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Notes to Accounts of Gillanders Arbuthnot & Company Ltd.

Mar 31, 2015

Note 1. Rights, Preferences and Restrictions attached to shares

i) Ordinary Shares

(a) The Company has only one class of Ordinary shares having a face value of Rs. 10 per share and each holder of Ordinary shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors (except interim dividend) is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(b) In case of liquidation the Ordinary Shareholders are eligible to receive remaining assets of the company, after distribution of all the preferential amounts, in the proportion of their Shareholding.

(ii) Preference Shares

(a) The Company has one class of 8 % Redeemable Cumulative Preference Shares having a par value of Rs. 100 per share and each holder of Preference shares has a preferential right over the Ordinary shareholders with respect to payment of dividend and repayment of Share Capital in case of liquidation. The preference shareholders do not have voting powers except in a meeting of preference shareholder.

(b) The 8% Redeemable Cumulative Preference Shares are redeemable at par in 15 (fifteen) years from the date of allotment i.e. 31st March, 2005 with the option to the Company to redeem the same at any time after the expiry of 60 (sixty) months from the said date of allotment at the discretion of the Board of Directors of the Company.

Note 2. Security Clauses

1. The Term Loan from IDBI Bank Ltd (IDBI), State Bank of Patiala (SBP) and State Bank of India (SBI), Corporate Loan from State Bank of India (SBI) and Letter of Credit facility from SBI for purchase of capital goods are secured by first charge by way of Equitable Mortgage by deposit of title deeds of the Company's immovable properties situated at (a) Akbarpur, Punjab, (b) Champdani, West Bengal, (c) Gillander House, West Bengal, (d) Sodepur, West Bengal and (e) Konnagar, West Bengal and also secured by way of 1st charge on entire Fixed Assets, both present and future of the Company except those pertaining to the Tea Division but subject to prior charge(s) created on current assets (except Tea Division) in favour of Company's bankers for securing working capital facilities availed from time to time in the ordinary course of business. The mortgage and charge shall rank pari passu with the mortgage and charges created in favour of IDBI, SBP and SBI. The term loans and letter of credit for Capital Goods are also secured by guarantee of a Director.

2. Lease Rental Discounting (LRD) Term Loan from SBI is secured by assignment/hypothecation of current and future lease proceeds, rental receivables and other fees from certain chargeable area of Gillander House, West Bengal and are also secured by 1st charge on entire Fixed Assets, both present and future of the Company except those pertaining to the Tea division but subject to prior charge(s) created on current assets (except Tea Division) in favour of Company's bankers. The mortgage and charge shall rank pari passu with the mortgage and charges created in favour of IDBI, SBP, SBI and KVB. The term loan is also secured by guarantee of a Director

3. Corporate Loan from The Karur Vysya Bank Limited (KVB) is secured by way of 1st charge on all fixed assets, both present and future of the Company except those pertaining to the Tea Division on pari-passu basis with existing term lenders.

4. The Term Loan from IndusInd Bank Ltd., are secured by hypothecation of the related Equipments/Vehicles and guaranteed by a Director.

5. Term Loan from HDFC Bank Ltd., are secured by hypothecation of the related vehicles purchased.

6. The Term Loan from Tea Board of India under Special Purpose Tea Fund Scheme (SPTF) is secured by second charge by way of equitable mortgage on Immovable properties situated at the Tea estates and also further secured by second charge by way of hypothecation of Tea crop of the estates .

Note 3. Information in accordance with the requirements of the Accounting Standard - 15 on 'Employee Benefits':

a. Provident Fund

The Company makes a contribution for Provident Fund towards defined contribution plans for eligible employees. In respect of certain employees, Provident Fund Contribution is made to Trust Funds administered by the Company towards defined benefit plans. The Company shall make good for deficiency, if any, in the interest rate declared by the trust vis-a-vis statutory rate.

During the year Company has contributed Rs. 745.59 Lakhs (Previous year Rs. 714.98 Lakhs) towards Provident Fund.

Based on the Guidance Note on measurement of Provident Fund liabilities from The Actuarial Society the actuary has provided the valuation of interest guaranteed on Provident Fund. Accordingly a short fall of interest of Nil as at 31st March, 2015 (Previous Year Rs. 13.31 Lakhs) has been provided for under the head Staff Welfare Expenses.

b. Employee State Insurance Scheme

The Company make contribution for Employee State Insurance (ESI) Scheme towards defined contribution plan. During the year Company has contributed Rs. 133.41 Lakhs (Previous year Rs. 122.23 Lakhs).

c. Gratuity

The Employee's Gratuity Fund Scheme, a defined benefit plan, is administered by Life Insurance Corporation of India (LIC) and SBI Life Insurance Company Ltd. (SBI Life). LIC or SBI Life 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 subject to a maximum limit as prescribed. Vesting occurs upon completion of five years of service. The present value of obligation is determined based on the actuarial valuation using the Projected Unit Credit Method at each balance sheet date.

Note 4. Contingent Liabilities and Commitments

Rs. in Lakhs

Particulars As at As at 31st March, 31st March, 2015 2014

Contingent Liabilities

Claims against the Company not acknowledged as debts

i) ESI - 17.87

ii) Sales Tax 983.35 2537.77

iii) Cess on Jute Bags/Jute Twine 7.32 7.32

iv) Cess and Excise on Captive Consumption 11.33 11.33

v) Excise Duty 70.30 70.30

vi) Service Tax 425.90 442.58

vii) Income Tax 106.02 137.00

viii) Voltage Surcharge on Electricity consumed 159.32 159.32

Note: In respect of above, future cash flows are determinable only on receipt of judgements pending at various forums/authorities which in the opinion of the Company is not tenable and there is no possibility of any reimbursement in case of above.

Commitments

i) Estimated amount of contracts remaining to be executed on Capital 337.07 225.92 Account and to provided for [Net of advance Rs. 147.00 Lakhs (Previous Year Rs. 120.77 Lakhs)]

ii) Arrear Dividend on Redeemable Cumulative Preference Shares 16.00 - The Board has not declared any dividend on Redeemable Cumulative Preference Shares. Dividend in arrears on cumulative preference shares can be paid in a later year where there are profits to justify such payment.

iii) The Company has given counter Guarantee to a bank for issue of Stand by letter of Credit against loan availed by the wholly owned subsidiary from a bank :

a) Amount of Guarantee Given USD 13.00 Million 8,125.65 -

b) Amount outstanding as on 31st March USD 12.60 Million 7,876.70 -

iv) Deposit with Bank Committed to Continue till the tenure of Stand by letter of Credit 1,611.74 -

Note 5. Information in accordance with the requirements of the Accounting Standard-17 on 'Segment Reporting' :

(a) The Company has identified Six primary business segments viz :

i) Textile - Manufacture and sale of yarn and fabric made out of Cotton and Man-Made Fibre viz., Acrylic, Polyster, Viscose Staple and Blends thereof.

ii) Engineering (MICCO) - Manufacture and sale of Steel Structurals, Pipes and Equipments and Designing, Supplying, Erectioning and Commissioning of projects on turnkey basis.

iii) Tea - Manufacture and sale of tea

iv) Chemical (Waldies) - Manufacture and sale of lead oxide, white lead, lead salts and metallic stearates

v) Trading - Purchase and sale of paints and allied products

vi) Property - Letting out property on rent

Segments have been identified and reported taking into account nature of products and services, the different risks and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with the accounting policy of the Company with the following additional policies for segment reporting.

Note 6.

i) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

ii) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related asset and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

Note 7. A Corporate Social Responsibility (CSR) committee has been formed by the company as per provisions of Section 135 of the Companies Act, 2013. The details of expenditure being incurred during the year on CSR activities are detailed below -

(a) Gross amount of Rs. 12.21 lakhs required to be spent by the company during the year.

(b) Total revenue expenditure incurred during the year on Medical, Health & Education purposes as part of CSR activities amounting to Rs. 12.26 lakhs.

Note 8. Revenue expenditure on Research and Development of Rs. 11.40 Lakhs (Previous Year Rs. 9.44 Lakhs) represents subscription to Tea Research Association.

Note 9. a) During the year, the Company has set up a wholly owned subsidiary at Mauritius in the name of Gillanders Holdings (Mauritius) Limited (GHML) to explore various acquisition opportunities.

b) The Company has acquired through GHML, 100% stake in Group Development Limited, Malawi along with its three subsidiaries engaged in the business of growing, production and sale of tea, macadamia nuts and other crops.

Note 10. Related Party Disclosure

10.1 Information in accordance with requirements of the Accounting Standard-18 on 'Related Party Disclosures':-

A) Subsidiary Companies:

i) Direct Subsidiary: Gillanders Holdings (Mauritius) Limited, Mauritius (GHML)

ii) Indirect Subsidiaries :

Group Development Limited, Malawi (Wholly Owned Subsidiary (WOS) of GHML (GDL)

Naming'omba Tea Estates Limited (WOS of GDL)

Mafisi Tea Estaes Limited (WOS of GDL)

Group Holdings Limited (WOS of GDL)

B) Name of the Companies in which Directors/Key Management Personnel and their relatives have significant influence

i. M D Kothari and Company Limited (MDKCL)

ii. Bhaktwatsal Investments Limited (BIL)

iii. Bharat Fritz Werner Ltd. (BFW)

iv. Kothari and Co Pvt. Limited (KCPL)

v. Kothari Investments & Industries Pvt. Limited (KIIPL)

vi. Commercial House Pvt. Limited (CHPL)

vii. Vishnuhari Investments and Properties Limited (VIPL)

viii. Kothari Medical Centre (KMC)

ix. Kothari Phytochemicals Industries Limited (KPIL)

x. Albert David Limited (ADL)

C) Key Management Personnel of the Company

Mr. D K Sharda (DKS) - Managing Director & Chief Executive Officer

Note 11. The Company has charged deprecation based on the revised remaining useful life of the assets as per requirement of Schedule II of the Companies Act, 2013 or reassessed by the Company based on technical evaluation, effective from April 1, 2014. Due to above, depreciation charge for the year ended 31st March, 2015 is lower by Rs. 695.83 lakhs. Further, based on transitional provision provided in note 7(b) of Schedule II, an amount of Rs. 230.88 lakhs (net of deferred tax) has been adjusted with retained earnings.

Note 12. Operating Lease Commitments

a) The Company has taken various Plant and Machinery for its Engineering (MICCO) Division under cancellable operating lease. Lease range for the period between 3 to 8 months. During the year the Company has charged related lease rental of 417.53 Lakhs (Previous Year Rs. 683.62 Lakhs) in the Statement of Profit and Loss under the head Machinery Hire Charges.

b) The Company has given office premises under cancellable operating leases. These leasing arrangements range between 3 years and 15 years generally or longer and are usually renewable by mutual consent on mutually agreeable terms. Initial Direct costs for such leases are borne by the Company and charged off to revenue. Lease rentals are recognised as income for Rs. 524.10 Lakhs during the year (Previous Year Rs. 469.03 Lakhs). The gross value and accumulated depreciation of such asset as at 31st March, 2015 was 23.59 Lakhs (Previous Year 23.59 Lakhs) and 22.41 Lakhs (Previous Year 23.55 Lakhs) respectively.

c) The Company has certain operating leases for premises (residential, offices and godowns) which are not non-cancellable range between 3 months to 5 years generally and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged in the Statement of Profit and Loss under the head Rent.

Note 13. Previous year's figures have been regrouped and / or reclassified, wherever considered necessary to correspond with the current year's classification and / or disclosure.


Mar 31, 2013

1.1 Information In accordance with the requirements of the Accounting Standard - 15 on ''Employee Benefits :-

a. Provident Fund

The Company makes a contribution far Provident Fund towards defined contribution plans for eligitile employees. In respect of certain employees, Provident Fund Contribution is made to Trust Funds dministered by the Company towards defined benefit plans. The Company shall make good for deficiency, if any, in the interest rate declared by the trust vis-a-vis statutory rate.

During the year Company has contributed T 5.93.19 Lakhs (Previous yearRs. &f 31.98 Lakhs] towards Provident Fund.

Based on the Guidance note on measurement of Provident Fund liabilities from The Actuarial Society the actuary has provided the valuation of interest guaranteed on Provident Fund. Accordingly a short fall of Interest of T19.89 lakhs as at 3lst March, 2013 (Previous Year T 6.13 Lakhs) has been provided for under the head Staff Welfare Expenses.

b. Employee State Insurance Scheme

The Company make cortribution for Employee State Insurance (ESI) Scheme towards defined contribution plan. During the year Company has recognised Rs. 1,01.34 Lakhs (Previous year Rs. 82.12 Lakhs).

c. Gratuity

The Employees Gratuity Fund Scheme, a defined benefit plan, is administered by Life Insurance Corporation of India (LIC) and SBI Life Insurance Company Ltd- (SBI Life)- LIC or SBI Life 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 subject to a maxinum limit as prescribed. Vesting occurs upon completion of five years of service. The present value of obligation Is determined based on the actuarial valuation using the Projected Unit Credit Method at each balance sheet date.

2. Contingent Liabilities and Commitments

Particulars As in As at 31st March, 31st March, 2013 2012

2.1 Contingent Liabilities

Claims agairst the Company not acknowledged as debts

I) ESI 17.75 17.75

ii) Sales Tax 20,94.30 7,59.89

iii) Cess on Jute Bags/Jute Twine 7.32 7.32

iv) Cass and Excise on Captive Consumption 11.33 11.33

v) Excise Duty 56.87 35.76

vii) Service Taz 4,89.26 1,93.36

vii) Income Tax 5.86 5.86

viii) Voltage Surcharge on Electricity consumed 1,59.32 1,87.51

2.2 Commitment

Estimated amount of contracts remaining to be executed on Capital Account and 3,48.59 22,83.02 not provided for [Net of advance Rs. 8,57.60 Lakhs (Previous Year Rs. 3,00.09 Lakhs)]

Note: In respect of above, future cash flows are determinable only on receipt at judgements pending at various forums/authorities which in the opinion of the Company is not tenable and there is no possibility of any reimbursement in case of above.

3. Information in accordance with therequirements of Accounting Standard-17 on Segment Reporting:

(a) The Company has identified Six primary business Segments viz:

i) Textile - Manufacture and sale of yarn made out of cotton and Man-Hade Fibre viz., Acrylic, Polyster Viscose Staple and Blends thereof.

ii) Tea - Manufacture and sale of Tea

iii) Enginnering (MICCO)- Manufacture and sale structurals, Pipes and equipments and Designing, Supplying, Erectioning and Commissioning of projects on turnkey basis.

iv) Chemical (Waldies) - Manufacture and sale or lead oxide, white lead, lead salts and metallic stearates

v) Property - Letting out property on rent.

vi) Trading - Purchase and sale or paints and allied products

Segments have been identified and reported taking into nature of products and services, the different risks and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with the accuonting policy of the Company with the following additional policies for segment reporting.

i) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable''.

II) Segment assets and segment liabilities represent assets and liabiibes in respective segments. Investments, tax related asset and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

4. Related Party Disclosure

4.1 information In accordance with requirements of the Accounting Standard-IB on ''Related Party Disclosures'';-

A) Name of the Companies in which Directors/Key Management Personel and their relatives have significant Influence

i} M D Kothari and company Limited (MDKCL}

ii) Bhaktwatsal Investments Limited (BIL)

iii) Kothari and Co Pvt.Limited (KCPL)

iv) Kothari Investments & Industries Pvt. Limited (KIIPL)

v) Commercial House Pvt. Limited (CHPL}

vi) Vishnuhari Invastments and Properties Limitedd (VIPL)

vii) Kothari Medical Centre {KMC)

viii) Kothari Phytochemicals Industries Limited (KPIL)

B) Key Management Personnel of the Company

Mr. D K Sharda (DKS) - Managing Director & C.E.O

5. Operating Lease Commitments

a) The Company has taken various Plant and Machinery for Its Engineering (MICOOJ Divisoin under cancellable operating lease. Lease range for the period between 3 to 8 months. During the year the Company has charged related lease rental of T3,55.80 Lakhs {Previous Year T 3,37.00 Lakhs) in the statement of Profit and Loss under the head Machinery Hire Charges.

b) The Company has entered into a non- cancellable operating lease agreement in previous year in respect of lease rental of a tea manufacturing facility for a period of Thirteen months. The terms of the lease include restrictionon to sell, sub-let and or part with possession of the let-out premises without prior permission of the lessor. The lease has teen expired during the year.

During the year Company has charged related lease rental of ( 17.50 Lakhs (Previous Year f 13.12 Lakhs) in the Statement of Profit and Loss under the head Rent.

c) The Company les given office premises under cancellable operating leases. These leasing arrangements range between 3 years and 15 years generally or longer and are usually renovrable by mutual consent on mutually agreeable terms. Initial Direct costs for such leases are borne by the Company and charged off to revenue. Lease rentals are recognised as income for Rs. 4,58.80 Lakhs during the year (Previous Year Rs. 4,83.41 Lakhs). The gross value and accumulated depreciation of such asset as at 31st March, 2013 was Rs. 23.59 Lakhs (Previous Year ( 23.59 Lakhs) and ( 23.55 Lakhs {Previous Year f 23.55 Lakhs;) respectively.

d) The Company has certain operating leases for premises {residential, offices and godowns) which are not non-cancellable range between 3 months to 5 years generally and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged in the Statement of Profit and Loss under the head Rent (Refer Note-28).

6. Previous year''s figures have been regrouped and/ or reclassified. wherever considered necessary to correspond with the current year''s classification and / or disclousure.

As per our report of even date.


Mar 31, 2012

1.1 Rights, Preferences and Restrictions attached to Shares

i) Ordinary Shares

(a) The Company has only one class of Ordinary shares having a par value of Rs 10/- per share and each holder of Ordinary shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors (except interim dividend) is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(b) In case of liquidation the Ordinary Shareholders are eligible to receive remaining assets of the company, after distribution of all the preferential amounts, in the proportion of their Shareholding.

(ii) Preference Shares

(a) The Company has one class of 8 % Redeemable Cumulative Preference Shares having a par value of Rs.100 per share and each holder of Preference share has a preferential right over the Ordinary shareholders with respect to payment of dividend and repayment of Share Capital in case of liquidation . The preference shareholders do not have voting powers except in a meeting of preference shareholder.

(b) The 8% Redeemable Cumulative Preference Shares are redeemable at par in 15 (fifteen) years from the date of allotment i.e. 31st March, 2005 with the option to the Company to redeem the same at any time after the expiry of 60 (sixty) months from the said date of allotment at the discretion of the Board of Directors of the Company.

1.1 Security Clauses

a) The Term Loan from IDBI Bank Ltd (IDBI),State Bank of India (SBI) and State Bank of Patiala (SBP) (under TUFS A/c I,II & III) and Letter of Credit Facility from SBI for purchase of capital goods are secured/to be secured by first charge by way of Equitable Mortgage by deposit of title deeds of the company's immovable properties situated at (a) Akbarpur, Punjab,

(b) Champdani, West Bengal,

(c) Gillander House, Kolkata

(d) Sodepur, 24 Parganas (North) West Bengal and

(e) Konnagar, West Bengal and also secured/to be secured by way of 1st charge on entire Fixed Assets, both present and future of the Company except those pertaining to the Tea Division but subject to prior charge(s) created/to be created on current assets (except Tea Division) in favour of Company's bankers for securing working capital facilities availed from time to time in the ordinary course of business. The mortgage and charge shall rank pari passu with the mortgage and charges created/ to be created infavour of IDBI,SBI, and SBP. The term loans and letter of credit for Capital Goods are also secured by guarantee of a Director.

b) The Term Loan from Vijaya Bank was secured by securitization of future rentals by way of assignment of lease agreements with certain tenant of Company's premises known as "Gillander House" and also secured/to be secured by first Charge by way of equitable mortgage of the Company's said premises on pari passu basis with the other Term lenders viz., IDBI, SBI and SBP for their respective Term Loan under Technology Up-gradation Fund Scheme (TUFS) A/c I, II & III granted to the Company and Letter of Credit Facility from SBI for purchase of capital goods.

c) The Term Loan from Indusind Bank Ltd., and HDFC Bank Ltd., are secured by hypothecation of the related Equipment / vehicles purchased and guaranteed by a director.

d) The Term Loan from Tea Board of India under Special Purpose Tea Fund Scheme (SPTF) is secured /to be secured by second charge by way of equitable mortgagee on Immovable properties situated at the Tea estates and also further secured /to be secured by second charge by way of hypothecation of Tea crop of the estates.

i) In respect of Tea Division, the working capital facilities from United Bank of India are secured/ to be secured by Hypothecation of Tea Crop, Made Tea, Book Debts and all other Current Assets of the Tea Estates and are further secured/to be secured by way of Equitable Mortgage on Immovable Properties situated at the Tea Estates.

ii) Working Capital Facilities from Banks (except those availed by Tea Division of the Company from United Bank of India) are secured/ to be secured by hypothecation of Company's (other than Tea Division) entire current assets, both present and future, ranking pari passu inter-se, and guaranteed by a Director and are further secured/ to be secured by way of second charge on the Fixed Assets of the Company (other than Tea Division) ranking pari passu inter-se.

iii) The Working Capital facilities having interest rate varying between 11.50% p.a. to 14.00% p.a. are repayable on demand.

iv) The Unsecured Short Term Loan from Axis Bank having Base Rate 0.25% rate of interest is repayable in 2 installments of Rs 1,500 lakhs and Rs 1,000 lakhs due on Aug'12 and Sep'12 respectively and is secured by a guarantee of a Director.

v) The Unsecured Short Term Loan from Bodies Corporate having 13.50% p.a. rate of interest are repayable on demand.

vi) Fixed deposits (From Public) is having interest rate varying between 10.00% p.a. to 11.00%. p.a.

26.1 Details of Employee Benefits as required by Accounting Standard - 15 "Employee Benefits" are as follows:

a. Provided Fund

The Company makes a contribution for Provident fund towards defined contribution Plans for eligible employees. In respect of certain employees, Provident Fund Contribution is made to Trust Funds administered by the Company towards defined benefit plans. The company shall make good for deficiency, if any, in the interest rate declared by the trust vis-a-vis statutory rate.

During the year company has contributed Rs. 5,31.98 lakhs (Previous Year - Rs. 4,82.54 lakhs) towards provident fund during the year 31st March, 2012.

Based on the guidance Note on measurement of Provident Fund liabilities from The Actuarial Society the actuary has provided the valuation of interest guaranteed on Provident fund. Accordingly a short fall of interest of Rs. 6.13 lakhs as at 31st March, 2012 has been provided for under the head Staff Welfare Expense.

The current year is the first year of actuarial valuation of the provident fund administered through Trust, in view of the issuance of the Guidance Note by the Institute of Actuaries of India, hence previous year figure has not neen disclosed.

b. Employee State Insurance Scheme

The Company make contribution for Employee State Insurance Scheme towards defined contribution plan. During the year company has recognized Rs. 82.12 lakhs (Previous year - Rs. 85.69 lakhs.)

c. Gratuity

The Company's Gratuity Scheme, a defined benefit plan, is administered by Life Insurance Corporation of India (LIC) and SBI Life Insurance Company Ltd (SBI Life). LIC or SBI Life 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 subject to a maximum limit as prescribed. Vesting occurs upon completion of five years of service. The present value obligation is determined based on the actuarial valuation using the Projected Unit Credit Method at each Balance Sheet date.

d. Leave Encashment

The Company's leave encashment scheme covers certain categories of employees. Pursuant to the Scheme cash equivalent of unutilized leave balance is paid at the time of exit of service.

2 Contingent Liabilities : Rs. in lakhs

Particulars As at As at

31st March, 31st March,

2012 2011

a) Claims against the Company not acknowledged as debts

i) ESI 17.75 17.75

ii) Sales Tax 7,59.89 7,59.89

iii) Cess on Jute Bags/Jute Twine 7.32 7.32

iv) Cess and Excise on Captive Consumption 11.33 11.33

v) Excise Duty 35.76 35.76

vi) Service Tax 1,93.36 42.46

vii) Income Tax 5.86 5.86

viii) Voltage Surcharge on Electricity consumed 1,87.51 1,87.51

b) Corporate Guarantee given on behalf of a Company:

i) Amount of Guarantee given - 150.00

ii) Amount outstanding as at 31st March - 36.59

Note: In respect of item (a) future cash flows is determinable only on receipt of judgments pending at various forums/authorities which in the opinion of the company is not tenable and in case of item (b) the maximum amount of cash flows would be the amount of guarantee given by the Company. There is no possibility of any reimbursement in case of item (a) above.

3 Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 22,83.02 lakhs (Previous Year - Rs. 11,52.37 lakhs) net of advances Rs. 3,00.09 lakhs (Previous Year - Rs. 1,77.92 lakhs).

4 The Company has made necessary application in respect of Chemical (Waldies) Division for exemption under the Urban Land (Ceiling & Regulation) Act, 1976 in respect of its landholding held in excess in terms of the said Act.

5. Information given in accordance with requirements of AS-17 on Segment Reporting prescribed under the Act :

(a) The Company has Six primary business segments viz :

i) Trading Division - Purchase and sale of paints and allied products

ii) Tea Division - Manufacture and sale of Tea

iii) Property Division - Letting out property on rent

iv) Textile Division - Manufacture and sale of yarn made out of Cotton and Man-made Fibre viz., Acrylic, Polyster,Viscose Staple and Blends thereof.

v) Engineering (MICCO) Division - Manufacture and sale of Steel Structural's , Pipes and equipments and Designing , Supplying, fractioning and Commissioning of projects on turnkey basis.

vi) Chemical (Waldies) Division - Manufacture and sale of lead oxide, white lead, lead salts and metallic stearates

6. Related Party Disclosures

6.1 Information in accordance with requirements of Accounting Standard-18 on Related Party disclosures prescribed under the Act:-

A) Enterprises over which Key Management Personnel & Relatives of such Personnel are able to exercise significant influence

a) M D Kothari and Company Limited (MDKCL)

b) Bhaktwatsal Investments Limited (BIL)

c) Kothari and Co Pvt. Limited (KCPL)

d) Kothari Investments & Industries (P) Limited (KIIPL)

e) Commercial House Pvt. Limited (CHPL)

f) Vishnuhari Investments and Properties Limited (VIPL)

g) G Das and Company Pvt. Limited (GDCPL)

h) Kothari Medical Centre (KMC)

B) Key Management Personnel of the Company

a) Mr D K Sharda (DKS) - Managing Director

b) Mr A. Mallick (AM) - Executive Director & CEO (retired w.e.f 31.03.2012)

7 Advances recoverable in cash or kind or for value to be received include Rs 5.92 lakhs (Previous Year Rs. Nil lakhs) adjustable against future lease rental of a manufacturing facility availed during the year as disclosed in Note 42(c ) below.

8 Operating Lease Commitments

a) The Company had entered into a non-cancellable operating lease agreement in earlier year for a period of 117 Months in connection with certain Plant and Machinery at its unit at Akbarpur, Punjab. The terms of the lease include operating term for renewal and restrict the right to sell, sub-let or allow any third person to use the machinery without the prior consent of the lessor in writing.

During the year lease has expired and the Company has charged related lease rental of Rs. 19.75 lakhs (Previous Year - Rs 26.33 lakhs) in the Statement of Profit and Loss under the head Machinery Hire Charges.

b) The Company has taken various Plant and Machinery for its Engineering (MICCO) Division under cancellable operating lease. Lease range for the period between 3 to 8 months. During the year the Company has charged related lease rental of Rs 3,37.00 lakhs (Previous Year - Rs 2,91.83 lakhs) in the Statement of Profit and Loss under the head Machinery Hire Charges.

c) The Company has entered into a non- cancellable operating lease agreement during the year 2011-12 in respect of lease rental of a tea manufacturing facility for a period of Thirteen months. The terms of the lease include restriction to sell, sub-let and or part with possession of the let-out premises without prior permission of the lessor. As per terms of the lease, an additional rent at a prescribed rate is payable from 1st February, 2012 onwards in case of production from the let-out premises exceeds a specified limit.

d) The Company has given office premises under cancellable operating leases. These leasing arrangements range between 3 years and 15 years generally or longer and are usually renewable by mutual consent on mutually agreeable terms. Initial Direct costs for such leases are borne by the Company and charged off to revenue. Lease rentals are recognized as income which was Rs. 4,83.41 lakhs during the year (Previous Year - Rs. 4,30.93 lakhs). The gross value and accumulated depreciation of such asset as at 31st March, 2012 was Rs. 23.59 lakhs (Previous Year - Rs. 23.59 lakhs) and Rs 23.55 lakhs (Previous Year - Rs. 23.55 lakhs) respectively.

e) The Company has certain operating leases for premises (residential, offices and godowns) which are not non-cancellable range between 3 months to 5 years generally and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged in the Statement of Profit & Loss Account under the head Rent (Note - 28).

9 The revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

 
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