Provisions, Contingent liabilities and Contingent assets 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.

p) 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.

q) 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.

r) 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.