Amal Ltd 2020-21

95 Significant estimates: Actuarial assumptions and sensitivity The significant actuarial assumptions were as follows: Particulars As at March 31, 2021 As at March 31, 2020 Discount rate 6.44% 6.43% Attrition rate 8.00% 14.00% Rate of return on plan assets 6.44% 6.43% Salary escalation rate 7.62% 8.04% Mortality rate Indian Assured Lives Mortality (2006-08) ultimate Indian Assured Lives Mortality (2006-08) ultimate Sensitivity analysis The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is: Particulars Change in assumptions Impact on defined benefit obligation As at March 31, 2021 As at March 31, 2020 Increase in assumptions Decrease in assumptions As at March 31, 2021 As at March 31, 2020 As at March 31, 2021 As at March 31, 2020 Discount rate 1.00% 1.00% (7.45%) (2.62%) 8.50% 2.96% Attrition rate 1.00% 1.00% (1.38%) (0.79%) 1.47% 0.84% Salary escalation rate 1.00% 1.00% 8.31% 2.87% (7.43%) (2.60%) The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied while calculating the defined benefit liability recognised in the Standalone Balance Sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change as compared to the previous year. Risk exposure Through its defined contribution plans, the Company is exposed to a number of risks, the most significant of which are detailed below: i) Interest rate risk A fall in the discount rate which is linked to the government securities rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset. Note 25.5 Employee benefit obligations (continued)