xm Provisions, Contingent Liability and Contingent Asset
Provisions
Provisions are recognized in terms of Accounting Standard 29 Provisions, Contingent Liabilities and Contingent Assets (AS-29), notified by the
Companies (Accounting Standards) Rules, 2006, when there is a present legal or statutory obligation as a result of past events, where it is probable
that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.
Contingent liabilities
Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or
more uncertain future events, not wholly within the control of the Company, or where any present obligation cannot be measured in terms of future
outflow of resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those
having a largely probable outflow of resources are provided for.
Contingent assets
Contingent Assets are not recognized in the financial statements. involving substantial degree of estimation in measurement are recognised when
there is a present obligation as a result of past events and it is probable that there will be an outflow of economic resources and a reliable estimate
can be made of the amount of the obligation. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
xiv Statement of Cash Flows
Statement of Cash Flows is prepared segregating the cash flows from operating, investing and financing activities. Cash flow from operating activities
is reported using indirect method. Under the indirect method, the net profit is adjusted for the effects of:
i. transactions of a non-cash nature;
ii. any deferrals or accruals of past or future operating cash receipts or payments;
iii. items of income or expense associated from investing or financing cash flows; and
Cash and cash equivalents (including bank balances) are reflected as such in the Statement of Cash Flows.
xv Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period. The weighted average numbers of equity shares are adjusted for events such as bonus issue,
bonus element in the rights issue, share split and reverse share split (consolidation of shares) that have changed the number of equity shares
outstanding, without corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted
average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
|