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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