01. Accounting Convention
The Financial Statements have been prepared in accordance with the
historical cost convention.
02. Revenue Recognition
The Company follows the mercantile system of accounting and recognized
income and expenditure on accrual basis.
03. Use of Estimates
The preparation of Financial Statements require Management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosures relating to the contingent liabilities and
assets as at the Balance Sheet date and the reported amount of income
and expenses during the year.
Sales are exclusive of Sales Tax and Excise duty.
05. Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation.
Cost includes purchase price and any directly attributable cost of
bringing the assets to working condition for the intended use.
Assets acquired under hire purchase scheme are treated as fixed assets
on delivery, pending transfer of title subsequently as per the terms of
hire purchase agreement.
All Expenditure incurred on Extension Planting are capitalized.
06. Depreciation & Amortisation
Depreciation on Fixed Assets has been charged on straight line method
in accordance with Section 205(2) (b) of the Companies Act, 1956 and
the rates of depreciation has been taken as prescribed in Schedule XIV
to the Companies Act, 1956 , No provision has been made in respect of
amortisation of Leasehold Land and Plantations.
07. Contingent Liabilities
Contingent Liabilities are generally not provided for in the accounts
and are separately shown in the Notes to the accounts.
Stock of Tea is valued at lower of cost or net realisable value and
Stock of Tea Waste is valued at estimated realisable value.
Cost is comprised of Materials, Labour and total Garden Overheads.
Stock of Stores and Spare Parts are valued at cost on FIFO basis.
As per practice followed by the Company value of green leaves in stock
as at the close of the year, are not taken into accounts.
Long term Investments are stated at cost. Provision for diminution of
investment is made to recognize a decline, other than temporary. Gain /
losses on disposal investment are recognized as income / expenditure.
Dividends are accounted for when received.
10. Insurance Claim
Insurance claim is accounted for on acceptance / settlement.
11 Excise Dutv and Cess on Tea production & Cenvat
Excise duty and Cess on Tea Manufactured is accounted for at the time
However Provision for Excise duty and Cess is made at the year end on
finished goods lying in stock.
12. Employees Benefits The Company contributes to Provident Fund which
are administered by duly constituted and approved authorities of
Liability in respect of Gratuity (being administered by a Trust) is a
defined benefit, obtain and determined based on actuarial valuation
made by an independent Sadat the balance sheet date. The actuarial
gains or losses are recognised immediately in the profit and loss
Leave Encashment benefits are accounted for on accrual basis.
13. Income Tax & Deferred Tax
Provision is made for Income Tax under the Tax Payable method, based on
Tax Liability as computed after taking credit for allowances, expenses
and carry forward losses. In case of matters under appeal due to
disallowance or otherwise, full provision ,s made when the said
liabilities are accepted.
Deferred Tax is calculated at current statutory income tax rate and s
recognised on timing difference between income and accounting income
that nominates; in one period and are capable of being reversal in one
or subsequent period. Deferred tax assets subject to consideration of
prudence, are recognised and carried forward only-to the extent that
there is virtual certainty that sufficient future taxable income w II
be ovarian Me against which such deferred tax assets can be realised.
Deferred tax assets/Habits are reviewed at each Balance Sheet date
based on development during the year and available case laws to
reassess realization / liabilities.
14. Government Grants
Revenue grants including subsidy / rebates are credited to Profit and
Loss Account under Otherncome or deducted from the related expenses.
Grants relating to fixed assets are credited to Capital Reserves
Account or adjusted in the cost of such assets as the case may be, as
and when the ultimate readability of such grants are established.
15. Borrowing Costs
Borrowing Cost that are directly attributable to the acquisition, const
ruction or production of qualifying assets are being capitalised as
part of the cost of that assets and other borrowing cost is recognised
as expenses in the year in which they are incurred.
16. Intangible Assets
Expense incurred on research are expended as and when incurred and
development expenses which satisfy the assets criteria are amortised
over a period of 10 year.
17. Impairment of Assets
The Company assesses at each Balance Sheet whether there is any
indication that an asset may be impaired, if any such indication exist,
the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or recoverable amount of the Cash
Generating Unit to which the asset belongs, is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Profit and Loss Account. If at the Balance Sheet date, there is any
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the asset is reflected
at the recoverable amount.
As on the Balance Sheet date the carrying amount of the assets net of
accumulated depreciation is not less than the recoverable amount of
those assets. Hence there is no impairment loss on the assets of the