Annual Report 2009/2010 - Colombo Stock Exchange

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NOTES TO THE FINANCIAL STATEMENTS (b) Revaluation of Land and Buildings The freehold land and buildings of the Company have been revalued and revaluation of these assets are carried out at least once every five years in order to ensure that the book values reflect the realisable values. Any surplus or deficit arising there from is adjusted in the revaluation reserve. (c) Subsequent Expenditure Expenditure incurred to replace a component of an item of property, plant and equipment that is accounted for separately is capitalised. Other subsequent expenditure is capitalised only if it is probable that the future economic benefits embodied with the item will flow to the Company and the cost of the item can be measured reliable. All other expenditure is recognised in the income statement as an expense as incurred. (d) Depreciation Depreciation is provided on a straight-line basis over the periods appropriate to the estimated useful lives of different types of assets, at varying rates specified on their costs or revalued amounts are as follows: % Freehold buildings 2 Plant & machinery 5 - 10 Furniture & fittings 10 Office equipment 10 - 33.33 Computer equipment 33.33 Computer equipment-software 20 Motor vehicles 20 - 25 Laboratory equipment 25 Assets are depreciated from the month of purchase up to the month of disposal. No depreciation is provided on freehold land. (e) Capital Work - in- Progress The cost of self constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a workable condition of their intended use and capitalised borrowing cost ( see below) . Capital Work-In-Progress is transferred to the respective asset accounts when the asset is available for use. The Company capitalises borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. The Company has capitalised borrowing costs with respect to capital work in progress. (f) Impairment of Property, Plant and Equipment The carrying value of property, plant and equipment is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying value exceed the estimated recoverable amount the assets are written down to their recoverable amount. Impairment losses are recognised in the Income Statement unless it reverses a previous revaluation surplus for the same asset. 3.3 Intangible Assets - Computer Application Software All software licensed for use by the Company, not constituting an integral part of related hardware are included in the Balance Sheet under the category of Intangible Assets and carried at cost less accumulated amortisation and accumulated impairment losses, if any. The initial acquisition cost comprises license fee paid at the inception, import duties, nonrefundable taxes and levies, cost of customising the software to meet the specific requirements of the Company and other directly attributable expenditure in preparing the asset for its intended use. The initial cost is enhanced by subsequent expenditure incurred by further customisation to meet ancillary transaction processing and reporting requirements tailor-made for the use of the Company constituting an improvement to the software. The cost is amortised using the straightline method, at the rate of 20% per annum commencing from the date the application software is available for use. The amortised amount is based on the best estimate of its useful life and the amortisation cost is recognised as an expense in the Income Statement. 3.4 Inventories Inventories are recognised at cost or net realisable value whichever is lower after making due allowance for obsolete and slow moving items. Actual breakages of bottles are removed from inventory and recognised as an expense in the income statement. The cost of each category of inventory is derived on the following bases: Fi n a n c i a l S t a t e m e n t s 31
Fi n a n c i a l S t a t e m e n t s NOTES TO THE FINANCIAL STATEMENTS Raw materials and containers (empty bottles and crates) - cost of purchase together with any incidental expenses. Work-in-progress - raw material cost and a proportion of manufacturing expenses. Finished goods - raw material cost and manufacturing expenses in full. Maintenance stock - on a weighted average basis. Appropriate provisions will be made for the value of any stocks where there has been no movement for a period greater than 365 days. Net realisable value is the price at which inventories can be sold in the normal course of business after allowing for cost of realisation and / or cost of conversion from their existing state to saleable condition. 3.5 Long Term Investments Investments classified as long term are carried at cost. If there is a decline other than temporary, in the value of long term investment, the carrying amount is reduced to recognise the decline. 3.6 Trade and Other Receivables Trade and other receivables are stated at the amounts estimated to be realised less provision for bad and doubtful debts. A provision Is recognised against the trade receivables when there is an evidence that the Company will not be able to collect all amounts due. The provision is measured at the difference between the relevant trade receivable's carrying amount and the estimated realisable value and recognised in the Income Statement under Distribution Expenses. 3.7 Cash & Cash Equivalents Cash and cash equivalents comprise cash in hand, bank demand deposits and short term highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value. LIABILITIES AND PROVISIONS Liabilities classified as Current Liabilities in the Balance Sheet are those obligations payable on demand or within one year from the Balance Sheet date. Items classified as Non - Current Liabilities are those obligations which will be repaid after a period of one year from the Balance Sheet date. All known liabilities have been accounted for in preparing these Financial Statements. 3.9 Agent Deposits Containers issued to agents are secured against a refundable deposit representing the cost. Refunding of deposits could arise due to a discontinuance of an agency or due to a contraction in sales. 3.10 Retirement Benefits The Company is liable to pay gratuity in terms of the Payment of Gratuity Act No. 12 of 1983. The Gratuity Provision for employees has been made on the basis of an actuarial valuation as at 31st March <strong>2010</strong>, which was carried out by Mr M Poopalanathan, (AIA), Actuarial and Management Consultants (Pvt.) Limited. As recommended by the Sri Lanka Accounting Standard No 16 " (Revised <strong>2010</strong>) Employee Benefits" , the 'Projected Unit Credit' (PUC) method has been used in this valuation and the premium for the year is charged as an expense to the Income Statement in the period to which it relates. The principal assumptions made are given below: - The Company will continue in business as a going concern. - The liability is not externally funded. Defined Contribution Plans Employees' Provident Fund and Employees' Trust Fund All employees who are eligible for Employees' Provident Fund contributions and Employees' Trust Fund contributions are covered by relevant contribution funds in line with the respective statutes. 3.8 Impairment of Assets Identifiable assets of the Company are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated and shown in the Balance Sheet. The impairment loss is recognised in the Income Statement. Company contributions to the defined contribution plans are recognised as an expense in the Income Statement when incurred. 3.11 Provisions A provision is recognised if the Company has a legal or constructive obligation as a result of a past event which can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. 32
Page 2 and 3: Operations Review
Page 4 and 5: CHAIRMAN'S STATEMENT Your Company w
Page 6 and 7: OPERATIONS REVIEW The single most i
Page 8 and 9: OPERATIONS REVIEW The stronger bala
Page 10 and 11: OPERATIONS REVIEW Conclusion From m
Page 12 and 13: PROFILE OF DIRECTORS Profiles of Di
Page 14 and 15: ANNUAL REPORT OF THE BOARD OF DIREC
Page 20 and 21: AUDIT COMMITTEE REPORT The Audit Co
Page 22 and 23: STATEMENT OF DIRECTOR'S RESPONSIBIL
Page 24 and 25: FINANCIAL STATEMENTS Financial High
Page 26 and 27: INCOME STATEMENT For the year ended
Page 28 and 29: STATEMENT OF CHANGES IN EQUITY In R
Page 30 and 31: NOTES TO THE FINANCIAL STATEMENTS 1
Page 36 and 37: NOTES TO THE FINANCIAL STATEMENTS F
Page 42 and 43: NOTES TO THE FINANCIAL STATEMENTS A
Page 44 and 45: NOTES TO THE FINANCIAL STATEMENTS N
Page 48 and 49: VALUE ADDED STATEMENT For the year
Page 50 and 51: FIVE YEAR SUMMARY Year ended 31st M
Page 52 and 53: INCOME STATEMENT For the year ended
Page 54 and 55: FINANCIAL HIGHLIGHTS Year ended 31s
Page 56 and 57: INFORMATION TO SHAREHOLDERS & INVES
Page 58 and 59: GLOSSARY OF FINANCIAL TERMS Appropr
Page 60 and 61: LION BREWERY (CEYLON) PLC FORM OF P

Annual Report 2009/2010 - Colombo Stock Exchange

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