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Accounting Policies of Shri Vasuprada Plantations Ltd. Company
Mar 31, 2025
1. CORPORATE AND GENERAL INFORMATION
Shri Vasuprada Plantations Limited is engaged in Manufacturing and Cultivation of Tea, Coffee and Rubber. The Company operates with 5 tea estates spread in Assam, Karnataka and Kerala, 1 rubber estate in Kerala and 1 Coffee estate in Karnataka. The Company was incorporated as a Limited Company in India under the Companies Act 1956 and has its listing on the Bombay Stock Exchange (BSE) and Calcutta Stock exchange (CSE). The registered office of the Company is at 21, Strand Road, Kolkata - 700 001.
The standalone financial statements of the company for the year ended 31st March,2025 has been approved by the Board of Directors in their meeting held on 17th May, 2025.
2. BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENT2.1. Statement of Compliance
These financial statements for the year ended 31st March, 2025 have been prepared in accordance with the Indian Accounting Standards ("Ind AS") as prescribed by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 ("the Act"), read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in Division II of the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended).
2.2. Basis of Preparation and Measurement
The Company maintains accounts on accrual basis following the historical cost convention, except for followings:
> Certain Financial Assets and Liabilities are measured at Fair value/ Amortised cost (refer accounting policy regarding financial instruments);
> Defined Benefit Plans - plan assets measured at fair value; and
> Biological Assets - At fair value less cost to sell
The directors have, at the time of approving the financial statements, a reasonable expectation that the Company have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements.
2.3. Functional and Presentation Currency
The Financial Statements are presented in Indian Rupee (INR), which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates. All financial information presented in INR has been rounded off to the nearest of two decimals of lakhs as per the requirements of Schedule III, unless otherwise stated.
2.4. Use of Estimates and Judgements
The preparation of financial statements in conformity with Ind AS requires judgements, estimates and assumptions that effect the application of the accounting policies and the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revision to accounting estimates are recognized in the period in which the estimate is revised if the revision only affects that period; they are recognized in the period of the revision and future periods if the revision affects both current and future periods
2.5. Operating Cycle for current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1. The Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
An asset is classified as current when it is:
> Expected to be realized or intended to sold or consumed in normal operating cycle;
> Held primarily for the purpose of trading;
> Expected to be realized within twelve months after the reporting period; or
> Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All the other assets are classified as non-current.
A liability is current when:
> It is expected to be settled in normal operating cycle;
> It is held primarily for the purpose of trading;
> It is due to be settled within twelve months after the reporting period; or
> There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current. Deferred Tax Assets and Liabilities are classified as non-current assets and liabilities respectively.
2.6. Measurement of Fair Values
Some of the accounting policies and disclosures of the company require Fair Value measurement for both financial and non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
> In the principal market for the asset or liability, or
> In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the input that is significant to the fair value measurement as a whole:
> Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
> Level 2 â Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
> Level 3 â Inputs which are unobservable inputs for the asset or liability.
External valuers are involved for valuation of significant assets & liabilities. Involvement of external valuers is decided by the management of the company considering the requirements of Ind AS and selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.
2.7. Changes in accounting policies and disclosures New and amended standards
The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2024 to amend the following Ind-AS which are effective for annual periods beginning on or after 1st April 2024. The Company has applied these amendments for the first time in the financial statements.
The MCA notified the Companies (Indian Accounting Standards) Second Amendment Rules, 2024, which amended Ind AS 116, Leases, with respect to lease liability in a sale and leaseback transaction. The amendment specifies the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains. The amendment is effective for annual reporting periods beginning on or after 1st April 2024 and must be applied retrospectively to sale and leaseback transactions entered into after the date of initial application of Ind AS 116.
The application of Ind AS 116 had no impact on the Company''s financial statements as the Company has not entered any contracts with respect to lease liability in a sale and leaseback transaction covered under Ind AS 116.
ii) Ind AS 117, Insurance Contracts
The Ministry of corporate Affairs ("MCA") notified the Ind AS 117, Insurance Contracts, under the Companies (Indian Accounting Standards) Amendment Rules, 2024, which is effective from annual reporting periods beginning on or after 1st April 2024. Ind AS 117 Insurance Contracts is a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. Ind AS 117 replaces Ind AS 104 Insurance Contracts. Ind AS 117 applies to all types of insurance contracts, regardless of the type of entities that issue them as well as to certain guarantees and financial instruments with discretionary participation features; a few scope exceptions will apply.
The application of Ind AS 117 had no impact on the Company''s financial statements as the Company has not entered any contracts in the nature of insurance contracts covered under Ind AS 117.
iii) New standards and amendments issued but not effective
There are no such standards which are notified but not yet effective.
iv) The other amendments to Ind-AS notified by these rules are primarily in the nature of clarifications.
3. MATERIAL ACCOUNTING POLICY INFORMATION
The material accounting policy information applied in the preparation of the standalone financial statements are as given below. These accounting policies have been applied consistently to all the periods presented in the standalone financial statements.
Raw materials (including purchased tea leaves), Stores & Spare parts, Finished Goods and Stock in trade are stated at the lower of cost and estimated net realisable value. The comparison of cost and net realisable value is made on an item-by-item basis. Cost comprises of expenditure incurred in the normal course of business in bringing such inventories to their present location and condition and includes appropriate overheads (in case
of Finished Goods). Cost is determined on weighted average basis.
> Raw material: In nature of harvested tea leaves, picked cherries, latex and other minor agricultural produce raised from own gardens are measured at fair value less cost of sale at point of harvest. The same cost is used for measuring cost for the purpose of valuation of finished goods.
> Stores and Spare Parts: Are measured at cost (measured at weighted average basis) or net realizable value whichever is lower.
> Stock in Process: Is valued with material at lower of weighted average cost and market rate and estimated conversion cost.
> Finished Goods: Finished goods produced from agricultural produce are valued at lower of cost and the net realizable value. Cost is arrived at by adding the cost of conversion to the fair value of agricultural produce. Other finished goods are measured at cost or NRV whichever is lower.
> Waste/ Scrap: Waste and Scrap (including tea waste) are valued at estimated realizable value.
Net realisable value is the estimated selling price in the ordinary course of business , less estimated cost of completion and estimated cost necessary to make the sale. Further, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
Provision is made for obsolete, slow moving and defect inventories, whenever necessary.
3.2. Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short term deposits with an original maturity of three months or less, which are subject to an insignificant risk of change in value
For the purpose of the statement of cash flows, cash and cash equivalents includes cash on hand, term deposits and other short-term highly liquid investments, net of bank overdrafts as they are considered an integral part of the Company''s cash management. Bank overdrafts are shown within short term borrowings in the balance sheet.
Taxes on income comprises of current taxes and deferred taxes. Current tax in the Statement of Profit and Loss is provided as the amount of tax payable in respect of taxable income for the period using tax rates and tax laws enacted during the period, together with any adjustment to tax payable in respect of previous years.
A provision is recognized for those matters for which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. The assessment is based on the judgement of tax professionals within the Company supported by previous experience in respect of such activities and in certain cases based on specialist independent tax advice.
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
3.4. Property, Plant and Equipment3.4.1. Tangible Assets (Other than Bearer Plants)3.4.1.1. Recognition and Measurement:
> Property, plant and equipment held for use in the production or/and supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost, less any accumulated depreciation and accumulated impairment losses (if any).
> Cost of an item of property, plant and equipment acquired comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting any trade discounts and rebates, any directly attributable costs of bringing the assets to its working condition and location for its intended use and present value of any estimated cost of dismantling and removing the item and restoring the site on which it is located.
> If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
> Profit or loss arising on the disposal of property, plant and equipment are recognized in the Statement of Profit and Loss.
3.4.1.2. Subsequent Measurement:
> Subsequent costs are included in the asset''s carrying amount, only when it is probable that future economic benefits associated with the cost incurred will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced.
> Major Inspection/ Repairs/ Overhauling expenses are recognized in the carrying amount of the item of property, plant and equipment as a replacement if the recognition criteria are satisfied. Any Unamortized part of the previously recognized expenses of similar nature is derecognized.
3.4.1.3. Depreciation and Amortization:
> Depreciation on Property, Plant & Equipment is provided under Written Down Method at rates determined based on the useful life of the respective assets and the residual values in accordance with Schedule II of the Companies Act, 2013 or as reassessed by the Company based on the technical evaluation.
> In case of asset"Fences, wells, tube wells"&"Carpeted Roads - Other than RCC", depreciation has been provided on written down value method at the rates determined considering the useful lives of 15 years which is based on assessment carried out by external valuers and the management believes that the useful lives as considered above best represent the period over which the respective assets shall be expected in use.
> In respect of spares for specific machinery, cost is amortized over the useful life of the related machinery as estimated by the management.
> In case of asset"Pruning Machine"and"Spraying Machine'', depreciation has been provided on written down value method at the rates determined considering the useful lives of 3 years.
> Depreciation on additions (disposals) during the year is provided on a pro-rata basis i.e., from (up to) the date on which asset is ready for use (disposed of).
> Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between net disposal proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
3.4.1.5. Capital Work in Progress
Capital work-in-progress is stated at cost which includes expenses incurred during construction period, interest on amount borrowed for acquisition of qualifying assets and other expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production.
Young tea bushes, coffee bushes, rubber trees & shade trees, including the cost incurred for procurement of new seeds and maintenance of nurseries, are carried at cost less any recognized impairment losses under capital work-in-progress. Cost includes the cost of land preparation, new planting and maintenance of newly planted bushes until maturity. On maturity, these costs are classified under bearer plants. The cost of Bearer Plant includes all cost incurred till the plants are ready for commercial harvest.
|
Bearer plant attains commercial harvestable stage in:- |
|
|
Tea Bushes |
3 years |
|
Coffee |
4 years |
|
Rubber |
7 years |
|
Minor produce |
4 years |
3.4.2.1 Recognition and Measurement:
Bearer Plants which are used in the production or supply of agricultural produce and expected to bear produce for more than a period of twelve months are capitalized as part of Property, Plant and Equipments and are stated in the balance sheet at cost, less any accumulated depreciation and accumulated impairment losses (if any).
3.4.2.2 Subsequent Measurement:
Costs incurred for infilling including block infilling are generally recognized in the Statement of Profit and Loss unless there is a significant increase in the yield of the sections, in which case such costs are capitalized and depreciated over the remaining useful life of the respective sections.
> Depreciation on bearer plants is recognized so as to write off its cost over useful lives, using the straight-line method.
> The estimated useful life, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.
> The residual value in case of Bearer Plants has been considered as as estimated by the management considering the scrap value to be realised. Estimated useful life of the bearer plants has been determined as the following:
|
Tea Bushes |
50 years to 60 years |
|
Coffee Bushes |
30 years to 80 years |
|
Rubber plants |
30 years |
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Minor produce |
30 years |
3.4.2.4. Capital Work in Progress
Young tea bushes & shade trees, including the cost incurred for procurement of new seeds and maintenance of nurseries, are carried at cost less any recognized impairment losses under capital work-in-progress. Cost includes the cost of land preparation, new planting and maintenance of newly planted bushes until maturity. On maturity, these costs are classified under bearer plants.
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Lessor accounting under Ind AS 116 is substantially unchanged from Ind AS 17. Lessor will continue to classify leases as either operating or finance leases using similar principles as in Ind AS 17. Therefore, Ind AS 116 does not have an impact for leases where the Company is the lessor.
Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
The Company applies a single recognition and measurement approach for all leases, except for shortterm leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right of use assets representing the right to use the underlying assets.
> Right of use assets
The Company recognises right of use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right of use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right of use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right of use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right of use assets is also subject to impairment.
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying assets.
> Short-term lease and lease of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of twelve months or less from the commencement date and do not contain a purchase option). It also applies the lease of low value assets recognition exemption to leases of offices, godowns, equipment, etc. that are of low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
3.6. REVENUE FROM CONTRACT WITH CUSTOMERS
Revenue from contract with customers is recognized when the Company satisfies performance obligations by transferring promised goods and services to the customer. Performance obligations are satisfied at a point of time or over a period of time. Performance obligations satisfied over a period of time are recognized as per the terms of relevant contractual agreements/arrangements. Performance obligations are said to be satisfied at a point of time when the customer obtain controls of the asset.
Revenue is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of various sales incentives/ discounts offered by the company as part of the contract.
Revenue from sale of products is recognized when the control on the goods have been transferred to the customer. The performance obligation in case of sale of product is satisfied at a point in time i.e., when the material is shipped to the customer or on delivery to the customer, as may be specified in the contract.
i) Interest Income:
Interest income is recognised using the effective interest rate (EIR) method.
ii) Dividend Income:
Dividend income is recognised in Standalone Statement of Profit and Loss on the date on which the Company''s right to receive payment is established.
3.7 EMPLOYEE BENEFITS3.7.1 Short Term Benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related services are provided. Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period.
3.7.2 Other Long Term Employee Benefits
The liabilities for leaves that are not expected to be settled wholly within twelve months are measured as the present value of the expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the government securities (G-Sec) at the end of the reporting period that have terms approximating to the terms of related obligation. Re-measurements as the result of experience adjustment and changes in actuarial assumptions are recognized in statement of profit and loss.
3.7.3 Post Employment Benefits
The Company operates the following post-employment schemes:
Defined contribution plans such as Provident Fund, Gratuity Fund, Employee State Insurance etc. are charged to the statement of profit and loss as and when incurred. The company makes regular contribution to above funds which are fully funded and administered by Government and are independent of company''s finance.
The liability or asset recognized in the Balance Sheet in respect of defined benefit plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The Company''s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods. The defined benefit obligation is calculated annually by Actuaries using the projected unit credit method.
The liability recognized for defined benefit plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. The benefits are discounted using the government securities (G-Sec) at the end of the reporting period that have terms approximating to the terms of related obligation.
Remeasurements of the net defined benefit obligation, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling, are recognized in other comprehensive income. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to the statement of profit and loss.
Government grants are recognized at their fair value, where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed.
The grant relating to the acquisition/ construction of an item of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on the same systematic basis as the respective assets are depreciated over their expected life and are presented within other operating income.
> Borrowing Costs consists of interest and other costs that an entity incurs in connection with the borrowings of funds.
> Borrowing costs directly attributable to the acquisition or construction of a qualifying asset are capitalized as a part of the cost of that asset that necessarily takes a substantial period of time to complete and prepare the asset for its intended use or sale.
> Transaction costs in respect of long term borrowing are amortized over the tenure of respective loans using Effective Interest Rate (EIR) method. All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.
3.10INVESTMENT IN SUBSIDIARIES & ASSOCIATE
Investments in subsidiaries & associate are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognized in the statement of profit and loss.
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the relevant instrument and are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issues of financial assets and financial liabilities (other than financial assets and financial liabilities measured at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial assets or financial liabilities. Purchase or sale of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date when the Company commits to purchase or sell the asset.
Recognition and Classification
The financial assets are classified at initial recognition in the following measurement categories as:
⢠those subsequently measured at amortised cost
⢠those to be subsequently measured at fair value [either through other comprehensive income (OCI), or through profit or loss]
Subsequen t Measuremen t
- Financial assets measured at amortised cost - Financial assets which are held within the business model of collection of contractual cash flows and where those cash flows represent payment solely towards principal and interest on the principal amount outstanding are measured at amortised cost. A gain or loss on a financial asset that is measured at amortised cost and is not a part of hedging relationship is recognised in profit or loss when the asset is derecognised or impaired.
- Financial assets measured at fair value through other comprehensive income - Financial assets that are held within a business model of collection of contractual cash flows and for selling and where the assets'' cash flow represents solely payment of principal and interest on the principal amount outstanding are measured at fair value through OCI. Movements in carrying amount are taken through OCI, except for recognition of impairment gains or losses. When a financial asset, other than investment
in equity instrument, is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to Statement of Profit and Loss. Classification of equity instruments, not being investments in subsidiaries, associates and joint arrangements, depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through OCI. When investment in such equity instrument is derecognised, the cumulative gains or losses recognised in OCI is transferred within equity on such derecognition.
- Financial assets measured at fair value through profit or loss - Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. Movements in fair value of these instruments are taken in profit or loss. However, trade receivables that do not contain a significant financial component are measured at transaction price.
Impairment of financial assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Impairment losses are recognised in the profit or loss where there is an objective evidence of impairment based on reasonable and supportable information that is available without undue cost or effort. For all financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses (ECL) if the credit risk on the financial asset has increased significantly since initial recognition. The Company always recognises lifetime ECL for trade receivables and lease receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Company''s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. For all other financial instruments, the Company recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
Financial liabilities are classified according to the substance of the contractual arrangements entered into. Financial liabilities are classified, at initial recognition, as subsequently measured at amortised cost unless they fulfill the requirement of measurement at fair value through profit or loss. Where the financial liability has been measured at amortised cost, the difference between the initial carrying amount of the financial liabilities and their redemption value is recognised in the Statement of Profit and Loss over the contractual terms using the effective interest rate method. Financial liabilities at fair value through profit or loss are carried at fair value with changes in fair value recognised in the finance income or finance cost in the Statement of Profit and Loss.
(iii) Derecognition of financial assets and financial liabilities
Financial assets are derecognised when the rights to receive benefits have expired or been transferred, and the Company has transferred substantially all risks and rewards of ownership of such financial asset. Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
(iv) Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle
on a net basis or realise the asset and settle the liability simultaneously.
Basic Earnings per share (EPS) amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders adjusted for the effects of potential equity shares by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
3.13Provisions, Contingent Liabilities and Contingent Assets3.13.1 Provisions
Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.
Contingent liability is a possible obligation arising from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events but is not recognized because it is not possible that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made. The Company discloses the existence of contingent liabilities in Other Notes to Financial Statements.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.
3.14Non-Current Assets held for sale
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset (or disposal group) and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets are not depreciated or amortised.
3.15Intangible Assets3.15.1 Recognition and Measurement
Software which is not an integral part of related hardware, is treated as intangible asset and are stated at cost on initial recognition and subsequently measured at cost less accumulated amortization and accumulated impairment loss, if any.
Subsequent costs are included in the asset''s carrying amount, only when it is probable that future economic benefits associated with the cost incurred will flow to the Group and the cost of the item can be measured reliably. All other expenditure is recognized in the Statement of Profit & Loss.
> Softwares are amortized over a period of five years.
> The amortization period and the amortization method are reviewed at least at the end of each financial year. If the expected useful life of the assets is significantly different from previous estimates, the amortization period is changed accordingly.
3.16Biological Assets and Agricultural Produce3.16.1 Biological Assets
The company recognizes biological assets when and only when , the company controls the assets as a result of past events , if it is probable that future economic benefit associated with such assets will flow to the company and fair value is reliably measurable.
Biological assets of the company comprises of un-harvested green tea leaves, unpicked cherries, latex on tree, timber and other minor produce are measured at fair valueless cost of sales. The gain or loss arising from a change in fair value less cost to sell of biological assets is included in Statement of Profit and Loss for the period in which it arises.
The company recognizes agricultural produce when and only when, the company controls the assets as a result of past events, if it is probable that future economic benefit associated with such assets will flow to the company and fair value is reliably measurable.
The Company''s agricultural produce comprises of Green leaf plucked, picked cherry, entracted latex and other picked/plucked minor produce. Company''s biological assets are valued at fair value less cost to sell at the point of harvest. A gain or loss arising on initial recognition of agricultural produce at fair value less cost to sell shall be included in Statement of Profit & Loss for the period in which it arises.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker of the Company is responsible for allocating resources and assessing performance of the operating segments and accordingly is identified as the chief operating decision maker (CODM).
The Company has identified three reportable segment "Tea", "Coffee" and "Rubber" based on the information reviewed by the CODM.
4. SIGNIFICANT JUDGEMENTS AND KEY SOURCES OF ESTIMATION IN APPLYING ACCOUNTING POLICIES
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. Information about Significant judgements and Key sources of estimation made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is included in the following notes:
> Recognition of Deferred Tax Assets: The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilized. In addition, significant judgement is required in assessing the impact of any legal or economic limits.
> Useful lives of depreciable/ amortisable assets (tangible and intangible): Management reviews its estimate of the useful lives of depreciable/ amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to actual normal wear and tear that may change the utility of plant and equipment.
> Classification of Leases: The Company enters into leasing arrangements for various assets. The classification of the leasing arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee''s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset''s economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.
> Defined Benefit Obligation (DBO): Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, medical cost trends, anticipation of future salary increases and the inflation rate. The Company considers that the assumptions used to measure its obligations are appropriate. However, any changes in these assumptions may have a material impact on the resulting calculations.
> Provisions and Contingencies: The assessments undertaken in recognising provisions and contingencies have been made in accordance with Indian Accounting Standards (Ind AS) 37,''Provisions, Contingent Liabilities and Contingent Assets''. The evaluation of the likelihood of the contingent events is applied best judgement by management regarding the probability of exposure to potential loss.
> Impairment of Financial Assets: The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication of impairment. If recoverable amount is less than its carrying amount, the impairment loss is accounted for.
> Allowances for Doubtful Debts: The Company makes allowances for doubtful debts through appropriate estimations of irrecoverable amount. The identification of doubtful debts requires use of judgment and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed.
> Fair value measurement of financial Instruments: When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The input to these models are taken from observable markets where possible, but where this not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.
> Fair Value of Biological Assets and Agricultural Produce: The fair value of Biological Assets and Agricultural Produce is determined based on recent transactions entered into with third parties or available market price. Fair valuation of Biological Asset and Agriculture Produce are based on the market rates published by the industrial body for various grades from which the fair value of Biological asset and Agriculture Produce are derived.
Mar 31, 2024
3. MATERIAL ACCOUNTING POLICY INFORMATION
The material accounting policy information applied in the preparation of the standalone financial statements are as given below. These accounting policies have been applied consistently to all the periods presented in the standalone financial statements.
3.1. Inventories
Raw materials (including purchased tea leaves), Stores & Spare parts, Finished Goods and Stock in trade are stated at the lower of cost and estimated net realisable value. The comparison of cost and net realisable value is made on an item-by-item basis. Cost comprises of expenditure incurred in the normal course of business in bringing such inventories to their present location and condition and includes appropriate overheads (in case of Finished Goods). Cost is determined on weighted average basis.
> Raw material: In nature of harvested tea leaves, picked cherries, latex and other minor agricultural produce raised from own gardens are measured at fair value less cost of sale at point of harvest. The same cost is used for measuring cost for the purpose of valuation of finished goods.
> Stores and Spare Parts: Are measured at cost (measured at weighted average basis) or net realizable value whichever is lower.
> Stock in Process: Is valued with material at lower of weighted average cost and market rate and estimated conversion cost.
> Finished Goods: Finished goods produced from agricultural produce are valued at lower of cost and the net realizable value. Cost is arrived at by adding the cost of conversion to the fair value of agricultural produce. Other finished goods are measured at cost or NRV whichever is lower.
> Waste/ Scrap: Waste and Scrap (including tea waste) are valued at estimated realizable value.
Net realisable value is the estimated selling price in the ordinary course of business , less estimated cost of completion and estimated cost necessary to make the sale. Further, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
Provision is made for obsolete, slow moving and defect inventories, whenever necessary.
3.2. Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short term deposits with an original maturity of three months or less, which are subject to an insignificant risk of change in value.
For the purpose of the statement of cash flows, cash and cash equivalents includes cash on hand, term deposits and other short-term highly liquid investments, net of bank overdrafts as they are considered an integral part of the Company''s cash management. Bank overdrafts are shown within short term borrowings in the balance sheet.
3.3. Income Tax
Taxes on income comprises of current taxes and deferred taxes. Current tax in the Statement of Profit and Loss is provided as the amount of tax payable in respect of taxable income for the period using tax rates and tax laws enacted during the period, together with any adjustment to tax payable in respect of previous years.
A provision is recognized for those matters for which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. The assessment is based on the judgement of tax professionals within the Company supported by previous experience in respect of such activities and in certain cases based on specialist independent tax advice.
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
3.4. PROPERTY, PLANT AND EQUIPMENT
3.4.1. Tangible Assets (Other than Bearer Plants)
3.4.1.1. Recognition and Measurement:
> Property, plant and equipment held for use in the production or/and supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost, less any accumulated depreciation and accumulated impairment losses (if any).
> Cost of an item of property, plant and equipment acquired comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting any trade discounts and rebates, any directly attributable costs of bringing the assets to its working condition and location for its intended use and present value of any estimated cost of dismantling and removing the item and restoring the site on which it is located.
> If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
> Profit or loss arising on the disposal of property, plant and equipment are recognized in the Statement of Profit and Loss.
3.4.1.2. Subsequent Measurement:
> Subsequent costs are included in the asset''s carrying amount, only when it is probable that future economic benefits associated with the cost incurred will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced.
> Major Inspection/ Repairs/ Overhauling expenses are recognized in the carrying amount of the item of property, plant and equipment as a replacement if the recognition criteria are satisfied. Any Unamortized part of the previously recognized expenses of similar nature is derecognized.
3.4.1.3. Depreciation and Amortization:
> Depreciation on Property, Plant & Equipment is provided under Written Down Method at rates determined based on the useful life of the respective assets and the residual values in accordance with Schedule II of the Companies Act, 2013 or as reassessed by the Company based on the technical evaluation.
> In case of asset"Fences, wells, tube wells"&"Carpeted Roads - Other than RCC", depreciation has been provided on written down value method at the rates determined considering the useful lives of 15 years which is based on assessment carried out by external valuers and the management believes that the useful lives as considered above best represent the period over which the respective assets shall be expected in use.
> In respect of spares for specific machinery, cost is amortized over the useful life of the related machinery as estimated by the management.
> In case of asset"Pruning Machine"and"Spraying Machine'', depreciation has been provided on written down value method at the rates determined considering the useful lives of 3 years.
> Depreciation on additions (disposals) during the year is provided on a pro-rata basis i.e., from (up to) the date on which asset is ready for use (disposed of).
> Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
3.4.1.4. Disposal of Assets
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between net disposal proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
3.4.1.5. Capital Work in Progress
Capital work-in-progress is stated at cost which includes expenses incurred during construction period, interest on amount borrowed for acquisition of qualifying assets and other expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production.
3.4.2. Bearer Plants
Young tea bushes, coffee bushes, rubber trees & shade trees, including the cost incurred for procurement of new seeds and maintenance of nurseries, are carried at cost less any recognized impairment losses under capital work-in-progress. Cost includes the cost of land preparation, new planting and maintenance of newly planted bushes until maturity. On maturity, these costs are classified under bearer plants. The cost of Bearer Plant includes all cost incurred till the plants are ready for commercial harvest.
3.4.2.1 Recognition and Measurement:
Bearer Plants which are used in the production or supply of agricultural produce and expected to bear produce for more than a period of twelve months are capitalized as part of Property, Plant and Equipments and are stated in the balance sheet at cost, less any accumulated depreciation and accumulated impairment losses (if any).
3.4.2.2 Subsequent Measurement:
Costs incurred for infilling including block infilling are generally recognized in the Statement of Profit and Loss unless there is a significant increase in the yield of the sections, in which case such costs are capitalized and depreciated over the remaining useful life of the respective sections.
3.4.2.3 Depreciation:
> Depreciation on bearer plants is recognized so as to write off its cost over useful lives, using the straight-line method.
> The estimated useful life, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.
3.4.2.4. Capital Work in Progress
Young tea bushes & shade trees, including the cost incurred for procurement of new seeds and maintenance of nurseries, are carried at cost less any recognized impairment losses under capital work-in-progress. Cost includes the cost of land preparation, new planting and maintenance of newly planted bushes until maturity. On maturity, these costs are classified under bearer plants.
3.5. LEASES
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
3.5.1. Company as lessor
Lessor accounting under Ind AS 116 is substantially unchanged from Ind AS 17. Lessor will continue to classify leases as either operating or finance leases using similar principles as in Ind AS 17. Therefore, Ind AS 116 does not have an impact for leases where the Company is the lessor
Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
3.5.2. Company as lessee
The Company applies a single recognition and measurement approach for all leases, except for shortterm leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right of use assets representing the right to use the underlying assets.
> Right of use assets
The Company recognises right of use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right of use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right of use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right of use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right of use assets is also subject to impairment.
> Lease Liability
At the commencement date of the lease, the Company recognises lease liabilities measured
at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying assets.
> Short-term lease and lease of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of twelve months or less from the commencement date and do not contain a purchase option). It also applies the lease of low value assets recognition exemption to leases of offices, godowns, equipment, etc. that are of low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
3.6. REVENUE FROM CONTRACT WITH CUSTOMERS
Revenue from contract with customers is recognized when the Company satisfies performance obligations by transferring promised goods and services to the customer. Performance obligations are satisfied at a point of time or over a period of time. Performance obligations satisfied over a period of time are recognized as per the terms of relevant contractual agreements/arrangements. Performance obligations are said to be satisfied at a point of time when the customer obtain controls of the asset.
Revenue is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of various sales incentives/ discounts offered by the company as part of the contract.
3.6.1 Sales of Products
Revenue from sale of products is recognized when the control on the goods have been transferred to the customer. The performance obligation in case of sale of product is satisfied at a point in time i.e., when the material is shipped to the customer or on delivery to the customer, as may be specified in the contract.
3.6.2 Other Income:
i) Interest Income:
Interest income is recognised using the effective interest rate (EIR) method.
ii) Dividend Income:
Dividend income is recognised in Standalone Statement of Profit and Loss on the date on which the Company''s right to receive payment is established.
3.7 EMPLOYEE BENEFITS
3.7.1 Short Term Benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related services are provided. Liabilities for wages and salaries, including non-monetary benefits
that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period.
3.7.2 Other Long Term Employee Benefits
The liabilities for leaves that are not expected to be settled wholly within twelve months are measured as the present value of the expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the government securities (G-Sec) at the end of the reporting period that have terms approximating to the terms of related obligation. Re-measurements as the result of experience adjustment and changes in actuarial assumptions are recognized in statement of profit and loss.
3.7.3 Post Employment Benefits
The Company operates the following post-employment schemes:
> Defined Contribution Plan
Defined contribution plans such as Provident Fund, Employee State Insurance etc. are charged to the statement of profit and loss as and when incurred.
> Defined Benefit Plans
The liability or asset recognized in the Balance Sheet in respect of defined benefit plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The Company''s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods. The defined benefit obligation is calculated annually by Actuaries using the projected unit credit method.
The liability recognized for defined benefit plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. The benefits are discounted using the government securities (G-Sec) at the end of the reporting period that have terms approximating to the terms of related obligation.
Remeasurements of the net defined benefit obligation, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling, are recognized in other comprehensive income. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to the statement of profit and loss.
3.8 GOVERNMENT GRANTS
Government grants are recognized at their fair value, where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed.
The grant relating to the acquisition/ construction of an item of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on the same systematic basis as the respective assets are depreciated over their expected life and are presented within other operating income.
3.9 BORROWING COSTS
> Borrowing Costs consists of interest and other costs that an entity incurs in connection with the borrowings of funds.
> Borrowing costs directly attributable to the acquisition or construction of a qualifying asset are capitalized as a part of the cost of that asset that necessarily takes a substantial period of time to complete and prepare the asset for its intended use or sale.
> Transaction costs in respect of long term borrowing are amortized over the tenure of respective loans using Effective Interest Rate (EIR) method. All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.
3.10INVESTMENT IN SUBSIDIARIES & ASSOCIATE
Investments in subsidiaries & associate are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognized in the statement of profit and loss.
3.11 FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the relevant instrument and are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issues of financial assets and financial liabilities (other than financial assets and financial liabilities measured at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial assets or financial liabilities. Purchase or sale of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date when the Company commits to purchase or sell the asset.
(i) Financial Assets
Recognition and Classification
The financial assets are classified at initial recognition in the following measurement categories as:
⢠those subsequently measured at amortised cost
⢠those to be subsequently measured at fair value [either through other comprehensive income (OCI), or through profit or loss]
Subsequent Measurement
- Financial assets measured at amortised cost - Financial assets which are held within the business model of collection of contractual cash flows and where those cash flows represent payment solely towards principal and interest on the principal amount outstanding are measured at amortised cost. A gain or loss on a financial asset that is measured at amortised cost and is not a part of hedging relationship is recognised in profit or loss when the asset is derecognised or impaired.
- Financial assets measured at fair value through other comprehensive income - Financial assets that are held within a business model of collection of contractual cash flows and for selling and where the assets'' cash flow represents solely payment of principal and interest on the principal amount outstanding are measured at fair value through OCI. Movements in carrying amount are taken through OCI, except for recognition of impairment gains or losses. When a financial asset, other than investment in equity instrument, is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to Statement of Profit and Loss. Classification of equity instruments, not being investments in subsidiaries, associates and joint arrangements, depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through OCI. When investment in such equity instrument is derecognised, the cumulative gains or losses recognised in OCI is transferred within equity on such derecognition.
- Financial assets measured at fair value through profit or loss - Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. Movements in fair value of these instruments are taken in profit or loss. However, trade receivables that do not contain a significant financial component are measured at transaction price.
Impairment of financial assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Impairment losses are recognised in the profit or loss where there is an objective evidence of impairment based on reasonable and supportable information that is available without undue cost or effort. For all financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses (ECL) if the credit risk on the financial asset has increased significantly since initial recognition. The Company always recognises lifetime ECL for trade receivables and lease receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Company''s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. For all other financial instruments, the Company recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
(ii) Financial Liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into. Financial liabilities are classified, at initial recognition, as subsequently measured at amortised cost unless they fulfill the requirement of measurement at fair value through profit or loss. Where the financial liability has been measured at amortised cost, the difference between the initial carrying amount of the financial liabilities and their redemption value is recognised in the Statement of Profit and Loss over the contractual terms using the effective interest rate method. Financial liabilities at fair value through profit or loss are carried at fair value with changes in fair value recognised in the finance income or finance cost in the Statement of Profit and Loss.
(iii) Derecognition of financial assets and financial liabilities
Financial assets are derecognised when the rights to receive benefits have expired or been transferred, and the Company has transferred substantially all risks and rewards of ownership of such financial asset. Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
(iv) Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
3.12 Earnings Per Share
Basic Earnings per share (EPS) amounts are calculated by dividing the profit for the year attributable to equity holders bythe weighted average number of equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders adjusted for the effects of potential equity
shares by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
Mar 31, 2018
1. ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation of the financial statements are as given below. These accounting policies have been applied consistently to all the periods presented in the financial statements.
1.1. Inventories
Raw materials (including purchased tea leaves), Stores & Spare parts, Finished Goods and Stock in trade are stated at the lower of cost and estimated net realisable value. Cost comprises of expenditure incurred in the normal course of business in bringing such inventories to their present location and condition and includes appropriate overheads (in case of Finished Goods). Cost is determined on weighted average basis. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
Raw material in nature of harvested tea leaves, picked cherries, latex and other minor agricultural produce raised from own gardens are measured at fair value less cost of sale at point of harvest. The same cost is used for measuring cost for the purpose of valuation of finished goods.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
1.2. Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short term deposits with an original maturity of three months or less, which are subject to an insignificant risk of change in value.
For the purpose of the statement of cash flows, cash and cash equivalents includes cash on hand, term deposits and other short-term highly liquid investments, net of bank overdrafts as they are considered an integral part of the Companyâs cash management. Bank overdrafts are shown within short term borrowings in the balance sheet.
1.3. Income Tax
The income tax expense or credit for the period is the tax payable on the current periodâs taxable income based on the applicable income tax rate as per taxation laws under Income tax act, 1961 and under respective state Agriculture Income tax act and adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Current and deferred tax is recognised in the statement of profit & loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
1.3.1. Current Tax:
Current tax liabilities (or assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the taxation authorities using the tax rates (and tax laws) that have been enacted or substantively enacted, at the end of the reporting period.
1.3.2. Deferred Tax
- Deferred Tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
- Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes (i.e., tax base). Deferred tax is also recognized for carry forward of unused tax losses and unused tax credits.
- Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
- The carrying amount of deferred tax asset is reviewed at the end of each reporting period. The Company reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or that entire deferred tax asset to be utilized. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profit will be available.
- Deferred tax relating to items recognized outside the Statement of Profit and Loss is recognized either in other comprehensive income or in equity. Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.
- Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
1.4. Property, Plant And Equipment
1.4.1. Tangible Assets (Other than Bearer Plants)
1.4.1.1. Recognition and Measurement:
- Property, plant and equipment held for use in the production or/and supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost, less any accumulated depreciation and accumulated impairment losses (if any).
- Cost of an item of property, plant and equipment acquired comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting any trade discounts and rebates, any directly attributable costs of bringing the assets to its working condition and location for its intended use and present value of any estimated cost of dismantling and removing the item and restoring the site on which it is located.
- If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
- Profit or loss arising on the disposal of property, plant and equipment are recognized in the Statement of Profit and Loss.
1.4.1.2. Subsequent Measurement:
- Subsequent costs are included in the assetâs carrying amount, only when it is probable that future economic benefits associated with the cost incurred will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced.
- Major Inspection/ Repairs/ Overhauling expenses are recognized in the carrying amount of the item of property, plant and equipment as a replacement if the recognition criteria are satisfied. Any Unamortized part of the previously recognized expenses of similar nature is derecognized.
1.4.1.3. Depreciation and Amortization:
- Depreciation on Property, Plant & Equipment is provided under Written Down Method at rates determined based on the useful life of the respective assets and the residual values in accordance with Schedule II of the Companies Act, 2013 or as reassessed by the Company based on the technical evaluation.
- In case of asset âFences, wells, tube wellsâ & âCarpeted Roads - Other than RCCâ, depreciation has been provided on written down value method at the rates determined considering the useful lives of 15 years which is based on assessment carried out by external valuers and the management believes that the useful lives as considered above best represent the period over which the respective assets shall be expected in use.
- Depreciation on additions (disposals) during the year is provided on a pro-rata basis i.e., from (up to) the date on which asset is ready for use (disposed of).
- Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
1.4.1.4. Disposal of Assets
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between net disposal proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
1.4.1.5. Capital Work in Progress
Capital work-in-progress is stated at cost which includes expenses incurred during construction period, interest on amount borrowed for acquisition of qualifying assets and other expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production.
1.4.2. Bearer Plants
1.4.2.1. Recognition and Measurement:
Bearer Plants which are used in the production or supply of agricultural produce and expected to bear produce for more than a period of twelve months are capitalized as part of Property, Plant and Equipments and are stated in the balance sheet at cost, less any accumulated depreciation and accumulated impairment losses (if any). The cost of Bearer Plant includes all cost incurred till the plants are ready for commercial harvest.
1.4.2.2. Depreciation:
- Depreciation on bearer plants is recognised so as to write off its cost over useful lives, using the straight-line method.
- The residual value in case of Bearer Plants has been considered as NIL. Estimated useful life of the bearer plants has been determined as the following:
1.4.2.3. Capital Work in Progress
Young tea bushes & shade trees, including the cost incurred for procurement of new seeds and maintenance of nurseries, are carried at cost less any recognized impairment losses under capital work-in-progress. Cost includes the cost of land preparation, new planting and maintenance of newly planted bushes until maturity. On maturity, these costs are classified under bearer plants.
1.5. Leases
1.5.1. Determining whether an arrangement contains a lease
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
1.5.2. Company as lessor
- Finance Lease
Leases which effectively transfer to the lessee substantially all the risks and benefits incidental to ownership of the leased item are classified and accounted for as finance lease. Lease rental receipts are apportioned between the finance income and capital repayment based on the implicit rate of return. Contingent rents are recognized as revenue in the period in which they are earned.
- Operating Lease
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease except where scheduled increase in rent compensates the Company with expected inflationary costs.
1.5.3. Company as lessee
- Finance Lease
Finance Leases, which effectively transfer to the lessee substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease Payments under such leases are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly to the statement of profit and loss. Lease management fees, legal charges and other initial direct costs are capitalized.
If there is no reasonable certainty that the Company will obtain the ownership by the end of lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.
- Operating Lease
Assets acquired on leases where a significant portion of risk and reward is retained by the lessor are classified as operating leases. Lease rental are charged to statement of profit and loss on a straight-line basis over the lease term, except where scheduled increase in rent compensates the Company with expected inflationary costs.
1.6. Revenue Recognition
Revenue is recognised based to the extent it is probable that the economic benefit will flow to the company and revenue can be reliably measured regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment, and excludes taxes & duties collected on behalf of the Government and is reduced for estimated customer returns, rebates and other similar allowances.
1.6.1. Sale of Products:
The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Company and significant risk and reward incidental to sale of products is transferred to the buyer, usually on delivery of the goods.
1.6.2. Rental Income:
Rental income from operating lease is recognized on a straight line basis over the term of the relevant lease unless the payments are structured to increase in line with expected general inflation to compensate for the companyâs expected inflationary cost increases.
1.6.3. Other Income:
1.6.3.1. Interest Income: For all debt instruments measured either at amortized cost or at fair value through other comprehensive income (FVTOCI), interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset.
1.6.3.2. Dividend Income: Dividend income is accounted in the period in which the right to receive the same is established.
1.6.3.3. Other Income: Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably.
1.7. Employee Benefits
1.7.1. Short Term Benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related services are provided. Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service are recognized in respect of employeesâ services up to the end of the reporting period.
1.7.2. Other Long Term Employee Benefits
The liabilities for leaves that are not expected to be settled wholly within twelve months are measured as the present value of the expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the government securities (G-Sec) at the end of the reporting period that have terms approximating to the terms of related obligation. Remeasurements as the result of experience adjustment and changes in actuarial assumptions are recognized in statement of profit and loss.
1.7.3. Post Employment Benefits
The Company operates the following post employment schemes:
- Defined Contribution Plan
Defined contribution plans such as Provident Fund, Employee State Insurance etc. are charged to the statement of profit and loss as and when incurred.
- Defined Benefit Plans
The liability or asset recognized in the Balance Sheet in respect of defined benefit plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The Companyâs net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods. The defined benefit obligation is calculated annually by Actuaries using the projected unit credit method.
The liability recognized for defined benefit plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. The benefits are discounted using the government securities (G-Sec) at the end of the reporting period that have terms approximating to the terms of related obligation.
Remeasurements of the net defined benefit obligation, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling, are recognized in other comprehensive income. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to the statement of profit and loss.
1.8. Government Grants
Government grants are recognised at their fair value, where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed.
The grant relating to the acquisition/ construction of an item of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on the same systematic basis as the respective assets are depreciated over their expected life and are presented within other operating income.
1.9. Foreign Currency Transactions
- Foreign currency (other than the functional currency) transactions are translated into the functional currency using the spot rates of exchanges at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate of exchanges at the reporting date.
- Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities are generally recognized in profit or loss in the year in which they arise except for exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those qualifying assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings, the balance is presented in the Statement of Profit and Loss within finance costs.
- Non monetary items are not retranslated at period end and are measured at historical cost (translated using the exchange rate at the transaction date).
1.10. Borrowing Costs
- Borrowing Costs consists of interest and other costs that an entity incurs in connection with the borrowings of funds. Borrowing costs also includes foreign exchange difference to the extent regarded as an adjustment to the borrowing costs.
- Borrowing costs directly attributable to the acquisition or construction of a qualifying asset are capitalized as a part of the cost of that asset that necessarily takes a substantial period of time to complete and prepare the asset for its intended use or sale.
- Transaction costs in respect of long term borrowing are amortized over the tenure of respective loans using Effective Interest Rate (EIR) method. All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.
1.11. Investment In Subsidiaries & Associate
Investments in subsidiaries & associate are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognized in the statement of profit and loss.
1.12. Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
1.12.1. Financial Assets
- Recognition and Initial Measurement:
All financial assets are initially recognized when the company becomes a party to the contractual provisions of the instruments. A financial asset is initially measured at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
- Classification and Subsequent Measurement:
For purposes of subsequent measurement, financial assets are classified in four categories:
- Measured at Amortized Cost;
- Measured at Fair Value Through Other Comprehensive Income (FVTOCI);
- Measured at Fair Value Through Profit or Loss (FVTPL); and
- Equity Instruments designated at Fair Value Through Other Comprehensive Income (FVTOCI).
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
- Measured at Amortized Cost: A debt instrument is measured at the amortized cost if both the following conditions are met:
- The asset is held within a business model whose objective is achieved by both collecting contractual cash flows; and
- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade receivables, cash and bank balances, loans and other financial assets of the company.
- Measured at FVTOCI: A debt instrument is measured at the FVTOCI if both the following conditions are met:
- The objective of the business model is achieved by both collecting contractual cash flows and selling the financial assets; and
- The assetâs contractual cash flows represent SPPI.
Debt instruments meeting these criteria are measured initially at fair value plus transaction costs. They are subsequently measured at fair value with any gains or losses arising on remeasurement recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains or losses. Interest calculated using the effective interest method is recognized in the statement of profit and loss in investment income.
- Measured at FVTPL: FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as FVTPL. In addition, the company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss. Equity instruments which are, held for trading are classified as at FVTPL.
- Equity Instruments designated at FVTOCI: For equity instruments, which has not been classified as FVTPL as above, the company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. In case the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment.
- Derecognition:
The Company derecognizes a financial asset on trade date only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
- Impairment of Financial Assets:
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS - 109 requires expected credit losses to be measured through a loss allowance. The company recognizes impairment loss for trade receivables that do not constitute a financing transaction using expected credit loss model, which involves use of a provision matrix constructed on the basis of historical credit loss experience. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
1.12.2. Financial Liabilities
- Recognition and Initial Measurement:
Financial liabilities are classified, at initial recognition, as at fair value through profit or loss, loans and borrowings, payables or as derivatives, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
- Subsequent Measurement:
Financial liabilities are measured subsequently at amortized cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.
- Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
1.12.3. Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is 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 counterparty.
1.13. Earnings Per Share
Basic Earnings per share (EPS) amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders adjusted for the effects of potential equity shares by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
1.14. Impairment of Non-Financial Assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (Cash Generating Units - CGU).
An impairment loss is recognized as an expense in the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in earlier accounting period is reversed if there has been an improvement in recoverable amount.
1.15. Provisions, Contingent Liabilities and Contingent Assets
1.15.1. Provisions
Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.
1.15.2. Contingent Liabilities
Contingent liability is a possible obligation arising from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events but is not recognized because it is not possible that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made. The Company discloses the existence of contingent liabilities in Other Notes to Financial Statements.
1.15.3. Contingent Assets
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.
1.16. Non-Current Assets held for sale
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary
for sales of such asset (or disposal group) and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets are not depreciated or amortised.
1.17. Intangible Assets
1.17.1. Recognition and Measurement
Software which is not an integral part of related hardware, is treated as intangible asset and are stated at cost on initial recognition and subsequently measured at cost less accumulated amortization and accumulated impairment loss, if any.
1.17.2. Subsequent Expenditure
Subsequent costs are included in the assetâs carrying amount, only when it is probable that future economic benefits associated with the cost incurred will flow to the Company and the cost of the item can be measured reliably. All other expenditure is recognized in the Statement of Profit & Loss.
1.17.3. Amortization
- Softwares are amortized over a period of five years.
- The amortization period and the amortization method are reviewed at least at the end of each financial year. If the expected useful life of the assets is significantly different from previous estimates, the amortization period is changed accordingly.
1.18. Biological Assets and Agricultural Produce
1.18.1. Biological Assets
Biological assets of the company comprises of un-harvested green tea leaves, unpicked cherries, latex on tree, timber and other minor produce are measured at fair value.less cost of sales. The gain or loss arising from a change in fair value less cost to sell of biological assets is included in Statement of Profit and Loss for the period in which it arises.
1.18.2. Agricultural Produce
Agricultural produce harvested from the Companyâs biological assets are valued at fair value less cost to sell at the point of harvest. A gain or loss arising on initial recognition of agricultural produce at fair value less cost to sell shall be included in Statement of Profit & Loss for the period in which it arises.
1.19. Operating Segment
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker of the Company is responsible for allocating resources and assessing performance of the operating segments and accordingly is identified as the chief operating decision maker.
The Company has identified three reportable segment âTeaâ, âCoffeeâ and âRubberâ based on the information reviewed by the CODM.
Mar 31, 2016
a) Accounting Convention
The financial statements have been prepared in accordance with historical cost convention, on accrual basis, in accordance with the generally accepted accounting principles in India, the applicable mandatory Accounting Standards and the relevant provisions of Companies Act, 2013.
b) Use of Estimates
The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known /materialized.
c) Fixed Assets and Depreciation Fixed Assets
i) Tangible Fixed Assets are stated at their original cost less depreciation. Cost includes incidental expenses. Profits or losses on sale of tangible fixed assets are included in the statement of profit and loss and calculated as difference between the value realized and book value. Capital work-in-progress is stated at cost. Subsidies received in respect of tangible fixed assets are deducted from the cost of respective assets.
ii) Items of machinery spares to be used in connection with an item of tangible fixed assets are amortized over the useful life of the assets.
iii) Land taken on perpetual lease is capitalized together with development expenditure incurred on the same.
Depreciation
iv) Depreciation on tangible fixed assets other than land and tea plantation is provided on written down value method at the rates determined based on the useful lives of respective assets as prescribed in the Schedule II of the Companies Act, 2013 except as mentioned in (v) below
v) In case of asset "Fences, wells, tube wells" & "Carpeted Roads - Other than RCC", depreciation has been provided on written down value method at the rates determined considering the useful lives of 15 years which is based on assessment carried out by external valuers and the management believes that the useful lives as considered above best represent the period over which the respective assets shall be expected in use.
vi) Land taken on perpetual lease is not amortized.
vii) All expenses incurred for extension of new areas of cultivation are capitalized. Cost of planting, upkeep and maintenance of areas till not matured for plucking and cost of replanting in existing areas are charged to revenue.
viii) Intangible assets are being amortized over a period of 5 years.
d) Government Grants
Grants and subsidies from the Government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.
Government grants related to specific tangible fixed assets are deducted from gross value of related assets in arriving at their book value. Government grants related to revenue are recognized in the statement of profit and loss.
e) Investment
Long term and unquoted investments are considered at cost, unless there is a permanent decline in value thereof, in which case, adequate provision is made in the accounts. Current investments are stated at lower of cost or market / fair value.
f) Inventories
i) Stock of finished rubber, tea, coffee and minor produce (i.e. pepper and cardamom) are valued at cost (determined on weighted average basis) or net realizable value whichever is lower.
ii) Stock of stores and spare parts are valued at cost (using the weighted average cost basis) or net realizable value whichever is lower.
iii) Cost comprises all direct and indirect expenses.
iv) Net realizable value is the estimated selling price in ordinary course of business less estimated cost of completion and estimated cost necessary to make the sale.
v) Materials and other items held for use in the production of inventories are not written down below the cost of the finished products in which they will be incorporated are expected to be sold at or above cost.
vi) Provision is made for obsolete and slow moving stocks where necessary.
g) Foreign Currency Transactions
i) Foreign currency transactions are recorded at the rate of exchange prevailing on the dates when the relevant transactions take place.
ii) Year end balances of foreign currency transactions are translated at exchange rates prevailing at the end of the year.
iii) Any income or expense on account of exchange difference either on settlement or translation is recognized in the Statement of Profit and Loss.
h) Revenue Recognition
Sales are recognized in the accounts on passing of titles of the goods, i.e. delivery as per terms of sales or completion of auction in case of auction sale. Sale of standing trees is accounted as and when they are removed and the proceeds are credited to the Statement of Profit & Loss. Other income with related tax credits and expenditure are accounted for on accrual basis.
i) Employee Benefits
Short Term Employees Benefits
The undiscounted amount of short term employee benefit expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee rendered the service. This benefit includes salary, wages, short term compensatory absences and bonus.
Long Term Employee Benefits
Defined Contribution Scheme
This benefit includes contribution to provident fund schemes and superannuation fund. The contribution is recognized during the period in which the employee renders service.
Defined Benefit Scheme
For defined benefit scheme the cost of providing benefit is determined using the projected unit credit method with actuarial valuation being carried out at each balance sheet date. The benefit obligation recognized in the balance sheet represents value of defined benefit obligation determined at the end of the year. Actuarial gains and losses are recognized in full during the period in which they occur.
Other Long Term Benefits
Long term compensation absence is provided for on the basis of an actuarial valuation, using the projected unit credit method as at the date of balance sheet.
j) Borrowing Costs
Borrowing costs, if attributable to qualifying assets (i.e. assets that necessarily take substantial period of time to get ready for its intended use or sale) are capitalized. Other borrowing costs are charged to Statement of Profit and Loss in the period they are incurred.
k) Taxes on Income
Current tax comprise of Income Tax & Wealth Tax that would be payable based on computation of tax as per taxation laws under the Income Tax Act, 1961 and under the respective state Agricultural Income Tax Acts. Deferred Tax is recognized, subject to the consideration of prudence, on timing differences, between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets are not recognized unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Tax credit for Minimum Alternate Tax (MAT) is recognized when there is convincing evidence of its reliability against future normal tax liability.
l) Leases
i) For assets acquired under operating lease, rentals payable are charged to the Statement of Profit and Loss.
ii) For assets acquired under finance lease/ hire purchase agreement, the assets are capitalized at lower of their respective fair value and present value of minimum lease payments after discounting them at an appropriate discount rate.
iii) Hire purchase charges are being amortized based on a constant periodic rate of interest on the remaining balance of the liability of each period.
m) Impairment
An impairment loss is recognized where applicable when the carrying value of fixed assets exceeds its market value or value in use whichever is higher. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.
n) Provisions and Contingent Liabilities
The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote, no provision or disclosure for contingent liability is made. Contingent assets are not provided for or disclosed.
Mar 31, 2014
A) Accounting Convention
The financial statements have been prepared in accordance with
historical cost convention, on accrual basis, in accordance with the
generally accepted accounting principles in India, the applicable
mandatory Accounting Standards and the relevant provisions of Companies
Act, 1956.
b) Use of Estimates
The preparation of financial statements require estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between actual results and estimates are recognized in the period in
which the results are known /materialized.
c) Fixed Assets and Depreciation Fixed Assets
i) Tangible Fixed Assets are stated at their original cost less
depreciation. Cost includes incidental expenses. Profits or losses on
sale of tangible fixed assets are included in the statement of profit
and loss and calculated as difference between the value realized and
book value. Capital work-in-progress is stated at cost.
ii) Items of machinery spares to be used in connection with an item of
tangible fixed assets are amortized over the useful life of the assets.
iii) Land taken on perpetual lease is capitalized together with
development expenditure incurred on the same.
Depreciation
iv) Depreciation on tangible fixed assets other than land and tea
plantation is provided on written down value basis in accordance with
the provisions of Schedule XIV of the Companies Act, 1956. Land taken
on perpetual lease is not amortized.
v) All expenses incurred for extension of new areas of cultivation are
capitalized. Cost of upkeep and maintenance of areas till not matured
for plucking and cost of replanting in existing areas are charged to
revenue.
vi) Intangible assets are being amortized over a period of 5 years.
d) Government Grants
Grants and subsidies from the Government are recognized when there is
reasonable assurance that (i) the Company will comply with the
conditions attached to them, and (ii) the grant/ subsidy will be
received.
Government grants related to specific tangible fixed assets are
deducted from gross value of related assets in arriving at their book
value. Government grants related to revenue are recognized in the
statement of profit and loss.
e) Investment
Long term and unquoted investments are considered at cost, unless there
is a permanent decline in value thereof, in which case, adequate
provision is made in the accounts. Current investments are stated at
lower of cost or market / fair value.
f) Inventories
i) Stock of finished rubber, tea, coffee and minor produce (i.e. pepper
and cardamom) are valued at cost (determined on weighted average basis)
or net realizable value whichever is lower.
ii) Stock of stores and spare parts are valued at cost (using the
weighted average cost basis) or net realizable value which ever is
lower.
iii) Cost comprises all direct and indirect expenses.
iv) Net realizable value is the estimated selling price in ordinary
course of business less estimated cost of completion and estimated cost
necessary to make the sale.
v) Materials and other items held for use in the production of
inventories are not written down below the cost of the finished
products in which they will be incorporated are expected to be sold at
or above cost.
vi) Provision is made for obsolete and slow moving stocks where
necessary.
g) Foreign Currency Transactions
i) Foreign currency transactions are recorded at the rate of exchange
prevailing on the dates when the relevant transactions take place.
ii) Year end balances of foreign currency transactions are translated
at exchange rates prevailing at the end of the year.
iii) Any income or expense on account of exchange difference either on
settlement or translation is recognized in the Statement of Profit and
Loss.
h) Revenue Recognition
Sales are recognized in the accounts on passing of titles of the goods,
i.e. delivery as per terms of sales or completion of auction in case of
auction sale. Sale of standing trees is accounted as and when they are
removed and the proceeds are credited to the Statement of Profit &
Loss. Other income with related tax credits and expenditure are
accounted for on accrual basis.
i) Employee Benefits
Short Term Employees Benefits The undiscounted amount of short term
employee benefit expected to be paid in exchange for the services
rendered by employee is recognized during the period when the employee
rendered the service. This benefit includes salary, wages, short term
compensatory absences and bonus. Long Term Employee Benefits Defined
Contribution Scheme This benefit includes contribution to provident
fund schemes and superannuation fund. The contribution is recognized
during the period in which the employee renders service.
Defined Benefit Scheme
For defined benefit scheme the cost of providing benefit is determined
using the projected unit credit method with actuarial valuation being
carried out at each balance sheet date. The benefit obligation
recognized in the balance sheet represents value of defined benefit
obligation determined at the end of the year. Actuarial gains and
losses are recognized in full during the period in which they occur.
Other Long Term Benefits
Long term compensation absence is provided for on the basis of an
actuarial valuation, using the projected unit credit method as at the
date of balance sheet.
j) Borrowing Costs
Borrowing costs, if attributable to qualifying assets (i.e. assets that
necessarily take substantial period of time to get ready for its
intended use or sale) are capitalized. Other borrowing costs are
charged to Statement of Profit and Loss in the period they are
incurred.
k) Taxes on Income
Current tax comprise of Income Tax and Wealth Tax that would be payable
based on computation of tax as per taxation laws under the Income Tax
Act, 1961 and under the respective state Agricultural Income Tax Acts.
Deferred Tax is recognised, subject to the consideration of prudence,
on timing differences, between taxable income and accounting income
that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred Tax assets are not recognised unless there
is virtual certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realised. Tax
credit for Minimum Alternate Tax (MAT) is recognized when there is
convincing evidence of its realisability against future normal tax
liability.
l) Leases
i) For assets acquired under operating lease, rentals payable are
charged to the Statement of Profit and Loss.
ii) For assets acquired under finance lease/ hire purchase agreement,
the assets are capitalized at lower of their respective fair value and
present value of minimum lease payments after discounting them at an
appropriate discount rate.
iii) Hire purchase charges are being amortized based on a constant
periodic rate of interest on the remaining balance of the liability of
each period.
m) Impairment
An impairment loss is recognized where applicable when the carrying
value of fixed assets exceeds its market value or value in use
whichever is higher. Reversal of impairment losses recognized in prior
years is recorded when there is an indication that the impairment
losses recognized for the assets no longer exist or have decreased.
n) Provisions and Contingent Liabilities
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation and the likelihood of outflow of resources is
remote, no provision or disclosure for contingent liability is made.
Contingent assets are not provided for or disclosed.
Mar 31, 2013
A) Accounting Convention
The financial statements have been prepared in accordance with
historical cost convention, on accrual basis, in accordance with the
generally accepted accounting principles in India, the applicable
mandatory Accounting Standards and the relevant provisions of Companies
Act, 1956.
b) Use of Estimates
The preparation of financial statements require estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between actual results and estimates are recognized in the period in
which the results are known/materialized.
c) Fixed Assets and Depreciation
Fixed Assets:
i) Tangible Fixed Assets are stated at their original cost less
depreciation. Cost includes incidental expenses. Profits or losses on
sale of tangible fixed assets are included in the statement of profit
and loss and calculated as difference between the value realized and
book value. Capital work-in-progress is stated at cost.
ii) Items of machinery spares to be used in connection with an item of
tangible fixed assets are amortized over the useful life of the assets.
iii) Land taken on perpetual lease is capitalized together with
development expenditure incurred on the same.
Depreciation :
iv) Depreciation on tangible fixed assets other than land and tea
plantation is provided on written down value basis in accordance with
the provisions of Schedule XIV of the Companies Act, 1956. Land taken
on perpetual lease is not amortized.
v) All expenses incurred for extension of new areas of cultivation are
capitalized. Cost of upkeep and maintenance of areas till not matured
for plucking and cost of replanting in existing areas are charged to
revenue.
vi) Intangible assets are being amortized over a period of 5 years.
d) Government Grants
Grants and subsidies from the Government are recognized when there is
reasonable assurance that (i) the Company will comply with the
conditions attached to them, and (ii) the grant/subsidy will be
received.
Government grants related to specific tangible fixed assets are
deducted from gross value of related assets in arriving at their book
value. Government grants related to revenue are recognized in the
statement of profit and loss.
e) Investment
Long term and unquoted investments are considered at cost, unless there
is a permanent decline in value thereof, in which case, adequate
provision is made in the accounts. Current investments are stated at
lower of cost or market/fair value.
f) Inventories
i) Stock of finished rubber, tea, coffee and minor produce (i.e. pepper
and cardamom) are valued at cost (determined on weighted average basis)
or net realizable value whichever is lower.
ii) Stock of stores and spare parts are valued at cost (using the
weighted average cost basis) or net realizable value which ever is
lower.
iii) Cost comprises all direct and indirect expenses.
iv) Net realizable value is the estimated selling price in ordinary
course of business less estimated cost of completion and estimated cost
necessary to make the sale.
v) Materials and other items held for use in the production of
inventories are not written down below the cost of the finished
products in which they will be incorporated are expected to be sold at
or above cost.
vi) Provision is made for obsolete and slow moving stocks where
necessary.
g) Foreign Currency Transactions
i) Foreign currency transactions are recorded at the rate of exchange
prevailing on the dates when the relevant transactions take place.
ii) Year end balances of foreign currency transactions are translated
at exchange rates prevailing at the end of the year.
iii) Any income or expense on account of exchange difference either on
settlement or translation is recognized in the Statement of Profit and
Loss.
h) Revenue Recognition
Sales are recognized in the accounts on passing of titles of the goods,
i.e. delivery as per terms of sales or completion of auction in case of
auction sale. Sale of standing trees is accounted as and when they are
removed and the proceeds are credited to the Statement of Profit &
Loss. Other income with related tax credits and expenditure are
accounted for on accrual basis.
i) Employee Benefits
Short Term Employees Benefits:
The undiscounted amount of short term employee benefit expected to be
paid in exchange for the services rendered by employee is recognized
during the period when the employee rendered the service. This benefit
includes salary, wages, short term compensatory absences and bonus.
Long Term Employee Benefits:
Defined Contribution Scheme - This benefit includes contribution to
provident fund schemes and superannuation fund. The contribution is
recognized during the period in which the employee renders service.
Defined Benefit Scheme - For defined benefit scheme the cost of
providing benefit is determined using the projected unit credit method
with actuarial valuation being carried out at each balance sheet date.
The benefit obligation recognized in the balance sheet represents value
of defined benefit obligation determined at the end of the year.
Actuarial gains and losses are recognized in full during the period in
which they occur.
Other Long Term Benefits - Long term compensation absence is provided
for on the basis of an actuarial valuation, using the projected unit
credit method as at the date of balance sheet.
j) Borrowing Costs
Borrowing costs, if attributable to qualifying assets (i.e. assets that
necessarily take substantial period of time to get ready for its
intended use or sale) are capitalized. Other borrowing costs are
charged to Statement of Profit and Loss in the period they are
incurred.
k) Taxes on Income
Current tax comprise of Income Tax and Wealth Tax that would be payable
based on computation of tax as per taxation laws under the Income Tax
Act, 1961 and under the respective state
Agricultural Income Tax Acts. Deferred Tax is recognised, subject to
the consideration of prudence, on timing differences, between taxable
income and accounting income that originate in one period and are
capable of reversal in one or more subsequent periods. Deferred Tax
assets are not recognised unless there is virtual certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realised. Tax credit for Minimum Alternate
Tax (MAT) is recognized when there is convincing evidence of its
readability against future normal tax liability.
I) Leases
i) For assets acquired under operating lease, rentals payable are
charged to the Statement of Profit and Loss.
ii) For assets acquired under finance lease/hire purchase agreement,
the assets are capitalized at lower of their respective fair value and
present value of minimum lease payments after discounting them at an
appropriate discount rate.
iii) Hire purchase charges are being amortized based on a constant
periodic rate of interest on the remaining balance of the liability of
each period.
m) Impairment
An impairment loss is recognized where applicable when the carrying
value of fixed assets exceeds its market value or value in use
whichever is higher. Reversal of impairment losses recognized in prior
years is recorded when there is an indication that the impairment
losses recognized for the assets no longer exist or have decreased.
n) Provisions and Contingent Liabilities
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation and the likelihood of outflow of resources is
remote, no provision or disclosure for contingent liability is made.
Contingent assets are not provided for or disclosed.
Mar 31, 2011
A) Accounting Convention
The financial statements have been prepared in accordance with
historical cost convention, on accrual basis, in accordance with the
generally accepted accounting principles in India, the applicable
mandatory Accounting Standards and the relevant provisions of Companies
Act, 1956.
b) Use of Estimates
The preparation of financial statements require estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period.
Difference between actual results and estimates are recognized in the
period in which the results are known/materialised.
c) Fixed Assets and Depreciation
Fixed Assets
i) Fixed Assets are stated at their original cost less depreciation.
Cost includes incidental expenses. Profits or Losses on sale of fixed
assets are included in the profit and loss account and calculated as
difference between the value realized and book value. Capital
work-in-progress is stated at cost.
ii) Items of machinery spares to be used in connection with an item of
fixed assets are amortized over the useful life of the assets.
Depreciation
iii) Depreciation on fixed assets other than land and tea plantation is
provided on written down value basis in accordance with the provisions
of Schedule XIV of the Companies Act, 1956.
iv) All expenses incurred for extension of new areas of cultivation are
capitalized. Cost of upkeep and maintenance of areas till not matured
for plucking and cost of replanting in existing areas are charged to
revenue.
v) Intangible assets are being amortized over a period of 5 years.
d) Government Grants
Government grants related to specific fixed assets are deducted from
gross value of related assets in arriving at their book value.
Government grants related to revenue are recognized in the profit &
loss account.
e) Investment
Long term and unquoted investments are considered at cost, unless there
is a permanent decline in value thereof, in which case, adequate
provision is made in the accounts. Current investments are stated at
lower of cost or market/fair value.
f) Inventories
i) Stock of tea, coffee and minor produce (i.e. pepper and cardamom)
are valued at cost (determined on weighted average basis) or net
realizable value whichever is lower.
ii) Stock of stores and spare parts are valued at cost (using the
weighted average cost basis) or net realizable value whichever is
lower.
iii) Cost comprises all direct and indirect expenses.
iv) Net realizable value is the estimated selling price in ordinary
course of business less estimated cost of completion and estimated cost
necessary to make the sale.
v) Materials and other items held for use in the production of
Inventories are not written down below the cost of the finished
products in which they will be incorporated are expected to be sold at
or above cost.
vi) Provision is made for obsolete and slow moving stocks where
necessary.
g) Foreign Currency Transactions
i) Foreign currency transactions are recorded at the rate of exchange
prevailing on the dates when the relevant transactions take place.
ii) Year end balances of foreign currency transactions are translated
at exchange rates prevailing at the end of the year.
iii) Any income or expense on account of exchange difference either on
settlement or translation is recognized in the profit and loss account.
h) Revenue Recognition
Sales are recognized in the accounts on passing of titles of the goods,
i.e. delivery as per terms of sales or completion of auction in case of
auction sale. Other income with related tax credits and expenditure are
accounted for on accrual basis.
i) Employee Benefits
Short Term Employee Benefits
The undiscounted amount of short term employee benefit expected to be
paid in exchange for the services rendered by employee is recognized
during the period when the employee rendered the service. This benefit
includes salary, wages, short term compensatory absences and bonus.
Long Term Employee Benefits
Defined Contribution Scheme
This benefit includes contribution to provident fund schemes and
superannuation fund. The contribution is recognized during the period
in which the employee renders service.
Defined Benefit Scheme
For defined benefit scheme the cost of providing benefit is determined
using the projected unit credit method with actuarial valuation being
carried out at each balance sheet date. The benefit obligation
recognized in the balance sheet represents value of defined benefit
obligation determined at the end of the year. Actuarial gains and
losses are recognized in full during the period in which they occur.
Other Long Term Benefits
Long term compensation absence is provided for on the basis of an
actuarial valuation, using the projected unit credit method as at the
date of balance sheet.
j) Borrowing Costs
Borrowing costs, if attributable to qualifying assets (i.e. assets that
necessarily take substantial period of time to get ready for its
intended use or sale) are capitalized. Other borrowing costs are
charged to profit & loss account in the period they are incurred.
k) Taxes on Income
Current Tax comprise of Income Tax and Wealth Tax that would be payable
based on computation of tax as per taxation laws under the Income Tax
Act, 1961 and under the respective state Agricultural Income Tax Acts.
Deferred Tax is recognised, subject to the consideration of prudence,
on timing differences, between taxable income and accounting income
that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred Tax assets are not recognised unless there
is virtual certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realised. Tax
credit for Minimum Alternate Tax (MAT) is recognized when there is
convincing evidence of its readability against future normal tax
liability.
I) Leases
i) For assets acquired under operating lease, rentals payable are
charged to the profit & loss account.
ii) For assets acquired under finance lease/hire purchase agreement,
the assets are capitalized at lower of their respective fair value and
present value of minimum lease payments after discounting them at an
appropriate discount rate.
iii) Hire purchase charges are being amortized based on a constant
periodic rate of interest on the remaining balance of the liability of
each period.
m) Impairment
An impairment loss is recognized where applicable when the carrying
value of fixed assets exceeds its market value or value in use
whichever is higher. Reversal of impairment losses recognized in prior
years is recorded when there is an indication that the impairment
losses recognized for the assets no longer exist or have decreased.
n) Provisions and Contingent Liabilities
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation and the likelihood of outflow of resources is
remote, no provision or disclosure for contingent liability is made.
Contingent assets are not provided for or disclosed.
Mar 31, 2010
A) Accounting Convention
The financial statements have been prepared in accordance with
historical cost convention, on accrual basis, in accordance with the
generally accepted accounting principles in India, the applicable
mandatory Accounting Standards and the relevant provisions of Companies
Act, 1956.
b) Fixed Assets and Depreciation
Fixed Assets
i) Fixed Assets are stated at their original cost less depreciation.
Cost includes incidental expenses. Profits or Losses on sale of fixed
assets are included in the Profit & Loss Account and calculated as
difference between the value realized and book value. Capital
Work-in-Progress is stated at cost.
ii) Items of machinery spares to be used in connection with an item of
fixed assets are amortized over the useful life of the assets.
Depreciation
iii) Depreciation on Fixed Assets other than Land and Tea Plantation is
provided on written down value basis in accordance with the provisions
of Schedule XIV of the Companies Act, 1956.
iv) All expenses incurred for extension of new areas of cultivation are
capitalized. Cost of upkeep and maintenance of areas till not matured
for plucking and cost of replanting in existing areas are charged to
revenue.
v) Intangible Assets are being amortized over a period of 5 years.
c) Government Grants:
Government grants related to specific fixed assets are deducted from
gross value of related assets in arriving at their book value.
Government grants related to revenue are recognized in the profit &
loss account.
d) Investment
Long term and unquoted investments are considered at cost, unless there
is a permanent decline in value thereof, in which case, adequate
provision is made in the accounts. Current Investments are stated at
lower of cost or market /fair value.
e) Inventories
i) Stock of tea, coffee and minor produce (i.e. Pepper and Cardamom)
are valued at cost (determined on weighted average basis) or net
realizable value whichever is lower.
ii) Stock of Stores and Spare parts are valued at cost using the
Weighted Average Cost basis.
iii) Cost comprises all direct and indirect expenses.
iv) Provision is made for obsolete and slow moving stocks where
necessary.
f) Foreign Currency Transactions
i) Foreign Currency Transactions are recorded at the rate of exchange
prevailing on the dates when the relevant transactions take place.
ii) Year end balances of foreign currency transactions are translated
at exchange rates prevailing at the end of the year.
iii) Any income or expense on account of exchange difference either on
settlement or translation is recognized in the profit and loss account.
g) Revenue Recognition
Sales are recognized in the accounts on passing of titles of the goods,
i.e. delivery as per terms of sales or completion of auction in case of
auction sale. Other income with related tax credits and expenditure are
accounted for on accrual basis.
h) Employee Benefits
Short Term Employee Benefits
The undiscounted amount of short term employee benefit expected to be
paid in exchange for the services rendered by employee is recognized
during the period when the employee rendered the service. This benefit
includes salary, wages, short term compensatory absences and bonus.
Long Term Employee Benefits
Defined Contribution Scheme
This benefit includes contribution to Provident Fund Schemes and
Superannuation Fund. The contribution is recognized during the period
in which the employee renders service.
Defined Benefit Scheme
For defined benefit scheme the cost of providing benefit is determined
using the Projected Unit Credit Method with actuarial valuation being
carried out at each Balance Sheet date. The benefit obligation
recognized in the Balance Sheet represents value of defined benefit
obligation determined at the end of the year. Actuarial gains and
losses are recognized in full during the period in which they occur.
Other Long Term Benefits
Long Term Compensation absence is provided for on the basis of an
actuarial valuation, using the Projected Unit Credit Method as at the
date of Balance Sheet.
i) Borrowing Costs
Borrowing Costs, if attributable to qualifying assets (i.e. assets that
necessarily take substantial period of time to get ready for its
intended use or sale) are capitalized, otherwise charged to Profit &
Loss Account.
j) Taxes on Income
Current Tax comprise of Income Tax and Wealth Tax that would be payable
based on computation of tax as per taxation laws under the Income Tax
Act, 1961 and under the respective state Agricultural Income Tax Acts.
DeferredTax is recognised, subject to the consideration of prudence, on
timing differences, between taxable income and accounting income that
originate in one period and are capable of reversal in one or more
subsequent periods. Deferred Tax Assets are not recognised unless there
is virtual certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realised. Tax
credit for Minimum Alternate Tax (MAT) is recognized when there is
convincing evidence of its readability against future normal tax
liability.
k) Leases
i) For assets acquired under operating lease, rentals payable are
charged to the Profit & Loss Account.
ii) For assets acquired under finance lease/hire purchase agreement,
the assets are capitalized at lower of their respective fair value and
present value of minimum lease payments after discounting them at an
appropriate discount rate.
iii) Hire Purchase charges are being amortized based on a constant
periodic rate of interest on the remaining balance of the liability of
each period.
I) Impairment
An impairment loss is recognized where applicable when the carrying
value of fixed assets exceeds its market value or value in use
whichever is higher. Reversal of impairment losses recognized in prior
years is recorded when there is an indication that the impairment
losses recognized for the assets no longer exist or have decreased.
m) Provisions and Contingent Liabilities
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation and the likelihood of outflow of resources is
remote, no provision or disclosure for contingent liability is made.
Contingent assets are not provided for or disclosed.
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