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Accounting Policies of Dhunseri Tea & Industries Ltd. Company
Mar 31, 2025
The material accounting policies adopted in the preparation of these standalone financial statements are stated below. These
policies have been consistently applied, unless otherwise stated.
a) Basis for preparation
(i) Compliance with Ind AS
These standalone financial statements comply in all material respects with the Indian Accounting Standards (Ind AS) notified
under Section 133 of the Companies Act, 2013 (the ''Act'') [Companies (Indian Accounting Standards) Rules, 2015] (as
amended from time to time) and other relevant provisions of the Act. These standalone financial statements has also been
prepared in compliance with presentation requirement of Division II of Schedule III of the Companies Act, 2013 (IND AS
Compliant Schedule III) as applicable to the standalone financial statements.
These standards and policies have been consistently applied to all the years presented, unless otherwise stated. The
standalone financial statements are presented in Indian Rupees (Rs.), which is the Company''s functional and presentation
currency.
(ii) Historical cost convention
The standalone financial statements have been prepared under the historical cost convention with the exception of certain
assets and liabilities that are required to be carried at fair values by Ind AS.
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.
b) Property, plant and equipment
(i) Property, plant and equipment are stated either at deemed cost as considered on the date of transition to Ind AS or
at acquisition/construction cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost
comprises of purchase cost, borrowing costs if capitalization criteria are met and other directly attributable cost of bringing
the assets to its working condition for intended use. Any trade discounts and rebates are deducted in arriving at the
purchase price.
(ii) Bearer plants comprising of mature tea bushes are stated at cost less accumulated depreciation and accumulated
impairment losses, if any.
(iii) Immature bearer plants, including the cost incurred for procurement of new seeds/plants and maintenance of nurseries,
are carried at cost less any recognized impairment losses under capital work-in-progress. Cost includes the expenditure for
uprooting, land preparation, new planting and maintenance of newly planted bushes until maturity. On maturity, these costs
are classified under bearer plants. Bearer Plants are depreciated from the date when they are ready for commercial harvest.
(iv) Subsequent expenditure related to an item of property, plant and equipment is added to its carrying amount only if it
increases the future benefits from the existing assets beyond its previously assessed standard of performance.
(v) Capital work in progress is stated at cost incurred during construction/installation period relating to items or projects in
progress.
(vi) Losses arising from the retirement of and gains or losses arising from disposal of property, plant and equipment are
recognized in the Statement of Profit and Loss.
(vii) Depreciation methods, estimated useful lives and residual value
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their useful
lives as estimated by management that are in line with those prescribed by the Schedule II of the Companies Act, 2013.
The useful lives of property, plant and equipment have been considered as per Schedule II, except in case of Bearer Plants
for which the useful life have been considered on the basis of technical evaluation.
Estimate of remaining useful life are reviewed every year.
Leasehold lands for Tea Estates are granted/allotted/settled/extended by the government with a right of renewal. The
government extends the lease renewals by way of general notifications at regular intervals. These leasehold lands are
considered as long term and perpetual leases.
c) Investment Properties
Property (Land or a Building- or part of a Building or both) that is held for long-term rental yields or for capital appreciation
or both, rather than for use in production or supply of goods or for administrative purposes or sale in the ordinary course of
business by the Company, is classified as investment property. Investment property is measured initially at its cost, including
related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the asset''s carrying
amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the
cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of
an investment property is replaced, the carrying amount of the replaced part is derecognized.
Investment properties are depreciated using the straight-line method over their estimated useful lives. The investment properties
held by the Company comprise only of freehold land, hence there is no depreciation.
d) Non-current assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction
rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying
amount and fair value less cost to sell.
An impairment loss is recognized for any initial or subsequent write-down of the asset to fair value less cost to sell. A gain
is recognized for any subsequent increases in fair value less cost to sell of an asset, but not in excess of any cumulative
impairment loss previously recognized. A gain or loss not previously recognized by the date of the sale of the non-current asset
is recognized at the date of de-recognition.
Non-current asset classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities
of a Non-current asset classified as held for sale are presented separately from other liabilities in the balance sheet.
e) Impairment of non-financial assets
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets
may not be recoverable. An impairment loss is recognised for the amount by which the asset''s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessment of the time value of money and the risks specific to the asset. In determining fair value less
costs of disposal, recent market transactions are taken into account. For the purpose of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash
inflows from other assets or groups of assets (cash-generating units).
An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment
losses no longer exist or have decreased. A previously recognised impairment loss is reversed only if there has been a change in
the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognised. The reversal
is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount
that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.
f) Financial Instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of
the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities
at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial
asset or financial liability. The transaction costs directly attributable to the acquisition of financial assets and financial liabilities
at fair value through profit and loss are immediately recognized in the Statement of Profit and Loss.
Effective interest method
The effective interest method is a method of calculating the amortized cost of a financial instrument and of allocating interest
income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or
payments through the expected life of the financial instrument, or where appropriate, a shorter period.
Financial assets
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, demand deposits with banks, other short-term highly liquid investments with
original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
Other bank balances
Other bank balances include deposits with maturity less than twelve months but greater than three months and balances and
deposits with banks that are restricted for withdrawal and usage.
Financial assets at amortized cost
Financial assets in the nature of Trade Receivables, Loans, Security Deposits, Advances, Fixed Deposits, etc., are subsequently
measured at amortized cost if these financial assets are held within a business model whose objective is to hold these assets
in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets measured at fair value
Financial assets are measured at ''Fair value through other comprehensive income'' (FVOCI) if these financial assets are held within
a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell these financial
assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
The Company in respect of equity investments (other than Investment in subsidiaries which are accounted for at cost) which are
not held for trading has made an irrevocable election to present in other comprehensive income subsequent changes in the fair
value of such equity instruments. Such an election is made by the Company on an instrument by instrument basis at the time of
initial recognition of such equity investments.
Financial asset not measured at amortized cost or at fair value through other comprehensive income is carried at ''Fair value
through the Statement of Profit and Loss'' (FVPL).
Impairment of financial assets
The Company assesses on a forward looking basis the ''Expected credit losses'' (ECL) associated with its assets carried at
amortized cost and FVOCI debt instruments. The Company recognizes loss allowance for expected credit losses on financial
asset including towards time value of money.
For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which
requires expected lifetime losses to be recognized from initial recognition of the receivables.
De-recognition of financial assets
The Company de-recognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or it
transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity. If the Company
neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset,
the Company recognizes its retained interest in the assets and an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company
continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.
Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual
arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its
liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at
amortized cost, using the effective interest rate method where the time value of money is significant.
Interest bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at
amortized cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and
the settlement or redemption of borrowings is recognized over the term of the borrowings in the Statement of Profit and Loss.
De-recognition of financial liabilities
The Company de-recognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or
they expire.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable
right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability
simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal
course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
g) Inventories
Finished Goods and Stores and Spare parts are stated at lower of cost and net realizable value. Cost of Finished Goods
comprise direct material [cost of green leaf harvested from own gardens ("agricultural produceâ) / purchased green leaves]
and appropriate portion of variable and fixed overhead expenditure. Cost of inventories also include all other costs incurred in
bringing the inventories to their present location and condition. Costs are assigned to individual items of inventory on the basis
of weighted average method. Agricultural produce (being green leaf harvested from own gardens) is measured at the fair value
less cost to sell at the point of harvest of tea leaves.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and
the estimated costs necessary to make the sale.
h) Biological assets (Other than bearer plant)
Tea leaves growing on tea bushes are measured at fair value less cost to sell with changes in fair value recognized in Statement
of profit and loss.
i) Employee Benefits
(i) Short term employee benefits
The undiscounted amount of Short-term Employee Benefits expected to be paid in exchange for the services rendered by
employees is recognized during the period when the employee renders the service. This benefit includes salary, wages,
short term compensatory absences, bonus and other short term benefits.
(ii) Long term compensated absences
Long term compensated absence is provided for on the basis of an actuarial valuation, using the Projected Unit Credit
Method as at the date of Balance Sheet. Actuarial loss/gains are recognized in the Statement of Profit and Loss in the year
in which they arise. The Company presents the entire leave as a current liability in the Balance Sheet, since it does not have
an unconditional right to defer its settlement for twelve months after the reporting date.
(iii) Post employment benefit plans
For Defined Benefit Plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial
valuations being carried out at each Balance Sheet date. Re-measurement gains and losses of the net defined benefit
liability/ (asset) are recognized immediately in other comprehensive income. The service cost and net interest on the net
defined benefit liability/ (asset) is treated as a net expense within employment costs.
Past service cost is recognized as an expense when the plan amendment or curtailment occurs or when any related
restructuring costs or termination benefits are recognized, whichever is earlier.
The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit
obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets.
Any asset resulting from this calculation is limited to the present value of any economic benefit available in the form of
refunds from the plan or reductions in future contributions to the plan.
(iv) Defined contribution plans
Payments to defined contribution plans are charged as an expense as they fall due. Payments made to state managed
retirement benefit schemes are dealt with as payments to defined contribution schemes where the Company''s obligations
under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme.
j) Foreign currency transactions
Functional and presentation currency
The financial statements of the Company are presented in Indian Rupees (Rs.), which is the functional currency of the Company
and the presentation currency for the financial statements.
Transactions and balances
Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transactions. Monetary assets
and liabilities related to foreign currency are restated at the year-end at the exchange rate prevailing on the Balance Sheet date.
Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate on the date of
transactions. Exchange differences arising on restatement or settlement are recognized in the Statement of Profit and Loss in
the period in which they arise.
k) Revenue Recognition
Revenue is measured at fair value of consideration received or receivable, net of discounts and taxes and duties collected on
behalf of the government, taking into account the contractually defined terms.
Sale of goods
The Company is in the business of cultivation, manufacturing and selling of tea in the market. Under Ind AS 115 sales are
recognized when control of the products has transferred to the customer. The transfer of control occurs when the products has
been shipped to the specific location as the case may be, the risks of obsolescence and loss have been transferred, and either
the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that
the goods are in control of the customer.
No element of financing is deemed present as the sales are made with a credit term which is consistent with market practice
for the industry.
Interest income
Interest income is accrued on a time proportion basis, by reference to the principle outstanding and the effective interest rate
applicable.
Dividend income
Dividend income from investments is recognized when the shareholder''s rights to receive payment have been established.
Rental income
Rental income from investment properties and subletting of properties is recognized on straight line basis over the term of the
relevant leases.
l) Borrowing costs
Borrowing costs include interest, other costs incurred in connection with borrowing and exchange differences arising from
foreign currency borrowings to the extent that they are regarded as an adjustment to the interest cost. General and specific
borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready for their intended use or sale. Premium in the form of fees paid
on refinancing of loans are accounted for as an expense over the life of the loan using effective interest rate method. All other
borrowing costs are recognized in the Statement of Profit and Loss in the period in which they are incurred.
m) Taxes on income
Taxes on income comprises of current taxes and deferred taxes. Current tax in the Statement of Profit and Loss is provided as
the amount of tax payable in respect of taxable income for the period using tax rates and tax laws enacted during the period,
together with any adjustment to tax payable in respect of previous years.
Deferred tax is recognized on temporary differences between the carrying amounts of assets (including capital work in progress
towards bearer plants) and liabilities and the amounts used for taxation purposes (tax base), at the tax rates and tax laws
enacted or substantively enacted by the end of the reporting period. Deferred tax assets are recognized for the future tax
consequences to the extent it is probable that future taxable profits will be available against which the deductible temporary
differences can be utilized.
Deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss).
Income tax and deferred tax, in so far as it relates to items disclosed under other comprehensive income or equity, are disclosed
separately under other comprehensive income or equity, as applicable.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends either to settle on net basis, or to realize the asset and settle the
liability simultaneously.
n) Leases
The Company as lessee
The Company''s lease asset classes primarily consist of leases for plant & machinery, buildings and furniture and fixtures. The
Company assesses whether a contract contains a lease, at the inception of a contract.
At the date of commencement of the lease, the Company recognizes a right of use asset (ROU) and a corresponding lease
liability for all lease arrangements, in which it is a lessee, except for leases with a term of twelve months or less (short-term
leases), non-lease components (like maintenance charges, etc.) and leases of low value assets.
For these short-term leases, non-lease components and lease of low value assets, the Company recognizes the lease rental
payments as an operating expense.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets
and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or prior to the commencement date of the lease plus any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and impairment losses, if any. An impairment loss is recognized where
applicable, when the carrying value of ROU assets of cash generating units exceeds it fair value or value in use, whichever is
higher.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the lease term.
Lease liabilities are initially measured at the present value of the future lease payments. After the commencement date, the
amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
The Company as lessor
Leases in which the company does not transfer substantially all the risks and rewards incidental to ownership of an asset are
classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Contingent
rents are recognised as revenue in the period in which they are earned.
o) Government Grants
(i) Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be
received and the Company will comply with all attached conditions.
(ii) Government grants relating to income are deferred and recognized in the profit or loss over the period necessary to match
them with the costs that they are intended to compensate and presented within other income.
(iii) Government grants relating to the purchase of property, plant and equipment are included in other liabilities as deferred
income and are credited to Statement of Profit and Loss on a straight-line basis over the expected lives of the related assets
and presented within other income.
Mar 31, 2024
1. Company Information
Dhunseri Tea & Industries Limited (the âCompanyâ) is a Company limited by shares, incorporated and domiciled in India. The Company is engaged in cultivation, manufacture and sale of tea. Its shares are listed on BSE Limited and National Stock Exchange of India Limited.
The standalone financial statements as at 31 March 2024 present the financial position of the Company.
The standalone financial statements for the year ended 31 March 2024 were approved by the Board of Directors and authorized for issue on 27 May 2024.
2. Material accounting policies
The material accounting policies adopted in the preparation of these standalone financial statements are stated below. These policies have been consistently applied, unless otherwise stated.
a) Basis for preparation
(i) Compliance with Ind AS
These standalone financial statements comply in all material respects with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the ''Act'') [Companies (Indian Accounting Standards) Rules, 2015] (as amended from time to time) and other relevant provisions of the Act. These standalone financial statements has also been prepared in compliance with presentation requirement of Division II of Schedule III of the Companies Act,2013 (IND AS Compliant Schedule III) as applicable to the standalone financial statements.
These standards and policies have been consistently applied to all the years presented, unless otherwise stated. The standalone financial statements are presented in Indian Rupees (Rs.), which is the Company''s functional and presentation currency.
(ii) Historical cost convention
The standalone financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities that are required to be carried at fair values by Ind AS.
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.
b) Property, plant and equipment
(i) Property, plant and equipment are stated either at deemed cost as considered on the date of transition to Ind AS or at acquisition/construction cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises of purchase cost, borrowing costs if capitalization criteria are met and other directly attributable cost of bringing the assets to its working condition for intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
(ii) Bearer plants comprising of mature tea bushes are stated at cost less accumulated depreciation and accumulated impairment losses, if any.
(iii) Immature bearer plants, including the cost incurred for procurement of new seeds/plants and maintenance of nurseries, are carried at cost less any recognized impairment losses under capital work-in-progress. Cost includes the expenditure for uprooting, land preparation, new planting and maintenance of newly planted bushes until maturity. On maturity, these costs are classified under bearer plants. Bearer Plants are depreciated from the date when they are ready for commercial harvest.
(iv) Subsequent expenditure related to an item of property, plant and equipment is added to its carrying amount only if it increases the future benefits from the existing assets beyond its previously assessed standard of performance.
(v) Capital work in progress is stated at cost incurred during construction/installation period relating to items or projects in progress.
(vi) Losses arising from the retirement of and gains or losses arising from disposal of property, plant and equipment are recognized in the Statement of Profit and Loss.
(vii) Depreciation methods, estimated useful lives and residual value
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their useful lives as estimated by management that are in line with those prescribed by the Schedule II of the Companies Act, 2013. The useful lives of property, plant and equipments have been considered as per Schedule II, except in case of Bearer Plants for which the useful life have been considered on the basis of technical evaluation.
|
Class of assets |
Estimated useful life (in years) |
|
Bearer plants |
72 |
|
Buildings |
3 - 60 |
|
Plant and Equipment |
3 - 15 |
|
Furniture and Fixtures |
5 - 10 |
|
Vehicles |
8 - 10 |
Estimate of remaining useful life are reviewed every year.
Leasehold lands for Tea Estates are granted/allotted/settled/extended by the government with a right of renewal. The government extends the lease renewals by way of general notifications at regular intervals. These leasehold lands are considered as long term and perpetual leases.
c) Investment Properties
Property (Land or a Building- or part of a Building or both) that is held for long-term rental yields or for capital appreciation or both, rather than for use in production or supply of goods or for administrative purposes or sale in the ordinary course of business by the Company, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized.
Investment properties are depreciated using the straight-line method over their estimated useful lives. The investment properties held by the Company comprise only of freehold land, hence there is no depreciation.
d) Non-current assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less cost to sell.
An impairment loss is recognized for any initial or subsequent write-down of the asset to fair value less cost to sell. A gain is recognized for any subsequent increases in fair value less cost to sell of an asset, but not in excess of any cumulative impairment loss previously recognized. A gain or loss not previously recognized by the date of the sale of the non-current asset is recognized at the date of de-recognition.
Non-current asset classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a Non-current asset classified as held for sale are presented separately from other liabilities in the balance sheet.
e) Impairment of non-financial assets
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognised for the amount by which the asset''s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).
An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.
f) Financial Instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. The transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through profit and loss are immediately recognized in the Statement of Profit and Loss.
The effective interest method is a method of calculating the amortized cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
Other bank balances include deposits with maturity less than twelve months but greater than three months and balances and deposits with banks that are restricted for withdrawal and usage.
Financial assets at amortized cost
Financial assets in the nature of Trade Receivables, Loans, Security Deposits, Advances, Fixed Deposits, etc, are subsequently measured at amortized cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets measured at fair value
Financial assets are measured at ''Fair value through other comprehensive income'' (FVOCI) if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company in respect of equity investments (other than Investment in subsidiaries which are accounted for at cost) which are not held for trading has made an irrevocable election to present in other comprehensive income subsequent changes in the fair value of such equity instruments. Such an election is made by the Company on an instrument by instrument basis at the time of initial recognition of such equity investments.
Financial asset not measured at amortized cost or at fair value through other comprehensive income is carried at ''Fair value through the Statement of Profit and Loss'' (FVPL).
Impairment of financial assets
The Company assesses on a forward looking basis the ''Expected credit losses'' (ECL) associated with its assets carried at amortized cost and FVOCI debt instruments. The Company recognizes loss allowance for expected credit losses on financial asset including towards time value of money.
For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables.
De-recognition of financial assets
The Company de-recognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the assets and an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.
Financial liabilities and equity instruments Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost, using the effective interest rate method where the time value of money is significant.
Interest bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortized cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognized over the term of the borrowings in the Statement of Profit and Loss.
De-recognition of financial liabilities
The Company de-recognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or they expire.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
g) Inventories
Finished Goods and Stores and Spare parts are stated at lower of cost and net realizable value. Cost of Finished Goods comprise direct material [cost of green leaf harvested from own gardens ("agricultural produceâ) / purchased green leaves] and appropriate portion of variable and fixed overhead expenditure. Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Costs are assigned to individual items of inventory on the basis of weighted average method. Agricultural produce (being green leaf harvested from own gardens) is measured at the fair value less cost to sell at the point of harvest of tea leaves.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
h) Biological assets (Other than bearer plant)
Tea leaves growing on tea bushes are measured at fair value less cost to sell with changes in fair value recognized in Statement of profit and loss.
i) Employee Benefits
(i) Short term employee benefits
The undiscounted amount of Short-term Employee Benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service. This benefit includes salary, wages, short term compensatory absences, bonus and other short term benefits.
(ii) Long term compensated absences
Long term compensated absence is provided for on the basis of an actuarial valuation, using the Projected Unit Credit Method as at the date of Balance Sheet. Actuarial loss/gains are recognized in the Statement of Profit and Loss in the year in which they arise. The Company presents the entire leave as a current liability in the Balance Sheet, since it does not have an unconditional right to defer its settlement for twelve months after the reporting date.
(iii) Post employment benefit plans
For Defined Benefit Plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each Balance Sheet date. Re-measurement gains and losses of the net defined benefit liability/ (asset) are recognized immediately in other comprehensive income. The service cost and net interest on the net defined benefit liability/ (asset) is treated as a net expense within employment costs.
Past service cost is recognized as an expense when the plan amendment or curtailment occurs or when any related restructuring costs or termination benefits are recognized, whichever is earlier.
The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets.
Any asset resulting from this calculation is limited to the present value of any economic benefit available in the form of refunds from the plan or reductions in future contributions to the plan.
(iv) Defined contribution plans
Payments to defined contribution plans are charged as an expense as they fall due. Payments made to state managed retirement benefit schemes are dealt with as payments to defined contribution schemes where the Company''s obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme.
j) Foreign currency transactions
Functional and presentation currency
The financial statements of the Company are presented in Indian Rupees (Rs.), which is the functional currency of the Company and the presentation currency for the financial statements.
Transactions and balances
Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transactions. Monetary assets and liabilities related to foreign currency are restated at the year-end at the exchange rate prevailing on the Balance Sheet date. Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate on the date of transactions. Exchange differences arising on restatement or settlement are recognized in the Statement of Profit and Loss in the period in which they arise.
k) Revenue Recognition
Revenue is measured at fair value of consideration received or receivable, net of discounts and taxes and duties collected on behalf of the government, taking into account the contractually defined terms.
Sale of goods
The Company is in the business of cultivation, manufacturing and selling of tea in the market. Under Ind AS 115 sales are recognized when control of the products has transferred to the customer. The transfer of control occurs when the products has been shipped to the specific location as the case may be, the risks of obsolescence and loss have been transferred, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that the goods are in control of the customer.
No element of financing is deemed present as the sales are made with a credit term which is consistent with market practice for the industry.
Interest income
Interest income is accrued on a time proportion basis, by reference to the principle outstanding and the effective interest rate applicable.
Dividend income
Dividend income from investments is recognized when the shareholder''s rights to receive payment have been established. Rental income
Rental income from investment properties and subletting of properties is recognized on straight line basis over the term of the relevant leases.
l) Borrowing costs
Borrowing costs include interest, other costs incurred in connection with borrowing and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to the interest cost. General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Premium in the form of fees paid on refinancing of loans are accounted for as an expense over the life of the loan using effective interest rate method. All other borrowing costs are recognized in the Statement of Profit and Loss in the period in which they are incurred.
m) Taxes on income
Taxes on income comprises of current taxes and deferred taxes. Current tax in the Statement of Profit and Loss is provided as the amount of tax payable in respect of taxable income for the period using tax rates and tax laws enacted during the period, together with any adjustment to tax payable in respect of previous years.
Deferred tax is recognized on temporary differences between the carrying amounts of assets (including capital work in progress towards bearer plants) and liabilities and the amounts used for taxation purposes (tax base), at the tax rates and tax laws enacted or substantively enacted by the end of the reporting period. Deferred tax assets are recognized for the future tax consequences to the extent it is probable that future taxable profits will be available against which the deductible temporary differences can be utilized.
Deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss).
Income tax and deferred tax, in so far as it relates to items disclosed under other comprehensive income or equity, are disclosed separately under other comprehensive income or equity, as applicable.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on net basis, or to realize the asset and settle the liability simultaneously.
n) Leases
The Company as lessee
The Company''s lease asset classes primarily consist of leases for plant & machinery, buildings and furniture and fixtures. The Company assesses whether a contract contains a lease, at the inception of a contract.
At the date of commencement of the lease, the Company recognizes a right of use asset (ROU) and a corresponding lease liability for all lease arrangements, in which it is a lessee, except for leases with a term of twelve months or less (short-term leases), non-lease components (like maintenance charges, etc.) and leases of low value assets.
For these short-term leases, non-lease components and lease of low value assets, the Company recognizes the lease rental payments as an operating expense.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. An impairment loss is recognized where applicable, when the carrying value of ROU assets of cash generating units exceeds it fair value or value in use, whichever is higher.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the lease term.
Lease liabilities are initially measured at the present value of the future lease payments. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
The Company as lessor
Leases in which the company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Contingent rents are recognised as revenue in the period in which they are earned.
o) Government Grants
(i) Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
(ii) Government grants relating to income are deferred and recognized in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
(iii) Government grants relating to the purchase of property, plant and equipment are included in other liabilities as deferred income and are credited to Statement of Profit and Loss on a straight-line basis over the expected lives of the related assets and presented within other income.
p) Provisions and contingent liabilities
Provisions are recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made.
Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only 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 arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or reliable estimate of the amount cannot be made.
q) Earnings per share
Basic Earnings per share is 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 period. Earnings considered in ascertaining the Company''s
earnings per share is the net profit for the period.
For the purpose of calculating the diluted earnings per share the net profit or loss for the period attributable to the equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
r) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chairman and Managing Director.
s) Use of estimates and critical accounting judgments
In preparation of the financial statements, the Company makes judgments, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and the associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods affected.
Significant judgments and estimates relating to the carrying values of assets and liabilities include
i. Useful lives of property, plant and equipment - Note 3(a)
ii. Fair valuation of Investment Properties and Unquoted Investments - Note 3(d) and 5
iii. Provisions - Note 21
iv. Current tax and deferred tax - Note 9
v. Valuation of Biological assets and harvested tea leaves (agricultural produce) - Note 42
vi. Impairment of Investments Note 5, Property, plant and equipment Note 3(a), Right of use assets Note 3(b), Capital Work-inprogress Note 3(c), Investment properties Note 3(d) and Trade receivables Note 6
vii. Provisions and Contingencies related to litigations and claims- Note 35
t) Rounding off amount
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of schedule III, unless otherwise stated.
u) Changes in existing Ind AS
The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated 31 March 2023 to amend the following Ind AS which are effective for annual periods beginning on or after 1 April 2023, but do not have any significant impact on the Consolidated Financial Statements:
i. Definition of Accounting Estimates - Amendments to Ind AS 8
The amendments clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates. The amendments had no impact on the Group''s consolidated financial statements.
ii. Disclosure of Material Accounting Policies - Amendments to Ind AS 1
The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ''significant'' accounting policies with a requirement to disclose their ''material'' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments have had an impact on the Group''s disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Group''s financial statements.
iii. Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to Ind AS 12
The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases. The amendments had no impact on the Group''s consolidated financial statements.
Apart from these, consequential amendments and editorials have been made to other Ind AS like Ind AS 101, Ind AS 102, Ind AS 103, Ind AS 107, Ind AS 109, Ind AS 115 and Ind AS 34.
Mar 31, 2017
a) Basis for preparation
These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis except for certain tangible fixed assets which are being carried at revalued amounts. Pursuant to Section 133 of the Companies Act, 2013 read with Rule 7(1) of the Companies (Accounts) Rules 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with accounting standards notified under Section 211(3C) of the Companies Act, 1956, [Companies (Accounting Standards) Rules 2006, as amended] and other relevant provisions of the Companies Act, 2013.
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III (Division I) to the Act.
b) Tangible Assets
As per Revised Accounting Standard (AS) 10 on âProperty, Plant and Equipmentâ effective from 01.04.2016, the Company has opted to adopt the Revaluation Model as prescribed therein for Land and Bearer Plants and the Cost Model for other class of assets.
Freehold and Leasehold Land are stated at revalued amounts. Bearer plants being tea bushes are stated at revalued amounts less accumulated depreciation. Revaluation of Land and Bearer Plants are made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the Balance Sheet date. Other Tangible assets are stated at cost net of accumulated depreciation and accumulated impairment loss, if any. Cost comprises cost of acquisition/construction and subsequent improvement thereto including taxes and duties, freight and other incidental expenses relating to acquisition and installation.
c) Depreciation
Depreciation has been provided on straight-line method at the rates determined based on the estimated useful lives of the tangible assets where applicable, specified in Schedule II to the Act and in keeping with other provisions of the said Schedule, which is the same as that evaluated by the management, except for certain categories of Plant and Equipment wherein the estimated useful life has been determined to be 3 years.
Bearer Plants are depreciated over its estimated useful life of 72 years from the date from which they can be commercially harvested.
The estimate of residual value and useful life are reviewed every year.
d) Impairment
An impairment loss is recognized, where applicable, when the recoverable amount of an asset (i.e. higher of the asset''s net selling price and value in use) is less than its carrying amount.
e) Investments
Current investments are carried at the lower of cost and fair value. Long-term investments are carried at cost and provision is recorded to recognize, any decline, other than temporary, in the carrying amount of such investment. Investment acquired in exchange of another is carried at cost determined with reference to the fair value of investment given up.
Investment Property represent investment in land that are not intended to be occupied substantially for use by, or in the operations of, the Company. Investment properties are carried at cost.
f) Inventories
Inventories are valued at the lower of cost, computed on a weighted average basis, and estimated net realizable value. Provision is made for obsolescence wherever considered necessary. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.
g) Employee Benefits
(i) Short term Employee Benefits :
The undiscounted amount of Short-term Employee Benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service.
(ii) Compensated Absences :
Accumulated compensated absences which are expected to be availed or encashed within twelve months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensating absences as the additional amount expected to be paid as a result of the unused entitlement as at the year-end.
(iii) Post Employment Benefits Plans :
Contributions under Defined Contribution Plans payable in keeping with the related schemes are recognized as expenses for the year.
For Defined Benefit Plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognized in full in the Statement of Profit and Loss for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise is amortized on straight line basis over the average period until the benefits become vested. The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the present value of any economic benefit available in the form of refunds from the plan or reductions in future contributions to the plan.
(iv) Other Long-Term Employee Benefits (unfunded) :
The cost of providing long-term employee benefits is determined using Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date. Actuarial gains and losses and past service cost are recognized immediately in the Statement of Profit and Loss for the period in which they occur. Other long term employee benefit obligation recognized in the Balance Sheet represents the present value of related obligation.
h) Foreign currency transactions
Transactions in foreign currency are recorded at daily exchange rates prevailing on the date of the transaction. Monetary items denominated in foreign currency are restated at the year-end at the exchange rate prevailing on the Balance Sheet date. Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate on the date of transactions. Exchange differences arising on restatement or settlement are recognized in the Statement of Profit and Loss.
i) Revenue recognition
Sales are recognized upon transfer of substantial risk and rewards of ownership in the goods to the buyers as per the terms of the contract and net of trade discounts, sales tax, etc. where applicable. Other items of the revenue are accounted for on accrual basis. j) Other Income
Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable. Dividend income is recognized when the right to receive dividend is established.
Other items are accounted for on accrual basis. k) Borrowing costs
Borrowing costs attributable to the acquisition, construction or production of qualifying assets (i.e. assets that necessarily take substantial period of time to get ready for their intended use or sale) are added to the cost of those assets. All other borrowing costs are recognized in Statement of Profit and Loss in the period in which they are incurred.
l) Current and Deferred Tax
Current tax in respect of taxable income for the year is recognized based on applicable tax rate and laws.
Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is measured using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets in respect of carried forward losses and/or unabsorbed depreciation are recognized only when it is virtually certain and in other cases where there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets are reviewed at each Balance Sheet date to re-assess realization. Current tax assets and current tax liabilities are offset when there is legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is legally enforceable right to set off assets and liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.
m) Leases
Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of lease.
n) Government Grants
(i) Government grants of the nature of promoters'' contribution are credited to Capital Reserve.
(ii) Government grants related to specific fixed assets are deducted from gross values of related assets in arriving at their book values.
(iii) Government grants related to revenue are recognized on a systematic basis in the Statement of Profit and Loss over the periods necessary to match them with their related costs.
o) Provisions and Contingent Liabilities
Provisions are recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made.
Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only 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 arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or reliable estimate of the amount cannot be made.
p) Cash & Cash Equivalents
In the cash flow statement, cash and cash equivalents include cash in hand, demand deposits with banks, other short term highly liquid investments with original maturities of three months or less.
q) Earnings per share
Basic Earnings per share is 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 period. Earnings considered in ascertaining the Company''s earnings per share is the net profit for the period.
For the purpose of calculating the diluted earnings per share the net profit or loss for the period attributable to the equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
r) Use of Estimates
The preparation of financial statements requires use of estimates and assumptions to be made that affect the reported amounts of assets, liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the period. Difference between actual amount and estimates are recognized in the period in which the results are known / materialized.
I. Gratuity (Funded)
The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Fund make payment to vested employees at retirement, death/disability, withdrawal of an amount based on the respective employeeâs eligible salary for specified number of days depending upon the tenure of service subject to a maximum limit of Rs 10 lakhs. Vesting occurs upon completion of five years of service. Liability with regard to the aforesaid gratuity plan is determined by actuarial valuation as set out in Note 1(g)(iii) above, based upon which the Company makes annual contributions for Gratuity to the Trust Fund.
(i) The estimate of future salary increase considered in actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors. The expected return on plan assets is determined after taking into consideration composition of plan assets held, assessed risk, historical results on plan assets, the Company''s policy for plan asset management and other relevant factors.
(j) The net liability recognized in the Balance Sheet is expected to be paid in full within the next year.
(k) The Company provides for Superannuation benefit to certain employees wherein 15% of basic salary is funded with Life Insurance Corporation of India. Contribution during the year to such Fund amounts to Rs 7.54 lakhs (Previous Year Rs. 7.30 lakhs) and has been recognized as an expense and included in Note 27- Employee benefits expenses under the head âContribution to provident and other fundsâ in the Statement of Profit and Loss.
(l) The Company contributes 12% of the basic salary of Head Office employees towards Pension/Provident Fund Scheme to the Regional Provident Fund Commissioner, West Bengal and 12% of the basic salary of garden staff/workers to Assam Tea Plantation Provident Fund account. Contribution during the year to such Funds amount to Rs 510.42 lakhs (Previous Year Rs 425.95 lakhs) and has been recognized as an expense and included in Note 27- Employee benefits expenses under the head âContribution to provident and other fundsâ in the Statement of Profit and Loss.
Mar 31, 2016
Notes to Financial Statements for the year ended 31st March, 2016
Note : 1 [SIGNIFICANT ACCOUNTING POLICIES
a) Basis for preparation
These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis except for certain tangible fixed assets which are being carried at revalued amounts. Pursuant to Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with accounting standards notified under Section 211(3C) of the Companies Act 1956, [Companies (Accounting Standards) Rules 2006, as amended] and other relevant provisions of the Companies Act, 2013.
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Act.
b) Tangible Assets
Tangible assets are stated at cost net of accumulated depreciation and accumulated impairment losses if any except in case of Freehold Land and Leasehold Land and Estate Development which are carried at revalued amount. Cost comprises cost of acquisition/construction and subsequent improvement thereto including taxes and duties, freight and other incidental expenses relating to acquisition and installation.
Expenditure incurred towards estate development during the first year is capitalized and the expenses incurred thereafter in subsequent years and cost of replanting in existing areas are charged to revenue.
c) Depreciation
Depreciation has been provided on straight-line method at the rates determined based on the estimated useful lives of the tangible assets where applicable, specified in Schedule II to the Act and in keeping with other provisions of the said Schedule except for certain categories of Plant and Equipment wherein the estimated use life has been determined to be 3 years.
d) Impairment
An impairment loss is recognized, where applicable, when the recoverable amount of an asset (i.e. higher of the asset''s net selling price and value in use) is less than its carrying amount.
e) Investments
Current investments are carried at the lower of cost and fair value. Long-term investments are carried at cost and provision is recorded to recognize, any decline, other than temporary, in the carrying amount of such investment. Investment acquired in exchange of another is carried at cost determined with reference to the fair value of investment given up.
Investment Property represent investment in land that are not intended to be occupied substantially for use by, or in the operations of, the Company. Investment properties are carried at cost.
f) Inventories
Inventories are valued at the lower of cost, computed on a weighted average basis, and estimated net realizable value. Provision is made for obsolescence wherever considered necessary. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.
g) Employee Benefits
(i) Short term Employee Benefits:
The undiscounted amount of Short-term Employee Benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service.
(ii) Compensated Absences
Accumulated compensated absences which are expected to be availed or encashed within twelve months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensating absences as the additional amount expected to be paid as a result of the unused entitlement as at the year-end.
(iii) Post Employment Benefits Plans:
Contributions under Defined Contribution Plans payable in keeping with the related schemes are recognized as expenses for the year.
For Defined Benefit Plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognized in full in the Statement of Profit and Loss for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise is amortized on straight line basis over the average period until the benefits become vested. The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the present value of any economic benefit available in the form of refunds from the plan or reductions in future contributions to the plan.
(iv) Other Long-Term Employee Benefits (unfunded):
The cost of providing long-term employee benefits is determined using Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date. Actuarial gains and losses and past service cost are recognized immediately in the Statement of Profit and Loss for the period in which they occur. Other long term employee benefit obligation recognized in the Balance Sheet represents the present value of related obligation.
h) Foreign currency transactions
Transactions in foreign currency are recorded at daily exchange rates prevailing on the date of the transaction. Monetary items denominated in foreign currency are restated at the year-end at the exchange rate prevailing on the Balance Sheet date. Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate on the date of transactions. Exchange differences arising on restatement or settlement are recognized in the Statement of Profit and Loss.
i) Revenue recognition
Sales are recognized upon transfer of substantial risk and rewards of ownership in the goods to the buyers as per the terms of the contract and net of trade discounts, sales tax, etc. where applicable. Other items of the revenue are accounted for on accrual basis.
j) Other Income
Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.
Dividend income is recognized when the right to receive dividend is established.
Other items are accounted for on accrual basis.
k) Borrowing costs
Borrowing costs attributable to the acquisition, construction or production of qualifying assets (i.e. assets that necessarily take substantial period or time to get ready for their intended use or sale) are added to the cost of those assets. All other borrowing costs are recognized in Statement of Profit and Loss in the period in which they are incurred.
l) Current and Deferred Tax
Current tax in respect of taxable income for the year is recognized based on applicable tax rate and laws.
Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is measured using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets in respect of carried forward losses and/or unabsorbed depreciation are recognized only when it is virtually certain and in other cases where there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets are reviewed at each Balance Sheet date to re-assess realization. Current tax assets and current tax liabilities are offset when there is legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is legally enforceable right to set off assets and liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.
m) Leases
Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of lease.
n) Government Grants
(i) Government grants of the nature of promoters'' contribution are credited to Capital Reserve.
(ii) Government grants related to specific fixed assets are deducted from gross values of related assets in arriving at their book values.
(iii) Government grants related to revenue are recognized on a systematic basis in the Statement of Profit and Loss over the periods necessary to match them with their related costs.
o) Provisions and Contingent Liabilities
Provisions are recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made.
Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only 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 arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or reliable estimate of the amount cannot be made.
p) Cash & Cash Equivalents
In the cash flow statement, cash and cash equivalents include cash in hand, demand deposits with banks, other short term highly liquid investments with original maturities of three months or less.
q) Earnings per share
Basic Earning per share is 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 period. Earnings considered in ascertaining the Company''s earnings per share is the net profit for the period.
For the purpose of calculating the diluted earnings per share the net profit or loss for the period attributable to the equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
r) Use of Estimates
The preparation of financial statements requires use of estimates and assumptions to be made that affect the reported amounts of assets, liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the period. Difference between actual amount and estimates are recognized in the period in which the results are known / materialized
Mar 31, 2015
A) Basis for preparation
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis except for certain tangible fixed
assets which are being carried at revalued amounts. Pursuant to
Section 133 of the Companies Act, 2013 read with Rule 7 of the
Companies (Accounts) Rules 2014, till the standards of accounting or
any addendum thereto are prescribed by Central Government in
consultation and recommendation of the National Financial Reporting
Authority, the existing Accounting Standards notified under the
Companies Act, 1956 shall continue to apply. Consequently, these
financial statements have been prepared to comply in all material
aspects with accounting standards notified under Section 211(3C)
[Companies (Accounting Standards) Rules 2006, as amended] and other
relevant provisions of the Companies Act, 2013 (the Act).
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the Schedule III to the Act.
b) Tangible Assets
Tangible assets are stated at cost net of accumulated depreciation and
accumulated impairment losses if any except in case of Freehold Land
and Leasehold Land and Estate Development which are carried at revalued
amount. Cost comprises cost of acquisition/construction and subsequent
improvement thereto including taxes and duties, freight and other
incidental expenses relating to acquisition and installation.
Expenditure incurred towards estate development during the first year
is capitalized and the expenses incurred thereafter in subsequent years
and cost of replanting in existing areas are charged to revenue.
c) Depreciation
Deprecation has been provided on straight-line method at the rates
determined based on the estimated useful lives of the tangible assets
where applicable, specified in Schedule II to the Act and in keeping
with other provisions of the said Schdule.
d) Impairment
An impairment loss is recognized, where applicable, when the
recoverable amount of an asset (i.e. higher of the asset's net
selling price and value in use) is less than its carrying amount.
e) Investments
Current investments are carried at the lower of cost and fair value.
Long-term investments are carried at cost and provision is recorded to
recognize, any decline, other than temporary, in the carrying amount of
such investment. Investment acquired in exchange of another is carried
at cost determined with reference to the fair value of investment given
up.
Investment Property represent investment in land that are not intended
to be occupied substantially for use by, or in the operations of, the
Company. Investment properties are carried at cost.
f) Inventories
Inventories are valued at the lower of cost, computed on a weighted
average basis, and estimated net realizable value. Provision is made
for obsolescence wherever considered necessary. Cost comprises all cost
of purchase, cost of conversion and other costs incurred in bringing
the inventories to their present location and condition.
g) Employee Benefits
(i) Short term Employee Benefits:
The undiscounted amount of Short-term Employee Benefits expected to be
paid in exchange for the services rendered by employees is recognized
during the period when the employee renders the service.
(ii) Post Employment Benefits Plans:
Contributions under Defined Contribution Plans payable in keeping with
the related schemes are recognized as expenses for the year.
For Defined Benefit Plans, the cost of providing benefits is determined
using the Projected Unit Credit Method, with actuarial valuations being
carried out at each Balance Sheet date. Actuarial gains and losses are
recognized in full in the Statement of Profit and Loss for the period
in which they occur. Past service cost is recognized immediately to the
extent that the benefits are already vested, and otherwise is amortized
on straight-line basis over the average period until the benefits
become vested. The retirement benefit obligation recognized in the
Balance Sheet represents the present value of the defined benefit
obligation as adjusted for unrecognized past service cost, and as
reduced by the fair value of scheme assets. Any asset resulting from
this calculation is limited to the present value of any economic
benefit available in the form of refunds from the plan or reductions in
future contributions to the plan.
(iii) Other Long-Term Employee Benefits (unfunded):
The cost of providing long-term employee benefits is determined using
Projected Unit Credit Method with actuarial valuation being carried out
at each Balance Sheet date. Actuarial gains and losses and past service
cost are recognized immediately in the Statement of Profit and Loss for
the period in which they occur. Other long-term employee benefit
obligation recognized in the Balance Sheet represents the present value
of related obligation.
h) Foreign currency transactions
Transactions in foreign currency are recorded at daily exchange rates
prevailing on the date of the transaction. Monetary items denominated
in foreign currency are restated at the year-end at the exchange rate
prevailing on the Balance Sheet date. Foreign currency non-monetary
items carried in terms of historical cost are reported using the
exchange rate on the date of transactions. Exchange differences
arising on restatement or settlement are recognized in the Statement of
Profit and Loss.
i) Revenue recognition
Sales are recognized upon transfer of substantial risk and rewards of
ownership in the goods to the buyers as per the terms of the contract
and net of trade discounts, sales tax, etc. where applicable. Other
items of the revenue are accounted for on accrual basis.
j) Other Income
Interest income is recognized on time proportion basis taking into
account the amount outstanding and the rate applicable. Dividend
income is recognized when the right to receive dividend is established.
Other items are accounted for on accrual basis.
k) Borrowing costs
Borrowing costs attributable to the acquisition, construction or
production of qualifying assets (i.e. assets that necessarily take
substantial period or time to get ready for their intended use or sale)
are added to the cost of those assets. All other borrowing costs are
recognized in Statement of Profit and Loss in the period in which they
are incurred.
l) Taxes on income
Current tax in respect of taxable income for the year is recognized
based on applicable tax rate and laws.
Deferred tax is recognized, subject to the consideration of prudence,
on timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods and is measured using tax
rates and laws that have been enacted or substantively enacted by the
Balance Sheet date. Deferred tax assets in respect of carried forward
losses and/or unabsorbed depreciation are recognized only when it is
virtually certain and in other cases where there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax
assets can be realized. Deferred tax assets are reviewed at each
Balance Sheet date to re-assess realization. Current tax assets and
current tax liabilities are offset when there is legally enforceable
right to set off the recognized amounts and there is an intention to
settle the asset and the liability on a net basis. Deferred tax assets
and deferred tax liabilities are offset when there is legally
enforceable right to set off assets and liabilities representing
current tax and where the deferred tax assets and the deferred tax
liabilities relate to taxes on income levied by the same governing
taxation laws.
m) Leases
Leases where a significant portion of the risk and rewards of ownership
are retained by the lessor are classified as operating lease. Payments
made under operating leases are charged to the Statement of Profit and
Loss on a straight-line basis over the period of lease.
n) Government Grants
(i) Government grants of the nature of promoters' contribution are
credited to Capital Reserve.
(ii) Government grants related to specific fixed assets are deducted
from gross values of related assets in arriving at their book values.
(iii) Government grants related to revenue are recognized on a
systematic basis in the Statement of Profit and Loss over the periods
necessary to match them with their related costs.
o) Provisions and Contingent Liabilities
Provisions are recognized when there is a present obligation as a
result of a past event, it is probable that an outflow of resources
will be required to settle the obligation and in respect of which
reliable estimate can be made.
Contingent Liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which will be
confirmed only 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 arises from past events where it is either
not probable that an outflow of resources will be required to settle
the obligation or reliable estimate of the amount cannot be made.
p) Use of Estimates
The preparation of financial statements requires use of estimates and
assumptions to be made that affect the reported amounts of assets,
liabilities and disclosure of contingent liabilities on the date of
financial statements and the reported amounts of revenue and expenses
during the period. Difference between actual amount and estimates are
recognized in the period in which the results are known / materialized.
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