Atul Ltd 2015-16

Atul Ltd | Annual Report 2015-16 Note 1 Significant Accounting Policies (continued) Notes to the Consolidated Financial Statements 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 supported by convincing evidence that there will be adequate future taxable income against which such deferred tax assets can be realised. 4.15 Government grants: a) 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. d) Grants in the nature of promoters’ contribution are credited to Capital reserve and treated as a part of Shareholders’ funds. 4.16 Segment reporting: The Accounting Policies adopted for segment reporting are in conformity with the Accounting Policies adopted for the Company. Further, inter-segment revenue have been accounted for based on the transaction price agreed to between segments which are primarily market based. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which related to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under ‘Unallocated corporate expenses | income’. 4.17 Cash and cash equivalents: In the Cash Flow Statement, cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of 3 months or less. 4.18 Earning per share: Earnings per share (EPS) is calculated by dividing the net profit or loss for the period attributable to Equity Shareholders by the weighted average number of Equity shares outstanding during the period. Earnings considered in ascertaining the EPS is the net profit for the period and any attributable tax thereto for the period. 4.19 Leases: As lessor: The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income on such operating leases are recognised in the Statement of Profit and Loss on a straight-line basis over the lease term which is representative of the time pattern in which benefit derived from the use of the leased asset is diminished. Initial direct costs are recognised as an expense in the Statement of Profit and Loss in the period in which they are incurred. As lessee: Assets taken on lease under which all risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis over the lease term in accordance with the respective Lease Agreement terms.