Page 280 - Tata_Chemicals_yearly-reports-2020-2021

Integrated Annual Report 2020-21

iii Net employee benefit expense for the year: ` in crore
Year ended March 31, 2021 Year ended March 31, 2020
Funded Unfunded Funded Unfunded
Current service cost 48.45 5.79 42.33 4.72
Past service cost 15.35 - 1.20 (25.00)
Administrative expenses 10.56 - 12.81 -
Interest on defined benefit obligation (net) 36.87 12.90 31.52 12.83
Extinguishment due to discontinued operations - - - (3.14)
Components of defined benefits costs recognised in 111.23 18.69 87.86 (10.59)
Consolidated profit or loss
Remeasurements of the net defined benefit liability/(asset)
Actuarial (gain) / loss arising from:
- Changes in financial assumptions 420.46 (5.64) (40.98) 37.48
- Changes in demographic assumptions (17.03) 0.74 (14.65) (0.08)
- Experience adjustments (34.03) (3.30) (3.40) (8.29)
Impact of assets ceiling - - (0.17) -
Return on plan assets less interest on plan assets (524.32) - 92.27 -
Components of defined benefits costs recognised in other (154.92) (8.20) 33.07 29.11
comprehensive income
Net benefit expense (43.69) 10.49 120.93 18.52

iv Categories of the fair value of total plan assets : ` in crore
As at As at
March 31, 2021 March 31, 2020
Government Securities/Corporate Bonds (Quoted) 2,530.51 2,024.17
Government Securities/Corporate Bonds (Unquoted) 561.17 534.97
Equity Instruments (Quoted) 358.23 253.31
Equity Instruments (Unquoted) 800.61 635.75
Insurer Managed/Hedged Funds 107.60 96.66
Others (Quoted) 33.58 327.09
Others (Unquoted) 94.35 53.96
Total 4,486.05 3,925.91

Each year an Asset-Liability-Matching study is performed in which the consequences of the strategic investment policies are analysed in
terms of risk-and-return profiles. Investment and contribution policies are integrated within this study.

v 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 that 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.

278