Re-measurement of net defined benefit liability/ asset pertaining to gratuity comprises actuarial gains/ losses (i.e.
changes in the present value resulting from experience adjustments and effects of changes in actuarial assumptions)
and is reflected immediately in the Balance Sheet with a charge or credit recognised in other comprehensive income in
the period in which they occur. Re-measurement recognised in other comprehensive income is reflected immediately
in retained earnings and is not reclassified to Statement of Profit and Loss.

Short-term employee benefits:

A liability is recognised for benefits accruing to employees in respect of salaries, wages, performance incentives,
medical benefits and other short term benefits in the period the related service is rendered, at the undiscounted
amount of the benefits expected to be paid in exchange for that service.

Compensated leave absences:
Balances of compensated lease absences of the employees at the end of year are not carried forward as per policy. The
balances remaining to be encashed are fully provided at year end and encashed subsequently.

B.16 FOREIGN CURRENCY TRANSACTIONS

The Group’s foreign operations are an integral part of the Company's activities. In preparing the Restated Consolidated
Financial Information, transactions in currencies other than the entity’s functional currency (foreign currencies) are
recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period,
monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary
items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in Statement of Profit and Loss in the period in which they
arise except for:

. Exchange differences on translation or settlement of long term foreign currency monetary items in respect of
loans borrowed, which are not hedged, before 01 April, 2016 at rates different from those at which they were initially
recorded or reported in the previous financial statements, insofar as it relates to acquisition of depreciable assets, are
adjusted to the cost of the assets and depreciated over remaining useful life of such assets. Where the borrowal is after
01 April, 2016, such exchange difference is recognised in Statement of Profit and loss. In other cases, where it has
been hedged the same has been restated and adjusted against cash flow hedge of the respective derivative
instruments.

. Exchange difference on translation of derivative instruments designated as cash flow hedge (see Note B.9 for
hedging accounting policies).

B.17 FOREIGN OPERATIONS

In the Group’s Consolidated Financial Statements, all assets, liabilities and transactions of the Group entities with a
functional currency other than the INR are translated into INR upon consolidation. The functional currency of
Craftsman Europe BV is EURO and the functional currency of Craftsman Automation Singapore Pte Limited is
Singapore Dollar (S$).

On consolidation, assets and liabilities have been translated into INR at the closing rate at the reporting date. Income
and expenses have been translated into INR at the average rate over the reporting period. Exchange differences are
charged or credited to other comprehensive income and recognised in the currency translation reserve in equity. On
disposal of a foreign operation, the related cumulative translation differences recognised in equity are re-classified to
Statement of Profit and Loss and are recognised as part of the gain or loss on disposal.

B.18 INCOME TAXES

Income tax expense represents the sum of the tax currently payable and deferred tax. Current and deferred tax are
recognised in Statement of Profit and Loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other
comprehensive income or directly in equity respectively.

247
