1.19 Provisions, Contingent Liabilities and Contingent Assets
a) Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered probable. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the balance sheet date.
b) Contingent liabilities are shown by way of Notes to the Accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable.
c) Contingent assets are not recognized in the Accounts till the realisation of income is virtually certain. However, the same are disclosed in the financial statements where an inflow of economic benefit is possible.
1.20 Earnings Per share
Basic earnings per share is computed by dividing the profit or loss after tax (including the post tax effect of extra ordinary
items, if any) by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit or loss after tax (including the post tax effect of any extra
ordinary items, if any) by the weighted average number of equity shares considered for deriving basic earnings per
share and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares.
1.21 Cash flow statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing flows. The cash flows from operating, investing and financing activities of the Company are segregated.
1.22 Cash and Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term highly liquid investments with orginial maturities of three months or less that are readily convertible to know amounts of cash and which are subject to an insignificant risk of changes in value.
1.23 Operating Segment
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM).
1.24 Significant Judgement and Estimation in Applying Accounting Policies
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. Information about significant judgements and key sources of estimation made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is included in the following notes:
i) Taxation : The Company is engaged in agricultural actvites and also subject to tax liability under MAT provisions. Significant judgement is involved in determining the tax liability for the Company. Also there are many transactons and calculatons during the ordinary course of business for which the ultimate tax determinaton is uncertain. Further judgement is involved in determining the deferred tax positon on the balance sheet date.
ii) Depreciation and amortisation : Management reviews its estimate of the useful lives of depreciable/ amortizable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to actual normal wear and tear that may change the utility of property, plant and equipment.
iii) Defined Benefit Obligation (DBO): Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, anticipation of future salary increases and inflation rate. The Company considers that the assumptions used to measure its obligations are appropriate. However, any changes in these assumptions may have a material impact on the resulting calculations.
iv) Provisions and Contingencies: Provisions and contingencies are based on Management's best estimate of the liabilities based on the facts known at the balance sheet date.
v) Fair value measurement of financial Instruments: When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The input to these models are taken from observable markets where possible, but where this not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.
vi) Fair Value of Biological Asset : The fair value of Biological Assets is determined based on recent transactions entered into with third parties or available market price. Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
vii) Impairment of Financial Assets: The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication of impairment. If recoverable amount is less than its carrying amount, the impairment loss is accounted for.
Nature of securitie
i) Term Loans :
(a) Federal Bank is secured by way of hypothecation of car purchased during the financial year 2022-23. The loan carries interest @ 7.90% p.a. (P.Y. 7.90% p.a.).
(b) HDFC Bank is secured by way of hypothecation of car purchased during the financial year 2022-23. The loan carries interest @ 8.50% p.a. (P.Y. 8.50% p.a.).
(c) Punjab National Bank is secured by way of hypothecation of Plant & Machinery and other equipments procured out of the term loan during the financial year 2023-24. Interest rate for PNB term loan is RLLR BSP -0.50% i.e. 8.75%.
ii) Terms of repayments
i) The outstanding amount of car loan with Federal Bank is repayable in 19 monthly installments starting from Apr, 2024 and the last installment is due in the month of October, 2025.
ii) The outstanding amount of car loan with HDFC Bank is repayable in 27 monthly installments starting from April, 2024 and the last installment is due in the month of June, 2026.
iii) The outstanding amount of term loan with Punjab National Bank is repayable in 17 equal quarterly installments starting from June, 2024 and the last installment is due in the month of June, 2028.
a) Nature of securities
i) Term Loans from :
(a) Bank of Baroda Bank was secured by way of hypothecation of car purchased during the financial year 2020-21. The loan carried interest @ 7.45% p.a. (P.Y. 7.45% p.a.). The final installment of the loan, which was due in February 2024, has been fully paid.
(b) Federal Bank is secured by way of hypothecation of car purchased during the financial year 2022-23. The loan carries interest @ 7.90% p.a. (P.Y. 7.90% p.a.).
(c) HDFC Bank is secured by way of hypothecation of car purchased during the financial year 2022-23. The loan carries interest @ 8.50% p.a. (P.Y. 8.50% p.a.)
(d) Punjab National Bank is secured by way of hypothecation of Plant & Machinery and other equipments procured out of the term loan during the financial year 2023-24. Interest rate for PNB term loan is RLLR BSP - 0.50% i.e. 8.75%.
ii) Cash Credit with Punajab National Bank is secured by hypothecation of tea, prompts, receivables, other current assets both present and future and equitable mortage of the company's Kanu, Teen Ali, Doyang and Dessoie Tea Estate and also secured against personal gurantee of two Directors of the Company.
iii) Overdraft Facility with HDFC Bank is secured by pledged of Fixed Deposit of Rs. 256.68 Lakhs with HDFC Bank.
iv) Overdraft Facility with YES Bank was secured by pledged of Fixed Deposit of Rs. 501.14 Lakhs with YES Bank.
b) Terms of repayments
i) The outstanding amount of car loan with Bank of Baroda was repayable in 11 monthly installments starting from April, 2023 and the final installment of the loan, which was due in February 2024, has been fully paid.
ii) The outstanding amount of car loan with Federal Bank is repayable in 19 monthly installments starting from Apr, 2024 and the last installment is due in the month of October, 2025.
iii) The outstanding amount of car loan with HDFC Bank is repayable in 27 monthly installments starting from April, 2024 and the last installment is due in the month of June, 2026.
iv) The outstanding amount of term loan with Punjab National Bank is repayable in 17 equal quarterly installments starting from June, 2024 and the last installment is due in the month of June, 2028.
c) The Company has filed quarterly returns or statements with the Banks in lieu of the sanctioned working capital facilities, which are in agreement with the Books of Accounts.
d) The Company has not been declared as willful defaulter by any Bank or Financial Institutions.
(ix) Risk exposure
These plans are exposed to the actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.
Investment risk:
For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.
Market/Interest risk: :
Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.
Longevity risk:
The impact of longevity risk will depend on whether the benefits are paid before retirement age or after. Typically for the benefits paid on or before the retirement age, the longevity risk is not very material.
Salary risk:
The present value of the defined benefit plan lliability is calculated by reference to the future salaries of plan participants. Actual Salary increase that are higher than the assumed salary escalation, will result in increase to the Obligation at a rate that is higher than expected.
Attrition/Withdrawal Assumption
If actual withdrawal rates are higher than assumed withdrawal rates, the benefits will be paid earlier than expected. Similarly if the actual withdrawal rates are lower than assumed, the benefits will be paid later than expected. The impact of this will depend on the demography of the company and the financials assumptions.
Regulatory Risk
Any Changes to the current Regulations by the Government, will increase (in most cases) or Decrease the obligation which is not anticapated. Sometimes, the increase is many fold which will impact the financials quite significantly.
(b) Measurement of fair values
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique :
Level 1: Financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting date.
Level 2: Biological Asset other than Bearer plant is measured at fair value which is arrived at based on the observable market prices of Green Leaf adjusted for estimated plucking cost.
Level 3: If one or more of the significant inputs is not based on observable market data, the instruments is included in level 3.
(c) Valuation technique used to determine fair value of Financial Instruments
Specific valuation techniques used to value financial instruments include:
- (i) the use of quoted market prices or dealer quotes for similar instruments
- (ii) If one or more of the significant inputs is not based on observable market data, the fair value is determined using
generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of counterparty. This is the case with listed instruments where market is not liquid and for unlisted instruments.
The Company's activities expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, the company has risk management policies as described below :-
(a) Credit Risk
Credit risk refers to the risk of financial loss arising from default / failure by the counterparty to meet financial obligations as per the terms of contract. The Company is exposed to credit risk for receivables, cash and cash equivalents. None of the financial instruments of the Company result in material concentration of credit risks.
Credit risk on receivables is minimum since sales through different mode (eg. auction, private ) are made after judging credit worthiness of the customers, advance payment etc.
Credit risk from balances with banks and financial institutions is managed by the Company's in accordance with the Company's policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty's potential failure to make payments.
(b) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Management monitors rolling forecasts of the Company's liquidity position on the basis of expected cash flows. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Maturity profile of financial liabilities :
The following are the remaining contractual maturities of financial liabilities as at the Balance Sheet dates -
(c) Market Risk
(i) Interest rate risk : Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company's does not have significant exposure to Long Term Borrowing and also does not have a significant cash flow interest rate risk. Similarly Short term borrowing do not have any significant fair value or interest rate risk due to short term tenure.
(ii) Price risk : The Company invest its surplus fund primarily in debt mutual funds measured at FVTPL and in fixed deposit of Banks,accordingly these do not pose any price risk..Further, Equity price risk is related to change in market reference price of investment in quoted shares. The exposure to equity price risk arises from Investment held and classified in Balance Sheet as FVTOCI. In general the investments are strategic investment and do not held for trading purpose so there is no material equity risk relating to Company's equity investment which are detailed in note no 4 of financial statements.
38 FINANCIAL RISK MANAGEMENT (Contd.)
(d) Agriculture risk :
Cultivation of tea being an agriculture activity, there are certain specific financal risk. These financial risk arise mainly due to adverse weather condition, fluctuation of selling price of finished goods and increase in input cost. The Company manges the above financial risks in the following manner :
- Adequate level of inventory of chemicals, fertilisers and other inputs are maintained so that timely corrective action can be taken in case of adverse weather condition.
- Sufficient level of consumables stores like packing material, coal HSD etc are maintained in order to mitigate financial risk.
- Sufficient working capital facility is obtained from banks so that cultivation and manufacturing and sale of tea is not adversely affected in times of adverse condition.
(e) Other Risk :
Based on a detailed assessment of the recoverability and carrying values of inventories, intangible assets, trade receivables, investments and other financial assets,it has been concluded that no material adustments are required in the financial statements.
39. CAPITAL MANAGEMENT
The Company manges its capital to ensure that the Company will be able to continue as going concern while maximising the return to all stakeholders through optimisation of debt and equity balances. The capital structure of the Company consist of net debt and total equity of the Company.
Net debt implies total borrowing of the Company as reduced by Cash and Cash Equivalent and Equity comprises all component attributable to the owners of the Company.
44. DISCLOSURE UNDER SCHEDULE V TO THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
There are no transaction (other than transactions with related parties as given in Note No. 36 which are required to be disclosed under Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
45. Micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company and accordingly, there is no due outstanding to Micro and Small Enterprises as on 31st March 2024 (P.Y. Nil).
No interest in terms of section 16 of Micro, Small & Medium Enterprises Development Act, 2006 or otherwise has either been paid or payable or accrued and remaining unpaid as at 31st March 2024
46. CORPORATE SOCIAL RESPONSIBILITY
Gross amount required to be spent by the company the year towards Corporate Social Responsibility (CSR) as per the provision of section 135 of the Companies Act, 2013 amounts to NIL (P.Y. Rs. 23.92 Lakhs).
47. Details of Loan given,Investments made, guarantee given or security provided covered under section 186 (4) of the Companies Act, 2013 -
(a) The particulars of loans given are stated under "Financial Assets - Loans" in Note No. 12. All these loans are repayable on demand and all the loans have been utilised for general corporate purpose by the recipents.
Notes to Financial Statements (Contd.)
(b) The relevant details of investments are given in Note Nos. 4. and 9.
(c) The Company has not given any guarantee or provided any security.
(d) During the financial year the Company has not granted any loans and advances to any promoter Directors,Key Managerial Persons and related parties.
48. DISCLOSURE UNDER IND AS- 115 REVENUE FROM CONTRACT WITH CUSTOMER -
The Company is engaged into the business of Cultivation and Manufacturing of Tea and trading of LED lights and all related products. During the financial year 2023-24, there is no material impact on Company revenue on applying the said Ind As - 115.
49. The Company's leasing agreements (as lessee) in respect of lease for housing and warehouse, which are on periodic renewal basis. Expenditure incurred on account of rent during the year and recognized in the Statement of Profit & Loss amounts to Rs. 15.36 Lakhs (P.Y. Rs 28.11 Lakhs).
50. OTHER DISCLOSURES :
(a) Relationship with Struck off Companies - The Company does not have any transactions or relationships with any companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956.
(b) There are no transactions that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 which have not been recorded in the books of account.
(c) There are no charges or satisfaction of charges yet to be registered with Registrar of Companies beyond the statutory period.
(d) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
(e) The Company have not advanced or loaned or invested funds, during the year, to any other person(s) or entity(ies), including foreign entititie (Intermediaries) with the understanding that the Intermediary shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(f) The Company have not received funds, during the year, from any person(s) or entity(ies), including foreign entitities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(g) The company has utilised the Borrowings from Banks and Financial Institutions for the purpose for which it was taken.
(h) During the year the company did not provide any loans or advances (repayable on demand or without specifying any term or period of repayment) to promoters, directors, KMP's and related parties (as defined under Companies Act, 2013,) either severally or jointly with any other persons.
51. SUBSEQUENT EVENT-
The Board of Directors at its meeting held on 22 nd May 2024, has recommended a dividend of Rs. 2 per Equity Share held subject to the shareholders approval at Annual General Meeting.
52. The financial statements were approved for issue by the Board of Directors on 22nd May, 2024.
53. The Company has used accounting software for maintaining its books of account, which has a feature of recording audit trail (edit log) as perthe requirement of the Companies (Accounts) Rules, 2014 as amended by Ministry of Corporate Affairs (MCA) notification dated 24th March 2021. This feature was enabled and operated throughout the year for all relevant transactions, with the following exceptions where the company is still in the process of implementing the audit trail for its books of accounts:
a) During the year the audit trail feature was not enabled for certain modules, viz., Inventory, Field. Labour and Employee.
b) The accounting software lacks a feature to track whether the audit trail was enabled continuously throughout the year.
c) The audit trail feature, where applied, only records the date and the person responsible for the modification.
54. The previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures to the current year.
As per our report of even date attached For & on behalf of the Board of Directors For G A R V & Associates
Chartered Accountants P K Agarwal N K Harodia
F.R No: 301094E (Managing Director) (Independent Director)
SUNDEEP SHARMA (dIN No. 00703745) (DIN No. 06676837)
Partner
Membership No. 063273 Chitra Jaiswal Subrata Dasgupta Vinay Kr. Kejriwal
Place: Kolkata (Company Secretary) (Chief Executive Officer) (Chief Financial Officer)
Dated : 22nd May, 2024 (Mem. # A-54257)
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