304 / 327
304
• Annual Report 2018-19
Shaping the future of software driven business
Balance sheet
Changes in the fair value of plan assets (recognized in the Balance Sheet) are as follows:
(In
`
Million)
For the year ended
March 31, 2019
March 31, 2018
Opening fair value of plan assets
773.89
711.86
Expected return
60.96
52.40
Adjustment to expected return
(4.97)
3.60
Contribution by employer
80.72
72.75
Benefits paid
(79.29)
(66.72)
Closing fair value of plan assets
831.31
773.89
Changes in the present value of the defined benefit obligation (recognized in Balance Sheet) are as follows:
(In
`
Million)
For the year ended
March 31, 2019
March 31, 2018
Opening defined benefit obligation
727.97
719.78
Interest cost
54.17
50.31
Current service cost
153.98
167.57
Benefits paid
(79.29)
(66.72)
Actuarial (gains) / losses on obligation
68.82
(142.97)
Closing defined benefit obligation
925.65
727.97
Benefit asset/ (liability)
(In
`
Million)
As at
March 31, 2019
March 31, 2018
Fair value of plan assets
831.31
773.89
(Less) : Defined benefit obligations
(925.65)
(727.97)
Plan asset / (liability)
(94.34)
45.92
The Company expects to contribute the entire deficit to gratuity fund in financial year 2019-20.
The major categories of plan assets as a percentage of the fair value of total plan assets:
As at
March 31, 2019
March 31, 2018
Investments with insurer including accrued interest
100%
100%
The principal assumptions used in determining gratuity for the Company’s plans are shown below:
As at
March 31, 2019
March 31, 2018
Discount rate
7.60%
7.87%
Increment rate
5.50%
5.00%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and
other relevant factors, such as supply and demand in the employment market.
As at March 31, 2019, every percentage point increase / decrease in discount rate will affect the gratuity benefit obligation by
approximately
`
102.92 million /
`
122.89 million respectively.
As at March 31, 2019, every percentage point increase / decrease in rate of increase in compensation levels will affect the
gratuity benefit obligation by approximately
`
121.39 million /
`
103.23 million respectively.
Notes forming part of financial statements (Contd.)