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Accounting Policies of Tyroon Tea Company Ltd. Company
Mar 31, 2025
3. MATERIAL ACCOUNTING POLICIES
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The Financial Statements have been prepared under the historical cost convention on accrual basis
excepting certain financial instruments which are measured in terms of relevant Ind AS at fair value/
amortized costs at the end of each reporting period.
Historical cost convention is generally based on the fair value of the consideration given in exchange
for goods and services.
As the operating cycle cannot be identified in normal course, the same has been assumed to have
duration of 12 months. All Assets and Liabilities have been classified as current or non-current as
per the operating cycle and other criteria set out in Ind AS 1 âPresentation of Financial Statementsâ
and Schedule III to the Companies Act, 2013.
The Financial Statements are presented in Indian Rupees and all values are rounded off to the
nearest rupees in lakh except otherwise stated.
2. FAIR VALUE MEASUREMENT
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date under current market
conditions.
The company categorizes assets and liabilities measured at fair value into one of the three levels
depending on the ability to observe inputs employed in their measurements which are described as
follows:
(a) Level 1 :- inputs are quoted prices (unadjusted) in active market for identical assets or
liabilities
(b) Level 2 :- inputs are inputs that are observable, either directly or indirectly, other than quoted
prices included within level 1 for the asset or liability
(c) Level 3:- inputs are unobservable inputs for assets or liability reflecting significant
magnifications to observable related market data or companyâs assumptions about pricing
by market participants.
3. PROPERTY PLANT AND EQUIPMENTS (Other than Bearer Plants)
Property, Plant and Equipment are stated at cost of acquisition, construction and subsequent
improvements thereto less accumulated depreciation and impairment losses, if any. For this purpose
cost include deemed cost on the date of transition and comprises purchase price of assets or its
construction cost including duties and taxes, inward freight and other expenses incidental to
acquisition or installation and adjustment for exchange differences wherever applicable and any
cost directly attributable to bring the asset into the location and condition necessary for it to be
capable of operating in the manner intended for its use. Interest on Borrowings used to finance the
construction of qualifying assets are capitalized as part of cost of the asset until such time that the
asset is ready for its intended use.
Parts of an item of Property, Plant and Equipment having different useful lives and material value
and subsequent expenditure on Property, Plant and Equipment arising on account of capital
improvement or other factors are accounted for as separate components.
Property, Plant and Equipment includes spare, stand by equipments and servicing equipments
which are expected to be used for a period more than twelve months and meets the recognition
criteria of Plant, Property and Equipment. The cost of replacing part of an item of property, plant
and equipment is recognized in the carrying amount of the item if it is probable that the future
economic benefits embodied within the part will flow to the Company and its cost can be measured
reliably. The costs of the day-to-day servicing of property, plant and equipment are recognized in
the statement of profit and loss when incurred.
Capital work in progress includes purchase price, import duty and any directly attributable cost of
bringing the assets to their working condition, trial run expenses and interest attributable up to the
date of installation. Such items are classified to the appropriate categories of Property, Plant and
Equipment when completed and ready for intended use.
Depreciation
Items of Property, Plant and Equipment are depreciated in a manner that amortizes the cost of the
assets less its residual value, over their useful lives on a straight line basis. Estimated useful lives
of the assets in years are as follows-
Right to Use Assets (Lease) As per Lease agreement
The above estimated useful lives are also as specified in Schedule II of the Companies Act, 2013.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each
reporting period and the effect of any changes in estimate is accounted for on a prospective basis.
DERECOGNITION OF PROPERTY, PLANT & EQUIPMENTS AND INTANGIBLE ASSETS
An item of PPE is derecognized upon disposal or when no future economic benefits are expected
to arise from its use or disposal. Gain or loss arising on the disposal or retirement of an item of PPE
is determined as the difference between the sales proceeds and the carrying amount of the asset
and is recognized in the Statement of Profit and Loss.
INVESTMENT PROPERTY
Investment properties are properties held to earn rentals and / or for capital appreciation. Investment
properties are major initially at cost, including transaction costs. Subsequent to initial recognition,
investment properties are major in accordance with Ind AS 16âs requirements for cost model, otherthan
those that meet the criteria to be classified as held for sale in accordance with Ind As 105-1.
The estimated useful life of the investment properties of the Company are as follows :-
Building 60 Years
An investment property is derecognized upon disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss
arising on derecognisation of the property (calculated as the difference between the net disposal
proceeds and the carrying amount of the assets) included in profit and loss in the period in which the
property is derecognized.
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENTS AND INTANGIBLE ASSETS
PPE and Intangible assets are reviewed at each Balance Sheet date for impairment. In case events
and circumstances indicate any impairment, recoverable amount of assets is determined. An impairment
loss is recognized in the statement of profit and loss, whenever the carrying amount of assets either
belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable
amount is the higher of assets fair value less cost of disposal and its value in use. In assessing value
in use, the estimated future cash flows from the use of the assets are discounted to their present value
at appropriate rate.
Impairment losses recognized earlier may no longer exist or may have come down. Based on such
assessment at each reporting period the impairment loss is reversed and recognized in the Statement
of Profit and Loss. In such cases the carrying amount of the asset is increased to the lower of its
recoverable amount and the carrying amount that have been determined, net of depreciation, had no
impairment loss been recognized for the asset in prior years.
BEARER PLANTS
Bearer plants comprising of mature tea bushes and shade trees are stated at cost less accumulated
depreciation and accumulated impairment losses.
Immature bearer plants, including the cost incurred for procurement of new seeds and maintenance of
nurseries, are carried at cost less any recognized impairment losses under capital work-in-progress.
Cost includes the cost of land preparation, new planting and maintenance of newly planted bushes
until maturity. On maturity, these costs are classified under bearer plants. Depreciation of bearer
plants commence on maturity.
Costs incurred for infilling including block infilling are generally recognized in the Statement of Profit
and Loss unless there is a significant increase in the yield of the sections, in which case such costs
are capitalized and depreciated over the remaining useful life of the respective sections.
Depreciation on bearer plants is recognized so as to write off its cost over useful lives, using the
straight-line method. The estimated useful lives, residual values and depreciation method are reviewed
at the end of each reporting period, with the effect of any change in estimate accounted for on a
prospective basis.
Estimated useful lives of the bearer plants has been determined to be 70 years.
FINANCIAL INSTRUMENTS
Financial Assets and Financial Liabilities (financial instruments) are recognized when the Company becomes
a party to the contractual provisions of the instruments.
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 or loss) are added to or deducted from
the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction
costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through
profit or loss are recognized immediately in the Statement of Profit and Loss.
The financial assets and financial liabilities are classified as current if they are expected to be realized or
settled within operating cycle of the company or otherwise these are classified as non-current.
The classification of financial instruments whether to be measured at Amortized Cost, at Fair Value
through Profit and Loss (FVTPL) or at Fair Value through Other Comprehensive Income (FVTOCI) depends
on the objective and contractual terms to which they relate. Classification of financial instruments are
determined on initial recognition.
i) Cash and Cash Equivalents
All highly liquid financial instruments, which are readily convertible into determinable amounts of
cash and which are subject to an insignificant risk of change in value and are having original
maturities of three months or less from the date of purchase, are considered as cash equivalents.
Cash and cash equivalents includes balances with banks which are unrestricted for withdrawal and
usage.
ii) Financial Assets and Financial Liabilities measured at amortized cost
Financial Assets held within a business 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
are measured at amortized cost.
The above Financial Assets and Financial Liabilities subsequent to initial recognition are measured
at amortized cost using Effective Interest Rate (EIR) method.
The effective interest rate is the rate that discounts estimated future cash payments or receipts
(including all fees and points paid or received, transaction costs and other premiums or discounts)
through the expected life of the Financial Asset or Financial Liability to the gross carrying amount
of the financial asset or to the amortized cost of financial liability, or, where appropriate, a shorter
period, to the net carrying amount on initial recognition.
iii) Financial Asset at Fair Value through Other Comprehensive Income (FVTOCI)
Financial assets are measured at fair value through other comprehensive income if these financial
assets are held within a business whose objective is achieved by both collecting contractual cash
flows and selling 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. Subsequent to initial recognition, they are measured at fair value and changes
therein are recognized directly in other comprehensive income.
iv) For the purpose of para (ii) and (iii) above, principal is the fair value of the financial asset at initial
recognition and interest consists of consideration for the time value of money and associated credit
risk.
v) Financial Assets or Liabilities at Fair value through profit or loss
Financial Instruments which does not meet the criteria of amortized cost or fair value through other
comprehensive income are classified as Fair Value through Profit or loss. These are recognized at
fair value and changes therein are recognized in the statement of profit and loss.
vi) Impairment of financial assets
A financial asset is assessed for impairment at each Balance Sheet date. A financial asset is
considered to be impaired if objective evidence indicates that one or more events have had a
negative effect on the estimated future cash flows of that asset.
The company measures the loss allowance for a financial asset at an amount equal to the lifetime
expected credit losses if the credit risk on that financial instrument has increased significantly
since initial recognition. If the credit risk on a financial instrument has not increased significantly
since initial recognition, the company measures the loss allowance for that financial instrument at
an amount equal to 12-month expected credit losses.
However, for trade receivables or contract assets that result in relation to revenue from contracts
with customers, the company measures the loss allowance at an amount equal to lifetime expected
credit losses.
vii) Derecognition of financial instruments
The Company derecognizes a financial asset or a group of financial assets when the contractual
rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially
all the risks and rewards of ownership of the asset to another party.
On de-recognition of a financial asset (except for equity instruments designated as FVTOCI), the
difference between the assetâs carrying amount and the sum of the consideration received and
receivable are recognized in statement of profit and loss.
On de-recognition of assets measured at FVTOCI the cumulative gain or loss previously recognized
in other comprehensive income is reclassified from equity to profit or loss as a reclassification
adjustment.
Financial liabilities are derecognized if the Companyâs obligations specified in the contract expire
or are discharged or cancelled. The difference between the carrying amount of the financial liability
derecognized and the consideration paid and payable is recognized in Statement of Profit and
Loss.
5. LEASES
The Companyâs lease asset classes primarily consist of leases for buildings. The Company assesses
whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset, the
Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has
substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (âROUâ) 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) and low value leases. For these short-term and low value
leases, the Company recognizes the lease payments as an operating expense on a straight-line basis
over the term of the lease.
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 less any lease incentives. They are subsequently measured at
cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter
of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability
whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.
The lease liability is initially measured at amortized cost at the present value of the future lease payments.
The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable,
using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are
remeasured with a corresponding adjustment to the related right of use asset if the Company changes its
assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments
have been classified as financing cash flows.
6. BIOLOGICAL ASSETS AND AGRICULTURAL PRODUCE
(i) Biological Assets
Biological assets of the Company comprises of un-harvested green tea leaves that are classified as
current biological assets and livestock for breeding purpose, classified as non-current biological
assets.
The Company recognizes biological assets when, and only when, the Company controls the assets
as a result of past events, it is probable that future economic benefits associated with such assets
will flow to the Company and the fair value or cost of the assets can be measured reliably. Expenditure
incurred on biological assets are measured on initial recognition and at the end of each reporting
period at its fair value less costs to sell. The gain or loss arising from a change in fair value less
costs to sell of biological assets are included in statement of profit and loss for the period in which
it arises.
(ii) Agricultural Produce
The Company recognizes agricultural produce when, and only when, the Company controls the
assets as a result of past events, it is probable that future economic benefits associated with such
assets will flow to the Company and the fair value or cost of the assets can be measured reliably.
Agricultural produce harvested from the Companyâs biological assets are valued at fair value less
cost to sell at the point of harvest. A gain or loss arising on initial recognition of agricultural produce
at fair value less costs to sell shall be included in Statement of profit and loss for the period in which
it arises.
The Companyâs agricultural produce comprises of green leaves plucked from its tea estates.
7. INVENTORIES
Inventories are valued at cost or net realizable value whichever is lower. Cost in respect of finished product
is determined on average cost basis and represents works cost and appropriate portion of overheads.
Cost in respect of Stores and Spares and Foodstuff is computed on FIFO basis.
Provision is made for obsolete, slow moving and defective inventories, whenever necessary.
8. GOVERNMENT GRANTS
Government grants are not recognized until there is reasonable assurance that the company will comply
with the conditions attaching to them and that the grant will be received.
Government grants that are receivable as a compensation for expenses or losses incurred or for the
purpose of giving immediate financial support to the company with no future related costs are recognized
in profit loss in the period in which they become receivable.
9. EQUITY SHARE CAPITAL
An equity instrument is a contract that evidences residual interest in the assets of the company after
deducting all of its liabilities. Par value of the equity shares is recorded as share capital and the amount
received in excess of par value is classified as Securities Premium.
Costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net
of any tax effects.
Mar 31, 2024
SIGNIFICANT ACCOUNTING POLICIES
1. CORPORATE INFORMATION
Tyroon Tea Company Limited is a public limited company domiciled and incorporated in India having its registered office at 3, Netaji Subhas Road, Kolkata - 700001. The companyâs shares are listed and publicly traded on the BSE Limited. The Company is engaged in cultivation, manufacture and sale of tea.
2. APPLICATION OF NEW AND REVISED INDIAN ACCOUNTING STANDARDS (IND AS)
Ministry of Corporate Affairs has not notified any new standard or amendments to the existing standards.
3. SIGNIFICANT ACCOUNTING POLICIES1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The Financial Statements have been prepared under the historical cost convention on accrual basis excepting certain financial instruments which are measured in terms of relevant Ind AS at fair value/ amortized costs at the end of each reporting period.
Historical cost convention is generally based on the fair value of the consideration given in exchange for goods and services.
As the operating cycle cannot be identified in normal course, the same has been assumed to have duration of 12 months. All Assets and Liabilities have been classified as current or non-current as per the operating cycle and other criteria set out in Ind AS 1 âPresentation of Financial Statementsâ and Schedule III to the Companies Act, 2013.
The Financial Statements are presented in Indian Rupees and all values are rounded off to the nearest rupees in lakh except otherwise stated.
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 under current market conditions.
The company categorizes assets and liabilities measured at fair value into one of the three levels depending on the ability to observe inputs employed in their measurements which are described as follows:
(a) Level 1 :- inputs are quoted prices (unadjusted) in active market for identical assets or liabilities
(b) Level 2 :- inputs are inputs that are observable, either directly or indirectly, other than quoted prices included within level 1 for the asset or liability
(c) Level 3:- inputs are unobservable inputs for assets or liability reflecting significant magnifications to observable related market data or companyâs assumptions about pricing by market participants.
3. PROPERTY PLANT AND EQUIPMENTS (Other than Bearer Plants)
Property, Plant and Equipment are stated at cost of acquisition, construction and subsequent improvements thereto less accumulated depreciation and impairment losses, if any. For this purpose cost include deemed cost on the date of transition and comprises purchase price of assets or its construction cost including duties and taxes, inward freight and other expenses incidental to acquisition or installation and adjustment for exchange differences wherever applicable and any cost directly attributable to bring the asset into the location and condition necessary for it to be capable of operating in the manner intended for its use. Interest on Borrowings used to finance the construction of qualifying
assets are capitalised as part of cost of the asset until such time that the asset is ready for its intended use.
Parts of an item of Property, Plant and Equipment having different useful lives and material value and subsequent expenditure on Property, Plant and Equipment arising on account of capital improvement or other factors are accounted for as separate components.
Property, Plant and Equipment includes spare, stand by equipments and servicing equipments which are expected to be used for a period more than twelve months and meets the recognition criteria of Plant, Property and Equipment. The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the statement of profit and loss when incurred.
Capital work in progress includes purchase price, import duty and any directly attributable cost of bringing the assets to their working condition, trial run expenses and interest attributable up to the date of installation. Such items are classified to the appropriate categories of Property, Plant and Equipment when completed and ready for intended use.
Items of Property, Plant and Equipment are depreciated in a manner that amortises the cost of the assets less its residual value, over their useful lives on a straight line basis. Estimated useful lives of the assets in years are as follows-
|
Office Equipment |
3-6 |
|
Building |
5-60 |
|
Plant and equipment |
15 |
|
Vehicle |
8-10 |
|
Water Supply System |
15 |
|
Irrigation Equipments |
15 |
|
Furniture & Fixture |
10 |
|
Right to Use Assets (Lease) |
As per Lease agreement |
The above estimated useful lives are also as specified in Schedule II of the Companies Act, 2013.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period and the effect of any changes in estimate is accounted for on a prospective basis.
DERECOGNITION OF PROPERTY, PLANT & EQUIPMENTS AND INTANGIBLE ASSETS
An item of PPE is derecognized upon disposal or when no future economic benefits are expected to arise from its use or disposal. Gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Statement of Profit and Loss.
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENTS AND INTANGIBLE ASSETS
PPE and Intangible assets are reviewed at each Balance Sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of assets is determined. An impairment loss is recognized in the statement of profit and loss, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the higher of assets fair value less cost of disposal and its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate.
Impairment losses recognized earlier may no longer exist or may have come down. Based on such assessment at each reporting period the impairment loss is reversed and recognized in the Statement of Profit and Loss. In such cases the carrying amount of the asset is increased to the lower of its recoverable amount and the carrying amount that have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.
Bearer plants comprising of mature tea bushes and shade trees are stated at cost less accumulated depreciation and accumulated impairment losses.
Immature bearer plants, including the cost incurred for procurement of new seeds and maintenance of nurseries, are carried at cost less any recognized impairment losses under capital work-in-progress. Cost includes the cost of land preparation, new planting and maintenance of newly planted bushes until maturity. On maturity, these costs are classified under bearer plants. Depreciation of bearer plants commence on maturity.
Costs incurred for infilling including block infilling are generally recognized in the Statement of Profit and Loss unless there is a significant increase in the yield of the sections, in which case such costs are capitalized and depreciated over the remaining useful life of the respective sections.
Depreciation on bearer plants is recognised so as to write off its cost over useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.
Estimated useful lives of the bearer plants has been determined to be 70 years.
Financial Assets and Financial Liabilities (financial instruments) are recognised when the Company becomes a party to the contractual provisions of the instruments.
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 or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the Statement of Profit and Loss.
The financial assets and financial liabilities are classified as current if they are expected to be realised or settled within operating cycle of the company or otherwise these are classified as non-current.
The classification of financial instruments whether to be measured at Amortized Cost, at Fair Value through Profit and Loss (FVTPL) or at Fair Value through Other Comprehensive Income (FVTOCI) depends on the objective and contractual terms to which they relate. Classification of financial instruments are determined on initial recognition.
All highly liquid financial instruments, which are readily convertible into determinable amounts of cash and which are subject to an insignificant risk of change in value and are having original maturities of three months or less from the date of purchase, are considered as cash equivalents. Cash and cash equivalents includes balances with banks which are unrestricted for withdrawal and usage.
ii) Financial Assets and Financial Liabilities measured at amortised cost
Financial Assets held within a business 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 are measured at amortized cost.
The above Financial Assets and Financial Liabilities subsequent to initial recognition are measured at amortized cost using Effective Interest Rate (EIR) method.
The effective interest rate is the rate that discounts estimated future cash payments or receipts (including all fees and points paid or received, transaction costs and other premiums or discounts) through the expected life of the Financial Asset or Financial Liability to the gross carrying amount of the financial asset or to the amortised cost of financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
iii) Financial Asset at Fair Value through Other Comprehensive Income (FVTOCI)
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling 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. Subsequent to initial recognition, they are measured at fair value and changes therein are recognised directly in other comprehensive income.
iv) For the purpose of para (ii) and (iii) above, principal is the fair value of the financial asset at initial recognition and interest consists of consideration for the time value of money and associated credit risk.
v) Financial Assets or Liabilities at Fair value through profit or loss
Financial Instruments which does not meet the criteria of amortised cost or fair value through other comprehensive income are classified as Fair Value through Profit or loss. These are recognised at fair value and changes therein are recognized in the statement of profit and loss.
vi) Impairment of financial assets
A financial asset is assessed for impairment at each Balance Sheet date. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.
The company measures the loss allowance for a financial asset at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.
However, for trade receivables or contract assets that result in relation to revenue from contracts with customers, the company measures the loss allowance at an amount equal to lifetime expected credit losses.
vii) Derecognition of financial instruments
The Company derecognizes a financial asset or a group of financial assets when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
On de-recognition of a financial asset (except for equity instruments designated as FVTOCI), the difference between the assetâs carrying amount and the sum of the consideration received and receivable are recognized in statement of profit and loss.
On de-recognition of assets measured at FVTOCI the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
Financial liabilities are derecognized if the Companyâs obligations specified in the contract expire or are discharged or cancelled. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in Statement of Profit and Loss.
The Companyâs lease asset classes primarily consist of leases for buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (âROUâ) 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) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
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 less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairmentlosses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
6. BIOLOGICAL ASSETS AND AGRICULTURAL PRODUCE(i) Biological Assets
Biological assets of the Company comprises of un-harvested green tea leaves that are classified as current biological assets and livestock for breeding purpose, classified as non-current biological assets.
The Company recognizes biological assets when, and only when, the Company controls the assets as a result of past events, it is probable that future economic benefits associated with such assets will flow to the Company and the fair value or cost of the assets can be measured reliably. Expenditure incurred on biological assets are measured on initial recognition and at the end of each reporting period at its fair value less costs to sell. The gain or loss arising from a change in fair value less costs to sell of biological assets are included in statement of profit and loss for the period in which it arises.
The Company recognizes agricultural produce when, and only when, the Company controls the assets as a result of past events, it is probable that future economic benefits associated with such assets will flow to the Company and the fair value or cost of the assets can be measured reliably. Agricultural produce harvested from the Companyâs biological assets are valued at fair value less cost to sell at the point of harvest. A gain or loss arising on initial recognition of agricultural produce at fair value less costs to sell shall be included in Statement of profit and loss for the period in which it arises.
The Companyâs agricultural produce comprises of green leaves plucked from its tea estates.
Inventories are valued at cost or net realizable value whichever is lower. Cost in respect of finished product is determined on average cost basis and represents works cost and appropriate portion of overheads.
Cost in respect of Stores and Spares and Foodstuff is computed on FIFO basis.
Tea Cess/ Education Cess if any leviable / payable on closing stock of Tea is provided and included in valuation of closing stock.
Provision is made for obsolete, slow moving and defective inventories, whenever necessary.
Government grants are not recognized until there is reasonable assurance that the company will comply with the conditions attaching to them and that the grant will be received.
Government grants that are receivable as a compensation for expenses or losses incurred or for the purpose of giving immediate financial support to the company with no future related costs are recognized in the profit loss in the period in which they become receivable.
An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Par value of the equity shares is recorded as share capital and the amount received in excess of par value is classified as Securities Premium.
Costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.
10. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS.
Provisions involving substantial degree of estimation in measurement are recognized when there is a legal or constructive obligation as a result of past events and it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of obligation. Provisions are not recognized for future operating losses. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
Contingent liabilities are not recognized but are disclosed by way of notes to the financial statements 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 when there is 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 same or a reliable estimate of the amount in this respect cannot be made.
Contingent assets are not recognized but disclosed in the Financial Statements by way of notes to accounts when an inflow of economic benefits is probable.
(i) Sales is recognized in the accounts on passing of title of goods i.e. delivery as per terms of sale or on completion of auction in case of auction sale.
(ii) This represents the net invoice value of goods supplied after deducting discounts, rebates and taxes and duties collected on behalf of third parties and which the company pays as principal.
Short term Employee benefits are accrued in the year services are rendered by the employees.
Provident and Family Pension Fund:In accordance with the provisions of the Employee Provident Funds and Miscellaneous Provisions Act, 1952, eligible employees of the company are entitled to receive benefits with respect to provident fund, a defined contribution plan, in which both the company and employee contribute monthly to Provident Fund Scheme the Central Government/T rust at a determined rate. The Companyâs contribution is charged off to the Statement of Profit and Loss.
Gratuity: The Company has taken a Group Gratuity scheme policy for part of its employees (Garden employees) with Life Insurance Corporation of India (LIC) for future payment of Gratuity to those part employees.
Employee benefits under defined benefit plans are determined at the close of each year at the present value of the amount payable by actuarial valuation techniques using the projected unit credit method. Contributions under the scheme for defined benefit under the Payment of Gratuity Act, 1972, is determined on the basis of actuarial valuation and are recognized as yearâs expenditure. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in other comprehensive income. Remeasurements are not classified to the statement of Profit and Loss in subsequent periods. Other costs are recognized in the Statement of Profit or Loss. Bifurcation of liabilities into Current and Non current are done based on actuarial valuation report.
Leave Encashment Benefits: Leave encashment benefits are payable to employees while in service, retirement and on death while in service or on termination of employment. With respect to accumulated leaves outstanding at the year-end, liability for leave are accounted for on the basis of actuarial valuation at the balance sheet date. The present value of such obligation is determined by the projected unit credit method as at the Balance Sheet date through which the obligations are settled. The resultant actuarial gains or losses on change in present value of defined benefit obligation or change in return of the plan assets
is recognized as an income or expense in the Statement of Profit and Loss. Bifurcation of liabilities into Current and Non-current are done based on actuarial valuation report.
13. FOREIGN EXCHANGE TRANSACTION
These financial statements are presented in Indian Rupee, the national currency of India, which is the functional currency of the company.
T ransactions in foreign currencies are translated into the functional currency at the exchange rates prevailing on the date of the transactions. Foreign currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate as at the date of transaction. The loss or gain thereon and also on the exchange differences on settlement of the foreign currency transactions during the year are recognized as income or expense in the statement of profit and loss.
Tea Replantation subsidy and other subsidies is accounted for on acceptance/receipt by/from the concerned authorities.
Exceptional items are disclosed separately in the Financial Statements where it is necessary to do so to provide further understanding of the financial performance of the Company. It has been shown separately due to its nature and incidence.
Borrowing cost comprises of interest and other costs incurred in connection with the borrowing of the funds. All borrowing costs are recognized in the Statement of Profit and Loss using the effective interest method except to the extent attributable to qualifying Property Plant Equipment (PPE) which are capitalized to the cost of the related assets. A qualifying PPE is an asset, that necessarily takes a substantial period of time to get ready for its intended use or sale. Borrowing cost also includes exchange differences to the extent considered as an adjustment to the borrowing costs.
Income tax expense representing the sum of current tax expenses and the net charge of the deferred taxes is recognized in the income statement except to the extent that it relates to items recognized directly in equity or other comprehensive income.
Current income tax is provided on the taxable income and recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilized.
Deferred tax assets include Minimum Alternative Tax (MAT) measured in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability and such benefit can be measured reliably and it is probable that the future economic benefit associated with same will be realized.
The Company is presently operating under one business segment viz. Cultivation, Manufacture and sale of Tea.
Operating segments are identified and reported taking into account the different risk and return, organisation structure and internal reporting system.
4. CRITICAL ACCOUNTING JUDGMENTS, ASSUMPTIONS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY
The preparation of the financial statements in conformity with the measurement principle of Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Differences between the actual results and estimates are recognized in the year in which the results are known / materialized and, if material, their effects are disclosed in the notes to the financial statements.
Application of accounting policies that require significant areas of estimation, uncertainty and critical judgments and the use of assumptions in the financial statements have been disclosed below. The key assumptions concerning the future and other key sources of estimation uncertainty at the Balance Sheet date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below:
A. Depreciation and Impairment on Property, Plant and Equipment.
Property, Plant and Equipment and Intangible assets are depreciated/ amortized on Straight Line Ba-sis/Written Down Value Basis over the estimated useful lives (or lease term, if shorter ) in accordance with Schedule II of the Companies Act, 2013, taking into account the estimated residual value, wherever applicable.
The company reviews its carrying value of its PPE and Intangible Assets whenever there is objective evidence that the assets are impaired. In such situation assets recoverable amount is estimated which is higher of assetâs or cash generating units (CGU) fair value less cost of disposal and its value in use. In assessing value in use the estimated future cash flows are discounted using pre-tax discount rate which reflect the current assessment of time value of money. In determining fair value less cost of disposal, recent market realisations are considered or otherwise in absence of such transactions appropriate valuations are adopted. The Company reviews the estimated useful lives of the assets regularly in order to determine the amount of depreciation / amortization and amount of impairment expense to be recorded during any reporting period. This reassessment may result in change estimated in future periods.
B. Impairment allowances on trade receivables
The Company evaluates whether there is any objective evidence that trade receivables are impaired and determines the amount of impairment allowance as a result of the inability of the customers to make required payments. The Company bases the estimates on the ageing of the trade receivables balance, credit-worthiness of the trade receivables and historical write-off experience. If the financial conditions of the trade receivable were to deteriorate, actual write-offs would be higher than estimated.
Significant judgment is required in determination of taxability of certain income and deductibility of certain expenses during the estimation of the provision for income taxes.
D. Defined benefit obligation (DBO)
Critical estimate of the DBO involves a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate, anticipation of future salary increases etc. as estimated by Independent Actuary appointed for this purpose by the Management. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
E. Provisions and Contingencies
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgment to existing facts and circumstances, which can be subject to change.
Management judgment is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations/ against the Company as it is not possible to predict the outcome of pending matters with accuracy.
The carrying amounts of provisions and liabilities and estimation for contingencies are reviewed regularly and revised to take account of changing facts and circumstances.
Mar 31, 2015
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost
convention in accordance with the provisions of the Companies Act, 2013
and accounting standards as prescribed under section 133 of the
Companies Act , 2013, read with rule 7 of the Companies (Accounts)
Rules,2014 and other recognized accounting practices. Accounting
policies unless specifically stated to be otherwise, are consistent and
are in consonance with generally accepted accounting principles.
B. USE OF ESTIMATES
The Preparation of financial Statements require Management to make
estimates and assumption that affect the reported amount of Assets and
Liabilities and disclosure relating to contingent liabilities as at the
Balance Sheet date and the reported amounts of Income and Expenses
during the year. Difference between the actual results and the
estimates are recognized in the year in which the results become
known/materialize.
Contingencies are recorded when it is probable that a liability will be
incurred and the amounts can reasonably be estimated. Differences
between the actual results and the estimates are recognized in the year
in which the results are known / materialized.
C. REVENUE RECOGNITION
(i) Sales is recognised in the accounts on passing of title of goods
i.e. delivery as per terms of sale or on completion of auction in case
of auction sale.
(ii) Sales represent the invoice value of goods supplied less tax, if
any.
D. FIXED ASSETS TANGIBLE ASSETS
Fixed Assets are stated at cost of acquisition. The cost of extension
planting on cultivable land including cost of development is
capitalised whereas expenses in respect of replanting of tea bushes are
charged to revenue. Subsidy related to fixed assets is adjusted against
the cost of the same.
E. DEPRECIATION
Depreciation on Fixed Assets is provided in the manner and at the
applicable rates as specified in Schedule II of the Companies Act, 2013
under Straight Line Method.
F. IMPAIRMENT
Fixed Assets are reviewed at each Balance Sheet date for impairment. In
case event and circumstances indicate any impairment, recoverable amount
of fixed assets is determined. An impairment loss is recognized,
wherever the carrying amounts of assets either belonging to Cash
Generating Unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of asset's net selling price or its
value in use. In assessing the value in use, the estimated future Cash
Flow from the use of assets is discounted to their present value at
appropriate rate. An impairment loss is reversed if there has been
change in the recoverable amount and such loss no longer exists or has
decreased. Impairment Loss / reversal thereof is adjusted to the
carrying value of the respective asset which in case of CGU, are
allocated to the assets on a pro-rata basis. Subsequent to recognition
of impairment loss / reversal thereof, depreciation is provided on the
revised carrying amount of the assets, on a systematic basis, over its
remaining useful life.
G INVESTMENTS
Investments are classified under Long Term and Current Investments
depending on the intention for holding the same. Long Term Investments
are stated at cost. Provision for diminution is made to recognise a
decline, other than the temporary, in the value of investments. Current
Investments are stated at lower of cost or fair value. Gains/Losses on
disposal of investments are recognised in the Profit and Loss account.
H. INVENTORIES
Inventories are valued at cost or net realisable value whichever is
lower. Cost in respect of finished product is determined on average
basis and represents works cost and appropriate portion of overheads.
Cost in respect of Stores and Spares and Foodstuff is computed on FIFO
basis.
Excise duty /Tea Cess/ Education Cess if any leviable/ payable on
closing stock of Tea is provided and included in valuation of closing
stock.
I. EMPLOYEE BENEFITS
Employee benefits are accrued in the year services are rendered by the
employees. Short term employee benefits are recognized as an expense in
the statement of profit and loss for the year in which the related
service is rendered.
Contribution to defined contribution schemes such as Provident Fund
etc. are recognized as and when incurred.
Long-term employee benefits under defined benefit scheme such as
contribution to gratuity are determined at close of the year at present
value of the amount payable using actuarial valuation techniques. Leave
Encashment is provided on the basis of actual valuation as computed by
the company.
Actuarial gain and losses are recognized in the year when they arise
J. FOREIGN EXCHANGE TRANSACTION :
Transaction in foreign currencies are accounted for at the exchange
rate prevailing on the date of the transaction. Foreign currency,
monetary assets and liabilities at the year end are translated using
exchange rate prevailing on the last day of the financial year. The
loss or gain thereon and also the exchange differences on settlement of
the foreign currency transactions during the year are recognized as
income or expenses and adjusted to the profit and loss account.
K. SUBSIDY
Tea Replantation subsidy and other subsidies is accounted for on
acceptance/receipt by/from the concerned authorities.
L. BORROWING COST
Borrowing cost incurred in relation to acquisition, construction or
production of a qualifying asset is capitalized as a part of the cost
of such assets up to the date when such assets are ready for intended
use or sale. Other borrowing cost are charged as an expense in the year
in which they are incurred.
M. TAXES ON INCOME
Provision for Tax is made for current and deferred taxes. Current tax
is provided on the taxable income using the applicable tax rates and
tax laws. Deferred tax assets and liabilities arising on account of
timing difference, which are capable of reversal in subsequent period
are recognized using tax rates and tax laws, which have been enacted or
substantively enacted. Deferred tax assets are recognized only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
will be realized. In case of carry forward of unabsorbed depreciation
and tax losses, deferred tax assets are recognized only if there is a
"virtual certainty" that such deferred tax assets can be realized
against future taxable profits.
N. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS.
Provision involving substantial degree of estimates in measurement is
recognized when there is a present obligation as a result of past
events, and it is probable that there will be an outflow of resources
and a reliable estimate can be made of the amount of obligation.
Contingent assets are neither recognized nor disclosed in the financial
statements. Contingent liabilities are not provided in the books but
disclosed by way of a note in the Notes to Account.
Mar 31, 2014
A. GENERAL
i. These accounts have been prepared on the historical cost convention
in accordance with provisions of the Companies Act, 1956 and mandatory
Accounting Standards Rules 2006 read with general circular 15/2013
dated 13th September 2013 of the Ministry of Corporate Affairs in
respect of section 133 of the Companies Act, 2013.
ii All income and expenses to the extent considered receivable and
payable respectively, unless specifically stated to be otherwise are
accounted for on mercantile basis.
iii. Accounting policies unless specifically stated to be otherwise are
consistent and are in consonance with generally accepted accounting
principles.
B. USE OF ESTIMATES
The Preparation of financial Statements require Management to make
estimates and assumption that affect the reported amount of Assets and
Liabilities and disclosure relating to contingent liabilities as at the
Balance Sheet date and the reported amounts of Income and Expenses
during the year.
Contingencies are recorded when it is probable that a liability will be
incurred and the amounts can reasonably be estimated. Differences
between the actual results and the estimates are recognized in the year
in which the results are known / materialized.
C. REVENUE RECOGNITION
i. Sales is recognised in the accounts on passing of title of goods
i.e. delivery as per terms of sale or on completion of auction in case
of auction sale.
ii. Sales represent the invoice value of goods supplied less tax, if
any.
D. FIXED ASSETS
Fixed Assets are stated at cost of acquisition. The cost of extension
planting on cultivable land including cost of development is
capitalised whereas expenses in respect of replanting of tea bushes are
charged to revenue. Subsidy related to fixed assets is adjusted against
the cost of the same.
E DEPRECIATION
Depreciation on Fixed Assets is provided in the manner and at the
applicable rates as specified in Schedule XIV of the Companies Act,
1956 under Straight Line Method.
F. IMPAIRMENT
Fixed Assets are reviewed at each Balance Sheet date for impairment. In
case event and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is
recognized, wherever the carrying amounts of assets either belonging to
Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of asset''s net selling price or its
value in use. In assessing the value in use, the estimated future Cash
Flow from the use of assets is discounted to their present value at
appropriate rate. An impairment loss is reversed if there has been
change in the recoverable amount and such loss no longer exists or has
decreased. Impairment Loss / reversal thereof is adjusted to the
carrying value of the respective asset which in case of CGU, are
allocated to the assets on a pro-rata basis. Subsequent to recognition
of impairment loss / reversal thereof, depreciation is provided on the
revised carrying amount of the assets, on a systematic basis, over its
remaining useful life.
G INVESTMENTS
Investments are classified under Long Term and Current Investments
depending on the intention for holding the same. Long Term Investments
are stated at cost. Provision for diminution is made to recognise a
decline, other than the temporary, in the value of investments. Current
Investments are stated at lower of cost or fair value. Gains/Losses on
disposal of investments are recognised in the Profit and Loss Account.
H. INVENTORIES
Inventories are valued at cost or net realisable value whichever is
lower. Cost in respect of finished product is determined on average
basis and represents works cost and appropriate portion of overheads.
Cost in respect of Stores and Spares and Foodstuff is computed on FIFO
basis.
Excise duty /Tea Cess/ Education Cess if any leviable/ payable on
closing stock of Tea is provided and included in valuation of closing
stock.
I. EMPLOYEE BENEFITS
Employee benefits are accrued in the year services are rendered by the
employees.
Contribution to defined contribution schemes such as Provident Fund
etc. are recognized as and when incurred.
Long-term employee benefits under defined benefit scheme such as
contribution to gratuity are determined at close of the year at present
value of the amount payable using actuarial valuation techniques. Leave
Encashment is provided on the basis of actual valuation as computed by
the company.
Actuarial gain and losses are recognized in the year when they arise
J. FOREIGN EXCHANGE TRANSACTION
Transaction in foreign currencies are accounted for at the exchange
rate prevailing on the date of the transaction. Foreign currency,
monetary assets and liabilities at the year end are translated using
exchange rate prevailing on the last day of the financial year. The
loss or gain thereon and also the exchange differences on settlement of
the foreign currency transactions during the year are recognized as
income or expenses and adjusted to the Profit and Loss Account.
K. SUBSIDY
Tea Replantation subsidy and other subsidies is accounted for on
acceptance/receipt by/from the concerned authorities.
L. BORROWING COST
Borrowing cost incurred in relation to acquisition, construction or
production of a qualifying asset is capitalized as a part of the cost
of such assets up to the date when such assets are ready for intended
use or sale. Other borrowing costs are charged as an expense in the
year in which they are incurred.
M. TAXES ON INCOME
Provision for Tax is made for current and deferred taxes. Current tax
is provided on the taxable income using the applicable tax rates and
tax laws. Deferred tax assets and liabilities arising on account of
timing difference, which are capable of reversal in subsequent period
are recognized using tax rates and tax laws, which have been enacted or
substantively enacted. Deferred tax assets are recognized only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
will be realized. In case of carry forward of unabsorbed depreciation
and tax losses, deferred tax assets are recognized only if there is a
"virtual certainty" that such deferred tax assets can be realized
against future taxable profits.
N. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provision involving substantial degree of estimates in measurement is
recognized when there is a present obligation as a result of past
events, and it is probable that there will be an outflow of resources
and a reliable estimate can be made of the amount of obligation.
Contingent assets are neither recognized nor disclosed in the financial
statements. Contingent liabilities are not provided in the books but
disclosed by way of a note in the Notes to Account.
Mar 31, 2012
A. GENERAL
i. These accounts have been prepared on the historical cost convention
in accordance with provisions of the Companies Act, 1956 and mandatory
Accounting Standards Rules 2006.
ii All income and expenses to the extent considered receivable and
payable respectively, unless specifically stated to be otherwise are
accounted for on mercantile basis.
iii. Accounting policies unless specifically stated to be otherwise are
consistent and are in consonance with generally accepted accounting
principles.
B. USE OF ESTIMATES
The Preparation of financial Statements require Management to make
estimates and assumption that affect the reported amount of Assets and
Liabilities and disclosure relating to contingent liabilities as at the
Balance Sheet date and the reported amounts of Income and Expenses
during the year.
Contingencies are recorded when it is probable that a liability will be
incurred and the amounts can reasonably be estimated. Differences
between the actual results and the estimates are recognized in the year
in which the results are known / materialized.
C. REVENUE RECOGNITION
i. Sales is recognised in the accounts on passing of title of goods
i.e. delivery as per terms of sale or on completion of auction in case
of auction sale.
ii. Sales represents the invoice value of goods supplied less tax, if
any.
D. FIXED ASSETS
Fixed Assets are stated at cost of acquisition. The cost of extension
planting on cultivable land including cost of development is
capitalised whereas expenses in respect of replanting of tea bushes are
charged to revenue. Subsidy related to fixed assets is adjusted against
the cost of the same.
E. DEPRECIATION
Depreciation on Fixed Assets is provided in the manner and at the
applicable rates as specified in Schedule XIV of the Companies Act,
1956 under Straight Line Method.
F. IMPAIRMENT
Fixed Assets are reviewed at each Balance Sheet date for impairment. In
case event and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is recognized,
wherever the carrying amounts of assets either belonging to Cash
Generating Unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of asset's net selling price or its
value in use. In assessing the value in use, the estimated future Cash
Flow from the use of assets is discounted to their present value at
appropriate rate. An impairment loss is reversed if there has been
change in the recoverable amount and such loss no longer exists or has
decreased. Impairment Loss / reversal thereof is adjusted to the
carrying value of the respective asset which in case of CGU, are
allocated to the assets on a pro-rata basis. Subsequent to recognition
of impairment loss / reversal thereof, depreciation is provided on the
revised carrying amount of the assets, on a systematic basis, over its
remaining useful life.
G. INVESTMENTS
Investments are classified under Long Term and Current Investments
depending on the intention for holding the same. Long Term Investments
are stated at cost. Provision for diminution is made to recognise a
decline, other than the temporary, in the value of investments. Current
Investments are stated at lower of cost or fair value. Gains/Losses on
disposal of investments are recognised in the Statement of Profit and
Loss.
H. INVENTORIES
Inventories are valued at cost or net realisable value whichever is
lower. Cost in respect of finished product is determined on average
basis and represents works cost and appropriate portion of overheads.
Cost in respect of Stores and Spares and Foodstuff is computed on FIFO
basis.
Excise duty /Tea Cess/ Education Cess if any leviable/ payable on
closing stock of Tea is provided and included in valuation of closing
stock.
I. EMPLOYEE BENEFITS
Employee benefits are accrued in the year services are rendered by the
employees.
Contribution to defined contribution schemes such as Provident Fund
etc. are recognized as and when incurred.
Long-term employee benefits under defined benefit scheme such as
contribution to gratuity are determined at close of the year at present
value of the amount payable using actuarial valuation techniques. Leave
Encashment is provided on the basis of actual valuation as computed by
the company.
Actuarial gain and losses are recognized in the year when they arise
J. FOREIGN EXCHANGE TRANSACTION
Transaction in foreign currencies are accounted for at the exchange
rate prevailing on the date of the transaction. Foreign currency,
monetary assets and liabilities at the year end are translated using
exchange rate prevailing on the last day of the financial year. The
loss or gain thereon and also the exchange differences on settlement of
the foreign currency transactions during the year are recognized as
income or expenses and adjusted to the Statement of Profit and Loss.
K. SUBSIDY
Tea Replantation subsidy and other subsidies is accounted for on
acceptance/receipt by/from the concerned authorities.
L. BORROWING COST
Borrowing cost incurred in relation to acquisition, construction or
production of a qualifying asset is capitalized as a part of the cost
of such assets up to the date when such assets are ready for intended
use or sale. Other borrowing cost are charged as an expense in the year
in which they are incurred.
M. TAXES ON INCOME
Provision for Tax is made for current and deferred taxes. Current tax
is provided on the taxable income using the applicable tax rates and
tax laws. Deferred tax assets and liabilities arising on account of
timing difference, which are capable of reversal in subsequent period
are recognized using tax rates and tax laws, which have been enacted or
substantively enacted. Deferred tax assets are recognized only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
will be realized. In case of carry forward of unabsorbed depreciation
and tax losses, deferred tax assets are recognized only if there is a
virtual certainty that such deferred tax assets can be realized against
future taxable profits.
N. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provision involving substantial degree of estimates in measurement is
recognized when there is a present obligation as a result of past
events, and it is probable that there will be an outflow of resources
and a reliable estimate can be made of the amount of obligation.
Contingent assets are neither recognized nor disclosed in the financial
statements. Contingent liabilities are not provided in the books but
disclosed by way of a note in the Notes to Account.
Mar 31, 2010
A. GENERAL
i) These accounts have been prepared on the historical cost convention
in accordance with provisions of the Companies Act, 1956 and mandatory
accounting standards Rules 2006.
ii) All income and expenses to the extent considered receivable and
payable respectively, unless specifically stated to be otherwise are
accounted for on mercantile basis.
iii) Accounting policies unless specifically stated to be otherwise are
consistent and are in consonance with generally accepted accounting
principles.
B. USE OF ESTIMATES
The Preparation of financial Statements require Management to make
estimates and assumption that affect the reported amount of Assets and
Liabilities and disclosure relating to contingent liabilities as at the
Balance Sheet date and the reported amounts of Income and Expenses
during the year.
Contingencies are recorded when it is probable that a liability will be
incurred and the amounts can reasonably be estimated. Differences
between the actual results and the estimates are recognized in the year
in which the results are known / materialized.
C. REVENUE RECOGNITION
(i) Sales is recognised in the accounts on passing of title of goods
i.e. delivery as per terms of sale or on completion of auction in case
of auction sale. (ii) Sales represents the invoice value of goods
supplied less tax, if any.
D. FIXED ASSETS
Fixed Assets are stated at cost of acquisition. The cost of extension
planting on cultivable land including cost of development is
capitalised whereas expenses in respect of replanting of tea bushes are
charged to revenue. Subsidy related to fixed assets is adjusted against
the cost of the same.
E. DEPRECIATION
Depreciation on Fixed Assets is provided in the manner and at the
applicable rates as specified in Schedule XIV of the Companies Act,
1956 under Straight Line Method.
F. IMPAIRMENT
Fixed Assets are reviewed at each Balance Sheet date for impairment. In
case event and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is recognized,
wherever the carrying amounts of assets either belonging to Cash
Generating Unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of assets net selling price or its
value in use. In assessing the value in use, the estimated future Cash
Flow from the use of assets is discounted to their present value at
appropriate rate. An impairment loss is reversed if there has been
change in the recoverable amount and such loss no longer exists or has
decreased. Impairment Loss / reversal thereof is adjusted to the
carrying value of the respective asset which in case of CGU, are
allocated to the assets on a pro-rata basis. Subsequent to recognition
of impairment loss / reversal thereof, depreciation is provided on the
revised carrying amount of the assets, on a systematic basis, over its
remaining useful life.
G. INVESTMENTS
Investments are classified under Long Term and Current Investments
depending on the intention for holding the same. Long Term Investments
are stated at cost. Provision for diminution is made to recognise a
decline, other than the temporary, in the value of investments. Current
Investments are staled at lower of cost or fair value. Gains/Losses on
disposal of investments are recognised in the Profit and Loss account.
H. INVENTORIES
Inventories are valued at cost or net realisable value whichever is
lower. Cost in respect of finished product is determined on average
basis and represents works cost and appropriate portion of overheads.
Cost in respect of Stores and Spares and Foodstuff is computed on FIFO
basis.
Excise duty /Tea Cess/ Education Cess if any leviable/ payable on
closing stock of Tea is provided and included in valuation of closing
stock.
1. EMPLOYEE BENEFITS
Employee benefits are accrued in the year services are rendered by the
employees. Contribution to defined contribution schemes such as
Provident Fund etc. are recognized as and when incurred.
Long-term employee benefits under defined benefit scheme such as
contribution to gratuity are determined at close of the year at present
value of the amount payable using actuarial valuation techniques. Leave
Encashment is provided on the basis of actual valuation as computed by
the company.
Actuarial gain and losses are recognized in the year when they arise.
J. FOREIGN EXCHANGE TRANSACTION
Transaction in Foreign Currencies are accounted for at the exchange
rale prevailing on the date of the transaction. Foreign currency,
monetary assets and liabilities at the year end are translated using
exchange rate prevailing on the last day of the financial year. The
loss or gain thereon and also the exchange differences on settlement of
the foreign currency transactions during the year are recognized as
income or expenses and adjusted to the profit and loss account.
K. SUBSIDY
Tea Replantation subsidy and other subsidies is accounted for on
acceptance/receipt by/from the concerned authorities.
L. BORROWING COST
Borrowing costs incurred in relation to acquisition construction or
production of a qualifying asset is capitalized as a part of the cost
of such assets up to the date when such assets are ready for intended
use or sale. Other borrowing costs are charged as an expense in the
year in which they are incurred.
M. TAXES ON INCOME
Provision for Tax is made tor current and deferred taxes. Current tax
is provided on the taxable income using the applicable tax rates and
tax laws. Deferred tax assets and liabilities arising on account of
timing difference, which are capable of reversal in subsequent period
are recognized using tax rates and tax laws, which have been enacted or
substantively enacted. Deferred tax assets are recognized only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
will be realized. In case of carry forward of unabsorbed depreciation
and tax losses, deferred tax assets are recognized only if there is a
"virtual certainty" that such deferred tax assets can be realized
against future taxable profits.
N. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS.
Provision involving substantial degree of estimates in measurement is
recognized when there is a present obligation as a result of past
events, and it is probable that there will be an outflow of resources
and a reliable estimate can be made of the amount of obligation.
Contingent Assets are neither recognized nor disclosed in the financial
statements. Contingent liabilities are not provided in the books but
disclosed by way of a note in the Notes to Account.
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