Mar 31, 2018
NOTES to financial statements for the year ended 31st March, 2018
Note 27. Earnings Per Share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
The following reflects the income and share data used in the basic and diluted EPS computations:
31-Mar-2018 |
31-Mar-2017 |
|
Net Profit for calculation of Basic and Diluted Earnings Per Share (Rs.. in Lakhs) |
338.71 |
(987.00) |
Weighted average number of shares (Nos.) |
2,88,77,488 |
2,88,77,488 |
Adjustment for Treasury Shares (Nos.) |
- |
6,06,920 |
Earning per equity share 5/- each |
||
Basic & Diluted earning per share (?) |
1.17 |
(3.49) |
Note 28. Significant accounting judgements, estimates and assumptions
The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur. In the process of applying the Company''s accounting policies, management has made the following judgements, estimates and assumptions, which have the most significant effect on the amounts recognised in the Financial Statements:
Defined Benefit plans
The cost and the present value of the defined benefit gratuity plan and other post-employment leave encashment benefit are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These include the determination of appropriate discount rate, estimating future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. For further details refer Note 30.
Fair value measurement of financial instruments and guarantees
When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 35 for further disclosures.
Depreciation on Property, Plant and Equipment
Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of company''s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
Provisions and contingencies
The assessments undertaken in recognising provisions and contingencies have been made in accordance with the Ind AS 37. A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Where the effect of time value of money is material, provisions are determined by discounting the expected future cash flows. In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. There are certain obligations which management has concluded, based on all available facts and circumstances, are not probable of payment or are very difficult to quantify reliably, and such obligations are treated as contingent liabilities and disclosed in the notes but are not reflected as liabilities in the financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings in which the Company involved, it is not expected that such contingencies will have a material effect on its financial position or profitability (Refer Note 32).
Note 29. Scheme of Arrangement
Pursuant to a Scheme of Arrangement ("the scheme") between the Company and Majhaulia Sugar Industries Private Limited (MSIPL) and Jayantika Investment & Finance Limited (JIFL) sanctioned by the Hon''ble High Court at Calcutta on 8th August 2016 under the provisions of the Companies Act 2013, Sugar Division and Jay Shree Beneficiary Trust Unit of the Company was demerged into MSIPL and JIFL respectively.
As per the scheme, the appointed date by the Hon''ble High Court at Calcutta was 1st April, 2016 and the effective date is 26th September, 2016. Following the scheme the balances had been transferred as per the Court Scheme without applying Ind AS adjustment therein.
The salient features of the Scheme were as under:
A. Demerger of Sugar Division:
i. All the assets and liabilities pertaining to the Sugar Division of the Company as on 1st April, 2016 got demerged to MSIPL (a Subsidiary).
ii. MSIPL issued and allotted 31,25,000 equity shares of Rs. 10/- each at a premium of Rs 111l/- per share to the Company in consideration of transfer of the Company''s Sugar Division.
iii. The value of the net assets of the Sugar Division as reduced by the shares as issued by MSIPL of Rs. 4,539.31 lakhs and Storage Reserve for Molasses amounting to Rs. 188.10 lakhs had been adjusted from the Capital Reserve of the Company.
B. Demerger of Jay Shree Beneficiary Trust Unit:
i. All the assets and liabilities pertaining to Jay Shree Beneficiary Trust Unit of the Company as on 1st April, 2016 got demerged to JIFL (a Subsidiary).
ii. JIFL shall issue and allot 20,00,000 equity shares of Rs. 10/- each at a premium of Rs. 256.53 per share to the Company in consideration of transfer of the Company''s Jay Shree Beneficiary Trust Unit.
iii. The value of the net assets of Jay Shree Beneficiary Trust Unit as reduced by the shares as issued by JIFL of Rs. 4,306.80 lakhs had been adjusted from the Capital Reserve of the Company.
C. The details of assets and liabilities transferred to the Resulting Company are as under:
Majhaulia Sugar Industries Private Limited (MSIPL)
ASSETS |
|
Non- Current Assets |
|
Property plant and equipment* |
13,593.00 |
Capital work in Progress |
292.62 |
13,885.62 |
|
Current assets |
|
Inventories |
12,270.53 |
Stores and Spares |
333.56 |
Cash and cash equivalents |
573.30 |
Loans |
329.32 |
Other current assets |
1,286.34 |
14,793.05 |
|
Total assets (A) |
28,678.67 |
Non-current liabilities |
|
Financial liabilities |
|
Borrowings |
3,707.27 |
Other non- current liabilities |
172.48 |
3,879.75 |
|
Deferred tax liability |
1,297.73 |
Current liabilities |
|
Financial liabilities |
|
Trade payables |
12,647.98 |
Other current liabilities |
2,399.92 |
Provisions |
132.60 |
15,180.50 |
|
Total Liabilities (B) |
20,357.98 |
Value of Net Assets transferred (C) |
8,320.69 |
Value of Shares of Majhaulia Sugar Industries Private Limited received as consideration (D) |
3,781.38 |
Net amount adjusted from Capital Reserves (Including Molasses Reserve of Rs. 188.10 lakhs) E = (C-D) |
4,539.31 |
The details of the Contingent liabilities transferred to the Resulting Company is as under: |
|
-Electricity duty demanded by Government of Bihar appealed in Hon''ble Supreme Court |
103.10 |
* 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 filed 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.
(Rs. in Lakhs) |
|
Jayantika Investment & Finance Limited (JIFL) |
|
ASSETS |
|
Non- Current Assets |
|
Financial assets |
|
Investments |
9,637.40 |
Total assets (A) |
9,637.40 |
Value of Shares of Jayantika Investment & Finance Limited received as consideration (B) |
5,330.60 |
Net amount adjusted from Capital Reserves C = (A-B) |
4,306.80 |
Note 30. Employee Benefits Obligation
(I) Defined benefit plans (a) Gratuity
The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employement, of an amount equivalent to 15 days salary for each completed year of service. Vesting occurs upon completion of 5 years of continuous service. The Company makes contribution to JSTI Gratuity Fund, which is funded defined benefit plan for qualifying employees.
(i) The principal assumptions used in determining gratuity obligations for the Company''s plans are as follows:
31-Mar-18 |
31-Mar-17 |
1-Apr-16 |
|
Significant Actuarial Assumptions |
|||
Discount Rate |
7.7% |
7.5% |
8% |
Employee turnover |
1% to 8% |
1 % to 8% |
1 % to 8% |
Salary Escalation Rate |
4% |
4% |
4% |
Mortality Rate |
IALM (2006-08) Table |
IALM (2006-08) Table |
IALM (2006-08) Table |
Amounts Recognised in the Balance Sheet consists of: |
|||
Present value of defined benefit obligation at the year end |
7,963.85 |
7,464.06 |
6,764.80 |
Fair Value of the Plan Assets at the year end |
4,551.00 |
4,236.53 |
3,980.11 |
Liability Recognised in the Balance Sheet |
3,412.85 |
3,227.53 |
2,784.69 |
Movement in present value of defined benefit obligation: |
|||
Changes in the present value of defined benefit obligation |
|||
Present value of defined benefit obligation as at year beginning |
7,464.06 |
6,764.80 |
4,384.11 |
Current Service Cost |
385.00 |
365.49 |
344.88 |
Past Service Cost |
4.52 |
- |
- |
Interest Cost |
545.12 |
487.36 |
329.09 |
Remeasurements (gains)/losses |
|||
Actuarial (gainsj/losses arising from changes in financial assumptions |
(649.20) |
(521.28) |
503.67 |
Actuarial (gains)/losses arising from changes in experience adjustments |
983.28 |
1,199.52 |
1,743.75 |
Increase/Decrease due to effect of any business combination |
- |
(298.40) |
- |
Benefits Paid |
(768.93) |
(533.43) |
(540.70) |
Present value of defined benefit obligation as at year end |
7,963.85 |
7,464.06 |
6,764.80 |
31-Mar-18 |
31-Mar-17 |
1-Apr-16 |
|
Amount recognised in Statement of Profit or Loss in respect of defined benefit plan are as follows : |
|||
Current Service Cost |
385.00 |
365.49 |
344.88 |
Past Service Cost |
4.52 |
- |
- |
Net Interest Cost/(lncome) |
545.13 |
487.36 |
329.10 |
Expected return on plan assets |
(326.21) |
(298.52) |
(296.34) |
Components of defined benefit costs recognised in profit or loss |
608.44 |
554.33 |
377.65 |
Amount recognised in other comprehensive income in respect of defined benefit plan are as follows: |
|||
Re-measurement of the net defined benefit obligation:- |
|||
Actuarial (gains)/losses arising from changes in financial assumptions |
(649.20) |
(521.28) |
503.67 |
Actuarial (gains)/losses arising from changes in experience adjustments |
983.28 |
1199.52 |
1743.75 |
(Gain)/Loss on plan assets (excluding amounts included in net interest cost) |
42.80 |
(105.28) |
79.60 |
Components of defined benefit costs recognised in Other comprehensive income |
376.88 |
572.96 |
2,327.02 |
Movement during in the fair value of plan assets is as follow: |
|||
Opening Balance |
4,236.53 |
3,980.10 |
3,704.07 |
Expected return |
326.21 |
298.52 |
296.33 |
Benefits paid |
(768.93) |
(533.43) |
(540.70) |
Contributions by the Employer |
800.00 |
600.00 |
600.00 |
Increase/Decrease due to effect of any business combination |
- |
(213.94) |
- |
Actuarial gains / (losses) |
(42.81) |
105.28 |
(79.60) |
Closing Balance |
4,551.00 |
4,236.53 |
3,980.10 |
Percentage allocation of plan assets by category |
JSTI Gratuity Fund |
||
Government Securities |
2.27% |
2.27% |
7.77% |
Debentures / bonds |
95.89% |
96.05% |
90.58% |
Fixed deposits |
1.82% |
1.67% |
1.63% |
Cash and Cash Equivalents |
0.02% |
0.01% |
0.02% |
JSTI Gratuity Fund contributes funds in Birla Sun Life Insurance, HDFC Life Insurance, Bajaj Allianz, India First Life Insurance, Life Insurance Corporation.
The Company expects to contribute Rs. 800 Lakhs to the funded defined benefit plans in fiscal year 2018-19.
Sensitivity Analysis
Below is the sensitivity analysis determined for significant actuarial assumptions for the determination of defined benefit obligations and based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period while holding all other assumptions constant.
31-Mar-18 |
31-Mar-17 |
|||
Assumptions |
Discount rate |
Discount rate |
||
Sensitivity Level |
1% increase |
1% decrease |
1% increase |
1% decrease |
Impact on defined benefit obligation |
(254.42) |
227.22 |
(163.67) |
157.45 |
31-Mar-18 |
31-Mar-17 |
|||
Assumptions |
Future Salary increase |
Future Salary increase |
||
Sensitivity Level |
1% increase |
1% decrease |
1% increase |
1% decrease |
Impact on defined benefit obligation |
251.04 |
(278.31) |
176.37 |
(184.70) |
Risk analysis
Company is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined benefits plans, and management''s estimation of the impact of these risks are as follows:
Interest risk
A decrease in the interest rate on plan assets will increase the plan liability. Salary growth risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase.
Investment risk
The Gratuity plan is funded with Birla Sun Life Insurance, HDFC Life Insurance, Bajaj Allianz, India First Life Insurance, Life Insurance Corporation. Company does not have any liberty to manage the fund provided to the Insurance Companies. The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to Government of India bonds. If the return on plan asset is below this rate, it will create a plan deficit.
(b) Provident fund for certain employees - In view of year-end position of the employer established provident fund and confirmation from the Trustees''s of such fund, there is no shortfall as at the year end.
(II) Defined contribution plans
31-Mar-2018 |
31-Mar-2017 |
|
Particulars |
||
Contribution to provident fund during the year |
1,402.69 |
1,470.62 |
Note 31. Leases
Operating lease â Company as lessee (Other than land lease)
The Company''s leasing arrangement are in the nature of cancellable operating leases. The Company has taken warehouse, machineries on Operating Leases. These leases have a life of between 1 year to 15 years which is renewable by mutual consent of concerned parties. No contingent rent is payable by the Company in respect of the above leases. Some of the lease agreements have price escalation clauses. Related lease rentals have been disclosed under the head "Rent" in Note 26 of Statement of Profit and Loss. There are no restrictions placed upon the Company by such leases.
The Company manages the above financial risks in the following manner:
⢠Sufficient inventory levels of chemicals, fertilisers and other inputs are maintained so that timely corrective action can be taken in case of adverse weather conditions.
⢠Slightly higher level of consumable stores viz. packing materials, coal and HSD are maintained in order to mitigate financial risk arising from logistics problems.
⢠Forward contracts are made with overseas customers as well as domestic customers, in order to mitigate the financial risk in fluctuation in selling price of tea.
⢠Sufficient working-capital-facility is obtained from banks in such a way that cultivation, manufacture and sale of tea is not adversely affected even in times of adverse conditions.
Note 36. Capital management________________________________________________________________
For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximise the shareholder value.
The Company''s objectives when managing capital is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth and maximise the shareholders value. The Company''s overall strategy remains unchanged from previous year.The Company sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments. The funding requirements are met through a mixture of borrowed funds and internal fund generation. The Company''s policy is to use short term and longterm borrowings to meet anticipated funding requirements. The Company monitors capital on the basis of the net debt to equity ratio. Net debt are long term and short term debts as reduced by cash and cash equivalents. Equity comprises share capital and free reserves (total reserves excluding OCI). The following table summarizes the capital of the Company:
31-Mar- 2018 |
31 -Mar- 2017 |
01-Apr-2016 |
|
Borrowings |
42,694.37 |
38,513.62 |
38,288.98 |
Less: Cash and cash equivalents |
(706.61) |
(624.36) |
(1,099.02) |
Net debt |
41,987.76 |
37,889.26 |
37,189.96 |
Total Equity |
27,769.22 |
26,953.71 |
27,132.77 |
Net debt to equity ratio |
1.51 |
1.41 |
1.37 |
Note 37. First-time adoption of Ind AS
These financial statements, for the year ended 31 March 2018, are the first the Company has prepared in accordance with Ind AS.
The Company''s financial statements for the year ended 31 March 2018 have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 as described in the summary of significant accounting policies. The adoption of Ind AS has been carried out in accordance with Ind AS 101, with April 1, 2016 as the transition date. In accordance with Ind AS 101, the resulting difference between the carrying amounts of the assets and liabilities in the financial statements under both Ind AS and Previous GAAP as at the transition date have been recognized directly in equity at the transition date. An explanation of how the transition from previous GAAP to Ind AS has affected the financial position, financial performance and cash flows is set out in the following notes:
Exemptions and exceptions applied
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from Previous GAAP to Ind AS.
A. Ind AS Optional Exemptions
A.I Fair valuation as deemed cost for certain items of Property, Plant and Equipment
Ind AS 101 permits an entity to elect to measure an item of property, plant and equipment at the date of transition to Ind AS at its fair value and use that fair value as its deemed cost at that date. Accordingly, the Company has elected to use the fair value of certain assets on the date of transition and designate the same as deemed cost on the date of transition. Fair value has been determined, by obtaining an external third party valuation, a level 3 valuation technique. For the remaining assets, the Company has applied Ind AS retrospectively, from the date of their acquisition.
A.2 Investments in subsidiaries, joint ventures and associates
Ind AS 101 permits a first-time adopter to measure its investments in subsidiaries, joint ventures and associates at deemed cost. The deemed cost of such an investment could be either (a) its fair value at the date of transition; or (b) previous GAAP carrying amount at that date. The option may be exercised individually and separately for each item of investment.
Accordingly, the Company has opted to measure its investments in subsidiaries and joint ventures at deemed cost, i.e. previous GAAP carrying amount, except for its investment in North Tukvar Tea Company Ltd. and Jayantika Investment & Finance Ltd. which has been measured at fair value at the date of transition.
B. Ind AS Mandatory Exemptions B.I Estimates
An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:
- Investment in equity instruments carried at FVTOCI.
- Investment in debt instruments carried at amortised cost.
- Other investments carried at FVTPL.
B.2 Classification and measurement of financial assets
Ind AS 101 allows an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS. The classification of financial assets is thus based on the facts and circumstances that exist as at 1 April 2016.
Note 38. Notes to first-time Adoption
1. Inventories
(a) Work in Progress : Under previous GAAP, no valuation was done for period end harvested tea-leaf. Under Ind AS, harvested leaf is measured at its fair value less cost to sell and is classified as Work in Progress. Consequent to this change, work in progress has increased by Rs. 56.61 lakhs and Rs. 35.15 lakhs as at 1 April 2016 and 31 March 2017 respectively with corresponding increase in equity.
(b) Finished Goods : Under previous GAAP, tea stock has been valued at the lower of cost and net realizable value. Cost of inventories comprise all costs of purchase/production of green leaf, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Under Ind AS, cost of inventories comprise cost of purchase of green leaf, fair value of green leaf at the time of harvest less cost to sell, conversion cost and other costs incurred in bringing the inventories to their present location and condition. Consequent to this change, inventory of finished goods has decreased by Rs. 147.27 lakhs and Rs. 41.27 as on 1 April 2016 and 31 March 2017 with corresponding decrease in equity.
2. Biological Assets (i.e. unplucked leaf on tea bushes)
Under previous GAAP, biological assets i.e. unplucked leaf on tea bushes has neither been valued nor recognised in the accounts. Under Ind AS, unplucked leaf on tea bushes has been measured at its fair value less cost to sell.
Consequent to this change, inventory of biological assets as on 1 April 2016 has increased by Rs. 93.37 lakhs with correponding increase in equity. However, inventory of biological assets as on 31 March, 2017 has increased by Rs. 62.19 lakhs with corresponding increase in equity.
3. Fair valuation of Investments
A. Mutual Funds, Alternative Investment Fund and Bonds: Under the previous GAAP, investments were classifed as long-term investments or current investments based on the intended holding period and readability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognised in retained earnings as at the date of transition and subsequently in the proft or loss for the year ended 31st March, 2017. This has resulted in increase in investments by Rs. 1855.22 Lakhs as at 31st March, 2017 (1st April, 2016 - Rs.1297.31 Lakhs) with corresponding increase in equity.
B. Equity shares(other than investments in subsidiaries, associates and joint venture): Under the previous GAAP, investments in equity instruments were carried at cost less provision for other than temporary decline in the value of such investments. Under Ind AS, such investments (in companies other than subsidiaries, joint ventures and associates) are required to be measured at fair value. The resulting fair value changes of these investments have been recognised in retained earnings as at the date of transition and subsequently in other comprehensive income for the year ended 31st March, 2017. This has resulted in increase in investments by Rs. 707.12 Lakhs as at 31st March, 2017 (1st April, 2016 - Rs 874.32 Lakhs) with corresponding increase in equity.
4. Investments in subsidiaries, joint ventures and associates
The Carrying value of investments in subsidiaries, associates and joint venture as on transition date have been considered as deemed cost. The company has designated investments in preference share of subsidiary (Jayantika Investment & Finance Ltd.) and debenture of subsidiary (North Tukvar Tea Company Ltd. ) as FVTPL investments. At the date of transition to Ind AS, difference between the instruments fair value and Indian GAAP carrying amount has been recognised as equity contribution in Investment. Consequent to this change, equity has been increased by Rs. 209.04 lakhs and Rs. 309.16 lakhs as on 1 April 2016 and 31 March 2017.
5. Borrowings
Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred. Accordingly, borrowings as at 31 March 2017 have been reduced by Rs 41.70 lakhs with a corresponding increase in profit for the year.
6. Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements i.e. acturial gains and losses and the return on plan assets, are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As result of this change and also due to revaluation of the gratuity liability, the equity for the year ended 1 April, 2016 decreased by Rs. 2073.83 lakhs. The profit for the year ended 31 March, 2017 for the same matter decreased by Rs. 386.42 lakhs.
7. Effect of fair valuation of land
The Company has elected to fair value land on the date of transition and designate the same as deemed cost. Consequent to this change, property plant and equipment has increased by Rs. 2,466.42 lakhs as at 1 April 2016 with corresponding increase in equity.
8. Proposed Dividend and Tax on Proposed Dividend
Under the Previous GAAP, dividend proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend including dividend distribution tax thereon was recognised as a provision. Under Ind AS, such dividend is recognised when the same is approved by the shareholders in the general meeting. Accordingly, the provision for proposed dividend including dividend distribution tax thereon of Rs. 305.73 Lakhs as at 1st April, 2016 included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.
9. Treasury shares
Under Ind AS, if an entity re-acquires its own equity instruments, those instruments (''treasury shares'') shall be deducted from equity. No gain or loss shall be recognised in profit or loss on the purchase,sale,issue or cancellation of an entity''s own equity instruments. Consideration paid or received shall be recognised directly in equity. Consequent to this, equity has been decresed by Rs. 9969.70 lakhs and Rs. 332.30 lakhs as on 1 April 2016 and 31 March 2017.
10. Deferred Tax
Under the previous GAAP, deferred tax was accounted using the income statement approach, on timing differences between the taxable profit and accounting profit for the year. Under Ind AS, deferred tax is recognised following balance sheet approach on the temporary differences between the carrying amount of asset or liability in the balance sheet and its tax base. In addition, various transitional adjustments have also led to recognition of deferred taxes on new temporary differences. Accordingly, deferred tax liabilities (net) as at 1 April 2016 have been increased by Rs. 126.70 Lakhs with a corresponding adjustment to retained earnings, and deferred tax asset (net) as at 31 March 2017 have increased by Rs. 49.94 Lakhs with a corresponding adjustment to Profit and Loss/ Other Comprehensive Income.
11. Retained Earnings
Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.
12. Other Comprehensive Income
Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ''other comprehensive income'' includes remeasurements of defined benefit plans and fair value gains or (losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP.
38.1. Effect of the Transition to Ind AS
Reconciliations of Equity as per erstwhile Indian GAAP as previously reported and Ind AS is as follows:
Particulars |
Notes to First time adoption |
Total Other Equity |
|
31-Mar-17 |
31-Mar-16 |
||
Equity as per previous GAAP |
24,454.71 |
34,845.62 |
|
Adjustments: |
|||
Effect of changes in value of Finished Goods (Tea) |
1 |
(6.12) |
(90.66) |
Effect of change in fair value of Biological Assets |
2 |
62.19 |
93.37 |
Effect of classification of Actuarial Loss/Gain on defined benefit plan |
6 |
(2,460.25) |
(2,073.83) |
Effect of measuring Financial Instruments at fair value |
3,4 & 5 |
2,913.20 |
2,380.67 |
Effect of revaluation of land on fair valuation |
7 |
2,466.42 |
2,466.42 |
Effect of Treasury shares netted off with Equity |
9 |
(332.30) |
(9,969.70) |
Dividend and tax on dividend (refer note 17) |
8 |
- |
305.73 |
Tax adjustments on above |
10 |
49.94 |
(126.70) |
Equity as per Ind AS |
27,147.79 |
27,830.92 |
Reconciliations of net profit as per erstwhile Indian GAAP as previously reported and Ind AS is as follows:
Particulars |
Notes to First time adoption |
Total Comprehensive Income |
31-Mar-17 |
||
Profit/(Loss) as per Indian GAAP |
(1,544.93) |
|
Adjustments: |
||
Effect of changes in value of Finished Goods (Tea) |
1 |
84.54 |
Effect of change in fair value of Biological Assets |
2 |
(31.18) |
Effect of Actuarial Loss/Gain on defined benefit plan |
6 |
(386.42) |
Effect of measuring Financial Instruments at fair value |
3,4 & 5 |
532.53 |
Tax Adjustments on above |
10 |
176.64 |
Profit/(Loss) as per Ind AS |
(1,168.82) |
38.2. Reconciliation of cash flows for the year ended March 31, 2017
The transition from erstwhile Indian GAAP to Ind AS has not made a material impact on the statement of cash flows.
As per our report on even date |
|||
For S.R.BATLIBOI & CO. LLP |
For and on behalf of Board of Directors |
||
Chartered Accountants |
|||
Firm Registration No : 301003E/E300005 |
|||
per Sanjay Kumar Agarwal |
|||
Partner |
|||
Membership No: 060352 |
R. K. Ganeriwala |
D. P. Maheshwari |
S.K. Tapuriah |
Place: Kolkata |
(President, CFO |
(Managing Director) |
(Director) |
Date: 29 May 2018 |
& Secretary) |
(DIN: 02203749) |
(DIN: 01065278) |
Mar 31, 2017
1. The Company has only one class of issued shares i.e. Equity Shares having par value of Rs.5/- 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.
2. The Company does not have any Holding Company/ultimate Holding Company.
3. Details of shareholders holding more than 5% shares in the Company :
4. 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.
5. 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.
6. No securities convertible into Equity/Preference shares issued by the Company during the year.
7. No calls are unpaid by any director or officer of the Company during the year.
Security:
8. Term Loan from Banks including Foreign Currency Term Loan and External Commercial Borrowings amounting to Rs.12604.48 are secured/to be secured by equitable mortgage by deposit of title deeds of tea estates along with all immovable properties thereon ranking pari-passu, interse, with working capital lenders for tea division. Further term loan from a Bank amounting to Rs.2025.00 is secured by pledge of certain non current investments.
*The Loan has been transferred to subsidiary company during the year vide Scheme of Demerger (Refer Note 2.28.J)
9. Land of Tribeni, West Bengal - Appeal for the final determination of compensation was decided in favour 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 earlier years 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 earlier 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.
10. Includes estimated cost of New Extension of area under tea Rs.43.01 (Previous Year Rs.136.30) capitalized during the year as certified by Management.
11. Excluding Rs.NIL (Previous Year Rs.47.17) on account of subsidy received from Tea Board under Tea Quality Upgradation & Product Diversification Scheme.
12. Includes development expenditure on Bearer Plants of Rs.624.87 which meets the definition of Property, Plant and Equipment, as per AS -10, which was hitherto charged to Statement of Profit & Loss, has been capitalized during the year ended 31st March, 2017.
13. 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.
14. 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.
15. Land & Plantation includes 6 hectares for which execution of conveyance deed in favour of the company is pending.
16. Borrowing cost capitalized in accordance with Accounting Standard (AS) - 16 is Rs.32.21 (Previous Year Rs. Nil).
17. The ownership of land of a tea estate measuring 72.39 acre has been disputed by a section of local people against which stay order has been obtained from Hon''ble High Court at Calcutta. The matter is subjudice and is pending before "Land Reform and Tenancy Tribunal".
18. The Company has constructed a warehouse on leasehold land taken for a period of 15 years from Kolkata Port Trust with an option to renew the same after 15 years based on prevailing rentals at that time with a 1st right of refusal. Considering the above fact, the management is confident of renewing the same and hence life of the asset is considered 30 years as per rate prescribed under Schedule - II of the Companies Act, 2013.
19: In respect of above, future cash flows are determinable only on receipt of judgments pending at various forums/ authorities which in the opinion of the Company is not tenable and there is no possibility of any future cash outflow in case of above.
*In view of injunction granted by the Hon''ble High Court at Calcutta, no provision has been made in respect of Entry Tax imposed by Govt. of West Bengal under the "Entry of Goods into Local Area Act 2012".
âTransfer to Majhaulia Sugar Industries Private Limited pursuant to the scheme of arrangement (Refer Note 2.28.J).
20. 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.
21. 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.113.41 (previous year Rs.111.94) 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.
22. 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 2017 for a period of one year by bidding through tender. A sum of Rs.198.77 (previous year Rs.262.96) is recoverable from ATCL which is being realized on a systematic basis from the payments to be made to ATCL on various grounds. (The above sum is inclusive of Rs.13.53 (previous year Rs.13.53 ) representing outstanding dues on account Amluckie Tea Estate of ATCL which shall also be recovered as mentioned above.)
23. Particulars in respect of loans and advances as per the disclosure requirement of regulation 34(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 :
24. 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.
25. 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.
26. As per requirements of Accounting Standard-19 on leases, the following disclosures are furnished for significant operating leases as lessor. The assets were sold during the year 2015-16.
27. The Company has taken over the operation and management control of North Tukvar Tea Estate on leave & license basis till 31st March, 2019 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 year 2013-2014. The results for the current financial year includes a loss of Rs.283.58 (P.Y. Rs.296.19) from the said tea estate.
28. Pursuant to a Scheme of Arrangement (the Scheme) between the Company and Majhaulia Sugar Industries Private Limited (MSIPL) and Jayantika Investment & Finance Limited (JIFL) sanctioned by the Hon''ble High Court at Calcutta on 8th August 2016 under the provisions of the Companies Act 2013, Sugar Division and Jay Shree Beneficiary Trust Unit of the Company has been demerged into MSIPL and JIFL respectively with effect from 1st April, 2016. The Scheme has been filed with Registrar of Companies, Kolkata on 26th September, 2016.
The salient features of the Scheme were as under:
Demerger of Sugar Division:
29. All the assets and liabilities pertaining to the Sugar Division of the Company as on 1st April, 2016 stands demerged to MSIPL (a Subsidiary).
30. MSIPL issued and allotted 3125000 equity shares of Rs.10/- each at a premium of Rs.111/- per share to the Company in consideration of transfer of the Company''s Sugar Division.
31. The value of the net assets of the Sugar Division as reduced by the shares as issued by MSIPL of Rs.4539.31 and Storage Reserve for Molasses amounting to Rs.188.10 has been adjusted from the Capital Reserve of the Company.
Demerger of Jay Shree Beneficiary Trust Unit:
32. All the assets and liabilities pertaining to Jay Shree Beneficiary Trust Unit of the Company as on 1st April, 2016 stands demerged to JIFL (a Subsidiary).
33. JIFL issued and alloted 2000000 equity shares of Rs.10/- each at a premium of Rs.256.53 per share to the Company in consideration of transfer of the Company''s Jay Shree Beneficiary Trust Unit.
34. The value of the net assets of Jay Shree Beneficiary Trust Unit as reduced by the shares as issued by JIFL of Rs.4306.80 has been adjusted from the Capital Reserve of the Company.
35. There was a fire in one of its tea factory which was damaged substantially. A claim has been lodged with the Insurance Company and the amount of the book value of the damaged assets of Rs.94.38 has been taken under claim receivable.
36. 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.
37. Employee Benefits (Accounting Standard - 15)
38. Defined Contribution Plan:
The Company makes contribution towards Provident Fund, ESIC and Superannuation Fund to a defined contribution 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.1470.62 (Previous Year Rs.1478.43) for provident fund contribution, Rs.21.43 (Previous Year Rs.20.34) for ESIC and Rs.94.24 (Previous Year Rs.86.73) 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.
39. Defined benefit plans:
40. The Company makes contribution of gratuity to JSTI Gratuity Fund created for the purpose of qualifying employees. The 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.
41. Certain employees of the Company are also eligible for encashment of leave upon retirement up to 30 days for each year (maximum 240 days).
42. 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.
43. Disclosure on Specified Bank Notes
During the year, the Company had Specified Bank Notes (SBNs) and other denomination notes as defined in the MCA notification, G.S.R. 308(E), dated March 31, 2017. The details of SBNs held and transacted during the period from November 8, 2016 to December 30, 2016, the SBNs and other notes as per the notification are as follows :
44. For the purposes of this clause, the term ''Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated November 8, 2016.
45. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure. In view of approval of scheme of arrangement for demerging the sugar division of the company by Hon''ble High court at Calcutta effective from 1st April, 2016, the results for year ended 31st March, 2017 does not include the performance of Sugar Division. Accordingly results for year ended 31st March, 2017 are not comparable with corresponding period.
Mar 31, 2016
b) The Company has only one class of issued shares i.e. Equity Shares having par value of '' 5/- 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.
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) 6528810 (Previous year 6528810) Equity shares of '' 5/-each fully paid up have been issued pursuant to scheme of amalgamation and arrangement for consideration other than cash in preceeding five years.
h) No securities convertible into Equity/Preference shares issued by the Company during the year.
i) No calls are unpaid by any director or officer of the Company during the year.
Security :
i) Term Loan from Banks and External Commercial Borrowings amounting to Rs. 1219885417 are secured/to be secured by equitable mortgage by deposit of title deeds of tea estates along with all immovable properties thereon ranking pari-passu, interse. with working capital lenders for tea division. Further Term Loan from a Bank amounting to Rs. 330000000 is secured by pledge of certain non current investments.
ii) Sugar Development loan fund is secured/to be secured by way of equitable mortgage of immovable/movable properties of Jay Shree Sugar division ranking pari-passu.
iii) Sugar Term Loan from a bank is secured by first charge by hypothecation of stocks, book debts/receivable and other current assets of sugar division ranking pari passu with other working capital consortium bank.
1) Land of Tribeni, West Bengal - Appeal for the final determination of compensation was decided in favour 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 previous years 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 Horfble 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. Horfble 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.
2) Includes estimated cost of New Extension of area under tea Rs. 136.30 (Previous Year Rs. 31.53) capitalized during the year as certified.
3) Excluding Rs. 47.17 (Previous Year Rs. 7.23) on account of subsidy received from Tea Board under Tea Quality Upgradation & Product Diversification Scheme.
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 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 filed 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.0.82 (Previous Year Rs.0.82) towards assets of farm.
9) Borrowing cost capitalized in accordance with Accounting Standard (AS) - 16 is Rs. Nil (Previous Year Rs.Nil).
10) The ownership of land of a tea estate measuring 72.39 acre has been disputed by a section of local people against which stay order has been obtained from Horfble High Court at Calcutta. The matter is subjudice and is pending before "Land Reform and Tenancy Tribunal".
Note : In respect of above, future cash flows are determinable only on receipt of judgements pending at various forums/ authorities which in the opinion of the Company is not tenable and there is no possibility of any future cash outflow in case of above.
D) 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 606920 equity shares held by a beneficiary trust 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.111.94 (previous year Rs. 245.36) 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.
E) 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 2016 for a period of one year by bidding through tender. A sum of '' 262.96 (previous year '' 400.45) is recoverable from ATCL which is being realized on a systematic basis from the payments to be made to ATCL on various grounds. The above sum is inclusive of Rs.13.53 (previous year Rs. 80.32 ) representing outstanding dues on account Amluckie Tea Estate of ATCL which shall also be recovered as mentioned above.
F) i) Particulars in respect of Loans and advances as per the disclosure requirement of regulation 34(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 : Apellestis
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.388.35 is envisaged /provided, being strategic in nature.
Note: Loans/Advances to employees under various schemes of the Company (i.e. housing loan etc.) is considered outside the purview of disclosure requirements.
G) 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.
H) The Company has no overdue amounts due to suppliers under the Micro, Small, & Medium Enterprises Development Act, 2006 (MSMED) as at 31.03.2016. The disclosure as required under the said act is as under :-
I) 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) As per requirements of Accounting Standard-19 on leases, the following disclosures are furnished for significant operating leases as lessor. The property has been sold during the year.
iii) The Company has taken over the operation and management control of North Tukvar Tea Estate on leave & license basis till 31.03.2019 from its subsidiary North Tukvar Tea Company Limited at an yearly charge of '' 9.00. The annual lease charge has been waived by the subsidiary from the year 2013-2014. The results for the current financial year includes a loss of Rs.296.19 (P.Y. Rs.269.22) from the said tea estate.
J) i) During the year, the Company has sold out one of its Tea Factory "Parvati Tea Factory" having a production capacity of 7 lacs kgs approx. p.a.
ii) The scheme of demerger of Sugar Division of the Company with Majhaulia Sugar Industries Private Limited (subsidiary company) w.e.f. 1st April, 2016 has been filed with Hon''ble High Court at Calcutta. The approval for the same is awaited at the Balance Sheet date.
L) 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.
N) 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. 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.1478.43 (Previous Year Rs.1269.89) for provident fund contribution, Rs.20.34 (Previous Year Rs.25.60) for ESIC and Rs.86.73 (Previous Year Rs.85.29) 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 contribution of gratuity to JSTI Gratuity Fund created for the purpose of qualifying employees. The 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).
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.
- The Company expects to contribute Rs.600.00 to its gratuity fund in 2016-17.
T) Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.
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, 2011
As at As at
31.03.2011 31.03.2010
A) Contingent Liabilities not provided for in respect of :-
i) Outstanding Bills Discounted with Banks - 349.05
ii) Outstanding Letter of Credit 9.53 5.50
iii) Demand from Sales Tax authority:
a) Certain disallowances in the Sales Tax
were confirmed 243.64 204.93
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.
b) Sales Tax appeal pending before
Appellate Commissioner 17.33 413.76
iv) Income Tax demand under appeal 107.82 34.33
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
vii) Demand of Provident Fund Damages by the 24.39 24,39
Provident Fund Authorities, West Bengal
viii) Electricity duty demanded by
Govt, of Bihar, Govt, appealed 103.10 -
in Supreme Court
ix) Demand from custom authorities for
non fulfilment of export 105.00 105.00
obligation in respect of an erstwhile unit
B) i) Capital Commitments outstanding 242.58 58.25
(net of advances Rs.100.55) (Previous
year Rs.35.54)
ii) Bank Guarantees Outstanding 724.60 224.29
(Pledge of Fixed Deposit of Rs.34.62)
(Previous year Rs.30.58)
iii) Corporate guarantee outstanding
given to a Bank against load acquired 3568.40 -
by a subsidiary company from the bank
(US$8 million)
C) Interest income of Rs.36.25 for the year (till date Rs.145.00) on an
Inter Corporate Deposit of Rs. 250.00 (previous year Rs.250.00) 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 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 favourable order from the Hon'ble 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 Hon'ble 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 and a
sum of Rs. 241.81 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.407.01 as on 31.03.2011 has been
carried forward as MAT credit available for set off in future years.
iv) Deferred Tax Assets has been recognised as capital loss incurred
during the year 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 7135730 equity shares held by the
beneficiary trusts in view of waiver letter received from them.
E) 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 subjudice. The company has provided an estimated liability
of Rs.12.00 and does not anticipate any more liability.
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.
F) 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.258.63 is
envisaged/provided, being strategic in nature.
G) As reported in previous year the Company had 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 a sum of
Rs.382.99 (previous year Rs.341.86) is recoverable from ATCL which is
recovered on systematic basis from the proceed of green leaf procured.
A sum of Rs.5.07 has been paid as usage charge as per agreement.
H) Pursuant to the Scheme of Amalgamation and Arrangement (the Scheme)
between M. P. Chini Industries Limited (herein after referred as
MPCIL), Parvati Tea Company Private Limited (herein after referred as
PTCPL) and the Company as approved by Shareholders of the respective
companies on 8th June, 2011 and sanctioned by the Hon'ble High Court at
Calcutta on 10th August, 2011 under the provisions of the Companies
Act, 1956;
à MPCIL has been merged with the Company w.e.f 01.10.2010 (being
appointed date in case of MPCIL amalgamation),
à The Parvati tea factory (herein after referred as factory) of PTCPL
has been demerged from PTCPL and merged with the Company w.e.f
01.04.2010 (being appointed date in case of PTCPL),
à The strategic investment division of the Company has been demerged
from the Company and merged with PTCPL w.e.f. 01.04.2010 (being
appointed date in case of demerger of strategic investment division),
Till the date of finalization of financial statements, the Certified
copy of the order of Hon'ble High Court could not be obtained and thus
not filed with the Registrar of the Companies. 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 respective
appointed dates, MPCIL, factory as well the demerged strategic
investment division have carried out all their business activities in
trust till the scheme becomes effective.
The Salient Features of the scheme are as under:
I. In respect of MPCIL:
(a) MPCIL is a wholly owned subsidiary of the Company and engaged in
the business of cultivation of sugarcane and manufacture & sale of
sugar. All the assets and liabilities of MPCIL as on the appointed date
have been incorporated in the books of the Company at their respective
book values on the basis of the audited accounts except the value of
land, agriculture farms, buildings and plant & machinery which have
been taken as Rs.11200.00 being the market value thereof and value of
investment amounting to Rs.575.15 in few unlisted entities have been
written off as per the scheme.
(b) In terms of the Scheme, the Company shall issue 3(three) equity
shares of Rs.5(five) each fully paid up, ranking pari passu, for 1(one)
equity share of Rs.10(ten) each fully paid up held by the shareholders
in MPCIL.
(c) In respect of the equity shares held by the company in MPCIL, the
shares which are required to be issued by the Company in terms of (b)
supra shall be allotted to the Board of the Trustees of Jay Shree
Beneficiary Trust to have and to hold such shares in trust exclusively
for the benefit of the Company and deal with same as they deem fit.
These shares have been recorded at original acquisition cost of shares
of MPCIL. The difference between the consideration and value of net
assets acquired amounting to Rs.9443.16 has been adjusted with capital
reserve.
(d) The difference between the purchase consideration and value of net
assets acquired of MPCIL, after carrying out necessary amendments and
/or adjustments as per point no.(c) supra, an amount of Rs.9443.16 has
been treated as capital reserve in terms of Accounting standard 14
"Accounting for Amalgamation" being amalgamation in the nature of
purchase.
II. In respect to Merger of Factory and demerger of Strategic
Investment Division:
(a) PTCPL is a wholly owned subsidiary of the Company and having a tea
factory in the name of "Parvati Tea Factory". PTCPL is engaged in
business of manufacture and sales of tea w.e.f. appointed date all the
assets and liabilities of "Parvati Tea Factory" have been incorporated
in the books of the Company at their respective book values on the
basis of the audited accounts except the value of fixed assets which
have been taken as Rs.300.00 being the market value thereof. Further as
on appointed date all the assets and liabilities of Strategic
investment division of the Company has been demerged and incorporated
in the books of the PTCPL at their respective book values as per the
scheme.
(b) In terms of the scheme, PTCPL shall issue 5,00,000 equity shares of
10(ten) each fully paid up, ranking pari passu, to the Company in
consideration of above.
(c) The difference between the purchase consideration as given by PTCPL
and value of net assets transferred to PTCPL, after carrying out
necessary amendments and /or adjustments as per point no. (a) supra, an
amount of Rs.726.25 has been treated as investment in PTCPL as
prescribed under the scheme in terms of "Accounting Standard" 14
accounting for Amalgamation being amalgamation in nature of purchase.
III. Other Conditions:
(a) Shares Suspense represents 65,28,810 Equity shares of Rs.5(five)
each fully paid to be issued in terms of point no. I (b) above which
will rank parri passu with the existing shareholders of the Company as
per the scheme with effective from appointed date. The shares will be
allotted on completion of necessary formalities under the Companies Act
and Listing agreement.
(b) The income accruing and expenses incurred by MPCIL, factory and
strategic investment division from respective appointed date to
31.3.2011 have been properly dealt in these accounts.
(c) Pursuant to the scheme, the authorized share capital of MPCIL shall
be added to the authorized capital of the Company and the increase in
the authorized share capital in the current year represents the same.
(d) Pending completion of the relevant formalities of transfer of
certain assets and liabilities of MPCIL & factory and strategic
investment division pursuant to scheme, such assets and liabilities
remain to be transferred in the name of the Company.
K) 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 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.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.
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.
M) 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.
N) Employee Benefits (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.707.23 for provident fund
contribution (previous year Rs. 636.05), Rs.27.51 for ESIC (previous
year Rs. 21.18) and Rs.55.69 for Superannuation Contribution (previous
year Rs. 42.28). 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. According to the
management, in consultation with Actuary, actuarial valuation cannot be
applied to reliably measure provident fund liabilities in absence of
guidance from Actuarial Society of India. Accordingly, the Company is
currently not in a position to provide other related disclosures as
required by the aforesaid AS 15 read with the ASB Guidance, however,
having regard to the position of the fund (for covered employees) and
confirmation from the Trustees' of such Fund there is no shortfall as
at the year end.
b) Defined benefit plans:
i) The Company makes annual contribution of gratuity to JSTI Employees
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 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.
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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