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Accounting Policies of Bhagyodaya Infrastructure Development Ltd. Company

Mar 31, 2014

1. (a) General

The financial statements are prepared under the historical cost convention on the accounting principles of a going concern and comply with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956.

The Company follows mercantile system of accounting and recognises Income and Expenditure on accrual basis except dividend, which is accounted on receipt basis, and those with significant uncertainties and in accordance with the applicable accounting standards.

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses during the reported period. Actual result could differ from these estimates and differences between actual results and estimates are recognised in the periods in which the results are known/ materialize.

(b) Revenue Recognition:

Revenue from construction contract is recognised for the consideration amount received or receivable based on the completion of the physical proportion of the contract work as per agreement.

Revenue from variation in contract work is recognised when such revenue can be reliably measured and there exist reasonable certainty as to its recovery.

(c) Fixed Assets

Fixed Assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working conditions for its intended use, less accumulated depreciation.

(d) Depreciation

The Company provides depreciation on Written Down Value Method on pro-rata basis at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

(e) Contract Work-In-Progress

Contract work in progress represents the contract costs incurred in relation to activity undertaken on the contract which amounts are due from the customers but have not been recognized as revenue pending completion of the physical proportion of the contract work as per the agreement. Contract costs consists of cost that directly relate to a specific contract and those which are attributable to contract activity in general and can be allocated to contract.

(f) Inventories

Items of inventories are measured at lower of cost or net realisable value after providing for obsolence, if any. Cost of Stores and materials are determined on FIFO basis.

(g) Retirement Benefits

Retirement Benefits to the employees comprises of payments under defined contribution plans like Provident Fund and Family Pension. The liability in respect of defined benefit scheme like Gratuity is provided on the basis of actuarial valuation as at the year end.

(h) Investments

Long term Investments are stated at cost. In case, there is a permanent diminution in the value of investments, a provision for the same is made in the accounts.

(i) Taxation

Income Tax expenses comprise current tax (i.e. amount of tax for the period determined in accordance with the Income Tax law) and deferred tax charges or credit (reflecting the tax effects of timing differences between accounting income and taxable income of the year).

Current Tax is determined as the amount of tax payable in respect of taxable income for the year in accordance with the Income Tax Act, 1961.

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however where there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each balance sheet date and written down or written up to reflect the amount that is reasonably/virtually certain as the case may be to be realised.

(j) Impairment of Fixed Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company''s fixed assets. If any indication exists, an asset''s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

(k) Earnings Per Share

The Company reports basic and diluted Earnings per share (EPS) in accordance with Accounting Standard (AS) -20 on "Earnings per Share". Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

(l) Provisions and Contingent Liabilities

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) The Company has a present obligation as a result of a past event

b) A probable outflow of resources is expected to settle the obligation and

c) The amount of the obligation can be reliably estimated.

Where some or all the expenditure required to settle a provision is expected to be reimbursed by another party, such reimbursement is recognized to the extent of provision or contingent liability as the case may be, only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of

a) At present obligation arising from a past event, when it is not probable that a outflow of resources will be required to settle the obligation.

b) A possible obligation, unless the probability of outflow of resources is remote.

2. a. Contingent Liabilities : Nil

b. Commitments : Nil

3. Managerial Remuneration:

The Remuneration has been paid to the Directors as per Schedule XIII of the Companies Act, 1956.

4. Employee Benefits

(i) Gratuity (Non-Funded): The Company has defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for the each completed year of service. The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet.

5. Segment Reporting

The Company''s business activities fall within a single segment, viz Real Estate Construction Contractor and predominantly operates in domestic market. Accordingly disclosure requirements under Accounting Standard - 17 "Segment Reporting", is not applicable.

6. Related Party Disclosure

Related party Disclosure as per Accounting Standard 18:

Key Management Personnel

i) Shri Sanjiv Bansal, Whole Time Director

ii) Shri Naman Shah

Nature of Transactions with related parties

Notes: Related party relationships have been identified by the management and relied upon by the auditors.

7. Small and Medium Enterprises

The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

8. No provision for tax has been made for the year as there is no taxable income and book profit Under Section 115JB of the Income-Tax Act, 1961.

9. Previous Years figures reclassification

Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.


Mar 31, 2013

(a) General

The financial statements are prepared under the historical cost convention on the accounting principles of a going concern and comply with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956.

The Company follows mercantile system of accounting and recognizes Income and Expenditure on accrual basis except dividend, which is accounted on receipt basis, and those with significant uncertainties and in accordance with the applicable accounting standards.

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses during the reported period. Actual result could differ from these estimates and differences between actual results and estimates are recognized in the periods in which the results are known/ materialize.

(b) Revenue Recognition :

Revenue from construction contract is recognized for the consideration amount received or receivable based on the completion of the physical proportion of the contract work as per agreement.

Revenue from variation in contract work is recognized when such revenue can be reliably measured and there exist reasonable certainty as to its recovery.

(c) Fixed Assets

Fixed Assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working conditions for its intended use, less accumulated depreciation.

(d) Depreciation

The Company provides depreciation on Written Down Value Method on pro-rata basis at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

(e) Contract Work-In-Progress

Contract work in progress represents the contract costs incurred in relation to activity undertaken on the contract which amounts are due from the customers but have not been recognized as revenue pending completion of the physical proportion of the contract work as per the agreement. Contract costs consists of cost that directly relate to a specific contract and those which are attributable to contract activity in general and can be allocated to contract.

(f) Inventories

Items of inventories are measured at lower of cost or net realizable value after providing for obsolesced, if any.

Cost of Stores and materials are determined on FIFO basis.

(g) Retirement Benefits

Retirement Benefits to the employees comprises of payments under defined contribution plans like Provident Fund and Family Pension. The liability in respect of defined benefit scheme like Gratuity is provided on the basis of actuarial valuation as at the year end.

(h) Investments

Long term Investments are stated at cost. In case, there is a permanent diminution in the value of investments, a provision for the same is made in the accounts.

(i) Taxation

Income Tax expenses comprise current tax (i.e. amount of tax for the period determined in accordance with the Income Tax law) and deferred tax charges or credit (reflecting the tax effects of timing differences between accounting income and taxable income of the year).

Current Tax is determined as the amount of tax payable in respect of taxable income for the year in accordance with the Income Tax Act, 1961.

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however where there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain as the case may be to be realized.

(j) Impairment of Fixed Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company''s fixed assets. If any indication exists, an asset''s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

(k) Earnings Per Share

The Company reports basic and diluted Earnings per share (EPS) in accordance with Accounting Standard (AS) -20 on "Earnings per Share". Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

(l) Provisions and Contingent Liabilities

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) The Company has a present obligation as a result of a past event

b) A probable outflow of resources is expected to settle the obligation and

c) The amount of the obligation can be reliably estimated.

Where some or all the expenditure required to settle a provision is expected to be reimbursed by another party, such reimbursement is recognized to the extent of provision or contingent liability as the case may be, only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of

a) At present obligation arising from a past event, when it is not probable that a outflow of resources will be required to settle the obligation.

b) A possible obligation, unless the probability of outflow of resources is remote.

a. Contingent Liabilities : Nil

b. Commitments: Preference Shares Dividend:- The Company has sought the waiver of dividend from the preference shareholders for the financial year under review which were duly approved by them.


Mar 31, 2012

(a) General

The financial statements are prepared under the historical cost convention on the accounting principles of a going concern and comply with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956.

The Company follows mercantile system of accounting and recognises Income and Expenditure on accrual basis except dividend, which is accounted on receipt basis, and those with significant uncertainties and in accordance with the applicable accounting standards.

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses during the reported period. Actual result could differ from these estimates and differences between actual results and estimates are recognised in the periods in which the results are known/ materialize.

(b) Revenue Recognition :

Revenue from construction contract is recognised for the consideration amount received or receivable based on the completion of the physical proportion of the contract work as per agreement.

Revenue from variation in contract work is recognised when such revenue can be reliably measured and there exist reasonable certainty as to its recovery.

(c) Fixed Assets

Fixed Assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working conditions for its intended use, less accumulated depreciation.

(d) Depreciation

The Company provides depreciation on Written Down Value Method on pro-rata basis at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

(e) Contract Work-In-Progress

Contract work in progress represents the contract costs incurred in relation to activity undertaken on the contract which amounts are due from the customers but have not been recognized as revenue pending completion of the physical proportion of the contract work as per the agreement. Contract costs consists of cost that directly relate to a specific contract and those which are attributable to contract activity in general and can be allocated to contract.

(f) Inventories

Items of inventories are measured at lower of cost or net realisable value after providing for obsolence, if any. Cost of Stores and materials are determined on FIFO basis.

(g) Retirement Benefits

Retirement Benefits to the employees comprises of payments under defined contribution plans like Provident Fund and Family Pension. The liability in respect of defined benefit scheme like Gratuity is provided on the basis of actuarial valuation as at the year end.

(h) Investments

Long term Investments are stated at cost. In case, there is a permanent diminution in the value of investments, a provision for the same is made in the accounts.

(i) Taxation

Income Tax expenses comprise current tax (i.e. amount of tax for the period determined in accordance with the Income Tax law) and deferred tax charges or credit (reflecting the tax effects of timing differences between accounting income and taxable income of the year).

Current Tax is determined as the amount of tax payable in respect of taxable income for the year in accordance with the Income Tax Act, 1961.

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however where there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain as the case may be to be realised.

(j) Impairment of Fixed Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

(k) Earnings Per Share

The Company reports basic and diluted Earnings per share (EPS) in accordance with Accounting Standard (AS) - 20 on "Earnings per Share". Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

(l) Provisions and Contingent Liabilities

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) The Company has a present obligation as a result of a past event

b) A probable outflow of resources is expected to settle the obligation and

c) The amount of the obligation can be reliably estimated.

Where some or all the expenditure required to settle a provision is expected to be reimbursed by another party, such reimbursement is recognized to the extent of provision or contingent liability as the case may be, only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of

a) At present obligation arising from a past event, when it is not probable that a outflow of resources will be required to settle the obligation.

b) A possible obligation, unless the probability of outflow of resources is remote.

a. Contingent Liabilities : Nil

b. Commitments: Preference Shares Dividend:- The Company has sought the waiver of dividend from the preference shareholders for the financial year under review which were duly approved by them.


Mar 31, 2011

(a) General

The financial statements are prepared under the historical cost convention on the accounting principles of a going concern and comply with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956, except otherwise stated.

The Company follows mercantile system of accounting and recognises Income and Expenditure on accrual basis except dividend, which is accounted on receipt basis, and those with significant uncertainties and in accordance with the applicable accounting standards.

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses during the reported period. Actual result could differ from these estimates and differences between actual results and estimates are recognised in the periods in which the results are known/ materialize.

(b) Revenue Recognition :

Revenue from construction contract is recognised for the consideration amount received or receivable based on the completion of the physical proportion of the contract work as per agreement. Revenue from variation in contract work is recognised when such revenue can be reliably measured and there exist reasonable certainty as to its recovery.

(c) Fixed Assets

Fixed Assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working conditions for its intended use, less accumulated depreciation.

(d) Depreciation

The Company provides depreciation on Written Down Value Method on pro-rata basis at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

(e) Contract work in progress

Contract work in progress represents the contract costs incurred in relation to activity undertaken on the contract which amounts are due from the customers but have not been recognized as revenue pending completion of the physical proportion of the contract work as per the agreement. Contract costs consists of cost that directly relate to a specific contract and those which are attributable to contract activity in general and can be allocated to contract.

(f) Inventories

Items of inventories are measured at lower of cost or net realisable value after providing for obsolence, if any.

Cost of Stores and materials are determined on FIFO basis.

(g) Retirement Benefits

Retirement Benefits to the employees comprises of payments under defined contribution plans like Provident Fund and Family Pension. The liability in respect of defined benefit scheme like Gratuity is provided on the basis of actuarial valuation as at the year end.

(h) Investments

Long term Investments are stated at cost. In case, there is a permanent diminution in the value of investments, a provision for the same is made in the accounts.

(i) Taxation

Income Tax expenses comprise current tax (i.e. amount of tax for the period determined in accordance with the Income Tax law) and deferred tax charges or credit (reflecting the tax effects of timing differences between accounting income and taxable income of the year).

Current Tax is determined as the amount of tax payable in respect of taxable income for the year in accordance with the Income Tax Act, 1961.

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however where there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain as the case may be to be realised.

(j) Impairment of Fixed Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

(k) Earnings Per Share

The Company reports basic and diluted Earnings per share (EPS) in accordance with Accounting Standard (AS) -20 on "Earnings per Share". Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

(l) Provisions and Contingent Liabilities

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) The Company has a present obligation as a result of a past event

b) A probable outflow of resources is expected to settle the obligation and

c) The amount of the obligation can be reliably estimated.

Where some or all the expenditure required to settle a provision is expected to be reimbursed by another party, such reimbursement is recognized to the extent of provision or contingent liability as the case may be, only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of

a) At present obligation arising from a past event, when it is not probable that a outflow of resources will be required to settle the obligation.

b) A possible obligation, unless the probability of outflow of resources is remote


Mar 31, 2010

(a) General

The financial statements are prepared under the historical cost convention on the accounting principles of a going concern and comply with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956, except otherwise stated.

The Company follows mercantile system of accounting and recognises Income and Expenditure on accrual basis except dividend, which is accounted on receipt basis, and those with significant uncertainties and in accordance with the applicable accounting standards.

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses during the reported period. Actual result could differ from these estimates and differences between actual results and estimates are recognised in the periods in which the results are known/ materialize.

(b) Revenue Recognition :

Revenue from construction contract is recognised for the consideration amount received or receivable based on the completion of the physical proportion of the contract work as per agreement.

Revenue from variation in contract work is recognised when such revenue can be reliably measured and there exist reasonable certainty as to its recovery.

(c) Fixed Assets

Fixed Assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working conditions for its intended use, less accumulated depreciation.

(d) Depreciation

The Company provides depreciation on Written Down Value Method on pro-rata basis at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

(e) Contract work in progress

Contract work in progress represents the contract costs incurred in relation to activity undertaken on the contract which amounts are due from the customers but have not been recognized as revenue pending completion of the physical proportion of the contract work as per the agreement. Contract costs consists of cost that directly relate to a specific contract and those which are attributable to contract activity in general and can be allocated to contract.

(f) Inventories

Items of inventories are measured at lower of cost or net realisable value after providing for obsolence, if any.

Cost of Stores and materials are determined on FIFO basis.

(g) Retirement Benefits

Retirement Benefits to the employees comprises of payments under defined contribution plans like Provident Fund and Family Pension. The liability in respect of defined benefit scheme like Gratuity is provided on the basis of actuarial valuation as at the year end.

(h) Investments

Long term Investments are stated at cost. In case, there is a permanent diminution in the value of investments, a provision for the same is made in the accounts.

(i) Taxation

Income Tax expenses comprise current tax and fringe benefit tax (i.e. amount of tax for the period determined in accordance with the Income Tax law) and deferred tax charges or credit (reflecting the tax effects of timing differences between accounting income and taxable income of the year).

Current Tax is determined as the amount of tax payable in respect of taxable income for the year in accordance with the Income Tax Act, 1961.

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however where there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain as the case may be to be realised.

(j) Impairment of Fixed Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Companys fixed assets. If any indication exists, an assets recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

(k) Earnings Per Share

The Company reports basic and diluted Earnings per share (EPS) in accordance with Accounting Standard (AS) -20 on "Earnings per Share". Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

(l) Cash Flow Statement

The Cash Flow Statement is prepared by the "Indirect Method" set out in Accounting Standard (AS) - 3 on "Cash Flow Statements" and presents the cash flows by operating, investing and financing activities of the Company.

(m) Provisions and Contingent Liabilities

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) The Company has a present obligation as a result of a past event

b) A probable outflow of resources is expected to settle the obligation and

c) The amount of the obligation can be reliably estimated.

Where some or all the expenditure required to settle a provision is expected to be reimbursed by another party, such reimbursement is recognized to the extent of provision or contingent liability as the case may be, only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of

a) At present obligation arising from a past event, when it is not probable that a outflow of resources will be required to settle the obligation.

b) A possible obligation, unless the probability of outflow of resources is remote.

 
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