Home  »  Company  »  United Breweries Ltd  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of United Breweries Ltd. Company

Mar 31, 2016

(A) Use Of Estimates

The Preparation Of The Financial Statements In Conformity With Indian GAAP Requires The Management To Make Judgments, Estimates And Assumptions That Affect The Reported Amounts Of Revenues, Expenses, Assets And Liabilities And The Disclosure Of Contingent Liabilities, As At End Of The Reporting Period. Although These Estimates Are Based On The Management''s Best Knowledge Of Current Events And Actions, Uncertainty About These Assumptions And Estimates Could Result In The Outcomes Requiring A Material Adjustment To The Carrying Amounts Of Assets Or Liabilities In Future Periods.

(B) Tangible Fxed Assets

Fixed Assets Are Stated At Cost, Net Of Accumulated Depreciation And Accumulated Impairment Losses, If Any. The Cost Comprises Purchase Price, Borrowing Costs If Capitalization Criteria Are Met And Directly Attributable Cost Of Bringing The Asset To Its Working Condition For The Intended Use. Any Trade Discounts And Rebates Are Deducted In Arriving At The Purchase Price.

Subsequent Expenditure Related To An Item Of Fxed Asset Is Added To Its Book Value Only If It Increases The Future Benefits From The Existing Asset Beyond Its Previously Assessed Standard Of Performance. All Other Expenses On Existing Fixed Assets, Including Day-To-Day Repair And Maintenance Expenditure And Cost Of Replacing Parts, Are Charged To The Statement Of Profit And Loss For The Period During Which Such Expenses Are Incurred.

The Company Adjusts Exchange Differences Arising On Translation/Settlement Of Long-Term Foreign Currency Monetary Items Pertaining To The Acquisition Of A Depreciable Asset To The Cost Of The Asset And Depreciates The Same Over The Remaining Life Of The Asset.

In Accordance With MCA Circular Dated August 9, 2012, Exchange Differences Adjusted To The Cost Of Fixed Assets Are Total Differences, Arising On Long-Term Foreign Currency Monetary Items Pertaining To The Acquisition Of A Depreciable Asset, For The Period. In Other Words, The Company Does Not Differentiate Between Exchange Differences Arising From Foreign Currency Borrowings To The Extent They Are Regarded As An Adjustment To The Interest Cost And Other Exchange Difference.

Gains Or Losses Arising From De-Recognition Of Fixed Assets Are Measured As The Difference Between The Net Disposal Proceeds And The Carrying Amount Of The Asset And Are Recognized In The Statement Of Profit And Loss When The Asset Is Derecognized.

The Company Identifies And Determines Cost Of Asset Significant To The Total Cost Of The Asset Having Useful Life That Is Materially Different From That Of The Remaining Life.

(C) Depreciation On Tangible Fixed Assets

Depreciation On Fixed Assets Is Calculated On A Straight-Line Method ("Slm") Basis Using The Useful Lives Estimated By The Management. For The Purpose Of Depreciation Calculation, Residual Value Is Determined As 5% Of The Original Cost For All The Assets, As Estimated By The Management Basis Independent Assessment By An Expert. The Company Has Used The Following Useful Lives To Provide Depreciation On Its Fixed Assets:

*In Respect Of Assets Used At Any Time During The Year On DOUBIE Shift Or Triple Shift Basis, The Depreciation For That Period Is Increased By 50% Or 100%, Respectively.

In Respect Of Following Assets, Not Included Above, The Useful Lives Estimated By The Management, Basis Technical Assessment, Are Different From Those Indicated In Schedule Ii To The Companies Act, 2013:

(i) Assets Acquired On Amalgamation, Etc. (Where Original Dates Of Acquisition Are Not Readily Available), Are Depreciated Over The Remaining Useful Life Of The Assets, As Certified By An Expert.

(ii) Beer Dispensers (Included Under Furniture And Fxtures) And Kegs (Included Under Plant And Machinery) Are Depreciated On A Straight-Line Basis Over A Period Of 3 Years Being Useful Life, As Estimated By The Management Considering Nature Of These Assets.

(iii) Assets Individually Costing Rs. 5,000 Or Less And Coolers (Included Under Furniture And Fixtures) Are Depreciated On A Straight-Line Basis Over A Period Of 1 Year Being Useful Life, As Estimated By The Management Considering Such Assets Do Not Have Enduring Benefits.

Leasehold Land Is Amortized On A Straight-Line Basis Over The Period Of Lease I.E. 90-99 Years. Leasehold Improvements Are Amortized On Straight-Line Basis Over The Lower Of Useful Life Of The Asset And The Remaining Period Of The Lease.

(D) Intangible Assets

Intangible Assets Acquired Separately Are Measured On Initial Recognition At Cost. Following Initial Recognition, Intangible Assets Are Carried At Cost Less Accumulated Amortization And Accumulated Impairment Losses, If Any. Internally Generated Intangible Assets, Excluding Capitalized Development Costs, Are Not Capitalized And Expenditure Is Reflected In The Statement Of Profit And Loss In The Year In Which The Expenditure Is Incurred.

Intangible Assets Are Amortized On A Straight Line Basis Over The Estimated Useful Economic Life. The Company Uses A Rebuttable Presumption That The Useful Life Of An Intangible Asset Will Not Exceed Ten Years From The Date When The Asset Is Available For Use. All Intangible Assets Are Assessed For Impairment Whenever There Is An Indication That The Intangible Asset May Be Impaired.

(E) Leases

Where The Company Is Lessee

Leases Where The Lessor Effectively Retains, Substantially All The Risks And Benefits Of Ownership Of The Leased Item, Are Classified As Operating Leases. Operating Lease Payments Are Recognized As Expense In The Statement Of Profit And Loss On A Straight-Line Basis Over The Lease Term.

(F) Borrowing Costs

Borrowing Cost Includes Interest, Exchange Differences Arising From Short-Term Foreign Currency Borrowings To The Extent They Are Regarded As An Adjustment To The Interest Cost And Amortization Of Ancillary Costs Incurred In Connection With The Arrangement Of Borrowings.

Borrowing Costs Directly Attributable To The Acquisition, Construction Or Production Of An Asset That Necessarily Takes A Substantial Period Of Time To Get Ready For Its Intended Use Or Sale Are Capitalized As A Part Of The Cost Of The Respective Asset. All Other Borrowing Costs Are Expensed In The Period They Occur.

(G) Impairment Of Tangible And Intangible Assets

The Company Assesses At Each Reporting Date Whether There Is An Indication That An Asset Or Group Of Assets May Be Impaired. If Any Such Indication Exists, Or When Annual Impairment Testing For An Asset Is Required, The Company Estimates The Asset''s Recoverable Amount. An Asset''s Recoverable Amount Is The Higher Of An Asset''s Or Cash-Generating Unit''s (CGU) Net Selling Price And Its Value In Use. The Recoverable Amount Is Determined For An Individual Asset, Unless The Asset Does Not Generate Cash Infows That Are Largely Independent Of Those From Other Assets Or Groups Of Assets.

Where The Carrying Amount Of An Asset Or CGU Exceeds Its Recoverable Amount, The Asset Is Considered Impaired And Is Written Down To Its Recoverable Amount. In Assessing Value In Use, The Estimated Future Cash Flows Are Discounted To Their Present Value Using A Pre-Tax Discount Rate That Reflects Current Market Assessments Of The Time Value Of Money And The Risks Specific To The Asset. In Determining Net Selling Price, Recent Market Transactions Are Taken Into Account, If Available. If No Such Transactions Can Be Identified, An Appropriate Valuation Model Is Used.

Impairment Losses, Including Impairment On Inventories, Are Recognized In The Statement Of Profit And Loss, Except For Previously Revalued Tangible Fixed Assets, Where The Revaluation Was Taken To Revaluation Reserve. In This Case, The Impairment Is Also Recognized In The Revaluation Reserve Up To The Amount Of Any Previous Revaluation.

After Impairment, Depreciation Is Provided On The Revised Carrying Amount Of The Asset Over Its Remaining Useful Life.

(H) Government Grant And Subsidies

Grants And Subsidies From The Government Are Recognized When There Is Reasonable Assurance That (I) The Company Will Comply With The Conditions Attached To Them And (Ii) The Grant/Subsidy Will Be Received.

When The Grant Or Subsidy Relates To Revenue, It Is Recognized As Income On A Systematic Basis In The Statement Of Profit And Loss Over The Periods Necessary To Match Them With The Related Costs, Which They Are Intended To Compensate. Where The Grant Relates To An Asset, It Is Recognized As Deferred Income And Released To Income In Equal Amounts Over The Expected Useful Life Of The Related Asset.

(I) Investments

Investments, Which Are Readily Realizable And Intended To Be Held For Not More Than One Year From The Date On Which Such Investments Are Made, Are Classified As Current Investments. All Other Investments Are Classified As Long-Term Investments.

On Initial Recognition, All Investments Are Measured At Cost. The Cost Comprises Purchase Price And Directly Attributable Acquisition Charges Such As Brokerage, Fees And Duties.

Current Investments Are Carried In The Financial Statements At Lower Of Cost And Fair Value Determined On An Individual Investment Basis. Long-Term Investments Are Carried At Cost. However, Provision For Diminution In Value Is Made To Recognize A Decline Other Than Temporary In The Value Of The Investments.

(J) Inventories

Raw Materials, Packing Materials And Bottles, Stores And Spares Are Valued At Lower Of Cost And Net Realizable Value. However, Materials And Other Items Held For Use In The Production Of Inventories Are Not Written Down Below Cost If The Finished Products In Which They Will Be Incorporated Are Expected To Be Sold At Or Above Cost.

Work-In-Progress And Finished Goods Are Valued At Lower Of Cost And Net Realizable Value. Cost Includes Direct Materials And Labour And A Proportion Of Manufacturing Overheads Based On Normal Operating Capacity. Cost Of Finished Goods Includes Excise Duty.

Traded Goods Are Valued At Lower Of Cost And Net Realizable Value. Cost Includes Cost Of Purchase And Other Costs Incurred In Bringing The Inventories To Their Present Location And Condition.

Cost Is Determined On A Weighted Average Basis. Net Realizable Value Is The Estimated Selling Price In The Ordinary Course Of Business, Less Estimated Costs Of Completion And Estimated Costs Necessary To Make The Sale.

(K) Revenue Recognition

Revenue Is Recognized To The Extent It Is Probable That The Economic Benefits Will Flow To The Company And The Revenue Can Be Reliably Measured. The Following Specific Recognition Criteria Must Also Be Met Before Revenue Is Recognized.

Sale Of Products

Revenue From Sale Of Products Is Recognized When All The Significant Risks And Rewards Of Ownership Of The Goods Have Been Passed To The Buyer, Usually On Dispatch Of The Goods From Breweries/Warehouses And Is Net Of Trade Discounts. The Company Collects Sales Taxes And Value Added Taxes (Vat) On Behalf Of The Government And, Therefore, These Are Not Economic Benefits Flowing To The Company. Hence, They Are Excluded From Revenue.

Excise Duty Deducted From Revenue (Gross) Is The Amount That Is Included In The Revenue (Gross) And Not The Entire Amount Of Liability Arising During The Year.

Sale Of Services

Royalty Income Is Recognized At Agreed Rate On Sale Of Branded Products By The Licensee, As Per The Terms Of The Agreement.

Income From Contract Manufacturing Units

Income From Contract Manufacturing Units ("CMUS") Relates To Net Share Of The Company As Per Terms Of The Respective Agreements And Is Recognized On The Basis Of Information Provided To The Company By CMUS And When The Right To Receive The Payment Is Established, Usually On Sale Of Goods By CMUS To Their Customers.

Interest

Interest Income Is Recognized On A Time Proportion Basis Taking Into Account The Amount Outstanding And The Applicable Interest Rate. Interest Income Is Included Under The Head "Other Income" In The Statement Of Profit And Loss.

Dividends

Dividend Income Is Recognized When The Company''s Right To Receive The Payment Is Established On Or Before The Balance Sheet Date.

(L) Foreign Currency Transactions

Foreign Currency Transactions And Balances

(i) Initial Recognition

Foreign Currency Transactions Are Recorded In The Reporting Currency, By Applying To The Foreign Currency Amount The Exchange Rate Between The Reporting Currency And The Foreign Currency At The Date Of The Transaction.

(ii) Conversion

Foreign Currency Monetary Items Are Retranslated Using The Exchange Rate Prevailing At The Reporting Date. Non-Monetary Items, Which Are Measured In Terms Of Historical Cost Denominated In A Foreign Currency, Are Reported Using The Exchange Rate At The Date Of The Transaction.

(iii) Exchange Differences

The Company Accounts For Exchange Differences Arising On Translation/ Settlement Of Foreign Currency Monetary Items As Below:

1. Exchange Differences Arising On Long-Term Foreign Currency Monetary Items Related To Acquisition Of A Fixed Asset Are Capitalized And Depreciated Over The Remaining Useful Life Of The Asset.

2. Exchange Differences Arising On Other Long-Term Foreign Currency Monetary Items Are Accumulated In The "Foreign Currency Monetary Item Translation Difference Account (FCMITDA)" And Amortized Over The Remaining Life Of The Concerned Monetary Item.

3. All Other Exchange Differences Are Recognized As Income Or As Expenses In The Period In Which They Arise.

For The Purpose Of 1 And 2 Above, The Company Treats A Foreign Monetary Item As "Long-Term Foreign Currency Monetary Item", If It Has A Term Of 12 Months Or More At The Date Of Its Origination. The Company Has Adopted Economic Hedge Accounting Whereby Only Net Exchange Loss (If Any) On The Underlying Item, After Considering Exchange Gain On Hedge Is Capitalized Or Accumulated In FCMITDA, As Applicable.

In Accordance With MCA Circular Dated August 9, 2012, Exchange Differences For This Purpose, Are Total Differences Arising On Long-Term Foreign Currency Monetary Items For The Period. In Other Words, The Company Does Not Differentiate Between Exchange Differences Arising From Foreign Currency Borrowings To The Extent They Are Regarded As An Adjustment To The Interest Cost And Other Exchange Difference.

(iv) Forward Exchange Contracts Are Entered Into, To Hedge Foreign Currency Risk Of An Existing Asset / Liability.

The Premium Or Discount Arising At The Inception Of Forward Exchange Contract Is Amortized And Recognized As An Expense/Income Over The Life Of The Contract. Exchange Differences On Such Contracts, Except The Contracts Which Are Long-Term Foreign Currency Monetary Items, Are Recognized In The Statement Of Profit And Loss In The Period In Which The Exchange Rates Change. Any Profit Or Loss Arising On Cancellation Or Renewal Of Such A Forward Exchange Contract Is Also Recognized As Income Or As Expense For The Period. Any Gain/ Loss Arising On Forward Contracts Which Are Long-Term Foreign Currency Monetary Items Is Recognized In Accordance With Paragraph (Iii)(1) And (Iii)(2).

(M) Retirement And Other Employee Benefits

(i) Retirement Benefit In The Form Of Provident Fund Is A Defined Contribution Scheme. The Company Has No Obligation, Other Than The Contribution Payable To The Provident Fund.

In Respect Of Certain Employees, The Company Has Established A Provident Fund Trust, Which Is A Defined Benefit Plan, To Which Contributions Towards Provident Fund Are Made Each Month. The Provident Fund Trust Guarantees A Specified Rate Of Return On Such Contributions On A Periodical Basis. The Company Will Meet The Shortfall In The Return, If Any, Which Is Determined Based On An Actuarial Valuation Carried Out, As Per Projected Unit Credit Method, As At The Date Of Balance Sheet. Contributions To Provident Fund Are Charged To The Statement Of Profit And Loss On An Accrual Basis.

The Company Recognizes Contribution Payable To The Provident Fund Scheme As Expenditure, When An Employee Renders The Related Service. If The Contribution Payable To The Scheme For The Service Received Before The Balance Sheet Date Exceeds The Contribution Already Paid, The Deficit Payable To The Scheme Is Recognized As A Liability After Deducting The Contribution Already Paid. If The Contribution Paid Exceeds The Contribution Due For Services Received Before The Balance Sheet Date, The Excess Is Recognized As An Asset.

(ii) Retirement Benefit In The Form Of Superannuation Fund Is A Defined Contribution Scheme. The Company Has Established A Superannuation Fund Trust To Which Contributions Are Made Each Month. The Company Recognizes Contribution Payable To The Superannuation Fund Scheme As Expenditure, When An Employee Renders The Related Service. The Company Has No Other Obligations Beyond Its Monthly Contributions.

(iii) The Company Operates Defined Benefit Plan For Its Employees, Viz., Gratuity. The Cost Of Providing Benefits Under This Plan Is Determined On The Basis Of Actuarial Valuation At Each Year-End. Actuarial Valuation Is Carried Out Using The Projected Unit Credit Method.

(iv) Accumulated Leave, Which Is Expected To Be Utilized Within The Next 12 Months, Is Treated As Short- Term Employee Benefit. The Company Measures The Expected Cost Of Such Absences As The Additional Amount That It Expects To Pay As A Result Of The Unused Entitlement That Has Accumulated At The Reporting Date. The Company Treats Accumulated Leave Expected To Be Carried Forward Beyond Twelve Months, As Long-Term Employee Benefit For Measurement Purposes. Such Long-Term Compensated Absences Are Provided For Based On The Actuarial Valuation Using The Projected Unit Credit Method At The Year-End.

The Company Presents The Leave As A Current Liability In The Balance Sheet, To The Extent It Does Not Have An Unconditional Right To Defer Its Settlement For 12 Months After The Reporting Date. Where The Company Has The Unconditional Legal And Contractual Right To Defer The Settlement For A Period Beyond 12 Months, The Same Is Presented As Non-Current Liability.

(v) Actuarial Gains/Losses Are Immediately Taken To The Statement Of Profit And Loss And Are Not Deferred.

(N) Income Taxes

Tax Expense Comprises 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 Enacted In India And Tax Laws Prevailing In The Respective Tax Jurisdictions Where The Company Operates. The Tax Rates And Tax Laws Used To Compute The Amount Are Those That Are Enacted Or Substantively Enacted, At The Reporting Date.

Deferred Income Taxes Reflect The Impact Of Timing Differences Between Taxable Income And Accounting Income Originating During The Current Year And Reversal Of Timing Differences For The Earlier Years. Deferred Tax Is Measured Using The Tax Rates And The Tax Laws Enacted Or Substantively Enacted At The Reporting Date. Deferred Tax Liabilities Are Recognized For All Taxable Timing Differences. Deferred Tax Assets Are Recognized For Deductible Timing Differences Only To The Extent That There Is Reasonable Certainty That Sufficient Future Taxable Income Will Be Available Against Which Such Deferred Tax Assets Can Be Realized. In Situations Where The Company Has Unabsorbed Depreciation Or Carry Forward Tax Losses, All Deferred Tax Assets Are Recognized Only If There Is Virtual Certainty Supported By Convincing Evidence That They Can Be Realized Against Future Taxable Profits.

At Each Reporting Date, The Company Re-Assesses Unrecognized Deferred Tax Assets. It Recognizes Unrecognized Deferred Tax Asset To The Extent That It Has Become Reasonably Certain Or Virtually Certain, As The Case May Be, That Sufficient Future Taxable Income Will Be Available Against Which Such Deferred Tax Assets Can Be Realized.

The Carrying Amount Of Deferred Tax Assets Are Reviewed At Each Reporting Date. The Company Writes- Down The Carrying Amount Of Deferred Tax Asset To The Extent That It Is No Longer Reasonably Certain Or Virtually Certain, As The Case May Be, That Sufficient Future Taxable Income Will Be Available Against Which Deferred Tax Asset Can Be Realized. Any Such Write-Down Is Reversed To The Extent That It Becomes Reasonably Certain Or Virtually Certain, As The Case May Be, That Sufficient Future Taxable Income Will Be Available. Deferred Tax Assets And Deferred Tax Liabilities Are Offset, If A Legally Enforceable Right Exists To Set-Off Current Tax Assets Against Current Tax Liabilities And The Deferred Tax Assets And Deferred Taxes Relate To The Same Taxable Entity And The Same Taxation Authority.

(O) Earnings Per Share

Basic Earnings Per Share Is Calculated By Dividing The Net Profit Or Loss For The Period Attributable To Equity Shareholders (After Deducting Preference Dividends And Attributable Taxes) By The Weighted Average Number Of Equity Shares Outstanding During The Period. The Weighted Average Number Of Equity Shares Outstanding During The Period Is Adjusted For Events Such As Bonus Issue, Bonus Element In A Rights Issue, Share Split, And Reverse Share Split (Consolidation Of Shares) That Have Changed The Number Of Equity Shares Outstanding, Without A Corresponding Change In Resources.

For The Purpose Of Calculating Diluted Earnings Per Share, The Net Profit Or Loss For The Period Attributable To Equity Shareholders And The Weighted Average Number Of Shares Outstanding During The Period Are Adjusted For The Effects Of All Dilutive Potential Equity Shares.

(P) Provisions

A Provision Is Recognized When The Company Has A Present Obligation As A Result Of Past Events, For Which It Is Probable That An Outflow Of Resources Embodying Economic Benefits Will Be Required To Settle The Obligation And A Reliable Estimate Can Be Made Of The Amount Of The Obligation. Provisions Are Not Discounted To Their Present Value And Are Determined Based On The Best Estimate Required To Settle The Obligation At The Reporting Date. These Estimates Are Reviewed At Each Reporting Date And Adjusted To Reflect The Current Best Estimates.

When The Company Expects A Provision To Be Reimbursed, The Reimbursement Is Recognized As A Separate Asset But Only When Such Reimbursement Is Virtually Certain. The Expense Relating To Any Provision Is Presented In The Statement Of Profit And Loss Net Of Any Reimbursement.

(Q) Contingent Liabilities

A Contingent Liability Is A Possible Obligation That Arises From Past Events Whose Existence Will Be Confirmed By The Occurrence Or Non-Occurrence Of One Or More Uncertain Future Events Beyond The Control Of The Company Or A Present Obligation That Is Not Recognized Because It Is Not Probable That An Outflow Of Resources Will Be Required To Settle The Obligation. A Contingent Liability Also Arises In Extremely Rare Cases Where There Is A Liability That Cannot Be Recognized Because It Cannot Be Measured Reliably. The Company Does Not Recognize A Contingent Liability But Discloses Its Existence In The Financial Statements.

(R) Cash And Cash Equivalents

Cash And Cash Equivalents For The Purposes Of Cash Flow Statement Comprise Cash At Bank And In Hand And Short-Term Investments With An Original Maturity Of Three Months Or Less.

(S) Derivative Instruments

In Accordance With The ICAI Announcement, Derivative Contracts, Other Than Foreign Currency Forward Contracts Covered Under As 11, Is Marked To Market On A Portfolio Basis, And The Net Loss, If Any Is Charged To The Statement Of Profit And Loss. Net Gain, If Any Is Ignored.


Mar 31, 2015

(a) Change in accounting policy

Pursuant to the notification of Schedule II of the Companies Act, 2013 ("the Act"), by the Ministry of Corporate Affairs effective April 1, 2014, the management has internally reassessed and changed, wherever considered necessary the useful lives of fixed assets for the purpose of computing depreciation, so as to conform to the requirements of the Act. Accordingly, the carrying amount of fixed assets as at April 1, 2014 is being depreciated over the revised remaining useful life of the asset and where the remaining useful life of an asset is nil as on April 1,2014, the carrying amount of such asset has been recognized as adjustment to the retained earnings as on that date.

Had the Company continued with the previously assessed useful lives, charge for depreciation and amortization expense for the year ended March 31,2015 would have been lower by Rs. 751 Lakhs and the profit before tax would have been higher by such amount. Further, the carrying value of Rs. 720 Lakhs (net of tax adjustment of Rs. 371 Lakhs), in case of assets with nil revised remaining useful life as at April 1,2014 has been reduced from the retained earnings as on such date.

(b) Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, as at end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

(c) Tangible fixed assets

Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

The Company adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

In accordance with MCA circular dated August 9, 2012, exchange differences adjusted to the cost of fixed assets are total differences, arising on long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset, for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference.

Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

(d) Depreciation on tangible fixed assets

Depreciation on fixed assets is calculated on a straight-line method ("SLM") basis using the useful lives estimated by the management. For the purpose of depreciation calculation, residual value is determined as 5% of the original cost for all the assets, as estimated by the management basis independent assessment by an expert. The Company has used the following useful lives to provide depreciation on its fixed assets:

Useful life (years)

Factory buildings 30

Other buildings (RCC) 60

Other buildings (Non-RCC) 30

Roads (RCC) 10

Roads (Non-RCC), Fences, etc 5

Plant and machinery 15*

Electrical installations 10

Office equipments 5

Computers 3

Servers and networks 6

Furniture and fixtures 10

Laboratory equipments 10

Vehicles 8 and 10

* In respect of assets used at any time during the year on double shift or triple shift basis, the depreciation for that period is increased by 50% or 100%, respectively.

In respect of following assets, not included above, the useful lives estimated by the management, basis technical assessment, are different from those indicated in Schedule II to the Companies Act, 2013:

(i) Assets acquired on amalgamation, etc (where original dates of acquisition are not readily available), are depreciated over the remaining useful life of the assets, as certified by an expert.

(ii) Assets individually costing Rs. 5,000 or less and coolers (included under furniture and fixtures) are depreciated on a straight-line basis over a period of 1 year being useful life, as estimated by the management considering such assets do not have enduring benefits.

Leasehold land is amortized on a straight line basis over the period of lease i.e. 90-99 years. Leasehold improvements are amortized over the lower of useful life of the asset and the remaining period of the lease.

(e) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred.

Intangible assets are amortized on a straight line basis over the estimated useful economic life. The Company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use.

A summary of amortization policies applied to the Company's intangible assets is as below:

Useful life (years)

Goodwill 5

Licenses and rights 10

Brands 10

(f) Leases

Where the Company is lessee

Leases where the lessor effectively retains, substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as expense in the statement of profit and loss on a straight-line basis over the lease term.

(g) Borrowing costs

Borrowing cost includes interest, exchange differences arising from short-term foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and amortization of ancillary costs incurred in connection with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as a part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

(h) Impairment of tangible and intangible assets

The Company assesses at each reporting date whether there is an indication that an asset or group of assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognized in the revaluation reserve up to the amount of any previous revaluation.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

(i) Government grant and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset.

(j) Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

(k) Inventories

Raw materials, packing materials and bottles, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty.

Traded goods are valued at lower of cost and net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.

Cost is determined on a weighted average basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(l) Revenue recognition

Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized.

Sale of products

Revenue from sale of products is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on dispatch of the goods from breweries/warehouses and is net of trade discounts. The Company collects sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue.

Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

Sale of services

Royalty income is recognized at agreed rate on sale of branded products by the licensee, as per the terms of the agreement.

Income from contract manufacturing units

Income from contract manufacturing units is recognized, as per terms of the agreement, when the right to receive the payment is established, usually on sale of goods by the contract manufacturing units to their customers.

Interest

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss.

Dividends

Dividend Income is recognized when the Company's right to receive the payment is established on or before the balance sheet date.

(m) Foreign currency transactions

Foreign currency transactions and balances

(i) Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

(iii) Exchange differences

The Company accounts for exchange differences arising on translation/ settlement of foreign currency monetary items as below:

1. Exchange differences arising on long-term foreign currency monetary items related to acquisition of a fixed asset are capitalized and depreciated over the remaining useful life of the asset.

2. Exchange differences arising on other long-term foreign currency monetary items are accumulated in the "Foreign Currency Monetary Item Translation Difference Account (FCMITDA)" and amortized over the remaining life of the concerned monetary item.

3. All other exchange differences are recognized as income or as expenses in the period in which they arise.

For the purpose of 1 and 2 above, the Company treats a foreign monetary item as "long-term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination. The Company has adopted economic hedge accounting whereby only net exchange loss (if any) on the underlying item, after considering exchange gain on hedge is capitalized or accumulated in FCMITDA, as applicable.

In accordance with MCA circular dated August 9, 2012, exchange differences for this purpose, are total differences arising on long-term foreign currency monetary items for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference.

(iv) Forward exchange contracts are entered into, to hedge foreign currency risk of an existing asset/ liability. The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/income over the life of the contract.

Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is also recognized as income or as expense for the period. Any gain/ loss arising on forward contracts which are long-term foreign currency monetary items is recognized in accordance with paragraph (iii)(1) and (iii)(2).

(n) Retirement and other employee benefits

(i) Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund.

In respect of certain employees, the Company has established a Provident Fund Trust, which is a defined benefit plan, to which contributions towards provident fund are made each month. The Provident Fund Trust guarantees a specified rate of return on such contributions on a periodical basis. The Company will meet the shortfall in the return, if any, which is determined based on an actuarial valuation carried out, as per projected unit credit method, as at the date of balance sheet. Contributions to provident fund are charged to the statement of profit and loss on an accrual basis.

The Company recognizes contribution payable to the provident fund scheme as expenditure, when an employee renders the related service. If the contribution payable to the scheme for the service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution paid exceeds the contribution due for services received before the balance sheet date, the excess is recognized as an asset.

(ii) Retirement benefit in the form of superannuation fund is a defined contribution scheme. The Company has established a Superannuation Fund Trust to which contributions are made each month. Such contributions are charged to the statement of profit and loss on an accrual basis. The Company has no other obligations beyond its monthly contributions.

(iii) The Company operates defined benefit plan for its employees, viz., gratuity. The cost of providing benefits under this plan is determined on the basis of actuarial valuation at each year-end. Actuarial valuation is carried out using the projected unit credit method.

(iv) Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long- term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end.

The Company presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Where the Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.

(v) Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred.

(o) Income taxes

Tax expense comprises 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 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets are reviewed at each reporting date.

The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT credit entitlement". The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

(p) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(q) Provisions

A provision is recognized when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. When the Company expects a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when such reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

(r) Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

(s) Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

(t) Derivative instruments

In accordance with the ICAI announcement, derivative contracts, other than foreign currency forward contracts covered under AS 11, is marked to market on a portfolio basis, and the net loss, if any is charged to the statement of profit and loss. Net gain, if any is ignored.


Mar 31, 2014

(a) Change in accounting policy

Effective April 1, 2013, the Company has changed the basis of determining cost for the purpose of valuation of inventories from First-in-First-out (FIFO) basis to weighted average basis. The Company''s management believes that the new method of accounting for inventory is preferable because weighted average method better refects the current value of inventories.

Had the Company continued to use the earlier method of inventory valuation, the inventories as at March 31, 2014 would have been higher by Rs.72 Lakhs, cost of materials consumed would have been lower by Rs.72 Lakhs and consequently profit before tax would have been higher by Rs.72 Lakhs.

(b) Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, as at end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

(c) Tangible fixed assets

Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

The Company adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

In accordance with MCA circular dated August 9, 2012, exchange differences adjusted to the cost of fixed assets are total differences, arising on long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset, for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference.

Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

(d) Depreciation on tangible fixed assets

Depreciation on fixed assets is calculated on a straight-line method ("SLM") basis using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule XIV to the Companies Act, 1956, whichever is higher. The Company has used the following rates to provide depreciation on its fixed assets:

*Assets acquired on amalgamation (where original dates of acquisition are not readily available), are depreciated over the remaining useful life of the assets, as certified by an expert.

Assets individually costing Rs. 5,000 or less are fully depreciated in the year of addition.

Leasehold land is amortized on a straight line basis over the period of lease i.e. 95-99 years. Leasehold improvements are amortized over the lower of useful life of the asset and the remaining period of the lease.

(e) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is refected in the statement of profit and loss in the year in which the expenditure is incurred.

Intangible assets are amortized on a straight line basis over the estimated useful economic life. The Company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use.

(f) Leases

Where the Company is lessee

Leases where the lessor effectively retains, substantially all the risks and benefits of ownership of the leased item, are classifed as operating leases. Operating lease payments are recognized as expenses in the statement of profit and loss on a straight-line basis over the lease term.

(g) Borrowing costs

Borrowing cost includes interest, exchange differences arising from short-term foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and amortization of ancillary costs incurred in connection with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as a part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

(h) Impairment of tangible and intangible assets

The Company assesses at each reporting date whether there is an indication that an asset or group of assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that refects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognized in the revaluation reserve up to the amount of any previous revaluation.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

(i) Government grant and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset.

(j) Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classifed as current investments. All other investments are classifed as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

(k) Inventories

Raw materials, packing materials and bottles, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the fnished products in which they will be incorporated are expected to be sold at or above cost.

Work-in-progress and fnished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of fnished goods includes excise duty.

Traded goods are valued at lower of cost and net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.

Cost is determined on a weighted average basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(l) Revenue recognition

Revenue is recognized to the extent it is probable that the economic benefits will fow to the Company and the revenue can be reliably measured. The following Specific recognition criteria must also be met before revenue is recognized.

Sale of products

Revenue from sale of products is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on dispatch of the goods from breweries/warehouses and is net of trade discounts. The Company collects sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue.

Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

Sale of services

Royalty income is recognized at agreed rate on sale of branded products by the licensee, as per the terms of the agreement.

Income from contract manufacturing units

Income from contract manufacturing units is recognized, as per terms of the agreement, when the right to receive the payment is established, usually on sale of goods by the contract manufacturing units to their customers.

Interest

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss.

Dividends

Dividend Income is recognized when the Company''s right to receive the payment is established on or before the balance sheet date.

(m) Foreign currency transactions

Foreign currency transactions and balances

(i) Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

(iii) Exchange differences

The Company accounts for exchange differences arising on translation / settlement of foreign currency monetary items as below:

1. Exchange differences arising on long-term foreign currency monetary items related to acquisition of a fixed asset are capitalized and depreciated over the remaining useful life of the asset.

2. Exchange differences arising on other long-term foreign currency monetary items are accumulated in the "Foreign Currency Monetary Item Translation Difference Account (FCMITDA)" and amortized over the remaining life of the concerned monetary item.

3. All other exchange differences are recognized as income or as expenses in the period in which they arise.

For the purpose of 1 and 2 above, the Company treats a foreign monetary item as "long-term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination. The Company has adopted economic hedge accounting whereby only net exchange loss (if any) on the underlying item, after considering exchange gain on hedge is capitalized or accumulated in FCMITDA, as applicable.

In accordance with MCA circular dated August 9, 2012, exchange differences for this purpose, are total differences arising on long-term foreign currency monetary items for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference.

(iv) Forward exchange contracts are entered into, to hedge foreign currency risk of an existing asset / liability

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/income over the life of the contract.

Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change.

Any profit or loss arising on cancellation or renewal of such a forward exchange contract is also recognized as income or as expense for the period. Any gain/ loss arising on forward contracts which are long-term foreign currency monetary items is recognized in accordance with paragraph (iii)(1) and (iii)(2).

(n) Retirement and other employee benefits

(i) Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund.

In respect of certain employees, the Company has established a Provident Fund Trust, which is a Defined benefit plan, to which contributions towards provident fund are made each month. The Provident Fund Trust guarantees a specified rate of return on such contributions on a periodical basis. The Company will meet the shortfall in the return, if any, which is determined based on an actuarial valuation carried out, as per projected unit credit method, as at the date of balance sheet. Contributions to provident fund are charged to the statement of profit and loss on an accrual basis.

The Company recognizes contribution payable to the provident fund scheme as expenditure, when an employee renders the related service. If the contribution payable to the scheme for the service received before the balance sheet date exceeds the contribution already paid, the defcit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution paid exceeds the contribution due for services received before the balance sheet date, the excess is recognized as an asset.

(ii) Retirement benefit in the form of superannuation fund is a Defined contribution scheme. The Company has established a Superannuation Fund Trust to which contributions are made each month. Such contributions are charged to the statement of profit and loss on an accrual basis. The Company has no other obligations beyond its monthly contributions.

(iii) The Company operates Defined benefit plan for its employees, viz., gratuity. The cost of providing benefits under this plan is determined on the basis of actuarial valuation at each year-end. Actuarial valuation is carried out using the projected unit credit method.

(iv) Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long- term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end.

The Company presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Where the Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.

(v) Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred.

(o) Income taxes

Tax expense comprises 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 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred income taxes refect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that suffcient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that suffcient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that suffcient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that suffcient future taxable income will be available. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT credit entitlement". The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

(p) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(q) Provisions

A provision is recognized when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to refect the current best estimates. When the Company expects a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when such reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

(r) Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

(s) Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

(t) Derivative instruments

In accordance with the ICAI announcement, derivative contracts, other than foreign currency forward contracts covered under AS 11, is marked to market on a portfolio basis, and the net loss, if any is charged to the statement of profit and loss. Net gain, if any is ignored.


Mar 31, 2013

(a) Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, as at end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

(b) Tangible fixed assets

Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

The Company adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

In accordance with MCA circular dated August 09, 2012, exchange differences adjusted to the cost of fixed assets are total differences, arising on long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset, for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference.

Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

(c) Depreciation on tangible fixed assets

Depreciation on fixed assets is calculated on a straight-line method ("SLM") basis using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule XIV to the Companies Act, 1956, whichever is higher. The Company has used the following rates to provide depreciation on its fixed assets:

*Assets acquired on amalgamation (where original dates of acquisition are not readily available), are depreciated over the remaining useful life of the assets, as certified by an expert.

Leasehold land is amortized on a straight line basis over the period of lease. Leasehold improvements are amortized over the lower of useful life of the asset and the remaining period of the lease.

(d) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is refected in the statement of profit and loss in the year in which the expenditure is incurred.

Intangible assets are amortized on a straight line basis over the estimated useful economic life. The Company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use.

A summary of amortization policies applied to the Company''s intangible assets is as below:

(e) Leases

Where the Company is lessee

Leases where the lessor effectively retains, substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as expenses in the statement of profit and loss on a straight-line basis over the lease term.

(f) Borrowing costs

Borrowing cost includes interest, exchange differences arising from short-term foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and amortization of ancillary costs incurred in connection with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as a part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

(g) Impairment of tangible and intangible assets

The Company assesses at each reporting date whether there is an indication that an asset or group of assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash lows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

(h) Government grant and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset.

(i) Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

(j) Inventories

Raw materials, packing materials and bottles, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty.

Traded goods are valued at lower of cost and net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.

Cost is determined on a First-in-First-out (FIFO) basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(k) Revenue recognition

Revenue is recognized to the extent it is probable that the economic benefits will low to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized.

Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on dispatch of the goods from breweries/warehouses and is net of trade discounts. The Company collects sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits lowing to the Company. Hence, they are excluded from revenue.

Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

Income from services

Royalty income is recognized at agreed rate on sale of branded products by the licensee, as per the terms of the agreement.

Income from contract manufacturing units

Income from contract manufacturing units is recognized, as per terms of the agreement, when the right to receive the payment is established, usually on sale of goods by the contract manufacturing units to their customers.

Interest

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss.

Dividends

Dividend Income is recognized when the Company''s right to receive the payment is established on or before the balance sheet date.

(l) Foreign currency transactions

Foreign currency transactions and balances

(i) Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

(iii) Exchange differences

The Company accounts for exchange differences arising on translation/ settlement of foreign currency monetary items as below:

1. Exchange differences arising on long-term foreign currency monetary items related to acquisition of a fixed asset are capitalized and depreciated over the remaining useful life of the asset.

2. Exchange differences arising on other long-term foreign currency monetary items are accumulated in the "Foreign Currency Monetary Item Translation Difference Account (FCMITDA)" and amortized over the remaining life of the concerned monetary item.

3. All other exchange differences are recognized as income or as expenses in the period in which they arise.

For the purpose of 1 and 2 above, the Company treats a foreign monetary item as "long-term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination. The Company has adopted economic hedge accounting whereby only net exchange loss (if any) on the underlying item, after considering exchange gain on hedge is capitalized or accumulated in FCMITDA, as applicable.

In accordance with MCA circular dated August 9, 2012, exchange differences for this purpose, are total differences arising on long-term foreign currency monetary items for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference.

iv. Forward exchange contracts are entered into, to hedge foreign currency risk of an existing asset / liability.

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense / income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is also recognized as income or as expense for the period. Any gain/ loss arising on forward contracts which are long-term foreign currency monetary items is recognized in accordance with paragraph (iii)(1) and (iii)(2).

(m) Retirement and other employee benefits

(i) Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund.

In respect of certain employees, the Company has established a Provident Fund Trust, which is a defined benefit plan, to which contributions towards provident fund are made each month. The Provident Fund Trust guarantees a specified rate of return on such contributions on a periodical basis. The Company will meet the shortfall in the return, if any, which is determined based on an actuarial valuation carried out, as per projected unit credit method, as at the date of balance sheet. Contributions to provident fund are charged to the statement of profit and loss on an accrual basis.

The Company recognizes contribution payable to the provident fund scheme as expenditure, when an employee renders the related service. If the contribution payable to the scheme for the service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution paid exceeds the contribution due for services received before the balance sheet date, the excess is recognized as an asset.

(ii) Retirement benefit in the form of superannuation fund is a defined contribution scheme. The Company has established a Superannuation Fund Trust to which contributions are made each month. Such contributions are charged to the statement of profit and loss on an accrual basis. The Company has no other obligations beyond its monthly contributions.

(iii) The Company operates defined benefit plan for its employees, viz., gratuity. The cost of providing benefits under this plan is determined on the basis of actuarial valuation at each year-end. Actuarial valuation is carried out using the projected unit credit method.

(iv) Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long- term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end.

The Company presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Where the Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.

(v) Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred.

(n) Income taxes

Tax expense comprises 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 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred income taxes refect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT credit entitlement". The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

(o) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(p) Provisions

A provision is recognized when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. When the Company expects a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when such reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

(q) Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

(r) Cash and cash equivalents

Cash and cash equivalents for the purposes of cash low statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

(s) Derivative instruments

In accordance with the ICAI announcement, derivative contracts, other than foreign currency forward contracts covered under AS 11, is marked to market on a portfolio basis, and the net loss, if any is charged to the statement of profit and loss. Net gain, if any is ignored.


Mar 31, 2012

1.1 Basis of Presentation of Financial Statements

The Financial Statements of the Company have been prepared under historical cost convention, to comply in all material aspects with the applicable accounting principles in India, the applicable accounting standards notified under Section 211(3C) of the Companies Act, 1956 and with the relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

1.2 Use of Estimates:

The preparation of the Financial Statements in conformity with Generally Accepted Accounting Principles in India that requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the Financial Statements, and the reported amounts of revenue and expenses during the reported period. Actual result could differ from those estimates.

1.3 Revenue Recognition:

Revenue from sale of goods is recognised in accordance with the terms of sale, on dispatch from the Breweries/ warehouses of the Company and is net of trade discount & Value Added Tax (VAT) where applicable but includes Excise Duty. Income from brand franchise is recognised at contracted rates on sale/production of the branded products by the franchisees. Dividend Income is recognised when the Company's right to receive the payment is established on or before the balance sheet date. Royalty from foreign entities (net of tax) is recognised as per the terms of agreement. Interest income is recognised on accrual basis.

1.4 Borrowing Costs:

Borrowing costs incurred for the acquisition of qualifying assets are recognised as part of cost of such assets when it is considered probable that they will result in future economic benefits to the Company while other borrowing costs are expensed in the period in which they are incurred.

1.5 Fixed Assets:

Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes, duties, freight and other incidental expenses relating to acquisition and installation of such assets.

1.6 Investments:

nvestments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.

1.7 Inventories:

nventories are valued at lower of cost and net realisable value. Costs include freight, taxes, duties and appropriate production overheads and are generally ascertained on the First in First Out (FIFO) basis. Excise/Customs duty on stocks in bond is added to the cost. Due allowance is made for obsolete and slow moving items.

1.8 Foreign Currency Transactions:

a) Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of such transactions.

b) All monetary assets and liabilities in foreign currency are restated at the end of accounting period. With respect to long-term foreign currency monetary items, from April 1, 2011 onwards, the Company has adopted the following policy:

- Foreign exchange difference on account of a depreciable asset, is adjusted in the cost of the depreciable asset/CWIP , which would be depreciated over the balance life of the asset.

- In other cases, the foreign exchange difference is accumulated in a Foreign Currency Monetary Item Translation Difference Account, and amortised over the balance period of such long term asset/ liability.

A monetary asset or liability is termed as a long-term foreign currency monetary item, if the asset or liability is expressed in a foreign currency and has a term of 12 months or more at the date of origination of the asset or liability.

Exchange differences on restatement of all other monetary items are recognised in the Statement of Profit and Loss.

The premium or discount arising att the inception of forward exchange contracts entered into to hedge an existing asset/liability, is amortised as expense over the life of the contract. Exchange differences on such a contract are recognised in the Statement of Profit and Loss in the reporting period. Any profit or loss arising on cancellation or renewal of such a forward exchange contract are recognised as income or as expense for the period.

Forward exchange contracts outstanding as at the year end on account of firm commitment/highly probable forecast transactions are marked to market and the losses, if any, are recognised in the Statement of Profit and Loss and gains are ignored in accordance with the Announcement of Institute of Chartered Accountants of India on 'Accounting for Derivatives' issued in March 2008.

1.9 Depreciation and amortisation:

Depreciation on fixed assets is provided on Straight Line Method based on the rates prescribed under Schedule XIV to the Companies Act, 1956 except as indicated below:

a) Plant and Machinery are depreciated at the rate of 10.34%. Further, depreciation is provided at higher rates in respect of certain specific items of plant and machinery having lower useful life based on technical evaluation carried out by the management.

b) Assets acquired on amalgamation (where original dates of acquisition are not readily available), are depreciated over the remaining useful life of the assets as certified by an expert.

c) Cost of Goodwill arising on amalgamation is amortised over a period of 5 years.

d) Other intangible assets are amortised on straight line basis over a period of 10 years.

e) Cost of Leasehold Land is amortised over the period of lease.

f) Assets purchased/sold during the year are depreciated from the month of purchase / until the month of sale of asset on a proportionate basis.

1.10 Employee benefits:

(i) Defined-contribution plans:

Provident Fund: Contribution towards provident fund for certain employees is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis.

Contributions to the Employees' Provident Fund, Superannuation Fund, Employees' State Insurance and Employees' Pension Scheme are as per statute and are recognised as expenses during the period in which the employees perform the services.

(ii) Defined-benefit plans:

Provident fund: In respect of certain employees, Provident Fund contributions are made to a Trust administered by the Company. The Company's liability is actuarially determined (using the Projected Unit Credit method) at the end of the year and any shortfall in the fund size maintained by the Trust set up by the Company is additionally provided for. Actuarial losses /gains are recognised in the Statement of Profit and Loss in the year in which they arise.

Gratuity: Liability towards gratuity is determined on actuarial valuation using the Projected Unit Credit Method at the balance sheet date. Actuarial Gains and Losses are recognised immediately in the Statement of Profit and Loss.

(iii) Other long term employee benefits:

Liability towards leave encashment and compensated absences is recognised at the present value based on actuarial valuation at each balance sheet date.

(iv) Short term employee benefits:

Undiscounted amount of liability towards earned leave, compensated absences, performance incentives etc. is recognised during the period when the employee renders the services.

1.11 Taxation:

Current tax is determined as per the provisions of the Income Tax Act, 1961.

(i) Provision for current tax is made, based on the tax payable under the Income Tax Act.1961. Minimum Alternative Tax (MAT) credit, which is equal to the excess of MAT (calculated in accordance with the provisions of section 115JB of the Income Tax Act, 1961) over normal income-tax is recognized as an asset by crediting the Statement of Profit and Loss only when and to the extent there is convincing evidence that the Company will be able to avail the said credit against normal tax payable during the period of ten succeeding assessment years.

(ii) Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting ncome that originates in one period and is capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised unless there is virtual / reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

1.12 Earnings per share:

Annualised earnings / (loss) per equity share (basic and diluted) is arrived at based on ratio of profit / (loss) attributable to equity shareholders to the weighted average number of equity shares.

1.13 Impairment of Assets:

At each Balance Sheet date, the Company assesses whether there is any indication that assets may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

1.14 Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when the company has a present obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions are reviewed regularly and are adjusted where necessary to reflect the current best estimates of the obligation. When the company expects a provision to be reimbursed, the reimbursement is recognised as a separate asset, only when such reimbursement is virtually certain.

A disclosure for contingent liability is made where there is a possible obligation or present obligation that may probably not require an outflow of resources.

1.15 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease.


Mar 31, 2010

1. Basis of Presentation of Financial Statements:

The Financial Statements of the Company have been prepared under historical cost convention, to comply in all material aspects with the applicable accounting principles in India, the applicable accounting standards notified under Section 211 (3C) of the Companies Act, 1956 and to relevant provisions of the Companies Act, 1956.

2. Use of Estimates:

The preparation of the Financial Statements in conformity with Generally Accepted Accounting Policies (GAAP) in India requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the Financial Statements, and the reported amounts of revenue and expenses during the reported period. Actual result could differ from those estimates.

3. Revenue Recognition:

Revenue from sale of goods is recognised in accordance with the terms of sale, on dispatch from the Breweries/warehouses of the Company and is net of trade discount but includes Excise Duty. Income from brand franchise is recognised at contracted rates on sale/production of the branded products by the franchisees. Dividend Income is recognised when the Companys right to receive the payment is established. Royalty from foreign entities (net of tax), technical advisory and management fees is recognised as per the terms of agreement.

4. Borrowing Costs:

Borrowing costs incurred for the acquisition of qualifying assets are recognised as part of cost of such assets when it is considered probable that they will result in future economic benefits to the Company while other borrowing costs are expensed in the period in which they are incurred.

5. Fixed Assets:

Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes, duties, freight and other incidental expenses relating to acquisition and installation of such assets.

The cost of fixed assets acquired on amalgamation have been determined at fair values as en the respective dates of amalgamation and as per the related Schemes of Arrangement and include taxes / duties thereof.

6. Investments:

Long term investments are carried at cost less provision made to recognise any decline, other than temporary in the values of such investments. Current investments are carried at cost or net realisable value, whichever is lower.

7. Inventories:

Inventories are valued at lower of cost and net realisable value. Costs include freight, taxes, duties and appropriate production overheads and are generally ascertained on the First in First Out (FIFO) basis. Excise/Customs duty on stocks in bond is added to the cost. Due allowance is made for obsolete and slow moving items.

8. Foreign Currency Transactions:

a) Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of such transactions.

All monetary items of foreign currency liabilities/ assets are restated at the rates ruling at the year end and all exchange gains/ losses arising there from are adjusted to the Profit and Loss Account.

Exchange difference on forward contracts are recognised in the Profit and Loss Account in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward contracts is recognised as income or expense for the year.

b) With retrospective effect from April 1, 2007 exchange differences on long term foreign currency monetary items (except for exchange differences on items forming part of the companys net investment in a non-integral foreign operation) are

i) adjusted to the cost of the asset in so far as they relate to the acquisition of a depreciable asset; ii) accumulated in a "Foreign Currency Monetary Item Translation Difference Account" and amortised over the period of the related long term foreign currency monetary item but not beyond March 31, 2011.

9. Depreciation and Amortisation:

Depreciation on fixed assets is provided on Straight Line Method based on the rates prescribed under Schedule XIV to the Companies Act, 1956 except as indicated below:

a) Plant and Machinery are depreciated at the rate of 10.34%. Further, depreciation is provided at higher rates in respect of certain specific items of plant and machinery having lower useful life based on technical evaluation carried out by the management.

b) Assets acquired on amalgamation (where original dates of acquisition are not readily available), are depreciated over the remaining useful life of the assets as certified by an expert.

Cost of Goodwill arising on amalgamation is amortised over a period of 5 years.

Cost of Leasehold Land is amortised over the period of lease.

Assets individually costing less than Rs.5 are depreciated fully in the year of purchase.

10. Employee Retirement benefits:

(i) Defined-contnbution plans:

Contributions to the Employees Provident Fund, Superannuation Fund, Employees State Insurance and Employees Pension Scheme are as per statute and are recognised as expenses during the period in which the employees perform the services.

(ii) Defined-benefit plans:

Liability towards gratuity is determined on actuarial valuation using the Projected Unit Credit Method at the balance sheet date. Actuarial Gains and Losses are recognised immediately in the Profit and Loss Account.

(iii) Other long term employee benefits:

Liability towards leave encashment and compensated absences are recognised at the present value based on actuarial valuation at each balance sheet date.

(iv) Short term employee benefits:

Undiscounted amount of liability towards earned leave, compensated absences, performance incentives etc. are recognised during the period when the employee renders the services.

11. Taxation:

Current tax is determined as per the provisions of the Income Tax Act, 1961.

Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

Fringe Benefit Tax is determined at current applicable rates on expenses falling within the ambit of "Fringe Benefit" as defined under Income Tax Act, 1961.

12. Earnings per share:

Annualised earnings/(Loss) per equity share (basic and diluted) is arrived at based on ratio of profit/(loss) attributable to equity shareholders to the weighted average number of equity shares.

13. Impairment of Assets:

At each Balance Sheet date, the Company assesses whether there is any indication that assets may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

14. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when the company has a present obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions are reviewed regularly and are adjusted where necessary to reflect the current best estimates of the obligation. When the company expects a provision to be reimbursed, the reimbursement is recognised as a separate asset, only when such reimbursement is virtually certain.

A disclosure for contingent liability is made where there is a possible obligation or present obligation that may probably not require an outflow of resources.

 
Subscribe now to get personal finance updates in your inbox!