Atul Ltd 2019-20

207 Consolidated | Notes to the Financial Statements Risk exposure Through its defined benefit plans, the Group is exposed to a number of risks, the most significant of which are detailed below: i) Asset volatility The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments are in fixed income securities with high grades and in government securities. These are subject to interest rate risk. The Group has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. All deviations from the range are corrected by rebalancing the portfolio. The Group intends to maintain the above investment mix in the continuing years. ii) Changes in bond yields A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of other bond holdings. The Group actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Group has not changed the processes used to manage its risks from previous periods. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets. A large portion of assets consists insurance funds, although the Group also invests in corporate bonds and special deposit scheme. The plan asset mix is in compliance with the requirements of the respective local regulations. Expected contributions to post-employment benefit plans for the year ending March 31, 2021 are ` 3.34 cr. The weighted average duration of the defined benefit obligation is six years. The expected maturity analysis of gratuity is as follows: ( ` cr) Particulars Less than a year Between 1 - 2 years Between 2 - 5 years Over 5 years Total Expected defined benefit obligation (gratuity) As at March 31, 2020 10.19 8.48 20.34 25.97 64.97 As at March 31, 2019 12.73 6.57 18.38 27.12 64.80 Provident fund: In case of certain employees, the provident fund contribution is made to a trust administered by the Group. The actuary has provided a valuation of provident fund liability based on the assumptions listed below and determined that there is no shortfall as at March 31, 2020. ( ` cr) Expenses recognised for the year ended March 31, 2020 (included in Note 26) As at March 31, 2020 As at March 31, 2019 i) Defined benefit obligation 10.81 10.29 ii) Fund 11.14 10.25 iii) Net asset | (liability) 0.33 (0.04) iv) Charge to the Consolidated Statement of Profit and Loss during the year 0.18 0.28 Note 29.6 Employee benefit obligations (continued)