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Notes to Accounts of Gillanders Arbuthnot & Company Ltd.

Mar 31, 2016

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 Annual General Meetings.

(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 the 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 shareholder 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.

2 Security Clauses

3. 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), State Bank of Patiala (SBP) 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 / to be 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.

4. Lease Rental Discounting (LRD) Term Loan from SBI is secured by assignment/hypothecation of current and future lease proceed, rental receivables and other fees from certain chargeable area of Gillander House, West Bengal and are also secured / to be 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 / to be 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 / to be created in favour of IDBI, SBP and SBI. The term loan is also secured by guarantee of a Director.

5. Term Loan from YES Bank Limited is secured by guarantee of a Director.

6. The Term Loan from IndusInd Bank Ltd. , are secured by hypothecation of the related Equipments purchased and guarantee by a Director.

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

8. 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.

9.1 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.852.30 Lakhs, which includes Rs.1.73 Lakhs for discontinuing operations (Previous Year Rs. 745.59 Lakhs, which includes Rs.6.13 Lakhs for discontinuing operations) 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, there is no shortfall of interest required to be provided for as at 31st March, 2016 as well as in the previous year.

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.127.94 Lakhs, which includes Rs.0.34 Lakhs for discontinuing operations (Previous year Rs.133.41 Lakhs, which includes Rs.13.65 Lakhs for discontinuing operations).

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.

Notes :-

10) The detail of experience adjustment arising on plan assets and liabilities as required by paragraph 120(n)(ii) of Accounting Standard-15 on ''Employee Benefits'' is given to the extent of information provided in the Actuarial Valuation Report.

11) The estimate of future salary increases, considered in actuarial valuations takes account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

12) The expected rate of return on plan assets is based on actuarial assumption.

13) The company expect to contribute a sum of Rs. 751.70 Lakhs during 2016-17 towards Gratuity Fund.

14) The above information is actuarially determined.

15. During the year, the Company, along with its nominees, acquired 99.99% equity shares of Barfani Builder Limited ("BBL"), by purchasing 49,995 fully paid up equity shares of Rs. 10/- each at par from the shareholders of BBL .

16. The Company will apply with the Hon''ble High Court at Calcutta, for approval of a Scheme of Arrangement for reconstruction by transfer of its Chemical (Waldies) Division in West Bengal, of the company to BBL with effect from 1st April 2015. Pending approvals of Hon''ble High Court at Calcutta and of regulatory authorities and completion of requisite formalities, the financials of the Chemical (Waldies) Division has been included in these Financial Statements.

17. Discontinuing Operations

In view of the long term strategy of the Company, the Board of Directors in their meeting held on 31st March, 2016 have decided to close its Trading Division with effect from the close of business hours of 31st March, 2016.

18. Revenue expenditure on Research and Development of Rs. 12.13 Lakhs (Previous Year Rs. 11.40 Lakhs) represents subscription to Tea Research Association.

19. Related Party Disclosure

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

A) Subsidiary Companies:

i) Direct Subsidiary:

a) Gillanders Holdings (Mauritius) Limited, Mauritius (GHML)

b) Barfini Builder Limited (BBL)

ii) Indirect Subsidiaries :

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

d) Naming''omba Tea Estates Limited (WOS of GDL)

e) Mafisi Tea Estaes Limited (WOS of GDL)

f) 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. Bharat Fritz Werner Ltd. (BFW)

iii. Kothari and Co Pvt. Limited (KCPL)

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

v. Commercial House Pvt. Limited (CHPL)

vi. Vishnuhari Investment and Properties Limited (VIPL)

vii. Kothari Medical Centre (KMC)

viii. Kothari Phytochemicals Industries Limited (KPIL)

ix. Albert David Limited (ADL)

C) Key Management Personnel of the Company

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

21. 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 Rs. 991.13 Lakhs (Previous Year Rs. 417.53 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 recognized as income for Rs.555.24 Lakhs during the year (Previous Year Rs.524.10 Lakhs). The gross value and accumulated depreciation of such asset as at 31st March, 2016 was Rs.23.59 Lakhs (Previous Year Rs.23.59 Lakhs) and Rs.22.41 Lakhs (Previous Year Rs.22.41 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 (Refer Note - 29).


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.


Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 11,52,37 thousands (Previous Year - Rs. 1,60,75 thousands) net of advances Rs. 1,95,39 thousands (Previous Year - Rs. 33,54 thousands).

2. Contingent Liabilities: Rs. '000

As at As at 31st March 31st March 2011 2010

a) Claims against the Company not acknowledged as debts :

i) ESI 17,75 17,75

ii) Sales Tax 7,59,89 1,63,15

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 36,53

vi) Service Tax 42,46 -

vii) Voltage Surcharge on Electricity Consumed1,87,51 1,87,51

b) Corporate Guarantee given on behalf of Company:

i) Amount of Guarantee given 1,50,00 1,50,00

ii) Amount outstanding as on 31st March 36,59 61,60

Note: In respect of item (a) future cash flows is determinable only on receipt of judgements 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. Secured Loans

3.1 The Term Loan from Vijaya Bank is secured by securitisation 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., State Bank of India (SBI), State Bank of Patiala (SBP), and IDBI Bank Ltd. (IDBI) for their respective Term Loan under Technology Up-gradation Fund Scheme (TUFS) A/c 1 & 2 granted to the Company and Letter of Credit Facility from SBI for purchase of capital goods.

3.2 The Term Loan from IDBI under Project Finance Scheme is secured by first charge by way of Equitable Mortgage by deposit of Title Deeds of the Company's immovable properties situated at Akbarpur in Punjab and at Champdani in West Bengal and also secured by way of hypothecation of all the movable assets both present and future relating to North India Spinning Mill, GIS Cotton Mill and MICCO Divisions of the Company both present and future but subject to prior charge(s) created on Current Assets relating to North India Spinning Mill, GIS Cotton Mill and MICCO Divisions of the Company in favour of the Company's Working Capital Bankers.

3.3 The Term Loans from IDBI, SBP and SBI (under TUFS A/c 1 & 2 ) 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 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 the 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 in favour of IDBI, SBI, SBP and Vijaya Bank. The term loans and Letter of Credit for Capital Goods are also secured by guarantee of a Director.

3.4 The Term Loan from Tea Board under Special Purpose Tea Fund Scheme (SPTF) is secured/to be secured by second charge by way of equitable mortgage 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.

3.5 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.

3.6 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.

3.7 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.

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. (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. The future minimum lease commitments of the Company at the year-end are as follows:

(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 2,91,83 thousands (Previous Year – Rs 2,35,00 thousands) in the Profit and Loss Account under the head Machinery Hire Charges (Schedule 16 to Accounts).

(c) The Company has entered into a non- cancellable operating lease agreement during the year 2009-10 in respect of lease rental of a tea manufacturing facility for a period of two years and ten 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 2nd April, 2009 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 recognised as income which was Rs.4,30,93 thousands during the year (Previous Year – Rs. 3,86,24 thousands). The gross value and accumulated depreciation of such asset as at 31st March, 2011 was Rs. 23,59 thousands (Previous Year – Rs. 23,59 thousands) and Rs 23,55 thousands (Previous Year – Rs. 23,55 thousands ) 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 Profit & Loss Account under the head Rent (Schedule 16 to Accounts).

6. Advances recoverable in cash or kind or for value to be received include Rs Nil thousands (Previous Year Rs. 13,12 thousands) adjustable against future lease rental of a manufacturing facility availed during the year as disclosed in Note 12(c) above.

7. Details of Employee Benefits as required by Accounting Standard – 15 "Employee Benefits" are as follows:

7.1 Providend 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, based on applicable rates, the Company has recognised Rs. 4,82,54 thousands (Previous year - Rs. 4,44,82 thousands) on this account in "Contribution to Provident Fund" under Schedule 16.

7.2 Employee State Insurance Scheme

The Company make contribution for Employee State Insurance Scheme towords defined contribution plan. During the year company has recognised Rs. 85,69 thousands (Previous year - Rs. 63,70 thousands) on this accounts in "Staff Welfare Expense" under Schedule 16.

7.3 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.

7.4 Leave Encashment

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

8. Information in accordance with requirements of Accounting Statdard-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 Pvt. 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

18. 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 - Comprises 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 - Comprise manufacture and sale of Steel Structurals , Pipes and Equipments and Designing , Supplying , Erectioning and Commissioning of projects on turnkey basis.

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

9. Taxation

(i) Current Tax charge for the year has been reckoned after taking into account, benefit under Section 33AB of the Income Tax Act, 1961 (which are available on timely deposit of required amount with development bank).

10. There are no Micro, Small and Medium enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006. The information has been determined on the basis of information available with the Company.

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


Mar 31, 2010

1. Schemes of Amalgamation/Arrangement given effect to in earlier years:

Pending completion of the relevant formalities of transfer of certain assets and liabilities acquired pursuant to the schemes, such assets and liabilities remain included in the books of the Company under the names of the transferor companies amalgamated with the Company from time to time.

2. Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 1,60,75 thousands (2009-Rs. 1,61,56 thousands) net of advances Rs. 33,54 thousands (2009-Rs. 60,07 thousands).

3. Contingent Liabilities: Rs. 000

2010 2009

a) Claims against the Company not acknowledged as debts :

i) ESI 17,75 17,75 ii) Sales Tax 1,63,15 1,64,81

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 36,53 35,80

vi) Voltage Surcharge on Electricity Consumed 1,87,51 1,87,51

b) Corporate Guarantee given on behalf of Company:

i) Amount of Guarantee given* 1,50,00 1,50,00

ii) Amount outstanding as on 31st March 61,60 84,13

* Excluding Rs. 45,00 thousands being guarantee given on behalf of erstwhile The Tengpani Tea Company Limited which has now been amalgamated with the Company

Note: In respect of item (a) future cash flows is determinable only on receipt of judgements pending at various forums/ authorities 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.

4. Secured Loans

4.1 The Term Loan from Vijaya Bank is secured by securitisation of future rentals by way of assignment of lease agreement with certain tenant of Companys premises known as Gillander House and also by 1st Charge by way of equitable mortgage of the Companys said premises on pari passu basis with the other Term lenders viz., State Bank of India (SBI), State Bank of Patiala (SBP), and IDBI Bank Ltd. (IDBI) for their respective Term Loan under Technology Up-gradation Fund Scheme (TUFS) A/c 2 granted to the Company.

4.2 The Term Loan from IDBI under Project Finance Scheme is secured by first charge by way of equitable mortgage by deposit of Title Deeds of the Companys immovable properties situated at Akbarpur in Punjab and at Champdani in West Bengal and also secured by way of hypothecation of all the movable assets (except book debts) both present and future relating to North India Spinning Mill, GIS Cotton Mill and MICCO Divisions of the Company (except book debts) both present and future but subject to prior charge(s) created on Current Assets relating to North India Spinning Mill, GIS Cotton Mill and MICCO Divisions of the Company in favour of the Companys Bankers.

4.3 The Term Loan from SBI is secured by exclusive first charge on the entire Plant and Machinery and other assets purchased under TUFS A/c 1 and also secured by first charge by way of equitable mortgage by deposit of Title Deed of the Companies immovable properties situated at Akbarpur in Punjab and at Champdani in West Bengal on pari passu basis with IDBI and guaranteed by a Director.

4.4 The Term Loans from IDBI, SBP and SBI (under TUFS A/c 2 ) are secured by first charge by way of equitable mortgage by deposit of title deeds of the Companys immovable properties situated at (a) Akbarpur, Punjab (b) Champdany, West Bengal (c) Gillander House, Kolkata (d) Sodepur, 24 Parganas (North) West Bengal and (e) Konnagar, West Bengal and also secured by way of hypothecation of all the movable assets (except book debts) 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 the Companys 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 in favour of IDBI, SBI, SBP and Vijaya Bank. The term loans are also secured by guarantee of a Director. The term loan from SBP is further secured by guarantee of a body corporate.

4.5 The Term Loan from Tea Board 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 excluding Tea estate of Tengapani and also further secured by second charge by way of hypothecation of Tea crop of the estates excluding the Tea estate of Tengapani.

4.6 The Term Loan from Indusind Bank Ltd., Srei Equipment Finance Pvt Ltd., and HDFC Bank Ltd., are secured by hypothecation of the related Equipments / Vehicles purchased and guaranteed by a Director.

4.7 Working Capital Facilities from Banks (except those availed by Tea Division of the Company from United Bank of India and State Bank of India) are secured/ to be secured by hypothecation of Companys (other than Tea Division) Stocks of Raw Materials, Finished Goods, Stocks-in-Process, Book Debts, Stores and Spares, Usance Bills, Receipted Challans and Irrevocable Letter of Credit, Export Bills, Shipping Documents and Other movable assets, ranking pari passu inter-se, tangible movables of MICCO Division of the Company, both present and future, and guaranteed by a Director and a body corporate 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.

4.8 In respect of Tea Division, the working capital facilities from United Bank of India and State Bank of India are secured/ to be secured by Hypothecation of Tea Crop, Book Debts and all Movable 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.

5. Advances recoverable in cash or in kind or for value to be received include Rs. Nil thousands (2009- Rs. 1,43 thousands) representing year-end balance of amounts paid to Financial Institution as upfront fees for loan restructuring, which is being amortised over the period through which benefit of lower interest arises.

6. 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.

Notes:

(i) Green Leaf Plucked (being Raw Material consumed) were harvested in the Companys own estates as agricultural produce involving integrated activities of nursery, cultivation, growth, etc. and utilised in the manufacture of tea and their values at the intermediate stage is not readily ascertainable. (ii) Excluding Parties Materials mild steel, etc 14,470 M.T. (2009 – 15,190 M.T.) pipes 52,893 Mtrs. (2009-17,172 Mtrs) Sheeting Nil (2009 – 6,269 SQM) and 18 M.T. (2009-227 M.T.), Equipment 5,826 M.T. (2009-5,869 M.T.) (iii) As none of the related items exceeded individually 10% of the total value of consumption quantitative information has not been provided.

(A) Net of internal consumption of 717 M.T. (2009 – 634 M.T.).

(B) Net of Stock loss in Transit 8 M.T. and Stock written off 6 M.T.

(C) Net of Stock written off 1 M.T.

(D) Net of Stock loss in Transit 5 M.T. and Stock written off 1 M.T.

(E) Net of Stock loss in Transit 2 M.T. and Stock written off 1 M.T.

(F) Excludes internal consumption, shortage/(excess), sample and transit loss 65.52 M.T. (2009- 56.38 M.T.).

(G) Nil M.T. (2009 - 108 M.T.) short billed, being not realisable.

(H) 349 M.T. (2009 - 156 M.T.) short billed, being not realisable.

(I) Fabrication and Erection 369 M.T. (2009 - 80 M.T.) short billed due to exceeding maximum ceiling of Billing Schedule, being not billable.

($) Including conversion sales of 28 M.T. of Rs. 2,50 thousands (2009 - 53 M.T. of Rs. 4,53 thousands).

(J) Sales includes adjustment of Stock of contract-in-progress.

Note: Materials Short billed and/or for job consumption a) Valves 472 Nos. (2009 – 120 Nos.), b) Equipments and Fittings 1,245 Nos. (2009 – 277 Nos.) , c) Pipe/Cable Wire 46,052 Mtrs (2009 – 11,267 Mtrs.), d) Pipes/Fittings 5 Lot (2009 – 10 Lot), e) Grating, M.S. Steel 89 M.T. (2009 – 100 M.T.), f) Electrical Parts/Motors 326 Nos/Set (2009 – 334 Nos/Set), g) Pipe/Fittings 549 M.T. (2009 – Nil), h) Coal Tar 678 SQM (2009 – Nil), costing Rs. 13,57,23 thousands (2009 - 5,01,11 thousands) being excess supply as per contractual obligations but not covered by billing schedule price break-up.

7. (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. The future minimum lease commitments of the Company at the year-end are as follows:

During the year the Company has charged related lease rental of Rs. 26,33 thousands (2009- Rs 26,33 thousands) in the Profit and Loss Account under the head Machinery Hire Charges (Schedule 17 to Accounts).

(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 2,35,00 thousands (2009 - Rs.1,60,41 thousands) in the Profit and Loss Account under the head Machinery Hire Charges (Schedule 17 to Accounts).

(c) The Company has entered into a non- cancellable operating lease agreement during the year 2009-10 in respect of lease rental of a tea manufacturing facility for a period of two years and ten 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 2nd April, 2009 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 recognised as income which was Rs.3,86,24 thousands during the year (2009 - Rs. 4,36,65 thousands). The gross value and accumulated depreciation of such asset as at 31st March, 2010 was Rs. 23,59 thousands (2009 - Rs. 23,59 thousands) and Rs 23,55 thousands ( 2009 - Rs. 23,55 thousands ) respectively.

8. Advances recoverable in cash or kind or for value to be received include Rs 13,12 thousands (2009 Rs. 23,43 thousands) adjustable against future lease rental of a manufacturing facility availed during the year as disclosed in Note 14(c) above.

9. Employee Benefits

a. With effect from 1st April, 2007 the Company has adopted The Revised Accounting Standard AS - 15 for employee benefits.

b. Gratuity Fund

The Companys 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 employees salary and tenure of employment subject to a maximum limit of Rs. 3,50 thousands (Rs. 10,00 thousands w.e.f 24th May 2010). Vesting occurs upon completion of five years of service.

c. Leave Encashment

The Companys leave encashment scheme covers certain categories of employees. Pursuant to the Scheme cash equivalent of unutilised leave balance is paid at the time of exit of service.

Notes: 1) The estimate of future salary increases is considered after taking into account inflation, promotion and other relevant factors.

2) The expected return on Plan assets is based on actuarial expectation of the average long term rate of return expected on investments of the funds during the estimated terms of obligations.

10. Information in accordance with requirements of Accounting Statdard-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 Pvt. Limited (KIIPL)

e) Commercial House Pvt. Limited (CHPL)

f ) Vishnuhari Investments and Properties Limited (VIPL) g) G. Das and Company Pvt. Limited (GDCPL)

B) Key Management Personnel of the Company

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

(Managing Director w.e.f. April 01, 2010)

b) Mr A. Mallick (AM) - Executive Director

(Executive Director & CEO w.e.f. April 01, 2010)

c) Mr S. K. Lakhotia (SKL) - Executive Director & CEO

(resigned w.e.f. March 31, 2010)

11. 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 - Comprises 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 - Comprise manufacture and sale of Steel Structurals , Pipes and Equipments and Designing , Supplying , Erectioning and Commissioning of projects on turnkey basis.

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

Figures in brackets represent particulars for 2008-2009.

(b) Secondary Segment

The Company operates predominantly within geographical limits of India accordingly Secondary Segment has not been considered.

12. Taxation

(i) Current Tax charge for the year has been reckoned after taking into account, benefit under Section 33AB of the Income Tax Act, 1961 (which are available on timely deposit of required amount with development bank).

(iii) In accordance with the requirements of Accounting Standard on Accounting for Taxes on Income, Deferred Tax Liability, net of Deferred Tax Assets, has been recognised in the Accounts as explained below:

a) Deferred Tax Assets comprise those arising out of provision for doubtful debts, items under the Income Tax Act, which will be allowed on actual payment and losses.

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

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