The Group provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible employees, majorly of Infosys and its Indian subsidiaries. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Group. The Company contributes gratuity liabilities to the Infosys Limited Employees' Gratuity Fund Trust (the Trust). In case of Infosys BPM and EdgeVerve, contributions are made to the Infosys BPM Employees’ Gratuity Fund Trust and EdgeVerve Systems Limited Employees' Gratuity Fund Trust, respectively. Trustees administer contributions made to the Trusts and contributions are invested in a scheme with Life Insurance Corporation of India as permitted by Indian Law.

The Group operates defined benefit pension plan in certain overseas jurisdictions, in accordance with the local laws. These plans are managed by third party fund managers. The plans provide for periodic payouts after retirement and/or for a lumpsum payment as set out in rules of each fund and includes death and disability benefits.

Liabilities with regard to these defined benefit plans are determined by actuarial valuation, performed by an external actuary, at each Balance Sheet date using the projected unit credit method. These defined benefit plans expose the Group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market risk.

The Group recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability / asset are recognized in other comprehensive income and not reclassified to profit or loss in subsequent periods. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effect of any plan amendments are recognized in net profits in the consolidated statement of comprehensive income.

Eligible employees of Infosys receive benefits from a provident fund, which is a defined benefit plan. Both the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. The Company contributes a portion to the Infosys Limited Employees' Provident Fund Trust. The trust invests in specific designated instruments as permitted by Indian law. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the Government of India. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate.

In respect of Indian subsidiaries, eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the eligible employee and the respective companies make monthly contributions to this provident fund plan equal to a specified percentage of the covered employee's salary. Amounts collected under the provident fund plan are deposited in a government administered provident fund. The Companies have no further obligation to the plan beyond its monthly contributions.

Certain employees of Infosys and its Indian subsidiaries are participants in a defined contribution plan. The Group has no further obligations to the plan beyond its monthly contributions which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India.

The Group has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each Balance Sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the Balance Sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

The following tables set out the funded status majorly of the Indian gratuity plans and the amounts recognized in the Group’s financial statements as of March 31, 2022, and March 31, 2021:

	(Dollars in millions)
	As of
	March 31, 2022			March 31, 2021
Change in benefit obligations
Benefit obligations at the beginning	222			185
Service cost	29			28
Interest expense	12			12
Remeasurements - Actuarial losses / (gains)		11			4
Transfer of obligation		—			—
Benefits paid		(39	)		(14	)
Translation differences		(8	)		7
Benefit obligations at the end	227			222
Change in plan assets
Fair value of plan assets at the beginning	220			201
Interest Income	13			13
Remeasurements – Returns on plan assets excluding amounts included in interest income	3			2
Contributions	36			10
Benefits paid		(38	)		(13	)
Translation differences		(8	)		7
Fair value of plan assets at the end	226			220
Funded status - Prepaid defined benefit plan asset / (Accrued defined benefit plan liability)		(1	)		(2	)

Amount for fiscal 2022, 2021 and 2020 recognized in net profit in the statement of comprehensive income comprises the following components:

	(Dollars in millions)
	Year ended March 31,
	2022			2021			2020
Service cost		29			28			25
Net interest on the net defined benefit liability / asset		(1	)		(1	)		(1	)
Net gratuity cost		28			27			24

Amount for fiscal 2022, 2021 and 2020 recognized in statement of other comprehensive income:

	(Dollars in millions)
	Year ended March 31,
	2022			2021			2020
Re-measurements of the net defined benefit liability / asset
Actuarial (gains) / losses		11			4			(11	)
(Return) / loss on plan assets excluding amounts included in the net interest on the net defined benefit liability / asset		(3	)		(2	)		(2	)
Total		8			2			(13	)

Breakup of actuarial (gains) / losses for fiscal 2022, 2021 and 2020 is as follows:

	(Dollars in millions)
	Year ended March 31,
	2022			2021		2020
(Gain) / loss from change in demographic assumptions		—			—		—
(Gain) / loss from change in financial assumptions		(6	)		2		(8	)
(Gain) / loss from change in experience adjustments		17			2		(3	)
		11			4		(11	)

The gratuity cost recognized in the statement of comprehensive income apportioned between cost of sales, selling and marketing expenses and administrative expenses on the basis of direct employee cost is as follows:

	(Dollars in millions)
	Year ended March 31,
	2022		2021		2020
Cost of sales		25		24		21
Selling and marketing expenses		2		2		2
Administrative expenses		1		1		1
		28		27		24

The weighted-average assumptions used to determine benefit obligations as of March 31, 2022 and March 31, 2021 are set out below:

	As of
	March 31, 2022			March 31, 2021
Discount rate		6.5	%		6.1	%
Weighted average rate of increase in compensation levels		6.0	%		6.0	%
Weighted average duration of defined benefit obligation	5.9 years			5.9 years

The weighted-average assumptions used to determine net periodic benefit cost for fiscal 2022, 2021 and 2020 are set out below:

	Year ended March 31,
	2022			2021			2020
Discount rate for the year		6.1	%		6.2	%		7.1	%
Weighted average rate of increase in compensation levels		6.0	%		6.0	%		8.0	%

Assumptions regarding future mortality experience are set in accordance with the published statistics by the Life Insurance Corporation of India. The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards. The discount rate is based on the government securities yield.

Trustees administer contributions made to the trust as at March 31, 2022, and March 31, 2021, the plan assets have been primarily invested in insurer managed funds.

Actual return on assets for fiscal 2022, 2021 and 2020 was $16 million, $15 million and $16 million, respectively.

Sensitivity of significant assumptions used for valuation of defined benefit obligation:

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant. In practice, this is not probable, and changes in some of the assumptions may be correlated.

The Group expects to contribute $30 million to the gratuity trusts during fiscal 2023.

The Group also operates defined benefit pension plan in certain overseas jurisdictions, in accordance with local laws. As at March 31, 2022, and March 31, 2021, the defined benefit obligation is $122 million and $111 million, respectively and the fair value of plan assets is $111 million and $94 million, respectively, resulting in recognition of a net defined benefit obligation of $11 million and $17 million, respectively.

The Group contributed $49 million, $35 million and $34 million to the superannuation plan during fiscal 2022, 2021 and 2020, respectively and the same has been recognized in the consolidated statement of comprehensive income under the head employee benefit expense.

Superannuation contributions have been apportioned between cost of sales, selling and marketing expenses and administrative expenses on the basis of direct employee cost as follows:

(Dollars in millions)
	Year ended March 31,
	2022		2021		2020
Cost of sales		44		31		30
Selling and marketing expenses		3		3		3
Administrative expenses		2		1		1
		49		35		34

Infosys has an obligation to fund any shortfall on the yield of the trust’s investments over the administered interest rates on an annual basis. These administered rates are determined annually predominantly considering the social and economic factors. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India.

The following tables set out the funded status of the defined benefit provident fund plan of Infosys Limited and the amounts recognized in the Group's financial statements as at March 31, 2022, and March 31, 2021:

				(Dollars in millions)
	As at
	March 31, 2022				March 31, 2021
Change in benefit obligations
Benefit obligations at the beginning		1,133				973
Service cost		88				57
Employee contribution		155				110
Interest expense		69				82
Actuarial (gains) / loss		16				(4	)
Benefits paid		(191	)			(121	)
Translation differences		(42	)			36
Benefit obligations at the end		1,228				1,133
Change in plan assets
Fair value of plan assets at the beginning		1,113				940
Interest income		68				80
Remeasurements- Return on plan assets excluding amounts included in interest income		2				17
Contributions (employer and employee)		244				162
Benefits paid		(191	)			(121	)
Translation differences		(41	)			35
Fair value of plan assets at the end		1,195				1,113
Accrued defined benefit plan liability		(33	)			(20	)

Amount for fiscal 2022, 2021 and 2020 recognized in net profit in the statement of comprehensive income comprises the following components:

	(Dollars in millions)
	Year ended March 31,
	2022		2021		2020
Service cost		88		57		57
Net interest on the net defined benefit liability / asset		1		2		—
Net provident fund cost		89		59		57

Amount for fiscal 2022, 2021 and 2020 recognized in the consolidated statement of other comprehensive income:

				(Dollars in millions)
	Year ended March 31,
	2022				2021			2020
Remeasurements of the net defined benefit liability/ (asset)
Actuarial (gains) / losses		16				(4	)		30
(Return) / loss on plan assets excluding amounts included in the net interest on the net defined benefit liability/(asset)		(2	)			(17	)		5
		14				(21	)		35

Assumptions used in determining the present value obligation of the interest rate guarantee under the Deterministic Approach:

	As of
	March 31, 2022			March 31, 2021
Government of India (GOI) bond yield ⁽¹⁾		6.50	%		6.10	%
Expected rate of return on plan assets		7.70	%		8.00	%
Remaining term to maturity of portfolio	6 years			6 years
Expected guaranteed interest rate		8.10	%		8.50	%

The breakup of the plan assets into various categories as at March 31, 2022, and March 31, 2021, are as follows:

	As of
	March 31, 2022			March 31, 2021
Central and State Government bonds		57	%		54	%
Public sector undertakings and Private sector bonds		37	%		40	%
Others		6	%		6	%

The asset allocation for plan assets is determined based on investment criteria prescribed under the relevant regulations.

As at March 31, 2022, the defined benefit obligation would be affected by approximately $12 million and $15 million on account of a 0.25% increase / decrease, respectively in the expected rate of return on plan assets.

The Group contributed $118 million, $90 million and $90 million to the provident fund during fiscal 2022, 2021 and 2020, respectively. The same has been recognized in the net profit in the consolidated statement of comprehensive income under the head employee benefit expense

Provident fund contributions have been apportioned between cost of sales, selling and marketing expenses and administrative expenses on the basis of direct employee cost as follows:

(Dollars in millions)
	Year ended March 31,
	2022		2021		2020
Cost of sales	106		80		80
Selling and marketing expenses	8		7		7
Administrative expenses	4		3		3
		118		90	90

The provident plans are applicable only to employees drawing a salary in Indian rupees.

(Dollars in millions)
	Year ended March 31,
	2022		2021		2020
Salaries and bonus ⁽¹⁾		8,383		7,322		7,020
Defined contribution plans		64		48		48
Defined benefit plans		138		123		100
		8,585		7,493		7,168

The employee benefit cost is recognized in the following line items in the consolidated statement of comprehensive income:

(Dollars in millions)
	Year ended March 31,
	2022		2021		2020
Cost of sales		7,714		6,671		6,406
Selling and marketing expenses		572		548		510
Administrative expenses		299		274		252
		8,585		7,493		7,168

The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.