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• Annual Report 2018-19
Shaping the future of software driven business
(ii) Gratuity
Gratuity is a defined benefit obligation plan operated by the Company for its employees covered under Company Gratuity
Scheme. The cost of providing benefit under gratuity plan is determined on the basis of actuarial valuation using the
projected unit credit method at the reporting date and are charged to the statement of profit and loss, except for
the remeasurements, comprising of actuarial gains and losses which are recognized in full in the statement of other
comprehensive income in the reporting period in which they occur. Remeasurements are not reclassified to profit and loss
subsequently.
(iii) Superannuation
Superannuation is a defined contribution plan covering eligible employees. The contribution to the superannuation fund
managed by the insurer is equal to the specified percentage of the basic salary of the eligible employees as per the
scheme. The contribution to this scheme is charged to the statement of profit and loss on an accrual basis. There are no
other contributions payable other than contribution payable to the respective fund.
(iv) Leave encashment
Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee
benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a
result of the unused entitlement that has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee
benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial
valuation using the projected unit credit method at the reporting date. Remeasurements, comprising of actuarial gains
and losses are recognized in full in the statement of profit and loss. Expense on non-accumulating compensated absences
is recognized in the period in which the absences occur.
The Company presents the entire leave encashment liability as a current liability in the balance sheet, since it does not
have an unconditional right to defer its settlement for twelve months after the reporting date.
(v) Long service awards
Long service awards are other long term benefits to all eligible employees, as per Company’s policy. The cost of providing
benefit under long service awards scheme is determined on the basis of actuarial valuation using the projected unit credit
method at the reporting date. Remeasurements, comprising of actuarial gains and losses are recognized in full in the
statement of profit and loss.
Amendment to Ind AS 19:
plan amendment, curtailment or settlement- On March 30, 2019, Ministry of Corporate Affairs
issued amendments to Ind AS 19, ‘Employee Benefits’, in connection with accounting for plan amendments, curtailments
and settlements.
The amendments require an entity:
• to use updated assumptions to determine current service cost and net interest for the remainder of the period after a
plan amendment, curtailment or settlement; and
• to recognise in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even
if that surplus was not previously recognised because of the impact of the asset ceiling.
Effective date for application of this amendment is annual period beginning on or after April 1, 2019. The Company does
not have any impact on account of this amendment.
(l) Income taxes
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to
the tax authorities in accordance with the Income Tax Act, 1961 enacted in India and tax laws prevailing in the respective
tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity
is recognized in equity and not in statement of profit and loss.
Deferred income taxes reflect the impact of temporary differences between tax base of assets and liabilities and their
carrying amounts. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at
the reporting date.
Notes forming part of financial statements (Contd.)