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Accounting Policies of Vardhman Concrete Ltd. Company

Mar 31, 2015

I. METHOD OF ACCOUNTING

a) The financial statements are prepared under the historical cost convention using accrual method of accounting, except as stated otherwise and for certain fixed assets which have been revalued.

b) Revenue from construction and project related activities is recognized as under:

In respect of construction business, the Company follows percentage completion method, stated on the basis of physical measurement of work actually completed at the balance sheet date, taking into account the contractual price and revision thereto. As per policy of the Company, in respect of running contracts, the revenue including escalation arrived on the basis of sales bills raised and/or unbilled work done is recognized as and when bills are raised and/or after inspection and the approval of the supplies by the customers as per the terms of respective contracts.

c) Income and expenses are mainly accounted on accrual basis except scrap and certain other income /expenses with significant uncertainties.

d) Amounts recoverable in respect of the price and other escalation, claims adjudication and variation in contract work required for performance of the contract are accounted to the extent that it is probable that they will result in revenue.

e) Contractual liquidated damages, payable for delays in completion of contract work or for other causes, are accounted for as costs when such delays and causes are attributable to the Company or when deducted by the client.

II. USE OF ESTIMATES

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as on the date of financial statements and the reported income and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which results are known/ materialized.

III. FIXED ASSETS

Fixed Assets are stated at cost, less accumulated depreciation and impairment, if any. Direct costs in relation to the fixed assets are capitalized until such assets are ready to us.

Depreciation on tangible assets is provided on the straight-line method over the useful lives of assets estimated by the Management. Depreciation for assets purchased during a period is proportionately charged. The Management estimates the useful lives and residual values of the fixed assets as prescribed under Part C of Schedule II of the Companies Act 2013 as follows.

Fixed Asset Useful Life Residual Value

Factory Building 30 years 5%

IV. IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

V. DEPRECIATION

a) Depreciation is provided on straight line method according to the rates specified in Schedule II of Companies Act, 2013.

b) In respect of the assets purchased / sold during the year, pro rata depreciation based on number of days is provided.

c) Depreciation on assets costing up to Rs. 5,000/- is provided at the rate of 100%.

d) Depreciation on revalued assets has been provided on revalued amounts. Additional depreciation on revaluation is adjusted against transfer of equivalent amount from Revaluation Reserve.

VI. VALUATION OF INVENTORIES

a) Finished Goods (Prefabricated Goods)

Finished Goods are valued at Cost or Market Value whichever is lower.

b) Construction Materials

Stock of materials lying at stores/sites has been valued at cost on first-in first-out basis, by the concerned store/site-in-charge.

Loose tools are charged to Profit & Loss Account as and when purchased.

c) Work in Progress

Work in Progress is accounted on progressive basis.

VII. CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

Adjustment to assets and liabilities are made for events occurring between balance sheet date and the date on which the financial statements are approved that provide additional information materially affecting the determination of the amounts relating to the conditions existing at the balance sheet date.

VIII. PRIOR PERIOD ITEMS

Prior period items are income and expenses that arises in the current period as a result of errors and omissions in the preparation of the financial statements of the one and more prior periods. Prior period does not include other adjustments necessitated by circumstances, which though related to prior periods, are determined in the current period.

IX. BORROWING COST

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Statement of Profit and Loss.

X. RETIREMENT BENEFITS

a) Contributions to the provident fund, a defined contribution scheme, are charged to the Statement of Profit and Loss.

b) Gratuity has been accounted on actuarial valuation. Any curtailment in the liability during the year is recognized as Income and credited to Statement of Profit & Loss.

c) Presently, the Company does not have any other defined benefit for staff payable on retirement/ cessation of service.

XI. EMPLOYEE BENEFITS

a) Short term employee benefits are recognized as expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss of the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit and Loss.

XII. TAXATION

Income tax comprises of Current Tax and Deferred Tax. Current Tax is the amount of tax payable as determined in accordance with the provisions of Income Tax Act, 1961. Deferred Tax charge or credit is recognized using the tax rates and tax laws that have been substantially enacted at the Balance Sheet date. Where there is unabsorbed depreciation or carry forward losses, Deferred Tax Assets are recognized only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such Deferred Tax Assets can be realized. Other Deferred Tax Assets are recognized only to the extent there is reasonable certainty of realization in future.

Undisputed assessment dues if any, are accounted on cash basis and disputed matters under appeal are disclosed by way of contingent liabilities.

XIII. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best 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 estimates.

Contingent Liability is disclosed in case of:

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

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

Contingent Assets are neither recognized nor disclosed.






Mar 31, 2014

I. METHOD OF ACCOUNTING

a) The financial statements are prepared under the historical cost convention using accrual method of accounting, except as stated otherwise and for certain fixed assets which have been revalued.

b) Revenue from construction and project related activities is recognized as under:

In respect of construction business, the Company follows percentage completion method, stated on the basis of physical measurement of work actually completed at the balance sheet date, taking into account the contractual price and revision thereto. As per policy of the Company, in respect of running contracts, the revenue including escalation arrived on the basis of sales bills raised and/or unbilled work done is recognized as and when bills are raised and/or after inspection and the approval of the supplies by the customers as per the terms of respective contract.

c) Income and expenses are mainly accounted on accrual basis except scrap and certain other income /expenses with significant uncertainties.

d) Amounts recoverable in respect of the price and other escalation, claims adjudication and variation in contract work required for performance of the contract are accounted to the extent that it is probable that they will result in revenue.

e) Contractual liquidated damages, payable for delays in completion of contract work or for other causes, are accounted for as costs when such delays and causes are attributable to the Company or when deducted by the client.

II. USE OF ESTIMATES

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as on the date of financial statements and the reported income and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which results are known/ materialized.

III. FIXED ASSETS

a) Certain premises and Plant & Machinery were revalued in March 1994 and are stated at such revalued amount less accumulated depreciation. Other assets are carried at cost less accumulated depreciation. Appropriate adjustment is made for any asset(s) disposed out of the revalued assets.

b) Cost includes interest on specific borrowing relating to fixed assets acquisition, specific expenses pertaining to respective assets by the registered office, other indirect expenses pertaining to acquisition of assets on percentage basis as consistently followed in the previous year and incidental expenses incurred up to the date of commissioning are capitalized on the commencement of commercial production.

c) Self-manufactured assets are capitalized at cost including appropriate apportionment from overheads.

IV. IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

V. DEPRECIATION

a) Depreciation is provided on straight line method according to the rates specified in Schedule XIV of Companies Act, 1956.

b) In respect of the assets purchased / sold during the year, pro rata depreciation based on number of days is provided.

c) Depreciation on assets costing up to Rs. 5,000/- is provided at the rate of 100%.

d) Depreciation on revalued assets has been provided on revalued amounts. Additional depreciation on revaluation is adjusted against transfer of equivalent amount from Revaluation Reserve.

VI. VALUATION OF INVENTORIES

a) Finished Goods (Prefabricated Goods)

Finished Goods are valued at Cost or Market Value whichever is lower.

b) Construction Materials

Stock of materials lying at stores/sites has been valued at cost on first-in first-out basis, by the concerned store/site-in-charge.

Loose tools are charged to Profit & Loss Account as and when purchased.

c) Work in Progress

Work in Progress is accounted on progressive basis.

VII. CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

Adjustment to assets and liabilities are made for events occurring between balance sheet date and the date on which the financial statements are approved that provide additional information materially affecting the determination of the amounts relating to the conditions existing at the balance sheet date.

VIII. PRIOR PERIOD ITEMS

Prior period items are income and expenses that arises in the current period as a result of errors and omissions in the preparation of the financial statements of the one and more prior periods. Prior period does not include other adjustments necessitated by circumstances, which though related to prior periods, are determined in the current period.

IX. BORROWING COST

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Statement of Profit and Loss.

X. RETIREMENT BENEFITS

a) Contributions to the provident fund, a defined contribution scheme, are charged to the Statement of Profit and Loss.

b) Gratuity has been accounted on actuarial valuation. Any curtailment in the liability during the year is recognized as Income and credited to Statement of Profit & Loss.

c) Presently, the Company does not have any other defined benefit for staff payable on retirement/ cessation of service.

XI. EMPLOYEE BENEFITS

a) Short term employee benefits are recognized as expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss of the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit and Loss.

XII. TAXATION

Income tax comprises of Current Tax and Deferred Tax. Current Tax is the amount of tax payable as determined in accordance with the provisions of Income Tax Act, 1961. Deferred Tax charge or credit is recognized using the tax rates and tax laws that have been substantially enacted at the Balance Sheet date. Where there is unabsorbed depreciation or carry forward losses, Deferred Tax Assets are recognized only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such Deferred Tax Assets can be realized. Other Deferred Tax Assets are recognized only to the extent there is reasonable certainty of realization in future Undisputed assessment dues if any, are accounted on cash basis and disputed matters under appeal are disclosed by way of contingent liabilities.

XIII. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best 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 estimates.

Contingent Liability is disclosed in case of:

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

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

Contingent Assets are neither recognized nor disclosed.


Mar 31, 2013

I METHOD OF ACCOUNTING

a) The financial statements are prepared under the historical cost convention using accrual method of accounting, except as stated otherwise and for certain fixed assets which have been revalued.

b) Revenue from construction and project related activities is recognized as under:

In respect of construction business, the Company follows percentage completion method, stated on the basis of physical measurement of work actually completed at the balance sheet date, taking into account the contractual price and revision thereto. As per policy of the Company, in respect of running contracts, the revenue including escalation arrived on the basis of sales bills raised and/or unbilled work done is recognized as and when bills are raised and/or after inspection and the approval of the supplies by the customers as per the terms of respective contracts.

c) Income and expenses are mainly accounted on accrual basis except scrap and certain other income /expenses with significant uncertainties.

d) Amounts recoverable in respect of the price and other escalation, claims adjudication and variation in contract work required for performance of the contract are accounted to the extent that it is probable that they will result in revenue.

e) Contractual liquidated damages, payable for delays in completion of contract work or for other causes, are accounted for as costs when such delays and causes are attributable to the Company or when deducted by the client.

II USE OF ESTIMATES

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as on the date of financial statements and the reported income and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which results are known/ materialized.

III FIXED ASSETS

a) Certain premises and Plant & Machinery were revalued in March 1994 and are stated at such revalued amount less accumulated depreciation. Other assets are carried at cost less accumulated depreciation. Appropriate adjustment is made for any asset(s) disposed out of the revalued assets.

b) Cost includes Interest on specific borrowing relating to fixed assets acquisition, specific expenses pertaining to respective assets by the registered office, other indirect expenses pertaining to acquisition of assets on percentage basis as consistently followed in the previous year and incidental expenses incurred up to the date of commissioning are capitalized on the commencement of commercial production.

c) Self-manufactured assets are capitalized at cost including appropriate apportionment from overheads.

IV IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

V. DEPRECIATION

a) Depreciation is provided on straight line method according to the rates specified in Schedule XIV of Companies Act, 1956.

b) In respect of the assets purchased / sold during the year, pro rata depreciation based on number of days is provided.

c) Depreciation on assets costing up to Rs. 5,000/- is provided at the rate of 100%.

d) Depreciation on revalued assets has been provided on revalued amounts. Additional depreciation on revaluation is adjusted against transfer of equivalent amount from Revaluation Reserve.

VI INVESTMENTS

Investments are classified into Current Investments and Non Current Investments. Investments intended to be held for more than one year are classified as Non Current Investments. Current Investments are stated at lower of cost and fair value. Long Term Investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary in nature, in the value of Long-term Investments.

VII VALUATION OF INVENTORIES

a) Finished Goods (Prefabricated Goods)

Finished Goods are valued at Cost or Market Value whichever is lower.

b) Construction Materials

Stock of materials lying at store/sites has been valued at cost on first-in first-out basis, by the concerned store/site-in-charge.

Loose Tools are charged to Profit & Loss Account as and when purchased.

c) Work in Progress

Work in Progress is accounted on progressive basis.

VIII CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

Adjustment to Assets and liabilities are made for events occurring between balance sheet date and the date on which the financial statements are approved that provide additional information materially affecting the determination of the amounts relating to the conditions existing at the balance sheet date.

IX PRIOR PERIOD ITEMS

Prior period items are income and expenses that arises in the current period as a result of errors and omissions in the preparation of the financial statements of the one and more prior periods. Prior period does not include other adjustments necessitated by circumstances, which though related to prior periods, are determined in the current period.

X BORROWING COST

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Statement of Profit and Loss.

XI. RETIREMENT BENEFITS

a) Contributions to the provident fund, a defined contribution scheme, are charged to the Statement of Profit and Loss.

b) Gratuity has been accounted on actuarial valuation.

c) Presently, the Company does not have any other defined benefit for staff payable on retirement/ cessation of service.

XII EMPLOYEE BENEFITS

a) Short term employee benefits are recognized as expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss of the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit and Loss.

XIII. TAXATION

Income tax comprises of Current Tax and Deferred Tax. Current Tax is the amount of tax payable as determined in accordance with the provisions of Income Tax Act, 1961. Deferred Tax charge or credit is recognized using the tax rates and tax laws that have been substantially enacted at the Balance Sheet date. Where there is unabsorbed depreciation or carry forward losses, Deferred Tax Assets are recognized only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such Deferred Tax Assets can be realized. Other Deferred Tax Assets are recognized only to the extent there is reasonable certainty of realization in future

Undisputed assessment dues if any, are accounted on cash basis and disputed matters under appeal are disclosed by way of contingent liabilities.

XIV. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best 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 estimates.

Contingent Liability is disclosed in case of:

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

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

Contingent Assets are neither recognized nor disclosed.


Jun 30, 2010

I. METHOD OF ACCOUNTING & REVENUE RECOGNITION

a) The financial statements are prepared under the historical cost convention using accrual method of accounting, except as stated otherwise and for certain fixed assets which have been revalued.

b) Revenue from construction and project related activities is recognized as under -

In respect of construction business, the Company follows percentage completion method, stated on the basis of physical measurement of work actually completed at the balance sheet date, taking into account the contractual price and revision thereto. As per policy of the Company, in respect of running contracts, the revenue including escalation arrived on the basis of sales bills raised and/or unbilled work done is recognized as and when bills are raised and/or after inspection and the approval of the supplies by the customers as per the terms of respective contracts.

c) Income and expenses are mainly accounted on accrual basis except scrap, interest on call money in arrears and certain other income /expenses with significant uncertainties.

d) Amounts recoverable in respect of the price and other escalation, claims adjudication and variation in contract work required for performance of the contract are accounted to the extent that it is probable that they will result in revenue.

e) Contractual liquidated damages, payable for delays in completion of contract work or for other causes, are accounted for as costs when such delays and causes are attributable to the Company or when deducted by the client.

II. USE OF ESTIMATES

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as on the date of financial statements and the reported income and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which results are known/ materialized.

III. FIXED ASSETS

a) Certain premises and Plant & Machinery were revalued in March 1994 and are stated at such revalued amount less accumulated depreciation. Other assets are carried at cost less accumulated depreciation. Appropriate adjustment is made for any asset(s) disposed out of the revalued assets.

b) Cost includes Interest on specific borrowing relating to fixed assets acquisition, specific expenses pertaining to respective assets by the registered office, other indirect expenses pertaining to acquisition of assets on percentage basis as consistently followed in the previous year and incidental expenses incurred up to the date of commissioning are capitalized on the commencement of commercial production.

c) Self-manufactured assets are capitalized at cost including appropriate apportionment from overheads.

IV. IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which as asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

V. DEPRECIATION

a) Depreciation is provided on straight line method according to the rates specified in Schedule XIV of Companies Act, 1956.

b) In respect of the assets purchased / sold during the year, pro rata depreciation based on number of days is provided.

c) Depreciation on assets costing up to Rs. 5,000/- is provided at the rate of 100%.

d) Depreciation on revalued assets has been provided on revalued amounts. Additional depreciation on revaluation is adjusted against transfer of equivalent amount from Revaluation Reserve.

VI. INVESTMENTS

Investments intended to be held for more than one year are classified as long term investments and are carried at cost of acquisition inclusive of other attributable expenses or fair value whichever is lower. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature.

Current Investments are carried at lower of cost and fair value.

All Investments are of long-term nature and are stated at cost of acquisition.

VII. VALUATION OF INVENTORIES

a) Finished Goods(Prefabricated Goods)

Finished Goods are valued at Cost or Market Value whichever is lower.

b) Construction Materials

Stock of materials lying at store/sites has been valued at cost on first-in first-out basis, by the concerned store/site-in-charge.

Loose Tools are charged to Profit & Loss Account as and when purchased.

c) Work in Progress

Work in Progress is accounted on progressive basis.

VIII. AMORTISATION

Pre-operative and preliminary expenses are being amortised.

IX. CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

Adjustment to Assets and liabilities are made for events occurring between balance sheet date and the date on which the financial statements are approved that provide additional information materially affecting the determination of the amounts relating to the conditions existing at the balance sheet date.

X. PRIOR PERIOD ITEMS

Prior period items are income and expenses that arises in the current period as a result of errors and omissions in the preparation of the financial statements of the one and more prior periods. Prior period does not include other adjustments necessitated by circumstances, which though related to prior periods, are determined in the current period.

XI. BORROWING COST

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit and Loss account. There are no borrowings for any capital expenditure and hence above standard is not applicable.

XII. RETIREMENT BENEFITS

a) Contributions to the provident fund, a defined contribution scheme, are charged to the profit and loss account.

b) Gratuity has been accounted on actuarial valuation.

c) Presently, the Company does not have any other defined benefit for staff payable on retirement/ cessation of service.

XIII. EMPLOYEE BENEFITS

a) Short term employee benefits are recognized as expense at the undiscounted amount in the Profit and Loss account of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the profit and loss account of the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Profit and Loss account.

XIV. TAXATION

Income tax comprises Current tax and deferred tax. Current tax is the amount of tax payable as determined in accordance with the provisions of Income Tax Act, 1961. Deferred tax charge or credit is recognized using the tax rates and tax laws that have been enacted by the Balance Sheet date. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future Undisputed assessment dues if any, are accounted on cash basis and disputed matters under appeal are disclosed by way of contingent liabilities.

XV. PROVISIONS. CONTINGENT LIABILITIES AND CONTINGENT ASSETS

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best 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 estimates.

Contingent Liability is disclosed in case of-

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

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

Contingent Assets are neither recognized nor disclosed.

 
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