Directors Report of Cochin Malabar Estates & Industries Ltd.

Mar 31, 2014

To the Members

The Directors have pleasure in presenting their 84th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2014.

FINANCIAL PERFORMANCE :

(Amount in Rs.)

31.03.2014 31.03.2013

Profit /(Loss) for the year before Depreciation 40,73,83,868 (4,13,01,998)

Deduct : Depreciation Profit /(Loss) before Tax 40,73,83,868 (4,13,01,998)

Deduct : Provision for Corporate Taxation / Excess

Tax Provision of earlier years written back - 57,29,928

Net Profit /(Loss) 40,73,83,868 (3,55,72,070)

Add : Balance of Profit /(Loss) brought forward from previous year (42,10,70,904) (24,30,27,650)

Add : Adjustment due to Scheme of Arrangement - (7,86,98,646)

Add : Net impact on Profit /(Loss) for 01/04/2011 to 31/03/2012 due to Scheme of Arrangement - (6,37,72,538)

Balance Carried to Balance Sheet (1,32,19,149) (42,10,70,904)

DIVIDEND

In view of accumulated losses, your Directors regret their inability to propose any dividend for the year ended 31st March, 2014.

OPERATIONAL REVIEW

The Company did not have any manufacturing activities during the year and there was also no operation at Goa since the same was suspended long back. One of the properties at Goa has been sold and the same will be recognized in the books of account after completion of necessary formalities.

The Company entered into a fresh Memorandum of Understanding with the legal heirs of PKC Ahammed Kutty and other sub-purchasers revising the earlier terms and conditions for the sale of Kinalur Estate of the Company and finally the protracted dispute of Kinalur Estate has been settled at the intervention of the Kerala Government. The Company has received the entire sale consideration in respect of the sale of the Kinalur Estate and has made a capital gain of Rs.5343.57 lacs. The carry forward losses of the Company have been reduced from Rs.4210.70 lacs to Rs.136.65 lacs during the year.

In view of the ban imposed by the forest department, the Rubber Wood Factory at Kinalur still continues to be non- operational. The representation of the Company before the forest department for withdrawal of ban is pending.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms :

i) that in the preparation of the annual accounts, the applicable Accounting Standards have been followed and there has been no material departure;

ii) that the selected Accounting Policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profits of the Company for the year ended on that date;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual accounts have been prepared on a going concern basis; and

v) that the Company has adequate internal systems and controls to ensure compliance of laws applicable to the Company.

HOLDING COMPANY

In view of the withdrawal of nominee directors by M/s. Joonktollee Tea & Industries Ltd. from the Board of the Company during the year, M/s. Joonktollee Tea & Industries Ltd. ceased to be the Holding Company of our Company.

FIXED DEPOSITS

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

SECRETARIAL COMPLIANCE CERTIFICATE

As required under the provisions of Section 383A of the Companies Act, 1956, Certificate from a Practicing Company Secretary forming part of this Report is attached herewith.

DIRECTORS

Shri Hemant Bangur, Shri K. C. Mohta and Shri B. L. Dhanuka ceased to be Directors, in view of withdrawal of nomination by M/s. Joonktollee Tea & Industries Ltd. from the Board of the Company during the year.

Shri M. L. Sharma and Shri R. K. Gupta were appointed as Directors on the Board of the Company to fill up the casual vacancies caused by the resignation of Nominee Directors of M/s. Joonktollee Tea & Industries Ltd. namely Shri Hemant Bangur and Shri K. C. Mohta.

During the year, Shri C. P. Sharma was appointed as an Additional Director of the Company. Shri Sharma, holds office only upto the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing his name for the office of Director liable to retire by rotation.

During the year, Shri B. R. Bhansali, Director of the Company, resigned from the Board.

Shri M. L. Sharma, Director of the Company, resigned from the Board during the current year.

The Board placed on record its deep appreciation for the valuable contribution made by Shri Hemant Bangur, Shri K. C. Mohta, Shri B. L. Dhanuka, Shri B. R. Bhansali and Shri M. L. Sharma during the tenure of their Directorship.

Shri R. K. Gupta is liable to retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.

Shri P. J. Bhide has been appointed as Independent Director for one year for a term upto the conclusion of the next Annual General Meeting of the Company as per the provisions of Section 149 and other applicable provisions, if any, of the Companies Act, 2013 and is not liable to retire by rotation. The Company has received requisite notice in writing from a member proposing Shri P. J. Bhide for appointment as an Independent Director of the Company.

Shri B. L. Surana has been appointed as an Additional Director of the Company during the current year, who holds office upto the conclusion of the ensuing Annual General Meeting and being eligible offers himself for appointment as an Independent Director of the Company for one year for a term upto the conclusion of the next Annual General Meeting of the Company as per the provisions of Section 149 and other applicable provisions, if any, of the Companies Act, 2013 and is not liable to retire by rotation. The Company has received requisite notice in writing from a member proposing Shri B. L. Surana for appointment as an Independent Director of the Company.

The Company has received declarations from all the Independent Directors of the Company that they meet with the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013.

Necessary resolutions for the appointment/re-appointment of the aforesaid directors have been included in the notice convening the ensuing Annual General Meeting and details of the proposal for appointment/re-appointment are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the ensuing Annual General Meeting.

CONSTITUTION OF COMMITTEES

During 2014-15, your Directors have constituted the following Committees –

a) Audit Committee;

b) Nomination & Remuneration Committee; and

c) Stakeholders Relationship Committee

AUDITORS & AUDITORS'' REPORT

The Statutory Auditors of the Company, M/s. Singhi & Co. Chartered Accountants, retire in accordance with the provisions of the Companies Act, 1956 and are eligible for re-appointment. M/s. Singhi & Co., Chartered Accountants, have sought the re-appointment and have confirmed that their re-appointment, if made, shall be within the limits. M/s. Singhi & Co. has submitted the Peer Review certificate issued to them by Institute of Chartered Accountants of India (ICAI). The Board of Directors recommends the re- appointment of M/s. Singhi & Co., Chartered Accountants, as the Statutory Auditors of the Company to hold the office from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting.

PARTICULARS OF EMPLOYEES

The Company had no employee of the category specified under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of employees) Rules, 1975, as amended.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Since the Company did not have any manufacturing activity during the Financial Year ended 31/03/2014 information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not attached.

ACKNOWLEDGEMENT

Your Directors take this opportunity to express their appreciation for assistance and cooperation received from the commercial banks and other authorities.

On behalf of the Board

Place: Kolkata R.K. Gupta C.P. Sharma 29th May, 2014 Director Director

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Mar 31, 2013

To the Members,

The Directors have pleasure in presenting their 83rd Annual Report and Audited Accounts of the Company for the year ended 31st March, 2013.

FINANCIAL PERFORMANCE (Amount in Rs.)

31.03.2013 31.03.2012

Profit/(Loss) for the year before Depreciation (41,301,998) 57,989,733

Deduct: Depreciation - 5,079,602

Profit/(Loss)before Tax (41,301,998) 52,910,131

Deduct: (Provision for Corporate Taxation)/Excess 5,729,928 - Tax Provision of earlier years written back

Net Profit/(Loss) (35,572,070) 52,910,131

Add: Balance of Profit/(Loss) brought forward from (243,027,650) (295,937,781) previous year

Add : Adjustment due to Scheme of Arrangement (78,698,646) -

Add : Net impact on Profit /(Loss) for 01/04/2011 to (63,772,538) - 31/03/2012 due to Scheme of Arrangement

Balance Carried to Balance Sheet (421,070,904) (243,027,650)

DIVIDEND

In view of accumulated losses, your Directors regret their inability to propose any dividend for the year ended 31st March, 2013.

SCHEME OF ARRANGEMENT

The Company since received final order from the Hon''ble High Court of Calcutta confirming the Scheme of Arrangement by which the Cochin Plantation Division of the Company comprising of Chemoni, Echipara & Pudukad Rubber Estates, Pullikanam & Kolahalmedu Tea Estates and legal proceedings of Sampaji Rubber Estates demerged from the Company and merged with Joonktollee Tea & Industries Ltd. The Company has already implemented the Scheme of Arrangement. The aforesaid financial results depicts the results after demerger of the Cochin Plantation Division.

OPERATIONAL REVIEW

Since the Company did not have any manufacturing activities during the current year, it incurred losses to the tune of t 355.72 Lacs. After the demerger of the Cochin Plantation Division, the Company has only Kinalur Rubber Estate with a Rubber Wood Factory. The Kinalur Rubber Estate is in litigation and as such there was no operation. In view of the ban imposed by the forest department, the Rubber Wood Factory at Kinalur still continues to be non-operational. The representation of the Company before the forest department for withdrawal of ban is pending. Operations at Goa properties were also suspended long back.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors ofthe Company confirms :

i) that in the preparation of the annual accounts, the applicable Accounting Standards have been followed and there has been no material departure;

ii) that the selected Accounting Policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2013 and of the profits of the Company for the year ended on that date;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual accounts have been prepared on a going concern basis; and

v) that the Company has adequate internal systems and controls to ensure compliance of laws applicable to the Company.

HOLDING COMPANY

M/s. Joonktollee Tea & Industries Ltd. continues to remain the Holding Company of the Company by virtue of Section 4(1)(a) of the Companies Act, 1956.

SUBSIDIARY COMPANY

M/s. Cochin Estates Ltd. ceased to be a subsidiary of the Company w.e.f. 12th February, 2013 and as such the Company does not have any subsidiary as on 31st March, 2013.

FIXED DEPOSITS

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

SECRETARIAL COMPLIANCE CERTIFICATE

As required under the provisions of Section 383A of the Companies Act, 1956, Certificate from a Practicing Company Secretary forming part ofthis Report is attached herewith.

DIRECTORS

Shri Hemant Bangur and Shri K. C. Mohta retire by rotation and being eligible, offer themselves for re-appointment.

AUDITORS & AUDITORS'' REPORT

Messrs. Singhi & Co. Chartered Accountants, Auditors of the Company, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

With regard to the observations made by the Auditors in their report the relevant Notes to Accounts are self explanatory.

PARTICULARS OF EMPLOYEES

The Company had no employee of the category specified under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of employees) Rules, 1975, as amended.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Since the Company did not have any manufacturing activity during the current Financial Year ended 31st March, 2013 information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not attached.

ACKNOWLEDGEMENT

Your Directors take this opportunity to express their appreciation for assistance and co-operation received from the commercial banks and other authorities. Your Directors also thank the employees of the Company for their valuable service and support during the year.

On behalf of the Board

Place : Kolkata H. Bangur

Dated : 11th May, 2013 Chairman

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Mar 31, 2010

The Directors have pleasure in presenting their 80th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2010.

FINANCIAL PERFORMANCE

(Amount in Rs.) 31.03.2010 31.03.2009

Profit for the year before Depreciation 1,80,93,186 1,45,89,920

Deduct: Depreciation 49,32,855 36,41,782

Profit Before Tax 1,31,60,331 1,09,48,138

Deduct: Provision for Corporate Taxation - -

Fringe Benefit Tax - 80,000

Net Profit 1,31,60,331 1,08,68,138

Add : Balance of Profit /(Loss) brought forward from previous year (34,30,43,286) (35,39,11,424)

Balance Carried to Balance Sheet (32,98,82,955) (34,30,43,286)

DIVIDEND

In view of accumulated losses, your Directors regret their inability to propose any dividend for the year ended 31st March, 2010.

REVIEW OF OPERATIONS

RUBBER ESTATES

Chemoni, Pudukad & Ichipara Estates

Your Companys production of Rubber during the year was lower by 67,815 kgs. at 10,21,055 Kgs. compared to 10,88,870 Kgs. harvested in the previous year. The production was lower primarily on account of poor yields from old standing trees and un-conducive weather conditions which prevailed during the harvesting months of the year. The Compay also purchased 1,70,411 Kgs. of field latex/cenex from the market for better utilization of processing facilities at the Estates and to meet, timely, the orders on hand.

The overall price realization was higher by Rs.8 per Kg. over last year which was partly due to producing quality products. Company continues to focus on quality to fetch premium in the market for its product.

Kinalur Estate

The Honble High Court of Kerala delivered the judgment or order dismissing all cases/ suits and intervening applications by various parties in respect of different issues pertaining to the Estate. Accordingly, the Honble Court released the Receiver appointed by it holding possession of the Estate. Owing to the fact that Mr. P. K. C Ahmmed Kutty, who had agreed to

buy the property, failed repeatedly in honouring his commitment to pay the sale consideration amount due to the Company in stipulated time, the Company has, as such, cancelled the Memorandum of Understanding entered into with him and also revoked the Power of Attorney granted in his favour.

Sampaji Estate

The Writ Petition filed by the Company before the Honble High Court, Chennai against the order of Debts Recovery Appellate Tribunal, Chennai in connection with the auction sale of this Estate is still pending.

Rubber Wood Factory

This factory continues to be non-operational during the year as the ban imposed by the Forest Department earlier has not been withdrawn as yet. The Company has made representation to the Forest officials for withdrawal of the ban imposed as the same is not applicable for processing Rubber Wood.

TEA ESTATE

Pullikanam Estate

Made Tea Production was impacted by unfavourable weather conditions during the year. Your Company produced 4,15,850 Kgs. Tea as against the production of 4,59,313 Kgs. during 2008-09. The average selling price for your Companys Tea for the year was higher by Rs.11/- per Kg. at Rs.74/- per Kg. as compared to Rs.63/- per Kg. realized last year. The main factors which contributed in getting higher price were production of improved quality teas and favourable market conditions.

OTHER DIVISION

Aqua Culture Division

Two of the Companys Aqua Culture Farms were disposed of earlier and third Farm remained without any activity for quite some time. Accordingly, the developmental expenditure capitalized pertaining to these Farms stands written off and effect thereof is given in the accounts for the year under review. Possibilities are being explored for proper use of available land for productive purposes.

PROSPECTS

RUBBER

It is estimated that the world Rubber consumption is to go up by 11% in 2010-11, but the current trends do not reflect matching production to be achieved in the Rubber producing countries. The projected mismatch between demand and supply has already resulted in higher prices. The benchmark RSS Grade Rubber price is currently ruling around Rs.180/- per Kg. as compared to Rs.130/- per Kg. prevailing some time back. Increase in inputs cost, both for material and man power will impact the profitability. However, it is expected that prices will be remunerative in the remaining period of the year.

TEA

Demand for Tea is likely to remain at higher level in view of overall production being lower. Consequently, the prices will remain firm.

Your Company has undertaken massive replantation programme both in Tea and Rubber in a phased manner. With the replanted areas coming into bearing, performance of the Company is expected to improve significantly in the coming years.

HOLDING COMPANY

M/s. Joonktollee Tea & Industries Ltd. continues to remain the Holding Company of the Company by virtue of Section 4(1 )(a) of the Companies Act, 1956 and in terms of an agreement with the Company.

REGISTERED OFFICE

Your Companys Registered Office stands shifted to the State of West Bengal from the State of Kerala in terms of the approval granted by the Company Law Board vide its order dated 6th April, 2010.

PUBLIC DEPOSITS

In terms of the provisions of Section 58A of the Companies Act, 1956, read with the Companies (Acceptance of Deposits

Rules) 1957, your Company has not invited/accepted any Deposits during the year under review.

SECRETARIAL COMPLIANCE CERTIFICATE

As required under the provisions of Section 383A of the Companies Act, 1956, Certificate from a Practicing Company Secretary forming part of this Report is attached herewith.

SOCIAL WELFARE

Your Company continues its welfare activities by participating in various projects sponsored by UPASI in the State of Kerala and also directly contributes to the areas social causes.

DISCLOSURE OF PARTICULARS

Information as per the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is provided in Annexure A forming part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms :

i) that in the preparation of the annual accounts, the applicable Accounting Standards have been followed and there has been no material departure;

ii) that the selected Accounting Policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 and of the profits of the Company for the year ended on that date;

ill) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual accounts have been prepared on a going concern basis; and

v) that the Company has adequate internal systems and controls in place to ensure compliance of laws applicable to the Company.

DIRECTORS

Shri Hemant Bangur and Shri B.L. Dhanuka retire from the Board by rotation and are eligible for re-appointment at the forthcoming Annual General Meeting. The Notice convening the forthcoming Annual General Meeting includes the proposals for re-appointment of Directors.

AUDITORS

The Auditors, M/s. Singhi & Co. Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. Certificate from the Auditors has been received to the effect that their re- appointment, if made, would be within the limits prescribed under Section 224(1 B) of the Companies Act, 1956.

In respect of Auditors observations in para 2(f) of their Report, attention is invited to Notes B-6 and B-7 of Schedule 13 of the Accounts which are self-explanatory.

PERSONNEL

The Company had no employee of the category specified under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended during the year under review.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the Banks, Central and State Government Authorities, Regulatory Authorities, Stock Exchanges and the Stakeholders for their continued co-operation and support to the Company. You Directors also wish to record their appreciation for the continued co-operation and support received from the employees of the Company.

On behalf of the Board

Kolkata Hemant Bangur

5th August, 2010 Chairman