Home  »  Company  »  Tata Coffee Ltd.  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Tata Coffee Ltd. Company

Mar 31, 2017

A. General Information

Tata Coffee Limited ("the Holding Company") and its subsidiaries (together "the Group") are engaged in the production, trading and distribution of Coffee, Tea and Allied products. The Company has business operations mainly in India, USA and CIS countries, Europe and Africa.

The Company is a public limited company incorporated and domiciled in India and has its registered office at Pollibetta, Kodagu, Karnataka, India. The Company has its primary listings on the Bombay Stock Exchange and National Stock Exchange in India.

The principal accounting policies applied in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

B. Basis of preparation and presentation of financial statements

(i) Accounting convention

The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the companies (Indian Accounting Standards) Amendment Rules, 2016.

For all periods up to and including the year ended March 31, 2016, the company prepared its financial statements in accordance with the accounting standards notified under the Section 133 of the Companies Act, 2013, read together with Companies (Accounts) Rules 2014 (Indian GAAP).

These are the company''s first annual financial statements prepared in accordance with Indian Accounting Standards (Ind AS). The Company has adopted all applicable standards and the adoption was carried out in accordance with Ind AS 101 - ''First Time Adoption of Indian Accounting Standards''. An explanation of how the transition to Ind AS has affected the reported financial position, financial performance and cash flows of the Company are provided in Note numbers 39-42 First Time Adoption.

All amounts included in the financial statements are reported in Indian Rupees Lakhs and have been rounded off to nearest decimal of Rs. Lakhs.

(ii) Basis of measurement

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, unless otherwise stated. These financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. All assets and liabilities are classified into current and non-current based on the operating cycle of less than twelve months or based on the criteria of realization/settlement within twelve months period from the balance sheet date.

C. Key accounting judgement, estimates and assumptions

The preparation of the financial statements required the management to exercise judgment and to make estimates and assumptions. These estimates and associated assumptions are based on historical experiences and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revision to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future period.

The areas involving critical estimates or judgments are:

i. Depreciation and amortization

Depreciation and amortization is based on management estimates of the future useful lives of certain class of property, plant and equipment and intangible assets. Estimates may change due to technological developments, competition, changes in market conditions and other factors and may result in changes in the estimated useful life and in the depreciation and amortization charges.

ii. Employee Benefits

The present value of the employee benefits obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) includes the discount rate, wage escalation and employee attrition. Any changes in these assumptions will impact the carrying amount of obligations. The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

iii. Provision and contingencies

Provisions and contingencies are based on the Management''s best estimate of the liabilities based on the facts known at the balance sheet date.

iv. Fair valuation

Fair value is the market based measurement of observable market transaction or available market information. Fair valuation of Agricultural produces are based on the market rates published by the industrial body for various grades from which the fair value of the agricultural produce are derived.

D. Functional and presentation currency

The functional and presentation currency of the Company is the Indian Rupee O.

E. Foreign currency transaction

Foreign currency transactions are translated at the exchange rate that approximates the prevalent exchange rate on the transaction date. Monetary assets and liabilities in foreign currencies are translated at the year-end rate. Any resultant exchange differences are taken to the Statement of Profit and Loss, except

a) when deferred, in Other Comprehensive Income as qualifying cash flow hedges and

b) exchange difference arising from translation of external commercial borrowing is capitalized in terms of para D13AA of Ind AS 101.

Non-monetary assets and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.

F. Significant Accounting Policies:

(a) Property, Plant and Equipment

Transition to Ind AS:

The Company has elected to continue with the net carrying value of all its property, plant and equipment recognized as of April 1, 2015 (transition date) as per the previous GAAP and use that carrying value as its deemed cost.

Subsequent to transition:

i) Recognition and measurement: Property, plant and equipment including Bearer biological assets are carried at cost of acquisition less accumulated depreciation and accumulated impairment loss, if any. Subsequent expenditure related to an item of fixed asset are added to its book value only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All repairs and maintenance are charged to the Statement of Profit and Loss during the financial year in which they are incurred.

ii) Depreciation: Land is not depreciated. Depreciation of other items of Property, Plant and Equipment are provided on a straight line basis over the estimated useful life of the asset or as prescribed in Schedule II to the Companies Act, 2013 or based on technical evaluation of the asset. Estimated useful life of items of property, plant and equipment are as follows:

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

The Company assesses at each balance sheet date whether there is objective evidence that a asset or a group of assets is impaired. An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the sale proceeds with the carrying amount and are recognized within operating profit in the Income statement.

(b) Biological Assets

Transition to Ind AS:

Under the previous GAAP, biological assets were not separately recognized. Accordingly, on the transition date, the Company has considered Nil value as the deemed cost for biological assets.

Subsequent to transition:

Biological assets are classified as Bearer biological assets and Consumable biological assets. Consumable biological assets are those that are to be harvested as agricultural produce or sold as biological assets. Bearer Biological Assets which are held to bear agricultural produce are classified as Bearer plants.

Tea bushes, Coffee bushes, Pepper vines, Cardamom tiller and Shade trees are recognized as Bearer biological assets. These are classified as mature Bearer Plants and Immature Bearer Plants. Mature Bearer Plants are those that have attained harvestable stage. Cost incurred for new plantations and immature areas are capitalized. Cost includes cost of land preparation, new planting and maintenance till maturity. The cost of areas coming into bearing is transferred to mature plantations and depreciated over their estimated useful lives.

Bearer plants relating to Coffee and Tea bushes, Pepper vines and minor produces attain a harvestable stage in about 3-5 years.

Bearer biological assets are carried at cost less accumulated depreciation and accumulated impairment loss, if any. Subsequent expenditure on bearer assets are added to its book value only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably.

Mature bearer plants are depreciated over their estimated useful life. Immature bearer plants are tested for impairment / obsolescence. The estimated useful life of mature bearer plants are as follows:

(c) Investment Property

For Transition to Ind AS, the Company has elected to continue with the carrying value of its investment property recognized as of April 1, 2015 (transition date) as per the previous GAAP and use that carrying value at its deemed cost.

Property that is held for long-term rental yields or for capital appreciation or both, and that is not used in the production of goods and services or for the administrative purposes, is classified as Investment Property. Investment property is measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Investment property held as Building is depreciated using the straight line method over the estimated useful life. The Company''s investment property has a useful life of 50 years.

(d) Intangible Assets Computer software

Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. Computer software development costs recognized as assets are amortized over their estimated useful life of 5 years.

(e) Non-current assets held for sale

Non-current assets held for sale are presented separately in the balance sheet when the following criteria are met:

- the company is committed to selling the asset;

- the assets are available for sale immediately;

- an active plan of sale has commenced; and

- sale is expected to be completed within 12 months.

Assets held for sale are measured at the lower of their carrying amount and fair value less cost to sell. Assets held for sale are no longer amortized or depreciated.

(f) Financial Instruments

Financial assets

The Company classifies its financial assets in the following categories:

i) Financial assets at amortized cost - Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost.

They are presented as current assets, except for those maturing later than 12 months after the reporting date which are presented as non-current assets. Financial assets are measured initially at fair value which usually represents cost plus transaction costs and subsequently carried at amortized cost using the effective interest method, less any impairment loss if any.

Financial assets at amortized cost are represented by trade receivables, security and other deposits, cash and cash equivalent, employee and other advances.

ii) Equity investments - Investment in subsidiaries are stated at cost. All other equity investments are measured at fair value, except for certain unquoted equity investments which are carried at cost where the fair value of these investments cannot be reliably measured.

iii) Financial Assets at Fair Value through Other Comprehensive Income (FVTOCI) - For

investments which are not held for trading purposes and where the company has exercised the option to classify the investment as at FVTOCI, all fair value changes on the investment are recognized in OCI. The accumulated gains or losses on such investments are not recycled to the Statement of Profit and Loss even on sale of such investment.

iv) Financial assets at Fair Value through Profit and loss (FVTPL) - Financial assets other than the equity investments and investment classified as FVTOCI are measured at FVTPL. These include surplus funds invested in mutual funds etc.

v) Impairment of financial assets - The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ''loss event'') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Financial liabilities Initial recognition and measurement

Financial liabilities are measured at amortized cost using effective interest method. For trade and other payable maturing within one year from the Balance Sheet date, the carrying value approximates fair value due to short maturity.

Derivative financial instruments and hedging activities

A derivative is a financial instrument which changes value in response to changes in an underlying asset and is settled at a future date. Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

The Company enters into derivative contracts to hedge the risks asserted with currency fluctuations relating to firm commitments and highly probable transactions. The Company does not use derivative instruments for speculative purposes.

The Company documents, at the inception of the transaction, the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Company also documents its assessment, both at hedge inception and on an on-going basis, of whether the derivatives that are used in hedging transactions are effective in offsetting changes in cash flows of hedged items.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in Other Comprehensive Income. The ineffective portion of changes in the fair value of the derivative is recognized in the Statement of Profit and Loss.

Amounts accumulated in equity are reclassified to the Statement of Profit and Loss in the periods when the hedged item affects the Statement of Profit and Loss.

Movements on the hedging reserve are accounted in Other Comprehensive Income and shown within the statement of changes in equity. The full fair value of a hedging derivative is classified as a current/ non-current, asset or liability based on the remaining maturity of the hedged item.

When a hedging instrument expires, swapped or unwound, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in statement of changes in equity is recognized in the Statement of Profit and Loss.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty.

Fair value measurement

The Company classifies the fair value of its financial instruments in the following hierarchy, based on the inputs used in their valuation:

i) The fair value of financial instruments quoted in active markets is based on their quoted closing price at the balance sheet date.

ii) The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques using observable market data. Such valuation techniques include discounted cash flows, standard valuation models based on market parameters for interest rates, yield curves or foreign exchange rates, dealer quotes for similar instruments and use of comparable arm''s length transactions.

iii) The fair value of financial instruments that are measured on the basis of entity specific valuations using inputs that are not based on observable market data (unobservable inputs). When the fair value of unquoted instruments cannot be measured with sufficient reliability, the Company carries such instruments at cost less impairment, if applicable.

(g) Inventories

Produce growing on Bearer plant is Biological asset and are fair valued based on the biological transformation, except where on initial recognition quoted market prices are not available and alternate fair value measures are clearly unreliable in which case biological asset is measured at cost less any accumulated depreciation and impairment loss.

Tea, Coffee, Pepper and minor crops are designated as agricultural produce as per Ind AS 41 and are measured at their fair value less cost to sell as at each reporting date. Any changes in fair value are recognized in the Statement of Profit and Loss in the year in which they arise. The fair valuation so arrived at becomes the cost of Inventory under Ind AS-2.

Inventories are valued at cost or net realizable value whichever is lower, cost being determined on weighted average method. Raw Materials and Stores are valued at weighted average cost.

(h) Employee Benefits

The Company operates various post-employment schemes, including both defined benefit and defined contribution plans.

Contribution to defined contribution schemes like Provident Fund (PF) and Superannuation Schemes are accounted for on accrual basis by the Company. With regard to PF contribution made by the Company to a Self-Administered Trust, Company is liable for annual contributions and any shortfall in the fund assets based on the government specified minimum rates of return and recognizes such contribution and shortfall, if any, as an expense in the year incurred.

Post retirement defined benefits including gratuity, pension and medical benefits (for qualifying executives/ whole time directors) as provided by the Company are determined through independent actuarial valuation, using projected unit credit method, at year end and charge recognized in the Statement of Profit and Loss. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognized in Other Comprehensive Income. Such accumulated remeasurement balances are never reclassified into the Statement of Profit and Loss subsequently.

Other employee benefits are accounted for on accrual basis. Liabilities for compensated absences are determined based on independent actuarial valuation at year end and charge is recognized in the Statement of Profit and Loss. Short Term Employee Benefits are recognized on an undiscounted basis whereas Long Term Employee Benefits are recognized on a discounted basis.

Net Interest on defined benefit obligations are accounted as Finance cost.

(i) Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

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.

These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. If the effect of the time value of money is material, provisions are discounted. The discount rate used to determine the present value is a pre- tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.

(j) Income Tax

i) Current Income Tax:

Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with local laws of various jurisdiction where the Company operates.

ii) Deferred Tax:

Deferred tax is provided using the balance sheet approach on differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible differences, and the carry forward of unused tax credits and unused tax losses can be utilized.

The tax rates and tax laws used to compute the tax are those that are enacted or substantively enacted at the reporting date.

Current and Deferred Tax are recognized in the Statement of Profit and Loss except to items recognized directly in Other Comprehensive income or equity, in which case the deferred tax is recognized in Other Comprehensive Income and equity respectively.

(k) Leases

As a lessee

Lease of assets, where the Company, as a lessee, has substantially assumed all the risks and rewards of ownership are classified as finance leases. Assets acquired on finance lease are capitalized and depreciated as per Company''s policy on Property, Plant and Equipment. Finance lease are measured at the lease''s inception at the lower of fair value of the leased property and the present value of the minimum lease payments. The corresponding lease rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each year.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to Statement of profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases.

As a lessor

Lease income from operating leases where the Company is a lessor is recognized as income in the Statement of profit or loss on a straight- line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.

(l) Cash flow Statement:

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipt or payments and item of income or expense associated with investing or financing cash-flows. The cash flow from operating, investing and financing activities of the Company are segregated.

(m) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts inclusive of excise duty receivable for goods supplied, stated net of discounts, returns and value added taxes. The company recognizes revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the Company''s activities, as described below.

Sale of goods and services

Sales are recognized when the significant risks and rewards of ownership of the goods are transferred to the buyer as per terms of contract. Income and fees from services are accounted as per terms of relevant contractual agreements/arrangements.

Interest income

Interest income is recognized on accrual basis as per the terms of relevant contracts or by using the effective interest method, where applicable.

Dividend and investment income

Dividend income is recognized when the right to receive payment is established. Incomes from investments are accounted on an accrual basis.

(n) Government Grant

Government grants including any non-monetary grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with.

Government grants are recognized in Statement of profit or loss on a systematic basis over the periods in which the related costs, for which the grants are intended to compensate, are recognized as expenses.

Government grants related to assets are presented at fair value by setting up the grant as a deferred income.

(o) Borrowing Costs

Borrowing costs consist of interest, ancillary and other costs that the Company incurs in connection with the borrowing of funds and interest relating to other financial liabilities. Borrowing costs also include exchange differences to the extent regarded as an adjustment to the borrowing costs.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.

(p) Exceptional Items

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. They are material items of income or expense that have been shown separately due to the significance of their nature or amount.

(q) Earnings per share

The Company presents Basic and Diluted earnings per share data for its equity shares. Basic and Diluted earnings per share is calculated by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year.

(r) Contingent Liabilities

Contingent liabilities exist when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence 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 or the amount cannot be reliably estimated. Contingent liabilities are appropriately disclosed unless the possibility of an outflow of resources embodying economic benefits is remote.

(s) Contingent Assets

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. The Group does not recognize a contingent asset.

(t) Events after the reporting period

Adjusting events are events that provide further evidence of conditions that existed at the end of the reporting period. The financial statements are adjusted for such events before authorization for issue.

Non-adjusting events are events that are indicative of conditions that arose after the end of the reporting period. Non-adjusting events after the reporting date are not accounted, but disclosed.

(u) Transition to Ind AS

The Standalone financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended, read with relevant rules issued there under in terms of the SEBI LODR, as modified by Circular No CIR/CFD/FAC/62/2016 dated July 5, 2016.

For periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with the then applicable Accounting Standards in India (''previous GAAP''). The adoption of Ind AS was carried out in accordance with Ind AS 101, considering April 01, 2015 as the transition date. Pursuant to adoption of Ind AS, the differences in the carrying amounts of assets and liabilities on the transition date under the previous GAAP and the balances on adoption of Ind AS have been recognized directly in equity. The financial statements for the year ended March 31, 2016 and the Balance Sheet as at the transition date and as at March 31, 2016 have been presented under Ind AS for comparative purposes. Accounting policies have been applied consistently to all periods presented in these Stand Alone Financial Results.

In preparing the opening Ind AS statement of financial position, adjustments are carried out to the amounts reported in financial statements prepared in accordance with previous GAAP. An explanation of how the transition from previous GAAP to Ind AS has affected our financial performance, cash flows and financial position is set out in Note Nos. 39-42.


Mar 31, 2016

I. General Information

Tata Coffee Limited ("the holding Company") and its subsidiaries (together "the Group") are engaged in the production, trading and distribution of Coffee, Tea and Allied products. The Group has business operations mainly in India, USA and CIS countries, Europe and Africa.

II. These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, as applicable, read with Rule 7 of Companies (Accounts) Rules, 2014. The financial statements have been prepared under the historical cost convention on accrual basis. All Assets and Liabilities are classified into Current and Non-current generally based on criteria of realization/settlement within twelve months period from the Balance Sheet date.

III. Statement of Profit and Loss

a) All income and expenses are accounted on accrual basis.

b) Sales are recognized on transfer of property in goods together with risks and rewards i.e. delivery as per terms of sale or on completion of auction in case of auction sale. In the case of Rosewood sale, income is recognized on completion of auction sale and confirmation of receipt of money by the auctioneer. Export incentives are estimated & accrued on completion of export sales.

c) Income and fees from services are accounted as per terms of relevant contracts.

d) The sale value of own timber and value added timber products are credited to revenue. Capital profits on such sale, including capital profit on value added timber products determined at estimated market value of actual timber products, are transferred to General Reserve No. II through Appropriation account.

e) Compensation received from Government/Government Agencies/ Government Cos. for their, acquisition of certain rights over the properties, are accounted for as revenue in the period in which the rights over the properties have been ceded to such Governmental Agencies.

Leasehold improvements are being depreciated over the lease period. Increase/decrease in value of Fixed Assets due to Foreign exchange fluctuation is depreciated over the balance residual life of the Asset.

g) The benefits for Employees / Executive Directors are provided in accordance with the revised Accounting Standard 15 - "Employee Benefits" prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules, 2014 and are dealt with in the following manner.

- Contribution to Provident Fund and Defined Contribution Superannuation Funds are accounted on accrual basis.

f) The Company had determined the estimated useful life of its Fixed Assets based on external technical evaluation as permitted under the provisions of Schedule II to the Companies Act, 2013 and has provided depreciation accordingly. Componentization of Assets has been considered wherever applicable and depreciation has been provided accordingly.

- Post retirement defined benefits including gratuity, superannuation, and medical benefits for qualifying employees / whole time directors as provided by the Company are determined by the independent actuarial valuation at year end and charge recognized in the books.

- Other employee benefits are accounted for on accrual basis. Liabilities for compensated absence are determined based on independent actuarial valuation at the year end and charge is recognized in the statement of profit and loss. Short term employee benefits are recognized on an undiscounted basis where as long term liabilities are recognized on discounted basis.

h) Transactions in foreign currency are recorded using the spot rate at the beginning of each fortnight and exchange differences resulting from settled transactions are taken in the Statement of Profit and Loss. Year end balances of monetary items are restated at the year- end exchange rates and the resultant net gain or loss is recognized in the statement of Profit & Loss. Premium or discount on forward contracts where there are underlying assets / liability are amortized over the life of the contract.

Gain or loss on hedging instruments in respect of effective portion of cash flow hedges of highly probable transactions are recognized in the hedging reserve account. The portion of the gain or loss on the hedging instruments if determined to be an ineffective cash flow hedge is recognized in the Statement of Profit and Loss.

In terms of Para 46 and 46A of Accounting Standard 11 - "The Effects of changes in Foreign exchange rates" prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2014 the exchange difference relating to long term foreign currency monetary items in so far as it relates to acquisition of depreciable capital assets are adjusted to the cost of the assets and in other cases such differences are accumulated in ''Foreign Currency Monetary Item Translation Difference Account''.

i) Deferred tax is recognized using the liability method, on all timing differences to the extent that it is possible that a liability or asset will crystallize. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

IV. Balance Sheet

a) Assets and Liabilities are recorded at cost to the company.

b) Fixed Assets are stated at cost less depreciation. Interest on qualifying assets (i.e. Assets that take substantial time to be ready for intended use) is capitalized at the applicable borrowing cost on the funds used for acquiring such assets. Roll over charges, and exchange differences, relating to foreign currency borrowings attributable to Fixed Assets are capitalized. The Fixed assets are tested for impairment and wherever required, provision is made.

c) Investments of long-term nature are stated at cost. A provision for diminution in value is made to recognize a decline, other than temporary. Current investments are stated at lower of cost and market value.

d) Inventories are valued at cost or net realizable value whichever is lower, cost being determined on weighted average method. Wind fallen/extracted timber, Cardamom and other minor produce are valued at net realizable value. Raw Materials and Stores & Spares are valued at weighted average cost.

a) Additions include Rs,35.43 Lakhs (Rs,29.01 Lakhs) towards Buildings and Rs, 172.47 Lakhs (Rs, 141.22 Lakhs) towards Plant & Equipment on account of exchange differences on Long Term Foreign Currency Loans (Ref Para lll(h) of Note 2.01)

b) The following assets are jointly owned/held with the Holding Company :- Freehold Land and Development Rs,103.78 Lakhs (Previous Year-Rs,103.78 Lakhs) Buildings Rs, 56.78 Lakhs (Previous Year - Rs, 56.78 Lakhs) Water and Sanitary Installations Rs,8.15 Lakhs (Previous Year- Rs,8.15 Lakhs) Electrical installations Rs, 22.07 Lakhs (Previous Year - Rs,22.07 Lakhs)

c) During the year, the Company has aligned its policy of providing depreciation on fixed assets with effect from 1st April, 2015. Depreciation is now provided on a straight line basis for all assets as against the policy of providing on written down value basis for certain assets and straight line basis for others. As prescribed by Para 21 of Accounting Standard 6-''Depreciation Accounting'', depreciation has been recomputed from the date of the asset coming into use. The adoption of new policy resulted in depreciation for the year 2015-16 being lower by Rs, 261.00 Lakhs and write back of depreciation amounting to Rs, 1697.15 Lakhs, relating to periods prior to 31st March, 2015. (Refer Note No. 2.30 - Change in Accounting Policy).


Mar 31, 2015

NOTE NO. 1.01:

I. General Information

Tata Coffee Limited ("the Holding Company") and its subsidiaries (together "the Group") are engaged in the production, trading and distribution of Coffee, Tea and Allied products. The Company owns Coffee and Tea Plantations and Instant Coffee manufacturing facilities in India. The Company exports Coffee to many countries including CIS countries, Europe and Africa. The Group has presence in USA through its overseas subsidiary Consolidated Coffee Inc.

I. These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (''Indian GAAP) to comply with the Accounting Standards specified 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. The financial statements have been prepared under the historical cost convention on accrual basis. All Assets and Liabilities are classified into Current and Non-current generally based on criteria of realisation/settlement within twelve months period from the Balance Sheet date.

II. Statement of profit and Loss

a) All income and expenses are accounted on accrual basis.

b) Sales are recognised on transfer of property in goods together with risks and rewards i.e. delivery as per terms of sale or on completion of auction in case of auction sale. In the case of Rosewood sale, income is recognised on completion of auction sale and confirmation of receipt of money by the auctioneer. Export incentives are estimated and accrued on completion of export sales.

c) The sale value of own timber and value added timber products are credited to revenue. Capital profits on such sale, including capital profit on value added timber products determined at estimated market value of actual timber products, are transferred to General Reserve No. II through Appropriation account.

d) Compensation received from Government/ Government Agencies/ Government Cos. for their, acquisition of certain rights over the properties, are accounted for as revenue in the period in which the rights over the properties have been ceded to such Governmental Agencies.

e) During the year, the Company had determined the estimated useful life of its Fixed Assets based on external technical evaluation as permitted under the provisions of Schedule II to the Companies Act, 2013 and has provided depreciation accordingly.

The Company follows Written Down Value method for providing depreciation for its Coffee estates and Tea estates in Coorg and Hasan and part of Curing works. The Straight Line method is being followed for all other Divisions.

Leasehold improvements are being depreciated over the lease period. Increase/decrease in value of Fixed Assets due to Foreign exchange fluctuation is depreciated over the balance residual life of the Asset.

f) The benefits for Employees/Executive Directors are provided in accordance with the revised AS 15 and are dealt with in the following manner.

- Contribution to Provident Fund and Defined Contribution Superannuation Funds are accounted on accrual basis.

- Post retirement defined benefits including gratuity, superannuation, and medical benefits for qualifying employees/whole time directors as provided by the Company are determined by the independent actuarial valuation at year end and charge recognised in the books.

- Other employee benefits are accounted for on accrual basis. Liabilities for compensated absence are determined based on independent actuarial valuation at the year end and charge is recognised in the statement of profit and loss. Short-term employee benefits are recognised on an undiscounted basis where as long-term liabilities are recognised on discounted basis.

Notes On Accounts

g) Transactions in foreign currency are recorded using the spot rate at the beginning of each fortnight and exchange differences resulting from settled transactions are taken in the Statement of Profit and Loss. Year end balances of monetary items are restated at the year- end exchange rates and the resultant net gain or loss is recognised in the Statement of Profit and Loss. Premium or discount on forward contracts where there are underlying assets/liability are amortised over the life of the contract.

Gain or loss on hedging instruments in respect of effective portion of cash flow hedges of highly probable transactions are recognised in the hedging reserve account. The portion of the gain or loss on the hedging instruments if determined to be an ineffective cash flow hedge is recognised in the Statement of Profit and Loss.

In terms of Para 46 and 46A of AS 11 issued by The Institute of Chartered Accountants of India, the exchange difference relating to long-term foreign currency monetary items in so far as it relates to acquisition of depreciable capital assets are adjusted to the cost of the assets and in other cases such differences are accumulated in ''Foreign currency Monetary Item Translation Difference Account''.

h) Deferred tax is recognised using the liability method, on all timing differences to the extent that it is possible that a liability or asset will crystallise. Deferred tax assets

are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

III. Balance Sheet

a) Assets and Liabilities are recorded at cost to the Company.

b) Fixed Assets are stated at cost less depreciation. Interest on qualifying assets (i.e. Assets that take substantial time to be ready for intended use) is capitalised at the applicable borrowing cost on the funds used for acquiring such assets. Roll over charges and exchange differences, relating to foreign currency borrowings attributable to Fixed Assets are capitalised. The Fixed Assets are tested for impairment and wherever required, provision is made.

c) Investments of long-term nature are stated at cost. A provision for diminution in value is made to recognise a decline, other than temporary. Current Investments are stated at lower of cost and market value.

d) Inventories are valued at cost or net realisable value whichever is lower, cost being determined on weighted average method. Wind fallen/extracted timber, Cardamom and other minor produce are valued at net realisable value. Raw Materials and Stores and Spares are valued at weighted average cost.

* With effect from record date 27th January, 2015, the face value of the Company''s shares have been sub-divided from Rs.10 per share to Rs. 1 per share.

c) During the year, the Company has with effect from 1st April, 2014 adopted, estimated useful life of fixed assets as stipulated by Schedule II to the Companies Act, 2013, applicable for accounting periods commencing 1st April, 2014 or re-assessed useful life based on technical evaluation. Accordingly, the depreciation of Rs. 15.79 Lakhs (net of Deferred Tax of Rs. 8.13 Lakhs), on account of assets whose useful life is already exhausted as on 1st April, 2014 has been adjusted against Retained Earnings. The consequential impact (after considering the transition provision specified in Part C of Schedule II to the Companies Act, 2013) on the depreciation charged and on the results for year to date is not material.


Mar 31, 2014

I. The presentation of the accounts is based on the revised Schedule VI of the Companies Act, 1956. All assets and liabilities are classified into current and non-current generally based on criteria of realization/settlement within twelve months period from the Balance Sheet date.

II. Statement of Profit and loss

a) All income and expenses are accounted on accrual basis.

b) Sales are recognized on transfer of property in goods together with risks and rewards i.e. delivery as per terms of sale or on completion of auction in case of auction sale. In the case of Rosewood sale, income is recognized on completion of auction sale and conformation of receipt of money by the auctioneer. Export incentives are estimated and accrued on completion of export sales.

c) The sale value of own timber and value added timber products are credited to revenue. Capital Profits on such sale, including capital Profit on value added timber products determined at estimated market value of actual timber input, are transferred to General Reserve No. II through Appropriation account.

d) Depreciation on Fixed Assets is provided at the rates stated in Schedule XIV of the Companies Act, 1956,

Divisions Method followed

Coffee Estates & Part of Curing works WDV

Other Divisions SLM

Leasehold improvements are being depreciated over the lease period. In respect of certain assets, depreciation has been provided at the rates arrived at based on its estimated useful life or as per the Rates prescribed in Schedule XIV whichever is higher. Increase/decrease in value of Fixed Assets due to Foreign exchange fluctuation is depreciated over the balance residual life of the Asset.

e) The benefits for Employees/Executive Directors are provided in accordance with the revised AS 15 and are dealt with in the following manner.

- Contribution to Provident Fund and Defined Contribution Superannuation Funds are accounted on accrual basis.

- Post retirement defined benefits including gratuity, superannuation, and medical benefits for qualifying employees/whole time directors as provided by the Company are determined by the independent actuarial valuation at year end and charge recognized in the books.

- Other employee benefits are accounted for on accrual basis. Liabilities for compensated absence are determined based on independent actuarial valuation at the year end and charge is recognized in the statement of Profit and loss. Short term employee benefits are recognized on an undiscounted basis where as long term liabilities are recognized on discounted basis.

f) Transactions in foreign currency are recorded using the spot rate at the beginning of each fortnight and exchange differences resulting from settled transactions are taken in the Statement of Profit and Loss. Year end balances of monetary items are restated at the year-end exchange rates and the resultant net gain or loss is recognized in the statement of Profit and loss. Premium or discount on forward contracts where there are underlying assets/liability are amortized over the life of the contract.

Gain or loss on hedging instruments in respect of effective portion of cash flow hedges of highly probable transactions are recognized in the hedging reserve account. The portion of the gain or loss on the hedging instruments if determined to be an ineffective cash flow hedge is recognized in the Statement of Profit and Loss. In terms of Para 46 and 46A of AS 11 issued by The Institute of Chartered Accountants of India, the exchange difference relating to long term foreign currency monetary items in so far as it relates to acquisition of depreciable capital assets are adjusted to the cost of the assets and in other cases such differences are accumulated in ''Foreign currency Monetary Item Translation Difference Account''.

g) Deferred tax is recognized using the liability method, on all timing differences to the extent that it is possible that a liability or asset will crystallize. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

III. Balance Sheet

a) Assets and Liabilities are recorded at cost to the Company.

b) Fixed Assets are stated at cost less depreciation. Interest on qualifying assets (i.e. Assets that take substantial time to be ready for intended use) is capitalized at the applicable borrowing cost on the funds used for acquiring such assets. Roll over charges, and exchange differences, relating to foreign currency borrowings attributable to Fixed Assets are capitalized. The Fixed assets are tested for impairment and wherever required, provision is made.

c) Investments of long-term nature are stated at cost. A provision for diminution in value is made to recognize a decline, other than temporary. Current investments are stated at lower of cost and market value.

d) Inventories are valued at cost or net realizable value whichever is lower, cost being determined on weighted average method. Cardamom and other minor produce are valued at net realizable value. Raw Materials and Stores & Spares are valued at weighted average cost.


Mar 31, 2012

I. The presentation of the accounts is based on the Revised Schedule VI of the Companies Act, 1956, applicable from the current financial year. Accordingly, previous year figures are realigned to make it comparable with the current year. Assets and Liabilities are bifurcated into current and non-current based on 12 months period from the Balance Sheet date.

II. Statement of Profit and Loss

a) All income and expenses are accounted on accrual basis.

b) Sales are recognized on transfer of property in goods together with risks and rewards i.e. delivery as per terms of sale or on completion of auction in case of auction sale. In the case of Rosewood sale, income is recognized on completion of auction sale and confirmation of receipt of money by the auctioneer. Export incentives are estimated and accrued on completion of export sales

c) The sale value of own timber and value added timber products are credited to revenue. Capital profits on such sale, including capital profit on value added timber products determined at estimated market value of actual timber input, are transferred to General Reserve No.II through Appropriation account.

d) Depreciation on Fixed Assets is provided at the rates stated in Schedule XIV of the Companies Act, 1956, on written down value method except that Fixed Assets at Instant Coffee Division, Anamallais, Corporate Office and certain Fixed Assets at the Curing Works under the straight-line method. Leasehold improvements are being depreciated over the lease period. In respect of certain assets, depreciation has been provided at the rates arrived at based on its estimated useful life or as per the Rates prescribed in Schedule XIV whichever is higher. Increase in value of Fixed Assets upto 31.03.2007 due to Foreign exchange fluctuations is depreciated over the balance residual life of the Asset.

e) The Employee benefits are provided in accordance with the revised AS 15 and are dealt with in the following manner.

- Contribution to Provident Fund and Defined Contribution Superannuation Funds are accounted on accrual basis.

- Gratuity, Leave encashment and post retirement health scheme liabilities are determined by actuarial valuation done at the end of the year and the current year charge is debited to the Profit and Loss Statement.

f) Transactions in foreign currency are recorded using the spot rate at the beginning of each fortnight and exchange differences resulting from settled transactions are taken in the Profit and Loss Statement. Monetary items covered by Forward Cover are stated at Forward Cover rates, while those not covered by Forward Cover are restated at the rates prevailing at the year-end. The resulting Exchange differences are dealt with, in the Profit and Loss Statement. Premium or discount on forward contracts is amortized over the life of the contract.

Gain or loss on hedging instruments in respect of effective portion of cash flow hedges of highly probable transactions are recognized in the hedging reserve account. The portion of the gain or loss on the hedging instruments if determined to be an ineffective cash flow hedge is recognized in the profit and loss statement.

g) Deferred tax is recognized using the liability method, on all timing differences to the extent that it is possible that a liability or asset will crystallize. As at the balance sheet date, unless there is evidence to the contrary, deferred tax assets pertaining to business loss are only recognized to the extent of virtual certainty of future taxable profits.

III. Balance Sheet

a) Assets and Liabilities are recorded at cost to the Company.

b) Fixed Assets are stated at cost less depreciation. Interest on qualifying assets (i.e. Assets that take substantial time to be ready for intended use) is capitalized at the applicable borrowing cost on the funds used for acquiring such assets. Roll over charges, and exchange differences, relating to foreign currency borrowings attributable to Fixed Assets are capitalized upto 31.03.2007 and charged to Profit and Loss Statement afterwards. The Fixed assets are tested for impairment and wherever required, provision is made.

c) Investments of long-term nature are stated at cost. A provision for diminution in value is made to recognize a decline, other than temporary. Current investments are stated at lower of cost and market value.

d) Valuation of Stock is dealt as under: -


Mar 31, 2010

I. Profit and Loss Account

a) All income and expenses are accounted on accrual basis.

b) Sales are recognized on passing of property in goods i.e. delivery as per terms of sale or on completion of auction in case of auction sale. In the case of Rosewood sale, income is recognized on completion of auction sale and confirmation of receipt of money by the auctioneer. Export incentives are estimated & accrued on completion of export sales

c) The sale value of own timber and value added timber products are credited to revenue, Capital profits on such sale, including capital profit on value added timber products determined at estimated market value of actual timber input, are transferred to General Reserve No.II through Appropriation account.

d) Depreciation on Fixed Assets is provided at the rates stated in Schedule XIV of the Companies Act, 1956, on written down value method except that Fixed Assets at Instant Coffee Division, Anamallais, Corporate Office and certain Fixed Assets at the Curing Works under the straight-line method. Leasehold improvements are being depreciated over the lease period. In respect of certain assets, depreciation has been provided at the rates arrived at based on its estimated useful life or as per the Rates prescribed in Schedule XIV whichever is higher. (Refer Schedule 4) Increase in value of Fixed Assets upto 31.03.2007 due to Foreign exchange fluctuations is depreciated over the balance residual life of the Asset.

e) The Employee benefits are provided in accordance with the revised AS 15 and are dealt with in the following manner.

Contribution to Provident Fund and Defined Contribution Superannuation Funds are accounted on accrual basis.

Gratuity, Leave encashment and post retirement health scheme liabilities are determined by actuarial valuation done at the end of the year and the current year charge is debited to the Profit and Loss Account. Transactions in foreign currency are recorded using the spot rate at the beginning of each fortnight and exchange differences resulting from settled transactions are taken in the Profit and Loss account. Current Assets and Liabilities covered by Forward Cover are stated at Forward Cover rates, while those not covered by Forward Cover are restated at the rates prevailing at the year-end. The resulting Exchange differences are dealt with, in the Profit & Loss Account. Premium or discount on forward contracts is amortized over the life of the contract. Gain or loss on hedging instruments in respect of effective portion of cash flow hedges of highly probable transactions are recognized in the hedging reserve account. The portion of the gain or loss on the hedging instruments if determined to be an ineffective cash flow hedge is recognized in the profit and loss account.

f) Provision for deferred taxation is made using the applicable rate of taxation, for all timing differences between Book Profit and Taxable Profit. As at the balance sheet date, deferred tax assets pertaining to business loss are only recognized to the extent of Managements expectation of future profits for set off.

Find IFSC