Notes to Financial Statements

ED FIRST TIME ADOPTION OF IND AS

Transition to Ind AS

These are the Company's first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 2, have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the Company's date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company's financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous

GAAP to Ind AS.

A.1 Ind AS optional exemptions

A. 1.1 Deemed cost

Ind AS 101 permits a first time adopter to elect to measure an item of property, plant and equipment at the date of transition to Ind AS at its fair value and use that fair value as its deemed cost at that date.

Accordingly, the Company has elected to measure certain class of property, plant and equipments at its fair value as at the transition date and considered such value as deemed cost at that date. While remaining class of assets are carried at historical cost determined in accordance with retrospective application of Ind AS.

A.1.2 Investments in subsidiaries

Ind AS 101 permits a first-time adopter to measure its investments in subsidiaries at deemed cost. The deemed cost of such an investment could be either (a) its fair value at the date of transition; or (b) previous GAAP carrying amount at that date. The option may be exercised individually and separately for each item of investment. Accordingly, the Company has opted to measure its investments in subsidiaries at deemed cost, i.e. previous GAAP carrying amount

A. 1.3 Past business combinations

Ind AS 101 permits a first-time adopter, not to apply Ind AS 103 retrospectively to past business combinations (business

combinations that occurred before the date of transition to Ind ASs).

Accordingly, the Company has opted to apply this exemption for past business combinations.

A.2 Ind AS mandatory exceptions

A. 2.1 Estimates

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

Investment in equity instruments carried at FVOCI and investment in mutual funds as FVPL;

Biological asset measured at fair value less cost to sell.

A.2.2 Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the fact and circumstances that exists at the date of transition to Ind AS.

Note 41l FIRST TIME ADOPTION OF IND AS

B. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Notes to reconciliation of total equity and total comprehensive income (1) Property, plant and equipment

(a) Under Ind AS, the Company has elected to measure certain class of property, plant and equipment at its fair value viz. freehold land, leasehold land and bearer plants as at the transition date and considered such value as deemed cost at that date. While remaining class of property, plant and equipment are carried at historical cost determined in accordance with retrospective application of Ind AS.

During the year 31 March 2017, the Company had applied revised Accounting standard 10 and recognised freehold land, leasehold land and bearer plants at fair value hence there is no impact on equity as at 31 March 2017.

(2) Financial Instruments

(a) In accordance with Ind AS 109 "Financial Instruments", investments in equity instruments (other than in subsidiaries, associates and joint ventures) and equity oriented mutual funds have been recognised at fair value at each reporting date through other comprehensive income.

Consequently, on eventual sale of such investments, profit or loss recognised in the statement of profit and loss under the Previous GAAP have been reversed as the fair value changes are recognised through other comprehensive income.

(b) In accordance with Ind AS 109 "Financial Instruments", investments in debt oriented/hybrid mutual funds are recognised at fair value through the statement of profit and loss at each reporting period.

(c) In accordance with Ind AS 109 "Financial Instruments", financial guarantee contracts are required to be recognised initially at fair value and subsequently at the higher of:

(i) the amount of the loss allowance

(ii) the amount initially recognised less, when appropriate, the cumulative amount of income recognised

(3) Impact of recognising biological assets at fair values and movement thereon

Under previous GAAP, biological assets were not required to be recognised. Under Ind AS, these have been recognised at fair value less costs to sell and change in fair value has been recognised in profit or loss.

(4) Impact of measuring inventory of made tea on the basis of Ind AS 2 and Ind AS 41

(a) Raw Materials: Under previous GAAP, no valuation was done for period end harvested tea-leaf. Under Ind AS, harvested leaf is measured at its fair value less cost to sell and is classified as Raw Materials.

(b) Fnished goods: Under previous GAAP, tea stock has been valued at the lower of cost and net realizable value. Cost of inventories comprise all costs of purchase/production 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, conversion cost and other costs incurred in bringing the inventories to their present location and condition.

(5) Reversal of Proposed Dividend and Tax on Proposed Dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements and applicable dividend tax thereon were considered as adjusting events. Accordingly, provision for proposed dividend and dividend tax thereon was recognised as a liability. Under Ind AS, such dividend and tax thereon are recognised when the dividend is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend and dividend tax thereon included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

(6) Replanting subsidy reclassified as deferred subsidy income

Under previous GAAP, replanting subsidy received from the Tea Board was recognized as revenue in the Statement of Profit and Loss as and when accrued. Under Ind AS, the same is recognized as deferred revenue in the Balance Sheet and transferred to profit or loss on a systematic and rational basis over the useful lives of the bearer plants.

(7) Other adjustments

Other adjustments primarily relate to capitalisation of finance cost on capital work-in-progress.

(8) Deferred tax

In accordance with Ind AS 12, "Income Taxes", the Company on transition to Ind AS has recognised deferred tax on temporary differences, i.e. based on balance sheet approach as compared to the earlier approach of recognising deferred taxes on timing differences, i.e. profit and loss approach.

Notes to reconciliation of total equity and total comprehensive income

(9) Reclassification of actuarial (gains) / losses of employee benefit to other comprehensive income (OCI)

(a) In accordance with Ind AS 19, "Employee Benefits" re-measurement gains and losses on post employment defined benefit plans are recognised in other comprehensive income as compared to the statement of profit and loss under the Previous GAAP.

(b) Interest expense/income on the net defined benefit liability/asset is recognised in the statement of profit and loss using the discount rate used for defined benefit obligation as compared to the expected rate used for recognising income from plan assets under the Previous GAAP.

(10) lmpact on account of government grant of capital nature

Under previous GAAP, government grant of capital nature were reduced from the value of property, plant and equipment and hence investing activities were shown net of such grants received. The same are now being treated as deferred income in accordance with Ind AS 20.

(11)Other bank balances

Under previous GAAP, other bank balances (comprising unpaid dividend), were considered as part of cash and cash equivalents. The same are not being included under Ind AS for consideration as cash and cash equivalents. The movement in balances is being considered under operating activities.

Note EH RESEARCH AND DEVELOPMENT

Note 43 LEASE OBLIGATION

Operating Lease

The Company has taken various office premises, factory premises and residential accommodation for employees under operating cancellable lease arrangements having tenures ranging between 5 and 9 years. There is no specific obligation for renewal of these agreements.

Out of a total of 12.98 hectares (31 March 2017 : 12.92 hectares, 01 April 2016 : 12.92 hectares) Freehold land under Investment Property as mentioned in Note 4 - Investment Properties, 6.25 hectares (31 March 2017 : 6.25 hectares, 01 April 2016 : 6.25 hectares) of land which was earlier declared as Private Forest land under the provisions of the Maharashtra Private Forest (Acquisition) Act 1975, has been mutated in the name of Dhunseri Petrochem & Tea Ltd (being the transferor company in the Scheme of Arrangement executed in the FY 2014-15) during the previous year. Pending completion of relevant formalities the same is yet to be transferred in the name of the Company.

Miscellaneous expenses (Refer Note 30) include a donation of Rs NIL (Previous Year Rs 25 lakh) for a political purpose to All India Trinamool Congress.

Disclosures relating to Specified Bank Notes* (SBNs) held and transacted during the period from 8 November 2016 to 30 December 2016

* Specified Bank Notes (SBNs) mean the bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees as defined under the notification of the Government of India, in the Minsitry of Finance, Department of Economic Affairs no. S.O. 3407(E), dated the November 8, 2016.

Pending completion of relevant formalities certain assets and liabilities acquired pursuant to the Scheme of Arrangement remain included in the books of the Company under the name of the transferor Company.

The Board of Directors in its meeting on May 21, 2018 has proposed a final dividend of Rs 8/- per equity share for the financial year ended March 31, 2018. The proposal is subject to the approval of the shareholders at the Annual General Meeting and if approved would result in a cash outflow of Rs 675.59 Lakhs (including taxes).