Page 116 - Interloop Annual Report 2018-2019

NOTES TO THE UNCONSOLIDATED NOTES TO THE UNCONSOLIDATED

FINANCIAL STATEMENTS FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2019 FOR THE YEAR ENDED JUNE 30, 2019

Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of cash-generating Once classified as held-for-sale, intangible assets and property, plant and equipment, are no longer amortized or
units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce depreciated.
the carrying amount of the other assets of the unit on a pro-rata basis. Impairment losses on goodwill shall not be
reversed. 5.10 Staff retirement benefits

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable (a) Defined Benefit Plan
amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had The Company operates an unfunded gratuity scheme for all employees according to the terms of employment,
been recognized. Prior impairments of non-financial assets are reviewed for possible reversal at each reporting subject to a minimum qualifying period of service. Annual provision is made on the basis of actuarial valuation to
date. cover obligations under the scheme for all employees eligible to gratuity benefits.

5.6 Stores and spares The cost of providing benefits is determined using the projected unit credit method, with actuarial valuation
being carried out at each balance sheet date. Remeasurement of net defined benefit liability, which comprise of
Stores and spares are carried at moving average cost. Provision is made for slow moving and obsolete store items actuarial gains and losses i.e. experience adjustments and the effects of changes in actuarial assumptions, are
when so identified. Stores and spares held for capital expenditure are included in capital work in progress. recognized immediately in other comprehensive income. The Company determines net interest expense/(income)
on the defined benefit obligation for the period by applying the discount rate used to measure the defined benefit
5.7 Stock-in-trade obligation at the beginning of the annual period to then-net defined benefit, taking into account any change in
the net defined benefit obligation during the period as a result of contributions and benefit payments. Net interest
These are stated at the lower of cost and net realizable value (NRV). The methods used for the calculation of cost expense and other expenses e.g. current service cost, related to defined benefit plans are recognized in statement
are as follows: of profit or loss.

Raw material - At factory Moving average cost (b) Defined Contribution Plan
- In transit Invoice value plus direct charges in respect thereof.
Work in process and finished goods Prime cost including a proportion of production overheads. There is a contributory provident fund for executive staff of the Company for which contributions are charged to
Wastes are valued at net realizable value. profit or loss as and when incurred.

Stock-in-trade is regularly reviewed by the management and any obsolete items are brought down to their net The Company makes monthly contribution to the fund at the rate of 7.5% whereas employees of the Company
realizable value. Net realizable value signifies the selling price in the ordinary course of business less costs make monthly contributions to the fund at the rates ranging from 7.5% to 12.5% of basic salary. The assets of the
necessary to be incurred to affect such sale. fund are held separately under the control of trustees.

5.8 Cash and cash equivalents (c) Employees’ Share Option Scheme (ESOS)

Cash and cash equivalents comprise of cash in hand, cheques in hand/cheques overdrawn, balances with banks The Company operates an equity settled stock option scheme to be called ‘Interloop Limited - Employees Stock
and include short term highly liquid investments with original maturities of three months or less. The cash and cash Option Scheme, 2016’. The compensation committee (“committee”) of the Board of directors (“Board”) evaluates
equivalents are readily convertible to known amount of cash and are subject to insignificant risk of change in value. the performance and other criteria of employees and recommends to the Board for grant of options. The Board
on the recommendation of the committee, on its discretion, grants recommended options to employees. These
5.9 Non-current assets held for sale options vest after a specified period subject to fulfillment of certain conditions as defined in the scheme. Upon
vesting, employees are eligible to apply and secure allotment of Company’s shares at a pre-determined price on
Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to the date of grant of options.
be recovered principally through a sale transaction rather than continuing use and a sale is considered highly The fair value of the share option is measured at grant date as difference of fair value of share and exercise price 2018 - 19
probable. They are stated at the lower of carrying amount and fair value less costs to sell. Impairment losses on
Interloop Limited initial classification as held for sale and subsequent gains or losses on re-measurements are recognized in the and is recognized as an employee compensation expense, with a corresponding increase in equity, on the straight Annual Report
line basis over the vesting period. The amount recognized as an expense is adjusted to reflect the number of
statement of profit or loss.

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