69 / 140
67
12 Research & Development Expenditure:
Research & Development expenditure is charged to revenue under the natural heads of account in the year
in which it is incurred. Research & Development expenditure on fixed assets is treated in the same way as
expenditure on other fixed assets.
13 Employee Benefits:
a) Defined contribution plan:
Contribution paid | payable by the Company during the period to Provident Fund, Super Annuation Fund,
Employees’ State Insurance Corporation, 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 provided for on the basis of an actuarial valuation on
projected unit credit method made at the end of each financial year. The liability so provided is represented
by creation of separate funds and is used to meet the liability as and when it accrues for payment in future.
Actuarial gains | losses are immediately taken to 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 project unit credit method. Actuarial gains | losses are immediately taken to Statement
of Profit and Loss.
Provident fund:
Provident 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 contribution by the employer and employee together with the interest accumulated thereon are
payable to employees at the time of their separation from the Company or retirement, whichever is earlier.
The benefits vest immediately on rendering of the services by the employee.
c) Short-term leave encashment:
Short-term leave encashment is provided at undiscounted amount during the accounting period based on
service rendered by employees.
d) Voluntary retirement scheme:
Compensation payable under the voluntary retirement scheme is being charged to Statement of Profit and
Loss in the year of settlement.
14 Taxation:
a) Income 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) MAT 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) Deferred 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.
15 Government Grants:
a) Government 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.
Notes
to financial statements
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
(contd)