Rights, preferences and restrictions attached to Shares
(a) The Company has only one class of shares referred to as Equity
Shares having a par value of Rs. 5/- per share. Each shareholder 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 shareholders are eligible to
receive the remaining assets of the Company after distribution of all
preferential amounts, in proportion to their shareholding.
(b) Details of Equity Shares held by shareholders holding more than 5
per cent of the Equity Shares in the Company
(a) Represents a free reserve not meant for any specific purpose.
(b) Represents the balance amount of reserve which had arisen on
transfer of Bulk Tea Division of Eveready Industries India Limited.
(a) Conveyance deed is pending execution for Jaibirpara Tea estate for
Rs. 293 lakhs (31.03.11 - Rs. 293 lakhs)
(c) Represents cost of proportionate share of undivided land pertaining
to certain portion of multistoried building
(a) The above represents the trade mark (Brand - WM logo) acquired in
January 2005 and the same is being amortised under straight line method
over a working life of 20 years on prudent basis based on the valuation
obtained by the management, considering the factors like effective
1. Schemes of Amalgamation/Scheme of Arrangement given effect to in
earlier years Pending completion of the relevant formalities of
transfer of certain assets and liabilities acquired pursuant to the
Schemes, such assets and liabilities remain included in the books of
the Company under the name of the transferor companies (including other
companies which were amalgamated with the transferor companies from
time to time).
2. Employee Benefits :
I. Post Employment Defined Contribution Plans:
During the year an amount of Rs. 3239.20 lakhs (31st March 2011 - Rs.
2738.73 lakhs) has been recognised as expenditure towards Defined
Contribution plans of the Company.
II. Post Employment Defined Benefit Plans:
(a) Gratuity (Funded)
The Company''s gratuity scheme, a defined benefit plan, covers the
eligible employees and is administered through certain gratuity fund
trusts. Such gratuity funds, whose investments are managed by insurance
companies/trustees themselves, make payments to vested employees or
their nominees upon retirement, death, incapacitation or cessation of
employment, of an amount based on the respective employee''s salary and
tenure of employment subject to a maximum limit of Rs. 10.00 lakhs.
Vesting occurs upon completion of five years of service.
(b) Superannuation (Funded)
The Company''s Superannuation scheme, a Defined Benefit plan, is
administered through trust funds and covers certain categories of
employees. Investments of the funds are managed by insurance companies
/trustees themselves. Benefits under these plans had been frozen in
earlier years with regard to salary levels then prevailing with the
exception of a few employees. Upon retirement, death or cessation of
employment, Superannuation Funds purchase annuity policies in favour of
vested employees or their spouses to secure periodic pension. Such
superannuation benefits are based on respective employee''s tenure of
employment and salary.
(c) Staff Pension Type A (Funded)
The Company''s Staff Pension Scheme Type A, a Defined Benefit plan, is
administered through a trust fund and covers certain categories of
employees. Investments of the fund are managed by Life Insurance
Corporation of India. Pursuant to the scheme, monthly pension is paid
to the vested employee or his/her nominee upon retirement, death or
cessation of service based on the respective employee''s salary and
tenure of employment subject to a limit on the period of payment in
case of nominee. Vesting occurs upon completion of twenty years of
(d) Staff Pension Type B (Unfunded)
The Company''s Staff Pension Scheme Type B, a Defined Benefit plan,
covers certain categories of employees. Pursuant to the scheme,
monthly pension is paid to the vested employee or his/her nominee upon
retirement, death or cessation of service based on the respective
employee''s salary and tenure of employment subject to a limit on the
period of payment in case of nominee. Vesting occurs upon completion of
twenty years of service.
(e) Medical Insurance Premium Re-imbursement (Unfunded)
The Company has a scheme of re-imbursement of medical insurance premium
to certain categories of employees and their surviving spouses, upon
retirement, subject to a monetary limit. The Company has introduced a
scheme of re-imbursement of medical expenses to a certain category of
employees up to certain monetary limit. The scheme is in the nature of
Defined Benefit plan.
(f) Expatriate Pension (Unfunded)
The Company has an informal practice of paying pension to certain
categories of retired expatriate employees and in certain cases to
their surviving spouses. The scheme is in the nature of Defined Benefit
The following Tables sets forth the particulars in respect of aforesaid
Defined Benefit plans of the Company for the year ended 31st March 2012
and corresponding figures for the previous year.
The estimates of rate of inflation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment sphere.
Plan assets represent investment in various categories. The return on
amounts invested with LIC is declared annually by them. Return on
amounts invested with Insurance companies, other than LIC, is mostly by
way of Net Asset Value declared on units purchased, with some schemes
declaring returns annually. Investment in Bonds and Special Deposit
carry a fixed rate of interest.
The expected return on plan assets is determined after taking into
consideration composition of the plan assets held, assessed risk of
asset management and other relevant factors.
(g) Provident Fund:
Contributions towards provident funds are recognised as expense for the
year. The Company has set up Provident Fund Trusts in respect of
certain categories of employees which is administered by Trustees. Both
the employees and the Company make monthly contributions to the Funds
at specified percentage of the employee''s salary and aggregate
contributions along with interest thereon are paid to the
employees/nominees at retirement, death or cessation of employment. The
Trusts invest funds following a pattern of investments prescribed by
the Government. The interest rate payable to the members of the Trusts
is not lower than the rate of interest declared annually by the
Government under The Employees'' Provident Funds and Miscellaneous
Provisions Act, 1952 and shortfall, if any, on account of interest is
to be made good by the Company.
In terms of the Guidance on implementing Accounting Standard 15
(Revised 2005) on Employee Benefits issued by the Accounting Standard
Board of The Institute of Chartered Accountants of India (ICAI), a
provident fund set up by the Company is defined benefit plan in view of
the Company''s obligation to meet shortfall, if any, on account of
Unlike in earlier years, the Actuary has carried out actuarial
valuation of plan''s liabilities and interest rate guarantee obligations
as at the balance sheet date using Project Unit Credit Method and
Deterministic Approach as outlined in the Guidance Note 29 issued by
the Institute of Actuaries of India. Based on such valuation, there is
no future anticipated shortfall with regard to interest rate obligation
of the Company as at the balance sheet date. Further during the year,
the Company''s contribution of Rs. 237.07 lakhs (31st March 2011 Rs.
189.10 lakhs) to the Provident Fund Trust has been expensed under the
Contribution to Provident and Other Funds. Disclosures given
hereunder are restricted to the information available as per the
3. There are certain overdue loans and advances, interest accrued on
loans and other recoverable items aggregating Rs. 4351.42 lakhs (31st
March 2011 - Rs. 4351.42 lakhs). These advances became overdue on
account of the sluggish market conditions and the resultant difficulty
in liquidating the assets by these parties. The management is actively
continuing to pursue options for recovery of these loans and advances.
As a measure of prudence, and in the management''s best judgement Rs.
4351.42 lakhs (31st March 2011 - Rs. 4351.42 lakhs) is being held in
provision for contingency, for overdue loans and advances etc. at the
year end. (Refer Note 6).
4. Contingent Liabilities
(a) Claims against the Company not acknowledged as debts : -
31st March 2012 31st March 2011
Rs. Lakhs Rs. Lakhs
Sales Tax 26.37 26.37
Electricity Dues 29.27 32.47
Assam Pollution Control Board 7.41 7.41
Provident Fund 68.43 68.43
Income Tax 247.65 79.49
Service Tax 75.48 75.48
Others 0.86 4.95
(b) Guarantees given on behalf of a subsidiary - Rs. 11445.75 lakhs
(31st March 2011 - Rs. 11745.46 lakhs); Year end utilisation Rs.
7089.93 lakhs (31st March 2011 Rs. 7938.19 lakhs).
(c) Bank Guarantees Rs. 102.94 lakhs (31st March 2011 - Rs. 83.28
(d) Bills Discounted Rs. 1014.45 lakhs (31st March 2011 Rs. 2445.65
Current Tax charge for the year has been reckoned after taking into
account, benefit under Section 33AB of the Income Tax Act, 1961 (which
are available on timely deposit of required amount with development
Estimated Capital Commitment on account of contracts remaining to be
executed and not provided for at the year-end is Rs. 3230.22 lakhs
(31st March 2011 - Rs. 1030.07 lakhs). Such commitment, net of
advances, is Rs. 1515.42 lakhs (31st March 2011 - Rs. 494.44 lakhs).
7. Business Segment
The Company is primarily engaged in the business of cultivation,
manufacture and sale of tea and is managed organisationally as a single
unit. Accordingly, the Company is a single business segment company.
8. Information given in accordance with the requirement of Accounting
Standard 18 on Related Party Disclosures prescribed under the Act : -
(a) List of Related Parties Where control exists:
- Subsidiaries :
Borelli Tea Holdings Limited (BTHL)
Phu Ben Tea Company Limited (PBTCL)
Rwenzori Tea Investments Limited (RTI)
McLeod Russel Uganda Limited (MRUL)
Olyana Holdings LLC (OLYANA)
Gisovu Tea Company Limited (GTCL) (w.e.f. 23rd February 2011)
McLeod Russel Middle East [MRME (DMCC)] (w.e.f. 9th May 2011)
- Associates :
D1 Williamson Magor Bio Fuel Limited (D1) Babcock Borsig Limited (BBL)
(upto 28th March 2012)
9. In connection with an overseas acquisition of a subsidiary in 2005,
the Income Tax authority had raised a demand of Rs.5278 lakhs during
the year 2009-10 on the Company on account of alleged non-deduction of
tax at source and interest thereon pertaining to the transaction. The
Company has challenged the said demand before the appropriate
authorities and the matter is pending. Further, the Company has
obtained a stay against the said demand from the Hon''ble High Court of
Calcutta. The Company has deposited Rs. 700.00 lakhs (31st March 2011
Rs. Nil) during the year with Income Tax Authority under protest (Refer
Note 19). In any event, as per the related Share Purchase Agreement,
Capital Gain tax or other tax, if any, relating to sale of shares etc.
is to be borne by the seller and not the Company.
10. Intangible Assets under Development
This represents Computer Software (acquired) which is under
11. Salaries and Wages excludes Rs. 1080.81 lakhs (31st March 2011 -
Rs. 1003.02 lakhs) and Stores and Spares consumed excludes Rs. 2532.97
lakhs (31st March 2011 - Rs. 2396.75 lakhs) debited to other accounts.
12. Items of Expenditure in the Profit and Loss Statement include
reimbursements to and by the Company.
13. Exceptional Items comprise provision for diminution in carrying
amount other than temporary Rs. 1500 lakhs (2010-11 Rs. Nil) of long
term investments in respect of an associate of the Company and profit
on disposal of investments Rs. 118.03 lakhs (2010-11 Rs. Nil) in
respect of another associate.
14. The financial statements for the year ended 31st March, 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 31st March, 2012 are prepared as per Revised Schedule
VI. Accordingly, the previous year figures have also been reclassified
to conform to this year''s classification.
a) The above Cash Flow Statement has been prepared under the indirect
method as set out in the Accounting Standard 3 on Cash Flow Statement
prescribed under the Companies Act, 1956.
b) Also refer Note 53 to the Financial Statements.
c) Notes referred to above form an integral part of the Cash Flow