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Notes to Accounts of Harrisons Malayalam Ltd.
Mar 31, 2025
q) Provisions and contingencies
Provisions
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that
is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the
liability. The increase in the provision due to the passage of time is recognised as interest expense.
Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a
present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle
the obligation or it cannot be measured with sufficient reliability. The Company does not recognise a contingent liability
but discloses its existence in the Standalone financial statements.
r) Financial instruments
Financial assets
Initial recognition and measurement
Financial assets (other than trade receivables) are recognised when the Company becomes a party to the contractual
provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs, except for
those carried at fair value through statement of profit and loss which are measured initially at fair value. Subsequent
measurement of financial assets is described below. Trade receivables are recognised at their transaction price as the
same do not contain significant financing component.
Subsequent measurement
For the purpose of subsequent measurement, financial assets are classified and measured based on the entity''s business
model for managing the financial asset and the contractual cash flow characteristics of the financial asset at:
a. Amortised cost
b. Fair value through other comprehensive income (FVTOCI) or
c. Fair value through profit or loss (FVTPL)
All financial assets are reviewed for impairment at least at each reporting date to identify whether there is any objective
evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are
applied for each category of financial assets, which are described below.
(i) Financial asset at amortised cost
Includes assets that are held within a business model where the objective is to hold the financial assets to collect
contractual cash flows and the contractual terms gives rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
These assets are measured subsequently at amortised cost using the effective interest method. The loss
allowance at each reporting period is evaluated based on the expected credit losses for next 12 months and credit
risk exposure. The Company shall also measure the loss allowance for a financial instrument at an amount equal
to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since
initial recognition.
(ii) Financial assets at fair value through other comprehensive income (FVTOCI)
Includes assets that are held within a business model where the objective is both collecting contractual cash flows
and selling financial assets along with the contractual terms giving rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding. At initial recognition, the Company,
based on its assessment, makes an irrevocable election to present in other comprehensive income the changes
in the fair value of an investment in an equity instrument that is not held for trading. These elections are made on
an instrument-by instrument (i.e.., share-by-share) basis. If the Company decides to classify an equity instrument
as at FVTOCI, then all fair value changes on the instrument, excluding dividends, impairment gains or losses
and foreign exchange gains and losses, are recognised in other comprehensive income. There is no recycling
of the amounts from OCI to profit or loss, even on sale of investment. The dividends from such instruments are
recognised in statement of profit and loss.
The fair value of financial assets in this category are determined by reference to active market transactions or
using a valuation technique where no active market exists.
The loss allowance at each reporting period is evaluated based on the expected credit losses for next 12 months
and credit risk exposure. The Company shall also measure the loss allowance for a financial instrument at an
amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased
significantly since initial recognition. The loss allowance shall be recognised in other comprehensive income and
shall not reduce the carrying amount of the financial asset in the balance sheet.
(iii) Financial assets at fair value through profit or loss (FVTPL)
Financial assets at FVTPL include financial assets that are designated at FVTPL upon initial recognition and financial
assets that are not measured at amortised cost or at fair value through other comprehensive income. All derivative
financial instruments fall into this category, except for those designated and effective as hedging instruments, for
which the hedge accounting requirements apply. Assets in this category are measured at fair value with gains or
losses recognised in statement of profit and loss. The fair value of financial assets in this category are determined
by reference to active market transactions or using a valuation technique where no active market exists.
The loss allowance at each reporting period is evaluated based on the expected credit losses for next 12 months
and credit risk exposure. The Company shall also measure the loss allowance for a financial instrument at an
amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased
significantly since initial recognition. The loss allowance shall be recognised in the statement of profit and loss.
De-recognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised (i.e. removed from the Company''s Standalone balance sheet) when:
a. The rights to receive cash flows from the asset have expired, or
b. The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a âpass-through'' arrangement; and
either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has
neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of
the asset."
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither
transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset,
the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In
that case, the Company also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that the Company could be required to
repay.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts,
financial guarantee contracts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for
trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative
financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships
as defined by Ind AS 109 Financial Instruments.
Gains or losses on liabilities held for trading are recognised in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the
initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value
gains/ losses attributable to changes in own credit risk are recognised in OCI. These gains/ loss are not subsequently
transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in
fair value of such liability are recognised in the statement of profit or loss. The Company has not designated any financial
liability as at fair value through profit and loss.
Loans and borrowings
"This is the category most relevant to the Company. After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are
recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss. This
category generally applies to borrowings."
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in
the Statement of Profit and Loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to
realise the assets and settle the liabilities simultaneously.
Derivative financial instruments
Initial recognition and subsequent measurement
The Company uses derivative financial instruments, such as forward currency contracts to hedge its foreign currency
risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract
is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair
value is positive and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the
effective portion of cash flow hedges, which is recognised in OCI and later reclassified to profit or loss when the hedge
item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the
recognition of a non-financial asset or non-financial liability.
s) Impairment of financial assets
In accordance with Ind AS 109 Financial Instruments, the Company applies expected credit loss (ECL) model for
measurement and recognition of impairment loss for financial assets.
The Company tracks credit risk and changes thereon for each customer. For recognition of impairment loss on other
financial assets and risk exposure, the Company determines that whether there has been a significant increase in the
credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for
impairment loss.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract
and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When
estimating the cash flows, an entity is required to consider:
- All contractual terms of the financial instrument over the expected life of the financial instrument. However, in rare
cases when the expected life of the financial instrument cannot be estimated reliably, then the entity uses the remaining
contractual term of the financial instrument.
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
The Company uses default rate for credit risk to determine impairment loss allowance on portfolio of its trade receivables.
Trade receivables
The Company applies approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses
to be recognised from initial recognition of receivables.
Other financial assets
For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there
has been a significant increase in the credit risk since initial recognition and if credit risk has increased significantly,
impairment loss is provided.
The presumption under Ind AS 109 with reference to significant increases in credit risk since initial recognition (when
financial assets are more than 30 days past due), has been rebutted and is not applicable to the Company, as the
Company is able to collect a significant portion of its receivables that exceed the due date."
Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the
asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the Standalone financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the
fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
| Segment reporting
The Company is engaged in plantations having tea and rubber estates. The business segments identified for segment
reporting are Tea, Rubber and Others as the Chief Operating Decision Maker (CODM) reviews business performance
at these levels. The Company has considered business segments as the primary segment. The business segments are
tea, rubber and others which have been identified taking into account the organisational structure as well as the differing
risks and returns of these segments.
I Earnings/ (loss) per share (EPS)
Basic EPS are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity
share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting
period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus
issue that have changed the number of equity shares outstanding, without a corresponding change in resources.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company (after adjusting for
interest on the convertible preference shares, if any) 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. Dilutive potential equity shares are deemed converted as of the beginning of the period,
unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
) Leases
"Effective from 1st April 2019, the Company adopted Ind AS 116 - Leases and applied the standard to all lease contracts
existing as on 1st April 2019 using the modified retrospective method on the date of initial application i.e. 1st April 2019.
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
i. As a lessee
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-
of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate
of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated
useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment.
In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain
re-measurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company''s
incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
Subsequently, the lease liability is measured at amortised cost using the effective interest method.
It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there
is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, or
if the Company changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for short term leases of real
estate properties that have a lease term of 12 months. The Company recognises the lease payments associated
with these leases as an expense on a straight-line basis over the lease term.
Operating Lease
In the comparative period, leases in which a significant portion of the risks and rewards of ownership are not
transferred to the Company as lessee are classified as operating leases. Payments made under operating leases
(net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period
of the lease unless the payments are structured to increase in line with expected general inflation to compensate
for the lessor''s expected inflationary cost increases."
ii. As a lessor
Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line
basis over the lease term unless the receipts are structured to increase in line with expected general inflation to
compensate for the expected inflationary cost increases. The respective leased assets are included in the balance
sheet based on their nature."
x) Cash and cash equivalents
Cash and cash equivalent in the statement of financial position comprises of cash at banks and on hand, demand
deposits, short-term deposits with an original maturity of three months or less and highly liquid investments that are
readily convertible into known amounts of cash, which are subject to an insignificant risk of changes in value.
y) Recent accounting pronouncements
Standards issued but not effective on Balance Sheet date:
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31,2025, MCA has notified
Ind AS 117 - Insurance Contracts and amendments to Ind As 116 - Leases, relating to sale and lease back transactions,
applicable from April 1, 2024. The Company has assessed that there is no significant impact on its financial statements.
Ind AS 21 - Foreign Currency Reporting
The amendments gives clear guidance on how to estimate the ''spot exchange rate'' when two currencies cannot be
exchanged easily. The new rules will be effective from April 2025. The Company does not expect this amendment to
have any significant impact in its financial statements.
(a) Title deeds of the immovable properties set out in the above table are in the name of Malayalam Plantations Limited (MPL)/
Harrisons and Crossfield Limited (HCL). The immovable properties of MPL got transferred to and vested in Malayalam
Plantations (India) Limited (MPIL) vide a Scheme of Arrangement and Amalgamation in 1978. Further, the immovable
properties of HCL got transferred and vested in MPIL vide a Scheme of Arrangement and Amalgamation in 1984. The name
of MPIL, Company incorporated in 1978, got changed to Harrisons Malayalam Limited in 1984.
(b) Also refer note 42 for ongoing land litigations.
(iii) Property, plant and equipment pledged as security
Details of properties pledged are as per note 37.
(iv) Capital work in progress (CWIP)
Capital work in progress mainly represents the immature bearer plants awaiting capitalisation. The capitalised portion of the
same is disclosed separately in the above table.
(a) Details of the Companyâs CWIP ageing as on 31 March 2025 are as follows:
The Company has unabsorbed depreciation and carry forward losses of earlier years and certain exempt income included
in the total income. Accordingly the tax expenses is nil in the current and previous years. Deferred tax assets on unabsorbed
depreciation and carry forward losses have been recognized to the extent of deferred tax liability / assets on temporary
differences in accordance with Ind AS 12 âIncome Taxesâ.
i) The Company has unabsorbed business loss of '' 1,901.23 under the provision of Income Tax Act, 1961 and '' 7,412.54
under the provision of Kerala Agricultural Income Tax Act, 1991 which expires on the 8th year from the end of the
relevant assessment year.
ii) The Company has unabsorbed depreciation loss under the provisions of Income-tax Act, 1961 amounting to '' 3,178.43,
which has no limit for expiry.
iii) The Company elected to exercise the option permitted under section 115BAA of the Income Tax Act, 1961, as introduced
by the Taxation Laws (Amendment) ordinance 2019. Hence the Company has not accounted for MAT liability
Reconciliation of tax expense and the accounting profit multiplied by Indiaâs domestic tax rate
37 Details of security, repayment terms, applicable interest rates
Term loan from banks - Non Current
a. Loan availed of '' 1,223.48 during 2017-18 and '' 1776.52 during 2018 - 19 is repayable in 24 equal quarterly
instalments commencing from June 2019, is secured by equitable mortgage created on immovable properties of the
Company situated in Kollam, Fort Kochi and Coimbatore. The loan carries an interest rate of MCLR plus applicable
spread payable on a monthly basis from disbursement of the loan. Year end balance of the loan is nil net of processing
fees (As at 31 March 2024 : '' 673.23)
b. Loan availed of '' 3,000.00 during 2018 - 19 is repayable in 20 quarterly instalments repayable as 8 quarterly instalments
of '' 25.00 commencing from September 2019 up to December 2021, 8 quarterly instalments of '' 225.00 from March
2023 up to December 2023 and 4 quarterly final instalments of '' 250.00 from March 2024 up to December 2024, is
secured by a charge created on immovable property of the Company situated at Kumbazha rubber estate, Kerala. The
loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year
end balance of the loan is nil net of processing fee (As at 31 March 2024 : '' 715.20 )
c. Loan availed of '' 3000 during 2021-22 is repayable in 20 quarterly instalments repayable as 8 quarterly instalments
of '' 75.00 commencing from June 2023 up to March 2025, 12 quarterly instalments of '' 200 from June 2025 up
to March 2028, is secured by a charge created on immovable property of the company situated at Kumbazha rubber
estate, Kerala. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement
of the loan. Year end balance of the loan is '' 2,375.62 net of processing fee (As at 31 March 2024 : '' 2,700.00 )
d. Agri Infra Loan availed of '' 175.50 during 2021-22 is repayable in 57 monthly instalments repayable as 56 monthly
instalments of '' 3.09 commencing from April 2022 up to November 2026 and one monthly instalment of '' 2.46 in
December 2026, is secured by first and exclusive charge on assets created out of bank finance. The loan carries an
interest of MCLR plus applicable spread with an interest subvention payable on a monthly from the disbursement of the
loan. Year end balance of the loan is '' 62.61 (As at 31 March 2024 : '' 101.34 )
e. The Company has availed the moratorium on term loan facilities offered by banks as part of COVID-19 regulatory
package announced by RBI vide Circular DOR.No.BPBC.47/21.04.048/2019-20 dated March 27, 2020 and Circular
DOR.No.BPBC.63/21.04.048/2019-20 dated April 17, 2020. The interest accrued during the moratorium period was
converted in to a deferred interest term loan and is repayable over the balance tenure of the term loans. The amount
outstanding as on 31st March 2025 is nil (As on 31 March 2024: '' 42.20 ) .
f. Loan availed of '' 249.97 during 2022-23 and '' 26.01 during 2023-24 is repayable in 60 equal monthly instalments
commencing from the date of availment, is secured by a charge created on assets created out of bank finance. The loan
carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end
balance of the loan is '' 153.39 net of processing fees (As at 31 March 2024 : '' 211.74).
g. Loan availed of '' 178.21 during 2022-23 and '' 119.03 during 2023-24 is repayable in 60 equal monthly instalments
commencing from the date of availment. The loan carries an interest of MCLR plus applicable spread payable on a
monthly from the disbursement of the loan. Year end balance of the loan is '' 183.50 net of processing fees (As at 31
March 2024 : '' 243.40).
h. Loan availed of '' 23.60 during 2022-23 is repayable in 60 equal monthly instalments commencing from the date of
availment, is secured by a charge created on assets created out of bank finance. The loan carries an interest of MCLR
plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 14.67
net of processing fees (As at 31 March 2024 : '' 18.99).
i. Loan availed of '' 27.83 during 2023-2024 is repayable in 60 monthly instalments commencing from the date of
availment, is secured by a charge created on assets created out of bank finance. The loan carries an interest of MCLR
plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 20.34
net of processing fees (As at 31 March 2024 : '' 25.27).
j. Agri Infra Loan availed of '' 148.00 during 2023-24 is repayable in 60 monthly instalments repayable as 59 monthly
instalments of '' 2.47 commencing from October 2023 up to August 2028 and one monthly instalment of '' 2.27 in
September 2028, is secured by first and exclusive charge on assets created out of bank finance. The loan carries an
interest of MCLR plus applicable spread with an interest subvention payable on a monthly from the disbursement of the
loan. Year end balance of the loan is '' 68.95 (As at 31 March 2024 : '' 91.53)
k. Loan availed of '' 103.00 during 2023-24 is repayable in 57 monthly instalments of '' 1.80 commencing from the date
of availment. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement
of the loan. Year end balance of the loan is '' 65.42 (As at 31 March 2024 : '' 87.84).
l. Loan availed of '' 750.00 during 2023-24 is repayable in 51 equal monthly instalments of '' 15.00 commencing after 9
months from the date of availment. The loan carries an interest of MCLR plus applicable spread payable on a monthly
from the disbursement of the loan. Year end balance of the loan is '' 544.12 (As at 31 March 2024 : '' 720.59).
m. Loan availed of '' 2,861 during 2024-25 is repayable in 12 equal monthly instalments of '' 7 commencing from April
2025 up to March 2026, 24 monthly equal instalments of '' 13 from April 2026 up to March 2028, 36 monthly equal
instalments of '' 50 from April 2028 up to March 2031, 23 monthly equal instalments of '' 54 from April 2031 up
to February 2033 and 1 final instalments of '' 62.00 in March 2033., is secured by a charge created on immovable
property of the Company situated at Coimbatore, Tamil Nadu and assets created out of bank finance. The loan carries
an interest of repo plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of
the loan is '' 2,861 net of processing fee (As at 31 March 2024 : '' nil )
n. Agri Infra Loan availed of '' 109 during 2024-25 is repayable in 60 monthly instalments of '' 1.81 commencing from
June 2024 up to May 2029 , is secured by first and exclusive charge on assets created out of bank finance. The
loan carries an interest of MCLR plus applicable spread with an interest subvention payable on a monthly from the
disbursement of the loan. Year end balance of the loan is '' 78.17 (As at 31 March 2024 : '' nil)
o. Agri Infra Loan availed of '' 136 during 2024-25 is repayable in 60 monthly instalments of '' 2.26 commencing from July
2024 up to June 2029 , is secured by first and exclusive charge on assets created out of bank finance. The loan carries
an interest of MCLR plus applicable spread with an interest subvention payable on a monthly from the disbursement of
the loan. Year end balance of the loan is '' 101.20 (As at 31 March 2024 : '' nil)
p. Loan availed of '' 42.56 during 2024-2025 is repayable in 60 monthly instalments commencing from the date of
availment, is secured by a charge created on assets created out of bank finance. The loan carries an interest of MCLR
Derivative financial instruments
The forward contracts in the financial year 2024-25 or 2023-24 are nil.
(ii) Interest rate risk
The Company''s fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk
as defined in Ind AS 107, âFinancial Instruments'' - Disclosures. As neither the carrying amount nor the future cash flows
will fluctuate because of a change in market interest rates.
41 Employee benefit obligations
The Company has provided for the gratuity liability and leave encashment liability (defined benefit plan), as per actuarial
valuation carried out by an independent actuary on the Balance Sheet date.
a) Defined contribution plan
The company makes contribution to statutory provident fund as per Employees Provident Fund and Miscellaneous
Provision Act, 1952 for its employees. Also the company makes contribution to superannuation fund for its employees.
This is a defined contribution plan as per Ind AS 19, Employee benefits. Total contribution made during the year
'' 1,647.56 (31 March 2024: '' 1,680.90).
b) Defined benefit plans
The company has provided for gratuity and leave encashment liability, for its employees as per actuarial valuation carried
out by an independent actuary on the Balance Sheet date. The valuation has been carried out using the Project Unit
Credit Method as per Ind AS 19 to determine the present value of Defined Benefit Obligations and the related current
service cost. This is a defined benefit plan as per Ind AS 19.
The gratuity plan is governed by the provisions of the Payment of Gratuity Act, 1972 (as amended from time to time).
Employees are entitled to all the benefits enlisted under this Act.
c) Sensitivity analysis
Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which
may vary overtime. Thus, the company is exposed to various risks in providing the above benefit which are as
follows:
i) Interest rate risk
The present value of the defined benefit liability is calculated using a discount rate determined by reference to
market yields of Government bonds. The estimated term of the bonds is consistent with the estimated term of the
defined benefit obligation (DBO) and it is denominated in INR. A decrease in market yield on government bonds
will increase the Company''s defined benefit liability.
ii) Liquidity risk
This is the risk when the Company is not able to meet the short-term gratuity payouts. This may arise due to non
availability of enough cash/cash equivalents to meet the liabilities or holding of illiquid assets not being sold in
time.
iii) Salary escalation risk
The present value of the defined benefit plan is calculated with the assumption of salary increase rate of employees
in future. Deviation in the rate of interest in future for employees from the rate of increase in salary used to
determine the present value of obligation will have a bearing on the plan''s liability.
iv) Demographic risk
The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is
exposed to the risk of actual experience turning out to be worse compared to the assumption.
v) Regulatory risk
Gratuity benefits are paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended
from time to time). There is a risk of change in regulations requiring higher gratuity payouts.
d. An area of 3123 hectares (31 March 2024: 3123 hectares) in respect of which a civil suit filed by Government of Kerala
seeking declaration of title and recovery of possession of Kumbazha, Koney and Lahai rubber estates in Pathanamathitta
district is currently pending consideration before the Subordinate Judges Court, Pathanamthitta.
e. An area of 2554 hectares (31 March 2024: 2554 hectares) in respect of which a civil suit filed by Government of Kerala
seeking declaration of title and recovery of possession in respect of Isfield, Venture and Nagamallay rubber estates in
Kollam district is currently pending consideration before Subordinate Judges Court, Punalur.
f. An area of 572 hectares (31 March 2024: 572 hectares) in respect of which a civil suit filed by Government of Kerala
seeking declaration of title and recovery of possession of Mundakayam rubber estate in Kottayam district is currently
pending consideration before Subordinate Judges Court, Pala.
g. An area of 992 hectares in respect of which a civil suit filed by Government of Kerala seeking declaration of title and
recovery of possession of Upper Surianalle tea estate in Idukki District is currently pending consideration before the
Subordinate Judges Court Devikulam.
h. An area of 297.17 hectares in respect of which a civil suit filed by Government of Kerala seeking declaration of title
and recovery of possession of part of Arrapetta tea estate in Wayanad district is currently pending consideration before
Subordinate Judges Court, Sultan Bathery.
i. An area of 184.40 hectares in respect of which a civil suit filed by Government of Kerala seeking declaration of title
and recovery of possession of Touramulla tea estate in Wayanad district is currently pending consideration before
Subordinate Judges Court, Sultan Bathery.
j. An area of 3,683.19 hectares in respect of which a civil suit filed by Government of Kerala seeking declaration of title
and recovery of possession of Moongalaar, Wallardie, Pattumallay and Panniar tea estates in Idukki district is currently
pending consideration before Subordinate Judges Court, Kattapana.
k. An area of 1982.45 hectares (31 March 2024: 1982.45 hectares) of Mooply Valley estates notified by the Government
of Kerala for resumption alleging violation of lease conditions as proceedings has been stayed by the Sub Court,
Irinjalakuda.
The above litigations are considered as Key audit matter.
42 (B) Land litigations not considered as Key audit matter
a. The Government by order dated 04 January 2008 directed the Company to remit an amount '' 96.84 lakhs alleging
violation of lease condition in Mooply Valley Estates. The said order has been challenged before the Sub Court,
Irinjalakuda and by order dated 08.04.2008 granted temporary prohibitory injunction restraining Government from
taking any further action. On appeal filed by the Government, the Hon''ble High Court by judgment dated 04 August
2008 sustained the order of injunction and directed the Company to furnish security for '' 96.84 lakhs and accordingly
the Company has furnished bank guarantee for the said amount and the suit is still pending.
b. An area of 1074.18 hectares (approximate) [31 March 2024: 1074.18 hectares (approximate)] in respect of which
cases filed by âJanmiesâ (original owners) of Koney, Kaliyar and Arrapetta Estates challenging the validity of the lease is
pending before the Sub-Court, Pathanamthitta, Sultan Bathery, Thodupuzha and High Court of Kerala.
c. An area of 178 hectares (approximately) [31 March 2024: 178 hectares (approximate)] deemed to have been vested
with the Government of Kerala pursuant to Kerala Private Forests (Vesting and Assignment) Act, 1971, as the Company''s
claim for the exclusion of the area from the purview of the Act is pending decision of the Forest Tribunal, Palghat and
restoration by the Forest Department.
d. The Vythiri Taluk Land Board''s order directing the Company to surrender 707 hectares (approximately) [31 March 2024:
707 hectares (approximate)] as excess land under the Kerala Land Reforms Act, 1963 has been set aside by the High
Court of Kerala on a revision petition filed by the Company and the matter has been remanded to the Vythiri Taluk Land
Board for fresh consideration and disposal.
e. An area of 415 hectares (approximately) [31 March 2024: 415 hectares (approximate)] held to be surplus under the
Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 as the Special Land Tribunal, Madras has remanded
the matter for fresh consideration by the Authorised Officer, Coimbatore.
f. The Government of Kerala vide G.O dated 27 June 2018 waived the levy of Seigniorage on rubber trees cut and removed
from the rubber plantations. A writ petition has been filed before the Hon''ble High Court of Kerala challenging the said
Government Order and the Hon''ble Court by interim order dated 18 February 2019 has permitted felling of trees on
condition that a bond, undertaking to pay Seigniorage is furnished to the Government of Kerala, if ultimately the writ
petition is allowed. The matter is pending consideration.
g. An extent of approximately 142 Hectares of rubber planted area in Kumbazha Estate has been encroached by the
members of Sadhu Jana Vimochana Samyuktha Vedi in 2007 and the Company filed a writ petition seeking eviction
of the encroachers and Police protection to its property. By judgment dated 24 August 2007, the Hon''ble High Court
directed the Government to evict the encroachers. However, the said direction was not complied with and a contempt
case in this connection is still pending consideration before the Hon''ble High Court.
h. The Special Officer appointed by the Government had issued a notice under the Kerala Land Conservancy Act, for
inspecting the properties of the company in Wayanad District. The company challenged the notice before the Hon''ble
High Court of Kerala and by judgment dated 11 April 2018 the said notice was set aside by the Hon''ble Court. The
Government filed a review petition in the matter and by order dated 06 August 2018 the Hon''ble Court directed the
Company to file its objections to the inspection notice. Accordingly the Company has filed its detailed objection with
relevant documents with the Special Officer, who has intimated that since Government is filing a civil suit no further
action is being initiated against the Company under Land Conservancy Act.
i. An area of 2.36 Hectares in respect of which a civil suit filed by Government of Kerala seeking declaration of title
and recovery of possession of property in Mundakkal in Kollam District is currently pending consideration before the
Subordinate Judges Court Kollam.
In the opinion of the management the outcome of above litigations will be in favour of the Company and there is no
financial impact.
Segment information
The company''s core business is production of natural rubber and tea. The operations are conducted through plantation
estates and factories based in Kerala and Tamil Nadu. The company has considered business segments as the primary
segment. The business segments are tea, rubber and others which have been identified taking into account the organisational
structure as well as differing risks and returns of these segments. The results for rubber segment includes income from sale
of rubber trees.
Other Segment comprise of Fruits, Spices and others and Wayanad Medical Fund.
Segment information for the reporting period is as follows:
46 Other regulatory disclosures
a) As per the information available with the Company, the Company has no transactions with the companies struck off
under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
b) There has been no charges or satisfaction yet to be registered with ROC beyond the statutory period.
c) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other
sources or kind of funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding
(whether recorded in writing or otherwise) that the intermediary shall :
i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the funding party (ultimate beneficiaries).
ii) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
d) The Company has not received any fund from any persons or entities, including foreign entities (funding party) with the
understanding (whether recorded in writing or otherwise) that the company shall :
i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the funding party (ultimate beneficiaries) or
ii) provided any guarantee, security or the like on behalf of the ultimate beneficiaries.
e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year ended 31
March 2025.
f) The Company has complied with the number of layers prescribed under the Section 2(87) of the Companies Act, 2013
read with Companies (Restriction on number of layers) Rules, 2017.
g) No loans or advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined
under Companies Act, 2013) either severally or jointly with any other person, that are repayable on demand or without
specifying any terms or period of repayment, except as disclosed below:
j) The Company does not have any surrendered or undisclosed income during the year in the tax assessments under the
Income Tax Act, 1961.
k) There are no approved scheme of arrangements as on the balance sheet date.
47 The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of
the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies
which uses accounting software for maintaining its books of account, shall use only such accounting software which has a
feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account
along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
The Company uses a legacy accounting software to process the payrolls of estate workers and also to maintain the fixed
asset records. Since this is an age-old software and is at the risk of obsolescence, the Company is currently in the process of
migrating the books of accounts related to estate workers and fixed assets completely to MS Dynamics 365 and hence audit
trail feature was not there in such accounting software.
The Company uses SaaS based accounting software for maintaining its accounting records. The âIndependent Service
Auditor''s Assurance Report on the Description of Controls, their Design and Operating Effectiveness'' (âType 2 report'' issued
in accordance with ISAE 3402, Assurance Reports on Controls at a Service Organisation) does not include details on the
existence on audit trail feature and for record retention at the database level . However, the audit trail (edit log) feature at the
application level was operating for all relevant transactions recorded in such accounting software.
The Company uses another SaaS based accounting software for maintaining employee records and processing the paysheets
of executives and staff. The said accounting software is operated by a third-party software service provider. The âIndependent
Service Auditor''s Report on a Description of the Service Organization''s System and the Suitability of the Design and Operating
Effectiveness of Controls'' (based on the criteria for a description of a service organization''s system as set forth in DC Section
200, 2018 Description Criteria for a Description of a Service Organization''s System in a SOC 2 Report, in AICPA Description
criteria), does not provide information on retention of audit trail (edit logs) for any direct changes made at the database level.
However, the audit trail (edit log) feature at the application level was operating for all relevant transactions recorded in the
software.
48 Prior year comparatives
Prior year comparatives have been regrouped / reclassified where necessary to conform with the current period / year
classification. The impact of such restatements / regroupings is not material to Standalone financial statements.
This is the notes forming part of the Standalone financial statements referred to in our report of even date.
For and on behalf of the Board of Directors of Harrisons Malayalam Limited
For Walker Chandiok & Co LLP Santosh Kumar Cherian M. George
Chartered Accountants Whole Time Director Whole Time Director
Firmâs Registration No.: 001076N/N500013 DIN: 08167332 DIN: 07916123
Rrajesh Raghvan Sajish George Binu Thomas
Partner Chief Financial Officer Company Secretary
Membership No.: 400510 M. No. 11208
Kochi Kochi
23 May 2025 23 May 2025
Mar 31, 2024
(a) Title deeds of the immovable properties set out in the above table are in the name of Malayalam Plantations Limited (MPL) / Harrisons and Crossfield Limited (HCL). The immovable properties of MPL got transferred to and vested in Malayalam Plantations (India) Limited (MPIL) vide a Scheme of Arrangement and Amalgamation in 1978. Further, the immovable properties of HCL got transferred and vested in MPIL vide a Scheme of Arrangement and Amalgamation in 1984. The name of MPIL, Company incorporated in 1978, got changed to Harrisons Malayalam Limited in 1984.
3 Property, plant and equipment pledged as security
Details of properties pledged are as per note 39.
4 Capital work in progress (CWIP)
Capital work in progress mainly represents the immature bearer plants awaiting capitalisation.The capitalised portion of the same is disclosed seperately in the above table.
During the year ended 31 March 2024, the Company has created a provision against subsidy receivable as on 31 March 2024 from Tea Board lndia amounting to '' 757.93, claimed under ââOrthodox Production Subsidy Scheme'''', as there is uncertainty in receipt of the above claim. The same has been disclosed as an exceptional item in the statement of profit and loss, during the year. The company has filed a writ petition with High Court of Kerala to direct Tea Board India to release the subsidy amounts and is hopeful of getting a favourable verdict.
ii) Terms/right attached to Equity Shares
The Company has issued only one class of equity shares having a face value of '' 10 per share. Each holder of equity shares is entitled to one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, in proportion to their shareholding.
Description of nature and purpose of each reservea. General reserve
General reserve was created from time to time by way of transfer of profits from retained earnings for appropriation purposes.
b. Securities premium account
The amount received in excess of face value of the Equity shares was recognised in securities premium. The reserve is utilised in accordance with the provisions of the Act.
c. Reserve arising from amalgamation
Pertains to reserve created on account of amalgation effected between erstwhile companies during 1978-79''4.43 and 2009-10''286.90.
d. Retained earnings
Retained earnings are the profits / (loss) that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
The management assessed that the fair value of cash and cash equivalents, trade receivables, loans, other financial assets, trade payables, other financial liabilities and working capital loans approximate the carrying amount largely due to short-term maturity of this instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
(ii) Fair value of financial assets and liabilities measured at amortised cost
The management assessed that for amortised cost instruments, fair value approximate largely to the carrying amount.
(iii) Fair value hierarchy
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:
Level 1: Quoted prices (unadjusted) in active markets for financial instruments.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
(iv) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the fair value of foreign exchange forward contracts is determined using market observable inputs, including prevalent forward rates for the maturities of the respective contracts and interest rate curves as indicated by banks and third parties.
|
34 |
Contingent liabilities and commitments |
||
|
As at |
As at |
||
|
March 31, 2024 |
March 31, 2023 |
||
|
a) |
Contingent liabilities |
||
|
1 |
Claims against the Company not acknowledged as debt |
||
|
i) |
Employee related |
487.75 |
502.71 |
|
ii) |
Disputed income tax matters |
4,027.16 |
3,807.60 |
|
iii) |
Sales tax matters |
2,976.00 |
2,976.00 |
|
2 |
Others |
||
|
i) |
Outstanding bills discounted with bank |
622.23 |
47.67 |
|
8,113.14 |
7,333.98 |
(ii) Certain expenditure have been disallowed and Income has been added by the Income tax authorities during assessment proceedings for earlier years and tax demands were raised against the company. The Company is contesting/filed appeal against these demands and the same are pending before various appellate authorities.
(iii) The sales tax department has denied certain claims made by the company in earlier years and raised demand against the company. The Company''s appeal against the said demands are pending before appellate authorities. In the opinion of management the outcome of the above litigations will be favourable to the group, hence no provision is considered necessary in the financial statements.
Note: The timing of outflows of these amounts, if they arise is uncertain.
|
b) |
Commitments |
||
|
i) |
Estimated amount of contracts remaining to be executed on capital Account and not provided for, net of advance payments of '' Nil (31 March 2023: '' 67.74). |
- |
38.69 |
|
- |
38.69 |
Terms of related party transactions
The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free. The settlement for these balances occurs through payment. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2023: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
(i) The Company has not recognised any deferred tax asset in respect of unabsorbed depreciation/ brought forward losses and other temporary differences in accordance with Ind AS 12 âIncome Taxesâ in the absence of reasonable certainty that probable taxable profit will be available against which the deductible temporary difference can be utilised.
(ii) The Company elected to exercise the option permitted under section 115BAA of the Income Tax Act, 1961, as introduced by the Taxation Laws (Amendment) ordinance 2019. hence the Company has not accounted for MAT liability.
Unused tax losses for which no deferred tax asset has been recognised:
The Company has unabsorbed business loss of '' 1,638.47 under the provisions of Income-tax Act, 1961 and '' 12,147.52 under the provisions of Kerala Agricultural Income Tax Act, 1991 which expires on the 8th year from the end of the relevant assessment year.
The Company has unabsorbed depreciation under the provisions of Income-tax Act, 1961 amounting to '' 2,697.33, which has no limit for expiry.
39 Details of security, repayment terms, applicable interest rates
Term loan from banks - Non Current
a. Loan availed of '' 1,223.48 during 2017-18 and '' 1776.52 during 2018 - 19 is repayable in 24 equal quarterly instalments commencing from June 2019, is secured by equitable mortgage created on immovable properties of the Company situated in Kollam, Fort Kochi and Coimbatore.The loan carries an interest rate of MCLR plus applicable spread payable on a monthly basis from disbursement of the loan.Year end balance of the loan is '' 673.23 net of processing fees (As at 31 March 2023 : '' 1218.64)
b. Loan availed of '' 3,000.00 during 2018 - 19 is repayable in 20 quarterly instalments repayable as 8 quarterly instalments of '' 25.00 commencing from September 2019 upto December 2021, 8 quarterly instalments of '' 225.00 from March 2023 upto December 2023 and 4 quarterly final installments of '' 250.00 from March 2024 upto December 2024, is secured by a charge created on immovable property of the Company situated at Kumbazha rubber estate, Kerala. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 715.20 net of processing fee (As at 31 March 2023 : '' 1,663.80 )
c. Loan availed of '' 3000 during 2021-22 is repayable in 20 quarterly instalments reapayable as 8 quarterly instalments of '' 75.00 commencing from June 2023 up to March 2025, 12 quarterly instalments of '' 200 from June 2025 up to March 2028, is secured by a charge created on immovable property of the company situated at Kumbazha rubber estate, Kerala. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 2,700.00 net of processing fee (As at 31 March 2023 : '' 2,962.50 )
d. Agri Infra Loan availed of '' 175.50 during 2021-22 is repayable in 57 monthly instalments reapayable as 56 monthly instalments of '' 3.09 commencing from April 2022 up to November 2026 and one monthly instalment of '' 2.46 in December 2026, is secured by first and exclusive charge on assets created out of bank finance. The loan carries an interest of MCLR plus applicable spread with an interest subvention payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 101.34 (As at 31 March 2023 : '' 138.42 )
e. The Company has availed the moratorium on term loan facilities offered by banks as part of COVID-19 regulatory package announced by RBI vide Circular DOR.No.BPBC.47/21.04.048/2019-20 dated March 27, 2020 and Circular DOR.No.BPBC.63/21.04.048/2019-20 dated April 17, 2020. The interest accrued during the moratorium period was converted in to a deferred interest term loan and is repayable over the balance tenure of the term loans. The amount outstanding as on 31st March 2024 is '' 42.20 (As on 31 March 2023: '' 94.24 ) .
f. Loan availed of '' 249.97 during 2022-23 and '' 26.01 during 2023-24 is repayable in 60 equal monthly instalments commencing from the date of availment, is secured by a charge creatd on assets created out of bank finance. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 211.74 net of processing fees (As at 31 March 2023 : '' 234.28).
g. Loan availed of '' 178.21 during 2022-23 and '' 119.03 during 2023-24 is repayable in 60 equal monthly instalments commencing from the date of availment. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 243.40 net of processing fees (As at 31 March 2023 : '' 169.83).
h. Loan availed of '' 23.60 during 2022-23 is repayable in 60 equal monthly instalments commencing from the date of availment, is secured by a charge creatd on assets created out of bank finance. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 18.99 net of processing fees (As at 31 March 2023 : '' 22.96).
i. Loan aviled of '' 27.83 during 2023-2024 is repayable in 60 monthly instalments commencing from the date of availment, is secured by a charge creatd on assets created out of bank finance. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 25.27 net of processing fees (As at 31 March 2023 : '' NIL).
j. Agri Infra Loan availed of '' 148.00 during 2023-24 is repayable in 60 monthly instalments reapayable as 59 monthly instalments of '' 2.47 commencing from October 2023 up to August 2028 and one monthly instalment of ? 2.27 in September 2028, is secured by first and exclusive charge on assets created out of bank finance. The loan carries an interest of MCLR plus applicable spread with an interest subvention payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 91.53 (As at 31 March 2023 : '' Nil)
k. Loan availed of '' 103.00 during 2023-24 is repayable in 57 monthly instalments of '' 1.80 commencing from the date of availment. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 87.84 (As at 31 March 2023 : '' Nil).
l. Loan availed of '' 750.00 during 2023-24 is repayable in 51 equal monthly instalments of '' 15.00 commencing after 9 months from the date of availment. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 720.59 (As at 31 March 2023 : '' Nil).
m. Interest rate on term loan range between 11.60% to 8.25% (less 3% interest subvention) (As at 31 March 2023: 11.60% to 8.25% (less 3% interest subvention)).
Term loan from others are secured by hypothecation of assets acquired out of these loans which are repayable in equated monthly instalments (ranging between 3 to 5 years) along with the applicable interest rates (ranging between 8.5% to 13%).
The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on it''s financial performance. The Company''s exposure to credit risk is influenced mainly by the individual characteristic of each customer.
The risk management activity focuses on actively securing the Company''s short to medium-term cash flows by minimising the exposure to volatile financial markets.
The Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Group is exposed are described below.
Trade receivables are typically unsecured and are derived from revenue earned from customers located in India and outside India. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, âFinancial Instruments'', the Company uses expected credit loss model to assess the impairment loss or gain. The provision for expected credit loss takes into account available
Cash and cash equivalents and bank balances other than cash and cash equivalents
The credit risk for cash and cash equivalents and bank balances is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.
Financial assets that are neither past due nor impaired
Loans and advances to employees, security deposits and other financial assets are neither past due nor impaired.
Financial assets that are past due but not impaired
There are no other classes of financial assets that is past due but not impaired.
Liquidity risk is that the Company might be unable to meet its obligations. The Company manages its liquidity needs by monitoring scheduled debt servicing payments for long-term financial liabilities as well as forecast cash inflows and outflows on a day-to-day business. The data used for analyzing these cash flows is consistent with that used in the contractual maturity analysis below. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on a monthly, quarterly, and yearly basis depending on the business needs. Net cash requirements are compared to available borrowing facilities in order to determine headroom or any shortfalls. This analysis shows that available borrowing facilities are expected to be sufficient over the lookout period.
The Company is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and certain other price risk, which result from both its operating and investing activities.
(i) Foreign currency sensitivity
The Company operates internationally and has transactions in USD, Euro and GBP currency and consequently the Company is exposed to foreign exchange risk through its sales to overseas customers. The exchange rate between the rupee and foreign currencies may fluctuate substantially in the future. Consequently, the results of the Company''s operations are adversely affected as the rupee appreciates/depreciates against these currencies.
The following table details the Company''s sensitivity to a 1% increase and decrease in the '' against the relevant foreign currencies. 1% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 1% change in foreign currency rates, with all other variables held constant. A positive number below indicates
an increase in profit or equity where '' strengthens 1% against the relevant currency. For a 1% weakening of '' against the relevant currency, there would be a comparable impact on profit or equity, and the balances below would be negative.
The Company''s fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, âFinancial Instruments'' - Disclosures. As neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
42 Employee benefit obligations
The Company has provided for the gratuity liability and leave encashment liability (defined benefit plan), as per actuarial valuation carried out by an independent actuary on the Balance Sheet date.
The company makes contribution to statutory provident fund as per Employees Provident Fund and Miscellaneous Provision Act, 1952 for its employees. Also the company makes contribution to superannuation fund for its employees. This is a defined contribution plan as per Ind AS 19, Employee benefits. Total contribution made during the year '' 1,680.90 (31 March 2023: '' 1,553.22).
The company has provided for gratuity and leave encashment liability, for its employees as per actuarial valuation carried out by an independent actuary on the Balance Sheet date. The valuation has been carried out using the Project Unit Credit Method as per Ind AS 19 to determine the present value of Defined Benefit Obligations and the related current service cost. This is a defined benefit plan as per Ind AS 19.
The gratuity plan is governed by the provisions of the Payment of Gratuity Act, 1972 (as amended from time to time). Employees are entitled to all the benefits enlisted under this Act.
Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary overtime. Thus, the company is exposed to various risks in providing the above benefit which are as follows:
i) Interest rate risk
The plan exposes the company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability as shown in financial statements.
ii) Liquidity risk
This is the risk when the Company is not able to meet the short-term gratuity payouts. This may arise due to non availability of enough cash/cash equivalents to meet the liabilities or holding of illiquid assets not being sold in time.
iii) Salary escalation risk
The present value of the defined benefit plan is calculated with the assumption of salary increase rate of employees in future. Deviation in the rate of interest in future for employees from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.
iv) Demographic risk
The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
The estimates of rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary. The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.
is sensitive to these assumptions. The following table summarises the effects of changes in these actuarial assumptions on the defined benefit liability at 31 March 2024.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The method and type of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
43 No adjustment is required to be made in the accounts in respect of :43 (A)
a. An area of 807 hectares (approximately) [31 March 2023: 807 hectares (approximate)], which is on a leasehold tenure falls under the provisions of the Gudalur Jenmam Estate (Abolition and Conversion into Ryotwari) Act, 1969. Company''s appeal challenging the Order of the Settlement Officer rejecting its application for âPattaâ was allowed by the District Court, Ooty and the matter is now remanded for denovo enquiry. The Settlement Officer by its order dated 22.10.2019 once again rejected the application for âPattaâ. An appeal has been filed before the District Court, Ooty challenging the said order and the same is pending. Meanwhile, Madras High Court held that out of this area, the notification of 335 Hectares (31 March 2023: 335 Hectares) as forest by the Settlement Officer is valid and has directed that in the event of âpattaâ being granted in respect of the notified areas the same will stand modified to that extent.
b. An area of 2588 hectares (approximately) [31 March 2023: 2588 hectares (approximate)] liable to be surrendered to the Government of Kerala under the Kerala Private Forests (Vesting and Assignment) Act, 1971, as the appeals relating to this area are pending in the High Court of Kerala.
c. An area of 535 hectares (approximate) [31 March 2023: 535 hectares (approximate)] in respect of which cases filed by âJanmiesâ (original owners) of Lahai Estate challenging the validity of the lease is pending before the Sub-Court, Pathanamthitta and High Court of Kerala.
d. An area of 1982.45 hectares (31 March 2023: 1982.45 hectares) of Mooply Valley estates notified by the Government of Kerala for resumption alleging violation of lease conditions as proceedings has been stayed by the Sub Court, Irinjalakuda.
e. An area of 3123 hectares (31 March 2023: 3123 hectares) in respect of which a civil suit filed by Government of Kerala seeking declaration of title and recovery of possession of Kumbazha,Koney and Lahai rubber estates in Pathanamathitta district is currently pending consideration before the Subordiante Judges Court, Pathanamthitta.
f. An area of 2554 hectares (31 March 2023: 2554 hectares) in respect of which a civil suit filed by Government of Kerala seeking declaration of title and recovery of possession in respect of Isfield, Venture and Nagamallay rubber estates in Kollam district is currently pending consideration before Subordinate Judges Court, Punalur.
g. An area of 572 hectares (31 March 2023: 572 hectares) in respect of which a civil suit filed by Government of Kerala seeking declaration of title and recovery of possession of Mundakyam rubber estate in Kottayam district is currently pending consideration before Subordinate Judges Court, Pala.
h. An area of 992 Hectares in respect of which a civil suit filed by Government of Kerala seeking declaration of title and recovery of possession of Upper Surianalle Tea Estate in Idukki District is currently pending consideration before the Subordinate Judges Court Devikulam.
The above litigations are considered as Key audit matter.
a. An area of 178 hectares (approximately) [31 March 2023: 178 hectares (approximate)] deemed to have been vested with the Government of Kerala pursuant to Kerala Private Forests (Vesting and Assignment) Act, 1971, as the Company''s claim for the exclusion of the area from the purview of the Act is pending decision of the Forest Tribunal,Palghat and restoration by the Forest Department.
b. The Vythiri Taluk Land Board''s order directing the Company to surrender 707 hectares (approximately) [31 March 2023: 707 hectares (approximate)] as excess land under the Kerala Land Reforms Act, 1963 has been set aside by the High Court of Kerala on a revision petition filed by the Company and the matter has been remanded to the Vythri Taluk Land Board for fresh consideration and disposal.
c. An area of 415 hectares (approximately) [31 March 2023: 415 hectares (approximate)] held to be surplus under the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 as the Special Land Tribunal, Madras has remanded the matter for fresh consideration by the Authorised Officer, Coimbatore.
d. An area of 1074.18 hectares (approximate) [31 March 2023: 1074.18 hectares (approximate)] in respect of which cases filed by âJanmiesâ (original owners) of Koney, Kaliyar and Arrapetta Estates challenging the validity of the lease is pending before the Sub-Court, Pathanamthitta, Sulthan Bathery, Thodupuzha and High Court of Kerala.
e. The Government of Kerala vide G.O dated 27 June 2018 waived the levy of Seigniorage on rubber trees cut and removed from the rubber plantations. A writ petition has been filed before the Hon''ble High Court of Kerala challenging the said Government Order and the Hon''ble Court by interim order dated 18 February 2019 has permitted felling of trees on condition that a bond, undertaking to pay Seigniorage is furnished to the Government of Kerala, if ultimately the writ petition is allowed. The matter is pending consideration.
f. The Government by order dated 04 January 2008 directed the Company to remit an amount '' 96.84 lakhs alleging violation of lease condition in Mooply Valley Estates. The said order has been challenged before the Sub Court, Irinjalakuda and by order dated 08.04.2008 granted temporary prohibitory injunction restraining Government from taking any further action. On appeal filed by the Government, the Hon''ble High Court by judgment dated 04 August 2008 sustained the order of injunction and directed the Company to furnish security for '' 96.84 lakhs and accordingly the Company has furnished bank guarantee for the said amount and the suit is still pending.
g. An extent of approximately 142 Hectares of rubber planted area in Kumbazha Estate has been encroached by the members of Sadhu Jana Vimochana Samyuktha Vedi in 2007 and the Company filed a writ petition seeking eviction of the encroachers and Police protection to its property. By judgment dated 24 August 2007, the Hon''ble High Court directed the Government to evict the encroachers. However, the said direction was not complied with and a contempt case in this connection is still pending consideration before the Hon''ble High Court.
h. The Special Officer appointed by the Government had issued a notice under the Kerala Land Conservancy Act, for inspecting the properties of the company in Wayanad District. The company challenged the notice before the Hon''ble High Court of Kerala and by judgment dated 11 April 2018 the said notice was set aside by the Hon''ble Court. The Government filed a review petition in the matter and by order dated 06 August 2018 the Hon''ble Court directed the Company to file its objections to the inspection notice. Accordingly the Company has filed its detailed objection with relevant documents with the Special Officer,who has intimated that since Government is filing a civil suit no further action is being initiated against the Company under Land Conservancy Act.
i. An area of 2.36 Hectares in respect of which a civil suit filed by Government of Kerala seeking declaration of title and recovery of possession of property in Mundakkal in Kollam District is currently pending consideration before the Subordinate Judges Court Kollam.
In the opinion of the management the outcome of above litigations will be in favour of the Company and there is no financial impact.
a. The Company has adopted Ind AS 116 on âLeasesâ with effect from 01 April, 2019 by applying it to all applicable contracts of leases existing on 01 April, 2019 by using modified retrospective approach .
b. The Company has recognised and measured the Right-of-Use (ROU, refer Note 3) asset and the lease liability over the remaining lease period and payments discounted using the incremental borrowing rate as at the date of initial application. For financial year ended 31 March, 2024, the depreciation for the ROU asset is '' 11.01 (31 March 2023: '' 11.01) and finance costs for interest accrued on lease liability is '' 40.25 (31 March 2023: '' 39.86).Lease payments made with respect to the applicable lease contracts during the year amounts to '' 37.29 (31 March 2023 : '' 36.56).
c. Lease payments amounting to '' 33.21 not recognised as a liability being short term or low value in nature and '' 31.87 not recognised as a liability being the same pertains to perpetual lease agreement.
The company''s core business is production of natural rubber and tea. The operations are conducted through plantation estates and factories based in Kerala and Tamil Nadu. The company has considered business segments as the primary segment. The business segments are tea, rubber and others which have been identified taking into account the organisational structure as well as differing risks and returns of these segments. The results for rubber segment includes income from sale of rubber trees.
Other Segment comprise of Fruits, Spices and others and Wayanad Medical Fund.
Income/expenses of a financial nature, and the assets/liabilities they are attributable to, have not been allocated to any segment as they are managed on a Company basis. Current taxes, deferred taxes and items of income and expense have not been allocated to any segment since these items are also managed on a Company basis.
*The Company''s current liabilities have exceeded its current assets as at 31 March 2024. However, on the basis of ageing and expected dates of realisation of financial assets and payment of financial liabilities, sanctioned and unutilized credit facilities from bankers and the plans of the Board of Directors and management, the Company is capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date.
48 Other regulatory disclosures
a) As per the information available with the Company, the Company has no transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
b) There has been no charges or satisfaction yet to be registered with ROC beyond the statutory period.
c) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary shall :
i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries).
ii) provide any guarante, security or the like on behalf of the ultimate beneficiaries.
d) The Company has not received any fund from any persons or entities, including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the company shall :
i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or
ii) provided any guarantee, security or the like on behalf of the ultimate beneficiaries.
e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year ended 31 March 2024.
f) The borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which such loans were taken.
g) The Company has complied with the number of layers prescribed under the Section 2(87) of the Companies Act, 2013 read with Companies (Restriction on number of layers) Rules, 2017.
h) No loans or advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013) either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.
i) No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
j) The Company has not been declared as a wilful defaulter by any bank or financial Institution or other lender during the period.
k) The Company does not have any surrendered or undisclosed income during the year in the tax assessments under the Income Tax Act, 1961.
l) There are no approved scheme of arrangements as on the balance sheet date.
49 The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
The Company uses a legacy accounting software to process the payrolls of estate workers and also to maintain the fixed asset records. Since this is an age-old software and is at the risk of obsolescence, the Company is currently in the process of migrating the books of accounts related to estate workers and fixed assets completely to MS Dynamics 365 and hence audit trail feature was not there in such accounting software.
The Company uses SaaS based accounting software for maintaining its accounting records. The âIndependent Service Auditor''s Assurance Report on the Description of Controls, their Design and Operating Effectiveness'' (âType 2 report'' issued in accordance with ISAE 3402, Assurance Reports on Controls at a Service Organisation) does not include details on the existence on audit trail feature at the database level. However, the audit trail (edit log) feature at the application level was operating for all relevant transactions recorded in such accounting software.
The Company uses another SaaS based accounting software for maintaining employee records and processing the paysheets of executives and staff. The said accounting software is operated by a third-party software service provider. The âIndependent Service Auditor''s Report on a Description of the Service Organization''s System and the Suitability of the Design and Operating Effectiveness of Controls'' (based on the criteria for a description of a service organization''s system as set forth in DC Section 200, 2018 Description Criteria for a Description of a Service Organization''s System in a SOC 2 Report, in AICPA Description criteria), does not provide information on retention of audit trail (edit logs) for any direct changes made at the database level. However, the audit trail (edit log) feature at the application level was operating for all relevant transactions recorded in the software.
Prior year comparatives have been regrouped / reclassified where necessary to conform with the current period / year classification. The impact of such restatements / regroupings is not material to standalone financial statements.
Mar 31, 2023
1 Land and development includes certain leasehold lands the value of which is not separately ascertainable. Refer note 43.
2 The title deeds of all the immovable properties held by the Company disclosed in the financial statements are held in the name of the Company, except the following
(a) Title deeds of the immovable properties set out in the above table are in the name of Malayalam Plantations Limited (MPL) / Harrisons and Crossfield Limited (HCL). The immovable properties of MPL got transferred to and vested in Malayalam Plantations (India) Limited (MPIL) vide a Scheme of Arrangement and Amalgamation in 1978. Further, the immovable properties of HCL got transferred and vested in MPIL vide a Scheme of Arrangement and Amalgamation in 1984. The name of MPIL, Company incorporated in 1978, got changed to Harrisons Malayalam Limited in 1984.
3 Property, plant and equipment pledged as security
Details of properties pledged are as per note 38.
4 Capital work in progress (CWIP)
Capital work in progress mainly represents the immature bearer plants awaiting capitalisation.The capitalised portion of the same is disclosed seperately in the above table.
ii) Terms/right attached to Equity Shares
The Company has issued only one class of equity shares having a face value of '' 10 per share. Each holder of equity shares is entitled to one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, in proportion to their shareholding.
Description of nature and purpose of each reserve:a. General reserve
General reserve was created from time to time by way of transfer of profits from retained earnings for appropriation purposes.
b. Securities premium account
The amount received in excess of face value of the Equity shares was recognised in securities premium. The reserve is utilised in accordance with the provisions of the Act.
c. Reserve arising from amalgamation
Pertains to reserve created on account of amalgation effected between erstwhile companies during 1978-79''4.43 and 2009-10''286.90
d. Retained earnings
Retained earnings are the profits / (loss) that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
* Based on the sanction letter from banks, value of four months standing crops has been considered in the returns filed with banks. The value of 14 days'' crop for tea and 4 days'' crop for rubber has been considered for the purpose of valuation in the finacial statements, on a prudent basis.
** The difference is on account of adjustments to valuation of inventory on change in net realisable value.
~ The difference is on account of reversal of revenue from contracts where performance obligation was met after the cut off date.
The above adjustments in respect of inventory and receivables are made after the date of initial filing of quarterly returns, but before the finalisation of books of accounts for the respective quarters. Revised statements have been filed with the bank, which are in agreement with the books of accounts.
The above disclosure has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.
*Unpaid gratuity represents '' 1,452.37 (31 March 2022: '' 1,437.36) gratuity payable to certain employees who have not handed over the possession of the allotted official accommodation/quarters, even after 30 days of their superannuation / resignation from the Company. Based on the judicial pronouncements and legal opinion obtained, the Company is bound to discharge this liability only upon vacation of accommodation/ quarters by the employees. The management has initiated necessary measures to obtain possession of the property to discharge the liability. In the opinion of management, there is no impact in the financial statements as necessary provision is carried in the books of accounts to meet this liability.
The management assessed that the fair value of cash and cash equivalents, trade receivables, loans, other financial assets, trade payables, other financial liabilities and working capital loans approximate the carrying amount largely due to short-term maturity of this instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
(ii) Fair value of financial assets and liabilities measured at amortised cost
The management assessed that for amortised cost instruments, fair value approximate largely to the carrying amount.
(iii) Fair value hierarchy
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:
Level 1: Quoted prices (unadjusted) in active markets for financial instruments.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
(iv) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the fair value of foreign exchange forward contracts is determined using market observable inputs, including prevalent forward rates for the maturities of the respective contracts and interest rate curves as indicated by banks and third parties.
(a) (ii) Certain expenditure have been disallowed and Income has been added by the Income tax authorities during assessment proceedings for earlier years and tax demands were raised against the company. The Company is contesting/filed appeal against these demands and the same are pending before various appellate authorities.
(iii) The sales tax department has denied certain claims made by the company in earlier years and raised demand against the company. The Company''s appeal against the said demands are pending before appellate authorities. In the opinion of management the outcome of the above litigations will be favourable to the group, hence no provision is considered necessary in the financial statements.
Terms of related party transactions
The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free. The settlement for these balances occurs through
payment. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2023, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2022: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
(i) The Company has not recognised any deferred tax asset in respect of unabsorbed depreciation/ brought forward losses and other temporary differences in accordance with Ind AS 12 âIncome Taxesâ in the absence of reasonable certainty that probable taxable profit will be available against which the deductible temporary difference can be utilised.
(ii) The Company elected to exercise the option permitted under section 115BAA of the Income Tax Act, 1961, as introduced by the Taxation Laws (Amendment) ordinance 2019. hence the Company has not accounted for MAT liability.
Unused tax losses for which no deferred tax asset has been recognised:
The Company has unabsorbed business loss of '' 1,674.50 under the provisions of Income-tax Act, 1961 and ''13,637.10 under the provisions of Kerala Agricultural Income Tax Act, 1991 which expires on the 8th year from the end of the relevant assessment year.
The Company has unabsorbed depreciation loss under the provisions of Income-tax Act, 1961 amounting to '' 2,707.82, which has no limit for expiry.
38 Details of security, repayment terms, applicable interest rates
Term loan from banks - Non Current
a Loan availed of '' 1,223.48 during 2017-18 and '' 1776.52 during 2018 - 19 is repayable in 24 equal quarterly instalments commencing from June 2019, is secured by equitable mortgage created on immovable properties of the Company situated in Kollam, Fort Kochi and Coimbatore.The loan carries an interest rate of MCLR plus applicable spread payable on a monthly basis from disbursement of the loan.Year end balance of the loan is '' 1218.64 net of processing fees (As at 31 March 2022 : '' 1566.58)
b. Loan availed of '' 3,000.00 during 2018 - 19 is repayable in 20 quarterly instalments repayable as 8 quarterly instalments of '' 25.00 commencing from September 2019 upto December 2021, 8 quarterly instalments of '' 225.00 from March 2022 upto December 2023 and 4 quarterly final installments of '' 250.00 from March 2024 upto December 2024, is secured by a charge created on immovable property of the Company situated at Kumbazha rubber estate, Kerala. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 1,663.80 net of processing fee (As at 31 March 2022 : '' 2,557.85 )
c Loan availed of '' 3000 during 2021-22 is repayable in 20 quarterly instalments reapayable as 8 quarterly instalments of '' 75.00 commencing from June 2023 up to March 2025, 12 quarterly instalments of '' 200 from June 2025 up to March 2028, is secured by a charge created on immovable property of the company situated at Kumbazha rubber estate, Kerala. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 2,962.50 net of processing fee (As at 31 March 2022 : '' 1,455.00)
d Agri Infra Loan availed of '' 175.50 during 2021-22 is repayable in 57 monthly instalments reapayable as 56 monthly instalments of '' 3.09 commencing from April 2022 up to November 2026 and one monthly instalment of '' 2.46 in December 2026, is secured by first and exclusive charge on assets created out of bank finance. The loan carries an interest of MCLR plus applicable spread with an interest subvention payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 138.42 (As at 31 March 2022 : '' 175.50)
e The Company has availed the moratorium on term loan facilities offered by banks as part of COVID-19 regulatory package announced by RBI vide Circular DOR.No.BPBC.47/21.04.048/2019-20 dated March 27, 2020 and Circular DOR.No.BPBC.63/21.04.048/2019-20 dated April 17, 2020. The interest accrued during the moratorium period was converted in to a deferred interest term loan and is repayable over the balance tenure of the term loans. The amount outstanding as on 31st March 2023 is '' 94.24(As on 31 March 2022: '' 144.88).
f Loan availed of '' 249.97 during 2022-23 is repayable in 60 equal monthly instalments commencing from the date of availment, is secured by a charge creatd on assets created out of bank finance. The loan carries an interest of MCLR
plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 234.28 net of processing fees (As at 31 March 2022 : '' Nil).
g Loan availed of '' 178.21 during 2022-23 is repayable in 60 equal monthly instalments commencing from the date of availment. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 169.83 net of processing fees (As at 31 March 2022 : '' Nil).
h Loan availed of '' 23.60 during 2022-23 is repayable in 60 equal monthly instalments commencing from the date of availment, is secured by a charge creatd on assets created out of bank finance. The loan carries an interest of MCLR plus applicable spread payable on a monthly from the disbursement of the loan. Year end balance of the loan is '' 22.96 net of processing fees (As at 31 March 2022 : '' Nil).
i. Interest rate on term loan range between 11.60% to 8.25% (less 3% interest subvention) (As at 31 March 2022: 11.00% to 8.25% (less 3% interest subvention).
Term loan from others are secured by hypothecation of assets acquired out of these loans which are repayable in equated monthly instalments (ranging between 3 to 5 years) along with the applicable interest rates (ranging between 8.5% to 13%).
The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on it''s financial performance. The Company''s exposure to credit risk is influenced mainly by the individual characteristic of each customer.
The risk management activity focuses on actively securing the Company''s short to medium-term cash flows by minimising the exposure to volatile financial markets.
Trade receivables are typically unsecured and are derived from revenue earned from customers located in India and outside India. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, âFinancial Instruments'', the Company uses expected credit loss model to assess the impairment loss or gain. The provision for expected credit loss takes into account available external and internal credit risk factors including the credit ratings of the various customers and Company''s historical experience for customers.
Cash and cash equivalents and bank balances other than cash and cash equivalents
The credit risk for cash and cash equivalents and bank balances is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.
Financial assets that are neither past due nor impaired
Loans and advances to employees, security deposits and other financial assets are neither past due nor impaired.
Financial assets that are past due but not impaired
There are no other classes of financial assets that is past due but not impaired.
Liquidity risk is that the Company might be unable to meet its obligations. The Company manages its liquidity needs by monitoring scheduled debt servicing payments for long-term financial liabilities as well as forecast cash inflows and outflows on a day-to-day business. The data used for analyzing these cash flows is consistent with that used in the contractual maturity analysis below. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on a monthly, quarterly, and yearly basis depending on the business needs. Net cash requirements are compared to available borrowing facilities in order to determine headroom or any shortfalls. This analysis shows that available borrowing facilities are expected to be sufficient over the lookout period.
The Company is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and certain other price risk, which result from both its operating and investing activities.
(i) Foreign currency sensitivity
The Company operates internationally and has transactions in USD, Euro and GBP currency and consequently the Company is exposed to foreign exchange risk through its sales to overseas customers. The exchange rate between the rupee and foreign currencies may fluctuate substantially in the future. Consequently, the results of the Company''s operations are adversely affected as the rupee appreciates/depreciates against these currencies.
Foreign currency denominated financial assets which expose the Company to currency risk are fully hedged by derivative cover.
The following table details the Company''s sensitivity to a 1% increase and decrease in the '' against the relevant foreign currencies. 1% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 1% change in foreign currency rates, with all other variables held constant. A positive number below indicates an increase in profit or equity where '' strengthens 1% against the relevant currency. For a 1% weakening of '' against the relevant currency, there would be a comparable impact on profit or equity, and the balances below would be negative.
Derivative financial instruments
The forward contracts in the financials year 2022-23 or 2021-2022 are nil.
(ii) Interest rate risk
The Company''s fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, âFinancial Instruments'' - Disclosures. As neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
41 Employee benefit obligations
The Company has provided for the gratuity liability and leave encashment liability (defined benefit plan), as per actuarial valuation carried out by an independent actuary on the Balance Sheet date.
The company makes contribution to statutory provident fund as per Employees Provident Fund and Miscellaneous Provision Act, 1952 for its employees. Also the company makes contribution to superannuation fund for its employees. This is a defined contribution plan as per Ind AS 19, Employee benefits. Total contribution made during the year '' 1,553.22 (31 March 2022: '' 1,483.03).
The company has provided for gratuity and leave encashment liability, for its employees as per actuarial valuation carried out by an independent actuary on the Balance Sheet date. The valuation has been carried out using the Project Unit Credit Method as per Ind AS 19 to determine the present value of Defined Benefit Obligations and the related current service cost. This is a defined benefit plan as per Ind AS 19.
The gratuity plan is governed by the provisions of the Payment of Gratuity Act, 1972 (as amended from time to time). Employees are entitled to all the benefits enlisted under this Act.
Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary overtime. Thus, the company is exposed to various risks in providing the above benefit which are as follows:
i) Interest rate risk
The plan exposes the company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability as shown in financial statements.
ii) Liquidity risk
This is the risk when the Company is not able to meet the short-term gratuity payouts. This may arise due to non availability of enough cash/cash equivalents to meet the liabilities or holding of illiquid assets not being sold in time.
iii) Salary escalation risk
The present value of the defined benefit plan is calculated with the assumption of salary increase rate of employees in future. Deviation in the rate of interest in future for employees from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.
iv) Demographic risk
The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
v) Regulatory risk
Gratuity benefits are paid in accordance with the requirements of the Payment of Gratuity Act,1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts.
The estimates of rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary. The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.
The significant actuarial assumptions for the determination of the defined benefit obligation are the attrition rate, discount rate and the long-term rate of compensation increase. The calculation of the net defined benefit liability is sensitive to these assumptions. The following table summarises the effects of changes in these actuarial assumptions on the defined benefit liability at 31 March 2023.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The method and type of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
42 No adjustment is required to be made in the accounts in respect of :42 (A)
a. An area of 807 hectares (approximately) [31 March 2022: 807 hectares (approximate)], which is on a leasehold tenure falls under the provisions of the Gudalur Jenmam Estate (Abolition and Conversion into Ryotwari) Act, 1969. Company''s appeal challenging the Order of the Settlement Officer rejecting its application for âPattaâ was allowed by the District Court, Ooty and the matter is now remanded for denovo enquiry. The Settlement Officer by its order dated 22.10.2019 once again rejected the application for âPattaâ. An appeal has been filed before the District Court, Ooty challenging the said order and the same is pending. Meanwhile, Madras High Court held that out of this area, the notification of 335 Hectares (31 March 2022: 335 Hectares) as forest by the Settlement Officer is valid and has directed that in the event of âpattaâ being granted in respect of the notified areas the same will stand modified to that extent.
b. An area of 2588 hectares (approximately) [31 March 2022: 2588 hectares (approximate)] liable to be surrendered to the Government of Kerala under the Kerala Private Forests (Vesting and Assignment) Act, 1971, as the appeals relating to this area are pending in the High Court of Kerala.
c. An area of 535 hectares (approximate) [31 March 2022: 535 hectares (approximate)] in respect of which cases filed by âJanmiesâ (original owners) of Lahai Estate challenging the validity of the lease is pending before the Sub-Court, Pathanamthitta and High Court of Kerala.
d. An area of 1982.45 hectares (31 March 2022: 1982.45 hectares) of Mooply Valley estates notified by the Government of Kerala for resumption alleging violation of lease conditions as proceedings has been stayed by the Sub Court, Irinjalakuda.
e. An area of 3123 hectares (31 March 2022: 3123 hectares) in respect of which a civil suit filed by Government of Kerala seeking declaration of title and recovery of possession of Kumbazha,Koney and Lahai rubber estates in Pathanamathitta district is currently pending consideration before the Subordiante Judges Court, Pathanamthitta.
f. An area of 2554 hectares (31 March 2022: 2554 hectares) in respect of which a civil suit filed by Government of Kerala seeking declaration of title and recovery of possession in respect of Isfield, Venture and Nagamallay rubber estates in Kollam district is currently pending consideration before Subordinate Judges Court, Punalur.
g. An area of 572 hectares (31 March 2022: 572 hectares) in respect of which a civil suit filed by Government of Kerala seeking declaration of title and recovery of possession of Mundakyam rubber estate in Kottayam district is currently pending consideration before Subordinate Judges Court, Pala.
h. An area of 992 Hectares in respect of which a civil suit filed by Government of Kerala seeking declaration of title and recovery of possession of Upper Surianalle Tea Estate in Idukki District is currently pending consideration before the Subordinate Judges Court Devikulam.
The above litigations are considered as Key audit matter.
42 (B)
a. An area of 178 hectares (approximately) [31 March 2022: 178 hectares (approximate)] deemed to have been vested with the Government of Kerala pursuant to Kerala Private Forests (Vesting and Assignment) Act, 1971, as the Company''s claim for the exclusion of the area from the purview of the Act is pending decision of the Forest Tribunal,Palghat and restoration by the Forest Department.
b. The Vythiri Taluk Land Board''s order directing the Company to surrender 707 hectares (approximately) [31 March 2022: 707 hectares (approximate)] as excess land under the Kerala Land Reforms Act, 1963 has been set aside by the High Court of Kerala on a revision petition filed by the Company and the matter has been remanded to the Vythri Taluk Land Board for fresh consideration and disposal.
c. An area of 415 hectares (approximately) [31 March 2022: 415 hectares (approximate)] held to be surplus under the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 as the Special Land Tribunal, Madras has remanded the matter for fresh consideration by the Authorised Officer, Coimbatore.
d. An area of 1074.18 hectares (approximate) [31 March 2022: 1074.18 hectares (approximate)] in respect of which cases filed by âJanmiesâ (original owners) of Koney, Kaliyar and Arrapetta Estates challenging the validity of the lease is pending before the Sub-Court, Pathanamthitta, Sulthan Bathery, Thodupuzha and High Court of Kerala.
e. The Government of Kerala vide G.O dated 27 June 2018 waived the levy of Seigniorage on rubber trees cut and removed from the rubber plantations. A writ petition has been filed before the Hon''ble High Court of Kerala challenging the said Government Order and the Hon''ble Court by interim order dated 18 February 2019 has permitted felling of trees on condition that a bond, undertaking to pay Seigniorage is furnished to the Government of Kerala, if ultimately the writ petition is allowed. The matter is pending consideration.
f. The Government by order dated 04 January 2008 directed the Company to remit an amount '' 96.84 lakhs alleging violation of lease condition in Mooply Valley Estates. The said order has been challenged before the Sub Court, Irinjalakuda and by order dated 08.04.2008 granted temporary prohibitory injunction restraining Government from taking any further action. On appeal filed by the Government, the Hon''ble High Court by judgment dated 04 August 2008 sustained the order of injunction and directed the Company to furnish security for '' 96.84 lakhs and accordingly the Company has furnished bank guarantee for the said amount and the suit is still pending.
g. An extent of approximately 142 Hectares of rubber planted area in Kumbazha Estate has been encroached by the members of Sadhu Jana Vimochana Samyuktha Vedi in 2007 and the Company filed a writ petition seeking eviction of the encroachers and Police protection to its property. By judgment dated 24 August 2007, the Hon''ble High Court directed the Government to evict the encroachers. However, the said direction was not complied with and a contempt case in this connection is still pending consideration before the Hon''ble High Court.
h. The Special Officer appointed by the Government had issued a notice under the Kerala Land Conservancy Act, for inspecting the properties of the company in Wayanad District. The company challenged the notice before the Hon''ble High Court of Kerala and by judgment dated 11 April 2018 the said notice was set aside by the Hon''ble Court. The
Government filed a review petition in the matter and by order dated 06 August 2018 the Hon''ble Court directed the Company to file its objections to the inspection notice. Accordingly the Company has filed its detailed objection with relevant documents with the Special Officer,who has intimated that since Government is filing a civil suit no further action is being initiated against the Company under Land Conservancy Act.
i. An area of 2.36 Hectares in respect of which a civil suit filed by Government of Kerala seeking declaration of title and recovery of possession of property in Mundakkal in Kollam District is currently pending consideration before the Subordinate Judges Court Kollam.
In the opinion of the management the outcome of above litigations will be in favour of the Company and there is no financial impact.
a. The Company has adopted Ind AS 116 on âLeasesâ with effect from 01 April, 2019 by applying it to all applicable contracts of leases existing on 01 April, 2019 by using modified retrospective approach.
b. The Company has recognised and measured the Right-of-Use (ROU, refer Note 3) asset and the lease liability over the remaining lease period and payments discounted using the incremental borrowing rate as at the date of initial application. For financial year ended 31 March, 2023, the depreciation for the ROU asset is '' 11.01 (31 March 2022: '' 11.01) and finance costs for interest accrued on lease liability is '' 39.86 (31 March 2022: '' 39.42).Lease payments made with respect to the applicable lease contracts during the year amounts to '' 36.56 (31 March 2022 : '' 36.76).
c. Lease payments amounting to '' 44.25 not recognised as a liability being short term or low value in nature and '' 31.88 not recognised as a liability being the same pertains to perpetual lease agreement.
d. Maturity analysis of the discounted cash flow of the lease liabilities
Income/expenses of a financial nature, and the assets/liabilities they are attributable to, have not been allocated to any segment as they are managed on a Company basis. Current taxes, deferred taxes and items of income and expense have not been allocated to any segment since these items are also managed on a Company basis.
47 Other regulatory disclosures
a) As per the information available with the Company, the Company has no transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
b) There has been no charges or satisfaction yet to be registered with ROC beyond the statutory period.
c) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other
sources or kind of funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding
(whether recorded in writing or otherwise) that the intermediary shall :
i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries).
ii) provide any guarante, security or the like on behalf of the ultimate beneficiaries.
d) The Company has not received any fund from any persons or entities, including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the company shall :
i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or
ii) provided any guarantee, security or the like on behalf of the ultimate beneficiaries.
e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year ended 31
March 2023.
f) The borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which such loans were taken.
g) The Company has complied with the number of layers prescribed under the Section 2(87) of the Companies Act, 2013 read with Companies (Restriction on number of layers) Rules, 2017.
h) No loans or advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013) either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.
i) No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
j) The Company has not been declared as a wilful defaulter by any bank or financial Institution or other lender during the period.
k) The Company does not have any surrendered or undisclosed income during the year in the tax assessments under the Income Tax Act, 1961.
l) There are no approved scheme of arrangements as on the balance sheet date.
Prior year comparatives have been regrouped / reclassified where necessary to conform with the current period / year classification.The impact of such restatements/ regroupings are not material to Standalone financial statements.
Mar 31, 2018
1. Background
Harrisons Malayalam Limited (âthe Companyâ) is a Public Company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. It''s shares are listed in two recognised stock exchanges in India. The registered office of the Company is located at 24/1624, Bristow Road, Willingdon Island, Cochin. The Company is principally engaged in plantations having tea and rubber estates in Kerala and Tamil Nadu.
Notes
1 Land and development includes certain leasehold lands the value of which is not separately ascertainable.
Also refer Note 44 to the Standalone Financial Statements
2 Title deeds of the immovable properties set out in the above table are in the name of Malayalam Plantations Limited (MPL)/ Harrisons Cross field Ltd (HCL) except as set out below which are in the name of the Company. Interalia, the immovable properties of MPL got transferred to and vested in Malayalam Plantations (India) Limited (MPIL) vide a Scheme of Arrangement and Amalgamation in 1978. Further, interalia the immovable properties of Harrisons Cross field (India) Limited got transferred and vested in MPIL vide a Scheme of Arrangement and Amalgamation in 1984. The name of MPIL a Company incorporated in 1978 got changed to Harrisons Malayalam Limited in 1984.
3 Deemed carrying cost
For property, plant and equipment and intangible assets existing as on the date of transition to Ind AS, i.e., 1 April 2016, the Company has used previous GAAP carrying value as deemed costs.
4 Property, plant and equipment pledged as security
Details of properties pledged are as per Note 40.
The management assessed that the fair value of cash and cash equivalents, trade receivables, loans, other financial assets, trade payables and working capital loans approximate the carrying amount largely due to short-term maturity of this instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
(ii) Fair value of financial assets and liabilities measured at amortised cost
The management assessed that for amortised cost instruments, fair value approximate largely to the carrying amount.
(iii) Fair value hierarchy
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:
Level 1: Quoted prices (unadjusted) in active markets for financial instruments.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
(iv) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the fair value of foreign exchange forward contracts is determined using market observable inputs, including prevalent forward rates for the maturities of the respective contracts and interest rate curves as indicated by banks and third parties.
2 Scheme of Amalgamation (âSchemeâ)
The Company has entered into a composite scheme of arrangement and amalgamation amongst Harrisons Malayalam Limited (HML) and Enchanting Plantations Limited (100% subsidiary of HML) and Malayalam Plantations Limited (100% subsidiary of Enchanting Plantations Limited) and Harmony Plantations Limited (100% subsidiary of HML) and their respective shareholders and their creditors (âthe Schemeâ). The Scheme has been approved by the Board of Directors and sanctioned by the shareholders of the Company and the Company has intimated to the Stock Exchanges in which the Company''s shares are listed. As per the Scheme interalia certain Tea and Rubber estates would be transferred/ demerged to its subsidiaries. The Scheme was pending before the High Court of Kerala and now before the National Company Law Tribunal, Chennai, as directed vide order dated 9 March 2017.
3 Discontinuing operations
The Company in its Board meeting dated 15 May 2012 had approved the plan for transferring its Engineering division to one of its wholly owned subsidiary and had also obtained the consent of its shareholders by way of postal ballot. The Engineering division is a separate segment as per Ind AS 108 âOperating Segmentsâ. The decision was consistent with the Company''s long term strategy to focus on core plantation activity. The Company has stopped quoting for new projects and the existing projects are nearing completion. During the financial year 2015-16, the Board in its meeting held on 28 September 2015 had decided to discontinue the engineering business itself and the aforesaid transfer was no longer warranted.
4 Deferred/Current tax
(i) No provision towards agricultural income tax has been considered necessary in view of the carry forward losses.
(ii) The Company has not recognised any deferred tax asset in respect of unabsorbed depreciation/ brought forward losses and other timing differences in accordance with Ind AS 12 âIncome Taxesâ in the absence of virtual/ reasonable certainty that probable taxable profit will be available against which the deductable temporary difference can be utilised.
(iii) The Company has not recognised MAT credit on a prudent basis in the absence of reasonable certainty that sufficient future tax profit against which such credit could be realised.
Unused tax losses for which no deferred tax asset has been recognised:
The Company has unabsorbed business loss of Rs. 1,109.61 lakhs under the provisions of Income-tax Act, 1961 and Rs. 9,914.57 lakhs the provisions of Kerala Agricultural Income Tax Act, 1991 which expires on the 8th year from the end of the relevant assessment year.
The Company has unabsorbed depreciation loss under the provisions of Income-tax Act, 1961 amounting to Rs. 1,832.21 lakhs, which has no limit for expiry.
5 Details of security, repayment terms, applicable interest rates
Term loan from banks
a Loan availed Rs.6,000.00 lakhs during 2010 - 11 and 2011 - 12 repayable in 17 quarterly instalments of Rs.333.30 lakhs commencing from September 2012 and final quarterly instalment of Rs.333.90 lakhs is secured by equitable mortgage of immovable properties of the Company situated in Kumbazha estate. The loan carries an interest rate of base rate plus 3% per annum payable on a monthly basis from disbursement of the loan. During March 2014, the Company has revised the terms of repayment of the loan outstanding of Rs.1,500 lakhs (balance being paid) repayable in 5 quarterly instalments commencing from December 2015 of Rs.166.67 lakhs and Rs.333.33 lakhs for the balance 4 instalments upto December 2016. Year end balance is Rs.Nil (as at 31 March 2017 Rs.Nil , as at 31 March 2016 Rs.1,000.00 lakhs).
b Loan availed of Rs.1,173.61 lakhs during 2012 - 13 is repayable in 31 quarterly instalments of Rs.36.69 lakhs commencing from July 2014 and final quarterly instalment of Rs.36.22 lakhs, is secured by equitable mortgage to be created on immovable property of the Company situated in Mayfield Estate. The loan carries an interest rate of base rate plus 2.75% per annum payable on a monthly basis from disbursement of the loan. Year end balance is Rs.Nil (as at 31 March 2017 Rs.770.18 lakhs, as at 31 March 2016 Rs.916.89 lakhs)
c Loan availed of Rs.4,000.00 lakhs during the 2013 - 14 is repayable in 24 quarterly instalments repayable as 6 quarterly instalments of Rs.50.00 lakhs commencing from June 2015 upto September 2016, 4 quarterly instalments of Rs.100.00 lakhs from December 2016 to September 2017, 8 quarterly instalment of Rs.200.00 lakhs from December 2017 to September 2019, 4 quarterly instalments of Rs.250.00 lakhs from December 2019 to September 2020 and 2 quarterly final instalments of Rs.350 lakhs from December 2020 to March 2021, is secured by equitable mortgage of immovable properties of the Company situated in Kumbazha estate. The loan carries an interest rate of base rate plus 2% per annum payable on a monthly basis from disbursement of the loan. Year end balance is Rs.2,900.00 lakhs (as at 31 March 2017 Rs.3,500.00 lakhs, as at 31 March 2016 Rs.3,800.00 lakhs).
d Loan availed of Rs.1,163.70 lakhs net of processing fee during 2017 - 18 is repayable in 24 equal quarterly instalments commencing from June 2019, is secured by equitable mortgage to be created on immovable properties of the Company situated in Kollam, Fort Kochi and Coimbatore. The loan carries an interest rate of 1 year McLr plus 1.45% per annum payable on a monthly basis from disbursement of the loan. Year end balance is Rs.1163.70 lakhs (as at 31 March 2017 Rs.Nil, as at 31 March 2016 Rs.Nil )
Term loan from others
e Term loan from others are secured by hypothecation of assets acquired out of these loans which are repayable in equated monthly instalments (ranging between 3 to 5 years) along with the applicable interest rates (ranging between 10.75% to 13.00%).
6 Financial risk management
The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on it''s financial performance. The Company''s exposure to credit risk is influenced mainly by the individual characteristic of each customer.
The risk management activity focuses on actively securing the Company''s short to medium-term cash flows by minimising the exposure to volatile financial markets.
A1 Trade receivables
Trade receivables are typically unsecured and are derived from revenue earned from customers located in India and outside India. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, Financial Instruments, the Company uses expected credit loss model to assess the impairment loss or gain. The provision for expected credit loss takes into account available external and internal credit risk factors including the credit ratings of the various customers and Company''s historical experience for customers.
Financial assets that are neither past due nor impaired
Cash and cash equivalents, loans and advances to employees and other financial assets are neither past due nor impaired.
Financial assets that are past due but not impaired
There are no other classes of financial assets that is past due but not impaired.
(B) Liquidity risk
Liquidity risk is that the Company might be unable to meet its obligations. The Company manages its liquidity needs by monitoring scheduled debt servicing payments for long-term financial liabilities as well as forecast cash inflows and outflows on a day-to-day business. The data used for analysing these cash flows is consistent with that used in the contractual maturity analysis below. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on a monthly, quarterly, and yearly basis depending on the business needs. Net cash requirements are compared to available borrowing facilities in order to determine headroom or any shortfalls. This analysis shows that available borrowing facilities are expected to be sufficient over the lookout period.
(C) Market risk
The Company is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and certain other price risk, which result from both its operating and investing activities.
(i) Foreign currency sensitivity
The Company operates internationally and has transactions in USD, Euro and GBP currency and consequently the Company is exposed to foreign exchange risk through its sales to overseas customers. The exchange rate between the rupee and foreign currencies may fluctuate substantially in the future. Consequently, the results of the Company''s operations are adversely affected as the rupee appreciates/ depreciates against these currencies.
(ii) Sensitivity
The following table details the Company''s sensitivity to a 1% increase and decrease in the Rs. against the relevant foreign currencies net of forward contracts. 1% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 1% change in foreign currency rates, with all other variables held constant. A positive number below indicates an increase in profit or equity where Rs. weakens 1% against the relevant currency. For a 1% strengthening of Rs. against the relevant currency, there would be a comparable impact on profit or equity, and the balances below would be negative.
Derivative financial instruments
The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace.
(iii) Interest rate risk
The Company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, Financial Instruments - Disclosures, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
7 Employee benefit obligations
The Company has provided for the gratuity liability and leave encashment liability (defined benefit plan), as per actuarial valuation carried out by an independent actuary on the Balance Sheet date.
a) Defined contribution Plan
The Company makes contribution to statutory provident fund as per Employees Provident Fund and Miscellaneous Provision Act, 1952 for its employees. Also the Company makes contribution to superannuation fund for its employees. This is a defined contribution plan as per Ind AS 19, Employee benefits. Contribution made during the year Rs.1,401.48 lakhs (31 March 2017: Rs.1,383.89 lakhs).
b) Defined benefit plans
The Company has provided for gratuity and leave encashment liability, for its employees as per actuarial valuation carried out by an independent actuary on the Balance Sheet date. The valuation has been carried out using the Project Unit Credit Method as per Ind AS 19 to determine the present value of Defined Benefit Obligations and the related current service cost. This is a defined benefit plan as per Ind AS 19.
The gratuity plan is governed by the provisions of the Payment of Gratuity Act, 1972 (as amended from time to time). Employees are entitled to all the benefits enlisted under this Act.
c) Sensitivity analysis
Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary overtime. Thus, the Company is exposed to various risks in providing the above benefit which are as follows:
i) Interest rate risk
The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability as shown in financial statements.
ii) Liquidity risk
This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non availability of enough cash/ cash equivalents to meet the liabilities or holding of illiquid assets not being sold in time.
iii) Salary escalation risk
The present value of the defined benefit plan is calculated with the assumption of salary increase rate of employees in future. Deviation in the rate of interest in future for employees from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.
iv) Demographic risk
The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
v) Regulatory risk
Gratuity benefits are paid in accordance with the requirements of the Payment of Gratuity Act,1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts.
The estimates of rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary. The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.
The significant actuarial assumptions for the determination of the defined benefit obligation are the attrition rate, discount rate and the long-term rate of compensation increase. The calculation of the net defined benefit liability is sensitive to these assumptions. The following table summarises the effects of changes in these actuarial assumptions on the defined benefit liability as at 31 March 2018.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as and when calculating the defined benefit liability recognised in the balance sheet.
The method and type of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
8 No adjustment is required to be made in the accounts in respect of :
a. An area of 807 hectares (approximately) [31 March 2017: 807 hectares (approximate)], which is on a leasehold tenure falls under the provisions of the Gudalur Jenmam Estate (Abolition and Conversion into Ryotwari) Act, 1969. Company''s appeal challenging the Order of the Settlement Officer rejecting its application for Patta was allowed by the District Court, Ooty and the matter is now remanded for de novo enquiry and is pending. Meanwhile, Madras High Court held that out of this area, the notification of 335 Hectares (31 March 2017: 335 Hectares) as forest by the Settlement Officer is valid and has directed that in the event of patta being granted in respect of the notified areas the same will stand modified to that extent.
b. An area of 178 hectares (approximately) [31 March 2017: 178 hectares (approximate)] deemed to have been vested with the Government of Kerala pursuant to Kerala Private Forests (Vesting and Assignment) Act, 1971, as the Company''s claim for the exclusion of the area from the purview of the Act is pending decision of the Forest Tribunal, Palghat and restoration by the Forest Department.
c. An area of 2588 hectares (approximately) [31 March 2017: 2588 hectares (approximate)] liable to be surrendered to the Government of Kerala under the Kerala Private Forests (Vesting and Assignment) Act, 1971, as the appeals relating to this area are pending in the High Court of Kerala.
d. The Vythiri Taluk Land Board''s order directing the Company to surrender 707 hectares (approximately) [31 March 2017: 707 hectares (approximate)] as excess land under the Kerala Land Reforms Act, 1963 has been set aside by the High Court of Kerala on a revision petition filed by the Company and the matter has been remanded to the Vythri Taluk Land Board for fresh consideration and disposal.
e. An area of 415 hectares (approximately) [31 March 2017: 415 hectares (approximate)] held to be surplus under the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 as the Special Land Tribunal, Madras has remanded the matter for fresh consideration by the Authorised Officer, Coimbatore.
f. An area of 1722 hectares (approximate) [31 March 2017: 1187 hectares (approximate)] in respect of which cases filed by Janmies (original owners) of Lahai, Koney and Arrapetta Estates challenging the validity of the lease is pending before the Sub-Court, Pathanamthitta ,Sub-Court, Sulthan Bathery and High Court of Kerala.
g. An area of 304 hectares (approximately) [31 March 2017: 304 hectares (approximate)] re-notified as vested forests by the Government of Kerala as the Company''s writ petition challenging the notification is pending before the High Court of Kerala.
h. An area of 1982.45 hectares (31 March 2017: 1982.45 hectares) of Mooply Valley estates notified by the Government of Kerala for resumption alleging violation of lease conditions as proceedings has been stayed by the Sub Court, Irinjalakuda.
i. An area of 336.64 hectares (31 March 2017: 336.64 hectares) of rubber field of Koney estate in respect of which the Writ Petition filed by the Company has been allowed by the Hon''ble High Court setting aside the proceedings initiated by the Government of Kerala to resume such lands.
j. An area of 12154 hectares (31 March 2017: 12154 hectares) in respect of which the Government of Kerala had issued resumption proceedings under the Kerala Land Conservancy Act claiming it to be Government Lands, has been set aside by the Hon''ble High Court on HMLs Writ Petition challenging the proceedings.
9 Segment information
Management currently identifies the Company''s three business lines as its operating segments: Tea, Rubber and others. Other Segment comprise of Fruits, Spices and others and Wyanad Medical Fund.
Income / expenses of a financial nature, and the assets / liabilities they are attributable to, have not been allocated to any segment as they are managed on a group basis. Current taxes, deferred taxes and items of income and expense reported under paragraph 97 of Ind AS 1, presentation of financial statements (âexceptional itemsâ) have not been allocated to any segment since these items are also managed on a group basis. Net defined benefit obligation and the expenditure pertaining to such plan constitutes provision for gratuity payable.
F Revenue from major customers
There are no customers contributing to 10 percent or more of Company''s revenues from product sale.
10 First time adoption of Ind AS
These are the Company''s first financial statements prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (âPrevious GAAP'').
Accordingly, the Company has prepared financial statements for the comparative period for the year ended 31 March 2017 that comply with the Ind AS applicable, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1 April 2016, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its previous GAAP financial statements, including the balance sheet as at 1 April 2016 and the comparative financial statements as at and for the year ended 31 March 2017.
i) Ind AS optional exemptions
a) Deemed cost for property, plant and equipment and intangible assets
Ind AS 101 First-time Adoption of Indian Accounting Standards, permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.
b) Deemed cost for investments in subsidiaries
Ind AS 101 First-time Adoption of Indian Accounting Standards, permits a first-time adopter to elect to continue with the carrying value for investments in subsidiaries as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. Accordingly, the Company has elected to measure its investments in subsidiaries in the standalone financial statements at their previous GAAP carrying value.
c) Lease
Appendix C to Ind AS 17, Leases, requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, Leases, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101, First-time Adoption of Indian Accounting Standards, provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/ arrangements.
ii) Ind AS mandatory exemptions
a) Estimates
In accordance with Ind AS, as at the date of transition to Ind AS an entity''s estimates shall be consistent with the 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 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP except impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition this was not required under the previous GAAP
b) Classification and measurement of financial assets and liabilities
The classification and measurement of financial assets will be made considering whether the conditions as per Ind AS 109 Financial Instruments are met based on facts and circumstances existing at the date of transition.
Financial assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstances existing at the date of transition and if it is impracticable to assess elements of modified time value of money i.e. the use of effective interest method, fair value of financial asset at the date of transition shall be the new carrying amount of that asset. The measurement exemption applies for financial liabilities as well.
Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. It is impracticable to apply the changes retrospectively if:
- The effects of the retrospective application or retrospective restatement are not determinable; or
- The retrospective application or restatement requires assumptions about what management''s intent would have been in that period; or
- The retrospective application or retrospective restatement requires significant estimates of amounts and it is impossible to distinguish objectively information about those estimates that existed at that time.
c) De-recognition of financial assets and liabilities
Ind AS 101 First-time Adoption of Indian Accounting Standards, requires a first-time adopter to apply the derecognition provisions of Ind AS 109, Financial Instruments, prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 First-time Adoption of Indian Accounting Standards, allows a first-time adopter to apply the de-recognition requirements in Ind AS 109, Financial Instruments, retrospectively from a date of the entity''s choosing, provided that the information needed to apply Ind AS 109, Financial Instruments, to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.
The Company has elected to apply the de-recognition provisions of Ind AS 109, Financial Instruments, prospectively from the date of transition to Ind AS.
iii) Reconciliations between previous GAAP and Ind AS
Ind AS 101 First-time Adoption of Indian Accounting Standards, requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS as at the periods specified below.
Notes
iv) Fair valuation of standing crops
Ind AS 2 âInventories'' does not envisage any change in the existing system of valuation of Inventories of finished products of tea and rubber from Accounting Standard 2 âValuation of Inventories'' followed by the Company during prior years. However Ind AS 2 âInventories'' does not apply to valuation of Agricultural Produce, but will continue to apply to valuation of Inventory of finished products of Tea and rubber. Ind AS 41 âAgriculture'' deals with the recognition and valuation of Agricultural Produce viz. standing crop of tea and rubber as Biological assets. The Company has valued its standing crops for tea and rubber as at Ind AS transition date (1 April 2016) and adjusted the same in the retained earnings. Further movement in valuation at the reporting dates were routed through the Statement of Profit and Loss.
v) Capitalisation of replanting expenses towards bearer plants
Under the previous GAAP all the replanting expenses consequent to replacement were charged to revenue as and when incurred. No adjustments have been made to the value of bearer plants existing as at 31 March 2016 on account of the replanting expenses of prior years. However all the replanting expenses incurred from the Ind AS transition date (1 April 2016) have been identified and capitalised.
vi) Defined benefit obligation
Both under Previous GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements comprising of actuarial gains and losses are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is reduced by such amount with a corresponding adjustment on defined benefit plans has been recognised in the OCI net of tax.
vii) 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 âother comprehensive income'' includes re-measurements of defined benefit plans, effective portion of gains and losses on cash flow hedging instruments and fair value gains or (losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP
viii) Property, plant and equipment
As the Company decided to adopt the cost model, Rs.13,957.19 lakhs being the revaluation amount included in the carrying value of land has been adjusted against the related Fixed Asset Revaluation Reserve as on 1 April 2016, effected as at the transition date in these standalone financial statements.
(ix) Other Equity
Adjustments to retained earnings as at 1 April 2016 and 31 March 2017 has been adjusted consequent to the above Ind AS transition adjustments.
Mar 31, 2017
1. Rights, preferences and restrictions attached to equity shares mentioned above :
The Company has only one class of equity shares having a par value ofRs.10 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, in proportion to their shareholding.
Term loan from banks
2. Loan availedRs.6,000.00 Lacs during 2010 - 11 and 2011 - 12 repayable in 17 quarterly installments ofRs.333.30 Lacs commencing from September 2012 and final quarterly installment ofRs.333.90 Lacs is secured by equitable mortgage of immovable properties of the Company situated in Kumbazha estate. The loan carries an interest rate of base rate plus 3% per annum payable on a monthly basis from disbursement of the loan. During March 2014, the Company has revised the terms of repayment of the loan outstanding ofRs.1,500 lacs (balance being paid) repayable in 5 quarterly installments commencing from December 2015 ofRs.166.67 Lacs andRs.333.33 Lacs for the balance 4 installments up to December 2016. Yearend balance is Rs. Nil (Previous yearRs.1,000 Lacs).
3. Loan availed ofRs.1,173.61 Lacs during 2012 - 13 is repayable in 31 quarterly installments ofRs.36.69 Lacs commencing from July 2014 and final quarterly installment ofRs.36.22 Lacs, is secured by equitable mortgage to be created on immovable property of the Company situated in Mayfield Estate. The loan carries an interest rate of base rate plus 2.75% per annum payable on a monthly basis from disbursement of the loan. Yearend balance isRs.770.18 Lacs (Previous yearRs.916.89 Lacs)
4. Loan availed of Rs.4,000.00 Lacs during the year 2013 - 14 is repayable in 24 quarterly installments repayable as 6 quarterly installments ofRs.50.00 Lacs commencing from June 2015 up to September 2016, 4 quarterly installments ofRs.100.00 Lacs from December 2016 to September 2017, 8 quarterly installment ofRs.200.00 Lacs from December 2017 to September 2019, 4 quarterly installments ofRs.250.00 Lacs from December 2019 to September 2020 and 2 quarterly final installments ofRs.350 Lacs from December 2020 to March 2021, is secured by equitable mortgage of immovable properties of the Company situated in Kumbazha estate. The loan carries an interest rate of base rate plus 2% per annum payable on a monthly basis from disbursement of the loan. Yearend balance is Rs..3,500.00 Lacs (Previous yearRs.3,800.00 Lacs).
Term loan from others
5. Term loan from others are secured by hypothecation of assets acquired out of these loans which are repayable in equated monthly installments (ranging between 3 to 5 years) along with the applicable interest rates (ranging between 10.75% to 15.01%).
6. There are no amounts due for payment to the Investor Education and Protection Fund under Section 125 of The Companies Act, 2013 as at the year end. ForRs.6.20 lacs (previous year Rs. Nil), where the Company had initiated the process for the transfer of the Unclaimed dividend (pertaining to the financial year 2008-2009) to the Investor Education and Protection Fund (IEPF), the challenge generated by the Company on December 5, 2016 (due date being December 5, 2016) was processed by Punjab National Bank only on December 14, 2016 due to certain technical problem encountered by the said bank. Accordingly the money was credited to IEPF on December 14, 2016.
7. No adjustment is required to be made in the accounts in respect of :
8. An area of 807 hectares (approximately) [Previous Year 807 hectares (approximately)], which is on a leasehold tenure falls under the provisions of the Gudalur Jenmam Estate (Abolition and Conversion into Ryotwari) Act, 1969. Company''s appeal challenging the Order of the Settlement Officer rejecting its application for Patta is pending before the District Court, Ooty. During the year the Madras High Court held that out of this area, the notification of 335 Hectares (Previous Year 335 Hectares) as forest by the Settlement Officer is valid and the Company is in the process of filing appeal before the division bench against this judgment.
9. An area of 178 hectares (approximately) [Previous Year 178 hectares (approximately)] deemed to have been vested with the Government of Kerala pursuant to Kerala Private Forests (Vesting and Assignment) Act, 1971, as the Company''s claim for the exclusion of the area from the purview of the Act is pending decision of the Forest Tribunal, Palghat and restoration by the Forest Department.
10. An area of 2588 hectares (approximately) [Previous Year 2588 hectares (approximately)] liable to be surrendered to the Government of Kerala under the Kerala Private Forests (Vesting and Assignment) Act, 1971, as the appeals relating to this area are pending in the High Court of Kerala.
11. The Vythiri Taluk Land Board''s order directing the Company to surrender 707 hectares (approximately) [Previous Year 707 hectares (approximately)] as excess land under the Kerala Land Reforms Act, 1963 has been set aside by the High Court of Kerala on a revision petition filed by the Company and the matter has been remanded to the Vythri Taluk Land Board for fresh consideration and disposal.
12. An area of 415 hectares (approximately) [Previous Year 415 hectares (approximately)] held to be surplus under the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 as the Special Land Tribunal, Madras has remanded the matter for fresh consideration by the Authorized Officer, Coimbatore.
13. An area of 1722 hectares (approximately) [Previous Year 1187 hectares (approximately)] in respect of which cases filed by Janmies (original owners) of Lahai, Koney and Arrapetta Estates challenging the validity of the lease is pending before the Sub-Court, Pathanamthitta ,Sub-Court, Sulthan Bathery and High Court of Kerala.
14. An area of 304 hectares (approximately) [Previous Year 304 hectares (approximately)] re-notified as vested forests by the Government of Kerala as the Company''s writ petition challenging the notification is pending before the High Court of Kerala.
15. An area of 1982.45 hectares (Previous Year 1982.45 hectares) of Mooply Valley estates notified by the Government of Kerala for resumption alleging violation of lease conditions as proceedings has been stayed by the Sub Court, Irinjalakuda.
16. An area of 336.64 hectares (Previous Year 336.64 hectares) of rubber field of Koney estate in respect of which the Writ Petition filed by the Company and the status quo order passed by the High Court of Kerala challenging the proceedings initiated by the Government of Kerala to resume such lands, is in force.
17. An area of 12154 hectares (Previous Year 12154 hectares) in respect of which the Government of Kerala has issued order of resumption under the Kerala Land Conservancy Act claiming it to be Government Lands, the further proceedings of which has been prevented by High Court of Kerala, on a writ petition filed by the Company.
18. Segment reporting
The Company has considered business segments as the primary segment and geographical segments as the secondary segments. The business segments are: Tea, Rubber,Engineering and others which have been identified taking into account the organisational structure as well as the differing risks and returns of these segments. Other segments comprise of Plant Tissue Culture, Fruits, Spices and others and Wyanaad Medical Fund. The geographical segments are identified on the basis of the location of customers.
19. Changes in Accounting Policy
20. Property Plant and Equipment
Up to March 31, 2016, cost of bearer plants (rubber trees and tea bushes) was accounted for and disclosed as part of Land and Development cost (Refer note 1.3). Consequent to the Companies (Accounting Standards) Amendment Rules , 2016 , published by the Ministry of Corporate Affairs which is effective from April 1,2016 the new Accounting Standard AS - 10 Property Plant and Equipment recognizes bearer Plants as a separate class of depreciable Property, Plant and Equipment . The development cost (representing cost of bearer plants) as was disclosed under the head âLand and Developmentâ as on March 31, 2016 has been bifurcated as Land , Bearer Plants and Bearer Plants in Progress and measured as per the Cost Model as on April 1, 2016 in keeping with the aforesaid AS 10.
Land
As the Company decided to adopt the cost model,Rs.13,957.19 lakhs being the revaluation amount included in the carrying value of Land has been adjusted against the related Fixed Asset Revaluation Reserve as on April 1, 2016 (Refer Note 3).
Bearer Plants
The Bearer Plants as at March 31, 2016 have been depreciated over their balance useful life. Had the Company continued to follow the earlier accounting policy, the depreciation charge recognized in the Statement of Profit and Loss would have been lower byRs.39.00 lakhs and the net block of Property Plant and Equipment as on March 31, 2017 would have been higher byRs.39.00 lakhs. Consequentially, the loss for the year would have been lower byRs.39.00 lakhs and the loss per equity share would have been lower by Re. 0.21.
Bearer Plant in Progress
As on 1st April 2016, Bearer Plants in Progress amounting toRs.389.66 lakhs has been classified as Capital Work in Progress.
21. Derivative contract:
The Company was following a policy for accounting for derivative contracts based on the announcement of Institute of Chartered Accountants of India (ICAI) issued in March 2008, wherein only mark to market losses were recognized in the statement of profit and loss, however based on the new Guidance Note by ICAI effective accounting period commencing from April 1, 2016 the Company recognizes profits and losses (net) if any, in the statement of profit and loss . Had the Company followed the earlier accounting policy the Mark to Market gain on foreign currency would have been lower byRs.1.49 lakhs with a corresponding impact on the loss for the year (higher byRs.1.49 Lacs) and the loss per equity share would have been higher by Re.0.01.
22 Taxation
23. No provision for Agricultural Income Tax has been considered necessary in view of the carry forward losses.
24. The Company has not recognized any Deferred Tax Asset in respect of unabsorbed depreciation/ brought forward losses and other timing differences in accordance with Accounting Standard 22 âAccounting for Taxes on Incomeâ in the absence of virtual/ reasonable certainty that sufficient future taxable income will be available against which such asset could be realized.
25. The Company has not recognized MAT credit on a prudent basis in the absence of reasonable certainty that sufficient future tax profit against which such credit could be realized.
26. The Company has entered into a composite scheme of arrangement and amalgamation amongst Harrisons Malayalam Limited (HML) and Enchanting Plantations Limited (100% subsidiary of HML) and Malayalam Plantations Limited (100% subsidiary of Enchanting Plantations Limited) and Harmony Plantations Limited (100% subsidiary of HML) and their respective shareholders and their creditors (âthe Schemeâ). The Scheme has been approved by the Board of Directors and sanctioned by the shareholders of the Company and the Company has intimated to the Stock Exchanges in which the Company''s shares are listed. As per the Scheme interalia certain Tea and Rubber estates would be transferred/ demerged to its subsidiaries. The Scheme was pending before the High Court of Kerala and now before the National Company Law Tribunal, Chennai, as directed vide order dated March 9, 2017.
27. Permitted payments
Permitted payments represents payment made to Kerala State Electricity Board.
28. Non-Permitted Receipts
29. Receipt at Hospital
The Company runs hospitals in various estates for the Company''s workers/employees and for the local population. In view of the emergency medical requirements at the Hospitals, the specified bank notes were accepted from the patients till 14th November 2016 amounting to Rs.0.25 lacs.
30. Currency exchange from Companyâs own employees/workers
The Company runs estates across Kerala and TamilNadu and most of the estates are in remote areas without easy access to banking facilities. In view of the announcement of November 8, 2016 on non validity of the thenRs.500/andRs.1000/- notes as legal tender, some of the workers were carrying SBNs and were not in a position to readily exchange the same at the banks. Having regard to the business and practices prevalent in estates, which are highly labor intensive, the Company had to take steps to mitigate the situation faced by the workers. AccordinglyRs.7.83 lacs was exchanged to the workers in lieu of the SBN''s.
31. Accounting differences
Before the announcement in respect of SBN''s certain receipts amounting to Rs.0.65 lacs were collected. However, the same has been recorded in books post 8th November 2016.
All the SBN''s in hand and those accepted net of payments as mentioned above have been deposited with the banks.
32. Previous year''s figures have been regrouped /rearranged wherever necessary to conform to the current year''s presentation.
Mar 31, 2016
1. No adjustment is required to be made in the accounts in respect of :
a An area of 807 hectares (approximately) [Previous Year 807 hectares (approximately)], which is on a leasehold tenure falls under the provisions of the Gudalur Jenmam Estate (Abolition and Conversion into Ryotwari) Act, 1969. Company''s appeal challenging the Order of the Settlement Officer rejecting its application for Patta is pending before the District Court, Ooty. The status quo Orders passed by the Madras High Court challenging the notification of 335 Hectares (Previous Year 335 Hectares) out of this area as forest by the Government of Tamil Nadu is also in force.
b An area of 178 hectares (approximately) [Previous Year 178 hectares (approximately)] deemed to have been vested with the Government of Kerala pursuant to Kerala Private Forests (Vesting and Assignment) Act, 1971, as the Company''s claim for the exclusion of the area from the purview of the Act is pending decision of the Forest Tribunal, Palghat and restoration by the Forest Department.
c An area of 2588 hectares (approximately) [Previous Year 2588 hectares (approximately)] liable to be surrendered to the Government of Kerala under the Kerala Private Forests (Vesting and Assignment) Act, 1971, as the appeals relating to this area are pending in the High Court of Kerala.
d The Vythiri Taluk Land Board''s order directing the Company to surrender 707 hectares (approximately) [Previous Year 707 hectares (approximately)] as excess land under the Kerala Land Reforms Act, 1963 has been set aside by the High Court of Kerala on a revision petition filed by the Company and the matter has been remanded to the Vythri Taluk Land Board for fresh consideration and disposal.
e An area of 415 hectares (approximately) [Previous Year 415 hectares (approximately)] held to be surplus under the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 as the Special Land Tribunal, Madras has remanded the matter for fresh consideration by the Authorized Officer, Coimbatore.
f An area of 1187 hectares (approximately) [Previous Year 1152 hectares (approximately)] in respect of which cases filed by Janmies (original owners) of Lahai, Koney, Kaliyar and Arrapetta Estates challenging the validity of the lease is pending before the Sub-Court, Pathanamthitta ,Sub-Court, Sulthan Bathery and High Court of Kerala.
g An area of 304 hectares (approximately) [Previous Year 304 hectares (approximately)] re-notified as vested forests by the Government of Kerala as the Company''s writ petition challenging the notification is pending before the High Court of Kerala.
h An area of 1982.45 hectares (Previous Year 1982.45 hectares) of Mooply Valley estates notified by the Government of Kerala for resumption alleging violation of lease conditions as proceedings has been stayed by the Sub Court, Irinjalakuda.
i An area of 336.64 hectares (Previous Year 336.64 hectares) of rubber field of Koney estate in respect of which the Writ Petition filed by the Company and the status quo order passed by the High Court of Kerala challenging the proceedings initiated by the Government of Kerala to resume such lands, is in force.
j An area of 12,154 hectares (Previous Year 12,154 hectares) in respect of which the Government of Kerala has issued order of resumption under the Kerala Land Conservancy Act claiming it to be Government Lands, the further proceedings of which has been prevented by High Court of Kerala, on a writ petition filed by the Company.
2. Segment Reporting
The Company has considered business segments as the primary segment and geographical segments as the secondary segments. The business segments are: Tea, Rubber, Engineering and others which have been identified taking into account the organizational structure as well as the differing risks and returns of these segments. Other segments comprise of Plant Tissue Culture, Fruits, Spices and others and Waylaid Medical Fund. The geographical segments are identified on the basis of the location of customers.
3. Related Party Disclosures
a List of Related Parties where control exists Wholly Owned Subsidiaries
HML Engineering Company Limited (HECL)
Enchanting Plantations Limited (EPL)
Harmony Plantations Limited (HPL)
Malayalam Plantations Limited (MPL) (100% subsidiary of EPL)
b Key management personnel
Mr. V Venugopal (Manager)
Mr Ashok Goyal (Whole Time Director) with effect from April 24, 2014 till July 24, 2014 Mr. N.Dharamraj (Whole Time Director) with effect from August 8, 2014
4 Extraordinary Item
Extraordinary item for the year ended March 31, 2015 represents net gain towards insurance claim received against loss of certain inventories and fixed assets (net of sale proceeds) due to fire in one of the tea factory; Consequent to that, Company received '' 13.95 lacs towards a part of insurance claim during the year ended March 31, 2015.
5. Taxation
a No provision for Agricultural Income Tax has been considered necessary in view of the carry forward losses.
b The Company has not recognized any Deferred Tax Asset in respect of unabsorbed depreciation/ brought forward losses and other timing differences in accordance with Accounting Standard 22 âAccounting for Taxes on Incomeâ in the absence of virtual/ reasonable certainty that sufficient future taxable income will be available against which such asset could be realized.
c The company has not recognized MAT credit on a prudent basis in the absence of reasonable certainty that sufficient future tax profit against which such credit could be realized.
6. The Company has entered into a composite scheme of arrangement and amalgamation amongst Harrisons Malayalam Limited (HML) and Enchanting Plantations Limited (100% subsidiary of HML) and Malayalam Plantations Limited (100% subsidiary of Enchanting Plantations Limited) and Harmony Plantations Limited (100% subsidiary of HML) and their respective shareholders and their creditors(âthe Schemeâ). The Scheme has been approved by the Board of Directors and sanctioned by the shareholders of the Company and the Company has intimated to the Stock Exchanges in which the Company''s shares are listed. As per the Scheme interlaid certain Tea and Rubber estates would be transferred/ demerged to its subsidiaries. The Scheme is now pending before the High Court of Kerala.
7. The Company in its Board meeting dated May 15, 2012 has approved the plan for transferring its Engineering division to one of its wholly owned subsidiary and had also obtained the consent of its shareholders by way of postal ballot. The Engineering division is a separate business segment as per AS 17 "Segment Reporting". The decision was consistent with the Company''s long term strategy to focus on core plantation activity. The Company has now stopped quoting for new projects and the existing projects are nearing completion. During the year, the Board in its meeting held on September 28, 2015 has decided to discontinue the engineering business itself and the aforesaid transfer is no longer warranted.
8. Previous year''s figures have been regrouped / rearranged wherever necessary to conform to the current year''s presentation.
Mar 31, 2016
Terms and rights attached to equity shares
The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Board of Directors do not propose any dividend during the current year. No dividend was declared in the preceding year.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
1 Deferred tax
Deferred tax asset on account of unabsorbed tax losses is not recognized during the year since there is no virtual certainty of taxable profits in the foreseeable future which would offset the asset as the Company has mainly one source of income being dividend which is exempt under Income Tax Act.
Note:
Provision in diminution in value of investments represents provision created against investments held by the Company in CFL Capital Financial Services Ltd.
2 Segment information
The Company''s income for the year consisted of dividend, interest and income from disposal of investments and accordingly there are no reportable segments.
3 Loans and advances in the nature of loans given to subsidiaries and associates and firms/ companies in which directors are interested.
Advance to Rainbow Investments Ltd. for purchase of shares 35,827,807 827,807
Amount receivable on redemption of debentures from Rainbow 37,445,000 37,445,000
Investments Ltd.
Maximum amount outstanding during the year 73,272,807 38,272,807
4 Details of dues to micro, small and medium enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006
The Company has not received any intimation from its vendors regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, required under the said Act have not been made.
5 Previous year figures have been regrouped / reclassified wherever necessary to suit current year layout.
Mar 31, 2016
Terms and rights attached to equity shares
The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Board of Directors do not propose any dividend during the current year. No dividend was declared in the preceding year.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
1 Deferred tax
Deferred tax asset on account of unabsorbed tax losses is not recognized during the year since there is no virtual certainty of taxable profits in the foreseeable future which would offset the asset as the Company has mainly one source of income being dividend which is exempt under Income Tax Act.
Note:
Provision in diminution in value of investments represents provision created against investments held by the Company in CFL Capital Financial Services Ltd.
2 Segment information
The Company''s income for the year consisted of dividend, interest and income from disposal of investments and accordingly there are no reportable segments.
3 Loans and advances in the nature of loans given to subsidiaries and associates and firms/ companies in which directors are interested.
Advance to Rainbow Investments Ltd. for purchase of shares 35,827,807 827,807
Amount receivable on redemption of debentures from Rainbow 37,445,000 37,445,000
Investments Ltd.
Maximum amount outstanding during the year 73,272,807 38,272,807
4 Details of dues to micro, small and medium enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006
The Company has not received any intimation from its vendors regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, required under the said Act have not been made.
5 Previous year figures have been regrouped / reclassified wherever necessary to suit current year layout.
Mar 31, 2016
Terms and rights attached to equity shares
The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Board of Directors do not propose any dividend during the current year. No dividend was declared in the preceding year.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
1 Deferred tax
Deferred tax asset on account of unabsorbed tax losses is not recognized during the year since there is no virtual certainty of taxable profits in the foreseeable future which would offset the asset as the Company has mainly one source of income being dividend which is exempt under Income Tax Act.
Note:
Provision in diminution in value of investments represents provision created against investments held by the Company in CFL Capital Financial Services Ltd.
2 Segment information
The Company''s income for the year consisted of dividend, interest and income from disposal of investments and accordingly there are no reportable segments.
3 Loans and advances in the nature of loans given to subsidiaries and associates and firms/ companies in which directors are interested.
Advance to Rainbow Investments Ltd. for purchase of shares 35,827,807 827,807
Amount receivable on redemption of debentures from Rainbow 37,445,000 37,445,000
Investments Ltd.
Maximum amount outstanding during the year 73,272,807 38,272,807
4 Details of dues to micro, small and medium enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006
The Company has not received any intimation from its vendors regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, required under the said Act have not been made.
5 Previous year figures have been regrouped / reclassified wherever necessary to suit current year layout.
Mar 31, 2015
1. Rights, preferences and restrictions attached to Equity shares
mentioned above :
The company has only one class of equity shares having a par value of
Rs.10 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, in proportion to their shareholding.
Term loan from banks
a.Loan availed Rs.6,000.00 Lacs during 2010-11 and 2011-12 repayable in
17 quarterly instalments of Rs.333.30 Lacs commencing from September
2012 and final quarterly instalment of Rs.333.90 Lacs is secured by
equitable mortgage of immovable properties of the Company situated in
Kumbazha estate. The loan carries an interest rate of base rate plus 3%
per annum payable on a monthly basis from disbursement of the loan.
During March 2014, the Company has revised the terms of repayment of the
loan outstanding of Rs. 1,500 lacs (balance being paid) repayable in 5
quarterly instalments commencing from December 2015 of Rs. 166.67 Lacs
and Rs. 333.33 Lacs for the balance 4 instalments upto December 2016.
Year end balance is Rs. 1,500.01 Lacs (Previous year Rs. 1,500.01 Lacs).
b Loan availed of Rs.1,173.61 Lacs during 2012-2013 is repayable in 31
quarterly instalments of Rs.36.69 Lacs commencing from July 2014 and
final quarterly instalment of Rs. 36.22 Lacs, is secured by equitable
mortgage to be created on immovable property of the Company situated in
Mayfield Estate. The loan carries an interest rate of base rate plus
2.75% per annum payable on a monthly basis from disbursement of the
loan. Year end balance is Rs. 1,063.58 Lacs (Previous year Rs. 1,173.61
Lacs)
c Loan availed of Rs. 4,000.00 Lacs during the year 2013-14 is
repayable in 24 quarterly instalments repayable as 6 quarterly
instalments of Rs. 50.00 Lacs commencing from June 2015 upto September
2016, 4 quarterly instalments of Rs. 100.00 Lacs from December 2016 to
September 2017, 8 quarterly instalment of Rs. 200.00 Lacs from December
2017 to September 2019, 4 quarterly instalments of Rs. 250.00 Lacs from
December 2019 to September 2020 and 2 quarterly final instalments of
Rs. 350 Lacs from December 2020 to March 2021, is secured by equitable
mortgage of immovable properties of the Company situated in Kumbazha
estate. The loan carries an interest rate of base rate plus 2% per
annum payable on a monthly basis from disbursement of the loan. Year
end balance is Rs. 4,000.00 Lacs (Previous year Rs. 4,000.00 Lacs).
Term loan from others
d Term loan from others are secured by hypothecation of assets acquired
out of these loans which are repayable in equated monthly instalments
(ranging between 3 to 5 years) along with the applicable interest rates
(ranging between 10.49% to 15.50%).
Secured by equitable mortgage of immovable properties of the Company
situated in Arrapetta Estate, hypothecation of standing crop in Achoor,
Arrapetta, Panniar, Mayfield , Lahai, Isfield and Nagamallay Estates
and by hypothecation of stocks of tea, rubber, trading merchandise,
stores and spares, book debts and other movable assets both present and
future.
25.1 In keeping with the Company's gratuity scheme ( an unfunded
defined benefit plan ), eligible employees are entitled for gratuity
benefit (as per the The Payment of Gratuity Act, 1972 ) on
retirement/death/incapacitation/ termination. Also refer note 1.11(ii)(
c ) for accounting policy relating to gratuity. Following are the
further particulars with respect to gratuity:-
As at March 31, As at March 31,
2015 2014
Rs. Lacs Rs. Lacs
2. Contingent Liabilities and
commitments
Contingent Liabilities :
a) Claims against the Company not
acknowledged as debt
i. Employee related 367.59 324.71
ii. Penalties under section 14B of
Employees' Provident Fund 59.33 49.41
Miscellaneous Provisions Act 1952
iii. Disputed Income Tax matters 1,302.59 1,019.97
iv The Government of Kerala had issued
a notification in February 2006, 205.47 348.49
enhancing the minimum wages of
plantation workers which has
been challenged by the Association
of Planters of Kerala of which
the Company was a member and an
interim stay was granted by the
High Court of Kerala. As the Company
resigned from Association of Planters
of Kerala with effect from 12.02.2007,
a separate writ petition was filed
and an interim stay of the Government
Notification obtained.
b) Others
(i) Outstanding bills discounted with bank 77.78 -
3. Commitments :
Estimated amount of contracts remaining to
be executed on Capital Account 1.53 121.94
and not provided for, net of advance
payments of Rs.22.30 lacs
(Previous year Rs.68.24 lacs)
4. No adjustment is required to be made in the accounts in respect of :
a An area of 807 hectares (approximately) [Previous Year 807 hectares
(approximately)], which is on a leasehold tenure falls under the
provisions of the Gudalur Jenmam Estate (Abolition and Conversion into
Ryotwari) Act, 1969. Company's appeal challenging the Order of the
Settlement Officer rejecting its application for Patta is pending
before the District Court, Ooty. The status quo Orders passed by the
Madras High Court challenging the notification of 335 Hectares
(Previous Year 335 hectares) out of this area as forest by the
Government of Tamil Nadu is also in force.
b An area of 178 hectares (approximately) [Previous Year 125.80
hectares (approximately)] deemed to have been vested with the
Government of Kerala pursuant to Kerala Private Forests (Vesting and
Assignment) Act, 1971, as the Company's claim for the exclusion of the
area from the purview of the Act is pending decision of the Forest
Tribunal, Palghat and restoration by the Forest Department.
c An area of 2588 hectares (approximately) [Previous Year 2588 hectares
(approximately)] liable to be surrendered to the Government of Kerala
under the Kerala Private Forests (Vesting and Assignment) Act, 1971, as
the appeals relating to this area are pending in the High Court of
Kerala.
d The Vythiri Taluk Land Board's order directing the Company to
surrender 707 hectares (approximately) [Previous Year 707 hectares
(approximately)] as excess land under the Kerala Land Reforms Act, 1963
has been set aside by the High Court of Kerala on a revision petition
filed by the Company and the matter has been remanded to the Vythri
Taluk Land Board for fresh consideration and disposal.
e An area of 415 hectares (approximately) [Previous Year 415 hectares
(approximately)] held to be surplus under the Tamil Nadu Land Reforms
(Fixation of Ceiling on Land) Act, 1961 as the Special Land Tribunal,
Madras has remanded the matter for fresh consideration by the
Authorised Officer, Coimbatore.
f An area of 1152 hectares (approximately) [Previous Year 1310 hectares
(approximately)] in respect of which cases filed by Janmies (original
owners) of Lahai, Koney and Arrapetta Estates challenging the validity
of the lease is pending before the Sub-Court, Pathanamthitta
,Sub-Court, Sulthan Bathery and High Court of Kerala.
g An area of 304 hectares (approximately) [Previous Year 304 hectares
(approximately)] re-notified as vested forests by the Government of
Kerala as the Company's writ petition challenging the notification is
pending before the High Court of Kerala.
h An area of 1982.45 hectares (Previous Year 1982.45 hectares) of
Mooply Valley estates notified by the Government of Kerala for
resumption alleging violation of lease conditions as proceedings has
been stayed by the Sub Court, Irinjalakuda.
i An area of 336.64 hectares (Previous Year 336.64 hectares) of rubber
field of Koney estate in respect of which the Writ Petition filed by
the Company and the status quo order passed by the High Court of Kerala
challenging the proceedings intiated by the Government of Kerala to
resume such lands, is in force.
j An area of 12154 hectares (Previous Year Nil) in respect of which the
Government of Kerala has issued order of resumption under the Kerala
Land Conservancy Act claiming it to be Government Lands, the further
proceedings of which has been prevented by High Court of Kerala, on a
writ petition filed by the Company.
5. Segment Reporting
The Company has considered business segments as the primary segment and
geographical segments as the secondary segments. The business segments
are: Tea, Rubber, Engineering and others which have been identified
taking into account the organisational structure as well as the
differing risks and returns of these segments. Other segments comprise
of Plant Tissue Culture, Clearing and Shipping, Fruits, Spices and
others and Wyanaad Medical Fund. The geographical segments are
identified on the basis of the location of customers.
6. Related Party Disclosures
a List of Related Parties where control exists (Wholly Owned
Subsidiaries)
HML Engineering Company Limited (HECL)
Enchanting Plantations Limited (EPL)
Harmony Plantations Limited (HPL)
Malayalam Plantations Limited (MPL) (100% subsidiary of EPL)
b Key management personnel
Mr. V Venugopal (Manager)
Mr. Ashok Goyal (Whole Time Director) with effect from April 24, 2014
till July 24, 2014
Mr. N.Dharma raj (Whole Time Director) with effect from August 8, 2014
7. Taxation
a The Company is liable to pay Minimum Alternate Tax under section
115JB of the Income Tax Act, 1961 based on which the current tax has
been computed and provided in the accounts.
b No provision for Agricultural Income Tax has been considered
necessary in view of the carry forward losses.
c The Company has not recognised any Deferred Tax Asset in respect of
unabsorbed depreciation/ brought forward losses and other timing
differences in accordance with Accounting Standard 22 "Accounting for
Taxes on Income" in the absence of virtual/ reasonable certainty that
sufficient future taxable income will be available against which such
asset could be realised.
d The company has not recognized MAT credit on a prudent basis in the
absence of reasonable certainty that sufficient future tax profit
against which such credit could be realised.
8. The Company has entered into a composite scheme of arrangement and
amalgamation amongst Harrisons Malayalam Limited (HML) and Enchanting
Plantations Limited (100% subsidiary of HML) and Malayalam Plantations
Limited (100% subsidiary of Enchanting Plantations Limited) and Harmony
Plantations Limited (100% subsidiary of HML) and their respective
shareholders and their creditors ("the Scheme"). The Scheme has been
approved by the Board of Directors and sanctioned by the shareholders
of the Company and the Company has intimated to the Stock Exchanges in
which the Company's shares are listed. As per the Scheme interalia
certain Tea and Rubber estates would be transferred/ demerged to its
subsidiaries. The Scheme is now pending before the High Court of
Kerala.
9. The Company in its Board meeting dated May 15, 2012 has approved the
plan for transferring its Engineering division to its wholly owned
subsidiary and has also obtained the consent of its shareholders by way
of postal ballot. The Engineering division is a separate business
segment as per AS 17 "Segment Reporting". The decision is consistent
with the Company's long term strategy to focus on core plantation
activity. The Board in its meeting of May 28, 2015, discussed on this
to evalauate the modus operandi/ process of transfer.
10. Previous year's figures have been regrouped / rearranged wherever
necessary to conform to the current year's presentation.
Mar 31, 2014
1 Share Capital
As at March 31, As at March 31,
2014 2013
Rs. Lacs Rs. Lacs
(i) Authorised:
3,00,00,000 Equity Shares 3,000.00 3,000.00
of Rs.10 each
(ii) Issued, Subscribed and Paid up:
1,84,55,405 Equity Shares 1,845.54 1,845.54
of Rs.10 each fully paid up
Less: Allotment Money in Arrears 0.11 0.11
1,845.43 1,845.43
(iii) Rights, preferences and restrictions attached to Equity shares
mentioned above :
The company has only one class of equity shares having a par value of
Rs.10 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, in proportion to their shareholding.
Term loan from banks
a) Loan availed Rs.6,000.00 Lacs during 2010-11 and 2011-12 repayable
in 17 quarterly instalments of Rs.333.30 Lacs commencing from September
2012 and final quarterly instalment of Rs.333.90 Lacs is secured by
equitable mortgage of immovable properties of the Company situated in
Kumbazha estate. The loan carries an interest rate of base rate plus 3%
per annum payable on a monthly basis from disbursement of the loan.
During March 2014, the Company has revised the terms of repayment of
the loan outstanding of Rs 1,500 lacs (balance being paid) repayable in
5 quarterly instalments commencing from December 2015 of Rs 166.67 Lacs
and Rs 333.33 Lacs for the balance 4 instalments upto December 2016.
Year end balance is Rs.1,500.01 Lacs (Previous year Rs.5,000.01 Lacs).
b) Loan availed of Rs.1,173.61 Lacs during 2012-2013 is repayable in 31
quarterly instalments of Rs.36.69 Lacs commencing from July 2014 and
final quarterly instalment of Rs. 36.22 Lacs, is secured by equitable
mortgage to be created on immovable property of the Company situated in
Mayfield Estate. The loan carries an interest rate of base rate plus
2.75% per annum payable on a monthly basis from disbursement of the
loan. Year end balance is Rs 1,173.61 Lacs (Previous year Rs 1,173.61
Lacs)
c) Loan availed of Rs 4,000.00 Lacs during the year is repayable in 24
quarterly instalments repayable as 6 quarterly instalments of Rs. 50.00
Lacs commencing from September 2015 upto December 2016, 4 quarterly
instalments of Rs 100.00 Lacs from March 2017 to December 2017, 8
quarterly instalment of Rs 200.00 Lacs from March 2018 to December
2019, 4 quarterly instalments of Rs 250.00 Lacs from March 2020 to
December 2020 and 2 quarterly final instalments of Rs. 350 Lacs from
March 2021 to June 2021, is secured by equitable mortgage of immovable
properties of the Company situated in Kumbazha estate. The loan carries
an interest rate of base rate plus 2% per annum payable on a monthly
basis from disbursement of the loan. Year end balance is Rs.4,000.00
Lacs (Previous year Rs. Nil).
Term loan from others
d) Term loan from others are secured by hypothecation of assets
acquired out of these loans which are repayable in equated monthly
instalments (ranging between 3 to 5 years) along with the applicable
interest rates (ranging between 10.49 to 15.50 % ).
As at March 31, 2014 As at March 31, 2013
Rs. Lacs Rs. Lacs
2 Contingent
Liabilities and
commitments
2.1 Contingent Liabilities :
Claims against the
Company not acknowledged
as debt
i. Employee related 324.71 560.03
ii. Penalties under section 49.41 93.49
14B of Employees'' Provident
Fund Miscellaneous
Provisions Act 1952
iii. Disputed Income Tax matters 1,019.97 674.10
iv The Government of Kerala had 348.49 348.49
issued a notification in
February 2006, enhancing the
minimum wages of plantation
workers which has been
challenged by the Association
of Planters of Kerala of which
the Company was a member and an
interim stay was granted by the
High Court of Kerala. As the
Company resigned from Association
of Planters of Kerala with effect
from 12.02.2007, a separate writ
petition was filed and an interim
stay of the Government Notification
obtained.
2.2 Commitments :
Estimated amount of contracts 121.94 19.89
remaining to be executed on
Capital Account and not provided
for, net of advance payments
of Rs.68.24 lacs (Previous year
Rs.35.12 lacs)
3 No adjustment is required to be made in the accounts in respect of :
a) An area of 807 hectares (approximately) [Previous Year 807 hectares
(approximately)], which is on a leasehold tenure falls under the
provisions of the Gudalur Jenmam Estate (Abolition and Conversion into
Ryotwari) Act, 1969. Company''s appeal challenging the Order of the
Settlement Officer rejecting its application for Patta is pending
before the District Court, Ooty. The status quo Orders passed by the
Madras High Court challenging the notification of 335 Hectares out of
this area as forest by the Government of Tamil Nadu is also in force.
b) An area of 125.80 hectares (approximately) [Previous Year 889
hectares (approximately)] deemed to have been vested with the
Government of Kerala pursuant to Kerala Private Forests (Vesting and
Assignment) Act, 1971, as the Company''s claim for the exclusion of the
area from the purview of the Act is pending decision of the Forest
Tribunal, Palghat and restoration by the Forest Department.
c) An area of 2588 hectares (approximately) [Previous Year 2588
hectares (approximately)] liable to be surrendered to the Government of
Kerala under the Kerala Private Forests (Vesting and Assignment) Act,
1971, as the appeals relating to this area are pending in the High
Court of Kerala.
d) The Vythiri Taluk Land Board''s order directing the Company to
surrender 707 hectares (approximately) [Previous Year 707 hectares
(approximately)] as excess land under the Kerala Land Reforms Act, 1963
has been set aside by the High Court of Kerala on a revision petition
filed by the Company and the matter has been remanded to the Vythri
Taluk Land Board for fresh consideration and disposal.
e) An area of 415 hectares (approximately) [Previous Year 415 hectares
(approximately)] held to be surplus under the Tamil Nadu Land Reforms
(Fixation of Ceiling on Land) Act, 1961 as the Special Land Tribunal,
Madras has remanded the matter for fresh consideration by the
Authorised Officer, Coimbatore.
f) An area of 1310 hectares (approximately) [Previous Year 1460
hectares (approximately)] in respect of which cases filed by Janmies
(original owners) of Lahai, Koney and Arrapetta Estates challenging the
validity of the lease is pending before the Sub-Court, Pathanamthitta,
Sub-Court, Sulthan Bathery and High Court of Kerala.
g) An area of 22.45 hectares (approximately) [Previous Year 22.45
hectares (approximately)] resumed by the Government of Kerala, as the
Government''s writ appeal challenging the High Court judgement directing
to return the land to the Company is pending before the High Court of
Kerala.
h) An area of 304 hectares (approximately) [Previous Year 304 hectares
(approximately)] re-notified as vested forests by the Government of
Kerala as the Company''s writ petition challenging the notification is
pending before the High Court of Kerala.
i) An area of 1982.45 hectares (Previous Year 1982.45 hectares) of
Mooply Valley estates notified by the Government of Kerala for
resumption alleging violation of lease conditions as proceedings has
been stayed by the Sub Court, Irinjalakuda.
j) An area of 336.64 hectares (Previous Year 336.64 hectares) of rubber
field of Koney estate in respect of which the Writ Petition filed by
the Company and the status quo order passed by the High Court of Kerala
challenging the proceedings intiated by the Government of Kerala to
resume such lands, is in force.
k) Guarantee of Rs. Nil (Previous Year Rs. 1,800 Lacs), provided to the
Registrar General, High Court of Kerala for commencing the felling of
trees in litigated lands as indicated interalia in points a to j above
is secured by equitable mortgage of property situated at Mumbai and
Coimbatore.
4 Segment Reporting
The Company has considered business segments as the primary segment and
geographical segments as the secondary segments. The business segments
are: Tea, Rubber, Engineering and others which have been identified
taking into account the organisational structure as well as the
differing risks and returns of these segments. Other segments comprise
of Plant Tissue Culture, Clearing and Shipping, Fruits, Spices and
others and Wyanaad Medical Fund. The geographical segments are
identified on the basis of the location of customers.
5 Earnings Per Share
Particulars 2013-14 2012-13
Rs. Lacs Rs. Lacs
a) Profit after tax 441.50 229.76
(including extraordinary
item) (Rs in lacs )
b) Profit after tax 439.77 229.76
(excluding extraordinary
item) (Rs in lacs )
c) Number of equity shares
at the beginning of the year 18,455,405 18,455,405
d) Number of equity shares 18,455,405 18,455,405
at the end of the year
e) Weighted average number 18,455,405 18,455,405
of equity shares outstanding
f) Nominal Value of each 10.00 10.00
equity share (Rs.)
g) Basic and diluted earnings 2.39 1.24
per share (including extraordinary
item) (Rs.) (a/e)
h) Basic and diluted earnings 2.38 1.24
per share (excluding extraordinary
item) (Rs.) (b/e)
6 Taxation
a) The Company is liable to pay Minimum Alternate Tax under section
115JB of the Income Tax Act, 1961 based on which the current tax has
been computed and provided in the accounts.
b) No provision for Agricultural Income Tax has been considered
necessary in view of the carry forward losses.
c) The Company has not recognised any Deferred Tax Asset in respect of
unabsorbed depreciation/ brought forward losses and other timing
differences in accordance with Accounting Standard 22 "Accounting for
Taxes on Income" in the absence of virtual/ reasonable certainty that
sufficient future taxable income will be available against which such
asset could be realised.
d) The company has not recognized MAT credit on a prudent basis in the
absence of reasonable certainty that sufficient future tax profit
against which such credit could be realised.
7 The Company has entered into a composite scheme of arrangement and
amalgamation amongst Harrisons Malayalam Limited (HML) and Enchanting
Plantations Limited (100% subsidiary of HML) and Malayalam Plantations
Limited (100% subsidiary of Enchanting Plantations Limited) and Harmony
Plantations Limited (100% subsidiary of HML) and their respective
shareholders and their creditors ("the Scheme"). The Scheme has been
approved by the Board of Directors and sanctioned by the shareholders
of the Company and the Company has intimated to the Stock Exchanges in
which the Company''s shares are listed. As per the Scheme interalia
certain Tea and Rubber estates would be transferred/ demerged to its
subsidiaries. The Scheme is now pending before the High Court of
Kerala.
8 The Company in its Board meeting dated May 15, 2012 has approved the
plan for transferring its Engineering division to its wholly owned
subsidiary and has also obtained the consent of its shareholders by way
of postal ballot. The Engineering division is a separate business
segment as per AS 17 "Segment Reporting". The decision is consistent
with the Company''s long term strategy to focus on core plantation
activity.
The operating activities of the Company''s discontinuing operations are
summarised as follows:
9 Previous year''s figures have been regrouped / rearranged wherever
necessary to conform to the current year''s presentation.
Mar 31, 2013
1.1 Certain employees of the Company were members of the Provident
Fund Trust set up by the Company and the Company had an obligation to
fund any shortfall in return on plan asset over the interest rate
prescribed by the authorities from time to time. In view of Company''s
obligation to meet the shortfall, it was a defined benefit plan.
During the year the Company on obtaining necessaray approvals from the
Employees Provident Fund Organisation transferred the corpus of the
aforesaid Trust to the Regional Provident Fund and discontinued making
contribution to the said Trust and is contributing to the Regional
Provident Fund effective January 1, 2013. Pursuant to above, all
contributions to Provident Fund effective January 1, 2013 are defined
contribution plan.
1.2 Commitments :
Estimated amount of contracts remaining to be executed on Capital
Account and not provided for, net of advance payments of Rs. 35.12 lacs
(Previous year Rs.75.68 lacs) 19.89 80.37
2 No adjustment is required to be made in the accounts in respect of:
a An area of 807 hectares (approximately), which is on a lease hold
tenure falling under the provisions of the Gudalur Jenmam Estate
(Abolition and Conversion into Ryotwari) Act, 1969. Company''s appeal
challenging the order of the Settlement Officer rejecting its
application for patta is pending before the District Court,Ooty. The
status quo orders passed by the Madras High Court challenging the
notification of vesting of 335 hectares out of the aforesaid area as
forest lands by the Government of Tamil Nadu are also in force.
b An area of 889 hectares (approximately) deemed to have been vested
with the Government of Kerala pursuant to Kerala Private Forests
(Vesting and Assignment) Act, 1971, as the Company''s claim for the
exclusion of the area from the purview of the Act has been upheld by
the Forest Tribunal, Palghat.
c An area of 2588 hectares (approximately) liable to be surrendered to
the Government of Kerala under the Kerala Private Forests (Vesting and
Assignment) Act, 1971, as the appeals relating to this area are pending
in the High Court of Kerala.
d The Vythiri Taluk Land Board''s order directing the Company to
surrender 707 hectares (approximately) as excess land under the Kerala
Land Reforms Act, 1963 has been set aside by the High Court of Kerala
on a revision petition filed by the Company and the matter has been
remanded to the Vythri Taluk Land Board for fresh consideration and
disposal.
e An area of 415 hectares (approximately) held to be surplus under the
Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 as the
Special Land Tribunal, Madras has remanded the matter for fresh
consideration by the Authorised Officer, Coimbatore.
f An area of 1460 hectares (approximately) in respect of which cases
filed by Janmies (original owners) of Lahai, Koney and Arrapetta
Estates challenging the validity of the lease is pending before the
Sub-Court, Pathanamthitta ,Sub-Court, Sulthan Bathery and High Court of
Kerala.
g An area of 22.45 hectares (approximately) resumed by the Government
of Kerala, as the Government''s writ appeal challenging the High Court
judgement directing to return the land to the Company is pending before
the High Court of Kerala.
h An area of 304 hectares (approximately) re-notified as vested forests
by the Government of Kerala as the Company''s writ petition challenging
the notification is pending before the High Court of Kerala.
i An area of 1982.45 hectares of Mooply Valley estates notified by the
Government of Kerala for resumption alleging violation of lease
conditions as proceedings has been stayed by the Sub Court,
Irinjalakuda.
j An area of 336.64 hectares of rubber field of Koney estate in respect
of which the Writ Petition filed by the Company and the status quo
order passed by the High Court of Kerala challenging the proceedings
intiated by the Government of Kerala to resume such lands, is in force.
k Guarantee of Rs. 1,800 lacs, provided to the Registrar General, High
Court of Kerala for commencing the felling of trees in litigated lands
as indicated interalia in points a to j above is secured by equitable
mortgage of property situated at Mumbai and Coimbatore.
3 Segment Reporting
The Company has considered business segments as the primary segment and
geographical segments as the secondary segments. The business segments
are: Tea, Rubber, Engineering and others which have been identified
taking into account the organisational structure as well as the
differing risks and returns of these segments. Other segments comprise
of Plant Tissue Culture, Clearing and Shipping, Fruits, Spices and
others and Wyanaad Medical Fund. The geographical segments are
identified on the basis of the location of customers.
(a) Primary Segment Information - By Business Segments *
4 Related Party Disclosures
a List of Related Parties where control exists (Wholly Owned
Subsidiaries)
HML Engineering Company Limited (HECL) effective June 6, 2011
Enchanting Plantations Limited (EPL) effective February 8, 2012
Harmony Plantations Limited (HPL) effective February 12, 2012
Malayalam Plantations Limited (MPL) effective November 11, 2011 ( 100%
subsidiary of EPL)
b Key management personnel
Mr. Pankaj Kapoor (Managing Director) upto June 30, 2012. Mr. V
Venugopal (Manager) with effect from August 14, 2012
5 Taxation
a The Company is liable to pay Minimum Alternate Tax under section
115JB of the Income Tax Act, 1961 based on which the current tax has
been computed and provided in the accounts.
b No provision for Agricultural Income Tax has been considered
necessary in view of the carry forward losses.
c The Company has not recognised any Deferred Tax Asset in respect of
unabsorbed depreciation/ brought forward losses and other timing
differences in accordance with Accounting Standard 22 "Accounting for
Taxes on Income" in the absence of virtual/ reasonable certainty that
sufficient future taxable income will be available against which such
asset could be realised.
d The Company has not recognized MAT credit on a prudent basis in the
absence of reasonable certainty that sufficient future tax profit
against which such credit could be realised.
6 The Company has entered into a composite scheme of arrangement and
amalgamation amongst Harrisons Malayalam Limited (HML) and Enchanting
Plantations Limited (100% subsidiary of HML) and Malayalam Plantations
Limited (100% subsidiary of Enchanting Plantations Limited) and Harmony
Plantations Limited (100% subsidiary of HML) and their respective
shareholders and their creditors ("the Scheme"). The Scheme has been
approved by the Board of Directors and sanctioned by the shareholders
of the Company and the Company has intimated to the Stock Exchanges in
which the Company''s shares are listed. As per the Scheme interalia
certain Tea and Rubber estates would be transferred/ demerged to its
subsidiaries. The Scheme is now pending before the High Court of
Kerala.
7 The Company in its Board meeting dated May 15, 2012 has approved the
plan for transferring its Engineering division to its wholly owned
subsidiary and has also obtained the consent of its shareholders by way
of postal ballot. The Engineering division is a separate business
segment as per AS 17 "Segment Reporting". The decision is consistent
with the Company''s long term strategy to focus on core plantation
activity.
8 Previous year''s figures have been regrouped / rearranged wherever
necessary to confrom to the current year''s presentation.
Mar 31, 2012
(i) Rights, preferences and restrictions attached to Equity shares
mentioned above :
The company has only one class of equity shares having a par value of
Rs.10 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, in proportion to their shareholding.
Term loan from banks
a Loan availed Rs.5,800 Lacs during financial years 2008-09 and 2009-10
repayable in 17 quarterly instalments of Rs.322.23 Lacs repayable from
April 2009 and final instalment of Rs.322.09 Lacs along with interest
of BPLR minus 1.25% is secured by equitable mortgage of immovable
properties of the Company situated in Wentworth Estate and Coimbatore
factory and also by a charge on the movable assets of the Company
situated in the above properties. Year end balance is Rs Nil Lacs
(previous year Rs.3,122.16 Lacs).
b Loan availed Rs. 883.54 Lacs during financial years 2009-10 and
2010-11 repayable in 32 quarterly instalments of Rs.23.80 Lacs
commencing from June 2014 and 4 quarterly instalments of Rs.30.485 Lacs
commencing from 2022-23 is secured on a pari passu basis by equitable
mortgage of immovable property of the Company situated in Mayfield
Estate and also by a charge on the movable assets of the Company
situated in the above estate. The loan carries an interest rate of
0.75% above SBAR payable on a monthly basis from disbursement of the
loan. Year end balance is Rs. 883.54 Lacs (previous year Rs.883.54
Lacs).
c Loan availed Rs.290.07 Lacs during financial years 2009-10 and
2010-11 repayable in 35 quarterly instalments of Rs.8.06 Lacs
commencing from June 2014 and final quarterly instalment of Rs.7.97
Lacs is secured on a pari passu basis by equitable mortgage of
immovable property of the Company situated in Mayfield Estate and also
by a charge on the movable assets of the Company situated in the above
estate. The loan carries an interest rate of 12.50% per annum payable
on a monthly basis from disbursement of the loan. Year end balance is
Rs.290.07 Lacs (previous year Rs.290.07 Lacs).
d Loan availed Rs.6,000.00 Lacs during 2010-11 and 2011-12 repayable in
17 quarterly instalments of Rs.333.30 Lacs commencing from September
2012 and final quarterly instalment of Rs.333.90 Lacs is secured by
equitable mortgage of immovable properties of the Company situated in
Kumbazha estate. The loan carries an interest rate of base rate plus 3%
per annum payable on a monthly basis from disbursement of the loan.
Year end balance is Rs.6,000.00 Lacs (previous year Rs.4,000.00 Lacs).
Term loan from others
e Term loan from others are secured by hypothecation of assets acquired
out of these loans which are repayable in equated monthly instalments
(ranging between 3 to 4 years) along with the applicable interest rates
(ranging between 10.49 to 15.50 % ).
Secured by equitable mortgage of immovable properties of the Company
situated in Arrapetta Estate, hypothecation of standing crop in Achoor,
Arrapetta, Panniar, Mayfield , Lahai, Isfield and Nagamallay Estates
and by hypothecation of stocks of tea, rubber, trading merchandise,
stores and spares, book debts and other movable assets both present and
future. Cash credit carries an interest within the range of 13 - 18 %
p.a.
1. Land and development includes
a) Certain leasehold lands the value of which is not separately
ascertainable
b) Rs. 13,957.19 Lacs added on revaluation during 1990-1991 and
credited to Fixed Assets Revaluation Reserve.
c) Rs. 22,739.61 Lacs added on revaluation during 2009-2010 and
credited to Fixed Assets Revaluation Reserve. The credit to Fixed
Assets Revaluation Reserve has been adjusted against the excess of
liabilities over the assets taken over (Rs.21,233.80 lacs) and the
carrying value of investments in the shares of the wholly owned
subsidiary companies (Rs. 1,218.91 lacs) and the balance amount of
Rs.286.90 Lacs was transferred to Capital Reserve arising from
amalgamation as per the scheme.
2. Plant and Machinery
Additions to Plant and Machinery is net of capital subsidy of Rs.72.30
lacs ( Previous year Rs. 17.92 lacs)
1.1 In keeping with the Company's gratuity scheme ( an unfunded
defined benefit plan ), eligible employees are entitled for gratuity
benefit (as per the Payment of Gratuity Act, 1972) on
retirement/death/incapacitation/ termination. Also refer note 1.11 (ii)
(c) for accounting policy relating to gratuity. Following are the
further particulars with respect to gratuity:-
The estimation of future salary increase considered in actuarial
valuation takes account of inflation, seniority, promotion and other
relevant factors such as supply and demand in employment market.
1.2 Contributions towards provident funds are recognised as expense
for the year. The Company has set up Provident Fund Trust 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
Trust invests funds following a pattern of investments prescribed by
the Government. The interest rate payable to the members of tthe Trust
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
interest.
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.15.75 lacs ( Previous year - Rs.12.71
lacs) to the Provident Fund Trust has been expensed under the
"Contribution to Provident Fund'. Disclosures given hereunder are
restricted to the information available as per the Actuary's report.
2 Contingent Liabilities and commitments
Contingent Liabilities :
2.1 Claims against the Company not acknowledged
as debt
i. Employee related 468.19 352.38
ii. Penalties under section 14B of Employees'
Provident Fund Miscellaneous Provisions Act 1952 146.04 95.59
iii. Disputed Income Tax matters 469.14 323.67
iv. Disputed Sales Tax matters - 61.53
v. Customs duty payable pending fulfillment of
export obligation - 23.50
vi. The Government of Kerala had issued a
notification in February 2006, enhancing the
minimum wages of plantation workers which has
been challenged by the Association of Planters
of Kerala of which the Company was a member and
an interim stay was granted by the High Court of
Kerala. As the Company resigned from Association
of Planters of Kerala with effect from 12.02.2007,
a separate writ petition was filed and an interim
stay of the Government Notification obtained. 348.49 382.75
2.2 No adjustment has been made in the accounts in respect of :
a An area of 335 hectares (approximately) declared to be vested with
the Government of Tamil Nadu under the provisions of the Gudalur Jenmam
Estate (Abolition and Conversion into Ryotwari) Act, 1969 as this has
been disputed by the company.
b An area of 1050 hectares (approximately) deemed to have been vested
with the Government of Kerala pursuant to Kerala Private Forests
(Vesting and Assignment) Act, 1971, as the Company's claim for the
exclusion of the area from the purview of the Act has been upheld by
the Forest Tribunal, Palghat.
c An area of 2588 hectares (approximately) liable to be surrendered to
the Government of Kerala under the Kerala Private Forests (Vesting and
Assignment) Act, 1971, as the appeals relating to this area are pending
before High Court of Kerala.
d The Vythiri Taluk Land Board's order directing the Company to
surrender 707 hectares (approximately) as excess land under the Kerala
Land Reforms Act, 1963 has been set aside by the High Court of Kerala
on a revision petition filed by the Company and the matter has been
remanded to the Taluk Land Board, Vythiri for fresh consideration and
disposal.
e An area of 415 hectares (approximately) held to be surplus under the
Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 as the
Special Land Tribunal, Madras has remanded the matter for fresh
consideration by the Authorised Officer, Coimbatore.
f An area of 1460.101 hectares (approximately) in respect of which
cases filed by Janmies (original owners) of Lahai, Koney and Arrapetta
Estates challenging the validity of the lease is pending before the
Sub-Court, Pathanamthitta and Sub-Court, Sulthan Bathery.
g An area of 22.45 hectares (approximately) resumed by the Government
of Kerala, as the Company's Writ Petition challenging the resumption
order is pending before the High Court of Kerala.
h An area of 304 hectares (approximately) re-notified as vested forests
by the Government of Kerala as the Company's Writ Petition challenging
the notification is pending before the High Court of Kerala.
i An area of 4896.65 acres of Mooply Valley estates notified by the
Government of Kerala for resumption alleging violation of lease
conditions as proceedings has been stayed by the Sub Court,
Irinjalakuda.
3 Segment Reporting
The Company has considered business segments as the primary segment and
geographical segments as the secondary segments. The business segments
are: Tea, Rubber, Engineering and others which have been identified
taking into account the organisational structure as well as the
differing risks and returns of these segments. Other segments comprise
of Plant Tissue Culture, Clearing and Shipping, Fruits, Spices and
others and Wyanaad Medical Fund. The geographical segments are
identified on the basis of the location of customers.
(a) Primary Segment Information - By Business Segments *
All operating facilities are located in India.
* Figures in bracket represent previous year's figures
4 Related Party Disclosures
a List of Related Parties where control exists (Wholly Owned
Subsidiaries)
HML Engineering Company Limited (HECL) effective June 6, 2011
Enchanting Plantations Limited (EPL) effective February 8, 2012 Harmony
Plantations Limited (HPL) effective February 12, 2012 Malayalam
Plantations Limited (MPL) effective November 11, 2011
b Key management personnel
Mr. Pankaj Kapoor (Managing Director)
5. Change in Accounting Estimate
During the year the Company has reassessed the useful life of
depreciable fixed assets based on economic benefits derived from these
assets. Based on this reassessment, depreciation rate for Furniture
and Fittings has been revised from 18.10% to 33.33% (under written down
value method). As a result of this change, the depreciation charge has
increased by Rs.9.28 lacs with corresponding impact on the profit for
the year.
6. Taxation
a The Company is liable to pay Minimum Alternate Tax under section
115JB of the Income Tax Act, 1961 based on which the current tax has
been computed and provided in the accounts.
b No provision for Agricultural Income Tax has been considered
necessary in view of the carry forward losses.
c The Company has not recognised any Deferred Tax Asset in respect of
unabsorbed depreciation/ brought forward losses and other timing
differences in accordance with Accounting Standard 22 "Accounting for
Taxes on Income" in the absence of virtual/ reasonable certainty that
sufficient future taxable income will be available against which such
asset could be realised.
d The company has not recognized MAT credit on a prudent basis in the
absence of reasonable certainty that sufficient future tax profit
against which such credit could be realised.
7. The Company in its Board meeting dated May 15, 2012 has decided to
obtain the consent of its shareholders by way of postal ballot for
transferring its Engineering Division to its wholly owned subsidiary
HML Engineering Company Limited and the same has been subsequently
sanctioned by the shareholders. Also refer note 37 for results and
capital employed of the Engineering Division.
8. 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 the 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 the previous year figures does not impact recognition
and measurement principles followed for preparation of financial
statements.
Mar 31, 2011
As at As at
March 31,2011 March 31,2010
Rs. Lacs Rs. Lacs
1. Contingent Liabilities
i. Claims against the Company not
acknowledged as debt
A Employee related 352.38 206.21
B Interest @12% on Levy of damages under
section 14B of Employees' Provident
Fund Miscellaneous Provisions Act 1952. 95.59 81.50
ii. Disputed Sales Tax/ Income Tax demands 385.20 69.53
iii. Customs Duty payable, pending
fulfillment of export obligation 23.50 23.50
iv. The Government of Kerala had issued a
notification in February 2006, enhancing
the minimum wages of plantation workers
which has been challenged by the Association
of Planters of Kerala of which the Company
was a member and an interim stay was granted
by the High Court of Kerala. As the Company
resigned from Association of Planters of
Kerala with effect from 12.02.2007, a
separate writ petition was filed and an
interim stay of the Government Notification
obtained. The possible impact would be
Rs. 822.75 Lacs (Previous year Rs.822.75
Lacs), against which an amount of Rs 489.04
Lacs has been paid as advance which has not
been expensed as the Company has been legally
advised that the claim is not maintainable.
2. No adjustment has been made in the accounts in respect of:
(a) An area of 398 hectares (approximately) declared to be vested with
the Government of Tamil Nadu under the provisions of the Gudalur Jenmam
Estate (Abolition and Conversion into Ryotwari) Act, 1969 as this has
been disputed by the company.
(b) An area of 1050 hectares (approximately) deemed to have been vested
with the Government of Kerala pursuant to Kerala Private Forests
(Vesting and Assignment) Act, 1971, as the Company's claim for the
exclusion of the area from the purview of the Act has been upheld by
the Forest Tribunal, Palghat.
(c) An area of 2588 hectares (approximately) liable to be surrendered
to the Government of Kerala under the Kerala Private Forests (Vesting
and Assignment) Act, 1971, as the appeals relating to this area are
pending before Supreme Court of India.
(d) The Vythiri Taluk Land Board's order directing the Company to
surrender 707 hectares (approximately) as excess land under the Kerala
Land Reforms Act, 1963 has been set aside by the High Court of Kerala
on a revision petition filed by the Company and the matter has been
remanded to the Taluk Land Board, Vythiri for fresh consideration and
disposal.
(e) An area of 415 hectares (approximately) held to be surplus under
the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 as
the Special Land Tribunal, Madras has remanded the matter for fresh
consideration by the Authorised Officer, Coimbatore.
(f) An area of 1435 hectares (approximately) in respect of which cases
filed by Janmies (original owners) of Lahai, Koney and Arrapetta
Estates challenging the validity of the lease is pending before the
Sub-Court, Pathanamthitta and Sub-Court, Sulthan Bathery.
(g) An area of 22.45 hectares (approximately) resumed by the Government
of Kerala, as the Company's Writ Petition challenging the resumption
order is pending before the High Court of Kerala
(h) An area of 304 hectares (approximately) re-notified as vested
forests by the Government of Kerala as the Company's Writ Petition
challenging the notification is pending before the High Court of
Kerala.
(i) An area of 4896.65 acres of Mooply Valley estates notified by the
Government of Kerala for resumption alleging violation of lease
conditions as proceedings has been stayed by the Sub Court,
Irinjalakuda.
3. Segment Reporting
The Company has considered business segments as the primary segment and
geographical segments as the secondary segments. The business segments
are: Tea, Rubber, Engineering and others which have been identified
taking into account the organisation structure as well as the differing
risks and returns of these segments. Other segments comprise of Plant
Tissue Culture and Clearing and Shipping. The geographical segments are
identified on the basis of location of customers.
4. Related Party Disclosures
a) Key management personnel
Mr. Sanjiv Goenka (Chairman)
Mr. Pankaj Kapoor (Managing Director)
b) The above information regarding related parties have been determined
to the extent such parties have been identified on the basis of
information available with the Company.
5. Taxation
(a) The Company is liable to pay Minimum Alternate Tax under section
115JB of the Income Tax Act, 1961 based on which the current tax has
been computed and provided in the accounts.
(b) No provision for Agricultural Income Tax has been considered
necessary in view of the carry forward losses.
(c) The Company has not recognised any Deferred Tax Asset in respect of
unabsorbed depreciation/ brought forward losses and other timing
differences in accordance with Accounting Standard 22 'Accounting for
Taxes on Income" in the absence of virtual certainty that sufficient
future taxable income will be available against which such asset could
be realised.
(d) The company has not recognized MAT credit in the absence of
reasonable certainty that sufficient future tax profit will be
available against which such credit could be adjusted.
6. Previous year's figures have been regrouped/ reclassified wherever
necessary to conform to the current year's presentation.
Mar 31, 2010
1.1 Contingent Liabilities
1.1.1 1,623,734 shares of CESC Ltd., having a cost of Rs. 353,811,639/-
is pledged with IDBI Trusteeship Services Limited as a borrowing
arrangement of CESC Ltd.
1.1.2 Disputed income tax dues relating to AY 1999 - 00 amounting to
Rs. 8,680 for which a rectification application is still pending before
the assessing authority
1.2 Segment Reporting
The Companys income for the year consisted of dividend income and
accordingly there are no reportable segments.
1.3 Related Party Transactions
Disclosure of Related Party Transaction in accordance with Accounting
Standard (AS-18) "Related Party Disclosures" issued by the Institute of
Chartered Accountants of India:
Name of the Company Relationship
Harrisons Malayalam Ltd. Holding Company (Till April 1, 2009)
Associate (From April 2, 2009)
1.4 Deferred Tax
Deferred tax asset on account of unabsorbed tax losses is not
recognized during the year since there is no virtual certainty of
taxable profits in the foreseeable future which would offset the asset
as the Company.has mainly one source of income being dividend which is
exempt under Income Tax Act.
1.5 Previous years figures have been regrouped / reclassified wherever
necessary to conform to the classification for the year.
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