Transactions in foreign currencies are recorded in rupees by applying
the exchange rate prevailing on the date of transaction. Transactions
remaining unsettled are translated at the rate of exchange ruling at
the end of the year. Exchange gain or loss arising on
settlement/translation is recognised in the Statement of Profit and
Premium or discount on forward contracts are amortised as expense or
income over the life of the contract. Foreign exchange forward
contracts are revalued at the balance sheet date and the exchange
difference is recognised as gain/loss in the Statement of Profit and
Loss. Profit or Loss on cancellations/renewals of forward contracts is
recognised in the Statement of Profit and Loss.
1 TAXES ON INCOME
Current tax represents the amount computed as per prevailing taxation
laws under the Income Tax Act, 1961.
Deferred Tax is recognized, 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. Deferred Tax assets have
been recognized where there is reasonable certainty that sufficient
future taxable income will be available against which such deferred tax
assets can be realized.
2 BORROWING COSTS
Borrowing cost attributable to acquisition and/or construction of
qualifying assets are capitalised as a part of the cost of such assets
up to the date when such assets are ready for intended use. Other
borrowing costs are charged to Statement of Profit and Loss.
Lease Payments under the Operating Lease are recognised as an expense
in the Statement of Profit and Loss, on a straight line basis over the
4 PROVISIONS AND CONTINGENT LIABILITIES
Provisions are recognised when there is a present obligation as a
result of a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and there is a reliable estimate of the amount of the obligation.
Provisions are measured at the best estimate of the expenditure
required to settle the present obligation at the Balance sheet date and
are not discounted to its present value.
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 present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle or
a reliable estimate of the amount cannot be made, is termed as a
5 USE OF ESTIMATES
The preparation of financial statements is in conformity with Indian
GAAP requires the management to make judgements, estimates and
assumptions that effect the reported amounts of revenues, expenses,
assets and liabilities and the disclosure of contingent liabilities, at
the end of the reporting period. Although these estimates are based on
the management''s best knowledge of current events and actions,
uncertainty about these assumptions and estimates could result in the
outcomes requiring a material adjustment to the carrying amounts of
assets or liabilities in the future periods. Any revision to accounting
estimates is recognised prospectively in the current and future
6 EARNING PER SHARE
Basic earnings 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. The
weighted average number of equity shares outstanding during the period
and for all periods presented is adjusted for events, such as bonus
shares, other than the conversion of potential equity shares, that have
changed the number of equity shares outstanding, without a
corresponding change in resources. For the purpose of calculating
diluted earnings per share, the net profit or loss for the period
attributable to equity shareholders and the weighted average number of
shares outstanding during the period is adjusted for the effects of all
dilutive potential equity shares.
7 The Company has taken various premises under operating lease having
tenure of 11 months/3 years. There is no specific obligation for
renewal of these agreements. Lease rent for the year amounts to Rs.
16,571,918 (2012 - Rs.9,771,764). This includes lease arrangements with
escalation clauses of 5% to 10% at the end of each year.
8. Consequent upon the vesting of the Indian undertakings on 1st
January 1978 of the eight Sterling Company''s under
the scheme of amalgamation, the title in respect of certain tea estates
acquired under such scheme, are to be transferred in the name of the
Company. The Company has been legally advised that the notification
issued by the Government of West Bengal in 1994 for payment of salami
does not apply to the Company.
9. Provision for taxation has been made as per the Income Tax Act,
1961 and the rules framed there under with reference to the profit for
the year ended 31st December, 2013 which extends over two assessment
years, Assessment Year 2013-2014 and Assessment Year 2014-2015. The
ultimate tax liability for the Assessment Year 2014- 2015 will be
determined on the total income for the period from 1st April, 2013 to
31st March, 2014.
10 Post Retirement Employee Benefits
The Company operates defined contribution schemes like proviclent fund
and defined contribution pension schemes. For these schemes,
contributions are made by the Company, based on current salaries, to
recognized funds maintained by the Company and for certain employees
contributions are made to State Plans. In case of Provident fund
schemes, contributions are also made by the employees. An amount of
Rs.124,024,445 (2012 - Rs.119,867,587) has been charged to the Profit &
Loss Account on account of defined contribution schemes.
The Company also operates defined benefit gratuity scheme, leave
encashment, defined benefit pension scheme, defined benefit provident
fund scheme and post retirement medical scheme. The pension benefits,
medical benefits and leave encashment benefits are restricted to
certain categories of employees. These schemes offer specified benefits
to the employees on retirement. Annual actuarial valuations are carried
out by an independent actuary in compliance with Accounting Standard 15
(revised 2005) on Employee Benefits. Wherever recognized funds have
been set up, annual contributions are made by the Company, as required.
Employees are not required to make any contribution.