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Accounting Policies of United Breweries (Holdings) Ltd. Company

Mar 31, 2014

I. Basis of preparation of financial statements:

The financial statements of the Company have been prepared, unless otherwise stated, under historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006.

ii. Use of estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon Management''s best knowledge of current events and actions, actual results could differ from these estimates.

iii. Revenue recognition:

Revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

a. Sales are recognized when the properties in goods are transferred for a price and their collection is expected within the agreed time.

b. Lease incomes from non-cancellable operating leases are recognized in the Statement of Profit and Loss, on straight line basis, over the lease term. In respect of other operating leases, lease income is recognized in accordance with the terms of the lease deeds as modified based on negotiations from time to time.

c. Interest is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

d. Dividends and royalty income are accounted for, when the right to receive the payment is established.

iv. Valuation of Inventories:

Inventories are valued at lower of weighted average cost and net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

v. Fixed Assets:

Fixed assets are stated at cost less depreciation, wherever applicable. The land and building in Bangalore is stated at the revalued amount as adjusted in accordance with the revaluation done in March 2014 at the market value determined by approved valuers. All costs relating to the acquisition and installation of fixed assets are capitalised and such costs include borrowing cost relating to borrowed funds attributable to the acquisition of qualifying assets for the period upto the date of acquisition / installation.

vi. Borrowing Cost:

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such assets till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.

vii. Depreciation:

Depreciation is provided under written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

viii. Effects of changes in Foreign Exchange rates :

a. Transactions in foreign currencies are translated applying the following exchange rates:

In respect of export transactions, at the average exchange rate prevailing in the month preceding month in which the transaction takes place.

In respect of all other transactions at the rate of exchange prevailing on the date of transaction.

b. Monetary assets and liabilities denominated in foreign currency are translated at the rates of exchange at the Balance Sheet date and the resultant gain or loss is recognized in the Statement of Profit & Loss except exchange differences arising on reporting of long term foreign currency monetary items which are accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term asset/liability but not beyond March 31, 2020.

c. Non monetary items are carried at historical cost denominated in foreign currency and these are translated using the exchange rate prevailing on the date of transaction.

ix. Accounting for Export benefits :

Export benefits available to the company are considered for inclusion in the accounts where there is reasonable assurance that the Company will comply with the conditions attached to them and where such benefits have been earned by the Company and it is reasonably certain that the ultimate collection will be made. Exports benefits of revenue nature are recognised in the Statement of Profit and Loss.

x. Investments :

i) Current investments refer to the investments that are readily realizable and intended to be held for not more than a year.

ii) Trade investments refer to the investments made with the aim of enhancing the group''s business interest.

iii) Long term investments are stated at cost. All expenses relating to acquisition of investments are capitalized. Diminution in the value of investments, if considered permanent, is provided for.

iv) Current investments are stated at lower of cost and fair value on the Balance Sheet date

xi. Employee Benefits:

a) Defined-contribution plans :

These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the Employees'' Provident Fund, Superannuation Fund, Employees'' Pension Scheme and certain state plans like Employees'' State Insurance. The Company''s payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that the payment covers.

b) Defined-benefit plans:

Gratuity: The Company provides for gratuity, a defined benefit plan (Gratuity Plan), to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on Projected Unit Credit Method, and carried out by an independent actuary, at the Balance Sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognized immediately in the Statement of Profit and Loss as income or expense.

c) Other long term employee benefits:

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the Balance Sheet date based on actuarial valuation carried out at each Balance Sheet date.

d) Short term employee benefits:

Undiscounted amount of 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. These benefits include compensated absences such as paid annual leave and performance incentives.

xii. Segment reporting:

The operations of the Company are divided into alcoholic beverages, leather products, readymade garments, investments, guarantee services, property development and other activities. Accordingly, the primary segment reporting comprises the performance under these segments and the secondary segment reporting is based on geographical locations of customers.

xiii. Related Party disclosures:

Transactions between related parties are disclosed as per Accounting Standard 18- "Related Party Disclosures". Accordingly, disclosures regarding the name of the transacting related party, description of the relationship between the parties, nature of transactions and the amount outstanding as at the end of the accounting year, are made.

xiv. Taxes on Income:

Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

xv. Impairment of assets:

The Company evaluates all its assets for assessing any impairment and accordingly recognises the impairment, wherever applicable, as provided in Accounting Standard 28- "Impairment of Assets".

xvi. Provisions and Contingencies:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an out flow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on Management estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current Management estimates.

xvii. Earnings per share:

Earnings per equity shares (basic / diluted) is arrived at by dividing the Net Profit or Loss for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.


Mar 31, 2013

I. Basis of preparation of financial statements:

The financial statements of the Company have been prepared, unless otherwise stated, under historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006.

ii. Use of estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon Management''s best knowledge of current events and actions, actual results could differ from these estimates.

iii. Revenue recognition:

Revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

a. Sales are recognized when the properties in goods are transferred for a price and their collection is expected within the agreed time.

b. Lease incomes from non-cancellable operating leases are recognized in the Statement of Profit and Loss, on straight line basis, over the lease term. In respect of other operating leases, lease income is recognized in accordance with the terms of the lease deeds as modified based on negotiations from time to time.

c. Interest is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

d. Dividends and royalty income are accounted for, when the right to receive the payment is established.

iv. Valuation of Inventories:

Inventories are valued at lower of weighted average cost and net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition

v. Fixed Assets:

Fixed assets are stated at cost less depreciation, wherever applicable. The land in Bangalore is stated at the revalued amount as adjusted in accordance with the revaluation done in August 2001 at the market value determined by approved valuers. All costs relating to the acquisition and installation of fixed assets are capitalised and such costs include borrowing cost relating to borrowed funds attributable to the acquisition of qualifying assets for the period upto the date of acquisition / installation.

vi. Borrowing Cost:

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such assets till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.

vii. Depreciation:

Depreciation is provided under written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

viii. Effects of changes in Foreign Exchange rates :

a. Transactions in foreign currencies are translated applying the following exchange rates:

In respect of export transactions, at the average exchange rate prevailing in the month preceding month in which the transaction takes place.

In respect of all other transactions at the rate of exchange prevailing on the date of transaction.

b. Monetary assets and liabilities denominated in foreign currency are translated at the rates of exchange at the Balance Sheet date and the resultant gain or loss is recognized in Statement of Profit and Loss except exchange differences arising on reporting of long term foreign currency monetary items which are accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term asset/liability but not beyond March 31, 2020.

c. Non monetary items are carried at historical cost denominated in foreign currency and these are translated using the exchange rate prevailing on the date of transaction.

ix. Accounting for Export benefits :

Export benefits available to the company are considered for inclusion in the accounts where there is reasonable assurance that the Company will comply with the conditions attached to them and where such benefits have been earned by the Company and it is reasonably certain that the ultimate collection will be made. Export benefits of revenue nature are recognised in the Statement of Profit and Loss.

x. Investments :

i) Current investments refer to the investments that are readily realizable and intended to be held for not more than a year.

ii) Trade investments refer to the investments made with the aim of enhancing the group''s business interest.

iii) Long term investments are stated at cost. All expenses relating to acquisition of investments are capitalized. Diminution in the value of investments, if considered permanent, is provided for.

iv) Current investments are stated at lower of cost and fair value on the Balance Sheet date.

xi. Employee Benefits:

a) Defined-contribution plans :

These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the Employees'' Provident Fund, Superannuation Fund, Employees'' Pension Scheme and certain state plans like Employees'' State Insurance. The Company''s payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that the payment covers.

b) Defined-benefit plans:

Gratuity: The Company provides for gratuity, a defined benefit plan (Gratuity Plan), to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on Projected Unit Credit Method, and carried out by an independent actuary, at the Balance Sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognized immediately in the Statement of Profit and Loss as income or expense.

c) Other long term employee benefits:

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the Balance Sheet date based on actuarial valuation carried out at each Balance Sheet date.

d) Short term employee benefits:

Undiscounted amount of short term employees 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. These benefits include compensated absences such as paid annual leave and performance incentives.

xii. Segment reporting:

The operations of the Company are divided into alcoholic beverages, leather products, readymade garments, investments, guarantee services, property development and other activities. Accordingly, the primary segment reporting comprises the performance under these segments and the secondary segment reporting is based on geographical locations of customers.

xiii. Related Party disclosures:

Transactions between related parties are disclosed as per Accounting Standard 18- "Related Party Disclosures". Accordingly, disclosures regarding the name of the transacting related party, description of the relationship between the parties, nature of transactions and the amount outstanding as at the end of the accounting year, are made.

xiv. Taxes on Income:

Provision for income tax comprises of current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

xv. Impairment of assets:

The Company evaluates all its assets for assessing any impairment and accordingly recognises the impairment, wherever applicable, as provided in Accounting Standard 28- "Impairment of Assets".

xvi. Provisions and Contingencies:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an out flow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on Management estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current Management estimates.

xvii. Earnings per share:

Earnings per equity share (basic / diluted) is arrived at by dividing the Net Profit or Loss for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.


Mar 31, 2012

I. Basis of preparation of financial statements:

The financial statements of the Company have been prepared, unless otherwise stated, under historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006.

ii. Use of estimates:

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon Management's best knowledge of current events and actions, actual results could differ from these estimates.

iii. Revenue recognition:

Revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

a. Sales are recognized when the property in goods are transferred for a price and their collection is expected within the agreed time.

b. Lease income from non-cancellable operating leases are recognized in the statement of Profit & Loss, on straight line basis, over the lease term. In respect of other operating leases, lease income is recognized in accordance with the terms of the lease deeds as modified based on negotiations from time to time.

c. Interest is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

d. Dividends and royalty income are accounted for, when the right to receive the payment is established.

iv. Valuation of Inventories:

Inventories are valued at lower of weighted average cost and net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

v. Fixed Assets:

Fixed assets are stated at cost less depreciation, wherever applicable. The land in Bangalore is stated at the revalued amount as adjusted in accordance with the revaluation done in August 2001 at the market value determined by approved valuers. All costs relating to the acquisition and installation of fixed assets are capitalised and such costs include borrowing cost relating to borrowed funds attributable to the acquisition of qualifying assets for the period upto the date of acquisition / installation.

vi. Borrowing Cost:

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such assets till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.

vii. Depreciation:

Depreciation has been provided under written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

viii. Effects of changes in Foreign Exchange rates :

a. Transactions in foreign currencies are translated applying the following exchange rates:

In respect of export transactions, at the average exchange rate prevailing in the month preceding month in which the transaction takes place.

In respect of all other transactions at the rate of exchange prevailing on the date of transaction.

b. Monetary assets and liabilities denominated in foreign currency are translated at the rates of exchange at the Balance Sheet date and the resultant gain or loss is recognized in the Statement of Profit & Loss except exchange differences arising on reporting of long term foreign currency monetary items which are accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term asset/liability but not beyond March 31, 2020.

c. Non monetary items are carried at historical cost denominated in foreign currency and these are translated using the exchange rate prevailing on the date of transaction.

ix. Accounting for Government Grants :

Government grants available to the Company are considered for inclusion in the accounts, where there is reasonable assurance that the Company will comply with the conditions attached to them and where such benefits have been earned by the Company and it is reasonably certain that the ultimate collection will be made. Grants of revenue nature are recognized in the Statement of Profit and Loss.

x. Investments:

i) Current investments refer to the investments that are readily realizable and intended to be held for not more than a year.

ii) Trade investments refer to the investments made with the aim of enhancing the group's business interest.

iii) Long term investments are stated at cost. All expenses relating to acquisition of investments are capitalized. Diminution in the value of investments, if considered permanent, is provided for.

iv) Current investments are stated at lower of cost and fair value on the Balance Sheet date.

xi. Employee Benefits:

a) Defined-contribution plans:

These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the Employees' Provident Fund, Superannuation Fund, Employees' Pension Scheme and certain state plans like Employees' State Insurance. The Company's payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that the payment covers.

b) Defined-benefit plans:

Gratuity: The Company provides for gratuity, a defined benefit plan (Gratuity Plan), to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on Projected Unit Credit Method, carried out by an independent actuary, at the Balance Sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognized immediately in the Statement of Profit and Loss as income or expense.

c) Other long term employee benefits:

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the Balance Sheet date based on actuarial valuation carried out at each Balance Sheet date.

d) Short term employee benefits:

Undiscounted amount of 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. These benefits include compensated absences such as paid annual leave and performance incentives.

xii. Segment reporting:

The operations of the Company are divided into alcoholic beverages, leather products, readymade garments investments, guarantee services, property development and other activities. Accordingly, the primary segment reporting comprises the performance under these segments and the secondary segment reporting is based on geographical locations of customers.

xiii. Related Party disclosures:

Transactions between related parties are disclosed as per Accounting Standard 18- "Related Party Disclosures". Accordingly, disclosures regarding the name of the transacting related party, description of the relationship between the parties, nature of transactions and the amount outstanding as at the end of the accounting year, are made.

xiv. Taxes on Income:

Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the year.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable /virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

xv. Impairment of assets:

The Company evaluates all its assets for assessing any impairment and accordingly recognises the impairment, wherever applicable, as provided in Accounting Standard 28- "Impairment of Assets".

xvi. Provisions and Contingencies:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an out flow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on Management estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current Management estimates.

xvii. Earnings per share:

Earnings per equity share (basic/diluted) is arrived at by dividing the Net Profit or Loss for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.


Mar 31, 2011

1. Accounting Convention:

The financial statements of the Company have been prepared, unless otherwise stated, under historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006.

2. Use of estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon Management's best knowledge of current events and actions, actual results could differ from these estimates.

B) Significant Accounting Policies

1. Revenue recognition:

Revenues are generally recognised on accrual basis except where there is an uncertainty of ultimate realisation.

i) Sales are recognised when the property in goods are transferred for a price and their collection is expected within the agreed time.

ii) Lease income from non-cancellable operating leases are recognised in the statement of Profit & Loss Account, on straight line basis, over the lease term. In respect of other operating leases, lease income is recognised in accordance with the terms of the lease deeds as modified based on negotiations from time to time.

iii) Interest is recognised on time proportion basis taking into account the amount outstanding and the rate applicable.

iv) Dividends and royalty income are accounted for, when the right to receive the payment is established.

2. Valuation of Inventories:

Inventories are valued at lower of weighted average cost and net realisable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

3. Fixed Assets:

Fixed assets are stated at cost less depreciation, wherever applicable. The land in Bangalore is stated at the revalued amount as adjusted in accordance with the revaluation done in August 2001 at the market value determined by approved valuers. All costs relating to the acquisition and installation of fixed assets are capitalised and such costs include borrowing cost relating to borrowed funds attributable to the acquisition of qualifying assets for the period upto the date of acquisition / installation.

4. Borrowing Cost:

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of such assets till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

5. Depreciation:

Depreciation has been provided under written down value method at the rates prescribed under Schedule XIV of the Companies Act, 1956.

6. Effects of changes in Foreign Exchange rates :

i) Transactions in foreign currencies are translated applying the following exchange rates:

a) In respect of export transactions, at the average exchange rate prevailing in the month preceding the month in which the transaction took place.

b) In respect of all other transactions at the rate of exchange prevailing on the date of transaction.

ii) Monetary assets and liabilities denominated in foreign currency are translated at the rates of exchange at the Balance Sheet date and the resultant gain or loss is recognised in the Profit & Loss Account .

iii) Non monetary items are carried at historical cost denominated in foreign currency and these are translated using the exchange rate prevailing on the date of transaction.

7. Accounting for Government Revenue Grants :

Government revenue grants available to the Company are considered for inclusion in the accounts, where there is reasonable assurance that the Company will comply with the conditions attached to them and where such benefits have been earned by the Company and it is reasonably certain that the ultimate collection will be made. Grants of revenue nature are recognised in the Profit & Loss Account.

8. Investments:

i) Current investments refer to the investments that are readily realisable and intended to be held for not more than a year.

ii) Trade investments refer to the investments made with the aim of enhancing the group's business interest.

iii) Long term investments are stated at cost. All expenses relating to acquisition of investments are capitalised. Diminution in the value of investments, if considered permanent, is provided for.

iv) Current investments are stated at lower of cost and fair value on the Balance Sheet date.

9. Employee Benefits:

a) Defined-contribution plans :

These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the Employees' Provident Fund, Superannuation Fund and certain state plans like Employees' State Insurance and Employees' Pension Scheme. The Company's payments to the defined contribution plans are recognised as expenses during the period in which the employees perform the services that the payment covers.

b) Defined-benefit plans:

Gratuity: The Company provides for gratuity, a defined benefit plan (Gratuity Plan), to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on Projected Unit Credit Method, carried out by an independent actuary, at the Balance Sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognised immediately in the Profit & Loss Account as income or expense.

c) Other long term employee benefits:

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the defined benefit obligation at the Balance Sheet date based on actuarial valuation carried out at each Balance Sheet date.

d) Short term employee benefits:

Undiscounted amount of short term employees benefits expected to be paid in exchange for the services rendered by the employees is recognised during the period when the employee renders the services. These benefits include compensated absences such as paid annual leave and performance incentives.

10. Segment reporting:

The operations of the Company are divided into alcoholic beverages, leather products, investments, guarantee services, property development and other activities. Accordingly, the primary segment reporting comprises the performance under these segments and the secondary segment reporting is based on geographical locations of customers.

11. Related Party disclosures:

Transactions between related parties are disclosed as per Accounting Standard 18 - "Related Party Disclosures". Accordingly, disclosures regarding the name of the transacting related party, description of the relationship between the parties, nature of transactions and the amount outstanding as at the end of the accounting year, are made.

12. Taxes on Income:

Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

13. Impairment of assets:

The Company evaluates all its assets for assessing any impairment and accordingly recognises the impairment, wherever applicable, as provided in Accounting Standard 28 - "Impairment of Assets".

14. Provisions and Contingencies:

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an out flow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on Management estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current Management estimates.

15. Earnings per share:

Earnings per equity share (basic / diluted) is arrived at by dividing the Net Profit or Loss for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.


Mar 31, 2010

1. Accounting Convention:

The financial statements of the Company have been prepared, unless otherwise stated, under historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006.

2. Use of estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon Managements best knowledge of current events and actions, actual results could differ from these estimates.

B) Significant Accounting Policies

1. Revenue recognition:

Revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

i) Sales are recognized when the property in goods are transferred for a price and their collection is expected within the agreed time.

ii) Lease income from non cancellable operating leases are recognized in the statement of Profit & Loss Account, on straight line basis, over the lease term. In respect of other operating leases, lease income is recognized in accordance with the terms of the lease deeds as modified based on negotiations from time to time.

iii) Interest is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

iv) Dividends and royalty income are accounted for, when the right to receive the payment is established.

2. Valuation of Inventories:

Inventories are valued at lower of weighted average cost and net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

3. Fixed Assets:

Fixed assets are stated at cost less depreciation, wherever applicable. The land in Bangalore is stated at the revalued amount as adjusted in accordance with the revaluation done in August 2001 at the market value determined by approved valuers. All costs relating to the acquisition and installation of fixed assets are capitalised and such costs include borrowing cost relating to borrowed funds attributable to the acquisition of qualifying assets for the period upto the date of acquisition/installation.

4. Borrowing Cost:

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such assets till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.

5. Depreciation:

Depreciation is provided under written down value method at the rates prescribed under Schedule XIV of the Companies Act, 1956.

6. Effects of changes in Foreign Exchange rates :

i) Transactions in foreign currencies are translated applying the following exchange rates:

a) In respect of export transactions, at the average exchange rate prevailing in the month preceding month in which the transaction took place.

b) In respect of all other transactions at the rate of exchange prevailing on the date of transaction.

ii) Monetary assets and liabilities denominated in foreign currency are translated at the rates of exchange at the Balance Sheet date and the resultant gain or loss is recognized in the Profit & Loss Account except exchange differences arising on reporting of long term foreign currency monetary items which are accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term asset/liability but not beyond March 31, 2011.

iii) Non-monetary items are carried at historical cost denominated in foreign currency and these are translated using the exchange rate prevailing on the date of transaction.

7. Accounting for Government Revenue Grants :

Government revenue grants available to the Company are considered for inclusion in the accounts, where there is reasonable assurance that the Company will comply with the conditions attached to them and where such benefits have been earned by the Company and it is reasonably certain that the ultimate collection will be made. Grants of revenue nature are recognized in Profit & Loss Account.

8. Investments:

i) Trade investments refer to the investments made with the aim of enhancing the groups business interest.

ii) Long term investments are stated at cost. All expenses relating to acquisition of investments are capitalized. Diminution in the value of investments, if considered permanent, is provided for.

iii) Current investments are stated at lower of cost and fair value on the Balance Sheet date.

9. Employee Benefits:

a) Defined-contribution plans :

These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the Employees Provident Fund, Superannuation Fund and certain state plans like Employees State Insurance and Employees Pension Scheme. The Companys payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that the payment covers.

b) Defined-benefit plans:

Gratuity : The Company provides for gratuity, a defined benefit plan (Gratuity Plan), to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on Projected Unit Credit Method, carried out by an independent actuary, at the Balance Sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognized immediately in the Profit & Loss Account as income or expense.

c) Other long term employee benefits:

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the Balance Sheet date based on actuarial valuation carried out at each Balance Sheet date.

d) Short term employee benefits:

Undiscounted amount of short term employees 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. These benefits include compensated absences such as paid annual leave and performance incentives.

10. Segment reporting:

The operations of the Company are divided into alcoholic beverages, leather products, investments, guarantee services, property development and other activities. Accordingly, the primary segment reporting comprises the performance under these segments and the secondary segment reporting is based on geographical locations of customers.

11. Related Party disclosures:

Transactions between related parties are disclosed as per Accounting Standard 18, "Related Party Disclosures". Accordingly, disclosures regarding the name of the transacting related party, description of the relationship between the parties, nature of transactions and the amount outstanding as at the end of the accounting year, are made.

12. Taxes on Income:

Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

13. Impairment of Assets:

The Company evaluates all its assets for assessing any impairment and accordingly recognises the impairment, wherever applicable, as provided in Accounting Standard 28, "Impairment of Assets".

14. Provisions and Contingencies:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an out flow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on Management estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current Management estimates.

15. Earnings per share:

Earnings per equity share (basic / diluted) is arrived at by dividing the Net Profit or Loss for the period attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.

 
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