Accounting Policies of Ledo Tea Company Ltd. Company

Mar 31, 2015

A) Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards as prescribed under the Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies(Accounts) Rules, 2014 and the relevant provisions of Companies Act, 2013, to the extent notified. The financial statements have been prepared under the cost convention on accrual basis. The accounting policies applied by the Company are consistent with those used in the previous year.

b) Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make judgements, estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported revenue and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialised.

c) Inventories

Stock of Tea is valued at the lower of cost and the net realisable value. However, Stock of Tea Waste is valued at estimated realisable value. Cost is comprised of Materials, Labour and total Garden Overheads.

Stock of Stores and Spare parts are valued at cost on FIFO basis.

As per practice followed by the Company value of green leaves in stock as at the close of the year are not taken into accounts.

d) Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash in hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

e) Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

(f) Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes purchase price and any directly attributable cost of bringing the assets to working condition for the intended use.

Assets acquired under hire purchase scheme are treated as fixed assets on delivery, pending transfer of title subsequently as per the terms of hire purchase agreement. All Expenditure incurred on Extension Planting are capitalized.

(g) Intangible assets

Expenses incurred on research are expended as and when incurred and development expenses which satisfy the assets criteria are amortised over a period of 10 years.

(h) Depreciation and amortisation

i. Depreciation on fixed assets is provided under Straight line method at the rates determined based on the useful lives of the respective assets and the residual values in accordance with the Schedule II of the Companies Act, 2013.

ii. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the date of addition/disposal.

(i) Revenue recognition

Sale of goods

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales exclude excise duty and sales tax.

Income from services

Company follows the mercantile system of accounting and recognize its income and expenditure on accrual basis.

Insurance Claims

Insurance and others claims are accounted for as and when accepted.

Interest Income

Interest Income is recognised on time proportionate basis, taking into account the amount outstanding and rate applicable.

(j) Government grants, subsidies and export incentives

Revenue grants including subsidy / rebates are credited to statement of Profit and Loss under "Other Income" or deducted from the related expenses. Grants relating to fixed assets are credited to Capital Reserves Account or adjusted in the cost of such assets as the case may be, as and when the ultimate realisability of such grants are established.

(k) Investments

Long-term investments are carried at cost. Provision for diminution in the value of such investment is made to recognize a decline other than temporary. Gain / losses on disposal of investment are recognized as income / expenditure. Dividends are accounted for when received.

(l) Employee benefits

i) The Company contributes to Provident Fund which are administered by duly constituted and approved authorities of Government.

ii) Gratuity are paid in accordance with the Payment of Gratuity Act, 1972 and accounted for, as and when paid/payable.

iii) Leave Encashment benefits are accounted for on accrual basis.

(m) Borrowing costs

Borrowing Costs that are directly attributable to the acquisition, construction or production of qualifying assets are being capitalised as part of the cost of that assets and other borrowing cost is recognised as expenses in the year in which they are incurred.

(n) Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

(o) Taxes on income

Tax expenses comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act,1961. Deferred income taxes reflect the impact of current year timing differences between taxable income for the year and reversal of timing differences of earlier years.

The deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax asset and deferred tax liabilities are offset, if a legally enforceable right exist to setoff current tax asset against current tax liabilities and the deferred tax asset and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax asset are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised. If the company has carry forward unabsorbed depreciation and tax losses deferred tax asset are recognised only to the extent there is virtual certainty supported by convincing evidence that sufficient taxable income will be available against which such deferred tax asset can be realised.

The carrying amount of deferred tax asset are reviewed at each Balance Sheet date. The company writes down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that becomes reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available.

Minimum alternate tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum alternate Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendation contained in guidance note issued by the institute of Chartered Accountants of India, the said asset is created by way of a credit to a statement of Profit and Loss and shown as MAT credit entitlement. The company reviews the carrying amount of MAT at each Balance Sheet date and writes down MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal income tax during specified period.

(p) Impairment of assets

The Company assesses at each Balance Sheet whether there is any indication that an asset may be impaired, if any such indication exist, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the Cash Generating Unit to which the asset belongs, is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date, there is any indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

As on the Balance Sheet date the carrying amount of the assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence, there is no impairment loss on the assets of the company.

(q) Provisions

Provision is made for Income Tax under the Tax Payable method, based on Tax Liability as computed after taking credit for allowances, expenses and carry forward losses. In case of matters under appeal due to disallowance or otherwise, full provision is made when the said liabilities are accepted.

(r ) Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence would be confirmed with the occurrence or the non-occurrence of one or more uncertain future events beyond 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. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability, but discloses its existence in the financial statements.

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Mar 31, 2014

A) Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention.

b) Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialised.

c) Inventories

Stock of Tea is valued at the lower of cost and the net realisable value. However, Stock of Tea waste is valued at estimated realisable value. Cost is comprised of Materials, Labour and total Garden Overheads.

Stock of Stores and Spare parts are valued at cost on FIFO basis.

As per practice followed by the Company value of green leaves in stock as at the close of the year are not taken into accounts.

d) Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash in hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

e) Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

f) Depreciation and amortisation

Depreciation has been provided on the straight-line method in accordance with Section 205(2)(b) of the Companies Act, 1956 and the rates prescribed in Schdule XIV to the Companies Act, 1956.

No provision has been made in respect of amortisation of Leasehold Land and Plantations.

g) Revenue recognition

Sale of goods

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales exclude excise duty and sales tax. Income from services

Company follows the mercantiles system of accounting and recognize its income and expenditure on accural basis.

h) Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes purchase price and any directly attributable cost of bringing the assets to working condition for the intended use.

Assets acquired under hire purchase scheme are treated as fixed assets on delivery, pending transfer of title subsequently as per the terms of hire purchase agreement.

All Expenditure incurred on Extension Planting are capitalized.

i) Intangible assets

Expenses incurred on research are expended as and when incurred and development expenses which satisfy the assets criteria are amortised over a period of 10 years.

j) Government grants, subsidies and export incentives

Revenue grants including subsidy / rebates are credited to Statement of Profit and Loss under "Other Income" or deducted from the related expenses. Grants relating to fixed assets are credited to Capital Reserves Account or adjusted in the cost of such assets as the case may be, as and when the ultimate realisability of such grants are established.

k) Investments

Long-term investments are carried at cost. Provision for diminution in the value of such investment is made to recognize a decline other than temporary. Gain / losses on disposal of investment are recognized as income / expenditure. Dividends are accounted for when received.

l) Employee benefits

The Company contributes to Provident Fund which are administered by duly constituted and approved authorities of Government.

Gratuity are paid in accordance with the Payment of Gratuity Act, 1972 and accounted for, as and when paid/payable. Leave Encashment benefits are accounted for on accrual basis.

m) Borrowing costs

Borrowing Costs that are directly attributable to the acquisition, construction or production of qualifying assets are being capitalised as part of the cost of that assets and other borrowing cost is recognised as expenses in the year in which they are incurred.

n) Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

o) Taxes on income

Deferred Tax is calculated at current statutory income tax rate and is recognised on timing difference between income and accounting income that originates in one period and are capable of being reversal in one or subsequent period. Deferred tax assets subject to consideration of prudence, are recognised and carried forward only to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets/liabilities are reviewed at each Balance Sheet date based on development during the year and available case laws to reassess realization / liabilities.

p) Impairment of assets

The Company assesses at each Balance Sheet whether there is any indication that an asset may be impaired, if any such indication exist, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the Cash Generating Unit to which the asset belongs, is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date, there is any indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

As on the Balance Sheet date the carrying amount of the assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence there is no impairment loss on the assets of the company.

q) Provisions

Provision is made for Income Tax under the Tax Payable method, based on Tax Liability as computed after taking credit for allowances, expenses and carry forward losses. In case of matters under appeal due to disallowance or otherwise, full provision is made when the said liabilities are accepted.

r) Contingent Liabilities

Contingent Liabilities are generally not provided for in the accounts and are separately shown in the Notes to the accounts.

s) Insurance claims

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

Note: Out of the above 1,00,110 Equity Shares werealloted as Bonus Shares by Capitalisation of General Reserve in FY1985-86

(a) There is no movement in share capital as compared to previous year

(b) Terms/rights attached to equity shares

(i) The company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees.

(ii) In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

(c) Details of Shareholders holding more than 5% equity shares in the Company;

(i) Special tea Term loans from Tea Board carry interest @ 9.50% and are secured by Equitable Mortgage Second charge or Pari passu charges on the Fixed Assets (i.e. immovable properties including machinery)

Special Tea Term Loan From Tea Board

(ii) Vehicle Loan from banks carry interest between 9.65% to 10.25% and are secured against hypothecation of Vehicle purchased against such loan

* Cash Credit facilities from United Bank of India carry interest at base rate plus 2.75%. Such facility is secured against Hypothecation of Tea and Tea Crops. Stock of Stores & Spare Parts, Plant & Machinery, other Fixed Assets and Book Debts and personal guarantee by the Directors of the Company

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Mar 31, 2013

A) Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention.

b) Use of Esti mates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialised

c) Inventories

Stock of Tea is valued at the lower of cost and the net realisable value. However, Stock of Tea Waste is valued at estimated realisable value. Cost is comprised of Materials, Labour and total Garden Overheads.

Stock of Stores and Spare parts are valued at cost on FIFO basis.

As per practice followed by the Company value of green leaves in stock as at the close of the year are not taken into accounts..

d) Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash in hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

e) Cash flow statement

Cash flows are reported using the indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

f) Depreciation and amortisation

Depreciation has been provided on the straight-line method in accordance with Section 205(2)(b) of the Companies Act, 1956 and the rates prescribed in Schedule XIV to the Companies Act, 1956.

No provision has been made in respect of amortisation of Leasehold Land and Plantations.

g) Revenue recognition

Sale of goods

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales exclude excise duty and sales tax.

I ncome from services

Company follows the mercantile system of accounting and recognizors its income and expenditure on accural basis.

h) Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes purchase price and any directly attributable cost of bringing the assets to working condition for the intended use.

Assets acquired under hire purchase scheme are treated as fixed assets on delivery, pending transfer of title subsequently as per the terms of hire purchase agreement.

All Expenditure incurred on Extension Planting are capitalized.

i) Intangible assets

Expenses incurred on research are expended as and when incurred and development expenses which satisfy the assets criteria are amortised over a period of 10 years.

j) Government grants, subsidies and export incentives

Revenue grants including subsidy / rebates are credited to statement of Profit and Loss under "Other Income" or deducted from the related expenses. Grants relating to fixed assets are credited to Capital Reserves Account or adjusted in the cost of such assets as the case may be, as and when the ultimate readability of such grants are established.

k) Investments

Long-term investments are carried at cost. Provision for diminution in the value of such investment is made to recognize a decline other than temporary. Gain / losses on disposal of investment are recognized as income / expenditure. Dividends are accounted for when received.

I) Employee benefits

The Company contributes to Provident Fund which are administered by duly constituted and approved authorities of Government.

Gratuity are paid in accordance with the Payment of Gratuity Act, 1972 and accounted for, as and when paid/payable.

Leave Encashment benefits are accounted for on accrual basis.

m) Borrowing costs

Borrowing Costs that are directly attributable to the acquisition, construction or production of qualifying assets are being capitalised as part of the cost of that assets and other borrowing cost is recognised as expenses in the year in which they are incurred.

n) Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

o) Taxes on income

Deferred Tax is calculated at current statutory income tax rate and is recognised on timing difference between income and accounting income that originates in one period and are capable of being reversal in one or subsequent period. Deferred tax assets subject to consideration of prudence, are recognised and carried forward only to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets/liabilities are reviewed at each Balance Sheet date based on development during the year and available case laws to reassess realization / liabilities.

p) Impairment of assets

The Company assesses at each Balance Sheet whether there is any indication that an asset may be impaired, if any such indication exist, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the Cash Generating Unit to which the asset belongs, is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date, there is any indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

As on the Balance Sheet date the carrying amount of the assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence, there is no impairment loss on the assets of the company.

q) Provisions

Provision is made for Income Tax under the Tax Payable method, based on Tax Liability as computed after taking credit for allowances, expenses and carry forward losses. In case of matters under appeal due to disallowance or otherwise, full provision is made when the said liabilities are accepted.

r) Contingent Liabilities

Contingent Liabilities are generally not provided for in the accounts and are separately shown in the Notes to the accounts.

s) Insurance claims

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

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Mar 31, 2012

A). Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared underthe historical cost convention.

b). Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known/materialise.

c). Inventories

Stock of Tea is valued at the lower of cost and the net realisable value.However, Stock of Tea waste is valued at estimated realisable value.Cost is comprised of Materials,Labour and total Garden Overheads.

Stock of Stores and Spare parts are valued at cost on FIFO basis.

As per practice followed by the Company value of green leaves in stock as at the close of the year are not taken into accounts.

d). Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash in hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

e). Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

f). Depreciation and amortisation

Depreciation has been provided on the straight-line method in accordance with Section 205(2)(b) of the Companies Act, 1956 and the rates prescribed in Schedule XIV to the Companies Act, 1956.

No provision has been made in respect of amortisation of Leasehold Land and Plantations.

g). Revenue recognition

Sale of goods

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales exclude excise duty and sales tax Income from services

Company follows the mercantile system of accounting and recognize its income and expenditure on accural basis.

h). Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes purchase price and any directly attributable cost of bringing the assets to working condition for the intended use.

Assets acquired under hire purchase scheme are treated as fixed assets on delivery, pending transfer of title subsequently as per the terms of hire purchase agreement.

All Expenditure incurred on Extension Planting are capitalized.

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Mar 31, 2010

The Financial Statements have been prepared in accordance with the generally accepted accounting principles and a summary of significant accounting policies which have been applied consistently is set out below:

01. Accounting Convention

The Financial Statements have been prepared in accordance with the historical cost convention.

02. Revenue Recognition

The Company follows the mercantile system of accounting and recognized income and expenditure on accrual basis.

03. Use of Estimates

The preparation of Financial Statements require Management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosures relating to the contingent liabilities and assets as at the Balance Sheet date and the reported amount of income and expenses during the year.

04. Sales

Sales are exclusive of Sales Tax and Excise Duty.

05. Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation.

Cost includes purchase price and any directly attributable cost of bringing the assets to working condition for the intended use.

Assets acquired under hire purchase scheme are treated as fixed assets on delivery, pending transfer of title subsequently as per the terms of hire purchase agreement.

All Expenditure incurred on Extension Planting are capitalized.

06. Depreciation & Amortisation

Depreciation on Fixed Assets has been charged on straight line method in accordance with Section 205(2) (b) of the Companies Act, 1956 and the rates of depreciation has been taken as prescribed in Schedule XIV to the Companies Act, 1956, No provision has been made in respect of amortisation of Leasehold Land and Plantations.

07. Contingent Liabilities

Contingent Liabilities are generally not provided for in the accounts and are separately shown in the Notes to the accounts.

08. Inventories

Stock of Tea is valued at lower of cost or net realisable value and Stock of Tea Waste is valued at estimated realisable value.

Cost is comprised of Materials, Labour and total Garden Overheads.

Stock of Stores and Spare Parts are valued at cost on FIFO basis.

As per practice followed by the Company value of green leaves in stock as at the close of the year, are not taken into accounts.

09. Investments

Long term Investments are stated at cost. Provision for diminution of investment is made to recognize a decline, other than temporary. Gain / losses on disposal of investment are recognized as income / expenditure. Dividends are accounted for when received.

10. Insurance Claim

Insurance claim is accounted for on acceptance/settlement.

11. Excise Duty and Cess on Tea production & Cenvat

Excise Duty and Cess on Tea Manufactured is accounted for at the time of clearance. However, provision for Excise duty and Cess is made at the year end on finished goods lying in stock.

12. Employees Benefits

The Company contributes to Provident Fund which are administered by duly constituted and approved authorities of Government..

Liability in respect of Gratuity (being administered by a Trust) is a defined benefit obligation and is determined based on actuarial valuation made by an independent actuary as at the balance sheet date. The actuarial gains or losses are recognised immediately in the profit and loss account. Leave Encashment benefits are accounted foron accrual basis.

13. Income Tax & Deferred Tax

Provision is made for Income Tax under the Tax Payable method, based on Tax Liability as computed after taking credit for allowances, expenses and carry forward losses. In case of matters under appeal due to disallowance or otherwise, full provision is made when the said liabilities are accepted.

Deferred Tax is calculated at current statutory income tax rate and is recognised on timing difference between income and accounting income that originates in one period and are capable of being reversal in one or subsequent period. Deferred Tax assets subject to consideration of prudence, are recognised and carried forward only to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred Tax assets/liabilities are reviewed at each Balance Sheet date based on development during the year and available case laws to reassess realisation / liabilities.

14. Government Grants

Revenue grants including subsidy / rebates are credited to Profit and Loss Account under "Other Income" or deducted from the related expenses. Grants relating to fixed assets are credited to Capital Reserves Account or adjusted in the cost of such assets as the case may be, as and when the ultimate readability of such grants are established.

15. Borrowing Costs

Borrowing Costs that are directly attributable to the acquisition, construction or production of qualifying assets are being capitalised as part of the cost of that assets and other borrowing cost is recognised as expenses in the year in which they are incurred.

16. Intangible Assets

Expenses incurred on research are expended as and when incurred and development expenses which satisfy the assets criteria are amortised over a period of 10 year.

17. Impairment of Assets

The Company assesses at each Balance Sheet whether there is any indication that an asset may be impaired, if any such indication exist, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the Cash Generating Unit to which the asset belongs, is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date, there is any indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

As on the Balance Sheet date the carrying amount of the assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence, there is no impairment loss on the assets of the company.