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Notes to Accounts of Goodricke Group Ltd.

Mar 31, 2016

1. CORPORATE SOCIAL RESPONSIBILITY

As per Section 135 of the Companies Act, 2013 the Company needs to spend at least 2% of the average net profit earned during the immediately preceding 3 years on CSR activities. The areas for CSR activities identified by the Company are special education for differently abled children, solar project, vocational training for livelihood and environment sustainability.

(a) Gross amount required to be spent by the Company is Rs. 7,040,403

(b) Amount spent during the period on

2. The Company has taken various premises under operating lease having tenure of 11 months to 6 years. There is no specific obligation for renewal of these agreements. Lease rent for the period amounts to Rs.26,545,633 (2014 - Rs.18,914,272) This includes lease arrangements with escalation clauses of 5% to 10% at the end of each year.

The Company has initiated the process of identification of suppliers registered under Micro and Small Enterprise Development Act, 2006 by obtaining confirmation from the suppliers. The information shown above is only to the extent of information obtained by the Company.

3. Post Retirement Employee Benefits

"The Company operates defined contribution schemes like provident fund and defined contribution pension schemes. For these schemes, contributions are made by the Company, based on current salaries, to recognized funds maintained by the Company and for certain employees contributions are made to State Plans. In case of Provident fund schemes, contributions are also made by the employees. An amount of Rs. 187,905,629 (2014 - Rs.124,042,025) has been charged to the Profit & Loss Account on account of defined contribution schemes. The Company also operates defined benefit gratuity scheme, leave encashment, defined benefit pension scheme, defined benefit provident fund scheme and post retirement medical scheme. The pension benefits, medical benefits and leave encashment benefits are restricted to certain categories of employees. These schemes offer specified benefits to the employees on retirement. Annual actuarial valuations are carried out by an independent actuary in compliance with Accounting Standard 15 (revised 2005) on Employee Benefits. Wherever recognized funds have been set up, annual contributions are made by the Company, as required. Employees are not required to make any contribution."

Net Liability /(Asset) as per Actuarial Valuation at period/year end:

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. 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 term of the obligations.

The contribution expected to be made by the Company for the year ended 31st March 2017 has not been ascertained.

4. Related Party Disclosures

a) Shareholders of the Company:

Western Dooars Investment Ltd. and Assam Dooars Investment Ltd. together hold 74% of the Equity Share Capital of the Company. Camellia Plc is the ultimate holding company which is indirectly holding Western Dooars Investment Ltd. and Assam Dooars Investment Ltd.

b) Other related parties with whom transactions have taken place during the period:

Fellow Subsidiary Companies:

(i) Stewart Holl (India) Limited (ii) Amgoorie India Limited (iii) Koomber Properties & Leasing Company Private Limited (iv) Goodricke Technical & Management Services Limited (v) Borbam Investments Limited (vi) Koomber Tea Company Private Limited (vii) Lebong Investments Private Limited (viii) Elgin Investments & Trading Company Limited"

c) Key Managerial Personnel:

Arun Narain Singh - Managing Director & CEO

Arjun Sengupta- VP & CFO

Subrata Banerjee- Company Secretary

5. Consequent upon the vesting of the Indian undertakings on 1st January 1978 of the eight Sterling Company’s under the scheme of amalgamation, the title in respect of certain tea estates acquired under such scheme, are to be transferred in the name of the Company. The Company has been legally advised that the notification issued by the Government of West Bengal in 1994 for payment of salami does not apply to the Company.

6 Provision for taxation has been made as per the Income Tax Act, 1961 and the rules framed there under with reference to the profit for the 15 months period ded 31st March, 2016 which extends over two assessment years, Assessment Year 2015-2016 and Assessment Year 2016-2017. The ultimate tax liability for the Assessment Year 20162017 will be determined on the total income for the period from 1st April, 2015 to 31st March, 2016.

7 Earning Per Equity Share (Basic and Diluted)

The calculation of earnings per share is based on the Profit after taxation of Rs. -128,900,610 (2014 - Rs.222,386,927) and Equity Shares outstanding (Nominal value Rs. 10/- each) during the period aggregating to 21,600,000 (2014 -21,600,000).

8 To align with the provisions of Section 2 (41) of Companies Act, 2013, the company has decided to prepare Financial Statements for a period of 15 months commencing from 1st January 2015. Therefore, the results of previous year are not comparable with that of the current period.

9 Depreciation on assets till 31st December, 2014 was provided on written down value method. With Effect from 1st January, 2015, the Company has changed the method of depreciation to Straight Line Method to align with the industry practice and the net surplus arising due to retrospective computation aggregates to Rs.419,772,448. Consequent to the change in estimated useful life as per the provisions of Schedule II to the Companies Act 2013, the charge on account of change in estimates aggregates to Rs.49,392,906 These items have been accounted and disclosed under exceptional items. As a result of the change in method of depreciation, the charge for the fifteen months period ended 31st March 2016 was lower by Rs.39,803,010 and the charge on account of change in accounting estimates was higher by Rs.66,221,739. The impact of such change on the future profits of the Company is not ascertainable at this stage.

10 Stock of teas as on 31st March 2016 has been valued at lower of the cost of production (based upon expenditure for the 12 months period ending 31st March 2016) and the net realizable value. Production of tea not being uniform throughout the year, stock valuation would be unrealistic if it is based on actual expenditure incurred during 15 months period ended 31st March 2016.

11. The Company has reclassified previous year’s figure to conform to this period classification along with other regrouping/rearrangement wherever considered necessary.

.


Dec 31, 2014

1.1 Rights, Preferences and Restrictions attached to Shares

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

2.1 There is no movement of Share Capital during the year.

3.1 Capital Reserve includes Rs. 3,883,676/- pre-acquisition profit

3.2 Development Rebate Reserve, Development Allowance Reserve and Investment Allowance (Utilised) Reserve are transferred from Pre-Merger Reserves.

3.3 Dividend Distribution Tax on Proposed Dividend for the year ended 31st December, 2013 includes Rs. 667,440 pertaining to 2012

4.1 Working Capital Loans and Packing Credit Facilities are secured by equitable mortgage by deposit of title deeds of the Company''s Tea Estates and hypothecation of entire tea crop and other produces of Tea Estates as well as stocks of tea manufactured or in process and book debts, and entire movable plant and machinery, tools and accessories and other movable fixed assets both present and future.

5.1 Trade Payables include Rs. 381,552 (2013 - Rs. 410,081) due to Micro & Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006, based on information available with the Company.

Rs. 1,23,134 represents interest accrued on amount outstanding as at the year end and remaining unpaid.

6.1 There is no amount due and outstanding to be credited to Investor Education and Protection Fund as at 31st December 2014

As at As at December 31,2014 December 31,2013 Rs. Rs.

7 CONTINGENT LIABILITIES (To the extent not provided for) Claims against the Company not acknowledged as Debts:

Income Tax Matters (without considering concomitant liability in respect of Agricultural Income Tax) 56,282,212 90,569,279

Central Excise Matters 12,934,600 -

Sales Tax Matters 1,502,235 3,484,438

Disputed Claims 2,516,000 2,516,000

Future cash flows if any, in respect of above cannot be determined at this stage

8 COMMITMENTS (To the extent not provided for)

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 15,909,800 (2013 - Rs. 22,458,655)

8.1 Research and Development Expenditure charged to Revenue Rs. 13,403,450 (2013 - Rs. 14,895,338)

9 The Company has taken various premises under operating lease having tenure of 11 months to 72 months. There is no specific obligation for renewal of these agreements. Lease rent for the year amounts to Rs. 18,914,272 (2013 - Rs. 16,571,918) This includes lease arrangements with escalation clauses of 5% to 10% at the end of each year.

10 Consequent upon the vesting of the Indian undertakings on 1st January 1978 of the eight Sterling Company''s under the scheme of amalgamation, the title in respect of certain tea estates acquired under such scheme, are to be transferred in the name of the Company. The Company has been legally advised that the notification issued by the Government of West Bengal in 1994 for payment of salami does not apply to the Company.

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

12. Post Retirement Employee Benefits

The Company operates defined contribution schemes like provident fund and defined contribution pension schemes. For these schemes, contributions are made by the Company, based on current salaries, to recognized funds maintained by the Company and for certain employees contributions are made to State Plans. In case of Provident fund schemes, contributions are also made by the employees. An amount of Rs. 124,042,025 (2013 - Rs. 124,024,445) has been charged to the Profit & Loss Account on account of defined contribution schemes.

The Company also operates defined benefit gratuity scheme, leave encashment, defined benefit pension scheme, defined benefit provident fund scheme and post retirement medical scheme. The pension benefits, medical benefits and leave encashment benefits are restricted to certain categories of employees. These schemes offer specified benefits to the employees on retirement. Annual actuarial valuations are carried out by an independent actuary in compliance with Accounting Standard 15 (revised 2005) on Employee Benefits. Wherever recognized funds have been set up, annual contributions are made by the Company, as required. Employees are not required to make any contribution.

Experience Gain/(Loss) adjustments on plan assets related to Gratuity Scheme for 2014 and the preceeding three years are Rs. 29,44,000; Rs. 1,212,000; Rs. 4017000 and Rs. (144,000) respectively

Experience Gain/(Loss) adjustments on plan liabilities related to Gratuity Scheme for 2014 and the preceeding three years are Rs. (49,562,000) Rs. 6,618,000; Rs. (6,577,000) and Rs. (78,761,000) respectively

Effect of increase/ decrease of one percentage point in the assumed medical cost trend rates:

As per Actuary, the cost trend in rates in case of medical benefits have no effect on the amount recognised since the benefit is in the form of a fixed amount.

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. 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 term of the obligations.

The contribution expected to be made by the Company for the year ended 31st December 2015 has not been ascertained.

13 Related Party Disclosures

a) Shareholders of the Company:

Western Dooars Investment Ltd. and Assam Dooars Investment Ltd. together hold 74% of the Equity Share Capital of the Company. Camellia Plc is the ultimate holding company which is indirectly holding Western Dooars Investment Ltd. and Assam Dooars Investment Ltd.

b) Other related parties with whom transactions have taken place during the year:

Fellow Subsidiary Companies:

Stewart Holl (India) Limited Amgoorie India Limited

Koomber Properties & Leasing Company Private Limited Goodricke Technical & Management Services Limited Borbam Investments Limited Koomber Tea Company Private Limited Lebong Investments Private Limited

c) Key Management Personnel:

A.N.Singh-Managing Director & CEO

14 Earning Per Equity Share (Basic and Diluted)

The calculation of earning per share is based on the Profit after taxation of Rs. 222,386,927 (2013 - Rs. 333,568,696) and Equity Shares outstanding (Nominal value Rs. 10/- each) during the year aggregating to 21,600,000 (2013 - 21,600,000).

15 The Company has reclassified previous years figure to conform to this years classification alongwith other regrouping/ rearrangement wherever considered necessary.


Dec 31, 2013

Transactions in foreign currencies are recorded in rupees by applying the exchange rate prevailing on the date of transaction. Transactions remaining unsettled are translated at the rate of exchange ruling at the end of the year. Exchange gain or loss arising on settlement/translation is recognised in the Statement of Profit and Loss.

Premium or discount on forward contracts are amortised as expense or income over the life of the contract. Foreign exchange forward contracts are revalued at the balance sheet date and the exchange difference is recognised as gain/loss in the Statement of Profit and Loss. Profit or Loss on cancellations/renewals of forward contracts is recognised in the Statement of Profit and Loss.

1 TAXES ON INCOME

Current tax represents the amount computed as per prevailing taxation laws under the Income Tax Act, 1961.

Deferred Tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets have been recognized where there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

2 BORROWING COSTS

Borrowing cost attributable to acquisition and/or construction of qualifying assets are capitalised as a part of the cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged to Statement of Profit and Loss.

3 LEASES

Lease Payments under the Operating Lease are recognised as an expense in the Statement of Profit and Loss, on a straight line basis over the lease term.

4 PROVISIONS AND CONTINGENT LIABILITIES

Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present value.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability.

5 USE OF ESTIMATES

The preparation of financial statements is in conformity with Indian GAAP requires the management to make judgements, estimates and assumptions that effect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in the future periods. Any revision to accounting estimates is recognised prospectively in the current and future periods.

6 EARNING PER SHARE

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

7 The Company has taken various premises under operating lease having tenure of 11 months/3 years. There is no specific obligation for renewal of these agreements. Lease rent for the year amounts to Rs. 16,571,918 (2012 - Rs.9,771,764). This includes lease arrangements with escalation clauses of 5% to 10% at the end of each year.

8. Consequent upon the vesting of the Indian undertakings on 1st January 1978 of the eight Sterling Company''s under

the scheme of amalgamation, the title in respect of certain tea estates acquired under such scheme, are to be transferred in the name of the Company. The Company has been legally advised that the notification issued by the Government of West Bengal in 1994 for payment of salami does not apply to the Company.

9. Provision for taxation has been made as per the Income Tax Act, 1961 and the rules framed there under with reference to the profit for the year ended 31st December, 2013 which extends over two assessment years, Assessment Year 2013-2014 and Assessment Year 2014-2015. The ultimate tax liability for the Assessment Year 2014- 2015 will be determined on the total income for the period from 1st April, 2013 to 31st March, 2014.

10 Post Retirement Employee Benefits

The Company operates defined contribution schemes like proviclent fund and defined contribution pension schemes. For these schemes, contributions are made by the Company, based on current salaries, to recognized funds maintained by the Company and for certain employees contributions are made to State Plans. In case of Provident fund schemes, contributions are also made by the employees. An amount of Rs.124,024,445 (2012 - Rs.119,867,587) has been charged to the Profit & Loss Account on account of defined contribution schemes.

The Company also operates defined benefit gratuity scheme, leave encashment, defined benefit pension scheme, defined benefit provident fund scheme and post retirement medical scheme. The pension benefits, medical benefits and leave encashment benefits are restricted to certain categories of employees. These schemes offer specified benefits to the employees on retirement. Annual actuarial valuations are carried out by an independent actuary in compliance with Accounting Standard 15 (revised 2005) on Employee Benefits. Wherever recognized funds have been set up, annual contributions are made by the Company, as required. Employees are not required to make any contribution.


Dec 31, 2012

1.1 Rights, Preferences and Restrictions attached to Shares

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

1.2 There is no movement of Share Capital during the year.

2.1 Capital Reserve includes Rs.3,883,676/- pre-acquisition profit

2.2 Development Rebate Reserve, Development Allowance Reserve and Investment Allowance (Utilised) Reserve are transferred from Pre-Merger Reserves.

3.1 Working Capital Loans are Secured by equitable mortgage by deposit of title deeds of the Company''s Tea Estates and hypothecation of entire tea crop and other produces of Tea Estates as well as stocks of tea manufactured or in process and book debts, and entire movable plant and machinery, tools and accessories and other movable fixed assets both present and future.

4.1 There are no Micro, Small and Medium Enterprises, as required to be disclosed under "The Micro, Small and Medium Enterprises Development Act, 2006" identified by the company on the basis of information available with the company.

5.1 There is no amount due and outstanding to be credited to Investor Education and Protection Fund as at 31st December 2012

6 CONTINGENT LIABILITIES (To the extent not provided for)

Claims against the Company not acknowledged as Debts:

Income Tax Matters (without considering concomitant liability in respect of Agricultural Income Tax) 98,434,848 98,434,848

Sales Tax Matters 1,502,235 1,502,235

Disputed Claims 2,516,000 2,516,000

Future cash flows if any, in respect of above cannot be determined at this stage

7.1 Research and Development Expenditure charged to Revenue Rs.11,683,167 (2011 - Rs.12,394,465)

8 The Company has taken various premises under operating lease having tenure of 11 months/3 years. There is no specific obligation for renewal of these agreements. Lease rent for the year amounts to Rs.9,771,764 (Previous year - Rs.9,583,000) This includes lease arrangements with escalation clauses of 5% to 10% at the end of each year.

9 Consequent upon the vesting of the Indian undertakings on 1st January 1978 of the eight Sterling Company''s under the scheme of amalgamation, the title in respect of certain tea estates acquired under such scheme, are to be transferred in the name of the Company. The Company has been legally advised that the notification issued by the Government of West Bengal in 1994 for payment of salami does not apply to the Company.

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

11. Post Retirement Employee Benefits

The Company operates defined contribution schemes like provident fund and defined contribution pension schemes. For these schemes, contributions are made by the Company, based on current salaries, to recognized funds maintained by the Company and for certain employees contributions are made to State Plans. In case of Provident fund schemes, contributions are also made by the employees. An amount of Rs.119,867,587 (2011 - Rs.105,581,925) has been charged to the Profit & Loss Account on account of defined contribution schemes.

The Company also operates defined benefit gratuity scheme, leave encashment, defined benefit pension scheme, defined benefit provident fund scheme and post retirement medical scheme. The pension benefits, medical benefits and leave encashment benefits are restricted to certain categories of employees. These schemes offer specified benefits to the employees on retirement. Annual actuarial valuations are carried out by an independent actuary in compliance with Accounting Standard 15 (revised 2005) on Employee Benefits. Wherever recognized funds have been set up, annual contributions are made by the Company, as required. Employees are not required to make any contribution.

Experience Gain/(Loss) adjustments on plan assets related to Gratuity Scheme for 2012 and the preceeding three years are Rs.4,017,000; Rs.(144,000); Rs.3,928,000 and Rs.(1,013,000) respectively Experience Gain/(Loss) adjustments on plan liabilities related to Gratuity Scheme for 2012 and the preceeding three years are Rs.(6,577,000); Rs.(78,761,000);Rs.(14,726,000) and Rs.(17,011,000) respectively

Effect of increase/ decrease of one percentage point in the assumed medical cost trend rates

As per Actuary, the cost trend in rates in case of medical benefits have no effect on the amount recognised since the benefit is in the form of a fixed amount.

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. 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 term of the obligations.

The contribution expected to be made by the Company for the year ended 31st December 2013 has not been ascertained.

Notes

i) The Company is engaged in the business of cultivation, manufacture and sale of tea. The products and their applications are homogeneous in nature. The segments are classified as Exports and Domestic.

ii) The Segmentwise Revenue, results, assets and liabilities figures relate to the respective amounts directly identifiable to each of the segments. Unallocable income / expenditure relate to the Company as a whole and are earned / incurred at the corporate level.

iii) Pricing of inter segment transfers is based on benchmark market price.

12 Related Party Disclosures

a) Shareholders of the Company:

Western Dooars Investments Ltd. and Assam Dooars Investments Ltd. together hold 74% of the Equity Share Capital of the Company. Camellia Plc is the ultimate holding company which is indirectly holding Western Dooars Investments Ltd. and Assam Dooars Investments Ltd.

b) Other related parties with whom transactions have taken place during the year:

Fellow Subsidiary Companies:

Stewart Holl (India) Limited

Amgoorie India Limited

Koomber Properties & Leasing Company Private Limited

Goodricke Technical & Management Services Limited

Borbam Investments Limited

Koomber Tea Company Private Limited

Lebong Investments Private Limited

Eastern Produce Kenya Ltd

c) Key Management Personnel:

A.N.Singh-Managing Director & CEO

d) Particulars of transactions during the year ended 31st December, 2012 :

13 Earning Per Equity Share (Basic and Diluted)

The calculation of earning per share is based on the Profit after taxation of Rs. 199,989,027 (2011 - Rs.374,244,260) and Equity Shares outstanding (Nominal value Rs. 10/- each) during the year aggregating to 21,600,000 (2011 - 21,600,000).

14 The Revised Schedule VI has become effective from the financial year commencing April 1, 2011 for the preparation of financial statements. Consequent to this the previous year''s figures have been regrouped/ reclassified wherever necessary to conform to the current year''s classification/disclosure


Dec 31, 2011

1. Contingent liabilities not provided for in respect of:

2011 2010 Rs.('000) Rs.('000)

a) Income Tax matters under appeal (without considering concomitant liability

in respect of Agricultural Income Tax) 98,435 64,727

b) Disputed Claims 2,516 2,556

c) Sales Tax Matters 1,502 1,502 Future cash outflow if any, in respect of above cannot be determined at this stage.

2. Estimated amount of contracts to be executed on Capital Account and not provided for Rs.53,496 (2010 - Rs.22,379)..

3. Consequent upon the vesting of the Indian undertakings on 1st January, 1978 of the eight Sterling Companies under the scheme of amalgamation, the title in respect of certain tea estates, acquired under such scheme, are to be transferred in the name of the company . The company has been legally advised that the notification issued by the Government of West Bengal in 1994 for payment of salami does not apply to the Company.

4. Provision for taxation has been made as per the Income Tax Act, 1961 and the rules framed there under with reference to the profit for the year ended 31st December, 2011 which extends over two assessment years, Assessment Year 2011-2012 and Assessment Year 2012-2013. The ultimate tax liability for the Assessment Year 2012- 2013 will be determined on the total income for the period from 1st April, 2011 to 31st March, 2012.

5. Research & Development expenses charged to revenue Rs.12,394 ( 2010 - Rs. 6,079).

6. The Company has taken various premises under operating lease having tenure of 11 months/3 years. There is no specific obligation for renewal of these agreements. Lease rent for the year amounts to Rs.9,583 (2010 - Rs.2,799) This includes lease arrangements with escalation clauses of 5% to 10% at the end of each year.

7. An inspection u/s 209A of the Companies Act, 1956 (Act) was carried out by the office of the Regional Director (E.R.), Ministry of Corporate Affairs in the year 2009 and 2010, pursuant to which show cause notices were issued alleging violation of various provisions of the Act. The Directors of the Company filed a petition u/s 633(2) of the Act being CP No.556 of 2010 before the High Court at Kolkata. It was interalia alleged in the notices that the Company has violated the provisions of section 269 and section 309 of the Act.

The Hon'ble Court, vide its order dated 19th December 2011, dropped the aforesaid charge levelled against the Company and directed the RoC not to launch any proceedings in this regard on the Company agreeing before the Hon'ble Court to disclose in the next Annual Accounts the information that in 2004 and 2006 the wife of the former Managing Director of the Company accompanied him in course of foreign visits which were necessary for the purpose of promoting the Company's business overseas.

All the other charges against the Company by the aforesaid show cause notices were also dropped by the Hon'ble Court and the Registrar of Companies was directed not to institute any proceedings in respect of any of the matters covered in the aforesaid show cause notices.

Pursuant to the said order dated 19th December 2011, members are hereby informed that the wife of Mr.K.S.David, the erstwhile Managing Director of the Company, travelled together to UK and USA for promoting the Company's business overseas and for such purposes the Company had incurred for both expenses of Rs.1.15 Million in 2004 and Rs.1.19 Million in 2006.

A copy of the order passed by Hon'ble Judge dated 19th December 2011 is available for inspection at the Registered Office of the Company.

** Being raw materials harvested in the Company's 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 could not be ascertained.

8. There are no Micro, Small and Medium Enterprises, as required to be disclosed under "The Micro, Small and Medium Enterprises Development Act, 2006" identified by the company on the basis of information available with the company.

9. Selling Expenses in schedule 16 include Brokerage Rs. 54,512 (2010 - Rs.43,918), Commission Rs. 5,919 (2010 - Rs. 15,641), Insurance Rs. 8,699 (2010 - Rs.3,430), Shipping and Other Charges Rs. 34,083 (2010 - Rs. 23,895), Sales Promotion Rs.170,251 (2010 - Rs. 134,341) and Freight Rs.90,499 (2010 - Rs. 65,882).

10. Earning Per Equity Share (Basic and Diluted)

The calculation of earning per share is based on the Profit after taxation of Rs. 374,245/- (2010 - Rs.449,967) and Equity Shares outstanding (Nominal value Rs. 10/- each) during the year aggregating to 21,600,000 (2010 - 21,600,000).

Notes :

i) The Company is engaged in the business of cultivation, manufacture and sale of Tea. The products and their applications are homogeneous in nature. The segments are classified as Exports and Domestic.

ii) The Segment wise Revenue, results, assets and liabilities figures relate to the respective amounts directly identifiable to each of the segments. Unallocable income / expenditure relate to the Company as a whole and are earned / incurred at the corporate level.

iii) Pricing of inter segment transfers is based on benchmark market price.

11. As at 31st December, 2011 the company had net outstanding foreign currency exposures of Rs.289,691 (USD equivalent 5,445) (2010 - Rs. 54,316 ; USD equivalent 1,205) of which Rs.74,395 (USD equivalent 1,398 (2010 - Rs.44,729 USD equivalent 992) has been covered by forward contracts.

12. Related Party Disclosures :—

a) Shareholders of the Company :—

Western Dooars Investment Ltd. and Assam Dooars Investment Ltd. together hold 74% of the Equity Share Capital of the Company. Camellia Plc is the ultimate holding company which is indirectly holding Western Dooars Investment Ltd. and Assam Dooars Investment Ltd.

b) Other related parties with whom transactions have taken place during the year :— Fellow Subsidiary Companies:—

Stewart Holl (India) Limited, Amgoorie India Limited, Koomber Properties & Leasing Company Private Limited, Goodricke Technical & Management Services Limited, Borbam Investments Limited, Koomber Tea Company Private Limited, Lebong Investments Private Limited, Eastern Produce Malawi Ltd, Linton Park Plc.

13. Post Retirement Employee Benefits:

The Company operates defined contribution schemes like provident fund and defined contribution pension schemes. For these schemes, contributions are made by the Company, based on current salaries, to recognized funds maintained by the Company and for certain employees contributions are made to State Plans. In case of Provident fund schemes, contributions are also made by the employees. An amount of Rs.105,582 (2010 - Rs.103,328) has been charged to the Profit & Loss Account on account of defined contribution schemes.

The Company also operates defined benefit gratuity scheme, leave encashment, defined benefit pension scheme, defined benefit provident fund scheme and post retirement medical scheme. The pension benefits, medical benefits and leave encashment benefits are restricted to certain categories of employees. These schemes offer specified benefits to the employees on retirement. Annual actuarial valuations are carried out by an independent actuary in compliance with Accounting Standard 15 (revised 2005) on Employee Benefits. Wherever recognized funds have been set up, annual contributions are made by the Company, as required. Employees are not required to make any contribution.

Experience Gain/(Loss) adjustments on plan assets related to Gratuity Scheme for 2011 and the preceding three years are Rs.(144); Rs.3,928; Rs.(1,013) and Rs.1,824 respectively

Experience Gain/(Loss) adjustments on plan liabilities related to Gratuity Scheme for 2011 and the preceding three years are Rs.(78,761); Rs.14,726;Rs.(17,011) and Rs.39,940 respectively

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. 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 term of the obligations.

The contribution expected to be made by the Company for the year ended 31st December 2012 has not been ascertained.

14. Previous year's figures have been regrouped and / or rearranged whenever necessary.


Dec 31, 2010

1. Contingent liabilities not provided for in respect of:

2010 2009

Rs.(000) Rs.(OOO)

a) Income Tax matters under appeal (without considering concomitant liability in respect of Agricultural Income Tax) 64,727 68,990

b) Disputed Claims 2,556 2,556

c) Sales Tax Matters 1,502 -

Future cash outflow if any, in respect of above cannot be determined at this stage.

2. Estimated amount of contracts to be executed on Capital Account and not provided for Rs. 22,379 (2009 - Rs.41,220).

3. Consequent upon the vesting of the Indian undertakings on 1st January, 1978 of the eight Sterling Companies under the scheme of amalgamation the title in respect of certain tea estates, acquired under such scheme, are to be transferred in the name of the company . The company has been legally advised that the notification issued by the Government of West Bengal in 1994 for payment of salami does not apply to the company.

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

5. Research & Development expenses charged to revenue Rs.6,079 ( 2009 - Rs. 2,657).

6. The Company has taken various premises under operating lease having tenure of 11 months/3 years. There is no specific obligation for renewal of these agreements. Lease rent for the year amounts to Rs.2,799 (2009 - Rs.1,670) This includes a lease arrangement with an escalation clause of 7% p.a. at the end of each year.

7. There are no Micro, Small and Medium Enterprises, as required to be disclosed under "The Micro, Small and Medium Enterprises Development Act, 2006" identified by the company on the basis of information available with the company.

8. Selling Expenses in schedule 16 include Brokerage Rs. 43,918 (2009 - Rs.48,383), Commission Rs. 15,641 (2009 - Rs. 16,420), Insurance Rs. 3,430 (2009 - Rs.1,784), Shipping and other Charges Rs. 23,895 (2009 - Rs. 20,830), Sales Promotion Rs.134,341 (2009 - Rs. 80,880) and Freight Rs.69,978 (2009 - Rs. 73,832).

9. Impairment Loss of Rs.15,537 is on account of plant & machinery installed at Instant Tea Plant. The unit has been running well below its rated capacity and has been making losses for a number of years due to high cost of production. In view of the above, and expected losses coupled with negative cash flow in future years, the company decided to impair the plant & Machinery based on its net realisable value ascertained by a technical valuer. The Instant Tea plant being an Export Oriented Unit, the impairment loss has been included in the results of the export segment as mentioned in Note 18 to Schedule 18.

10. Earning Per Equity Share (Basic and Diluted)

The calculation of earning per share is based on the Profit after taxation of Rs. 449,967 (2009 - Rs.419,426) and Equity Shares outstanding (Nominal value Rs. 10/- each) during the year aggregating to 21,600,000 (2009 - 21,600,000).

11. Related Party Disclosures

1. Shareholders of the Company:-

Western Dooars Investment Ltd. and Assam Dooars Investment Ltd. together hold 74% of the Equity Share Capital of the Company. Camellia Pic is the ultimate holding Company which is indirectly holding Western Dooars Investment Ltd. and Assam Dooars Investment Ltd.

2. Other related parties with whom transactions have taken place during the year:- Fellow Subsidiary Companies:-

Stewart Holl (India) Limited, Amgoorie India Limited, Koomber Properties & Leasing Company Private Limited, Goodricke Technical & Management Services Limited, Borbam Investments Limited, Koomber Tea Company Private Limited, Lebong Investments Private Limited, Eastern Produce Malawi Ltd, Linton Park Pic.

3. Key Management Personnel:-

A. N. Singh - Managing Director & CEO

12. As at 31st December, 2010 the Company had net outstanding foreign currency exposures of Rs.54,316 (USD equivalent 1,205) (2009 - Rs. 31,455 ; USD equivalent 686) of which Rs.44,729 (USD equivalent 992 (2009 - Rs.Nil USD equivalent Nil) has been covered by forward contracts.

13. Previous years figures have been re-grouped and / or re-arranged wherever necessary.


Dec 31, 2009

1. Contingent liabilities not provided for in respect of:

2009 2009 Rs. Rs.

a) Income Tax matters under appeal 68,989,838 39,863,556 (without considering concomitant liability in respect of Agricultural Income Tax)

b) Bills discounted / Factoring - 19,329,894

c) Disputed Duties, etc. 2,556,480 1,177,618

2. Estimated amount of contracts to be executed on Capital Account and not provided for Rs.41,220,442 /- (2008 - Rs. 47,103,546/- ) including Rs. Nil (2008 - Rs. 4,526,297/-) for Computer Software.

3. Consequent upon the vesting of the Indian undertakings on 1st January, 1978 of the eight Sterling Companies under the scheme of amalgamation, the title in respect of certain tea estates acquired under such scheme, are to be transferred in the name of the company . The company has been legally advised that the notification issued by the Government of West Bengal in 1994 for payment of salami does not apply to the company.

4. Provision for taxation has been made as per the Income Tax Act, 1961 and the rules framed thereunder with reference to the profit for the year ended 31st December, 2009 which extends over two assessment years, Assessment Year 2009-2010 and Assessment Year 2010-2011. The ultimate tax liability for the Assessment Year 2010- 2011 will be determined on the total income for the period from 1st April, 2009 to 31st March, 2010.

5. a) Research & Development expenses charged to revenue Rs. 2,657,200/- (2008 - Rs. 2,551,395/-).

b) The Company has taken various premises under operating lease having tenure of 11 months/3 years. There is no specific obligation for renewal of these agreements. Lease rent for the year amounts to Rs.1,670,412/- (2008- Rs.1,995,307/-) This includes a lease arrangement with an escalation clause of 7% p.a. at the end of each year.

6. There are no Micro, Small and Medium Enterprises, as required to be disclosed under "The Micro, Small and Medium Enterprises Development Act, 2006" identified by the company on the basis of information available with the company.

7. Freight, Sales, Warehouse charges, etc. in schedule 16 include Brokerage Rs.48,383,059/- (2008 - Rs.31,833,624/-), Commission Rs. 16,419,986/- (2008 - Rs. 15,016,912/-), Insurance Rs. 1,783,993/- (2008 - Rs.1,086,483/-), Shipping and Other Charges Rs. 20,830,080/- (2008 - Rs. 12,935,778/-), Sales Promotion Rs. 80,880,159/- (2008 - Rs. 36,073,110/-) and Freight Rs. 73,832,036/- (2008 - Rs. 60,911,882/-).

8. Earning Per Equity Share (Basic and Diluted)

The calculation of earning per share is based on the Profit after taxation of Rs. 419,425,729/- (2008 - Rs. 175,873,274/-) and Equity Shares outstanding (Nominal value Rs. 10/- each) during the year aggregating to 21,600,000 (2008 - 21,600,000).

Notes :

i) The Company is engaged in the business of cultivation, manufacture and sale of Tea. The products and their applications are homogeneous in nature. The segments are classified as Exports and Domestic.

ii) The Segment wise revenue, results, assets and liabilities figures relate to the respective amounts directly identifiable to each of the segments. Unallocable income / expenditure relate to the Company as a whole and are earned / incurred at the corporate level.

iii) Pricing of inter segment transfers is based on benchmark market price.

9. Related Party Disclosures

1. Shareholders of the Company:—

Western Dooars Investment Ltd. and Assam Dooars Investment Ltd. together hold 74% of the Equity Share Capital of the Company. Camellia Plc is the ultimate holding company which is indirectly holding Western Dooars Investment Ltd. and Assam Dooars Investment Ltd.

2. Other related parties with whom transactions have taken place during the year:— Fellow Subsidiary Companies:—

Stewart Holl (India) Limited, Amgoorie India Limited, Koomber Properties & Leasing Company Private Limited, Goodricke Technical & Management Services Limited, Borbam Investments Limited, Koomber Tea Company Private Limited, Lebong Investments Private Limited.

3. Key Management Personnel:—

A. N. Singh — Managing Director & CEO

10. As at 31st December, 2009 the company had net outstanding foreign currency exposures of Rs. 31,455,367/- (USD equivalent 685,988) (2008 - Rs. 50,229,234/- USD equivalent 1,031,402) of which Rs. Nil (USD equivalent (2008 - of which Rs. 30,583,600/- USD equivalent 628,000) has been covered by forward contracts.

11. Previous years figures have been re-grouped and / or re-arranged wherever necessary.

12. Post Retirement Employee Benefits:

The Company operates defined contribution schemes like provident fund and defined contribution pension schemes. For these schemes, contributions are made by the Company, based on current salaries, to recognized funds maintained by the Company and for certain employees contributions are made to State Plans. In case of Provident fund schemes, contributions are also made by the employees. An amount of Rs.131,189,833 (2008 - Rs. 87,645,513) has been charged to the Profit & Loss Account on account of defined contribution schemes.

The Company also operates defined benefit schemes like gratuity, leave encashment, defined benefit pension and post retirement medical. The pension benefits, medical benefits and leave encashment benefits are restricted to certain categories of employees. The defined benefit schemes offer specified benefits to the employees on retirement. Annual actuarial valuations are carried out by an independent actuary in compliance with Accounting Standard 15 (revised 2005) on Employee Benefits. Wherever recognized funds have been set up, annual contributions are also made by the Company. Employees are not required to make any contribution.

Effect of increase /decrease of one percentage point in the assumed medical cost trend rates :-

As per Actuary, the cost trend in rates in case of medical benefits have no effect on the amount recognised since the benefit is in the form of a fixed amount

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. 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 term of the obligations.

The contribution expected to be made by the Company for the year ended 31st December 2010 has not been ascertained.

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