J) Provision for Current Tax and Deferred Tax
Provision for current income tax is made on the basis of the amount payable on the
taxable income computed as per provision of income tax Act, 1961. Deferred tax
resulting from timing difference between book and taxable profit for the year is
accounted for using current tax rate. Deferred tax Assets are recognized, if any only if,
there is a virtual certainty that there would be adequate future taxable income against
which such deferred tax assets can be realized
K) Foreign Currency Transactions:
Foreign currency is earned from the exports on the basis of FOB value and foreign
currency expenditure is incurred in respect of directors travelling.
L) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized for liabilities that can be measured only by using a substantial
degree of estimation, if:
• The company has a present obligation as a result of a past event.
• A probable outflow of resources is expected to settle the obligation and
• The amount of the obligation can be easily estimated.
Current Liability is disclosed in the case of:
• 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.
• A possible obligation, unless the probability of outflow of resources is remote.
Contingent Assets are neither recognized nor disclosed.
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