xii. Contingent liabilities and provisions

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.

A disclosure is made for a contingent liability when there is a:

a) possible obligation, the existence of which will be confirmed by the occurrence/non-occurrence of one or
more uncertain events, not fully with in the control of the Company;

b) present obligation, where it is not probable that an outflow of resources embodying economic benefits will
be required to settle the obligation;

c) present obligation, where a reliable estimate cannot be made.

A provision is recognised when the Company has a present obligation as a result of past events, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation. Provisions are not disclosed to their
present value and are determined based on best estimates required to settle the obligation at the reporting
date. These estimates are reviewed at each reporting date and are adjusted to reflect the current best
estimates.