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Accounting Policies of Mount Shivalik Industries Ltd. Company

Jun 30, 2015

A) Basis of Preparation:

The financial statements have been prepared under the historical cost convention on accrual basis and to comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 2013. The accounting policies have been consistently applied.

b) Use of Estimates:

In the preparation of the Company's financial statements in conformity with the accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in the period the same is determined.

c) Fixed Assets:

* Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

* Fixed assets under construction and cost of assets not put to use before the year end, are disclosed as capital work-in-progress.

* Intangibles:

Intangible assets are stated at cost less accumulated amortisation. The cost incurred for acquiring trademarks are capitalised and amortised on a straight line basis.

d) Depreciation / Amortisation:

* Depreciation on fixed assets is charged on straight line method, on pro-rata basis, at the rates arrived at on the basis of residual life as specified in Schedule - II to the Companies Act, 2013.

* Expenditure on account of intangible assets is amortised on pro-rata basis, over the useful life thereof, as estimated by the management.

* Renovation expenditure is amortised over the useful life of renovations covered by the relevant agreements.

* Assets costing Rs.5,000 or less each acquired during the year are fully depreciated.

e) Borrowing Costs:

Borrowing costs directly attributable to the acquisition and/or construction of qualifying assets are capitalised as part of the cost of the respective assets upto the date when such asset is ready for its intended use in accordance with the Accounting Standard (AS-16) on 'Borrowing Costs' issued by The Institute of Chartered Accountants of India. All other borrowing costs are charged to revenue.

f) Investments:

* Investments that are readily realisable and intended to be held for not more than one year are classified as current investments. Such investments are carried at lower of cost and fair value determined on an individual investment basis.

* Other investments are classified as long - term investments and are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of such investments.

* Profit/loss on sale of investments is computed on FIFO basis.

g) Inventory Valuation:

* Inventories are valued at lower of cost and net realisable value.

* Cost of purchases consists of the purchase price, including applicable duties and taxes, freight inwards and other expenditure attributable to the acquisition, less trade discounts and rebates, and include other costs incurred in bringing the inventories to their present location and condition.

* Costs are based on the First-in-First-out method. Costs in relation to inventories comprising finished goods and Work-in-process include cost of conversion specifically attributable and production overheads.

* Stores and spares are valued at cost/estimated cost.

h) Revenue Recognition:

Revenue is recognized to the extent that it can be reliably measured and it is probable that the economic benefits will flow to the Company.

* Revenue in respect of sales is recognised at the point of despatch to customers, when significant risks and rewards of ownership get transferred to them.

* Gross sales are inclusive of excise duty and are net of sales return and trade discounts.

* Revenue from Contract Brewing arrangements is recognised on the basis of the Company's right to recover the proceeds as per relevant contracts.

* Income from Franchisee Fee is recognised in the accounts at the end of each calender month since the commencement of the franchisee arrangement irrespective of the volume of operations made by the franchisee.

* Revenue on account of interest income from bank deposit is recognized on a time proportion basis taking into account the amount outstanding based on interest rates implicit in the transaction. In other cases interest income is accounted on actual receipt.

i) Expenditure:

Expenses are accounted for on an accrual basis and provisions are made for all known losses and liabilities.

j) Foreign Currency Transactions:

* Transactions denominated in foreign currency are accounted at the exchange rate prevailing at the date of transaction.

* Current Assets and Current Liabilities outstanding at the Balance Sheet date are converted at the exchange rate prevailing at the year end and the resultant gain/loss is considered to revenue.

k) Retirement Benefits:

Employee benefits include provident fund, superannuation fund(only for executive directors), gratuity fund and unavailed leaves.

Defined contribution plans

The Company's contribution to provident fund, superannuation fund, employee state insurance corporation etc. are considered as defined contribution plans and are charged as an expense as it falls due based on the amount of contribution required to be made.

Defined benefit plans

For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service.

Long-term employee benefits

Unavailed leaves 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 as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

l) Taxes on Income:

* Provision for tax comprises current tax and deferred tax.

* The provision for current income tax if any, is based on the estimated taxable profit for the year and Minimum Alternate Tax (MAT) provisions under the Income Tax Act 1961. Provision is also made for unforseen demand raised on conclusion of assessment of earlier years.

The tax filings are subject to review by the tax authorities in the jurisdictions where the Company conducts business. These reviews may result in assessments of additional taxes that are resolved with the authorities or potentially through the courts. Resolution of these matters involves some degree of uncertainty; accordingly, the Company provides income taxes for the liabilities it believes will ultimately result from the proceedings.

* Deferred income tax reflects the impact of current years timing differences between taxable income/ losses and the accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted as at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In respect of carry forward losses and unabsorbed depreciation, deferred tax assets are recognized only to the extent there is virtual certainty that sufficient future taxable income will be available against which such losses can be set off.

* Provision for wealth tax is made based on tax liability computed after considering tax allowances and exemptions available in accordance with the provisions of the Wealth Tax Act, 1957.

m) Provisions and Contingent Liabilities:

A provision is recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. A disclosure as a contingent is made when there is a possible obligation or a present obligations 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.

n) Earnings Per Share - Basic:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue and share split.

o) Impairment of assets:

Based on tests for impairment on an annual basis in the carrying amount of assets, the Company accounts for:

* provision for impairment loss; if any, or

* the reversal, if any, of such loss recognized in previous periods.


Jun 30, 2014

A) Basis of Preparation:

The financial statements have been prepared under the historical cost convention on accrual basis and to comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied.

b) Use of Estimates:

In the preparation of the Company''s financial statements in conformity with the accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in the period the same is determined.

c) Fixed Assets:

- Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

- Fixed assets under construction and cost of assets not put to use before the year end, are disclosed as capital work-in-progress.

- Intangibles:

Intangible assets are stated at cost less accumulated amortisation. The cost incurred for acquiring trademarks are capitalised and amortised on a straight line basis.

d) Depreciation / Amortisation:

- Depreciation on fixed assets is charged on straight line method, on pro-rata basis, at the rates specified in Schedule - XIV to the Companies Act, 1956.

- Expenditure on account of intangible assets is amortised on pro-rata basis, over the useful life thereof, as estimated by the management.

- Renovation expenditure is amortised over the useful life of renovations covered by the relevant agreements.

- Assets costing Rs. 5,000 or less each acquired during the year are fully depreciated.

e) Borrowing Costs:

Borrowing costs directly attributable to the acquisition and/or construction of qualifying assets are capitalised as part of the cost of the respective assets upto the date when such asset is ready for its intended use in accordance with the Accounting Standard (AS-16) on ''Borrowing Costs'' issued by The Institute of Chartered Accountants of India. All other borrowing costs are charged to revenue.

f) Investments:

- Investments that are readily realisable and intended to be held for not more than one year are classified as current investments. Such investments are carried at lower of cost and fair value determined on an individual investment basis.

- Other investments are classified as long - term investments and are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of such investments.

- Profit/loss on sale of investments is computed on FIFO basis.

g) Inventory Valuation:

- Inventories are valued at lower of cost and net realisable value.

- Cost of purchases consists of the purchase price, including applicable duties and taxes, freight inwards and other expenditure attributable to the acquisition, less trade discounts and rebates, and include other costs incurred in bringing the inventories to their present location and condition.

- Costs are based on the First-in-First-out method. Costs in relation to inventories comprising finished goods and Work-in-process include cost of conversion specifically attributable and production overheads.

- Stores and spares are valued at cost/estimated cost.

h) Revenue Recognition:

Revenue is recognized to the extent that it can be reliably measured and it is probable that the economic benefits will flow to the Company.

- Revenue in respect of sales is recognised at the point of despatch to customers, when significant risks and rewards of ownership get transferred to them.

- Gross sales are inclusive of excise duty and are net of sales return and trade discounts.

- Revenue from Contract Brewing arrangements is recognised on the basis of the Company''s right to recover the proceeds as per relevant contracts.

- Revenue on account of interest received is recognized on a time proportion basis taking into account the amount outstanding based on interest rates implicit in the transaction.

i) Expenditure:

Expenses are accounted for on an accrual basis and provisions are made for all known losses and liabilities.

j) Foreign Currency Transactions:

- Transactions denominated in foreign currency are accounted at the exchange rate prevailing at the date of transaction.

- Current Assets and Current Liabilities outstanding at the Balance Sheet date are converted at the exchange rate prevailing at the year end and the resultant gain/loss is considered to revenue.

k) Retirement Benefits:

Employee benefits include provident fund, superannuation fund, gratuity fund and unavailed leaves.

Defined contribution plans

The Company''s contribution to provident fund, superannuation fund, employee state insurance corporation etc. are considered as defined contribution plans and are charged as an expense as it falls due based on the amount of contribution required to be made.

Defined benefit plans

For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service.

Long-term employee benefits

Unavailed leaves 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 as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

l) Taxes on Income:

- Provision for tax comprises current tax and deferred tax.

- The provision for current income tax is based on the estimated taxable profit for the year.

The tax filings are subject to review by the tax authorities in the jurisdictions where the Company conducts business. These reviews may result in assessments of additional taxes that are resolved with the authorities or potentially through the courts. Resolution of these matters involves some degree of uncertainty; accordingly, the Company provides income taxes for the liabilities it believes will ultimately result from the proceedings.

- Deferred income tax reflects the impact of current years timing differences between taxable income/losses and the accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted as at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In respect of carry forward losses and unabsorbed depreciation, deferred tax assets are recognized only to the extent there is virtual certainty that sufficient future taxable income will be available against which such losses can be set off.

- Provision for wealth tax is made based on tax liability computed after considering tax allowances and exemptions available in accordance with the provisions of the Wealth Tax Act, 1957.

m) Provisions and Contingent Liabilities:

A provision is recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. A disclosure as a contingent is made when there is a possible obligation or a present obligations 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.

n) Earnings Per Share - Basic:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue and share split.

o) Impairment of assets:

Based on tests for impairment on an annual basis in the carrying amount of assets, the Company accounts for:

- provision for impairment loss; if any, or

- the reversal, if any, of such loss recognized in previous periods.


Jun 30, 2013

A) Basis of Preparation:

The fnancial statements have been prepared under the historical cost convention on accrual basis and to comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied, unless otherwise stated.

b) use of estimates:

In the preparation of the Company''s fnancial statements in conformity with the accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the fnancial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in the period the same is determined.

c) Fixed assets:

- Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

- Fixed assets under construction and cost of assets not put to use before the year end, are disclosed as capital work-in-progress.

- Intangibles:

Intangible assets are stated at cost less accumulated amortisation. The cost incurred for acquiring trademarks are capitalised and amortised on a straight line basis.

d) depreciation / amortisation:

- Depreciation on fxed assets is charged on straight line method, on pro-rata basis, at the rates specifed in Schedule - XIV to the Companies Act, 1956.

- Expenditure on account of intangible assets is amortised on pro-rata basis, over the useful life thereof, as estimated by the management.

- Renovation expenditure is amortised over the useful life of renovations covered by the relevant agreements.

- Assets costing Rs. 5,000 or less each acquired during the year are fully depreciated.

e) Borrowing Costs:

Borrowing costs directly attributable to the acquisition and/or construction of qualifying assets are capitalised as part of the cost of the respective assets upto the date when such asset is ready for its intended use in accordance with the Accounting Standard (AS-16) on ''Borrowing Costs'' issued by The Institute of Chartered Accountants of India. All other borrowing costs are charged to revenue.

f) investments:

- Investments that are readily realisable and intended to be held for not more than one year are classifed as current investments. Such investments are carried at lower of cost and fair value determined on an individual investment basis.

- Other investments are classifed as long - term investments and are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of such investments.

- Proft/loss on sale of investments is computed on FIFO basis.

g) inventory valuation:

- Inventories are valued at lower of cost and net realisable value.

- Cost of purchases consists of the purchase price, including applicable duties and taxes, freight inwards and other expenditure attributable to the acquisition, less trade discounts and rebates, and include other costs incurred in bringing the inventories to their present location and condition.

- Costs are based on the First-in-First-out method. Costs in relation to inventories comprising fnished goods and Work-in-process include cost of conversion specifcally attributable and production overheads.

- Stores and spares are valued at cost/estimated cost.

h) revenue recognition:

Revenue is recognized to the extent that it can be reliably measured and it is probable that the economic benefts will fow to the Company.

- Revenue in respect of sales is recognised at the point of despatch to customers, when signifcant risks and rewards of ownership get transferred to them.

- Gross sales are inclusive of excise duty and are net of sales return and trade discounts.

- Revenue on account of interest received is recognized on a time proportion basis taking into account the amount outstanding based on interest rates implicit in the transaction.

i) expenditure:

Expenses are accounted for on an accrual basis and provisions are made for all known losses and liabilities.

j) Foreign Currency transactions:

- Transactions denominated in foreign currency are accounted at the exchange rate prevailing at the date of transaction.

- Current Assets and Current Liabilities outstanding at the Balance Sheet date are converted at the exchange rate prevailing at the year end and the resultant gain/loss is considered to revenue.

k) retirement Benefts:

Employee benefts include provident fund, superannuation fund, gratuity fund and unavailed leaves.

defned contribution plans

The Company''s contribution to provident fund, superannuation fund, employee state insurance corporation etc. are considered as defned contribution plans and are charged as an expense as it falls due based on the amount of contribution required to be made.

defned beneft plans

For defned beneft plans in the form of gratuity fund, the cost of providing benefts is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Proft and Loss in the period in which they occur.

Short-term employee benefts

The undiscounted amount of short-term employee benefts expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service.

long-term employee benefts

Unavailed leaves 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 as a liability at the present value of the defned beneft obligation as at the Balance Sheet date.

l) taxes on income:

- Provision for tax comprises current tax and deferred tax.

- The provision for current income tax is based on the estimated taxable proft for the year.

The tax flings are subject to review by the tax authorities in the jurisdictions where the Company conducts business. These reviews may result in assessments of additional taxes that are resolved with the authorities or potentially through the courts. Resolution of these matters involves some degree of uncertainty; accordingly, the Company provides income taxes for the liabilities it believes will ultimately result from the proceedings.

- Deferred income tax refects the impact of current years timing differences between taxable income/losses and the accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted as at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that suffcient future taxable income will be available against which such deferred tax assets can be realized. In respect of carry forward losses and unabsorbed depreciation, deferred tax assets are recognized only to the extent there is virtual certainty that suffcient future taxable income will be available against which such losses can be set off.

m) Provisions and Contingent liabilities:

A provision is recognised when there is a present obligation as a result of a past event and it is probable that an outfow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. A disclosure as a contingent is made when there is a possible obligation or a present obligations that may, but probably will not, require an outfow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outfow of resources is remote, no provision or disclosure is made.

n) earnings Per Share - Basic:

Basic earnings per share are calculated by dividing the net proft or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue and share split.

o) impairment of assets:

Based on tests for impairment on an annual basis in the carrying amount of assets, the Company accounts for:

- provision for impairment loss; if any, or

- the reversal, if any, of such loss recognized in previous periods.


Mar 31, 2010

1. Basis of preparation:

The financial statements have been prepared under the historical cost convention on accrual basis and to comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied, unless otherwise stated.

In the preparation of the Companys financial statements in conformity with the accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in the period in which the same is determined.

2. a) Fixed Assets:

Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Fixed assets under construction, advances paid towards acquisition of fixed assets and cost of assets not put to use before the year end, are disclosed as capital work in progress.

b) Intangibles:

Intangible assets are stated at cost less accumulated amortisation. The cost incurred for acquiring trademarks are capitalised and amortised on a straight line basis.

3. Depreciation/Amortisation:

3.1 Depreciation on fixed assets (except on trade marks) is charged on straight line method, on pro rata basis, at the rates specified in Schedule - XIV to the Companies Act, 1956.

3.2 Expenditure on account of cost of trade marks acquired, is amortised on pro-rata basis, over the useful life thereof, as estimated by the management.

3.3 Renovation expenditure is amortised over the useful life of renovations covered by the relevant agreements.

3.4 Assets costing Rs.5,000 or less each acquired during the year are fully depreciated.

4. Investments:

a) Investments that are readily realizable and intended to be held for not more than one year are classified as current investments. Such investments are carried at lower of cost and fair value determined on an individual investment basis.

b) Other investments are classified as long - term investments and are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of such investments.

c) Profit/loss on sale of investments is computed on FIFO basis. 5 Inventory Valuation:

5.1 Inventories are valued at lower of cost and net realisable value.

5.2 Cost of purchases consists of the purchase price, including applicable duties and taxes, freight inwards and other expenditure attributable to the acquisition, less trade discounts and rebates, and include other costs incurred in bringing the inventories to their present location and condition.

5.3 Costs are based on the First-in-First-out method. Costs in relation to inventories comprising finished goods and Work-in-process include cost of conversion specifically attributable and production overheads.

5.4 Stores and spares are valued at cost/estimated cost.

6. Revenue Recognition:

Revenue is recognized to the extent that it can be reliably measured and it is probable that the economic benefits will flow to the Company.

6.1 Revenue in respect of sales is recognised at the point of despatch to customers, when significant risks and rewards of ownership get transferred to them.

6.2 Gross sales are inclusive of excise duty and are net of sales return and trade discounts..

6.3 Interest income is accounted on accrual basis except interest on income-tax refunds which is accounted on realisation.

7. Expenditure:

Expenses are accounted for on an accrual basis and provisions are made for all known losses and liabilities.

8. Foreign Currency Transactions:

8.1 Transactions in foreign currency are accounted at the exchange rate prevailing at the time of transactions.

8.2 Current assets and current liabilities outstanding in foreign currency are converted at the year end exchange rate, and the resultant gain/loss is taken to revenue.

9. Retirement Benefits:

9.1 Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

9.2 Provident fund is a defined contribution scheme and the contributions are charged to the profit and loss account of the year when the contributions to the Government funds are due.

9.3 Gratuity liability is defined benefit obligation and is provided in the profit and loss account and funded into a continuing policy on the basis of annual actuarial valuation using Projected Unit Credit Method.

9.4 Pension scheme for eligible employees is a defined contribution scheme and the contributions are charged to the profit and loss account of the year and are funded into a continuing policy via a Trust established for this purpose.

9.5 Long term compensated absences are provided for based on last drawn salary and on the assumption of cessation of service of the employees at the year end.

9.6 Actuarial gains/losses are immediately taken to the profit and loss account and are not deferred.

10. Borrowing Costs:

Borrowing costs directly attributable to the acquisition and/or construction of qualifying assets are capitalised as part of the cost of the respective assets upto the date when such asset is ready for its intended use in accordance with the Accounting Standard (AS-16) on Borrowing Cost issued by The Institute of Chartered Accountants of India. All other borrowing costs are charged to revenue.

11. Taxes on Income:

11.1 Provision for tax comprises current tax and deferred tax.

11.2 The provision for current income tax is based on the estimated taxable profit for the year. The tax filings are subject to review by the tax authorities in the jurisdictions where the Company conducts business. These reviews may result in assessments of additional taxes that are resolved with the authorities or potentially through the courts. Resolution of these matters involves some degree of uncertainty; accordingly, the Company provides income taxes for the liabilities it believes will ultimately result from the proceedings.

11.3 Deferred income tax reflects the impact of current years timing differences between taxable income/ losses and the accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted as at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In respect of carry forward losses and unabsorbed depreciation, deferred tax assets are recognized only to the extent there is virtual certainty that sufficient future taxable income will be available against which such losses can be set off.

11.4 Provision for wealth tax is made based on tax liability computed after considering tax allowances and exemptions available in accordance with the provisions of the Wealth Tax Act, 1957.

12. Provisions and Contingent Liabilities:

A provision is recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. A disclosure as a contingent is made when there is a possible obligation or a present obligations 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.

13. Earnings per share: Basic:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue and share split.

14. Impairment of assets:

Based on tests for impairment on an annual basis in the carrying amount of assets, the Company accounts for:

i) provision for impairment loss; if any, or

ii) the reversal, if any, of such loss recognized in previous periods.



 
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