17.	Employee benefits

	March 31, 2018		March 31, 2017
Gratuity payable		99,120		89,114
Compensated absences		48,360		38,184
		147,480		127,298

Gratuity cost

The components of gratuity costs recognized in the consolidated income statement for the years ending March 31, 2018, March 31, 2017 and March 31, 2016 consist of the following:

	March 31, 2018			March 31, 2017			March 31, 2016
Service cost		29,577			19,154			16,215
Interest cost		7,518			6,880			6,178
Interest income		(1,418	)		(2,667	)		(2,590	)
		35,677			23,367			19,803

Details of employee benefit obligation and plan asset are as follows:

	March 31, 2018			March 31, 2017
Present value of projected benefit obligation at the end of the year		131,687			109,826
Funded status of the plans		(32,567	)		(20,712	)
Recognized (asset) / liability		99,120			89,114

The following table set out the status of the gratuity plan:

Change in defined benefit obligation	March 31, 2018			March 31, 2017			March 31, 2016
Projected benefit obligation at the beginning of the year		109,826			91,801			79,038
Service cost		29,577			19,154			16,215
Interest cost		7,518			6,880			6,178
Remeasurements - Actuarial (gain) / loss		(6,872	)		2,250			(1,325	)
Benefits paid		(8,362	)		(10,259	)		(8,305	)
Projected benefit obligation at the end of the year		131,687			109,826			91,801

Change in plan assets	March 31, 2018			March 31, 2017			March 31, 2016
Fair value of plan assets at the beginning of the year		20,712			35,589			33,135
Interest income		1,418			2,667			2,590
Remeasurements – return on plan assets excluding amounts included in interest income		(1,493	)		(14,785	)		66
Employer contributions		20,292			7,500			8,103
Benefits paid		(8,362	)		(10,259	)		(8,305	)
Fair value of plan assets at the end of the year		32,567			20,712			35,589

Actual return on plan assets		(75	)		(12,118	)		2,656

Actuarial assumptions at end of the year:

The principal actuarial assumptions as on March 31, 2018, 2017 and 2016 were as follows:

March 31, 2018

March 31, 2017

March 31, 2016

Discount rate

7.30

% P.a

6.85

% P.a

7.50

% P.a

Long-term rate of compensation increase

7.00

% P.a

7.00

% P.a

7.00

% P.a

Expected long term rate of return on plan assets

7.00

% P.a

7.00

% P.a

8.00

% P.a

Average future working life time

4.38 years

4.39 years

4.40 years

Discount rate: The discount rate is based on prevailing market yields of Indian Government securities as at the end of the year for the estimated term of the obligations.

Long term rate of compensation increase: The estimates of future salary increases considered take into account inflation, seniority, promotion and other factors.

Expected long term rate of return on plan assets: This is based on the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Assumptions regarding future mortality are based on published statistics and mortality tables.

The Group assesses these assumptions with the projected long-term plans of growth and prevalent industry standards.

Contributions: The Group expects to contribute ₹ 124,991 (March 31, 2017: ₹ 20,000) to its gratuity fund during the year ending March 31, 2018.

The expected benefit payments to be made in the next few years are as under:

Year	March 31, 2018		March 31, 2017
1 Year		24,983		19,534
2 to 5 years		79,348		66,704
6 to 10 years		56,595		45,103
More than 10 years		34,386		28,171

Plan assets: The Gratuity plan’s weighted-average asset allocation at March 31, 2018 and March 31, 2017, by asset category is as follows:

		March 31, 2018				March 31, 2017
Funds managed by insurers			100	%			100	%

Remeasurements of the net defined benefit liability recognized in other comprehensive income

Amount recognized in other comprehensive income for the years ending March 31, 2018, 2017 and 2016 are as follows:

	March 31, 2018			March 31, 2017			March 31, 2016
Remeasurements of the net defined benefit liability
Actuarial (gain)/loss
- Change in demographic assumptions		-			-			-
- change in financial assumptions		(2,806	)		3,271			1,250
- experience variance		(4,066	)		(1,021	)		(2,575	)
- return on plan assets, excluding amounts recognized in net interest expense/ income		1,493			14,784			(66	)
		(5,379	)		17,034			(1,391	)

Sensitivity Analysis of significant actuarial assumption

Sensitivity analysis for the defined benefit obligations will increase/ decrease by the amounts mentioned below if there is a variation of 100 basis points in the discount rate and salary escalation rate.

Discount rate

Salary escalation rate

Increase by
100 bps
(₹ ‘000s)

Decrease by
100 bps
(₹ ‘000s)

Increase by
100 bps
(₹ ‘000s)

Decrease by
100 bps
(₹ ‘000s)

Present Value of Defined Benefit Obligation

125,822

138,070

137,805

125,915

The present value of defined benefit obligation has been arrived at using the same method as is used for valuing the defined benefit obligation as per the current assumptions. The increase/decrease in defined benefit obligation has been arrived assuming the other assumptions are constant though such increase/decrease do not happen in isolation in real scenarios.

Contributions to defined contribution plans

In accordance with Indian law, all employees receive benefits from a provident fund, which is a defined contribution plan. Both the employee and employer make monthly contributions to the plan, each equal to a specified percentage of employee’s basic salary. The Group has no further obligations under the plan beyond its monthly contributions. The Group contributed ₹ 102,340, ₹ 85,006 and ₹73,902 for the years ended March 31, 2018, 2017 and 2016. The Group has contributed to 401(K) plan on behalf of eligible employees amounting to ₹ 8,692 (March 31, 2017: ₹ 9,728) during the year ended March 31, 2018.