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Accounting Policies of United Nilgiri Tea Estates Company Ltd. Company

Mar 31, 2015

2.1 Basis of accounting and preparation of financial statements.

The financial statements of the Company have been prepared under the historical cost convention on accrual basis in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) and 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 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable besides additional disclosures required by SEBI under listing agreement.

2.2 Use of estimates.

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

2.3 Fixed Assets and Depreciation

(a) Expenditure on Development and New Tea Planting is capitalised.

(b) Fixed assets both intangible and tangible are carried at cost less accumulated depreciation / amortisation and impairment losses, if any.

(c) Assets acquired under Finance Lease Agreement are capitalised

(d) Depreciation on Tangible assets is provided on Straight Line basis at the rates specified in Schedule II to the Companies Act, 2013. Cost of software is amortised over a period of three years.

2.4 Borrowing Cost

Borrowing costs attributable to acquisition or construction of qualifying assets are capitalised as part of the cost of assts up to the date such assets are ready for their intended use. Other borrowing costs are recognised as expense in the period in which they are incurred.

2.5 Impairment

The carrying values of assets / cash generating units at each Balance Sheet date are annually reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased such reversal of impairment loss is recognised in the Statement of Profit and Loss.

2.6 Investments

Investments being long term are stated at cost inclusive of brokerage and stamp duty and diminution in their value, if considered permanent in nature, is provided for.

2.7 Inventories

(a) Finished Goods (Tea) are valued at lower of Cost and net realizable price.

(b) Stores and Spares are valued at cost ascertained primarily on weighted average basis.

(c) Nursery stocks are valued at cost incurred in raising and maintaining such stocks till transplanted.

2.8 Cash and cash equivalents

Cash and cash equivalents consist of all cash balances including demand deposits with banks with original maturities of three months or less.

2.9 Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the Notes. Contingent assets are neither recognised nor disclosed in the financial statements.

2.10 Revenue recognition

(a) Revenue from sale of tea at auction is recognised on receipt of sale notes from the brokers. Exports and Private tea sales are recognised when the property in finished goods (tea) is transferred.

(b) Export benefits are accounted for based on eligibility and when there is no uncertainty in receiving them.

(c) The Company recognises the Minimum Guaranteed Fixed License fee (MGFLF) in respect of its let-out property as revenue. As per the Leave and License agreement, the Company is entitled for MGFLF or Variable License Fee (VLF) whichever is higher and shall be determined on half yearly basis. The difference, if any, between MGFLF and VLF will be recognised upon its determination as per the said agreement.

(d) Other income

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

2.11 Subsidies

Replanting expenses and subsidy received from Tea Board are accounted in the Statement of Profit and Loss. Subsidy on manufacture of Orthodox tea is accounted based on acceptance of claim by the Tea Board.

2.12 Employee benefits

(a) Short Term

Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

(b) Post Retirement

Post Retirement Benefits comprise of Provident Fund, Superannuation Fund and Gratuity which are accounted for as follows:

(i) Provident Fund

This is a defined contribution plan, and contributions made to the Fund as per the rules of the Company are charged to Revenue. The Company has no further obligations for future provident fund benefits other than monthly contributions

(ii) Superannuation Fund

This is a defined contribution plan. The Company contributes a sum equivalent to 15% of eligible employees'' salary towards superannuation fund administered by the Trustees and managed by Life Insurance Corporation of India (LIC). The Company has no further obligations for future superannuation benefits other than its annual contributions and recognises such contributions as expense in the year incurred.

(iii) Gratuity

This is a defined benefit plan. The Company makes annual contribution to a Gratuity Fund administered by LIC. The liability is determined based on the actuarial valuation using projected unit credit method. Actuarial gains and losses are recognised in full in the Statement of Profit and Loss for the period in which they occur.

(c) Long Term

Long term employee benefits represent compensated absence which is provided for based on actuarial valuation using projected unit credit method.

2.13 Income Taxes

Current tax is the amount of tax payable on the portion of taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961 .Provision for Deferred Tax is made for all timing differences arising between the taxable income and accounting income at the tax rates enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only if there is a virtual/reasonable certainty that they will be realised and are reviewed for the appropriateness of their respective carrying values with reference to each Balance Sheet date.

2.14 Leases

Assets taken on lease by the Company in its capacity as lessee where substantially all the risks and rewards of ownership vest in the Company are classified as finance leases. Such leases are capitalised at the inception of the lease at the lower of the fair value and the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis.

2.15 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are restated at the exchange rates prevailing on the Balance Sheet date. Exchange differences arising on settlement of transactions and from the year end restatement are dealt with in the Statement of Profit and Loss.

2.16 Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Earnings considered in ascertaining the Company''s earnings per share is the net profit for the year is attributable to the equity shareholders.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

2.17 Segment reporting

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocated corporate expenses/income".


Mar 31, 2013

1.1 Basis of accounting and preparation of financial statements.

The financial statements have been prepared under the historical cost convention on an accrual basis and in accordance with the accounting principles generally accepted in India (Indian GAAP) and comply with Accounting Standards notified by the Central Government of India under the Companies (Accounting Standards) Rules 2006 and the relevant provisions of the Companies Act, 1956 to the extent applicable. The accounting policies adopted in the preparation of financial statements are consistent with those followed in the previous year.

1.2 Use of estimates.

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

1.3 Inventories

(a) Stores and Spares are valued at cost ascertained primarily on weighted average basis.

(b) Nursery stocks are valued at cost incurred in raising and maintaining such stocks till transplanted.

(c) Stock-in-Trade (Tea) is valued at lower of Cost and net realizable price.

1.4 Cash flow statement

Cash flow statement has been prepared in accordance with the indirect method prescribed in Accounting Standard 3-Cash Flow Statement.

1.5 Revenue recognition

(a) Revenue from sale of tea at auction is recognised on receipt of sale notes from the brokers. Exports and Private tea sales are recognised when the property in goods are transferred.

(b) Export benefits are accounted for based on eligibility and when there is no uncertainty in receiving the same.

(c) The Company recognises the Minimum Guaranteed Fixed License fee (MGFLF) in respect of its let- out property as revenue. As per the Leave and License agreement, the Company is entitled for MGFLF or Variable License fee (VLF) whichever is higher and shall be determined on half yearly basis. The difference, if any, between MGFLF and VLF will be recognised upon determination of the same as per the agreement.

1.6 Borrowing Cost

Borrowing costs attributable to acquisition or construction of qualifying assets are capitalised as part of the cost of assets up to the date such assets are ready for their intended use. Other borrowing costs are recognised as expense in the period in which they are incurred.

1.7 Fixed Assets

(a) Expenditure on Development and New Tea Planting is capitalised.

(b) Fixed Assets other than let-out assets are recorded at cost to the Company. Capital Subsidy received from Tea Board is deducted from the Asset additions. Depreciation on tangible assets is provided on Straight Line basis at the rates specified in Schedule XIV to the Companies Act, 1956. Cost of Software is written off over a period of three years.

(c) With regard to tangible let-out property, depreciation is provided on Straight Line basis at the following rates which are different from rates specified in Schedule XIV to the Companies Act, 1956.

Building - 3.33%, Fixed Glazing - 6.67%, Plant & Machinery-6.67%, Electrical lnstallation-10%.

(d) Assets acquired under Finance Lease Agreement and Equipment Lease arrangements are capitalised.

1.8. Foreign currency transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are restated at the exchange rates prevailing on the Balance Sheet date. Exchange differences arising on settlement of transactions and from the year end restatement are dealt with in the Statement of Profit and Loss.

1.9. Subsidies

Replanting expenses and subsidy received from Tea Board are accounted in the Statement of Profit and Loss. Subsidy on Orthodox tea is accounted based on acceptance of claim by the Tea Board.

"Fair Trade International (FLO) charter" offer a certain premium in addition to the sale price for sale of tea under its labeling".

Premium received is recognised as income when related expenditure which premium intends to compensate are incurred; Premium received but related expenditure not incurred will be considered as a part of "unearned income" - Fair Trade Premium under "Other Current Liabilities"; Premium accrued and receivable will be accounted as Fair Trade Premium receivable under "Other Current Assets" in the financial statement.

1.10. Investments

Investments being long term are stated at cost inclusive of brokerage and stamp duty and diminution in their value, if considered permanent in nature, is provided for.

1.11. Employee benefits

(a) Short Term

Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

(b) Post Retirement

Post Retirement Benefits comprise of Provident Fund, Superannuation Fund and Gratuity which are accounted for as follows:

(i) Provident Fund

This is a defined contribution plan, and contributions made to the Fund as per the rules of the Company are charged to Revenue. The Company has no furthe ''igathns for future provident fund benefits other than monthly contributions.

(ii) Superannuation Fund

This is a defined contribution plan. The Company contributes a sum equivalent to 15% of eligible employees'' salary towards superannuation fund administered by the Trustees and managed by Life Insurance Corporation of India (LIC). The Company has no further obligations for future superannuation benefits other than its annual contributions and recognises such contributions as expense in the year incurred.

(iii) Gratuity

This is a defined benefit plan. The Company makes annual contribution to a Gratuity Fund administered by LIC. The liability is determined based on the actuarial valuation using projected unit credit method. Actuarial gains and losses are recognised in full in the Statement of Profit and Loss for the period in which they occur.

(c) Long Term

Long term employee benefits represent compensated absence which is provided for based on actuarial valuation using projected unit credit method.

1.12 Leases

Assets taken on lease by the Company in its capacity as lessee where substantially all the risks and rewards of ownership vest in the Company are classified as finance leases. Such leases are capitalised at the inception of the lease at the lower of the fair value and the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis.

1.13 Income Taxes

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Provision for Deferred Tax is made for all timing differences arising between the taxable income and accounting income at the tax rates enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only if there is a virtual/reasonable certainty that they will be realised and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

1.14 Impairment

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

1.15 Research and Development

Research and Development expenses are capitalised where appropriate, otherwise absorbed as expenses.

1.16 Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the Notes. Contingent assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2012

1.1 Basis of accounting and preparation of financial statements

The financial statements have been prepared under the historical cost convention on an accrual basis and in accordance with the accounting principles generally accepted in India (Indian GAAP) and comply with Accounting Standards notified by the Central Government of India under the Companies (Accounting Standards) Rules 2006 and the relevant provisions of the Companies Act 1956 to the extent applicable. The accounting policies adopted in the preparation of financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

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

1.3 Inventories

(a) Stores and Spares are valued at cost ascertained primarily on weighted average basis.

(b) Nursery stocks are valued at cost incurred in raising and maintaining such stocks till transplanted.

(c) Stock-in-Trade (Tea) is valued at lower of Cost and net realizable price.

1.4 Cash flow statement

Cash flow statement has been prepared in accordance with the indirect method prescribed in Accounting Standard 3-Cash Flow Statement.

1.5 Revenue recognition

Revenue from sale of tea at auction is recognized on receipt of sale notes from the brokers.

Exports and Private tea sales are recognized when the property in goods are transferred.

Export benefits are accounted for based on eligibility and when there is no uncertainty in receiving the same.

1.6 Borrowing costs

Borrowing costs attributable to acquisition or construction of qualifying assets are capitalised as part of the cost of assets upto the date such assets are ready for their intended use. Other borrowing costs are recognized as expense in the period in which they are incurred.

1.7 Fixed Assets

(a) Expenditure on Development and New Tea Planting is capitalised.

(b) Fixed Assets are recorded at cost to the Company. Capital Subsidy received from Tea Board is deducted from the Asset additions. Depreciation on tangible assets is provided on Straight Line basis at the rates specified in Schedule XIV to the Companies Act, 1956. Cost of Software is written off over a period of three years.

(c) Assets acquired under Finance Lease Agreement are capitalised. Assets under Equipment Lease arrangements are not capitalized and such lease rentals are expensed.

(d) Capital work-in-progress includes projects under which assets are not ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

1.8 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are restated at the exchange rates prevailing on the Balance Sheet date. Exchange differences arising on settlement of transactions and from the year end restatement are dealt with in the Statement of Profit and Loss.

1.9 Subsidies

Replanting expenses and subsidy received from Tea Board are accounted in the Statement of Profit and Loss. Subsidy on Orthodox tea is accounted based on acceptance of claim by the Tea Board.

1.10 Investments

Investments being long term are stated at cost inclusive of brokerage and stamp duty and diminution in their value, if considered permanent in nature, is provided for.

1.11 Employee benefits

(a) Short Term

Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

(b) Post Retirement

Post Retirement Benefits comprise of Provident Fund, Superannuation Fund and Gratuity which are accounted for as follows:

(i) Provident Fund

This is a defined contribution plan, and contributions made to the Fund as per the rules of the Company are charged to Revenue. The Company has no further obligations for future provident fund benefits other than monthly contributions.

(ii) Superannuation Fund

This is a defined contribution plan. The Company contributes a sum equivalent to 15% of eligible employees' salary towards superannuation fund administered by the Trustees and managed by Life Insurance Corporation of India (LIC). The Company has no further obligations for future superannuation benefits other than its annual contributions and recognises such contributions as expense in the year incurred.

(iii) Gratuity

This is a defined benefit plan. The Company makes annual contribution to a Gratuity Fund administered by LIC. The liability is determined based on the actuarial valuation using projected unit credit method. Actuarial gains and losses are recognised in full in the Statement of Profit and Loss for the period in which they occur.

(c) Long Term

Long term employee benefits represent compensated absence which is provided for based on actuarial valuation using projected unit credit method.

1.12 Leases

Assets leased by the Company in its capacity as lessee where substantially all the risks and rewards of ownership vest in the Company are classified as finance leases. Such leases are capitalised at the inception of the lease at the lower of the fair value and the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis.

1.13 Income Taxes

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Provision for Deferred Tax is made for all timing differences arising between the taxable income and accounting income at the tax rates enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized only if there is a virtual/reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

1.14 Impairment

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

1.15 Research and Development

Research and Development expenses are capitalised where appropriate, otherwise absorbed as expenses.

1.16 Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2011

1. ACCOUNTING CONVENTION :

The financial statements have been prepared under the historical cost convention on an accrual basis and in accordance with the accounting principles generally accepted in India (Indian GAAP) and comply with Accounting Standards notified by the Central Government of India under the Companies (Accounting Standard) Rules 2006 and the relevant provisions of the Companies Act 1956 to the extent applicable.

2. FIXED ASSETS :

(a) Expenditure on Development and New Tea Planting is capitalised.

(b) Fixed Assets are recorded at cost to the Company. Capital Subsidy received from Tea Board is deducted from the Asset additions. Depreciation on tangible assets are provided on Straight Line basis at the rates specified in Schedule XIV to the Companies Act, 1956. Cost of Software is written off over a period of three years.

(c) Assets acquired under Finance Lease Agreement are capitalised. Assets under Equipment Lease arrangements are not capitalized and such lease rentals are expensed.

(d) Expenditure on Poly House for Herbal Tea Cultivation and Floriculture is amortised over its effective economic life.

3. SUBSIDIES:

Replanting expenses and subsidy received from Tea Board are accounted in the Profit and Loss Account. Subsidy on Orthodox tea is accounted based on acceptance of claim by the Tea Board.

4. INVESTMENTS:

Investments being long term are stated at cost inclusive of brokerage and stamp duty and diminution in their value, if considered permanent in nature , is provided for.

5. INVENTORIES:

(a) Stores and Spares are valued at cost ascertained primarily on weighted average basis.

(b) Nursery stocks are valued at cost incurred in raising and maintaining such stocks till transplanted.

(c) Stock-in-Trade (Tea) is valued at lower of Cost and net realizable price.

6. REVENUE RECOGNITION:

Revenue from sale of tea at auction is recognized on receipt of sale notes from the brokers. Private tea sales including exports are recognized on Transfer of Property of goods.

7. FOREIGN CURRENCY TRANSACTIONS :

Foreign currency transactions are recorded at the exchange rates prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are restated at the exchange rates prevailing on the Balance Sheet date. Exchange differences arising on settlement of transactions and from the year end restatement are dealt with in the Profit and Loss Account.

8. EMPLOYEE BENEFITS:

(a) Short Term:

Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

(b) Post Retirement:

Post Retirement Benefits comprise of Provident Fund, Superannuation Fund and Gratuity which are accounted for as follows:

(i) Provident Fund :

This is a defined contribution plan, and contributions made to the Fund as per the rules of the Company are charged to Revenue. The Company has no further obligations for future provident fund benefits other than monthly contributions.

(ii) Superannuation Fund :

This is a defined contribution plan. The Company contributes a sum equivalent to 15% of eligible employees salary towards superannuation fund administered by the Trustees and managed by Life Insurance Corporation of India (LIC). The Company has no further obligations for future superannuation benefits other than its annual contributions and recognises such contributions as expense in the year incurred.

(iii) Gratuity :

This is a defined benefit plan. The Company makes annual contribution to a Gratuity Fund administered by LIC. The liability is determined based on the actuarial valuation using projected unit credit method. Actuarial gains and losses are recognised in full in the profit and loss account for the period in which they occur.

(c) Long Term :

Long term employee benefits represent compensated absence which is provided for based on actuarial valuation using projected unit credit method.

9. PROVISIONS AND CONTINGENCIES:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent assets are neither recognized nor disclosed in the financial statements.

10. RESEARCH AND DEVELOPMENT:

Research and Development expenses are capitalised where appropriate, otherwise absorbed as expenses.

11. INCOME TAXES:

Provision for Deferred Tax is made for all timing differences arising between the taxable income and accounting income at the tax rates enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized only if there is a virtual certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

12 CASH FLOW STATEMENT:

Cash Flow Statement has been prepared in accordance with the Indirect method prescribed in Accounting Standard 3.


Mar 31, 2010

1. ACCOUNTING CONVENTION :

The financial statements have been prepared under the historical cost convention on an accrual basis and in accordance with the accounting principles generally accepted in India (Indian GAAP) and comply with Accounting Standards notified by the Central Government under the Companies (Accounting Standard) Rules 2006 and the relevant provision of the Companies Act, 1956 to the extent applicable.

2. FIXED ASSETS :

(a) Expenditure on Development and New Tea Planting is capitalised.

(b) Fixed Assets are recorded at cost to the Company. Capital Subsidy received from Tea Board is deducted from the Asset additions. Depreciation on tangible assets are provided on Straight Line basis at the rates specified in Schedule XIV to the Companies Act, 1956. Cost of Software is written off over a period of three years.

(c) Assets acquired under Finance Lease Agreement are capitalised. Assets under Equipment Lease arrangements are not capitalized and such lease rentals are expensed.

(d) Expenditure on Poly House for Herbal Tea Cultivation and Floriculture is amortised over its effective economic life.

3. SUBSIDIES:

Replanting expenses and subsidy received from Tea Board are accounted in the Profit and Loss Account. Subsidy on Orthodox tea is accounted based on acceptance of claim by the Tea Board.

4. INVESTMENTS :

Investments being long term are stated at cost inclusive of brokerage and stamp duty and diminution in their value, if considered permanent in nature , is provided for.

5. INVENTORIES:

(a) Stores and Spares are valued at cost ascertained primarily on weighted average basis.

(b) Nursery stocks are valued at cost incurred in raising and maintaining such stocks till transplanted.

(c) Stock-in-Trade (Tea) is valued at lower of cost and net realizable price.

6. REVENUE RECOGNITION:

Revenue from sale of tea at auction is recognized on receipt of sale notes from the brokers. Private tea sales including exports are recognized on dispatch of goods.

7. FOREIGN CURRENCY TRANSACTIONS :

Foreign currency transactions are recorded at the exchange rates prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are restated at the exchange rates prevailing on the Balance Sheet date. Exchange differences arising on settlement of transactions and from the year end restatement are dealt with in the Profit and Loss Account.

8. EMPLOYEE BENEFITS :

(a) Short Term:

Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

(b) Post Retirement:

Post Retirement Benefits comprise of Provident Fund, Superannuation Fund and Gratuity which are accounted for as follows:

(i) Provident Fund :

This is a defined contribution plan, and contributions made to the Fund as per the rules of the Company are charged to Revenue. The Company has no further obligations for future provident fund benefits other than monthly contributions.

(ii) Superannuation Fund :

This is a defined contribution plan. The Company contributes a sum equivalent to 15% of eligible employees salary towards superannuation fund administered by the Trustees and managed by Life Insurance Corporation of India (LIC). The Company has no further obligations for future superannuation benefits other than its annual contributions and recognises such contributions as expense in the year incurred.

(iii) Gratuity:

This is a defined benefit plan. The Company makes annual contribution to a Gratuity Fund administered by LIC. The liability is determined based on the actuarial valuation using projected unit credit method. Actuarial gains and losses are recognised in full in the profit and loss account for the period in which they occur.

(c) Long Term :

Long term employee benefits represent compensated absence which is provided for based on actuarial valuation using projected unit credit method.

9. PROVISIONS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent assets are neither recognized nor disclosed in the financial statements.

10. RESEARCH AND DEVELOPMENT:

Research and Development expenses are capitalised where appropriate, otherwise absorbed as expenses.

11. DEFERRED TAXATION:

Provision for Deferred Tax is made for all timing differences arising between the taxable income and accounting income at the tax rates enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized only if there is a virtual certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

 
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