248 / 300
Notes forming part of onancial statements (Contd.)
248
•
Annual Report 2016-17
(j) Retirement and other employee beneots
(i) Provident fund
Provident fund is a deoned contribution plan covering eligible employees. The Company 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 Company has no obligation, other than the contribution payable to the
provident fund.
(ii) Gratuity
Gratuity is a deoned beneot obligation plan operated by the Company for its employees covered under
Company 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 twelve months, is treated as short-term
employee beneot. 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 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 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
/ong service awards are other long term beneots to all eligible employees, as per Company’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.
(k) 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 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.