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• Annual Report 2018-19
Shaping the future of software driven business
(q) Earnings per share (EPS)
Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year. The weighted average number of equity shares
outstanding during the reporting period is adjusted for events such as bonus issue, bonus element in a rights issue, share
split, and reverse share split (consolidation of shares), if any occurred during the reporting period, that have changed
the number of equity shares outstanding, without a corresponding change in resources. Further, the weighted average
number of equity shares used in computing the basic earnings per share is reduced by the shares held by PSPL ESOP
Management Trust at the balance sheet date, which were obtained by subscription to the shares from finance provided
by the Group.
For the purpose of calculating diluted earnings per share, the net profit for the year attributable to the equity shareholders
and the weighted average number of equity shares outstanding during the year, are adjusted for the effects of all dilutive
potential equity shares.
The number of shares and potential dilutive equity shares are adjusted retrospectively for all periods presented for
any bonus shares issues including for changes effected prior to the approval of the financial statements by the Board
of Directors.
(r) Provisions
A provision is recognized when the Group has a present obligation as a result of past event; it is probable that an outflow
of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate
can be made. Provisions are determined based on the best estimate required to settle the obligation at the reporting date.
If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects the
risks specific to the liability. These estimates are reviewed at each balance sheet date and adjusted to reflect the current
best estimates.
(s) 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.
(t) Cash and cash equivalents
Cash and cash equivalents in the cash flow statement comprises of cash at bank, cash in hand and short term deposits
with an original maturity period of three months or less.
(u) Employee stock compensation expenses
Employees of the Group receive remuneration in the form of share based payment transactions, whereby employees
render services as consideration for equity instruments granted (equity-settled transactions).
In accordance with Ind AS 102 – “Share Based Payments”, the cost of equity-settled transactions is determined by the fair
value of the options at the date of the grant and recognized as employee compensation cost over the vesting period. The
cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the
extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that
will ultimately vest.
The expense or credit recognized in the statement of profit and loss for a year represents the movement in cumulative
expense recognized as at the beginning and end of that year and is recognized in employee benefits expense. In case
of the employee stock option schemes having a graded vesting schedule, each vesting tranche having different vesting
period has been considered as a separate option grant and accounted for accordingly.
Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as
if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any
modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the
employee as measured at the date of modification.
Notes forming part of consolidated financial statements (Contd.)