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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:
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and Loss in the year of settlement.
4.14 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
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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.
d) Deferred tax assets, representing unabsorbed depreciation or carried forward losses, are recognised,
if and only if there is virtual certainty that there would be adequate future taxable income against
which such deferred tax assets can be realised.
4.15 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.
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d) Government grants in the nature of promoters’ contribution are credited to capital reserve and
treated as a part of shareholders’ funds.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
(contd)
Notes
to Consolidated financial statements