Page 113 - CCL AR 2017 Final

deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused
tax credits to the extent that it is probable that sufficient future taxable profits will be available against
which these can be utilized.

Deferred tax is calculated at the rates that are expected to apply to the period when the differences
reverse, based on tax rates that have been enacted or substantively enacted by the balance sheet date. In
this regard, the effects on deferred taxation of the portion of income expected to be subject to final tax
regime is adjusted. Deferred tax is charged or credited to profit and loss account.

2.5.3 Stock-in-trade, stores, spare parts and loose tools
The Company reviews the net realizable value (NRV) of stock-in-trade and stores, spare parts and loose
tools to assess any diminution in the respective carrying values. NRV is estimated with reference to the
estimated selling price in the ordinary course of business less the estimated costs of completion and
estimated costs necessary to make the sale.

2.5.4 Staff retirement benefits
Certain actuarial assumptions have been adopted for valuation of present value of defined benefit
obligations and fair value of plan assets. Any change in these assumptions in future years might affect
gains and losses in those years. The actuarial valuation involves making assumptions about discount
rates, expected rates of return on assets, future salary increases and mortality rates.

2.5.5 Contingencies
The assessment of the contingencies inherently involves the exercise of significant judgment as the
outcome of the future events cannot be predicted with certainty. The Company, based on the availability
of the latest information, estimates the value of contingent assets and liabilities which may differ on the
occurrence / non-occurrence of the uncertain future events.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 Property, plant and equipment
Property, plant and equipment except for land and capital work-in-progress are stated at cost less
accumulated depreciation and impairment loss, if any. Land and capital work-in-progress are stated at
cost less impairment, if any. Depreciation is charged to profit and loss account applying the reducing
balance method except for computers, which are depreciated using the straight-line method at the rates
mentioned in the note 4.1.1 to the financial statements. Depreciation is charged from the month in which
an asset is available for use, while no depreciation is charged in the month in which an asset is disposed
off.

Maintenance and repairs are charged to profit and loss account as and when incurred. Major renewals
and improvements which increase the asset’s remaining useful economic life or the performance beyond
the current estimated levels are capitalized and the assets so replaced, if any, are retired.

Gains or losses on disposal of operating property, plant and equipment, if any, are recognised in the profit
and loss account.

The carrying values of operating property, plant and equipment are reviewed for impairment annually
when events or changes in circumstances indicate that the carrying values may not be recoverable. If
such indications exist and where the carrying values exceed the estimated recoverable amounts, the
assets are written down to the recoverable amounts.

3.1.1 Intangible assets

An intangible asset is recognised if it is probable that the future economic benefits that are attributable to
the asset will flow to the enterprise and the cost of such assets can also be measured reliably.

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