11. Provisions and Contingent Liabilities:

A provision is recognised if, as a result of past event, the Company has a present legal obligation that can be
estimated reliably and it is probable that an outflow of economic benefit will be required to settle the obligation.
Provisions are determined by the best estimate of outflow of economic benefits required to settle the obligation at
the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A
disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that
may, but probably will not, require an outflow of resources. Where there is possible obligation or present
obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

12. Earnings Per Share:

Basic Earnings per share is computed by dividing the net profit after tax by the weighted average number of equity
shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax
by the weighted average number of shares considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon conversion of all dilutive potential equity
shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually
issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares
are deemed converted as at the beginning of the period, unless issued at a later date. Dilutive potential equity
shares are determined independently for each period presented.

13. Operating Leases

Lease where the Lessor effectively retains substantially all the risks and benefits of ownership of the leased term,
are classified as operating lease. Operating lease payments are recognized as an expense in the Profit and Loss
Account on a straight-line basis.

14. Cash and Cash Equivalents:

Cash and cash equivalents comprise cash and cash deposits with banks. The Company considers all highly liquid
investments with an original maturity at a date of purchase of three months or less and that are readily convertible
to known amounts of cash to be cash equivalents. Other deposits with bank represent investments with an original
maturity at a date of purchase between 3 months and 12 months.

15. Foreign Currency Transactions

In preparing financial statements of the company, transactions in currencies other than the functional currency are
recorded at the rate of exchange Prevailing on the date of transaction. At the end of each reporting period, monetary
items denominated in foreign currencies are retranslated at the rates prevailing at the end of reporting period. Non¬
monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates
prevailing on the date when the fair value was determined. Exchange differences arising on the settlement of
monetary items, and on retranslation of monetary items are included in the statement of profit and loss for the
period Exchange differences arising on retranslation on non-monetary items carried at fair value are included in

statement of profit and loss for the period except for differences arising on the retranslation of non-monetary items
in respect of which gains and losses are recognised directly in other comprehensive income.

16. Inventories

Stock of Raw Materials, components and other stocks are valued at Cost (FIFO Basis) (net off CENVAT & GST
wherever applicable) Finished products including traded goods and work-in-process are valued at lower of cost
or net realizable value.

17. Borrowing Cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take Substantial period of time to get ready for their intended for use. Other income earned
on the temporary investment of specific borrowing pending their expenditure on qualifying assets is deducted
from the borrowing costs eligible for capitalisation.