3. MATERIAL ACCOUNTING POLICY
INFORMATION
(i) Functional and presentation currency
These standalone financial statements are presented
in Indian Rupees, which is the functional currency of
the Company.
(ii) Foreign currency transactions and
translation
Transactions in foreign currency are translated into
the functional currency using the exchange rates
prevailing at the date of the transaction. Foreign
exchange gains and losses resulting from the
settlement of such transactions and from translation
at the exchange rates prevailing at the reporting date
of monetary assets and liabilities denominated in
foreign currencies are recognized in the statement of
profit and loss and reported within foreign exchange
gains/(losses), net, within results of operating activities
except when deferred in other comprehensive income
as qualifying cash flow hedges and qualifying net
investment hedges. Net loss relating to translation
or settlement of borrowings denominated in foreign
currency are reported within finance costs. Net gain
relating to translation or settlement of borrowings
denominated in foreign currency are reported within
Other income. Non-monetary assets and liabilities
denominated in foreign currency and measured at
historical cost are translated at the exchange rate
prevalent at the date of transaction. Translation
differences on non-monetary financial assets
measured at fair value at the reporting date, such as
equities classified as financial instruments measured
at fair value through other comprehensive income are
included in other comprehensive income, net of taxes.
(iii) Financial instruments
a) Non-derivative financial instruments:
Non derivative financial instruments consist of:
• financial assets, which include cash and
cash equivalents, trade receivables, unbilled
receivables, finance lease receivables, employee
and other advances, investments in equity and debt
securities and eligible current and non-current
assets; and
• financial liabilities, which include borrowings, trade
payables, lease liabilities, and eligible current and
non-current liabilities.
Non- derivative financial instruments other than trade
receivables and unbilled receivables are recognized
initially at fair value. However, trade receivables and
unbilled receivables that do not contain a significant
financing component are measured at the Transaction
Price. Subsequent to initial recognition, non¬
derivative financial instruments are measured as
described below:
A. Cash and cash equivalents
The Company's cash and cash equivalents
consist of cash on hand and in banks and demand
deposits with banks, which can be withdrawn
at any time, without prior notice or penalty on
the principal.
For the purposes of the statement of cash
flows, cash and cash equivalents include cash
on hand, in banks and demand deposits with
banks, net of outstanding bank overdrafts that
are repayable on demand and are considered
part of the Company's cash management
system. In the balance sheet, bank overdrafts
are presented under borrowings within current
financial liabilities.
B. Investments
Financial instruments measured at amortised
cost:
Debt instruments that meet the following criteria
are measured at amortised cost (except for debt
instruments that are designated at fair value
through profit or loss on initial recognition):
• the asset is held within a business model
whose objective is to hold assets in order to
collect contractual cash flows; and
• the contractual terms of the instrument give
rise on specified dates to cash flows that are
solely payment of principal and interest on the
principal amount outstanding.
Financial instruments measured at fair
value through other comprehensive income
(“FVTOCI”):
Debt instruments that meet the following
criteria are measured at FVTOCI (except for debt
instruments that are designated at fair value
through profit or loss on initial recognition):
• the asset is held within a business model
whose objective is achieved both by collecting
contractual cash flows and selling the financial
asset; and
• the contractual terms of the instrument give
rise on specified dates to cash flows that are
solely payment of principal and interest on the
principal amount outstanding.
Interest income is recognized in statement of
profit and loss for FVTOCI debt instruments.
Other changes in fair value of FVTOCI financial
assets are recognized in other comprehensive
income. When the investment is disposed of, the
cumulative gain or loss previously accumulated
in reserves is transferred to statement of profit
and loss.
Financial instruments measured at fair value
through profit or loss (“FVTPL"):
Instruments that do not meet the amortised
cost or FVTOCI criteria are measured at FVTPL.
Financial assets at FVTPL are measured at fair
value at the end of each reporting period, with
any gains or losses arising on re-measurement
recognized in the statement of profit and loss.
The gain or loss on disposal is recognized in the
statement of profit and loss.
I nterest income is recognized in the statement
of profit and loss for FVTPL debt instruments.
Dividends on financial assets at FVTPL is
recognized when the Company's right to receive
dividends is established.
Investments in equity instruments:
The Company carries certain equity instruments
which are not held for trading. At initial
recognition, the Company may make an
irrevocable election to present subsequent
changes in the fair value of an investment in
an equity instrument in other comprehensive
income (FVTOCI) or through statement of profit
and loss (FVTPL). For investments designated
to be classified as FVTOCI, movements in fair
value of investments are recognized in other
comprehensive income and the gain or loss is
not transferred to statement of profit and loss
on disposal of investments. For investments
designated to be classified as FVTPL, both
movements in fair value of investments and gain
or loss on disposal of investments are recognized
in the statement of profit and loss.
Dividends from these investments are
recognized in the statement of profit and loss
when the Company's right to receive dividends
is established.
When the investment in equity instruments is
derecognized, the cumulative gain or loss in
other comprehensive income is transferred to
retained earnings.
Investments in subsidiaries:
Investment in equity instruments of subsidiaries
are measured at cost less impairment.
Investment in redeemable preference shares
of subsidiaries are measured at FVTPL. These
investments are measured at fair value at the
end of each reporting period, with any gains or
losses arising on re-measurement recognized
in statement of profit and loss. The gain or loss
on disposal is recognized in statement of profit
and loss.
C. Other financial assets
Other financial assets are non-derivative
financial assets with fixed or determinable
payments that are not quoted in an active market.
These comprise trade receivables, unbilled
receivables, finance lease receivables, employee
and other advances and eligible current and non-
current assets. They are presented as current
assets, except for those expected to be realised
later than twelve months after the reporting date
which are presented as non-current assets. AH
financial assets are initially recognized at fair
value and subsequently measured at amortised
cost using the effective interest method, less any
impairment losses. However, trade receivables
and unbilled receivables that do not contain a
significant financing component are measured at
the Transaction Price.
D. Trade payables and other liabilities
Trade payables and other liabilities are
initially recognized at transaction price,
and subsequently carried at amortised cost
using the effective interest method. For these
financial instruments, the carrying amounts
approximate fair value due to the short-term
maturity of these instruments. Contingent
consideration recognized in a business
combination is initially recognized at fair value
and subsequently measured at fair value through
profit or loss.
b) Derivative financial instruments
The Company is exposed to foreign currency
fluctuations on foreign currency assets, liabilities, net
investment in foreign operations and forecasted cash
flows denominated in foreign currency.
The Company limits the effect of foreign exchange
rate fluctuations by following established risk
management policies including the use of derivatives.
The Company enters into derivative financial
instruments where the counterparty is primarily
a bank.
Derivative financial instruments are recognized and
measured at fair value. Attributable transaction costs
are recognized in the statement of profit and loss
as cost.
Subsequent to initial recognition, derivative financial
instruments are measured as described below:
A. Cash flow hedges
Changes in the fair value of the derivative
hedging instruments designated as a cash flow
hedge are recognized in other comprehensive
income and held in cash flow hedging reserve,
net of taxes, a component of equity, to the
extent that the hedge is effective. To the extent
that the hedge is ineffective, changes in fair
value are recognized in the statement of profit
and loss and reported within foreign exchange
gains/(losses), net, within results from operating
activities. If the hedging instrument no longer
meets the criteria for hedge accounting, then
hedge accounting is discontinued prospectively.
If the hedging instrument expires or is sold,
terminated or exercised, the cumulative gain
or loss on the hedging instrument recognized
in cash flow hedging reserve till the period the
hedge was effective remains in cash flow hedging
reserve until the forecasted transaction occurs.
The cumulative gain or loss previously recognized
in the cash flow hedging reserve is transferred
to the statement of profit and loss upon the
occurrence of the related forecasted transaction.
If the forecasted transaction is no longer expected
to occur, such cumulative balance is immediately
recognized in the statement of profit and loss.
B. Others
Changes in fair value of foreign currency
derivative instruments not designated as cash
flow hedges are recognized in the statement
of profit and loss and reported within foreign
exchange gains/(losses), net, within results from
operating activities.
Changes in fair value and gains/(losses), net,
on settlement of foreign currency derivative
instruments relating to borrowings, which have
not been designated as hedges are recorded in
finance costs.
c) Derecognition of financial instruments
The Company derecognizes a financial asset when
the contractual rights to the cash flows from the
financial asset expire or it transfers the financial asset
and the transfer qualifies for derecognition under Ind
AS 109. If the Company retains substantially all the
risks and rewards of a transferred financial asset,
the Company continues to recognize the financial
asset and recognizes a borrowing for the proceeds
received. A financial liability (or a part of a financial
liability) is derecognized from the Company's balance
sheet when the obligation specified in the contract is
discharged or cancelled or expires.
(iv) Equity and share capital
a) Share capital and securities premium
The authorised share capital of the Company as at
March 31, 2025 is H 25,274 divided into 12,504,500,000
equity shares of H 2 each, 25,000,000 preference
shares of H 10 each and 150,000, 10% optionally
convertible cumulative preference shares of H 100
each. Par value of the equity shares is recorded as
share capital and the amount received in excess of par
value is classified as securities premium.
Every holder of the equity shares, as reflected in
the records of the Company as at the date of the
shareholder meeting shall have one vote in respect of
each share held for all matters submitted to vote in
the shareholder meeting.
b) Capital Reserve
Capital reserve amounting to H 1,139 and H 1,139 as of
March 31, 2025 and 2024, respectively, is not freely
available for distribution.
c) Capital Redemption Reserve
As per the Companies Act, 2013, Capital redemption
reserve is created when a company purchases its own
shares out of free reserves or securities premium.
A sum equal to the nominal value of the shares so
purchased is transferred to capital redemption
reserve. The reserve can be utilized in accordance
with the provisions of section 69 of the Companies
Act, 2013. Capital redemption reserve amounting
to H 13 and H 1,674 as of March 31, 2025 and 2024,
respectively, is not freely available for distribution.
d) Retained earnings
Retained earnings comprises of the Company's
undistributed earnings after taxes and is freely
available for distribution.
e) Common Control Transactions Capital Reserve
The Common Control Transactions Capital Reserve
is on account of merger of certain wholly owned
subsidiaries with the Company during the year ended
March 31, 2019. As of March 31, 2025 and 2024, this
reserve amounting to H 2,473 and H 2,473, respectively,
is not freely available for distribution.
f) Share options outstanding account
The Share options outstanding account is used
to record the value of equity-settled share-based
payment transactions with employees. The amounts
recorded in share options outstanding account are
transferred to securities premium upon exercise
of stock options and restricted stock unit options
by employees.
g) Special Economic Zone re-investment reserve
The Special Economic Zone re-investment reserve has
been created out of profit of eligible Special Economic
Zone units as per provisions of section 10AA (1)(ii)
of the Income-tax Act, 1961 for acquiring new plant
and machinery. The reserve should be utilized by the
Company for acquiring plant and machinery as per the
terms of section 10AA(2) of the Income-tax Act, 1961.
This reserve is not freely available for distribution.
h) Others
Changes in the fair value of financial instruments
(debt or equity) measured at fair value through
other comprehensive income is recognized in other
comprehensive income, net of taxes and presented
within investment in debt instruments measured
at fair value through OCI or investment in equity
instruments measured at fair value through OCI.
Actuarial gains and losses on remeasurements of
the defined benefit plans are recognized in other
comprehensive income, net of taxes and presented
within equity in remeasurement of the defined
benefit plans.
i) Cash flow hedging reserve
Changes in fair value of derivative hedging instruments
designated and effective as a cash flow hedge are
recognized in other comprehensive income, net of
taxes, and presented within equity as cash flow
hedging reserve.
j) Foreign currency translation reserve
The exchange differences arising from the translation
of financial statements of foreign operations with
functional currency other than Indian Rupees is
recognized in other comprehensive income, net of
taxes and is presented within equity in the FCTR.
k) Dividend
A final dividend on common stock is recorded as a
liability on the date of approval by the shareholders.
An interim dividend is recorded as a liability on the
date of declaration by the board of directors.
l) Buyback of equity shares
The buyback of equity shares, including tax thereon
and related transaction costs are recorded as a
reduction of securities premium and retained earnings.
Further, capital redemption reserve is created as an
apportionment from retained earnings.
m) Bonus issue
For the purpose of bonus issue, the amount is
transferred from capital redemption reserve,
securities premium and retained earnings to the
share capital.
(v) Property, plant and equipment
a) Recognition, measurement and derecognition
Property, plant and equipment are measured at
cost less accumulated depreciation and impairment
losses, if any. Cost includes expenditures directly
attributable to the acquisition of the asset. General
and specific borrowing costs directly attributable to
the construction of a qualifying asset are capitalised
as part of the cost till all the activities necessary to
prepare the qualifying asset for its intended use or
sale are substantially completed. The cost and related
accumulated depreciation are derecognized upon
sale or disposition of the asset and the resultant gains
or losses are recognized in the statement of profit
and loss.
Capital work-in-progress are measured at cost less
accumulated impairment losses, if any.
b) Depreciation
The Company depreciates property, plant and
equipment over the estimated useful life on a
straight-line basis from the date the assets are
available for use. Leasehold improvements are
amortised over the shorter of estimated useful life
of the asset or the related lease term. Term licenses
are amortised over their respective contract term.
Freehold land is not depreciated. The estimated
useful life of assets is reviewed and where appropriate
are adjusted, annually. The estimated useful lives of
assets are as follows:
The Company believes that the technically evaluated
useful lives, different from Schedule II of the
Companies Act, 2013, best represents the period over
which these assets are expected to be used.
When parts of an item of property, plant and
equipment have different useful lives, they are
accounted for as separate items (major components)
of property, plant and equipment. Subsequent
expenditure relating to property, plant and equipment
is capitalised only when it is probable that future
economic benefits associated with these will flow
to the Company and the cost of the item can be
measured reliably.
Deposits and advances paid towards the acquisition
of property, plant and equipment outstanding as
at each reporting date is classified as capital
advances under other non-current assets and the
cost of property, plant and equipment not available
for use before such date are disclosed under capital
work-in-progress.
vi) Business combinations, Goodwill and
Intangible assets
i) Business combinations
Business combinations are accounted for using
the purchase (acquisition) method. The cost of an
acquisition is measured as the fair value of the assets
transferred, liabilities incurred or assumed, and equity
instruments issued at the date of exchange by the
Company. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business
combination are measured initially at fair value at
the date of acquisition. Transaction costs incurred in
connection with a business acquisition are expensed
as incurred.
The cost of an acquisition also includes the fair value
of any contingent consideration measured as at
the date of acquisition. Any subsequent changes to
the fair value of contingent consideration classified
as liabilities, other than measurement period
adjustments, are recognized in the statement of profit
and loss.
Common Control business combinations
The Company accounts for business combinations
involving entities or businesses under common
control using the pooling of interests method. The
assets and liabilities of the combining entities are
reflected at their carrying amounts. The identity of
the reserves shall be preserved and shall appear
in the financial statements of the transferee in the
same form in which they appeared in the financial
statements of the transferor. The difference, if any,
between the amount recorded as share capital issued
plus any additional consideration in the form of cash
or other assets and the amount of share capital of the
transferor shall be transferred to capital reserve and
should be presented separately as Common Control
Transactions Capital reserve.
b) Goodwill
The excess of the cost of an acquisition over the
Company's share in the fair value of the acquiree's
identifiable assets and liabilities is recognized as
goodwill. If the excess is negative, a bargain purchase
gain is recognized in equity as capital reserve. Goodwill
is measured at cost less accumulated impairment
(if any).
Goodwill associated with disposal of an operation that
is part of cash-generating unit is measured based
on the relative values of the operation disposed of
and the portion of the cash-generating unit retained,
unless some other method better reflects the goodwill
associated with the operation disposed of.
c) Intangible assets
I ntangible assets acquired separately are measured
at cost of acquisition. Intangible assets acquired in a
business combination are measured at fair value as at
the date of acquisition. Following initial recognition,
intangible assets are carried at cost less accumulated
amortization and impairment losses, if any.
The amortization of an intangible asset with a finite
useful life reflects the manner in which the economic
benefit is expected to be generated.
The estimated useful life of amortisable intangibles is
reviewed and where appropriate is adjusted, annually.
The estimated useful lives of the amortisable
intangible assets are as follows:
Customer-related intangibles includes customer
contracts and customer relationships acquired as a
part of Business combinations. Marketing-related
intangibles includes non-compete acquired as a part
of Business combinations.
(vii) Leases
The Company as a lessee
The Company enters into an arrangement for
lease of land, buildings, plant and equipment
including computer equipment and vehicles. Such
arrangements are generally for a fixed period but may
have extension or termination options. The Company
assesses, whether the contract is, or contains, a lease,
at its inception. A contract is, or contains, a lease if the
contract conveys the right to:
a) control use of an identified asset,
b) obtain substantially all the economic benefits
from use of the identified asset, and
c) direct the use of the identified asset
The Company determines the lease term as the non¬
cancellable period of a lease, together with periods
covered by an option to extend the lease, where
the Company is reasonably certain to exercise that
option. The Company makes an assessment on the
expected lease term on a lease-by-lease basis and
thereby assesses whether it is reasonably certain that
any options to extend or terminate the contract will
be exercised.
At the commencement of the lease, the Company
recognizes a Right of Use (“RoU”) asset at cost and
corresponding lease liability, except for leases with
term of twelve months or less (“Short-term leases”)
and low-value assets. For these short-term and low
value leases, the Company recognizes the lease
payments as an operating expense on a straight-line
basis over the lease term.
The cost of the RoU assets comprises the amount
of the initial measurement of the lease liability, any
lease payments made at or before the inception
date of the lease, plus any initial direct costs, plus
an estimate of costs to be incurred by the lessee in
dismantling and removing the underlying asset or
restoring the site on which it is located less any lease
incentives received. Subsequently, the RoU assets are
measured at cost less any accumulated depreciation
and accumulated impairment losses, if any. The RoU
assets are depreciated using the straight-line method
from the commencement date over the shorter of
lease term or useful life of RoU assets. The estimated
useful lives of RoU assets are determined on the same
basis as those of property, plant and equipment.
The Company applies Ind AS 36 to determine whether
a RoU asset is impaired and accounts for any
identified impairment loss as described in the
impairment of non-financial assets below.
For lease liabilities at the commencement of the
lease, the Company measures the lease liability at
the present value of the lease payments that are not
paid at that date. The lease payments are discounted
using the interest rate implicit in the lease, if that
rate is readily determined, if that rate is not readily
determined, the lease payments are discounted using
the incremental borrowing rate that the Company
would have to pay to borrow funds, including the
consideration of factors such as the natu re of the asset
and location, collateral, market terms and conditions,
as applicable in a similar economic environment.
After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made.
The lease liability is subsequently remeasured by
increasing the carrying amount to reflect interest on
the lease liability, reducing the carrying amount to
reflect the lease payments made and remeasuring the
carrying amount to reflect any lease modifications.
The Company recognizes the amount of the re¬
measurement of lease liability due to modification as
an adjustment to the RoU asset or in statement of profit
and loss, depending upon the modification. Where the
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carrying amount of the RoU asset is reduced to zero
and there is a further reduction in the measurement
of the lease liability, the Company recognizes any
remaining amount of the re-measurement in the
statement of profit and loss.
Payment of lease liabilities are classified as cash
used in financing activities in the statement of
cash flows.
The Company as a lessor
Leases under which the Company is a lessor are
classified as a finance or operating lease. Lease
contracts where all the risks and rewards are
substantially transferred to the lessee are classified
as a finance lease. All other leases are classified as
operating lease.
For leases under which the Company is an
intermediate lessor, the Company accounts for
the head-lease and the sub-lease as two separate
contracts. The sub-lease is further classified either as
a finance lease or an operating lease by reference to
the RoU asset arising from the head-lease.
(viii) Inventories
Inventories are valued at lower of cost and net
realisable value, including necessary provision for
obsolescence. Cost is determined using the weighted
average method.
(ix) Impairment
A) Financial assets
The Company applies the expected credit loss model
for recognising impairment loss on financial assets
measured at amortised cost, debt instruments
classified as FVTOCI, trade receivables, unbilled
receivables, finance lease receivables and other
financial assets. Expected credit loss is the difference
between the contractual cash flows and the cash
flows that the entity expects to receive discounted
using the effective interest rate.
Loss allowances for trade receivables, unbilled
receivables and finance lease receivables are
measured at an amount equal to lifetime expected
credit loss. Lifetime expected credit losses are
the expected credit losses that result from all
possible default events over the expected life of a
financial instrument. Lifetime expected credit loss is
computed based on a provision matrix which takes
in to account, risk profiling of customers and
historical credit loss experience adjusted for
forward-looking information. For other financial
assets, expected credit loss is measured at the
amount equal to twelve months expected credit loss
unless there has been a significant increase in credit
risk from initial recognition, in which case those are
measured at lifetime expected credit loss.
B) Impairment of Investment in subsidiaries
The Company assesses investments in subsidiaries
for impairment whenever events or changes in
circumstances indicate that the carrying amount
of the investment may not be recoverable. If any
such indication exists, the Company estimates the
recoverable amount of the investment in subsidiary.
The recoverable amount of such investment is the
higher of its fair value less cost of disposal (“FVLCD”)
and its value-in-use (“VIU”). The VIU of the investment
is calculated using projected future cash flows. If the
recoverable amount of the investment is less than its
carrying amount, the carrying amount is reduced to
its recoverable amount. The reduction is treated as an
impairment loss and is recognized in the statement of
profit and loss.
C) Non-financial assets
The Company assesses long-lived assets such as
property, plant and equipment, RoU assets and
intangible assets for impairment whenever events or
changes in circumstances indicate that the carrying
amount of an asset or group of assets may not be
recoverable. If any such indication exists, the Company
estimates the recoverable amount of the asset or
group of assets.
Goodwill is tested for impairment at least annually at
the same time and when events occur or changes in
circumstances indicate that the recoverable amount
of the cash generating unit is less than its carrying
value. The goodwill impairment test is performed
at the level of cash-generating unit or groups of
cash-generating units which represents the lowest
level at which goodwill is monitored for internal
management purposes.
The recoverable amount of an asset or cash
generating unit is the higher of its FVLCD and its VIU.
The VIU of long-lived assets is calculated using
projected future cash flows. FVLCD of a cash
generating unit is computed using turnover and
earnings multiples. If the recoverable amount of
the asset or the recoverable amount of the cash
generating unit to which the asset belongs is less
than its carrying amount, the carrying amount is
reduced to its recoverable amount. The reduction is
treated as an impairment loss and is recognized in
the statement of profit and loss.
I f at the reporting date, there is an indication that a
previously assessed impairment loss on property,
plant and equipment, RoU assets and intangible
assets, no longer exists, the recoverable amount is
reassessed and the impairment losses previously
recognized are reversed such that the asset is
recognized at its recoverable amount but not
exceeding written down value which would have
been reported if the impairment losses had not been
recognized initially. An impairment loss in respect of
goodwill is not reversed subsequently.
x) Employee benefits
0 Post-employment plans
The Company participates in various employee
benefit plans. Pensions and other post-employment
benefits are classified as either defined contribution
plans or defined benefit plans. Under a defined
contribution plan, the Company's sole obligation is to
pay a fixed amount with no obligation to pay further
contributions if the fund does not hold sufficient
assets to pay all employee benefits. The related
actuarial and investment risks are borne by the
employee. The expenditure for defined contribution
plans is recognized as an expense during the period
when the employee provides service. Under a
defined benefit plan, it is the Company's obligation
to provide agreed benefits to the employees. The
related actuarial and investment risks are borne by
the Company. The present value of the defined benefit
obligations is calculated by an independent actuary
using the projected unit credit method.
Remeasurements of the defined benefit plans,
comprising actuarial gains or losses, the effect of
changes to the asset ceiling, and the return on plan
assets (excluding interest) are immediately recognized
in other comprehensive income, net of taxes and not
reclassified to profit or loss in subsequent period.
Net interest recognized in profit or loss is calculated
by applying the discount rate used to measure the
defined benefit obligation to the net defined benefit
liability or asset. The actual return on the plan assets
above or below the discount rate is recognized as
part of remeasurements of the defined benefit plans
through other comprehensive income, net of taxes.
The Company has the following employee benefit
plans:
A. Provident fund
Eligible employees receive benefits under the
provident fund plan in which both the employer
and employees make periodic contributions
to the approved provident fund trust managed
by the Company. A portion of the employer's
contribution is made to the government
administered pension fund. The contributions to
the trust managed by the Company is accounted
for as a defined benefit plan as the Company is
liable for any shortfall in the fund assets based
on the government specified minimum rates
of return.
Certain employees receive benefits under the
provident fund plan in which both the employer
and employees make periodic contributions to
the government administered provident fund. A
portion of the employer's contribution is made
to the government administered pension fund.
This is accounted as a defined contribution plan
as the obligation of the Company is limited to the
contributions made to the fund.
B. Gratuity and foreign pension
In accordance with the Payment of Gratuity
Act, 1972, applicable for Indian companies, the
Company provides for a lump sum payment to
eligible employees, at retirement or termination
of employment based on the last drawn salary
and years of employment with the Company.
The gratuity fund is managed by the third-party
fund managers.
The Company also maintains pension and similar
plans for employees outside India, based on
country specific regulations. These plans are
partially funded, and the funds are managed by
third party fund managers. The plans provide for
monthly payout after retirement as per salary
drawn and service period or for a lump sum
payment as set out in rules of each fund.
The Company's obligations in respect of the
above plans, which are defined benefit plans, are
provided for based on actuarial valuation using
the projected unit credit method.
C. Superannuation
Superannuation plan, a defined contribution
scheme is administered by third party fund
managers. The Company makes annual
contributions based on a specified percentage of
each eligible employee's salary.
b) Termination benefits
Termination benefits are expensed when the Company
can no longer withdraw the offer of those benefits.
c) Short-term benefits
Short-term employee benefit obligations such as cash
bonus, management incentive plans or profit sharing
plans are measured on an undiscounted basis and are
recorded as expense as the related service is provided.
A liability is recognized for the amount expected to
be paid under short-term cash bonus, management
incentive plans or profit-sharing plans, if the Company
has a present legal or constructive obligation to pay
this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
d) Compensated absences
The employees of the Company are entitled to
compensated absences. The employees can carry
forward a portion of the unutilized accumulating
compensated absences and utilize it in future
periods or receive cash at retirement or termination
of employment. The Company records an obligation
for compensated absences in the period in which the
employee renders the services that increases this
entitlement. The Company measures the expected
cost of compensated absences as the additional
amount inai tne company expects to pay as a result
of the unused entitlement that has accumulated
at the end of the reporting period. The Company
recognizes accumulated compensated absences
based on actuarial valuation using the projected unit
credit method. Non-accumulating compensated
absences are recognized in the period in which the
absences occur.
(xi) Share-based payment transactions
Selected employees of the Company receive
remuneration in the form of equity settled
instruments or cash settled instruments, for
rendering services over a defined vesting period and
for Company's performance-based stock options
over the defined period. Equity instruments granted
are measured by reference to the fair value of the
instrument at the date of grant. In cases, where equity
instruments are granted at a nominal exercise price,
the intrinsic value on the date of grant approximates
the fair value. The expense is recognized in the
statement of profit and loss with a corresponding
increase to the share options outstanding account, a
component of equity.
The equity instruments or cash settled instruments
generally vest in a graded manner over the vesting
period. The fair value determined at the grant date
is expensed over the vesting period of the respective
tranches of such grants (accelerated amortization).
The stock compensation expense is determined based
on the Company's estimate of equity instruments or
cash settled instruments that will eventually vest.
Cash Settled instruments granted are re-measured
by reference to the fair value at the end of each
reporting period and at the time of vesting. The expense
is recognized in the statement of profit and loss with a
corresponding increase to the financial liability.
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