Page 170 - BCML AR 2019-20

FINANCIAL STATEMENTS

Notes forming part of the Standalone Financial Statements

Note No. : 2 Significant accounting policies (contd.)

2.13 Foreign currency transactions and translations
Transactions in foreign currencies are initially recorded at the exchange rate prevailing on the date the transaction first qualifies for
recognition.

Monetary assets and liabilities related to foreign currency transactions remaining outstanding on the balance sheet date are translated
at the exchange rate prevailing on the balance sheet date. Any income or expense arising on account of foreign exchange difference,
either on settlement or on translation, is recognized in the statement of profit and loss.

Non-monetary items which are carried at historical cost denominated in a foreign currency are translated using the exchange rate at
the date of the initial transaction.
2.14 Employee benefits
(a) Short-term employee benefits
Short-term employee benefits in respect of salaries and wages, including non-monetary benefits, are recognized as an expense
at the undiscounted amount in the statement of profit and loss in the year in which the related service is rendered.
(b) Defined contribution plans
The Company pays provident and other fund contributions to publicly administered fund as per related Government regulations.

The Company has no further obligation, other than the contributions payable to the respective funds. The Company recognizes
contribution payable to such funds as an expense when an employee renders the related service.
(c) Defined benefit plans

The Company operates a defined benefit gratuity plan, which requires contributions to be made to “The Balrampur Sugar
Company Limited Employees Gratuity Fund” (“the Trust”). Trustees administer contributions made to the Trust and contributions
are invested through insurance companies.

The liability or asset recognized in the balance sheet in respect of gratuity is the present value of the defined benefit obligation
as at the balance sheet date less the fair value of plan assets. The defined benefit obligation is calculated by external actuaries
using the projected unit credit method.
Re-measurements, comprising of actuarial gains and losses, any change in the effect of the asset ceiling and the return on plan
assets (excluding amounts included in net interest on the net defined benefit liability or asset), are recognized immediately in
the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income (“OCI”) in the
period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
(d) Compensated absences
The employees of the Company are entitled to compensated absences which are both accumulating and non-accumulating in
nature. The expected cost of accumulating compensated absences is determined by actuarial valuation using the projected unit
credit method for the unused entitlement that has accumulated as at the balance sheet date.
The benefits are discounted using the market yields as at the end of the balance sheet date that has terms approximating to the
terms of the related obligation. Re-measurements as a result of experience adjustments and changes in actuarial assumptions
are recognized in profit or loss.

2.15 Financial instruments
Financial assets and financial liabilities are recognized in the balance sheet when the Company becomes a party to the contractual
provisions of the instrument. The Company determines the classification of its financial assets and financial liabilities at initial recognition
based on its nature and characteristics.

168 | Balrampur Chini Mills Limited