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Accounting Policies of James Warren Tea Ltd. Company

Mar 31, 2016

Note No.1: Significant Accounting Policies

1.1 Basis of Accounting

These Financial Statements are prepared to comply in all material aspects with all the applicable accounting principles in India and Indian GAAP. The Company has prepared these financial statements to comply in all material respects with the Accounting Standards as prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 to the extent notified. These financial statements have been prepared under historical cost convention on accrual basis.

1.2 Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of revenue and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are actually known/materialized.

1.3 Fixed Assets

a) Tangible Fixed assets are stated at cost less accumulated depreciation and cumulative impairment losses, if any. Cost includes duties, taxes, incidental expenses, erection/commissioning expenses and borrowing cost attributable to qualifying assets up to the date, the asset is put to use. Tangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress".

b) Costs incurred on intangible assets, resulting in future economic benefits are capitalized as intangible assets. Intangible assets are stated at cost less accumulated amortization and cumulative impairment losses, if any.

c) Compensation received for acquisition of Assets of the Company is accounted for upon acceptance of the Company''s claim by the appropriate authorities.

1.4 Depreciation and Amortization

a) Depreciation on fixed assets is provided under Straight Line Method at the rates determined based on Useful Lives of the respective assets and the residual values in accordance with Schedule II of the Companies Act, 2013.

b) The cost of a part of the asset which is significant to the total cost of the assets and whose useful life is different from the useful life of the main asset is depreciated separately over its useful life.

c) Although Tea Plantation is an item of wasting asset, no depreciation is charged on such assets as it is customary in the Tea Industry. Replantation/uprooting expenditure is charged off in the year of incurrence.

1.5 Impairment of Assets

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value, being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful life of the assets. An impairment loss is recognized as an expense in the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been an improvement in recoverable amount.

1.6 Leases

For assets acquired under Operating Lease, rentals payable are charged to Statement of Profit and Loss. Assets acquired under Finance Lease are capitalized at lower of the Fair Value and Present Value of Minimum Lease Payments. Lease income from operating leases is recognized in the Statement of Profit and Loss over the period of Lease.

1.7 Investments

Non Current Investments are stated at cost with an appropriate provision for diminution in value, other than temporary in nature. Current Investments are stated at lower of cost and fair value. Gains/Losses on disposal of investments are recognized as income/expenditure.

1.8 Inventories

Inventories are valued at cost or net realizable value whichever is lower. Cost is determined on weighted average basis. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to their location and condition and includes appropriate overheads. Provision is made for obsolete and slow moving stocks, wherever necessary.

1.9 Recognition of Revenue & Expenses

a) All revenue and expenses are accounted for on accrual basis except as otherwise stated.

b) Sales are net of returns, Sales Tax/VAT and trade discount

1.10 Government Grants

a) Government Grants related to specific assets are adjusted with value of fixed assets.

b) Government Grants in the nature of Promoter''s Contribution towards fixed assets are credited to Capital Reserve.

c) Government Grant related to revenue items are adjusted with the related expenditure/ taken in income.

1.11 Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.

1.12 Foreign Currency Transactions

Transactions in foreign currency are accounted for at the exchange rates prevailing on the date of transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end exchange rates.

Gains/Losses arising out of fluctuations in the exchange rates are recognized in the Accounts in the period in which they arise. Differences between the forward exchange rates and the exchange rates at the date of transactions are accounted for as income/expense over the life of the contracts.

1.13 Derivative Instruments

The Company uses forward exchange contracts to hedge its risks associated with foreign currency fluctuations relating to the underlying transactions, highly probable forecast transactions and firm commitments. In respect of forward exchange contracts with underlying transactions, the premium or discount arising at the inception of such contract is amortized as income or expense over the life of contract. Other forward exchange contracts outstanding at the Balance Sheet date are marked to market and in case of loss the same is provided for in the financial statement. Any profit or loss arising on cancellation of forward exchange contracts are recognized as income or expense for the period.

1.14 Employees Benefits

a) Short Term Employee Benefits

The amount of Short Term Employee Benefits payable in terms of employment for the services rendered by such employees is recognized during the period when the employee renders services.

b) Post-Employment Benefits

i. The Company operates defined Contribution Schemes of Provident Funds and makes regular contributions to Provident Funds which are fully funded and administered by the Government. Such contributions are recognized in the accounts when an employee renders the related service. The company has no obligations other than contribution payable to the respective funds.

ii. The Company operates defined benefit Superannuation and Gratuity Schemes administered by the Trustees, which are independent of the Company''s finance. Such obligations are recognized in the accounts on the basis of actuarial valuation applying Projected Unit Credit Method including gains and losses at the year-end.

iii. The Company operates a defined benefit Pension Scheme and Additional Retrial Benefit for certain categories of employees for which obligations are recognized in the accounts based on actuarial valuation applying Projected Unit Credit Method including gains and losses at the year-end.

c) Other Long Term Employee Benefits

Other Long Term Employee Benefits are recognized in the accounts based on actuarial valuation applying Projected Unit Credit Method including gains and losses at the year-end.

1.15 Taxes on Income

a) Current Tax in respect of taxable income is provided based on computation of tax as per taxation laws under the Income Tax Act, 1961.

b) Deferred Tax is recognized at substantively enacted tax rates, subject to the consideration of prudence, on timing difference, between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax Assets are not recognized unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

c) Tax Credit for Minimum Alternate Tax (MAT) is recognized when there is convincing evidence of its reliability against future normal tax liability.

1.16 Provisions, Contingent Liabilities and Contingent Assets

a) Provision is recognized when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

b) Disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. No provision is recognized or disclosure for contingent liability is made when there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote.

c) Contingent Asset is neither recognized nor disclosed in the financial statements.

a) There is no movement/change in number of shares outstanding at the beginning and at the end of the reporting period.

b) Rights, preferences and restrictions attached to equity shares

The Company has only one class of shares being Equity Shares having a par value of '' 10/-each. Each holder of the Equity Share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the shareholders.

c) The Company does not have any Holding or Ultimate Holding Company.

f) Aggregate no. of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date -1-1-1-1-1-

g) The company has neither issued any bonus shares nor it has bought back any shares during the last five years preceding immediately the reporting date.

h) No securities convertible into Equity/ Preference shares have been issued by the Company during the year.

i) No calls are unpaid by any Director or Officer of the Company during the year. ( Rs . lakhs)

a) Represents Shares received on demerger of Crompton Greaves Ltd. at NIL Cost as per cost allocation sheet provided by the resultant company.

b) Represents Bonus Shares

c) Pledged against facilities availed from ICICI Bank Limited

d) Pledged against facilities availed from Kotak Mahindra Bank Limited

e) Deposited with Government Department as security

f) Amount is below the rounding off norm adopted by the Company


Mar 31, 2015

1.1 Basis of Accounting

These Financial Statements are prepared to comply in all material aspects with all the applicable accounting principles in India and Indian GAAP. The Company has prepared these financial statements to comply in all material respects with the Accounting Standards as prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 to the extent notified. These financial statements have been prepared under historical cost convention on accrual basis.

1.2 Fixed Assets

a) Tangible Fixed assets are stated at cost less accumulated depreciation and cumulative impairment losses, if any. Cost includes duties, taxes, incidental expenses, erection/commissioning expenses and borrowing cost attributable to qualifying assets up to the date, the asset is put to use. Tangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in- progress".

b) Costs incurred on intangible assets, resulting in future economic benefits are capitalised as intangible assets. Intangible assets are stated at cost less accumulated amortisation and cumulative impairment losses, if any.

c) Compensation received for acquisition of Assets of the Company is accounted for upon acceptance of the Company's claim by the appropriate authorities.

1.3 Depreciation and Amortization

a) Depreciation on fixed assets is provided under Straight Line Method at the rates determined based on Useful Lives of the respective assets and the residual values in accordance with Schedule II of the Companies Act, 2013.

b) Although Tea Plantation is an item of wasting asset, no depreciation is charged on such assets as it is customary in the Tea Industry. Replantation/uprooting expenditure is charged off in the year of incurrence.

1.4 Impairment of Assets

The carrying amounts of Fixed Assets are reviewed at each balance sheet date to determine, if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of the fixed assets of a cash generating unit exceeds its net selling price or value in use whichever is higher.

1.5 Leases

For assets acquired under Operating Lease, rentals payable are charged to Statement of Profit and Loss. Assets acquired under Finance Lease are capitalised at lower of the Fair Value and Present Value of Minimum Lease Payments. Lease income from operating leases is recognised in the Statement of Profit and Loss over the period of Lease.

1.6 Investments

Non Current Investments are stated at cost with an appropriate provision for diminution in value, other than temporary in nature. Current Investments are stated at lower of cost and fair value. Gains/Losses on disposal of investments are recognised as income/expenditure.

1.7 Inventories

Inventories are valued at cost or net realizable value whichever is lower. Cost is determined on weighted average basis. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to their location and condition and includes appropriate overheads. Provision is made for obsolete and slow moving stocks, wherever necessary.

1.8 Recognition of Revenue & Expenses

a) All revenue and expenses are accounted for on accrual basis except as otherwise stated.

b) Sales are net of returns, Sales Tax/VAT and trade discount

1.9 Government Grants

a) Government Grants related to specific assets are adjusted with value of fixed assets.

b) Government Grants in the nature of Promoter's Contribution towards fixed assets are credited to Capital Reserve.

c) Government Grant related to revenue items are adjusted with the related expenditure/ taken in income.

1.10 Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

1.11 Foreign Currency Transactions

Transactions in foreign currency are accounted for at the exchange rates prevailing on the date of transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end exchange rates.

Gains/Losses arising out of fluctuations in the exchange rates are recognized in the Accounts in the period in which they arise. Differences between the forward exchange rates and the exchange rates at the date of transactions are accounted for as income/expense over the life of the contracts.

1.12 Derivative Instruments

The Company uses forward exchange contracts to hedge its risks associated with foreign currency fluctuations relating to the underlying transactions, highly probable forecast transactions and firm commitments. In respect of forward exchange contracts with underlying transactions, the premium or discount arising at the inception of such contract is amortized as income or expense over the life of contract. Other forward exchange contracts outstanding at the Balance Sheet date are marked to market and in case of loss the same is provided for in the financial statement. Any profit or loss arising on cancellation of forward exchange contracts are recognised as income or expense for the period.

1.13 Employees Benefits

a) Short Term Employee Benefits

The amount of Short Term Employee Benefits payable in terms of employment for the services rendered by such employees is recognized during the period when the employee renders services.

b) Post-Employment Benefits

i. The Company operates defined Contribution Schemes of Provident Funds and makes regular contributions to Provident Funds which are fully funded and administered by the Government. Such contributions are recognized in the accounts when an employee renders the related service. The company has no obligations other than contribution payable to the respective funds.

ii. The Company operates defined benefit Superannuation and Gratuity Schemes administered by the Trustees, which are independent of the Company's finance. Such obligations are recognized in the accounts on the basis of actuarial valuation applying Projected Unit Credit Method including gains and losses at the year-end.

iii. The Company operates a defined benefit Pension Scheme and Additional Retrial Benefit for certain categories of employees for which obligations are recognized in the accounts based on actuarial valuation applying Projected Unit Credit Method including gains and losses at the year-end.

c) Other Long Term Employee Benefits

Other Long Term Employee Benefits are recognized in the accounts based on actuarial valuation applying Projected Unit Credit Method including gains and losses at the year-end.

1.14 Taxes on Income

Income tax expense comprises current tax and deferred tax charge. Current tax is determined as the amount of tax payable in respect of taxable income for the year based on applicable tax rates and laws. Deferred tax is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised only if there is reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax assets will be realised. Such assets are reviewed as at each Balance Sheet date to reassess the realizability thereof.

1.15 Contingent Liabilities

Contingent Liabilities are disclosed when there is a possible obligation which may arise from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or reliable or estimate of the amount cannot be made.


Mar 31, 2014

1. Basis of Accounting

These Financial Statements are prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the relevant provisions of the Companies Act, 2013 (to the extent notified) and the Companies Act, 1956 (to the extent applicable).

2 Fixed Assets

a) Tangible Fixed assets are stated at cost less accumulated depreciation and cumulative impairment losses, if any. Cost includes duties, taxes, incidental expenses, erection/commissioning expenses and borrowing cost attributable to qualifying assets up to the date, the asset is put to use. Tangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress".

b) Costs incurred on intangible assets, resulting in future economic benefits are capitalised as intangible assets. Intangible assets are stated at cost less accumulated amortisation and cumulative impairment losses, if any.

c) Compensation received for acquisition of Assets of the Company is accounted for upon acceptance of the Company''s claim by the appropriate authorities.

3 Depreciation and Amortization

a) Depreciation and amortisation on fixed assets (both tangible and intangible) other than Estate and development is provided on Straight Line Method at rates indicated below :

Category of Assets Rate of Deprecation

Buildings, Roads and Bridges (including Tenancy Rights) 5 %

Plant and Machinery : Computers including Software 20 %

: Others 7.50 %

Air conditioners, Refrigerators and Other Equipments 7.50 %

Furniture and Fixtures 7.50 %

Vehicles 15 %

b) Although Tea Plantation is an item of wasting asset, no depreciation is charged on such assets as it is customary in the Tea Industry. Replantation/uprooting expenditure is charged off in the year of incurrence.

c) For additions to Assets during the course of the year depreciation/amortization is being charged on a full year basis. In case of acquisition of any undertaking, depreciation is charged from the effective date of such acquisition.

4 Impairment of Assets

The carrying amounts of Fixed Assets are reviewed at each balance sheet date to determine, if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of the fixed assets of a cash generating unit exceeds its net selling price or value in use whichever is higher.

5 Leases

For assets acquired under Operating Lease, rentals payable are charged to Statement of Profit and Loss. Assets acquired under Finance Lease are capitalised at lower of the Fair Value and Present Value of Minimum Lease Payments. Lease income from operating leases is recognised in the Statement of Profit and Loss over the period of Lease.

6 Investments

Long Term Investments are stated at cost with an appropriate provision for diminution in value, other than temporary in nature. Current Investments are stated at lower of cost and fair value. Gains/Losses on disposal of investments are recognised as income/expenditure.

7 Inventories

Inventories are valued at cost or net realizable value whichever is lower. Cost is determined on weighted average basis. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to their location and condition and includes appropriate overheads. Provision is made for obsolete and slow moving stocks, wherever necessary.

8 Recognition of Revenue & Expenses

a) All revenue and expenses are accounted for on accrual basis except as otherwise stated.

b) Sales are net of returns, Sales Tax/VAT and trade discount

9 Government Grants

a) Government Grants related to specific assets are adjusted with value of fixed assets.

b) Government Grants in the nature of Promoter''s Contribution towards fixed assets are credited to Capital Reserve.

c) Government Grant related to revenue items are adjusted with the related expenditure/ taken in income.

10 Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

11 Foreign Currency Transactions

Transactions in foreign currency are accounted for at the exchange rates prevailing on the date of transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end exchange rates.

Gains/Losses arising out of fluctuations in the exchange rates are recognized in the Accounts in the period in which they arise. Differences between the forward exchange rates and the exchange rates at the date of transactions are accounted for as income/expense over the life of the contracts.

12 Employees Benefits

a) Short Term Employee Benefits

The amount of Short Term Employee Benefits payable in terms of employment for the services rendered by such employees is recognized during the period when the employee renders services.

b) Post-Employment Benefits

i. The Company operates defined Contribution Schemes of Provident Funds and makes regular contributions to Provident Funds which are fully funded and administered by the Trustees/Government and are independent of the Company''s finance. Such contributions are recognized in the accounts on accrual basis. Interests accruing to the Fund administered by the Trustees are credited to respective members'' accounts based on the rates stipulated by the Government and shortfall if any, recognized on the basis of actuarial valuation report in this regard, is borne by the Company.

ii. The Company operates defined benefit Superannuation and Gratuity Schemes administered by the Trustees, which are independent of the Company''s finance. Such obligations are recognized in the accounts on the basis of actuarial valuation applying Projected Unit Credit Method including gains and losses at the year- end.

iii. The Company operates a defined benefit Pension Scheme and Additional Retrial Benefit for certain categories of employees for which obligations are recognized in the accounts based on actuarial valuation applying Projected Unit Credit Method including gains and losses at the year-end.

c.) Other Long Term Employee Benefits

Other Long Term Employee Benefits are recognized in the accounts based on actuarial valuation applying Projected Unit Credit Method including gains and losses at the year-end.

13 Taxes on Income

Income tax expense comprises current tax and deferred tax charge. Current tax is determined as the amount of tax payable in respect of taxable income for the year based on applicable tax rates and laws. Deferred tax is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised only if there is reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax assets will be realised. Such assets are reviewed as at each Balance Sheet date to reassess the realizability thereof.

14 Contingent Liabilities

Contingent Liabilities are disclosed when there is a possible obligation which may arise from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or reliable or estimate of the amount cannot be made.

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