1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost
convention on accrual basis in accordance with Generally Accepted
Accounting Principles, the provisions of the Companies Act, 1956 and
the applicable Accounting Standards issued by the Institute of
Chartered Accountants of India.
2. FIXED ASSETS AND DEPRECIATION:
i) COST -
a) All Fixed Assets are stated at cost. Cost includes purchase price
and all other attributable costs of bringing the asset to working
condition for intended use.
b) Fixed Assets acquired under hire purchase are capitalised at cost.
The annual financial charges are charged to revenue.
Depreciation on fixed assets is provided under the written-down value
method at the rates specified in Schedule XIV to the Companies Act,
Investments, being long term in nature, are stated at cost. Diminution
in value, if considered permanent, is provided for.
(i) Raw material and stores & spares are valued at cost. Other
inventories are valued at lower of cost or net realisable value. Cost
is arrived on weighted average basis and includes manufacturing
overheads and borrowing costs, where applicable. Excise duty paid on
stocks is added to the cost. Due allowance is made for obsolete and
slow moving items.
5. FOREIGN CURRENCY TRANSACTIONS:
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of the transaction. Where the Company enters
into forward contracts, the difference between the forward rate and the
exchange rate prevailing on the date of transaction is recognized as
income or expense over the tenure of the contract.
6. REVENUE RECOGNITION
(a) Revenue from sale of goods is recognised in accordance with the
terms of sale, on despatches from the distilleries/ warehouses of the
(b) Income from brand franchise is recognised at contract rates on sale
/ production of the branded products.
(c) Income from lease of machineries prior to 1st April, 2001, is
accounted as per the terms of the lease agreements.
(d) Dividend income is recognised when the companys right to receive
7. RESEARCH AND DEVELOPMENT EXPENSES:
Revenue expenditures charged to profit & loss account and capital
expenditure is added to the cost of fixed assets .
8. RETIREMENT BENEFITS:
a) Monthly contributions to Provident Fund and Superannuation Fund are
paid into separate recognised Trust Funds.
b) Future liability in respect of gratuity payable to employees,
determined actuarially as at the close of the year, is paid into a
separate recognised Trust Fund.
c) Liabilty for leave encashment on retirement is provided for on the
basis of actuarial valuation .
d) Pension payable to employees who have opted for early retirement,
taking their assumed age of superannuation as per the scheme, is fully
provided for in the year of retirement.
9. CONTINGENT LIABILITIES:
All known liabilities, wherever material, are provided for and
liabilities, which are material and whose future outcome cannot be
ascertained with reasonable certainty, are treated as contingent and
disclosed by way of notes to the accounts.
10. INCOME TAX
Provision for income tax comprises current taxes as also deferred
taxes. Deferred tax liability is recognised for the future tax
consequences of the temporary differences between the tax basis and the
carrying values of assets and liabilities. Deferred tax assets are
recognised only if there is virtual certainty that those will be
realized and are reviewed every year. The tax effect is calculated on
the accumulated timing differences at the end of the year based on
enacted or substantially enacted tax rates.
11. IMPAIRMENT OF ASSETS
Impairment of cash generating and other fixed assets is evaluated as
per Accounting Standard 28 issued by the Institute of Chartered
Accountants of India.