O Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when the company has a present obligation as a result of past
event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to their present value and are determined based
on best management estimate required to settle the obligation at the balance sheet date.
These are reviewed at each balance sheet date and adjusted to reflect the current best
management estimates.
A contingent liability is a possible obligation that arises from past events whose existence
will be confirmed by the occurrence or non-occurrence of one or more uncertain future
events beyond the control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be required to settle the
obligation. A contingent liability also arises in extremely rare cases where there is a liability
that cannot be recognized because it cannot be measured reliably. The company does not
recognize contingent liabilities but discloses it's existence in the financial statement.
Contingent assets are neither recognized nor disclosed in the financial statements.
P Employee Benefits:
Short term obligations:
Liabilities for wages and salaries, including earned leave and sick leave that are expected to
be settled wholly within 12 months after the end of the period in which the employees
render the related service are recognised in respect of employees' services up to the end of
the reporting period and are measured by the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee benefit obligations in
the balance sheet.
Retirement benefits
The Company has dissolved the Provident Fund Trust and is in the process of closure of the
same as there are no employees left other than the two Whole Time Directors and Chief
Financial Officer. The Company's Superannuation Fund is administered through Life
Insurance Corporation of India and is recognised by the Income Tax Department.
Company's contribution to Superannuation Fund for the year is charged against revenue.
Employee Separation Costs:
The compensation paid to the employees under Voluntary Retirement Scheme is expensed
in the year of payment.
Q Cash flow Statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for
the effects of transactions of non cash nature and any deferrals or accruals of past or future
cash receipts or payments. The cash flows from operating, investing and financing activities
of the Company are segregated based on the available information.
The previous year figures have been regrouped/reclassified, wherever necessary to confirm
to the current presentation.
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