Good Health Can’t Wait.
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<strong>Good</strong> <strong>Health</strong> <strong>Can’t</strong> <strong>Wait</strong>.<br />
Dr. Reddy’s Laboratories Limited<br />
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br />
(All amounts in Indian Rupees millions, except share data and where otherwise stated)<br />
2.35: EMPLOYEE BENEFIT PLANS (CONTINUED)<br />
Amount recognized in the balance sheet<br />
PARTICULARS<br />
AS AT<br />
31 MARCH 2015<br />
AS AT<br />
31 MARCH 2014<br />
Present value of funded obligations 1,236 1,040<br />
Fair value of plan assets (1,157) (908)<br />
Net liability 79 132<br />
Expense recognized in statement of profit and loss<br />
PARTICULARS<br />
FOR THE YEAR ENDED<br />
31 MARCH 2015<br />
FOR THE YEAR ENDED<br />
31 MARCH 2014<br />
Current service cost 136 116<br />
Interest on defined benefit obligation 99 74<br />
Expected return on plan assets (80) (56)<br />
Net actuarial losses / (gains) recognized in the year 2 31<br />
Amount included in employee benefit expense 157 165<br />
Actual return on plan assets 123 70<br />
Contributions: The Company expects to contribute ` 100 to the Gratuity Plan during the year ending 31 March 2016.<br />
Asset information<br />
CATEGORY OF ASSETS<br />
AS AT<br />
31 MARCH 2015<br />
AS AT<br />
31 MARCH 2014<br />
Government of India securities - -<br />
Corporate bonds - -<br />
Insurer managed funds 99% 99%<br />
Others 1% 1%<br />
Total 100% 100%<br />
Summary of actuarial assumptions<br />
PARTICULARS<br />
AS AT<br />
31 MARCH 2015<br />
AS AT<br />
31 MARCH 2014<br />
Discount rate 8.00% p.a. 9.00% p.a.<br />
Expected rate of return on plan assets 8.00% p.a. 9.00% p.a.<br />
Salary escalation rate<br />
10% p.a. for first<br />
two years & 9% p.a.<br />
thereafter<br />
11% p.a. for first two<br />
years & 10% p.a.<br />
thereafter<br />
Discount rate:The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated<br />
term of the obligations.<br />
Expected rate of return on plan assets: This is based on the expectation of the average long term rate of return expected on investments of the fund<br />
during the estimated term of the obligations.<br />
Salary escalation rate: The estimate of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.<br />
Amounts recognized in current year and previous four years<br />
PARTICULARS<br />
AS AT/ FOR THE YEAR ENDED 31 MARCH<br />
2015 2014 2013 2012 2011<br />
Defined benefit obligation 1,236 1,040 875 646 584<br />
Plan assets 1,157 908 707 624 490<br />
Surplus / (deficit) (79) (132) (168) (22) (94)<br />
Experience Adjustment on Plan Liabilities 27 42 26 23 28<br />
Experience Adjustment on Plan Assets 43 15 7 6 5<br />
210
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