12 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.

13 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.

14 CASH AND CASH EQUIVALENTS:

Cash and cash equivalents comprise cash on hand and
Cheque in hand, balance with bank, demand deposits with
banks and other short term highly liquid investments that
are readily convertible to known amounts of cash & which
are subject to an insignificant risk of changes in value
where it has a short maturity of three months or less from
the date of acquisition.

15 CASH FLOW STATEMENT:

Cash flows are reported using indirect method, whereby
net profit/loss before tax is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals
of past or future operating cash receipts or payments and
item of income or expenses associated with investing
or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are
segregated.

16 INVESTMENTS:

Investments, which are readily realizable and intended
to be held for not more than one year from the date
on which such investments are made, are classified as
current investments. All other investments are classified
as long-term investments.

17 GOVERNMENT GRANTS

Government grants related to assets are deducted from
the cost of the asset and amortised over the useful life
of the asset. Government grants related to income are
presented as an offset against the related expenditure, and
government grants that are awarded as incentives with no
ongoing performance obligations are recognised as other
income in the period in which the grant is received.

18 BORROWING COSTS

Borrowing costs include exchange differences arising
from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost.

Borrowing costs that are directly attributable to the
acquisition or construction of qualifying assets are

capitalised as part of the cost of such assets. A qualifying
asset is one that necessarily takes substantial period of time
to get ready for its intended use. Interest income earned on
the temporary investment of specific borrowings pending
their expenditure on qualifying assets is deducted from
the borrowing costs eligible for capitalisation. All other
borrowing costs are charged to the Statement of Profit
and Loss for the period for which they are incurred.

19 LEASES
As a Lessee
I. Operating Lease

Lease payments under an operating lease is recognised as
an expense in the statement of profit and loss on a straight
line basis over the lease term

As a Lessor
I. Operating Lease

Lease income from operating leases is recognised in the
statement of profit and loss on a straight line basis over
the lease term.