Together good things happen - Airtel

c) Reconciliation of opening and closing balances of benefit obligations and plan assets
Bharti Airtel Annual Report 2009-10
For the Year ended March 31, 2010
Particulars Gratuity
(Rs '000)
Leave Encashment
Funded Unfunded Total Unfunded
Change in Projected Benefit Obligation (PBO)
Projected benefit obligation at beginning of year 516,698 263,318 780,016 617,981
Current service cost 100,236 130,681 230,917 206,284
Interest cost 38,752 19,749 58,501 46,349
Benefits paid - (259,509) (259,509) (326,623)
Acquisition adjustment - 62,794 62,794 22,225
Curtailment and Settlement cost - - - -
Contribution by plan participants - - - -
Past service cost - - - -
Actuarial (gain) / loss 5,013 119,672 124,684 145,593
Projected benefit obligation at year end
Change in plan assets :
660,699 336,705 997,404 711,809
Fair value of plan assets at beginning of year 81,137 - 81,137 -
Expected return on plan assets 6,085 - 6,085 -
Actuarial gain / (loss) (6,085) - (6,085) -
Employer contribution - - - -
Contribution by plan participants - - - -
Settlement cost - - - -
Benefits paid - - - -
Fair value of plan assets at year end 81,137 - 81,137 -
Net funded status of the plan (579,562) (336,705) (916,266) (711,809)
Net amount recognized (579,562) (336,705) (916,266) (711,809)
For the Year ended March 31, 2009
Particulars Gratuity
(Rs '000)
Leave Encashment
Funded Unfunded Total Unfunded
Change in Projected Benefit Obligation (PBO)
Projected benefit obligation at beginning of year 354,577 144,913 499,490 525,781
Current service cost 141,233 68,969 210,202 214,135
Interest cost 25,169 12,293 37,462 39,434
Benefits paid - (92,868) (92,868) (217,677)
Curtailment and Settlement cost - - - -
Contribution by plan participants - - - -
Past service cost - - - -
Actuarial (gain) / loss (4,281) 130,011 125,730 56,308
Projected benefit obligation at year end
Change in plan assets :
516,698 263,318 780,016 617,981
Fair value of plan assets at beginning of year 70,502 - 70,502 -
Expected return on plan assets 5,288 - 5,288 -
Actuarial gain / (loss) (5,288) - (5,288) -
Employer contribution 10,635 - 10,635 -
Contribution by plan participants - - - -
Settlement cost - - - -
Benefits paid - - - -
Fair value of plan assets at year end 81,137 - 81,137 -
Net funded status of the plan (435,561) (263,318) (698,879) (617,981)
Net amount recognised (435,561) (263,318) (698,879) (617,981)
(d) The expected rate of return on plan assets was based on the average long-term rate of return expected to prevail over the
next 15 to 20 years on the investments made by the LIC. This was based on the historical returns suitably adjusted for
movements in long-term government bond interest rates. The discount rate is based on the average yield on government
bonds of 20 years.
(e) 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.
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