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Notes to Accounts of Goodricke Group Ltd.

Mar 31, 2017

1. Additional Notes to the Financial Statements

2. Contingent liabilities and commitments :

3. Contingent liabilities

Claims against the Company not acknowledged as debts:

Income Tax matters relate to amounts disputed by the Company in relation to issues of disallowances/additions in computing total income under the Income Tax Act, 1961.

Central Excise and Sales Tax matter relates to amounts disputed by the Company in relation to issues of applicability, classification and determination, as applicable.

Disputed claims relates to third party claims arising from disputes relating to contracts.

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

4. Commitments

Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 16.18 Millions (2016 -Rs. 0.74 Millions; 2015 -Rs. 15.91 Millions).

5. Research and Development expenses for the year charged to revenue amounts to Rs13.50 Million (2016 -Rs. 16.05 Millions).

6. Corporate Social Responsibility (CSR) - 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.

7. Gross amount required to be spent by the Company is Rs. 5.43 Millions (2016 Rs 7.04 Millions)

8. Amount spent during the year/period is Rs 5.50 Millions (2016 Rs 7.57 Millions)

9. Employee Benefit Plans:

Defined Contribution Plans

The Company operates defined contribution schemes like provident fund and pension schemes for all qualifying employees. 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.

An amount of Rs. 157.54 Millions (2016 - Rs. 155.44 Millions) has been charged to the Statement of Profit and Loss on account of defined contribution schemes.

Defined Benefit Plans

The Company also operates defined benefit schemes in respect of gratuity, pension, provident fund and postretirement medical benefit towards its employees. These schemes offer specified benefits to the employees on retirement. The pension benefits and medical benefits are restricted to certain categories of employees. The liabilities arising in the Defined Benefit Schemes are determined in accordance with the advice of independent, professionally qualified actuaries, using the projected unit credit method as at year end. The Company makes regular contributions to these Employee Benefit Plans. Additional contributions are made to these plans as and when required based on actuarial valuation.

Provident Fund, Pension and Gratuity Benefits are funded and Post-Retirement Medical Benefits are unfunded in nature. The funds are administered through approved Trusts, which operate in accordance with the Trust Deeds, Rules and applicable Statutes. The concerned Trusts are managed by Trustees who provide strategic guidance with regard to the management of their investments and liabilities and also periodically review their performance.

Risk Management

The above benefit plans expose the company to actuarial risks such as follows-

10. Interest rate risk: The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase

11. Salary inflation risk: Higher than expected increases in salary will increase the defined benefit obligation

12. Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

These Plans have a relatively balanced mix of investments in order to manage the above risks. The investment strategy is designed based on the interest rate scenario, liquidity needs of the Plans and pattern of investment as prescribed under various statutes. The Trustees regularly monitor the funding and investments of these Plans. Robust risk mitigation systems are in place to ensure that the health of the portfolio is regularly reviewed and investments do not pose any significant risk of impairment. Pension obligation of the employees is secured by purchasing annuities thereby de-risking the Plans from future payment obligation.

13. Sensitivity Analysis

Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the balance sheet. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

14. The Company’s significant leasing arrangements are in respect of operating leases for premises and tea estates. These leasing arrangements are not non-cancellable range between 11 months and 30 years generally, or longer, and are usually renewable by statute or mutual consent on mutually agreeable terms as applicable. The aggregate lease rentals payable are charged as ‘Rent’ under Note 28.

The Company’s tea estates are located in remote areas of Assam and West Bengal with very limited access to banking. Further, tea is a very labour intensive activity. Workers have no means to banking and hence are totally dependent on the gardens for their financial needs. Therefore, the estates had no choice but to transact in SBN’s for a limited period.

15. 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.

16. Segment Information

17. Consequent to the adoption of Ind AS, the Company has identified one operating segment viz, "Tea" which is consistent with the internal reporting provided to the chief executive officer, who is the chief operating decision maker.

18. The Company deals in only one product i.e., Tea. The products and their applications are homogenous in nature.

19. The Company is not reliant on revenues from transactions with any single external customer and does not receive 10% or more of its revenues from transactions with any single external customer.

20. Related Party Disclosures 1. Parent information

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.

21. Key Managerial Personnel (KMP):

Arun Narain Singh - Managing Director and CEO

Arjun Sengupta - Vice President and CFO

Subrata Banerjee - Sr. General Manager & Company Secretary

22. Other related parties with whom transactions have taken place during the year/period:

23. 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

Elgin Investments & Trading Company Limited

24. Post employment benefit plan:

Goodricke Group Limited Gratuity Fund Goodricke Group Limited Executive Staff Pension Fund Goodricke Group Limited Executive Staff Provident Fund Goodricke Group Limited Employees Provident Fund

25. Financial risk management objectives

The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company continues to focus on a system-based approach to business risk management. The Company’s financial risk management process seeks to enable the early identification, evaluation and effective management of key risks facing the business. Backed by strong internal control systems, the current Risk Management System rests on policies and procedures issued by appropriate authorities; process of regular reviews / audits to set appropriate risk limits and controls; monitoring of such risks and compliance confirmation for the same.

26. Market risk

The Company’s business primarily agricultural in nature, exposes it to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of adverse weather conditions and lack of future markets. The Company closely monitors the changes in market conditions and select the sales strategies to mitigate its exposure to risk.

27. Foreign currency risk

The Company undertakes transactions denominated in foreign currency which results in exchange rate fluctuations. Such exchange rate risk primarily arises from transactions made in foreign exchange and reinstatement risks arising from recognized assets and liabilities, which are not in the Company’s functional currency (Indian Rupees). A significant portion of these transactions are in US Dollar,euro, etc.

The carrying amounts of the Company’s foreign currency denominated financial assets and financial liabilities, at the end of the reporting period are as follows:

Foreign currency sensitivity

The impact of sensitivity analysis arising on account of outstanding foreign currency denominated assets and liabilities is insignificant.

28. Interest rate risk

Interest rate risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The objectives of the Company’s interest rate risk management processes are to lessen the impact of adverse interest rate movements on its earnings and cash flows and to minimize counter party risks.

The Company is exposed to interest rate volatilities primarily with respect to its short terms borrowings from banks as well as Financial Institutions. Such volatilities primarily arise due to changes in money supply within the economy and/or liquidity in banking system due to asset/liability mismatch, poor quality assets etc. of banks. The Company manages such risk by operating with banks having superior credit rating in the market as well as Financial Institutions.

Interest rate sensitivity

Since the borrowings are all short term in nature, the possible volatility in the interest rate is minimal.

29. Price risk

The Company invests its surplus funds primarily in debt mutual funds measured at fair value through profit or loss. Aggregate value of such investments as at 31st March, 2017 is Rs.142.85 Millions (2016 -Rs. Nil; 2015 - Rs. Nil).

Investments in the mutual fund schemes are measured at fair value. Accordingly, these do not pose any significant price risk.

30. Liquidity risk

Liquidity risk is the risk that the Company may encounter difficulty including seasonality in meeting its obligations.

The Company mitigates its liquidity risks by ensuring timely collections of its trade receivables, close monitoring of its credit cycle and ensuring optimal movements of its inventories.

The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date.

31. Credit risk

Credit risk is the risk that counter party will not meet its obligations leading to a financial loss.

The Company has its policies to limit its exposure to credit risk arising from outstanding receivables. Management regularly assess the credit quality of its customer’s basis which, the terms of payment are decided. Credit limits are set for each customer which are reviewed on periodic intervals. The credit risk of the Company is low as the Company largely sells its teas through the auction system which is on cash and carry basis and through exports which are mostly backed by letter or credit or on advance basis.

32. Fair value measurements Fair value hierarchy

Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:

Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities

Level 2: Inputs other than quoted price including within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)

If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of counterparty. This is the case with listed instruments where market is not liquid and for unlisted instruments.

The management consider that the carrying amounts of financial assets (other than those measured at fair values) and liabilities recognized in the financial statements approximate their fair value as on March 31, 2017, March 31, 2016 and January 1, 2015.

There has been no change in the valuation methodology for Level 3 inputs during the year. The Company has not classified any material financial instruments under Level 3 of the fair value hierarchy. There were no transfers between Level 1 and Level 2 during the year.

Notes to the reconciliations

39. For PPE other than bearer plants, the company has considered carrying cost on the date of transition as the deemed cost. The difference in depreciation under Previous GAAP and Ind AS is adjusted.

40. Under Ind AS, tea bushes representing bearer plants have been recognized as depreciable items of PPE, fair valued on the date of transition in accordance with exemptions available in Ind AS 101 and recognized as deemed cost. These are depreciated over the remaining useful life of the bearer plants. The consequent impact on depreciation is reflected in Statement of Profit and Loss.

41. Stock of tea is valued at lower of cost and net realizable value. Cost, computed under Ind AS, comprises of fair value of green leaf plucked from the Company’s estates less costs to sell at the point of harvest and cost of production for the full year. However, under previous GAAP, cost comprised of the cost of production (including costs for plucked green leaf) for the full year.

43. The actuarial gains and losses, under Ind AS form part of re-measurement of the net defined benefit liability and is recognized in OCI, as against recognition in profit or loss under previous GAAP. Consequently, the tax effect of the same has also been recognized in OCI instead of profit or loss.

44. In view of recognition of bearer plants, expenditure on uprooting and replanting of tea bushes, under Ind AS, qualifies for capitalization and has therefore been recognized as PPE / CWIP, as the case may be and depreciated, as applicable, over the remaining useful life. Under previous GAAP, such expenditure incurred were treated as revenue expenses.

45. Under previous GAAP, biological assets were not required to be recognized. Under Ind AS, these have been recognized at fair value less costs to sell and change in fair value has been recognized in profit or loss.

46. Under previous GAAP, dividend payable on equity shares (including the tax thereon) was recognized as a liability in the period to which it relates. Under Ind AS, dividends (including the tax thereon) to shareholders are recognized when declared by the members in a general meeting.

47. Under previous GAAP, replanting subsidy received from the Tea Board was recognized as revenue in the Statement of Profit and Loss as and when accrued. Under Ind AS, the same is recognized as deferred revenue in the Balance Sheet and transferred to profit or loss on a systematic and rational basis over the useful lives of the bearer plants.

48. The financial risk associated to agriculture would include climate change, price fluctuation, currency fluctuation and input cost increases. Being dependent on rainfall, any shortfall would directly impact the production. The sale of tea being largely through the auction system, any price fluctuation would impact profitability. Increased wages also has a direct impact on the cost of production because of labour intensive nature of the business operations.

Management is continuously monitoring all the above factors. Investment in irrigation, a planned replanting programme to ensure higher yields and improving efficiency of labour and modernization are some of the measures taken by the management to mitigate the risks.

49. Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) (Amendment) Rules, 2017 on 17th March, 2017 notifying the amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment’. These amendments are applicable for annual periods beginning on or after 1st April, 2017. The Company expects that there will be no material impact on the financial statements resulting from the implementation of these standards.

50. The financial statements were approved for issue by the Board of Directors on 23rd May, 2017.


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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