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Notes forming part of consolidated onancial statements (Contd.)
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Annual Report 2016-17
(m) Retirement and other employee beneots
(i) Provident fund
Provident fund is a deoned contribution plan covering eligible employees. The Group and the eligible employees
make a monthly contribution to the provident fund maintained by the Regional Provident Fund Commissioner
equal to the specioed percentage of the basic salary of the eligible employees as per the scheme. The contributions
to the provident fund are charged to the statement of proot and loss for the year when the contributions are due.
The Group has no obligation, other than the contribution payable to the provident fund.
(ii) Gratuity
Gratuity is a deoned beneot obligation plan operated by the Group for its employees covered under Group Gratuity
Scheme. The cost of providing beneot 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 proot 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 reclassioed to
proot and loss subsequently.
(iii) Superannuation
Superannuation is a deoned contribution plan covering eligible employees. The contribution to the superannuation
fund managed by the insurer is equal to the specioed percentage of the basic salary of the eligible employees as
per the scheme. The contribution to this scheme is charged to the statement of proot 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 twelvemonths, is treated as short-termemployee
beneot. The Group 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 Group treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee
beneot 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 proot and loss. Expense on non-accumulating
compensated absences is recognized in the period in which the absences occur.
The Group 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
/ong service awards are other long term beneots to all eligible employees, as per Group’s policy. The cost of
providing beneot 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 proot and loss.
(n) 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 Group 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 proot and loss.
Deferred income taxes repect 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.
Deferred tax liabilities are recognized for all taxable temporary differences, except deferred tax liability arising
from initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and,
affects neither accounting nor taxable proot/ loss at the time of transaction. Deferred tax assets are recognized