Arohan Financial Services Limited | Annual Report 2021-22

184 | Annual Report | 2021-2022 Arohan Financial Services Limited Summary of significant accounting policies and other explanatory information for the year ended 31 March, 2022 (Contd.) (All amounts in ` lakhs unless otherwise stated) Note 37: Employee benefits (Contd.) B) Defined benefit plans (a) 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 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. (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: Particulars As at 31 March 2022 As at 31 March 2021 Present value of obligation 1,803.19 1,375.75 Fair value of plan assets 843.94 424.73 Net obligation recognised in balance sheet as provision 959.25 951.02 Particulars Year ended 31 March 2022 Year ended 31 March 2021 Current service cost 241.30 184.08 Net interest cost on defined benefit obligation 46.18 43.12 Net impact on profit (before tax) 287.48 227.20 Particulars Year ended 31 March 2022 Year ended 31 March 2021 Actuarial losses recognized in OCI 223.42 166.14