Page 159 - InterloopAnnualReport2020

NOTES TO THE UNCONSOLIDATED

FINANCIAL STATEMENTS

For the year ended June 30, 2020

6.9 Cash and cash equivalents
Cash and cash equivalents comprise of cash in hand, cheques in hand/cheques overdrawn, balances with
banks and includes short term highly liquid investments with original maturities of three months or less. The
cash and cash equivalents are readily convertible to known amounts of cash and are subject to insignificant
risk of change in value.

6.10 Share capital
Ordinary shares are classified as equity and recognized at their face value.

6.11 Staff retirement benefits
(a) Defined Benefit Plan
The Company operates an unfunded gratuity scheme for all employees according to the terms of
employment, subject to a minimum qualifying period of service. Annual provision is made on the basis of
actuarial valuation to cover obligations under the scheme for all employees eligible to gratuity benefits.

The cost of providing benefits is determined using the projected unit credit method, with actuarial valuation
being carried out at each reporting date. Remeasurement of net defined benefit liability, which comprise of
actuarial gains and losses i.e. experience adjustments and the effects of changes in actuarial assumptions,
are 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 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 expense and other expenses e.g. current service cost, related to defined
benefit plans are recognized in statement of profit or loss.

(b) Defined Contribution Plan
There is a contributory provident fund for executive staff of the Company for which contributions are charged
to profit or loss as and when incurred.

The Company makes monthly contribution to the fund at the rate of 7.5% whereas employees of the Company
make monthly contributions to the fund at the rates ranging from 7.5% to 12.5% of basic salary. The assets
of the fund are held separately under the control of trustees.

(c) Employees’ Share Option Scheme (ESOS)
The Company operates an equity settled stock option scheme to called ‘Interloop Limited – Employees
Stock Option Scheme, 2016’. The compensation committee (“committee”) of the Board of directors
(“Board”) evaluates 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 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 the date of grant of options.

The fair value of the share option is measured at grant date as difference of fair value of share and exercise
price and is recognized as an employee compensation expense, with a corresponding increase in equity, on
the straight line basis over the vesting period. The amount recognized as an expense is adjusted to reflect
the number of awards for which the related service and non–market performance conditions are expected to
be met, such that the amount ultimately recognized is based on the number of awards that meet the related
service and non– market performance conditions at the vesting date.

When share options are exercised, the proceeds received, net of any transaction costs, are credited to share
capital (nominal value) and share premium.

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