(a) Accounting Convention:
The Financial Statements have been prepared under the Historical Cost Convention (except for certain assets which are revalued] in accordance with the Generally Accepted Accounting Practices in India.
(b) Basis of Preparation:
The financial statements have been prepared to comply with the mandatory accounting standards notified by Companies (Accounting Standard] Rules, 2006 and the relevant provisions of the Companies Act, 2013.
(c) Estimates and Assumptions:
Preparation of Financial Statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities as at the date of the Balance Sheet and the reported amounts of income and expenses during the reporting period. Examples include provision for doubtful debts, useful life of assets, etc. Actual results may differ from these estimates.
(d) Inventories:
Inventory of raw material, stores, spares, materials in transit, work in progress, finished goods - both manufactured and traded are valued at lower of cost and net realizable value.
The cost is calculated on First-in First-Out basis and comprises of expenditure incurred in the normal course of business in bringing such inventory to its present location, and includes the borrowing cost that are attributable to maturation stocks which has been considered for valuation of Work In Progress wherever applicable, and allocation of appropriate overheads based on normal level of activity.
Stock in Trade - Land is valued at the value on the date of conversion from capital asset to stock in Trade or the current market value, whichever is lower.
(e) Cash Flow Statements:
Cash Flow Statement has been prepared under "Indirect Method” as prescribed by Accounting Standard-3. Cash and cash equivalents comprise Cash in Hand, Cheques in Hand, Current and other accounts (Including Fixed Deposit] held with Banks.
(f) Events occurring after the Balance Sheet Date:
Assets and Liabilities are adjusted for events occurring after the balance sheet date that provide additional evidence to assist the estimation of amounts related to conditions existing at the balance sheet date,
(g) Net Profit or Loss for the period, prior period Items and Changes in Accounting Policies:
- Net Profit for the period:
All the items of income and expenses in the period are included in the determination of net Profit / Loss for the period, unless specifically mentioned elsewhere in the financial statements or is required by an Accounting Standard.
- Prior Period item:
Income / Expenditure are disclosed in Prior Year Adjustments only when the value exceeds Rupees One Lakh in each case.
- Extra Ordinary items:
Extraordinary items, if any are disclosed separately in accordance with Accounting Standard - 5.
(h) Depreciation Accounting:
Depreciation has been provided on fixed assets based on the useful life prescribed under Schedule II to the Companies Act 2013, on written down value method except for Plant & Machinery and Building of Distillery Division acquired prior to 31st March 1999 and the assets of Paper Division where the depreciation has been provided on straight line basis. The useful life of Oakwood Barrels has been taken as 14 years, based on technical evaluation. Depreciation is provided on pro-rata basis on additions and deletions from the date the assets were put to use and up to the date of sale / transfer, respectively.
Certain Fixed Asset were been revalued during the year 1998-99. Consequent to provisions contained in Schedule II to the Companies Act, 2013 read with "Applicable Guide on the Provisions of Schedule II to the Companies Act, 2013” issued by the ICAI, the depreciation amount attributable to the revalued portion of Fixed Assets have been charged to the Statement of Profit & Loss Account and not drawn from the Revaluation Reserve.
(i) Revenue Recognition:
- Sales are recognized when the significant risks and rewards of ownership of the goods have passed to the buyer which coincides with the dispatch of goods to the customers. Sales are net of returns; sales tax collected and tax collected at source are not included in sales. Sales include excise duty and additional excise duty.
- Dividend on Investments is accounted in the year in which the right to receive is established.
* Incomes from services or contracts are recognized in accordance with the terms of the contract.
(j) Accounting for Tangible Fixed Assets:
Fixed assets are stated at cost of acquisition inclusive of inward freight, duties (net off CENVAT Credit] and taxes and incidental expenses related to acquisition. In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing costs till the date of commencement of production.
Assets acquired under hire purchase are capitalized to the extent of the principal value.
In case of revaluation of Tangible Assets, the difference between the written up value of the Asset revalued and the carrying amount in the books are transferred to Revaluation Reserve.
(k) Accounting for Effect in Foreign Exchange Rates:
Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Foreign currency monetary assets and liabilities on the balance sheet date are translated at year end exchange rates. Exchange difference arising either on settlement of foreign exchange transactions or translation of monetary items is recognized as income or expense in the year in which they arise.
(1) Accounting for Investments:
- Non Current investments are valued at cost. Provision is made to recognize a diminution other than temporary, in the value of each long-term investment.
- Current Investments are stated at lower of cost and quoted/fair value.
(m) Accounting for Employee benefits:
- Short term benefits
Short term employee benefits expected to be paid in exchange for the services rendered by the employees is recognized during the period when the employee renders the services.
- Provident Fund
Provident fund is a defined contribution scheme as the Company pays fixed contribution at predetermined rates. The obligation of the Company is limited to such fixed contribution. The contributions are charged to Profit & Loss Account.
- Gratuity
The company provides for gratuity, a defined benefit retirement plan covering eligible employees. Liabilities with regard to the Gratuity are determined by actuarial valuation as at the balance sheet date.
- Leave Encashment
The company provides for Leave Encashment, a defined benefit retirement plan covering all the employees. Liabilities with regard to the Leave Encashment are determined by actuarial valuation as at the balance sheet date.
(n) Borrowing Cost:
Borrowing costs attributable to acquisition and construction of assets are capitalized as part of the cost of such asset up to the date when such asset is ready for its intended use. Borrowing costs attributable to 'Maturation stocks' has been considered for valuation of Work In Progress, as these stocks require a substantial period of time to bring them to saleable condition. Other Borrowing Costs are treated as revenue expenditure.
(o) Segment Reporting:
The company has considered business segment as reporting segment and accordingly identified Liquor, Glass, Contract, Systems and Realty as reporting business segments. Secondary segmental reporting is performed on the basis of the geographical location of the customers and accordingly segmental revenue is reported as revenue from India and from outside India.
The related party transactions have been classified under the heads Subsidiary, Key Management Personnel, relatives of Key Management Personnel and Entities over which Key Management Personnel and / or their relatives are able to exercise significant influence.
(q) Lease:
- Finance Lease Payments are apportioned between Finance Charges and reduction of lease liability as per the relevant agreements.
- Operating Lease payments are recognized in the Statement of Profit and Loss over the lease term.
(r) Earnings per Share:
- Basic earnings per share has been computed with reference to Weighted Average number of Shares outstanding at monthly rests.
- Diluted Earnings per share has been computed based on the basic earnings adjusted for all dilutive potential equity shares.
(s) Accounting for Taxes on Income:
Tax expense comprises of current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income-tax reflects the impact of timing difference between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the Tax Laws and rates that have been enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized on brought forward unabsorbed depreciation and brought forward losses only if there is a virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits. Deferred tax asset of earlier years is reassessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which, such deferred tax assets can be realized.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax asset and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and deferred tax liabilities relate to taxes on income levied by same governing taxation laws.
Minimum Alternate Tax (MAT) Credit recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. Such asset is reviewed at each balance sheet date and the carrying amount of MAT credit asset is written down to the extent there is no longer convincing evidence to the effect that the company will pay normal income tax during the specified period.
(t) Impairment of Asset:
At each balance sheet date, the management reviews the carrying amounts of its assets to determine whether there is any indication that those assets were impaired. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which the asset is identified as impaired, unless the asset is carried at revalued amount, in which case any impairment loss of a revalued asset is treated as a decrease in Revaluation Reserve. The impairment Loss recognized in prior accounting periods is reversed if there has been an increase in the estimate of recoverable value.
(u) Provision, Contingent Liabilities and Contingent Assets:
- A present obligation, as a result of past events which could be reliably estimated, is provided in the accounts, if it is probable that there will be an outflow of resources.
- Contingent liabilities are not recognized, but are disclosed at their estimated value by way of notes in the Financial Statements.
- Contingent Assets are neither recognized nor disclosed in the financial statements.
(v) Trade Receivables and Loans & Advances:
Trade receivables and Loans and Advances are stated after making adequate provision for those doubtful of recovery.
(w)Expenditure:
Expenses are accounted on accrual basis and provision is made for all known losses and liabilities.
(x) Excise Duty:
Excise duty recovered is included in the sale of products. Excise duty paid on dispatches and in respect of finished goods lying at factory premises are shown separately as an item of excise duty in the Profit and Loss account and included in the valuation of Finished Goods.
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