2. Summary of material accounting policies
a) Basis of preparation and presentation of financial statements
i) Statement of compliance with Indian Accounting Standards (Ind AS)
The Standalone financial statements have been prepared in accordance with the accounting principles generally
accepted in India including Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies
Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and as amended. The
aforesaid Standalone financial statements have been approved and authorised for issue by the Board of Directors
at the meeting held on 23 May 2025.
ii) Basis of accounting and measurement
The Company has prepared these financial statements which comprise the Balance Sheet as at 31 March 2025,
the Statement of Profit and Loss, the Statements of Cash Flows and the Statement of Changes in Equity for
the year ended 31 March 2025, and accounting policies and other explanatory information (together hereinafter
referred to as “Standalone financial statements”).
The Standalone financial statements have been prepared using the material accounting policies and measurement
bases summarized below. These accounting policies have been used throughout all periods presented in these
financial statements except for the changes below.
The Standalone financial statements have been prepared on an accrual basis and in accordance with the historical
cost convention, unless otherwise stated. All amounts included in the Standalone financial statements are reported
in Indian Rupees (?) lakhs and have been rounded off to nearest decimal of ' lakhs.
b) Use of estimates
The preparation of the Standalone financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities affected in future periods.
The Company bases its estimates and assumptions on parameters available when the Standalone financial statements
were prepared. Existing circumstances and assumptions about future developments, however, may change due to
market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the
assumptions when they occur.
Significant management judgements
The following are significant management judgements in applying the accounting policies of the Company that have the
most significant effect on the amounts recognised in the Standalone financial statements or that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
Classification of leases
The Company enters into leasing arrangements for various assets. The classification of the leasing arrangement as a
finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer
of ownership of leased asset at the end of lease term, lessee's option to purchase and estimated certainty of exercise
of such option, proportion of lease term to the asset's economic life, proportion of present value of minimum lease
payments to fair value of leased asset and extent of specialised nature of the leased asset.
Recoverability of advances / receivables
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the
expected credit loss on outstanding receivables and advances.
Useful lives of depreciable / amortisable assets
Management reviews its estimate of the useful lives of depreciable / amortisable assets at each reporting date, based
on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence
that may change the utility of certain items of property, plant and equipment.
Contingent liability
Management reviews its estimate of the financial impact of the contingent liability at each reporting date, based on the
demands received from various departmental authorities.
Litigations
Management reviews its estimate of the impact of the litigations liability at each reporting date, based on the land
matters pending with various Courts.
Defined benefit obligation (DBO)
Management's estimate of the DBO is based on a number of critical underlying assumptions such as standard rates
of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these
assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
Fair value measurements
Management applies valuation techniques to determine the fair value of financial instruments (where active market
quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with
how market participants would price the instrument. Management bases its assumptions on observable data as far as
possible but this is not always available. In that case management uses the best information available. Estimated fair
values may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.
Valuation of Agricultural Produce
Produce growing on bearer plants are biological Assets and are ‘fair valued' based on biological transformations. As at
the Balance Sheet date, the management has determined that it can reliably measure the biological transformations of its
growing produce and such growing produce and agricultural produce have been measured at ‘fair values' based on the
management's estimates of expected produce. ‘Fair values' have been assessed at market prices at the reporting date
and adjusted for estimates of costs to be incurred from the reporting date until harvest. Considering the susceptibility
of the estimates to variations, these estimates and assumptions are reviewed at every reporting date until harvest and
revisions to the ‘fair values' carried out on a cumulative basis. Such variations are considered as change in estimates
and are presented as part of changes in inventories of finished goods.
:) Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realized within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting period.
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash
equivalents. The Company has evaluated and considered its operating cycle as 12 months.
I) Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly
attributable to acquisition are capitalised until the property, plant and equipment are ready for use, as intended by
management.
Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended
use. Cost includes inward freight, non refundable duties/ taxes and expenses incidental to acquisition/installation.
Subsequent costs are included in the asset's carrying amount or recognised 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 repairs and maintenance are charged to profit or loss during the reporting period
in which they are incurred.
Capital work in progress is stated at cost, net of accumulated impairment loss, if any
Expenses relating to new planting and further expenditure incurred at the replanted fields are capitalised.
Property, plant and equipment [other than freehold land and lease hold land (perpetual lease)] are depreciated under the
written down value method [other than bearer plants (rubber trees and tea bushes) which are depreciated using straight
line method] over the estimated useful lives of the assets, which are different from the lives prescribed under Schedule II
to the Companies Act, 2013. The useful lives have been arrived at based on technical assessment of the management.
Freehold land and leasehold land (perpetual lease) are not depreciated.
Useful life adopted by the Company for various class of assets is as follows:
The asset's residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each financial year
end and, if expectations differ from previous estimates, the changes shall be accounted for as a change in an accounting
estimate.
In the case of leasehold improvements, expected useful lives are determined as their useful life or over the term of the
lease, if shorter.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the
net disposal proceeds and the carrying amount of the assets and are recognised in Standalone statement of profit and
loss within other income or other expenses.
e) Bearer Plants
Bearer plants are recognised under Property, Plant and Equipment on fulfilment of the following conditions.
1. Is used in the production or supply of agricultural produce;
2. Is expected to bear produce for more than one period; and
3. Has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales."
Tea bushes and rubber trees are recognised as bearer biological assets. These are classified as mature bearer plants
and immature bearer plants. Mature bearer plants are those that have attained harvestable stage. Cost incurred for new
plantations and immature areas are capitalised. Cost includes cost of land preparation, new planting and maintenance till
maturity. The cost of areas coming into bearing is transferred to mature plantations and depreciated over their estimated
useful lives.
Bearer plants relating to tea bushes and rubber trees attain a harvestable stage in about 4 years & 7 years respectively.
Other minor crops attain harvestable stage in about 5-7 years.
Bearer biological assets are carried at cost less accumulated depreciation and accumulated impairment loss, if any.
Subsequent expenditure on bearer assets are added to its book value 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. Mature
bearer plants are depreciated over their estimated useful life. Immature bearer plants are tested for impairment /
obsolescence. The estimated useful life of mature bearer plants is as follows
Refer Para 2(j) for accounting of agricultural produce.
f) Intangible assets and Intangible assets under development
Computer software is capitalised in the period in which the software is implemented for use, where it is expected to
provide future enduring economic benefits; such capitalisation costs include license fees and cost of implementation/
system integration services.
Computer software capitalised are amortised on a straight line basis over a period of five years from the date of
capitalisation.
Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as intangible assets under
development
g) Impairment of property, plant and equipment and intangible assets
The carrying amounts of property, plant and equipment are reviewed at each Balance Sheet date if there is any indication
of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of
property, plant and equipment exceeds the recoverable amount (i.e. higher of net selling price and value in use). In
assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average
cost of capital. After impairment, depreciation is provided on the revised carrying amounts of the assets over their
remaining useful lives.
h) Assets held for sale
Items of property, plant and equipment that have been retired from active use and are held for disposal are stated at
the lower of their net carrying amount and net realisable value and are shown separately in the Standalone financial
statements under the head ‘Assets classified as held for sale'. Any write-down in this regard is recognised immediately
in the Statement of Profit and Loss.
i) Revenue recognition
Revenue from contracts with customers is recognised to the extent that it is probable that the economic benefits
will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made.
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable
consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net
of variable consideration on account of various discounts and schemes offered by the Company as part of the contract.
The specific recognition criteria described below must also be met before revenue is recognised.
Revenue from sale of goods
Revenue from sale of tea at auction is recognized on receipt of the sale note from the brokers. Revenue from sale of tea
other than at auction and sale of rubber is recognized on transfer of significant risks and rewards of ownership in goods
in accordance with the terms of sale.
Revenue from contract with customers
The Company recognizes the amount as revenue from contracts with customers, which is received for the transfer
of promised goods to customers in exchange for those goods. The relevant point in time or period of time is the
transfer of control of the goods. Revenue is reduced for customer returns, taxes on sales, estimated rebates and other
similar allowances. The transaction price is determined and allocated to the performance obligations according to
the requirements of Ind AS 115. Performance obligations are deemed to have been met when the control of goods is
transferred to the customer.
The Company has entered into a barter arrangement with vendors wherein the vendors are allowed to cultivate pineapple
in few rubber estates with a condition that these vendors are to bear the cost of replanting of rubber plants in these
estates, in lieu of cultivation rent otherwise payable by vendors to the company. The transaction price in the above
arrangement has been accounted at fair value as per Ind AS 115 Revenue from contracts with customers.
Interest income
Interest income is reported on an accrual basis using the effective interest method and is included under the head “Other
income” in the Statement of Profit and Loss.
Export Incentive
Income from export incentives are recognised when right to receive credit as per the terms of the scheme is established
and when there is certainty of realisation.
j) Inventories including biological assets / standing crops
Valuation of inventory of finished products of tea and rubber have been done as per Ind AS 2 ‘Inventories'. Raw
materials, work in progress, traded and finished goods are stated at the lower of cost and net realisable value. Net
realisable value represents the estimated selling price less all estimated cost of completion and selling expenses. Cost
is determined on weighted average basis and includes expenditure incurred in the normal course of business in bringing
inventories to its location and condition, labour and overhead, where applicable. Stores and spares are carried at cost.
Provision is made for obsolete, slow-moving and defective stocks, where necessary.
Produce growing on bearer plant is biological asset and are fair valued based on the biological transformation,
except where on initial recognition quoted market prices are not available and alternate fair value measures
are clearly unreliable in which case biological asset is measured at cost less any accumulated depreciation
and impairment loss. Ind AS 41 ‘Agriculture' deals with the recognition and valuation of agricultural produce.
Tea and rubber viz. standing crops of tea and rubber are designated as agricultural produce as per Ind AS 41 and are
measured at their fair value less cost to sell at the point of harvest. Any changes in fair value are recognised in the
Statement of Profit and Loss in the year in which these arise upon harvest. The Company has valued its standing crops
for tea and rubber at the reporting date at their fair value less cost to sell at the point of harvest. The fair valuation so
arrived at becomes the cost of Inventory under Ind AS-2.
k) Employee benefits
Expenses and liabilities in respect of employee benefits are recorded in accordance with Ind AS 19, Employee
Benefits.
Defined contribution plan
(i) Provident fund
This is a defined contribution plan where contributions are remitted to provident fund authorities in accordance
with the relevant statute and charged to the Statement of Profit and Loss in the period in which the related
employee services are rendered. The Company has no further obligations for future provident fund benefits in
respect of these employees other than its monthly contributions.
(ii) Superannuation
This is a defined contribution plan. The Company contributes as per the scheme to superannuation fund
administered by Life Insurance Corporation of India (LIC). The Company has no further obligations for future
superannuation benefits other than its annual contributions and recognises such contributions as expense in the
period in which the related employee services are rendered.
Defined benefit plan
(i) Gratuity
This is a defined benefit plan. Provision is based on year-end actuarial valuation using projected unit credit
method. Actuarial gains / losses are recognised immediately in the Statement of Profit and Loss as income
or expense.
(ii) Compensated absences
This is a defined benefit plan. Provision is based on year-end actuarial valuation using projected unit credit
method. Actuarial gains/ losses are recognised immediately in the Statement of Profit and Loss as income
or expense.
The present value of the defined benefit obligation denominated in ' is determined by discounting the
estimated future cash outflows by reference to market yields at the end of the reporting period on government
bonds that have terms approximating to the terms of the related obligation.
Service cost on the Company's defined benefit plan is included in employee benefits expense. Employee
contributions, all of which are independent of the number of years of service, are treated as a reduction
of service cost. Gains and losses through re-measurements of the defined benefit plans are recognised in
other comprehensive income, which are not reclassified to profit or loss in a subsequent period. Further,
as required under Ind AS compliant Schedule III, the Company transfers those amounts recognised in
other comprehensive income to retained earnings in the statement of changes in equity and balance
sheet.
Short-term employee benefits
Short-term employee benefits comprise of employee costs such as salaries, bonus etc. These benefits recognised
on the basis of the amount paid or payable for the period during which services are rendered by the employee.
l) Foreign currency transactions
Functional and presentation currency
The functional currency of the Company is the Indian Rupee. These Standalone financial statements are presented in
Indian Rupees (?).
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally
recognised in Statement of Profit or Loss.
m) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the
asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other
borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that
an entity incurs in connection with the borrowing of funds.
n) Investments in subsidiaries
The Company's investment in equity instruments in subsidiaries are accounted for at cost. Where the carrying amount
of an investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable
amount and the difference is transferred to the Statement of Profit and Loss.
o) Government grants/ Subsidy
Revenue subsidy receivable from Tea Board towards manufacture of orthodox tea is accrued on production of orthodox
tea. Revenue subsidy receivable from Tea Board towards replanting activities undertaken is accounted on sanction of
such subsidy by the Tea Board. Capital subsidy from Tea Board and Rubber Board is adjusted against the cost of specific
depreciable assets on receipt of such subsidy.
p) Income taxes
Income tax expense comprises of current and deferred income tax. Current and deferred tax is recognised in the
Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or
directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from
the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet
date.
Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either
in OCI or directly in equity.
Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax
assets and liabilities is recognised as income or expense in the period that includes the enactment or the substantive
enactment date. A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will
be available against which the deductible temporary differences and tax losses can be utilised. The Company offsets
current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognised amounts
and where it intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
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