Mar 31, 2015
I. METHOD OF ACCOUNTING
a) The financial statements are prepared under the historical cost
convention using accrual method of accounting, except as stated
otherwise and for certain fixed assets which have been revalued.
b) Revenue from construction and project related activities is
recognized as under:
In respect of construction business, the Company follows percentage
completion method, stated on the basis of physical measurement of work
actually completed at the balance sheet date, taking into account the
contractual price and revision thereto. As per policy of the Company,
in respect of running contracts, the revenue including escalation
arrived on the basis of sales bills raised and/or unbilled work done is
recognized as and when bills are raised and/or after inspection and the
approval of the supplies by the customers as per the terms of
respective contracts.
c) Income and expenses are mainly accounted on accrual basis except
scrap and certain other income /expenses with significant
uncertainties.
d) Amounts recoverable in respect of the price and other escalation,
claims adjudication and variation in contract work required for
performance of the contract are accounted to the extent that it is
probable that they will result in revenue.
e) Contractual liquidated damages, payable for delays in completion of
contract work or for other causes, are accounted for as costs when such
delays and causes are attributable to the Company or when deducted by
the client.
II. USE OF ESTIMATES
The preparation of financial statements requires the Management to make
estimates and assumptions considered in the reported amounts of assets
and liabilities (including contingent liabilities) as on the date of
financial statements and the reported income and expenses during the
reporting period. Difference between the actual results and estimates
are recognized in the period in which results are known/ materialized.
III. FIXED ASSETS
Fixed Assets are stated at cost, less accumulated depreciation and
impairment, if any. Direct costs in relation to the fixed assets are
capitalized until such assets are ready to us.
Depreciation on tangible assets is provided on the straight-line method
over the useful lives of assets estimated by the Management.
Depreciation for assets purchased during a period is proportionately
charged. The Management estimates the useful lives and residual values
of the fixed assets as prescribed under Part C of Schedule II of the
Companies Act 2013 as follows.
Fixed Asset Useful Life Residual Value
Factory Building 30 years 5%
IV. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Statement of Profit and Loss in the year in which an asset is
identified as impaired. The impairment loss recognized in prior
accounting periods is reversed if there has been a change in the
estimate of recoverable amount.
V. DEPRECIATION
a) Depreciation is provided on straight line method according to the
rates specified in Schedule II of Companies Act, 2013.
b) In respect of the assets purchased / sold during the year, pro rata
depreciation based on number of days is provided.
c) Depreciation on assets costing up to Rs. 5,000/- is provided at the
rate of 100%.
d) Depreciation on revalued assets has been provided on revalued
amounts. Additional depreciation on revaluation is adjusted against
transfer of equivalent amount from Revaluation Reserve.
VI. VALUATION OF INVENTORIES
a) Finished Goods (Prefabricated Goods)
Finished Goods are valued at Cost or Market Value whichever is lower.
b) Construction Materials
Stock of materials lying at stores/sites has been valued at cost on
first-in first-out basis, by the concerned store/site-in-charge.
Loose tools are charged to Profit & Loss Account as and when purchased.
c) Work in Progress
Work in Progress is accounted on progressive basis.
VII. CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
Adjustment to assets and liabilities are made for events occurring
between balance sheet date and the date on which the financial
statements are approved that provide additional information materially
affecting the determination of the amounts relating to the conditions
existing at the balance sheet date.
VIII. PRIOR PERIOD ITEMS
Prior period items are income and expenses that arises in the current
period as a result of errors and omissions in the preparation of the
financial statements of the one and more prior periods. Prior period
does not include other adjustments necessitated by circumstances, which
though related to prior periods, are determined in the current period.
IX. BORROWING COST
Borrowing costs that are attributable to the acquisition or construction
of qualifying assets are capitalized as part of the cost of such assets.
A qualifying asset is one that takes substantial period of time to get
ready for its intended use. All other borrowing costs are charged to
Statement of Profit and Loss.
X. RETIREMENT BENEFITS
a) Contributions to the provident fund, a defined contribution scheme,
are charged to the Statement of Profit and Loss.
b) Gratuity has been accounted on actuarial valuation. Any curtailment
in the liability during the year is recognized as Income and credited
to Statement of Profit & Loss.
c) Presently, the Company does not have any other defined benefit for
staff payable on retirement/ cessation of service.
XI. EMPLOYEE BENEFITS
a) Short term employee benefits are recognized as expense at the
undiscounted amount in the Statement of Profit and Loss of the year in
which the related service is rendered.
b) Post employment and other long term employee benefits are recognized
as an expense in the Statement of Profit and Loss of the year in which
the employee has rendered services. The expense is recognized at the
present value of the amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the Statement of
Profit and Loss.
XII. TAXATION
Income tax comprises of Current Tax and Deferred Tax. Current Tax is
the amount of tax payable as determined in accordance with the
provisions of Income Tax Act, 1961. Deferred Tax charge or credit is
recognized using the tax rates and tax laws that have been
substantially enacted at the Balance Sheet date. Where there is
unabsorbed depreciation or carry forward losses, Deferred Tax Assets
are recognized only if there is virtual certainty supported by
convincing evidence that sufficient future taxable income will be
available against which such Deferred Tax Assets can be realized. Other
Deferred Tax Assets are recognized only to the extent there is
reasonable certainty of realization in future.
Undisputed assessment dues if any, are accounted on cash basis and
disputed matters under appeal are disclosed by way of contingent
liabilities.
XIII. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
A provision is recognized when there is a present obligation as a
result of 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. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the Balance Sheet date. These are reviewed at
each Balance Sheet date and adjusted to reflect the current best
estimates.
Contingent Liability is disclosed in case of:
a. A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
b. A possible obligation, unless the probability of outflow of
resources is remote.
Contingent Assets are neither recognized nor disclosed.
Mar 31, 2014
I. METHOD OF ACCOUNTING
a) The financial statements are prepared under the historical cost
convention using accrual method of accounting, except as stated
otherwise and for certain fixed assets which have been revalued.
b) Revenue from construction and project related activities is
recognized as under:
In respect of construction business, the Company follows percentage
completion method, stated on the basis of physical measurement of work
actually completed at the balance sheet date, taking into account the
contractual price and revision thereto. As per policy of the Company,
in respect of running contracts, the revenue including escalation
arrived on the basis of sales bills raised and/or unbilled work done is
recognized as and when bills are raised and/or after inspection and the
approval of the supplies by the customers as per the terms of
respective contract.
c) Income and expenses are mainly accounted on accrual basis except
scrap and certain other income /expenses with significant
uncertainties.
d) Amounts recoverable in respect of the price and other escalation,
claims adjudication and variation in contract work required for
performance of the contract are accounted to the extent that it is
probable that they will result in revenue.
e) Contractual liquidated damages, payable for delays in completion of
contract work or for other causes, are accounted for as costs when such
delays and causes are attributable to the Company or when deducted by
the client.
II. USE OF ESTIMATES
The preparation of financial statements requires the Management to make
estimates and assumptions considered in the reported amounts of assets
and liabilities (including contingent liabilities) as on the date of
financial statements and the reported income and expenses during the
reporting period. Difference between the actual results and estimates
are recognized in the period in which results are known/ materialized.
III. FIXED ASSETS
a) Certain premises and Plant & Machinery were revalued in March 1994
and are stated at such revalued amount less accumulated depreciation.
Other assets are carried at cost less accumulated depreciation.
Appropriate adjustment is made for any asset(s) disposed out of the
revalued assets.
b) Cost includes interest on specific borrowing relating to fixed
assets acquisition, specific expenses pertaining to respective assets
by the registered office, other indirect expenses pertaining to
acquisition of assets on percentage basis as consistently followed in
the previous year and incidental expenses incurred up to the date of
commissioning are capitalized on the commencement of commercial
production.
c) Self-manufactured assets are capitalized at cost including
appropriate apportionment from overheads.
IV. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Statement of Profit and Loss in the year in which an asset is
identified as impaired. The impairment loss recognized in prior
accounting periods is reversed if there has been a change in the
estimate of recoverable amount.
V. DEPRECIATION
a) Depreciation is provided on straight line method according to the
rates specified in Schedule XIV of Companies Act, 1956.
b) In respect of the assets purchased / sold during the year, pro rata
depreciation based on number of days is provided.
c) Depreciation on assets costing up to Rs. 5,000/- is provided at the
rate of 100%.
d) Depreciation on revalued assets has been provided on revalued
amounts. Additional depreciation on revaluation is adjusted against
transfer of equivalent amount from Revaluation Reserve.
VI. VALUATION OF INVENTORIES
a) Finished Goods (Prefabricated Goods)
Finished Goods are valued at Cost or Market Value whichever is lower.
b) Construction Materials
Stock of materials lying at stores/sites has been valued at cost on
first-in first-out basis, by the concerned store/site-in-charge.
Loose tools are charged to Profit & Loss Account as and when purchased.
c) Work in Progress
Work in Progress is accounted on progressive basis.
VII. CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
Adjustment to assets and liabilities are made for events occurring
between balance sheet date and the date on which the financial
statements are approved that provide additional information materially
affecting the determination of the amounts relating to the conditions
existing at the balance sheet date.
VIII. PRIOR PERIOD ITEMS
Prior period items are income and expenses that arises in the current
period as a result of errors and omissions in the preparation of the
financial statements of the one and more prior periods. Prior period
does not include other adjustments necessitated by circumstances, which
though related to prior periods, are determined in the current period.
IX. BORROWING COST
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that takes substantial period
of time to get ready for its intended use. All other borrowing costs
are charged to Statement of Profit and Loss.
X. RETIREMENT BENEFITS
a) Contributions to the provident fund, a defined contribution scheme,
are charged to the Statement of Profit and Loss.
b) Gratuity has been accounted on actuarial valuation. Any curtailment
in the liability during the year is recognized as Income and credited
to Statement of Profit & Loss.
c) Presently, the Company does not have any other defined benefit for
staff payable on retirement/ cessation of service.
XI. EMPLOYEE BENEFITS
a) Short term employee benefits are recognized as expense at the
undiscounted amount in the Statement of Profit and Loss of the year in
which the related service is rendered.
b) Post employment and other long term employee benefits are recognized
as an expense in the Statement of Profit and Loss of the year in which
the employee has rendered services. The expense is recognized at the
present value of the amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the Statement of
Profit and Loss.
XII. TAXATION
Income tax comprises of Current Tax and Deferred Tax. Current Tax is
the amount of tax payable as determined in accordance with the
provisions of Income Tax Act, 1961. Deferred Tax charge or credit is
recognized using the tax rates and tax laws that have been
substantially enacted at the Balance Sheet date. Where there is
unabsorbed depreciation or carry forward losses, Deferred Tax Assets
are recognized only if there is virtual certainty supported by
convincing evidence that sufficient future taxable income will be
available against which such Deferred Tax Assets can be realized. Other
Deferred Tax Assets are recognized only to the extent there is
reasonable certainty of realization in future Undisputed assessment
dues if any, are accounted on cash basis and disputed matters under
appeal are disclosed by way of contingent liabilities.
XIII. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
A provision is recognized when there is a present obligation as a
result of 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. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the Balance Sheet date. These are reviewed at
each Balance Sheet date and adjusted to reflect the current best
estimates.
Contingent Liability is disclosed in case of:
a. A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation
b. A possible obligation, unless the probability of outflow of
resources is remote.
Contingent Assets are neither recognized nor disclosed.
Mar 31, 2013
I METHOD OF ACCOUNTING
a) The financial statements are prepared under the historical cost
convention using accrual method of accounting, except as stated
otherwise and for certain fixed assets which have been revalued.
b) Revenue from construction and project related activities is
recognized as under:
In respect of construction business, the Company follows percentage
completion method, stated on the basis of physical measurement of work
actually completed at the balance sheet date, taking into account the
contractual price and revision thereto. As per policy of the Company,
in respect of running contracts, the revenue including escalation
arrived on the basis of sales bills raised and/or unbilled work done is
recognized as and when bills are raised and/or after inspection and the
approval of the supplies by the customers as per the terms of
respective contracts.
c) Income and expenses are mainly accounted on accrual basis except
scrap and certain other income /expenses with significant
uncertainties.
d) Amounts recoverable in respect of the price and other escalation,
claims adjudication and variation in contract work required for
performance of the contract are accounted to the extent that it is
probable that they will result in revenue.
e) Contractual liquidated damages, payable for delays in completion of
contract work or for other causes, are accounted for as costs when such
delays and causes are attributable to the Company or when deducted by
the client.
II USE OF ESTIMATES
The preparation of financial statements requires the Management to make
estimates and assumptions considered in the reported amounts of assets
and liabilities (including contingent liabilities) as on the date of
financial statements and the reported income and expenses during the
reporting period. Difference between the actual results and estimates
are recognized in the period in which results are known/ materialized.
III FIXED ASSETS
a) Certain premises and Plant & Machinery were revalued in March 1994
and are stated at such revalued amount less accumulated depreciation.
Other assets are carried at cost less accumulated depreciation.
Appropriate adjustment is made for any asset(s) disposed out of the
revalued assets.
b) Cost includes Interest on specific borrowing relating to fixed
assets acquisition, specific expenses pertaining to respective assets
by the registered office, other indirect expenses pertaining to
acquisition of assets on percentage basis as consistently followed in
the previous year and incidental expenses incurred up to the date of
commissioning are capitalized on the commencement of commercial
production.
c) Self-manufactured assets are capitalized at cost including
appropriate apportionment from overheads.
IV IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Statement of Profit and Loss in the year in which an asset is
identified as impaired. The impairment loss recognized in prior
accounting periods is reversed if there has been a change in the
estimate of recoverable amount.
V. DEPRECIATION
a) Depreciation is provided on straight line method according to the
rates specified in Schedule XIV of Companies Act, 1956.
b) In respect of the assets purchased / sold during the year, pro rata
depreciation based on number of days is provided.
c) Depreciation on assets costing up to Rs. 5,000/- is provided at the
rate of 100%.
d) Depreciation on revalued assets has been provided on revalued
amounts. Additional depreciation on revaluation is adjusted against
transfer of equivalent amount from Revaluation Reserve.
VI INVESTMENTS
Investments are classified into Current Investments and Non Current
Investments. Investments intended to be held for more than one year are
classified as Non Current Investments. Current Investments are stated
at lower of cost and fair value. Long Term Investments are stated at
cost. A provision for diminution is made to recognize a decline, other
than temporary in nature, in the value of Long-term Investments.
VII VALUATION OF INVENTORIES
a) Finished Goods (Prefabricated Goods)
Finished Goods are valued at Cost or Market Value whichever is lower.
b) Construction Materials
Stock of materials lying at store/sites has been valued at cost on
first-in first-out basis, by the concerned store/site-in-charge.
Loose Tools are charged to Profit & Loss Account as and when purchased.
c) Work in Progress
Work in Progress is accounted on progressive basis.
VIII CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
Adjustment to Assets and liabilities are made for events occurring
between balance sheet date and the date on which the financial
statements are approved that provide additional information materially
affecting the determination of the amounts relating to the conditions
existing at the balance sheet date.
IX PRIOR PERIOD ITEMS
Prior period items are income and expenses that arises in the current
period as a result of errors and omissions in the preparation of the
financial statements of the one and more prior periods. Prior period
does not include other adjustments necessitated by circumstances, which
though related to prior periods, are determined in the current period.
X BORROWING COST
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that takes substantial period
of time to get ready for its intended use. All other borrowing costs
are charged to Statement of Profit and Loss.
XI. RETIREMENT BENEFITS
a) Contributions to the provident fund, a defined contribution scheme,
are charged to the Statement of Profit and Loss.
b) Gratuity has been accounted on actuarial valuation.
c) Presently, the Company does not have any other defined benefit for
staff payable on retirement/ cessation of service.
XII EMPLOYEE BENEFITS
a) Short term employee benefits are recognized as expense at the
undiscounted amount in the Statement of Profit and Loss of the year in
which the related service is rendered.
b) Post employment and other long term employee benefits are recognized
as an expense in the Statement of Profit and Loss of the year in which
the employee has rendered services. The expense is recognized at the
present value of the amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the Statement of
Profit and Loss.
XIII. TAXATION
Income tax comprises of Current Tax and Deferred Tax. Current Tax is
the amount of tax payable as determined in accordance with the
provisions of Income Tax Act, 1961. Deferred Tax charge or credit is
recognized using the tax rates and tax laws that have been
substantially enacted at the Balance Sheet date. Where there is
unabsorbed depreciation or carry forward losses, Deferred Tax Assets
are recognized only if there is virtual certainty supported by
convincing evidence that sufficient future taxable income will be
available against which such Deferred Tax Assets can be realized. Other
Deferred Tax Assets are recognized only to the extent there is
reasonable certainty of realization in future
Undisputed assessment dues if any, are accounted on cash basis and
disputed matters under appeal are disclosed by way of contingent
liabilities.
XIV. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
A provision is recognized when there is a present obligation as a
result of 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. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the Balance Sheet date. These are reviewed at
each Balance Sheet date and adjusted to reflect the current best
estimates.
Contingent Liability is disclosed in case of:
a. A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation
b. A possible obligation, unless the probability of outflow of
resources is remote.
Contingent Assets are neither recognized nor disclosed.
Jun 30, 2010
I. METHOD OF ACCOUNTING & REVENUE RECOGNITION
a) The financial statements are prepared under the historical cost
convention using accrual method of accounting, except as stated
otherwise and for certain fixed assets which have been revalued.
b) Revenue from construction and project related activities is
recognized as under -
In respect of construction business, the Company follows percentage
completion method, stated on the basis of physical measurement of work
actually completed at the balance sheet date, taking into account the
contractual price and revision thereto. As per policy of the Company,
in respect of running contracts, the revenue including escalation
arrived on the basis of sales bills raised and/or unbilled work done is
recognized as and when bills are raised and/or after inspection and the
approval of the supplies by the customers as per the terms of
respective contracts.
c) Income and expenses are mainly accounted on accrual basis except
scrap, interest on call money in arrears and certain other income
/expenses with significant uncertainties.
d) Amounts recoverable in respect of the price and other escalation,
claims adjudication and variation in contract work required for
performance of the contract are accounted to the extent that it is
probable that they will result in revenue.
e) Contractual liquidated damages, payable for delays in completion of
contract work or for other causes, are accounted for as costs when such
delays and causes are attributable to the Company or when deducted by
the client.
II. USE OF ESTIMATES
The preparation of financial statements requires the management to make
estimates and assumptions considered in the reported amounts of assets
and liabilities (including contingent liabilities) as on the date of
financial statements and the reported income and expenses during the
reporting period. Difference between the actual results and estimates
are recognized in the period in which results are known/ materialized.
III. FIXED ASSETS
a) Certain premises and Plant & Machinery were revalued in March 1994
and are stated at such revalued amount less accumulated depreciation.
Other assets are carried at cost less accumulated depreciation.
Appropriate adjustment is made for any asset(s) disposed out of the
revalued assets.
b) Cost includes Interest on specific borrowing relating to fixed
assets acquisition, specific expenses pertaining to respective assets
by the registered office, other indirect expenses pertaining to
acquisition of assets on percentage basis as consistently followed in
the previous year and incidental expenses incurred up to the date of
commissioning are capitalized on the commencement of commercial
production.
c) Self-manufactured assets are capitalized at cost including
appropriate apportionment from overheads.
IV. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which as asset is identified as
impaired. The impairment loss recognized in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
V. DEPRECIATION
a) Depreciation is provided on straight line method according to the
rates specified in Schedule XIV of Companies Act, 1956.
b) In respect of the assets purchased / sold during the year, pro rata
depreciation based on number of days is provided.
c) Depreciation on assets costing up to Rs. 5,000/- is provided at the
rate of 100%.
d) Depreciation on revalued assets has been provided on revalued
amounts. Additional depreciation on revaluation is adjusted against
transfer of equivalent amount from Revaluation Reserve.
VI. INVESTMENTS
Investments intended to be held for more than one year are classified
as long term investments and are carried at cost of acquisition
inclusive of other attributable expenses or fair value whichever is
lower. Diminution in the value of investment is provided for, if such
diminution is of other than temporary nature.
Current Investments are carried at lower of cost and fair value.
All Investments are of long-term nature and are stated at cost of
acquisition.
VII. VALUATION OF INVENTORIES
a) Finished Goods(Prefabricated Goods)
Finished Goods are valued at Cost or Market Value whichever is lower.
b) Construction Materials
Stock of materials lying at store/sites has been valued at cost on
first-in first-out basis, by the concerned store/site-in-charge.
Loose Tools are charged to Profit & Loss Account as and when purchased.
c) Work in Progress
Work in Progress is accounted on progressive basis.
VIII. AMORTISATION
Pre-operative and preliminary expenses are being amortised.
IX. CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
Adjustment to Assets and liabilities are made for events occurring
between balance sheet date and the date on which the financial
statements are approved that provide additional information materially
affecting the determination of the amounts relating to the conditions
existing at the balance sheet date.
X. PRIOR PERIOD ITEMS
Prior period items are income and expenses that arises in the current
period as a result of errors and omissions in the preparation of the
financial statements of the one and more prior periods. Prior period
does not include other adjustments necessitated by circumstances, which
though related to prior periods, are determined in the current period.
XI. BORROWING COST
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that takes substantial period
of time to get ready for its intended use. All other borrowing costs
are charged to Profit and Loss account. There are no borrowings for any
capital expenditure and hence above standard is not applicable.
XII. RETIREMENT BENEFITS
a) Contributions to the provident fund, a defined contribution scheme,
are charged to the profit and loss account.
b) Gratuity has been accounted on actuarial valuation.
c) Presently, the Company does not have any other defined benefit for
staff payable on retirement/ cessation of service.
XIII. EMPLOYEE BENEFITS
a) Short term employee benefits are recognized as expense at the
undiscounted amount in the Profit and Loss account of the year in which
the related service is rendered.
b) Post employment and other long term employee benefits are recognized
as an expense in the profit and loss account of the year in which the
employee has rendered services. The expense is recognized at the
present value of the amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the Profit and
Loss account.
XIV. TAXATION
Income tax comprises Current tax and deferred tax. Current tax is the
amount of tax payable as determined in accordance with the provisions
of Income Tax Act, 1961. Deferred tax charge or credit is recognized
using the tax rates and tax laws that have been enacted by the Balance
Sheet date. Where there is unabsorbed depreciation or carry forward
losses, deferred tax assets are recognized only if there is virtual
certainty of realization of such assets. Other deferred tax assets are
recognized only to the extent there is reasonable certainty of
realization in future Undisputed assessment dues if any, are accounted
on cash basis and disputed matters under appeal are disclosed by way of
contingent liabilities.
XV. PROVISIONS. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
A provision is recognized when there is a present obligation as a
result of 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. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the Balance Sheet date. These are reviewed at
each Balance Sheet date and adjusted to reflect the current best
estimates.
Contingent Liability is disclosed in case of-
a. A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation,
b. A possible obligation, unless the probability of outflow of
resources is remote.
Contingent Assets are neither recognized nor disclosed.