(A) Basis of Preparation of financial statement
The Company maintains its accounts on accrual basis following the
historical cost convention in accordance with generally accepted
accounting principle in compliance with accounting standards and other
requirements of the Companies Act, 1956.
(B) Taxation Policy
(i) Provision for Income tax is made on the basis of the estimated
taxable income for the current accounting period in accordance with the
Income-tax Act, 1961.
(ii) The deferred tax for timing differences between the book profits
and tax profits for the year is accounted for using the tax rates and
laws that have been enacted or substantially enacted as of the Balance
Sheet date. Deferred tax asset arising from timing differences are
recognised to the extent there is a virtual certainty that this would
be realised in future and are reviewed for the appropriateness of their
respective carrying values at each Balance Sheet date.
(C) 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 management 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 assets belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of profit and loss. If at the balance sheet
date there is an indication that if 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.
(D) Provision & Contingent Liability
The Company creates a provision when there is a present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is made.