SIGNIFICANT ACCOUNTING POLICIES
The Financial Statements have been prepared in accordance with
applicable Accounting Standards in India. A summary of important
policies, which have been applied consistently, are set out below. The
financial statements have also been prepared in accordance with the
relevant presentational requirements of the Companies Act, 1956.
b) BASIS OF ACCOUNTING
The financial statements have been prepared in accordance with the
historical cost-convention as modified by revaluation of certain fixed
c) FIXED ASSETS
Leasehold Land including development, certain Building, and Plant and
Machinery at Tea Estates are stated at valuation made by an approved
valuer at the then current cost. Subsequent acquisition of these
assets and other fixed assets are stated at their purchase cost
together with any incidental expenses of acquisition.
Assets acquired on hire purchase, for which ownership will vest at
future date, are capitalised at cash cost.
Depreciation on Fixed Assets other than Land including Leasehold Land
and Development is provided on written down value method in accordance
with Schedule XIV to the Companies Act, 1956. Additional charge of
Depreciation on amount added on revaluation is adjusted against
All expenditure incurred for extension of new area of cultivation are
capitalised. However, cost of upkeep and maintenance of the areas till
not matured for plucking and cost of replanting in existing areas are
charged to revenue.
Profit or loss on disposal of Fixed Assets is recognised in the Profit
and Loss Account.
Long Term Investments are stated at cost where applicable, provision is
made where there is a permanent fall in value of investments.
Inventories are valued at cost (Net of Modvat credit) or realisable
value, whichever is lower. Cost is determined on weighted average
basis and includes expenditure incurred in the normal course of
business in bringing stock and finished goods to their location and
condition including appropriated overheads wherever applicable.
f) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are recorded at the exchange rate
prevailing at the date of transactions. Gains/Losses arising out
of fluctuations in the exchange rates are recognised in Profit & Loss
Account in the period in which they arise except in respect of fixed
assets where exchange variance is adjusted in the carrying amount of
the respective fixed assets. The differences between the forward
exchange rates and the exchange rates at the date of transactions are
accounted as income or expense over the life of the contracts, except
in respect of liabilities incurred for acquiring fixed assets, in which
case such profit/loss are adjusted in the carrying amount of the
respective fixed assets.
Gains/Losses on foreign exchange rate fluctuations relating to current
assets and liabilities are accounted for at the year end, except in the
case of inventories.
Gains/Losses on foreign exchange rate fluctuations relating to
Inventories are accounted for where valuation is at net realisable
Sales represent the invoiced value of goods supplied less Sales Tax.
h) INCOME FROM INVESTMENTS
Income from investments is included together with the related tax
credit in the Profit and Loss Account.
i) REPLANTING SUBSIDY
Replanting Subsidy is recognised as income in the Profit and Loss
Account in the year of receipt.
j) COMPENSATION OF LAND
Compensation in respect of certain land acquired by the Assam
Government under the Assam Fixation of Ceiling on Land Holding Act,
1956 which is yet to be determined will be accounted for as and when
k) RESEARCH AND DEVELOPMENT
Research and Development Expenditure of revenue nature is charged to
Revenue and Capital Expenditure is treated as fixed assets.
I) LEASED EQUIPMENT
Rentals in respect of leased equipment acquired under financial lease
are charged to the Profit and Loss Account.
m) RETIREMENT BENEFIT
The Company makes regular contribution to provident funds,
superannuation funds and pension fund which are fully funded and
administrated by Trustees and are independent of Company's finance.
The Company also contributes to gratuity fund and such contribution
determined by the actuary. The gratuity fund is also administrated by
Trustees and is independent of the Company's finance. Leave encashment
benefit on retirement is provided in the accounts as per actual