Commercial SOP # 4

Version 1.0
SOP on Cash Payments Issued on
-
27 June- 2014

Effective from 10-July-2014

1. Objectives

The SOP has the following objectives

a. Describe the complete process of petty cash payments which includes process for IOU and
departmental imprest and list down the items where payment can be made through petty
cash.
b. This includes process for cash requisition, disbursement, approvals and accounting.
c. Efficient internal controls are built in the process to mitigate the risk of unauthorized use of
cash
d. Cash pilferage is avoided through periodic/ regular physical cash counting and
reconciliation by the designated personnel

2. Scope

This SOP is applicable to all Cash Payments made by Sula and its group companies.

3. Petty Cash Funds (IOU)

The Cash would lie with the cashier of the location. In case of requirement of incurring
official expenditure of petty nature comes up, any employee can put a request in a IOU
request form (Annexure 1) which needs to be approved by his HOD and then duly
approved IOU is to be submitted to the Cashier in the Finance Team.

The cashier after verifying the request will disburse/pay the cash to employee

The employee will spend the amount for the designated purpose (only official use and for
the purposes as specified in Annexure 2 and prepare an expense statement in the
required format (Annexure 3) and submit the expense statement with details of amount
spent, along with bills after authorization by persons specified in Authority matrix in
Annexure 4.

The excess money if any should be returned to the cashier.

The expenses statement should be submitted within 7 days of taking the cash advance
through IOU, and IOU should be cleared.

This document remains the property of Sula Vineyards Pvt. Ltd. and the information contained therein is confidential. Persons receiving this document are
responsible for restricting disclosure except as absolutely necessary consistent with intended use.
 Commercial SOP # 4
Version 1.0
SOP on Cash Payments Issued on
-
27 June- 2014

Effective from 10-July-2014

In case of failure to clear IOU within 7 days, the entire amount will be recovered from the
employee’s next salary except cases where the advance is for purpose of travel.

In case of advance taken for travel, the employee needs to settle the advance/IOU within
7 days of returning from travel.

4. Departmental Imprest

Departments having high quantum of transactions can take an imprest from Finance for a
fixed amount (Amount to be decided by respective HOD & CFO). The money can lie with
the designated person including EA to HODs who will keep the cash and disburse it as per
requirements of the department (as per list in Annexure 2).

On weekly basis, the designated person shall prepare an expense statement, attach all
bills and after taking the approval of person authorized as per Approval Matrix specified in
Annexure 4 and submit the same to Finance.

The cashier after checking the statement and the bills, supporting documentation etc. will
re-imburse the amount spent to designated person.

For e.g. If HO Sales takes an permanent imprest of Rs.20,000/- and during the week petty
expenses of Rs.14,000/- are incurred then the designated person holding the float will
prepare an expense statement of Rs.14,000/-, attach the bills and get an approval on the
expense statement from the HOD Sales or any other person designated in Annexure 4 and
submit to the cashier on last day of the week.

The cashier after verification will pay the cash of Rs.14,000/- to the person holding the
float so that the original amount of Rs.20,000/- is restored in the hand of person holding
the float

Having departmental floats especially for those departments having high cash transaction
will simplify the process and coming to Finance for every expenses, taking approval on IOU
etc. can be eliminated.

This document remains the property of Sula Vineyards Pvt. Ltd. and the information contained therein is confidential. Persons receiving this document are
responsible for restricting disclosure except as absolutely necessary consistent with intended use.
 Commercial SOP # 4
Version 1.0
SOP on Cash Payments Issued on
-
27 June- 2014

Effective from 10-July-2014

5. Imprest for Sales Team members

Similar process as laid down in departmental imprest in point#4 above would be applicable
for imprest given to individual sales team members.
The limits per person shall be approved by Head of Sales and expenses statements to be
submitted fortnightly as per current practice.

6. Limit on Cash Payments:

a. As a rule, NO single cash payment / vendor invoice payment should exceed Rs.20,000/-.
Exceptions to this (i.e. single invoice payment in cash exceeding Rs.20,000/-)
should be approved by CFO and will be allowed in exceptional and emergency
situations only.

b. PROHIBITION ON SPLITTING TRANSACTIONS: It is strictly prohibited to split

transactions to circumvent this limit or any other policy/control procedure in place
regarding the purchase and disbursement cycle.

7. Eligible List of expenses, which can be incurred in cash:

a) Usage of Petty cash is strictly restricted to the list of “Approved Payments” as mentioned in
Annexure 2

b) Usage of cash for any purpose other than those listed in the Annexure -2 for each of the
respective location is not permitted. In case of any exceptional case an approval, in
advance via email by the CFO is required

8. Documentation / Supporting documents: All Cash payments (to employees / vendors)

should be supported by:
a) An Original invoice/receipt for each expense item
b) In exceptional circumstances, in the absence of invoice/receipt, the settlement form
should include an itemized list of missing receipts, including explanation for their
unavailability and should approved by the respective approvers as per the policy.
c) Vendor Invoices for cash payments should have Service / Goods received
acknowledgement, delivery note from the employee
d) Revenue Stamp should be affixed on cash payments above Rs.5,000/-

This document remains the property of Sula Vineyards Pvt. Ltd. and the information contained therein is confidential. Persons receiving this document are
responsible for restricting disclosure except as absolutely necessary consistent with intended use.
 Commercial SOP # 4
Version 1.0
SOP on Cash Payments Issued on
-
27 June- 2014

Effective from 10-July-2014

9. Roles & Responsibilities:

a) The petty cash officer’s/ cashier’s responsibilities include:
a. Ensuring funds are properly safeguarded. The cash should be kept in a fire proof
safe/cabinet at the HO/Winery/other location.
b. Ensuring the fund is used only for approved business purpose as mentioned in this
policy (Annexure 2)
c. Collecting/maintaining adequate records as specified (including denomination wise
details of notes and coins of closing cash balance)
d. Conducting a daily physical verification / reconciliation of cash.
e. An independent physical verification of cash should be conducted by designated
employee as a surprise check once or twice in a month at HO/Winery/other
locations.
f. Verifying the adequacy of supporting documents, approvals etc. prior to cash
disbursement/ reimbursement
g. Reporting any instance of surplus/deficit funds to the CFO

10. Balance confirmation

All employees holding IOU and imprest will need to submit confirmation of IOU/Imprest
amount as on 31st march each year or at regular intervals specified by Finance

11. In case an employee does not take a cash advance but incurs expenditure for official
purposes by himself, he shall claim his expenses (as per his entitlements) in the expense
statement format and after taking approval of his manager submit the expense statement
to Finance. These payments would be paid out as re-imbursement to the employee’s bank
account or through cheque. No cash payments will be made in such cases.

This document remains the property of Sula Vineyards Pvt. Ltd. and the information contained therein is confidential. Persons receiving this document are
responsible for restricting disclosure except as absolutely necessary consistent with intended use.
 Commercial SOP # 4
Version 1.0
SOP on Cash Payments Issued on
-
27 June- 2014

Effective from 10-July-2014

Annexure 1 – IOU (I owe you) format

IOU
Nashik Vintners Pvt. Ltd.

Date:

Name:

Purpose of Advance:

Amount (In Figures) Rs.

Amount (In Words) Rs.

Authorised By: Head of Accounts:

Reporting HOD:

Receiver's Signature Paid By Cashier

This document remains the property of Sula Vineyards Pvt. Ltd. and the information contained therein is confidential. Persons receiving this document are
responsible for restricting disclosure except as absolutely necessary consistent with intended use.
 Commercial SOP # 4
Version 1.0
SOP on Cash Payments Issued on
-
27 June- 2014

Effective from 10-July-2014

Annexure 2 – List of eligible expenses which can be made by cash

Winery
1. Employees and Operators Reimbursement Expenses including Medical treatment and cash
allowances
2. Float Advances for domestic and international travel of employees
3. Travelling and Conveyance
4. Utility Bill Payments – includes electricity and telephone bill payments, water charges,
newspapers, internet and cable charges, housekeeping charges, courier charges
5. Transportation Charges for trucks and own vehicles – includes freight, fuel expenses.
6. Recruitment Expenses
7. Food Expenses for visitors – includes purchase of food &wine items for tasting panel,
technicians, official meetings.

Head Office
1. Housekeeping Reimbursements – includes conveyance, lunch and snacks.
2. Driver’s and Office Boy Salaries
3. Float Advances
a. Domestic / International travel & lodging for employees as per policy
b. Expenses
4. Travelling and Conveyance including Taxi hire
5. Food Expenses for visitors and HOD meeting
6. Books and periodicals
7. Stamps, stamp fees and documentation etc.
8. Petty Repairs and Maintenance on office equipment, computers
9. Petty office expenses

Annexure 4 – Approval Matrix

IOU should be approved by the respective HOD

This document remains the property of Sula Vineyards Pvt. Ltd. and the information contained therein is confidential. Persons receiving this document are
responsible for restricting disclosure except as absolutely necessary consistent with intended use.