Mar 31, 2015
Nature of Operations
The Company was incorporated on June 22, 1992 in the name of VR Mathur
Mass Communications Ltd. and subsequently the name has been changed to
Gradient Infotainment Ltd.( w.e.f 09-01-2003). The Company's revenue
is generated mainly from advertisement, in Print Media & Electronic
Media and TV Serial production for other production houses and own
production.
i)Basis of Accounting
These financial statements are prepared under the historical cost
convention and comply in all material aspects with the applicable
accounting principles in India, the applicable accounting standards
notified under section 211(3C) of the Companies Act, 2013 ("The Act")
and the relevant provisions of the Act.
ii)Use of Estimates
The preparation of financial statements in accordance with the
generally accepted accounting principles requires the Management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of financial statements and the
reported amount of expenses of the year. Actual results could differ
from these estimates. Any revision to such accounting estimates is
recognized in the accounting period in which such revision takes place
iii)Revenue Recognition
Revenue from Advertisement in Print Media & Electronic Media and TV
Serial Production is recognized on an accrual basis on fulfilling the
terms of contract & publicity of client's commercial, net of service
tax.
iv)Fixed assets and Depreciation
a. Tangible assets
Tangible fixed assets are stated at cost less accumulated depreciation.
Depreciation on tangible fixed assets is provided on written down value
method at the rates and in the manner specified in Schedule II to the
Act. The cost of leasehold improvements is amortized over the primary
period of lease of the property. Tangible assets individually costing
less than Rupees 5,000 are depreciated @ 100% in the year of purchase.
v)Software
Software obtained initially together with hardware is capitalized along
with the cost of hardware and depreciated in the same manner as the
hardware. All subsequent purchases of software are treated as revenue
expenditure and charged in the year of purchase.
vi)Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transaction. Gains and losses arising out
of subsequent fluctuations are accounted for on actual payment or
realization. Monetary items denominated in foreign currency as at the
Balance Sheet Date are converted at the exchange rates prevailing on
that day. Exchange differences are recognized in the Profit and Loss
account.
vii)Investments
Long term investments are stated at cost. Provision is made for
permanent diminution in value, if any. Current investments are stated
at lower of cost and market value / repurchase price.
vi)Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transaction. Gains and losses arising out
of subsequent fluctuations are accounted for on actual payment or
realization. Monetary items denominated in foreign currency as at the
Balance Sheet Date are converted at the exchange rates prevailing on
that day. Exchange differences are recognized in the Profit and Loss
account.
vii)Investments
Long term investments are stated at cost. Provision is made for
permanent diminution in value, if any. Current investments are stated
at lower of cost and market value / repurchase price.
viii)Retirement Benefits
a. Gratuity
In accordance with payment of Gratuity Act 1972, company has provided
for gratuity, covering the employees of the company who have rendered
service for a continuous period of service of not less than five years.
The Gratuity plan provides a lump-sum payment to vested employees at
the time of retirement, death, incapacitation or termination of
employment, of an amount based on the respective employee's salary and
tenure of employment with the Company. Liabilities with regard to
gratuity plan are determined based on estimates at the Balance Sheet
date. The company is yet to frame a scheme for making annual
contributions to the Employees group for qualifying employees.
b. Provident Fund
Provident fund contribution is not applicable to the company as the
number of employed persons in the company is less than the limit
prescribed i.e. 20 persons.
ix)Borrowing Cost
Borrowing cost attributable to the acquisition or construction of a
qualifying asset is capitalized as part of cost of the asset. Other
borrowing costs are recognized as an expense in the period in which
they are incurred.
x)Taxation
Provision for income tax is to be made at the current tax rates based
on assessable income or on the basis of Section 115JB of the Income Tax
Act, 1961. However, in view of sizable accumulated/un-absorbed business
losses of the Company subsisting as on 01.04.2014 that are eligible for
carry forward and set off, no tax liability/obligation is reported.
Deferred tax is recognized, subject to the consideration of prudence,
on timing differences, being the difference between taxable incomes and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
Deferred tax assets are recognized 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 realized.
xi)Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the Profit and Loss Account.
xii)Provisions and Contingent Liabilities
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to its present date value and
are determined based on best estimates of the amount required to settle
the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Mar 31, 2014
I) Basis of Accounting
These financial statements are prepared under the historical cost
convention and comply in all material aspects with the applicable
accounting principles in India, the applicable accounting standards
notified under section 211(3C) of the Companies Act, 1956 ("The Act")
and the relevant provisions of the Act.
ii) Use of Estimates
The preparation of financial statements in accordance with the
generally accepted accounting principles requires the Management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of financial statements and the
reported amount of expenses of the year. Actual results could differ
from these estimates. Any revision to such accounting estimates is
recognized in the accounting period in which such revision takes place.
iii) Revenue Recognition
Revenue from Advertisement, in Print Media & Electronic Media and TV
Serial Production recognized on an accrual basis on the Fulfilling the
terms of contract & publicity of client's commercial net of service
tax.
iv) Fixed assets and Depreciation
a. Tangible assets
Tangible fixed assets are stated at cost less accumulated depreciation.
Depreciation on tangible fixed assets is provided on written down value
method at the rates and in the manner specified in Schedule XIV to the
Act. The cost of leasehold improvements is amortized over the primary
period of lease of the property. Tangible assets individually costing
less than Rs. 5,000 are depreciated @ 100% in the year of purchase.
v) Software
Software obtained initially together with hardware is capitalized along
with the cost of hardware and depreciated in the same manner as the
hardware. All subsequent purchases of software are treated as revenue
expenditure and charged in the year of purchase.
vi) Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transaction. Gains and losses arising out
of subsequent fluctuations are accounted for on actual payment or
realization. Monetary items denominated in foreign currency as at the
Balance Sheet Date are converted at the exchange rates prevailing on
that day. Exchange differences are recognized in the Profit and Loss
account.
vii) Investments
Long term investments are stated at cost. Provision is made for
permanent diminution in value, if any. Current investments are stated
at lower of cost and market value / repurchase price.
viii) Retirement Benefits
a. Gratuity
In accordance with payment of Act, 1972 company has provides for
gratuity, covering the employees of the company who have rendered
service for a continuous period of service of not less than five years.
The Gratuity plan provides a lump-sum payment to vested employees at
the time of retirement, death, incapacitation or termination of
employment, of an amount based on the respective employee's salary and
tenure of employment with the Company. Liabilities with regard to the
gratuity plan are determined based on estimates at the Balance sheet
date. The company is yet to frame a scheme for making annual
contributions to the Employees group for qualifying employees.
b. Provident Fund
Provident fund contribution is not applicable to the company as the
number of employed persons in the company is less than the limit
prescribed i.e. 20 persons.
ix) Borrowing Cost
Borrowing cost attributable to the acquisition or construction of a
qualifying asset is capitalized as part of cost of the asset. Other
borrowing costs are recognized as an expense in the period in which
they are incurred.
x) Taxation
Provision for income tax has been made at the current tax rates based
on assessable income or on the basis of Section 115JB of the Income Tax
Act, 1961.
Deferred tax is recognized, subject to the consideration of prudence,
on timing differences, being the difference between taxable incomes and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
Deferred tax assets are recognized 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 realized.
The company has a liability of Rs. 7.6 Crores as per provisions of Income
tax Act and Rs. 8.58 Crores Service tax liability.
xi) Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any
indication that asset may be impaired. If any such indication exists,
the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or the recoverable amount of the cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognized in the
Profit and Loss Account.
xii) Provisions
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to its present date value and
are determined based on best estimates of the amount required to settle
the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Xiii) Contingent Liabilities
a. The Company has defaulted in payment of loan to Andhra Bank for
which they have raised a demand of Rs. 1.80 crores under one time
settlement scheme (OTS) vide letter no.1204/45/26/837 dated
12-03-2004,subsequently Bank has Auctioned 2 properties.
- No.301/1, 3rd Floor of Krishna Plaza, Muncipal # 6-2-953/A and
6-2-953/B admeasuring 952.85sq ft along with undivided land 30.68 sq
Yds, Kharitabad and
- No.309/1, 3rd Floor of Krishna Plaza, Muncipal # 6-2-953, 6-2-953/A
and 6-2-953/B admeasuring 923.65sq ft along with undivided land 28.83
sq Yds, Kharitabad.
The above properties were auctioned by the Bank in the year 2006-07 and
realised an amount of Rs.41 lacs and the company has paid Rs.9 lacs in cash
making a total repayment of Rs.50 lacs. Balance demands Rs.1.30 crores.
The company has requested to settle the demand for Rs.1.00 crore. If the
request is accepted by the bank there will be a net outflow of Rs. 50
lacs, if not outflow shall be Rs. 1.30 crores.
b. Director Vimal Raj Mathur has given a corporate guarantee of 5 lakh
shares of Gradiente allotted on his name to SE Investments for Rs.25
lakhs.
Mar 31, 2013
NOTES TO THE FINANCIAL STATEMENTS Nature of Operations
The Company was incorporated on 2nd June , 1992 in the name of VR Mathur Mass Communications Ltd. and subsequently the name has been changed to Gradients Infotainment Ltd.( w.e.f 09-01-2003). The Company''s revenue is generated mainly from the advertisement, in Print Media & Electronic Media and TV Serial production for other production houses and own production.
1. Significant Accounting Policies
I) Basis of Accounting: These financial statements are prepared under the historical cost convention and comply in all material aspects with the applicable accounting principles in India, the applicable accounting standards notified under section 211(3C) of the Companies Act, 1956 ("The Act") and the relevant provisions of the Act.
ii) Use of Estimates: The preparation of financial statements in accordance with the generally accepted accounting principles requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of financial statements and the reported amount of expenses of the year. Actual results could differ from these estimates. Any revision to such accounting estimates is recognized in the accounting period in which such revision takes place.
iii) Revenue Recognition: Revenue from Advertisement, in Print Media & Electronic Media and TV Serial Production recognized on an accrual basis on the Fulfilling the terms of contract & publicity of client''s commercial net of service tax.
iv) Fixed assets and Depreciation
a. Tangible assets: Tangible fixed assets are stated at cost less accumulated depreciation.
Depreciation on tangible fixed assets is provided on written down value method at the rates and in the manner specified in Schedule XIV to the Act. The cost of leasehold improvements is amortized over the primary period of lease of the property. Tangible assets individually costing less than Rupees 5,000 are depreciated @ 100% in the year of purchase.
v) Software: Software obtained initially together with hardware is capitalized along with the cost of hardware and depreciated in the same manner as the hardware. All subsequent purchases of software are treated as revenue expenditure and charged in the year of purchase.
vi) Foreign Currency Transactions: Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment or realization. Monetary items denominated in foreign currency as at the Balance Sheet Date are converted at the exchange rates prevailing on that day. Exchange differences are recognized in the Profit and Loss account.
vii) Investments: Long term investments are stated at cost. Provision is made for permanent diminution in value, if any. Current investments are stated at lower of cost and market value / repurchase price.
viii)Retirement Benefits
a. Gratuity: In accordance with payment of Act, 1972 company has provides for gratuity, covering the employees of the company who have rendered service for a continuous period of service of not less than five years. The Gratuity plan provides a lump-sum payment to vested employees at the time of retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and tenure of employment with the Company. Liabilities with regard to the gratuity plan are determined based on estimates at the Balance sheet date. The company is yet to frame a scheme for making annual contributions to the Employees group for qualifying employees.
b. Provident Fund: Provident fund contribution is not applicable to the company as the number of employed persons in the company is less than the limit prescribed i.e. 20 persons.
ix) Borrowing Cost: Borrowing cost attributable to the acquisition or construction of a qualifying asset is capitalized as part of cost of the asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.
x) Taxation: Provision for income tax has been made at the current tax rates based on assessable income or on the basis of Section 115JB of the Income Tax Act, 1961.
Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.
Deferred tax assets are recognized 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 realized.
xi) Impairment of Assets: The Company assesses at each Balance Sheet date whether there is any indication that asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account.
xii) Provisions and Contingent Liabilities: The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to its present date value and are determined based on best estimates of the amount required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
2. Contingent Liabilities
a. The Company has defaulted in payment of loan to Andhra Bank for which they have raised a demand of Rs, 1.80 crores under one time settlement scheme (OTS) vide letter no.1204/45/26/837 dated 12-03-2004,subsequently Bank has Auctioned 2 properties.
- No.301/1, 3rd Floor of Krishna Plaza, Muncipal # 6-2-953/A and 6-2-953/B admeasuring 952.85sq ft along with undivided land 30.68 sq Yds, Kharitabad and
- No.309/1, 3rd Floor of Krishna Plaza, Muncipal # 6-2-953, 6-2-953/A and 6-2-953/B admeasuring 923.65sq ft along with undivided land 28.83 sq Yds, Kharitabad.
The above properties were auctioned by the Bank in the year 2006-07 and realized an amount of Rs, 41 lacs and the company has paid Rs, 9 lacs in cash making a total repayment of Rs, 50 lacs. Balance demands Rs, 1.30 crores.
The company has requested to settle the demand for Rs, 1.00 crore. If the request is accepted by the bank there will be a net outflow of Rs, 50 lacs, if not outflow shall be Rs, 1.30 crores.
b. Director Vimal Raj Mathur has given a corporate guarantee of 5 lakh shares of Gradiente allotted on his name to SE Investments for Rs, 25 lakhs.
Mar 31, 2012
I) Basis of Accounting: These financial statements are prepared under
the historical cost convention and comply in all material aspects with
the applicable accounting principles in India, the applicable
accounting standards notified under section 211(3C) of the Companies
Act, 1956 ("The Act") and the relevant provisions of the Act.
ii) Use of Estimates: The preparation of financial statements in
accordance with the generally accepted accounting principles requires
the Management to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the date of financial
statements and the reported amount of expenses of the year. Actual
results could differ from these estimates. Any revision to such
accounting estimates is recognized in the accounting period in which
such revision takes place.
iii) Revenue Recognition: Revenue from Advertisement, in Print Media &
Electronic Media and TV Serial Production recognized on an accrual
basis on the Fulfilling the terms of contract & publicity of client's
commercial net of service tax.
iv) Fixed assets and Depreciation
a. Tangible assets: Tangible fixed assets are stated at cost less
accumulated depreciation.
Depreciation on tangible fixed assets is provided on written down value
method at the rates and in the manner specified in Schedule XIV to the
Act. The cost of leasehold improvements is amortized over the primary
period of lease of the property. Tangible assets individually costing
less than Rupees 5,000 are depreciated @ 100% in the year of purchase.
v) Software: Software obtained initially together with hardware is
capitalized along with the cost of hardware and depreciated in the same
manner as the hardware. All subsequent purchases of software are
treated as revenue expenditure and charged in the year of purchase.
vi) Foreign Currency Transactions: Foreign currency transactions are
recorded at the exchange rates prevailing on the date of the
transaction. Gains and losses arising out of subsequent fluctuations
are accounted for on actual payment or realization. Monetary items
denominated in foreign currency as at the Balance Sheet Date are
converted at the exchange rates prevailing on that day. Exchange
differences are recognized in the Profit and Loss account.
vii) Investments: Long term investments are stated at cost. Provision
is made for permanent diminution in value, if any. Current investments
are stated at lower of cost and market value / repurchase price.
viii)Retirement Benefits
a. Gratuity: In accordance with payment of Act, 1972 company has
provides for gratuity, covering the employees of the company who have
rendered service for a continuous period of service of not less than
five years. The Gratuity plan provides a lump-sum payment to vested
employees at the time of retirement, death, incapacitation or
termination of employment, of an amount based on the respective
employee's salary and tenure of employment with the Company.
Liabilities with regard to the gratuity plan are determined based on
estimates at the Balance sheet date. The company is yet to frame a
scheme for making annual contributions to the Employees group for
qualifying employees.
b. Provident Fund: Provident fund contribution is not applicable to
the company as the number of employed persons in the company is less
than the limit prescribed i.e. 20 persons.
ix) Borrowing Cost: Borrowing cost attributable to the acquisition or
construction of a qualifying asset is capitalized as part of cost of
the asset. Other borrowing costs are recognized as an expense in the
period in which they are incurred.
x) Taxation: Provision for income tax has been made at the current tax
rates based on assessable income or on the basis of Section 115JB of
the Income Tax Act, 1961.
Deferred tax is recognized, subject to the consideration of prudence,
on timing differences, being the difference between taxable incomes and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
Deferred tax assets are recognized 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 realized.
xi) Impairment of Assets: The Company assesses at each Balance Sheet
date whether there is any indication that asset may be impaired. If any
such indication exists, the Company estimates the recoverable amount of
the asset. If such recoverable amount of the asset or the recoverable
amount of the cash generating unit to which the asset belongs is less
than its carrying amount, the carrying amount is reduced to its
recoverable amount. The reduction is treated as an impairment loss and
is recognized in the Profit and Loss Account.
xii) Provisions and Contingent Liabilities: The Company recognizes a
provision when there is a present obligation as a result of a past
event that probably requires an outflow of resources and a reliable
estimate can be made of the amount of the obligation. Provisions are
not discounted to its present date value and are determined based on
best estimates of the amount required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Mar 31, 2011
I) Basis of Accounting
These financial statements are prepared under the historical cost
convention and comply in all material aspects with the applicable
accounting principles in India, the applicable accounting standards
notified under section 211(3C) of the Companies Act, 1956 ("The Act")
and the relevant provisions of the Act.
ii) Use of Estimates
The preparation of financial statements in accordance with the
generally accepted accounting principles requires the Management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of financial statements and the
reported amount of expenses of the year. Actual results could differ
from these estimates. Any revision to such accounting estimates is
recognized in the accounting period in which such revision takes place.
iii) Revenue Recognition
Revenue from Advertisement, in Print Media & Electronic Media and TV
Serial Production recognized on an accrual basis on the Fulfilling the
terms of contract & publicity of client's commercial net of service
tax.
iv) Fixed assets and Depreciation
a. Tangible assets
Tangible fixed assets are stated at cost less accumulated depreciation.
Depreciation on tangible fixed assets is provided on written down value
method at the rates and in the manner specified in Schedule XIV to the
Act. The cost of leasehold improvements is amortized over the primary
period of lease of the property. Tangible assets individually costing
less than Rupees 5,000 are depreciated @ 100% in the year of purchase.
v) Software
Software obtained initially together with hardware is capitalized along
with the cost of hardware and depreciated in the same manner as the
hardware. All subsequent purchases of software are treated as revenue
expenditure and charged in the year of purchase.
vi) Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transaction. Gains and losses arising out
of subsequent fluctuations are accounted for on actual payment or
realization. Monetary items denominated in foreign currency as at the
Balance Sheet Date are converted at the exchange rates prevailing on
that day. Exchange differences are recognized in the Profit and Loss
account.
vii) Investments
Long term investments are stated at cost. Provision is made for
permanent diminution in value, if any.
Current investments are stated at lower of cost and market value /
repurchase price.
viii) Retirement Benefits
a. Gratuity :In accordance with payment of Act, 1972 company has
provided for gratuity, covering the employees of the company who have
rendered service for a continuous period of service of not less than
five years. The Gratuity plan provides a lump-sum payment to vested
employees at the time of retirement, death, incapacitation or
termination of employment, of an amount based on the respective
employee's salary and tenure of employment with the Company.
Liabilities with regard to the gratuity plan are determined based on
estimates at the Balance sheet date. The company is yet to frame a
scheme for making annual contributions to the Employees group for
qualifying employees.
b. Provident Fund : Provident fund contribution is not applicable to the
company as the number of employed persons in the company is less than
the limit prescribed i.e. 20 persons.
I) Borrowing Cost
Borrowing cost attributable to the acquisition or construction of a
qualifying asset is capitalized as part of cost of the asset. Other
borrowing costs are recognized as an expense in the period in which
they are incurred.
ii) Taxation
Provision for income tax has been made at the current tax rates based
on assessable income or on the basis of Section 115JB of the Income Tax
Act, 1961.
Deferred tax is recognized, subject to the consideration of prudence,
on timing differences, being the difference between taxable incomes and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
Deferred tax assets are recognized 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 realized.
iii) Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any
indication that asset may be impaired. If any such indication exists,
the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or the recoverable amount of the cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognized in the
Profit and Loss Account.
iv) Provisions and Contingent Liabilities
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to its present date value and
are determined based on best estimates of the amount required to settle
the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
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