Scheduleforming part of the Balance Sheet - Domain-b

The Indian Hotels Company Limited
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Schedule forming part of the Balance Sheet
Schedule 14 : Notes to the Balance Sheet and the Profit and Loss Account
(h) Impairment of Assets:
Impairment is ascertained at each Balance Sheet date in respect of the Company’s fixed assets. An impairment loss is
recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the
greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted
to their present value, based on an appropriate discount factor.
(i) Assets taken on lease:
Operating Lease payments are recognised as expenditure in the Profit and Loss Account on a straight line basis,
representative of the time pattern of benefits received from the use of the assets taken on lease.
(j) Inventories:
Stock of food and beverages and operating supplies are carried at cost (computed on weighted average basis) or Net
Realisable Value, whichever is lower.
(k) Investments:
i) Long term investments are carried at cost. However, provision is made for diminution in value, other than
temporary, on an individual basis.
ii) Current investments are carried at the lower of cost and fair value, determined on a category-wise basis.
(l) Miscellaneous Expenditure:
Payments made under the Voluntary Retirement Scheme, including the additional liabilities towards leave encashment
and gratuity, arising pursuant to the Voluntary Retirement Scheme, are amortised over a period of 60 months,
commencing from the month in which the Scheme is implemented, or upto 31 st March, 2010, whichever is earlier.
(m) Taxes on income:
i. Income tax is computed in accordance with Accounting Standard 22 - ‘Accounting for Taxes on Income’ (AS-22),
notified by the Companies (Accounting Standards) Rules, 2006. Tax expenses are accounted in the same period to
which the revenue and expenses relate.
ii. Provision for current income tax is made for the tax liability payable on taxable income after considering tax allow
ances, deductions and exemptions determined in accordance with the prevailing tax laws. The differences be
tween the taxable income and the net profit or loss before tax for the year as per the financial statements are
identified and the tax effect of timing differences is recognised as a deferred tax asset or deferred tax liability. The
tax effect is calculated on accumulated timing differences at the end of the accounting year based on effective tax
rates substantively enacted by the Balance Sheet date that would apply in the years in which the timing
differences are expected to reverse.
iii. Deferred tax assets, other than on unabsorbed depreciation or carried forward losses, are recognised only if there
is reasonable certainty that they will be realised in the future and are reviewed for the appropriateness of their
respective carrying values at each Balance Sheet date.