1 (E) Summary of material accounting policiesi) a) Functional and presentation currency
Items included in the standalone financial statements of the Corporation are measured using the currency of the
primary economic environment in which the Corporation operates (i.e. the "functional currency"). The standalone
financial statements are presented in Indian Rupees ('INR'), which is the functional and presentation currency of the
Corporation.
b) Foreign currency transactions and translations
Foreign currency transactions of the Corporation are accounted at the exchange rates prevailing on the date of the
transaction. Monetary assets and liabilities are translated at the rate prevailing on the balance sheet date whereas
non-monetary assets and liabilities are translated at the rate prevailing on the date of the transaction. Gains and
losses resulting from the settlement of foreign currency monetary items and from the translation of monetary
assets and liabilities denominated in foreign currencies are recognised in the standalone statement of profit and
loss.
The assets and liabilities of foreign operations including goodwill and fair value adjustments arising on acquisition,
are translated into INR, the functional currency of the Corporation, at the exchange rates on the reporting date.
The income and expenses of foreign operations are translated into INR at the exchange rates at the dates of the
transactions or an average rate if the average approximates the actual rate at the date of transaction.
c) Current versus non-current classification
(i) An asset is considered as current when it is:
a. Expected to be realised or intended to be sold or consumed in the normal operating cycle, or
b. Held primarily for the purpose of trading, or
c. Expected to be realised within twelve months after the reporting period, or
d. Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period.
(ii) All other assets are classified as non-current.
(iii) Liability is considered as current when it is:
a. Expected to be settled in the normal operating cycle, or
b. Held primarily for the purpose of trading, or
c. Due to be settled within twelve months after the reporting period, or
d. There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.
(iv) All other liabilities are classified as non-current.
(v) All assets and liabilities have been classified as current or non-current as per the Corporation's operating
cycle and other criteria set out in Schedule III to the Act. Based on the nature of products and services and the
time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the
Corporation has ascertained its operating cycle as a period not exceeding twelve months for the purpose of
current and non-current classification of assets and liabilities.
ii) a) Property, plant and equipment ('PPE')
PPE are stated at historical cost, less accumulated depreciation and impairment losses, if any. Historical costs include
expenditure directly attributable to acquisition which are capitalised until the PPE are ready for use, as intended by
management. Any trade discount and rebates are deducted in arriving at the purchase price.
The cost of a self-constructed item of PPE comprises the cost of materials, direct labour and any other costs directly
attributable to bringing the asset to its intended working condition and estimated costs of dismantling, removing
and restoring the site on which it is located, wherever applicable.
Income and expenses related to the incidental operations, not necessary to bring the item to the location and
condition necessary for it to be capable of operating in the manner intended by management, are recognised in
standalone statement of profit and loss.
An item of PPE initially recognised is de-recognised upon disposal or when no future economic benefits are expected
from its use.
Gains or losses arising From disposals of assets are measured as the difference between the net disposal proceeds
and the carrying value of the asset on the date of disposal and are recognised in the standalone statement of profit
and loss, in the period of disposal.
Items such as spare parts are recognised as PPE when they meet the definition of PPE. Otherwise, such items are
classified as inventory.
If significant parts of an item of PPE have different useful lives, then they are accounted for as a separate asset
(major components) of PPE. Any gain or loss on disposal of an item of PPE is recognised in the standalone statement
of profit and loss.
In case of certain PPE, the Corporation uses different useful life than those specified in Schedule II of the Act which is
duly supported by technical evaluation. The management believe that these estimated useful lives are realistic and
reflect fair approximation of the period over which the assets are likely to be used.
Depreciation on addition to PPE or on disposal of PPE is calculated pro-rata from the month of such addition or up
to the month of such disposal as the case may be.
b) Development plantations
Cost incurred for acquiring new plantations and their upkeep are capitalised until they attain maturity to yield
biological produce. Such cost is included under capital work-in-progress and thereafter the same is capitalised as
"Development plantations" and depreciated over their estimated useful life.
c) Capital work-in-progress
Costs incurred during construction or acquisition of PPE is included under capital work-in-progress and the same
gets capitalised in the respective block of PPE on the completion of their construction. No depreciation is charged
till the asset is ready to use.
Advances made toward the acquisition or construction of any PPE outstanding at each reporting date are disclosed
as capital advances under "Other non-current assets".
d) Intangible assets
Intangible assets acquired separately are measured at cost of acquisition. Identifiable intangible assets are
recognised when it is probable that future economic benefits attributed to the asset will flow to the Corporation
and the cost of the asset can be reliably measured. Computer software is amortised on a straight line basis over the
estimated useful economic life. Following initial recognition, intangible assets are carried at cost less accumulated
amortisation and impairment losses, if any. The amortisation of an intangible asset with a finite useful life reflects
the manner in which the economic benefit is expected to be generated. The estimated useful life of amortisable
intangibles are reviewed and where appropriate are adjusted, annually.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset on the date of disposal and are recognised in the standalone
statement of profit and loss when the asset is derecognised. Amortisation on addition to intangible assets or on
disposal of intangible assets is calculated pro-rata from the month of such addition or up to the month of such
disposal as the case may be.
Depreciation and amortisation is provided on pro-rata basis from the period of addition or upto the period of
disposal, as the case may be.
f) Impairment of assets
(i) Non-financial assets
Intangible assets, right of use ('ROU') assets, investment property and PPE are evaluated for recoverability
whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For
the purpose of impairment testing, the recoverable amount (i.e., the higher of the fair value less cost to sell and
the value in use) is determined on an individual asset basis unless the asset does not generate cash flows that
are largely independent of those from other assets. In such cases, the recoverable amount is determined for the
cash generating unit ('CGU') to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognised in the standalone statement
of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated
recoverable amount of the asset. An impairment loss is reversed in the standalone statement of profit and loss
if there has been a change in the estimates used to determine the recoverable amount. The carrying amount
of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the
carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had
no impairment loss been recognised for the asset in prior years.
(ii) Financial assets
The Corporation assesses at each date of balance sheet whether a financial asset or a group of financial assets
is impaired. Ind AS 109 "Financial Instruments" requires expected credit losses to be measured through a loss
allowance. The Corporation recognises lifetime expected losses for all trade receivables that do not constitute
a financing component. In determining the allowances for doubtful trade receivables, the Corporation has
used a practical expedient by computing the expected credit loss allowance for trade receivables based on a
provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted For
Forwardlooking information. The expected credit loss allowance is based on the ageing of the receivables that
are due and allowance rates used in the provision matrix. For all other financial assets, expected credit losses
are measured at an amount equal to the 12-months expected credit losses or at an amount equal to the lifetime
credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition,
the Company considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company's
historical experience and informed credit assessment, that includes forward-looking information.
(iii) Investment in subsidiaries and associates
Investment in subsidiaries and associates are carried at cost less accumulated impairment losses, if any. Where
an indication of impairment exists, the carrying amount of the investment is assessed and written down
immediately to its recoverable amount. On disposal of investments in subsidiaries and associates, the difference
between net disposal proceeds and the carrying amounts are recognised in the standalone statement of profit
and loss.
Investment in quoted equity instruments are classified as Level 1 fair values in the fair value hierarchy.
Investments in unquoted equity instruments of companies are classified as Level 2 fair values in the fair value
hierarchy as valuation of these instruments is based on the recent market transactions and investment in co¬
operative societies and government securities are classified as Level 3 fair values.
g) Borrowing cost
Borrowing costs includes interest, amortisation of ancillary costs incurred in connection with the arrangement of
borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as
an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction or production of an asset 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
respective asset. All other borrowing costs are expensed in the period in which they occur.
h) Inventories
Inventories are valued at lower of cost and estimated net realisable value, after providing for obsolescence, wherever
appropriate. The cost is determined on weighted average basis, and includes all cost included in bringing inventories
to their present location and condition. In case of work in progress and manufactured finished goods, cost also
includes cost of conversion. Net realisable value is the estimated selling price in the ordinary course of business, less
estimated costs of completion and estimated costs necessary to make the sale.
i) Stores and spares are valued at lower of cost or net realisable value. Cost is calculated on weighted average
basis.
ii) Raw materials are valued at lower of cost or net realisable value. The cost includes purchase price as well as
incidental expenses and is calculated on weighted average basis.
iii) Tea stock is valued at cost or net realisable value whichever is lower. Timber in stock are designated as
agricultural produce as per Ind AS 41 "Agriculture" and are measured 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 "Inventories".
iv) Work-in-progress and manufactured finished goods of all divisions are valued at cost or net realisable value
whichever is lower. Cost is arrived on the basis of absorption costing.
v) Traded finished goods of all businesses are valued at first in first out ('FIFO') basis or net realisable value
whichever is lower.
vi) Real Estate under development comprises of freehold / leasehold land and buildings at cost, converted from
fixed assets into stock-in-trade and expenses related / attributable to the development of the said properties.
The same is valued at lower of cost or net realisable value.
i) Investments
Investments, which are readily realisable and intended to be held for not more than one year from the date on which
such investments are made, are classified as current investments. All other investments are classified as non-current
investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and
directly attributable acquisition charges such as brokerage, fees and duties.
Non-current investments including investment in subsidiaries and associates are carried at cost less impairment,
if any. However, provision for expected credit loss is recognised in the manner specified in para (f) (ii) above. On
disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or
credited to the standalone statement of profit and loss.
Non-current investments including Investments in quoted, unquoted equity instruments are carried at FVOCI .
However, provision for expected credit loss is recognised in the manner specified in para (f) (ii) above. On disposal of
an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the
FVOCI
j) Income tax
Tax expense for the year comprises of current tax and deferred tax. Current tax is measured by the amount of
tax expected to be paid to the taxation authorities on the taxable profits after considering tax allowances and
exemptions and using applicable tax rates and laws. Deferred tax is recognised on temporary differences between
the accounting base and the tax base for the year and quantified using the tax rates and tax laws enacted or
substantively enacted as on the balance sheet date.
Deferred tax is recognised using the balance sheet approach. Deferred tax assets and liabilities are recognised
for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their
carrying amount in standalone financial statements, except when the deferred tax arises from the initial recognition
of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting
nor taxable profits or loss at the time of the transaction. Deferred tax asset is recognised to the extent 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 are expected to be utilised. Deferred tax liabilities are recognised for all
taxable temporary differences.
Current tax and deferred tax assets and liabilities are offset where there is a legally enforceable right to set off the
recognised amount and there is an intent to settle the asset and liability on a net basis.
k) Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity
shareholders of the Corporation by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders of the Corporation and the weighted average number of shares outstanding during the period, are
adjusted for the effects of all dilutive potential equity shares.
l) Income recognition
(i) Revenue recognition
Revenue is recognised to depict the transfer of promised products to customers in an amount that reflects the
consideration to which the Corporation expects to be entitled in exchange for those products. The following
specific recognition criteria must also be met before revenue is recognised:
Sale of products - When a performance obligation is satisfied, the Company recognises as revenue the amount of
the transaction price (which excludes estimates of variable consideration) that is allocated to that performance
obligation. Transaction price is the amount of consideration to which the Company expects to be entitled in
exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of
third parties.
Trade receivables and contract liabilities - Trade Receivable is primarily comprised of billed and unbilled
receivables (i.e. only the passage of time is required before payment is due) for which the Company has an
unconditional right to consideration, net of an allowance for expected credit loss. Contract liabilities consist of
advance payments and billings in excess of revenues recognised.
The difference between opening and closing balance of the contract assets and liabilities results from the
timing differences between the performances obligation and customer payment.
(ii) Other operating income
It includes revenue arising from the duty drawbacks, export incentives or revenue arising from Corporation's
ancillary revenue-generating activities. Revenue from these activities are recorded only when Corporation is
reasonably certain of such income.
(iii) Other income
a. Dividend income is recognised when the Corporation's right to receive the payment is established.
b. For all financial instruments measured at amortised cost, interest income is recognised using the effective
interest method and on time proportion basis.
m) Employee benefits
Retirement benefits to employees comprise payments to provident funds, gratuity fund, compensated absence and
superannuation fund.
i) Long-term employee benefits
a. Defined contribution plan - The Corporation has defined contribution plan for post employment benefits
in the form of provident fund, employees' state insurance, pension and superannuation and labour welfare
fund. Under the defined contribution plan, the Corporation has no further obligation beyond making the
contributions. Such contributions are charged to the standalone statement of profit and loss as incurred.
b. Defined benefit plan - The Corporation has defined benefit plan for post employment benefits in the
form of gratuity for its employees in India. Liability for defined benefit plan is provided on the basis of
actuarial valuations, as at the balance sheet date, carried out by an independent actuary. The actuarial
valuation method used by independent actuary for measuring the liability is the projected unit credit
method. Actuarial gains or losses are recognised in Other Comprehensive Income ('OCI'). Further, the profit
or loss does not include an expected return on plan assets. Instead net interest recognised in standalone
statement of profit and loss is calculated by applying the discount rate used to measure the defined benefit
obligation to the net defined benefit liability or asset. The actual return on the plan assets above or below
the discount rate is recognised as part of remeasurement of net defined benefit liability or asset through
OCI. Remeasurement comprising of actuarial gains or losses and return on plan assets (excluding amounts
included in net interest on the net defined benefit liability or asset) are not reclassified to standalone
statement of profit and loss in subsequent periods.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that
relates to past service or the gain or loss on curtailment is recognised immediately in the standalone
statement of profit and loss. The Corporation recognises gains and losses on the settlement of a defined
benefit plan when the settlement occurs.
c. Other long-term employee benefits - The employees of the Corporation are also entitled to other
long-term employee benefits in the form of compensated absences as per the policy of the Corporation.
Accumulated leave, which is expected to be utilised within the next twelve months, is treated as short-term
employee benefit. The Corporation measures the expected cost of such absences as the additional amount
that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
Actuarial gains and loss are recognised in the standalone statement of profit and loss during the period in
which they arise.
ii) Short term employee benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services
rendered by employees is recognised in the year during which the employee rendered the services. These
benefits include performance incentives. These benefits include compensated absences such as paid annual
leaves and sickness leaves.
iii) Post-employment benefits
Contributions to defined contribution schemes such as provident fund and superannuation fund are recognised
as expenses in the period in which the employee renders the related service. In respect of certain employees,
provident fund contributions are made to a Trust administered by the Corporation. The interest rate payable
to the members of the trust shall not be lower than the statutory rate of interest declared by the Central
Government under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if
any, shall be made good by the Corporation. In respect of contributions made to Government administered
provident fund, the Corporation has no further obligations beyond its monthly contributions.
Superannuation fund - The eligible employees of the Corporation are entitled to receive post employment
benefits in respect of superannuation fund in which the Corporation makes annual contribution at a specified
percentage of the employee's eligible salary. Superannuation is classified as defined contribution plan as the
Corporation has no further obligations beyond making the contribution. The Corporation's contribution to
defined contribution plan is charged to the standalone statement of profit and loss as incurred.
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