(i) These accounts are prepared on the historical cost basis and on the
accounting principles of a going concern.
(ii) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
(b) Revenue Recognition
Expenses and income considered payable and receivable have been
accounted for on accrual basis.
(c) Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation
(d) Investments are stated at the cost of acquisition.
Stock-in-trade and spares - At cost or net realizable value whichever
is lower, cost being the actual purchase price and other costs that are
necessary to bring the inventories to the present location and
Depreciation is provided on straight-line method at the rates and in the
manner as specified in Schedule XIV of the Companies Act, 1956 except:
- in the case of Licenses and Franchise, depreciation has been
charged on written down value method at the rate of 25% as specified
for Intangible Assets under the Income-tax Rules.
- In the case of Spa Equipment, which are depreciated over a period
of 7 years on straight line method.
(g) Foreign Exchange Transactions:
Transactions in foreign currency are recorded at the prevailing
exchange rate on the date of negotiation of bills. Current assets and
current liabilities in foreign currency are stated at the exchange rate
prevailing as on 31 March, 2012 and the difference is recognized in the
Statement of Profit and Loss. Where the Company has entered into
forward exchange contract the liability is recorded at the contract
rate. The difference between the contracted rate and the rate at the
date of transaction, except for the fixed assets, is recognized in the
Statement of Profit and Loss over the period of the contract.
(h) Employee Benefits
(i) Provision for Gratuity has been accounted as per the actuarial
valuation done by Life Insurance Corporation of India (LIC) in
accordance with Accounting Standard on Employee Benefits (AS-15
revised) and with corresponding payment to LIC.
(ii) Amount payable on account of leave encashment is on actual basis.
(i) Assets acquired under finance leases are capitalized at the lower
of the fair value of the leased assets at the inception of the lease
term and the present value of minimum lease payments. Lease payments
are apportioned between the finance charge and the reduction of the
outstanding liability. The finance charge is allocated to periods
during the lease term at constant periodic rate of interest on the
remaining balance of liability.
(ii) Lease payments under operating lease are recognized as an expense
in the Statement of Profit and Loss on straight line basis over the
Provision for Income-tax comprises current tax based on the liability
computed after considering tax allowances and exemptions. Deferred tax
recognized, subject to consideration of prudence in respect of deferred
tax assets, at the rate of income tax prevailing on the balance sheet
date on timing difference, being the difference between the taxable
income and accounting income that originate in one period and is
capable of reversal in one or more subsequent periods.