval of the shareholders by a Special Resolution passed at the $QQXDO*HQHUDO0HHWLQJKHOGRQ WK-XO\HQDEOHVWKH&RPSDQ\WRSD\FRPPLVVLRQWRLWVQRQH[HFXWLYH 'LUHFWRUVVXEMHFWWRWKHDJJUHJDWHOLPLWRIRIWKHQHWSUR¿W UHVWULFWHGWR5VSHU'LUHFWRUDV DSSURYHGE\WKH%RDUG RIWKH&RPSDQ\FRPSXWHGLQDFFRUGDQFHZLWKWKHSURYLVLRQVRI6HFWLRQV DQG RIWKH&RPSDQLHV$FW IRUHDFKRIWKH¿YH¿QDQFLDO\HDUVFRPPHQFLQJIURPVW$SULO v. Details of Remuneration to All the Directors D 7KHGHWDLOVRIUHPXQHUDWLRQIRUWKH¿QDQFLDO\HDUHQGHGVW0DUFKWRWKH1RQ([HFXWLYH'LUHFWRUVDQG their shareholding in the Company are as under: Name of Directors Sitting Fees Sitting Fees (Rs.) Commission(#) No. of Shares held (Rs.) for Board for Committee (Rs.) as on 31st March Meetings (#) Meetings (#) 2014 (#) Mr. B. M. Khaitan - Mr. D. Khaitan - Dr. R. Srinivasan - Mr. B. Bajoria 1,00,000 1,400 Mr. R. Sen Mr. U. Parekh 1,00,000 40,000 - Mr. S. N. Menon - - - Mrs. R. Nirula - - Total (#) Other than the above there is no pecuniary relationship or transactions with any of the Non-Executive Directors. The Company has not issued any convertible instruments. E 'HWDLOVRI5HPXQHUDWLRQIRUWKH¿QDQFLDO\HDUHQGHGVW0DUFKWRWKH0DQDJLQJ'LUHFWRUDQG:KROHWLPH Directors are given below: Mr. A. Khaitan Mr. R. Takru Mr. A. Monem Mr. K.K. Baheti Rs. Rs. Rs. Rs. Salary Contribution to Provident Fund 17,01,000 17,01,000 17,01,000 and other Funds Bonus and Allowances Monetary value of Perquisites Period of appointment \HDUVZHI \HDUVZHI \HDUVZHI \HDUVZHI Notice period PRQWKV PRQWKV PRQWKV PRQWKV Severance fees 1RWVSHFL¿HG 1RWVSHFL¿HG 1RWVSHFL¿HG 1RWVSHFL¿HG 5. Shareholders’/Investors’ Grievance Committee i. Composition of the Committee and the Non-Executive Director heading the Committee 7KH 6KDUHKROGHUV¶,QYHVWRUV¶ *ULHYDQFH &RPPLWWHH RI WKH %RDUG DV DW VW 0DUFK FRQVLVWHG RI WKUHH members. Mr. R. Sen, a Non-Executive Independent Director, is the Chairman of the Committee. Mr. B. Bajoria and Mr. U. Parekh both Non-Executive and Independent Directors were the other Members of the Committee. a) Brief description of the terms of reference The terms of reference of the Committee are to look into redressal of Shareholders’/Investors’ complaints relating WRQRQUHFHLSWRIQRWLFHVVKDUHFHUWL¿FDWHVDQQXDOUHSRUWVGLYLGHQGVWUDQVIHURIVKDUHVGHPDWHULDOL]DWLRQRI shares and other grievances. b) Meetings and attendance during the year 'XULQJWKH¿QDQFLDO\HDUWZR0HHWLQJVRIWKH6KDUHKROGHUV¶,QYHVWRUV¶*ULHYDQFH&RPPLWWHHZHUHKHOGRQWK 2FWREHUDQGWK0DUFKDQGWKHDWWHQGDQFHRI0HPEHUVDUHDVIROORZV Name of Directors Category Attended Mr. R. Sen, Chairman Non-Executive & Independent Mr. B. Bajoria Non-Executive & Independent Mr. U. Parekh Non-Executive & Independent LL1DPHDQGGHVLJQDWLRQRIWKH&RPSOLDQFH2̇FHU Mr. A. Guha Sarkar 9LFH3UHVLGHQW &RPSDQ\6HFUHWDU\&RPSOLDQFH2̇FHU McLeod Russel India Limited Four Mangoe Lane Surendra Mohan Ghosh Sarani Kolkata 700001 LLL'HWDLOVRI&RPSODLQWVUHFHLYHGUHGUHVVHGDQGSHQGLQJGXULQJWKH¿QDQFLDO\HDUHQGHGVW March 2014 Pending at the Received during Redressed/Replied Pending at beginning of the year the year during the year the year end Nil Nil 6. General Body Meetings i. Location and time of last three Annual General Meetings: Financial Year ended Date Time Venue 11.00 a.m. .DOD0DQGLU6KDNHVSHDUH6DUDQL Kolkata 700 017 DP .DOD0DQGLU6KDNHVSHDUH6DUDQL Kolkata 700 017 DP .DOD0DQGLU6KDNHVSHDUH6DUDQL Kolkata 700 017 40 McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 ii. Special Resolutions passed in the previous three AGMs. AGM held on Special Resolution passed: $6SHFLDO5HVROXWLRQSXUVXDQWWRWKHSURYLVLRQVRI6HFWLRQ RIWKH&RPSDQLHV$FW IRUSD\PHQWRIUHPXQHUDWLRQE\ZD\RIFRPPLVVLRQWRWKH1RQ([HFXWLYH'LUHFWRUV None None iii. No Special Resolution was passed during the E 7KH &RPSDQ\ KDV REWDLQHG &HUWL¿FDWH IURP WKH ¿QDQFLDO\HDUHQGHGVW0DUFKWKURXJK3RVWDO 6WDWXWRU\$XGLWRUVRQFRPSOLDQFHRI&ODXVH RIWKH Ballot. /LVWLQJ $JUHHPHQW DQG D FRS\ RI VXFK &HUWL¿FDWH LV attached to this report. iv. Resume and other information regarding the Directors being re-appointed as required under Clause iv) The Company has laid down a procedure for risk ,9 * L RIWKH/LVWLQJ$JUHHPHQWKDYHEHHQJLYHQ assessment and minimization thereof. The Company in the Notice of the Annual General Meeting annexed maintains a Risk Register wherein the various risks to this Annual Report. the Company is exposed to and the steps for mitigation thereof are recorded. 7. Disclosures v) All the mandatory requirements have been i) Transactions with the related parties have been appropriately complied with and the non-mandatory GLVFORVHG LQ 1RWH 1R RI WKH 1RWHV WR )LQDQFLDO requirements are dealt with at the end of this Report. Statements in the Annual Report for the year under review. 8. Means of Communication ii) The Company has complied with all the mandatory i. Quarterly Results and publication thereof requirements of the Stock Exchanges, SEBI and other in newspapers. statutory authorities on all matters related to capital Quarterly, half-yearly and annual results are published PDUNHWV GXULQJ WKH ¿QDQFLDO \HDU 1R SHQDOWLHV RU in prominent dailies which inter alia include Business strictures were imposed on the Company by the Stock Standard (English), The Economic Times (English) Exchanges, SEBI or any other statutory authority, on and Aajkal (Bengali) in the form prescribed by any matter relating to the capital markets during the Clause 41 of the Listing Agreements with the Stock ¿QDQFLDO \HDUV HQGHG VW 0DUFK VW 0DUFK Exchanges. DQGVW0DUFK ii. Display in Website iii) a) The Company has adopted separate Codes of Financial Results, Shareholding Pattern, Information Conduct (‘Code’) for the Members of the Board and Update etc., are displayed on the Company’s Website Senior Management Personnel as required under www.mcleodrussel.com &ODXVH RI WKH /LVWLQJ $JUHHPHQW $OO WKH %RDUG LLL 'LVSOD\ RI 2̇FLDO QHZV DQG SUHVHQWDWLRQ Members and the Senior Management Personnel have made to the Shareholders/Institutional ḊUPHGFRPSOLDQFHRIWKH&RGH7KH$QQXDO5HSRUW Investors/Analysts: RIWKH&RPSDQ\FRQWDLQVDGHFODUDWLRQWRWKLVH̆HFW Press releases and Information Updates as and when signed by the CEO. The Company has also adopted a made are displayed in the Company’s website and also Code for Prohibition of Insider Trading. sent to the Stock Exchanges to enable them to put the All the aforesaid Codes have been posted on the same on their own websites. Company’s Website. 41 iv. Management Discussion and Analysis forms a of the Annual General Meeting of the Company and part of the Company’s Annual Report. payment of Dividend. 9. General Shareholders’ iv. Dividend Payment Date Information The Dividend, if declared, shall be paid/credited on or i. 16th Annual General Meeting DIWHUWK-XO\ 'DWHDQG7LPH UG-XO\ :HGQHVGD\ v. Listing on Stock Exchanges at 11.00 a.m. The Company’s Shares are listed at the following Venue : Kala Mandir Stock Exchanges and the Annual Listing Fees for 6KDNHVSHDUH6DUDQL WKH\HDUKDYHEHHQSDLGWRDOOWKHVH6WRFN Kolkata – 700 017 Exchanges. ii. Financial Year: VW$SULOWRVW0DUFK Name of the Stock Exchange 1. Bombay Stock Exchange Limited [BSE] iii. Dates of Book Closure 1DWLRQDO6WRFN([FKDQJHRI,QGLD/LPLWHG>16(@ The Share Transfer Books and Register of Members of 7KH&DOFXWWD6WRFN([FKDQJH$VVRFLDWLRQ WKH&RPSDQ\ZLOOUHPDLQFORVHGIURPWK-XO\ Limited [CSE] WRUG-XO\ ERWKGD\VLQFOXVLYH IRUWKHSXUSRVH vi. Stock Code Name of the Date of Listing Date of Listing Date of Listing Date of Listing Stock Code Stock Exchanges of 5,59,05,402 of 4,25,25,000 of 99,07,305 of 11,18,028 [where the Equity Shares of Equity Shares of Equity Shares Equity Shares of Company’s Rs. 5/- each of Rs. 5/- each of of Rs. 5/- each Rs. 5/- each of Shares are listed] the Company the Company of the Company the Company BSE NSE MCLEODRUSS CSE Demat ISIN for NSDL & CDSL: INE 942G01012 vii. Stock Price Data: Bombay Stock Exchange National Stock Exchange Month High Low Share Price Sensex High Low Rs. Rs. (closing) Rs. (closing) Rs. Rs. $SULO 0D\ -XQH -XO\ $XJXVW 6HSWHPEHU 2FWREHU 1RYHPEHU 'HFHPEHU -DQXDU\ )HEUXDU\ 0DUFK McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 viii. Performance in comparison to BSE Sensex: 6KDUH3ULFH3HUIRUPDQFH $SULOWR0DUFK Sensex (Closing) Share Price (Closing) Performance of McLeod Russel Share Price in Comparison to BSE sensex 2013-2014 24000 350 McLeod Russel Share Price 22000 20000 300 18000 250 16000 14000 200 12000 10000 150 Sensex 8000 100 6000 4000 50 2000 0 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 Sensex (closing) Share Price (closing) ix. Registrar and Share Transfer Agents: 6DUDQL.RONDWDRUDWWKH5HJLVWHUHG2̇FHRI In accordance with the SEBI directive vide Circular the Company. The Board of Directors has unanimously 1RV ' &&),77&&,5 GDWHG WK delegated the powers of share transfer, transmission, 'HFHPEHUWKH&RPSDQ\DSSRLQWHGWKHIROORZLQJ sub-division, consolidation and issue of duplicate SEBI registered Agency as the Common Registrar and 6KDUH &HUWL¿FDWHV WR D 6KDUH 7UDQVIHU &RPPLWWHH Share Transfer Agents of the Company for both the comprising Messrs. R. Takru, A. Monem and K. K. 3K\VLFDO DQG 'HPDWHULDOL]HG VHJPHQWV ZLWK H̆HFW Baheti in order to expedite transfer, transmission etc. IURPWK0DUFK in the physical form. During the year the Committee met once every week for approving Share Transfers Maheshwari Datamatics Pvt Ltd. and for other related activities. Share Transfers are 0DQJRH/DQHQG)ORRU registered and returned in the normal course within Surendra Mohan Ghosh Sarani, Kolkata – 700001. an average period of 14 days, if the transfer documents 7(/ are found technically in order and complete in all )$; respects. E-MAIL : [email protected] x. Share Transfer System: The Company conducts a weekly review of the The requests for transfer of shares held in physical functions of the Registrar and Share Transfer Agent PRGHVKRXOGEHORGJHGDWWKHṘFHRIWKH&RPSDQ\¶V for upgrading the level of service to the Shareholders. Registrar & Share Transfer Agents, Maheshwari Weekly review is also conducted on the response to Datamatics Private Limited (Registered with SEBI), the shareholders pertaining to their communication 0DQJRH/DQHQG)ORRU6XUHQGUD0RKDQ*KRVK and grievances, if any. xi. (a) Distribution of shareholding as on 31st March 2014 Size of holding No. of holders Percentage No. of Shares Percentage WR 04.71 WR WR 01.17 WR WR WR 00.10 WR 10001 and above 00.44 Total 100.00 100.00 (b) Shareholding Pattern as on 31st March 2014 Sr. Category Number of No. of % of holding No. Shareholders Shares held 1 Promoters Mutual Funds/UTI Financial Institutions/Banks 4 Central/State Government(s) 1 00.00 Insurance Companies Foreign Institutional Investors 7 Bodies Corporate Resident Individuals NRIs/OCBs 10 Trust 11 Clearing Member Total: 56,603 10,94,55,735 100.00 xii. Dematerialization of Shares and liquidity: $V RQ VW 0DUFK RI WKH &RPSDQ\¶V The Company’s Shares form part of the SEBI’s HTXLW\VKDUHVRI5VHDFKUHSUHVHQWLQJ Compulsory Demat segment for all shareholders/ shares were in dematerialized form and the balance investors. The Company has established connectivity UHSUHVHQWLQJVKDUHVZHUHLQSK\VLFDO with both the Depositories viz. National Securities form. The entire shareholding of the Promoters is in Depository Limited [NSDL] and Central Depository the dematerialized form. Services (India) Limited [CDSL] through the Registrar, xiii. Outstanding GDRs/ADRs/Warrants or 0DKHVKZDUL 'DWDPDWLFV 3ULYDWH /LPLWHG 0DQJRH any Convertible Instruments: /DQH QG )ORRU 6XUHQGUD 0RKDQ *KRVK 6DUDQL The Company has not issued any GDRs/ADRs/ Kolkata 700001. Requests for dematerializations of Warrants or any convertible instruments. VKDUHV DUH SURFHVVHG DQG FRQ¿UPDWLRQV DUH EHLQJ given to the respective Depositories. 44 McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 xiv. Plant Locations: Tea manufacturing plants are located at the following Tea Estates – Locations Tea Estates Assam:- Bishnauth Dekorai, Mijicajan, Monabarie, Pertabghur Dhunseri Behora, Bukhial Doom Dooma Baghjan, Bordubi, Koomsong, Phillobari, Beesakopie/Daimukhia, Raidang, Samdang East Boroi %DUJDQJ%HKDOL%RURL'ẌDJKXU+DOHP1\D*RJUD Jorhat Hunwal Mangaldai Attareekhat, Bhooteachang, Borengajuli, Corramore, Dimakusi, Paneery Margherita Bogapani, Dehing, Dirok, Margherita, Namdang Moran Attabarrie, Dirai, Lepetkatta, Moran, Rajmai, Sepon Thakurbari Addabarie, Harchurah, Nilpur, Phulbari, Rupajuli, Tarajulie, Tezpore & Gogra Tingri Dirial, Itakhooli, Keyhung, Mahakali West Bengal:- Dooars Bhatpara, Central Dooars, Chuapara, Jainti/Chuniajhora, Mathura xv. Address for correspondence for Share and ii. Registrar and Share Transfer Agents’ related services: 5HJLVWHUHG2̇FHDW Any assistance regarding Share transfers and Maheshwari Datamatics Pvt Ltd. transmission, change of address, non-receipt of 0DQJRH/DQHQG)ORRU VKDUH FHUWL¿FDWHGXSOLFDWH VKDUH FHUWL¿FDWH GHPDW Surendra Mohan Ghosh Sarani, Kolkata - 700001. and other matters and for redressal of all share- 7HO related complaints and grievances, the Members )D[ are requested to write to or contact the Registrar & E-mail: [email protected] Share Transfer Agents or the Share Department of ,QFDVHRIDQ\GL̇FXOW\WKH&RPSOLDQFH2̇FHUDWWKH the Company for all their queries or any other matter 5HJLVWHUHG2̇FHRIWKH&RPSDQ\PD\EHFRQWDFWHG relating to their shareholding in the Company at the addresses given below: Special E-mail Id. : [email protected] L7KH&RPSDQ\¶V5HJLVWHUHG2̇FHDW Compliance of Non-Mandatory Requirements McLEOD RUSSEL INDIA LIMITED (i) The Board: Corporate Identity Number (CIN): 'XULQJ WKH ¿QDQFLDO \HDU HQGHG VW 0DUFK / :% 3/& D SDUW RI WKH H[SHQVHV IRU PDLQWHQDQFH RI WKH ṘFH ‘Four Mangoe Lane’, Surendra Mohan Ghosh Sarani, of the Non-Executive Chairman was borne by the Kolkata - 700001. Company. 7(/ (ii) Remuneration Committee: )$; The Company has a Remuneration Committee comprising Mr. B. Bajoria, Dr. R. Srinivasan and Mr. R. E-Mail: [email protected] Sen as Members as stated in Paragraph 4 of this Report. (iii) Shareholder Rights: (vi) Mechanism for evaluating Non-Executive Half-yearly results including summary of the Board Members: VLJQL¿FDQWHYHQWVDUHSUHVHQWO\QRWEHLQJVHQWWRWKH There is no mechanism for evaluating Non-Executive Shareholders of the Company. Board Members at present. All the Non-Executive %RDUG0HPEHUVDUHKDYLQJUHTXLVLWHTXDOL¿FDWLRQDQG LY $XGLW4XDOL¿FDWLRQ Nil expertise in the respective functional areas. (v) Training of Board Members: (vii) Whistle Blower Policy: The Company has not yet adopted any training A Whistle Blower Policy has been adopted by the programme for its Directors. Board of Directors of the Company at its Meeting held RQUG0D\ For and on behalf of the Board Place: Kolkata A. Khaitan K. K. Baheti 'DWH UG0D\ Managing Director Wholetime Director & CFO AUDITORS’ CERTIFICATE REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE To the Members of McLeod Russel India Limited We have examined the compliance of conditions of Corporate Governance by McLeod Russel India Limited, for WKH\HDUHQGHGVW0DUFKDVVWLSXODWHGLQ&ODXVH RIWKH/LVWLQJ$JUHHPHQW V RIWKHVDLG&RPSDQ\ZLWK stock exchange(s) in India. The compliance of conditions of Corporate Governance is the responsibility of the Company’s management. Our H[DPLQDWLRQZDVFDUULHGRXWLQDFFRUGDQFHZLWKWKH*XLGDQFH1RWHRQ&HUWL¿FDWLRQRI&RUSRUDWH*RYHUQDQFH DV VWLSXODWHGLQ&ODXVH RIWKH/LVWLQJ$JUHHPHQW LVVXHGE\WKH,QVWLWXWHRI&KDUWHUHG$FFRXQWDQWVRI,QGLDDQG was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance RIWKHFRQGLWLRQVRI&RUSRUDWH*RYHUQDQFH,WLVQHLWKHUDQDXGLWQRUDQH[SUHVVLRQRIRSLQLRQRQWKH¿QDQFLDO statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. :HVWDWHWKDWVXFKFRPSOLDQFHLVQHLWKHUDQDVVXUDQFHDVWRWKHIXWXUHYLDELOLW\RIWKH&RPSDQ\QRUWKHḢFLHQF\ RUH̆HFWLYHQHVVZLWKZKLFKWKHPDQDJHPHQWKDVFRQGXFWHGWKHD̆DLUVRIWKH&RPSDQ\ Prabal Kr. Sarkar Partner 0HPEHUVKLS1XPEHU For Price Waterhouse 3ODFH .RONDWD )LUP5HJLVWUDWLRQ1XPEHU( 'DWH UG0D\ Chartered Accountants McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANY’S CODES OF CONDUCT 7KLVLVWRFRQ¿UPWKDWWKH&RPSDQ\KDVDGRSWHGWZRVHSDUDWH&RGHVRI&RQGXFWWREHIROORZHGE\WKH0HPEHUV RIWKH%RDUGDQG6HQLRU0DQDJHPHQW3HUVRQQHORIWKH&RPSDQ\UHVSHFWLYHO\LQFRPSOLDQFHZLWK&ODXVH RIWKH Listing Agreement with the Stock Exchanges. Both these Codes are available on the Company’s website. ,FRQ¿UPWKDWWKH&RPSDQ\KDVLQUHVSHFWRIWKH¿QDQFLDO\HDUHQGHGVW0DUFKUHFHLYHGIURPWKH0HPEHUV of the Board and Senior Management Personnel, a Declaration of Compliance with the Code of Conduct as applicable to them. McLEOD RUSSEL INDIA LIMITED Place : Kolkata A. Khaitan 'DWH UG0D\ Managing Director (CEO) 47 Independent Auditors’ Report To the Members of McLeod Russel India Limited Report on the Financial Statements :HKDYHDXGLWHGWKHDFFRPSDQ\LQJ¿QDQFLDOVWDWHPHQWVRI0FOHRG5XVVHO,QGLD/LPLWHG WKH³&RPSDQ\´ ZKLFK FRPSULVHWKH%DODQFH6KHHWDVDW0DUFKDQGWKH3UR¿WDQG/RVV6WDWHPHQWDQG&DVK)ORZ6WDWHPHQWIRU WKH\HDUWKHQHQGHGDQGDVXPPDU\RIVLJQL¿FDQWDFFRXQWLQJSROLFLHVDQGRWKHUH[SODQDWRU\LQIRUPDWLRQZKLFK we have signed under reference to this report. Management’s Responsibility for the Financial Statements 7KH&RPSDQ\¶V0DQDJHPHQWLVUHVSRQVLEOHIRUWKHSUHSDUDWLRQRIWKHVH¿QDQFLDOVWDWHPHQWVWKDWJLYHDWUXHDQG IDLUYLHZRIWKH¿QDQFLDOSRVLWLRQ¿QDQFLDOSHUIRUPDQFHDQGFDVKÀRZVRIWKH&RPSDQ\LQDFFRUGDQFHZLWKWKH $FFRXQWLQJ6WDQGDUGVQRWL¿HGXQGHUWKH&RPSDQLHV$FW WKH³$FW´ UHDGZLWKWKH*HQHUDO&LUFXODU GDWHG6HSWHPEHURIWKH0LQLVWU\RI&RUSRUDWH$̆DLUVLQUHVSHFWRI6HFWLRQRIWKH&RPSDQLHV$FW 7KLVUHVSRQVLELOLW\LQFOXGHVWKHGHVLJQLPSOHPHQWDWLRQDQGPDLQWHQDQFHRILQWHUQDOFRQWUROUHOHYDQWWRWKH SUHSDUDWLRQDQGSUHVHQWDWLRQRIWKH¿QDQFLDOVWDWHPHQWVWKDWJLYHDWUXHDQGIDLUYLHZDQGDUHIUHHIURPPDWHULDO misstatement, whether due to fraud or error. Auditors’ Responsibility 2XUUHVSRQVLELOLW\LVWRH[SUHVVDQRSLQLRQRQWKHVH¿QDQFLDOVWDWHPHQWVEDVHGRQRXUDXGLW:HFRQGXFWHGRXU audit in accordance with the Standards on Auditing and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements DQGSODQDQGSHUIRUPWKHDXGLWWRREWDLQUHDVRQDEOHDVVXUDQFHDERXWZKHWKHUWKH¿QDQFLDOVWDWHPHQWVDUHIUHH from material misstatement. $QDXGLWLQYROYHVSHUIRUPLQJSURFHGXUHVWRREWDLQDXGLWHYLGHQFHDERXWWKHDPRXQWVDQGGLVFORVXUHVLQWKH¿- nancial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the ULVNVRIPDWHULDOPLVVWDWHPHQWRIWKH¿QDQFLDOVWDWHPHQWVZKHWKHUGXHWRIUDXGRUHUURU,QPDNLQJWKRVHULVN assessments, the auditors consider internal control relevant to the Company’s preparation and fair presentation of WKH¿QDQFLDOVWDWHPHQWVLQRUGHUWRGHVLJQDXGLWSURFHGXUHVWKDWDUHDSSURSULDWHLQWKHFLUFXPVWDQFHVEXWQRWIRU WKHSXUSRVHRIH[SUHVVLQJDQRSLQLRQRQWKHH̆HFWLYHQHVVRIWKHHQWLW\¶VLQWHUQDOFRQWURO$QDXGLWDOVRLQFOXGHV evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates PDGHE\0DQDJHPHQWDVZHOODVHYDOXDWLQJWKHRYHUDOOSUHVHQWDWLRQRIWKH¿QDQFLDOVWDWHPHQWV :HEHOLHYHWKDWWKHDXGLWHYLGHQFHZHKDYHREWDLQHGLVVẊFLHQWDQGDSSURSULDWHWRSURYLGHDEDVLVIRURXUDXGLW opinion. Opinion ,QRXURSLQLRQDQGWRWKHEHVWRIRXULQIRUPDWLRQDQGDFFRUGLQJWRWKHH[SODQDWLRQVJLYHQWRXVWKHDFFRPSDQ\LQJ ¿QDQFLDOVWDWHPHQWVJLYHWKHLQIRUPDWLRQUHTXLUHGE\WKH$FWLQWKHPDQQHUVRUHTXLUHGDQGJLYHDWUXHDQGIDLU view in conformity with the accounting principles generally accepted in India: D LQWKHFDVHRIWKH%DODQFH6KHHWRIWKHVWDWHRID̆DLUVRIWKH&RPSDQ\DVDW0DUFK E LQWKHFDVHRIWKH3UR¿WDQG/RVV6WDWHPHQWRIWKHSUR¿WIRUWKH\HDUHQGHGRQWKDWGDWH DQG F LQWKHFDVHRIWKH&DVK)ORZ6WDWHPHQWRIWKHFDVKÀRZVIRUWKH\HDUHQGHGRQWKDWGDWH McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 Report on Other Legal and Regulatory Requirements $VUHTXLUHGE\µWKH&RPSDQLHV $XGLWRU¶V5HSRUW 2UGHU¶DVDPHQGHGE\µWKH&RPSDQLHV $XGLWRU¶V5HSRUW $PHQGPHQW 2UGHU¶LVVXHGE\WKH&HQWUDO*RYHUQPHQWRI,QGLDLQWHUPVRIVXEVHFWLRQ $ RIVHFWLRQ RIWKH$FW KHUHLQDIWHUUHIHUUHGWRDVWKH³2UGHU´ DQGRQWKHEDVLVRIVXFKFKHFNVRIWKHERRNVDQGUHFRUGVRIWKH &RPSDQ\DVZHFRQVLGHUHGDSSURSULDWHDQGDFFRUGLQJWRWKHLQIRUPDWLRQDQGH[SODQDWLRQVJLYHQWRXVZHJLYHLQ WKH$QQH[XUHDVWDWHPHQWRQWKHPDWWHUVVSHFL¿HGLQSDUDJUDSKVDQGRIWKH2UGHU $VUHTXLUHGE\VHFWLRQ RIWKH$FWZHUHSRUWWKDW D :HKDYHREWDLQHGDOOWKHLQIRUPDWLRQDQGH[SODQDWLRQVZKLFKWRWKHEHVWRIRXUNQRZOHGJHDQGEHOLHIZHUH QHFHVVDU\IRUWKHSXUSRVHRIRXUDXGLW E ,QRXURSLQLRQSURSHUERRNVRIDFFRXQWDVUHTXLUHGE\ODZKDYHEHHQNHSWE\WKH&RPSDQ\VRIDUDVDSSHDUV IURPRXUH[DPLQDWLRQRIWKRVHERRNV F 7KH%DODQFH6KHHW3UR¿WDQG/RVV6WDWHPHQWDQGWKH&DVK)ORZ6WDWHPHQWGHDOWZLWKE\WKLV5HSRUWDUHLQ DJUHHPHQWZLWKWKHERRNVRIDFFRXQW G ,QRXURSLQLRQWKH%DODQFH6KHHW3UR¿WDQG/RVV6WDWHPHQWDQG&DVK)ORZ6WDWHPHQWGHDOWZLWKE\WKLV UHSRUWFRPSO\ZLWKWKH$FFRXQWLQJ6WDQGDUGVQRWL¿HGXQGHUWKH&RPSDQLHV$FW UHDGZLWKWKH*HQHUDO &LUFXODUGDWHG6HSWHPEHURIWKH0LQLVWU\RI&RUSRUDWH$̆DLUVLQUHVSHFWRI6HFWLRQRIWKH &RPSDQLHV$FW H 2QWKHEDVLVRIZULWWHQUHSUHVHQWDWLRQVUHFHLYHGIURPWKHGLUHFWRUVDQGWDNHQRQUHFRUGE\WKH%RDUGRI 'LUHFWRUVQRQHRIWKHGLUHFWRUVLVGLVTXDOL¿HGDVRQ0DUFKIURPEHLQJDSSRLQWHGDVDGLUHFWRULQ WHUPVRIFODXVH J RIVXEVHFWLRQ RIVHFWLRQRIWKH$FW For Price Waterhouse )LUP5HJLVWUDWLRQ1XPEHU ( Chartered Accountants Prabal Kr. 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Area Under Tea Area Under 6DOHDEOH 7HD 3URGXFWLRQ +HFWDUH IRU /RFDWLRQV (VWDWHV .JV (DVW%RURL %DUJDQJ %HKDOL %RURL 'ẌDJKXU +DOHP 1\D*RJUD -RUKDW +XQZDO 0DQJDOGDL $WWDUHHNKDW %KRRWHDFKDQJ %RUHQJDMXOL &RUUDPRUH 'LPDNXVL 3DQHHU\ 0DUJKHULWD %RJDSDQL 'HKLQJ 'LURN 0DUJKHULWD 1DPGDQJ 0RUDQ $WWDEDULH 'LUDL /HSHWNDWWD 0RUDQ 5DMPDL 6HSRQ 7KDNXUEDUL $GGDEDULH +DUFKXUDK 3KXOEDUL 5XSDMXOL 7DUDMXOLH 7H]SRUH *RJUD 7LQJUL 'LULDO ,WDNKRROL .H\KXQJ 0DKDNDOL 'RRDUV %KDWSDUD &HQWUDO'RRDUV &KXDSDUD -DLQWL&KXQLDMKRUD 0DWKXUD 3URGXFWLRQLQFOXGHVWHDPDGHRXWRILQWHUHVWDWHWUDQVIHUSXUFKDVHRIJUHHQOHDI McLEOD RUSSEL INDIA LIMITED | Annual Report 2013-14 1RWHV $0(0%(52):,//,$06210$*25*5283 $352'8&7LQIR#WULV\VFRPFRP McLEOD RUSSEL INDIA LIMITED Corporate Identity Number (CIN):L51109WB1998PLC087076 Registered Office: Four Mangoe Lane, Surendra Mohan Ghosh Sarani, Kolkata - 700001. TEL : 033-2210-1221, 2248-9434/35 FAX : 91-33-2248-3683, 2248-8114 E-Mail: [email protected] Website: www.mcleodrussel.com Folio No./DP. Id./Client Id: Name: Address: Joint Holder(s): No. of shares held: Dear Member, Sub: Voting through electronic means Pursuant to the provisions of Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, McLeod Russel India Limited (MRIL or the Company) is offering e-voting facility to its Members in respect of the businesses to be transacted at the Sixteenth Annual General Meeting scheduled to be held on Wednesday, 23rd July 2014 at 11.00 a.m. The Company has engaged the services of Central Depository Services (India) Limited (CDSL) to provide e-voting facilities. The e-voting particulars are set out below: ELECTRONIC VOTING PARTICULARS EVSN USER ID PERMANENT ACCOUNT NUMBER (E-voting Sequence Number) (16 Digit Demat Account/Folio No. of members (PAN) holding shares in physical mode) (Original PAN / as per point no. 1 - (vii) of e-voting procedure of Instructions 140616011 The e-voting facility will be available during the following voting period: Commencement of e-voting : From 10.00 a.m. (IST) on 17th July 2014 End of e-voting : Up to 10.00 a.m. (IST) on 20th July 2014 Please read the instructions printed overleaf before exercising the vote. This Communication forms an integral part of the Notice dated 23rd May 2014 for the Sixteenth Annual General Meeting scheduled to be held on 23rd July 2014. A copy of the said Notice is sent herewith. Attention is invited to the statement on the accompanying Notice that the businesses of the Meeting may be transaction through electronic voting system and that the Company is providing facility for voting by electronic means. The Notice of the Annual General Meeting and this Communication are also available on the website of the Company at www.mcleodrussel.com Yours faithfully, McLeod Russel India Limited Kolkata A.Guha Sarkar 23rd May 2014 Vice President & Company Secretary Instruction and other information relating to e-voting are as under: 1. In case of Members receiving e-mail: (i) Log on to the e-voting website : www.evotingindia.com (ii) Click on Shareholders tab. (iii) Now, select the Mcleod Russel India Limited from the drop down menu and click on SUBMIT (iv) 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. (v) Next enter the Image Verification as displayed and Click on Login. (vi) If you are holding shares in Demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any company, then your existing password may be used. P.T.O. (vii) If you are a first time user follow the steps given below: For Members holding shares in Demat Form and Physical Form PAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both Demat shareholders as well as physical shareholders) l Members who have not updated their PAN with the Company/Depository Participant are requested to use the first two letters of their name and the 8 digits of the sequence number in the PAN field excluding special character and space. (viz., if your name is Ramesh Kumar with sequence number 00000001 then enter RA00000001 in the PAN field. Sequence Number is communicated in the Attendance Slip.) DOB Enter the Date of Birth as recorded in your Demat account or in the company records for the said Demat account or folio in dd/mm/yyyy format. Dividend Enter the Dividend Bank Details as recorded in your Demat account or in the company records for the said Demat account or Bank Details folio. l Please enter the DOB or Dividend Bank Details in order to login. If the details are not recorded with the depository or company please enter your DP. Id. together with Client Id. or Registered Folio number in the Dividend Bank details field. (viii) After entering these details appropriately, click on SUBMIT tab. (ix) Members holding shares in physical form will then reach directly to the Company selection screen. However, members holding shares in Demat form will now reach Password Creation menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the Demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential. (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 l A member/proxy wishing to attend the Meeting must complete this Attendance Slip before coming to the Meeting and hand it over at the entrance. l If you intend to appoint a proxy, please complete the Proxy Form and deposit it at the Companys Registered Office, at least 48 hours before the Meeting. l Please bring your copy of the Annual Report to the Meeting. I record my presence at the Sixteenth Annual General Meeting Name of Proxy in BLOCK LETTERS (If the Proxy attends instead of the Member) Signature of Member/Proxy Form No. MGT-11 Proxy Form [Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014] CIN:L51109WB1998PLC087076 Name of the Company: McLeod Russel India Limited Registered Office: Four Mangoe Lane, Surendra Mohan Ghosh Sarani, Kolkata-700001 Name of the Member(s): Registered address: E-mail Id: Folio No./Client Id & DP. Id: I/We, being the Member(s) of .shares of the above named Company, hereby appoint 1. Name: ...... Address: E-mail Id: Signature: .. , or failing him 2. Name: ...... Address: E-mail Id: Signature: .. , or failing him 3. Name: ...... Address: E-mail Id: Signature: .. P.T.O. as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 16th Annual General Meeting of the Company, to be held on Wednesday, the 23rd July 2014 at 11.00 a.m. at Kala Mandir Auditorium, 48 Shakespeare Sarani, Kolkata-700017 and at any adjournment thereof in respect of such resolutions as are indicated below: Resolution Nos. 1 Adoption of Audited Financial Statements of the Company for the Financial 9. Appointment of Mr. Bharat Bajoria as an Independent Director of the Year ended 31st March 2014 together with the Report of the Board of Company. Directors and Auditors thereon. 10. Appointment of Mr. Ranabir Sen as an Independent Director of the 2. Declaration of dividend for the Financial Year ended 31st March 2014. Company. 3. Appointment of a Director in place of Mr. Deepak Khaitan who retires 11. Re-Appointment of Mr. Aditya Khaitan as the Managing Director for three by rotation and being eligible, offers himself for re-appointment. years with effect from 1st April 2014. 12. Re-Appointment of Mr. Rajeev Takru as a Wholetime Director for three 4. Appointment of a Director in place of Mr. Azam Monem who retires by years with effect from 1st April 2014. rotation and being eligible, offers himself for re-appointment. 13. Re-Appointment of Mr. Azam Monem as a Wholetime Director for three 5. Appointment of Messrs.Price Waterhouse, Chartered Accountants, as years with effect from 1st April 2014. the Statutory Auditors of the Company and to authorize the Board of 14. Re-Appointment of Mr. Kamal Kishore Baheti as a Wholetime Director Directors to fix their remuneration. for three years with effect from 1st April 2014. 6. Appointment of Mr. Utsav Parekh as an Independent Director of the 15. Approval of payment of Commission to non-executive Directors. Company. 16. Authority to the Board of Directors to create securities in respect of the 7. Appointment of Mrs. Ramni Nirula as an Independent Director of the borrowings of the Company, in terms of Section 108(1)(c) of the Companies Company. Act, 2013. 8. Appointment of Dr. Raghavachari Srinivasan as an Independent Director 17. Ratification of the remuneration of the Cost Auditors as fixed by the of the Company. Board of Directors in terms of Section 148 of the Companies Act, 2013. Affix Signed this day of .2014. Revenue Stamp Signature of shareholder(s) Signature of Proxy holder(s) Notes: 1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting. 2. For the resolutions, Explanatory Statement and Notes, please refer to the Notice of the Sixteenth Annual General Meeting.