Page 340 - Tata Chemical Annual Report_2022-2023

Integrated Annual Report 2022-23 01-83 84-192 193-365
Integrated Report Statutory Reports Financial Statements
Consolidated

(ii) Changes in the fair value of plan assets: (v) Risk Exposure :
` in crore Through its defined benefit plans, the Group is exposed to a number of risks, the most significant of which are detailed below :
Year ended March 31, 2023 Year ended March 31, 2022
Particulars Investment risk: If future investment returns on assets are lower than assumed in valuation, the scheme's assets will
Funded Unfunded Funded Unfunded be lower, and the funding level higher than expected.
At the beginning of the year 4,359 - 4,486 -
Interest on plan assets 142 - 119 - Changes in bond yields: A decrease in yields will increase plan liabilities, although this will be partially offset by an increase
Administrative expenses (11) - (12) - in the value of the plans' bond holdings.
Remeasurement (gain)/loss -
Annual return on plan assets less interest on plan assets (1,116) - 62 - Longevity risk: If improvements in life expectancy are greater than assumed, the cost of benefits will increase because
Contributions 69 - 26 - pensions are paid for longer than expected. This will mean that the funding level will be higher
than expected.
Benefits paid (258) - (348) -
Exchange fluctuations 142 - 26 - Inflation risk: If inflation is greater than assumed, the cost of benefits will increase as pension increases and deferred
Value of plan assets at the end of the year 3,327 - 4,359 - revaluations are linked to inflation.
Liability (net) 960 263 822 256
(vi) (a) Assumptions used to determine net periodic benefit costs:
(iii) Net employee benefit cost for the year India USA Plans UK Plans
` in crore
Year ended March 31, 2023 Year ended March 31, 2022 Funded Unfunded Funded Unfunded Funded
Particulars Discount rate As at March 31, 2023 7.45% to 7.50% 7.45% to 7.50% 5.10% 5.08% p.a. 4.90% p.a.
Funded Unfunded Funded Unfunded
Current service cost 45 5 49 6 As at March 31, 2022 6.85 % to 7.23% p.a. 6.85 % to 7.23% p.a. 3.84% 3.81% p.a. 2.80% p.a.
Past service Cost - 21 - 12
Administrative expenses 11 - 12 - Increase in As at March 31, 2023 7.50% - 8.00% p.a. 7.50% - 8.00% p.a. 5.30% to NA NA
Interest on defined benefit obligation (net) 27 16 28 13 compensation cost 8.40% p.a.
Components of defined benefits costs recognised in 83 42 89 31
Consolidated profit or loss As at March 31, 2022 7.50% - 8.00% p.a. 7.50% - 8.00% p.a. 5.30% to NA NA
Remeasurements of the net defined benefit liability/(asset) 8.40% p.a.
Actuarial (gain) / loss arising from:
- Changes in financial assumptions (1,118) (22) (344) (16) Healthcare cost As at March 31, 2023 NA 8.00%-10.00% p.a. NA NA NA
- Changes in demographic assumptions (28) - (14) - increase rate
- Experience adjustments 110 (7) 51 (9) As at March 31, 2022 NA 8.00%-10.00% p.a. NA NA NA
Return on plan assets less interest on plan assets 1,116 - (62) -
Components of defined benefits costs recognised in 80 (29) (369) (25)
Other Comprehensive Income Pension increase As at March 31, 2023 NA 6.00% p.a. NA NA 3.00% p.a.
Net benefit expense 163 13 (280) 6 rate
As at March 31, 2022 NA 6.00% p.a. NA NA 3.35% p.a.
(iv) Categories of the fair value of total plan assets:
` in crore (a) Discount rate for the domestic plans is based on the prevailing market yields of Indian Government securities as at the Balance
As at As at Sheet date for the estimated term of the obligations. Discount rate for USA Subsidiaries is based on high quality bonds and for
Particulars
March 31, 2023 March 31, 2022 UK subsidiaries it is based on corporate bonds.
Government Securities/Corporate Bonds (Quoted) 1,756 2,503 (b) The estimates of future salary increases considered in actuarial valuation take into account inflation, seniority, promotion and
Government Securities/Corporate Bonds (Unquoted) 475 537 other relevant factors.
Equity Instruments (Quoted) 195 341
Equity Instruments (Unquoted) 687 763 (c) The details of post-retirement and other benefit plans for its employees given above are certified by the actuaries and relied
Insurer Managed/Hedged Funds 118 116 upon by the Auditors.
Others (Quoted) 25 13
Others (Unquoted) 71 86
Total 3,327 4,359

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.

338 339