Fixed Assets Policy

FIN-005
Release Date : January 2022

Objective:
This policy has been developed to specify policies and procedures, which apply within the Fixed
Assets Management process followed by Cravia Group Holdings Limited (hereinafter referred to as
‘the Company’) and its sub. This manual is subject to provisions of applicable legal
pronouncements.

Provisions stipulated in this manual would serve as standard procedures to be followed at the
Company and any modifications in the policies and procedures would require approval from the
BAC and the CEO respectively.

Provisions of this policy are applicable to all part time, full-time and contracted employees of the
Company, which are as follows:

o Transparency in shortlisting and selection of suppliers / buyers.

o Ensure appropriate approvals exist for purchase / disposal of fixed assets.
o Procurement of assets at competitive prices.
o Accurate and timely recording of the asset purchase / disposal / depreciation / amortization /
revaluation and impairment.
o Proper tagging of assets.
o Conduct periodic physical verification of assets.
o Monitor repairs & maintenance requirements of the assets.
o Ensure timely and accurate processing of supplier payments to avoid delayed payments.
o All payments processed should be approved by Authorized person as per DOA.
o Ensure asset recording is in accordance with the accounting policy of the Company.

Scope:

This policy covers policies and procedures applicable for the following:

o Acquisition
o Asset Capitalization and Depreciation / Amortisation
o Maintenance of Fixed Asset Register
o Physical Verification
o Repairs & Maintenance of Assets
o Impairment / Revaluation of Assets
o Disposal of Assets
o Inter-location Transfers
o Intercompany Transfers

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Table of Contents

Contents
CONTENTS .................................................................................................................................................. 3
A. ACQUISITION ................................................................................................................................... 4
DEFINITION AND CLASSIFICATION ................................................................................................................ 4
INTANGIBLE ASSETS ..................................................................................................................................... 4
CAPITALIZATION POLICY .............................................................................................................................. 4
LIKE ITEMS .................................................................................................................................................. 5
COMPUTER HARDWARE & SOFTWARE ........................................................................................................... 5
OTHER FIXED ASSETS .................................................................................................................................. 5
UPGRADES ................................................................................................................................................... 5
NON-CAPITALIZED EXPENDITURES................................................................................................................ 6
ASSET PURCHASES AND TAGGING ................................................................................................................. 6
A.1. ACQUISITION OF FIXED ASSETS ................................................................................................. 7
Procedures ........................................................................................................................................... 7
A.2. ACQUISITION – RECEIPT OF ASSETS, CAPITALISATION AND PAYMENT
PROCESSING .............................................................................................................................................. 9
Procedures ........................................................................................................................................... 9
A.3. Intangible Assets – Category, Capitalization and Asset Register ......................................10
A. DEPRECIATION AND TRANSFERS ......................................................................................................10
B.1. Depreciation .........................................................................................................................10
Policy ...................................................................................................................................................10
Procedures ..........................................................................................................................................11
B.2. Transfers ...............................................................................................................................11
Policy ...................................................................................................................................................11
B. MAINTENANCE OF FIXED ASSET REGISTER (FAR) ..........................................................................12
Policy ...................................................................................................................................................12
Tagging and Coding ..........................................................................................................................12
C. PHYSICAL VERIFICATION .................................................................................................................12
Policy ...................................................................................................................................................12
Procedures ..........................................................................................................................................13
D. REPAIR AND MAINTENANCE .............................................................................................................15
Policy ...................................................................................................................................................15
E. REVALUATION OF FIXED ASSET ........................................................................................................15
Policy ...................................................................................................................................................15
F. DISPOSAL OF FIXED ASSET ...............................................................................................................15
G. ASSET WRITE-OFF DURING RESTAURANT CLOSURE ........................................................................16
Policy ...................................................................................................................................................17
RESPONSIBILITY MATRIX....................................................................................................................19
ABBREVIATIONS CHART ......................................................................................................................20

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A. Acquisition
Definition and Classification

Fixed assets are items such as land; building; equipment; machinery; vehicles; leasehold
improvements and other such items that are not held for sale during the normal course of business.
Normal classes of fixed assets maintained by the Company include:
o Office Furniture and Fixture.
o Leasehold Improvements.
o Computer Hardware and Software.
o Office Equipment.
o Vehicles.
According to IAS 16: Property, Plant and Equipment, items should be recognised as fixed assets
when:
o it is probable that the future economic benefits associated with the asset will flow to the
entity.
o the cost of the asset can be measured reliably.

Intangible Assets

According to IAS 38, an intangible asset is an identifiable non-monetary asset without physical
substance. It is identifiable when it is separable and arises from contractual or legal rights,
regardless of whether those rights are transferable or separable from the entity or from other rights
and obligations.
Intangible assets include:
o Computer Software.
o Licenses.
o Import Quotas.
o Goodwill.

Capitalization Policy

All expenditures for capital assets which exceed AED / SAR 1,000 or equivalent, on a per unit cost
basis will be capitalized and depreciated / amortized using the methods and the estimated useful
lives defined. Any asset purchased wherein value is below AED / SAR 1000/- is to be expensed off
in the corresponding month reflecting in the Profit and loss statement.
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Items with a useful life of less than a year (for example – spare parts used in Fixed Assets) shall
be charged to profit and loss account in the same year.
If it is appropriate to aggregate individually insignificant items, the capitalization criteria shall be
applied on aggregate value.

Like Items

Significant purchases of like or related items which cost less than the general capitalization level,
but which when used together to implement a single project or for certain task exceed AED / SAR
1,000 or equivalent, are to be capitalized and depreciated over the appropriate useful life. Like
items which are purchased in bulk, but for which per unit price does not exceed AED / SAR 1,000
or equivalent, shall be expensed.

Computer Hardware & Software

Computer hardware or software, which is purchased for internal use, is capitalized if the cost of
the single software package, excluding any maintenance agreement is over AED / SAR 1,000 or
equivalent. The costs incurred to bring the asset into useable condition, such as installation costs
will be capitalized, while other costs such as maintenance costs will be expensed. Additionally,
software purchased under a license will be capitalized provided that the accumulated value of the
requisition exceeds AED / SAR 1,000 or equivalent. Software, which is developed for internal use
but exceed AED / SAR 1,000, will be expensed. Implementation costs for internal software such as
project team salaries will be expensed.

Other Fixed Assets

Office Furniture, Equipment and Fixtures which are used internally should be capitalized at landed
cost / transfer price (as appropriate) plus other direct costs incurred to bring the assets in usable
condition, which consists of site preparation cost; delivery and handling; installation; architects and
engineer’s professional fees for architects and engineers and the estimated cost of dismantling and
removing the asset and restoring the site.

Upgrades

An upgrade shall be defined as physical modifications to an existing capital asset which clearly adds
value, expands the functionality of or extends the estimated useful life of the original asset. The
cost of an upgrade exceeding AED / SAR 1,000 or equivalent, which clearly extends the useful life
of the asset, will be added to the net book value and the sum shall be depreciated over its new
estimated useful life.

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Non-Capitalized Expenditures

In general, all expenditures which do not add significantly to the value or utility of an asset should
be expensed in the current period. Such expenditures include, but are not limited to, normal repairs,
spare parts, routine maintenance, relocation, and storage.

Asset Purchases and Tagging

All purchases should be made through an approved Purchase Requisition (PR) and Purchase
Order (PO) created in prescribed formats.
At least two members representing Supply Chain, Operations, Project Management and Finance
should be involved in shortlisting suppliers during the bid-opening date.
All payments for asset purchases (cheque or bank transfer) should be approved by the
authorized person as per DOA and processed within specified timelines to avoid any delayed
payment penalties.
Payments to the suppliers should be processed against approved POs and invoices and any
advances given should be set off before making final payments. For fit-out contracts that are
awarded to the vendors, payments should be processed only when there is an approved PO and
progress report on stage of the work executed.
All assets should be allocated a unique identification number, which gets generated when the
new asset details are saved in the ERP system. This should be linked to the tag that is located on
the principal body of the respective asset.
All IT equipment such as laptop, hard drives, mobile phone etc. should be handed over to the
employees after obtaining an acknowledgement of ‘IT Asset Issuance Form’. When the employee
leaves the company, IT equipment should be returned during the last working date.

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A.1. Acquisition of Fixed Assets

Procedures

Activity Responsibility Task/ Activity Reference

No.: Document
A.1.1. Department Head Identify new asset to be purchased or receive request Asset Acquisition
from department staff for new asset requirement (both Request (AAR)
for outlet and Head Office).
A.1.2. Department Head Raise Asset Requisition Form (ARF) for the request ARF
received.
A.1.3. Department Head Forward ARF to Senior / Chief Accountant for review ARF
against approved annual budget.
A.1.4. Accountant Review the request and forward it to Finance Manager ARF
(FM) / Group Financial Controller (GFC) for verification
and approval.
A.1.5. FM / GFC / Review the ARF against budget and approve the same. ARF
Authorized Person If the purchase was budgeted and/or the purchase
as per DOA amount is within the budget. Else, Group Managing
Director (GMD) will review the ARF and the
justifications; and forward the same for the approval of
Authorized Person as per DOA.
A.1.6. Group Head of Receive approved ARF from FM/ GMD/ Authorized ARF
Supply Chain Person as per DOA.
(GHSC) /
Procurement
Manager (PM)
A.1.7. GHSC / PM In case there is a preferred supplier, contact preferred ARF
supplier to obtain quotation.
A.1.8. GHSC / PM Receive quotation from preferred and / approved ARF
supplier and submit to GMD for review and approval.
A.1.9. GMD Review and approve quotation. ARF
A.1.10. GHSC / PM Receive the approved quotation from GMF (Proceed to ARF
A.1.16).
A.1.11. Supply Chain In case there is no preferred / approved suppliers, RFQ
Coordinator (SCC) obtain at least three (3) quotations from the Master List
or from the other suppliers in the market.
A.1.12. SCC Prepare comparative statement (CS). CS
A.1.13. SCC Forward CS to GHSC/PM for shortlisting suppliers. CS
A.1.14. GHSC / PM Review CS with at least two members from Supply Chain; CS
Operations and Project Manager to shortlist supplier with
the lowest bid in coordination with FM and Internal Audit.
For Equipment; Fit-Out; Furniture, the GHSC/PM will
involve Brand Manager / Project Manager / Engineer to

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obtain technical details on the inquiry before raising the

RFQ.
A.1.15. SCC Raise a Purchase Order (PO) to the shortlisted supplier. PO
The PO should include the cost center and the location
code for which the asset is purchased for. For multiple
assets procured for a division, the division cost center
should be used, and the assets must be individually
allocated to their respective outlets / stores upon
posting in ERP system.
A.1.16. SCC Prepare PO based on the approved details in the PO
quotation prior to submitting it to the following for review
and approval: -
• GHSC/PM
• Department / Operation / Functional Head
• FM
• GFC
• GMD (for payments slabs in line with DoA)
A.1.17. SCC Must ensure that the following approvals are also PO
obtained if the assets are placed in the following
locations: -
• Restaurants: Branch Manager / Area Manager
• Warehouse: Warehouse In-charge
• Central Kitchen (CK): CK Manager
Head Office: GHSC/PM
A.1.18. Accountant / Chief Ensure availability of signed Delivery Note and Invoice Delivery Note;
Accountant with the PO. Conduct a 3-way match prior to posting it Invoice; PO
in ERP.
A.1.19. FM Review and provide final sign off on PO prior to N/A
proceeding towards payment through cash; cheque or
bank transfer in line with DoA.
A.1.20. GHSC/PM Dispatch PO to the supplier with a copy marked to N/A
Department Head and FM.
A.1.21. Accountant Enters the invoice details (consisting of invoice number; Invoice
invoice date; amount; cost center; location etc.) in ERP
system.
A.1.22. Senior Accountant / Verify the details entered by Accountant prior to signing Invoice
Chief Accountant off for upload in ERP system.

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A.2. Acquisition – Receipt of Assets, Capitalisation and Payment

Processing

Procedures

Activity
Responsibility Task /Activity Reference Document
No
A.2.1. Department Head Receive the delivery of asset along with the invoice. Delivery Note (DN)

A.2.2. Department Head Compare asset details with PO and acknowledge DN DN; PO
and forward the DN to Accountant.
A.2.3. Accountant Review DN and invoice against PO. DN; PO
A.2.4. Accountant Obtain approval from FM on Invoice and book invoice. Invoice
A.2.5. Accountant If the capitalization criteria are met, record asset FAR
purchase, tag asset and update FAR. Else, the amount
incurred is expensed off.
A.2.6. Accountant Prepare payment voucher. Payment Voucher

A.2.7. Accountant Attach voucher with invoice and other supporting Invoice
documents.
A.2.8. Accountant Forward payment voucher; PO; invoice and cheque to N/A
FM; GM and Authorized Person as per DOA.

A.2.9. FM and GFC Review and sign off payment voucher; PO and N/A
invoice.
A.2.10. Authorized Person Review and sign off cheque and approve payment N/A
as per DOA processing.
A.2.11. Authorized Person Submit cash / cheque to Accountant for handover to N/A
as per DOA supplier.
A.2.12. Accountant Receive signed cheque from Authorized Person as per N/A
DOA and contact supplier to collect cheque.
A.2.13. Accountant Obtain sign off from supplier on receipt and forward N/A
confirmation of payment to FM with a copy marked to
GFC.
For bank transfers, the Accountant must share the
transfer receipt / transaction reference to the
supplier.
A.2.14. Accountant File payment voucher and supporting documentation N/A
in asset file.

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A.3. Intangible Assets – Category, Capitalization and Asset

Register
Activity
Responsibility Task /Activity Format
No
Accountant Responsible for posting entries on Intangible Assets N/A
consisting of: -
A.3.1.
• Franchise Fees
• Software License
Accountant Transfer all the assets under ‘Fixed Assets’ or N/A
‘Intangible Assets’ category in ERP system. Must enter
A.3.2.
Group ID (asset category); Asset Description and Asset
Location under its respective groups.
Accountant Classify all assets as ‘Work-in-Progress’ if they are kept N/A
A.3.3. in the warehouse upon acquisition instead of restaurant
or Head Office.

A. Depreciation and Transfers

B.1. Depreciation

Policy

For tangible fix ed asset, depreciation is to commence immediately when the asset is placed into
service irrespective of the cost / profit centre. Capital assets are depreciated/amortized using the
methods and estimated useful lives as specified in the following table: -

S. No. Asset Group Method Life (Years)

1 Leasehold improvements Straight Line 8
2 Machinery and equipment Straight Line 5
3 Furniture and fixtures Straight Line 5
4 Computers Straight Line 3
5 Vehicles Straight Line 5

Each part of an item of PPE, with a cost that is significant in relation to the total cost of the item,
is to be depreciated separately.

Depreciation is recorded monthly on a pro-rata basis for the purpose of preparation of management
accounts.

Deprecation for each year is charged to the P/L account and posted under Accumulated
Depreciation in the Balance Sheet.

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For intangible fix ed asset, amortization is to commence in the first month after the asset is
placed into service using the methods and estimated useful lives as specified in the following table:
S. No. Asset Group Method Life (Years)
1 Franchise fee Straight Line 10
2 Computer software Straight Line 3

For closed stores (idle assets), the depreciation computation needs to be continued in the ERP
and the cost should be charged to the respective cost / profit centres.

Procedures

Activity Reference
Responsibility Task /Activity
No Document
B.1.1. Accountant Initiate the depreciation process. N/A
Accountant Calculate depreciation in the first month after asset is N/A
B.1.2. placed in service. Depreciation for the month is
calculated by the system automatically.
FM Review the depreciation calculation for any abnormal N/A
deviations and approve for posting. Accounting entry
B.1.3.
for depreciation is posted automatically in the books of
accounts by the system.
FM Reconcile General Ledger and FAR to ensure accuracy. N/A
B.1.4. In case of any differences, review the depreciation
calculation.

B.2. Transfers

Policy

The transfer of a fixed asset between departments, divisions or business units should have no
impact on its net book value. All assets are transferred at their current net book value with no
recognition of a gain or loss by the department transferring the asset. The depreciation method
used by the transferring department should also be used by the acquiring department unless local
or asset conditions require a change. All costs associated with the transfer will be expensed.

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B. Maintenance of Fixed Asset Register (FAR)

Policy

FAR should be updated by Accountant as and when an asset is purchased or disposed-off. FAR
should at least include the following details for every asset:
o Detailed description of each item
o Unique identification number
o Name of Supplier
o Supplier invoice number and date
o Original cost of the asset
o Date of acquisition
o Date of disposal
o Asset classification
o Location and/or custodian of asset
o Accumulated depreciation
o Depreciation charge for the period
o Net book value
o Warranty details

Tagging and Coding

Fixed Assets should be identified by a unique code. This code could be numbering or
alphanumeric. A sub-code should be used for major components of an asset.

Fixed assets are tagged with the unique code as a means of positive identification, a form of
asset location control, a way to make it easier and quicker, and a common ground for identifying
an asset. Tags should be selected and placed on the assets so that they are not easily removed
or destroyed by asset use.

All assets located in the Head Office and restaurants should be immediately tagged upon
acquisition. The alphanumeric code for individual assets is created in the ERP by the Accountant
upon saving its details in the Fixed Asset Register. These codes should be bar-coded for ease in
tracking in the ERP system.

C. Physical Verification
Policy

Physical verification of all assets should be conducted at least once a year. It should also be done
to ensure that all assets have been tagged appropriately. If there is any transfer of assets (inter-
location or intercompany), the Accountant must ensure to update the asset location against its
unique identifier number in FAR, which is to be placed on the body of the asset after linking it
with the tag.

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Physical verification team should include personnel having no direct responsibility; custody and
receipt / issue authority for the assets subject to physical count.

Physical verification report should be used as a basis to correct and update FAR.

Procedures

Activity Reference
Responsibility Task /Activity
No Document
Accountant Forward a copy of the FAR as on date of the N/A
D.1. verification to the verification team.

D.2. Verification Team Receive a copy of FAR from Accountant. N/A

Verification Team Compare all physical assets against the details N/A
D.3.
mentioned in FAR.
Verification Team In case discrepancies identified, update discrepancies N/A
D.4.
in physical verification sheet / copy of FAR.
Verification Team In case no discrepancies are identified, sign off and N/A
D.5. submit verification sheet to Accountant.

D.6. Accountant Receive verification sheet from verification team. N/A

Accountant Prepare Asset Reconciliation Report between Asset
D.7. verification sheet, FAR and Fixed Asset Ledger. Reconciliation
Report
Accountant In case there are no variances identified, file the N/A
D.8. physical verification documentation.
D.9. Accountant Forward the asset verification report to FM. N/A
Accountant In case variance exists, obtain justifications for all N/A
D.10. such variances from relevant divisions.

D.11. Accountant Document justifications for the variances in the asset N/A
verification report.
D.12. Accountant Forward Asset Reconciliation Report to FM for review. N/A
FM Review Asset Reconciliation Report including the N/A
D.13.
justifications.
FM Obtain further clarifications if required and sign off on N/A
D.14.
report.
FM Forward asset verification report with justifications N/A
D.15. for the review and approval of GM/GMD and
Authorized Person as per DOA.
GFC and Review the asset verification report with justifications N/A
D.16. Authorized Person and approve for write-off.
as per DOA
Accountant Based on the approval received, record adjustments N/A
D.17. for the variance in FAR.

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Activity Reference
Responsibility Task /Activity
No Document
FM Review and approve the adjustment entry recorded N/A
D.18. for posting of transaction and communicate to
GM/GMD.
FM Confirm completion of annual asset verification to N/A
D.19.
GM/GMD.

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D. Repair and maintenance

Policy

Cost of day-to-day servicing and maintenance of assets is not recognized as an asset; it is

charged to the profit and loss account as and when incurred. Repairs, betterments, and
improvements that increase future benefits of the asset are capitalized when these costs are
equal to or greater than the capitalization threshold specified.

E. Revaluation of fixed asset

Policy

For its fixed assets accounting, the Company will follow the “Cost Model” as defined in Paragraph
30 of the IAS 16 – Property, Plant and Equipment. Hence, after the initial recognition, an item of
fixed assets will be carried at cost less any accumulated depreciation and any accumulated
impairment losses.

To account for the impairment of fixed assets, the Company will follow rules and principles outlined
in the IAS 36 – Impairment of Assets.

It shall be the responsibility of FM to ensure that the Company remains compliant with IFRS and
all other legal and regulatory pronouncements and the industry best practices. Such compliance
will be evaluated by the Company’s external auditors at-least annually.

F. Disposal of fixed asset

Disposal of asset may be necessary as the result of either asset becoming redundant, obsolete or
inefficient, replacement by an upgrade, becoming unserviceable or beyond economic repair,
damaged, stolen or missing or surplus to requirements.

For all the assets of the restaurant that are closed, they would be moved from the existing location
to the division until their transfer to new location and necessary amendments carried out in FAR.

The process is initiated by the Branch Manager / Area Manager to identify those items (furniture /
equipment) that can be reused in other locations. All such transfers should be done in coordination
with the Finance team. The Accountant should immediately update the Fixed Asset Register with
the revised location details of the asset and the value in which it was inducted, which must at arm’s
length.

For those that could not reused, the Branch Manager must create a list of such assets and initiate
the selling process. All such lists should be prepared during the notice period prior to shutting down
the restaurant.

Supply Chain (SC) team should be tasked with identifying the buyers offering the highest price for
such assets through competitive bidding process. All such disposals should be completed within
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three-months of the closure of the restaurant / outlet and no unsold items should be retained in
the warehouse beyond this stated period. During this retention period, segregation of all those
assets that are to be scrapped or sold at an appropriate price must be done at the warehouse to
avoid damage.

An inspection of the assets is to be conducted when an outlet closes to assess whether they are in
a good working condition and if it is not required, it could be sold at the right price.

Once the assets have been disposed / sold as scrap, they should be immediately ‘Deactivated’ from
the Fixed Asset Register and removed from list.

G. Asset Write-off During Restaurant Closure

When a restaurant is about to be closed, the Area Manager / Operations Head must do the
following:

a) Inform at least month prior to the Finance and Quality Assurance Departments.

b) Prepare a comprehensive plan for staff and asset relocation to the other outlets.

c) Conduct an asset count of all the equipment and furniture in the outlet. A representative
from Finance (preferably an Accountant) must also be present at that time when the count
procedures are performed.

For the equipment to be transferred to other restaurants, the Quality Assurance Department’s
representative must conduct a thorough inspection to ensure they are in a working condition and
compliant with local municipality requirements.

The Area Manager / Operations Head must inform and get approval from Finance Department for
asset to be transferred and the Asset Register needs to be updated with the location. Depreciation
for such assets should not be stopped in ME.

The assets, which are not transferred because of its non-working condition, should be immediately
scrapped.

Those found to be in working condition but does not have immediate requirement must be
transported to the central warehouse. The maximum period for storing these assets should not
exceed beyond three months following which it should be either transferred to other locations or
sold as scrap.

When the outlet is closed, Leasehold Improvements are immediately written off (i.e., fully
depreciated). For the usable assets, they should be transferred to the new location or the
warehouse. The asset transfer form should be filled by the operations team within the respective
brands.

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All assets, kept in the warehouse, should be reviewed quarterly to assess their possible future
usage. Within a year, a decision would be taken by the Finance Manager and Group Financial
Controller to impair and have it disposed.

In situation of sale of the assets, the Procurement team initiates the sale by seeking active buyers
and obtaining the highest bidder for the asset at a fair-market value. During this process, a person
from the from Finance team would visit the warehouse to ensure transparency of the process.

Policy

All settlements with buyers will be done on a cash basis and no credit will be provided unless
approved by Authorized person as per DOA.

All asset disposal requests will be approved in line with the requirements of Delegation of
Authority (DOA) in place.

All asset disposal requests should be prepared in prescribed formats.

Procedures

Activity Reference
Responsibility Task /Activity
No Document
Department Head Identify assets to be disposed off and forward Fixed Assets
H.1.
disposal request to Accountant. Register
Accountant Receive disposal request from Department Head. Asset Disposal
H.2.
Form
Accountant Prepare Asset Disposal Form. Asset Disposal
H.3.
Form
Accountant Forward disposal request to FM for Asset Disposal
H.4.
recommendation. Form
FM Evaluate request and forward to Accountant for Asset Disposal
H.5.
details of depreciation. Form
Accountant Update depreciation details on the form and Asset Disposal
H.6.
forward to FM for review. Form
FM Review and forward it to GM/GMD and Authorized Asset Disposal
H.7.
Person as per DOA for the review and approval. Form
GM/GMD and Approve and forward Asset Disposal Form to Asset Disposal
H.8. Authorized Person as Accountant. Form
per DOA
Accountant Receive approved asset disposal request from Asset Disposal
H.9.
GM/GMD and Authorized Person as per DOA. Form
Accountant Forward the disposal request to GHSC/PM for N/A
H.10.
RFQs.
GHSC/PM Request for at least 3 quotations from buyers for RFQ
H.11.
disposal of asset.
H.12. GHSC/PM Receive quotations from customers. RFQ

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Activity Reference
Responsibility Task /Activity
No Document
H.13. GHSC/PM Prepare comparative statements. CS

H.14. GHSC/PM Forward CS to GM/GMD and FM. N/A

GM/GMD Review CS and shortlist a customer in coordination N/A
H.15.
with FM and GHSC/PM.
GHSC/PM Forward shortlisted customer details to N/A
H.16.
Accountant.
H.17. Accountant Receive the shortlisted customer details. N/A

H.18. Accountant Carry out the disposal process. N/A

H.19. Accountant Receive payment from customer. N/A

H.20. Accountant Reconcile payment with approved documents N/A

Accountant Record receipts and initiate asset disposal in FAR N/A
H.21.
for approval and posting by FM.
FM Reviews the asset disposal and receipt entries FAR
H.22. initiated and approves the same for GL and FAR
posting.
H.23. GHSC/PM Handover the asset to the buyer. N/A

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RESPONSIBILITY MATRIX

Designation Responsibilities
GFC • Review and approve the planned / budgeted PR.
• Review PR exceeding the budgeted amount and / or unplanned PR and
forward the same to Authorized Person as per DOA for approval.
• Review CS and shortlist suppliers / buyers for acquisition and disposal of
assets.
• Review and forward each asset disposal request to Authorized Person as per
DOA for the approval.
Authorized Person as • Review and approve the planned / budgeted PR.
• Approve PR exceeding the budgeted amount and / or unplanned PR once
per DOA
reviewed by GFC.
• Sign-off on cheques / bank transfers for payments.
• Approve the asset disposal request once reviewed by GFC.
FM • Review PRs against the planned budget along with GFC.
• Review POs and PVs and approve the same for the processing.
• Review depreciation calculation for correctness.
• Review FAR to ensure information updated and recorded is accurate.
• Provide sign-off on invoice.
GHSC/PM • Receive PRs approved by the competent authority.
• Send out request for RFQs.
• Obtain quotations from suppliers and/or buyers.
• Prepare comparative statement of quotations received from suppliers and/or
buyers.
• Review and shortlist suppliers and/or buyers for the acquisition and disposal
of assets respectively along with GM and FM.
• Coordinate execution of the acquisition and/or disposal of assets.
• Raise PO and obtain the required approvals.
Accountant • Compare asset details with approved PO and acknowledge DN
• Ensure that each asset purchase has an approved PR.
• Ensure that each invoice is recorded against approved PR, PO, and signed
delivery note (DN).
• Record fixed assets purchases and tag fixed assets.
• Identify invoices due for payment based on payment terms mentioned in
PO.
• Prepare payment voucher.
• Maintain updated fixed asset register.
• Review and post accounting entries for fixed assets adjustments and
disposals.
• Post monthly depreciation entries.
• Schedule physical verification of assets.
• Prepare asset disposal request form.

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• Provide confirmation to FM with a copy marked to Department Head on the

receipt of payment from buyer.

Department Head • Identify new asset requirements for the department.

• Document justification in PR when the asset purchases are unplanned and
/ exceed the budgeted amount.

ABBREVIATIONS CHART

ARC Audit & Risk Committee

CS Comparative Statement
DN Delivery Note
DOA Delegation of Authority
FAR Fixed Assets Register
GFC Group Financial Controller
GHSC Group Head of Supply Chain
GM General Manager
GMD Group Managing Director
PM Procurement Manager
PO Purchase Order
PR Purchase Requisition

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