Mcleod Russel India Ltd

For the year ended 31st March 2024

Your Directors have pleasure in presenting the Twenty-Sixth Annual Report with the Audited Financial Statements of your Company, for the financial year ended 31st March 2024.

REVIEW OF PERFORMANCE

The financial results of the Company for the year ended 31stMarch 2024aresummarized below:

(Rs. in Lakhs)

FINANCIAL PERFORMANCE

The operational turnover of the Company was lower at Rs. 92,342 lakhs against Rs. 1,09,670 lakhs in the last year, due to lower production. Loss before exceptional items and Tax was Rs. 30,451 lakhs against Rs. 16,079 lakhs for the last year. The higher loss was mainly due to lower operational turnover (as above) and also due to increase in wage rate and other inputs.

The Company's financial position has continued to be under stress. The Debt Resolution process of the company was initiated in earlier years. Inter-Creditor Agreement for arriving at and implementing the resolution plan was signed by all the lenders ('bankers'). Further, the forensic audit for utilisation of funds borrowed in the past conducted on behest of the lenders, Techno Economic Viability (TEV), Valuation of tea estates and other assets and credit rating for draft Resolution Plan were completed. Meanwhile, certain lender banks and creditor have filed petitions under Insolvency and Bankruptcy Code, 2016 ('IBC') with Hon'ble National Company Law Tribunal, Kolkata ('NCLT') which are pending as on date. Pending these, offer for One Time settlement of loans including interest thereon was made at the behest of the lenders by the company, the validity period of which in absence of consensus among certain lenders has expired on 30th September, 2023. Consequent to this, the company on the request of the lenders has submitted a fresh resolution plan in the month of January 2024 and reports on the company's valuation carried out by two Independent Valuers appointed by the lenders have been submitted to them. The lenders are considering the proposals including that submitted by the company with respect to the borrowings from them and necessary communication conveying their decision on the matter is awaited. The management is confident that the lenders will arrive at a suitable resolution with respect to the company's borrowings from them so as to facilitate in arriving at a sustainable amount in this respect along with related costs thereto and the period over which these are repayable. Considering the lenders' support in restructuring the debt as above and resultant rationalisation of cost and period of repayment of the company's borrowing along with management's continuous effort for rationalising operational costs as well and additional fund to be made available in the system or otherwise and other ameliorative measures taken and/or proposed to be taken in due course of time, it is envisaged that the company will be able to generate sufficient cashflows to meet its obligations and strengthen its financial position over a period oftime.

SHARE CAPITAL

The Authorised Share Capital of the Company is Rs. 60,00,00,000/- divided into 12,00,00,000 equity shares of Rs. 5/- each and the Issued, Subscribed and Paid up share capital oftheCompanyis Rs.52,22,79,000/-divided into 10,44,55,735 equityshares of Rs. 5/- each.

During the year, the Company did not issue any shares with differential rights or convertible securities. The Company does not have any scheme forthe issue ofshares, including sweat equity to the employees or directors of the Company. The Company does not have a scheme for the purchase of its shares by employees or by trustees for the benefit of employees. The company securities have been suspended from trading on The Calcutta Stock Exchange Limited and the Company is in process of revocation for the same.

There was no change in the capital structure of the Company during the period under review.

RECLASSIFICATION OF PROMOTER AND PROMOTER GROUP

As mentioned in the report of previous year, the Company at the request of Eveready Industries India Limited ('EIIL'), falling under Promoter and Promoter Group Category had applied for reclassification of EIIL from 'Promoter and Promoter Group' category to 'Public Shareholder' category.

During the year under review, the BSE Limited has considered and approved the said application and the same is reflecting in the BSE Listing portal. However, approval from National Stock Exchange Limited is awaiting.

TRANSFER TO GENERAL RESERVE

The Board has decided not to transfer any amount to the General Reserve for the year ended 31st March 2024 because of loss sustained. DIVIDEND

In view of the loss sustained by the Company during the year under review, the Board decided to not recommend any dividend for the year ended 31st March 2024.

REVIEW OF OPERATIONS

During the Financial year under review, weather was very unpredictable and kept fluctuating between extreme heat and continuous rainfall at times. From end of October 2023 upto March 2024, endured prolonged phase of dry weather affecting production of March 2024. The saleable production ofyour Company was 391.94 Lakh Kgs tea, as compared to 414.29 Lakh Kgs in the previous year.

With controlled plucking activity resulted in a better quality of teas produced during the financial year. "Integrated Pest Management" practice continued as per past practice and was very effective resulting in improved pest control and reduced cost. However with inclement weather there was considerable build up in pest activity through the year. A high standard of Clonal Tea nurseries continued to be established on all estates. A healthy standard of Shade Nurseries was grown providing adequate saplings required for shade infilling and interlining. The Afforestation program continues to be enhanced along with creation of new water-bodies, to improve the "micro-climate", in select areas. This has become essential to counter the effects of climate change. Alternate cropping of melia dubia and agarwood has established satisfactorily.

It has always been Your Company's endeavor to produce Quality teas, which continued to command a premium, both in the domestic and international markets. Factory infrastructure and machinery continued to be enhanced upon.

The Company has thirty-one ISO 22000:2018 certified Factories. Your Company has twenty nine estates certified under "Rainforest Alliance." Also all the thirty one estates and factories of Assam are certified under the "Trustea" certification.

Your Company also participates in the Ethical Tea Partnership forum for international buyers and producers to promote sustainable practices jointly. Due to such initiatives we have set up 'Community Development Forums' on some of our estates, to enable welfare schemes mandated by the Government to reach our communities as well as bring about better awareness and improve the livelihood of our workers and their families.

We have also over the last few years, engaged with various organisations including UN Women, IDH, Dharmalife, GAIN, BSR, Mercy Corps, ZvdZ Foundation, ETP and ITA to build awareness and provide responsible services among all levels of our employees, particularly women. Programmes such as 'Preventing Violence Against Women and Girls', 'Women's Safety Accelerator Fund', 'Work and Opportunities for Women', 'Global Alliance for Improved Nutrition', 'Project Sanitation', Child Protection etc. now cover twenty-nine of our Estates in Assam and have proven to be most successful at building social awareness amongst women and children.

The Company performed well in the domestic and overseas markets and achieved a sales turnover of Rs. 90,509.70 Lakhs. Favorable feedback was received from all buyers both in terms of quality and deliveries. Your Company continues to be the leading producer-exporter of tea with shipments to nine countries worldwide at an FOB value of Rs. 19,795.86 Lakhs.

CORPORATE INSOLVENCY RESOLUTION PROCESS ("CIRP")

As informed earlier, the Companywas underCorporate Insolvency Resolution Process ("CIRP") pursuantto orderdated 10th February, 2023, passed by Hon'ble National Company LawTribunal, Kolkata Bench, Court II, Kolkata ("NCLT") and the Hon'ble NCLT had appointed Mr. Ritesh Prakash Adatiya, having registration number IBBI/IPA-001/IP-P01334/2018-2019/12013, as Interim Resolution Professional ('IRP') to perform the functions as mentioned under the Insolvency and Bankruptcy Code, 2016 (the Code) and the related rules and regulations issued thereunder. The powers of the Board of Directors was suspended and such powers had been vested with the IRP and had since taken control of the management of the Company.

Further, the Hon'ble National Company Law Appellate Tribunal, New Delhi Bench, New Delhi ("NCLAT") vide its Order dated 15th May, 2023, has closed the CIRP initiated vide order dated 10th February 2023 and has set aside the said order. The suspension of the Board of Directors of the Company had been revoked and the Company was set free of the restrictions of the CIRP and the IRP was also relieved from his functions.

All the necessary Compliances under various Rules and Regulations as required to be discharged by the Board of Directors during the CIRP period was complied by the IRP appointed by the Hon'ble NCLT due to suspension of the Board of Directors of the Company.

Further, applications filed by State Bank of India, Shah Brothers, PDK Impex Pvt. Ltd. and IndusInd Bank Limited before NCLT, Kolkata for initiating CIRP under the Code are still pending and are being contested by the Company. Subsequent to the closure of financial year, applications before NCLT, Kolkata for initiating CIRP under the Code has been filed by HDFC Bank Limited and Indian Bank, which are being contested by the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of requirements of Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), a Management Discussion and Analysis Report is attached as Annexure -1 forming part of this Report.

REPORT ON CORPORATE GOVERNANCE

In terms of requirements of Regulation 34(3) of the Listing Regulations, a Report on Corporate Governance together with the Auditors' Certificate regarding Compliance ofConditions ofCorporate Governance are attached as Annexure II and Annexure III respectively, forming part ofthis Report.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The Company had one wholly owned subsidiary namely, Borelli Tea Holdings Limited, U.K. (Borelli) and four step down Subsidiaries at the beginning of the year under review. However, during the year, a stepdown subsidiary Phu Ben Tea Company Limited was disposed of as explained hereunder.

Borelli is inter alia engaged in the business of investing funds in various companies engaged in tea production, blending and marketing activities and as on31st March 2024, Borelli had the following Subsidiaries in different countries:-

(i) McLeod Russel Uganda Limited - controlling stake of Borelli being 100%

(ii) McLeod Russel Middle East DMCC, UAE - controlling stake of Borelli being 100%

(iii) McLeod Russel Africa Limited, Kenya - controlling Stake of Borelli being 100%

(iv) Phu Ben Tea Company Limited, Vietnam - controlling stake of Borelli being 100% (till 1st November 2023)

PHU BEN TEA COMPANY LIMITED, VIETNAM (PBT)

During the calendar year 2023, PBT's operations ofcultivation and manufacture oftea were totally closed. In view of the continuous losses over the past few years, the management had decided to close down the operations. The Company was running only for the purpose of selling old stock of teas. Borelli received accounts from PBT upto 30th June 2023 only, and thereafter did not receive any accounts.

Simultaneously negotiations were going on with many prospective buyers for sale of the Company as a whole. Ultimately it was decided to sell the Company to TLK Agriculture Joint Stock Company Ltd (TLK) at a consideration of USD 2150000. The consideration was discharged by TLK on 1st November 2023 ('Transfer date') and was kept deposited in Escrow account pending regulatory clearances and completion oftransferformalities.

In earlier years, Borelli had pledged its 100% holding in PBT in favour of Yes Bank Limited (India) from whom Borelli's holding Company McLeod Russel India Limited had taken loans. Subsequently, Yes Bank Ltd had sold its exposure to J.C. Flowers Asset Reconstruction Private Limited (India) (JCF). Subsequent to the closure of the financial year ended 31st March 2024, Borelli had received the sale-consideration from the above mentioned Escrow account, and simultaneously, the amount was paid to JCF.

The performances of the Subsidiaries are summarised below for your information. As required under Section 129(3) of the Companies Act, 2013 and Regulation 33 and 34(2)(b) of the Listing Regulations, Consolidated Profit & Loss Statement of the Company and its subsidiaries and the Consolidated Balance Sheet of the Company and its subsidiaries prepared in accordance with the Indian Accounting Standards prescribed under Section 133 of the Companies Act 2013 read with the Companies (Indian Accounting Standard) Rules 2015 as amended ("Ind AS") are appended in the Annual Report. Investments made in D1 Williamson Magor Bio Fuel Limited, an Associate Company, have been fully provided for in the Accounts of the earlier years and as such the Financial Statements of the said Company have not been considered for consolidation.

A statement containing the salient features of the financial statements of the Company's Subsidiaries and the Associate Company pursuant to the first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 prepared in Form AOC-1 is attached to the financial statements oftheCompanyforyour information.

In terms of Regulation 34(2)(a) of the Listing Regulations, Statements on impact ofAudit Qualifications as stipulated in Regulation 33(3)(d) of the Listing Regulations are appended in the Annual Report.

Although the Company does not have any material subsidiary still the Company has formulated a Policy for determining "Material Subsidiary" and the same is disclosed on the website of the Company and can be accessed at: http://www.mcleodrussel.com/ investors/policies.aspx

The performance of Borelli Tea Holdings Limited and its subsidiaries (excluding PBT as mentioned above) during the year were as follows:

BORELLI TEA HOLDINGS LIMITED

At the close of the financial year, Borelli Tea Holdings Limited ("Borelli") has investments in its subsidiaries in Uganda, Dubai and Kenya. During the year under review, Borelli has a loss after tax GBP 70136 as compared to previous year (2022-23) loss of GBP 17464728. In the previous year (2022-23), the loss was mainly due to full provision made against investment in Phu Ben Tea Company Limited.

McLEOD RUSSEL UGANDA LIMITED (MRUL)

MRUL is a fully owned subsidiary of Borelli Tea Holdings Limited. It prepares its accounts on calendar year basis. During the calendar year 2023, the Company's total comprehensive Loss was USD 3.378 Million as against total comprehensive Income of USD 1.766 Million in year 2022. During the year, the company was able to maintain its creditability with banks by paying back their dues but few of the other creditors were not paid their dues. For the calendar year 2023, depreciation was USD 1.331 million and finance cost was USD 1.793 million; EBIDTA was negative by USD 1.779 million.

Manufacture, Sales, Selling Price and Closing Stock

During the calendaryear 2023, MRUL manufactured 19.436 million kgs oftea (2022 - 19.655 million kgs). During theyear2023, MRUL sold 19.851 million kgs tea (2022 - 20.236 million kg). Average selling price per kg during 2023 was USD 0.95 (2022 - USD 1.31). Closing Stock oftea as at31st December2023 was 2.73 million kg (31st December2022 - 3.18 million kg).

Outlook

In the year 2023, despite an increase in production in estates for the year 2023 compared to 2022, there was a decline in bought-leaf production by 17.2%.The year 2023 saw more rainfall across all estates than the year 2022. Due to the increase in rainfall during the calendar year 2023, all estates experienced a corresponding increase in their crop, with an overall average yield of 3.261 kg tea per Hectare in 2023 compared to the average yield of 2,904 in 2022.

Auction tea prices during calendar year 2023 were very low compared to 2022 and this has affected overall operations on the estates. The low prices were due to non-availability of USD in tea buying nations such as Egypt, Pakistan, Sudan, etc.This has resulted into poor performance and operations were at a loss all through.

FSMS (ISO 22000:2018) Certificate was renewed and is valid until 30th August 2026. Rainforest Alliance Group certificate was renewed till 20th June 2026 subject to annual surveillance audits every year.

MCLEOD RUSSEL MIDDLE EAST - DMCC (MRME)

MRME is a fully owned subsidiary of Borelli Tea Holdings Limited. It prepares its accounts calendar year wise. During the calendar year 2023, the Company's total comprehensive Income is USD 97,593 as against total comprehensive Income of USD 44,735 in year 2022.

Purchase, Sales, Gross Profit and Closing Stock

During the year 2023, MRME purchased 673,530 kgs oftea (2022 - 861,149 kgs). During the year 2023 MRME sold 644,270 kgs tea (2022 - 856,771 kgs).Gross profitfortheyear2023was 19.81% (2022 -10.55%). Closing stockoftea as at31st December2023was 119,377 kgs (31st December 2022 - 89,578 kgs).

Outlook

Business progressed steadily in 2023 with all customers. All the customers have expressed satisfaction on their deliveries and assured of repeat and increased business in the coming year. MRME also started shipments to Iran market through a local customer. Growth of the business continued to be hampered by the lack offinances available for MRME's trading activities.

Year 2024 is expected to bring further growth in MRME's business and profitability. Higher sales volumes are expected from all sales verticals. MRME is trying to secure local financing for their trading activities to take on larger volumes.

McLEOD RUSSEL AFRICA LIMITED, KENYA (MRAL)

MRAL is a fully owned subsidiary of Borelli Tea Holdings Limited. It prepares its accounts calendar year wise. During the calendar year 2023, the Company's total comprehensive income is USD 109,335 as against total comprehensive income of USD 56,342 in year 2022.

Purchase, Sales, Gross Profit and Closing Stock

During the year 2023, MRAL purchased 3.64 million kgs of tea (2022 - 1.77 million kgs). During the year 2023 MRAL sold 3.62 million kgs tea (2022 -1.65 million kgs). Gross profit for the year 2023 was 10.9% (2022 - 8.7%). Closing stock oftea as at 31st December 2023 was 229,114 kgs (31st December 2022 - 207,992 kgs).

Outlook

The economic challenges and inflationary tendencies persisted in the key markets during the year 2023. This was worsened by a severe shortage of Forex in Egypt and Pakistan. Despite the challenges, MRAL performed better than the previous year, in the face of limited cash flows and strong competition from other traders offering credit facilities. During the year, MRAL was forced to limit trading with Pakistan traders as their ability to pay continued to shrink.

Ukraine and Poland customers offered very good support with large increases in order for both CTC and Orthodox teas. Trade with Egypt also improved as MRAL increased the number of clients to the destination. However, competition to the destination remains fierce as other traders offer credit facilities. Saudi Arabia clients also made repeat orders at competitive rates. The year also saw MRAL moving good volume to Afghanistan on blend basis. Other destinations that also did meaningful business with MRAL included Kazakhstan, UAE, Spain and USA, with very valuable orders with good margins.

In the local economic environment, MRAL faced several challenges, including a sharply devalued Kenyan Shilling, which resulted in an increased in Forex losses for the period. Price fluctuations at the Mombasa auction also impacted MRAL as MRAL with limited working- capital was unable to effectively take advantage of lower prices in the market.

Looking ahead, with a customer focused approach a sound marketing mechanism and efficient service delivery, MRAL remains optimistic of maintaining the business tempo already established. Plans are in process to develop new markets and to grow the business with existing customers in Europe.

CORPORATE SOCIAL RESPONSIBILITY

The philosophy of your Company towards fair governance going hand-in hand with social responsibilities is deeply embedded in its day to day working. The Company has, over the years, successfully formulated a methodology aimed towards improving the life of the people and the environment, which surround the units of the Company and thereby enriching the society.

In terms of Section 135(5) of the Companies Act, 2013, certain class of companies are required to spend at least 2% of Average Net Profits made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy. Although your Company did not have Average Net Profit during the above period computed in terms of Section 198 of the Act, still like earlier years, it continued with its welfare activities for development in the field of education, culture and other welfare measures to improve the general standard of living in and around the Tea Estates of the Company and other areas where it operates.

The Company has a CSR Committee and has adopted a CSR Policy which can be accessed at http://www.mcleodrussel.com/ investors/policies.aspx.TheCorporate Social ResponsibilityCommittee of the Board as on 31st March, 2024 comprised ofMr. Aditya Khaitan, Executive Director, Mr. Sanjay Ginodia and Ms. Rupanjana De, Independent Directors. Mr. Aditya Khaitan acts as the Chairperson of the Committee. A report on Corporate Social Responsibility (CSR) is attached as Annexure VIII.

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Board of Directors of the Company has adopted a Dividend Distribution Policy. There has been no change in this policy during the year under review. This policy is also available on the website of the Company and can be accessed at the weblink https://www.mcleodrussel.com/investors/policies.aspx

DIRECTORS AND OFFICERS LIABILITY INSURANCE POLICY

The Company has a Directors and Officers Liability Insurance Policy which protects Directors and Officers of the Company for any breach offiduciaryduty.

DIRECTORS' RESPONSIBILITY STATEMENT

The Board acknowledges the responsibility for ensuring compliance with the provisions of Section 134(3) (c) read with Section 134(5) of the Companies Act, 2013 for the year ended 31st March 2024 and state that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed with no material departure.

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls were operating effectively and subject to continuous improvement.

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company as on 31st March 2024 comprised of 6(six) Directors of whom 4(four) were Independent Directors including one Woman Director. In the opinion of the Board, all the Directors possess the requisite qualifications, experience and expertise and hold high standards ofintegrity.

CHANGE IN DIRECTORATE

During the period under review and as mentioned earlier, the Board of Directors of the Company at its meeting held on 17th May 2023, subsequent to withdrawal of Corporate Insolvency Resolution Process (CIRP), had approved the appointment of Mr. Aditya Khaitan as the Chairman and Managing Director of the Company for a period of three years commencing from 17th May 2023 to 16th May 2026 (both days inclusive). The said appointment was subject to approval of the Shareholders and such other necessary approvals as may be required in terms of Section 196 read with Schedule V of the Companies Act, 2013.The Shareholders through Postal Ballot by way of remote e-voting had approved the said appointment on 14th August 2023.

Subsequent to the closure of financial year, the tenure of Mr. Suman Bhowmik and Mr.Raj Vardhan as Non - Executive Independent Directors of the Company expired on 18th July 2024.

The Board places on record its appreciation for the valuable services and cooperation rendered by Mr. Suman Bhowmik and Mr. Raj Vardhan during their tenure as Directors and Member/Chairperson of the Committees.

Further, subsequent to the closure of financial year, the Board based on the recommendation of the Nomination and Remuneration Committee of the Company, approved the appointment of Mr. Amar Nath Dhar (DIN: 10711585) and Mr. Indrajit Sengupta (DIN: 00167910) as an Additional Director (Non - Executive Independent) for a period of three consecutive years commencing from 18th July 2024 to 17th July 2027 (both days inclusive) subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM).

Particulars relating to appointment of Mr. Amar Nath Dhar and Mr. Indrajit Sengupta as stipulated under Secretarial Standard-2 and Regulation 36 of the Listing Regulation is appended as Annexure to the notice of the ensuing AGM.

RETIREMENT BY ROTATION AND SUBSEQUENT REAPPOINTMENT

In accordance with the provisions of the Articles of Association of the Company read with Section 152 of the Companies Act, 2013, Mr. Amritanshu Khaitan will retire by rotation at the forthcoming Annual General Meeting and being eligible has offered his candidature for re-appointment.

As per provisions of the Act, the Independent Directors are not liable to retire by rotation.

Brief resume, nature of expertise, disclosure of relationship between directors inter-se, details ofdirectorships and committee membership held in other companies of Mr. Amritanshu Khaitan proposed to be re-appointed, along with his shareholding in the Company, as stipulated under Secretarial Standard-2 and Regulation 36 of the Listing Regulations, is appended as an Annexure to the Notice of the ensuing AGM.

KEY MANAGERIAL PERSONNEL

During the year, the Company had 3(Three) Key Managerial Personnel, being Mr. Aditya Khaitan, Chairman and Managing Director, Mr. Pradip Bhar, Chief Financial Officer and Mr. Alok Kumar Samant, Company Secretary.

DECLARATION FROM INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board, that they meet the criteria as stipulated in Section 149(6) of the Companies Act, 2013.

In the opinion of the Board, all Independent Directors possess requisite qualifications, experience, expertise and hold high standards of integrity required to discharge their duties with an objective independent judgment and without any external influence. List of key skills, expertise and core competencies of the Board, including the Independent Directors, forms a part of the Corporate Governance Report of this Integrated Annual Report.

In terms ofSection 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification ofDirectors) Rules, 2014, as amended, the names of all the Independent Directors of the Company have been included in the data bank maintained by the Indian Institute ofCorporate Affairs.

A certificate of Non-Disqualification of Directors furnished by M/s. A.K. Labh & Co., Company Secretaries as required under Regulation 34(3) read with Schedule V Para C sub-clause 10(i) of SEBI (LODR) Regulations, 2015 is attached as Annexure IX.

MEETINGS OF THE BOARD, BOARD EVALUATION AND FAMILIARISATION PROGRAMME& VIGIL MECHANISM

The Board met seven times during the year on 17th May 2023,30th May 2023,10th July 2023,28th July 2023 which was adjourned to 4th August 2023,14th August 2023,14th November2023 and 13th February 2024. The intervening gap between anytwo Board Meetingswas within the period prescribed by the Companies Act, 2013.

During the period under review, as intimated earlier, the Company was undergoing through the process of Corporate Insolvency Resolution Process from 10th February 2023 till 15th May 2023. One (1) meeting was held on 3rd May 2023 under the Chairmanship of the Interim Resolution Professional (IRP) with Key Managerial Personnel in lieu of Board Meeting.

The details of meetings held and Director's attendance, familiarisation programme and Annual Board Evaluation process for Directors, policy on Director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Director and also remuneration for Key Managerial Personnel and other employees, composition of Audit Committee, establishment of Vigil Mechanism for Directors and employees, form a part of the Corporate Governance Report ofthis Integrated Annual Report.

The Securities and Exchange Board of India (SEBI) vide its circular No. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5th January 2017 had issued a guidance note on Board Evaluation which inter alia contains indicative criterion for evaluation of the Board of Directors, its Committees and the individual members of the Board.

The Nomination & Remuneration Committee of the Board of Directors had laid down the criteria forevaluation of the performance of the Board as a whole, the Directors individually as well as the evaluation of the working of the Audit, Nomination & Remuneration, Stakeholders Relationship and Corporate Social Responsibility Committees of the Board. Annual Performance Evaluations as required have been carried out. The statement indicating the manner in which formal annual evaluation of the Directors (including Independent Directors), the Board and Board level Committees is given in the Corporate Governance Report, which forms a part of this Annual Report.

The Company has adopted a Familiarization Programme for Independent Directors and the same is disclosed on the website of the Company and can be accessed at http://www.mcleodrussel. com/investors/policies.aspx.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

In terms of requirement of Schedule IV to the Companies Act, 2013, the Independent Directors had a separate meeting on 12th February 2024 without the attendance of non-independent Directors and members of management. All Independent Directors were present at the said meeting. The activities prescribed in paragraph VII of Schedule IV to the Act were carried out at the said meeting.

COMMITTEES

As on31st March, 2024, the Board has 4 statutory Committees: Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. During the year, all recommendations of the Committees of the Board which were mandatorily required have been accepted by the Board. A detailed note on the composition of the Board and its Committees, meetings held during the year and its terms of reference is provided in the Corporate Governance Report forming part ofthis Integrated Annual Report. The composition and terms of reference of all the Committees of the Board of Directors of the Company is inline with the provisions of the Act and the Listing Regulations.

LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The particulars of loans, guarantee or investment made under Section 186 of the Companies Act, 2013 are furnished in the Note 50 to the Financial Statements for the year ended 31st March 2024.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The Related Party Transactions entered into by the Company during the year under review were on arm's length basis and in the ordinary course of business. There was no contract, arrangement or transaction with Related Parties which could be considered as material and which may have a potential conflict with the interest of the Company. Accordingly, the disclosure required u/s 134(3)(h) of the Act in Form AOC-2 is not applicable to your Company. The Company has formulated a Related Party Transaction Policy and the same is disclosed on the website of the Companyand can be accessed at http://www.mcleodrussel.com/investors/policies.aspx.

POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION AND OTHER DETAILS

In pursuance of the provisions of Section 178 of the Companies Act, 2013 and Listing Regulations, the Company has formulated a Remuneration Policy. There has been no change in this policy during the year under review and a copy of the said Policy is annexed as Annexure IV and is also available at the website of the Company at the web link http://www.mcleodrussel.com/investors/policies.aspx

The Remuneration Policy, inter-alia, includes the appointment criterion & qualification requirements, process for appointment & removal, retirement policy and remuneration structure & components, etc. of the Directors, Key Managerial Personnel (KMP) and other senior management personnel of the Company. As per the Remuneration Policy, a person proposed to be appointed as Director, KMP or other senior management personnel should be a person of integrity with high level of ethical standards. In case of appointment as an Independent Director, the person should fulfil the criteria of independence prescribed under the Companies Act, 2013and rules framed thereunder and the Listing Regulations. The Remuneration Policy also contains provisions about the payment of fixed & variable components of remuneration to the Whole-time Director and payment of sitting fee & commission to the Non-Executive Directors.

DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

SIGNIFICANTAND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the year under review and as mentioned elsewhere in the report, Hon'ble National Company Law Appellate Tribunal vide its order dated 15th May 2023 had closed the Corporate Insolvency Resolution Process ("CIRP") initiated pursuant to order dated 10th February, 2023, passed by Hon'ble National Company LawTribunal, Kolkata Bench, Court II, Kolkata ("NCLT") and had set aside the said Order.

The company had given undertaking to IL&FS Infrastructure Debt Fund ('ILFS-IDF') and Aditya Birla Finance Limited ('ABFL') in connection with borrowings and other facilities availed by the group entities. Pursuant to the Settlement agreement, Terms of Settlement and Consent Term entered with ILFS-IDF and ABFL respectively to amicably resolve the disputes, and the claim made by them have been settled by a group entity. The company's obligations in this respect and related terms and conditions thereof and consequential impact, if any, in this respect have presently not been determined.

In the matter of Shah Brothers, application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, the Hon'ble National Company LawTribunal, Kolkata Bench, Court II, Kolkata ("NCLT") vide its Order dated 8th November 2023 had passed an ad-interim order of injunction by which, inter alia, the Company has been restrained from selling any assets of the Company.

Further, The Hon'ble High Court of Delhi at New Delhi vide its ex-parte, interim order in O.M.P.(I) (COMM.) 459/2019 in KKR India Financial Services Limited & Anr. Vs. Williamson Magor & Co. Limited & Ors., has, inter-alia, restrained the Company from selling, transferring, alienating, disposing, assigning, dealing or encumbering or creating third party rights on their assets.

Members' attention is also invited to Notes on Contingent Liabilities, in the notes forming part of the Financial Statements.

MATERIAL CHANGES AFTER END OF THE FINANCIAL YEAR

Except as disclosed elsewhere in the report, no other material changes and commitments which could affect the financial position of the Company have occurred between the end of the lastfinancial year and the date ofthis Annual Report.

ONE TIME SETTLEMENT WITH BANKS AND FINANCIAL INSTITUTIONS

During the year under review, the Company has not entered into any One Time Settlement with Banks and Financial Institutions, hence, the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Financial statements (i.e. Balance Sheet, Profit & Loss Statement and Cash Flow Statement, together with notes) are prepared through the process which has automated as well as manual controls to ensure accuracy of recording all transactions which have taken place during any accounting period, and the resultant financial position at period end. All data pertaining to payroll, purchases, agricultural activities, plucking, manufacturing, dispatch, selling and other activities are recorded through ERP systems operating in tea estates as well as head office. All data/ transactions entered in systems are checked by various functional personnel on the basis of supporting documents & records, then the accounting entries are checked by accounts personnel and finally those are validated by managerial personnel.

At periodic intervals, the accounting data are compiled, and financial statements are prepared. While preparing the financial statements, it is ensured that all transactions pertaining to the accounting period are recorded. Fixed assets, stock oftea, all significant items of stores and monetary assets are physically verified. Balance confirmations are obtained for all significant items of trade receivable and advances.

After preparation of the financial statements, all items appearing in the statements are analysed in order to ensure overall reasonableness.

The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of fraud and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.

CEO AND CFO CERTIFICATION

In terms of Part B of Schedule II of Listing Regulations, the CEO/MD and the CFO of the Company certify to the Board regarding review of the financial statements, compliance with the accounting standards, maintenance of internal control systems for financial reporting and accounting policies, etc.

HEALTH, SAFETYAND WORKING ENVIRONMENT

The Company considers its people as one of the most valuable resources and recognises that safe and healthy working environment motivate employees to be more productive and innovative. The Company takes adequate measures to keep its field and factories safe inall respects. Regular training is imparted to the employees for promoting awareness on safety and skill enhancement. The Company runs a hospital in each of its Tea Estates where the employees of the concerned Estate get regular medical attention. In addition, the Company has set up a few central hospitals which are equipped with modern medical instruments. These hospitals are accessible to the employees of the surrounding areas. The Company also provides facilities for sporting and cultural activities for the employees in the Tea Estates.

ANNUAL SECRETARIAL COMPLIANCE REPORT

The Company has undertaken an Audit of all the applicable compliances as per the SEBI Regulations and Circulars/Guidelines issued thereunder.

The Annual Secretarial Compliance Report issued by a Practising Company Secretary (PCS) has been submitted to the Stock Exchanges within the stipulated time as mentioned in SEBI Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/109 dated June 25, 2020 and the same is available on the website of the Company.

ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2024 pursuant to the provisions of Section 92 of the Companies Act, 2013 is available on the Company's website and can be accessed at https://www.mcleodrussel.com/investors/annual-return.aspx

AUDITORS AND AUDIT REPORT

In terms of Section 139 of the Companies Act, 2013, M/s. Lodha & Co., Chartered Accountants (Firm Registration No. 301051E) was appointed as the Statutory Auditors of the Company to hold office for a term of 5 (five) consecutive years from the conclusion of 21st Annual General Meeting (AGM) till the conclusion of the 26th AGM. M/s. Lodha & Co. has conducted audit for the Financial Year ended 31st March 2024 and furnished their report.

Subsequent to the closure of financial year, based on the recommendation of the Audit Committee, the Board at its meeting held on 14th August 2024 has approved the re-appointment of M/s Lodha & Co. LLP, Chartered Accountants (Firm Registration No. 301051E/ E300284) as the Statutory Auditors of the Company for another term of five consecutive years and to hold office from the conclusion of the ensuing 26th AGM till the conclusion of the 31st AGM to be held in the year 2029 subject to approval of the shareholders in the general meeting.

In their Report dated 30th May 2024, M/s. Lodha & Co. has given an adverse opinion in relation to the Standalone and Consolidated Financial Statements oftheCompanyforthe Financial Yearended 31stMarch 2024. The Board's response in relationto thesaid opinion is as under:-

In their Report dated 30th May 2024, M/s. Lodha & Co. has given an adverse opinion in relation to the Standalone and Consolidated Financial Statements oftheCompanyforthe Financial Yearended 31stMarch 2024. The Board's response in relationto thesaid opinion is as under:-

SECRETARIAL AUDIT

In terms of the requirements of Section 204 of the Companies Act, 2013, the Secretarial Audit of the Company for the year ended 31st March 2024 was conducted by Messrs. A. K. Labh & Co., Company Secretaries. The Secretarial Auditors' Report is attached to this Report as Annexure V and forms part of the Directors' Report.

There is a qualification/reservation/adverse remarks made by the Secretarial Auditors in their Report and the response of the Company to thesame isas under:-

1. There were instances of contra-trade and trading during the Trading Window Closure period by two designated persons of the Company without obtaining any pre-clearance from the Compliance Officer of the Company.

The management has informed that, immediately after the violation came to the knowledge of the Company, Show Cause Notice was issued on 20th May 2024 to both the Ex Designated Persons. Based on the recommendation of the audit committee, the Board of Directors of the Company at its Meeting held on 30th May 2024 after considering several factors including their reply and loss incurred and keeping in view the code of the Company had imposed penalty of Rs.40,000 (Rupees Forty Thousand only) and Rs.20,000 (Rupees Twenty Thousand only) respectively for violation of Company's Insider Code. Both the Employees are no more associated with Company. The fine amount so received by the company from both ofthem has been remitted to SEBI for credit to the Investor Protection and Education Fund (IPEF) administered by SEBI.

COST AUDIT & COST RECORDS

In accordance with the requirements of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors of the Company has appointed the following firms of Cost Accountants to conduct audit of Cost Records maintained by the Company for the Tea Plantations of the Company for the year ending 31st March 2024;

(i) M/s Mani & Co. (ii) M/s SPK Associates (iii) M/s DGM & Associates.

Pursuant to the provisions of Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors is required to be ratified by the Members of the Company in a General Meeting. Accordingly, a resolution seeking Members ratification for remuneration payable to the Cost Auditors is included in the Notice of the ensuing Annual General Meeting (AGM).

The Cost Audit Report furnished by the Cost Auditors in respect of the year ended 31st March 2024 would be filed as stipulated in the applicable provisions of law. The Company is making and maintaining the accounts and cost records as specified by the Central Government under the provisions of Section 148(1) of the Act.

FRAUD REPORTING BY AUDITORS

During the year under review, no instances of fraud has been reported to the Audit Committee under Section 143(12) of the Companies Act, 2013 against the Company by its officers or employees, the details ofwhich would need to be mentioned in the Board's Report neither by the Statutory Auditors nor the Secretarial Auditors.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

A statement giving details of conservation of energy, technology absorption and foreign exchange earnings & outgo in accordance with Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is attached to this Report as Annexure VI.

RISKMANAGEMENT

The Company identifies various risks which the Company encounters with during the course of its business none of which in the opinion of the Board may threaten the very existence of the Company itself. The Company has taken adequate measures to mitigate various risks encountered by the Company. The Company has in place a risk management policy to mitigate these actual and potential risks both at tea estates and head office. The Board is actively considering a comprehensive review of the policy for further improvement.

PREVENTION OF INSIDER TRADING

Your Company has adopted a Code of Conduct for prevention of Insider Trading in compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015. All Directors, employees and other designated persons, who could have access to unpublished price sensitive information of the Company, are governed by this Code. The trading window for dealing with equity shares of the Company is duly closed during declaration of financial results and occurrence of any other material events as per the code. However, during the year under review and as mentioned elsewhere in the report, there were instances of contra-trade and trading during the Trading Window Closure period by two ex-designated persons of the Company without obtaining any pre-clearance from the Compliance Officer of the Company and subsequently the Board of Directors of the Company had imposed fine upon them for violation of Company's code and the same was deposited with IPEF administered by SEBI.

PARTICULARS OF EMPLOYEES

The ratio of the remuneration of each Director to the median employee's remuneration and other particulars or details of employees pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014are attached to this Report as Annexure VII.

EMPLOYEE RELATIONS

The Company's large work force continues to remain the backbone of its operations and their welfare has remained a prime area of focus. Upgradation and introduction of new housing facilities, water supply and sanitation, medical infrastructure etc. have been given priority.

INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

Your Company has constituted an Internal Complaints Committee, under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and has a policy and framework for employees to report sexual harassment cases at workplace. The Company's process ensures complete anonymity and confidentiality of information. Adequate workshops and awareness programmes against sexual harassment are conducted across the organization.

As per requirement of the POSH act, your Company follows calendar year for annual filling with statutory authority and as per the filing, there were no complaints related to sexual harassment raised in the calendar year 2023.

COMPLIANCE WITH SECRETARIAL STANDARDS

Your Company complies with all applicable Secretarial Standards as issued by the Institute of Company Secretaries of India (ICSI).

GREEN INITIATIVE

Pursuant to the relevant circulars issued by Ministry of Corporate Affairs, Government of India (MCA) and Securities and Exchange Board of India and as a continuing endeavour towards 'Go Green' initiative undertaken by the MCA, the Company proposes to send all the correspondences/communications including Notice and Annual Report etc. to shareholders at their e-mail address already registered with the Depository Participants ("DPs") and Registrarand Share TransferAgents ("RTA").

In view of the above, shareholders who have not yet registered their email addresses are requested to register the same with their DPs/ the Company's RTA for receiving all communications, including Annual Report, Notices, Circulars etc. from the Company electronically.

Your Board of Directors wish to place on record its sincere appreciation for the dedicated services rendered by the executives, staff and workers at all levels for smooth functioning ofall the estates.