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Integrated report Statutory reportS Financial StatementS
Standalone

5 Risk Exposure :
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below :
Investment risk : If future investment returns on assets are lower than assumed in valuation, the scheme's assets will be
lower, and the funding level higher than expected.
Changes in bond yields : A decrease in yields will increase plan liabilities, although this will be partially offset by an increase in the
value of the plans' bond holdings.
Longevity risk : If improvements in life expectancy are greater than assumed, the cost of benefits will increase because
pensions are paid for longer than expected. This will mean the funding level will be higher than expected.
Inflation risk : If inflation is greater than assumed, the cost of benefits will increase as pension increases and deferred
revaluations are linked to inflation.

6 Assumptions used in accounting for gratuity, post retirement medical benefits, directors' retirement obligations
and family benefit scheme:
Gratuity and Directors'
Compensated Post retirement retirement Family benefit
absences medical benefits obligations scheme
Discount rate As at March 31, 2020 6.05% 6.05% 6.05% 6.05%
As at March 31, 2019 7.70% 7.70% 7.70% 7.70%
Increase in Compensation cost As at March 31, 2020 7.50% NA 7.50% 7.50%
As at March 31, 2019 7.50% NA 7.50% 7.50%
Healthcare cost increase rate As at March 31, 2020 NA 10.00% 8.00% NA
As at March 31, 2019 NA 10.00% 8.00% NA
Pension increase rate As at March 31, 2020 NA NA 6.00% NA
As at March 31, 2019 NA NA 6.00% NA
(a) Discount rate is based on the prevailing market yields of Indian Government securities as at Balance Sheet date for the estimated
term of the obligations.
(b) The estimates of future salary increases considered in actuarial valuation take into account the inflation, seniority, promotion and
other relevant factors.

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