3(A) MATERIAL ACCOUNTING POLICY INFORMATION
i) Current versus non-current classification
The Company presents assets and liabilities in
the balance sheet based on current/ non-current
classification. An asset is classified as current
when it is:
• Expected to be realized or intended to be
sold or consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realized within twelve
months after the reporting period, or
• Cash or cash equivalent unless restricted
from being exchanged or used to settle a
liability for at least twelve months after the
reporting period
All other assets are classified as non-current.
A liability is classified as current when:
• It is expected to be settled in normal
operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months
after the reporting period, or
• There is no unconditional right to defer
settlement of the liability for at least twelve
months after the reporting period.
Terms of a liability that could, at the option of
the counterparty, result in its settlement by the
issue of equity instruments do not affect its
classification
The Company classifies all other liabilities as
non-current.
Deferred tax assets and liabilities are classified
as non-current assets and liabilities.
Operating Cycle
Operating cycle for the business activities
of the Company covers the duration of the
specific project or contract and extends up to
the realisation of receivables (including retention
monies) within the agreed credit period normally
applicable. Other than project related assets
and liabilities, 12 months period is considered
as normal operating cycle.
ii) Revenue recognition
Revenue from contracts with customers is
recognised when control of the goods or services
are transferred to the customer at an amount that
reflects the consideration to which the Company
expects to be entitled in exchange for those
goods or services.
a) Revenue from Engineering, procurement
and construction
The Company derives revenue primarily
from the long-term construction of major
infrastructure projects across India.
The transaction price is normally fixed at the
start of the project. It is normal practice for
contracts to include escalation clause based
on timely construction or other performance
criteria known as variable consideration,
discussed below. Revenue is recognized
over time in the construction stream, when
the customer simultaneously receives and
consumes the benefits provided through the
entity's performance or when the Company
creates or enhances an asset that the
customer controls.
For performance obligation satisfied over
time, the revenue recognition is done
using input method by measuring the
progress towards complete satisfaction
of performance obligation. The Company
recognises revenue from construction
contracts, using an input method (i.e.
percentage of completion method) on the
basis of accumulated project expenses in
relation to estimated accumulated project
expenses upon completion. This method
reflects close approximation of actual
work performed. A provision is made for
the difference between the expected cost
of fulfilling a contract and the expected
unearned portion of the transaction price
where the forecast costs are greater than
the forecast revenue.
The Company transfers control of a good
or service over time and therefore satisfies
a performance obligation and recognises
revenue over a period of time if one of the
following criteria is met:
(a) the customer simultaneously consumes
the benefit of the Company's
performance or
(b) t he customer controls the asset as
it is being created/ enhanced by the
Company's performance or
(c) there is no alternative use of the asset
and the Company has either explicit or
implicit right of payment considering
legal precedents,
In all other cases, performance obligation is
considered as satisfied at a point in time.
Estimates of revenues, costs or extent of
progress towards completion are revised
if circumstances change. Any resulting
increase or decrease in estimated revenues
or costs are reflected in Standalone
Statement of profit and loss in the period in
which the circumstances that give rise to the
revision become known by management.
For construction contracts the control
is transferred over time and revenue is
recognised based on the extent of progress
towards completion of the performance
obligations. When it is probable that total
contract costs will exceed total contract
revenue, the expected loss is recognised
as an expense immediately.
Significant judgments are used in:
a. Determining the revenue to be
recognised in case of performance
obligation satisfied over a period of
time; revenue recognition is done
by measuring the progress towards
complete satisfaction of performance
obligation.
b. Determining the method to be applied
to arrive at the variable consideration
including variations and claims requiring
an adjustment to the transaction price.
b) Variable consideration
Due to the nature of the work required to
be performed on many of the performance
obligations, the estimation of total revenue
and cost of completion is complex, subject
to many variables and requires significant
judgment. Variability in the transaction price
arises primarily due to liquidated damages,
price variation clauses, changes in scope,
incentives, if any. The Company considers
its experience with similar transactions
and expectations regarding the contract
in estimating the amount of variable
consideration to which it will be entitled and
determining whether the estimated variable
consideration should be constrained.
The Company includes estimated amounts
in the transaction price to the extent it
is probable that a significant reversal of
cumulative revenue recognised will not
occur when the uncertainty associated
with the variable consideration is resolved.
The estimates of variable consideration
are based largely on an assessment of
anticipated performance and all information
(historical, current and forecasted) that is
reasonably available.
c) Services revenue
The Company performs operation and
maintenance and other services (including
advisory and consultancy). Revenue is
recognised in the accounting period in which
the services are rendered as per the
contractual terms.
d) Sale of goods / materials
Revenue from sale of goods / materials is
recognized when all the same is transferred
to the customer and it is probable that the
Company will collect the consideration to
which it is entitled for the exchanged goods,
which is usually on delivery of the goods.
The Company collects goods and service
tax on behalf of the government and,
therefore, these are not economic benefits
flowing to the Company. Hence, they are
excluded from revenue.
e) Contract Balances
Contract assets and contract liabilities
A contract asset is the right to consideration
in exchange for goods or services transferred
to the customer.
A contract liability is the obligation to transfer
goods or services to a customer for which
the Company has received consideration (or
an amount of consideration is due) from the
customer.
Unlike the method used to recognise
contract revenue related to construction
contract, the amounts billed to the customer
are based on achievement of the various
milestones established in the contract.
The amounts recognised as revenue for a
given year do not necessarily coincide with
the amounts billed to or certified by the
customer. In the case of contracts, in which
the goods or services transferred to the
customer exceed the related amount billed,
the difference is recognised (as a contract
asset) and presented in the statement of
financial position under "Contract assets",
whereas in contracts in which the goods
or services transferred are lower than
the amount billed to the customer, the
difference is recognised (as a contract
liability) and presented in the statement of
financial position under "Contract liabilities".
The Company recognises impairment loss
(termed as provision for expected credit
loss in the financial statements) on account
of credit risk in respect of a contract asset
using expected credit loss model on similar
basis as applicable to trade receivables.
Trade receivables
A trade receivable represents the Company's
right to an amount of consideration that
is unconditional (i.e., only the passage
of time is required before payment of the
consideration is due). Revenue earned from
construction activities, but yet to be billed to
customers, is initially recognised as contract
assets and reclassified to trade receivables
when the right to consideration becomes
unconditional.
f) Cost to obtain a contract
Costs to obtain a contract which are
incurred regardless of whether the contract
was obtained are charged-off in profit or
loss immediately in the period in which
such costs are incurred. Incremental costs
of obtaining a contract, if any, and costs
incurred to fulfil a contract are amortised
over the period of execution of the contract
in proportion to the progress measured
in terms of a proportion of actual cost
incurred to-date, to the total estimated cost
attributable to the performance obligation.
g) Financing components
The Company does not expect to have any
contracts where the period between the
transfer of the promised goods or services
to the customer represents a financing
component. As a consequence, generally
the Company does not adjust any of the
transaction prices for the time value of
money. Retention money receivable from
project customers does not contain any
significant financing element, these are
retained for satisfactory performance of
contract. However, in case financing element
is present, then the Company splits the
transaction price between the consideration
for services rendered and time value of
money ('financing component').
h) Interest income
Interest income for all debt instruments,
measured at amortised cost or fair value
through other comprehensive income, is
recognised using the effective interest rate
('EIR') method and shown under interest
income in the statement of profit and loss.
Interest income on interest bearing financial
assets classified as fair value through profit
and loss is shown as interest income under
other income. Interest income on debt
instruments which are credit impaired is
recognised using EIR on net carrying value
(net of ECL) of debt instruments.
i) Dividend income
Dividend income is recognised when the
Company's right to receive the payment
is established, which is generally when
shareholders approve the dividend.
iii) Exceptional items
On certain occasions, the size, type, or incidences
of the item of income or expenses pertaining to
the ordinary activities of the Company is such
that its disclosure improves the understanding of
the performance of the Company, such income
or expenses is classified as an exceptional
item and accordingly, disclosed in the financial
statements.
iv) Leases
The Company assesses at contract inception
whether a contract is, or contains, a lease. That is,
if the contract conveys the right to control the
use of an identified asset for a period of time in
exchange for consideration.
Company as a lessee
The Company applies a single recognition and
measurement approach for all leases, except
for short-term leases and leases of low-value
assets. The Company recognises lease liabilities
to make lease payments and right-of-use assets
representing the right to use the underlying
assets.
i) Right-of-use assets
The Company recognises right-of-use
assets at the commencement date of the
lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are
measured at cost, less any accumulated
depreciation and impairment losses, and
adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets
includes the amount of lease liabilities
recognised, initial direct costs incurred,
and lease payments made at or before
the commencement date less any lease
incentives received. Right-of-use assets
are generally depreciated over the shorter
of the asset's useful life and the lease term
on a straight-line basis.
The right-of-use assets are also subject to
impairment. Refer to the material accounting
policies - Impairment of non-financial assets.
ii) Lease liabilities
At the commencement date of the lease,
the Company recognises lease liabilities
measured at the present value of lease
payments to be made over the lease term.
The lease payments include fixed payments
(including insubstance fixed payments) less
any lease incentives receivable, variable
lease payments that depend on an index
or a rate, and amounts expected to be paid
under residual value guarantees.
I n calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date. After the commencement date, the
amount of lease liabilities is increased to
reflect the accretion of interest and reduced
for the lease payments made. In addition,
the carrying amount of lease liabilities is
remeasured if there is a modification, a
change in the lease term, a change in the
lease payments (e.g., changes to future
payments resulting from a change in an
index or rate used to determine such lease
payments).
iii) Short-term leases and leases of low-value
assets
The Company applies the short-term lease
recognition exemption to its short-term
leases of rented premises (i.e., those leases
that have a lease term of 12 months or less
from the commencement date and do not
contain a purchase option). It also applies
the lease of low-value assets recognition
exemption to leases that are considered to
be low value. Lease payments on short-term
leases or leases of low-value assets are
recognised as expense on a straight-line
basis over the lease term.
v) Property, plant and equipment ('PPE')
Freehold land is carried at cost. Other property,
plant and equipment acquired are measured on
initial recognition at cost. Subsequent to initial
recognition, property, plant and equipment are
stated at cost net of accumulated depreciation
and accumulated impairment losses, if any.
Such cost includes the cost of replacing part
of the plant and equipment and borrowing
costs for long-term construction projects if the
recognition criteria are met. When significant
parts of plant and equipment are required to be
replaced at intervals, the Company depreciates
them separately based on their specific useful
lives. The carrying amount of the replaced part
accounted for as a separate asset previously is
derecognised. Likewise, when a major inspection
is performed, its cost is recognised in the
carrying amount of the plant and equipment
as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs
are recognised in statement of profit and loss
when incurred. The present value of the expected
cost for the decommissioning of an asset after its
use is included in the cost of the respective asset
if the recognition criteria for a provision are met.
Pursuant to this policy, property, plant and
equipment are depreciated over the useful life
as provided below :-
An item of property, plant and equipment
and any significant part initially recognised
is derecognised upon disposal or when no
future economic benefits are expected from
its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the
difference between the net disposal proceeds
and the carrying amount of the asset) is included
in the statement of profit and loss when the asset
is derecognised.
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. Depreciation on
additions to/deductions from, owned assets is
calculated pro rata to the period of use.
Property, plant and equipment not ready for the
intended use on the date of the Balance Sheet
is disclosed as "Capital Work-In-Progress" and
carried at cost net of accumulated impairment
loss, if any. Cost comprises directly attributable
costs and related incidental expenses.
Depreciation
Depreciation on property, plant and equipment
is provided on written down value basis as per
the rate derived on the basis of useful life and
method prescribed under Schedule - II of the
Act. If the management estimates the useful
life of assets at the time of acquisition of assets
or remaining useful life on a subsequent review
is shorter/longer than that envisaged in the
aforesaid schedule, depreciation is provided at a
higher rate/ lower rate based on the management
estimate of the useful life/remaining useful
life. Property, plant and equipment, costing
individually ' 5,000 or less are depreciated fully
in the year of purchase.
vi) Intangible assets
Intangible assets acquired separately are
measured on initial recognition at cost.
Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation
and accumulated impairment losses, if any.
The Company amortises intangible assets with
a finite useful life using the straight-line method
over 3 - 6 years.
vii) Impairment of non-financial assets
The carrying amounts of non-financial assets
are reviewed at each balance sheet date if
there is any indication of impairment based on
internal/external factors. An asset is treated as
impaired when the carrying amount exceeds
its recoverable value. 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 the present value using a pre-tax discount
rate that reflects current market assessment
of the time value of money and risks specific
to the assets. An impairment loss is charged
to the statement of profit and loss in the year
in which an asset is identified as impaired.
After impairment, depreciation is provided
on the revised carrying amount of the asset
over its remaining useful life. The impairment
loss recognized in prior accounting periods is
reversed by crediting the statement of profit and
loss, if there has been a change in the estimate
of recoverable amount.
Impairment loss is recognised when the carrying
amount of an asset exceeds its recoverable
amount. Recoverable amount is determined:
(i) in the case of an individual asset, at the
higher of the fair value less costs of disposal
and the value-in-use; and
(ii) i n the case of a cash generating unit (the
smallest identifiable group of assets that
generates independent cash flows), at the
higher of the cash generating unit's fair value
less costs of disposal and the value-in-use.
(The amount of value-in-use is determined as
the present value of estimated future cash flows
from the continuing use of an asset, which may
vary based on the future performance of the
Company and from its disposal at the end of its
useful life. For this purpose, the discount rate
(post-tax) is determined based on the weighted
average cost of capital of the company suitably
adjusted for risks specified to the estimated cash
flows of the asset).
If recoverable amount of an asset (or cash
generating unit) is estimated to be less than
its carrying amount, such deficit is recognised
immediately in the Statement of Profit and Loss
as impairment loss and the carrying amount of
the asset (or cash generating unit) is reduced to
its recoverable amount.
When an impairment loss recognised earlier is
subject to full or partial reversal, the carrying
amount of the asset (or cash generating unit),
except impairment loss allocated to goodwill,
is increased to the revised estimate of its
recoverable amount, such that the increased
carrying amount does not exceed the carrying
amount that would have been determined had
no impairment loss is recognised for the asset (or
cash generating unit) in prior years. A reversal of
an impairment loss (other than impairment loss
allocated to goodwill) is recognised immediately
in the Statement of Profit and Loss.
viii) Inventories
Inventories are stated at lower of cost and net
realizable value.
Project materials (including consumables)
includes cost of purchases and other costs
incurred in bringing the inventories to the present
location and condition. Cost is determined using
weighted average method.
Assessment of net realisable value is made
at each reporting period end and when the
circumstances that previously caused inventories
to be written-down below cost no longer exist or
when there is clear evidence of an increase in net
realisable value because of changed economic
circumstances, the write-down, if any, in the past
period is reversed to the extent of the original
amount written-down so that the resultant
carrying amount is the lower of the cost and the
revised net realisable value.
ix) Non-current assets held-for-sale
The Company classifies non-current assets and
disposal groups as 'Held For Sale' if their carrying
amounts will be recovered principally through
a sale rather than through continuing use and
sale is highly probable and the asset or disposal
Company is available for immediate sale in its
present condition. Non-current assets held for
sale and disposal groups are measured at the
lower of their carrying amount and the fair value
less costs to sell. Assets and liabilities classified
as held for sale are presented separately in the
balance sheet. Property, plant and equipment
and intangible assets once classified as held for
sale are not depreciated or amortised.
x) Employee benefits
a) Short-term benefits
Short-term employee benefits are recognized
as an expense at the undiscounted amount
in the statement of profit and loss for the
year in which the related services are
rendered.
b) Defined benefit plans
Gratuity scheme:
The employees' gratuity fund scheme,
managed by Life Insurance Corporation
(LIC) is a defined benefit plan. The cost of
providing defined benefits is determined
using the Projected Unit Credit method
with actuarial valuations carried out as at
the end of each financial year. The present
value of the defined benefit plan is
determined by discounting the estimated
future cash outflow by reference to market
yields as at the end of the reporting period
on Government bonds that have terms
approximately to the terms of the related
obligation. The defined benefit obligations
recognized in the Balance Sheet represent
the present value of the defined benefit
obligations as reduced by the fair value of
plan assets, if any.
Recognition and measurement of defined
benefit plans
All expenses represented by current
service cost, past service cost, if any, and
net interest on the defined benefit liability/
(asset) are recognized in the Statement of
Profit and Loss. The present value of the
obligation under defined benefit plans is
determined based on actuarial valuation
using the Projected Unit Credit Method.
Re-measurements of the net defined benefit
liability / (asset) comprising actuarial gains
and losses and the return on the plan assets
(excluding amounts included in net interest
on the net defined benefit liability/asset),
are recognized in Other Comprehensive
Income. They are included in the retained
earnings in the Statement of changes in
equity and Standalone Balance Sheet.
c) Defined contribution plans:
The amount charged as expense is equal
to the contributions paid or payable when
employees have rendered services entitling
them to the contributions.
Recognition and measurement of defined
contribution plans:
The Company recognizes contribution
payable to a defined contribution plan as an
expense in the Statement of Profit and Loss
when the employees render services to the
Company during the reporting period. If the
contributions payable for services received
from employees before the reporting date
exceeds the contributions already paid, the
deficit payable is recognized as a liability
after deducting the contributions already
paid. If the contributions already paid
exceeds the contributions due for services
received before the reporting date, the
excess is recognized as an asset to the
extent that the prepayment will lead to, for
example, a reduction in future payments or
a cash refund.
The obligation towards defined benefit
plans is measured at the present value of
the estimated future cash flows using a
discount rate based on the market yield on
government securities of a maturity period
equivalent to the weighted average maturity
profile of the defined benefit obligations at
the Balance Sheet date.
Re-measurement, comprising actuarial
gains and losses, the return on plan assets
(excluding amounts included in net interest
on the net defined benefit liability or asset)
and any change in the effect of asset
ceiling (if applicable) is recognised in other
comprehensive income and is reflected
in retained earnings and the same is not
eligible to be reclassified to profit or loss.
Defined benefit costs comprising current
service cost, past service cost and gains or
losses on settlements are recognised in the
Statement of Profit and Loss as employee
benefits expense. Interest cost implicit in
defined benefit employee cost is recognised
in the Statement of Profit and Loss under
finance costs. Gains or losses on settlement
of any defined benefit plan are recognised
when the settlement occurs. Past service
cost is recognised as expense at the earlier
of the plan amendment or curtailment and
when the Company recognises related
restructuring costs or termination benefits.
xi) Share based payment arrangements
Employees of the Company receive remuneration
in the form of share based payment transactions,
whereby employees render services as
consideration for equity instruments (equity
settled transactions).
Employee stock options
The fair value of the options granted under
the Employees Stock Option Schemes are
recognised as an employee benefits expense
with a corresponding increase in equity.
The total amount to be expensed is determined
by reference to the fair value of the options
granted:
- including any market performance conditions
- excluding the impact of any service and
non-market performance vesting conditions,
and
- including the impact of any non-vesting
conditions.
The total expense is recognised over the vesting
period, which is the period over which all of the
specified vesting conditions are to be satisfied.
At the end of each period, the entity revises
its estimates of the number of options that
are expected to vest based on the non-market
vesting and service conditions. It recognises the
impact of the revision to original estimates, if
any, in the statement of profit and loss, with a
corresponding adjustment to the Equity settled
share based payment reserve.
The dilutive effect of outstanding options is
reflected as additional share dilution in the
computation of diluted earnings per share
xii) Treasury Shares
The Company has created an Welspun
Enterprises Employees Welfare Trust ('EWT'
or 'ESOP trust'). The Company uses EWT as a
vehicle for distributing shares to employees
under the employee stock option schemes.
EWT buys shares from the market for giving
to employees. The Company treats EWT as its
extension and shares held by EWT are treated
as treasury shares.
Own equity instruments that are held by the
trust are recognised at cost and deducted from
equity. No gain or loss is recognised in profit or
loss on the purchase, sale, issue or cancellation
of the Company's own equity instruments.
Any difference between the carrying amount and
the consideration, if reissued, is recognised in
the other equity.
xiii) Borrowing costs
Borrowing costs that are directly attributable
to the acquisition, construction or production
of a qualifying asset are capitalised during the
period of time that is required to complete and
prepare the asset for its intended use or sale.
Qualifying assets are assets that necessarily take
a substantial period of time to get ready for their
intended use or sale.
Other borrowing costs are charged to Statement
of Profit and Loss in the period in which they are
incurred.
xiv) Taxes on income
a) Current tax
Current income tax assets and liabilities for
the current and prior periods are measured
at the amount expected to be recovered
from or paid to the taxation authorities.
The tax rates and tax laws used to compute
the amount are those that are enacted or
substantively enacted by the reporting
date. Current taxes are recognized in
profit or loss except to the extent that
the tax relates to items recognized in
other comprehensive income or directly in
equity. Management periodically evaluates
positions taken in the tax returns with
respect to situations in which applicable tax
regulations are subject to interpretation and
establishes provisions where appropriate.
b) Deferred tax
Deferred income tax is recognized on
all temporary differences which are the
differences between the carrying amount
of an asset or liability in the statement of
financial position and its tax base except
when the deferred income tax arises from
the initial recognition of an asset or liability
that effects neither accounting nor taxable
profit or loss at the time of the transaction.
Deferred tax liabilities are recognized for all
taxable temporary differences; and deferred
tax assets are recognized for all deductible
temporary differences, the carry forward of
unused tax credits and unused tax losses,
to the extent that it is probable that future
taxable profit will be available against which
the deductible temporary differences, and
the carry-forward of unused tax credits and
unused tax losses can be utilized.
The carrying amount of deferred tax assets
is reviewed at each reporting date and
reduced to the extent that it is no longer
probable that sufficient future taxable
profit will be available to allow all or part
of the deferred tax asset to be utilized.
Unrecognized deferred tax assets are
reassessed at each reporting date and are
recognized to the extent that it has become
probable that future taxable profit will allow
the deferred tax 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 realized
or the liability is settled, based on tax rates
and tax laws that have been enacted or
substantively enacted at the reporting date
and based on the tax consequence which
will follow from the manner in which the
Company expects, at financial year end, to
recover or settle the carrying amount of its
assets and liabilities.
Deferred tax relating to item recognised
outside the statement of profit and loss is
recognised outside the statement of profit
and loss. Deferred tax items are recognised
in correlation to the underlying transaction
either in other comprehensive income or
directly in equity.
Deferred tax assets and deferred tax liabilities
are offset, if a legally enforceable right exists
to set off current income tax assets against
current income tax liability and the deferred
taxes relate to the same taxable entity and
the same taxation authority.
xv) Foreign Currency transactions
The Company's financial statements are
presented in INR rupees in crores, which is also the
Company's functional currency. Foreign currency
transactions are recorded on initial recognition in
the functional currency, using the exchange rate
at the date of the transaction. At each balance
sheet date, foreign currency monetary items
are reported using the closing exchange rate.
Exchange differences that arise on settlement
of monetary items or on reporting at each
balance sheet date of the Company's monetary
items at the closing rate are recognised as
income or expenses in the period in which they
arise. Non-monetary items which are carried at
historical cost denominated in a foreign currency
are reported using the exchange rate at the date
of transaction.
xvi) Cash and cash equivalents
Cash and cash equivalents comprise cash at
bank and on hand and other short term highly
liquid investments with an original maturity of
three months or less that are readily convertible
to a known amount of cash and are subject to an
insignificant risk of changes in value.
For the purpose of the statement of cash flows,
cash and cash equivalents consist of cash,
short-term deposits and short term highly liquid
investments, as defined above, net of outstanding
bank overdrafts as they are considered an integral
part of the Company's cash management.
xvii) Earnings per share
Basic earnings per share is computed by dividing
the profit and loss after tax by the weighted
average number of equity shares outstanding
during the year. The weighted average number
of equity shares outstanding during the year is
adjusted for treasury shares, bonus issue, bonus
element in a rights issue to existing shareholders,
share split and reverse share split (consolidation
of shares).
Diluted earnings per share is computed by
dividing the profit or loss after tax as adjusted
for dividend, interest and other charges to
expense or income (net of any attributable taxes)
relating to the dilutive potential equity shares,
by the weighted average number of equity
shares considered for deriving basic earnings
per share and the weighted average number
of equity shares which could have been issued
on the conversion of all dilutive potential equity
shares including the treasury shares held by the
Company to satisfy the exercise of the share
options by the employees.
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