134 / 168
Atul Ltd | Annual Report 2014-15
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
(continued)
4.11 Revenue recognition:
Revenue 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) Domestic 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) Eligible 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) Interest income is recognised on a time proportion basis taking into account the amount
outstanding and the rate applicable.
4.12 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.
4.13 Research and Development expenditure:
Research and Development expenditure is charged to revenue under the natural 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.
4.14 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 Consolidated 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.
Long-term leave encashment:
Long-term leave encashment is provided for on the basis of an actuarial valuation carried out at the
end of the year on the projected unit credit method. Actuarial gains | losses are immediately taken
to the Consolidated Statement of Profit and Loss.
Notes
to the Consolidated Financial Statements