DIRECTORS' REPORT

Your Directors have pleasure in presenting the 97th Annual Report on the performance of the Company together with the Audited Financial Statements for the year ended 31st March, 2019.

FINANCIAL RESULTS :

Rs. in lakhs

Indian Accounting Standards (Ind AS)

In the preparation of financial statements, the Company has followed the Indian Accounting Standards (Ind AS) and the financial results have been prepared in accordance with the recognition and measurements principles laid down in the said standards.

Dividend

Your Directors have recommended a final dividend of Rs.1.70 per share (17%) which together with an interim dividend of Re. 1/- per share (10%) already paid, makes a total dividend of Rs. 2.70 per share (27%) for the year ended 31st March, 2019 [previous year Rs.2.70/-per share (27%)]. The proposed final dividend of Rs.1.70 per share (17%) for the year amounting to Rs. 84,94,162/- will be accounted in the financial year 2019-20 in accordance with Ind AS 10 -'Events after the reporting period'.

Transfer to Reserves

The Directors have proposed to transfer a sum of Rs.3,300 Lakhs to the General Reserve which will be accounted in the financial year 2019-20 in accordance with Ind AS 10 - 'Events after the reporting period'.

Operations

The total quantity of tea manufactured during the year was higher at 30,91,002 kgs as against 29,96,514 kgs during the previous year. The rainfall during the year was 1194 mm as against 1082 mm during the previous year.

Your Company has recorded a sale of 31,65,290 kgs (previous year 30,00,344 kgs) of tea which is the highest ever in the history of the Company. The average price realized during the year was marginally higher when compared to the previous year.

Profit before tax for the year was higher at Rs.1,700.10 lakhs as against Rs.1,530.08 lakhs during the previous year.

The total exports during the year was 18,65,911 kgs as against 14,66,671 kgs during the previous year.

Outlook

With an extended dry period and a very low rainfall, the first quarter is likely to have low crop compared to last year. With more area under organic tea cultivation, the sale of organic tea would be higher than last year. We are undertaking a significant expansion at Korakundah factory to increase organic tea production capacity that will help to achieve improved sales as well as profitability.

Share Capital

The paid up capital of the Company as at 31st March 2019 remains unchanged. Directors' Responsibility Statement

As required by sub-section 5 of Section 134 of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of Annual Accounts for the year ended 31st March, 2019, the applicable Indian Accounting Standards have been followed without any material departures;

(b) such accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 and of the profit of the Company for the year then ended;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 to safeguard the assets of the Company and to prevent and detect fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) proper internal financial controls to be followed by the Company have been laid down and that the financial controls are adequate and were operating effectively;

(f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and were operating effectively.

Directors and Key Managerial Personnel

Mr.D.Hegde and Mr.T.G.B.Pinto were re-appointed as Whole-time Directors of the Company by the members on 21st January, 2019 through postal ballot for a period of three years with effect from 01.01.2019.

Mr.N.Srinivasan resigned from the Board with effect from 1st April, 2019 due to age limit prescribed by SEBI. The Board places on record its appreciation of Mr.N. Srinivasan's involvement and valuable contribution for the growth of the Company during his tenure.

The term of Mr.R. Srinivasan as Independent Director ended on 31st January, 2019. The Board places on record its appreciation for the valuable services of Mr.R. Srinivasan to the Company during his tenure as an Independent Director.

Of the Directors liable to retire by rotation, Ms.Mallika Srinivasan will retire at the forthcoming Annual General Meeting. She is eligible for re-election and offers herself accordingly.

The tenure of Mr.Sankar Datta, Independent Director will end on 9th November 2019. It is proposed to re-appoint him as an Independent Director for a period of 5 years with effect from 10th November, 2019.

The Board of Directors and the Nomination & Remuneration Committee are of the opinion that having regard to his credentials and vast experience in business advisory services, audit and accounts, his re-appointment as a Non-Executive Independent Director would be beneficial to the Company and this will enable the Board to discharge its functions and duties effectively.

Accordingly, the Board recommends his re-appointment for a second term of five years to the members for their approval at the ensuing Annual General Meeting.

Particulars of Loan, Guarantees or Investments under Section 186

The Company has not given any loan or guarantee or made investments in any Body Corporate in terms of Section 186 of the Companies Act, 2013, during the financial year 2018-19.

Particulars of Contracts or arrangements made with related parties

Particulars of contracts or arrangement with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed form AOC-2 is appended as Annexure 2 to this report.

Material changes and Commitments between 31st March 2019 and date of this report

There are no material changes and commitments affecting the financial position of the company which have occurred between 31st March 2019 and the date of this report.

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

Details pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo are given in Annexure-1.

Transfer to Investor Education and Protection Fund (IEPF)

The Company has transferred during the year unclaimed dividends amounting to Rs.3,54,941/- to the Investor Education and Protection Fund.

Pursuant to the applicable provisions of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company transferred 7,350 shares during the year, in respect of which dividend has not been claimed for 7 consecutive years or more to the demat account of IEPF Authority. The transfer was effected after sending notices to the concerned shareholders. The details are given in the Report on Corporate Governance forming part of this report.

Annual Return

Extract of Annual Return in Form MGT-9 is given as Annexure-5 to this report. Number of meetings of the Board Six meetings of the Board were held during the year the details of which are furnished in the Report on Corporate Governance which forms part of this report.

Declaration by Independent Directors

The Company has received declarations from all the independent directors confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Policy on appointment and remuneration of Directors

The Company's policy on Directors' appointment and remuneration remains unchanged which can be accessed on the Company's website www.unitednilgiritea.com.

Committees of the Board

The Company has four Committees as mentioned below:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

A detailed note on the composition of the Board and its Committees and the meetings held during the financial year is provided in the Report on Corporate Governance.

Auditors

There are no qualifications, reservations or adverse remarks or disclaimers made by K.S.Aiyar & Co. Statutory Auditors in their report.

K.S. Aiyar & Co., Chartered Accountants, Coimbatore were appointed as the Statutory Auditors of the Company for a period of 5 years from the conclusion of the 95th Annual General Meeting held on 4th August 2017 till the conclusion of the 100th Annual General Meeting. Pursuant to the Companies (Amendment Act) 2017 with effect from May 7, 2018, the ratification of appointment of Statutory Auditors at every Annual General Meeting by the members has been dispensed with.

Secretarial Audit Report

Secretarial Audit has been carried out by L. K. & Associates, Practicing Company Secretaries and their report is annexed herewith (Annexure-7). There are no qualifications, reservations or adverse remarks.

Risk Management

The Company has a robust risk management system. The strategic risks are integrated with the business plan with mitigation measures. High impact operational and financial risks are reviewed by the management periodically and discussed at the Board quarterly.

Corporate Social Responsibility (CSR)

CSR Policy and the annual report on CSR activities are given in Annexure-3. The Company's policy on Corporate Social Responsibility is also available on the Company's website www.unitednilgiritea.com.

Besides supporting the orphanage and the public medical scheme administered by the Company in the area of rural development and tribal welfare, your Company has been associated with United Nilgiri Conservative Society (UNCS). UNCS since its establishment in 2013 has built confidence and trust for people in Kotagiri and Ooty through its effort to achieve better standard of life through community development works.

Board Evaluation

The details are furnished in the Report on Corporate Governance which forms part of this report. The policy regarding performance evaluation of the Board of Directors and its Committees and Independent Directors is available on the Company's website www.unitednilgiritea.com.

Report on Corporate Governance

A Report on Corporate Governance forms part of this report. The Auditors certificate on Corporate Governance is enclosed as an Annexure.

Management Discussion and Analysis Report

Management Discussion and Analysis Report is given separately which forms part of this Report (Annexure-6).

Particulars of Employees

Particulars of employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure-4.

A statement showing the remuneration of employees who were in receipt of remuneration as prescribed under Rule 5(2) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report and will be provided to any member on a written request to the Company Secretary.

Awards and Distinctions

Chamraj and Korakundah estates have once again bagged four awards at the Golden Leaf India Awards held in Ahmedabad in April, 2019.

Environmental Protection

The Company has been certified by the Rain Forest Alliance and UTZ in the area of environmental protection. To ensure sustainability and environmental protection, your Company has undertaken planting of trees around 100 acres every year. This will ensure environmental protection and sustainable source of firewood to our factories.

Industrial Relations

Industrial relations have been cordial during the year.

Public Deposits

The Company has not accepted or renewed any public deposit during the year.

Vigil Mechanism

The Company has a vigil mechanism details of which can be accessed at the Company's website www.unitednilgiritea.com. No complaints have been received during the year under review.

Sexual Harassment of Women at Workplace

The Company's policy on Sexual Harassment of women employees can be accessed at the Company's website www.unitednilgiritea.com. An Internal Complaints Committee has been constituted to redress the grievances of women at workplace. No complaint was reported during the year under review.

Cost Records

The Company maintains cost records for its products in the books of accounts as per the requirement of Section 148(1) of the Companies Act, 2013 read with Companies (Cost records and audit) Rules, 2014.

Others

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's future operations.

Acknowledgement

The Board of Directors acknowledges the support received from the promoters, shareholders, bankers, suppliers, customers and employees at all levels.

ANNEXURE 1

A. Conservation of Energy

B. Technology Absorption

C. Foreign Exchange Earnings and Outgo

ANNEXURE 2 AOC-2

[Pursuant to Clause (h) of sub-section(S) of Section 134 of the Companies Act, 2013, and Rule 8(2) of the Companies (Accounts) Rules, 2014]

Particulars of contracts/arrangements made with related parties

This form pertains to the disclosure of particulars of contracts / arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013, including certain arm's length transactions under third proviso thereto.

Details of contracts or arrangements or transactions not at arm's length basis

There were no contracts or arrangements or transactions entered into during the year ended March 31, 2019, which were not at arm's length basis.

Details of contracts or arrangements or transactions at arm's length basis

The details of contracts or arrangements or transactions at arm's length basis for the year ended March 31, 2019 are as follows:

ANNEXURE 3

REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR)

1. CSR Policy Objectives

The Company adopts the following objectives as part of its Corporate Social Responsibility:

(a) Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently-abled;

(b) Healthcare and livelihood enhancement projects;

(c) Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;

(d) Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro-forestry, conservation of natural resources and maintaining quality of soil, air and water;

(e) Training to promote rural sports, nationally recognized sports, paralympic sports and Olympic sports;

(f) Contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women;

(g) Rural Development Projects and Tribal Welfare.

The Company's CSR Policy is uploaded on the website of the Company www.unitednilgiritea.com

2. Composition of CSR Committee

6. Reasons for not spending :

The CSR Committee has approved CSR Projects for promoting social sector and rural development and tribal welfare that are under implementation. Therefore, the amount will be spent in the coming year 2019-20.

7. Responsibility Statement by CSR Committee :

The CSR Committee confirms that the implementation and monitoring of CSR Policy is in compliance with CSR objectives and Policy of the Company.

(c) Manner in which the amount spent during the financial year is detailed below:

ANNEXURE 4

PAYMENT OF REMUNERATION TO DIRECTORS AND KEY MANAGERIAL PERSONNEL

(Pursuant to Section 197 (12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014)

Particulars of Employees:

(i) The ratio of remuneration of each Whole-time Director to the median remuneration of the employees of the Company for the financial year:

(ii) Percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

The two whole-time Directors were given 11.06% increase for the year. The Chief Financial Officer was given an increase of 18.98% for the year. There was no increase in the remuneration to the Company Secretary during the year.

(Mi) Percentage increase in the median remuneration of employees in the financial year:

Percentage increase in the median remuneration of employees in the financial year is 7%. (iv) Number of permanent employees on the rolls of the Company:

Number of permanent employees on the rolls of the Company as on 31st March, 2019 is 1030.

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average percentage increase in the salaries of workmen, staff and managers was 11.32%. Two Whole-time Directors were given an increase of 11.06% for the year. (vi) Affirmation that remuneration is as per the Remuneration Policy of the Company:

It is affirmed that the remuneration is paid as per the remuneration policy of the Company.

(vii) Employed throughout the year and was in receipt of remuneration not less than Rupees One Crore and two lakhs per annum:

There were no employees who were in receipt of remuneration exceeding Rupees One Crore and two lakhs per annum.

(viii) Employed for part of the year and was in receipt of remuneration not less than Rupees Eight Lakhs fifty thousand per month:

There were no employees who were in receipt of remuneration exceeding Rupees Eight Lakhs fifty thousand per month.

(ix) Employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company:

There were no employees who were in receipt of remuneration at a rate which in aggregate is in excess of remuneration drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company.

ANNEXURE 5

EXTRACT OF ANNUAL RETURN IN FORM No. MGT - 9

[Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014]

REGISTRATION AND OTHER DETAILS:

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

* Associate upto 30th April 2018.

(IV) SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

(i) Category wise shareholding

(IV) SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

(ii) Shareholding of Promoters and Promoter Group

(iii) Change in Promoters' shareholding (please specify, if there is no change)

(iv) Shareholding Pattern of top 10 shareholders (other than directors, promoters and holders of GDRs and ADRs)

(v) Shareholding of Directors and Key Managerial Personnel

(VI) INDEBTEDNESS

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

(VII) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

(A) Remuneration to Whole-time Directors

B. Remuneration to other Directors

C. Remuneration to Key Managerial Personnel other than MD / Manager / Whole-time Director

(VIM) Penalties, Punishment / Compounding of Offences

PROGRESS REPORT AND CROP HARVESTED

*Subject to confirmation of Re.1/- per share (10%) interim dividend paid already and approval of Rs. 1.70 per share (17%) final dividend by the members at the Annual General Meeting.

AREA OF ESTATES ARE AS FOLLOWS (Approximately in Hectares)