Provisions, contingent liabilities and contingent asset Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of
a past event and 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 discounted, if the effect of the time value of money is material, using pre-tax rates that
reflects the risks specific to the liability. When discounting is used, an increase in the provisions due to the
passage of time is recognised as finance cost. These provisions are reviewed at each Balance Sheet date
and adjusted to reflect the current best estimates.

Necessary provision for doubtful debts, claims, etc., are made if realisation of money is doubtful in the
judgement of the management.

Contingent liability

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 recognized 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 recognized because it cannot be measured reliably. Contingent liabilities are
disclosed separately.

Show cause notices issued by various Government authorities are considered for evaluation of contingent
liabilities only when converted into demand.

Contingent assets

Where an inflow of economic benefits is probable, the Company discloses a brief description of the nature
of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their
financial effect. Contingent assets are disclosed but not recognised in the financial statements.

r) Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances
with original maturity of less than 3 months, highly liquid investments that are readily convertible into cash,
which are subject to insignificant risk of changes in value.

s) Cash Flow Statement

Cash flows are presented using indirect method, whereby profit / (loss) before tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.

Bank borrowings are generally considered to be financing activities. However, where bank overdrafts which
are repayable on demand form an integral part of an entity's cash management, bank overdrafts are included
as a component of cash and cash equivalents for the purpose of Cash flow statement.

t) Earnings per share

"The basic earnings per share are computed by dividing the net profit for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period. Diluted EPS
is computed by dividing the net profit after tax by the weighted average number of equity shares considered
for deriving basic EPS and also weighted average number of equity shares that could have been issued
upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted
as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined
independently for each period presented. The number of equity shares and potentially dilutive equity shares
are adjusted for bonus shares, as appropriate"