Notes to Accounts of Bengal Tea and Fabrics Ltd.

Mar 31, 2018

1. CORPORATE AND GENERAL INFORMATION

Bengal Tea & Fabrics Limited was incorporated in the year 1983 and later on, in the year 1985, it took over the whole undertakings of Bengal Tea & Industries Limited, earlier known as Bengal Tea Company Limited. At present the Company has interest in the business of Tea, Textiles & Real Estate.

2. BASIS OF ACCOUNTING

2.1. Statement of Compliance

These financial statements have been prepared in accordance with the Indian Accounting Standards ("Ind AS") as prescribed by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 ("the Act"), read with the Companies (Indian Accounting Standards) Rules, 2015 (as amended), other relevant provisions of the Act and other accounting principles generally accepted in India.

The financial statements for all periods up to and including the year ended 31st March, 2017, were prepared in accordance with Generally Accepted Accounting Principles (GAAP) in India, which includes the accounting standards prescribed under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 and other provisions of the Act (collectively referred to as "Indian GAAP"). These financial statements for the year ended 31st March, 2018are the first Ind AS Financial Statements with comparatives, prepared under Ind AS. The Company has consistently applied the accounting policies used in the preparation of its opening Ind AS Balance Sheet at 1st April, 2016 throughout all periods presented, as if these policies had always been in effect and are covered by Ind AS 101 "First Time Adoption of Indian Accounting Standards".

An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is provided in Note no. 47. Certain of the Company''s Ind-AS accounting policies used in the opening Balance Sheet differed from its Indian GAAP policies applied as at 31st March, 2016 and accordingly the adjustments were made to restate the opening balances as per Ind-AS. The resulting adjustment arising from events and transactions before the date of transition to Ind-AS were recognized directly through retained earnings as at 1st April, 2016 as required by Ind- AS 101. The financial statements of the Company for the year ended 31st March, 2018 has been approved by the Board of Directors in their meeting held on 19th May, 2018.

2.2. Basis of Accounting

The Company maintains accounts on accrual basis following the historical cost convention, except for followings:

- Certain Financial Assets and Liabilities is measured at Fair value/ Amortised cost (refer accounting policy regarding financial instruments);

- Defined Benefit Plans - plan assets measured at fair value; and

- Biological Assets-At fair value less cost to sell

2.3. Functional and Presentation Currency

The Financial Statements are presented in Indian Rupee (INR), which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates. All financial information presented in INR has been rounded off to the nearest lakhs as per the requirements of Part II of Schedule III, unless otherwise stated.

2.4. Use of Estimates and Judgements

The preparation of financial statements in conformity with Ind AS requires judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

2.5. Presentation of Financial Statements

The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 ("the Act"). The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended).

2.6. Operating Cycle for current and non-current classification

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1. The Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.

An asset is classified as current when it is:

- Expected to be realized or intended to sale or consumed in normal operating cycle;

- Held primarily for he purpose of trading;

- Expected to be realized within twelve months after the reporting period; or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All the other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the reporting period; or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company classifies all other liabilities as non-current. Deferred Tax Assets and Liabilities are classified as non-current assets and liabilities respectively.

2.7. Measurement of Fair Values

A number of the Company''s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability; or

- In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the input that is significant to the fair value measurement as a whole:

- Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

- Level 2 — Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 — Inputs which are unobservable inputs for the asset or liability.

External valuers are involved for valuation of significant assets & liabilities. Involvement of external valuers is decided by the management of the company considering the requirements of Ind AS and selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.

Notes:

3.1 For Property, Plant and Equipment existing as on 1st April 2016, i.e. the date of transition to Ind AS for the company, the company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of intangible assets also as per the option available under para D7AA of Ind AS 101 "First Time Adoption".

3.2 Refer Note No. 42 for information on property, plant and equipment pledged as securities by the Company.

3.3 Refer Note No. 41.1 for disclosure of contractual commitments for the acquisition of Property, Plant & Equipment.

3.4 Disposals in Plant & Machinery includes Gross block and Accumulated Depreciation of Rs. 725.01 lakh and Rs. 190.80 lakh respectively towards assets classified as held for Disposal Group during year ended on March 31,2018.

3.5 Depreciation for the year ended 31st March 2018 includes depreciation of Rs. 168.00 lakh in respect to assets classified as held for disposal Group during year ended on March 31,2018.

3.6 Deferred tax assets and deferred tax liabilities have been offset wherever the Company has a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income tax levied by the same taxation authority.

3.7 Refer note no. 42 for information on inventories pledged as securities by the Company.

3.8 Refer note no. 30,31 &36 for information in relation to the amount of inventories recognized as expenses.

3.9 Unharvested Tea leaves on bushes as on 31st March 2018was 25,412 kgs (31st March, 2017- 38,492 kgs, 1st April 2016- 72,882 kgs).

3.10 Trade receivables are non-interest bearing and are generally on terms of30 to 60 days. "

3.11 No trade or other receivables are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

3.12 Reconciliation of the number of shares at the beginning and at the end of the year

There has been no change/ movements in number of shares outstanding at the beginning and at the end of the year.

3.13 Terms/ Rights attached to Equity Shares:

The Company has only one class of Ordinary Equity shares having a face value of Rs. 10 per share and each holder of Ordinary Equity shares is entitled to one vote per share. Ordinary Equity Shares transferred to Investor''s Education and Protection Fund (IEPF) do not enjoy any voting rights. The Company declares and pays dividends in Indian Rupees. The dividend, as and when proposed by the Board of Directors (except interim dividend), subject to the approval of the shareholders in the Annual General Meeting is paid to the shareholders. The claim of Ordinary Equity Shareholders on earnings and on assets in the event of liquidation, follows all others, in proportion to their shareholding.

4. Shareholding Pattern with respect to Holding or Ultimate Holding Company

The Company has Holding Company namely Rydak Enterprises & Investment Limited, the shareholding of which is given in Note No. 18.6.

4.1 No ordinary Equity shares have been reserved for issue under options and contracts/commitments for the sale of shares/disinvestment as at the Balance Sheet date.

4.2 The Company has not allotted any equity shares against consideration other than cash nor has allotted any shares as fully paid up by way of bonus shares nor has bought back any shares during the period of five years immediately preceding the date at which the Balance Sheet is prepared.

4.3 No securities convertible into Equity/ Preference shares have been issued by the Company during the year.

4.5 No calls are unpaid by any Director or Officer of the Company during the year.

4.6 Details of Security Given for Loan

a Term Loans are secured by first charge over all immovable properties situated at Asarwa Mills both present and future ranking pari passu inter se and hypothecation of all movable properties both present and future (save and except Book Debts) including movable machinery, machinery spares, tools and accessories subject to prior charge created and/or to be created in favor of Textile Division''s bankers for working capital facilities. b Additionally secured by the Company''s Bungalow situated at Asarwa House, Dr. Balwantrai Mehta Marg, Shahibaug, Ahmedabad. c Loans are guaranteed by the Managing Director.

5.1 Refer note no. 42 for information on the carrying amounts of financial and non-financial assets pledged as security for current & non-current borrowings.

5.2 Terms and conditions of Short Term Borrowings

a Out of Working Capital Loans of Rs. 1559.57 lakh ( P.Y. Rs. 2534.33 lakh &as on April 1, 2016Rs. 2449.92 lakh ) amount of Rs. 1078.84 lakh (P.Y. Rs. 1927.14 lakh &as on April 1,2016 Rs. 1885.55 lakh ) from banks are secured by:

i) Pari-passu First charge over entire Current Assets of the Textile Division.

ii) Pari-passu Second Charge over entire movable fixed assets, the whole of the immovable properties situated at Asarwa Mills and Bungalow situated at Asarwa House, Dr. Balwantrai Mehta Marg, Shahibaug, Ahmedabad.

b Balance amount of Loans repayable on demand of Rs. 480.73 lakh (Previous Year Rs.607.19 lakh & as on April 1,2016Rs. 564.37 lakh) from Bank is secured against hypothecation of green tea leaves, before and after plucking, tea in process, finished tea in stock/intransit and /or lying with brokers/agents, book debts (present and future), first charge overall current assets of the Tea Division (both present and future) and equitable mortgage of immovable properties and machineries of Tea Estates as additional security. c The Working Capital Facilities having interest rate varying between 10.00%-12.50% p.a. are repayable on demand. d All Loans are guaranteed by the Managing Director.

5.3 Refer note no. 42 for information on the carrying amounts of financial and non-financial assets pledged as security for current & noncurrent borrowings.

6.1 All Provisions are valued at their Present value of money.

6.2 Miscellaneous Income includes government grants in the form of subsidy are related to certain incentives being made available by the Government of India for Tea Industry. Replantation subsidy relates to activities for which cost has been incurred in earlier years. There are no unfulfilled conditions or other contingencies attached to these grants. The Company did not benefit directly from any other forms of government assistance.

6.3 Applicable Indian Statutory Income Tax rate for Fiscal Year 2018 & 2017 is 33.063% under Income Tax Act 1961 and 30% under the Assam Agricultural Income Tax Act, 1939. However, the Company is required to pay tax for the year only under Assam Agricultural Income tax Act, 1939. Further the Company has created Deferred Tax Asset/(Liabilities) @27.82% for Income Tax purpose.

7. DISCONTINUED OPERATIONS

The Board of Directors of the Company has announced the decision of closure of the Spinning section (Yarn Segment) at the Textile Division of the Company situated at Asarwa Mills,Ahmedabad w.e.f. 15th September, 2017 after obtaining requisite approvals from the shareholders. Accordingly, the results of the Yarn Division has been shown as "Discontinued Operation" in terms of IND AS 105 - Non-Current Assets Held for Sale and Discontinued Operations in the financial statements.

8.1 In respect of the matters in note no. 40.1, future cash outflows are determinable only on receipt of judgements/decisions pending at various forums/ authorities. Furthermore, there is no possibilities of any reimbursements to be made to the company from any third party.

8.2 In view of stay granted by Hon''ble High Court of Gujarat on April 5, 2016 on retrospective implementation of Payment of Bonus (Amendment) Act notified on January 8,2016, the Textile Division have not provided for differential bonus liability of Rs. 19.76 lakh related to Financial Year 2014-15.

8.3 Defined Benefit Plan

The following are the types of defined benefit plans: a Gratuity Plan (Funded)

The Company''s gratuity scheme, a defined benefit plan is as per the Payment of Gratuity Act, 1972, covers the eligible employees and is administered through certain gratuity fund trusts. Such gratuity funds, whose investments are managed by insurance companies/trustees themselves, make payments to vested employees or their nominees upon retirement, death, incapacitation or cessation of employment, of an amount based on the respective employee''s salary and tenure of employment. Vesting occurs upon completion of five years of service. The amount of gratuity payable is the proportionate salary for 15 days multiplied for the number of years of service based on the 26 days average salary computed on the basis of last drawn basic salary per month.

a. Other Defined Benefits (Un-Funded)

Other employee benefits are accounted for on accrual basis. Liabilities for compensated absences are determined based on independent actuarial valuation at year end and charge is recognised in the statement of profit and loss.

The Company recognises undiscounted amount of short term employee benefits during the accounting period based on service rendered by the employee.

b. Asset-Liability Matching Strategy

The Company deploys its fund in bonds, special deposit, LIC and other insurance companies in Textile Division and has Group Gratuity insurance policy with insurers in Tea Division. The company aims to maintain a close to full-funding position at each Balance Sheet date. Any deviation from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the coming years.

c. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

d. At 31st March 2018, the weighted average duration of the defined benefit obligation was 10years in both Tea &Textile Division (previous year 11 years in Tea Division & 10 years in Textile Division).

e. the company expects to contribute Rs. 45lakh(previous year Rs. 82lakh)to its gratuity fund in 2018-19.

9. In accordance with the Guidance Note on Accounting for Expenditure on Corporate Social Responsibility activities, the requisite disclosure is as follows:

In view of losses in earlier years, Nil amount was required to be spent by the Company on account of Corporate Social Responsibility.

10. Certain trade receivables, loans & advances and creditors are subject to confirmation. In the opinion of the management, the value of trade receivables and loans & advances on realisation in the ordinary course of business, will not be less than the value at which these are stated in the balance sheet.

* Notes:

1) Short term employee benefits includes the perquisites calculated as prescribed under the Income Tax Act, 1961.

2) The Company contributes equal amount to the employees Provident Fund within the statutory limits as prescribed under the relevant Act.

3) As the future liabilities for gratuity and leave encashment are provided on an actuarial valuation basis for the Company, the amount pertaining to individual is not ascertainable and therefore not included above.

11. Terms and Conditions of transaction with Related Parties

i) All related party transactions entered during the year were in ordinary course of business and on arms length basis.

ii) The Company doesn''t have any balances outstanding with related parties as at the end of the financial year.

12 TRANSITION TO IND AS

12.1 Basis for Preparation

For all period up to and including the year ended March 31,2017,the Company has prepared its financial statements in accordance with generally accepted accounting principles in India (Indian GAAP). These financial statements for the year ended March 31,2018 are the Company''s first annual IND AS financial statements and have been prepared in accordance with IND AS.

The Accounting Policies set out in Note 2 have been applied in preparing the financial statements for the year ended March 31,2018, the comparative information presented in these financial statements for the year ended March 31,2017 and in the preparation of an opening Ind AS balance sheet at April 1, 2016 (the date of transition). This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP and how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows.

12.2 Exceptions and Exemptions Applied

IND AS 101 "First-time adoption of Indian Accounting Standards" (hereinafter referred to as Ind AS 101) allows first time adopters certain exemptions from the retrospective application of certain IND AS, effective for April 1,2016 opening balance sheet. In preparing these financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.

12.1.1 Optional Exemptions Availed

a Business Combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.

The Company has not applied Ind AS 103 to acquisitions of businesses under Ind AS, that occured before the transition date i.e., 1st April 2016. Accordingly, business combinations occurring prior to the transition date have not been restated.

b Property Plant and Equipment, Intangible Assets and Investment Properties

As permitted by para D5-D8B of Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of intangible assets also. Further previous GAAP revaluation reserve has also been transferred to retained earnings.

c Determining whether an arrangement contains a Lease

Para D9-D9AA of Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind AS 17 "Leases" for determining whether an arrangement existing at the date of transition contains a lease by considering the facts and circumstances existing at the date of transition (rather than at the inception of the arrangement). The Company has applied the above transition provision and has assessed all the arrangements at the date of transition.

12.2.1 Mandatory Exceptions

a Estimates

As per para 14 of Ind AS 101, an entity''s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the comparative period presented in the entity''s first Ind AS financial statements, as the case may be, should be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies.

As per para 16of the standard, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition or at the end of the comparative period.

The Company''s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the financial statements that were not required under the previous GAAP are listed below:

- Fair Valuation of financial instruments carried at FVTPL and/or FVOCI.

- Fair Valuation of Biological Assets measured at fair value less cost to sell.

- Impairment of financial assets based on the expected credit loss model.

- Determination of the discounted value for financial instruments carried at amortized cost.

- Discounted value of liability for decommissioning costs.

b De-recognition of financial assets and liabilities

As per para B2 of Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, "Financial Instruments", prospectively for transactions occurring on or after the date of transition to Ind AS. However, Para B3 gives an option to the entity to apply the derecognition requirements from a date of its choice if the information required to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the initial accounting for those transactions. The company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

c Classification and measurement of financial assets

Para B8 - B8C of Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortized cost, if any, has been done retrospectively.

12.3 Impact of Transition to Ind AS

The following is a summary of the effects of the differences between IND AS and Indian GAAP on the Company''s total equity shareholders'' funds and profit and loss for the financial periods previously reported under Indian GAAP following the date of transition to INDAS.

12.3.1 Notes to First Time Adoption

a Fair valuation of Investments

Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value.

b Inventories

Under previous GAAP, Finished Tea stock has been valued at net realizable value. Under Ind AS, Finished Tea Stock were valued at lower of Cost or Net Realizable Value. Cost of Finished Tea comprise cost of purchase of green leaf, fair value of green leaf at the time of harvest less cost to sell, conversion cost (i.e 40 % of factory cost) and other costs incurred in bringing the same to their present location and condition.

c Biological Assets (i.e. unplucked leaf on tea bushes)

Under previous GAAP, biological assets i.e. unplucked leaf on tea bushes has neither been valued nor recognised in the accounts. Under Ind AS, unplucked leaf on tea bushes has been measured at its fair value less cost to sell.

d Borrowings

Ind AS 109 read with ITFG 5 requires transaction costs incurred towards origination of borrowings to be added to the carrying amount of borrowings on initial recognition. These costs are recognised in the statement of profit & loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. In respect to the Processing Cost capitalised prior to the date of transition, the processing cost capitalised (net of Cumulative Depreciation impact) shall also be reduced from the respective fixed assets and the differential amount shall be adjusted with the retained earnings.

Under previous GAAP, these transaction costs were charged off to Statement of Profit & Loss or capitalized with the qualifying asset as per the application of the corresponding Borrowings.

e Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in Other Comprehensive Income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the Statement of profit & loss for the year.

f Retained Earnings

Retained earnings as at April 1,2016 has been adjusted consequent to the above Ind AS transition adjustments.

g Other Comprehensive Income

Under Ind AS, all items of income and expense recognised in a period should be included in the statement of profit & loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as'' Other Comprehensive Income ''includes remeasurements of defined benefit plans and fair value gains or (losses) on FVOCI equity instruments and debt instruments. The concept of Other Comprehensive Income did not exist under previous GAAP.

h Deferred Tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. IndAS12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to different temporary differences. According to the accounting policies, the company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity.

i Expected Credit Loss Model

Ind-AS 109 requires to recognize loss allowances on trade receivable and other financial assets of the Company, at an amount equal to the lifetime expected credit loss or the 12 month expected credit loss based on the increase in the credit risk.

j Deferred Revenue

Under Indian GAAP, grants received from government agencies against specific fixed assets (Property, Plant and Equipment) are adjusted to the cost of the respective asset. Under IND AS the same has been presented as deferred revenue being amortised in the Statement of Profit & Loss on a systematic basis.

k Proposed Dividend and Tax on Proposed Dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements and applicable dividend tax thereon were considered as adjusting events. Accordingly, provision for proposed dividend and dividend tax thereon was recognised as a liability. Under Ind AS, such dividend and tax thereon are recognised when the dividend is approved by the shareholders in the general meeting.

l Re-classifications

The Company has done the following reclassifications as per the requirements of Ind-AS:

I Assets / liabilities which do not meet the definition of financial asset / financial liability have been reclassified to other asset / liability.

II Remeasurement gain/loss on long term employee defined benefit plans are re-classified from statement of profit and loss to Other Comprehensive Income.

III The Company has re-classified unpaid dividend balance form Cash and Cash equivalents to Other Bank Balances.

IV Excise duty on sales was earlier netted off with Sales, has now been presented separately.

13.1 The management assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings and other financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments.

13.2 For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to their fair values.

13.3 The fair value of the financial assets and financial liabilities is included at the amount at which the same could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

13.4 The following methods and assumptions were used to estimate the fair values.

13.5. The fair values of non-current borrowings are based on the discounted cash flows using a current borrowing rate. They are classified as Level 2 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including own credit risks, which was assessed, as on the balance sheet date to be insignificant.

14. FAIR VALUE HIERARCHY

The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into three levels of fair value measurement as prescribed under the Ind AS 113 "Fair Value Measurement". An explanation of each level follows underneath the tables.

14.1 During the year ended March 31,2018 and March 31,2017, there were no transfers between Level 1 and Level 2 fair value measurements and no transfer into and out of Level 3 fair value measurements.

14.2 Explanation to the fair value hierarchy

The Company measures financial instruments, such as, quoted investments at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy as described in Note no. 2.7.

15. FINANCIALRISKMANAGEMENT

The Company''s activities expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, the Company has risk management policies as described below :-

15.1 Credit Risk

Credit risk refers to the risk of financial loss arising from default/failure by the counterparty to meet financial obligations as per the terms of contract. The Company is exposed to credit risk for receivables, cash and cash equivalents, financial guarantees and derivative financial instruments. None of the financial instruments of the Company result in material concentration of credit risks.

Credit risk on receivables is minimum since sales through different mode (e.g.. auction, consignment, private - both domestic and export) are made after judging credit worthiness of the customers, advance payment or against letter of credit by banks. The history of defaults has been minimal and outstanding receivables are regularly monitored. For credit risk on the loans to parties, the Company is not expecting any material risk on account of non-performance by any of the parties.

For derivative and financial instruments, the Company manages its credit risks by dealing with reputable banks and financial institutions. Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The carrying value of the financial assets represent the maximum credit exposure. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

15.2 Liquidity Risk

Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company monitors rolling forecast of its liquidity position on the basis of expected cash flows. The Company''s approach is to ensure that it has sufficient liquidity or borrowing headroom to meet its obligations at all point in time. The Company has sufficient short-term fund based lines, which provides healthy liquidity and these carry highest quality credit rating from reputed credit rating agency.

15.2.1 Fund Management

Management monitors rolling forecasts of the company''s liquidity position (including the undrawn credit facilities extended by banks and financial institutions) and cash and cash equivalents on the basis of expected cash flows. In addition, the Company''s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

15.3 Market Risk

15.3.1 Foreign Exchange Risk

The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the U.S. Dollar. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company''s functional currency(INR). The risk is measured through a forecast of highly probable foreign currency cash flows.

Since the Company''s financials are prepared and reported in INR which also is the functional currency of the Company and as it doesn''t have any foreign associate, subsidiary etc, there is no translation risk involved. On the date of financial results, Company doesn''t have significant foreign currency trade payables and receivables etc. and is, therefore, not exposed to foreign exchange risk.

b Sensitivity Analysis

Since the Company doesn''t have material foreign currency operations, the analysis is not reported.

15.3.2 Interest Rate Risk

The Company is exposed to risk due to interest rate fluctuation, on the following :

a Interest rate risk arises from the sensitivity of financial assets and liabilities to changes in market rate of interest. However, the Company does not have any interest bearing financial asset or liability at the end of the financial year ended 31st March 2018. b The interest rate risk can also impact the provision for retrial benefits. The Company generally utilizes variable rate borrowings and therefore subject to interest rate risk, as both the carrying amount and the future cash flows will fluctuate because of change in the market interest rates.

During 31st March 2018, 31st March 2017 and on 1st April 2016, all the Company''s borrowings were at variable rate mainly denominated in INR.

15.3.3 Other Price Risk

The price risk is the risk arising from investments held by the Company and classified in the balance sheet either at fair value through Other Comprehensive Income or at fair value through profit or loss.

The Company''s equity investments are mainly strategic in nature and are generally held on a long-term basis. Further, the current investments are in units of liquid mutual fund and these are not exposed to significant price risk.

16. CAPITAL MANAGEMENT

The Company''s objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through optimum mix of borrowed and own funds.

16.1 Other Disclosures

a The Company''s corporate strategy aims at creating multiple drivers of growth anchored on its core competencies. The Company is currently focused on three business groups: Textile - Fabric Division, Tea and Real Estate. The Company''s organizational structure and governance processes are designed to support effective management of multiple businesses while retaining focus on each one of them. During the financial year, the Company has discontinued operations relating to Yarn Division as reported in Note No. 39.

b The geographical information considered for disclosure are:

- Sales with in India

- Sales outside India

c The Company is not reliant on revenues from transactions with any single external customer and does not receive 10% or more of its revenues from transactions with any single external customer. d The accounting policies adopted for segment reporting are in line with the accounting policy of the Company.

17. Previous GAAP figures have been reclassified/regrouped to confirm the presentation requirements under IND AS and the requirements laid down in Division-II of the Schedule-III of the Companies Act, 2013.

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Mar 31, 2015

Current Year Previous Year

(A) Contingent Liabilities not provided for :

(a) Claims against the Company not acknowledged as debts 71 71

(b) Bills Discounted 42 127

(c) Guarantees given by Company'sBanker 147 174

(d) Disputed Sales Tax Demands including interest and penalty under appeal 1 30

(e) Disputed Service Tax / Excise Matters * - -

* Below rounding off norms adopted by the Company.

It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolutions of the respective proceedings.

viii.The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

b) Amount recognised as an expense in respect of Compensated Leave Absences is Rs.41 Lacs (Previous Year Rs.33 Lacs).

c) Short term payment of Leave Encashment amounting to Rs.5 Lacs (Previous year Rs. 4 Lacs ) is charged to Employee Benefits Expense.

(d) The Textile division of the Company has converted the land at Dholka under Real Estate Development planned for sale, from fixed assets into Stock-in-Trade at fair value of Rs. 1670 Lacs as on the date of conversion.

(e) During the year, the Company has revised depreciation rate on certain fixed assets as per useful life specified in Schedule II of the Companies Act, 2013. Accordingly, depreciation of Rs.44 Lacs on account of assets whose useful life has already exhausted as on 01.04.2014 (after adjusting deferred tax) has been adjusted with the retained earnings.

As a consequence of such change in the accounting policy, excess depreciation up to 31st March, 2014 amounting to Rs. 120 Lacs and a further sum of Rs. 10 Lacs on account of Capital Subsidy received has been adjusted with the currentyear depreciation. Had there not been any change in the policy of depreciation, depreciation for the year ended 31st March, 2015 would have been lower by Rs. 16 Lacs.

(f) Previous year's figures have been regrouped/rearranged wherever necessary.

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Mar 31, 2014

Figures for the Figures for the Current Year Previous Year

(A) Contingent Liabilities not provided for :

(a] Claims against the Company not acknowledged as debts 71 55

(b] BillsDiscounted 127 168

(c] Guarantees given by Company''s Banker 174 200

(d] Disputed Sales Tax Demands including interest andpenaltyunderappeal 30 73

(e] Disputed Service Tax / Excise Matters * - 2

* Below rounding off norms adopted by the Company.

It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolutions of the respective proceedings.

viii.The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

c] Amount recognised as an expense in respect of Compensated Leave Absences is Rs. 33 Lacs (Previous Year Rs. 27Lacs].

d] Short Term payment of Leave Encashment amounting to Rs. 4 Lacs (Previous year Rs. 10 Lacs] is charged to Employee Benefits Expense.

(O) At textile division of the Company, certain assets and Inventory were destroyed / damaged due to fire at the godown on 13th March 2014. The claim has been filed with the Insurance Company for which survey has been completed A sum of Rs. 116 lacs has been shown as Insurance Claim Receivable in Note No 21 of the financial statements.

(P) Previous year''s figures have been regrouped/rearranged wherever necessary.

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Mar 31, 2013

A) Rights, Preferences and Restrictions attached to Shares Equity Shares :

The Company has one class of shares referred to as equity shares having a par value ofRs. 10 each. Each shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

* Based on information so far available with the Company in respect ofMSME (as defined in ''The Micro, Small and Medium Enterprise Development Act, 2006'') there are no delays in payment of dues to such enterprises during the year and there are no such dues payable at the year end. Further no interest has been paid/payable to such enterprises.

a) The amount of Leasehold Land amortized during the year as disposals is below rounding off norms adopted by the Company.

b) Adjustment in gross block includes amount of Rs. 84 lacs (Previous year Rs. 21 lacs) as borrowing cost capitalised during the year and reduction of Rs. Nil (Previous year Rs. 4 lacs) as subsidy received from Tea Board.

Figures for the Figures for the Current Year Previous Year

(A) Contingent Liabilities not provided for :

(a) Claims against the Company not acknowledged as debts 55 16

(b) Bills Discounted 168 270

(c) Guarantees given by Company''s Banker 200 212

(d) Disputed Sales Tax Demands including interest and penalty under appeal 73 15

(e) Disputed Service Tax / Excise Matters 2 2

It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolutions of the respective proceedings.

(B) Disclosure pursuant to Accounting Standard -15 ( Revised ) "Employee Benefits" :

a. Defined Contribution Plans :

Amount of 1214 lacs (Previous Year 1196 lacs) is recognised as expense and included in "Employee Benefits Expense in Note-27".

b. Defined Benefit Plans :

Defined Benefit Obligation

i. Reconciliation of opening and closing balances of Present Value of the Defined Benefit Obligation :

viii.The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

c) Amount recognised as an expense in respect of Compensated Leave Absences isRs. 27 Lacs (Previous YearRs. 13 Lacs)

d) Short Term payment of Leave Encashment amounting to Rs. 10 Lacs (Previous year Rs. 9 Lacs) is charged to Employee Benefits Expense.

Notes:

i) The reportable primary segment is based on two business namely; Tea & Textile and the reportable secondary segment is based on geographical location of customers.

ii) The segment revenue, results, assets & liabilities include respective amounts identifiable to each of the segment and amounts allocated on reasonable basis.

(C)In the opinion of the Board, any of the assets other than fixed assets have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

(D) Previous year''s figures have been regrouped/rearranged wherever necessary.

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Mar 31, 2012

Figures for the Figures for the

Current Year Previous Year

(B) Contingent Liabilities not provided for :

(a) Claims against the Company not acknowledged as debts 16 23

(b) Bills Discounted 270 53

(c) Guarantees given by Company's Banker 212 177

(d) Disputed Sales Tax Demands including interest and penalty under appeal 15 15

(e) Disputed Service Tax / Excise Matters 2 It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolutions of the respective proceedings.

i. The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

a) Amount recognized as an expense in respect of Compensated Leave Absences is Rs.13 Lacs (Previous Year Rs.18 Lacs)

b) Short Term payment of Leave Encashment amounting to Rs.9 Lacs (Previous year Rs.10 Lacs) is charged to Employee Benefits Expense.

(A)The financial statements for the year ended March 31,2012 have been prepared as per the Notification on Revised Schedule

ii. under the Companies Act, 1956 and accordingly, the previous year figures have also been reclassified/regrouped to conform to this year's classification.

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Mar 31, 2011

(Amount in Rs. Lacs)

As at As at

1) Contingent Liabilities not provided for: 31.03.2011 31.03.2010

(a) Claims against the Company not acknowledged as debts 23.9 1648

b) Bills Discounted 52.69 159.10

Since Realised - 128.85

(c) Disputed Sales Tax Demands including interest and penalty under appeal 15.44 15.44

d) Disputed Service Tax Excise Matters 2.10 2.31

2) Estimated amount of contracts remaining to be executed on Capital Account but not provided for Rs 937.41 (Previous year Rs. 27.85)

3) Secured Loans:

A. Terms Loans from Banks of Rs. 5078.77 lacs under their Project Finance Scheme are secured against joint equitable mortgage of all immovable properties both present and future pertaining to Textile Division ranking pari pasu inter- se and hypothecation of all movable properties both present and future pertaining to Textile Division (save and except book debts) including movable machinerymachinery spares, tools and accessories, subject to prior charge created and/or to be created in favour of Bankers of the Company's Textile Division for Working Capital Facilities and guarnteed by the Managing Director.

B. Working capital facility from Punjab National Bank of Rs. 196.17 Lacs is secured against hypothecation of green tea leavfs, before and after plucking, tea in process, finished tea in stock/transit and/or lying with brokers/agents relating to Season 2011, book deb! (present and future) and equitable mortgage of immovable properties and machineries of Tea Estates as additional security and further guaranteed by the Managing Director

C. Out of other facilities taken from State Bank of India,Bank of India and IDBI Bank Limited (i) amount of Rs. 2440.49 are secured against hypothecation of all tangible assets including movable machinery, stock-in-trade, stores, book debts etc. andlecond charge on entire fixed assets, present and future, pertaining to Textile Division and guaranteed by the Managing Director: (ii) Rs. 250.00 are secured by exclusive charge on stock of raw material, semi finished and finished goods, consumable stores and spares including book debts pertaining to Textile Division: and (iii) Rs. 800.00 are secured against endoresment of warehouse receipts relating to Textile Division in favour of Bank.

4) Total Salaries, Wages, Bonus and Gratuity amounted to Rs. 1688.93 (Previous year Rs. 1607.84 )

6) Micro & Small Enterprises Dues:

(a) Amount Due and outstanding to suppliers as at the end of the accounting year is Rs.2.25 (Prev. year Rs. 0.53) (b) Interest paid during the year-Nil (c) Interest payable at tiie end of the accounting year - Nil (d) Interest accrued and unpaid at the end of the accounting year - Nil

7) Guarantees given by State Bank of India are secured by extension of hypothecation charge over stocks and book debts and second charge on entire fixed assets, present & future pertaining to Textile Division. Amount outstanding Rs 177.10 (Previous Year Rs. 147.10).

8) Additions to Fixed Assets includes capitalisation of borrowing cost of Rs. 18.01 (Previous Year Rs. Nil).

9) Disclosure pursuant to Accounting Standard -15 ( Revised ) "Employee Benefits" :

a) Defined Contribution Plans : Amount of Rs.189.45 (Previous Year Rs.161.10) is recognised as expense and included in "Payments to and Provision For Employees" in Schedule - N of the Profit & Loss Account

b) Defined Benefit Plans:

viii.The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

c) Amount recognised as an expense in respect of Compensated Leave Absences is Rs. 18.37 (Previous Year Rs 23.68]

d) Short Term payment of Leave Encashment amounting to Rs. 10.20 (Previous year Rs. 10.93) is charged to Profit & Loss Account.

10) Segment Reporting as per AS-17 notified by Companies (Accounting Standards) Rules, 2006, for the year ended 31st March, 2011.

Notes :

i) The reportable primary segment is based on two business namely; Tea & Textile and the reportable secondary segment is based on geographical location of customers.

ii) The segment revenue, results, assets & liabilities include respective amounts identifiable to each of the segment and amounts allocated on reasonable basis.

11) Related Party Disclosures as per AS-18 notified by Companies (Accounting Standards) Rules, 2006 for the year ended 31st March, 2011.

(A) Relationships:

(i) Key Management Personnel & Relatives

Shri BasudeoKanoria Shri Adarsh Kanoria Master Varenya Kanoria

Smt Pushpa Devi Smt Shubha Kanoria Shri Radhe Shyam Kanoria Saraogi

(ii) Associates

Kanoria Exports Rydak Enterprises Samrat Industrail Private Ltd. & Investment Ltd Resources Ltd

(III) Enterprises over which key management personnel and/or their relatives have significant influence Eskay Udyog Ltd

12)During the year a fire has broken out in the Spinning Section (Synthetic) of the textile unit. The Company has lodged the claim with the Insurance Company. The net loss due to fire of Rs 19.91 is shown under other expenditure in Schedule V.

13) In accordance with the Accounting Standard (AS-28) on impairment of Assets, there is no indication of impairment based on internal/external factors and hence no impairment is considered necessary during the year under review.

14)The figures of the previous year have been re-grouped/re-arranged, wherever necessary.