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ii) Export sales are recognised when significant risk and rewards are transferred to the buyer as per terms
of contract.
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.
11. 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.
12. 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.
13. 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.
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
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 employees together with the interest accumulated thereon are
payable to the employees at the time of their retirement or separation from the Company, whichever is
earlier. The benefits vest immediately on rendering of the services by the employee. 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)