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NOTES TO THE FINANCIAL STATEMENTS
Year ended 31 March 2018
3.12 Impairment of non–Financial Assets Employees’ Trust Fund
The carrying amounts of the company’s non-financial The Company contributes 3% of the salary of each
assets, other than, deferred tax assets are reviewed at employee to the employees’ trust fund.
each reporting date to determine whether there is any
indication of impairment. If any such indication exists, Defined benefit plans
then the asset’s recoverable amount is estimated. An
impairment loss is recognized if the carrying amount A defined benefit plan is a post-employment benefit plan
of an asset or cash-generating unit (CGU) exceeds its other than a defined contribution plan. The Company’s
recoverable amount. net obligation in respect of defined benefit plans is
calculated by estimating the amount of future benefit
The recoverable amount of an asset or CGU is the that employees have earned in return for their service
greater of its value in use and its fair value less costs in the current and prior periods and discounting that
to sell. In assessing value in use, the estimated future amount to determine its present value. The calculation
cash flows are discounted to their present value using is performed annually by a qualified independent
a pre-tax discount rate that reflects current market actuary using the projected unit credit method.
assessments of the time value of money and the risks
specific to the asset or CGU. For impairment testing, The Company recognizes all actuarial gains and losses /
assets are grouped together into the smallest group remeasurement component arising from defined benefit
of assets that generates cash inflows from continuing plans immediately in other comprehensive income.
use that are largely independent of the cash inflows of
other assets or CGUs. Principal Actuarial Assumptions
Impairment losses are recognized in the statement of The principal assumptions used in the valuation were
profit or loss. Impairment losses recognized in respect of as follows:
CGUs are allocated first to reduce the carrying amount
of any goodwill allocated to the CGU (group of CGUs), Parameter 2018 2017
if any, and then to reduce the carrying amounts of the Discount Rate 10.0% 12.9%
other assets in the CGU (group of CGUs) on a pro rata Rate of salary increment 9.0% 10.5 %
basis.
The demographic assumptions underlying the valuation
An impairment loss in respect of goodwill is not reversed. are retirement age 55, early withdrawals from service,
For other assets, an impairment loss is reversed only and retirement on medical grounds, death before and
to the extent that the asset’s carrying amount does after retirement, etc.
not exceed the carrying amount that would have been
determined, net of depreciation or amortization, if no An actuarial valuation is carried out at every year end
impairment loss had been recognized. to ascertain the full liability under the fund.
3.13 Employee Benefits Recognition of Actuarial Gain and Losses
Defined Contribution Plans The company recognizes the total actuarial gains and
losses that arises in calculating the company obligation
A defined contribution plan is a post-employment in respect of the plan in Other Comprehensive Income
benefit plan under which an entity pays fixed during the period in which it occurs.
contributions into a separate entity and will have no
legal or constructive obligation to pay further amounts. Interest Cost
Obligations for contributions to defined contribution
plans are recognized as an employee benefit expense Interest cost is the expected increase due to interest
in profit or loss in the periods during which services during the period in the present value of the planned
are rendered by employees. Prepaid contributions liabilities because the benefits are one year closer to
are recognized as an asset to the extent that a cash settlement.
refund or a reduction in future payments is available
All employees of the Company are members of the Recognition of Past Service Cost (Applicable only when
Employees’ Provident Fund (EPF) and Employees’ Trust a plan has been changed)
Fund (ETF), to which the Company contributes 12% and
3% of employee salaries respectively. Past Service Costs are recognized as an expense on a
straight line basis over the average period until the
Employees’ Provident Fund benefits become vested. If the benefits have already
been vested, immediately following the introduction of,
The company and the employees contribute 12% and or changes to the plan, past service costs are recognized
8% respectively on the salary of each employee to the immediately.
approved private provident fund.
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