Gillette_India_Limited_AR_20

Annual Report 2019-20 117 Notes to Financial Statements for the year ended June 30, 2020 Company Overview Board's Report MD&A Corporate Governance Financial Statements Gillette India Limited 29.3 Provident Fund The Provident Fund assets and liabilities are managed by "Gillette India Limited Provident Fund" in line with The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees minimum interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefit vests immediately on rendering of the services by the employee. In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary has provided a valuation of provident fund liability and based on the assumptions provided below, there is no shortfall as at June 30, 2020. The Company's contribution to Provident Fund ` 725 Lakhs (Previous Year: ` 662 Lakhs) has been recognised in the statement of profit and loss under the head employee benefits expense (refer note 23). The details of the "Gillette India Limited Provident Fund" and plan assets position as at June 30, 2020 is given below: Particulars Year ended June 30, 2020 ` in lakhs Year ended June 30, 2019 ` in lakhs Present value of benefit obligation at period end 236 251 Plan assets at period end, at fair value, restricted to asset recognized in Balance Sheet 236 251 Assumptions used in determining the present value obligation of the interest rate guarantee under the Projected Unit Credit Method (PUCM): Valuations as at June 30, 2020 June 30, 2019 Discounting Rate 6.50% 7.00% Expected Guaranteed interest rate 8.50%* 8.65%* * Rate mandated by EPFO 30 Financial instruments 30.1 Capital management The Company manages its capital to ensure that it will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. Equity share capital and other equity are considered for the purpose of group's capital management. The Company is not subject to any externally imposed capital requirements. The Company's risk management committee manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return on capital to shareholders or issue new shares.