a) Revenue from contracts with customers
Revenue from contracts with customers is
recognised on transfer of control of goods or
services to the customer at an amount that
reflects the consideration to which the Compa¬
ny is expected to be entitled to in exchange for
those goods or services.
Revenue towards satisfaction of a performance
obligation is measured at the amount of trans¬
action price (net of variable consideration)
allocated to that performance obligation. The
transaction price of goods sold and services
rendered is net of variable consideration on
account of discounts offered by the Company
as part of the contract. This variable consider¬
ation is estimated based on expected value
method. Revenue (net of variable consider¬
ation) is recognised only to the extent that it is
highly probable that the amount will not be
subject to significant reversal when uncertainty
relating to its recognition is resolved.
The Company does not have any contracts
where the period between the transfer of the
promised goods or services to the customer
and payment by the customer exceeds one
year. As a consequence, the Company does not
adjust any of the transaction prices for the time
value of money.
The Company collects goods and services tax
(GST) on behalf of the government and, there¬
fore, these are not economic benefits flowing
to the Company. Hence, it is excluded from
revenue.
The Company has the following streams of
revenue:
(i) Revenue from sale of goods
(ii) Revenue from sale of services
(iii) Revenue from software products/licenses
and implementation activities
Revenue from sale of goods is recognised when
the Company satisfies a performance obligation
in accordance with the provisions of contract
with the customer. This is achieved when
control of the goods has been transferred to
the customer, which is generally determined
when title, ownership, risk of obsolescence and
loss pass to the customer and the Company has
present right to payment, all of which occurs at
a point in time upon shipment or delivery of
goods as per the terms of the contract.
Revenue from sale of services - In certain
customer contracts for export of goods,
shipping and handling services are treated as a
distinct separate performance obligation and
the Company recognises revenue for such
services over time when the performance
obligation is completed.
Revenue from software products/licenses and
implementation activities - Revenue from a
right-to-use license is recognised when the
license is made available to the customer.
Where implementation services are distinct, the
transaction price is allocated to each
performance obligation based on relative
standalone selling prices and recognised over
time as each performance obligation is satisfied.
Other operating revenue
Export incentives on export of goods are
recognised where there is a reasonable certain¬
ty that the Company will comply with the
conditions attached to it and incentive will be
received. Export incentives are included under
'Other operating revenue'. Revenue from
sale of scrap material is recognised at point in
time upon disposal.
b) Property, plant and equipment
Property, plant and equipment (PPE) are
measured at cost less accumulated deprecia¬
tion and accumulated impairment losses, if any.
Freehold land and capital work-in-progress are
carried at cost less impairment losses, if any.
Cost includes purchase price and directly
attributable expenditure required to bring the
asset to the location and condition necessary
for it to be capable of operating as intended by
management.
Depreciation is charged on a straight-line basis
over the estimated useful lives of the assets,
after considering residual values. Useful
lives and residual values are reviewed at least
annually and revised prospectively, where
appropriate. Certain classes of assets are
depreciated over useful lives that differ from
Schedule II to the Companies Act, 2013 based
on technical evaluation and management
assessment. The management believes that
these estimated useful lives are realistic and
reflect fair approximation of the period over
which the assets are likely to be used. The table
below provides the details of the useful lives
which are different from useful lives
prescribed under Schedule II of the Companies
Act, 2013:
Considered on the basis of management's
estimation, supported by technical advice, of
the useful lives of the respective assets.
# Residual value considered up to 15% on the
basis of management's estimation, supported
by technical advice.
Leasehold improvements and assets acquired
under leases are depreciated over the shorter
of the useful life of the underlying asset and
the lease term, unless the Company expects to
use the asset beyond the lease term.
Buildings are depreciated on a straight-line
basis over 30-60 years, based on the nature
and condition of the building.
Property, plant and equipment is tested for
impairment when events or changes in circum¬
stances indicate that the carrying amount may
not be recoverable; any impairment loss is
recognised in profit or loss.
See note (r) under 2.3 for the other relevant
accounting policies.
c) Leases
As a Lessee:
The Company leases various assets that
includes land, buildin g and pi ant and mac hinery.
Rental con tracts are typically made for fixed
geriods of 2 to 15 years lout may have extension
options as described below. Lease terms are
negotiated on an individual ba sis snd consain a
wide mange of different terms and conditions.
Leases are recog n i sed as a right -of- u se asset
and a corresdonding li abiNty at t he date at
whi ch theleased aosetis available for use lay
the company. Eac h lease payment is allocked
between th e principal (liabi lity) an d finance
cost. The finance co sit is chenged tea mrofit ere
loss over th e lease desi end sp as to p roduce a
constant periodic rate cfinteeest on the remain¬
ing bala ncc of the liabilito foreach petiod.Th e
rigM-of-use asset is Cepreciuted over the
shorter of the asset's useful life and the lease
term on a straight-line basis. If the Company is
reasonably certain to exercise a purchase
option, the right-of-use asset is depreciated
over the underlying asset's useful life.
Lease payments to be made under reasonably
certain extension options are also included in
the measurement of the liability. The lease
payments are discounted using the interest rate
implicit in the lease. If that rate cannot be
readily' determinpd, the lessee's increm e n t a I
borrowing rate is used, being the rote that tee
lessee would hage to pay ter borrow the funds
necessary to obtein ac asset of s1 milar valu e
in a similar cccnomic environment with similar
terms, security and co n d i t1 ons .
Assets andliabilities arising from a lease are
initially measured on ^ ps-sent: vaiue basis.
Leane liab ilitiesinclude the net present value of
the fixed payments (includingin-su b st a n ce
fixed |aayments), less any/ leaseiccentivey
receivable.
R^M-af-use assets are; meanured at cost:
com prising the followin g:
Ý the i^moont of the iniha I measur eme nt of
tease Ability
Ý my lease payments madeat or before the
commencement dateless any lease
incehtives received
Ý any initial directi cos--
Ý restora tion cants, wlncre applicalale.
Payments associated wilih short-term leases
and leases ht'low-value assets are recognised
on a straightdine basisas aa expense in inrofit
or Ioss. Short-term Inasos are leases w i th a lease
tema of 12 months or less.
Extension and termination options are included
in a number of prop-sty and equipment leases
across the compan y. These t -oms are used
tm maximise ogctationalflexibility in terms of
managing cnntracts.The majority of extens1 on
and termination options held are
exercisable only by tha Company and not by
the respective lessor.
See note (s) under 2.3 for the other relevant
accounting policies.
d) Inventories
Inventories are measured at the lower of cost
and net realisable value (NRV). Cost is deter¬
mined on a weighted-average basis and
includes expenditure incurred in bringing
inventories to their present location and condi¬
tion.
NRV is the estimated selling price in the
ordinary course of business less estimated costs
of completion and the estimated costs
necessary to make the sale. Inventories are
written down to NRV where they are damaged,
obsolete, slow-moving or where selling prices
have declined. Any write-down is recognised in
profit or loss and reversed if the circumstances
causing the write-down no longer exist.
See note (t) under 2.3 for the other relevant
accounting policies.
e) Impairment of non-financial assets
Non-financial assets are tested for impairment
whenever events or changes in circumstances
indicate that the carrying amount may not
be recoverable. An impairment loss is
recognised for the amount by which the asset's
carrying amount exceeds its recoverable
amount.
The recoverable amount is the higher of an
asset's fair value less costs of disposal and
value in use. For the purposes of assessing
impairment, assets are grouped at the lowest
levels for which there are separately identifiable
cash inflows which are largely independent
of the cash inflows from other assets or groups
of assets (cash-generating units). Non-financial
assets that suffered an impairment are
reviewed for possible reversal of the impair¬
ment at the end of each reporting period.
f) Investments and Other Financial assets
i. Classification and Recognition:
The Company classifies its financial assets in the
following measurement categories:
• Those to be measured subsequently at fair
value (either through other comprehensive
income, or through profit or loss)
• Those measured at amortised cost
The classification depends on the entity's
business model for managing the financial
assets and the contractual terms of the cash
flows. For assets measured at fair value, gains
and losses will either be recorded in profit or
loss or other comprehensive income.
For investments in debt instruments, this will
depend on the business model in which the
investment is held. For investments in
equity instruments, this will depend on whether
the Company has made an irrevocable election
at the time of initial recognition to
account for the equity investment at fair value
through other comprehensive income.
The Company reclassifies debt investments
when and only when its business model for
managing those assets changes.
ii. Measurement:
At initial recognition, the Company measures a
financial asset (excluding trade receivables
which do not contain a significant financing
component) at its fair value plus, in the case of
a financial asset not at fair value through profit
or loss, transaction costs that are directly
attributable to the acquisition of the financial
asset. Transaction costs of financial assets
carried at fair value through profit or loss are
expensed in profit or loss. Trade receivables
that do not contain a significant financing
component are initially measured at the
transaction price.
Equity instruments
The Company subsequently measures all equity
investments at fair value. Where the company's
management has elected to present fair value
gains and losses on equity investments in other
comprehensive income, there is no subsequent
reclassification of fair value gains and losses to
profit or loss. Dividends from such investments
are recognised in profit or loss as other income
when the company's right to receive payments
is established.
Changes in the fair value of financial assets at
fair value through profit or loss are recognis ed
in other income/ (expenses) in the
statement of profit and loss. Impairment losses
(and reversal of i mpai rment losses) on equity
investmeuts measured at FVOCI are?
not rephrted m parately from other chang es in
fair value.
Equity in vestment in subsidiaries are carried at
historiml cost as per the accoenting policy
choice given by Ind AS 27. Investments in
subsidiar ies me teseed fo r impairment in
accordancc withInd AS 36Impai rmeno of
Assetd. Th e carrying amount of themvestment
is tested fo impairment by comparing itp
recoverable amount wi tin its carryring amount,
any lmpairment loss recognised reduces the
carrying amount of1 thh invesliment.
iii. Impairment of financial assets:
In accordance with Ind AS 109, the Company
applies expected credit loss (ECL) model for
measurement and recognition of impairment
loss on the following financial assets:
• Financial assets that are debt instruments,
and are measured at amortised cost e.g.,
loans, debt securities, deposits and bank-
balance;
• Trade receivables or any contractual right
to receive cash or another financial asset
that result from transactions that are within
the scope of Ind AS 115
The Company follows 'simplified approach' for
recognition of impairment loss allowance on
trade receivables or contract revenue
receivables.
The application of simplified approach does not
require the Company to track changes in credit
risk. Rather, it recognises impairment loss
allowance based on lifetime ECLs at each
reporting date, right from its initial recognition.
For recognition of impairment loss on other
financial assets, the Company determines that
whether there has been a significant
increase in the credit risk since initial recogni¬
tion. If credit risk has not increased significantly,
12-month ECL is used to provide for
impairment loss. However, if credit risk has
increased significantly, lifetime ECL is used. If, in
a subsequent period, credit quality
of the instrument improves such that there is no
longer a significant increase in credit risk since
initial recognition, then the entity
reverts to recognising impairment loss allow¬
ance based on 12-month ECL.
The Company has given interest bearing loans
to its subsidiaries which are repayable on
demand. Further, certain external loans
taken by the subsidiaries are guaranteed by the
Company. The loans and financial guarantees
given to subsidiaries are reviewed and
assessed for impairment at each reporting date
under Ind AS 109. The inter-company loans
have been provided to the subsidiaries
for operational purposes and with an expecta¬
tion of an extended gestation period. The
Company intends to allow the subsidiaries to
continue trading and expects to recover the
loans from the cash generated from operations.
The Company reviews the cash flow
projections where it has used certain estimates
at the year end to assess if any provision
towards expected credit loss needs to be
made.
Lifetime ECL are the expected credit losses
resulting from all possible default events over
12-month ECL is a portion of the lifetime ECL
which results from default events that are
possible within 12 months after the reporting
date.
Lifetime ECL are the difference between all
contractual cash flows that are due to the
Company in accordance with the contract and
all the cash flows that the entity expects to
receive (i.e., all cash shortfalls), discounted at
the original EIR. When estimating the
cash flows, an entity is required to consider:
• All contractual terms of the financial
instrument (including prepayment, exten¬
sion, call and similar options) over the
expected life of the financial instrument.
However, in rare cases when the expected
life of the financial instrument cannot be
estimated reliably, then the entity is
required to use the remaining contractual
term of the financial instrument;
• Cash flows from the sale of collateral held
or other credit enhancements that are
integral to the contractual terms.
Lifetime ECL impairment loss allowance (or
reversal) recognised during the period is
recognised as income/ expense in the
statement of profit and loss. This amount is
reflected under the “net impairment losses on
financial and contract assets” in the
statement of profit and loss. The balance sheet
presentation for various financial instruments is
described below:
• Financial assets measured at amortised
cost, trade receivables and contract assets:
ECL is presented as an allowance which
reduces the gross carrying amount to arrive
at the net carrying amount. The gross
carrying amount is not reduced by the
allowance untilthe asset meets tine
write-off criteria.
For as sessiog increase in credit risk and impam-
ment losa, the Co mpany combines financ ial
instmments o n tilde bpsis of ahared credit ris k
characteristics with tne objective vf facilitating
an analysis that is designed to enab le significagt:
increaoes m credit; risk tio be igenefied con a
timely to^si^.
The Comegny does riot have any eurchesed tor
onginated cred^-impaired (POCI) financial
assets,i.e., financial assetu which are credit
impaired on purchase/ originstion.
See notd (u)under 2.3 for the other relevant
accom^ng no^cies.
g) Derivatives and hedging activities
Derivatives are only used for economic hedging
purposes and not as speculative investments.
However, where derivatives do not meet the
hedge accounting criteria, they are classified as
'held for trading' for accounting purposes and
are accounted for at fair value through profit or
loss. They are presented as current assets or
liabilities to the extent they are expected to be
settled within 12 months after the end of the
reporting period.
Derivatives are initially recognised at fair value
on the date a derivative contract is entered into
and are subsequently re-measured to their fair
value at the end of each reporting period. The
accounting for subsequent changes in fair value
depends on whether the derivative is designat¬
ed as a hedging instrument, and if so, the
nature of the item being hedged.
The Company designates their derivatives as
hedges of foreign exchange risk associated with
the cash flows of assets and liabilities and
highly probable forecast transactions (cash flow
hedges). The Company documents at the
inception of the hedging transaction the
economic relationship between hedging instru¬
ments and hedged items including whether the
hedging instrument is expected to offset
caanges in cash flows of hedged ite ms. The
Company docume nts its risk management
objective and strategy for undertaking various
hedge traneactions at the inception of each
hedge relationship. The ful lfair value Tf t
hedging der ivative is class ifi ed as a n od-current
as set or li abili ty when the remaining maturity of
the hedged item is more than 12 months; it is
classified as a current asset or liability when the
remaining maturity of the heegeditem isless
than 12 mon ths.
Cash flew hedges that qualifd for hedg e
oc coonting
The effective portion of changes in the fair
val ue of derivatives that are designated and
qualify as cahh flow ar^des is recognisedin
cash flow hedging reserve within equity. The
gain or loss telating to the i neffective portion is
recognised immediately in profit or loss, within
other gainsntlosses).
When forward contracts ase used to hedge
forecast transactions, the Company designate
tha fdilc;h^n^e in fair value of the forward
contrao as the hedging instrument The gains
and lorses relsting to the effective portion of
the change in fair value of the entire forward
nontrnct mre tecognised in the cash flow hedg¬
ing reserve witpin cquity.
Amounts accumulated in equity are reclassified
to profit or loss in the periods when the hedged
item affects profit or loss (for example, when
the forecast sale that is hedged takes place).
When the hedged forecast transaction results in
the recognition of a non-financial asset (for
example inventory), the amounts
accumulated in equity are transferred to profit
or loss as follows:
• With respect to gain or loss relating to the
effective portion of the forward contracts,
the deferred hedging gains and losses are
included within the initial cost of the asset.
The deferred amounts are ultimately
recognised in profit or loss as the hedged
item affects profit or loss (for example,
through cost of sales).
When a hedging instrument expires, or is sold
or terminated, or when a hedge no longer
meets the criteria for hedge accounting, any
cumulative deferred gain or loss and deferred
costs of hedging in equity at that time remains
in equity until the forecast transaction
occurs. When the forecast transaction is no
longer expected to occur, the cumulative gain
or loss and deferred costs of hedging that were
reported in equity are immediately reclassified
to profit or loss within other gains/(losses).
If the hedge ratio for risk management purpos-
esis no longer optimal but the risk manage¬
ment objective remains unchanged and the
hed ge cont inues to qualify foa hedge account¬
ing, the Inedge re lationshig will b e rebalanced
by adjusting eithe r the volume of the hedging
mstrument ar the volume of1 the hedged item ao
that the hedge ratio aligns with the ratio used
for risk management purposes. Any hedge
i ncffediiveness is calcelated and aacount ed fos
in profit or loss at the tme of the hedge
relationsNp rebnlancirg.
Forman currency option contact
The Comirany ent ers mto forei gm curre ncy call
opt icon contaacts to hhdge th e foreigri curreusy
risk on the p rinci pal cash flows of Extnmal
Commercial Borrowings. Thne d erivatives are
designated as cash I'low hedged in accordance
with Ind AS 109.
Derivatives areinihally recognised and subse¬
quently measured at fair value at each reporting
date. Tire Company designates only the
intrinsic; value af the o ption contracts as the
hedging instrumurti The effective portidn of t he
change inintrinsic valus is rerognieed in
Other Comprehensive Income and accumulated
in the CTrh Flow Hed ge Riserne, and reclasst
fied to the Statement of Profit and Loss in
1:he sam e period in w Nch ffn e hedgad cash flowt
affect prof it c toss. T he ineffective portio n is
recognised immediately in the Statement
or Profit and Loss.
The change in fair value of the time value of the
option contracts is excluded from the designat¬
ed hedging relationship and accounted for
as 'cost of hedging' in Other Comprehensive
Income. The aligned time value at inception is
recognised in the reclassifiable portion of the
Cost of Hedging Reserve and amortised to the
Statement of Profit and Loss on a systematic
and rational basis over the tenor of the
hedged ECB. Subsequent fair value movements
of the time value that do not relate to the
aligned amount are recognised in the nonre¬
classifiable portion of the Cost of Hedging
Reserve and are not subsequently reclassified
to the Statement of Profit and Loss.
Where the option premium is paid on a
deferred basis, the present value of future
premium instalments is recognised as a financial
liability, with the unwinding of discount being
charged to the Statement of Profit and Loss as
a finance cost.
See note (x) under 2.3 for the other relevant
accounting policies.
h) Presentation of EBITDA
The Company presents Earnings before inter¬
est, tax, depreciation and amortisation ('EBIT¬
DA') in the statement of profit or loss; this is
not specifically required by Ind AS 1. The term
EBITDA is not defined in Ind AS. Ind AS compli¬
ant Schedule III allows companies to present
line items, sub-line items and sub-totals to be
presented as an addition or substitution on the
face of the financial statements when such
presentation is relevant to an understanding of
the company's financial position or perfor¬
mance.
Accordingly, the Company has elected to
present EBITDA as a separate line item on the
face of the statement of profit and loss. The
Company measures EBITDA based on profit/
(loss) from continuing operations. In its mea¬
surement, the Company does not include
exceptional items, depreciation and amortiza¬
tion expense, finance costs and tax expense.
i) Income Taxes
The income tax expense for the period is the
tax payable on the current period's taxable
income based on the applicable income tax rate
adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences.
Current income tax
The current income tax charge is calculated on
the basis of the tax laws enacted or substan¬
tively enacted at the end of the reporting
period. Management periodically evaluates
positions taken in tax returns with respect to
situations in which applicable tax regulation is
subject to interpretation. It establishes provi¬
sions where appropriate on the basis of
amoun ts expected to be paid to the tax authori¬
ties.
Deferred tax
Deferred tax is provided in full, using the liability
method, on temporary differences arising between
the tax bases of assets and
liabilities and their carrying amounts in the finan¬
cial statements at the reporting date.
Deferred tax liabilities are recognised for all
taxable temporary differences, except:
• When the deferred tax liability arises from the
initial recognition of goodwill or an asset or
liability in a transaction that is not a business
combination and, at the time of the transac¬
tion, affects neither the accounting profit nor
taxable profit or loss;
• In respect of taxable temporary differences
between the carrying amount and tax bases of
investments in subsidiaries, branches, associ¬
ates and interests in joint ventures, when the
timing of the reversal of the temporary differ¬
ences can be controlled by the Company and it
is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred tax assets are recognised for all
deductible temporary differences and unused
tax losses only if it is probable that future
taxable amounts will be available to utilise
those temporary differences and losses.
The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to
the extent that it is no longer probable that
sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are
re-assessed at each reporting date and are
recognised to the extent that it has become
probable that future taxable profits will allow
the deferred tax asset to be recovered.
Deferred tax is determined using tax rates (and
tax laws) that have been enacted or substan¬
tively enacted at the reporting date and are
expected to apply in the year when the asset is
realised or the liability is settled.
Current and Deferred tax is recognised in profit
or loss, except to the extent that it relates to
items recognised in other comprehensive
income or directly in equity. In this case, the tax
is also recognised in other comprehensive
income or directly in equity, respectively.
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 taxes relate to
income taxes levied by same taxation authori¬
ties on either same taxable entity which intend
either to settle the current tax assets and tax
liabilities on a net basis or to realise the asset
and settle the liability simultaneously.
j) Discontinued Operations
A discontinued operation is a component of the
entity that has been disposed off or is classified as
held for sale and that represents a separate major
line of business or geographical area of operations,
is part of a single co-ordinated plan to dispose of
such a line of business or area of operations, or is a
subsidiary acquired exclusively with a view to resale.
The results of discontinued operations are present¬
ed separately in the statement of profit and loss.
k) Financial Guarantee Contracts
Financial guarantee contracts are recognised as a
financial liability at the time the guarantee is issued.
The liability is initially measured at fair value and
subsequently at the higher of (i) the amount deter¬
mined in accordance with the expected credit loss
model as per Ind AS 109 and (ii) the amount initially
recognised less, where appropriate, cumulative
amount of income recognised in accordance with
the principles of Ind AS 115.
The fair value of financial guarantees is determined
based on the present value of the difference
between the cash flows between the contractual
payments required under the debt instrument and
the payments that would be without the guarantee,
or the estimated amount that would be payable to
the third party for assuming the obligations.
Where the guarantees in relation to the loans or
other payables of subsidiaries are provided for no
compensation, the fair values are accounted for as
contributions and recognised as part of the cost of
the investment.
l) Borrowings
Borrowings are initially recognised at fair value, net
of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings
using the effective interest method. Fees paid on
the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is
probable that some or all of the facility will be
draw-down. In this case, the fee is deferred until the
draw down occurs. To the extent there is no
evidence that it is probable that some or all of the
facility will be drawn down, the fee is capitalised as
a prepayment for liquidity services and amortised
over the period of the facility to which it relates.
Borrowings are removed from the balance sheet
when the obligation specified in the contract is
discharged, cancelled or expired. The difference
between the carrying amount of a financial liability
that has been extinguished or transferred to another
party and the consideration paid, including any
non-cash assets transferred or liabilities assumed, is
recognised in profit or loss as other gains/(losses).
Where the terms of a financial liability are renegoti¬
ated and the entity issues equity instruments to a
creditor to extinguish all or part of the liability (debt
for equity swap), a gain or loss is recognised in
profit or loss, which is measured as the difference
between the carrying amount of the financial liability
and the fair value of the equity instruments issued.
m) Employee benefits
i. Short-term obligations
Liabilities for wages and salaries, including
non-monetary benefits that are expected to be
settled wholly within 12 months after the end of
the period in which the employees render the
related service are recognised in respect of
employees' services up to the end of the report¬
ing period and are measured at the amounts
expected to be paid when the liabilities are
settled. The liabilities are presented as current
employee benefit obligations in the balance
sheet.
ii. Other long-term employee benefit obligations
The liabilities for earned leave and sick leave are
not expected to be settled wholly within 12
months after the end of the period in which the
employees render the related service. They are
therefore measured as the present value of
expected future payments to be made in
respect of services provided by employees up
to the end of the reporting period using the
projected unit credit method. The benefits are
discounted using the market yields at the end of
the reporting period on government bonds that
have terms approximating to the terms of the
related obligation. Re-measurements as a result
of experience adjustments and changes in
actuarial assumptions are recognised in profit or
loss.
The obligations are presented as current liabili¬
ties in the balance sheet if the entity does not
have the right at the end of the reporting period
to defer settlement of the liability for at least
twelve months after the reporting period.
iii. Other long-term employee benefit obligations
The Company operates the following post-em¬
ployment schemes:
(a) Defined benefit plans in the nature of gratu¬
ity and
(b) Defined contribution plans such as provident
fund
Gratuity obligations
The liability or asset recognised in the balance sheet
in respect of defined benefit gratuity plans is the
present value of the defined benefit obligation at
the end of the reporting period less the fair value of
plan assets. The defined benefit obligation is calcu¬
lated annually by actuaries using the projected unit
credit method.
The present value of the defined benefit obligation
denominated in INR is determined by discounting
the estimated future cash outflows by reference to
market yields at the end of the reporting period on
government bonds that have terms approximating
to the terms of the related obligation.
The net interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets.
This cost is included in employee benefit expense in
the statement of profit and loss.
Re-measurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in which
they occur, directly in other comprehensive income.
Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in profit or
loss as past service cost.
Defined contribution plans
The Company pays provident fund contributions to
publicly administered provident funds as per local
regulations. The Company has no further payment
obligations once the contributions have been paid.
The contributions are accounted for as defined
contribution plans and the contributions are
recognised as employee benefit expense when they
are due. Prepaid contributions are recognised as an
asset to the extent that a cash refund or a reduction
in the future payments is available.
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