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Company Information

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B&A LTD.

14 May 2021 | 12:00

Industry >> Plantations - Tea & Coffee

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ISIN No INE489D01011 52Week High 218 Book Value (Rs.) 246.04 Face Value 10.00
Bookclosure 29/09/2020 52Week Low 102 EPS 13.09 P/E 14.08
Market Cap. 57.13 Cr. P/BV 0.75 Div Yield (%) 0.00 Market Lot 1.00

ACCOUNTING POLICY

You can view the entire text of Accounting Policy of the company for the latest year.
Year End :2018-03 

Note 1 - Significant Accounting Policies

1.1. Statement of Compliance

These financial statements comply, in all material aspects, with Indian Accounting Standards (Ind ASs) notified under Section 133 of the Companies Act, 2013 (''the Act''). The financial statements have been prepared in accordance with the relevant presentational requirements of the Act. The Company has adopted Ind AS from 1st April, 2017 with a transition date of 1st April, 2016.

These financial statements for the year ended 31st March, 2018 are the first the Company has prepared under Ind AS. For all periods up to and including the year ended 31st March, 2017, financial statements were prepared as per the previous Generally Accepted Accounting Principles (GAAP), which included the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended from time to time) and other relevant provisions of the Act. The financial statements for the year ended 31st March, 2017 and the Opening Ind AS Balance Sheet as on 1st April, 2016 have been restated in these financial statements for the purpose of comparability in accordance with Ind AS 101, “First-time Adoption of Indian Accounting Standards”. Details of the exceptions and optional exemptions availed by the Company and principal adjustments along with related reconciliations are detailed in Note 3.

1.2. Basis of Preparation

These financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements as well as the Opening Ind AS Balance Sheet as at 1st April, 2016 which is the date of transition to Ind AS.

The financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention, except for the following:-

a. certain financial assets and liabilities which have been measured at fair value,

b. biological assets, including unlocked green leaves which have been measured at fair value less cost to sell, if any.

c. defined employee benefit plans which have been measured at fair value.

All assets and liabilities have been classified as current and non-current as per the Company's normal operating cycle and other criteria as set out in Division II of Schedule III to the Companies Act, 2013. For the purpose of this classification, the Company has ascertained that the time between acquisition of assets for processing and their realization in cash and cash equivalents does not exceed

12 months.

1.3. Property, Plant & Equipment

Property, plant & equipment is stated at historical cost net of accumulated depreciation and accumulated impairment loss, if any. Historical cost includes expenditure that are directly attributable to the acquisition of the items, including borrowing costs in case of qualifying assets. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other expenses for repairs and maintenance are charged to the Statement of Profit and Loss during the period in which they are incurred.

Gains or losses arising on retirement or disposal of property, plant & equipment are recognized in the Statement of Profit & Loss.

Property, plant & equipment which are not ready for their intended use as on the date of Balance Sheet are disclosed as “Capital Work-in-Progress”.

Depreciation is provided under straight line method based on estimated useful life prescribed under Schedule II to the Companies Act, 2013 with the following exceptions:-

a. buildings are depreciated over a range of 3 to 65 years;

b. plant & machineries are depreciated over a range of 15 to 35 years;

based on the technical evaluation of useful life.

Depreciation on bearer plants is provided under straight line method based on an estimated useful life of 80 years. Such useful life is estimated by the management based on previous experience. Bearer plants are depreciated from the date they are ready for commercial harvest, pending which they are accounted for under Capital Work-in-Progress.

Freehold land is not depreciated. Leasehold land is also not depreciated as the lease is renewed upon expiry of the lease period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

The residual values and useful lives of property, plant & equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

With the exception of revalued items of property, plants and equipment’s, dealt with in the following paragraph, the Company, upon first time adoption of Ind ASs, has elected the respective carrying amounts under the previous GAAP as the deemed cost of all other property, plants and equipment’s as on the date of transition to Ind AS, i.e. 1st April, 2016 in accordance with Ind AS 101, “First-time Adoption of Indian Accounting Standards”.

Items of property, plants and equipment’s that were revalued prior to 1st April, 2016 have been written down to cost less accumulated depreciation and accumulated impairment loss, if any.

1.4. Intangible Assets

Intangible assets comprises of computer software. Costs associated with maintaining software programmes are recognized as an expense in the period in which they are incurred. Cost of purchased software is recorded as intangible assets and is amortized from the point at which they are put to use. The amortization is made on a straight line basis over an estimated useful life of 5 years.

1.5. Investment in Subsidiaries

Investment in subsidiaries is carried at cost less accumulated impairment loss, if any. Upon first-time adoption to Ind AS, the Company has elected to measure its investment in subsidiaries at previous GAAP carrying amounts as its deemed cost on the date of transition to Ind AS i.e. 1st April, 2016.

1.6. Inventories

Inventories of Store & Spares and Finished Goods are stated at cost or net realizable value whichever is lower. Cost of Finished Goods comprises of cost of direct material, direct labour and appropriate portion of variable and fixed overhead expenditure. Cost of inventories also includes other costs incurred in bringing the same to their present location. Cost of items of Stores & Spares is determined under weighted average method. Net realizable value is the estimated selling price in the ordinary course of business as reduced by estimated cost to sell.

1.7. Biological Assets (Other than Bearer Plants)

Standing leaves on tea bushes at the end of the reporting period, which are expected to be plucked within the next plucking round, are measured at fair value less cost to sell.

1.8. Deferred Expenditure

It includes costs incurred on nursery plants that are to be used in future other than for new planting and replanting.

1.9. Cash and Cash Equivalents

For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents include cash on hand; balance with banks in current accounts; any remittance in transit and bank overdrafts. Bank overdrafts are shown within borrowings under current liabilities in the Balance Sheet.

1.10. Financial Assets

Initial Recognition and Measurement

Financial assets are recognized when the Company becomes a party to the contractual provisions of a financial instrument. On initial recognition, a financial asset is recognized at fair value along with related transaction costs where such financial assets are not measured at Fair Value Through Profit or Loss (FVTPL). However, where a financial asset is measured at FVTPL on initial recognition, related transaction costs are recognized in the Statement of Profit and Loss.

Subsequent Measurement

For subsequent measurement the Company classifies its financial assets into the following categories, based on facts and circumstances:-

a. Amortized Cost

b. Fair Value Through Other Comprehensive Income (FVTOCI)

c. Fair Value Through Profit or Loss (FVTPL) Reclassification

Financial assets are not reclassified subsequent to their recognition unless the Company changes its business model for managing financial assets in the reporting period.

Impairment

The Company measures the expected credit loss associated with its financial assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Loss on impairment is recognized in the year in which the impairment becomes certain beyond reasonable doubt.

De-recognition

Financial assets are derecognized when the contractual rights to the cash flows from the financial assets expire, or it transfers the contractual rights to receive the cash flows from the asset, or the Company has not retained control over the financial asset. Therefore, if the asset is one which is measured at:-

a. amortized cost, the gain or loss is recognized in the Statement of Profit and Loss;

b. fair value through other comprehensive income, the cumulative fair value adjustments previously taken to reserves are classified to the Statement of Profit and Loss unless the asset represents an equity investment in which case the cumulative fair value adjustments previously taken to reserves is reclassified within equity.

Income Recognition

Interest income is recognized in the Statement of Profit and Loss using the effective interest rate method. Dividend income is recognized in the Statement of Profit and Loss when the right to receive dividend is established.

Trade Receivables and Loans

Trade receivables and loans are initially recognized at fair value. Subsequently, these assets are held at amortized cost, using the effective interest rate method net of any expected credit losses. The effective interest rate is the rate that discounts estimated future cash income through the expected life of a financial instrument.

Debt Instruments

Debt instruments are initially measured at amortized cost, fair value through other comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL) till de-recognition on the basis of (i) the entity's business model for managing the financial assets and (ii) the contractual cash flow characteristics of the financial asset.

(a) Measured at Amortized Cost - Financial assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows that are solely payment of principal and interest, are subsequently measured

at amortized cost using the effective interest rate method less impairment, if any. The amortization of effective interest rate and loss arising from impairment, if any are recognized in the Statement of Profit and Loss.

(b) Measured at Fair Value Through Other Comprehensive Income (FVTOCI) -Financial assets that are held within a business model whose objective is achieved by both, selling financial assets and collecting contractual cash flows that are solely payment of principal and interest, are subsequently measured at FVTOCI. Fair value movements are recognized in the Other Comprehensive Income (OCI).

(c) Measured at Fair Value Through Profit or Loss (FVTPL) - A financial asset not classified as either amortized cost or FVTOCI is classified as FVTPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income, if any, recognized as 'other income' in the Statement of Profit or Loss.

Equity Instruments

On transition to Ind AS, the Company has made an irrevocable election to measure all its investments in equity instruments, except for those in subsidiaries, at FVTOCI. Fair value gains or losses are recognized in Other Comprehensive Income. Such fair value gains or losses will not be reclassified to profit or loss.

1.11. Financial Liabilities

Borrowings, trade payables and other financial liabilities are initially recognized at the value of the respective contractual obligations. They are subsequently measured at amortized cost. Any discount or premium on redemption/ settlement is recognized in the Statement of Profit and Loss as finance cost over the life of the financial liability using effective interest method and adjusted to the liability figure disclosed in the Balance Sheet. Financial liabilities are derecognized when the liability is extinguished i.e. when the contractual obligation is discharged, cancelled and on expiry.

1.12. Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount is included in the Balance Sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

1.13. Impairment of Non-financial Assets

Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment loss, if any, is provided to the extent, the carrying amount of the asset or cash generating unit exceed their recoverable amount.

Recoverable amount is the higher of an asset's net selling price and the present value of estimated future cash flows expected to arise from the continuing use of an asset or cash generating unit and from its disposal at the end of its useful life.

Impairment losses recognized in prior years are reversed when there is an indication that the impairment losses recognized no longer exists or have decreased. Such reversals are recognized as an increase in the carrying amount of the assets to the extent it does not exceed the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized in previous years.

1.14. Government Grants

Government grants are recognized at their fair value where there is reasonable assurance that the grant will be received, and the Company will comply with the conditions attached.

Government grants relating to income are deferred and recognized in the profit or loss over the period necessary to match them with the cost that they are intended to compensate and presented within other non-operating income.

Government grants relating to the acquisition or construction of property, plant & equipment are included in the Balance Sheet as deferred income and recognized as income in the Statement of Profit and Loss over the useful life of the related item of property, plant & equipment and presented within other no operating income.

1.15. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized when the Company has a present obligation (legal or constructive) 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 a reliable estimate can be made 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.

If the effect of time value of money is material, provisions are discounted to reflect its present value using a current pre-tax rate that reflects the current market assessments of time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognized as finance cost.

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 when a present obligation arises from past events where it is either not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or a reliable estimate of the amount cannot be made.

Contingent assets are not recognized but disclosed when an inflow of economic benefits is probable.

1.16. Claims not acknowledged as Debts

Claims against the Company not acknowledged as debts are disclosed after a careful evaluation of the facts and legal aspects of the matter involved.

1.17. Dividends

Interim dividend is recognized in the period in which it is approved by the Board of Directors and final dividend in the period in which it is approved by the Shareholders.

1.18. Income Taxes

Income tax expense for the year comprises of current tax and deferred tax. Current tax is the expected tax payable on the taxable income for the year using the applicable tax rates and any adjustment to taxes in respect of previous years. Deferred tax is recognized in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.

A deferred tax liability is recognized based on the expected manner of realizations or settlement of the carrying amount of assets or liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period. Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the assets and liabilities on a net basis. Deferred tax assets and liabilities are set off when there is a legally enforceable right to set off current tax assets against current tax liabilities; and deferred tax assets and the deferred tax liabilities relate to taxes levied by the same taxation authority.

1.19. Employee Benefits

Short Term Employee Benefits

These are recognized at the undiscounted amount as expense for the year in which the related service is rendered.

Post-Employment Benefit Plans

The Company makes defined contributions to a provident fund scheme, which is recognized as expense.

The cost of providing benefits under the Company's defined benefit gratuity plan is calculated by independent actuary using the projected unit credit method. Service costs and interest expense are reflected in the Statement of Profit and Loss. Actuarial gains or losses are recognized in full under Other Comprehensive Income.

1.20. Revenue Recognition

Revenue from sale of goods is recognized when

- all the significant risks and rewards of ownership in the goods are transferred to the buyer,

- there is no continuing managerial involvement with the goods,

- the amount of revenue can be measured reliably and

- it is probable that future economic benefits will flow to the Company.

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of goods and service tax and sales returns.

Revenue from financial assets has been dealt with in Note 1.10.

1.21. Foreign Currencies

The financial statements are presented in Indian Rupees (Rs.), the functional currency of the Company (i.e. the currency of the primary economic environment in which the entity operates).

Foreign currency transactions are translated into the functional currency using exchange rates at the date of the transaction. Foreign exchange gains and losses from settlement of these transactions and from translation of monetary assets and liabilities at the reporting date exchange rates are recognized in the Statement of Profit and Loss.

Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate at the date of the transactions.

1.22. Borrowing Costs

Interest and other borrowing costs attributable to qualifying assets are capitalized. Other interest and borrowing costs are charged to the Statement of Profit and Loss.

1.23. Research and Development

Contribution to Tea Research Association is charged to revenue.

1.24. Earnings per Share

Basic earnings per share is computed by dividing:

- the profit / loss attributable to owners of the Company

- by the weighted average number of equity shares outstanding during the financial year.

Diluted earnings per share adjusts the figures used in determination of basic earnings per share to take into account:

- the after-income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

-- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

1.25. Rounding Off

All amounts disclosed in the Ind AS Financial Statements and notes have been rounded off to the nearest lakhs or decimals thereof as per the requirement of Division II of Schedule

III to the Companies Act, 2013, unless otherwise stated.

Note 2 - Critical Estimates and Judgments

The areas involving critical estimates and judgments are:-

- Taxation

The Company is engaged in agricultural activities and is also subject to tax liability under Minimum Alternate Tax (MAT) provisions of the Income Tax Act, 1961 and Assam Agricultural Income Tax Act, 1939. Significant judgment is involved in determining the tax liability for the Company. Further, there are many transactions and calculations during the ordinary course of business for which the ultimate tax determination is uncertain. Further judgment is involved in determining the deferred tax position on the balance sheet date.

- Depreciation and amortization

Depreciation and amortization is based on management estimates of the future useful lives of the property, plant and equipment and intangible assets. Estimates may change due to technological developments, competition, changes in market conditions and other factors and may result in changes in the estimated useful life and in the depreciation and amortization charges.

- Actuarial Valuation for Employee Benefits

The determination of Company's liability towards defined benefit obligation to employees on account of gratuity is made through independent actuarial valuation including determination of amounts to be recognized in the Statement of Profit and Loss and in Other Comprehensive Income. Such valuation depends upon assumptions determined after taking into account inflation, seniority, promotion and other relevant factors. Information about such valuation is provided in notes to the financial statements.

- Provisions and Contingencies

Provisions and contingencies are based on Company Management's best estimate of the liabilities based on the facts known at the balance sheet date.

- Fair Value of Biological Assets

The fair value of biological assets is determined based on recent transactions entered into with third parties or available market price.

Note 3 - First Time Adoption of Indian Accounting Standards (Ind ASs)

The adoption of Ind ASs has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. This standard requires that all Ind ASs and interpretations that are issued and effective for the first Ind AS financial statements be applied retrospectively and consistently for all financial years presented. Accordingly, the Company has prepared financial statements which comply with Ind ASs for the year ended 31st March, 2018, together with the comparative information as at and for the year ended 31st March, 2017 and the Opening Ind AS Balance Sheet as at 1st April, 2016 (the date of transition to Ind ASs).

In preparing these Ind AS financial statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards, as explained below. The difference between the carrying amounts of assets and liabilities in the financial statements as at the transition date under Ind AS and previous GAAP have been recognized directly in equity. This note explains the adjustments made by the Company in restating its financial statements prepared under previous GAAP viz. the Balance Sheet as at 1st April, 2016 and the financial statements as at and for the year ended 31st March, 2017.

3.1. Optional Exemptions from Retrospective Application

- Business Combinations

Ind AS 101 provides the option to apply Ind AS 103, Business Combinations prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The Company has elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

- Deemed Cost

Ind AS 101 permits a first-time adopter to elect and continue with the carrying value of all its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind ASs, measured as per the requirements of the previous GAAP and use that as deemed cost as at the date of transition after making necessary adjustments for decommissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38, Intangible Assets. The Company has accordingly elected to measure all its property, plant & equipment and intangible assets at their previous GAAP carrying value (with one exception discussed below*). The Company does not have decommissioning liabilities as on the date of transition and accordingly no adjustment have been made for the same.

* Under the previous GAAP, the Company had in the financial year 2016-17 elected to follow the cost model for all its property, plant & equipment as per “Accounting Standard 10, Property, Plant & Equipment.'' Accordingly, as per the requirements of that standard, the revalued assets were written down to their cost less accumulated depreciation and impairment loss, if any in that year. As such the revaluation reserve outstanding as on 1st April, 2016 was written back against the respective items of property, plant & equipment. The Company's management elects to continue with such written down balance of property, plant & equipment to Ind AS Financial Statements.

- Investment in Subsidiary

Ind AS 101 allows a first-time adopter the option to measure investment in subsidiary as per the requirements of Ind AS 27, Separate Financial Statements or at deemed cost. For this purpose deemed cost shall be its fair value at the date of transition to Ind AS or previous GAAP carrying amount as on that date. The Company has elected to measure its investment in subsidiary at the previous GAAP carrying amount on the date of transition.

- Investment in Equity Instruments

Ind AS 101 allows a first-time adopter the option to designate investment in equity instruments at FVTOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investments in equity instruments. However, income tax effect on fair value changes is not recognized since it will lead to recognition of deferred tax items which may never reverse since the Company does not intend to sell these in the foreseeable future.

3.2. Mandatory Exceptions from Retrospective Application

- Estimates

An entity's estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1st April, 2016 are consistent with the estimates at the same date made in conformity with previous GAAP .The Company made estimates for the following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Biological assets measured at fair value less cost to sell and

- Investment in equity instruments carried at FVTOCI.

- Classification and Measurement of Financial Assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of facts and circumstances that existed at the date of transition to Ind AS.

- De-recognition of Financial Assets and Liabilities

As per Ind AS 101, an entity should apply the de-recognition requirements in Ind AS 109, Financial Instruments, prospectively for transactions occurring on or after the date of transition. However, an entity may apply the de-recognition requirements retrospectively from a date chosen by it if the information needed to apply Ind AS 109 to financial assets and liabilities de-recognized as a result of past transactions was obtained at the time of initial accounting of those transaction. The Company has elected to apply such de-recognition principles prospectively.

3.6. Explanatory Notes on Ind AS Adjustments for Reconciliation of Balance Sheet and Statement of Profit and Loss as per Ind AS with that reported under the Previous GAAP

(a) Property, Plant & Equipment

Under the previous GAAP, the Company had adopted the cost model as envisaged by Revised AS 10, Property, Plant & Equipment. This Standard required write back of the outstanding balance in Revaluation Reserve as on 1st April, 2016 against the respective items of property, plant & equipment which had been revalued to adopt the cost model.

Under the previous GAAP, till 31st March, 2016 there was no concept of treating bearer plants as a separate class of asset, and all capital expenditure on tea-growing areas was capitalized under the head Leasehold Land & Plantations. However, tea bushes qualify as Bearer Plants within the meaning of Ind AS 16, Property, Plants and Equipment. Hence they are to be recognized as a depreciable asset. Bearer Plants have been stated at cost less accumulated depreciation in the Opening Ind AS Balance Sheet as at 1st April, 2016. The accumulated depreciation has been debited to Retained Earnings.

Further, tea bushes require time to mature before they can provide the expected yield. As such, the expenses incurred previously, which had been capitalized under Leasehold Land & Plantations, on account of new plantations have now been shown under Capital Work-in-Progress (CWIP). Accumulated expenses up to 31st March, 2016 on nursery for nucleus clones have been shown under CWIP to the extent the clones are expected to be used in newly planted or replanted areas. The balance of accumulated expenditure, which pertains to clones that are expected to be used for infilling in existing planted areas as part of their normal upkeep, has been shown under Deferred Expenditure under Other Current Assets.

(b) Capital Work-in-Progress

Previously, subsidy received from Tea Board of India as compensation for expenses on replanting was deducted from Leasehold Land & Plantations as per the requirements of the previous GAAP. However, as per Ind AS 20, Accounting for Government Grants and Disclosure of Government Assistance, such grants are to be initially recognized as deferred income in the Balance Sheet and subsequently are to be recognized in the profit or loss on a systematic basis over the useful life of the replanted bushes, which is the period over which the expenses that are sought to be compensated will be recognized in the Statement of Profit or Loss. Grants received prior to 1st April, 2016 in respect of replanted bushes that did not attain maturity till that date (which had been credited to Leasehold Land & Plantations earlier) have now been recognized as Deferred Income with corresponding debit to Capital Work-in-Progress on the date of transition. Similar treatment has been given to grants received during 2016-17. Deferred income has been bifurcated appropriately into Other Current Liabilities and Other Non-Current Liabilities.

(c) Investments

Under the previous GAAP, Non-Current Investments in Equity Shares were carried at cost less permanent diminution in their value, if any. However, under Ind AS the Company has elected to carry investments in equity instruments other than those in subsidiary at Fair Value Through Other Comprehensive Income (FVTOCI) as per the option provided in Ind AS 101, First-time Adoption of Indian Accounting Standards. As such the changes in fair value of investments are accounted for through Retained Earnings in the Opening Ind AS Balance Sheet and through Other Comprehensive Income (OCI) in the Balance Sheet as at 31st March, 2017.

(d) Inventories

Inventories of finished goods (i.e. made tea) were valued, under the previous GAAP, at cost or net realizable value which ever was lower. The valuation principle has not changed under the Ind AS regime. However, under the previous GAAP, cost included all costs of production/purchase of green leaf, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Under Ind AS, cost of inventories comprise cost of purchase of green leaf, fair value of green leaf at the time of harvest less cost to sell, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The changes in value of inventories of finished goods as on the transition date (i.e. on 1st April, 2016) has been accounted for through Retained Earnings.

As a consequence, in the Statement of Profit and Loss for the year ended on 31st March, 2017 Profit Before Tax has been reduced by Rs. 28.86 lakhs (38.04 - 9.18).

(e) Biological Assets (Other than Bearer Plants)

This represents unplucked leaf on tea bushes as at the end of the reporting period. Under the previous GAAP, such biological assets were neither valued nor recognized in the accounts. As per Ind AS 41, Agriculture, unplucked leaf on tea bushes have to be measured at its fair value less cost to sell. The related amount as on the transition date (i.e. 1st April, 2016) has been recognized through Retained Earnings. Subsequent changes in value of unplucked leaf of tea bushes have been accounted for through the Statement of Profit and Loss.

As a consequence, Other Expenses in the Statement of Profit and Loss for the year ended on 31st March, 2017 has been reduced by Rs. 3.94 lakhs (16.14 - 12.20).

(f) Other Current Assets

As explained in Note No. 3.6.(a) above, expenses incurred on nursery for nucleus clones that are expected to be utilized for infilling, have been accounted for as deferred expenditure shown under Other Current Assets.

*This impact has already been given effect to in the financial statements for 2016-17.

(g) Tea Board Replanting Subsidy

As explained in Note No. 3.6.(b) above, Tea Board Replanting Subsidy has been shown as deferred income under Other Non-Current Liabilities and Other Current Liabilities depending on whether it is expected to be recognized as income after a period of 12 months following the reporting date or earlier.

(h) Current Provisions

Under the previous GAAP, up to 31st March, 2016, proposed final dividend and tax thereon were recognized as a liability in the books of accounts. However, under the Ind AS regime, liability for final dividend is to be recognized only when the same is approved by the shareholders in the Annual General Meeting. Hence the liabilities recognized on the above account as on 1st April, 2016 have been reversed with corresponding effect to Retained Earnings.

(i) Actuarial Gain / Loss on Defined Benefit Obligation

Under the previous GAAP, actuarial gain / loss on defined benefit obligation had been recognized in the Statement of Profit and Loss as a part of Employee Benefit Expenses. However, under the Ind AS regime, re-measurement gain / loss on defined benefit obligation is to be recognized in Other Comprehensive Income (OCI). The deferred tax effect of such actuarial gain / loss is also to be shown under OCI and not under the Profit and Loss.