Accounting Policies of Aditya Ispat Ltd. Company

Mar 31, 2024

III. Significant Accounting Policies

a) Property, plant and equipment (PPE):

i) Recognition and measurement:

Property, Plant and Equipment are measured at cost, which includes capitalized borrowing cost. less
accumulated depreciation and accumulated impairment loss, if any. The cost of PPE includes freight, duties,
taxes and other incidental expenses related to the acquisition and construction of those PPE.

Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non¬
refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing
the item to its working condition for its intended use and estimated costs of dismantling and removing the item and
restoring the site on which it is located.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct
labor, any other costs directly attributable to bringing the item to working condition for its intended use, and estimated
costs of dismantling and removing the item and restoring the site on which it is located.

Capital work-in-progress includes cost of property, plant and equipment under installation/ under development as
at the balance sheet date. Advances paid towards the acquisition of property, plant and equipment outstanding at
each balance sheet date is classified as capital advances under other noncurrent assets.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted
for as separate items (major components) of property, plant and equipment.

ii) Transition to Ind AS:

On transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and
equipment recognised as atApril 1,2016, measured as per the previous GAAP, and use that carrying value as the
deemed cost of such property, plant and equipment.

iii) Subsequent expenditure:

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the
expenditure will flow to the Group.

iv) Depreciation

Depreciation on property, plant and equipment is charged on a Straight Line basis over the useful life of assets as
prescribed by Schedule II of Companies Act, 2013.

The estimated useful lives of items of property, plant and equipment for the current and comparative periods are
as follows:

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate. Based on technical evaluation and consequent advice, the management believes that its estimates
of useful lives as given above best represent the period over which management expects to use these assets.

Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (upto) the date on which asset is
ready for use (disposed of)

b) Impairment

i) Impairment of non-financial assets:

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories
and deferred tax assets) to determine whether there is any indication on impairment. If any such indication exists,
the Company estimates the recoverable amount of the asset.

The recoverable amount of an asset is the greater of its value in use or fair value less costs to sell. Value in use is
based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable amount.
Impairment losses are recognised in Statement of Profit and Loss.

In respect of assets for which impairment loss has been recognised in prior periods, the Company reviews at
each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment
loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a
reversal is made only to the extent that the assets carrying amount does not exceed the carrying amount that
would have been determined net of depreciation or amortisation, if no impairment loss had been recognised.

After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful
life.

c) Financial Instruments

A financial instrument is any contract that gives rise to a financial Asset of one entity and a financial liability or
equity instrument of another entity.

i. Initial recognition and measurement

The Company recognises financial assets and financial liabilities when it becomes a party to the contractual
provisions of the instrument. All financial assets and liabilities are recognised at fair value on initial recognition,
except for trade receivables which are initially measured at transaction price. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through
profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale of financial assets
are accounted for at trade date.

ii. Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

- Debt instruments at amortized cost

- Debt instruments at fair value through other comprehensive income (FVTOCI)

- Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

- Equity instruments measured at fair value through other comprehensive income (FVTOCI)

iii. Debt instruments at amortized cost

A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash
flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal
and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective
interest rate (EIR) method. Amortized cost is calculated by considering any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the
profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally
applies to trade and other receivables.

iv. Debt instrument at FVTOCI

A ''debt instrument'' is classified as at the FVTOCI if both of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling the
financial assets, and

b) The asset''s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at
fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the company
recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the P&L. On
derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to
P&L. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

v. Debt instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. The company has not designated
any debt instrument as at FVTPL.

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in
the P&L.

vi. Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for
trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable
election to present in other comprehensive income subsequent changes in fair value. The Company makes such
election on instrument to instrument basis. The classification is made on initial recognision and is irrevocable.
Equity Instruments included within the FVTPL Category are measured at fair value with all changes recognised in
the Statement of Profit and Loss.

vii. Financial Assets
Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets)
is primarily derecognized when:

- The rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement-
and either(a) the company has transferred substantially all the risks and rewards of the asset, or (b) the
company has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.

Impairment of financial assets

In accordance with Ind AS 109, the company applies expected credit loss (ECL) model for measurement and
recognition of impairment loss.

The company follows ''simplified approach'' for recognition of impairment loss allowance on:

- Trade receivables or contract revenue receivables; and

- All lease receivables resulting from transactions within the scope of IndAS 17

The application of simplified approach does not require the company to track changes in credit risk. Rather, it
recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

Financial assets measured as at amortized cost, contractual revenue receivables and lease receivables:

ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance
sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the company does
not reduce impairment allowance from the gross carrying amount.

viii. Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.

The company financial liabilities include trade and other payables
Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held
for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held
for trading are recognized in the profit or loss.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

d) Inventories:

Raw Materials, Stores and Spares are valued at Cost and finished goods are valued at lower of Cost or Net
Realizable Value, Cost of raw materials, stores & spares parts are ascertained on FIFO basis. Trading Goods are
valued at lower of cost or Net realizable value.

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Mar 31, 2014

A. Basis of accounting: The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956, except otherwise mentioned. The accounting policies have been consistently applied by the Company and are consistent with those in the previous years.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

b. Fixed Assets: Fixed Assets are stated at cost net of Cenvat less accumulated depreciation and impairment loss, if any. All costs till commencement of commercial production attributable to fixed assets are capitalised.

c. Capital work in Progress: All expenditure, including advance given for capital expenditure are accumulated and shown as capital work in progress until the assets are ready for commercial use. Assets under construction are not depreciated.

d. Depreciation on Fixed Assets (Other than lease hold land) is provided on straight line method at the rates and in the manner as prescribed under schedule XIV of the Companies Act, 1956 on pro-rata basis.

e. Impairment of Assets: The carrying amount of assets are reviewed at each balance sheet date to determine, if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value i.e net selling price or value in use, whichever is higher. An impairment loss, if any, is charged to profit & loss account in the year in which an asset is identified as impaired.

f. Inventories: Inventories are valued at cost or net realisable value whichever is less except scrap, which is valued at estimated realisable value. Excise duty on goods manufactured by the company is included as part of valuation of finished goods. Cost is determined using FIFO basis.

g. Turnover: Turnover is inclusive of sales tax and excise duty collected.

h. Taxes on Income: Provision for Income Tax is made for both current and deferred taxes. Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Deferred Tax resulting from ''timing difference'' between the book profit and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the assets will be realised in future.

i. Retirement and other Employee Benefits:

a. Defined Contribution Plans : The company makes defined contribution to E.S.I Scheme, which is recognised in the statement of profit & loss on accrual basis.

b. Defined Benefit Plan: Gratuity is a defined benefit scheme and is accounted based on actuarial valuation at the balance sheet date, carried out once in three years by an independent actuary.

c. Short Term Employee Benefits: All employee benefits which are wholly due within twelve months of rendering the services are recognised in the period in which the employee rendered the related services.

j. Provisions, Contingent Liabilities and Contingent Assets: The company creates a provision when there is a present obligation as a result of past events and it is probable that there will be outflow of resources and a reliable estimate of the obligation can be made of the amount of the obligation.

Contingent liabilities are not recognised but are disclosed in the notes to the financial statements. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that the outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent assets are neither recognised nor disclosed in the financial statements

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Mar 31, 2013

A. Basis of accounting: The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956, except otherwise mentioned. The accounting policies have been consistently applied by the Company and are consistent with those in the previous years.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current – non current classification of assets and liabilities.

b. Fixed Assets: Fixed Assets are stated at cost net of Cenvat less accumulated depreciation and impairment loss, if any. All costs till commencement of commercial production attributable to fixed assets are capitalised.

c. Capital work in Progress: All expenditure, including advance given for capital expenditure are accumulated and shown as capital work in progress until the assets are ready for commercial use. Assets under construction are not depreciated.

d. Depreciation on Fixed Assets (Other than lease hold land) is provided on straight line method at the rates and in the manner as prescribed under schedule XIV of the Companies Act, 1956 on pro-rata basis.

e. Impairment of Assets: The carrying amount of assets are reviewed at each balance sheet date to determine, if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value i.e net selling price or value in use, whichever is higher. An impairment loss, if any, is charged to profit & loss account in the year in which an asset is identified as impaired.

f. Inventories: Inventories are valued at cost or net realisable value whichever is less except scrap, which is valued at estimated realisable value. Excise duty on goods manufactured by the company is included as part of valuation of finished goods. Cost is determined using FIFO basis.

g. Turnover: Turnover is inclusive of sales tax and excise duty collected.

h. Taxes on Income: Provision for Income Tax is made for both current and deferred taxes. Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Deferred Tax resulting from ''timing difference'' between the book profit and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the assets will be realised in future.

i. Retirement and other Employee Benefits:

a. Defined Contribution Plans : The company makes defined contribution to E.S.I Scheme, which is recognised in the statement of profit & loss on accrual basis.

b. Defined Benefit Plan: Gratuity is a defined benefit scheme and is accounted based on actuarial valuation at the balance sheet date, carried out once in three years by an independent actuary.

c. Short Term Employee Benefits: All employee benefits which are wholly due within twelve months of rendering the services are recognised in the period in which the employee rendered the related services.

j. Provisions, Contingent Liabilities and Contingent Assets: The company creates a provision when there is a present obligation as a result of past events and it is probable that there will be outflow of resources and a reliable estimate of the obligation can be made of the amount of the obligation.

Contingent liabilities are not recognised but are disclosed in the notes to the financial statements. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that the outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent assets are neither recognised nor disclosed in the financial statements

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Mar 31, 2012

A. Basis of accounting: The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956, except otherwise mentioned. The accounting policies have been consistently applied by the Company and are consistent with those in the previous years.

For the year under consideration, the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company for presentation of its financial statements. The revised Schedule VI has a significant impact on the presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current – non current classification of assets and liabilities.

b. Fixed Assets: Fixed Assets are stated at cost net of Cenvat less accumulated depreciation and impairment loss, if any. All costs till commencement of commercial production attributable to fixed assets are capitalised.

c. Capital work in Progress: All expenditure, including advance given for capital expenditure are accumulated and shown as capital work in progress until the assets are ready for commercial use. Assets under construction are not depreciated.

d. Depreciation on Fixed Assets (Other than lease hold land) is provided on straight line method at the rates and in the manner as prescribed under schedule XIV of the Companies Act, 1956 on pro-rata basis.

e. Impairment of Assets: The carrying amount of assets are reviewed at each balance sheet date to determine, if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value i.e net selling price or value in use, whichever is higher. An impairment loss, if any, is charged to statement of profit & loss in the year in which an asset is identified as impaired.

f. Inventories: Inventories are valued at cost or net realisable value whichever is less except scrap, which is valued at estimated realisable value. Excise duty on goods manufactured by the company is included as part of valuation of finished goods. Cost is determined using FIFO basis.

g. Turnover: Turnover is inclusive of sales tax and excise duty collected.

h. Taxes on Income: Provision for Income Tax is made for both current and deferred taxes. Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Deferred Tax resulting from 'timing difference' between the book profit and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the assets will be realised in future.

i. Retirement and other Employee Benefits:

a. Defined Contribution Plans : The company makes defined contribution to E.S.I Scheme, which is recognised in the Statement of Profit & Loss on accrual basis.

b. Defined Benefit Plan: Gratuity is a defined benefit scheme and is accounted based on actuarial valuation at the balance sheet date, carried out once in three years by an independent actuary.

c. Short Term Employee Benefits: All employee benefits which are wholly due within twelve months of rendering the services are recognised in the period in which the employee rendered the related services.

j. Provisions, Contingent Liabilities and Contingent Assets: The company creates a provision when there is a present obligation as a result of past events and it is probable that there will be outflow of resources and a reliable estimate of the obligation can be made of the amount of the obligation.

Contingent liabilities are not recognised but are disclosed in the notes to the financial statements. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that the outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent assets are neither recognised nor disclosed in the financial Statements

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Mar 31, 2011

A. Basis of accounting: The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956, except otherwise mentioned. The accounting policies have been consistently applied by the Company and are consistent with those in the previous years.

b. Fixed Assets: Fixed Assets are stated at cost net of Cenvat less accumulated depreciation and impairment loss, if any. All costs till commencement of commercial production attributable to fixed assets are capitalised.

c. Capital work in Progress: All expenditure, including advance given for capital expenditure are accumulated and shown as capital work in progress until the assets are ready for commercial use. Assets under construction are not depreciated.

d. Depreciation on Fixed Assets (Other than lease hold land) is provided on straight line method at the rates and in the manner as prescribed under schedule XIV of the Companies Act, 1956 on pro-rata basis.

e. Impairment of Assets: The carrying amount of assets are reviewed at each balance sheet date to determine, if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value i.e net selling price or value in use, whichever is higher. An impairment loss, if any, is charged to profit & loss account in the year in which an asset is identified as impaired.

f. Inventories: Inventories are valued at cost or net realisable value whichever is less except scrap, which is valued at estimated realisable value. Excise duty on goods manufactured by the company is included as part of valuation of finished goods. Cost is determined using FIFO basis.

g. Turnover: Turnover is inclusive of sales tax and excise duty collected.

h. Taxes on Income: Provision for Income Tax is made for both current and deferred taxes. Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Deferred Tax resulting from 'timing difference' between the book profit and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the assets will be realised in future.

i. Retirement and other Employee Benefits:

a. Defined Contribution Plans : The company makes defined contribution to E.S.I Scheme, which is recognised in the Profit & Loss Account on accrual basis.

b. Defined Benefit Plan: Gratuity is a defined benefit scheme and is accrued based on actuarial valuation at the balance sheet date, carried out once in three years by an independent actuary.

c. Short Term Employee Benefits: All employee benefits which are wholly due within twelve months of rendering the services are recognised in the period in which the employee rendered the related services.

j. Provisions, Contingent Liabilities and Contingent Assets: The company creates a provision when there is a present obligation as a result of past events and it is probable that there will be outflow of resources and a reliable estimate of the obligation can be made of the amount of the obligation.

Contingent liabilities are not recognised but are disclosed in the notes to the financial statements. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but

probably will not, require an outflow of resources.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that the outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent assets are neither recognised nor disclosed in the financial statements

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Mar 31, 2010

A. Basis of accounting: The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956, except otherwise mentioned. The accounting policies have been consistently applied by the Company and are consistent with those in the previous years.

b. Fixed Assets: Fixed Assets are stated at cost net of Cenvat less accumulated depreciation and impairment loss, if any. All costs till commencement of commercial production attributable to fixed assets are capitalised.

c. Capital work in Progress: All expenditure, including advance given for capital expenditure are accumulated and shown as capital work in progress until the assets are ready for commercial use. Assets under construction are not depreciated.

d. Depreciation on Fixed Assets (Other than lease hold land) is provided on straight line method at the rates and in the manner as prescribed under schedule XIV of the Companies Act, 1956 on pro-rata basis.

e. Impairment of Assets: The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value i.e net selling price or value in use, whichever is higher. An impairment loss, if any, is charged to profit & loss account in the year in which an asset is identified as impaired.

f. Inventories: Inventories are valued at cost or net realisable value whichever is less except scrap, which is valued at estimated realisable value. Excise duty on goods manufactured by the company is included as part of valuation of finished goods. Cost is determined using FIFO basis.

g. Turnover: Turnover is inclusive of sales tax and excise duty collected.

h. Taxes on Income: Provision for Income Tax is made for both current and deferred taxes. Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Deferred Tax resulting from ‘timing difference between the book profit and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the assets will be realised in future.

i. Retirement and other Employee Benefits:

a. Defined Contribution Plans : The company makes defined contribution to E.S.I Scheme, which is recognised in the Profit & Loss Account on accrual basis.

b. Defined Benefit Plan: Gratuity is a defined benefit scheme and is accrued based on actuarial valuation at the balance sheet date, carried out by an independent actuary.

c. Short Term Employee Benefits: All employee benefits which are wholly due within twelve months of rendering the services are recognised in the period in which the employee rendered the related services.

j. Provisions, Contingent Liabilities and Contingent Assets: The company creates a provision when there is a present obligation as a result of past events and it is probable that there will be outflow of resources and a reliable estimate of the obligation can be made of the amount of the obligation.

Contingent liabilities are not recognised but are disclosed in the notes to the financial statements. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that the outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent assets are neither recognised nor disclosed in the financial statements