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Annual Report 2011-12
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unrecognized deferred tax assets. It recognizes
unrecognized deferred tax assets to the extent that it
has become reasonably certain or virtually certain, as
the case may be, that sufficient future taxable income
will be available against which such deferred tax assets
can be realised.
The carrying amount of deferred tax assets are
reviewed at each balance sheet date. The Group
writes-down the carrying amount of a deferred tax
asset to the extent that it is no longer reasonably certain
or virtually certain, as the case may be, that sufficient
future taxable income will be available against which
deferred tax asset can be realized. Any such write-down
is reversed to the extent that it becomes reasonably
certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset,
if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax
assets and deferred tax liabilities relate to the taxes on
income levied by same governing taxation laws.
Minimum Alternate Tax (MAT) paid in a year is
charged to the statement of profit and loss as current
tax. The Group recognises MAT credit available as an
asset only to the extent there is convincing evidence
that the Group will pay normal Income-tax during
the specified period. In the year in which the Group
recognises MAT credit as an asset in accordance with
the Guidance Note on Accounting for Credit Available
in respect of Minimum Alternative Tax under the
income-tax Act, 1961, the said asset is created by way
of credit to the statement of profit and loss and shown
as ‘MAT Credit Entitlement’. The Group reviews the
‘MAT Credit Entitlement’ asset at each reporting date
and writes down the asset to the extent the Group does
not have convincing evidence that it will pay normal
tax during the specified period.
q) Earnings Per Share
Basic Earnings per Share are calculated by dividing
the net profit or loss for the year attributable to Equity
Shareholders (after deducting preference dividend and
attributable taxes) by the weighted average number
of equity shares outstanding during the year. The
weighted average numbers of equity shares outstanding
during the year are adjusted for events of bonus issue,
bonus element in a rights issue to existing shareholders,
share split and reverse share split (consolidation of
shares) that have changed the number of equity
shares outstanding, without a corresponding change in
resources.
For the purpose of calculating Diluted Earnings Per
Share, the net profit or loss for the year attributable to
equity shareholders and the weighted average number
of shares outstanding during the year are adjusted for
the effects of all dilutive potential equity shares.
r) Employee Stock Compensation Cost
Measurement and disclosure of the employee sharebased
payment plans is done in accordance with SEBI
(Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and the
Guidance Note on Accounting for Employee Sharebased
Payments, issued by the Institute of Chartered
Accountants of India. The Company measures
compensation cost relating to employee stock options
using the intrinsic value method. Compensation cost
is amortized over the vesting period of the option on a
straight line basis.
s) Cash and Cash equivalents
Cash and Cash equivalents in the cash flow statement
comprise cash at bank and in hand and short term
investments with an original maturity of three months
or less.
t) Segment Reporting Policies
Identification of segments
The Group’s operating businesses are organized
and managed separately according to the nature of
products and services provided, 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 Group
operate.
Inter segment Transfers
The Group generally accounts for intersegment sales
and transfers as if the sales or transfers were to third
parties at current market prices
Allocation of Common Costs
Common allocable costs are allocated to each segment
on a rational basis based on nature of each such
common cost.
Unallocated Items
Unallocated items include general corporate income
and expense items which are not allocated to any
business segment.
Segment Policies
The Group prepares its segment information in
conformity with the accounting policies adopted for
preparing and presenting the financial statements of
the Group as a whole.
u) Contingent liabilities
A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed
by the occurrence or non-occurrence of one or more
uncertain future events beyond the control of the
Group or a present obligation that is not recognized
because it is not probable that an outflow of resources
will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where there
is a liability that cannot be recognized because it cannot
be measured reliably. The Group does not recognize
a contingent liability but discloses its existence in the
financial statements.
v) Expenses incurred on Initial Public Offer (IPO)
Expenses incurred in Initial Public Offer are adjusted
against the securities premium account.