Amal Ltd 2011-12

Amal Ltd | Annual Report 2011-12 No provision is recognised for – i. Any possible obligation that arises frompast events and 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 Company; or ii. Any present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or a reliable estimate of the amount of obligation cannot be made. iii. Such obligations are recorded as contingent liabilities. These are assessed continually and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made. iv. Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised. M. Research & Development Expenditure: Research & Development Expenditure is charged to revenue under the natural heads of account in the year in which it is incurred. However, Research & Development expenditure on Fixed Assets is treated in the same way as expenditure on other Fixed Assets. N. Employee Benefits: i. Defined Contribution Plan: C ompany’s contribution paid | payable during the period to Provident Fund, Employees’ Deposit Link Insurance Scheme, Officer Super Annuation Fund, Employees’ State Insurance Corporation, and Labour Welfare Fund are recognised in the Statement of Profit and Loss. ii. Defined Benefit Plan: Gratuity: G ratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. The liability so provided is represented by creation of separate funds and is used to meet the liability as and when it accrues for payment in future. Actuarial gains | losses are immediately taken to Statement of Profit and Loss. Long-term Leave Encashment: L ong-term leave encashment are provided for based on actuarial valuation on project unit credit method carried by an actuary as at the end of the year. Actuarial gains | losses are immediately taken to Statement of Profit and Loss. iii. Short-term Employee Benefits: S hort term leave encashment are provided at undiscounted amount during the accounting period based on service rendered by employee. iv. Voluntary Retirements: Compensation payable under the Voluntary Retirement Scheme is being charged to Statement of Profit and Loss. O. Taxation: i. I ncome-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. ii. T he Company is declared sick under Section 17(1) of SICA (Special Provisions),1985 and hence the MAT under Section 115JB of the Income Tax Act,1961 is not applicable. iii. D eferred 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. P. Earnings Per Share: The Company reports basic and diluted Earnings Per Share in accordance with Accounting Standard 20 on ‘Earnings Per Share’. Basic earnings per share are computed by dividing the net profit or loss for the period by the weighted average number of equity share outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of equity shares outstanding during the period adjusted for the effects of all diluted potential equity shares except where the results are anti-dilutive. Notes to financial statements for the year ended March 31, 2012