1.1 Basis of Preparation of Financial Statements
These financial statements have been prepared on the accrual basis of
accounting, under the historical cost convention and in accordance with
the Companies Act, 1956 arid the applicable accounting standards issued
by the institute of Chartered Accountants of India.
1.2 Revenue Recognition
Expenses are recognized on accrual basis and provisions are made for
all known losses and expenses. Dividend income is recognized when the
right to receive dividend is established. Interest income is recognized
on the time proportion method.
Provision for current Income Tax is made in accordance with the Income
Tax Act, 1961.
In accordance with Accounting Standard 22 Accounting for Taxes on
Income, Issued by the Institute of Chartered Accountants of India, the
deferred tax liability for timing differences between book and the
profits occurs when there are actual taxable profits for the year.
Deferred tax assets are not recognized unless there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
1.4 Basic Earnings per Share
Basic Earnings per share is determined by dividing net income by the
weighted average number of shares outstanding during the years.