Annual Report 2010-2011 - Gammon India

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22. Disclosure relating to Employee Benefits – As per Revised AS-15
As per Accounting Standard–15 “Employee Benefits” and as defined in the accounting standard the summarized components of net benefit
expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet are given herein below:
Sr.
No.
Particulars Gratuity
2010-11
A NNUAL R EPORT I 2010/11
(` in Crores)
Gratuity
2009-10
I. Change in Benefit Obligation
Liability at the beginning of the year 6.61 6.03
Interest cost 0.52 0.47
Current Service Cost 0.80 0.61
Past Service Cost (Non Vested Benefit) — —
Past Service Cost (Vested Benefit) — —
Benefit Paid (0.92) (0.57)
Actuarial (gain)/loss on obligations 2.31 0.07
Curtailments and Settlements — —
Liability at the end of the year 9.32 6.61
II. Fair Value of Plan Assets
Fair Value of Plan Assets at the beginning of the year 5.09 4.05
Expected Return on Plan Assets 0.45 0.38
Contributions 0.94 1.23
Benefit paid (0.92) (0.57)
Actuarial gain/(loss) on Plan Assets — —
Fair Value of Plan Assets at the end of the year 5.56 5.09
Total Actuarial (gain)/loss to be Recognized 2.31 0.07
III. Actual Return on Plan Assets
Expected Return on Plan Assets 0.45 0.38
Actuarial gain/(loss) on Plan Assets — —
Actual Return on Plan Assets 0.45 0.38
IV. Amount Recognized in the Balance Sheet
Liability at the end of the year 9.32 6.61
Fair Value of Plan Assets at the end of the year 5.56 5.09
Difference 3.76 1.52
Unrecognized Past Service Cost — —
Amount Recognized in the Balance Sheet 3.76 1.52
V. Expenses Recognized in the Income Statement
Current Service Cost 0.80 0.61
Interest Cost 0.53 0.47
Expected Return on Plan Assets (0.45) (0.38)
Net Actuarial (gain)/loss To Be Recognized 2.31 0.07
Past Service Cost (Non Vested Benefit) Recognized — —
Past Service Cost (Vested Benefit) Recognized — —
Effect of Curtailment or Settlements. — —
Expense Recognized in Profit and Loss Account 3.19 0.77
VI. Balance Sheet Reconciliation
Opening Net Liability 1.52 1.98
Expense as above 3.19 0.77
Employers Contribution (0.94) (1.23)
Effect of Curtailment or Settlements — —
Amount Recognized in Balance Sheet 3.76 1.52
VII. Actuarial Assumptions
Discount Rate Current 8.00% 8.00%
Note:
(i) Employer’s contribution includes payments made by the Company directly to its past employees.
(ii) 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.
(iii) The Company’s Gratuity fund is managed by Life Insurance Corporation of India. The plan assets under the fund are deposited under
approved securities.
(iv) The Company’s Leave Encashment liability is entirely unfunded.