j) Provision
Provisions are recognized when the Company has a present obligation (legal or constructive),
as a result of past events, and it is probable that an outflow of resources, that can be reliably
estimated, will be required to settle such an obligation. If the effect of the time value of money
is material, provisions are discounted using a current pre-tax 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 recognised as a finance cost. Provisions are reviewed
at each reporting date and are adjusted to reflect the current best estimate.
k) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand and short-term money market
deposits with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of change in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and
short-term deposits, as defined above.
l) Provisions, contingent liabilities and contingent assets
The assessments undertaken in recognising provisions and contingencies have been made in
accordance with the applicable Ind AS.
Provisions represent liabilities for which the amount or timing is uncertain. Provisions are
recognized when the Company has a present obligation (legal or constructive), as a result of
past events, and it is probable that an outflow of resources, that can be reliably estimated, will
be required to settle such an obligation.
If the effect of the time value of money is material, provisions are determined by discounting
the expected future cash flows to net present value using an appropriate pre-tax discount rate
that reflects current market assessments of the time value of money and, where appropriate,
the risks specific to the liability. Unwinding of the discount is recognized in Statement of profit
and loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted to
reflect the current best estimate.
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 recognised 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 recognised
because it cannot be measured reliably. The Company does not recognize a contingent liability
but discloses its existence in the Balance Sheet.
In the normal course of business, contingent liabilities may arise from litigation and other claims
against the Company. There are certain obligations which management has concluded, based
on all available facts and circumstances, are not probable of payment or are very difficult to
quantify reliably, and such obligations are treated as Contingent liabilities and disclosed in the
notes but are not reflected as liabilities in the financial statements. Although there can be no
assurance regarding the final outcome of the legal proceedings in which the Company is
involved, it is not expected that such contingencies will have a material effect on its financial
position or profitability.
Contingent assets are not recognised but disclosed in the financial statements when an inflow
of economic benefit is probable.
The Company has significant capital commitments in relation to various capital projects which
are not recognized on the balance sheet but disclosed in the financial statement.
4. (II) CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
Standards issued but not yet effective
There are no new amendments proposed in the existing Ind AS.
5 (III) SIGNIFICANT ACCOUNTING ESTIMATE AND JUDGEMENT
The preparation of the standalone financial statements in conformity with Ind AS requires
management to make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amount of assets, liabilities, income, expenses and
disclosures of contingent liabilities at the date of these financial statements. Actual results may
differ from these estimates under different assumptions and conditions.
The management believes that the estimates used in preparation of the consolidated financial
statements are prudent and reasonable. Information about estimates and judgments made in
applying accounting policies that have the most significant effect on the amounts recognized
in the consolidated financial statements are as follows:
The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company's board
of directors has overall responsibility for the establishment and oversight of the Company's risk
management framework. This note explains the sources of risk which the entity is exposed to and how
the entity manages the risk and the related impact in the financial statements.
A Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market prices. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return. Market risk
comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price
risk and commodity risk. Financial instruments affected by market risk include loans and borrowings,
other financial liabilities and deposits.
i Liabilities
Interest rate risk exposure
The company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to
interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows
will fluctuate because of a change in market interest rates
ii Assets
The company’s fixed deposits are carried at fixed rate. Therefore not subject to interest rate risk as
defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate
because of a change in market interest rates
B Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations
associated with its financial liabilities that are settled by delivering cash or another financial asset. The
Company's approach to managing liquidity is to ensure as far as possible, that it will have sufficient
liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the
Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The
Company takes into account the liquidity of the market in which the entity operates.
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