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, 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.

 
Subscribe now to get personal finance updates in your inbox!