1. Basis of Accounting:
The Company maintains its accounts on accrual basis on historical cost convention in accordance with generally accepted accounting principles (GAAP) in India and in compliance with the requirements of the Companies Act, 2013.
2. Revenue Recognition:
The company follows practice of accounting for all income and expenditure on accrual basis.
3. Provision for Current and Deferred Tax:
a. Tax expenses comprise both current tax and deferred tax. Provision for the current income tax is made on the basis of relevant provision of the Income Tax Act, 1961 as applicable to the financial year.
b. Deferred Tax resulting from the “Timing Difference” between book profit and taxable profit is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize. Deferred tax assets are recognized only to the extent that there is reasonable certainty that the asset can be realized in future. Deferred tax assets are reviewed at each balance sheet date and is written down or written up to reflect the amount that is reasonably or virtually certain, as the case may be, to be realized.
4. Provision for Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.
5. Miscellaneous Expenditure:
Pre-operative expenses are amortized over a period of five years.
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