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Accounting Policies of NHC Foods Ltd. Company

Mar 31, 2015

1.1 Basis of Accounting

Financial statements have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) under the historical cost convention on an accrual basis in compliance with all material aspects of the Accounting Standards (AS) specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

1.2 Use of Estimates

Preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting year. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

1.3 Fixed Assets

Tangible fixed assets are stated at cost, less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Borrowing costs attributable to acquisition and construction of qualifying assets are capitalized as a part of the cost of such assets up to the date when such assets are ready for its intended use.

All other borrowing costs are recognized as an expense in the period in which they are incurred.

Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.

1.4 Depreciation and Amortisation

Pursuant to the enactment of the Companies Act, 2013 ("the Act"), the company has, effective from April 1, 2014 reassessed the useful life of its fixed assets and has computed depreciation with reference to the useful life of the assets as recommended in schedule II of the Act, an amount of 1,668,143/- has been adjusted with opening reserves during the year ended March 31, 2015 and depreciation for the year ended March 31, 2015 is higher by 16,70,602/-

Goodwill on amalgamation is amortized over a period of 20 years as per the approved court scheme.

Fixed assets, individually costing less than Rs. Five thousands are fully depreciated in the year of purchase.

Depreciation on the fixed assets added/ disposed off/ discarded during the period is provided on pro-rata basis with reference to the month of addition/ disposal/ discarding.

1.3 Leases

Leases where significant portion of risk and reward of ownership are retained by the Lessor are classified as operating leases and lease rental thereof are charged to the Statement of Profit and Loss as per the terms of agreement which is representative of the time pattern of the user's benefit.

1.4 Impairment of Assets

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 treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

1.5 Investments

Current Investments are carried at lower of cost and fair value computed on individual investment basis. Long- term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in value.

1.6 Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sales are recognized when significant risk and rewards of ownership of the goods have passed to the buyer which coincides with delivery and are recorded net of trade discounts and VAT. Interest income is recognized on time proportion basis taking into account the amount outstanding and the applicable rate.

Commission income is recognised as and when the terms of the contract are fulfilled. Other items of income are accounted as and when the right to receive arises.

1.7 Taxation

Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961.

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.

The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain that sufficient future taxable income will be available. In case of unabsorbed losses and unabsorbed depreciation deferred tax assets thereon are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profit. At each Balance Sheet date, the Company reassesses the unrecognized deferred tax assets.

Minimum alternate tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period in the year, in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the Guidance Note issued by the ICAI, the said asset is created by way of a credit to the Statement of Profit and Loss and shows as MAT Credit Entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period.

1.8 Employee Benefits

Defined Contribution Plan:

Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are charged to the statement of Profit and Loss of the year when the contributions to the respective funds are due.

Defined Benefit Plan:

Post employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to Statement of Profit and Loss.

The Company does not have a policy of encashment of unexpired leave.

1.9 Foreign Currency Transactions

Transactions in foreign currencies are accounted at the prevailing rates of exchange on the date of transaction. Monetary items denominated in foreign currencies, are restated at the prevailing rates of exchange at the Balance Sheet date. All gains and losses arising out of fluctuations in exchange rates are accounted for in the Statement of Profit and Loss.

Exchange difference on forward exchange contracts, entered into for hedging foreign exchange fluctuation risk in respect of an underlying asset/liability are recognized in the Statement of Profit and Loss in the reporting period in which the exchange rate changes. Premium/Discount on forward exchange contracts are recognized as an expense/income over the life of the contract.

1.10 Inventories

Raw materials, Stores and spares and packing materials are valued at lower of cost and net realizable value. However, these items are considered to be realizable at cost if the finished products, in which they will be used, are expected to be sold at or above cost.

Work-in-progress, finished goods and stock-in-trade are valued at lower of cost and net realizable value. Finished goods and Work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is calculated on FIFO basis.

1.11 Capital Issue/Preliminary and Pre-Operative Expense

These expenses are charged to the Statement of Profit and Loss account in the period in which incurred.

1.12 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources will be required to settle the obligations and a reliable estimate can be made. Contingent Liabilities are not recognized, but are disclosed in the notes.

Contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2014

1.1 Basis of Accounting

Financial statements have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) under the historical cost convention on an accrual basis in compliance with all material aspects of the Accounting Standards (AS) notified under the Companies Act, 1956 (''The Act'') read with general circular 15/2013 dated 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 (to the extent applicable) and Companies Act, 2013 (to the extent notified).

1.2 Use of Estimates

Preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting year. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

1.3 Fixed Assets

Tangible fixed assets are stated at cost, less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Borrowing costs attributable to acquisition and construction of qualifying assets are capitalized as a part of the cost of such assets up to the date when such assets are ready for its intended use.

All other borrowing costs are recognized as an expense in the period in which they are incurred.

Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.

1.4 Depreciation and Amortisation

Depreciation on tangible assets is provided on Straight line method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956.

Goodwill on amalgamation is amortized over a period of 20 years as per the approved court scheme.

Fixed assets, individually costing less than Rs. Five thousands are fully depreciated in the year of purchase.

Depreciation on the fixed assets added/disposed off/discarded during the period is provided on pro-rata basis with reference to the month of addition/ disposal/ discarding.

1.5 Leases

Leases where significant portion of risk and reward of ownership are retained by the Lessor are classified as operating leases and lease rental thereof are charged to the Statement of Profit and Loss as per the terms of agreement which is representative of the time pattern of the user''s benefit.

1.6 Impairment of Assets

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 treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

1.7 Investments

Current Investments are carried at lower of cost and fair value computed on individual investment basis. Long- term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in value.

1.8 Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sales are recognized when significant risk and rewards of ownership of the goods have passed to the buyer which coincides with delivery and are recorded net of trade discounts and VAT.

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

Commission income is recognised as and when the terms of the contract are fulfilled.

Other items of income are accounted as and when the right to receive arises.

1.9 Taxation

Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income-Tax Act, 1961.

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.

The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain that sufficient future taxable income will be available. In case of unabsorbed losses and unabsorbed depreciation deferred tax assets thereon are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profit. At each Balance Sheet date, the Company reassesses the unrecognized deferred tax assets.

Minimum alternate tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period in the year, in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the Guidance Note issued by the ICAI, the said asset is created by way of a credit to the Statement of Profit and Loss and shows as MAT Credit Entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period.

1.10 Employee Benefits

Defined Contribution Plan:

Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the statement of Profit and Loss of the year when the contributions to the respective funds are due.

Defined Benefit Plan:

Post employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to Statement of Profit and Loss.

The Company does not have a policy of encashment of unexpired leave.

1.11 Foreign Currency Transactions

Transactions in foreign currencies are accounted at the prevailing rates of exchange at the date of transaction. Monetary items denominated in foreign currencies, are restated at the prevailing rates of exchange at the Balance Sheet date. All gains and losses arising out of fluctuations in exchange rates are accounted for in the Statement of Profit and Loss.

Exchange differenced on forward exchange contracts, entered into for hedging foreign exchange fluctuation risk in respect of an underlying asset/liability are recognized in the Statement of Profit and Loss in the reporting period in which the exchange rate Changes. Premium/Discount on forward exchange contracts are recognized as an expense/income over the life of the contract.

1.12 Inventories

Raw materials, Stores and spares and packing materials are valued at lower of cost and net realizable value. However, these items are considered to be realizable at cost if the finished products, in which they will be used, are expected to be sold at or above cost.

Work-in-progress, finished goods and stock-in-trade are valued at lower of cost and net realizable value. Finished goods and Work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is calculated on FIFO basis.

1.13 Capital Issue/Preliminary and Pre-Operative Expense

These expenses are charged to the Statement of Profit and Loss account in the period in which incurred.

1.14 Provisions, Contingent Liabilities And Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized, but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2012

1.1 Basis of Accounting

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles (GAAP) in compliance with the provisions of Companies Act, 1956 and the Accounting Standards as specified in the Companies (Accounting Standard) Rules 2006 (as amended) and other relevant provisions of the Companies Act, 1956.

1.2 Use of Estimates:

The preparation of financial statements in conformity with GAAP requires that the management of the Company to make estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known.

1.3 Fixed Assets

Fixed assets are stated at their cost net of tax/duty credits availed, if any, less accumulated depreciation and accumulated amortizations. Costs comprise the purchase price and any attributable costs of bringing the assets to its working condition, for its intended use.

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of such asset till such time as the asset is ready for its intended use or sale.

All other borrowing costs are recognized as an expense in the period in which they are incurred

1.4 Depreciation and Amortisation

Depreciation on tangible assets is provided on Straight line method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

Goodwill on amalgamation is amortized over a period of 20 years as per the approved court scheme.

1.5 Leases

Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as Operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

1.6 Impairment of Assets

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 impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use.

In assessing value in use, the Company has measured its 'value in use' on the basis of undiscounted cash flows of next five years projections estimated based on current prices.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

1.7 Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. All other investments are classified as long term investments. Long term investments are carried at Cost. However provision for diminution in value is made to recognize a decline other than temporary in the value of investment.

1.8 Revenue Recognition

Revenue is recognized based on the nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery.

- Sale of Goods:

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. The company collects Sales Tax and Value Added Tax (VAT) on behalf of the Government and therefore these are not economic benefit flowing to the company and hence excluded from revenue by the reporting date.

- Commission:

Commission income is recognised as and when the terms of the contract are fulfilled.

- Interest Income:

Interest income is recognised pro-rata on accrual basis on the basis of amount outstanding and rate applicable.

- Other items of income are accounted as and when the right to receive arises.

1.9 Taxes on Income

Taxes on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessments/appeals.

Minimum alternate tax (MAT) paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the company will pay normal income tax. Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the company and the asset can be measured reliably.

Deferred tax is recognized on timing differences between the income accounted in financial statements and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head 'Capital gains' are recognized and carried forward to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Other deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against such deferred tax assets can be realized.

1.10 Employee Benefits

- Defined Contribution Plan:

Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the period when the contributions to the respective funds are due.

- Defined Benefit Plan

Gratuity Liability for eligible employees are defined benefit obligation and are provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial period. Obligation is measured at the present value of estimated future cash flows using discounted rate that is determined by reference to market yields at the Balance Sheet date on Government Securities where the currency and terms of the Government Securities are consistent with the currency and estimated terms of the defined benefit obligation.

The Company does not have a policy of encashment of unexpired leave.

Actuarial gains/losses are immediately taken to Profit and Loss account and are not deferred

1.11 Foreign Currency Transactions

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the period are recognised as income or as expenses in the period in which they arise

1.12 Inventories

Inventories are valued as follows:- a) Raw material : At cost b) Finished goods and work in Progress: At the lower of cost and net realizable value.

Cost includes purchase cost plus custom duty, freight and insurance, if any. Net realizable value is the estimated selling price in the ordinary course of business, less estimated selling costs of completion and estimated costs necessary to make the sale.

1.13 Capital Issue/Preliminary and Pre-Operative Expense

These expenses are charged to the profit and loss account in the period in which incurred.

1.14 Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate 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.


Mar 31, 2010

1.1 BASIS FOR PREPARING FINANCIAL STATEMENTS

The Financial Statements have been prepared to comply in all material aspects with applicable accounting principles in India, the Accounting Standards issued by the Institute of the Chartered Accountants of India and the relevant provisions of the Companies Act 1956. The financial statements have been prepared under the historical cost convention on accrual basis. The accounting policies have been consistently applied by the company and are consistent with those used in the previous year.

1.2 REVENUE RECOGNITION

Export Sales are accounted on the basis of amount realized from the bills discounted with bank. Bills for collection are accounted at the actual rate realized on the due date of realization.

Claims and duty drawback are accounted as and when they are admitted for by concern authorities.

DEPB, VKUY licenses are accounted on accrual basis.

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

1.3 USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of the contingent liabilities on the date of the financial statements.

Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. Difference between the actual results and estimates is recognized in the period in which the results are known/ materialized

1.4 FIXED ASSETS & DEPRECIATION / AMORTIZATION

Fixed assets are stated at their cost less accumulated depreciation. Costs comprise the purchase price and any attributable cost of bringing the assets to its working conditions, for its intended use.

Depreciation is charged on SLM basis as per the rate prescribed in the schedule XIV of the Companies Act 1956.

1.5 INVESTMENT

Investments intended to be held for not more than a year are classified as current Investments and valued at lower of cost and fair value.

Long term Investments are stated at cost. Provision for diminution in value is made only if in the opinion of management such a decline is other than temporary.

1.6 INVENTORIES

Stock-in-Trade has been valued at purchase cost which is determined on FIFO basis.

Closing stock of Export incentives, entitlements & licenses etc are valued at approximate market value.

1.7 FOREIGN CURRENCY

Transactions in foreign currency are recorded at the exchange rates prevailing on the date of transaction. Current Assets and Current Liabilities are translated at the rates prevailing as at the year end. The difference on the account of such transaction and on actual settlement is taken to the profit and loss account.

1.8 RETIREMENT BENEFITS

1.8.1 Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the period when the contributions to the Respective funds are due. There are no other obligations other than the contribution payable to the respective funds.

1.8.2Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial period.

1.8.3Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method

1.8.4Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

1.9 CAPITAL ISSUE / PRELIMINARY EXPENDITURE

Capital Issue Expenditure and Preliminary Expenditure are charged to the Profit & Loss Account in the year in which they are incurred in accordance with Accounting Standard (AS) 26, Intangible Assets, issued by the Council of the Institute of Chartered Accountants of India.

1.10 TAXATION

Tax expense comprises of current, deferred tax. Current income 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 reflects the impact of current year timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years

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 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. In situation where the Company has unabsorbed depreciation and carry forward tax losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits.

1.11 IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is changed to Profit & Loss Account in the year in which the asset is impaired and the impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount. For the purpose of assessing impairment, assets are grouped at the lowest level of cash generating units.