Annexure XIV Continued… - Edelweiss

Impairment
The carrying amounts of assets are reviewed at each balance sheet date in accordance with Accounting
Standard 28, "Impairment of Assets," to determine whether there is any indication of impairment. If any such
indication exists, the asset's recoverable amount is estimated. An impairment loss is recognized when the
carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are
recognized in the profit and loss account. An impairment loss is reversed if there is a change in the estimates
used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's
carrying amount does not exceed the carrying amount that would have been determined net of depreciation or
amortization, if no impairment loss had been recognized.
Provisions and contingencies
We recognize a provision when there is a present obligation as a result of a past event, and it is more likely
than not that there will be an outflow of resources embodying economic benefits to settle such obligation and
the amount of such obligation can be reliably estimated. Provisions are not discounted to their present value
and are determined based on the management's best estimate of the amount of obligation required at the year
end. These are reviewed at each balance sheet date and adjusted to reflect current management estimates.
Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and the
existence of which will be confirmed only by the occurrence or non occurrence of future events not wholly
within our control. Contingent liabilities are also disclosed for present obligations in respect of which it is not
probable that there will be an outflow of resources or a reliable estimate of the amount of obligation cannot be
made.
When there is a possible obligation or a present obligation where the likelihood of an outflow of resources is
remote, no disclosure or provision is made.
Results of operations
Explanation of key income statement items
Revenue
Our total income currently comprises income from coal beneficiation and allied receipts (such as logistical
services); income from sale of coal; income from sale of power; income from sale of sponge iron; sale of
equipment (which is only to our associates); and other income.
In accordance with the Accounting Standard on Segment Reporting, (AS 17), we report the financial
statements of our business in five separate segments. These segments relate to our businesses in (a) coal
operations (which includes revenue from coal beneficiation and allied receipts and from the sale of coal), (b)
wind power, (c) thermal power (which, together with wind power, comprises our revenue from the sale of
power), (d) sponge iron and (e) equipment manufacturing.
Coal operations
Income from coal beneficiation and allied receipts
Income from coal beneficiation and allied receipts primarily refers to income generated from coal beneficiation
and transportation and logistics services.
Sale of coal
The income from sale of coal is primarily from sales of coal rejects produced as a result of the beneficiation of
coal, sales of reprocessed rejects and sales of coal (both processed and unprocessed) purchased through the e-
auction scheme conducted by Coal India Limited and its subsidiaries and sales of a blend of raw coal
purchased from third parties and coal rejects.
Wind and thermal power
Our wind and thermal power projects derive income primarily from the sale of electricity to state-owned
distribution companies.
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