Page 236 - Annual Report 2019-20

notes forming part of the consolidated financial statements notes forming part of the consolidated financial statements 235

(H) Fair value measurements 51 Employee Benefits
This note provides information about how the Group determines fair values of various financial assets and financial liabilities. The Group has classified various employee benefits as under:
(i) Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis (A) Defined Contribution Plans PIDILITE ANNUAL REPORT 2019-20
Some of the Group’s financial assets and financial liabilities are measured at fair value at the end of each reporting (a) Provident Fund
period. The following table gives information about how the fair values of these financial assets and financial liabilities are (b) Superannuation Fund
determined (in particular, the valuation technique(s) and inputs used).
(c) State Defined Contribution Plans
Financial Assets/ Financial Liabilities Fair value Fair value Valuation - Employers' Contribution to Employees' State Insurance
hierarchy Technique(s)
As at As at and key input(s) - Employers' Contribution to Employees' Pension Scheme 1995
st
st
31 March 31 March - Labour Welfare Fund
2020 2019
(d) national Pension Scheme
1 Investment in Mutual/Alternate Various listed Various listed Level 1 Quoted bid
Investment Funds, Preference funds - funds - prices in active The Provident Fund and the State Defined Contribution Plans are operated by the Regional Provident Fund
Commissioner, the Superannuation Fund is administered by the LIC of India and national Pension Fund is administered
Shares, Debentures and Bonds aggregate fair aggregate fair market by Pension Fund Regulatory and Development Authority (PFRDA), as applicable, for all eligible employees. under the
value of value of
1,034.49 1,515.92 schemes, the Group is required to contribute a specified percentage of payroll cost to the retirement benefit schemes
crores crores to fund the benefits. These funds are recognised by the Income Tax Authorities.
2 Derivative assets & liabilities Assets - 1.81 Assets - 0.03 Level 2 Mark to market The Group has recognised the following amounts in the Statement of Profit and Loss:
towards foreign currency forward crores; and crores; and values acquired ( in crores)
contracts liabilities - liabilities - from banks, with For the For the
0.42 crores 1.27 crores whom the Group year ended year ended
contracts. 31 March 31 March
st
st
3 Gross obligation towards Liabilities - Liabilities - Level 2 Fair values 2020 2019
acquisition 81.23 crores 76.17 crores of options using (i) Contribution to Provident Fund 19.17 20.43
black scholes
valuation model (ii) Contribution to Employees' Superannuation Fund 0.87 0.84
based on (iii) Contribution to Employees' State Insurance Scheme & Labour Welfare Fund 0.27 0.45
Independent
valuer’s report (iv) Contribution to Employees' Pension Scheme 1995 10.06 7.59
4 Investment in Promissory notes Aggregate fair value - Level 3 Fair value (v) Contribution to national Pension Scheme 2.80 1.88
of 122.48 crores is derived vi) Other Funds (International) 9.41 4.88
considering
recent financial TOTAL 42.58 36.07
rounds of
investment (B) Defined Benefit Plans
Gratuity
5 Investment in Promissory notes Aggregate fair Aggregate fair Level 3 Fair value
value of 3.77 value of is derived (C) Other Long-Term Benefits
crores 3.46 crores considering (a) Compensated Absences
recent financial
rounds of (b) Anniversary Awards
investment (c) Premature Death Pension Scheme
(d) Total Disability Pension Scheme
(ii) Financial instruments measured at amortised cost
Valuations in respect of above have been carried out by independent actuary, as at the balance sheet date, based on the
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are following assumptions:
a reasonable approximation of their fair values since the Group does not anticipate that the carrying amounts would be Valuations as at
significantly different from the values that would eventually be received or settled.
31 March 2020 31 March 2019
st
st
(i) Discount Rate (per annum) 6.25% - 9.46% 7.15% - 7.7%
(ii) Rate of increase in Compensation levels (per annum) 1 2 yrs - 4 - 8.7%, 1 2 yrs - 6.5 - 15%,
st
st
thereafter 5 - 10% thereafter 6.5 - 10%
7.4% - 7.7%
(iii) Expected Rate of Return on Assets 5 - 10 yrs -2% to 25%, 5 - 10 yrs - 2 to 15%,
6.25% - 9.46%
PIDILITE ANNUAL REPORT 2019-20 (v) Retirement Age 10 yrs - 2% to 25% 10 yrs - 2 to 15%
(iv)
upto
upto
Attrition Rate
5 yrs - 2% - 25%,
5 yrs - 2% - 15%,
Above
Above
58- 60 years
60 years
The expected rate of return on plan assets is determined after considering several applicable factors such as the
(vi)
composition of the plan assets, investment strategy, market scenario, etc. In order to protect the capital and optimise
returns within acceptable risk parameters, the plan assets are well diversified.
(vii) The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet
date for the estimated term of the obligations.
(viii) The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments
234 and other relevant factors.