Terms and Rights attached to equity shares:
The company has one class of equity shares having per value of Rs. 10
per share. Each share holder is eligible for one vote per share held.
The dividend proposed by the board of directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting,
except in case of interim dividend. In the event of liquidation the
equity share holder are eligible to receive the remaining assets after
discharging all liabilities of the Company, in proportion to their
Terms and Rights attached to preference shares:
The dividend proposed by the Board of Directors is subject to the
approval of shareholders in the ensuing Annual General Meeting. In the
event of liquidation of the company before redemption of the RCPS, the
holders of RCPS shall have priority over equity shareholders in the
payment of dividend and repayment of capital.
(i) In terms of the one time settlement (OTS) arrived at in respect of
secured borrowings, cash credit, term loans from bank and loan from
ARCIL has been continued for operations of tea division. The balance
amount of the borrowings from the secured creditors (other than 15%
NCD, OCD and loan from bodies corporate secured by pledge of shares of
ISG Traders Ltd.) have been settled for Rs. 25721 lacs (OTS amount) and
has been transferred to KFCL for payment there against in terms of the
Scheme (Note 29.1( c)).
(ii) Loans and Debentures in earlier years from Financial Institutions,
Banks, ARCIL and other bodies corporate including non fund based
facilities, save and except otherwise stated, against specific balances
under secured loans are secured/to be secured by a pari passu first
charge on the fixed and current assets of the Company. These loans and
facilities are further secured by the personal guarantee of a director
and the pledge of the unencumbered equity shares held by the promoters
in the Company.
OTS amount payable as per (i) above has since been deposited by the
KFCL in Escrow with the SBI, the Operating Agency appointed by BIFR, as
per the stipulations in the scheme. All the lenders excepting ARCIL and
a few other minority lenders (aggregating Rs. 13882 lacs) have since
accepted the payment and released the charges and securities against
the loan given by them. The Company''s appeal filed before the AAIFR as
given in Note 29.2 (c) is pending for disposal. Moreover the matter has
also been taken up with the respective lenders for release of the
securities, etc and acceptance of the OTS amount.
(iii) The cash credit from bank, term loan from banks and ARCIL
including non-fund based facilities retained for tea operation are
secured/to be secured by first charge over the immoveable properties,
moveable fixed assets and current assets of Tea Division and security
by way of personal guarantee of one of the Director of the Company.
(iv) 15% Redeemable NCD''s, 15% OCD and loan from bodies corporate
secured by pledge of 33,45,000 equity shares of ISG Traders Ltd held by
the Company have been settled for Rs.578 lacs and are repayable within
a period of 90 days (since repaid) from the date of the sanction of the
(v) Unsecured fixed deposits from shareholders and public are repayable
to the extent of 85% of the principal amount of the fixed deposits
within 180 days (since repaid) without carrying any interest in terms
of the Scheme, in full and final settlement of entire outstanding in
(vi) Unsecured advances from bodies corporate and 15% OCD is repayable
for Rs 758.81 lacs being 25% value of the principal amount in three
equal annual installments after a moratorium of one year from the date
of sanction of the Scheme.
(vii) Unsecured advances from promoters amounting to Rs. 3055.50 lacs
are to be converted into equity shares at par after reduction of the
existing equity share capital in terms of the Scheme (Note 29.2 (a)).
(viii) Amounts payable as per (iv) to (vi) above have been transferred
to KFCL (Note 29.1(c)). In terms of the Scheme these amounts are
required to be paid through the Company and as such Rs. 7075.76 lacs
payable in respect of these have been included under Other Current
Liabilities and Rs. 758.81 lacs under Other Long Term Liabilities.
Corresponding amount receivable from KFCL have been included under
Other Current Assets.
(ix) In terms of the Scheme, Rs. 3643.75 lacs payable for FRCN has been
transferred to KFCL for full and final settlement in terms of the order
passed by Hon''ble High Court at Calcutta (Note 29.1(c)).
1. Non Current Investments:
(i) # Investments net of diminution of Rs. 27843 lacs (Previous Year
Rs. 23521 lacs).
(ii) Keeping in view of the provisions of Accounting Standard on
Investments (AS 13), the Company''s investment in ISG Traders Ltd, an
associate company has been evaluated based on valuation carried out by
an independent firm of chartered accountants and further diminution in
value thereof by Rs. 4322.11 lacs has been recognized in this year and
included under Exceptional Items.
(iii) * Market quotations in respect of Non-Traded shares are not
available since long. Therefore market values of these investments have
not been stated.
2. (a) Long Term Loans and Advances:
(i) Loans and deposits include Rs.1685 lacs (Previous Year Rs.1685
lacs) given to Andhra Cements Limited (ACL) in earlier years. In terms
of the scheme of rehabilitation of ACL, the said loan has been assigned
to Boydell Media Private Ltd., a wholly owned subsidiary of ISG Traders
Ltd and is recoverable by March, 2015 in terms of the deed of
(ii) Loans and deposits and advance towards equity participation
includes Rs. 2002.66 lacs (Previous Year Rs. 1577.61 lacs) outstanding
from Santipara Tea Company Ltd. (STCL) of which Rs. 853.79 lacs will be
converted into equity. Considering the strategic involvement and
consequential restructuring etc, provision of Rs. 853.79 lacs made in
earlier years has been considered to be adequate.
3. Exceptional Items:
Exceptional Items (net) Rs. 864.91 lacs represents income arising on
settlement of loans and liabilities amounting to Rs. 5187.02 lacs
(other than those pertaining to Fertiliser Undertaking de-merged to
KFCL) and charges on account of diminution in value of investments
amounting to Rs. 4322.11 lacs.
4. Discontinuing Operations:
Following the sanction of the Scheme by BIFR (Note 29.1(b)), Fertiliser
Undertaking has been de-merged to KFCL w.e.f.1st October, 2010 and
operations pertaining to said undertaking has been discontinued with
effect from the said date. Consequently income of Rs. 72947.20 lacs
arising on settlement of loans and liabilities and Rs. 586.57 lacs on
account of write back of expenses over income for the period from 1st
October, 2010 to 31st March, 2011, after deducting therefrom charges on
account of provisions for other current assets and other charges
pertaining to fertilizer undertaking Rs. 2752.49 lacs has been shown as
profit from discontinuing operations.
5. Expenditure in Foreign Currency on account of:
-Foreign Travel Rs.3.45 lacs (Previous Year Rs.0.52 lac).
6.1 Related Party disclosures pursuant to Accounting Standard -18.
List of Related Parties with whom the Company had transaction:
Dail Consultants Ltd (DCL), North India Fertiliser Ltd. (NIFL), Leyden
Leasing and Financial Services Ltd (LLFSL) , and Pentonville Software
(b) Associate/Group Company
ISG Traders Limited (ISG)
(c) Key Management Personnel
Mr. A. K. Goel, Wholetime Director, and Mr. S. P. Gupta, Executive
6.2 The aggregate amount of transaction with Related Parties is as
(i) Previous year figures are given in brackets.
(ii) The above Related Party Information is as identified by the
Management and relied upon by the auditors.
(iii) In respect of the above parties, there is provision for doubtful
debts of Rs. 427.94 lacs as on 31.3.2012 out of which Rs. 17.62 lacs
has been written back during the year.
7. (a) The disclosures required under Accounting Standard 15
Employee Benefits notified in the Companies (Accounting Standards)
Rules 2006 in respect of tea division are given below:
Defined Benefit Scheme
The employee''s gratuity, superannuation and provident fund (other than
those covered and contributed under Employee''s Provident Fund
Organization) Scheme are defined benefit plans. The present value of
obligations are determined based on actuarial valuation using the
Projected Unit Credit Method, which recognizes each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation. The
obligation for Leave Encashment is recognized in the same manner as
i) Assumptions relating to future salary increases, attrition, interest
rate for discount & overall expected rate of return on Assets have been
considered based on relevant economic factors such as inflation, market
growth & other factors applicable to the period over which the
obligation is expected to be settled.
ii) The Guidance issued by the Accounting Standard Board (ASB) on
implementation AS-15, Employees benefit (Revised 2005) states that
provident funds set up by employers which requires interest shortfall
to be met by the employer, needs to be treated as defined benefit plan.
The fund does not have any unprovided existing deficit or interest
shortfall. In regard to any future obligation arising due to interest
shortfall (i.e. in case Government interest to be paid on provident
fund scheme exceeds rate of interest earned on investment), pending the
issuance of the Guidance Note from the Actuarial Society of India, the
Company''s actuary has expressed his inability to reliable measures the
(c) The scheme for superannuation benefit to employees has ceased with
effect from 31st July, 2003 and the liability existing as on that date
is repayable to the eligible employees at specified return of 5% per
annum. on their retirement. The scheme being presently not in operation
and the company''s liability now being restricted to the shortfall in interest
thereon if any, the liability in this respect as determined by the
actuary is charged to profit and loss account as employee benefit on
year to year basis.
8. The Scheme of Arrangement for transfer of the Tea Undertaking of
the Company to Shubh Shanti Services Limited on a going concern basis
with effect from 1st April, 2001 has become infractus in view of the
current Scheme of Arrangement for de-merger of the Fertilizer
Undertaking sanctioned by BIFR as per Note 29.1(b). Necessary step for
withdrawing the petition pending before the Hon''ble High Court at
Calcutta is being taken.
9.1 (a) The Company is a sick industrial company under the provisions
of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA).
The Rehabilitation Scheme (the Scheme) for revival of the Company has
been sanctioned by the Board for Industrial and Financial
Reconstruction (BIFR) vide its Order dated 16th January, 2012 and the
rehabilitation measures in terms of the Scheme are under
(b) In terms the of Scheme of Arrangement sanctioned by the BIFR
pursuant to the Order as given above the Fertiliser Undertaking has
been de-merged and transferred to Kanpur Fertilizers and Cement Limited
(KFCL) w.e.f 1st October, 2010 and the same has become effective on
filing of the Scheme with the Registrar of Companies of the respective
States on 24th January, 2012. Consequent to this all assets and
liabilities, rights and obligations including contingent liabilities,
employees and all legal and other proceedings and operations of the
said division with effect from said date have been transferred to and
vested with KFCL.
(d) Rs. 40317.75 lacs being the deferential amount with respect to
above assets and liabilities have been adjusted against the accumulated
losses of the Company.
(e) Further, other adjustments consequent to the sanction of the Scheme
and settlement of the loans and liabilities etc to the extent these are
relatable to Fertiliser undertaking amounting to Rs.70781.28 lacs (net)
have been shown as profit from discontinuing operation leaving the
balance amount of Rs. 5187.02 lacs (net) which has been shown under
exceptional items (Note 21 & 22).
9.2 (a) The Scheme also envisages reduction of Equity Share Capital
and 8.5% Cumulative Redeemable Preference Share Capital by 60 %
amounting to Rs 3763.36 lacs and consolidation thereafter at their
original face value, 0.001% Cumulative Redeemable Preference Share
Capital by Rs. 16598.33 lacs, issuance of further equity capital to the
promoters of Rs. 4182 lacs including conversion of unsecured loans of
Rs. 3055.50 lacs from them into equity post reduction and consolidation
of the existing equity share capital and transfer of capital redemption
reserve amounting to Rs. 1500 lacs to the surplus of the Company.
(b) KFCL in consideration of transfer as per note 29.1(c) above shall
issue 1 (one) equity share of Rs. 10 each fully paid up for every 40
(forty) equity shares of Rs. 10 each (post reduction and consolidation
as above) held by the equity shareholders of the Company at the record
date to be specified for the purpose.
(c) The Company has preferred appeals for rectification of certain
inadvertent errors in the Scheme which have been admitted by the
Appellate Authority (AAIFR). Necessary effect with respect to (a) and
(b) above will be given on completion of necessary formalities pending
disposal of appeals before AAIFR.
10. In terms of the Scheme, Hon''ble BIFR has directed to waive penal
interest and damages as per rules and policy for late/non payment of
provident fund dues till cut off date i.e. 1.10.2010, and to consider
to allow payment of provident fund dues with statutory rate of simple
interest after moratorium of one year in 36 monthly installments. The
matter is being pursued with the relevant authorities for necessary
11. The Company had filed a Writ Petition before the Hon''ble High
Court at Calcutta challenging the applicability of Section 274 (1) (g)
of the Companies Act, 1956 and a stay has been granted by the High
Court on this matter. Consequently, as per the legal opinion received,
provisions for the disqualification of directors in terms of the said
Section are not applicable to the Directors of the Company.
12. In respect of levy of salami by the Government of West Bengal on
renewal of lease of tea estates in certain circumstances and pursuant
to the decision of Hon''ble High Court at Calcutta in a similar matter,
the Company has preferred an appeal against the said imposition before
the appropriate authority. Accordingly, pending finalization of the
matter, Rs. 811.67 lacs (Previous year Rs. 811.67 lacs) has not been
provided for in this respect which would be payable in equal annual
installments over the lease period i.e. 30 years. However, this is not
likely to have revenue impact, since the same will be capitalized to
the cost of land as and when paid by the Company.
13. Remuneration amounting to Rs. 597.29 lacs (including Rs. 105.78
lacs for the year) paid to the current Wholetime/Executive Directors
and ex-wholetime directors/ex-Managing Director are pending approval of
14. Consequent to demerger of Fertiliser Undertaking, the Company
operates in single business segment of Tea.
15.1 Contingent liabilities and commitments to the extent not provided
(Rs. in lacs)
Year ended Year ended
31st March, 31st March,
a) Guarantees (excluding since released)
given by the Company on behalf of bodies
corporate Limit 5568.89 5568.89
Amount Outstanding 4010.21 4746.14
b) Guarantees given by Banks on behalf
of the Company 256.12 267.64
c) Cumulative Dividend on Preference Shares 705.38 627.72
d) Claims against the Company not
acknowledged as debts (to the extent
ascertainable from available records)
i) Income/Agriculture Tax matters
pending in appeal 685.84 644.33
at various stages (other than matters
awaiting quantification by assessing
authorities and/or with favourable
appellate decisions for earlier years,
against which further appeals are pending)
ii) Sales Tax matters under appeal 257.52 24.65
(to the extent ascertained)
e) A show cause notice issued in 1986 in respect Not ascertainable Not
ascertainable of erstwhile tobacco division taken up for hearing by the
adjudicator. The management is of the view that in accordance with the
Scheme of Arrangement approved by Calcutta High Court, liabilities
relating to Excise stood vested from 1st April, 1984 to New Tobacco
Company Ltd. (NTC) pursuant to transfer of tobacco business to the said
NTC effective that date.
Future cash out flow in respect of a) to e) is dependent upon the
outcome of judgments/ decisions.
15.2 Estimated value of Capital Commitments (Net of Advances Rs. 98.19
lacs Previous Year Rs. 33.82 lacs) -Rs. 161.31 lacs (Previous Year Rs.
16.1 Consequent to the notifications under the Companies Act,1956, the
financial statements for the year ended 31st March,2012 are prepared
under revised Schedule VI . Accordingly, the previous year''s figures
have been reclassified/regrouped/rearranged to make it comparable with
the current year''s figures.
16.2 The previous years figures are inclusive of the figures of the
fertilizer undertaking which has been transferred to KFCL in terms of
the scheme for revival of the company sanctioned by the Hon''ble BIFR
(Note 29.1 and 29.2). Accordingly, figures for the current year are not
comparable with the corresponding figures of previous year.