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Accounting Policies of G S Auto International Ltd. Company

Mar 31, 2013

A) Basis for Preparation of Financial Statements:

The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India under the historical cost convention on accrual basis. These financial statement have been prepared to comply In all material aspects with the accounting standards notified under Section 211 {3C) [Companies (Accounting Standard) Rules,2006, as amended) and the other relevant provisions of the Companies Act, 1956.

b) System of accounting:

The Company follows the mere- ntile system of accounting and recognizes income and expenditure on the accrual bas , except those with significant uncertainties, Financial Statements are based on histo;ical cost. These costs are not adjusted to reflect the impact of the changing value in Me purchasing power of money.

c) Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets & liabilities on the date of financial statements and the reported amounts of revenues a,d expenses during the reported period and disclosures '' of contingent assets and Jiab:;ities. The estimates and assumptions used in the accompanying financial statements are based upon management''s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized.

d) Revenue Recognition:

i) Sales:

Sales comprise Sale of goods, Services and Export incentives. Revenue from sale of goods is recognized:

a) When all the significant risks and rewards of ownership are transferred to the buyer and the Company retains no effective control of the goods transferred to a degree usually associated with ownership, which generally coincides with the dispatch of goods to the customers.; and

b) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

c) Export Sales are accounted on the basis of dates of Bill of Lading.

d) Price escalation claims from customers are accounted in the year under audit, only if they are settled with the customers up to the date of finaliiation of accounts.

11} Interest;

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

iii) Export Incentives:

Revenue in respect of the above benefit is recognized on post export basis. Export Incentives are accounted for on accrual basis at the time of Export of Goods if the entitlements can be estimated with reasonable accuracy and conditions precedent to claim is fulfilled.

Iv) Insurance and other claims;

Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

v) Dividend:

Dividend income from fnvestment, is recognized when the Company''s right to receive the payment is established,

vi) Profit/Loss on sale of Investment is recognized on contract date.

e) Fixed Assets (Tangible & Intangible) and Depreciation:

(1) Filed Assets-Ta n gi b le & I nta ngl bl e As sets:

Tangible Fixed assets are stated at their original cost of acquisition or construction net of refundable taxes or levies}, less accumulated depreciation (except freehold land). Historical cost includes all incidental costs related to the acquisition installation, erection/commissioning of the concerned assets, including interest and financial charges on borrowings, if capitalization criteria is met, attributable to the concerned Asset, up to the date of the assets w put into use/assets Is ready for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. AIT 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 Also refer para 2(h).

The Tangible Fixed Assets manufactured by the Company are stated at its manufacturing cost plus all the incidental expenses related thereto up to date of the assets are put into use/assets s ready for its intend use along with the interest cost.

Machinery Specific spares other than those required for regular maintenance are capitalizsd as a part of the tangible fixed assets.

Expenditure on New Projects and Expenditure during Construction etc.:

In case of new project and in the case of substantial modernization or expansion at the existing units of the Company, specific expenditure incurred including specific interest on borrowings and financing cost, prior to the commencement of commercial production is capitalized to the cost of specific assets. All the other expenses/indirect expenses, up to the date of start of commercial production, not specific to any particular assets, is being debited to the preoperative expenses/expenses pending capitalization account & will be capitalized, to all the relevant tangible assets, on the date of commencement of commercial production, of the new project. Trial Run expenditure is also capitated.

Intangible Assets are stated at cost less accumulated amount of amortization.

Expenditure incurred on acquisition or development of software, video Advertisement, and such other Intangible Assets are recognized as Intangible Assets, if it is expected that such assets will generate sufficient future economic benefits.

Leasehold land, acquired on thirty years tease basis, from "Adityapur Industrial Development Authority ("AIDA"} for setting up of new manufacturing unit at Jamshedpur and ail the related expenses, up to the date & incidental to the, acquisition of the leasehold land, is capitalized.

Fixed Assets are reviewed for impairment on each Balance Sheet date.

(II) Depreciation and Amortization:

Depreciation on all tangible fixed assets, is provided under the "Straight line Method" in accordance with the provisions of Section 205(2)(b) of the Companies Act,1956 in the manner and at the rates specified in Schedule XIV to the said Act.

Depreciation on tangible fixed assets, where actual cost of individual Assets is Rs.5000/- or below, is provided at the rate of hundred percent.

Intangible Assets are amortized by straight line method over a period of four years and stated at cost less accumulated depreciation and impairment loss, if any. The useful life is estimated based on the evaluation of future economic benefits expected of such assets. The appropriateness of the amortization period and the amortization method is reviewed at each financial year end.

Depreciation on the additions to the particular assets, during the year, is being provided on a pro-rata basis, from the date of acquisition/installation/on which the particular asset is put to use.

Depreciation on assets sold, discarded or demolished during the year, is being provided at their respective rates on pro-rata basis up to the date on which such assets are sold, discarded or demolished.

Depreciation on additions on account of increase in rupee value due to revalorization of foreign currency loans is being provided at rates of depreciation over the future life of the said assets.

Amortization of Leasehold land at Jamshedpur will be started, once the Jamshedpur unit will commence its commercial production & will then be amortized over the period of lease.

f) Inventories:

Cost of Inventories have been computed to include all cost of purchases, Cost of

Conversion and other costs incurred in bringing the inventories to their present location and condition:

a) Raw material & Components are valued at lower of cost or estimated net realizable value,

b) Work-in-Progress is valued at raw material cost-plus conversion cost depending upon the stage of compfet on.

c) Finished Goods are valued at raw material cost-plus conversion cost & other overheads incurred in bringing the goods to their present condition & location.

d) Consu mable Stores a re val ued at cost plus expenses,

e) Scrap is valued at estimate :J realizable value. g) Investments:

Investments that are readily readable and intended to be held for not more than a year are classified as Current Investments. All other investments are classified as Long Term Investments.

Current Investments are valued at cost of acquisition less provision for diminution as necessary, if any, determined on an individual investment basis. On disposal of''an investment, the difference betw-en its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

Long-term investments are valuec at their acquisition cost. h) Fo reign Cu r ren cy Tra n s a ctfons:

Foreign currency transactions are recorded on initial recognition at the rate prevailing

on the date of transaction. When- export bills are negotiated with the bank, the export sales are recorded at the rate on the date of negotiation as the said rate approximates the actual rate at the date of the transaction. Gains & Losses resulting from the settlement of such transactions are recognized in the statement of profit & loss account.

Monetary Assets & Liabilities denominated in foreign currency at the balance sheet date are translated into rupees at the closing exchange rate prevailing on that date All monetary Assets and Liabilities denominated in foreign currency are restated at the relevant year-end rates. Gains or Losses arising on restatement are recognized to the statement of profit & loss account.

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

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

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.

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. 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. As the Jamshedpur project is yet to commence its commercial production as at balance sheet date, hence the year end date foreign exchange adjustment to the foreign currency term loan has not been taken into effect to the cost of the overall assets of the Jamshedpur unit.

i) Hedge Accounting:

The Company till date is not using the booking of forward contract as hedging instrument for covering its risk against currency fluctuations for it''s all the import and export business carried on during the year, further the Company has not booked any forward or hedged its foreign currency exposure for the foreign exchange term loan, outstanding as at the balance sheet date, availed for the setting up of new manufacturing unit at Jamshedpur. In terms of risk management strategy, the Company does not use forward cover contracts for trading & speculative purposes.

However, the Company is planning to use forward contract as hedging instrument, going forward, for all its import and export business, so to cover against currency fluctuations risk, as its overall business strategy.

j) Research & Development Expenditure:

Revenue expenses incurred for Research and Development for its existing products are charged to the statement of profit & loss account of the year. However Capital Expenditure for Research and Development is treated in the same way as other fixed assets and is capitalized in the year of acquisition/installation and are accounted for in the manner stated in Mote No, 2 fe) above.

Cenvat Credit:

Cenvat credit of excise duty paid on inputs, capita! assets and input services is recognized in accordance with the Cenvat Credit Rules, 2004.

I) Empfoyee Benefits: Provident Fund:

Benefits in the form of Provident Fund and Pension Schemes whether in pursuance of any law or otherwise, which are defined contributions is made in accordance with the provisions of the Empfoyee Provident Fund and Miscellaneous Provision Act 1952 is accounted for on accrual basis and charged to the statement of profit and loss account on the basis of actual liability calculated as a percentage of salary.

Gratufty:

Payment for present liability of future payment of gratuity is being made to approved gratuity funds, which fulfy covers the same under cash accumulation policy of the Life Insurance Corporation of India The employees'' gratuity is a defined benefit funded plan. The present value of the obligation under such defined benefit plan is determined based on the actuarial valuation using the Projected Unit Credit Method as at the date of the Balance Sh^et and the shortfall in the fair value of the plan Assets is recognized as an obligation.

Leave Encashment:

The Company provides for the encashment of leave with pay subject to certain rules The employees are entitled to accumulate leave, for future encashment/a vailment The liability .s provided based on the number of days of unutilized leave at each balance sheet date. Privilege le;ive benefits or compensated absences are considered as long term unfunded benefits and is recognized on the basis of an independent actuarial valuation using the projected unit credit method determined by an appointed Actuary.

The Actuarial gain/loss is recognized in statement of profit and loss account.

Short term employee''s benefits are recognized as an expense on an undiscounted basis in the statement of profit and loss account of the year in which the related service is rendered.

Termination benefits such as compensation under voluntary retirement scheme are recognized as a liability in the year of termination.

m) Events subsequent to Balance Sheet Date:

Events occurring after the balance sheet date, which have a material impact on the financial affairs of the Company, are taken into cognizance.

n) Borrowing cost:

Interest on borrowings is recognized in the statement of profit & loss Account except interest incurred on borrowings, specially raised for acquisition/construction of tangible fixed assets, for the new project, are capitalized to the cost of the specific assets until such time that the asset is ready to be put to use for its intended purpose except where installation is extended beyond reasonable/normal time limits.

Further, borrowings costs attributable to the acquisition or construction/manufacture of tangible fixed assets, are capitalized till the date of substantial completion or such time that the asset is ready to be put to use for its intended purposes- Borrowing cost specific related to the setting of new manufacturing unit at Jamshedpur, is debited to the pre-operative expenses account and will be apportioned to the respective assets at the time of commencement of the commercial production of that unit.

o) Taxation:

Income tax comprises the current tax provision, net changes in the deferred tax assets or liability in the year. Provision for taxation, is made on the basis of the taxable profits computed for the current accounting period in accordance with the Income Tax Act 1961.

Deferred tax is recognized, subject to the consideration of prudence, in respect of deferred tax assets, on timing differences, being the differences between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods, using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is a

virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

p} Earning Per Share:

Annualized Earning per Share (Basic) is computed by dividing the net profit or loss (after taxation} for the period, attributable to equity shareholders, by the weighted average number of Equity Shares, outstanding during the period. Diluted earnings per share is computed by taking into account weighted average number of Equity Share outstanding during the period and weighted average number of Equity Share which would be issued on convers«on of all the dilutive potential equity shares into equity shares.

q) Provision:

A provision is recognized (for liabilities that can be measured by using a substantial degree of estimation) when the Company has a present obligation as a result of past event; it is probabie that an outflow of resources embodying economic benefits is expected to settle the obligation, in respect of which a reliable estimate can be made Necessary provisions are made for present obligations that arise of past events prior to the balance sheet date entailing future outflow of economic resources. Such provisions reflect best estimates based on available information.

r) Contingencies:

Loss contingencies arising from claims, litigations, assessments, fines, penalties etc are recorded when it is probable that a liability will be incurred and the amount can be reasonably estimated. Further, contingent liabilities are disclosed by way of note to the financial statements, after careful evaluation by the management of the facts and legal aspects of the matter involved.

s) Expenses;

Goods received are accounted a> purchases on satisfactory completion of inspection Discount to customers and price escalation to suppliers, if any, to the extent not settled at the Balance Sheet date are amounted on the basis of reasonable estimates made after 7considering negotiations with vendors/customers. Tools, jigs and fixtures costing less than Rs.5,000/- each, are written off in the year of purchase.

j impairment of Assets:

The Company tests for impairments at the close of the accounting period if and only if there are indications that suggest a possible reduction in the recoverable value of an asset. If the recoverable value of an Asset i.e. the net realizable value or the economic value
u) Operating Leases:

Assets acquired on leases wherein a significant portion of the risk and rewards of the ownership are retained by the lessor are classified as operating lease. Lease rental paid, if any, for such a leases, are recognized as an expense on systematic basis over the term of lease, in the Statement of profit and loss.

v) Others:

Liability for Liquidated damages is recognized when it is deducted/ claimed by the customer or when a reasonable estimate of the likely obligation can be made.


Mar 31, 2010

A) Accounting Convention:

The financial statements have been prepared on accrual basis under the historical cost convention in accordance with the applicable Accounting Standards referred to in section 211 (3C) and other relevant provisions of the Companies Act, 1956.

b) Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets & liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized.

c) Revenue Recognition: i) Sales:

Sales comprise Sale of goods, Services and export incentives. Revenue from sale of goods is recognized:

i) When all the significant risks and rewards of ownership are transferred to the buyer and the Company retains no e f f e c t i v e control of the goods transferred to a degree usually associated with ownership, which generally coincides with the dispatch of goods to the customers.; and

ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

ii)Interest:

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

iii) Benefit under Duty Entitlement Pass Book Scheme/ Duty Drawback Scheme:

Revenue in respect of the above benefit is recognized on post export basis. Export Incentives are accounted for on accrual basis at the time of Export of Goods if the entitlements can be estimated with reasonable accuracy and conditions precedent to claim is fulfilled.

iv) Insurance and other claims:

Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

v) Dividend:

Dividend income is recognized when the Companys right to receive the payment is established. vi) Price escalation claims from customers are accounted in the year under audit, only if they are settled with the customers up to the date of fmalization of accounts.

d) Fixed Assets (Tangible & Intangible) and Depreciation (i) Fixed Assets-Tangible & Intangible Assets:

Tangible Fixed assets are stated at historical cost of acquisition or construction (net of refundable taxes or levies), less accumulated depreciation. Historical cost includes all incidental costs related to the acquisition, installation, erection/commissioning of the concerned assets, including interest and financial charges on borrowings, if any, a tt ri b u ta bl e to the concerned Asset, up to the date of the assets are put into use/assets is ready for its intend use.

The Fixed Cost manufactured by the Company are stated at manufacturing cost plus all the incidental expenses related thereto.

Machinery Specific spares other than those required for regular maintenance are capitalized as a part of the tangible fixed assets.

Fixed Assets are reviewed for impairment on each Balance Sheet date. Expenditure on New Projects and Expenditure during Construction etc.:

In case of new projects and in the case of substantial modernization or expansion at the existing units of the Company, expenditure incurred including interest on borrowing and financing cost of specific loans, prior to the commencement of commercial production is capitalized to the cost of specific assets. Trial Run expenditure is also capitalized.

Expenditure incurred on acquisition or development of software, Video Advertisement, and such other Intangible Assets a r e recognized as Intangible Assets, if it is expected that such assets will generate sufficient future economic benefits, under the heading "Other Assets" in the Schedule "D" of Fixed Assets.

Intangible Assets are stated at cost less accumulated amount of amortization.

(ii) Depreciation:

Depreciation on all tangible Fixed assets, is provided under the "Straight line Method" in accordance with the provisions of Section 205(2)(b) of the Companies Act, 1956 in the manner and at the rates specified in Schedule XIV to the said Act.

Depreciation on additions to assets during the year is being provided on a pro-rata basis from the date of acquisition/installation/on which asset is put to use.

Depreciation on assets sold, discarded or demolished during the year, is being provided at their respective rates on pro- rata basis up to the date on which such assets are sold, discarded or demolished.

Depreciation on tangible fixed assets, where actual cost of individual Assets is Rs.50007- or below, is provided at the rate of hundred percent per annum.

Intangible Assets are amortized by straight line method over the estimated useful life of such assets. The useful life is estimated based on the evaluation of future economic benefits expected of such assets.

e) Inventory Valuation:

Cost of Inventories have been computed to include all cost of Purchases, Cost of Conversion and other costs incurred in bringing the inventories to their present location and condition:

a) Raw material & Components : at lower of cost or estimated net Realizable value.

b) Work-in-Progress : at raw material cost-plus conversion cost depending upon the stage of completion.

c) Finished Goods : at raw material cost-plus conversion cost & other overheads incurred in bringing the goods to their present condition & location.

d) Consumable Stores : at cost plus expenses.

f) Investments:

Investments that are readily realizable and intended to be held for not more than a year are classified as Current Investments. All other investments are classified as Long Term Investments.

Current Investments are valued at cost of acquisition less provision for diminution, as necessary, if any, determined on an individual investment basis. Long-term investments are carried at their acquisition cost.

g) Foreign Currency Transactions:

Foreign currency transactions are recorded on initial recognition at the rate prevailing on the date of transaction. Where export bills are negotiated with the bank, the export sales are recorded at the rate on the date of negotiation as the said rate approximates the actual rate at the date of the transaction. Gains & Losses resulting from the settlement of such transactions are recognized in the Profit & Loss Account.

Monetary Assets & Liabilities denominated in foreign currency at the balance sheet date are translated into rupees at the closing exchange rate prevailing on that date. All monetary Assets and Liabilities denominated in foreign currency are restated at the relevant year-end rates. Gains or Losses arising on restatement are recognized to the profit & loss account.

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

The above said accounting policies have been consistently followed in terms with the Accounting standard-11 ,the policy has been overridden by an amendment to the aforementioned accounting standard for limited period of time as stated on No.22 in Schedule "0".

h) HedgeAccounting:

The Company till date are not using the booking of forward contract as hedging instrument for covering its risk against currency fluctuations for its all the import and export business carried on during the year, except for Foreign Exchange Term Loan availed from financial institutions for their normal working capital requirements. Further in terms of risk management strategy, the Company does not use forward cover contracts for trading & speculative purposes.

However, the Company has now planned to use forward contract as hedging instrument for all its import and export business, so to cover against currency fluctuations risk, as its overall business strategy.

i) Research & Development:

Revenue expenses incurred for Research and Development for its existing products are charged to the Profit & Loss account.

However capital expenditure on Research and Development is treated in the same way as other fixed assets.

j) Cenvat Credit:

Cenvat credit of excise duty paid on inputs, capital assets and input services is recognized in accordance with the Cenvat Credit Rules, 2004.

k) Employee Benefits:

a) Post Employment Benefits:

Defined Contribution Plans: Provident Fund:

Benefits in the form of Provident Fund and Pension Schemes whether in pursuance of any law or otherwise, which are defined contributions is made in accordance with the provisions of the Employee Provident Fund and Miscellaneous Provision Act 1952, is accounted for on accrual basis and charged to the Profit and Loss Account, on the basis of actual liability calculated as a percentage of salary.

b) Defined Benefit Plans:

Gratuity:

Paymentfor present liability of future payment of gratuity is being made to approved gratuity funds, which fully covers the same under cash accumulation policy of the Life Insurance Corporation of India. The present value of the obligation under such defined benefit plan is determined based on the actuarial valuation using the Projected Unit Credit Method as at the date of the Balance Sheet and the shortfall in the fair value of the plan Assets is recognized as an obligation. Leave Encashment:

The Company provides for the encashment of leave with pay subject to certain rules. The employees are entitled to accumulate leave, forfuture encashment/availment. The Liability is provided based on the number of days of unutilized leave at each Balance Sheet date. Privilege Leave Benefits or compensated absences are considered as long term unfunded benefits and is recognized on the basis of an independent actuarial valuation using the projected Unit Credit Method determined by an appointed Actuary.

The Actuarial gain/loss is recognized in statement of profit and loss account.

Short term employees benefits are recognized as an expense on an undiscounted basis in the Profit and Loss Account of the year in which the related service is rendered.

I) Events subsequent to Balance Sheet Date:

Events occurring after the balance sheet date, which have a material impact on the financial affairs of the Company, are taken into cognizance.

m) Taxation:

Income tax comprises the current tax provision, net changes in the deferred tax assets or liability in the year. Provision for Taxation, is made on the basis of the Taxable Profits computed for the current accounting period in accordance with the Income Tax Act 1961.

Deferred Taxis recognized, subject to the consideration of prudence, in respect of deferred tax assets, on timing differences, being the differences between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

n) Earning Per Share:

The Earning per Share (Basic) is computed by dividing the net profit or loss (after taxation) for the period, attributable to Equity shareholders, by the weighted average number of Equity Shares, outstanding during the period. Diluted earning per share is computed by taking into account weighted average number of Equity Share outstanding during the period and weighted average number of Equity Share which would be issued on conversion of all the dilutive potential Equity Shares into Equity Shares.

o) Provision:

A Provision is recognized (for liabilities that can be measured by using a substantial degree of estimation) when the Company has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefits is expected to settle the obligation, in respect of which a reliable estimate can be made. Necessary Provisions are made for present obligations that arise of past events prior to the Balance Sheet date entailing future outflow of economic resources

p) Contingencies:

Loss contingencies arising from claims, litigations, assessments, fines, penalties etc., are recorded when it is probable that a I liability will be incurred and the amount can be reasonably estimated. Further, Contingent liabilities are disclosed by way of note to the financial statements, after careful evaluation by the management of the facts and legal aspects of the matter involved.

q) Borrowing cost:

Interest on borrowings is recognized in the Profit & Loss Account except interest incurred on borrowings, specially raised for acquisition/construction of tangible fixed assets, are capitalized to the cost of the assets until such time that the asset is ready to be put to use for its intended purpose except where installation is extended beyond reasonable/normal time limits.

r) Expenses:

Goods received are accounted as purchases on satisfactory completion of inspection. Discount to customers and price escalation to suppliers to the extent not settled at the Balance Sheet date are accounted on the basis of reasonable estimates made after considering negotiations with vendors/customers.

s) Impairment of Assets:

The Company tests for impairments at the close of the accounting period if and only if there are indications that suggest a possible reduction in the recoverable value of an asset. If the recoverable value of an Asset .i.e. the net realizable value or the economic value in use of a cash generating unit, is lowerthan the carrying amount of the Assets the difference is provided for as impairment. However, if subsequently the position reverses and the recoverable amount become higher than the then carrying value the provision to the extent of then differences is reversed, but not higher than the amount provided for.

t) Others

Liability for Liquidated damages is recognized when it is deducted/claimed by the customer or when a reasonable estimate of the likely obligation can be made.