Page 109 - InterloopAnnualReport2021

NOTES TO THE

FINANCIAL STATEMENTS

For the year ended June 30, 2021

The related payment obligations, net of finance costs are classified as current and long term liability
depending upon the timing of the payment.

In calculating the present value of lease payments, the Company uses the incremental borrowing rate
at the lease commencement date if the interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities
is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed
lease payments or a change in the assessment to purchase the underlying asset.

Each lease payment is allocated between the liability and finance cost so as to achieve a constant rate
on the balance outstanding. The interest element of the rental is charged to statement of profit or loss
over the lease term.

Payments associated with short-term leases and leases of low-value assets are recognized on a straight-
line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or
less and leases of low value items.

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

6.12 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 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.

6.13 Government grants
Grants from the government are recognized at their fair value where there is a reasonable assurance
that the grant will be received and the Company will comply with all attached conditions. Government
grants received by the Company in the form of economic benefits are deferred and accounted for under
income approach in profit or loss. Relevant amortization income is recognized in profit or loss, net off
with relevant expense, on systematic basis over the period in which the expenses for the grants are
intended to compensate.

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