Together good things happen - Airtel

The Company has no further obligations under these
plans beyond its monthly contributions.
(c) Some employees of the Company are entitled to
superannuation, a defined contribution plan which is
administered through Life Insurance Corporation of
India (“LIC”). Superannuation benefits are recorded as
an expense as incurred.
(d) Short term compensated absences are provided for,
based on estimates. Long term compensated
absences are provided for based on actuarial
valuation. The actuarial valuation is done as per
projected unit credit method.
(e) The Company provides for gratuity obligations
through a defined benefit retirement plan (the
‘Gratuity Plan’) covering all employees. The Gratuity
Plan provides a lump sum payment to vested
employees at retirement or termination of
employment based on the respective employee salary
and years of employment with the Company. The
Company provides for the Gratuity Plan based on
actuarial valuations as per the Projected Unit Credit
Method at the end of each financial year in
accordance with Accounting Standard 15 (revised),
“Employee Benefits “. The Company makes annual
contributions to the LIC for the Gratuity Plan in respect
of employees at certain circles.
(f) Other Long term service benefits are provided based
on actuarial valuation made at the end of each
period/year. The actuarial valuation is done as per
projected unit credit method.
(g) Actuarial gains and losses are recognized as and
when incurred.
11.PRE-OPERATIVE EXPENDITURE
Expenditure incurred by the Company from the date of
acquisition of license for a new circle or from the date of
start-up of new ventures or business, up to the date of
commencement of commercial operations of the circle or
the new venture or business, not directly attributable to
fixed assets are charged to the Profit and Loss account in
the year in which such expenditure is incurred.
12.LEASES
a) Where the Company is the lessee:
Leases where the lessor effectively retains
substantially all the risks and benefits of ownership of
the leased term, are classified as operating leases.
Lease Rentals with respect to assets taken on
‘Operating Lease’ are charged to the Profit and Loss
Account on a straight-line basis over the lease term.
Leases which effectively transfer to the Company
substantially all the risks and benefits incidental to
ownership of the leased item are classified as finance
lease. Assets acquired on ‘Finance Lease’ which transfer
risk and rewards of ownership to the Company are
capitalized as assets by the Company at the lower of fair
value of the leased property or the present value of the
minimum lease payments or where applicable,
estimated fair value of such assets.
Amortization of capitalised leased assets is computed
on the Straight Line method over the useful life of the
assets. Lease rental payable is apportioned between
principal and finance charge using the internal rate of
return method. The finance charge is allocated over
the lease term so as to produce a constant periodic
rate of interest on the remaining balance of liability.
b) Where the Company is the lessor:
Lease income in respect of ‘Operating Lease’ is
recognised in the Profit and Loss Account on a
straight-line basis over the lease term.
Finance leases as a dealer lessor are recognized as a
sale transaction in the Profit and loss account and are
treated as other outright sales.
Finance Income is recognized based on a pattern
reflecting a constant periodic rate of return on the net
investment of the lessor outstanding in respect of
the lease.
c) Initial direct costs are expensed in the Profit and Loss
Account at the inception of the lease.
13.TAXATION
Current Income tax is measured at the amount expected
to be paid to the tax authorities in accordance with Indian
Income Tax Act, 1961
Deferred income taxes reflects the impact of current year
timing differences between taxable income and
accounting income for the year and reversal of timing
differences of earlier years. Deferred tax is measured
based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred
tax assets are recognised and reviewed at each balance
sheet date, only to the extent that there is reasonable
certainty that sufficient future taxable income will be
available against which such deferred tax assets can be
realised. In situations where the Company has
unabsorbed depreciation or carry forward tax losses, all
deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can
be realised against future taxable profits. 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 certain that future taxable income
will be available against which such deferred tax assets
can be realized.