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Notes to Accounts of Jay Shree Tea & Industries Ltd.

Mar 31, 2014

(Rs. in Lacs) AS at As at 31st March, 2014 31st March, 2013 Contingent Liabilities not provided for in respect of :

A) Claims/Disputes/Demands not acknowledged as debts:

i) Demand from Sales Tax authority : 231.82 156.02

Certain disallowances of Sales Tax were demanded against the company and the appeals before the Commissioner/ Tribunal Appellate and revisional Board has been filed and the management is of the opinion that it will obtain full relief

ii) Income Tax demand under appeal 637.74 648.06

iii) Demand from a lessor for interest on differential rent 70.14 70.14

iv) Demand of Provident Fund Damages by the Provident Fund 24.39 24.39

Authorities, West Bengal

v) Electricity duty demanded by Government of Bihar appealed in 103.10 103.10

Hon''ble Supreme Court

vi) Demand of additional provident fund contribution on food grain 50.37 50.37 concession provided to daily rated plantation workers in Assam Tea estates till September 2012 against which stay has been obtained from Hon''ble High Court at Guwahati

B) i) Capital Commitments outstanding (Net of Advances) 858.49 86.24

ii) Bank Guarantees Outstanding (Pledge of Fixed Deposit of - 838.29

Rs. NIL) (Previous YearRs. 112.19)

iii) Corporate guarantee outstanding given to a Bank against loan 1917.44 3041.92 acquired by a subsidiary company from the bank (US$ 3.2 million) (previous year US$ 5.6 million)

iv) Corporate guarantee outstanding given to a Bank against banking 3553.26 3259.20 facility taken by a subsidiary and step down subsidiary from the bank (US$ 5.93 million) (previous year US$ 6.0 million)

C) Other Commitments

Letter of credit issued against Import of materials 11.20 301.59

D) Interest Income of Rs. 144.85 till this financial year (previous year Rs. 59.85) on an Inter-corporate Deposit of Rs. 500 has not been recognized in view of uncertainty in realization. Te Company is confident of recovering the principal.

E) i) Fringe Benefit Tax has been abolished from accounting year 2009-10. However in view of the interim stay granted by the Hon''ble High Court at Calcutta, no liability has been provided for earlier years.

ii) No provision for dividend and corresponding dividend distribution tax has been recognized in respect to 7135730 equity shares held by the beneficiary trusts in view of waiver letter received from them.

iii) During the year, the Company has further assessed the recoverability of Minimum Alternate Tax (MAT) for set off with future normal taxes and a sum of Rs. 418.43 (Previous year Rs. 418.43) have been carried forward. Based on projections made by the management and current trend of working of the Company the management is virtually certain of recovering the MAT credit entitlements.

F) In terms of the resolution passed by the shareholders on 22nd September 2011, the company has paid remuneration to Mrs. Jayashree Mohta as a Whole time Director. In view of inadequate profit during the current financial year, the said payment has exceeded the limits prescribed under Schedule XIII of the Companies Act 1956 by Rs. 42.00. An application has been made to the Central Government for necessary approval.

G) In respect to rent of a tenanted property, during the year the division bench of Hon''ble High Court at Kolkata upheld the decree awarded in favour of the landlord enhancing the rent with effect from April 2000 to March 2010. Te Special leave petition filed against the said order with the Hon''ble Supreme Court got rejected. Te Company has paid a sum of Rs. 372.54 (net of provision) towards rent and Rs. 281.35 towards interest thereupon have been charged to the statement of Profit & Loss Account in terms of decree.

H) i) The agreement with Assam Tea Corporation Ltd. (ATCL) for purchase of entire green leaves of Longai and Ishabheel Tea Estates and operating the Longai Tea Factory were further renewed for the season 2014 for a period of one year by bidding through tender. Further the company has also entered a similar agreement with ATCL for purchase of entire green leaves of Bidyanagar Tea Estate for the season 2014 by bidding through tender. A sum of Rs. 416.42 (previous year Rs. 281.20) is recoverable from ATCL which is being realized on a systematic basis from the proceeds of green leaf procured.

ii) The agreement in respect of operation of Amluckie Tea Factory and purchase of green leaf with ATCL could not be renewed for the season 2014 due to lack of economies. A sum of Rs. 80.32 (previous year Rs. 386.59) is outstanding on account of funds invested in earlier years and the same shall be refunded back and/or adjusted from the payments to be made on account of Longai, Ishabheel and Bidyanagar tea estates.

ii) The Net Worth of the subsidiary company M/s North Tukvar Tea Company Ltd. is negative. No provision in value of the investment amounting to Rs. 356.20 and for advances /security deposit of Rs. 277.45 is envisaged /provided, being strategic in nature.

Note : Loans to employees under various schemes of the Company (i.e. housing loan etc) is considered outside the purview of disclosure requirements.

J) As per the requirements of Accounting standard - 28 on "Impairment of Assets", the Company has assessed the carrying amount of the assets vis-a-vis their recoverable values and no impairment is envisaged at the balance sheet date.

K) The Company has no overdue amounts due to suppliers under the Micro, Small, & Medium Enterprises Development Act 2006 (MSMED) as at 31.03.2014. Te disclosure as required under the said act is as under :-

The above information has been determined to the extent such parties have been identified on the basis of information available with the company.

L) i) The Company''s significant leasing agreements (as lessee) are in respect of lease for Land & Premises (residential, office, stores, godowns etc). Tese Leasing arrangements which are non-cancellable ranging between one month and three years generally or longer and are usually renewable by mutual agreement. Te aggregate lease rentals payable are charged as Rent.

ii) Certain land and building has been given on operating lease to a society at a lease rental of Rs. 17.00 Per month (Previous Year Rs. 17.00 per month) for the building and Rs. 0.50 ( Previous Year Rs. 0.50) per annum for the land to be reviewed annually.

As per requirements of Accounting Standard-19 on leases, the following disclosures are furnished for significant operating leases as lessor :

iii) The Company has taken over the operation and management control of North Tukvar Tea Estate on leave & license basis till 31.03.2015 from its subsidiary North Tukvar Tea Company Limited at an yearly charge of Rs. 9.00. Te annual lease charge has been waived by the subsidiary from the year 2012-2013. Te results for the current financial year includes a loss of Rs. 77.55 (Previous year Rs. 21.84) from the said tea estate.

M) Disclosure as per Accounting Standard-29 "Provisions, Contingent Liabilities & Contingent Assets" :

The provisions for disputed statutory & obligatory liabilities are on account of cases pending with courts/concerned authorities based on estimates made by the Company considering the facts & circumstances.

N) The Company uses forward contracts, swaps and other derivative contracts to hedge its risks relating to changes in exchange rates and interest rates. Te use of such contract is consistent with the Company''s risk management policy. Te Company does not use derivative contracts for speculation purposes.

O) Employee Benefits (Accounting Standard - 15)

i) Defined Contribution Plan :

The Company makes contribution towards Provident Fund, ESIC and Superannuation Fund to a defined contribution benefit plan for qualifying employees. Te provident fund plan is operated partly by Regional Provident Fund Commissioner and partly by an independent Trust, ESIC by government agencies and Superannuation Fund by a trust created for the purpose. Under the said schemes the company is required to contribute a specific percentage of pay roll costs in respect of eligible employees to the retirement benefit scheme to fund the benefits.

During the year the company has recognized Rs. 1185.77 (Previous Year Rs. 1097.80) for provident fund contribution, Rs. 28.81 (Previous Year Rs. 29.75) for ESIC and Rs. 78.86 (Previous Year Rs. 71.56) for Superannuation Contribution. Te Contribution payables to these plans by the Company are at the rates specified in the rules of the scheme.

In keeping with the Guidance on implementing Accounting Standard (AS) 15 on Employees Benefits issued by the Accounting Standards Board of the Institute of Chartered Accountants of India (ASB Guidance), employer-established provident fund trusts are treated as Defined Benefit Plans since the company is obligated to meet interest shortfall, if any, with respect to covered employees. In view of year-end position of the fund (for covered employees) and confirmation from the Trustees'' of such fund, there is no shortfall as at the year end.

ii) Defined benefit plans :

a) The Company makes contribution of gratuity to JSTI Gratuity Fund created for the purpose of qualifying employees. Te scheme provides for payment to vested employees upon retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of 5 years of continuous service.

b) Certain employees of the Company are also eligible for encashment of leave upon retirement up to 30 days for each year (maximum 240 days).

c) The present value of defined benefit obligation and related current cost are measured using the Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date.

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

- The expected rate of return on Plan Assets is determined based on the portfolio of assets, existing investments along with the Strategic changes in the portfolio and market scenario. Te Plan Assets are diversified reasonable to maximize the return within acceptable risk parameters.

- The Company expects to contributeRs. 500.00 to its gratuity fund in 2014-15.

Q) Interest in Joint Venture :

The Company has 50% ownership interest in Tea Group Investment Company Limited. Te proportionate share in the assets, liabilities, income and expenses (each without elimination of the effect of transactions between the company and the joint venture) related to its in jointly controlled entity are given below:

U) Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

1) a) Land of Tribeni, West Bengal - Appeal for the fnal determination of compensation was decided

in favour of the Company by the District Court of Hooghly and fnal compensation determined at Rs.8.33 (Including interest Rs. 0.50) against which a sum of Rs. 2.05 was received in a previous year and credited to fxed assets. Rs. 6.28 including Rs. 1.50 released during the year 1967 against hypothecation of Khardah Land by the District Court has been shown in Current Liabilities. The Hon''ble High Court at Calcutta has decided the appeal against the Company in a previous year by reducing the amount of compensation for which an appeal before the Hon''ble Supreme Court of India was fled. Hon''ble Supreme Court has upheld the decision of the Hon''ble High Court and accordingly the adjustments will be carried out when the amount to be refunded is ascertained.

b) Land at Guwahati measuring 2 hectares and related building including furniture & fxture and related equipment has been given on registered lease to a Society for operating a School.

2) Includes estimated cost of New Extension of area under tea Rs. 27.56 (Previous Year Rs. 24.63) capitalized during the year as certifed.

3) Excluding Rs. 75.60 (Previous Year Rs. 73.44) on account of subsidy received from Tea Board under Tea Quality Upgradation & Product Diversifcation Scheme, Rs. 19.70 (Previous Year Rs. 15.42) on account of transport subsidy received against vehicles from Tea Board and Rs.285.23 (previous year Rs.NIL) on account of capital subsidy received from Cane Ministry, Bihar.

4) Land, Buildings and Plant& Machinery include Rs. 1.18, Rs. 6.43 and Rs. 0.81 respectively (Previous Year Rs. 1.18, Rs. 6.43, and Rs. 0.81 respectively) being 5.18% share of cost of Land, Buildings and Plant & Machinery held on co-ownership by the Company with other parties.

5) Land & Plantation include Rs. 29.28 (Previous year Rs. 29.28) and Building include Rs. 1.55 (Previous year Rs. 1.55) (being cost of foor of a leasehold building) in the name of the nominees of the Company on co- ownership basis, pending execution of conveyance deed.

6) Land & Plantation includes 2.431 Hectare of land at tea estates for which possession handed over for construction of schools and 6 hectares for which execution of conveyance deed in favour of the company is pending.

7) The Jayshree Sugar division of the company is holding 1070.57 acre of land which is in dispute under "Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) Act,1961 & Rules 1963. Vide order dated 29/12/2012, the Additional Collector,Bettiah had declared 970.57 acre of land as surplus and ordered for surrender of such land. The company has fled an appeal against the order of the collector and matter is subjudice. Further compensation of 146.92 acres of land which was surrendered under the above Act in earlier years is yet to be determined and shall be accounted for in the year of receipt.

8) Depreciation during the year includes of Rs. 0.43 (Previous year Rs. 1.15) towards assets of farm.

9) Borrowing cost capitalized in accordance with Accounting Standard (AS) - 16 is Rs. Nil (Previous Year Rs. Nil).

A) Interest Income of Rs.59.85 for the year (previous year- Rs.Nil) on an Intercorporate Deposit of Rs.500 has not been recognized in view of uncertainty in realization. The Company is confdent of recovering the principal and interest.

B) i) Fringe Beneft Tax has been abolished from accounting year 2009-10. However in view of the interim stay granted by the Hon''ble High Court at Calcutta, no liability has been provided for earlier years.

ii) No provision for dividend and corresponding dividend distribution tax has been recognized in respect to 7135730 equity shares held by the benefciary trusts in view of waiver letter received from them.

iii) During the year the Company has further assessed the recoverability of Minimum Alternate Tax (MAT) for set off with future normal taxes and a sum of Rs.45.65(net) have been further recognized. Based on projections made by the management and current trend of working of the Company the management is virtually certain of recovering the MAT credit entitlements and a sum of Rs.418.43 as on 31.03.2013 ( previous Year Rs.372.78 ) has been carried forward as MAT credit available for set off in future years.

iv) During the year the Company has further recognized deferred tax credit on capital losses amounting to Rs.112.78 (net of utilization) and the aggregate balance as at the year end is Rs.340.11. The management of the Company is confdent of realizing the same based on proft available in future years.

C) In view of clarifcation issued by the Ministry of Company Affairs vide its Circular No.25/2012 dated 09.08.2012 on Para 46A of Accounting Standard -11 on ''The Effects of Changes in Foreign Exchange Rates'', the Company has reversed fnance cost amounting to Rs.215.44 related to previous year and adjusted the same with ''Foreign Currency Monetary Item Translation Difference Account''. Out of which a sum of Rs.162.92 (including Rs.82.58 related to previous year) has been amortized during the year.

D) The Hon''ble High Court at Calcutta had passed an order in the year 2009-10 in favour of landlord of a tenanted property enhancing the rent w.e.f. from April 2000 over and above its interim order issued earlier, as a result of which an additional rent of Rs.410.82 and interest and cost thereon to the extent of Rs.182.59 accrues to the landlord. The Company has fled an appeal before the Division Bench of Hon''ble High Court at Calcutta and has obtained a stay on the execution of the decree awarded in favour of the landlord and furnished the bank guarantee for the additional rent and interest. However, in compliance to the earlier interim order the company has provided the enhanced rent and hence does not envisage any further liability on account of enhanced rent amounting to Rs.140.48 (previous year Rs.101.27) and interest thereon

E) i) The agreement with Assam Tea Corporation Ltd. (ATCL) for purchase of entire green leaves of Longai and Ishabheel tea estates and operating the Longai tea factory were renewed for (the season 2013) a period of one year by bidding through tender. A sum of Rs.281.20 (previous year Rs.350.11) is recoverable from ATCL which is being realized on a systematic basis from the proceeds of green leaf procured.

ii) During the year, the Company has entered into an agreement with Assam Tea Corporation Ltd. (ATCL) for operating Amluckie Tea Factory for the season 2013 and purchasing entire green leaves of Amluckie Tea Estate for the season 2013. The Company has funded Rs.386.59 towards working capital and capex, which will be recovered from the proceeds of green leaf to be procured and payable usage charges to Assam Tea Corporation Ltd. (ATCL) in an agreed manner.

ii) The Net Worth of the subsidiary company M/s North Tukvar Tea Company Ltd. is negative. No provision in value of the investment amounting to Rs.356.20 and for advances /security deposit of Rs.266.44 is envisaged /provided, being strategic in nature.

Note: Loans to employees under various schemes of the Company (i.e. housing loan etc) is considered outside the purview of disclosure requirements.

F) As per the requirements of Accounting standard -28 on "Impairment of Assets", the company has assessed the carrying amount of the assets vis-a-vis their recoverable values and no impairment is envisaged at the balance sheet date.

G) The Company has no overdue amounts due to suppliers under the Micro, Small & Medium Enterprises Development Act, 2006 (MSMED) as at 31.03.2013. The disclosure as required under the said act is as under :-

The above information has been determined to the extent such parties have been identifed on the basis of information available with the company.

L) i) The Company''s signifcant leasing agreements (as lessee) are in respect of lease for Land & Premises (residential, offce, stores, godowns etc). These Leasing arrangements which are non-cancellable ranging between one month and three years generally or longer and are usually renewable by mutual agreement. The aggregate lease rentals payable are charged as Rent.

ii) Certain land and building has been given on operating lease to a society at a lease rental of Rs.17.00 Per month (Previous Year Rs.17.00 per month) for the building and Rs.0.50 (Previous Year Rs.0.50) per annum for the land to be reviewed annually.

iii) The Company has taken over the operation and management control of North Tukvar Tea Estate on leave & license basis till 31.03.2015 from its subsidiary North Tukvar Tea Company Limited at an yearly charge of Rs.9.00. The annual lease charge has been waived by the subsidiary from the current year. The results for the current fnancial year include a loss of Rs.21.84 (Previous year Rs.106.78) from the said tea estate.

H) The Company uses forward contracts, swaps and other derivative contracts to hedge its risks relating to changes in exchange rates and interest rates. The use of such contract is consistent with the Company''s risk management policy. The Company does not use derivative contracts for speculation purposes.

I) Employee Benefts (Accounting Standard - 15)

i) Defned Contribution Plan:

The Company makes contribution towards Provident Fund, ESIC and Superannuation Fund to a defned contribution beneft plan for qualifying employees. The provident fund plan is operated partly by Regional Provident Fund Commissioner and partly by an independent Trust, ESIC by government agencies and Superannuation Fund by a trust created for the purpose. Under the said schemes the company is required to contribute a specifc percentage of pay roll costs in respect of eligible employees to the retirement beneft scheme to fund the benefts.

During the year the company has recognized Rs.1091.32 (Previous Year Rs.1004.06) for provident fund contribution, Rs.29.75 (Previous Year Rs.29.72) for ESIC and Rs.63.46 (Previous Year Rs.57.47) for Superannuation Contribution. The Contribution payables to these plans by the Company are at the rates specifed in the rules of the scheme.

In keeping with the Guidance on implementing Accounting Standard (AS) 15 on Employees Benefts issued by the Accounting Standards Board of the Institute of Chartered Accountants of India (ASB Guidance), employer-established provident fund trusts are treated as Defned Beneft Plans since the company is obligated to meet interest shortfall, if any, with respect to covered employees. In view of year-end position of the fund (for covered employees) and confrmation from the Trustees'' of such fund, there is no shortfall as at the year end.

ii) Defned beneft plans:

a) The Company makes annual contribution of gratuity to JSTI Gratuity Fund & other private administrated Gratuity Fund schemes created for the purpose of qualifying employees. The scheme provides for a lump sum payment to vested employees upon retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of 5 years of continuous service.

b) Certain employees of the Company are also eligible for encashment of leave upon retirement up to 30 days for each year (maximum 240 days).

c) The present value of defned beneft obligation and related current cost are measured using the Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date.

J) Previous year''s fgures have been regrouped / reclassifed wherever necessary to correspond with the current year''s classifcation / disclosure.


Mar 31, 2012

Security:

i) Working Capital Loan, Packing Credit in Foreign Currency and Rupee Loan from Banks of Rs 2250.00 are secured /to be secured by current assets namely stock of raw materials, work-in-progress, semi finished and finished goods, stores & spares not related to plant and machinery, bills and book debts and other movable both present and future of the company and deposit of title deeds of certain tea estates as collateral security.

ii) Rupee Loan from a bank of Rs 1000.00 is secured /to be secured by subservient charge on current assets of the company.

iii) Jay Shree Sugar division has a sanctioned working capital loan against :

(i) Hypothecation of Stocks of Sugar, Stock in process ,Stores and Spares at Majhaulia.

(ii) Second Charge on immovable properties situated at Majhaulia, as collateral security. There is no outstanding at the year end.

Note No-1 :- Fixed Assets (Contd.)

1) a) Land of Tribeni, West Bengal - Appeal for the final determination of compensation was decided in favor of the Company by the District Court of Hooghly and final compensation determined at Rs 8.33 (Including interest Rs 0.50) against which a sum of Rs 2.05 was received in a previous year and credited to fixed assets. Rs 6.28 including Rs 1.50 released during the year 1967 against hypothecation of Khardah Land by the District Court has been shown in Current Liabilities. The Hon'ble High Court at Calcutta has decided the appeal against the Company in a previous year by reducing the amount of compensation for which an appeal before the Hon'ble Supreme Court of India was filed. Hon'ble Supreme Court has upheld the decision of the Hon'ble High Court and accordingly the adjustments will be carried out when the amount to be refunded is ascertained.

b) Land at Guwahati measuring 2 hectares and related building including furniture & fixture and related equipment has been given on registered lease to a Society for operating a School.

2) Includes estimated cost of New Extension of area under tea Rs 24.63 (Previous year 1.69) capitalized during the year as certified.

3) Excluding Rs 73.44 (Previous year 93.79) on account of subsidy received from Tea Board under Tea Quality Up gradation & Product Diversification Scheme and Rs 15.42 (Previous year Rs Nil) on account of transport subsidy received against vehicles from Tea Board.

4) Land, Buildings and Plant& Machinery include Rs 1.18, Rs 6.43 and Rs 0.81 respectively (Previous year Rs 1.18,Rs 6.43, and Rs 0.81 respectively) being 5.18% share of cost of Land, Buildings and Plant & Machinery held on co-ownership by the Company with other parties.

5) Land & Plantation include Rs 29.28 (Previous year Rs 29.28) and Building include Rs 1.55 (Previous year Rs 1.55) (being cost of floor of a leasehold building) in the name of the nominees of the Company on co-ownership basis, pending execution of conveyance deed.

6) Land & Plantation includes 2.431 Hectare of land at tea estates for which possession handed over for construction of schools and 6 hectares for which execution of conveyance deed in favor of the company is pending.

7) Agricultural Land of sugar unit is under Land Ceiling dispute since 1968-69 and the matter is subjoined.

8) The entire land owned by the Sugar division is KAST KAMI Land for which, usual rent is being paid to the Bihar Govt.

9) Depreciation during the year includes Rs 1.15, (Previous year Rs 0.10) towards assets of farm.

10)Borrowing cost capitalized in accordance with Accounting Standard (AS) - 16 is Rs Nil (Previous year Rs Nil).

As at As at

2: Notes 31.03.2012 31.03.2011

A) Contingent Liabilities not provided for in respect of:- Claims/Disputes/Demands not acknowledged as debts:

i) Demand from Sales Tax authority : 184.59 260.97

Certain disallowances in the Sales Tax were confirmed against the company and an appeal before the Commissioner/ Tribunal Appellate and revisional Board has been filed and the management is of the opinion that it will obtain full relief

ii) Income Tax demand under appeal 198.17 107.82

iii) Demand from a less or for interest on differential rent 70.14 70.14

IV) Demand of Provident Fund Damages by the Provident Fund Authorities, 24.39 24.39

West Bengal

v) Electricity duty demanded by Government of Bihar appealed in Supreme 103.10 103.10 Court

vi) Demand from Custom Authorities for non fulfillments of export obligations 105.00 105.00 in respect of an erstwhile unit

vii) Demand of additional provident fund contribution on food grain concession 30.34 - provided to daily rated plantation workers in Assam Tea estates against

which stay has been obtained from Hon'ble High Court at Guwahati.

B) i) Capital Commitments outstanding (Net of Advances) 612.41 242.58

(Including shares of Joint Venture Rs 484.94(Previous year Rs Nil))

ii) Bank Guarantees Outstanding (Pledge of Fixed Deposit of Rs 111.28) 773.73 724.60 (Previous year Rs 34.62)

iii) Corporate guarantee given to a Bank against loan acquired by a subsidiary 4070.40 3568.40 company from the bank (US$ 8 million)

C) Other Commitments

Letter of credit issued against Import of materials 220.81

D) In view of initiation of recovery of outstanding dues, the company has recognized a sum of Rs 181.25 lacs (including Rs 36.25 lacs related to current year) as interest income on an inter corporate deposit which was hitherto not recognized in the books till previous year. The management is confident of recovery the entire principal of Rs 250.00 (Previous year 250.00) and interest of Rs 169.17 (Previous year 145).

E) i) Fringe Benefit Tax has been abolished from accounting year 2009-10. However in view of the interim stay granted by the Hon'ble High Court at Calcutta, no liability has been provided for earlier years.

ii) In view of the favorable order from the Hon'ble Supreme Court, the liability of dividend tax has been provided to the extent of 40% of the proposed dividend. Furthermore provision of dividend tax amounting to Rs 215.63 in excess of 40% of the proposed dividend as made in earlier years has been reversed during the year.

iii) During the year the Company has further assessed the recoverability of Minimum Alternate Tax (MAT) for set off with future normal taxes and a sum of Rs 230.16 for earlier year have been reversed. Based on projections made by the management and current trend of working of the Company the management is virtually certain of recovering the MAT credit entitlements and a sum of Rs 372.78 as on 31.03.2012 ( Previous year 407.01 ) has been carried forward as MAT credit available for set off in future years.

iv) Deferred Tax Assets has been recognized on capital loss incurred based on the profit available in future as ascertained by the management.

v) No provision for dividend and corresponding dividend distribution tax has been recognized in respect to 71,35,730 equity shares held by the beneficiary trusts in view of waiver letter received from them.

F) During the year , the Company has exercised the option under paragraph 46A(1) of Accounting Standard - 11 'The Effects of Changes in Foreign Exchange Rates' as notified by Ministry of Company Affairs vide notification dated 29/12/2011. Consequently the foreign exchange loss arising on reporting / settlement of long term foreign currency monetary items (other than related to acquisition of depreciable fixed assets) amounting to Rs 375.80 for the year ended 31st March 2012 has been accumulated in "Foreign Currency Monetary Translation Difference Account", out of which Rs 230.22 remains to be amortized as at 31.3.2012.

G) i) The Hon'ble High Court at Calcutta had passed an order in the year 2009-10 in favour of landlord of

a tenanted property enhancing the rent w.e.f. from April 2000 over and above its interim order issued earlier, as a result of which an additional rent of Rs 410.82 and interest and cost thereon to the extent of Rs 182.59 accrues to the landlord. The Company has filed an appeal before the Division Bench of Hon'ble High Court at Calcutta and has obtained a stay on the execution of the decree awarded in favour of the landlord. However, in compliance to the earlier interim order the company has paid the enhanced rent and hence does not envisage any further liability.

ii) A matter of industrial dispute against a unit with regard to 12 workers is sub juice. The company has provided an estimated liability of Rs 12.00 and does not anticipate any further liability in this regard.

iii) In earlier years 146.92 acres of land around Majhaulia related to Sugar division has been surrendered to the Government of Bihar "The Bihar Land Reforms (fixation of ceiling area and acquisition of surplus land) Act and Rules, 1961". Since the compensation in this respect has not been determined, the same will be accounted upon receipt.

H) During the year , the agreement with Assam Tea Corporation Ltd. (ATCL) for purchase of Green Leaf of Longai and I shabheel tea estates and operating the Longai tea factory was renewed for a further period of one year. The company had also agreed to fund the Working Capital and Capital Expenditure requirement. For the season 2012, the company is now required to pay to ATCL, Rs 2.55 (full figure) per kg. of made tea towards usage charges for operating the longai factory and disbursement of Rs 50 as interest free security deposit. Accordingly a sum of Rs 350.11 (previous year Rs 382.99) is recoverable from ATCL which is being realized on a systematic basis from the proceeds of green leaf procured. A sum of Rs 7.02 (Previous year 5.07) has been paid as usage charge as per the agreement.

** The Net Worth of the subsidiary company M/s North Tukvar Tea Company Ltd. is negative. No provision in value of the investment amounting to Rs 356.20 and for advances and security deposit of Rs 292.63 is envis- aged /provided, being strategic in nature.

## Repayable on demand

J) As per the requirements of Accounting standard -28 on "Impairment of Assets", the company has assessed the carrying amount of the assets vis a vis their recoverable values and no impairment is envisaged at the balance sheet date.

L) i) The Company's significant leasing agreements (as lessee) are in respect of lease for Land & Premises (residential, office, stores, godowns etc). These Leasing arrangements which are non-cancellable ranging between one month and three years generally or longer and are usually renewable by mutual agreement. The aggregate lease rentals payable are charged as Rent.

ii) Certain land and building has been given on operating lease to a society at a lease rental of Rs 17.00 per month (Previous Year Rs 15.00 per month) for the building and Rs 0.50 (Previous Year Rs 0.50) per annum for the land to be reviewed annually.

iii) The Company has taken over the operation and management control of North Tukvar Tea Estate on leave & license basis till 31.03.2015 from its subsidiary North Tukvar Tea Company Limited at an yearly charge of Rs 9.00. The lease charge for the year 2011-12 has been waived by the subsidiary. The results for the current financial year include a loss of Rs 106.78 (Previous year 76.54) from the said tea estate. The disclosures of lease rental as required under Accounting Standard-19 as lessee are:

N) The Company uses forward contracts, swaps and other derivative contracts to hedge its risks relating to changes in exchange rates and interest rates. The use of such contract is consistent with the Company's risk management policy. The Company does not use forward contracts for speculation purposes.

O) Employee Benefits (Accounting Standard - 15) i) Defined Contribution plan:

The Company makes contribution towards Provident Fund, ESIC and Superannuation Fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated partly by Regional Provident Fund Commissioner and partly by an independent Trust, ESIC by government agencies and Superannuation Fund by a trust created for the purpose. Under the said schemes the company is required to contribute a specific percentage of pay roll costs in respect of eligible employees to the retirement benefit scheme to fund the benefits.

During the year the company has recognized Rs 954.59 (Previous year Rs707.23) for provident fund contribution, Rs 29.72 (Previous year Rs 27.51) for ESIC and Rs 64.22 (Previous year Rs 55.69) for Superannuation Contribution. The Contribution payables to these plans by the Company are at the rates specified in the rules of the scheme.

In keeping with the Guidance on implementing Accounting Standard (AS) 15 on Employees Benefits issued by the Accounting Standards Board of the Institute of Chartered Accountants of India (ASB Guidance), employer-established provident fund trusts are treated as Defined Benefit Plans since the company is obligated to meet interest shortfall, if any, with respect to covered employees. In view of year-end position of the fund (for covered employees) and confirmation from the Trustees' of such fund, there is no shortfall as at the year end.

ii) Defined benefit plans:

a) The Company makes annual contribution of gratuity to JSTI Gratuity Fund & other private administrated Gratuity Fund schemes created for the purpose of qualifying employees. The scheme provides for a lump sum payment to vested employees upon retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of 5 years of continuous service.

b) Certain employees of the Company are also eligible for encashment of leave upon retirement up to 30 days for each year (maximum 240 days).

c) The present value of defined benefit obligation and related current cost are measured using the Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date.

Notes :

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

- The expected rate of return on Plan Assets is determined based on the portfolio of assets, existing investments along with the Strategic changes in the portfolio and market scenario. The Plan Assets are diversified reasonable to maximize the return within acceptable risk parameters.

- Fair value of plan assets does not include any amount for companies own financial instruments or any property occupied by, or other assets used by, the company.

- The Company expects to contribute Rs 250.00 lacs to its gratuity fund in 2012-13.

R) Interest in Joint Venture:

The Company has 50% ownership interest in Tea Group Investment Company Limited.

The proportionate share in the assets, liabilities, income and expenses (each without elimination of the effect of transactions between the company and the joint venture) related to its interest in jointly controlled entity are given below:

V) The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements. Furthermore during the previous year, M.P.Chini Industries Limited was merged with the company w.e.f.01.10.2010, hence current year figures are not comparable with that of previous year.


Mar 31, 2010

As at As at

1. Notes 31.03.2010 31.03.2009

A) Contingent Liabilities not provided for in respect of :-

i) Outstanding Bills Discounted with Banks 3,49,05 4,64,67

ii) Outstanding Letter of Credit 5,50 5,50

iii) Demand from Sales Tax authority:

a) Certain disallowances in the Sales Tax were confirmed against the company and an appeal before the Appellate and Revisional Board has been filed and the Management is of the opinion that it will obtain full relief. 2,04,93 1,71,10

b) Sales Tax appeal pending before Appellate Commissioner 4,13,76 92,04

iv) Income Tax demand under appeal 34,33 40,15

v) Demand from a lessor for interest on differential rent 70,14 70,14

vi) Refund of excise duty under appeal by the Department 16,10 16,10

vii) Demand of Provident Fund Damages by the Provident Fund Authorities, West Bengal 24,39 24,39

viii) Demand from custom authorities for non fulfilment of export obligation in respect of an erstwhile unit 1,05,00 1,05,00

C) Interest income of Rs.36,25 for the year (till date Rs.108,75) on an Inter Corporate Deposit of Rs. 2,50,00 (previous year Rs.2,50,00) has not been recognised in view of non recovery of earlier interest. The Company is confident of recovering the principal and interest of Rs.27,21 recognised in earlier years.

D) i) Fringe Benefit Tax has been abolished from current year. However in view of the interim stay granted

by the Honble High Court at Calcutta, no liability has been provided for earlier years.

ii) In view of the favourable order from the Honble Supreme Court in respect of dividend tax, the Company is depositing dividend tax to the extent of 40% of the applicable rates. However identical matter in respect of other companies are pending before the Honble Supreme Court the Company is continuing to provide dividend tax at applicable rates.

iii) During the year the Company has assessed the recoverability of Minimum Alternate Tax (MAT) for set off with future normal taxes. Based on projections made by the management and current trend of working in tea industry the management is virtually certain of recovering the MAT with the normal taxes payable in the future years, hence a credit for Rs.3,54,11 (including Rs. 1,00,58 for earlier years) has been taken in the accounts of current year.

E) The Honble High Court at Calcutta has passed an order in favour of land lord of a tenanted property enhancing the rent w.e.f. from April 2000 over and above its interim order issued earlier, as a result of which an additional rent of Rs.4,10,82 and interest and cost thereon to the extent of Rs. 1,82,59 accrues to the land lord. The Company has filed an appeal before the Division Bench of Honble High Court at Calcutta and has obtained a stay on the execution of the decree awarded in favour of the landlord. However, in compliance to the earlier interim order the company has paid the enhanced rent and hence does not envisage any further liability.

F) The Net Worth of the subsidiary company M/s North Tukvar Tea Company Ltd. is negative. The Holding Company has taken various measures to revive the company, hence no provision in value of the invesment amounting to Rs.3,56,20 and for advance of Rs. 1,39,62 is envisaged/provided, being strategic in nature.

G) Pursuant to the scheme of amalgamation of Jayantika Tea Co. Ltd. 4,60,460 shares were allotted to a beneficiary trust which has been allotted during the year. Dividend on these shares @ Rs.3/- per share amounting to Rs.13,81 declared for 2008-09 has been subsequently waived by the trust, accordingly reversed during the year alongwith dividend tax of Rs.2,35 written back.

H) i) During the year, the Company has established a wholly owned subsidiary in U.A.E. in the name of Birla Holdings Ltd. to explore various acquisition opportunities.

ii) The Company has entered into a consortium agreement with Rwanda Mountain Tea SARL , Rwanda to form a joint venture company Tea Group Investment Co.Ltd. at Dubai on 50:50 sharing ratio to own and operate tea gardens at Rwanda.

I) The Company is in the process of acquiring 100% shares of M.RChini Industries Ltd. at a total consideration of Rs.100,23,36 w.e.f. 01.04.2010 and has paid Rs.54,00,00 on account towards their stock of sugar and settlement of liabilities and Rs.15,00,00 paid as advance to the promoter group for acquiring shares of the said company.

J) i) The Company has entered into an agreement to acquire 100% of the shares of Parvati Tea Co. Ltd. w.e.f. 01.04.2010 having a tea factory in Tinsukia , Assam at a consideration of Rs.3,00,00 and an additional sum of Rs.25,00 on account of settlement of liabilities.

ii) The Company has entered into an agreement with Assam Tea Corporation Ltd. (ATCL) for purchase of green leaf of Longai and Ishabheel tea estates and operating the Longai Tea factory for the season 2010 to 2012 with effect from 01.03.2010. The company is required to pay to ATCL Re.1/- per kg. of made tea towards usage charges for operating the said factory . The Company has agreed to fund the working capital and Capex requirements. Accordingly the company has funded Rs.3,41,86 which will be recovered from the proceeds of green leaf to be procured in an agreed manner. The factory is likely to commence its operations shortly upon completion of renovation, hence no lease rental has accrued during the period.

M) i) The Companys significant leasing agreements (as lessee) are in respect of lease for Land & Premises (residential, office, stores, godowns etc.). These leasing arrangements which are non-cancellable ranging between one month and three years generally, or longer, and are usually renewable by mutual agreement. The aggregate lease rentals payable are charged as Rent under Schedule 20.

ii) Certain land and building has been given on operating lease to a society at a lease rental of Rs.15,00 per month (previous year Rs.14,50 per month) for the building and Rs.50 (previous year Rs.50) per annum for the land to be reviewed annually.

0) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of such contracts is consistent with the companys risk management policy. The Company does not use forward contracts for speculative purposes.

P) Employee Benefits ( Revised Accounting Standard 15)

a) Defined Contribution Plan:

The Company makes contribution towards Provident Fund, ESIC and Superannuation Fund to a defined contribution retirement benefit plan for qualifying employees. The Provident fund plan is operated partly by Regional Provident Fund Commissioner and partly by an independent Trust, ESIC by government agencies and Superannuation Fund by a trust created for the purpose. Under the said schemes the company is required to contribute a specific percentage of pay roll costs in respect of eligible employees to the retirement benefit scheme to fund the benefits.

During the year the company has recognised Rs.7,36,05 for provident fund contribution (previous year 6,43,11), Rs.21,18 for ESIC (previous year 20,63) and Rs.42,28 for Superannuation Contribution (previous year 36,17). The Contribution payable to these plans by the Company are at the rates specified in the rules of the scheme.

b) Defined benefit plans:

i) The Company makes annual contribution of gratuity to JSTI Employees Gratuity Fund & Group Gratuity cum Life assurance Policy with Birla Sun Life Insurance Co. Ltd. a scheme created for the purpose of qualifying employees. The scheme provides for a lump sum payment to vested employees upon retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of 5 years of continous service.

ii) Certain employees of the Company are also eligible for encashment of leave upon retirement upto 30 days for each year (maximum 240 days).

iii) The present value of defined benefit obligation and related current cost are measured using the Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date.

 
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