Note : 1 SIGNIFICANT ACCOUNTING POLICIES a) Basis for brparation These financial statements have been brpared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis except for certain tangible fixed assets which are being carried at revalued amounts. Pursuant to Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014, till the standards of accounting or any addendum thereto are brscribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been brpared to comply in all material aspects with accounting standards notified under Section 211(3C) of the Companies Act 1956, [Companies (Accounting Standards) Rules 2006, as amended] and other relevant provisions of the Companies Act, 2013. 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 Act. b) Tangible Assets Tangible assets are stated at cost net of accumulated debrciation and accumulated impairment losses if any except in case of Freehold Land and Leasehold Land and Estate Development which are carried at revalued amount. Cost comprises cost of acquisition/construction and subsequent improvement thereto including taxes and duties, freight and other incidental expenses relating to acquisition and installation. Expenditure incurred towards estate development during the first year is capitalized and the expenses incurred thereafter in subsequent years and cost of replanting in existing areas are charged to revenue. c) Debrciation Debrciation has been provided on straight-line method at the rates determined based on the estimated useful lives of the tangible assets where applicable, specified in Schedule II to the Act and in keeping with other provisions of the said Schedule except for certain categories of Plant and Equipment wherein the estimated uselife life has been determined to be 3 years. d) Impairment An impairment loss is recognised, where applicable, when the recoverable amount of an asset (i.e. higher of the asset's net selling price and value in use) is less than its carrying amount. e) Investments Current investments are carried at the lower of cost and fair value. Long-term investments are carried at cost and provision is recorded to recognise, any decline, other than temporary, in the carrying amount of such investment. Investment acquired in exchange of another is carried at cost determined with reference to the fair value of investment given up. Investment Property rebrsent investment in land that are not intended to be occupied substantially for use by, or in the operations of, the Company. Investment properties are carried at cost. f) Inventories Inventories are valued at the lower of cost, computed on a weighted average basis, and estimated net realisable value. Provision is made for obsolescence wherever considered necessary. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. g) Employee Benefits (i) Short term Employee Benefits: The undiscounted amount of Short-term Employee Benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the service. (ii) Compensated Absences Accumulated compensated absences which are expected to be availed or encashed within twelve months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensating absences as the additional amount expected to be paid as a result of the unused entitlement as at the year-end. (iii) Post Employment Benefits Plans: Contributions under Defined Contribution Plans payable in keeping with the related schemes are recognised as expenses for the year. For Defined Benefit Plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in full in the Statement of Profit and Loss for the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on straight line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet rebrsents the brsent value of the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the brsent value of any economic benefit available in the form of refunds from the plan or reductions in future contributions to the plan. (iv) Other Long-Term Employee Benefits (unfunded): The cost of providing long-term employee benefits is determined using Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date. Actuarial gains and losses and past service cost are recognised immediately in the Statement of Profit and Loss for the period in which they occur. Other long term employee benefit obligation recognised in the Balance Sheet rebrsents the brsent value of related obligation. h) Foreign currency transactions Transactions in foreign currency are recorded at daily exchange rates brvailing on the date of the transaction. Monetary items denominated in foreign currency are restated at the year-end at the exchange rate brvailing on the Balance Sheet date. Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate on the date of transactions. Exchange differences arising on restatement or settlement are recognised in the Statement of Profit and Loss. i) Revenue recognition Sales are recognised upon transfer of substantial risk and rewards of ownership in the goods to the buyers as per the terms of the contract and net of trade discounts, sales tax, etc. where applicable. Other items of the revenue are accounted for on accrual basis. j) Other Income Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable. Dividend income is recognised when the right to receive dividend is established. Other items are accounted for on accrual basis. k) Borrowing costs Borrowing costs attributable to the acquisition, construction or production of qualifying assets (i.e. assets that necessarily take substantial period or time to get ready for their intended use or sale) are added to the cost of those assets. All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they are incurred. l) Current and Deferred Tax Current tax in respect of taxable income for the year is recognised based on applicable tax rate and laws. Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is measured using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets in respect of carried forward losses and/or unabsorbed debrciation are recognised only when it is virtually certain and in other cases where there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets are reviewed at each Balance Sheet date to re-assess realisation. Current tax assets and current tax liabilities are offset when there is legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is legally enforceable right to set off assets and liabilities rebrsenting current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws. m) Leases Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of lease. n) Government Grants (i) Government grants of the nature of promoters' contribution are credited to Capital Reserve. (ii) Government grants related to specific fixed assets are deducted from gross values of related assets in arriving at their book values. (iii) Government grants related to revenue are recognized on a systematic basis in the Statement of Profit and Loss over the periods necessary to match them with their related costs. o) Provisions and Contingent Liabilities Provisions are recognised when there is a brsent obligation as a result of a 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. Contingent Liabilities are disclosed 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 to settle the obligation or reliable estimate of the amount cannot be made. p) Cash & Cash Equivalents In the cash flow statement, cash and cash equivalents include cash in hand, demand deposits with banks, other short term highly liquid investments with original maturities of three months or less. q) Earnings per share Basic Earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company's earnings per share is the net profit for the period. For the purpose of calculating the diluted earnings per share the net profit or loss for the period attributable to the equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares. r) Use of Estimates The brparation of financial statements requires use of estimates and assumptions to be made that affect the reported amounts of assets, liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the period. Difference between actual amount and estimates are recognised in the period in which the results are known / materialized. Note : 1 SEGMENT REPORTING The Company is engaged in the integrated process of growing, harvesting and sale of loose and packet tea and operates in the domestic market. During the year it had also ventured into marketing of packaged Atta, however the same does not meet the criteria of Reportable Segment as specified under AS-17 of Segment Reporting. Note : 2.DEbrCIATION The Company has changed its estimate regarding the estimated useful lives of certain fixed assets based on technical evaluation from 15 years to 3 years effective 1st April 2015. Pursuant to the said revision in useful lives for the year ended 31.3.2016 the debrciation expense is higher and profit before tax is lower by Rs. 23 lakhs. Note : 3 DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURES Foreign Currency Exposure that are not hedged by a derivative instrument or otherwise -Loan Taken Rs. 1,326.66 lakhs (Previous Year Rs. 1267.97 lakhs) Loan Given Rs. 191.77 lakhs (Previous Year Rs. 619.10 lakhs) Interest Receivable Rs. 25 lakhs (Previous Year Rs. 40.06 lakhs) Interest Payable Rs. 3.26 lakhs (Previous Year Rs. Nil) Note : 4 LEASE OBLIGATION Operating Lease The Company has taken various office brmises, factory brmises and residential accommodation for employees under operating cancellable lease arrangements having tenures ranging between 5 and 9 years. There is no specific obligation for renewal of these agreements. Lease rent for the period amounts to Rs. 123.20 lakhs (Previous Year Rs. 133.45 lakhs) debited to the Statement of Profit and Loss. Note :5 REVALUATION Freehold Land and Leasehold Land & Estate Development located at the ten tea estates of the Company were revalued on April 1, 2014 by Ernst & Young LLP, independent valuer on the bases as set out below: Freehold Land - Market Method Leasehold Land & Estate Development (or Tea Plantation) - Combination of Market Method and Debrciated Replacement Cost Method. The resultant increase in Net Book Value by Rs. 28837.99 lakhs, had been credited to the Revaluation Reserve included under Reserves and Surplus (Note Pursuant to the Scheme of Arrangement (the Scheme), duly sanctioned by the Hon'ble High Court at Calcutta at the hearing held on 7th August, 2014, the Tea Division of Dhunseri Petrochem & Tea Limited (DPTL) engaged in the business of cultivation, production and marketing of tea, together with all its assets, liabilities etc. had been transferred as a going concern by way of demerger to the Company, with effect from the appointed date i.e. 1st April, 2014. Upon filing of the certified copy of the Court Order with the Registrar of Companies on 1st September 2014, the Scheme has become operative on and from the said date. Accordingly the assets and liabilities of the Tea Division as recorded in the books of account of DPTL as on 1st April, 2014 with changes in values consequent to revaluation, as it was appearing in the books of DPTL, being ignored, amounting to Rs. 20,614.87 lakhs and Rs. 6,661.15 lakhs respectively have been recognized in the books of the Company. As per the Scheme the Company in consideration of the demerger and transfer of the Tea Division from DPTL issued and allotted to the members of DPTL one equity share of Rs. 10 each in the Company, credited as fully paid up for every 5 equity shares of Rs. 10 each held by them in DPTL. Accordingly 7,004,951 equity shares were issued during the year ended 31st March 2015. The difference between the assets and liabilities amounting to Rs. 13,953.72 lakhs recorded above as reduced by the aggregate face value of shares amounting to Rs. 700.50 lakhs allotted by the Company was taken to General Reserve. (Refer Note 3) Further in terms of the Scheme the Company's 50,000 equity shares of Rs. 10 each fully paid up outstanding as at 1st April, 2014 were cancelled upon the issue of new equity shares to the shareholders of DPTL. Note : 6 Freehold land included under Note 12, includes 6.25 Hectares (Previous Year 6.25 Hectares) of land declared as Private Forest under the provisions of the Maharashtra Private Forest (Acqusition) Act 1975, out of a total of 12.92 Hectares (Previous Year 12.92 Hectares) Note : 7.Miscellaneous expenses (Refer Note 29) include a donation of Rs.20 lakh (Previous Year Nil) for a political purpose to Assam Pradesh Congress Committee. Note :8.Pending completion of relevant formalities certain assets and liabilities acquired pursuant to the Scheme of Arrangement remain included in the books of the Company under the name of the transferor Company. Note :9.Previous period's figures have been regrouped and rearranged wherever necessary. For and on behalf of the Board For Lovelock & Lewes Firm Registration No. 301056E Chartered Accountants Bhavana Khemka Chief Financial officer C. K. Dhanuka Managing Director Avijit Mukerji Partner Membership No. 056155 R. Mahadevan Company Secretary Basudeo Beriwala Director Place : Kolkata Date : May 27, 2016 |