Company Overview Financial Statements Notice Statutory Reports 51 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 lease payments made at or before commencement date less any lease incentives received and any initial direct costs. Subsequently, the right-of-use asset is measured at cost less accumulated depreciation and any impairment losses. Lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using an effective interest rate method) and reducing the carrying amount to reflect the lease payments made. The right-of-use asset and lease liability are also adjusted to reflect lease modifications or revised in-substance fixed lease payments. q) Earnings per share Earnings per share (EPS) is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the EPS is the net profit for the period and any attributable tax thereto for the period. r) Offsetting financial instruments Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the assets and settle the liabilities simultaneously. s) Estimation of uncertainties relating to the global health pandemic from COVID-19 The Company has considered possible effects that may result from the COVID-19 pandemic and Russia-Ukraine war in preparation of these Financial Statements, used relevant internal and external sources of information and expect that these events will not have any material implications on the operations of the Company in the near future. t) Critical estimates and judgement The preparation of Financial Statements requires the use of accounting estimateswhich, by definition, will seldom equal the actual results. This note provides an overview of the areas that involved a higher degree of judgements or complexity, and of items that are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the Financial Statements. The areas involving cr i t i cal est imates or judgements are: • Estimation for income tax – Note 1 (o) • Estimation of defined benefit obligation – Note 1 (m) • Fair value measurements – Note 24.6 • Estimation of provision for inventories – Note 1 (j) • Al lowance for credi t losses on trade receivable – Note 1 (g) • Estimation of claims | liabilities: Note 1 (n) • Impairment: Note 1 (e) Est imates and judgements are cont inual ly evaluated. They are based on historical experiences and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
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