Corporate Info
Smart Quotes
Company Background
Board of Directors
Balance Sheet
Profit & Loss
Peer Comparison
Cash Flow
Shareholdings Pattern
Quarterly Results
Share Price
Deliverable Volume
Historical Volume
MF Holdings
Financial Ratios
Directors Report
Price Charts
Notes Of Account
Management Discussion
Beta Analysis
Board Meetings
Corporate Announcements
Book Closure
Record Date
Bonus
Company News
Bulk Deals
Block Deals
Monthly High/low
Dividend Details
Bulk Deals
Insider Trading
Advanced Chart
HOME   >  CORPORATE INFO >  NOTES TO ACCOUNT
Notes Of Account      
 
Year End: March 2016

NOTES FORMING PART OF THE

FINANCIAL STATEMENTS

1. General Information:

Tata Global Beverages Limited ("the holding company") and its subsidiaries, joint ventures and associates (together, "the Group") is a global beverages company engaged in the trading, production and distribution of Tea, Coffee and Water. The group has branded beverage business operations mainly in India, Europe, US, Canada and Australia, plantation business in India/Sri Lanka and extraction business mainly in lndia, US and China.

2. Significant Accounting Policies:

(a) Accounting Convention

The financial statements have been brpared in accordance with the historical cost convention on an accrual basis and comply with the applicable Accounting Standards specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and Accounting Standard 30 on Financial Instrument to the extent it does not contradict with any other Accounting Standard.

These Financial Statements have been brpared as required under relevant provision of the Companies Act, 2013 and the brsentation is based on the Schedule III of the Companies Act, 2013. All assets and liabilities are classified into current and non-current generally based on the criteria of realisation/ settlement within twelve months period from the balance sheet date.

(b) Fixed Assets and Debrciation i) Tangible:

Tangible Assets are carried at cost of acquisition less accumulated debrciation and accumulated impairment loss, if any. Subsequent expenditure related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its brviously assessed standard of performance. The cost of extension planting of cultivable land including cost of development is capitalised.

Assets acquired on hire purchase, for which ownership will vest at a future date, are capitalised at cash cost.

Subsidies receivable from government in respect of fixed assets are deducted from the cost of respective assets as and when they accrue.

Debrciation is provided on tangible asset including asset created on lands under lease on a monthly straight line basis over the estimated useful life of the asset or as brscribed in Schedule II to the Companies Act, 2013.

For the above class of assets, based on internal assessment and independent technical evaluation, management believes that the useful lives as given above best rebrsents the period over which the asset would be used.

Intangible:

Intangible Assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment loss, if any.

Expenditure on software and related implementation costs are capitalized where it is expected to provide enduring economic benefits and are amortised on a monthly basis over a period of five years.

Non-compete fees paid on acquisition of business is being amortised on monthly basis over a period of ten years.

Product development cost incurred on new products having enduring benefits is recognised as Intangible Assets and are amortised on a monthly basis over a period of ten years.

(c) Impairment

At each balance sheet date, the management assess whether there is any indication that the assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset's net selling price and its value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their brsent value using a br-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Cash flows used to determine value in use are derived from the annual budgets and strategic plans of the cash generating units. For certain cash generating units, variable growth may be considered even beyond the period of five years, having regard to factors like maturity of the business and scope for geographical expansion.

Reversal of impairment loss is recognised as income in the statement of profit and loss.

(d) Leases

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

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vests with the lessor, are recognised as operating leases. Lease rental under operating leases arerecognised in the statement of profit and loss on a straight- line basis over the period of lease.

(e) Borrowing Costs

Borrowing cost includes interest, ancillary costs incurred in connection with the arrangement of borrowings and exchange difference arising from foreign currency borrowings to the extent they are regarded as adjustment to the interest cost.

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised. The other costs are charged to the statement of profit and loss. Discount on Commercial Paper is amortised on straight line basis over its tenure.

(f) Investments

Investments of a long-term nature are stated at cost, less adjustment for any diminution, other than temporary, in the value thereof. Current investments are stated at lower of cost or fair value.

(g) Inventories

Inventories are stated at lower of cost or net realisable value. Cost is determined on weighted average method for all categories of inventories other than for auction/privately bought teas in which case cost is considered as actual cost for each lot. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to its brsent location and condition, where applicable, appropriate overheads based on normal level of activity. Provision is made for obsolescence and other anticipated losses wherever considered necessary.

(h) Foreign Currency Transactions

Transactions in foreign currencies are recorded at average fortnightly spot rates. The exchange difference resulting from settled transactions is recognised in the statement of profit and loss. Year end balances of monetary items are restated at the year end exchange rates and the resultant net gain or loss is recognised in the statement of profit and loss.

Premium or discount on forward contracts where there are underlying assets /liabilities are amortised over the life of the contract. Such foreign exchange forward contracts are revalued at the balance sheet date and the exchange difference between the spot rate at the date of the contract and the spot rate on the balance sheet date is recognised as gain/loss in the statement of profit and loss.

(i) Revenue Recognition

(i) Sales are recognised when the significant risks and rewards of ownership in the goods are transferred to the buyer as per terms of the contract .

(ii) Income and fees from services are accounted as per terms of relevant contractual agreements/arrangements.

(iii) Export incentives are accounted on accrual basis.

(j) Other Income

Interest income and income from investments are accounted on accrual basis.

Dividend income is recognised when the right to receive dividend is established.

(k) Replanting/Rejuvenation

Cost of replanting/rejuvenating tea bushes/fuel trees is charged to revenue. Related Tea Board subsidies are accrued as Other Income on obtaining approval from Tea Board.

(l) Compensation of Land

Compensation, if any, in respect of land surrendered or incidental rights thereto/vested in Governments under various State Land Legislations is accounted for as and when received.

(m) Employee Benefits

i) Post retirement employee benefits:

Post retirement benefits like Provident Fund which are in the nature of defined benefit plans and also Superannuation schemes, in the nature of defined contribution plans, are maintained by the Company and for certain categories contributions are made to State Plans. In respect of PF contribution made to a Self Administered Trust, the Company is liable for annual contributions and any shortfall in the fund assets based on the government specified minimum rates of return, such contribution and shortfall, if any is recognized as an expense in the year incurred.

Post retirement defined benefits including gratuity, pension and medical benefits for qualifying executives / wholetime directors as provided by the Company are determined through independent actuarial valuation at year end and charge recognised in the statement of profit and loss. For schemes, where recognised funds have been set up, annual contributions determined as payable in the actuarial valuation report are contributed. Actuarial gains and losses are recognised in the statement of profit and loss.

The Company recognizes in the statement of profit and loss, gains or losses on settlement of a defined benefit plan as and when the settlement occurs.

ii) Other Employee Benefits:

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

iii) Other Employee Termination Benefits:

Payments to employees on termination along with additional liabilities towards retirement benefits arising pursuant to the termination are charged to the statement of profit and loss in the year in which it is incurred.

Research and Development

Research and Development expenditure of revenue nature is charged to revenue and capital expenditure is included under fixed assets.

(o) Taxes on Income

Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with Income Tax Act, 1961.

Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets.

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

(p) Financial Instruments

The Company uses foreign currency forward contracts and options to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and highly probable transactions. The Company designates these hedging instruments as cash flow hedges.

Hedging instruments are initially measured at fair value and are remeasured at subsequent reporting dates. Gain or loss on account of change in the fair value of hedging instruments in respect of effective portion of cash flow hedges are recognised in the hedging reserve account. On occurrence of the underlying transactions the accumulated balance is transferred from hedging reserve and recognised in the statement of profit and loss. The portion of the gain or loss on the hedging instruments if determined to be an ineffective cash flow hedge is recognised in the statement of profit and loss.

Fair value hedges are marked to market on balance sheet date and gain or loss recognised in the statement of profit and loss.

(q) Cash and Cash Equivalent

Cash and Cash equivalents for the purpose of cash flow statement comprise of cash at bank and in hand and short term investments/bank deposits with an original maturity of three months or less.

(r) Provisions

Provisions are recognised when there is a brsent obligation as a result of 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 measured at the best estimate of the expenditure required to settle the obligation at the reporting date and are not discounted to its brsent value. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

(s) Contingent Liabilities

Contingent liabilities exist when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company, or a brsent obligation that arises from past events where it is either not probable that an outflow of resources will be required or the amount cannot be reliably estimated. Contingent liabilities are appropriately disclosed unless the possibility of an outflow of resources embodying economic benefits is remote.

3. Unless otherwise stated, figures in brackets relate to brvious year and have been rearranged / regrouped wherever necessary.

For Lovelock & Lewes

Firm Registration No. 301056E

Chartered Accountants

Dibyendu Majumder

Partner Membership No. 057687

Cyrus P Mistry

Chairman

Ajoy Misra

Managing Director

L Krishnakumar

Executive Director

Harish Bhat

Director

V Leeladhar

Director

Darius Pandole

Director

John Jacob Chief Financial Officer

V Madan Company Secretary

Place : Mumbai
date : May 24, 2016

Disclaimer | Privacy Policy | Grievance | FAQ | Sitemap | Client Registration | Useful Links| Anti Money Laundering | Inactive Client Policy | Scores
Vernacular Kyc | Advisory For Investors | Investor Adviser | Filing complaints on SCORES - Easy & quick | Policy on PMLA
Publishing of investor charter information | Annexure A – Investor charter of brokers |
Annexure A – Investor charter of DP | Annexure B –Linked content for information to charter for DP | Annexure B & C (investor complaint data) broker & DP
Investor Charter & Complaints | Advisory-KYC Compliance | E-Voting NSE | E-Voting BSE | Details of Client Bank Accounts | Risk Disclosure | NSE FO Risk disclosure
SEBI Regn. No.: INB010997431 (BSE), INB230997430 (NSE)
Copyright 2008 Javeri Fiscal Services Ltd.
Designed , Developed & Content Powered by Accord Fintech Pvt. Ltd.
CLOSE X

RISK DISCLOSURES ON DERIVATIVES

  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Source: Click Here.