Indage Vintners Ltd. कंपली की लेखा नीति

Mar 31, 2010

The financial statements are prepared under historical cost convention on accrual basis and comply with the Accounting Standards (AS) issued by the Institute of Chartered Accountants of India (ICAI), referred to in Section 211 (3C) of the Companies Act 1956. The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of Assets and Liabilities (including Contingent Liabilities) as of the date of the financial statements that are prudent and reasonable. Management believes that the estimates used in preparation of the financial statements are reasonable and prudent. Future results could differ from these estimates. The significant accounting policies adopted in the presentation of the accounts are as under:

1.1. Fixed Assets:

The fixed assets are valued at cost less depreciation. Depreciation has been provided on straight-line basis in accordance with the provisions of Schedule XIV to the Companies Act, 1956.

Deposits given for premises, where right to operate for more than three years exists are classified as long term deposits under fixed assets as the same represents a long term right to occupy the Office Premises and operate the business.

1.2. Agricultural Assets:

The Company has entered into contracts with Indage Vineyards Private Ltd. for long-term supply of grapes and essential raw materials in coming years. Pursuant to the arrangements, the Company has all rights over the fruits grown on identified cultivated areas with compensation related to costs and yield. The Company also has all rights, including creating mortgage and hypothecation of concerned land, standing crops and all present and future assets of these identified land and vineyards.

Since the investment has been made in agrii ultural assets on long-term basis, the amount to the extent of 10% of the supply will be re< overed and reduced from these assets every year from the first harvest under the Schene. The said assets are disclosed separately in Fixed Assets Schedule.

1.3. Depreciation / Amortization:

Depreciation on fixed assets held / purchased at owned premises, vehicles and computers has been provided on Straight line basis in accordance with the provisions of Schedule XIV to Companies Act, 1956.

1.4. Investments:

a. Long term Investments other than Investments in Foreign Subsidiaries are carried at cost. However, provision is made for diminution in value, other than temporary, on an individual basis.

b. Current Investments are carried at the lower of cost and fair value determined on a category wise basis.

The earnings on investments are accounted when the Companys right to receive the payment is established. Interest on bank deposit is accounted on accrual basis.

Any reduction in the realizable value of the above investments is debited to the Profit & Loss account as per the provisions of Accounting Standard 13- Accounting for Investments (AS-13).

1.5. Revenue recognition:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer

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

Dividend is recognized when the shareholders right to receive payment is established by the balance sheet date.

Sales are inclusive of state excise duty and sales tax, wherever such duties are payable.

1.6. Foreign Currency Transactions:

Transactions in foreign currency are recognized at the rates existing at the time at which the transactions take place. Exchange difference relating to fixed assets is adjusted in the cost of relevant fixed assets. Any other difference is dealt with in the Profit & Loss Account. Exchange difference pertaining to investments in international operations is transferred to foreign currency translation reserve. The same will be accounted for as gain/ loss in Profit & Loss account on disposal of investment in subsidiary.

1.7. Employees Retirement Benefits:

The Company has retirement benefit schemes of Provident Fund and Gratuity. The contribution to Provident Fund is charged to Profit & Loss Account as and when incurred. The Company has group gratuity cum life insurance Scheme. Gratuity premium paid to insurers under the above Scheme are debited to Profit & Loss Account in the year in which such a payment is made to the extent of Companys liability. Due to numerous assumptions and presumptions involved in calculation, the extent of probable shortfall is indeterminate and hence ignored.

1.8. Inventories:

The inventories are valued in accordance with Accounting Standard 2 - Valuation of Inventories (AS-2) as under:

Stores & Spares Part at Cost

Raw Materials at Cost

Packing Materials at Cost Work in process at Cost

Finished Goods Lower of cost or net realizable value.

The cost for this purpose has been determined on First-in-First-Out basis. For the purpose of valuation, cost includes financial cost attributable to process time necessary to bring the product in saleable condition. (Ref. Note No.2.16) This is done in accordance with AS 16-Borrowing cost, issued by the Institute of Chartered Accountants of India.

According to the existing legal status, the Companys products are not liable to be charged Central Excise Duty. However, various states are empowered to levy "State Excise Duties". Such state excise duty on liquor is payable in the States where these are consumed hence it is not possible to ascertain liabilities in this respect against the stocks held in the warehouse and wineries. As per the practice consistently followed by the Company, the excise duties on such stocks has neither been provided for nor included in the value of stocks. This treatment has however no impact on the profits/losses for the year under review.

1.9. Taxes on Income:

a. Income tax is computed in accordance with Accounting Standard 22 - Accounting for Taxes on Income, issued by the ICAI. Tax expenses are accounted for in the same period to which the revenue and expenses relate.

b. Provision for current income tax is made for the tax liability payable on taxable income after considering tax allowances deductions and exemptions determined in accordance with the prevailing tax laws. The differences between the taxable income and the net profit or loss before tax for the year as per the financial statements are identified and the tax effect of timing differences is recognised as a deferred tax asset or deferred tax liability. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on effective tax rates substantively enacted by the balance sheet date that would apply in the years in which timing difference is expected to reverse.

c. Deferred tax assets other than on unabsorbed depreciation or carried forward losses are recognised only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

1.10. Impairment of Assets:

Impairment is ascertained as at each Balance Sheet date in respect of the Companys fixed assets. An impairment loss is recognised whenever the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and its value in use.

1.11. Accounting for Provisions. Contingent Liabilities, and Contingent Assets:

Provisions are recognised in terms of Accounting Standard 29 - Provisions Contingent Liabilities and Contingent Assets (AS-29), issued by the ICAI, when there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of obligation can be made. Contingent liabilities are recognised only when there is a possible obligation arising from past events due to occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for. Contingent assets are hot recognised in the financial statements.

1.12. Borrowing Costs:

Interest and other borrowing costs are charged to revenue in the period in which they are paid in accordance with Accounting Standard 16 - Borrowing Costs (AS-16). Borrowing costs attributable to fixed assets is capitalized up to the date the asset is put to use.

1.13. Contingent Liabilities, if any, are disclosed by way of notes to accounts.

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Mar 31, 2009

The financial statements are prepared under historical cost convention on accrual basis and comply with the Accounting Standards (AS) issued by the Institute of Chartered Accountants of India (ICAI), referred to in Section 211 (3C) of the Companies Act 1956. The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of Assets and Liabilities (including Contingent Liabilities) as of the date of the financial statements that are prudent and reasonable. Management believes that the estimates used in preparation of the financial statements are reasonable and prudent. Future results could differ from these estimates. The significant accounting policies adopted in the presentation of the accounts are as under:

1.1. Fixed Assets :

The fixed assets are valued at cost less depreciation. Depreciation has been provided on straight-line basis in accordance with the provisions of Schedule XIV to the Companies Act, 1956.

Deposits given for premises, where right to operate for more than three years exists are classified as long term deposits under fixed assets as the same represents a long term right to occupy the Office Premises and operate the business.

1.2. Agricultural Assets :

The Company has entered into contracts with Indage Vineyards Private Ltd. (formerly known as Champagne Vineyards Limited) for long-term supply of grapes and essential raw materials , in coming years. Pursuant to the arrangements, the Company has all rights over the fruits grown on identified cultivated areas with compensation related to costs and yield. The Company also has all rights, including creating mortgage and hypothecation of concerned land, standing crops and all present and future assets of these identified land and vineyards.

Since the investment has been made in agricultural assets on long-term basis, the amount to the extent of 10% of the supply will be recovered and reduced from these assets every year from the first harvest under the scheme. The said assets are disclosed separately in Fixed Assets Schedule.

The Company as per the terms of agreement is receiving interest on such advances.

1.3. Depreciation / Amortization :

Depreciation on fixed assets held / purchased at owned premises, vehicles and computers has been provided on Straight line basis in accordance with the provisions of Schedule XIV to Companies Act, 1956.

1.4. Investments :

a. Long term Investments are carried at cost. However, provision is made for diminution in value, other than temporary, on an individual basis.

b Current Investments are carried at the lower of cost and fair value determined on a category wise basis.

The earnings on investments are accounted when the companys right to receive the payment is established. Interest on bank deposit is accounted on accrual basis.

Any reduction in the realizable value of the above investments is debited to the Profit & Loss account as per the provisions of Accounting Standard 13- Accounting for Investments (AS-13).

1.5. Sales and Debtors:

Sales are inclusive of state excise duty and sales tax, wherever such duties are payable.

1.6. Foreign Currency Transactions:

Transactions in foreign currency are recognized at the rates existing at the time at which the transactions take place. Exchange difference relating to fixed assets is adjusted in the cost of relevant fixed assets. Any other difference is dealt with in the Profit & Loss Account. Exchange difference pertaining to investments in international operations is transferred to foreign currency translation reserve as per Accounting Standard 11 (AS-11). The same will be accounted for as gain/ loss in Profit & Loss account on disposal of investment in subsidiary.

1.7. Employees Retirement Benefits:

The company has retirement benefit schemes of Provident Fund and Gratuity. The contribution to Provident Fund is charged to Profit & Loss Account as and when incurred. The Company has group gratuity cum life insurance scheme. Gratuity premium paid to insurers under the above scheme are debited to Profit & Loss Account in the year in which such a payment is made to the extent of Companys liability. Due to numerous assumptions and presumptions involved in calculation, the extent of probable shortfall is indeterminate and hence ignored.

1.8. Inventories:

The inventories are valued in accordance with Accounting Standard 2 - Valuation of Inventories (AS-2) as under:

Stores & Spares Part : at Cost

Raw Materials : at Cost

Packing Materials : at Cost

Work in process : at Cost

Finished Goods : Lower of cost or net realizable value.

The cost for this purpose has been determined on First-in-First-Out basis. For the purpose of valuation, cost includes financial cost attributable to process time necessary to bring the product in saleable condition. This is done in accordance with AS 16-Borrowing cost, issued by the Institute of Chartered Accountants of India.

According to the existing legal status, the companys products are-not liable to be charged Central Excise Duty. However, various states are empowered to levy "State Excise Duties". Such state excise duty on liquor is payable in the States where these are consumed hence it is not possible to ascertain liabilities in this respect against the stocks held in the warehouse and wineries. As per the practice consistently followed by the Company, the excise duties on such stocks has neither been provided for nor included in the value of stocks. This treatment has however no impact for the profits/losses for the year under review.

1.9. Taxes on Income:

a. Income tax is computed in accordance with Accounting Standard 22 - Accounting for Taxes on Income, issued by the ICAI. Tax expenses are accounted for in the same period to which the revenue and expenses relate.

b. Provision for current income tax is made for the tax liability payable on taxable income after considering tax allowances deductions and exemptions determined in accordance with the prevailing tax laws. The differences between-the taxable income and the net profit or loss before tax for the year as per the financial statements are identified and the tax effect of timing differences is recognised as a deferred tax asset or deferred tax liability. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on effective tax rates substantively enacted by the balance sheet date that would apply in the years in which timing difference is expected to reverse.

c. Deferred tax assets other than on unabsorbed depreciation or carried forward losses are recognised only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

1.10. Impairment of Assets:

Impairment is ascertained as at each Balance Sheet date in respect of the companys fixed assets. An impairment loss is recognised whenever the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and its value in use.

1.11. Accounting for Provisions, Contingent liabilities, and Contingent Assets:

Provisions are recognised in terms of Accounting Standard 29 - Provisions Contingent Liabilities and Contingent Assets (AS-29), issued by the ICAi, when there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of obligation can be made. Contingent liabilities are recognised only when there is a possible obligation arising from past events due to occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for. Contingent assets are not recognised in the financial statements.

1.12 Borrowing Costs:

Interest and other borrowing costs are charged to revenue in the period in which they are paid in accordance with Accounting Standard 16 - Borrowing Costs (AS-16). Borrowing costs attributable to fixed assets is capitalized up to the date the asset is put to use.