Provisions and Contingent Liabilities
A Provision is recognised when the entity has a present obligation as a result of past event and it is probable that an outflow
of resources will be required and a reliable estimate can be made of the amount of the obligation. Provisions are measured
at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the entity or a present obligation that arises from past events where it is either not probable that an outflow of resources
will be required to settle the obligation or a reliable estimate of the amount cannot be made. A Contingent asset is neither
recognised nor disclosed.
Revenue Recognition
Revenue from sale of goods is recognised when control and significant risks and rewards of ownership of the products being
sold is transferred to the customer. This is generally fulfilled at the time of dispatch, delivery or upon formal customer
acceptance depending on customer terms. Revenue is measured on the basis of contracted price, after deduction of any
trade discounts, volume rebates and any taxes or duties collected on behalf of the government such as goods and services
tax, etc. Previous experience is used to estimate the provision for such discounts and rebates. Revenue is only recognised to
the extent that it is highly probable a significant reversal will not occur. Income from services rendered is recognised based
on agreements/arrangements with the customers as the service is performed and there are no unfulfilled obligations.
Interest income is recognized on accrual basis, adopting a time proportion method, taking into account the amount
outstanding and the rate applicable. Dividend income on investments is accounted for when the right to receive the income
is established. Export incentives are recognised on accrual basis to the extent the management is certain of the income.
Employee Benefits
Short-term employee Benefits
Benefits such as salaries, wages and performance incentives are charged to the statement of profit and loss at the actual
amounts due in the period in which the employee renders the related service.
Defined Contribution Plans
Payments made to defined contribution plans such as provident and pension fund are charged as an expense based on the
amount of contribution required to be made as and when services are rendered by the employees.
Defined Benefit Plans
All defined benefit plans obligations are determined based on valuations, as at the Balance Sheet date, made by
independent actuary using the projected unit credit method. Actuarial gains and losses are recognised immediately in the
statement of profit and loss. The fair value of the plan assets is reduced from the gross obligation under the defined benefit
plan, to recognise the obligation on net basis.
Other Long-term Employee Benefits
Other long-term employee benefits include leave encashment. Leave encashment is recognised as an expense in the
statement of profit and loss as and when it accrues on actuarial basis.
Borrowing Cost
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised. Qualifying
asset is an assets that necessesarily takes substantial period of time to get ready for its intended use. Other borrowing costs
are recognised as an expense in the period in which they are incurred.
Taxes on Income
Income tax expense for the year comprises of current tax and deferred tax.
Current tax
Current tax is the estimated amount of tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date. Minimum Alternate Tax (MAT) is accounted as Current tax when the taxes
calculated as per Book profits are greater than the taxes calculated as per normal provisions of Income Tax. Credit for such
MAT is availed when the entity is subjected to normal tax provisions in the future. MAT credit Entitlement is recognised as an
asset based on the management's estimate of its recoverability in the future.
Earnings per Share
In determining earnings per share, the Company considers the net profit after tax attributable to equity shareholders. The
number of shares used in computing basic earnings per share is the weighted average number of equity shares outstanding
during the year. The number of equity shares used in computing diluted earnings per share comprises weighted average
number of equity shares considered for deriving basic earnings per share and also weighted average number of equity shares
which could have been issued on the conversion of all dilutive potential equity shares.
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