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37 Employee benefits |
Liability for employee benefits has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Indian Accounting Standard 19 the details of which are as hereunder.
Funded schemes
Gratuity
The Group provides for gratuity payments to employees. The gratuity benefit payable to the employees of the Company is greater of the provisions of the Payment of Gratuity Act, 1972 and the Group’s gratuity scheme. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The gratuity plan is a funded plan and the Group makes contributions to approved gratuity fund.
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(₹ In Crore) |
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Particulars |
As at 31 March |
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|
2024 |
2023 |
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|
|
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Amount recognised in Balance Sheet |
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Present value of funded defined benefit obligation (DBO) |
477.70 |
472.92 |
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Fair value of plan assets |
(499.86) |
(505.15) |
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Net funded obligation |
(22.16) |
(32.23) |
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Present value of unfunded defined benefit obligation |
0.90 |
– |
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Amount not recognised due to asset ceiling |
4.81 |
31.57 |
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|
Net defined benefit liability/(asset) recognised in balance Sheet |
(16.45) |
(0.66) |
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|
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Expense recognised in the Statement of Profit and Loss |
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Current service cost |
27.17 |
26.79 |
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Interest on net defined benefit liability/(asset) |
(1.89) |
(2.74) |
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Total expense charged to Statement of Profit and Loss |
25.28 |
24.05 |
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|
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Amount recorded as Other Comprehensive Income |
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Opening amount recognised in OCI outside Statement of Profit and Loss |
56.48 |
54.34 |
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Remeasurements during the period due to |
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Changes in financial assumptions |
8.16 |
(6.30) |
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Experience adjustments |
(4.10) |
(1.51) |
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Actual return on plan assets less interest on plan assets |
(8.65) |
12.20 |
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Adjustment to recognise the effect of asset ceiling |
(29.11) |
(2.25) |
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Closing amount recognised in OCI outside Statement of Profit and Loss |
22.78 |
56.48 |
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|
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Reconciliation of net liability/(asset) |
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Opening net defined benefit liability/(asset) |
(0.66) |
(12.92) |
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Expense charged to Statement of Profit and Loss |
25.28 |
24.05 |
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Amount recognised outside Statement of Profit and Loss |
(33.70) |
2.14 |
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Employer contributions |
(7.37) |
(13.93) |
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Closing net defined benefit liability/(asset) |
(16.45) |
(0.66) |
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|
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Movement in benefit obligation |
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Opening of defined benefit obligation |
472.92 |
477.07 |
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Current service cost |
27.17 |
26.79 |
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Interest on defined benefit obligation |
30.70 |
30.57 |
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Remeasurements due to: |
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Actuarial loss/(gain) arising from change in financial assumptions |
8.16 |
(6.30) |
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Actuarial loss/(gain) arising on account of experience changes |
(4.10) |
(1.51) |
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Benefits paid |
(60.72) |
(53.70) |
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Liabilities assumed/(settled) |
4.47 |
– |
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Closing of defined benefit obligation |
478.60 |
472.92 |
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|
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Movement in plan assets |
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Opening fair value of plan assets |
505.15 |
521.52 |
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Employer contributions |
7.37 |
13.93 |
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Interest on plan assets |
34.97 |
35.60 |
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Remeasurements due to: |
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Actual return on plan assets less interest on plan assets |
8.62 |
(12.20) |
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Benefits paid |
(60.72) |
(53.70) |
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Assets acquired/(settled) |
4.47 |
– |
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Closing fair value of plan assets |
499.86 |
505.15 |
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Disaggregation of assets |
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Category of assets |
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Insurer managed funds. |
499.86 |
505.15 |
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Others |
– |
– |
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|
499.86 |
505.15 |
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Sensitivity Analysis
Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to are discount rate and future salary escalation rate. The following table summarises the impact in percentage terms on the reported defined benefit obligation (DBO) at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.
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Particulars |
As at 31 March 2024 |
As at 31 March 2023 |
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Discount rate |
Salary escalation rate |
Discount rate |
Salary escalation rate |
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Senior staff |
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Impact of increase in 50 bps on DBO |
(3.00%) |
3.09% |
(3.09%) |
3.18% |
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Impact of decrease in 50 bps on DBO |
3.19% |
(2.94%) |
3.28% |
(3.03%) |
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Junior staff |
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Impact of increase in 50 bps on DBO |
(3.65%) |
3.86% |
(3.21%) |
3.40% |
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Impact of decrease in 50 bps on DBO |
3.99% |
(3.58%) |
3.50% |
(3.16%) |
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These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analyses.
Funding arrangement and policy
The money contributed by the Group to the fund to finance the liabilities of the plan has to be invested.
The trustees of the plan have outsourced the investment management of the fund to insurance companies. The insurance companies in turn manage these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations.
There is no compulsion on the part of the Group to fully pre fund the liability of the Plan. The Group’s philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of the plan.
The expected contribution payable to the plan next year is ₹ 15.85 crore.
Projected plan cash flow
The table below shows the expected cash flow profile of the benefits to be paid to the current membership of the plan:
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(₹ In Crore) |
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Particulars |
Less than a year |
Between 1 – 2 years |
Between 3 -5 years |
Over 5 years |
Total |
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31 March 2024 |
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Senior staff |
35.25 |
12.91 |
81.54 |
220.94 |
350.64 |
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Junior staff |
81.06 |
39.11 |
66.57 |
429.56 |
616.30 |
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31 March 2023 |
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Senior staff |
34.64 |
8.40 |
75.13 |
205.87 |
324.04 |
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Junior staff |
88.13 |
43.43 |
86.99 |
401.93 |
620.48 |
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As at 31 March |
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Weighted average duration of defined benefit obligation (in years) |
2024 |
2023 |
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Senior Staff |
6.19 |
6.36 |
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Junior Staff |
7.63 |
6.70 |
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As at 31 March |
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Principal Actuarial Assumptions (Expressed as Weighted Averages) |
2024 |
2023 |
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Discount rate (p.a.) |
7.20% |
7.45% |
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Salary escalation rate (p.a.) – senior staff |
10.00% |
10.00% |
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Salary escalation rate (p.a.) – junior staff |
10.00% |
10.00% |
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The estimates of future salary increases, considered in actuarial valuation, takes into account, inflation, seniority, promotions and other relevant factors, such as demand and supply in the employment market.
Provident Fund:
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(₹ In Crore) |
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As at 31 March |
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Particulars |
2024 |
2023 |
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Amount recognised in Balance Sheet |
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Present value of funded defined benefit obligation |
1,516.11 |
1,452.17 |
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Fair Value of plan assets |
(1,566.45) |
(1,476.49) |
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Net funded obligation |
(50.34) |
(24.32) |
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Amount not recognised due to asset ceiling |
50.34 |
24.32 |
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Net defined benefit liability/(asset) recognised in balance sheet |
– |
– |
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Expense recognised in the Statement of Profit and Loss |
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Current service cost |
45.23 |
42.81 |
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Total expenses charged to Statement of Profit and Loss |
45.23 |
42.81 |
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Amount recorded as Other Comprehensive Income |
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Opening amount recognised in OCI outside Statement of Profit and Loss |
– |
– |
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Remeasurements during the period due to |
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Changes in financial assumptions |
10.83 |
– |
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Experience adjustments |
19.92 |
21.67 |
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Actual return on plan assets less interest on plan assets |
(54.95) |
24.76 |
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Adjustment to recognise the effect of asset ceiling |
24.20 |
(46.43) |
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Closing amount recognised in OCI outside Statement of Profit and Loss |
– |
– |
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|
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Reconciliation of net liability/(asset) |
||||
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Opening net defined benefit liability/(asset) |
– |
– |
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Expense charged to Statement of Profit and Loss |
45.23 |
42.81 |
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Employer contributions |
(45.23) |
(42.81) |
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Closing net defined benefit liability/(asset) |
– |
– |
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|
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Movement in benefit obligation |
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Opening of defined benefit obligation |
1,452.17 |
1,385.12 |
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Current service cost |
45.23 |
42.81 |
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Interest on defined benefit obligation |
105.49 |
98.50 |
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Remeasurements due to: |
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Actuarial loss / (gain) arising from change in financial assumptions |
10.83 |
– |
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Actuarial loss/(gain) arising on account of experience adjustments |
19.92 |
21.67 |
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Employee contributions |
82.60 |
80.26 |
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Benefits paid |
(194.93) |
(173.18) |
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Liabilities assumed/(settled) |
(5.20) |
(3.01) |
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Closing defined benefit obligation |
1,516.11 |
1,452.17 |
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|
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Movement in plan assets |
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Opening fair value of plan assets |
1,476.49 |
1,451.09 |
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Interest on plan assets |
107.31 |
103.28 |
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Remeasurements due to: |
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Actual return on plan assets less interest on plan assets |
54.95 |
(24.76) |
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Employer contributions during the period |
45.23 |
42.81 |
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Employee contributions during the period |
82.60 |
80.26 |
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Benefits paid |
(194.93) |
(173.18) |
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Assets acquired/(settled) |
(5.20) |
(3.01) |
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Closing fair value of plan assets |
1,566.45 |
1,476.49 |
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(₹ In Crore) |
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As at 31 March |
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Disaggregation of assets |
2024 |
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Quoted |
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Government debt instruments |
947.73 |
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Other debt instruments |
504.25 |
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Others |
48.59 |
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Unquoted |
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Others |
65.88 |
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|
1,566.45 |
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As at 31 March |
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Key actuarial assumptions |
2024 |
2023 |
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Discount rate (p.a.) |
7.20% |
7.45% |
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Future derived return on assets (p.a.) |
8.97% |
9.43% |
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Discount rate for the remaining term to maturity of the investment (p.a.) |
7.15% |
7.30% |
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Average historic yield on the investment (p.a.) |
8.92% |
9.28% |
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Guaranteed rate of return (p.a.) |
8.25% |
8.15% |
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Unfunded schemes
|
(₹ In Crore) |
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Particulars |
As at 31 March 2024 |
As at 31 March 2023 |
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Compensated Absences |
Compensated Absences |
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|
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Present value of unfunded obligations |
153.62 |
135.00 |
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Expense recognised in the Statement of Profit and Loss |
27.31 |
18.80 |
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Amount recorded as Other Comprehensive Income |
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Discount rate (p.a.) |
7.20% |
7.45% |
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Salary escalation rate (p.a.) – senior staff |
10.00% |
10.00% |
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Salary escalation rate (p.a.) – junior staff |
10.00% |
10.00% |
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Compensated absences
The compensated absences cover the Group’s liability for casual and earned leave.
Entire amount of the provision is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken or paid within the next 12 months.
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(₹ In Crore) |
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|
As at 31 March |
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Particulars |
2024 |
2023 |
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|
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Compensated absences expected to be settled after twelve months |
121.86 |
105.60 |
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(₹ In Crore) |
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|
As at 31 March |
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Particulars |
2024 |
2023 |
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|
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Amount recognised in the Statement of Profit and Loss |
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Defined contribution plans: |
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Superannuation paid to trust |
8.41 |
8.38 |
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Pension fund paid to Government authorities |
11.31 |
12.59 |
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Provident fund paid to Government authorities |
1.46 |
0.46 |
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Others |
4.60 |
0.83 |
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Defined benefit plans: |
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Gratuity |
25.28 |
24.05 |
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Provident fund paid to trust |
45.23 |
42.81 |
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Others |
0.40 |
0.47 |
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|
96.69 |
89.59 |
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