Prithvi Information Solutions Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

Mar 31, 2013

A. Basis of preparation

The financial statements are prepared under the historical cost convention and the requirement of the Companies Act, 1956.

b. Use of estimates

The preparation of financial statements requires the management of the company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of financial statements and reported amounts of income and expenses during the year. Example of such estimates include provision for doubtful debts, employee benefits, provision for income taxes, useful lives of depreciable fixed assets and provisions for impairment.

c. Fixed Assets

Fixed assets are stated at cost/less accumulated depreciation. Costs include all expenses incurred to bring the assets to its present location and condition.

Individual assets costing Rs. 5,000/- or less are fully depreciated in the year of purchase.

e. Impairment

At each balance sheet date, the management reviews the carrying amounts of its assets to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss.

Recoverable amount is the higher of an asset''s net setting price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

f. Intangible assets

An intangible is recognised, where it is probable that future economic benefits attributable to the asset will accrue to the enterprise and the cost can be measured reliably. Intangible assets are stated at cost less accumulated amortisation.

g. Research and Development Costs

Research costs are expensed as incurred. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project.

h. Leases

Assets leased by the company in its capacity as lessee, where the company has substantially all the risks and rewards of ownership are classified as finance lease. Such lease are capitalised at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the profit & loss account on a straight line basis.

i. Investments

Investments are stated at cost, less provision for other than temporary diminution in value.

j. Inventories

Raw materials, sub-assemblies and components are carried at the lower of cost and net realisable value. Cost is determined on first in first out basis. Work-in-progress and finished goods are carried at lower of cost and net realisable value. Cost includes direct material and labour and a proportion of manufacturing overheads.

k. Revenue recognition

Revenues from contracts priced on a time and material basis are recognised when services are rendered and related costs are incurred.

Revenues from turn key contracts, which are generally time bound fixed priced contracts, are recognised over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion.

Revenues from the sale of equipment are recognised upon delivery to the customer.

I. Foreign currency transactions

Income and expenses in foreign currencies during a month are converted at projected exchange rates for the month. The projected exchange rates for the month are based on the closing exchange rates of the previous month. The assets and liabilities as at the end of a month are restated using the current month''s closing exchange rate and the exchange gain or loss arising on the restatement is recognised as income or expense in that month. The projected exchange rate is reviewed for any major fluctuation during the month.

m. Retirement and other employee benefits (Refer Note:27)

Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the Provident Fund authorities.

Gratuity liability is defined benefit obligations and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method.

Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

n. Income Taxes

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.

Deferred Tax expense or benefit is recognised on timing differences being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or subsequently enacted by the balance sheet date.

Minimum alternative tax (MAT) paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment of income tax liability, is considered as an asset if there is convincing evidence that the company will pay normal income tax after the tax holiday period. Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the company and the asset can be measured reliably.

o. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when the company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to,settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settLe the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. Contingent asset is neither recognised nor disclosed in the financial statements.

p. Cash and cash equivalents

The company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalents.

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Mar 31, 2010

A. Basis of preparation

The financial statements have been prepared to comply in all material respects with the Notified accounting standard by Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis and in accordance with the Accounting Principles Generally Accepted in India. The accounting policies have been consistently applied by the Company and except for the changes in accounting policy discussed more fully below, are consistent with those used in the previous year.

b. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

c. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

d. Depreciation

Depreciation is provided using the Straight Line Method (‘SLM’) as per the useful lives of the assets estimated by Management, or at the rates prescribed under schedule XIV of the Companies Act, 1956 whichever is higher as described below:

Individual assets costing 5,000 or less are fully depreciated in the year of purchase.

Intangible Assets are depreciated as per the Useful life of the Acquisiton period.

e. Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful Life.

f. Intangible assets

An intangible asset is recognized, where it is probable that future economic benefits attributable to the asset will accrue to the enterprise and the cost can be measured reliably.

Intangible assets are stated at cost less accumulated amortization.

Research and Development Costs

Research costs are expensed as incurred. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortized over the period of expected future sales from the related project, not exceeding ten years.

Software

Cost of software is amortized on straight line basis over the stipulated license period and for software without any stipulated license period.

g. Leases

Finance lease

Leases, which effectively transfer to the Company, substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are expensed as incurred.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Operating lease

Leases where the lessor effectively retains substantially all the risks and the benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss Account on a straight line basis over the lease term.

h. Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis.

Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

i. Inventories

Inventories are valued as follows:

Raw materials, components, stores and spares.

Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a first in first out basis.

Work-in-progress and finished goods

Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

j. Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Income from Services

Revenues from services are recognised pro-rata over the period of the contract as and when services are rendered.

- Time and material contracts- Revenues are recognised on the basis of time spent and duly approved by the respective customers.

- Fixed price contracts- Revenues are recognised on the basis of approval received from the respective customers.

- Unbilled revenue- Unbilled revenue related to project is valued based on internal timesheets or timesheets submitted by vendors for time and material contracts and for fixed price contracts based upon assessment of work done. Unbilled revenue recognised is subsequently billed to customer after receipt of approval.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends

Dividend from investments in Mutual Funds is recognised once the right to receive dividend is established.

k. Deferred Revenue Expenditure

Costs incurred in raising Foreign Currency Convertible Bonds are adjusted against Securities premium account.The Interest Provided on FCCB bonds payable on Yearly basis is adjusted against Securities premium Account.

l. Foreign currency transaction

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

Exchange Differences

Exchange differences arising on the settlement of monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

Forward Exchange Contracts not intended for trading or speculation purposes.

The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any

profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense for the year.

Translation of foreign branch

The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the company itself.

m. Retirement and other employee benefits

- Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the Provident Fund authorities.

- Gratuity liability is defined benefit obligations and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

- Short term compensated absences are provided for on based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method

- Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

n. Income taxes

Tax expense comprises of current, and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each balance sheet date the Company re- assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

o. Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted

average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

p. Provisions

A provision is recognised when the Company has a present obligation as a result of past event. It is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

q. Cash and Cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short- term investments with an original maturity of three months or less.

r. Derivative Instruments

As per the ICAI Announcement, accounting for derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the loss is charged to the income statement. Gains are ignored.

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Mar 31, 2009

A. Basis of consolidation

The Consolidated Financial Statements of Prithvi Information Solutions Limited ("PISL" or "the parent company") together with its subsidiaries and joint ventures (collectively termed as the Company" or "the Consolidated Entities" or "the Group") are prepared under the historical cost convention on accrual basis to comply in all material respects with the mandatory Accounting Standards ("AS") notified by Companies Accounting Standards Rules, 2006 using uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible in the same manner as the Companys separate financial statements. Difference in accounting policy which has not been adjusted has been disclosed separately.

Investments in consolidating entities, except where such investments are acquired with a view to their subsequent disposal in the immediate future (discussed more fully in Note 16), are accounted in accordance with accounting principles as defined under AS 21 "Consolidated Financial Statements", on a line by line basis, and AS 27 "Financial Reporting of Interests in Joint Ventures" using proportionate consolidation method.

AIL material inter-company balances and inter-company transactions and resulting unrealised profits are eliminated in full and unrealized losses are eliminated unless cost cannot be recovered.

The Joint Ventures which are in the form of "Jointly Controlled Entities" are not consolidated Also company has initiated legal action on the Management of M/s.Walking Sticks solutions ltd where the company has 67.44%stake. With no control on the Management the figures for 08-09 are not consolidated.

The Consolidated Financial Statements of the company have been prepared on the basis of the financial statements of the following subsidiaries and joint Ventures:

Names of the consolidated entities Country of incorporation % of-interest

Subsidiaries

Prithvi Solutions Inc. U.S.A 100%

b. Use of estimates

The preparation of financial statements in ¦ conformity with generally accepted

accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.

c. Changes in Accounting Policies

Adoption of Accounting Standard (AS) 15 (Revised) Employee Benefits

Till March 31 2007, the Company provided for gratuity based on AS15 Accounting for retirement "benefits in the financial statements of Employers. In the current year the Company has adopted the Accounting

Standard 15 (Revised) which is mandatory from accounting periods commencing on or after from December 7, 2006. Accordingly, the Company has provided for gratuity based on . actuarial valuation done as per projected unit credit method. Further in accordance with the transitional provision in the revised accounting standard, Rs.0.35 million (net of deferred tax of Rs.0.18 million) has been adjusted to the opening balance of Profit & Loss Account.

Accounting for Derivatives

As per the announcement of the Institute of Chartered Accountants of India; accounting for derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss is charged to the income statement. Net gains are ignored. In the previous year, no gains/ losses were recognised. Had the Company followed the previous year policy, the profit for the year would have been higher by Rs.309.55 million,

d. Fixed Assets

Fixed assets are stated -at cost, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any cost attributable to bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

e. Depreciation

Depreciation and amortization is provided using the Straight Line Method ("SLM"), except as stated in the Note 2, at the rates based, on useful lives of the assets estimated by management or at the rates prescribed under Schedule XIV of the Companies Act, 1956 whichever is higher, as mentioned below:

e. Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on the internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds -its recoverable amount. The recoverable amount is the greater of the assets net selling price and its value in use.

In assessing value in use, the estimated future cash, flows are discounted to their present value at the Weighted average cost of capital.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

g. Intangible Assets

An intangible asset is recognised, where it is probable that future economic benefits attributable to the asset will accrue to the enterprise and the cost can be measured reliably. Intangible assets are. stated at cost less accumulated amortisation. Goodwill arising on consolidation of acquired subsidiaries is carried at cost.

Research and Development Costs

Research costs are expensed as incurred, Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be . regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years.

Software

Cost of software is amortised on straight line basis over the stipulated license period and for software without any stipulated license period over 6.16 years.

Leases

Operating lease

Leases where the lessor effectively retains substantially all the risks and the benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the Profit & Loss Account on a straight line basis over the lease term.

i. Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

Inventories

Inventories are valued as follows:

Raw materials, components, stores and spares Lower of cost and net realisable value. However; materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a first in first out basis.

k. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue from traded goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Income from Services

Revenues from services are recognised pro- rata over the period of thecontract as and when services are rendered

Time and material contracts - Revenues are recognised on the basis of time spent and duly approved by the respective customers.. ® Fixed price-contracts- Revenues are recognised on the basis of approval received from the respective customers.

Unbilled revenue - Unbilled revenue related to project is valued based on internal timesheets or timesheets submitted by vendors for time and material contracts and,for fixed price contracts based upon, assessment of work done. Unbilled revenue recognised is subsequently billed to customer after receipt of approval.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends

Dividend from investments in Mutual Funds is recognised once the right to receive dividend is established.

l. Deferred Revenue Expenditure

Costs incurred in raising Foreign Currency Convertible Bonds are adjusted against Securities Premium Account.

m. Foreign currency transactions Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange differences

Exchange differences arising on the settlement of monetary items or on reporting companys monetary items at rates different from those at which they were initially recorded during the year or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise except those arising from investments in non-integral operations.

Exchange differences arising on a monetary item that, in substance, form part of the companys net investment in a non-integral foreign operation is accumulated in a foreign currency translation reserve in the financial statements until the disposal of the net investment, at which time they are recognised as income or as expenses.

Exchange- differences arising in respect of fixed assets acquired from outside India during the current year are recognised in the statement of Profit & Loss Account as against adjusted to cost of the asset until previous year. Exchange differences recorded in Profit & Loss Account was immaterial.

Forward Exchange Contracts not intended for trading or speculation purposes The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such

contracts are recognised in the statement of profit and toss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense for the year.

Translation of foreign branch

The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation are those of the Company itself.

n. Foreign currency translation

The reporting currency for PISL is Indian Rupee. The subsidiaries have been identified as non-integral operations as they accumulate cash and other monetary items, incur expenses, generate income and arrange borrowings, all substantially in their local currency. Assets and liabilities, both monetary and non-monetary of overseas subsidiaries are translated at the exchange rates as at the, date of balance sheet. Income and expenses are translated at the average exchange rate for the reporting year. Resultant currency translation exchange gain or loss is carried . as foreign currency translation reserve until the disposal of the net investment.

o. Retirement and other employee benefits

i. Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are charged to the Profit & Loss Account of the year. when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the Provident Fund authorities.

ii. Gratuity liability is defined benefit obligations and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

iii. Short term compensated absences are provided for on based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method.

iv. Actuarial gains/losses are immediately taken to Profit & Loss Account and are not deferred.

p. Income taxes

Tax expense comprises current, deferred taxes and fringe benefit tax. Current income tax and fringe benefit tax are measured at the amount expected to be paid to the tax authorities in accordance with the tax laws as applicable to the respective consolidated entities. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on. the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities across various countries of operation are not set off against each other as the company does not have a legal right to do so. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient.future taxable income will be available against which such deferred, tax assets can be realized.In situations where the company has unabsorbed depreciation or carry forward ,tax,losses, all deferred tax assets are recognised only if. there is virtual certainty supported by convincing evidence that they can be realized "against future taxable profits. At each balance sheet date the Company re1 assesses unrecognized deferred tax assets. It recognizes unrecognized deferred-tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable incqme will be available against which such deferred tax assets can be realized.

The carrying amount of deferred:tax assets are reviewed at each balance sheet date .The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually. certain, as the case may be, that sufficient future taxable income will be available. against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or-virtually certain,.as the case may be that sufficient future taxable income will be available.

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified year. In the year in which the Minimum Alternative tax

(MAT) credit becomes eligible to be recognized as an asset in accordance, with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Profit & Loss Account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified year.

q. Earnings per Share

Basic earnings per share is determined by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year.Diluted earnings per share is determined 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 as adjusted for weighted average number of potential equity shares outstanding during the year except to the effect that it is anti dilutive.

Provisions

A provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

r. Cash and cash equivalent

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short- term investments with an original maturity of three months or less.

s. Derivative instruments

As per the ICAI announcement, accounting for derivative contracts, other than those covered under AS-il, are marked to market on a portfolio basis, and the loss is charged to the income statement. Gains are ignored.