1. SIGNIFICANT ACCOUNTING POLICIES 1.1 Accounting Convention The financial statements have been brpared to comply in all material aspects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, as amended and the relevant provisions of the Companies Act, 2013. The significant accounting policies adopted are applied consistently. 1.2 Basis of Accounting The financial statements have been brpared in accordance with historical cost concept, save and except certain items of Fixed Assets, which were revalued as on 31st March, 2008 (Note 1.3 below). All assets and liabilities have been classified as current and non-current as per Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. 1.3 Fixed Assets Fixed Assets, both tangible and intangible, are stated at cost of acquisition, net of subsidy received, where applicable together with resultant write up due to revaluation. Debrciation on Fixed Assets has been provided on straight line method at rates ascertained based on useful life of each of such assets and residual value as provided in schedule II to the Companies Act, 2013. Certain items of Fixed Assets (Buildings and Plant and Machinery) revalued as on 31st March, 2008 have been debrciated based on Book Value in terms of the Application Guide on the Provisions of Schedule II to the Companies Act, 2013 issued by the Institute of Chartered Accountants of India during February, 2015. Cost of fixed asset includes purchase price and any expense directly attributable for bringing the asset to the working condition for intended use. The cost of Extension Planting on cultivable land including cost of development is capitalised. However, cost of upkeep and maintenance of the areas still not matured for plucking and cost of replanting in existing areas are charged to revenue. Leasehold Improvement for the brmises taken on rent is amortized over the period of the lease. Expenses incurred for development of Brand and Trademark are capitalized and amortized as per the Accounting Standard AS-26, Intangible Assets. Computer Software is capitalized where it is expected to provide future enduring economic benefit. The capitalization costs include license fee and cost of implementation and system integration services. The cost of such Software is also amortized as per the Accounting Standard AS- 26, Intangible Assets. Profit or Loss on disposal of Fixed Assets is recognized in the Profit and Loss Statement. Any Impairment Loss is recognized, if and when the carrying value of Fixed Assets of a cash generating unit exceeds its market value or value in use, whichever is higher as per Accounting Standard, AS-28, Impairment of Assets. Compensation received from the authorities concerned for acquisition of small pieces and parcels of Land including surface compensation in the Tea Estates is recognized in the year of receipt. Such Compensation is directly credited to Capital Reserve, as the cost attributable to such Land can not be ascertained. Subsidy received from Government or any statutory authority in respect of any item of fixed assets is deducted from cost of respective assets on receipt/ settlement. 1.4 Foreign Currency Transaction Foreign Currency Transactions are converted and accounted for at the rates brvailing on the dates of transaction. Year-end current assets (Monetary Items) and liabilities are restated at the year-end exchange rate and resultant net gain or loss is adjusted in the Profit and Loss Statement as brscribed by Accounting Standard-11, Accounting for the Effect of Changes in Foreign Exchange Rates. The loss attributable to adverse Foreign Exchange fluctuation on the outstanding portfolio of Currency Swap at year end is being provided for based on year-end exchange rate and recognized in the Profit and Loss Statement. 1.5 Investments Investments are stated at cost of acquisition and treated as long term investments. Provision is made in case of permanent diminution in value of Investments. Cost includes purchase price plus brokerage and transfer cost. Incomes from Investments and Gain/ Loss on sale of investments are recognized in the Profit and Loss Statement for the year on accrual basis inclusive of related tax deduction at source. 1.6 Inventories Stock of Finished Goods is valued at lower of cost computed on periodical average basis and net realisable value and that of stores and spares is valued at or under cost. Stock of Raw Materials and Work-in-progress has been valued at respective cost. Provision for obsolete and slow moving stores is made, wherever necessary and reviewed from time to time. 1.7 Staff Benefits a) The Company is contributing regularly to the Provident Funds, administered by the Governments and independent of Company's finances, in respect of all its eligible employees. The Company also operates Defined Contribution Scheme for payment of Pension to certain classes of employees. Monthly contribution at 15% of the employees' current salary is made to recognized Superannuation Fund, which is fully funded. This Fund is administered by Trustees and is independent of Company's finance. Contributions are recognized in Profit and Loss Statement on an accrual basis. b) Defined Benefit Gratuity Plan is also maintained by the Company. The Company contributes to the recognized Gratuity Fund, which is administered by the Trustees and is independent of Company's finance. The Annual Contribution is determined by the actuary at the end of the year. Actuarial gains and losses are recognized in the Profit and Loss Statement. The Company also recognizes in the Profit and Loss Statement gains or losses on curtailment or settlement of the defined benefit plan as and when the curtailment or settlement occurs. c) Leave encashment liability for certain eligible employees, as determined on the basis of an actuarial valuation, is provided for at the end of each year, except where the same is actually ascertained and paid/provided for and charge is recognized in the Profit and Loss Statement. Such liability is not funded and being paid by the Company as and when required. 1.8 Borrowing Cost Borrowing cost is recognized as an expense to the extent, the same has been incurred for the year, unless such cost is directly attributable to the acquisition, construction or production of a qualifying asset and capitalised as part of the cost of that asset as brscribed by Accounting Standard-16, Borrowing Costs. Subsidy receivable on this account is adjusted with expense for the year, in which the claim of the Company for such subsidy gets admitted. The loss attributable to adverse Foreign Exchange fluctuation paid at the time of repayment of principal as well as provision made for such loss on the outstanding portfolio of Currency Swap at year end (Note 1.4 above) is also being considered as borrowing cost and shown accordingly in the Profit and Loss Statement under the head "Finance Cost". 1.9 Revenue Recognition Items of income and expenditure are recognized on accrual and prudent basis. 1.10 Sales Sale of Products rebrsents the invoice/ account sales value of finished goods supplied, inclusive of Central Excise Duty, wherever applicable, net of Sales Tax/Value Added Tax. Proceeds of insurance claims received for damage/ shortage of finished goods are treated as part of Sale of Products. Net revenue is stated after deducting such Central Excise Duty. Sale of Services rebrsents the invoice value of services rendered as per the agreed terms, net of Service Tax. 1.11 Replanting and Other Subsidies Replanting Subsidy is recognized as income in the Profit and Loss Statement in the year of receipt on prudent basis. Other Subsidies are recognized as income on accrual basis or on receipt of related sanction, when the certainty of receipt of such subsidy gets established. 1.12 Dividend Income Dividend Income is recognized when the right to receive such dividend is established. 1.13 Taxes on Income Current Tax is determined as the amount of tax payable in respect of taxable income for the period based on applicable tax rates and laws. Provisions for Deferred Taxation is made at the current rate of taxation, on all timing difference, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods. Deferred Tax Asset/ Deferred Tax Liability are reviewed at each Balance Sheet date to reassess liability or realization, as the case may be. 1.14 Excise Duty and Tea Cess Excise duty and Tea Cess, as applicable on manufactured goods is accounted for at the time of clearance. However, provision is made at the year-end on finished goods lying in stock at factory. 1.15 Provision A provision is recognized when there is an obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. 2. The Conveyance Deeds in the name of the Company for Kharikatia T.E., District Jorhat, Assam is yet to be executed, as the required Sale and Purchase permission from the Office of the Deputy Commissioner, Jorhat, Assam is yet to be obtained 8. Previous year's figures have been rearranged wherever necessary. In terms of our Report of even date For S. S. KOTHARI & CO. Chartered Accountants Registration No. 302034E R. K. Roy Chaudhury Partner Membership No.008816 Executive Chairman C. S. Bedi Managing Director V. P. Agarwal Director Dr. S. S. Baijal Director H. M. Parekh Director N. Palchoudhuri Director N. K. Khurana Chief Financial Officer-cum-Company Secretary Place: Delhi Date: 30th May, 2016 |