Airtel 2015 Annual Report Download - page 142

Transformational Network
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140 Annual Report 2015-16
at the date of balance sheet. Plan assets are assets
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qualifying insurance policies.
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including actuarial gains and losses, are recognised in
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when the employee renders the related services. The
Company has no further obligations under these plans
beyond its periodic contributions.
The distinction between short-term and long-term
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settlement rather than the employee’s entitlement
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The employees of the Company are entitled to
compensated absences based on the unavailed
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Company records liability based on actuarial valuation
computed under projected unit credit method. The
Company presents the liability for compensated
absences as a current liability in the balance sheet
as it does not have an unconditional right to defer its
settlement for 12 months after the reporting date.
3.15. Share Based Compensation
The Company issues equity-settled and cash-settled
share-based options to certain employees. These are
measured at fair value on the date of grant.
The fair value determined on the grant date of the
equity settled share based options is expensed over the
vesting period, based on the Company’s estimate of the
shares that will eventually vest.
The fair value determined on the grant date of the cash
settled share based options is expensed over the vesting
period, based on the Company’s estimates of the shares
that will eventually vest. At each reporting date, until the
liability is settled, and at the date of settlement, liability is
re-measured at fair value, with any changes in fair value
pertaining to the vesting period till the reporting date is
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Fair value is measured using Lattice-based option
valuation model, Black-Scholes and Monte Carlo
Simulation framework and is recognised as an expense,
together with a corresponding increase in equity/
liability, as appropriate, over the period in which the
options vest using the graded vesting method. The
expected life used in the model is adjusted, based on
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transferability, exercise restrictions and behavioral
considerations. The expected volatility and forfeiture
assumptions are based on historical information.
Where the terms of a share-based compensation are
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original terms of the award are met. An additional
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increases the total fair value of the share-based
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Where an equity-settled award is cancelled, it is treated
as if it is vested on the date of cancellation, and any
expense not yet recognised for the award is recognised
immediately. This includes any award where non-
vesting conditions within the control of either the entity
or the employee are not met. However, if a new award is
substituted for the cancelled award, and designated as
a replacement award on the date that it is granted, the
cancelled and new awards are treated as if they were a
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previous paragraph. All cancellations of equity-settled
transaction awards are treated equally.
3.16. Ta xes
(i) Current Income tax
Current Income tax is measured at the amount expected
to be paid to the tax authorities in accordance with
Indian Income Tax Act, 1961. The tax rates and tax laws
used to compute the amount are those that are enacted
or substantively enacted, by the reporting date.
(ii) Deferred Tax
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accounting income for the year and reversal of timing
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based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date.
Deferred tax liabilities are recognised for all taxable
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only to the extent that there is reasonable certainty
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against which such deferred tax assets can be realised.
In situations, where the Company has unabsorbed
depreciation or carry forward tax losses, deferred tax
assets are recognised only if there is virtual certainty
supported by convincing evidence that they can be
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In the situations where the Company is entitled to a
tax holiday under the Indian Income-tax Act, 1961, no
deferred tax (asset or liability) is recognised in respect of
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which reverse after the tax holiday period is recognised
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The carrying amount of deferred tax assets is reviewed
at each balance sheet date and reduced to the extent
that it is no longer reasonably certain or virtual certain,
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available to allow all or part of the deferred tax asset to
be realised.
At each balance sheet date, unrecognised deferred tax
assets of earlier years are re-assessed and recognised to the
extent that it has become reasonably or virtually certain, as
the case may be, that future taxable income will be available
against which such deferred tax assets can be realised.