Page 217 - FBL AR 2019-20

CORPORATE STATUTORY FINANCIAL
OVERVIEW STATEMENTS STATEMENTS

Notes to the Consolidated financial statements for the year ended March 31, 2020

42 Employee benefits (contd.)
j) Inherent risks:
The inherent risk for the Company mainly are adverse salary growth or demographic experience or inadequate returns on underlying
plan assets can result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in
nature the plan is not subject to any longevity risks.

II) Other long term benefit plan
Actuarial valuation for compensated absences is done as at the year end and provision is made as per Company rules with corresponding
charge / (credit) to the Consolidated statement of profit and loss amounting to (H18.28 Lakhs) [March 31, 2019: H185.39 Lakhs] and it
covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation.

Obligation in respect of defined benefit plan and other long term employee benefit plans are actuarially determined at the year end
using the “Projected Unit Credit Model”. Gains and losses on changes in actuarial assumptions related to defined benefit obligations are
recognised in OCI where as gains and losses in respect of other long term employee benefit plans are recognised in the Consolidated
statement of profit and loss.
43 Leases

(A) Assets taken on operating lease
Effective April 01, 2019, the Group has adopted Ind AS 116 “Leases” and applied to lease contracts existing on April 01, 2019, by electing
‘retrospective approach with the cumulative effect at the date of initial application’. Under this approach, the Group has recorded lease
liability at the present value of the remaining lease payments, discounted at the incremental borrowing rate and the right of use asset at
an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments related to that lease recognised
under Ind AS 17.
The Group has entered into agreements for taking on leave and license basis certain residential and office premises and also taken
vehicles on lease basis. The Group also has lease arrangements for land taken on lease at Dahej and Saykha. The lease term in respect of
these lease ranges from 2 to 98 years. In respect of the said leases, the additional information is as under
( H in Lakhs )
Particulars March 31, 2020
Depreciation charge for right-of-use assets 152.86
Expenses relating to leases of low-value assets accounted for on straight line basis 45.51
(included in Rent expenses in Note 40)
Total cash outflow for leases 213.86
Mayurity analysis of lease liabilities (on undiscounted basis)
Less than one year 152.73
One to five years 384.21
More than five years 720.00
Total 1,256.94
Weighted average incremental borrowing rate applied to lease liabilities recognised in the balance sheet at the date of intial application
10%
The following is the summary of practical expedients elected on initial application:
i) The Group has not reassessed whether a contract is or contains a lease at the date of initial application.
ii) The Group has utilised the exemptions provided for short-term leases (less than a year) and leases for low value assets.
iii) The Group has utilised hindsight in determining the lease terms where contracts contained options to extend or terminate the
lease.
iv) Initial direct costs are excluded from the measurement of right-of-use assets at the date of initial application
The difference between the operating lease commitments as of March 31, 2019, disclosed applying Ind AS 17 and the value of the
lease liability recognised in the balance sheet at the date of initial application is primarily on account of inclusion of extension options
reasonably certain to be exercised, in measuring the lease liability in accordance with Ind AS 116.

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