h) Provisions and contingent liabilities
Contingent Liabilities are disclosed in respect of:
a) A possible obligation that arises from past events but their existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or
b) A present obligation where it is not probable that an outflow of resources embodying economic benefit will be required to settle the obligations or a reliable estimate of the amount of obligation cannot be made.
c) Contingent Liabilities are considered only for items exceeding Rs.5 lakhs in each case. Contingent Liabilities in respect of show-cause notices are considered only when converted into demands. Capital Commitments are considered only for items exceeding Rs.1 lakh in each case.
A provision is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.
If the effect of the time value of money is material, provisions are discounted using a rate that reflects, when appropriate, the risks specific to the liability. When
......... discounting is used, the increase in the provision due to the passage of time is
. fecognized as a finance cost.
i) Accounting/ classification of expenditure and income
Insurance claims are accounted on acceptance basis.
All other claims/entitlements are accounted on the merits of each case/realization.
Income and expenditure of previous years which are considered to be insignificant are not considered for restatement of financial statements of previous years.
j) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares.
k) Cash and Cash equivalents
Cash and cash equivalents comprises cash in hand, cash at banks and demand deposit with banks which are Short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
l) Current / Non-current classification
Classification of current / non-current assets and liabilities in the Balance Sheet is based on principles as mentioned below:
An asset is treated as current when it is:
* Expected to be realised or intended to be sold or consumed in normal operating cycle;
• Held primarily for the purpose of trading;
' ; - • Expected to be realised within twelve months after the reporting period, or
• Cash or Cash Equivalents unless restricted from being exchanged or used for settlement of a liability arising at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is treated as current when it is:
• Expected to be settled in normal operating cycle;
• Held primarily for the purpose of trading;
Ý Due to be settled within twelve months after the reporting period, or
• Not granting any unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as non-current,
m) Cash Flows
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated. For the purpose of the Statement of Cash Flows, cash and cash equivalent consist of cash, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company's cash management.
|