(a) The financial statements have been prepared in accordance with the
Companies Act, 1956 of India and the rules framed thereunder.
All asset 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 revised schedule VI to the Companies Act, 1956.
(b) Fixed Assets and Depreciation / Amortisation
Written down value of Fixed Assets (both Tangible and Intangible)
represents cost of acquisition/valuation of such assets after deduction
of depreciation (including amortisation) on Straight Line Method at
rates indicated in Note 25(6a). Rights are carried at cost of
acquisition less amortisation, basis of which is indicated in Note
Although Tea Plantation is an item of wasting asset, no depreciation is
charged on such assets as it is customary in the Tea Industry and also
because the Infilling costs of Tea Bushes, Replanting of Tea and other
long term developmental expenditure in the plantation areas are charged
to Revenue Expenditure upon completion of the composite activities
which are allowed by the Indian Taxation Authorities. Thus, no
depreciation has been charged on New Planting.
For additions to Assets during the course of the year
depreciation/amortisation is being charged on a full year basis. In
case of acquisition of any undertaking, depreciation is charged from
the effective date of such acquisition.
Assets costing upto Rs. 5000/- each are fully depreciated in the same
Compensation received for acquisition of Assets of the Company is
accounted for upon acceptance of the Company''s claim by the appropriate
(c) Impairment of Assets
Loss on account of Impairment of Assets is to be recognised if and when
the carrying amount of the Fixed Assets exceeds the recoverable amount
i.e higher of net selling price and value in use.
Long term Investments made by the Company have been stated at cost,
except in certain cases where these have been brought down upon
commercial considerations and in keeping with the applicable Accounting
Standard. Current Investments are stated at lower of cost and fair
Inventories of Stores, as existing at the year-end, represent weighted
average cost of procurements. Obsolete and slow moving inventories are
fully depreciated in the Accounts.
Unsold but saleable Stock of Tea are valued at weighted average cost of
production including attributable charges and levies or net realisable
value, whichever is lower.
(f) Sales and Revenue Recognition
Disposal of Company''s produce is accounted for as Sales whenever
appropriate documents are received even when the proceeds are received
after the accounting period.
Items of income including Export Benefits are recognised on accrual and
(g) Government Grants
Government Grants related to specific depreciable fixed asset are
deducted from gross values of the related fixed asset in arriving at
their book value.
Government Grants related to revenue are recognised in the Accounts on
(h) Foreign Currencies Transactions
Transactions in foreign currency are accounted for at the exchange
rates prevailing on the date of transactions. Monetary assets and
liabilities related to foreign currency transactions remaining
unsettled at the end of the year are translated at year-end exchange
Gains/Losses arising out of fluctuations in the exchange rates are
recognised in the Accounts in the period in which they arise.
Differences between the forward exchange rates and the exchange rates
at the date of transactions are accounted for as income/ expense over
the life of the contracts.
(i) Employee Benefits
a) Short Term Employee Benefits
The amount of Short Term Employee Benefits payable in terms of
employment for the services rendered by such employees is recognised
during the period when the employee renders services.
b) Post Employment Benefits
(i) The Company operates defined Contribution Schemes of Provident
Funds and makes regular contributions to Provident Funds which are
fully funded and administered by the Trustees/Government and are
independent of the Company''s finance. Such contributions are recognised
in the Accounts on accrual basis. Interest accruing to the Fund
administered by the Trustees are credited to respective members''
accounts based on the rates stipulated by the Government and shortfall
if any, recognised on the basis of actuarial valuation report in this
regard, is borne by the Company.
(ii) The Company operates defined benefit Superannuation and Gratuity
Schemes administered by the Trustees, which are independent of the
Company''s finance. Such obligations are recognised in the Accounts on
the basis of actuarial valuation applying Projected Unit Credit Method
including gains and losses at the year-end.
(iii) The Company operates a defined benefit Pension Scheme and
Additional Retiral Benefit for certain categories of employees for
which obligations are recognised in the Accounts based on actuarial
valuation applying Projected Unit Credit Method including gains and
losses at the year-end.
c) Other Long Term Employee Benefits
Other Long Term Employee Benefits are recognised in the Accounts based
on actuarial valuation applying Projected Unit Credit Method including
gains and losses at the year-end.
As is customary in the Tea Industry, maintenance expenditure incurred
at Gardens, for which accruing benefits may not be relatable in terms
of periods, are charged off to Revenue Expenditure in the year these
Operational Borrowing Costs are recognised as Revenue Expenditure in
the year in which these are incurred.
(k) Corporate Taxation
Current Tax is determined as the amount of income-tax
payable/recoverable in respect of the taxable income for the current
Deferred Tax is recognised as the tax effect of timing differences
being the differences between taxable income and accounting income that
originated in one period and is capable of reversal in one or more
Deferred Tax Assets are recognised subject to the consideration of
prudence only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realised.
(l) Contingent Liabilities
Contingent Liabilities are disclosed when there is a possible
obligation which may arise from past events and the existence of which
will be confirmed only by the occurance or non-occurance 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
the obligation or reliable estimate of the amount cannot be made.