CONTENTS Proxy Form 65

8. Employee Benefit(i) Defined benefit planThe Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity ondeparture at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance companyin the form of a qualifying insurance policy.The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded statusand amounts recognised in the balance sheet for the respective plans.Year Ended31st March, 2008Rs. CroresProfit and Loss accountNet employee benefit expense (recognised in Employee Cost)Current Service Cost 2.64Interest Cost 0.76Expected Return on Plan Assets (0.63)Net Actuarial (gain)/loss recognised in the year 2.14Expenses Recognised in the Income Statement 4.91Actual return on Plan Assets 0.54Balance SheetDetails of provision for GratuityPresent Value of Obligation (A) 14.23Fair value of Plan Assets (B) (10.78)Liability Recognised in Balance Sheet 3.45(A) Changes in the present value of the defined benefit obligation are as follows:Projected Benefit Obligations (PBO) at the beginning of the year 10.21Interest Cost 0.76Service Cost 2.64Benefits paid (1.42)Actuarial (gain)/loss on obligations 2.04PBO at the end of the year 14.23(B) Changes in the fair value of plan assets are as follows:Fair Value of Plan Assets at the beginning of the year 5.51Expected Return on Plan Assets 0.63Contributions/Transfers 6.16Benefits paid (1.42)Gain / (loss) on Plan Assets (0.10)Fair Value of Plan Assets at the end of the year 10.78Investment details of plan assets100% of the plan assets are with Insurance company.AssumptionsDiscount Rate 8.00%Rate of Return on Plan 8.00%Mortality LIC (1994-96)UltimateThe estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and otherrelevant factors such as supply and demand factors in the employment market.This being first year in which the Company has adopted Accounting Standard 15 (Revised) on Employee Benefit, figures for theprevious year are not available and hence not disclosed above.(ii) Salaries, wages and bonus in Schedule 17 includes Leave encashment of Rs. 2.97 Crores (Previous Year Rs. 2.72 Crores)The Company has made provision of Rs. 0.14 crore for long term service award on the basis of average expense incurred in the pastyears.29