Download the Annual Report for 2010-11. - kiocl limited

and charged to consumption over a period of three years. However, if the writtendown value of each tool is below ` 1,000 at the end of the year, the remainingbalance is charged to consumption.4.6 No value is assigned to semi finished goods at different stages of production.5. REVENUE RECOGNITION :5.1 Sales include Excise Duty and Freight on Consignment Sales wherever applicable andis net of Sales Tax/Value Added Tax. Sales are recognised on despatch of goods tothe customers. In respect of sea shipments, issue of Bill of Lading is considered asdespatch.5.2 Interest is recognised on accrual basis subject to certainty of realisation.5.3 Sale of scrap is accounted on lifting of scrap by the buyers.5.4 Government Grants, if any, are accounted on actual receipt.5.5 Refunds of statutory duties and taxes, other than service tax, export duty and cess,are accounted on receipt.5.6 Insurance and Railway claims are accounted on receipt.6. TAX ON INCOME :6.1 Tax on income for the current period is determined based on taxable income and taxcredits computed in accordance with the provisions of the Income Tax Act 1961.Deferred tax is recognised, subject to consideration of prudence on timing differences,representing the difference between the taxable income and accounting income thatoriginate in one period and are capable of reversal in one or more subsequent periods.Deferred tax assets and liabilities are measured using the tax rates and tax laws thathave been enacted or substantively enacted by the balance sheet date.7. RETIREMENT BENEFITS :7.1 Liability with regard to Gratuity benefits payable in future is determined by actuarialvaluation at each Balance Sheet date using the Projected Unit Credit Method. Liabilityon this account is covered under Group Gratuity Life Assurance Scheme of LIC ofIndia. Premium paid on this Scheme is charged to expense as contribution to gratuity.Settlement, if any, in excess of the amount received under the scheme, is also recognisedas an expense as and when incurred.82