Mar 31, 2016
1. SIGNIFICANT ACCOUNTING POLICIES:
I) Basis of Preparation
a) The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India(Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of Companies Act,2013 (''the Act'') as applicable. The financial statements have been prepared as a going concern on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
All the 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 Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be 12 months for the purpose of current - non-current classification of assets and liabilities.
b) Use of estimates:
The presentation of financial statements in conformity with the Generally Accepted Accounting Principles in India requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known/ materialized.
c) Accounting Policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.
II) Fixed Assets
Tangible assets
Tangible fixed assets are carried at the cost of acquisition or construction, less accumulated depreciation/ accumulated impairment. The cost of fixed assets comprises of its purchase price, including non refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use. Expenses directly attributable to new manufacturing facility during its construction period are capitalized.
Profit or loss on disposal of tangible assets is recognized in the Statement of Profit and Loss.
Intangible assets
Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortized on a straight line basis over their estimated useful lives.
III) Method of Depreciation and amortization
1. In respect of fixed assets (other than capital work in progress) acquired during the year, Depreciation / amortization is charged on a straight line basis so as to write off the cost of the assets over useful lives and for the assets acquired prior to April 1, 2014, the carrying amount as on April 1, 2014 is depreciated over the remaining useful life based on an evaluation
2. Residual values for Plant & Machinery, Air Conditioners, Furniture and Fittings, Office Equipments, Computers and servers are considered Nil.
3. Depreciation on assets added/disposed off during the year has been provided on pro-rata basis with reference to the month of addition/disposal.
IV) Investment
Investments that are readily realizable 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 the 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 recognize a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.
V) Valuation of Inventories
Inventories are valued at the lower of cost and estimated net realizable value (except scrap/waste which are valued at net realizable value). The cost comprises of cost of purchase, cost of conversion and other costs including appropriate production overheads in the case of finished goods and work in progress, incurred in bringing such inventories to their present location and condition.
In case of raw materials, stores & spares and traded goods, cost (net of CENVAT/VAT credits wherever applicable) is determined on a First In First Out basis, also in case of work in process and finished goods, cost is determined on First In First Out basis.
VI) Revenue Recognition
i. Sales are stated at net of returns and sales tax. The Excise Duty relatable to sales is separately disclosed and deducted from sales. Sales revenue is recognized when risks and rewards of ownership of the goods have passed to the buyer.
ii. Interest income is recognized on a time proportion basis taking into accounts the amount outstanding and the rate applicable.
iii. All other known incomes to the extent receivable and quantifiable till the date of finalization of account are accounted on accrual basis.
VII) Borrowing Costs
Interest and other borrowing costs attributable to qualifying assets are capitalized. Other interest and borrowing costs are charged to revenue.
VIII) Leases Accounting
Assets taken on Operating Lease
Lease rentals on assets taken on operating lease are recognized as expense in the Statement of Profit and Loss on straight line basis.
IX) Foreign Currency Transactions
i. All transactions in foreign currency are recorded at the exchange rate prevailing at the dates of transactions. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit & Loss.
ii. Monetary items in the form of Loans, Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. Resultant gain or loss is accounted during the year.
iii. All other incomes or expenditure in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.
X) Employee Benefits
Short-term employee benefit:
All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability after deducting any amount already paid.
Long-term employee benefit:
i. No provision has been considered in accounts towards future payment of gratuity to the employees as the same is proposed to be accounted on cash basis. No provision has been made towards accrued leave wages which is continued to be accounted on cash basis.
ii. The company has adopted PAY-AS-YOU-GO method for payment of other retirement benefits if any payable to the employees.
XI) Cash and cash equivalents
In the cash flow statement, cash and cash equivalent includes cash on hand, demand deposits with banks, other Short Term highly liquid Investments with original maturities of three months or less.
XII) Segment Reporting policies
The main business of the Company is manufacturing electric stamping plate from Iron and steel in India and all other related activities revolve around the main business and as such there are no separate reportable segments as specified in Accounting Standard (AS-17) on "Segment Reporting".
XIII) Dividend
Dividend recommended by the Board of Directors is not provided for in the accounts, due to pending approval at the Annual General Meeting.
XIV) Taxes on Income
(i) Tax expense for the period, comprising current tax and deferred tax, are included in the determination of the net profit or loss for the period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws prevailing in the respective jurisdictions.
(ii) Deferred tax is recognized for all the timing difference, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that the sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. In situations, where the Company has unabsorbed depreciation or carry forward losses under tax laws, all deferred tax assets are recognized only to the extent that there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each Balance Sheet date, the Company re-assesses unrecognized deferred tax assets, if any.
(iii) Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.
(iv) Minimum Alternative Tax credit (MAT Credit) is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.
XV) Earnings per share
Basic earnings per equity share are calculated by dividing the net profit / (loss) for the year attributable to equity shareholders (after deducting attributable taxes) by weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for event of fresh issue of equity shares, if any.
For the purpose of calculating diluted earnings per equity share, the net profit / (loss) for the year attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
XVI) Impairment
(i) The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.
XVII) Provisions, Contingent Liabilities and Contingent Assets Provisions:
Provisions are recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date and are not discounted at its present value.
Contingent Liabilities:
Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only on the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
Contingent Assets:
Contingent Assets are neither recognized nor disclosed in the financial statements.
Mar 31, 2015
I) Basis of Preparation
a) These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. Pursuant to section 133 of the
Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules,
2014, till the Standards of Accounting or any addendum thereto are
prescribed by Central Government in consultation and recommendations of
the National Financial Reporting Authority, the existing Accounting
Standards notified under the Companies Act, 1956 shall continue to
apply. Consequently, these financial statements have been prepared to
comply all material aspects with the Accounting Standards notified
under section 211(3C) of Companies Act, 1956 (Companies (Accounting
Standards) Rules, 2006, as amended) and other relevant provisions of
the Companies Act, 2013.
All the 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 Schedule III to the Companies Act, 2013. Based on
the nature of products and the time between the acquisition of assets
for processing and their realisation in cash and cash equivalent, the
Company has ascertained its operating cycle to be 12 months for the
purpose of current- non current classification of assets and
liabilities.
b) Use of estimates:
The presentation of financial statements in conformity with the
Generally Accepted Accounting Principles in India requires estimates
and assumptions to be made that affect the reported amount of assets
and liabilities and disclosure of contingent liabilities on the date of
the financial statements and the reported amount of revenues and
expenses during the reporting period. Difference between the actual
result and estimates are recognised in the period in which the results
are known/ materialised.
c) Accounting Policies not specifically referred to otherwise are
consistent with the generally accepted accounting principles followed
by the Company.
II) Fixed Assets
Tangible assets
Fixed assets are stated at cost of acquisition or construction net of
recoverable taxes, trade discounts, rebates, depreciation accumulated
and accumulated impairment losses. All costs relating to the
acquisition and installation of fixed assets are capitalised and
includes borrowing costs relating to borrowed funds attributable to
construction or acquisition of fixed assets, up to the date the asset
is put to use.
Items of fixed assets that have been retired from active use and are
held for disposal are stated at the lower of their net book value and
net realisable value and are shown separately in the financial
statements. Any expected loss is recognised immediately in the
Statement of Profit and Loss.
Losses arising from the retirement of and gains or losses arising from
disposal of fixed assets which are carried at cost are recognised in
the Statement of Profit and Loss.
III) Method of Depreciation and amortization
1) Depreciation has been provided as under:
i) For assets existing on 1st April, 2014 the carrying amount will be
amortised over the remaining useful lives on straight line method as
prescribed in the Schedule II of the Companies Act, 2013.
ii) For the assets added after the 1st April, 2014:
On Plant and Machinery, Furniture & Fittings, Office equipments and
Vehicles depreciation has been provided on Straight Line Method at the
useful lives prescribed in Schedule II to the Companies Act, 2013.
2) Residual values for Air Conditioners, Furniture and Fittings, Office
Equipments, Computers and servers are considered Nil.
3) Depreciation on assets added/disposed off during the year has been
provided on prorata basis with reference to the month of
addition/disposal.
IV) Investment
Investments 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 the 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.
V) Inventories
Inventories are valued at the lower of cost and estimated net
realizable value (except scrap/waste which are valued at net realisable
value). The cost comprises of cost of purchase, cost of conversion and
other costs including appropriate production overheads in the case of
finished goods and work in progress, incurred in bringing such
inventories to their present location and condition.
In case of raw materials, stores & spares and traded goods, cost (net
of CENVAT/VAT credits wherever applicable) is determined on a First In
First Out basis, also in case of work in process and finished goods,
cost is determined on First In First Out basis.
VI) Revenue Recognition
i. Sales are stated at net of returns and sales tax. The Excise Duty
relatable to sales is separately disclosed and deducted from sales.
Sales revenue is recognised when risks and rewards of ownership of the
goods have passed to the buyer.
ii. Interest income is recognized on a time proportion basis taking
into accounts the amount outstanding and the rate applicable.
iii. Rent Revenue is recognized on accrual basis.
iv. All other known incomes to the extent receivable and quantifiable
till the date of finalization of account are accounted on accrual
basis.
VII) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of the assets, upto the date the assets are ready for their intended
use. All other borrowing costs are recognised in the Statement of
Profit and Loss in the year in which they are incurred.
VIII) Leases
As a lessee:
Lease rentals on assets taken on operating lease are recognized as
expense in the Statement of Profit and Loss on straight line basis.
As a lessor:
The Company has given part of Immovable property on rental basis and
treated as operating lease. Lease rentals are accounted on accrual
basis in accordance with the respective lease agreements.
IX) Foreign Currency Transactions
i. All transactions in foreign currency are recorded at the rates of
exchange prevailing on the dates when the relevant transactions take
place.
ii. Monetary items in the form of Loans, Current Assets and Current
Liabilities in foreign currency, outstanding at the close of the year,
are converted in Indian Currency at the appropriate rates of exchange
prevailing on the date of the Balance Sheet. Resultant gain or loss is
accounted during the year.
iii. All other incomes or expenditure in foreign currency, are
recorded at the rates of exchange prevailing on the dates when the
relevant transactions take place.
X) Employee Benefits
Short-term employee benefit:
Short Term employee benefits are recognized as an expense at the
undiscounted amount in the Statement of Profit and Loss for the year in
which the related service is rendered.
Long-term employee benefit:
i. No provision has been considered in accounts towards future payment
of gratuity to the employees as the same is proposed to be accounted on
cash basis. No provision has been made towards accrued leave wages
which is continued to be accounted on cash basis.
ii. The company has adopted PAY-AS-YOU-GO method for payment of other
retirement benefits if any payable to the employees.
XI) Cash and cash equivalents
In the cash flow statement, cash and cash equivalent includes cash on
hand, demand deposits with banks, other Short Term highly liquid
Investments with original maturities of three months or less.
XII) Taxes on Income
(i) Tax expense comprises of current and deferred tax charge or credit.
Current tax is measured at the amount expected to be paid to the tax
authorities in accordance with the Indian Income Tax Act. Deferred
income taxes reflect the impact of current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years.
(ii) Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the Balance Sheet date. Deferred
tax assets are recognised 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 realised. In situations
where the Company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
(iii) At each Balance Sheet date, the Company re-assesses unrecognised
deferred tax assets. It recognises unrecognised deferred tax assets 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 realised.
(iv) Minimum Alternative Tax credit (MAT Credit) is recognized as an
asset only when and to the extent there is convincing evidence that the
Company will pay normal tax during the specified period. Such asset is
reviewed at each Balance Sheet date and the carrying amount of the MAT
credit asset is written down to the extent there is no longer a
convincing evidence to the effect that the Company will pay normal
income tax during the specified period.
XIII) Earnings per share
Basic earnings per equity share are calculated by dividing the net
profit / (loss) for the year attributable to equity shareholders (after
deducting attributable taxes) by weighted average number of equity
shares outstanding during the year. The weighted average number of
equity shares outstanding during the year is adjusted for event of
fresh issue of equity shares, if any.
For the purpose of calculating diluted earnings per equity share, the
net profit / (loss) for the year attributable to equity shareholders
and the weighted average number of equity shares outstanding during the
year are adjusted for the effects of all dilutive potential equity
shares.
XIV) Impairment
(i) The carrying amounts of assets are reviewed at each Balance Sheet
date if there is any indication of impairment based on
internal/external factors. An asset is impaired when the carrying
amount of the asset exceeds the recoverable amount. An impairment loss
is charged to the Statement of Profit and Loss in the year in which an
asset is identified as impaired.
(ii) After impairment, depreciation is provided on the assets revised
carrying amount over its remaining useful life.
(iii) A previously recognised impairment loss is increased or decreased
depending on change in circumstances. However, an impairment loss is
not decreased to an amount higher than the carrying amount that would
have been determined has no impairment loss been recognised.
XV) Provisions, Contingent Liabilities and Contingent Assets
Provisions:
Provisions are recognised when there is a present obligation as a
result of a past event and it is probable that an outflow of benefits
will be required to settle the obligation and there is a reliable
estimate of the amount of the obligation.
Mar 31, 2014
(A) Basis of Presenting Financial Statements:
(I) Basis of Accounting:
The Company maintains its accounts on the accrual basis following the historical cost convention, in accordance with generally accepted accounting principles ["GAAP"] in compliance with the provisions of the Companies Act,1956 and the Accounting Standards as specified in the Companies (Accounting Standards) Rule,2006 read with the General circular 15/2013 dates September 13,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013 and the relevant provisions of the Companies Act,1956 read with the General Circular No. 1/19/2013 dated April 4,2014 of the Ministry of Corporate Affairs in respect of the relevant provisions/schedules/rules of the Companies Act,2013.
The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumption that affect the reported amounts of income and expenses of the period, the reported balances of the assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements.
The Accounting policies adopted in the presentation of financial statements are consistent with those of previous year.
(II) Classification of Assets and Liabilities
The classification of assets and liabilities of the Company is done into current and non-current based on the operating cycle of the business of the Company. The operating cycle of the business of the Company is less than twelve months and therefore all current and non-current classifications are done based on the status of reliability and expected settlement of the respective asset and liability within a period of twelve months from the reporting date as required by Revised Schedule VI to the Companies Act 1956.
(III) Accounting Policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company
(B) Summary of Significant Accounting Policies
I) FIXED ASSETS:
Tangible Assets
Fixed Assets are stated at their original cost of acquisition and installation, less accumulated Depreciation, amortization and impairment loss, if any.
The cost of fixed assets comprises its purchase price net of any trade discounts and rebates and other taxes (other than those subsequently recoverable from the tax authorities), any other direct attributable expenditure on making the assets ready to its intended use and other incidentals expenses.
II) DEPRECIATION :
i. Depreciation has been provided on written down value basis as per the rates and methods explained under schedule XIV of the Companies Act,1956.
ii. The assets purchased or sold during the year has been depreciated on prorate basis as per the rates applicable to them.
III) BORROWING COST:
Borrowing cost are expensed as and when incurred.
IV) INVENTORIES:
Inventories are valued at the lower of cost and estimated net realizable value (except scrap/waste which are valued at net realizable value). The cost comprises of cost of purchase, cost of conversion and other costs including appropriate production overheads in the case of finished goods and work in progress, incurred in bringing such inventories to their present location and condition.
In case of raw materials, stores & spares and traded goods, cost (net of CENVAT/VAT credits wherever applicable) is determined on a First In First Out basis, also in case of work in process and finished goods, cost is determined on First In First Out basis.
V) ACCOUNTING EXCISE DUTY, CENVAT AND VAT BENEFIT:
Excise duty is chargeable on production but is payable on clearance of goods. Accordingly excise duty on the goods manufactured by the company is accounted for at the time of their clearance. Excise duty payable is adjusted against the CENVAT credits, to the extent it is available and balance duty is paid. CENVAT / VAT credit availed under the relevant provisions in respect of Raw material, packing materials, Fuels, Stores and spares, capital goods, etc is reduced from the relevant cost of purchases. Unutilized CENVAT balance at the year end is considered as advance excise duty.
VI) REVENUE RECOGNITION:
i. Sales are stated at net of returns and sales tax. The Excise Duty relatable to sales is separately disclosed and deducted from sales. Sales revenue is recognized when risks and rewards of ownership of the goods have passed to the buyer.
ii. Interest income is recognized on a time proportion basis taking into accounts the amount outstanding and the rate applicable.
iii. Rent Revenue is recognized on accrual basis.
iv. All other known incomes to the extent receivable and quantifiable till the date of finalization of account are accounted on accrual basis.
VII) INVESTMENTS
Current investments are carried at lower of cost and quoted/fair value, computed category-wise. Long-term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary
VIII) OPERATING LEASES
Assets taken on lease under which, all the risks and rewards of the ownership are effectively retained by the lessor are classified as operating lease. Lease payments under operating leases are recognized as expenses in accordance with the respective lease agreements.
IX) CUSTOM DUTY:
The Liability on account of Custom Duty is recognized on clearance of the goods and paid on import of raw materials are added in the cost of raw material.
X) FOREIGN EXCHANGE TRANSACTIONS:
i) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.
ii) All import payables at the yearend are restated at the rate prevailing at the year end. The exchange difference arising there on has been recognized as income/expenses in the current year''s Statement of Profit and Loss.
iii) Monetary Assets & Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Profit/Loss so determined are recognized in the Statement of Profit and Loss.
XI) EMPLOYEE BENEFITS :
Short-term employee benefit:
Short Term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.
Long-term employee benefit:
i. No provision has been considered in accounts towards future payment of gratuity to the employees as the same is proposed to be accounted on cash basis. No provision has been made towards accrued leave wages which is continued to be accounted on cash basis.
ii. The company has adopted PAY-AS-YOU-GO method for payment of other retirement benefits if any payable to the employees.
XII) EARNING PER SHARE:
Basic earnings per share are calculated by dividing the net profit / (loss) for the year attributable to equity shareholders (after deducting attributable taxes) by average number of equity shares outstanding
during the year. The average number of equity shares outstanding during the year is adjusted for event of fresh issue of equity shares if any.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
XIII) TAXES OF INCOME:
i. Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation or losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.
ii. Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.
XIV) IMPAIRMENT OF ASSETS:
As at each Balance Sheet date, the carrying amount of the assets is tested for impairment so as to determine
a. the provision for impairment loss, if any; and
b. reversal of impairment loss recognized in previous periods, if any,
Impairment loss is recognized when the carrying amount of an asset exceed its recoverable amount. Recoverable amount is determined:
a. in the case of an individual asset, at the higher of the net selling price and the value in use;
b. in the case of a cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of the cash generating unit''s net selling price and the value in use.
(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life).
XV) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provision is recognized in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. 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.
Contingent liabilities are clearly disclosed unless the possibility of outflow of resources is remote.
Contingent assets are neither recognized nor disclosed in the financial statements
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