1.10 Provisions and Contingent Liabilities
A provision is recognised when the Company has a present obligation as a result of past event and it is
probable that an outflow of resources will be required to settle the obligation, in respect of which reliable
estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best
estimates. A discloure for a Contingent liability is made when there is a possible obiligation or a present
obligation that may, but probably will not, require an outflow of resources. When there is possible obiligation
or a present obligation in respect of which the likelihood of outflow of resources is remote no provision or
disclosure is made. A contingent asset is neither recognised nor disclosed in the financial statements.
1.11 Investments
Long-term investments and current maturities of long-term investments are stated at cost, less provision for
other than temporary diminution in value.
1-12 Lease
Assets taken on lease by the Company in its capacity as lessee, where the Company has substantially all the
risks and rewards of ownership are classified as finance lease. Such a lease is capitalised at the inception of the
lease at lower of the fair value or the present value of the minimum lease payments and a liability is
recognised for an equivalent amount. Each lease rental paid is allocated between the liability and the interest
cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with
the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the
statement of profit and loss on a straight-line basis.
1.13 Intangible Assets
The company does not have any intangible asset.
1.14 Foreign Exchange Transactionns
Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the
transaction.
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