Mcleod Russel (India)

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 :
 
 2.1 Post Employment Defined Contribution Plans:
 
 During the year an amount of Rs. 2271.35 lakhs (31st March 2008 - Rs.
 2173.71 lakhs) has been recognised as expenditure towards Defined
 Contribution plans of the Company.
 
 2.2. Post Employment Defined Benefit Plans:
 
 Gratuity (Funded)
 
 The Companys 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 employees salary and
 tenure of employment subject to a maximum limit of Rs. 3.50 lakhs.
 Vesting occurs upon completion of five years of service.
 
 Superannuation (Funded)
 
 The Companys 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 employees tenure of
 employment and salary.
 
 Staff Pension - Type A (Funded)
 
 The Companys 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 employees 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.
 
 Staff Pension - Type B (Unfunded)
 
 The Companys 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
 employees 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.
 
 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
 plan.
 
 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 scheme is in the nature of
 Defined Benefit plan.
 
 The following Table sets forth the particulars in respect of Defined
 Benefit plans of the Company for the year ended 31st March 2009 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 it. Return on amounts
 invested with Insurance companies, other than LIC, is by way of Net
 Asset Value declared on units purchased. 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.  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 employees 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
 
 Notes on Accounts for the year ended 31st March, 2009 Schedule 17
 [Contd.] 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 Companys obligation to meet shortfall, if any, on account of
 interest. However, the Provident Fund Trusts of the Company do not have
 any interest shortfall at the year end.
 
 The Actuary has expressed his inability to provide an actuarial
 valuation of the provident fund as at the year end in the absence of a
 Guidance Note from The Institute of Actuaries of India. Accordingly,
 complete information required to be considered as per AS 15 in this
 regard are not available and the same could not be disclosed.
 
 The Companys contribution to the aforesaid provident fund for the year
 was Rs. 160.52 lakhs (31st March 2008 - Rs. 168.19 lakhs).
 
 3.  Pursuant to the Announcement on Accounting for Derivatives issued
 by ICAI in March, 2008, the Company has accounted for during the year
 losses amounting to Rs. 762.75 Lakhs (31st March,2008- Rs. 26.01 Lakhs)
 in respect of outstanding derivative contracts. Such derivative loss
 has been included in Exchange Loss (net) (Schedule 16). Further, loss
 amounting to Rs. 178.77 Lakhs (31st March 2008-Rs. 39.55 Lakhs) on
 outstanding forward contracts relating to exports has been included in
 net exchange loss in Schedule 13.
 
 4.  There are certain overdue loans and advances, interest accrued on
 loans and other recoverable items aggregating Rs. 5322.05 lakhs (31st
 March 2008 - Rs. 5374.94 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 managements best judgement Rs.
 5322.05 lakhs (31st March 2008 - Rs. 5374.94 lakhs) are being held in
 provision for contingency, for overdue loans and advances etc. at the
 year end. (Refer Schedule 12 to Accounts).
 
 5.  Contingent Liabilities
 
 5.1 Claims against the Company not acknowledged as debts : -
 
                                 31st March 2009            31st March 2008
                                 Rs. Lakhs                  Rs. Lakhs
 
 Sales Tax :                     27.53                         72.50
 Electricity Dues :              29.27                         29.27
 Assam Pollution Control Board : 47.00                         46.60
 Income Tax :                   124.62                         93.90
 Others :                         1.83                          2.33
 
 5.2 Guarantees given on behalf of other companies to bank, Financial
 institutions etc. - limit Rs. 9450.00 lakhs (31st March 2008 - Rs.
 9908.00 lakhs); Year end utilisation Rs. 2662.72 lakhs (31st March 2008
 - Rs. 3418.42 lakhs)
 
 5.3 Bank Guarantees Rs. 127.71 lakhs (31st March 2008 - Rs. 139.83
 lakhs)
 
 5.4 Bills Discounted - Rs. 2460.05 lakhs (31st March 2008- Rs. 989.82
 lakhs)
 
 6.  TAXATION
 
 6.1 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
 bank).
 
 7. Estimated Capital Commitment on account of contracts remaining to be
 executed and not provided for at the year-end is Rs. 186.69 lakhs (31st
 March 2008 - Rs. 749.35 lakhs). Such commitment, net of advances, is
 Rs. 106.43 lakhs (31st March 2008 - Rs. 223.83 lakhs).
 
 8.  Advances include :-
 
 Loan to directors Rs. 16.76 lakhs (31st March 2008 - Rs. 20.06 lakhs)
 [Maximum amount during the year Rs. 20.06 lakhs (31st March 2008 - Rs.
 24.71 lakhs)] being originally initiated as advances to employees in
 the books of Eveready Industries India Limited, taken ovar in terms of
 a Scheme of Arrangement in 2004-05.
 
 9.  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.
 
 10. In connection with an overseas acquisition of a subsidiary in 2005,
 the Income Tax authority has raised a demand of Rs.5278 lakhs
 subsequent to year end on the Company on account of alleged non-
 deduction of tax at source and interest thereon pertaining to the
 transaction. The Company has not admitted the said demand and initiated
 actions for challenging the same before the appropriate authorities. 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.