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. The Company has provided for
Gratuity in Current Year for the Two Wholetime Directors
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.
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