MS AR 2018 (1)

i) Property, plant and equipment and intangible asset
The Company reviews the useful life and residual value of property, plant and equipment and intangible
assets on a regular basis. Any change in estimates in future years might affect the carrying amounts of
the respective items of property, plant and equipment and intangible asset with a corresponding effect
on depreciation / amortization charge and impairment.
ii)
iii)
iv)
Defined benefit plan obligation
The Company has adopted certain actuarial assumptions as disclosed in note 23.2 to the financial
statements for valuation of present value of defined benefit obligation, based on actuarial advice.
Provisions
Provisions are considered, among others, for legal matters, disputed indirect taxes, stock obsolescence
and doubtful debts where a legal or constructive obligation exists at the reporting date and reliable
estimate can be made of the likely outcome. The nature of these costs is such that judgement is involved
in estimating the timing and amount of cash flows.
Income taxes
In making the estimates for income taxes, the Company takes into account the current income tax law
and decisions taken by appellate authorities on certain issues in the past. There may be various matters
where the Company’s view differs with the view taken by the income tax department at the assessment
stage and where the Company considers that its view on items of a material nature is in accordance with
the law.
v) Estimation of future export sales
Deferred tax calculation is based on estimate of future ratio of export and local sales.
vi)
Control over associates
The management determined whether or not the Company is a parent by assessing whether or not it has
control over its associated companies (associates based upon common directorship / shareholding).
The assessment is based upon whether the Company has the practical ability to direct the relevant
activities of associated companies unilaterally. In making its judgement, the management considers the
following:
- power over the associated companies;
- exposure, or rights, to variable returns from its involvement with the associated companies; and
- the ability to use its power over the associated companies to affect the amount of the Company’s
returns.
The Board of Directors have confirmed that the Company has no involvement in the activities of the
associated companies nor is the Company exposed to, or have any rights, to any returns from the
associated companies. Based upon its assessment, the management has concluded that the Company
does not have control or significant influence over its associated companies and is therefore, not a
regarded as “Parent Entity”.
5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principle accounting policies applied in the preparation of these financial statements are set out below.
These polices have been consistently applied to all the years presented, unless otherwise stated.
Annual Report 2018
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