president & cfo - UB Group

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)(a) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from the costof the asset and are depreciated over the balance life of the asset; and(b) In other cases, the said exchange differences are accumulated in a ‘Foreign Currency Monetary Item TranslationDifference Account’ and amortised over the balance period of such long term asset/liability but not beyondMarch 31, 2011.All other monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at theyear end and all exchange gains/ losses arising therefrom are adjusted to the Profit and Loss Account, except thosecovered by forward contracted rates where the premium or discount arising at the inception of such forwardexchange contract is amortised as expense or income over the life of the contract.Exchange differences on forward contracts are recognised in the Profit and Loss Account in the reporting periodin which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward contractsis recognised as income or expense for the year.For forward exchange contracts and other derivatives that are not covered by AS-11 ‘The Effects of Changes inForeign Exchange Rates’, the Company follows the guidance in the announcement of the Institute of CharteredAccountants of India (ICAI) dated March 29,2008 whereby for each category of derivatives, the Company records anynet mark- to- market losses. Net mark-to-market gains are not recorded for such derivatives. [Also refer Schedule19 Note 17 below]Foreign Company:In respect of overseas subsidiary companies, Income and Expenses are translated at average exchange rate for theyear. Assets and Liabilities, both monetary and non-monetary, are translated at the year-end exchange rates. Thedifferences arising out of translation are included in the foreign currency translation reserve. Any Goodwill orCapital Reserve arising on acquisition of non integral operation is translated at closing rate.14. Employee Benefitsa) Defined-contribution plansThese are plans in which the Group pays pre-defined amounts to separate funds and does not have any legalor informal obligation to pay additional sums. These comprise of contributions to the employees’ providentfund with the government, superannuation fund and certain state plans like Employees’ State Insuranceand Employees’ Pension Scheme. The Group’s payments to the defined contribution plans are recognised asexpenses during the period in which the employees perform the services that the payments cover.b) Defined-benefit plansGratuity:The Group provides for gratuity, a defined benefit plan (the Gratuity Plan), to certain categories of employees.Liability with regard to the Gratuity Plan is accrued based on actuarial valuation, based on Projected UnitCredit Method at the balance sheet date, carried out by an independent actuary. Actuarial Gains and Lossescomprise experience adjustments and the effect of changes in the actuarial assumptions and are recognisedimmediately in the Profit and Loss Account as income or expense.97