Atul Ltd 2014-15

133 NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued) Provident Fund: P rovident Fund for certain eligible employees is managed by the Company through the ‘Atul Products Ltd – Ankleshwar Division Employees Provident Fund Trust’ in line with Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund authorities. The contributions by the employer and employees together with the interest accumulated thereon are payable to the employees at the time of their retirement or separation from the Company, whichever is earlier. The benefits vest immediately on rendering of the services by the employee. Any shortfall in the value of assets over the Defined Benefit Obligation is recognised as a liability, with a corresponding charge to the Consolidated Statement of Profit and Loss. c) Short-term leave encashment: S hort-term leave encashment is provided at undiscounted amount during the accounting period based on service rendered by employees. d) Voluntary Retirement Scheme: C ompensation payable under the Voluntary Retirement Scheme is being charged to the Consolidated Statement of Profit and Loss in the year of settlement. 4.15 Taxation: a) I ncome tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. b) M AT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax within the specified period. c) D eferred tax asset and deferred tax liability are calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets on account of timing differences are recognised, only to the extent there is a reasonable certainty of its realisation. Deferred tax assets are reviewed at each Balance Sheet date to reassure realisation. d) D eferred tax assets, representing unabsorbed depreciation or carried forward losses are recognised, if and only if there is virtual certainty supported by convincing evidence that there will be adequate future taxable income against which such deferred tax assets can be realised. 4.16 Government grants: a) Grants are recognised when there is reasonable assurance that the same will be received. b) Revenue grants for expenses incurred are reduced from the respective expenses. c) Capital grants relating to specific fixed assets are reduced from the cost of the respective fixed assets. d) G rants in the nature of promoters’ contribution are credited to Capital reserve and treated as a part of Shareholders’ funds. 4.17 Segment reporting: The Accounting Policies adopted for segment reporting are in conformity with the Accounting Policies adopted for the Company. Further, inter-segment revenue have been accounted for based on the transaction price agreed to between segments which are primarily market based. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which related to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under ‘Unallocated corporate expenses | income.’ 4.18 Cash and cash equivalents: In the cash flow statement, cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less. 4.19 Earning per share: Earning per share (EPS) is calculated by dividing the net profit or loss for the period attributable to Equity Shareholders by the weighted average number of Equity shares outstanding during the period. Earnings considered in ascertaining the EPS is the net profit for the period and any attributable tax thereto for the period. Notes to the Consolidated Financial Statements