2009-10 Annual Report - SPML

SPML INFRA LIMITEDSPML INFRA LIMITED (formerly Subhash Projects and Marketing Limited)SCHEDULES FORMING PART OF THE BALANCE SHEET AND PROFIT & LOSS ACCOUNTShort term compensated absences are provided for based on accrual basis. Long term compensated absences are provided for based on actuarialvaluation made at the end of each financial year, which is done as per the projected unit credit method.Actuarial gain and losses are recognized immediately in the statement of Profit & Loss Account as income or expenses.13. Income taxesTax expense comprises of current and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authoritiesin accordance with the Indian Income Tax Act. Deferred taxes reflect the impact of current year timing differences between taxable income andaccounting income for the year and reversal of timing differences of earlier years.Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assetsare recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferredtax assets can be realised. In situations where the Company have unabsorbed depreciation or carry forward tax losses, all deferred tax assets arerecognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. Deferred tax inrespect of timing differences which reverse during the tax holiday period are not recognised to the extent the Company’s gross total income is subjectto the deduction during the tax holiday period as per the requirement of the Act.MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax duringthe specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordancewith the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way ofa credit to the profit and loss account and shown as MAT Credit Entitlement. The Company review the same at each balance sheet date and writesdown the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will paynormal Income Tax during the specified period.14. Segment ReportingIdentification of SegmentsThe Company has identified that its business segments are the primary segments. The Company’s businesses are organized and managed separatelyaccording to the nature of activity, with each segment representing a strategic business unit that offers different products and serves different markets.The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.The Company at present primarily operates in India and therefore the analysis of geographical segments is not applicable.Allocation of common costsCommon allocable costs are allocated to each segment on case to case basis applying the ratio, appropriate to each relevant case. Revenue andexpenses, which relate to the enterprise as a whole and are not allocable to segment on a reasonable basis, have been included under the head“Unallocated - Common”.15. Earnings Per ShareBasic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average numberof equity shares outstanding during the year.For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weightedaverage number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.16. ProvisionsA provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will berequired to settle the obligation, in respect of which a reliable estimate can be made.Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on management estimatesrequired to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the currentmanagement estimates.17. Cash and Cash EquivalentsCash and cash equivalents as indicated in the Cash Flow Statements comprise cash at bank and in hand and short term investments with an originalmaturity of three months or less.44