Page 230 - InterloopAnnualReport2020

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

For the year ended June 30, 2020

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

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

7.11 Staff retirement benefits
(a) Defined Benefit Plan
The group 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 group 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 group for which contributions are charged to
profit or loss as and when incurred.
The group makes monthly contribution to the fund at the rate of 7.5% whereas employees of the group
have the option to contribute more than 7.5% but not exceeding 12.5% of his/her monthly basic pay with the
written approval of the Board. The assets of the fund are held separately under the control of trustees.

(c) Employees’ Share Option Scheme (ESOS)
The Holding company operates an equity settled stock option scheme called as ‘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 Holding 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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