UBHL annual report - United Spirits Limited

Consolidated Financial StatementsNotes to the financial statements for the year ended March 31, 2012 (Contd.)Pension:Whyte and Mackay Group operates and contributes in a defined benefit pension scheme (the Pension Plan).Liability with regard to Pension Plan is accrued based on actuarial valuation, based on Projected Unit CreditMethod at the Balance Sheet date, carried out by an independent actuary. Actuarial Gains and Losses compriseexperience adjustments and the effect of changes in the actuarial assumptions and are recognised immediatelyin the Statement of Profit and Loss as income or expense.Provident Fund:Company’s Provident Funds administered by trusts set up by the Company where the Company’s obligation is toprovide the agreed benefit to the employees and the actuarial risk and investment risk fall, in substance, on theCompany are treated as a defined benefit plan. Liability with regard to such provident fund plans are accruedbased on actuarial valuation, based on Projected Unit Credit Method, carried out by an independent actuary at theBalance Sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in theactuarial assumptions and are recognised immediately in the Statement of Profit and Loss as income or expense.Death Benefit:Death Benefit payable at the time of death is actuarially ascertained at the year-end and provided for in theaccounts.(c)(d)Other long term employee benefits:Compensated absences which are not expected to occur within twelve months after the end of the period inwhich the employee renders the related services are recognised as a liability at the present value of the definedbenefit obligation at the Balance Sheet date based on an actuarial valuation.Short term employee benefits:Undiscounted amount of short term employee benefits expected to be paid in exchange for the services renderedby employees is recognised during the period when the employee renders the services. These benefits includecompensated absences (e.g., paid annual leave), performance incentives, etc.1.14 Expenditure on account of Voluntary Retirement SchemeExpenditure on account of Voluntary Retirement Scheme of employees is expensed in the period in which it is incurred.1.15 Research and DevelopmentRevenue expenditure on research and development is charged to Statement of Profit and Loss in the period in whichit is incurred. Capital Expenditure is included as part of fixed assets and depreciated on the same basis as other fixedassets.1.16 Taxes on IncomeProvision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of taxpayable in respect of taxable income for the period.Deferred tax is recognised on timing differences between the accounting income and the taxable income for the yearand quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.Deferred tax assets are recognised and carried forward to the extent that there is a reasonable/ virtual certainty thatsufficient future taxable income will be available against which such deferred tax asset can be realised.1.17 Earnings per Share (EPS)Basic EPS is arrived at based on Net Profit after Taxation available to equity shareholders to the weighted averagenumber of equity shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS, afteradjusting for the effects of potential dilutive equity share unless impact is anti-dilutive.78