Provisions, Contingent Liabilities and Contingent Assets
Provision is recognized when the Company has a present
obligation (legal or constructive) as a result of past events
and it is probable that the outflow of resources will be
required to settle the obligation and in respect of which
reliable estimates can be made.
A disclosure for contingent liability is made when there is a
possible obligation that may, but probably will not require
an outflow of resources. When there is a possible
obligation or a present obligation in respect of which the
likelihood of outflow of resources is remote, no provision/
disclosure is made. The Company does not recognize a
contingent liability but discloses its existence in the
financialstatements.
Contingent assets are not recognized in the financial
statements. Provisions and contingencies are reviewed at
each balance sheet date and adjusted to reflect the correct
management estimates.
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that
reflects, using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability.
Commitments include the amount of purchase order (net
of advances) issued to parties for completion of assets.
Provisions, contingent liabilities, contingent assets and
commitments are renewed at each balance sheet date.
3.13 Cash and Cash Equivalents
Cash and cash equivalent comprise cash on hand and
demand deposits with banks which are short-term, highly
liquid investments that are readily convertible into known
amounts of cash and which are subject to insignificant risk
ofchangesinvalue.
3.14 Exceptional items
Certain occasions, the size, type or incidence of an item of
income or expense, pertaining to the ordinary activities of
the Company is such that its disclosure improves the
understanding of the performance of the Company, such
income or expense is classified as an exceptional item and
accordingly, disclosed in the notes accompanying to the
financialstatements.
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