Accounting Policies of Citi Port Financial Services Ltd. Company

Mar 31, 2024

2. Material Accounting Policies:

2.1 Basis of preparation:

These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS)
notified under section 133 of the Companies Act, 2013 (''the Act'') read together with the Companies
(Indian Accounting Standards) Rules, 2015, as amended from time to time, other relevant provisions of the
Act and the RBI guidelines/regulations to the extent applicable on an accrual basis.

The financial statements have been prepared on a historical cost basis, except for certain financial assets
and financial liabilities that are measured at fair value.

Summary of material accounting policies

On 31 March 2023, the Ministry of Corporate Affairs notified Companies (Indian Accounting Standards)
Amendment Rules, 2023 amending the Companies (Indian Accounting Standards) Rules, 2015. The amend¬
ments come into force with effect from 1 April 2023, i.e., Financial Year 2023-24. One of the major changes
is in Ind AS 1 ''Preparation of Financial Statements, which requires companies to disclose in their financial
statements ''material accounting policies'' as against the erstwhile requirement to disclose ''significant ac¬
counting policies''. The word ''significant'' is substituted by ''material''.

Accounting policy information is expected to be material if users of an entity''s financial statements would
need it to understand other material information in the financial statements.

The Company applied the guidance available under paragraph 117B of Ind AS 1, Presentation of Financial
Statements in evaluating the material nature of the accounting policies.

2.2 Presentation of financial statements:

The Balance Sheet, Statement of changes in Equity for the year and the Statement of Profit and Loss are
prepared and presented in the format prescribed in the Division III of Schedule III to the Companies Act,
2013 ("the Act") applicable for Non-Banking Finance Companies ("NBFC"). The Statement of Cash Flows
has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash Flows". The
disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as
prescribed in the Schedule III to the Act, are presented by way of Notes forming part of standalone financial
statements along with the other notes required to be disclosed under the notified accounting Standards and
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Amounts in the financial statements are presented in Indian Rupees in lakhs rounded off to two decimal
places as permitted by Schedule III to the Companies Act, 2013. Per share data are presented in Indian
Rupee to two decimal places.

2.3 Financial instruments:

(i) Classification of financial Instruments

Financial assets and financial liabilities are recognised in the Company''s balance sheet when the Company
becomes a party to the contractual provisions of the instrument. recognised financial assets and financial
liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisi¬
tion or issue of financial assets and financial liabilities (other than financial assets and financial liabilities
at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial
assets or financial liabilities at FVTPL are recognised immediately in profit or loss. A financial asset and a
financial liability is offset and Notes forming part of standalone financial statements presented on net basis
in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and
it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously:

a. Financial Assets:

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset. Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e.,
the date that the Company commits to purchase or sell the asset.

Subsequent measurement

(i) Debt instrument at FVTPL

Debt instruments included within the FVTPL category are measured at fair value with all changes recognised
in the statement of profit and loss. The Company has not designated any debt instrument as at FVTPL.

(ii) Investment in Preference Shares and Unquoted trade Investments

Investment in Preference Shares and Unquoted trade Investments are measured at amortised cost using
Effective Rate of Return (EIR).

(iii) Investment in equity instruments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held
for trading and contingent consideration recognised by an acquirer in a business combination to which Ind
AS103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an
irrevocable election to present in other comprehensive income subsequent changes in the fair value. The
Company makes such election on an instrument by-instrument basis. The classification is made on initial
recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI
to the statement of profit and loss, even on sale of investment. However, the Company may transfer the
cumulative gain or loss within equity.

Equity instruments i.e., investments in equity shares within the FVTPL category are measured at fair value
with all changes recognised in the statement of profit and loss.

(iv) Investments in subsidiaries

Investments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an
indication of impairment exists, the carrying amount of the investment is assessed and written down
immediately to its recoverable amount. On disposal of investments in subsidiaries and joint venture, the
difference between net disposal proceeds and the carrying amounts are recognized in the statement of
profit and loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e., removed from the Company''s balance sheet) when:

(i) The rights to receive cash flows from the asset have expired, or

(ii) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a ''pass-through''
arrangement? and either (a) the Company has transferred substantially all the risks and rewards of the
asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of
the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor
transferred control of the asset, the Company continues to recognise the transferred asset to the extent of
the Company''s continuing involvement. In that case, the Company also recognises an associated liability.
The transferred asset and the associated liability are measured on a basis that reflects the rights and
obligations that the Company has retained.

b. Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans
and borrowings and payables, net of directly attributable transaction costs.

The Company''s financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts, financial guarantee contracts.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

(i) Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised
cost using the EIR method. Gains and losses are recognised in the statement of profit and loss when the
liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of
profit and loss.

2.4 Impairment:

The Company recognises loss allowances for ECLs on the following financial instruments that are not
measured at FVTPL:

• Loans and advances to customers

• Debt investment securities

• Trade and other receivable

• Lease receivables

• Irrevocable loan commitments issued and

• Financial guarantee contracts issued
Credit-impaired financial assets:

financial asset is ''credit-impaired'' when one or more events that have a detrimental impact on the esti¬
mated future cash flows of the financial asset have occurred. Credit-impaired financial assets are referred
to as Stage 3 assets. Evidence of credit impairment includes observable data about the following events:

• significant financial difficulty of the borrower or issuer

• a breach of contract such as a default or past due event

• the lender of the borrower, for economic or contractual reasons relating to the borrower''s financial
difficulty, having granted to the borrower a concession that the lender would not otherwise consider

• the disappearance of an active market for a security because of financial difficulties; or Notes forming
part of standalone financial statements

• the purchase of a financial asset at a deep discount that reflects the incurred credit losses.

It may not be possible to identify a single discrete event-instead; the combined effect of several events may
have caused financial assets to become credit-impaired. The Company assesses whether debt instruments
that are financial assets measured at amortised cost or FVTOCI are credit-impaired at each reporting date.
To assess if corporate debt instruments are credit impaired, the Company considers factors such as bond
yields, credit ratings and the ability of the borrower to raise funding.

A loan is considered credit-impaired when a concession is granted to the borrower due to a deterioration in
the borrower''s financial condition, unless there is evidence that as a result of granting the concession the
risk of not receiving the contractual cash flows has reduced significantly and there are no other indicators
of impairment. For financial assets where concessions are contemplated but not granted the asset is
deemed credit impaired when there is observable evidence of credit-impairment including meeting the
definition of default. The definition of default (see below) includes unlikeliness to pay indicators and a back¬
stop if amounts are overdue for more than 90 days. The 90-day criterion is applicable unless there is
reasonable and supportable information to demonstrate that a more lagging default criterion is more
appropriate.

Definition of default:

Critical to the determination of ECL is the definition of default. The definition of default is used in measuring
the amount of ECL and in the determination of whether the loss allowance is based on 12-month or lifetime
ECL, as default is a component of the probability of default (PD) which affects both the measurement of
ECLs and the identification of a significant increase in credit risk. The Company considers the following as
constituting an event of default:

• the borrower is past due more than 90 days on any material credit obligation: or

• the borrower is unlikely to pay its credit obligations to the Company in full.

When assessing if the borrower is unlikely to pay its credit obligation, the Company takes into account both
qualitative and quantitative indicators. The information assessed depends on the type of the asset. Quan¬
titative indicators, such as overdue status and non-payment on another obligation of the same counterparty
are key inputs in this analysis.

The Company uses a variety of sources of information to assess default which are either developed
internally or obtained from external sources. The definition of default is applied consistently to all financial
assets unless information becomes available that demonstrates that another default definition is more
appropriate for a particular financial asset.

Significant increase in credit risk:

The Company monitors all financial assets and Corporate Overview Reports financial guarantee contracts
that are subject to the impairment requirements to assess whether there has been a significant increase
in credit risk since initial recognition. If there has been a significant increase in credit risk the Company will
measure the loss allowance based on lifetime rather than 12-month ECL.

2.5 Cash & Cash Equivalents

Cash and bank balances comprise of cash balance in hand, in current accounts with banks, demand deposit,
short-term deposits, Margin Money deposits and unclaimed dividend accounts. For this purpose, "short¬
term" means investments having maturity of three months or less from the date of investment. Bank
overdrafts that are repayable on demand and form an integral part of our cash management are included
as a component of cash and cash equivalents for the purpose of the statement of cash flows. The Margin
money deposits and unclaimed dividend balances shall be disclosed as restricted cash balances.

2.6 Employee Benefits

a. Short term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised
for the amount expected to be paid if the Company has a present legal or constructive obligation to pay
this amount as a result of past service provided by the employee and the obligation can be estimated
reliably.

b. Defined Contribution Plan

The Company''s contributions to defined contribution plans are charged to the statement of profit and
loss as and when the services are received from the employees.

c. Defined Benefit Plans

The liability in respect of defined benefit plans and other post-employment benefits is calculated using
the projected unit credit method consistent with the advice of qualified actuaries. The present value of
the defined benefit obligation is determined by discounting the estimated future cash outflows using
interest rates based on prevailing market yields of Indian Government Bonds and that have terms to
maturity approximating to the terms of the related defined benefit obligation. The current service cost
of the defined benefit plan, recognised in the statement of profit and loss in employee benefit expense,
reflects the increase in the defined benefit obligation resulting from employee service in the current
year, benefit changes, curtailments and settlements. Past service costs are recognised immediately in
income. The net interest cost is calculated by applying the discount rate to the net balance of the
defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit
expense in the statement of profit and loss. Actuarial gains and losses arising from experience adjust¬
ments and changes in actuarial assumptions are charged or credited to equity in other comprehensive
income in the period in which they arise.

d. Termination benefits

Termination benefits are recognized as an expense when the Company is demonstrably committed,
without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment
before the normal retirement date, or to provide termination benefits as a result of an offer made to
encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognized as

an expense if the Company has made an offer encouraging voluntary redundancy, it is probable that
the offer will be accepted, and the number of acceptances can be estimated reliably.

e. Other long-term employee benefits

The Company''s net obligation in respect of other long term employee benefits is the amount of future
benefit that employees have earned in return for their service in the current and previous periods.
That benefit is discounted to determine its present value. Re-measurements are recognized in the
statement of profit and loss in the period in which they arise.

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Mar 31, 2014

1. Basis of accounting

The Financial Statements are prepared under historical cost convention on the basis of going concern and as per Accounting Standards notified under Section 211(3C) of the Companies Act, 1956.The Company follows the Accrual system of Accounting and Prudential Norms prescribed by Reserve Bank of India consistently from year to year.

2. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Although these estimates are based upon management''s knowledge of current events and actions, actual results could differ from those estimates and revisions, if any, are recognized in the current and future periods.

3. Intangible assets and amortization

Softwares which are not integral part of the hardware are classified as intangibles and is stated at cost less accumulated amortization. Softwares are being amortized over the estimated useful life of 5 years.

4. Fixed assets and depreciation / amortization

Fixed Assets (Gross Block) are stated at historical cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Building/specific identifiable portion of Building, including related equipments are capitalized when the construction is substantially complete or upon receipt of the occupancy certificate, whichever is earlier. Depreciation on assets is provided on straight-line method at the rates and in the manner prescribed in schedule XIV to the Companies Act, 1956.

5. Investments

Current investments are stated at lower of cost and fair value. Long-term investments are stated at cost and provision for diminution in value, other than temporary, is considered wherever necessary. Profit / loss on sale of investments is computed with reference to the average cost of the investment.

6. Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company the revenue can be reliably measured on mercantile basis.

7. Borrowing costs

Borrowing costs that are attributable to the acquisition and / or construction of qualifying assets are capitalized as part of the cost of such assets, in accordance with Accounting Standard AS-16 -

"Borrowing Costs". A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. Capitalisation of Borrowing Costs is suspended in the period during which the active development is delayed due to, other than temporary interruption. All other borrowing costs are charged to the profit & loss account as incurred.

8. Taxation

Provision for tax for the year comprises current income tax and deferred tax. Current income tax is determined in respect of taxable income with deferred tax being determined as the tax effect of timing differences representing the difference between taxable income and accounting income that originate in one period, and are capable of reversal in one or more subsequent period(s). Such deferred tax is quantified using rates and laws enacted or substantively enacted as at the end of the financial year.

9. Foreign currency transactions

Transactions in foreign currency and nonmonetary assets are accounted for at the exchange rate prevailing on the date of the transaction. All monetary items denominated in foreign currency are converted at the yearend exchange rate. As specified under Accounting Standard (AS-11) - Effects of Changes in Foreign Exchange Rates, the exchange gain/loss on transaction with regard to the Fixed Assets has been capitalized along with Fixed Assets. The other exchange gains related to current assets has been charged to the profit & loss account

10. Employees benefits

Expenses and liabilities in respect of employee benefits are recorded in accordance with Revised Accounting Standard 15 - Employee Benefits (Revised 2005) issued by the Institute of Chartered Accountants of India (the "ICAI").

(i) Provident fund

The Company makes contribution to statutory provident fund in compliance with the Employees Provident Fund and Miscellaneous Provision Act, 1952. In terms of the Guidance on implementing the revised AS - 15, issued by the Accounting Standard Board of the ICAI, contribution made towards statutory provident fund is treated as a defined benefit plan. Accordingly, the contribution paid or payable and the interest shortfall, if any, is recognized as an expense in the period in which services are rendered by the employee.

i) Gratuity

Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of gratuity is the present value of the defined benefit / obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. The defined benefit / obligation is provided at or near the balance sheet date by an independent actuary using the projected unit credit method. Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to the profit & loss account in the year in which such gains or losses are determined.

(iii) Compensated absences

Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognized on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees.

(iv) Other short term benefits

Expense in respect of other short-term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.

11. Leases

Assets subject to operating leases are included under fixed assets or current assets as appropriate. Rent (Lease) income is recognized in the profit & loss account on a straight-line basis over the lease term. Costs, including depreciation, are recognized as an expense in the profit & loss account.

12. Impairment of assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognized in the profit & loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost and is accordingly reversed in the profit & loss account.

13. Provisions, Contingent Liabilities & Contingent Assets:

Depending upon the facts of each case and after due evaluation of legal aspects, claims against the Company are accounted for as either provisions or disclosed as contingent liabilities. In respect of statutory dues disputed and contested by the Company, contingent liabilities are provided for and disclosed as per original demand without taking into account any interest or penalty that may accrue thereafter. The Company makes a provision when there is a present obligation as a result of a past event where the outflow of economic resources is probable and a reliable estimate of the amount of obligation can be made. Possible future or present obligations that may but will probably not require outflow of resources or where the same cannot be reliably estimated, is disclosed as contingent liability in the Financial Statements. Contingent Assets are neither recognized or nor disclosed in the financial statements.

14. Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events including a bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). 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.

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Mar 31, 2010

1. Basis of accounting

The Financial Statements are prepared under historical cost convention, on accrual basis, in accordance with the generally accepted accounting principles of India and to comply with the Accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government in exercise of the power conferred under sub-section (I) (a) of Section 642 and the relevant provisions of the Companies Act, 1956 (the "Act").

2. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting prin- ciples requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements and the results of operations during the reporting periods. Although these estimates are based upon managements knowledge of current events and actions, actual results could differ from those estimates and revisions, if any, are recognized in the current and future periods.

3. Intangible assets and amortization

Software which are not integral part of the hardware are classified as intangibles and is stated at cost less accumulated amortisation. Softwares are being amortised over the estimated useful life of 5 years.

4. Fixed assets and depreciation / amortization

a) Fixed assets (gross block) are stated at historical cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Building / specific identifiable portion of Building, includ- ing related equipments are capitalized when the construction is substantially complete or upon receipt of the occupancy certificate, whichever is earlier. Depreciation on assets is provided on straight-line method at the rates and in the manner prescribed in schedule XIV to the Companies Act, 1956.

5. Investments

Current investments are stated at lower of cost and fair value. Long-term investments are stated at cost and provision for diminution in their value, other than temporary, is made in the accounts. Profit / loss on sale of investments is computed with reference to the average cost of the invest- ment.

6. Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company the the revenue can be reliably measured on mercantile basis.

7. Borrowing costs

Borrowing costs that are attributable to the acquisition and / or construction of qualifying assets are capitalized as part of the cost of such assets, in accordance with Accounting Standard AS-16 - "Borrowing Costs". A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. Capitalisation of borrowing costs is suspended in the period during which the active development is delayed due to, other than temporary interruption. All other borrowing costs are charged to the profit & loss account as incurred.

8. Taxation

Provision for tax for the year comprises current income tax, deferred tax and fringe benefit tax. Current income tax is determined in respect of taxable income with deferred tax being deter- mined as the tax effect of timing differences representing the difference between taxable income and accounting income that originate in one period, and are capable of reversal in one or more subsequent period(s). Such deferred tax is quantified using rates and laws enacted or substan- tively enacted as at the end of the financial year.

9. Foreign currency transactions

Transactions in foreign currency and nonmonetary assets are accounted for at the exchange rate prevailing on the date of the transaction. All monetary items denominated in foreign currency are converted at the yearend exchange rate. As specified under Accounting Standard - Changes in Foreign Exchange Rates (AS)-ll, the exchange gain /loss on transaction with regard to the Fixed Assets has been capitalized along with Fixed Assets. The other exchange gains related to current assets has been charged to the profit & loss account

10. Employees benefits

Expenses and liabilities in respect of employee benefits are recorded in accordance with Revised Accounting Standard 15 - Employee Benefits (Revised 2005) issued by the Institute of Chartered Accountants of India (the "ICAI").

(i) Provident fund

The Company makes contribution to statutory provident fund in compliance with the Employees Provident Fund and Miscellaneous Provision Act, 1952. In terms of the Guidance on implement- ing the revised AS - 15, issued by the Accounting Standard Board of the ICAI, contribution made towards statutory provident fund is treated as a denned benefit plan. Accordingly, the contribu- tion paid or payable and the interest shortfall, if any is recognized as an expense in the period in which services are rendered by the employee.

(ii) Gratuity

Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of gratuity is the present value of the defined benefit / obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. The defined benefit / obligation is provided at or near the balance sheet date by an independent actuary using the projected unit credit method. Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to the profit & loss account in the year in which such gains or losses are determined.

(iii) Compensated absences

Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognized on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employ- ees.

(iv) Other short term benefits

Expense in respect of other short-term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.

11. Leases

Assets subject to operating leases are included under fixed assets or current assets as appropri- ate. Rent (Lease) income is recognized in the profit & loss account on a straight-line basis over the lease term. Costs, including depreciation, are recognized as an expense in the profit & loss account.

12. Impairment of assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash gen- erating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognized in the profit & loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost and is accordingly reversed in the profit & loss account.

13. Contingent liabilities and provisions

Depending upon the facts of each case and after due evaluation of legal aspects, claims against the Company are accounted for as either provisions or disclosed as contingent liabilities. In respect of statutory dues disputed and contested by the Company contingent liabilities are provided for and disclosed as per original demand without taking into account any interest or penalty that may accrue thereafter. The Company makes a provision when there is a present obligation as a result of a past event where the outflow of economic resources is probable and a reliable estimate of the amount of obligation can be made. Possible future or present obligations that may but will probably not require outflow of resources or where the same cannot be reliably estimated, is dis- closed as contingent liability in the Financial Statements.

14. Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are ad- justed for events including a bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). 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.