Amal Ltd | Annual Report 2023-24 ii) Salary risk The present value of the defined benefit plan liability is calculated with reference to the future salaries of members. As such, an increase in the salary of the members more than the assumed level will increase the plan liability. iii) Investment risk The present value of the defined benefit plan liability is calculated using a discount rate, which is determined with reference to market yields at the end of the reporting period on government bonds. If the return on plan assets is below this rate, it will create a plan deficit. Currently, the plan in India has a relatively balanced mix of investments in government securities and other debt instruments. iv) Concentration risk The plan has a concentration risk as all the assets are invested with the insurance company and default will wipe out all the assets. Although probability of this is very low as insurance companies have to follow regulatory guidelines. The weighted average duration of the defined benefit obligation is seven years (2022-23: seven years). The expected maturity analysis of gratuity is as follows: (` lakhs) Particulars Less than a year Between 1 - 2 years Between 2 - 5years Over 5 years Total Defined benefit obligation (gratuity) As at March 31, 2024 1.69 1.83 6.79 28.21 38.52 As at March 31, 2023 1.32 1.42 4.69 20.67 28.10 b) Other long-term benefits Leave encashment is payable to eligible employees who have earned leaves, during the employment and | or on separation as per the policy of the Group. Valuation in respect of leave encashment has been carried out by an independent actuary, as at the Balance Sheet date, based on the following assumptions: (` lakhs) Expenses recognised for the year ended on March 31, 2024 (included in Note 24) 2023-24 2022-23 Present value of unfunded obligations 17.34 15.46 - Current 2.26 1.85 - Non-current 15.08 13.61 Expense recognised in the Consolidated Statement of Profit and Loss 3.10 6.99 Discount rate 7.19% 7.35% Salary escalation rate 10.36% 9.84% Note 28.5 Employee benefit obligations (continued)
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