Arohan Annual Report FY 20-21

Note 37: Employee benefits A. Defined contribution plans Provident and other funds The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund and other funds which are defined contribution plans. The Company has no obligations other than this to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. B. Defined benefit plans Gratuity The Company has a defined benefit gratuity plan. Every employee is entitled to gratuity as per the provisions of the Payment of Gratuity Act, 1972. The scheme is funded and the scheme is managed by Life Insurance Corporation of India (‘LIC’). The liability of gratuity is recognized on the basis of actuarial valuation. Risks associated with plan provisions i. Amount recognised in the balance sheet is as under: ii. Amount recognised in the statement of profit and loss is as under: Amount recognised in the other comprehensive income: The Company has adopted Indian Accounting Standard (Ind AS) - 19 on Employee Benefit as under : Arohan Financial Services Limited Summary of significant accounting policies and other explanatory information for the year ended 31 March 2021 (Contd.) Particulars Year ended 31 March 2021 Year ended 31 March 2020 Employers contribution to provident and other fund 1,549.19 1,159.92 Particulars Year ended 31 March 2021 Year ended 31 March 2020 Present value of obligation 1,375.75 999.05 Fair value of plan assets 424.73 209.40 Net obligation recognised in balance sheet as provision 951.02 789.65 Particulars Year ended 31 March 2021 Year ended 31 March 2020 Actuarial losses recognized in OCI 166.14 576.11 Particulars Year ended 31 March 2021 Year ended 31 March 2020 Current service cost 184.08 68.40 Net interest cost on defined benefit obligation 43.12 13.17 Net impact on profit/(loss) (before tax) 227.20 81.57 Salary increases Actual salary increases will result in increase in the Plan’s liability. Increase in salary rate assumption in future valuations will also increase the liability. Investment risk If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability. Discount rate Reduction in discount rate in subsequent valuations can increase the plan’s liability. Mortality & disability Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities. Withdrawals Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan’s liability. Annual Report | 2020-2021 160