69 / 140
67
Notes
to financial statements
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
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Gratuity:
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year. The liability so provided is paid to a trust administered by the Company, which in turn invest in eligible
securities to meet the liability as and when it accrues for payment in future. Actuarial gains | losses are
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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 Statement of
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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
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by the employer and employee together with the interest accumulated thereon are payable to employees at
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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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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
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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.
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.