Provisions are recognised when the Company has a present obligation (legal or constructive)
as a result of a past event, it is probable that the Company will be required to settle the
obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required toil
settle the present obligation at the end of the reporting period, taking in to account the risks
and uncertainties surrounding the obligation.
Operating Segments
Operating segments are reported in a manner consistent with the internal reporting provided
to the chief operating decision-maker (CODM). The chief operating decision-maker, who is
responsible for allocating resources and assessing performance of the operating segments,
has been identified as the Chief Executive Officer.
Key judgements and sources of estimation uncertainties
The following are the key assumptions concerning the future and other key sources of
estimating uncertainty as at the balance sheet date that may have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial
year. The Company based its assumptions and estimates on parameters available when the
financial statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances arising beyond
the control of the Company. Such changes are reflected in the assumptions when they occur.
Useful lives of Property, Plant and Equipment
The Company has adopted the useful lives as specified in Schedule II of the Companies Act,
2013 for Property, Plant and Equipment other than for bearer plants. For bearer plants, it has
determined the useful life to be 46 years. The Company reviews the estimated useful lives at
the end of each reporting period. Such useful lives depend upon various factors such as usage,
maintenance practices etc. and can involve estimation uncertainty. Changes in the expected
level of usage and technological developments could impact the economic useful lives and the
residual values of these assets, therefore, future depreciation charges could be revised. The
carrying amount of the Company's Property, Plant and Equipment at the balance sheet date
is disclosed in Note 5A to the financial statements.
Impairment of Property, Plant and Equipment
An impairment exists when the carrying value of an asset exceeds its recoverable amount,
which is the higher of its fair value less costs to sell and its value in use. The fair value less
costs to sell calculation is based on available data from binding sales transactions in an arm's
length transaction of similar assets or observable market prices less incremental costs for
disposing the asset. The value in use calculation is based on a discounted cash flow model and
requires the Company to make an estimate of the expected future cash flows from the cash¬
generating units and also to choose a suitable discount rate in order to calculate the present
value of those cash flows.
Fair value measurements and valuation processes
Some of the Company's assets are measured at fair value for financial reporting purposes.
Significant estimates are used in fair valuation of agricultural produce (harvested green leaves)
and biological assets (unharvested green leaves).
For harvested or unharvested green leaves, since there is no active market, the fair value is
arrived at based on the observable market prices of made tea adjusted for manufacturing
costs and plucking costs, as applicable.
Employee Defined Benefit Plans
The determination of Company's liability towards defined benefit obligations to employees
is made through independent actuarial valuation including determination of amounts to be
recognised in the income statement and in the other comprehensive income. Such valuation
depend upon assumptions determined after taking into account inflation, promotion and other
relevant factors such as supply and demand factors in the employment market. Any changes
in these assumptions will impact the carrying amount of defined benefit obligations.
The Company always measures the loss allowance for trade receivables at an amount equal to lifetime expected credit
losses (ECL). The ECL on trade receivables are estimated using a provision matrix by reference to past default experience
of the debtor and an analysis of the debtor's current financial position, adjusted for factors that are specific to the debtors,
general economic conditions of the industry in which the debtors operate, and an assessment of both the current as well
as the forecast direction of conditions at the reporting date.
b) Rights, preferences and restrictions attached to the Equity Shares
The Company has only one class of shares referred to as Equity shares having a par value of Rs. 10 per share. Each
Shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the
approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation, the Equity Shareholders
are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to
their shareholding.
a. Capital Reserve Account
This reserve represents the excess of net assets taken over by the Company over the consideration paid for business
combinations. This includes Rs. 3.88 Millions on account of pre-acquisition profit.
b. Development Rebate Reserve, Development Allowance Reserve and Investment Allowance (Utilised) Reserve
Transferred from pre-merger reserves.
c. General Reserve
This reserve represents appropriations of profits made from retained earnings and can be distributed / utilized by the
Company in accordance with the Companies Act, 2013.
d. Retained Earnings
This reserve represents the cumulative profits and can be distributed / utilized by the Company in accordance with the
Companies Act, 2013.
(i) Represents term loans from Lebong Investments Private Limited (Fellow subsidiary company) of Rs. 103.13 millions (31st
March 2025 : Rs 115.63 Millions), at interest rate of 9% p.a., repayable in 33 quarterly instalments of Rs. 3.125 millions from
the Balance Sheet date.
(ii) Represents term loan of Rs. Nil (31st March 2025 : Rs 34.38 Millions) from Axis Bank, secured by first charge on the entire
property, plant and equipment of one tea estate, both movables and immovables. The loan was fully repaid during the year.
(iii) Represents term loan of Rs. 16.36 Millions (31st March 2025 : Rs 16.76 Million) from Candi Solar IN 1 Private Limited,
secured by hypothecation of the Solar Plant installed at one of the tea estate of the Company. This is payable in 221
equated monthly instalments of Rs 0.144 Million from the Balance Sheet date.
The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender in accordance
with the guidelines on wilful defaulters issued by the Reserve Bank of India.
Note: Demand Loans were secured by hypothecation of entire current assets of the Company including stocks and book
debts both present and future on first pari-passu basis.
Equitable mortgage over the immovable properties at four of the Company's Tea Estates and hypothecation charge on
movable plant and machinery and other movable fixed assets at the same four Tea Estates of the Company on first pari-
passu basis.
The quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in
agreement with the unaudited books of accounts for respective quarters.
The Company has a supplier financing arrangement with a financing partner to ensure settlement of dues payable to MSME
vendors within the statutory period prescribed under the MSMED Act, 2006. Under the arrangement, once supplier invoices
are approved by the company, the financing partner makes payment to MSME suppliers, while the company settles the
amount with the financing partner on the due date agreed upon.
In its liquidity assessment, the Company does not see any liquidity risk arising out of these supplier financing arrangements,
as commercial terms for the Company do not vary materially based on whether the supplier avails such financing
arrangements.
The Company's activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The
Company continues to focus on a system-based approach to business risk management. The Company's financial risk
management process seeks to enable the early identification, evaluation and effective management of key risks facing the
business. Backed by strong internal control systems, the current Risk Management System rests on policies and procedures
issued by appropriate authorities; process of regular reviews / audits to set appropriate risk limits and controls; monitoring
of such risks and compliance confirmation for the same.
a) Market risk
The Company's business primarily agricultural in nature, exposes it to the risk that the fair value or future cash fiows of a
financial instrument will fluctuate because of adverse weather conditions and lack of future markets. The Company closely
monitors the changes in market conditions and select the sales strategies to mitigate its exposure to risk.
i. Foreign currency risk
The Company undertakes transactions denominated in foreign currency which results in exchange rate fluctuations. Such
exchange rate risk primarily arises from transactions made in foreign exchange and reinstatement risks arising from
recognised assets and liabilities, which are not in the Company's functional currency (Indian Rupees). A significant portion
of these transactions are in US Dollar, Euro, etc.
The impact of sensitivity analysis on account of outstanding foreign currency denominated assets and liabilities is
insignificant.
ii. Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The objectives of the Company's interest rate risk management processes are to lessen the
impact of adverse interest rate movements on its earnings and cash flows and to minimise counter party risks.
The Company is exposed to interest rate volatilities primarily with respect to its short terms borrowings from banks as well
as financial institutions which are taken and squared off during the year. Such volatilities primarily arise due to changes in
money supply within the economy and/or liquidity in banking system due to asset/liability mismatch, poor quality assets
etc. of banks. The Company manages such risk by operating with banks having superior credit rating in the market as well
as financial institutions.
Interest rate sensitivity
The table below shows the sensitivity of the Company's profitability related to change in rate of borrowings by 100 basis
points on loans outstanding as at 31st March 2026.
iii. Price risk
The Company invests its surplus funds primarily in mutual funds measured at fair value through profit or loss. However,
aggregate value of such investments as at 31st March 2026 is Rs 131.22 millions (31st March 2025 - Rs. 7.60 millions).
Investments in the mutual fund schemes are measured at fair value. Accordingly, these do not pose any significant price risk.
b) Liquidity risk
Liquidity risk is the risk that the Company may encounter difficulty, including seasonality in meeting its obligations. The
Company mitigates its liquidity risks by ensuring timely collections of its trade receivables, close monitoring of its credit cycle
and ensuring optimal movements of its inventories.
The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the
reporting date.
c) Credit risk
Credit risk is the risk that counterparty will not meet its obligations leading to a financial loss. The Company has its policies
to limit its exposure to credit risk arising from outstanding receivables. Management regularly assess the credit quality of
its customer's basis which, the terms of payment are decided. Credit limits are set for each customer which are reviewed
on periodic intervals. The credit risk of the Company is low as the Company largely sells its teas through the auction system
which is on cash and carry basis and through exports which are mostly backed by letter or credit or on advance basis. There
is no significant financing component involved._
4. Fair value measurements
Fair value hierarchy
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities
Level 2: Inputs other than quoted price including within level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques
which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If significant
inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)
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 inputs 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.
36. The financial risk associated to agriculture would include climate change, price fluctuation, currency fluctuation and
input cost increases. Being dependent on rainfall, any shortfall would directly impact the production. The sale of tea being
largely through the auction system, any price fluctuation would impact profitability. Increased wages also has a direct
impact on the cost of production because of labour intensive nature of the business operations.
Management is continuously monitoring all the above factors. Investment in irrigation, a planned replanting programme
to ensure higher yields and improving efficiency of labour and modernisation are some of the measures taken by the
management to mitigate the risks.
37. (i) On 16th April 2025, the Board of Directors of the Company approved to sell assets and assign leasehold rights of land
of a tea estate of the Company. In line with such approval, the Company has sold assets of the aforesaid tea estate for an
aggregate consideration of Rs. 265.50 million in March 2026. Profit arising on such transaction amounting to Rs. 101.44
million has been disclosed as exceptional item in the Statement of Profit and Loss.
(ii) During the previous year ended 31st March 2025, on 11th February 2025, the Board of Directors of the Company
approved to sell assets and assignment of leasehold rights of land of a tea estate of the Company. In line with such
approval, the Company had sold assets of the aforesaid tea estate for an aggregate consideration of Rs. 181.10 Million in
the year ended 31st March 2025. Profit arising on such transaction amounting to Rs. 53.20 millions has been disclosed as
exceptional item for the year ended 31st March 2025.
38. Subsequent to the current year ended 31st March 2026, pursuant to a non-binding Memorandum of Understanding
dated 6th April 2026, the Company entered into a Agreement for Sale of Specified Assets on 21st May 2026 for the disposal
of certain specified assets and assignment of leasehold rights relating to a tea estate, for an aggregate consideration of Rs
190.00 millions.
39. On 21st November 2025, the Government of India notified provisions of the Code on Wages, 2019, the Industrial
Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code,
2020, ('Labour Codes') which consolidate twenty-nine existing labour laws into a unified framework governing employee
benefit during employment and post-employment. The Labour Codes, amongst other things, introduces changes, including
a uniform definition of wages. The Company has assessed and accounted for the incremental impact of these changes
amounting to Rs 21.90 millions, which has been recognised under employee benefit expenses in the year ended 31st March
2026. The Company continues to monitor the developments pertaining to the Labour Codes and will evaluate impact if any
on the measurement of liability pertaining to employee benefits.
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