10. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS.
Provisions involving substantial degree of estimation in measurement are recognized when there is a legal
or constructive obligation as a result of past events and it is probable that there will be an outflow of
resources and a reliable estimate can be made of the amount of obligation. Provisions are not recognized
for future operating losses. The amount recognized as a provision is the best estimate of the consideration
required to settle the present obligation at the end of the reporting period, taking into account the risks and
uncertainties surrounding the obligation.
Contingent liabilities are not recognized but are disclosed by way of notes to the financial statements
when there is a possible obligation arising from past events, the existence of which will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control
of the Company or when there is a present obligation that arises from past events where it is either not
probable that an outflow of resources will be required to settle the same or a reliable estimate of the
amount in this respect cannot be made.
Contingent assets are not recognized but disclosed in the Financial Statements by way of notes to
accounts when an inflow of economic benefits is probable.
11. REVENUE RECOGNITION
(i) Sales is recognized in the accounts on passing of title of goods i.e. delivery as per terms of sale or
on completion of auction in case of auction sale.
(ii) This represents the net invoice value of goods supplied after deducting discounts, rebates and
taxes and duties collected on behalf of third parties and which the company pays as principal.
12. EMPLOYEE BENEFITS
Short term Employee benefits are accrued in the year services are rendered by the employees.
Provident and Family Pension Fund: In accordance with the provisions of the Employee Provident Funds
and Miscellaneous Provisions Act, 1952, eligible employees of the company are entitled to receive benefits
with respect to provident fund, a defined contribution plan, in which both the company and employee
contribute monthly to Provident Fund Scheme the Central Government/T rust at a determined rate. The
Company’s contribution is charged off to the Statement of Profit and Loss.
Gratuity: The Company has taken a Group Gratuity scheme policy for part of its employees (Garden
employees) with Life Insurance Corporation of India (LIC) for future payment of Gratuity to those part
employees.
Employee benefits under defined benefit plans are determined at the close of each year at the present
value of the amount payable by actuarial valuation techniques using the projected unit credit method.
Contributions under the scheme for defined benefit under the Payment of Gratuity Act, 1972, is determined
on the basis of actuarial valuation and are recognized as year’s expenditure. Actuarial gains and losses
arising from experience adjustments and changes in actuarial assumptions are recognized in other
comprehensive income. Remeasurements are not classified to the statement of Profit and Loss in
subsequent periods. Other costs are recognized in the Statement of Profit or Loss. Bifurcation of liabilities
into Current and Non-current are done based on actuarial valuation report.
Leave Encashment Benefits: Leave encashment benefits are payable to employees while in service,
retirement and on death while in service or on termination of employment. With respect to accumulated
leaves outstanding at the year-end, liability for leave are accounted for on the basis of actuarial valuation
at the balance sheet date. The present value of such obligation is determined by the projected unit credit
method as at the Balance Sheet date through which the obligations are settled. The resultant actuarial
gains or losses on change in present value of defined benefit obligation or change in return of the plan
assets is recognized as an income or expense in the Statement of Profit and Loss. Bifurcation of liabilities
into Current and Non-current are done based on actuarial valuation report.
13. FOREIGN EXCHANGE TRANSACTION
These financial statements are presented in Indian Rupee, the national currency of India, which is the
functional currency of the company.
T ransactions in foreign currencies are translated into the functional currency at the exchange rates prevailing
on the date of the transactions. Foreign currency monetary assets and liabilities at the year-end are
translated at the year-end exchange rates. Non-monetary items which are carried in terms of historical
cost denominated in a foreign currency, are reported using the exchange rate as at the date of transaction.
The loss or gain thereon and also on the exchange differences on settlement of the foreign currency
transactions during the year are recognized as income or expense in the statement of profit and loss.
14. SUBSIDY
Tea Replantation subsidy and other subsidies is accounted for on acceptance/receipt by/from the concerned
authorities.
15. EXCEPTIONAL ITEMS
Exceptional items are disclosed separately in the Financial Statements where it is necessary to do so to
provide further understanding of the financial performance of the Company. It has been shown separately
due to its nature and incidence.
16. BORROWING COST
Borrowing cost comprises of interest and other costs incurred in connection with the borrowing of the
funds. All borrowing costs are recognized in the Statement of Profit and Loss using the effective interest
method except to the extent attributable to qualifying Property, Plant Equipment (PPE) which are capitalized
to the cost of the related assets. A qualifying PPE is an asset, that necessarily takes a substantial period
of time to get ready for its intended use or sale. Borrowing cost also includes exchange differences to the
extent considered as an adjustment to the borrowing costs.
17. TAXES ON INCOME
Income tax expense representing the sum of current tax expenses and the net charge of the deferred
taxes is recognized in the income statement except to the extent that it relates to items recognized
directly in equity or other comprehensive income.
Current income tax is provided on the taxable income and recognized 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 end of the reporting period.
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities
in the Financial Statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets
are generally recognized for all deductible temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible temporary differences can be utilized.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of
the deferred tax asset to be utilized.
Deferred tax assets include Minimum Alternative Tax (MAT) measured in accordance with the tax laws in
India, which is likely to give future economic benefits in the form of availability of set off against future
income tax liability and such benefit can be measured reliably and it is probable that the future economic
benefit associated with same will be realized.
18. SEGMENT REPORTING
The Company is presently operating under one business segment viz. Cultivation, Manufacture and sale
of Tea.
Operating segments are identified and reported taking into account the different risk and return, organization
structure and internal reporting system.
4. CRITICAL ACCOUNTING JUDGEMENTS, ASSUMPTIONS AND KEY SOURCES OF
ESTIMATION AND UNCERTAINTY
The preparation of the financial statements in conformity with the measurement principle of Ind AS requires
management to make estimates, judgements and assumptions. These estimates, judgments and
assumptions affect the application of accounting policies and the reported amounts of assets and liabilities,
the disclosures of contingent assets and liabilities at the date of the financial statements and reported
amounts of revenues and expenses during the period. Accounting estimates could change from period to
period. Actual results could differ from those estimates. Appropriate changes in estimates are made as
management becomes aware of changes in circumstances surrounding the estimates. Differences between
the actual results and estimates are recognized in the year in which the results are known / materialized
and, if material, their effects are disclosed in the notes to the financial statements.
Application of accounting policies that require significant areas of estimation, uncertainty and critical
judgements and the use of assumptions in the financial statements have been disclosed below. The key
assumptions concerning the future and other key sources of estimation uncertainty at the Balance Sheet
date, that have a significant risk of causing a material adjustment to the carrying amount of assets and
liabilities within the next financial year are discussed below:
A. Depreciation and Impairment on Property, Plant and Equipment.
Property, Plant and Equipment and Intangible assets are depreciated/ amortized on Straight Line Basis/
Written Down Value Basis over the estimated useful lives (or lease term, if shorter ) in accordance with
Schedule II of the Companies Act, 2013, taking into account the estimated residual value, wherever applicable.
The company reviews its carrying value of its PPE and Intangible Assets whenever there is objective
evidence that the assets are impaired. In such situation assets recoverable amount is estimated which is
higher of asset’s or cash generating units (CGU) fair value less cost of disposal and its value in use. In
assessing value in use the estimated future cash flows are discounted using pre-tax discount rate which
reflect the current assessment of time value of money. In determining fair value less cost of disposal,
recent market realizations are considered or otherwise in absence of such transactions appropriate valuations
are adopted. The Company reviews the estimated useful lives of the assets regularly in order to determine
the amount of depreciation / amortization and amount of impairment expense to be recorded during any
reporting period. This reassessment may result in change estimated in future periods.
B. Impairment allowances on trade receivables
The Company evaluates whether there is any objective evidence that trade receivables are impaired and
determines the amount of impairment allowance as a result of the inability of the customers to make
required payments. The Company bases the estimates on the ageing of the trade receivables balance,
credit-worthiness of the trade receivables and historical write-off experience. If the financial conditions of
the trade receivable were to deteriorate, actual write-offs would be higher than estimated.
C. Income taxes
Significant judgement is required in determination of taxability of certain income and deductibility of certain
expenses during the estimation of the provision for income taxes.
D. Defined benefit obligation (DBO)
Critical estimate of the DBO involves a number of critical underlying assumptions such as standard rates
of inflation, mortality, discount rate, anticipation of future salary increases etc. as estimated by Independent
Actuary appointed for this purpose by the Management. Variation in these assumptions may significantly
impact the DBO amount and the annual defined benefit expenses.
E. Provisions and Contingencies
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future
outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably
estimated. The timing of recognition and quantification of the liability requires the application of judgement
to existing facts and circumstances, which can be subject to change.
Management judgement is required for estimating the possible outflow of resources, if any, in respect of
contingencies/claim/litigations/ against the Company as it is not possible to predict the outcome of pending
matters with accuracy.
The carrying amounts of provisions and liabilities and estimation for contingencies are reviewed regularly
and revised to take account of changing facts and circumstances.
19.1 Refer Statement of Changes in Equity for movement in balances of reserve.
19.2 Nature and Purpose of Reserves :
a) General Reserve :The General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General
Reserve is created by a transfer from one component of equity to another and it will not be reclassified subsequently to Statement of Profit and Loss.
b) Securities Premium Reserve Securities Premium Reserve represents the amount received in excess of par value of securities. Section 52 of
Companies Act, 2013 specify restriction and utilisation of security premium.
c) Retained Earnings : Retained earnings generally represent the undistributed profit/amount of accumulated earnings of the company.
d) Other Comprehensive Income:Other Comprehensive Income (OCI) represent the balance in equity for items to be accounted under OCI and
comprises of the following: i) Items that will not be reclassified to profit and loss :ii) The company has elected to recognise changes in the fair value
of non-current investments in OCI. This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured
at fair value. iii) Remeasurement of Gains/(Losses) on defined benefit Plans.
33 Segment Information
Consequent to the adoption of Ind AS, the Company has identified one operating segment viz, “Tea” which is consistent with the internal reporting
provided to the chief executive officer, who is the chief operating decision maker.
The Company deals in only one product i.e., Tea. The products and their applications are homogenous in nature.
34 Contingent Liabilities, Contingent Assets and Commitments (to the extent not provided for)
34.1 Contingent Liabilities and Contingent Assets - Rs. Nil (Previous Year Rs.Nil)
34.1.1 A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or nonoccurrence
of one or more uncertain future events not wholly within the control of the entity. During the normal course of business, several unresolved claims are
currently outstanding. The inflow of economic benefits, in respect of such claims cannot be measured due to uncertainties that surround the related
events and circumstances.
(b) Defined Benefit Plan
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms
not less favourable than the provisions of The Payment of Gratuity Act, 1972. The Defined benefit plan is partly funded with LIC and remaining is
unfunded.
The Company also has certain Defined Contribution plans. Contributions are made to provident fund in India at the rate of 12% of salary of the
employees covered as per the regulations. The contributions are made to registered provident fund administered by the Government. The obligation
of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.
The present value of obligation is determined based on acturial valuation using the Projected Unit Credit Method, which recognizes each period of
service as giving rise to additional unit of employees benefit entitlement and measures each unit separatly to build up the financial obligation.
Fair Valuation Techniques
The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the fair values:
The fair value of cash and cash equivalents, other bank balances, current trade receivables and payables, other current financial liabilities and assets
approximate their carrying amount largely due to the short-term nature of these instruments. The management considers that the carrying amounts of
financial assets and financial liabilities recognised at nominal cost/amortised cost in the financial statements approximate their fair values.
Fair value of Investment in unquoted Non Cumulative Redeemable Preference Share and security deposit have been determined based on Effective interest
Rate method(EIR) and differential thereof has been recognised as deferred loss/gain and to be recognised to profit and loss over the tenure of the instrument.
Investments traded in active market are determined by reference to the quotes from the Stock exchanges as at the reporting date. Investments in liquid and
short-term mutual funds are measured using quoted market prices at the reporting date multiplied by the quantity held. Unquoted investments in shares have
been valued based on the historical net asset value as per the latest audited financial statements.
During the year ended March 31, 2025, there were no transfers between Level 1, Level 2 and Level 3.
The Inputs used in fair valuation measurement are as follows :
Fair valuation of Financial assets and liabilities not within the operating cycle of the company is amortised based on the borrowing rate of the company.
Unquoted investments in shares have been valued based on the amount available to shareholder’s as per the latest audited financial statements. There
were no external unobservable inputs or assumption used in such valuation.
38.4 Financial risk factors
The Company’s financial liabilities comprise mainly of borrowings, trade and other payables. The Company’s financial assets comprise mainly of cash
and cash equivalents, other balances with banks including trade receivables and other receivables, Deposits and Investments. The Company is exposed
to Market risk, Credit risk and Liquidity risk. The Company’s senior management oversees the management of these risks. The Board of Director reviews
and agrees policies for managing each of these risks, which are summarised below:
38.5 Market risk
The Company’s business is primarily agricultural in nature, exposes it to the risk that the fair value or future cash flows 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.
38.6 Interest rate risk management
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.
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.
38.7 Price risks
The Company invests its surplus funds primarily in Equity Instruments, Preference Shares and mutual funds measured at fair value through profit or
loss and other comprehensive income reserve. Aggregate value of such investments as at 31st March, 2025 is Rs. 1718.89 Lakhs (Previous Year
Rs.2175.77 Lakhs).
Accordingly, other price risk of the financial instrument to which the company is exposed is not expected to be material.
38.8 Credit risks
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The
Company is exposed to credit risk from its operating activities primarily trade receivables and other financial assets including deposits with Bank.
Exposure to credit risk is monitored on an ongoing basis.The Company periodically assesses the financial reliability of customers, taking into account
the financial condition, current economic trends and ageing of accounts receivable. The Company’s exposure of its counterparties are continuously
monitored and the aggregate value of transactions is reasonably spread amongst the counterparties. 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.
38.9 Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient
liquidity and ensure that funds are available for use as per requirements. The Company has obtained fund based working capital loans from banks.
The company relies on borrowings and internal accruals to meet its fund requirement. The current committed line of credit are sufficient to meet its
short to medium term fund requirement.
The following tables detail the Company’s contractual maturity for its non derivative financial liabilities with agreed repayment periods. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.
The tables include both interest and principal cash flows as at balance sheet date:
A) The Ratio improved in compairsion to last year due to significant decrease in current Liabilities in current year.
B) The Ratio decreased due to significant decrease in current borrowing in the current year.
C) The Ratio improved due to significant increase in Profit after Tax in the current year.
D) The Ratio improved due to significant decrease in net credit purchase in the current year.
E) The Ratio decreased due to significant decrease in total investment in the current year.
Additional Regulatory Information
40.1) The Company is not declared as wilful defaulter by any bank or bank or other lender.
40.2) There are no transactions and /or balance outstanding with companies struck off u/s 248 of Companies Act, 2013.
40.3) There are no such cases where registration of charges or satisfaction with Registrar of Companies is pending beyond the statutory period.
40.4) The Company does not have any investments through more than 2 layers of Investment companies as per section 2(87)(d) and section 186 of
Companies Act , 2013.
40.5.) There is no scheme of arrangement in terms of section 230 to 237 of Companies act,2013 which is lying before any competent authority for its
approval.
40.6A) The company has not advanced or loaned or invested funds to any other persons or entities including foreign entities (Intermediaries) with the
understanding that the intermediary shall
i. Directly or indirectly lend or invest in other persons or entities identified in any manner what so ever by or on behalf of the company(ultimate
beneficiary); or
ii. Provide any guarantee, security or the like to or on behalf of the ultimate beneficiary.
40.6B) The company has not received any fund from persons , entities including foreign entities (Funding party) with the understanding that the company
shall
i. Directly or indirectly lend or invset in other persons or entities identified in any manner what so ever by or on behalf of the Funding
party(ultimate beneficiary); or
ii. Provide any guarantee, security or the like to or on behalf of the ultimate beneficiary.
40.7) Capital Work-in-Progress
Project in progress
Less than 1 year 66.59
1 - 2 Years 38.09
2 - 3 Years 136.28
More than 3 Years -
40.8) The Company has borrowings from Banks on the basis of security of current assets and quarterly returns or statement of current assets filed by
the company with the Banks are in agreement with the books of accounts.
40.9) The Company does not have any transactions which are not recorded in the books of Accounts that has been surrendered or disclosed as Income
during the year in the Tax Assessment under the Income Tax Act,1961(Such as search or survey or any other relevant provisions of the Income
Tax act, 1961).
40.10) The Company has not traded or Invested in Crypto Currency or virtual currency during the Financial Year.
41. Comparative Financial Information ( i.e amounts and other disclosures of preceding year ) presented above, is included as an integral part of the
current year’s financial statements and is to be read in relation to the amounts and other disclosures relating to current year. Figures of Previous
Year are regrouped/ reclassified wherever necessary to correspond to figures of current year.
42. These financial statements have been approved by the Board of Directors of the Company on 30th May,2025 for issue to the shareholders for their
adoption.
These notes are an integral part of the Financial Statements.
As per our report of even date Tyroon Tea Company Limited
For and on behalf of the Board
For K. N. Gutgutia & Co. Anuradha Jalan Deepak Swain
Chartered Accountants Director Director
Firm Registration No. 304153E DIN - 09059592 DIN - 01575448
(Kailash Chandra Sharma)
Partner Keshab Chandra Mishra
Membership No. 050819 Company Secretary & CFO
Place: Kolkata eCSIN - EA013288A000046618
Date: 30th May, 2025
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