2010-11 - Grasim

UltraTec
ech Cement Limited
SCHEDULE 21 (Contd.)
The difference between the face value and the issue price of ‘Discounted Value Non-Convertible
Debentures’, being in the nature of interest, is charged to the profit and loss account, on a
compound interest basis determined with reference to the yield inherent in the discount.
13.
Taxation:
Current Tax is measured on the basis of estimated taxable income for the current accounting
period and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.
Deferred Tax resulting from “timing differences” between book and taxable profit for the year is
accounted for using the tax rates and laws that have been enacted or substantively enacted as on
the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent
that there is reasonable certainty, except for carried forward losses and unabsorbed depreciation
which are recognised based on virtual certainty, that the assets will be realised in future.
14.
Revenue enue Recognition:
(i) Sales Revenue is recognised on transfer of significant risks and rewards of ownership of the
goods to the buyer. Sales are net of Sales Tax, VAT, trade discounts, rebates and returns but
includes excise duty.
(ii) Income from services is recognised as they are rendered, based on agreement/arrangement
with the concerned parties.
(iii) Dividend income on investments is accounted for when the right to receive the payment is
established. Interest income is recognised on accrual basis.
(iv) Export Incentives, insurance, railway and other claims, where quantum of accruals cannot be
ascertained with reasonable certainty, are accounted on acceptance basis.
15.
5. Mines Restoration Expenditure:
The Company provides for the estimated expenditure required to restore quarries and mines. The
total estimate of restoration expenses is apportioned over the estimate of mineral reserves and a
provision is made based on minerals extracted during the year.
The total estimate of restoration expenses is reviewed periodically, on the basis of technical
estimates.
16.
6. Pro
rovisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised when there is a present obligation as a result of past events and it is
probable that an outflow of resources will be required to settle the obligation, in respect of which
a reliable estimate can be made. These are reviewed at each Balance Sheet date and adjusted to
reflect the current best estimate.
Contingent Liabilities are not recognised but are disclosed and Contingent Assets are neither
recognised nor disclosed, in the financial statements.
17. Employees Share based payments:
The Company follows intrinsic value method for valuation of Employees Stock Options. The
excess of the market price of shares at the time of grant of options, over the exercise price to be
paid by the option holder is considered as employee compensation expense and is amortised in
the Profit and Loss account over the period of vesting, adjusting for the actual and expected
vesting.
18.
Earnings Per Share:
The basic Earnings Per Share (“EPS”) is computed by dividing the net profit after tax for the year
attributable to the equity shareholders by the weighted average number of equity shares
outstanding during the year.
For the purpose of calculating diluted earnings per share, net profit after tax for the year attributable
to the equity shareholders and the weighted average number of equity shares outstanding during
the year are adjusted for the effects of all dilutive potential equity shares.
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