n. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
(i) Provisions
A provisions is recognized when the Company has a present obligation as a result of past event,
if 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 obligation.
(ii) Contingent Liability
Contingent Liabilities are disclosed when there is a possible obligation arising from past events,
the existence of which will be confirmed only on the occurrence or non-occurrence of one or
more uncertain future events not wholly within the control of the Company or a present
obligation that arises from past events where it is either not probable that an outflow of resources
will be required to settle or a reliable estimate of the amount cannot be made.
(iii) Contingent Assets
Contingent Assets are neither recognised nor disclosed in the financial statements.
o. SEGMENT REPORTING
In accordance with the Accounting Standard 17 "segment reporting" as precribed under
Companies (Accounting Standard) Rules, 2006 (as amended), as the company is covered under
categories of SMC companies, the said accounting standard is not applicable to it.
p. CASH & CASH EQUIVALENTS
Cash & cash equivalents comprise cash and cash on deposit with banks and corporations. The
company considers all highly liquid investments with a remaining maturity at the date of
purchase of three months or less and that are readily convertible to known amount of cash to be
cash equivalents.
q. LEASES
Leases where the Lessor effectively retains substantially all the risks and benefits of ownership
of the Leased Asset, are classified as 'Operating Leases". Lease rentals with respect to assets
taken on 'Operating Lease' are charged to Statement of Profit and Loss on a straight line basis
over the lease term.
Leases which effectively transfer to the Company substantially all the risks and benefits
incidental to the ownership of the leased item are classified as 'Finance Lease'. Assets acquired
on Finance Lease which substantially transfer all the risks and rewards of ownership to the
Company are capitalized as assets by the Company at the lower of the fair value and the present
value of the minimum lease payment and a liability is created for an equivalent amount. Lease
rentals payable is apportioned between the liability and finance charge so as to obtain a constant
periodic rate of interest on the outstanding liability for each year.
r. Government Grants
Government grants / subsidies received towards specific fixed assets have been deducted from
the gross value of the concerned fixed assets and grant / subsidies received during the year
towards revenue expenses have been reduced from respective expenses.
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