Gillette_India_Limited_AR_20

Annual Report 2019-20 85 Notes to Financial Statements for the year ended June 30, 2020 Company Overview Board's Report MD&A Corporate Governance Financial Statements Gillette India Limited Past service costs are recognised in the Statement of Profit and Loss on the earlier of: ▶ The date of the plan amendment or curtailment, and ▶ The date that the Company recognises related restructuring costs Net interest is calculated by applying the discount rate at the beginning of the year to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit obligation as an expense in the Statement of Profit and Loss: ▶ Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and ▶ Net interest expense or income ii) Liability for Compensated Absences, Bonus, Leave Travel Allowance etc which are in the nature of short term benefits is provided for as per Company rules based on the undiscounted amount of benefits expected to be paid in exchange of services rendered. iii) Termination benefits and long service awards in terms of Company policy are recognised as an expense as and when incurred. f. Share-based payment arrangements Employees (including senior executives) of the Company receive remuneration in the form of share- based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions). Equity-settled transactions The Procter & Gamble Company, USA has an "Employee Stock Option Plan (ESOP)" whereby the specified employees covered by the plan are granted an option to purchase shares of the Ultimate Holding Company i.e. - The Procter & Gamble Company, USA at a fixed price (grant price) for a fixed period of time. The difference between the market price and grant price on the exercise of the stock options issued by the Ultimate Holding Company to the employees of the Company is charged in the year of exercise by the employees. Parent company will recharge an amount equal to spread as on date of exercise of options. The cost of equity-settled transactions is recognised in employee benefits expense, together with a corresponding increase in equity (other reserves) over the period in which the service and performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately vest. Recharge to parent company to the extent of fair value of options will be debited in equity reserves and any excess recharge above the fair value of options will be recognised as equity distribution from the Company. Employee share purchase plan The Procter & Gamble Company, USA has an “International Stock Ownership Plan (ISOP)” (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of the Ultimate Holding Company i.e. The Procter and Gamble Company, USA. Every employee who opts for the scheme contributes by way of payroll deduction up to a specified percentage (upto 15%) of base salary towards purchase of shares on a monthly basis. The Company contributes 50% of employee’s contribution (restricted to 2.5% of his base salary) and charged to employee benefit expenses. The expenses related ISOP are recognised immediately in the Statement of Profit and Loss since there are no vesting conditions attached to the scheme. The expense in the Statement of Profit and Loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.