Notes to Accounts of Cochin Malabar Estates & Industries Ltd.

Mar 31, 2015

Note : 1

a) There is no movement in the equity shares outstanding at the beginning and at the end of the year.

b) The Company has only one class of issued shares i.e. Equity Shares having par value of Rs. 10/- per share. Each holder of Ordinary Shares is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the ordinary shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.

c) No Equity Shares have been reserved for issue under options and contracts/commitments for the sale of shares/ disinvestment as at the Balance Sheet date

d) No shares have been bought back by the Company during the period of 5 years preceding the date as at which the Balance Sheet is prepared.

e) No securities convertible into Equity/Preference shares issued by the Company during the year.

f) No calls are unpaid by any Director or Officer of the Company during the year.

Note : 2

(Amount in Rs.)

2014-15 2013-14

A. Contingent Liabilities not provided for in respect of :

a) Claims against the company not acknowledged as debts:

- Central Sales Tax 213,331 213,331

Note : 3

A. During the year the Company has recognized the profit on sale of a property situated at Goa as necessary formalities with respect to its transfer has been duly completed.

B. The management is of the view that the Goa property sold by the Company during the year is Agricultural Land. As per the provisions of the Income Tax Act, 1961 Capital Gains Tax is not applicable on the profits arising from the sale of Agricultural Land, hence no provision for Income Tax is required to be made on the said profits.

C. In an earlier year the Company had received entire sale consideration in respect of sale of Kinalur Estate and recognized the profit on its sale in accordance with the terms of the revised settlement agreement. Except in certain cases, the process of registration of Land in the name of the respective buyers has also been completed.

D. The Company has not recognized deferred tax assets during the year in absence of virtual certainity of future taxable income.

E. Related party disclosures as required by AS 18 "Related Party Disclosures" are given below :

Relationship:

a) Company having significant influence in TCMEIL (by virtue of having more than 20% voting rights) Joonktollee Tea & Industries Ltd. (JTIL)

---

Mar 31, 2014

A) There is no movement in the equity shares outstanding at the beginning and at the end of the year.

b) The Company has only one class of issued shares i.e. Equity Shares having par value of Rs. 10/- per share. Each holder of Ordinary Shares is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the ordinary shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.

c) In view of the withdrawal of nominee directors from the Board of the Company by M/s Joonktollee Tea & Industries Ltd. (JTIL), the Company ceased to be a Board controlled subsidiary of JTIL u/s 4(1)(a) of the Companies Act, 1956, w.e.f. 7th October, 2013.

e) No Equity Shares have been reserved for issue under options and contracts/commitments for the sale of shares/ disinvestment as at the Balance Sheet date.

f) No shares have been bought back by the Company during the period of 5 years preceding the date as at which the Balance Sheet is prepared.

g) No securities convertible into Equity/Preference shares issued by the Company during the year. h) No calls are unpaid by any Director or Officer of the Company during the year.

B. Pending dispute for sale of Kinalur Estate was finally settled during the year with the intervention of the Kerala Govt., and accordingly, the Company entered into a revised memorandum of understanding with the legal heirs of Mr. P. K. C. Ahammed Kutty and other sub-purchasers revising the earlier terms and conditions.

During the year the Company has received entire sale consideration in respect of sale of Kinalur Estate and recognized the profit on its sale in accordance with the terms of the revised settlement agreement. Except in certain cases, the process of registration of Land in the name of the respective buyers has also been completed.

C. Finance Cost of the year includes Rs. 12,15,53,486 towards interest expense from 1st October, 2008 till the date of repayment of secured loan obtained from Joonktollee Tea & Industries Ltd. in an earlier year. The interest amount was recognized / paid on triggering of the parameters prescribed in the agreement.

D. The management is of the view that the Kinalur Estate Land sold by the company during the year is Agricultural Land. This view has also been confirmed by the Income Tax Appellate Tribunal, Kochi in its order pertaining to profits arising on sale of a small portion of the Kinalur Estate Land by the company in an earlier year. As per the provisions of the Income Tax Act, 1961, Capital Gains Tax is not applicable on the profits arising from the sale of Agricultural Land, hence no provision for Income Tax is required to be made on the said profits.

E. The Rubber wood Factory has not been in operation for nearly 16 years pursuant to notice received from the Deputy Conservator of Forests (Protection), Trivandrum. The representation made earlier to the Chief Divisional Officer is still pending. The Company is making fresh representation to the Forest Officials concerned for withdrawal of ban imposed on the Company, as the same is not applicable in our case.

F. Disclosure of related party transaction as per AS 18 "Related Party Disclosures" prescribed in"The Accounting Standards Rules, 2006."

Relationship :

a) Company having substantial interest in CMEI (by virtue of having more than 20% voting rights) Joonktollee Tea & Industries Ltd. (JTI) (**)

(**) Upto 7th October, 2013, JTI was also the Holding Company

b) Key Managerial Personnel (KMP) and Relatives

c) Other Enterprises over which the Key Managerial Personnel / Relatives are able to exercise significant influence : Madhav Trading Corporation Ltd. (MTCL) Kherapati Vanijya Ltd. (KVL) Kettlewell Bullen Company Ltd. (KBCL) Gloster Ltd. (GL)

J. The previous year figures have been regrouped / rearranged wherever considered necessary.

---

Mar 31, 2013

A) There is no movement in the equity shares outstanding at the beginning and at the end of the year.

b) The Company has only one class of issued shares i.e. Equity Shares having par value of Rs. 10/- per share. Each holder of Ordinary Shares is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the ordinary shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.

c) By virtue of control over the Board of the Company, Joonktollee Tea & Industries Limited is the holding Company of the Company.

d) Details of shareholders holding more than 5% shares in the Company :

e) No Equity Shares have been reserved for issue under options and contracts/commitments for the sale of shares/disinvestment as at the Balance Sheet date.

f) No shares have been bought back by the Company during the period of 5 years preceding the date as at which the Balance Sheet is prepared.

g) No securities convertible into Equity/Preference shares issued by the Company during the year.

h) No calls are unpaid by any Director or Officer of the Company during the year.

Note : The Memorandum of Understanding for sale of Kinalur Estate to Mr. P. K. C. Ahammed Kutty has been terminated by the Company and other statutory bodies in earlier years due to non-fulfillment of obligations on his part. As mentioned in previous year, the Hon''ble High Court of Kerala vide its Order and Judgment both dated 25th November, 2009 dismissed the suit and closed all interlocutory applications in respect of Kinalur Estate of the Company and accordingly the Receiver appointed was also released. Aggrieved by the High Court Order, some of the Applicants have filed appeal before the Division Bench of the High Court. Also some other applicants have filed suit before the Sub-Court, Koyilandy and Kozhikode against Mr. P. K. C. Ahammed Kutty in respect of Kinalur estate impleading the Company.

Pending finalization of the matter the amount so received continues to be shown under ''Other Current Liabilities''.

Note : As the green leaf is harvested in the Company''s own garden as Agriculture Produce involving integrated activities of Nursery, Cultivation, growth etc and utilised in the manufacture of tea, its value at the intermediate stage could not be ascertained.

A. Pursuant to the Scheme of Arrangement (the Scheme) between "The Cochin Malabar Estate and Industries Limited" (herein after referred as Company) and "Joonktollee Tea & Industries Limited" (herein after referred as JTIL) as approved by Shareholders of the respective companies on 5th April 2012 and sanctioned by the Hon''ble High Court at Calcutta on 3rd December 2012 under the provisions of The Companies Act, 1956;

- The Cochin Plantation division of the Company (herein after referred as CPD) has been demerged from the Company and merged with JTIL w.e.f. 01.04.2011 (the appointed date).

The Certified copy of the order of Hon''ble High Court at Calcutta has been filed with the Registrar of the Companies, West Bengal on 15th January 2013. The accounts of the Company for the year have been prepared by giving the effect of the scheme. According to the scheme, with effect from the appointed date, the company has carried out all business activities of CPD in trust till the scheme becomes effective.

The Salient Features of the scheme are as under:

I. The Company is a subsidiary of JTIL and engaged mainly in the business of cultivation & manufacture of Rubber and Tea. The CPD of the Company is consisting of Chemoni, Pudukad & Eichipara Rubber Estate & Factory, Sampaji Rubber Estate (under legal proceedings) and Pullikanam Tea Estate & Factory. As segregated by the management of the JTIL and the Company, w.e.f. from 01.04.2011 (the appointed date) all the assets and liabilities of CPD have been demerged at their respective book values on the basis of the audited accounts of the Company.

II. In terms of the Scheme, JTIL shall issue 1 (one) equity shares of Rs. 10/- (ten) each fully paid up, ranking pari passu, for 2 (two) equity share of Rs. 10/- (ten) each fully paid up held by the shareholders in the Company.

III. In terms of Accounting standard 14 "Accounting for Amalgamation" excess value of Assets over Liability of CPD amounting to Rs. 78,698,646/- has been adjusted with Debit balance of Profit & Loss Surplus.

B. The Rubber Wood Factory has not been in operation for nearly 15 years pursuant to notice received from the Deputy Conservator of Forests (Protection), Trivandrum. The representation made earlier to the Chief Divisional Officer is still pending. The Company is making fresh representation to the Forest Officials concerned forwithdrawal of ban imposed on the Company, as the same is not applicable in our case.

C. Disclosure of related party transaction as per AS 18 "Related Party Disclosures" prescribed in" The Accounting Standards Rules, 2006."

Relationship :

a) Holding Company :

Joonktollee Tea & Industries Ltd. (JTI)

b) Subsidiary Company :

Cochin Estates Limited (CEL) (Upto 12.02.2013)

c) Other Enterprises over which the Key Managerial Personnel/Relatives are able to exercise significant influence :

Credwyn Holdings (India) Pvt. Ltd. (CHI)

Wind Power Vinimay Pvt. Ltd. (WPV)

PDGD Investments & Trading Pvt. Ltd. (PDGD)

Kettlewell Bullen & Co. Ltd. (KBC)

Kherapati Vanijya Ltd. (KVL)

d) Key Managerial Personnel :

Mr. Hemant Bangur - Chairman

D. The financial statements have been drawn up giving effect to the Scheme of Arrangement effective from 01-04-2011 as outlined in Note No.2.23B above. Hence, the current year''s figures are not comparable with those of the previous year.

---

Mar 31, 2010

The tangible assets are reviewed to determine whether there is any indication that those assets have suffered on impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where there is an indication that there is a likely impairment loss for a group of assets, the Company estimates the recoverable amount of the group of assets as a whole to determine the value of impairment.

2. Borrowing Costs

Borrowing costs relating to acquisition/construction of qualifying assets are capitalised until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

3. Segment Reporting

As the entire operation of the Companys products relate to "Plantation" as single primary reportable segment, in the opinion of management no separate segment reporting is required under Accounting Standard (AS-17) issued by Institute of Chartered Accountants of India.

4. Cash Flow Statement

Cash Flow Statement has been prepared in accordance with the Indirect Method prescribed in the Accounting Standard 3 issued by the Institute of Chartered Accountants of India.

5. The Rubber Wood Factory has not been in operation for nearly 12 years pursuant to notice received from the Dy. Conservator of Forests (Protection), Trivandrum.The representation made earlier to the Chief Divisional Officer is still pending.The Company is making fresh representation to the Forest Officials concerned for withdrawal of Ban imposed on the Company, as the same is not applicable in our case.

6. The Company has received notice from the Directorate of Revenue Intelligence prohibiting any alteration/disposal of certain assets of CIF value approximately Rs. 1.10 Crores imported for Rubber wood project, consequent to non-fulfillment of export obligation. Demand for payment of balance Customs Duty has been fully paid. The Company has filed a writ petition before the Honble High Court of Madras against the levy of Interest of Rs. 30,29,925/- by the Department.

7. The Honble High Court of Kerala vide its order and judgement both dated 25th November, 2009 dismissed the suit and closed all Interlocutory Applications in respect of Kinalur Estate of the Company and accordingly the Receiver appointed was also released.

The Memorandum of Understanding for sale of Kinalur Estate to Mr. P.K.C. Ahammed Kutty has been terminated by the Company and other statutory bodies in earlier years due to non-fulfilment of obligations on his part. Pending finalization of the matter the amount so received continues to be shown under Current Liabilities.

8. Sundry Debtors/Creditors, Loans and Advances and Deposits include certain overdue and unconfirmed balances. However, in the opinion of the manage- ment, these current assets would, in the ordinary course of business, realize the values stated in the accounts.

9. In view of no operations in Rubber Wood Division and Kinalur Estate of Rubber Division, depreciation amounting to Rs.13.84 Lacs has not been provided in the accounts.

10. The closing stock of Finished Goods as at 31st March, 2010 was valued at the lower of cost and net realizable value. These were hitherto being valued at since realizable value. Due to change in the method of valuation, the closing stock of Finished Goods disclosed in these accounts is lower by Rs.57.52 Lacs.

11. Replantation expenditure incurred on area under cultivation is considered as revenue expenditure as per the policy of the Company consistently followed. During the year the Company has taken up a plan to replant over the next seven years, a substantial part of the Tea Estate abandoned in earlier years as the existing Tea plants could not be revived. Expenditure of Rs.99.58 Lacs incurred during the year as per the said plan has been capitalized as the benefit of the same shall accrue over a very long period of time.

12. Disclosure of related party transaction as per AS 18 "Related Party Disclosures" issued by The Institute of Chartered Accountants of India.

Relationships :

a) Holding Company:

Joonktollee Tea & Industries Ltd.

b) Other Enterprises over which the Key Managerial Personnel/Relatives are able to exercise significant influence :

Credwyn Holdings (India) Pvt. Ltd.

Wind Power VinimayPvt. Ltd.

PDGD Investments & Trading Pvt. Ltd.

c) Key Managerial Personnel

Mr. Hemant Bangur - Chairman

13. (a) There are no small-scale industries to which the Company owes dues, which were outstanding for more than 30

days as on the balance sheet date. The amount due to small scale industrial undertaking has been determined to the extent such parties has been identified on the basis of information available with the Company. This has been relied upon by Auditors.

(b) The Company has not received any intimation from "Suppliers" regarding their status Under Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to the amounts unpaid as at the year end together with interest paid/payable as required under said Act could not be furnished.

14. The Company has written back liabilities and credit balances no longer required amounting to Rs. 2,91,81,672/- during the year. The Company also written off Bad debts/Advances no longer required amounting to Rs. 9,74,766/- and also written of Fixed Assets amounting to Rs. 1,13,78,652/- during the year. In the opinion of the management the amounts are not payable/receivable/realisable and hence treated as income/expenses of the current year.

15. The comparative figure for the previous year have been regrouped/ re-arranged wherever necessary to conform to the classification for the year.