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Notes to Accounts of Assam Company (India) Ltd.

Dec 31, 2014

(A) Terms/ rights attached to equity shares

The Company has only one class of Ordinary Shares(''Equity Shares'') having a par value of Re1/- each. Each holder of Ordinary Shares (''Equity Shareholders'') is entitled to one vote per Share. The Company declares and pays dividend in Indian Rupees.

The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting of the Company. In the event of the Liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The Board of Directors has not recommended any dividend for the year ended 31st December, 2014, (31.12.2013- Re Nil perShare)

Nature of Security

(a) Loan repayable on demand from Banks

Outstanding loans of Rs. 1,799,964,659/- (31.12.13 - Rs. 1,607,902,809/-) Secured by hypothecation created on stock, book debts, all moveable assets and other current assets of the tea estates both present and future and equitable mortgage created of all immovable properties both present and future relating to all tea estates of the Company situated in Assam ranking pari passu with all other term loans from Consortium Banks.

1. [a] All assets except Furniture as at 31st December, 1994 were revalued by an approved valuer at the then net replacement cost resulting in increase in value of these assets by Rs.427,664,732/-. All assets except Furniture as at 31st December, 1996 were revalued again by an approved valuer at the then net replacement cost resulting in a further increase in value of these assets by Rs.113,567,000/-.

[b] Taking into account the total intrinsic value of the Company''s land in Assam, no adjustment in the opinion of the management is required for the loss of land lost due to flood and consequent erosion before 2009. Claim for compensation in this regard has been made to the Government of Assam. Subsequent loss of land due to flood and erosion from 2009 is yet to be ascertained.

29. Estimated amount of contracts remaining to be executed on capital account and other commitment not provided for are as follows:-

[a] On capital account - Rs. Nil (net of advance - Rs. Nil), [31.12.2013 - Rs. 97,000/- (net of advance - Rs. Nil)]

[b] Other Commitment - For Hire Purchase and Lease payments, Refer Note No 35 [a] and 35 [b].

30. Contingent Liabilities not provided for in respect of:

[a] Income tax demand amounting to Rs. 28,631,700/- ( 31.12.2013 - Rs. 28,631,700/-) is under assessment.

[b] Sales Tax assessments disputed in appeals Rs. 142,225,852/- and Professional Tax of Rs. 235,000/- (31.12.2013-^174,185,080/- and Professional Tax-Rs. Nil)

[c] Liability towards Interest on unpaid FCCB Bonds and Redemption premium amounting to Rs. 25,128,053/- (31.12.2013-Rs. 16,952,210/-).

[d] Liability towards fringe benefit tax under adjudication - Rs.70,929,211/- (31.12.2013 - Rs.70,929,211/-).

[e] Guarantees given in favour of third parties Rs. 3,000,000,000/- (31.12.2013 - Rs. 1,050,000,000/-).

[f] Pledged 5,000,000 shares ( having cost of Rs. 50,000,000/-) representing investment in 51% Equity shares in Gujarat Hydrocarbon & Power SEZ Ltd in favour of third parties.

[g] Uncalled liability on partly paid shares - Rs. 6,999,510/- (31.12.2013 - Rs. 6,999,510/-).

The future cash flows on account of above cannot be determined unless the judgement / decisions / demand are received from the appropriate authorities/parties.

2 Provision for taxation has been made as per the Income Tax Act, 1961 and the rules framed thereunder with reference to the profit for the year ended 31st December, 2014 which extends over two assessment years, Assessment Year 2014-2015 and Assessment Year 2015 - 2016. The ultimate tax liability for the Assessment Year 2015-2016 will be determined on the total income for the period from 1st April, 2014 to 31st March, 2015.

3. As the production of green leaf (raw materials consumed by the company for the manufacture of Tea) from Company''s own tea estates involves integrated process having various stages such as nursery, planting, cultivation etc., their values at intermediate stage could not be ascertained.

4. [a] Assets acquired under Hire Purchase (HP) comprise of vehicles. These agreements are of a period of 36 months and more and in certain cases provide for revision of hire charges for variation in prime lending rates of the bank. There are no restrictive covenants in the HP agreements.

[b] The Company has taken various premises under operating lease having tenures upto 36 months which are not non-cancellable. These are usually renewed periodically by mutual consent. The rental payable against these lease amounting to Rs. 2,012,400/- (31.12.2013- Rs. 2,012,400/-) has been debited to the Statement of Profit and Loss.

5 [a] The Company has three Oil and Gas Fields/Blocks in Assam Arakan Basin - Amguri (Discovered Field), AA-ON/7 (Exploration Block) and AA-ONN-2005/1 (Exploration Block) having Participating Interest (PI) of 40%, 35% and 10% respectively. Amguri Oil Field and AA-ON/7 Exploration Block were operated under a consortium with Canoro Resources Limited (CRL), a Canadian based E&P company while AA-ONN-2005/1 Exploration Block is under consortium with Oil & Natural Gas Corporation Limited (ONGC) and Oil India Limited (OIL).

[b] Government of India (GOI) terminated 60% PI and operatorship of Canoro Resources Limited (CRL) with effect from 29th August, 2010 for breach of Production Sharing Contract (PSC). CRL closed the operation of Amguri in December, 2010 and GOI considering its vesting right on 60% PI handed over the Amguri Field to ONGC on 16th March, 2011 to continue the operations till the ownership of 60% PI and operatorship were finalized. The company had already staked its claim on 60% PI in accordance with the provisions of PSC being the sole non-defaulting contractor. After a prolong delay, GOI had finally appointed the company as the operator of Amguri Field vide its letter dated 2nd January, 2013.

[c] Pursuant to the appointment as an operator, the Company has entered into a Bilateral Agreement on 23rd December, 2014, with ONGC to takeover the field from them and to commence operations by the Company. The handover of the field to the Company by ONGC is awaiting for the approval of Bilateral Agreement by the GOI.The approval is expected to be received shortly.

[d] The Company''s rightful claim on 60% PI earlier held by CRL is being contested by the Company before an Arbitral Tribunal Board, where GOI is a party. The Company expects that the Award of the Tribunal will be available during the next financial year as the Arbitral proceeding are under progress.

[e] As per the Award of the Arbitral Tribunal against CRL dated 21st November, 2011, the Company has got a damage claim of US$ 39.12 million Rs. 247.95 Crores) against CRL.

The Tribunal had assigned a value of US$ 4.16 million (Rs. 26.35 Crores) for 60% PI in Amguri and US$ 2.2071 million (Rs. 13.97 Crores) for 52.9% shares of CRL, thereby awarding a net damage claim of US$ 32.75 million (Rs. 207.41 Crores) against CRL.

For enforcement of the Arbitral Tribunal award before Canadian Court, the company had initiated legal steps by filing execution petition on 9th November, 2012 before the Supreme Court of British Columbia. The Hon''ble Court has recognised the Arbitral award vide its order dated 07.03.14 as legally enforceable in British Columbia.The Company has taken necessary legal steps for execution and realisation of the damaged claim as recognised by the Hon''ble Court

[f] Having finally appointed as the operator of the Field, the company is quite upbeat in commencing the production of oil and gas, which has remained suspended after the Field was closed by CRL in December, 2010.

[g] In respect of AA-ON/7 Exploration Block, the area falls into two States - Assam and Nagaland. The exploration activities in Assam were completed and the area has been relinquished in March,2008, as there was no discovery of oil and gas. In order to pursue exploration activities in the State of Nagaland, a new PSC in continuation of the earlier PSC on the basis of the terms and conditions not inferior to the existing PSC will be executed as approved by the Cabinet Committee of Economic Affairs (CCEA) on 5th December, 2009.

Though execution of a new PSC was approved by CCEA,GOI was unable to enter into a new contract due to Nagaland (Ownership of land and execution) Act,1990, which entitles the Government of Nagaland to formulate their own exploration policy and continue E&P activities by them. Similar to Amguri Field, the company as per PSC is also entitled to 65% PI and operatorship of AA- ON/7 Block, earlier held by Canoro, as the company remained as the sole non-defaulting contractor. The company has already claimed the PI and operatorship from GOI. The company feels that once the ownership of 60% PI in Amguri is resolved, GOI will take similar decision on AA-ON/7. GOI earlier vide letter Ref. No. O- 19024/29/2000-ONG-DV (Pt.1) dated 24.05.2013 had coveyed that they would take up the matter of execution of the new PSC along with the Comany''s claim of 65% PI with operatorship after resolution of Nagaland issue.

The Company is hopeful that the Nagaland issue between the State of Nagaland and GOI would be resolved soon as E & P activities by all operators have been stopped in the State of Nagaland. Considering high potential basin, GOI will ensure to resolve the issue for operators to commence exploration activities to step up domestic production,which is the need of the Country to save foreign exchange. GOI has reconfirmed the said status vide its commuinication DGH/(AA-ON/7)/New PSC/03 dated 9th February,2015.

[h] Though a new PSC will be executed, the name of the Block will remain as AA-ON/7 as the Nagaland portion for which a new PSC will be executed was part of the original acereage of AA-ON/7. Accordingly, all past investment costs in Assam area would be eligible for cost recovery. Since, the Block in totality was not relinquished and execution of a new PSC was mere an administrative action having already approved by CCEA, legally the Block still exists and it does not attract any capitalisation/impairment provision/adjustment as per AS-10 and 28 and Guidance Note on Accounting for Oil & Gas producing activities.

[i] With regard to AA-ONN-2005/1 Exploration Block where ONGC is the operator, the Geological and Geophysical (G&G) activities are under progress, which are the activities in phase -1 of Exploration phase.The drilling activities in AA-ONN-2005/1 Exploraton Block will only commence after G&G activities are concluded and drilling potential is identified.

[j] The Company''s aggregate capital investments grouped under Capital Work in Progress and Fixed Assets will be eligible for full cost recovery as per PSC against future activities and revenue from production of oil and gas.

[k] Fixed Assets Register has not been maintained in Oil & Gas Division as details of the assets were maintained by the Operator (CRL) which has since been maintained by ONGC as the custodian operator and 40% share of cost was booked by ACIL for each of the assets in Amguri Field.

[l] In respect of oil and gas producing assets for which depreciation rates has not been prescribed in Schedule XIV of the Companies Act, 1956, the Company has applied to the Central Government for its approval to adopt the unit of production method of computing depreciation for the purpose of provision of Section 205 of the Companies Act, 1956, which is awaited.

[m] Cost Record Order is applicable for Oil and Gas. There was no production of oil & gas during the year.

[n] Disclosure of Company''s participating interest (PI)in the Oil and Gas project:

6. The Company had issued Zero Per Cent Foreign Currency Convertible Bonds ("FCCB") in 2006 aggregating to USD 48 Million (INR 2,109,120,000/-) to finance capital expenditure for modernisation, expansion and acquisitions. The Bond holders have an option of converting these Bonds into Equity Shares at a conversion price of Rs. 28.75 per share, at any time on or after 28th November, 2006, subject to compliance with certain conditions stated in the offer circular dated 23rd November, 2006. The Bonds were redeemable on 30th November, 2011 at 150.019 per cent of their principal amount, unless previously converted or redeemed.

Unutilised FCCB proceeds amounting to Rs.692,467/- (31.12.2013 - Rs. 692,467/-) have been invested in securities and the balance Rs. 235893/- ( 31.12.2013 - Rs. 236,119/-) is lying with banks at the year end.

As at the year end, the total Principal FCCBs outstanding is USD 3.10 million. The Company had obtained permission from Reserve Bank of India (RBI) for extending the time for redemption of Outstanding FCCBs beyond the maturity date.

7. Advances and loans to subsidiaries include an amount of Rs. 2,527,479,375/- (including interest Rs. 1,111,049,664/- Net of TDS) (31.12.13Rs. 2,526,631,406/- including interestRs. 1,111,049,664/- Net of TDS) due from Gujarat Hydrocarbons and Power SEZ Limited (GHPSL), a subsidiary of the company.

GHPSL was incorporated for developing a Hydrocarbon and Power Special Economic Zone (SEZ) in the state of Gujarat. GHPSL had acquired 315 hectares of land for its project from Gujarat Industrial Development Corporation (GIDC) out of which 296 hectares possession was received and the balance 19 Hectares is in the process of acquisition. The loan was given towards acquisition and development of the acquired area by GHPSL. In view of the assurance of repayment received from GHPSL and also in order to protect the long term interest of the Company the Board considered prudent not to charge interest for the year on the loan provided to GHPSL.

8. Advances and loans to subsidiaries include interest free loan of Rs. Nil (31.12.13Rs. 813,732,224/-) due from Duncan Macneill Natural Resources Limited (DMNRL) a wholly owned subsidiary of the company located in UK, The loan was given to acquire E & P assets. The Company ,in order to expand its oil and gas activities in upstream sector desire to make a strong presence at overseas countries by acquiring E & P assets.Since no overseas E&P assets could be acquired over the last few years, DMNRL has refunded the entire amount in January ,2014.

9. Advances and loans to subsidiaries include interest free loan of Rs.13,558,077/-) (31.12.13 Rs.12,991,165/-) due from Assam Oil and Natural Gas Limited a wholly owned subsidiary of the company located in Cayman Islands, as loan. The loan was given to acquire E&P (Oil and gas) assets in Colombia.

10. In line with the notification dated 31st March, 2009 and notification dated 29th December,2011 issued by the Ministry of Corporate Affairs, amending Accounting Standard (AS) 11 - "Effects of Changes in Foreign Exchange Rate", the Company in the current year has:

[i] charged to the Statement of Profit and Loss Rs. 183,043,098 /-(31.12.13 - Rs.131,842,159/- being the amortisation charge of ''Foreign Currency Monetary item Translation Difference Account'' (FCMITDA) for the year.

[ii] carried forward Rs.134,045,860/- (31.12.13- Rs.345,001,365/-) in the FCMITDA, amortisable by31st January, 2020.

11. Derivative instruments:

The Company uses Foreign Exchange Contracts to hedge its certain exposures in foreign currency related to firm commitments and highly probable transactions.

[a] There was no Derivative instruments (Forward Exchange Contracts) outstanding as at Balance Sheet date.

12. Employee Benefit Obligation Provident Fund

Provident Fund is a defined contribution scheme whereby the Company contributes an amount determined as a fixed percentage of basic salary to the trust/government authorities every month.

Gratuity

The Company operates three gratuity schemes wherein every employee is entitled to the benefit equivalent to 15 days salary last drawn for each completed year of service subject to minimum service of five years. The same is payable on retirement or termination of service, whichever is earlier. Annual contributions based on actuarial valuation carried out at the year end are made to an independent trust fund who in turn is investing in a private insurance company under group gratuity scheme.

Pension

The Company operates two pension schemes for eligible employees, one of them being a defined benefit scheme and the other a defined contribution scheme. Annual contributions to the defined benefit scheme are made by the Company based on actuarial valuation carried out by the Company at year end. Contributions for the defined contribution scheme are deposited with a Trust and such funds are funded to a private insurance company.

Leave Benefit

Leave benefit comprises of leave balances accumulated by the employees. These balances can be accumulated upto a maximum of 120 days and can be encashed only at any time of retirement/separation.

Post Retirement Medical Benefit

The Company has a scheme of re-imbursement of post retirement medical expenses to certain categories of employees and their surviving spouses, upon retirement, subject to a monetary limit.

A. Defined Contribution Plans

Contributions for Defined Contribution Plans amounting to Rs.103,787,952/- (31.12.2013Rs. 95,063,234/-) has been recognised in the Statement of Profit & Loss.

13. Related Party Disclosure :

I Names of related parties and description of relationship

[a] Subsidiaries of the Company

Camellia Cha Bar Limited North East Hydrocarbon Limited Assam Oil & Gas Limited Duncan Macneill Natural Resources Limited Dahej Offshore Infrastructure SEZ Limited Gujarat Hydrocarbons & Power SEZ Limited Duncan Macneill Power India Ltd Assam Oil & Natural Gas Limited.

[b] Stepdown subsidiaries

Lord Inchcape Financial Services Limited (control exercised through two subsidiaries) Assam Oil & Natural Gas Columbia Limited

[c] Key Managerial Personnel

Mr. A.K.Jajodia, Managing Director

[d] Relatives of Key Managerial Personnel Ms. Ruchika Jajodia

[e] Joint Venture through jointly controlled operations

Oil and Natural Gas Corporation Limited Oil India Limited

14. Pursuant to a Resolution passed by the shareholders on 26.06.2012 and the subsequent approval of the Board on 02.08.2012, the Company had entered into an "Agreement for sale" on 03.08.2012 with Salonah Tea Private Limited for sale of Salonah Tea Estate. The requisite approvals and NOCs from the concerned authorities have been received and accordingly necessary entries have been booked in the year 2013. The amount due is shown underTrade Receivables. The Conveyance in respect of the immovable property is pending.

15 The Company has obtained a stay from the Hon''ble Guwahati High Court restraining the taxation authorities from imposing and collecting Fringe Benefit Tax (FBT) under section 115WA of the Income Tax Act, 1961. In view of this, the Company has not provided the liability for FBT till the year-end December 2009.

16 Previous year figures have been regrouped/rearranged wherever necessary.


Dec 31, 2012

(a) Terms/ rights attached to Equity Shares

The Company has only one class of Ordinary Shares (''Equity Shares'') having a par value of Rs. 1/- each. Each holder of Ordinary Shares (''Equity Shareholders'') is entitled to one vote per Share. The Company declares and pays Dividend in Indian Rupees.

The Dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting of the Company. In the event of the Liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the Shareholders.

During the year ended 31st December, 2012, the amount of per Share Dividend recognised as distribution to Equity Shareholders was Rs. 0.05/- per share.

(31.12.2011- Rs. 0.05) The Total Dividend appropriation for the year ended 31st December, 2012, amounted to Rs. 18,000,597 including Corporate Dividend Tax of Rs. 2,512,549.

Nature of Security

(a) Loan repayable on demand from Banks

Outstanding loans of 1 1,665,813,679 (31.12.11 -1 1,645,251,770) Secured by hypothecation created on stock, book debts, all moveable assets and other current assets of the tea estates both present and future and equitable mortgage created of all immovable properties both present and future relating to all Tea Estates of the Company situated in Assam ranking pari passu with all other term loans from Consortium Banks.

1. [a] All assets except Furniture as at 31st December, 1994, were revalued by an approved valuer at the then net replacement cost resulting in increase in value of these assets by Rs. 427,664,732. All assets except Furniture as at 31st December, 1996, were revalued again by an approved valuer at the then net replacement cost resulting in a further increase in value of these assets by Rs. 113,567,000.

[b] Taking into account the total intrinsic value of the Company''s land in Assam, no adjustment in the opinion of the Management is required for the loss of land lost due to flood and consequent erosion in past years. Claim for compensation in this regard has been made to the Government ofAssam.

2. Estimated amount of contracts remaining to be executed on capital account and other commitment not provided for are as follows:-

[a] On capital account - Rs. 235,527 (net of advance - Rs. 867,345), [31.12.2011- Rs. 10,264,615 (net of advance -Rs. 4,717,872)]

[b] Other Commitment - For Hire Purchase and Lease payments, Refer Note No 36 [a] and 36 [b].

3. Contingent Liabilities not provided for in respect of :

[a] Sales Tax assessments disputed in appeals Rs. 174,272,207 (31.12.2011 - Rs. 108,907,869)

[b] LiabilitytowardsFringeBenefitTaxunderadjudication-Rs. 70,929,211 (31.12.2011 - Rs. 70,929,211).

[c] Guarantees given in favour of third parties Rs. 1,048,200,000 (31.12.2011 - Rs. 1,048,200,000).

[d] Pledged 5,000,000 shares (having cost of Rs 50,000,000) representing investment in 51% Equity shares in Gujarat Hydrocarbons and Power SEZ Ltd. in favour of third parties.

[e] Uncalled liability on partly paid shares - Rs. 6,999,510 (31.12.2011 - Rs. 6,999,510).

[f] Interest and penalty for non-deduction and non-deposit of tax deducted at source from green leaf suppliers in respect of an earlier year, not ascertainable at this stage.

[g] Financial undertaking issued to a subsidiary - amount not ascertainable.

The future cash flows on account of above cannot be determined unless the judgement / decisions / demand are received from the appropriate authorities/parties.

4. Provision for taxation has been made as per the Income Tax Act, 1961 and the rules framed thereunder with reference to the profit for the year ended 31st December, 2012 which extends over two assessment years, Assessment Year 2012-2013 and Assessment Year 2013 - 2014. The ultimate tax liability for the Assessment Year 2013-2014 will be determined on the total income for the period from 1st April, 2012 to 31st March, 2013.

5. As the production of green leaf (raw materials consumed by the Company for the manufacture of Tea) from Company''s own Tea Estates involves integrated process having various stages such as nursery,planting,cultivation etc., theirvalues at intermediate stage could not be ascertained.

6. [a] Assets acquired under Hire Purchase (HP) comprise of vehicles. These agreements are of a period of 36 months and more and in certain cases provide for revision of hire charges for variation in prime lending rates of the bank. There are no restrictive covenants in the HP agreements.

[b] The Company has taken various premises under operating lease having tenures upto 36 months which are not non-cancellable. These are usually renewed periodically by mutual consent. The rental payable against these lease amounting to Rs. 2,006,400 (31.12.2011 - Rs. 2,006,400) has been debited to the Statement of Profit and Loss.

7. [a] The Companys'' Oil and Gas activities comprise of three Oil Fields - Amguri (Discovered Field), AA-ON/7 (Exploration Block) and AA-ONN-2005/1 (Exploration Block) having Participating Interest of 40%, 35% and 10% respectively. Amguri Oil Field and AA-ON/7 Exploration Block were operated under a consortium with Canoro Resources Limited (Canoro), a Canadian based E&P company. AA-ONN-2005/1 Exploration Block is however under consortium with ONGC and OIL.

[b] Following termination of Production Sharing Contract (PSC) and 60% Participation Interest (PI) of Amguri Field of Canoro by Government of India (GOI) with effect from 29th August, 2010, Canoro finally closed its operation in India in December,2012 having their appeal being dismissed by Hon''ble High Court. GOI as interim arrangement had appointed ONGC as the custodian of GOI to operate the field from 16th March, 2011 pending appointment of a regular operator for which the Company had already staked its claim alongwith the ownership of 60% PI in accordance of the provisions of PSC. After a prolong delay, GOI has finally appointed the Company as the operator of Amguri Field vide its letter dated 2nd January, 2013. The Company on priority basis has now taken steps to resume the operations and production of oil and gas in Amguri Field.

[c] The Company also, under the Joint Operating Agreement (JOA), exercised its right of first refusal on its claim on 60% PI from Canoro. Accordingly, the Company initiated Arbitral proceedings against Canoro as per PSC for redressal of dispute on ownership of majority Equity Shareholding of Canoro and 60% PI of Amguri Field.

The Arbitral Tribunal passed the Award on21st November,2011 under which the Company had become the rightful owner of 60% PI of Amguri and also 52.9% shares of Canoro which was earlier issued to Mass Financial Corporation in breach of JOA. As per the said Award, the Company had also got a damage claim of US$ 39.12 Million (Rs. 214.29 Crores) against Canoro. The consideration of US$ 4.16 Million (Rs. 22.78 Crores) and US$ 2.2071 Million (Rs. 12.08 Crores) assigned towards 60% PI ofAmguri and 52.9% shares of Canoro respectively was set off from the total damage claim and the net damage claim of US$ 32.75 Million (Rs. 179.40 Crores) was awarded against Canoro. Consequent upon the receipt of the Award, the Company sought the formal consent from GOI on transfer of 60% PI pursuant to the provisions of PSC which is still awaited.

[d] For execution of the Arbitral Tribunal award before Canadian Court, the Company has initiated legal steps by filing execution petition on 9th November,2012 before the Supreme Court of British Columbia. The hearing ofthe execution petition is due in April, 2013. Meanwhile, the Company had received execution orders on Arbitral award against Canoro from District Courts in Assam for taking possession of inventory and field equipments.

[e] In view of delay in response from GOI for according consent on assignment of 60% PI and operatorship of Amguri Field, the Company had initiated Arbitral proceedings against GOI by filing Section 9 Application before Hon''ble High Court of Delhi seeking interim relief, pending disposal ofthe case by Arbitral Tribunal. The Company had received interim Judgment of Hon''ble High Court on 20th July,2012, under which the Court had prima facie observed that the Company was entitled to 60% PI of Canoro as per PSC and GOI should accord the consent without holding it up further. However, GOI is still to take a decision on this matter.

[f] In respect of AA-ON/7 Exploration Block, the area falls into two States - Assam and Nagaland. The exploration activities in Assam were completed and the area has been relinquished as there was no discovery of oil and gas. In order to pursue exploration activities in the State of Nagaland, a new PSC in continuation of the earlier PSC on the basis of same terms and conditions of the earlier PSC will be executed very shortly. The execution of new PSC has been delayed due to ongoing legal dispute on Amguri with Canoro. Since the matter has now been finally resolved and also Canoro''s PSC and PI on this Block has been terminated by GOI vide letter dated 10th January,2013, the new PSC, which has already been approved by GOI, will now be executed with the Company. Similar to Amguri Field, the Company as per PSC is also entitled to 65% PI and operatorship of this Block, earlier held by Canoro, as the Company remained as the sole non-defaulting contractor. The Company has already claimed the PI and Operatorship from GOI.

[g] The new PSC of AA-ON/7 Exploration Block will be in continuation of the previous PSC and its terms and conditions will not be inferior to the terms and conditions of previous PSC as confirmed by GOI. AA-ON/7 even though falls in two states - Assam and Nagaland and require independent PSC, is a single E&P asset. Accordingly, all past expenditure in this Block will qualify for 100% cost recovery and at present it does not attract any capitalisation/impairment provision/adjustment as per AS- 10 and 28 and Guidance Note on Accounting for Oil & Gas producing activities.

[h] With regard to AA-ONN-2005/1 Exploration Block where ONGC is the operator, the Geological and Geophysical (G&G) activities are under progress.

[i] With regard to AA-ONN-2005/1 Exploration Block, this Block was awarded under NELP-VII round under consortium with ONGC and OIL. The PEL was obtained on 1st December, 2010. This Block falls in the Assam-Nagaland border and is sensitive with respect to environment, reserve forest and border disputes. Permission to conduct seismic surveys was granted by Assam State Government recently hence exploration activities are in early stages.

[j] The Company''s aggregate capital investments grouped under Capital Work in Progress and Fixed Assets will be eligible for full cost recovery as per PSC against future activities. The operations in Amguri Field and AA-ON/7 Exploration Block will resume on receipt of consent from GOI and execution of new PSC respectively.

[k] Fixed Assets Register has not been maintained in Oil & Gas Division as details ofthe assets were maintained by the Operator (Canoro) which has since been maintaind by ONGC as the custodian operator and 40% share of cost was booked by ACIL for each of the assets. A list of assets is maintained.

[l] In respect of oil and gas producing assets for which depreciation rates has not been prescribed in Schedule XIV of the Companies Act, 1956, the Company has applied to the Central Government for its approval to adopt the unit of production method of computing depreciation for the purpose of provision of Section 205 of the Companies Act, 1956, which is awaited.

[m] Cost Record Order is applicable for Oil and Gas. There was no production during the year and the Company was not the Operator. All relevant papers and records were maintained by the Operator.

8. The Company had issued Zero Per Cent Foreign Currency Convertible Bonds ("FCCB") in 2006 aggregating to USD 48 Million (INR 2,109,120,000) to finance capital expenditure for modernisation, expansion and acquisitions. The Bond holders have an option of converting these Bonds into Equity Shares at a conversion price of Rs. 28.75 per share, at any time on or after 28th November, 2006, subject to compliance with certain conditions stated in the Offer Circular dated 23rd November, 2006. The Bonds were redeemable on 30th November, 2011, at 150.019 per cent of their principal amount, unless previously converted or redeemed.

Unutilised FCCB proceeds amounting to t7,884,472 (31.12.2011 -t 7,884,472) have been invested in securities and the balance t 241,015 ( 31.12.2011 -t 241,015) is lying with banks at the year end.

The Principal amount of FCCBs outstanding at the beginning of the year was USD 31.80 Million. The Company had during the year redeemed Principal FCCBs of USD 22.70 Million together with agreed redemption premium. As at the year end, the total Principal FCCBs outstanding is USD 9.10 Million out of which the Company has since redeemed Principal FCCBs of USD 6 Million with agreed redemption premium. The Company is negotiating with the Bondholders for settlement of the remaining FCCB''s. The Company had obtained permission from Reserve Bank of India (RBI) for extending the time for redemption of Outstanding FCCBs beyond the maturity date.

9. Advances and loans to subsidiaries include an amount oft 2,520,121,211 (including interest 1 1,111,049,664 Net of TDS) (31.12.11 t 2,118,199,469 including interest t 783,371,113 Net of TDS) due from Gujarat Hydrocarbons and Power SEZ Limited (GHPSL), a Subsidiary of the Company.

GHPSL was incorporated for developing a Hydrocarbon and Power Special Economic Zone (SEZ) in the State of Gujarat. GHPSL had acquired 315 Hectares of land for its project from Gujarat Industrial Development Corporation (GIDC) out ofwhich 296 Hectares possession was received and the balance 19 Hectares is in the process of acquisition.The loan was given towards acquisition and development of the acquired area by GHPSL.

10. Advances and loans to subsidiaries include interest free loan of Rs. 813,732,224) (31.12.11 t813,732,224) due from Duncan Macneill Natural Resources Limited (DMNRL) a Wholly Owned Subsidiary of the Company located in UK. The loan was given to acquire E&P assets.The Company, in order to expand its oil and gas activities in upstream sector desire to make a strong presence at overseas countries by acquiring E&P assets.The Company is confident in acquiring economically feasible E& P assets through DMNRL by using the loan given to them. DMNRL has agreed to repay rupee equivalent of the total amount outstanding to the Company.

11. Advances and loans to subsidiaries include interest free loan of Rs. 10,708,140 (31.12.11 t 10,174,605) due from Assam Oil and Natural Gas Limited a Wholly Owned Subsidiary of the Company located in Cayman Islands, as loan. The loan was given to acquire E&P (Oil and Gas) assets in Colombia.

12. The Single Bench of the Hon''ble Calcutta High Court has allowed the eviction proceedings filed by the owners in respect of the Company''s Corporate Office at Kolkata.The Company has preferred an appeal before the Division Bench of the Hon''ble Calcutta High Court,who have stayed the order passed by the Single Bench. TheAppeal is pending adjudication.

Notes :

[i] The Company has considered business segment as the primary segment for disclosure. The components of these business segments are plantation products,oil and gas activities and Merchant trading.

[ii] The segment wise revenue, results, assets and liabilities relate to the respective amounts directly identifiable to each ofthe segments. Unallocable income/expenditure refers to income/expenses incurred on common services at corporate level.

[iii] Geographical segment:

Segregation of revenue is on the basis of geographical location of customer i.e.

Sales within India Sales outside India

Segregation of asset and capital expenditure is on the basis of geographical location of assets i.e. Asset within India Asset outside India

[iv] Figures in bold represent previous year''s figures .

50. In line with the notification dated 31st March, 2009 and notification dated 29.12.11 issued by the Ministry of Corporate Affairs, amending Accounting Standard (AS) 11 - "Effects of Changes in Foreign Exchange Rate", the Company in the current year has:

[i] charged to the Statement of Profit and Loss Rs. 84,949,234 (31.12.11 - Rs. 136,945,139) being the amortisation charge of ''Foreign Currency Monetary item Translation Difference Account'' (FCMITDA) for the year.

[ii] carried forward Rs. 165,916,130 (31.12.11- Rs. 174,684,288) in the FCMITDA, amortisable by 31st January, 2020.

13. Employee Benefit Obligation Provident Fund

Provident Fund is a defined contribution scheme whereby the Company contributes an amount determined as a fixed percentage of basic salary to the Trust/Government authorities every month.

Gratuity

The Company operates three gratuity schemes wherein every employee is entitled to the benefit equivalent to 15 days salary last drawn for each completed year of service. The same is payable on retirement or termination of service, whichever is earlier. Annual contributions based on actuarial valuation carried out at the year end are made to an independent trust fund who in turn is investing in a private insurance company under group gratuity scheme.

Pension

The Company operates two pension schemes for eligible employees, one of them being a defined benefit scheme and the other a defined contribution scheme. Annual contributions to the defined benefit scheme are made by the Company based on actuarial valuation carried out by the Company at year end. Contributions for the defined contribution scheme are deposited with a Trust and such funds are funded to a private insurance company.

Leave Benefit

Leave benefit comprises of leave balances accumulated by the employees. These balances can be accumulated upto a maximum of 120 days and can be encashed only at any time of retirement/separation.

Post Retirement Medical Benefit

The Company has a scheme of re-imbursement of post retirement medical expenses to certain categories of employees and their surviving spouses, upon retirement, subject to a monetary limit.

A. Defined Contribution Plans

Contributions for Defined Contribution Plans amounting to t 9,17,04,830 (31.12.2011 t 8,47,96,893) has been recognised in the Profit & Loss Account.

Notes:

(i) The estimates of future salary increases considered in the actuarial valuation takes into account factors like inflation, future salary increases, seniority, promotion, supply and demand in the employment market etc. The expected return on plan assets is based on the actuarial expectation of the average long term rate of return on investments of the fund during the estimated time of the obligations.

(ii) Since the Company has adopted Accounting Standard 15 (Revised 2005) on Employee Benefits during the year 2007, figures for five financial years are available and have been disclosed except for post retirement medical benefits which have been actuarially valued from the year 2011.

(iii) As per the actuarial valuation carried out ,there is gain in contribution to be made during the year of Rs.3,618,543 and Rs. 2,465,546 in Management Staff Gratuity Fund and Clerical, Medical & Technical Staff Pension Fund respectively.As a matter of prudence the effect of the same has not been taken.

(iv) The contribution expected to be made by the Company for the year ending 31st December, 2013, cannot be ascertained at this stage.

14. Related Party Disclosure :

I. Names of related parties and description of relationship

[a] Subsidiaries of the Company

Namburnadi Tea Company Limited Camellia Cha Bar Limited North East Hydrocarbon Limited Assam Oil and Gas Limited Duncan Macneill Natural Resources Limited

Dahej Offshore Infrastructure SEZ Limited (Formerly known as Assam Estates Limited)

Gujarat Hydrocarbons and Power SEZ Limited

Duncan Macneill Power India Ltd. (Formerly known as Duncan Macneill Power and Utilities Ltd.) Assam Oil & Natural Gas Limited.

[b] Stepdown subsidiaries

Lord Inchcape Financial Services Limited (control exercised through two subsidiaries)

Assam Oil & Natural Gas Columbia Limited

[c] Key Managerial Personnel

Mr. A.K.Jajodia, Managing Director

[d] Relatives of Key Managerial Personnel

Ms. Ruchika Jajodia

[e] Joint Venture through jointly controlled operations

Canoro Resources Limited

Oil and Natural Gas Corporation Limited

Oil India Limited

15. Pursuant to a Resolution passed by the Shareholders on 26th June, 2012 and the subsequent approval of the Board on 2nd August, 2012, the Company had entered into an "Agreement for Sale" (Agreement) on 3rd August, 2012 with Salonah Tea Private Limited (Purchaser) for sale of Salonah Tea Estate (the Estate) subject to receipt of requisite approvals and NOCs from the concerned authorities which are awaited. Pursuant to the said Agreement, the profit and loss and liabilities will accrue and arise to the account of Purchaser from the appointed date i.e. 20th August, 2012. Accordingly, the Company has discontinued to account for all the income and expenditure of the Estate effective from the same date. As the "sale" of the Estate is yet to be completed pending receipt of requisite approvals and NOCs and execution of conveyance deed, the assets and ownership of the Estate continues to remain with the Company.

Net block of Fixed Assets as referred in Note No.11 includes Assets pertaining to Salonah Tea Estate which are not being used by the Company from the appointment date ie. 20th August, 2012 and held for disposal.

16. The Company has obtained a stay from the Hon''ble Guwahati High Court restraining the taxation authorities from imposing and collecting Fringe Benefit Tax (FBT) under Section 115WA of the Income Tax Act, 1961. In view of this, the Company has not provided the liability for FBT till the year-end December, 2009.

17. The Financial Statements for the year ended 31st December, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act,1956.Consequent to the notification of Revised Schedule VI under the Companies, Act 1956, the Financial Statements for the year ended 31st December, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform with this year''s classification.


Dec 31, 2010

1. [a] All assets except Furniture as at 31 st December, 1994 were revalued by an approved valuer at the then net replacement cost resulting in increase in value of these assets by Rs.427,664,732. All assets except Furniture as at 31st December, 1996 were revalued again by an approved valuer at the then net replacement cost resulting in a further increase in value of these assets by Rs.113,567,000. [b] Taking into account the total intrinsic value of the Company's land in Assam, no adjustment in the opinion of the management is required for the loss on land lost due to flood and consequent erosion in past years. Claim for compensation in this regard has been made to the Government of Assam.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.10,162,148 (net of advance - Rs. 1,823,897), [31.12.2009 - Rs.6,228,955 (net of advance - Rs.1,978,734)]

3. Contingent Liabilities not provided for in respect of:

[a] Income Tax assessments disputed in appeals Rs. 20,824,240 (31.12.2009 - Rs.1,084,258)

[b] Sales Tax assessments disputed in appeals Rs.118,019,201 (31.12.2009 - Rs.195,551,033)

[c] Liability towards fringe benefit tax under adjudication - Rs. 70,929,211 (31.12.2009 - Rs. 70,929,211) (Refer Note 29 of Schedule 13).

[d] Premium on redemption of Foreign Currency Convertible Bonds Rs.559,923,846 (31.12.2009 - Rs.422,707,146). (Refer Note 18 of Schedule 13.)

[e] Guarantees given on behalf of third parties Rs. 48,214,400 (31.12.2009 - Rs.76,814,400) of which Rs.26,178,697 (31.12.2009 - Rs.30,863,255) was outstanding as at 31st December, 2010.

[f] Uncalled liability on partly paid shares - Rs.6,999,510 (31.12.2009 - Rs.6,999,510).

[g] Interest and penalty for non-deduction and non-deposit of tax deducted at source from green leaf suppliers in respect of an earlier year, not ascertainable at this stage.

[h] Commercial claims not acknowledged as debts Rs. Nil (31.12.2009 - 242,899,702) [i] Financial undertaking issued to a subsidiary - amount not ascertainable.

The future cash flows on account of above cannot be determined unless the judgement / decisions / demand are received from the appropriate authorities/parties.

4. Provision for taxation has been made as per the Income Tax Act, 1961 and the rules framed thereunder with reference to the profit for the year ended 31st December, 2010 which extends over two assessment years, Assessment Year 2010-2011 and Assessment Year 2011 - 2012. The ultimate tax liability for the Assessment Year 2011-2012 will be determined on the total income for the period from 1st April, 2010 to 31st March, 2011.

5. Employee Benefit Obligation Provident Fund

Provident Fund is a defined contribution scheme whereby the Company contributes an amount determined as a fixed percentage of basic salary to the Trust/government authorities every month. Gratuity

The Company operates three gratuity schemes wherein every employee is entitled to the benefit equivalent to 15 days salary last drawn for each completed year of service. The same is payable on retirement or termination of service, whichever is earlier. Annual contributions based on actuarial valuation carried out at the year end are made to an independent trust fund who in turn is investing in a private insurance company under group gratuity scheme. Pension

The Company operates two pension schemes for eligible employees, one of them being a defined benefit scheme and the other a defined contribution scheme. The defined benefit scheme is funded with Life Insurance Corporation of India (LICI). Annual contributions to the defined benefit scheme are made by the Company based on actuarial valuation carried out by LICI at year end. Contributions for the defined contribution scheme are deposited with a Trust and such funds are utilised to buy pension annuity from the insurance company. Leave Benefit

Leave benefit comprises of leave balances accumulated by the employees. These balances can be accumulated upto a maximum of 120 days and can be encashed only at any time of retirement/seperation. Post Retirement Medical Benefit

The Company has a Scheme of re-imbursement of Post-retirement medical expenses to certain categories of employees and their surviving spouses, upon retirement, subject to a monetary limit. A. Defined Contribution Plans

Contributions for Defined Contribution Plans amounting to Rs.78,296,118 (31.12.2009 - Rs.58,906,944) has been recognised in the Profit & Loss Account.

6. [a] Assets acquired under Hire Purchase (HP) comprise of vehicles. These agreements are of a period of 36 months and more and in certain cases provide for revision of hire charges for variation in prime lending rates of the bank. There are no restrictive covenants in the HP agreements.

[b] The Company has taken various premises under operating lease having tenures upto 36 months which are not non- cancellable. These are usually renewed periodically by mutual consent. The rental payable against these lease amounting to Rs 335,400 (31.12.2009 - Rs. 676,200) have been debited to the Profit and Loss Account.

7. Related Party Disclosure:

I. Names of related parties and description of relationship

a. Subsidiaries of the Company

Namburnadi Tea Company Limited

Camellia Cha Bar Limited

North East Hydrocarbon Limited

Assam Oil & Gas Limited

Duncan Macneill Natural Resources Limited

Dahej Offshore Infrastructure SEZ Limited (Formerly known as Assam Estates Limited)

Gujarat Hydrocarbons & Power SEZ Limited

Duncan Macneill Power and Utilities Limited (with effect from 17.12.2010)

Lord Inschcape Financial Services Limited (Control Exercised through two Subsidiaries)

b. Key Managerial Personnel

Mr. A.KJajodia, Managing Director

c. Relatives of Key Managerial Personnel

Ms. Ruchika Jajodia

d. Joint Venture through jointly controlled operations

Canoro Resources Limited - (Refer Note No. 17(a))

8. [a] In 2009, the Company was pursuing E&P activities in Amguri Development Block and AA-ON/7 Exploration Block located in North East under a Joint Operating Agreement (JOA) with Canoro Resources Ltd (Canoro), a Canadian E&P Company based in Calgary, Canada, having participation interest of 40% and 35% respectively.

The company continued its E&P operations in upstream oil and gas sector in Amguri Development Block during the year under Production Sharing Contract (PSC) with Government of India (GOI). Consequent to Canoro Resources Limited (CRL) committing breach to the PSC, GOI had terminated their Participation Interest (PI) and operatorship with effect from 29th August, 2010. Hon'ble Delhi High Court has decided against Canoro in the case filed by them against such termination by the GOI. Subsequently, case filed by the Company against Canoro was dismissed by the Hon'ble Delhi High Court. However, the Arbitration proceedings against Canoro is in progress.

As per interim arrangement, GOI had advised Oil and Natural Gas Corporation (ONGC) to take over the physical possession of the Amguri field from CRL along with all assets as a custodian of GOI, pending formalization of transfer of PI to ACIL and appointment of ACIL as an operator.

In addition, the Company has one more E&P asset - AA-ONN-2005/1 in Assam and Assam-Arakan Basin under consortium with ONGC and OIL, having participation interest of 10% through bidding process under NELP-VII.

[b] New PSC of AA-ON/7 Exploration Block covering Nagaland area is awaiting execution after completion of exploratory activities in Assam area. The new PSC will be an extension of the existing PSC under same terms and conditions allowing another 7 years Exploratory Phase in Nagaland.

[c] Initial exploratory activities such as seismic studies in AA-ONN-2005/1, awarded under NELP-VII,The Company has 10% PI along with ONGC and Oil India Ltd holding 60% and 30% respectively, has already commenced.

9. The Company had issued Zero Per Cent Foreign Currency Convertible Bonds ("FCCB") in 2006 aggregating to USD 48 Million (INR 2,109,120,000) to finance capital expenditure for modernisation, expansion and acquisitions. The Bond holders have an option of converting these Bonds into Equity Shares at a conversion price of Rs. 28.75 per share, at any time on or after 28th November, 2006, subject to compliance with certain conditions stated in the offer circular dated 23rd November, 2006. The Bonds are redeemable on 30th November, 2011 at 150.019 per cent of their principal amount, unless previously converted or redeemed.

During the year 2008, bond holders have exercised their option of converting their Bond amounting Rs.5,145,703 into Equity Shares. Accordingly, 5,145,703 shares were issued in 2008 with resultant increase in issued share capital and securities premium account.

During the year 2009, the Company re-purchased and cancelled FCCB of Rs.605,152,000 at a discount which has resulted in a saving of Rs.118,107,100/. Consequent upon such re-purchase and cancellation the Company's obligation to convert said FCCBs into shares or to redeem the same in foreign currency has come to an end. As of date FCCBs outstanding aggregate to Rs. 1,424,958,000.

10. During the year 2007, the Company received the balance amount outstanding against 81,000,000 share warrants of Re. 1 each issued in 2006 at a premium of Rs.22.25 per warrant. Equivalent number of Equity Shares of Re. 1 each has been issued on conversion of these warrants resulting in increase of issued and paid up share capital of the Company by Rs.81,000,000 and the securities premium by Rs. 1,802,250,000 .

11. Loans and Advances to subsidiaries include an amount of Rs.1,883,979,211 (including interest Rs.524,377,105 Net of TDS) (31.12.09 Rs.1,388,834,110 including interest Rs.314,327,976 Net of TDS) due from Gujarat Hydrocarbons and Power SEZ Limited (GHPSL), a wholly owned subsidiary of the company. GHPSL was incorporated for developing a Hydrocarbon and Power Special Economic Zone (SEZ) in the state of Gujarat. GHPSL has acquired 315 hectares of land for its SEZ project from Gujarat Industrial Development Corporation (GIDC) out of which 296 hectares of land has been taken possession of and the balance 19 Hectares is in the process of acquisition.

12. The Single bench of the Hon'ble Calcutta High Court has allowed the eviction proceedings filed by the owners in respect of the Company's Corporate Office at Kolkata.The Company has preferred an apeal before the Division Bench of the Hon'ble Calcutta High Court.

13. In line with the notification dated 31st March, 2009 issued by the Ministry of Corporate Affairs, amending Accounting Standard (AS) 11 - "Effects of Changes in Foreign Exchange Rate", the Company in the current year has:

(i) charged to the Profit and Loss Account Rs.29,637,828, being the amortisation charge of 'Foreign Currency Monetary Item Translation Difference Account' (FCMITDA) for the year.

(ii) carried forward Rs.7,227,867 (31.12.09- Rs.36,865,695) in the FCMITDA, amortisable by 31st March, 2011.

14. Derivative instruments

The Company uses Foreign Exchange Contracts to hedge its certain exposures in foreign currency related to firm commitments and highly probable transactions.

15. The Company has obtained a stay from the Hon'ble Guwahati High Court restraining the taxation authorities from imposing and collecting Fringe Benefit Tax (FBT) under section 115WA of the Income Tax Act, 1961. In view of this, the Company has not provided the liability for FBT till the year-end.

16. Sundry Debtors include an overdue above one year of Rs. 2,777.64 lacs, which in the opinion of the management is good and recoverable.

17[a] Until previous year depreciation for Oil and Gas producing properties used as fixed assets, was provided based on Unit of Production method as recommended in the Guidance Note on "Accounting for Oil and Gas Producing Activities" issued by Institute of Chartered Accountants of India in February, 2003. In the current year the Company has changed the method of providing depreciation in respect of certain assets for which depreciation rates have, been prescribed in Schedule XIV of the Companies Act, 1956. For those assets depreciation has been provided for on Written Down Value method at the rates prescribed in Schedule XIV of the Companies Act, 1956. In respect of other oil and gas producing assets, depreciation has been provided on unit of production method as per past practice. In view of the above change in method of providing depreciation, an additional depreciation charge of Rs. 52,536,252 has been provided in these accounts.

18 [b] In respect of oil and gas producing assets for which depreciation rates has not been prescribed in Schedule XIV of the Companies Act, 1956, the Company has applied to the Central Government for its approval to adopt the unit of production method of computing depreciation for the purpose of provision of Section 205 of the Companies Act, 1956, which is awaited.

19. Previous year's figures have been regrouped / rearranged wherever necessary.


Dec 31, 2009

1. [a] All assets except Furniture as at 31st December, 1994 were revalued by an approved valuer at the then net replacement cost resulting in increase in value of these assets by Rs.427,664,732/-. All assets except Furniture as at 31st December, 1996 have been revalued again by an approved valuer at net replacement cost resulting in a further increase in value of these assets by Rs.113,567,000/-.

[b] Taking into account the total intrinsic value of the Companys land in Assam, no adjustment in the opinion of the management is required for the loss on land lost due to flood and consequent erosion in past years. Claim for compensation in this regard has been made to Government of Assam.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.6,228,955/- (net of advance - Rs. 1,978,734/-), [31.12.2008 - Rs.7,638,834/- (net of advance - Rs.15,368,371/-)]

3. Contingent Liabilities not provided for in respect of:

[a] [i] Income Tax assessments disputed in appeals Rs.1,084,258/- (31.12.2008 - Rs.11,208,122/-).

[a] [ii] Agricultural Income Tax matter Rs. Nil ( 31.12.2008 - Rs.64,209,208/-)

[b] Sales Tax assessments disputed in appeals Rs.195,551,033/- (31.12.2008-Rs.143,482,782/-)

[c] Liability towards fringe benefit tax under adjudication - Rs. 70,929,211/- (31.12.2008 - Rs. 48,527,839/-) Refer Note 29 of Schedule 13.

[d] Premium on redemption of Foreign Currency Convertible Bonds Rs. 422,707,146/- (31.12.2008 - Rs. 400,623,012/-). Refer Note 18 of Schedule 13.

[e] Guarantees gr.-on on behalf of third parties Rs. 76,814,400/- (31.12.2008 - Rs. 151,100,000/-) of which Rs. 30,863,255/- (31.12.2008 - Rs. 45,844,416/-) was outstanding as at 31st December, 2009.

[f] Uncalled liability on partly paid shares - Rs.6,999,510/- (31.12.2008 - Rs. 6,999,510/-).

[g] Interest and penalty for non-deduction and non-deposit of tax deducted at source from green leaf suppliers not ascertainable at this stage.

[h] Commercial claims not acknowledged as debts Rs. 242,899,702/- (31.12.2008 - not ascertainable).

The future cash (lows on account of above cannot be determined unless the judgement / decisions / demand are received from the appropriate authorities / parties.

4. Provision for taxation has been made as per the Income Tax Act, 1961 and the rules framed thereunder with reference to the profit for the year ended 31st December, 2009 which extends over two assessment years, Assessment Year 2009-2010 and Assessment Year 2010-11. The ultimate tax liability for the Assessment Year 2010-11 will be determined on the total income for the year period from 1st April, 2009 to 31st March 2010.

5. Employee Benefit Obligation Gratuity

The Company operates three gratuity schemes wherein every employee is entitled to the benefit equivalent to 15 days salary last drawn for each completed year of service. The same is payable on" retirement or termination of service, whichever is earlier. Annual contributions based on actuarial valuation carried out at the year end are made to an independent trust fund who in turn is investing in a private insurance company under group gratuity scheme. Pension

The Company operates two pension schemes for eligible employees, one of them being a defined benefit scheme and the other a defined contribution. The defined benefit scheme is funded with Life Insurance Corporation of India (LICI). Annual contributions to the defined benefit scheme are made by the Company based on actuarial valuation carried out by them at year end. Contributions for the defined contribution plan are deposited with a Trust and such contributions along with interest accumulate during the service period of such employee. Such funds are utilised to buy pension annuity from the insurance company.

Provident Fund

Provident Fund is a defined contribution scheme whereby the Company deposits an amount determined as a fixed percentage of basic salary to the Trust/government authorities every month. Leave Benefit

Leave benefit comprises of leave balances accumulated by the employees which can be encashed only at the time of retirement. A. Defined Contribution Plans

Contributions for Defined Contribution Plans amounting to Rs.58,906,944/- (31.12.2008 - Rs.56,928,082/-) has been recognised in the Profit and Loss Account.

Notes:

(i) The estimates of future salary increases considered in the actuarial valuation takes into account factors like inflation, future salary increases, seniority, promotion, supply and demand in the employment market etc. The expected return on plan assets is based on the actuarial expectation of the average long term rate of return on investments of the fund during the estimated time of the obligations.

(ii) Since the company has adopted Accounting Standard 15 (Revised 2005) on Employee Benefits during the year 2007, figures for three financial years are available and have been disclosed.

(iii) The contribution expected to be made by the company for the year ending 31st December, 2010 cannot be ascertained at this stage.

6. [a] Assets acquired under Hire Purchase (HP) comprise of vehicles. These agreements are of a period of 36 months and more and in certain cases provide for revision of hire charges for variation in prime lending rates of the bank. There are no restrictive covenants in the HP agreements.

[b] The Company has taken various premises under operating lease having tenures upto 36 months which are not non- cancellable. These are usually renewed periodically by mutual consent. The rental payable against these lease amounting to Rs.676,200/- (31.12.2008 - Rs.424,495/-) have been debited to the Profit and Loss Account.

7. Related Party Disclosure:

I. Names of related parties and description of relationship

a. Subsidiaries of the Company

Namburnadi Tea Company Ltd.

Camellia Cha Bar Ltd.

North East Hydrocarbon Ltd.

Assam Oil and Gas Ltd.

Duncan Macneill Natural Resources Ltd.

Assam Estates Ltd.

Gujarat Hydrocarbons and Power SEZ Ltd.

b. Key Managerial Personnel

Mr. A. K. Jajodia, Managing Director

Mr. Abhay Chawdhry, Director Finance & CFO (upto 18.08.2008)

c. Relatives of Key Managerial Personnel

Ms. Ruchika Jajodia

Ms. Rashmi Chawdhry (upto 18.08.2008)

d. Enterprises over which the key managerial personnel are able to exercise a significant influence

Abhay Chawdhry HUF (upto 18.08.2008)

e. Joint Venture through jointly controlled operations

Canoro Resources Limited - (Refer Note No. 17 below)

8. [a] The Company is pursuing E&P activities in Amguri Development Block and AA-ON/7 Exploration Block located in North East under a Joint Operating Agreement (JOA) with Canoro Resources Ltd, a Canadian E&P Company based in Calgary, Canada, having participation interest of 40% and 35% respectively. In addition, the Company has one more E&P asset - AA-ONN-2005/1 in Assam and Assam-Arakan Basin under consortium with ONGC and OIL, having participation interest of 10% through bidding process under NELP-VII.

With regard to operations in Marginal Discovered Fields, having made investments in work over operations in Laxmijan and Barsilla and having established oil and gas reserve, the Company made strong representation before ONGC seeking amendment of commercial terms to make the operation economically viable due to increased cost of operation. Since the operation was not economically viable, the management has decided to treat these Marginal Fields as abandoned and subsequently surrendered these Fields back to ONGC. Accordingly the investment cost capitalised earlier has been fully charged off under the head "exceptional items".

9. The Company had issued Zero Per Cent Foreign Currency Convertible Bonds ("FCCB") in 2006 aggregating to USD 48 Million (INR 2,109,120,000/-) to finance capital expenditure for modernisation, expansion and acquisitions. The Bond holders have an option of converting these Bonds into Equity Shares at a conversion price of Rs. 28.75 per share, at any time on or after 28th November, 2006, subject to compliance with certain conditions stated in the offer circular dated 23rd November, 2006. The Bonds are redeemable on 30th November, 2011 at 150.019 per cent of their principal amount, unless previously converted or redeemed.

Bond holders have exercised their option of converting their Bond amounting Rs. 5,145,703/- into Equity Shares on 18th January, 2008. Accordingly, 5,145,703 shares have been issued last year with resultant increase in issued share capital and securities premium account.

During the current year the Company re-purchased and cancelled FCCB of Rs. 605,152,000/- at a discount which has resulted in a saving of Rs. 118,107,100/. This has been treated as "Exceptional Items". Consequent upon such re-purchase and cancellation the Companys obligation to convert said FCCBs into shares or to redeem the same in foreign currency has come to an end. As of date FCCBs outstanding aggregate to Rs. 148,442,400/-.

Unutilised FCCB proceeds amounting to Rs.8,706,025/- have been invested in securities and the balance Rs.37,275,008/- is lying with banks at the year end.

10. During the year 2007, the Company received the balance amount outstanding against 81,000,000 share warrants of Re. 1 each issued in 2006 at a premium of Rs.22.25/- per warrant. Equivalent number of Equity Shares of Re. 1 each has been issued on conversion of these warrants resulting in increase of issued and paid up share capital of the Company by Rs.81,000,000/- and the securities premium by Rs.1,802,250,000/-.

11. Loans and Advances to subsidiaries include an amount of Rs. 1,388,834,110/- (including interest Rs. 183,081,878/-) (31.12.08 - Rs.1,107,849,116/- including interest Rs. 133,991,914/-) due from Gujarat Hydrocarbons and Power SEZ Limited (GHPSL), a wholly owned subsidiary of the Company.

GHPSL was incorporated for developing a Special Economic Zone (SEZ) for Hydrocarbon Park for Energy in the State of Gujarat. GHPSL has acquired 315 hectares of land for its SEZ project from Gujarat Industrial Development Corporation (GIDC) out of which 276 hectares of land has been taken possession of and the balance 39 Hectares is in the process of acquisition.

12. An eviction suit has been filed before the Single bench at Calcutta High Court by the Landlord of the Corporate Office.The Honble Judge has directed the Parties to settle the matter amicably and has sought for submitting terms from both the parties. The Court has given the terms of settlement but the Landlord have asked for some time to furnish their terms of settlement. It is expected that the matter will be resolved amicably and the new long term lease deed will be entered into on mutually accepted terms. However, as a matter of abundant precaution, the amount lying in the Fixed Assets has been fully depreciated.

Notes :-

[i] The Company has considered business segment as the primary segment for disclosure. The components of these business segments are plantation products and oil & gas.

[ii] The segment wise revenue, results, assets and liabilities relate to the respective amounts directly identifiable to each of the segments. Unallocable income/expenditure refers to income/expenses incurred on common services at corporate level.

[iii] Geographical segments is on the basis of the geographical location of the customer namely :

Sales within India

Sales outside India [iv] Figures in bold represent previous years figures.

13. In line with the notification dated 31st March, 2009 issued by the Ministry of Corporate Affairs, amending Accounting Standard (AS) 11 - "Effects of Changes in Foreign Exchange Rate", the Company in the current year has:

(i) charged to the Profit and Loss Account Rs.29,492,555/-, being the amortisation charge of Foreign Currency Monetary Item Translation Difference Account (FCMITDA) for the year.

(ii) carried forward Rs.36,865,695/- (31.12.08 - Rs. 66,358,250/-) in the FCMITDA amortisable by 31st March, 2011.

14. Derivative instruments

The Company uses Foreign Exchange Contracts to hedge its certain exposures in foreign currency related to firm commitments and highly probable transactions.

15. The Company has obtained a stay from the Honble Guwahati High Court restraining the taxation authorities from imposing and collecting Fringe Benefit Tax (FBT) under Section 115WA of the Income Tax Act, 1961. In view of this, the Company has not provided the liability for FBT till the year-end.

16. Previous years figures have been regrouped / rearranged wherever necessary.

 
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