2.12 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.

2.13 Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year.

2.14 Cash, Cash Equivalents and Bank Balances

Cash, Cash Equivalents and Bank Balances for the purpose of Cash Flow Statement comprise Cash at Bank,
Cash in Hand, Cheques / Drafts in Hand, Deposits with Bank within 12 months maturity and other permissible
instruments as per Accounting Standard AS-3.

2.15 Borrowing Cost:

Borrowing Cost attributable to the acquisition or construction of a qualifying asset is capitalized as part of the
cost of the asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

2.16 Segment Information:

Based on the principles for determination of segments given in Accounting Standard 17 “Segment Reporting”
issued by accounting standard notified by Companies (Accounting Standard) Rules, 2008, the Company is
mainly engaged in the activity surrounded with main business of the Company hence there is no reportable
segment.

2.17 Prior Period Expenditure:

The change in estimate due to error or omission in earlier period is treated as prior period items. The items in
respect of which liability has arisen/crystallized in the current year, though pertaining to earlier year is not
treated as prior period expenditure.

2.18 Extra Ordinary Items:

The income or expenses that arise from event or transactions which are clearly distinct from the ordinary
activities of the Company and are not recurring in nature are treated as extra ordinary items. The extra ordinary
items are disclosed in the statement of profit and loss as a part of net profit or loss for the period in a manner
so as the impact of the same on current profit can be perceived.