Accounting Policies of Rajasthan Cylinders & Containers Ltd. Company

Mar 31, 2024

Note 2 MATERIAL ACCOUNTING POLICIES

2.1 Basis of Preparation of Accounts

2.1. a The financial statements have been prepared in accordance with Indian Accounting Standards

(Ind AS) as prescribed under section 133 of the companies Act, 2013 (the Act) read with
Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant
provisions of the Act.

2.1. b The financial statements are prepared and presented on accrual basis and under the historical

cost convention, except for the following material items that have been measured at fair value as
required by the relevant Ind AS:

(i) Financial instruments measured at fair value through Profit and Loss.

(ii) Financial instruments measured at fair value through other comprehensive income.

(iii) Defined benefit plans measured at fair value through other comprehensive income.

2.2 Recent Accounting Developments

The following Indian Accounting Standards have been modified on miscellaneous issues with
effect from April 1, 2023. Such changes include clarification/ guidance on:

a. Ind AS 107 - Financial Instruments: Disclosures- Information about the measurement
basis for financial instruments shall be disclosed as part of material accounting policy
information.

b. Ind AS 1 - Presentation of Financial Statements - Material accounting policy information
(including focus on how an entity applied the requirements of Ind AS) shall be disclosed
instead of significant accounting policies as part of financial statements.

c. Ind AS 8 - Accounting policies, changes in accounting estimate and errors - Clarification
on what constitutes an accounting estimate provided.

d. Ind AS 12 - Income Taxes - In case of a transaction which give rise to equal taxable and
deductible temporary differences, the initial recognition exemption from deferred tax is
no longer applicable and deferred tax liability & deferred tax asset shall be recognized
on gross basis for such cases.

None of the above amendments had any material effect on the company''s financial statements,
except for disclosure of Material Accounting Policies instead of Significant Accounting Policies in
the Financial Statements.

2.3 Functional and Presentation Currency

The financial statements are prepared in Indian Rupees ("INR") which is the Company''s
presentation currency and the functional currency for all its operations. All financial information
presented in INR has been rounded to the nearest lakhs with two decimal places unless stated
otherwise.

2.4 Use of Estimates and critical accounting judgments

The preparation of the financial statements in conformity with Ind AS requires management to
make estimates, judgments and assumptions that affect the application of accounting policies
and the reported amounts of assets and liabilities, the disclosures of contingent assets and
liabilities at the date of the financial statements and reported amounts of revenues and expenses
during the reporting period. The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to the accounting estimates are recognised in the period in which the
estimate is revised and future periods affected.

Critical estimates and judgments

i. Property , plant and equipment

Useful lives of PPE is based on the life prescribed in Schedule II of the Companies Act, 2013.
The Company reviews its estimate of the useful lives of PPE at each reporting date, based on
the expected utility of the assets.

ii. Recognition of deferred tax assets

The extent to which deferred tax assets can be recognised is based on an assessment of the
probability of the future taxable income against which the deferred tax assets can be utilized.

iii. Recognition and measurement of defined benefit obligations

The obligation arising from defined benefit plan is determined on the basis of actuarial
assumptions. Key actuarial assumptions include discount rate, trends in salary escalation and
vested future benefits and life expectancy.

iv. Provisions and contingent liabilities

The Company exercises judgment in measuring and recognizing provisions and the
exposures to contingent liabilities related to pending litigation or other outstanding claims
subject to negotiated settlement, mediation, arbitration or government regulation, as well as
other contingent liabilities. Judgment is necessary in assessing the likelihood that a pending
claim will succeed, or a liability will arise, and to quantify the possible range of the financial
settlement. Because of the inherent uncertainty in this evaluation process, actual losses may
be different from the originally estimated provision.

v. Fair Value Measurements

Management applies valuation techniques to determine the fair value of financial
instruments (where active market quotes are not available). This involves developing
estimates and assumptions consistent with how market participants would price the
instrument.

2.5 Classification of Assets and Liabilities as Current and Non-Current

All Assets and Liabilities have been classified as current or non-current as per the Company''s
normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013.
Based on the nature of product & activities of the Company and their realization in cash and cash
equivalent, the Company has determined its operating cycle as 12 months for the purpose of
current and non-current classification of assets and liabilities.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

2.6 Revenue Recognition

Revenue is measured based on transaction price received or receivable, net of returns and
rebates. The Company recognises revenue when the amount of revenue can be reliably
measured, it is probable that future economic benefits will flow to the entity.

Value added tax (VAT)/ Goods and Service tax (GST) is not received by the Company on its own
account. Rather, it is tax collected on value added to the commodity by the seller on behalf of the
government. Accordingly, it is excluded from revenue.

Sale of goods/ Other Operating Income

Revenue from sale of products is recognised when the significant risks and rewards in respect of
ownership of products are transferred by the Company as well as the controls on the goods have
been transferred to the customer. The performance obligation in case of sale of product is
satisfied at a point in time i.e., when the material is shipped to the customer or on delivery to the
customer, as may be specified in the contract.

Interest income

Interest income is recognised on time proportionate basis taking into account the amount
invested and the rate of interest. For all interest bearing financial assets measured at amortised
cost, interest income is recorded using the effective interest rate (EIR).

Rendering of Services

Revenue from rendering of services is recognised when the performance of agreed contractual
task has been completed.

Dividend income

Dividend income from investments is recognised when the shareholder''s right to receive
payment has been established.

Rental Income

Rental income is recognised on accrual basis in accordance with agreement.

2.7 Inventories

Raw Material, Stores & Spares including packing material, Work In Progress, Finished Goods and
Scrap are valued at the lower of cost and net realisable value. Cost is determined on weighted
average basis.

In respect of Raw materials, Stores & Spares including Packing material: Cost includes cost of
purchase and other costs incurred in bringing the inventories to their present location and
condition.

In respect of Finished goods and work in progress: Cost includes cost of materials, labour and
those overheads that have been incurred in bringing the inventories to their present location and
condition.

Net realisable value is the price at which the inventories can be realised in the normal course of
business after allowing for the cost of conversion from their existing state to a finished condition
and for the cost of marketing, selling and distribution.

2.8 Property, Plant & Equipment

Property, plant and Equipment are initially recognized at cost including the cost directly
attributable for bringing the asset to the location and conditions necessary for it to be capable of
operating in the manner intended by the management. After the initial recognition the property,
plant and equipment are carried at cost less accumulated depreciation and impairment losses, if
any. Any gain or loss on disposal of an item of property, plant and equipment is recognized in the
statement of profit and loss.

Subsequent expenditure is capitalised only if it is probable that the future economic benefits
associated with the expenditure will flow to the Company.

The Company has opted for an exemption provided by the Indian Accounting Standard (Ind AS)-
101. Accordingly the carrying value for all Property, plant and equipment recognized in the
financial statements, as at the date of transition to Ind AS i.e 01.04.2016 measured as per
previous GAAP and use that carrying value as deemed cost of Property, plant and equipment.

Capital work-in-progress includes cost of property, plant and equipment under installation /
under development as at the balance sheet date and allocated to respective property, plant and
equipment on completion/erection.

Depreciation

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its
estimated residual value. Depreciation on PPE has been provided, pro rata for the period of use,
on straight line method over the useful lives of the property, plant & equipment as prescribed in
Schedule II of the Companies Act, 2013.

The residual values, useful lives and methods of depreciation of property, plant and equipment
are reviewed at each financial year end and adjusted prospectively, if appropriate. Profit and loss
on disposals are determined by comparing proceeds with carrying amount. These are included in
statement of profit and loss.

2.9 Leases

The Company has applied Ind AS 116 using the modified retrospective approach and therefore
the comparative information has not been restated and continues to be reported under
Ind AS 17.

As a lessee

The Company recognises a right-of-use asset and a lease liability at the lease commencement
date. The right-of-use asset is initially measured at cost, which comprises the initial amount of
the lease liability adjusted for any lease payments made at or before the commencement date,
plus any initial direct costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is located, less any
lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the earlier of the end of the useful life of the right-of-use asset or the end
of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses,
if any.

The lease liability, if any, is initially measured at the amortised cost at present value of future
lease payments discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, company''s incremental borrowing rate.

Depreciation on Right-of-use Asset has been provided using Straight line method over their
useful lives or lease period, whichever is lower. Interest Expense on Lease Liabilities are
provided using discount rate used to determine Lease Liabilities. Depreciation and Interest
expenses are recognised in the Statement of Profit and Loss.

Short-term leases and leases of low-value assets

The company has elected not to recognise right-of-use assets and lease liabilities for short term
leases of real estate properties that have a lease term of 12 months. The company recognises the
lease payments associated with these leases as an expense on a straight-line basis over the lease
term.

As a lessor

Lease income from operating leases where the Company is a lessor is recognised in income on a
straight-line basis over the lease term. The respective leased assets are included in the balance
sheet based on their nature. However, there are no assets which are given on lease as a lessor.

2.10 Impairment of Non Financial Assets

The Property, Plant and Equipment and intangible assets are tested for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset''s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs of
disposal and value in use.

For the purposes of assessing impairment, the assets are grouped at the lowest levels for which
there are separately identifiable cash flows which are largely independent of the cash inflows
from other assets or groups of assets (cash generating units). Non-financial assets other than
goodwill that suffered an impairment loss are reviewed for possible reversal of impairment at
the end of each reporting period. An impairment loss is charged to the Statement of Profit and
Loss in the year in which an asset is identified as impaired. The impairment loss recognised in
prior accounting period is reversed if there has been a change in the estimate of recoverable
amount.

2.11 Financial Instruments

A Financial Instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.

2.11.1 Financial Assets

Initial Recognition and Measurement

Financial assets are recognised when the Company becomes a party to the contractual provisions
of the instruments. Financial assets other than trade receivables are initially recognised at fair
value plus transaction costs for all financial assets not carried at fair value through profit or loss.
Financial assets carried at fair value through profit or loss are initially recognised at fair value,
and transaction costs are expensed in the Statement of Profit and Loss
Subsequent Measurement:

The financial assets, other than equity instruments, are subsequently classified under one of the
following three categories according to the purpose for which they are held. The classification is
reviewed at the end of each reporting period.

i) Measured at amortised cost: A Financial asset is measured at the amortised cost if both the
following conditions are met: (a) The asset is held within a business model whose objective is to
hold assets for collecting contractual cash flows, and (b) Contractual terms of the asset give rise
on specified dates to cash flows that are Solely Payments of Principal and Interest (SPPI) on the
principal amount outstanding. After initial measurement, financial assets are subsequently
measured at amortised cost using the EIR method. 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 in finance income in the Statement of Profit and Loss. The
losses arising from impairment are recognised in the Statement of Profit and Loss.

ii) Measured at FVTOCI: Financial assets are measured at fair value through other
comprehensive income if these financial assets are held within a business model whose objective
is to hold these assets in order to collect contractual cash flows or to sell these financial assets
and the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding. Financial assets
included within the FVTOCI category are measured at fair value with all changes recognized in
the Other Comprehensive Income.

iii) Measured at FVTPL: FVTPL is a residual category for financial assets. Any financial asset,
which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is
classified as at FVTPL. Financial asset included within the FVTPL category are measured at fair
value with all changes recognized in the Statement of Profit and Loss.

Equity Instruments measured at FVTOCI or FVTPL: All equity investments in scope of Ind-AS
109 are measured at fair value. Equity instruments which are held for trading are classified as at
FVTPL. For all other equity instruments, the Company decides to classify the same either as at
FVTOCI or FVTPL. 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 recognized in the Other Comprehensive Income (OCI). There is no recycling of the
amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the
cumulative gain or loss within equity. Equity instruments included within the FVTPL category
are measured at fair value with all changes recognized in the Statement of Profit and loss.

Equity instruments measured at Cost: Equity investments in subsidiaries / joint ventures /
associates are accounted at cost.

Derecognition:

• A financial asset (or, where applicable, a part of a financial asset or part of a Company 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.

Where the entity has transferred an asset, the Company evaluates whether it has transferred
substantially all risks and rewards of ownership of the financial asset. In such cases, the financial
asset is derecognised. Where the entity has not transferred substantially all risks and rewards of
ownership of the financial asset, the financial asset is not derecognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and
rewards of ownership of the financial asset, the financial asset is derecognised if the Company
has not retained control of the financial asset. Where the Company retains control of the financial
asset, the asset is continued to be recognised to the extent of continuing involvement in the
financial asset.

Impairment of Financial Assets:

In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for
measurement and recognition of impairment loss on the following financial assets and credit
risk exposure:

i) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt
securities, deposits, and bank balance.

ii) Trade receivables - The application of simplified approach does not require the Company to
track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime
ECLs at each reporting date, right from its initial recognition.

2.11.2 Financial Liabilities

Financial liabilities include long-term and short term loans and borrowings, trade and other
payables and other eligible current and non-current liabilities.

At initial recognition, Financial liabilities are recognised when the Company becomes a party to
the contractual provisions of the instruments. Financial liabilities are initially recognised at fair
value net of transaction costs for all financial liabilities not carried at fair value through profit or
loss. Subsequent measurement of financial liabilities depends on the classification of financial
liabilities.

There are two measurement categories into which the company classifies its financial liabilities:

• Fair value through profit or loss (FVTPL): Financial liabilities are classified as at
FVTPL when the financial liability is held for trading or it is designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on
remeasurement recognized in profit or loss.

• Amortised cost: Financial liabilities that are not held-for-trading and are not designated
as at FVTPL are measured at amortised cost at the end of subsequent accounting
periods. The carrying amounts of financial liabilities that are subsequently measured at
amortised cost are determined based on the effective interest method. Interest expense
that is not capitalized as part of costs of an asset is included in the ''Finance Costs'' line
item.

Derecognition of financial liabilities:

A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the derecognition of the original liability
and the recognition of a new liability. The difference in the respective carrying amounts is
recognised in the Statement of profit and loss.

2.11.3 Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Balance
Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is
as intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

2.12 Foreign currency transactions and translation

Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange rates are generally recognised in profit
and loss.

Non-monetary items carried at fair value that are denominated in foreign currencies are
retranslated at the rates prevailing at the date when the fair value was determined.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not
retranslated. The gain or loss arising on translation of non-monetary items measured at fair
value is treated in line with the recognition of the gain or loss on the change in fair value of the
item.

2.13 Employee Benefits

Short Term Employee Benefits

Short term employee benefits consisting of wages, salaries, social securities contributions,
ex-gratia and accrued leave, are benefits payable & recognised in twelve months. Short term
employee benefits expected to be paid in exchange for the services rendered by employees are
recognised undiscounted during the year as the related service are rendered by the employee.

Defined contribution plans

Defined contribution plans Payments to defined contribution plans are charged as an expense as
they fall due. Payments made to state managed retirement benefit schemes are dealt with as
payments to defined contribution schemes where the Company''s obligations under the schemes
are equivalent to those arising in a defined contribution retirement benefit scheme.

Defined benefit plans

The liability recognised in the balance sheet in respect of defined benefit gratuity plans is the
present value of the defined benefit obligation at the end of the reporting period less the fair
value of plan assets. The company does not have any plan assets or made any contributions for
defined benefits plan. The defined benefit obligation is determined at the year end by
independent actuary using the projected unit credit method.

Re-measurement gains and losses of the net defined benefit liability/(asset) are recognised
immediately in other comprehensive income. The service cost and net interest on the net defined
benefit liability/ (asset) is treated as a net expense within employment costs. Past service cost is
recognised as an expense when the plan amendment or curtailment occurs or when any related
restructuring costs or termination benefits are recognised, whichever is earlier. The retirement
benefit obligation recognised in the balance sheet represents the present value of the defined-
benefit obligation as reduced by the fair value plan assets.

Compensated absences: Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the related service are
recognised based on actuarial valuation at the present value of the obligation as on the reporting
date.

As required by Ind AS 19 ''Employee Benefits'', the discount rate used to arrive at the present
value of the defined benefits, obligations is based on the Indian government security yields
prevailing as at the Balance Sheet date that have maturity date equivalent to the tenure of the
obligation.

2.14 Taxes on Income

Tax expense comprises current and deferred tax. It is recognised in Statement of profit and loss
except to the extent it relates to the items recognised directly in equity or in OCI.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for
the year and any adjustment to the tax payable or receivable in respect of previous years. It is
measured using tax rates enacted or substantively enacted at the reporting date. Management
periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate
on the basis of amounts expected to be paid to the tax authorities.

Current tax assets and liabilities are offset only if:

(a) There is a legally enforceable right to set off current tax assets against current tax liabilities
and when they relate to income tax levied by the same taxation authority.

(b) There is intention either to settle the asset and liability on a net basis.

Deferred Tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
values of assets and liabilities in the financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable
temporary differences. In contrast, deferred tax assets are only recognised to the extent that it is
probable that future taxable profits will be available against which the temporary differences can
be utilised.

The carrying value of deferred tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available
to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the reporting date. Deferred tax items are
recognised in correlation to the underlying transaction either in statement of profit and loss,
other comprehensive income or directly in equity as applicable. Deferred tax assets and deferred
tax liabilities are offset if a legally enforceable right exists to set off current tax assets against
current income tax liabilities and when the deferred tax balances relate to the same taxation
authority.

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Mar 31, 2015

(A) Basis of Preparation of Financial Statements:

The Company follows mercantile system of accounting except Leave Pay and retirement benefits which are accounted for on cash basis and sales claims are accounted for as and when settled.

(B) FIXED ASSETS

Fixed Assets are stated at cost including addition in value due to revaluation (refer Note No. 2.02) less depreciation. Cost includes direct expenses and interest on borrowings attributable to acquisition of fixed assets up to the date of commissioning of the assets and allocation of project & pre operative expenses.

(C) DEPRECIATION

Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly, the unamortised carrying value is being depreciated / amortised over the revised/ remaining useful lives on straight line value method basis. The written down value of fixed assets whose lives have expired as at 01/04/2014 have been adjusted from opening retained earnings as on 01/04/2014.

(D) INVENTORY

i) Raw materials, Stores & Spares and work in process are valued at cost..

ii) Finished goods are valued at lower of cost or net realizable value.

iii) Scrap is valued at estimated realizable value.

Cost is computed on weighted average basis. Finished goods and process stock include cost of conversion and other cost incurred in bringing the inventories to their present location and condition but excludes VAT/Excise Duty, which are subsequently recoverable from the taxing authorities.

(E) REVENUE FROM SALE OF PRODUCT & SERVICES

Revenues from sales of product is recognized when all significant risk and rewards of ownership of goods are transferred to customers and are net of sales tax, inclusive of Excise duty, net of rate differences and freight on certain parties.

(F) EMPLOYEES BENEFITS

i) Contributions to provident and other funds made to the Government are charged off to the Statement of Profit & Loss .

ii) Gratuity Liability is defined obligation and calculated on the basis of actuarial valuation at the end of each financial year and it is being accounted for and as when paid.

iii) Leave salary is calculated on accumulated leave and is accounted for as and when paid.

(G) INVESTMENTS

Long term investments are stated at cost. Current investments are valued at lower of cost or fair market value. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

(H) EXCISE DUTY

Excise duty is accounted for on the basis of payments made in respect of goods cleared and provision is made on closing stock of finished goods & scrap.

(I) SEGMENT REPORTING

The accounting policies applicable to the reportable segments are the same as those used in the preparation of the financial statements. Segment revenue and expenses include amounts, which are directly identifiable to the segment or allocable on a reasonable basis Segment assets include all operating assets used by the segment and consist primarily of debtors, inventories and fixed assets. Segment liabilities include all operating liabilities and consist primarily of deposit from customers, creditors etc.

(J) TAXATION

Current Tax :

Provision for current tax is recognized in accordance with the provisions of Income Tax Act, 1961 and is made annually based on the tax liability after taking credit for tax allowances and exemptions.

Deferred Taxes :

The carrying amount of deferred tax liabilities is reviewed at each Balance Sheet date. The deferred tax asset and deferred tax liability are calculated by applying tax rates and tax laws that have been enacted as on Balance Sheet date. Deferred tax assets arising mainly on account of brought forward losses / unabsorbed depreciation/other timing differences under tax laws are recognized only if there is a virtual certainty of its realization supported by convincing evidence. Deferred tax liabilities on account of timing differences are recognized only at each balance sheet date.

(K) IMPAIRMENT OF ASSETS

An assets is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired.

(L) PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

(M) EARNING PER SHARE

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholder by the weighted average number of equity share outstanding during the period.

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