Atul Ltd 2014-15

95 forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in Shareholders’ funds is transferred to the Statement of Profit and Loss for the period. 11. Revenue recognition: R evenue from sales are recognised when all significant risks and rewards of ownership have been transferred to the buyer and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. a) Sale of goods and services: i) D omestic sales are accounted for on dispatch from the point of sale, where property in goods are transferred to the buyer. ii) Export sales are accounted on the basis of dates of on board bill of lading and | or air way bill. iii) Service income is recognised, net of service tax, when the related services are rendered. b) Other revenue: i) E ligible export incentives are recognised in the year in which the conditions precedent are met and there is no significant uncertainty about the collectability. ii) Lease rental income is recognised on accrual basis. iii) Dividend income is accounted for in the year in which the right to receive the same is established. iv) I nterest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. 12. Provisions, contingent liabilities and contingent assets: Provisions involving a 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. Provision is not discounted to its present value and is determined based on the best estimate required to settle an obligation at the year end. These are reviewed every year end and adjusted to reflect the best current estimate. Contingent liabilities are not recognised but are disclosed in the Financial Statements. Contingent assets are neither recognised nor disclosed in the Financial Statements. 13. Research and Development expenditure: Research and Development expenditure is charged to revenue under the respective heads of account in the year in which it is incurred. However, development expenditure qualifying as an intangible asset, if any, is capitalised, to be amortised over the economic life of the product | patent. Research and Development expenditure on fixed assets is treated in the same way as expenditure on other fixed assets. 14. Employee benefits: a) Defined contribution plan: Contribution paid | payable by the Company during the period to Provident Fund, Superannuation Fund, Employees’ State Insurance Corporation, National Pension Scheme and Labour Welfare Fund are recognised in the Statement of Profit and Loss. b) Defined benefit plan: Gratuity: Gratuity liability is a defined benefit obligation and is computed on the basis of an actuarial valuation by an actuary appointed for the purpose as per projected unit credit method at the end of each financial year. The liability so provided is paid to a Trust administered by the Company, which in turn invests in eligible securities to meet the liability as and when it accrues for payment in future. Actuarial gains | losses are immediately taken to the Statement of Profit and Loss. Any shortfall in the value of assets over the defined benefit obligation is recognised as a liability with a corresponding charge to the Statement of Profit and Loss. Notes to the Financial Statements NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued)