Arohan Financial Services Limited | Annual Report 2022-23

157 | Annual Report | 2022-2023 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 As plan is funded, 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 Particulars As at 31 March 2023 As at 31 March 2022 Present value of obligation 2,334.71 1,803.19 Fair value of plan assets 966.01 843.94 Net obligation recognised in balance sheet as provision 1,368.70 959.25 (ii) Amount recognised in the statement of profit and loss is as under: Particulars Year ended 31 March 2023 Year ended 31 March 2022 Current service cost 297.21 241.30 Net interest cost on defined benefit obligation 56.80 46.18 Net impact on profit (before tax) 354.01 287.48 Amount recognised in the other comprehensive income: Particulars Year ended 31 March 2023 Year ended 31 March 2022 Actuarial losses recognized in OCI 350.99 223.42 Arohan Financial Services Limited Summary of significant accounting policies and other explanatory information for the year ended 31 March 2023 (Contd.) (All amounts in ` lakhs unless otherwise stated)