Annual Report FY 2010-11 - Pipavav Shipyard

14. PROVISION FOR CURRENT AND DEFERRED TAX:
Annual Report 2010-11
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax
Act, 1961. Deferred tax resulting from “timing differences” between taxable and accounting income is accounted for using
the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is
recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.
15. 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 an asset is identified as impaired. The impairment loss
recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
16. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions involving substantial degree of estimation in measurement are recognised 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 recognised
but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.
17. PRELIMINARY AND ISSUE EXPENSES:
Preliminary and Expenses related to issue of equity, equity related instruments and debentures are adjusted against the
securities premium account.
Schedule 22: Notes to Accounts
(Rs. in Lacs)
1. Contingent Liabilities: 31.03.2011 31.03.2010
a) Guarantees given by Company’s Bankers
i) Refund Bank Guarantees given to customers (Net of liabilities
accounted for)
17,539.84 48,400.26
ii) Other Bank Guarantees
(Bank Guarantees are provided under Contractual/ Legal obligations.
No cash outflow is expected)
b) Demands not acknowledged as Debts
i) Income Tax
(Out of total demand the Company has already deposited Rs.288.67
Lacs (P.Y. Rs. 21.17 Lacs) and no further cash outflow is expected in
the near future)
ii) Service Tax and excise duty
(Relates to disallowance of Cenvat Credit taken by the Company.)
iii) Other Claims
(Relates to claims of suppliers and demand raised by vendor for
service tax etc. No Cash Outflow is expected.)
c) Letters of Credit opened in favour of suppliers
(Cash Flow is expected on receipt of materials from Suppliers)
9,065.85 7,597.99
397.32 40.49
58.45 -
192.10 94.01
23,388.51 1,891.67
2. Estimated amount of contracts remaining to be executed on Capital Accounts
and not provided for (Net of Advances).
3,377.20 11,630.89
(Cash flow is expected on execution of such Capital Contracts on Progressive
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