Asset Management Policy

REACH INDIATRUST
Admin

Declaration:
This Asset management policy is a subsidiary policy of the Reach India Trust’s original Finance
manual. To get clear understand about the asset procurement maintenance management of the
assets the respective parts related to asset management have been separately projected in the
document for better understand. Some addition has also been made to document for proper up
keep of the assets by the staff of Reach India Trust.
 RIT – Asset Management policy

TABLE OF CONTENTS

Sl.no Content Page no.

1. DEFINITIONS AND ABBREVIATIONS 3
2. OBJECTIVE OF THE ASSET MANAGEMENT POLICY 4
3. ROLE OF THE FINANCE MANAGER 4
4. Asset Control System 4
5. Procurement Section 5
6. FORMAT OF THE ASSET REGISTER 5
7. Verification 6
8. Intangible Assets 6
9. CAPITALISATION CRITERIA 7
10. CALCULATION OF CAPITALISATION COST OF ASSETS 8
11. Safekeeping 8
12. DONATED/ BEQUEATHED ASSETS 8
13. Disclosure of Donated/Bequeathed Assets 9
14. DEPRECIATION OF ASSETS 9
15. ASSET RISK MANAGEMENT (Insurance) 10
16. MAINTENANCE OF ASSETS 10
17. Assets Identification Number or Tagging 10
18. Physical verification of all movable assets 11
19. Transfer of Assets 11
20. Disposal of assets 11
21. Consequences of mishandling misused and manipulation, 11
tampering of movable assets by a “user”

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DEFINITIONS AND ABBREVIATIONS

Item Description

Asset An asset is a resource, tangible or intangible, controlled by the entity as a

result of past events which is expected to be used during more than one
reporting period and from which future economic benefits or service
potential will flow.
Asset Management of the assets of the organization as required by
management organization legislation which inter alia includes the compilation of an
asset register
Carrying Amount The amount at which an asset is included in the statement or financial
position after deducting any accumulated depreciation and any
impairment losses thereon.
Cost The amount of cash or cash equivalents paid or the fair value
of the other consideration given to acquire an asset at the time
of its acquisition.
Depreciation This is the systematic allocation of the cost of use of an asset over its
useful life.
Depreciable The cost of an asset, or other amount substituted for cost in the financial
Amount statements, less its residual value
Asset Register An asset register is a list of the assets owned or controlled by
organization. It contains pertinent details about each asset to track their
value and physical location. Asset Register preferably in computerized
format and maintained strictly in accordance with this document, which
shall reflect all the assets of the said organization..
User Staff/ colleague / consultants / representatives of the organization or any one
handing the asset to whom the organization have formally handover an
asset for office use / purpose.

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OBJECTIVE OF THE ASSET MANAGEMENT POLICY

The Asset Management Policy provides direction for the management, accounting and control of
Non-current Assets (Fixed Assets) owned or controlled by the Organization.

ROLE OF THE FINANCE MANAGER

1. The Finance Manager is responsible for the management of—
2. The assets of the organization, including the safeguarding and the maintenance of those assets;
and
3. The liabilities of the organization,
4. The Finance Manager shall be the custodian of the asset register of the organization, and shall
ensure that a complete, accurate and up-to-date computerized asset register is maintained. No
amendments, deletions or additions to the fixed asset register shall be made other than by the
Finance Manager or by an official acting under the written instruction of the Finance Manager.
Asset Control System
 Shall ensure that complete records of asset items are kept, verified and balanced regularly.
 Shall ensure that all movable assets are properly tagged and accounted for
 Shall conduct annual asset verification by selected movable assets and compare this inventory
with the Departments asset sign-offs of the previous year.
 The asset verification report shall reflect any discrepancies between the articles found during
verification and the record referred to in the point above.
 Shall ensure that the Asset Register is balanced annually with the general ledger and the
financial statements.
 Shall ensure adequate bar codes to exercise the function relating to asset control are available at
all times.
 Shall provide the Auditor-General or his personnel, on request, with the financial records
relating to assets belonging to Council as recorded in the Asset Register.
 Shall ensure that all audit queries are resolved in a timely manner.
 Shall ensure that the relevant information relating to the calculation of depreciation is obtained
from the departments and provided to the Finance department in the prescribed format.
 Shall ensure that asset acquisitions are allocated to the correct asset code.
 Shall ensure that, a completed asset disposal form, counter signed by the Asset Control Section,
is presented.
 Shall ensure that a verifiable record is kept of all obsolete, damaged and unused asset or asset
inventory items received from the departments.
Procurement Section
 Prior written approval of Board of Trustees is required before initiating procurement of any
capital item exceeding of Rs. 250,000 each
 Asset and Inventory purchase: Before finalizing on an asset purchase at least 3 quotations
should be obtained by the finance or administration in-charge for assets with value of more
than Rs. 5,000, and a documented comparative analysis made (not only of price but also other
factors). A comparison of the quotation is to be made regarding price, terms of suppliers, after
sale services, reliability, recommendation, branded / non- branded and a written note made in
this regard justifying a particular choice for consideration and approval.
 The Bid Adjudication / Bid Specification Committee must comply with and be constituted in

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accordance with the procurement policy.

 Shall ensure that the completed “asset take-on” document, indicating the asset ID, accompany
above documents before processing order.
 For every purchase there should an explanatory purchase order specifying the item of
purchase, agreed price and terms, delivery schedule, payment and other terms. This should be
signed by the senior manager, accounts and administration, or the Chief functionary and a
copy should be in the purchase file. Only the assets as in the approval letters of donors be
bought if donor funds are being used for the same. If not in approval letters, a written approval
of the Donor should be on record.
 For consumable/running stock or inventory purchases (computer stationery, office stationery,
postage stamps, machine tools, cartridges small calculators, books/periodicals, workshop
materials like bags, folders, pads, pens/pencils, badges etc., purchases should be made by the
finance and administration person in charge in order to meet periodical requirements and to
maintain the minimum levels as decided from time to time.

FORMAT OF THE ASSET REGISTER

 The fixed asset register shall be maintained in the format determined by the Finance Manager,
which format shall comply with the requirements of any accounting requirements which may
be prescribed.
 Without in any way detracting from the compliance criteria mentioned in the preceding
paragraph, the asset module shall reflect at least the following information:
 a brief but identifiable description of each asset
 classification of each asset
 the date on which the asset was acquired for use
 the location of the asset
 the departments or cost centre within which the assets will be utilized
 the original cost or fair value if no costs are available
 accumulated depreciation to date
 the carrying value of the asset
 the method and, where applicable, the rate of depreciation
FIXED ASSETS REGISTER
ASSET DESCRIPTION
PARTICULARS VOUCHER QUANTITY IDENTIFICATION ASSET YEAR OF COST (Rs)
REF. NO. LOCATION PURCHASE

Verification
 The Asset Control Section shall at least once during every financial year provide all Users of
departments with a comprehensive list of assets which is registered under their control.
 Every Staffs of a department shall be responsible for verifying this list with the assets under their
control and investigate any discrepancies arising out of the asset verification exercise. The Staffs of
each department will be required to sign and date a declaration stating that the list of assets verified

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for his/her department is complete & accurate except for the discrepancies as reported to the Asset
Control Section.

Intangible Assets
Items belonging to the category „intangible‟ do not have a physical form and meets the
identification criterion in the definition of an intangible asset when it:
 is separable, i.e. is capable of being separated or divided from the Organization and sold,
transferred, licensed, rented or exchanged, either individually or together with a related
contract, asset or liability; or
 Arises from contractual or other legal rights (excluding rights granted by statute),
regardless of whether those rights are transferable or separable from the organization or
from other rights and obligations.
Examples of intangible items are:
 Mineral exploration rights
 Computer software (not operational software)
 Licensing rights.
 Servitudes
 Copy and patent rights
 Advertising rights
 Encroachment rights

CAPITALISATION CRITERIA
All items are Property; Plant & Equipments acquired that comply with the asset definition must be
capitalized in the cost and be provided for on the capital budget. These items will be bar-coded (when
moveable).
Group Assets
 Are assets of a similar nature and usually purchased as a group. Group items identified are
(examples of such assets):
 Water and electricity meters;
 Library books (purchased by the Organization)
 Chairs for community centers and the city hall
CALCULATION OF CAPITALISATION COST OF ASSETS
Initial Cost
An item of property, plant and equipment that qualifies for recognition as an asset should initially be
measured at its cost. The cost of an item of property, plant and equipment comprises its purchase price,
including import duties and non-refundable purchase taxes, and any directly attributable costs of bringing
the asset to working condition for its intended use. Any trade discounts and rebates are deducted in arriving
at the purchase price. Examples of directly attributable costs are:
 The cost of site preparation
 Initial delivery and handling costs

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 Installation and assembly costs, and

 Professional fees such as for architects and engineers that is directly applicable to the project
Safekeeping
 Financial Management determines that the Accounting Officer is responsible for the
management of the assets of the organization, including the safeguarding and the
maintenance of those assets.
 Financial Management determines each senior manager of a organization and each official of
a organization exercising financial management responsibilities must take all reasonable
steps within their respective areas of responsibility to ensure that the assets and liabilities of
the organization are managed effectively and that assets are safeguarded and maintained to
the extent necessary. A senior manager or such official must perform the functions subject to
the directions of the Accounting officer.
 Every Staffs of a department / User shall be directly responsible for the physical safekeeping
of any asset controlled or used by the department in question.
DONATED/ BEQUEATHED ASSETS
An item donated or bequeathed to the Trust or acquired by means of an exchange of assets
between to the any registered Trust or society shall be recorded in the asset register only if it
subscribes to the definition of asset.
Disclosure of Donated/Bequeathed Assets
Donated assets will be disclosed in the Statement of Financial Position at fair value less
accumulated depreciation at date of acquirement. Fair value being what the asset would cost in
the open market at the date of acquirement. If there is no open market for such assets the
depreciated replacement value will be applied to determine fair value. The transaction of
acquirement will reflect on the Statement of Changes to Net Assets as “Assets
Donated/Bequeathed”
DEPRECIATION OF ASSETS
 Depreciation is the accounting process used to allocate the cost to particular accounting
periods of 'using up' the service potential of the asset over its useful life.
 Note: depreciation is not a method of financing the replacement of assets and is necessary even
when assets are revalued every year (excluding valuation of biological assets).
 The organization applies straight line depreciation method to best reflect the pattern of use of
an asset, whereby items of property, plant and equipment are depreciated on a constant or
uniform amount over their estimated useful life. For example, if a vehicle is purchased and has
an estimated useful life of 5 years, each month 1/60th of the vehicle will be depreciated.
 Depreciation is an expense both calculated and debited on a monthly basis against the
appropriate line item in the Department or vote in which the item of property, plant and
equipment is used or consumed and should be recognized as such.
 Depreciation shall be charged from the calendar month following the month in which an item
of property, plant and equipment is available for use and will continue until the accumulated

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depreciation equals the cost or valuation amount of the respective item of property, plant and
equipment or the item is disposed or written off.
 When depreciation is calculated, a corresponding accumulated depreciation account is created.
The accumulated depreciation account is a statement of financial position item (it is an asset
provision). This account balance reflects the depreciation charge that has been expensed or
capitalized since the asset was available for use. The balance on the accumulated depreciation
account can never exceed the cost or valuation of the specific item of property, plant and
equipment to which it relates.

ASSET RISK MANAGEMENT (Insurance)

 Departments are responsible for managing the risks associated with their activities.
 The ultimate decision taken by a Chief Functionary of the organization relating to appropriate
risk management will depend on the types of risks it is exposed to, the amount of excess it is
willing to carry, budgetary constraints and all relevant factors peculiar to the organization..
 Comprehensive property, plant and equipment identification and valuation may prevent the
organization from being over or under insured. Specific supportable insurable values as defined
in the insurance policy of the organization should be reviewed regularly. In some instances, an
in-house estimate of cost or insurable value may not be sufficient to substantiate the amount of
a loss and, an appraisal by an independent third party may be require
 Insurance of assets, especially high value assets and cash, should be done.
MAINTENANCE OF ASSETS
 Regular maintenance can prevent or minimize unplanned and expensive breakdowns.
Maintenance plans must therefore be drawn up to ensure minimum maintenance standards and
execution to achieve the optimum use of assets as planned.
 Every staffs of a Department / User shall ensure that a maintenance plan in respect of
infrastructural assets is prepared and submitted to the Chief Functionary of the Trust for
approval.
 Involves proper upkeep of assets including repairs, maintenance, annual maintenance contracts
AMCs, insurance of assets, control on usage vide Log books, fixed asset registers, stock
registers to maintain the flow and balances of consumables, movement registers, project
registers.
 Every User shall be directly responsible for ensuring that all assets in his/her care are
properly maintained and in a manner which will ensure that such assets attain their useful
operating lives.
Assets Identification Number or Tagging
Tagging means to place a control number on a piece of equipment or property. All movable
assets must be tagged if at all possible. The primary purpose of tagging is to maintain a
positive identification of assets.

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Tagging is important to:

 Provide an accurate method of identifying individual assets
 Aid in the annual taking of physical inventory
 Control the location of all physical assets
 Aid in maintenance of assets
Fixed property and plant is not tagged; such as:
 Buildings (record legal description in asset record)
 Land (record legal description in asset record)
 Infrastructural assets
 Computer software
Physical verification of all movable assets
 The Asset Control Section will conduct a physical verification of movable assets annually.
They will require the cooperation of departmental personnel in accomplishing the physical
verification task and will attempt to minimize the time demanded of them.
 The designated officials in the different Departments within the organization must execute the
functions listed below
 Ensure that the bar code number and location number are reflected on the asset movement
form by the relevant official on the receipt of the asset. Where applicable, the serial number or
registration number should be included.
 Ensure that a completed asset disposal form is submitted when an asset item is disposed of
after the necessary approval has been obtained.
 Asset Control Section must be notified by the relevant Department within 14 days of any of
the following possible movements:
 Donations
 Additions / Improvements
 Departmentally manufactured items
 Loss or damage
 Transfers
 Sale of asset
Transfer of Assets (annexure – 1 attached)
When a Department transfers an asset or inventory item within the Department, the asset movement
form must be completed (signed by both the transferor and the transferee) and forwarded to the Asset
Control Section. The copy of this form must be forwarded to the party receiving the asset or
inventory item.

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When a Department transfers an asset or inventory item to another Department, the transferring
Department must approve the transfer. After approval has been granted the asset movement form
must be completed and forwarded to the Asset Control Section.
Disposal of assets
When assets become obsolete, outdated or unsuitable or if they entail increasing maintenance costs,
they should be disposed off in prescribed manner. Same committee formed for purchase of assets
should decide the disposal procedures and monitor disposal of assets. In case of significant high value
assets disposal, bids should be invited from at least three sources before deciding on disposal. All
Departments must submit the properly completed asset disposal forms together with copies of all
relevant approvals for the disposal of assets to the Asset Control Section.
Consequences of mishandling misused and manipulation, tampering of movable
assets by a “user”:
Reach India trust being a non-profit organization entity believes that anything that we are purchase
or receive as donation is out of someone‟s hard earned income, humanity and kindness. We as an
organization valued, respect and appreciate the contribution. We discourage casualness, negligence
attitude of the “user” i.e. (staff/ colleague / consultants / representatives of the organization or any one
handing the asset) toward up keeping of the assets provided to them for official use.
Although all assets are covered by Annual maintenance cost (AMC)/ insurance / warranty and
guaranty. Provision of damage recovery from insurance doesn‟t mean that one can mishandle /
misuse and manipulate with the assets for official purpose.
Loss or Damage considered as: Partial and complete damage of Asset due to drowned / dropped in
water or rain, burned by fire / extreme hit, broken extreme pressure/ dropped from height, stolen,
misplace, missing, and lost
Two type “cause” of damage will be considered: “Damage due to accident” and “Damage due to
“negligence /mishandling / misused and manipulation”.
1. Loss or Damage due to accident: If the damage of a movable asset cause due to an accident, that
is unintentional in nature.
1.1. In both the case of loss and damage, proper evidence (General Diary / FIR) to the nearest
police station should be presented and in that case it head office may take necessary
decision and action to take care of the damage recovery.
1.2. In case of damage due to accident, along with the GD, proof of other damages, example
picture of injury, treatment expenses / picture of damaged other assets occurred during
the same accident / picture of the damaged vehicle etc have to submit. This proof or
evidence will also be required for insurance claim. Even apart from these documents,
other required documents have to submit if required.
2. Loss or Damage due to “ negligence /mishandling / misused and manipulation”.: This is
type of damage is either intentional in nature / unintentional but caused due to improper upkeep

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of the asset / mishandling / misuse or manipulation / tampering of the original parts of the
assets.
2.1. If the asset is under the warranty and user is facing any problem, then user should report
to the head office through mail and head office will communicate with the authorized
dealers to take up the issue, or the “user” after intimating the head office may take the asset
to the authorized service center / authorized service provider.
2.2. If the Asset is within the warranty period but repaired by an unauthorized service provider
will also be treated as negligence /mishandling / misused and manipulation as it cause
“Loss of Warranty”.
2.3. Reach India put tagging (with asset identification number) for each assets, removing the
tag will be treated as “manipulation”.
2.4. Tampering with the original spare parts of the assets will also be treated as manipulation
under the policy.
2.5. Any type of loss or damage of the organizational assets by “User” other than “loss or
damage due to accident will be considered under the “Loss or Damage due to “ negligence
/mishandling / misused and manipulation”

Punishment / penalty under the policy Loss or Damage due to “negligence /mishandling / misused
and manipulation:
1. Reach India Trust as the possessor of the assets reserve complete right to take back the assets
from the user at any point of time during the project or completion of the project.
2. In that case of above mentioned occurrence with the asset the cost may be recovered from the
“user” means the person whom Reach India Trust have formally hand over the particular office
asset.
3. Damage by water will not covered under insurance claim, so special care should be taken by
the user while using assets near water /rain. So damage by water will only be repaired and it
may be claimed fully from the user / shared by both the parties, depends on the situation and
circumstances.
4. In major cases “termination from the job / position” may occur of the candidate find guilty
under the policy.

All Users have to sign the declaration form at the time of taking handover of the any asset.

……………………….XXXXX……………………….
The End

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Annexure - 1

Asset Handover form

Company Name Reach India Trust

Company’s Registered address A-41, Rajdanga, Nabapally, Kshetra Villa, 1st
Floor, Near – Naba Uday Sangha Maath, P.S –
Kasba, Kolkata – 700107
Name of the Employee
Designation of the Employee
Permanent address of the Employee
(As per adhaar card/ voter card)
Employee Code no
Employee Contact details
Employee E mail Id
Date of Joining
Handover Date
Handover By

Instructions: Please find the below of assets handed over to you, to support you in carrying out your project
or work in the most proficient manner.

Assets Handed over

Sl. No Asset Name Asset Asset Serial Asset Qty Remarks

code Number Location

Signature

(Person responsible for hand over)

ACKNOWLEDGEMENT AND DECLARATION BY EMPLOYEE

I, Ms. / Mr........................................................................................................................ Here by

acknowledge that I have received the above mentioned assets. I understand these assets belong to
REACH INDIA TRUST and are under my possession for carrying out my office work. I hereby assure that I
will take care of the assets of the company to the best possible extend.

Employee Signature:

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Asset handed over Check list: Declaration

Loss or Damage considered as: Partial and complete damage of Asset due to drowned / dropped in water or rain, burned by fire /
extreme hit, broken extreme pressure/ dropped from height, stolen, misplace, missing, and lost

Two type “cause” of damage will be considered: “Damage due to accident” and “Damage due to “negligence /mishandling / misused
and manipulation”.

1. Loss or Damage due to accident: If the damage of a movable asset cause due to an accident, that is unintentional in nature.
1.1. In both the case of loss and damage, proper evidence (General Diary / FIR) to the nearest police station should be
presented and in that case it head office may take necessary decision and action to take care of the damage recovery.
1.2. In case of damage due to accident, along with the GD, proof of other damages, example picture of injury, treatment
expenses / picture of damaged other assets occurred during the same accident / picture of the damaged vehicle etc
have to submit. This proof or evidence will also be required for insurance claim. Even apart from these documents,
other required documents have to submit if required.
2. Loss or Damage due to “ negligence /mishandling / misused and manipulation”.: This is type of damage is either intentional
in nature / unintentional but caused due to improper upkeep of the asset / mishandling / misuse or manipulation / tampering
of the original parts of the assets.
2.1. If the asset is under the warranty and user is facing any problem, then user should report to the head office through
mail and head office will communicate with the authorized dealers to take up the issue, or the “user” after intimating
the head office may take the asset to the authorized service center / authorized service provider.
2.2. If the Asset is within the warranty period but repaired by an unauthorized service provider will also be treated as
negligence /mishandling / misused and manipulation as it cause “Loss of Warranty”.
2.3. Reach India put tagging (with asset identification number) for each assets, removing the tag will be treated as
“manipulation”.
2.4. Tampering with the original spare parts of the assets will also be treated as manipulation under the policy.
2.5. Any type of loss or damage of the organizational assets by “User” other than “loss or damage due to accident will be
considered under the “Loss or Damage due to “ negligence /mishandling / misused and manipulation”

Punishment / penalty under the policy Loss or Damage due to “negligence /mishandling / misused and manipulation:

1. Reach India Trust as the possessor of the assets reserve complete right to take back the assets from the user at any point of
time during the project or completion of the project.

2. In that case of above mentioned occurrence with the asset the cost may be recovered from the “user” means the person
whom Reach India Trust have formally hand over the particular office asset.

3. Damage by water will not covered under insurance claim, so special care should be taken by the user while using assets near
water /rain. So damage by water will only be repaired and it may be claimed fully from the user / shared by both the parties,
depends on the situation and circumstances.

4. In major cases “termination from the job / position” may occur of the candidate find guilty under the policy.

ACKNOWLEDGEMENT AND DECLARATION BY EMPLOYEE

I, Ms. / Mr........................................................................................................................ Here by agreed, I am responsible for the

above office equipment or office asset issued to me, I will use it/ them in the manner intended. I will responsible for any
damages occurred by my negligence /mishandling / misused and manipulation, the cost of repair of damages will take from
me.

Signature of the Employee Signature of the employer

(Person responsible for hand over)

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