Page 190 - Tata_Chemicals_yearly-reports-2019-20

For defined benefit schemes in the form of The cost of compensated absences is accounted
gratuity fund, provident fund, post-retirement as under:
medical benefits, pension liabilities (including (a) In case of accumulating compensated
directors’) and family benefit scheme, the cost of absences, when employees render service
providing benefits is actuarially determined using that increase their entitlement of future
the projected unit credit method, with actuarial compensated absences; and
valuations being carried out at each Balance Sheet (b) In case of non - accumulating compensated
date.
absence, when the absences occur.
The retirement benefit obligation recognised 2.16.3 Other long-term employee benefits
in the Standalone Balance Sheet represents the
present value of the defined benefit obligation as Compensated absences which are not expected
reduced by the fair value of scheme assets. to occur within twelve months after the end of the
period in which the employee renders the related
The present value of the said obligation is services are recognised as a liability. The cost of
determined by discounting the estimated future providing benefits is actuarially determined using
cash outflows, using market yields of government the projected unit credit method, with actuarial
bonds of equivalent term and currency to the valuations being carried out at each Balance
liability. Sheet date. Long Service Awards are recognised
as a liability at the present value of the obligation
The interest income / (expense) are calculated at the Balance Sheet date. All gains/losses due to
by applying the discount rate to the net defined actuarial valuations are immediately recognised in
benefit liability or asset. The net interest income the Standalone Statement of Profit and Loss.
/ (expense) on the net defined benefit liability is
recognised in the Standalone Statement of Profit 2.17 Employee separation compensation
and Loss. Compensation paid / payable to employees who
have opted for retirement under a Voluntary
Remeasurements, comprising of actuarial gains
and losses, the effect of the asset ceiling (if any), are Retirement Scheme including ex-gratia is charged
recognised immediately in the Standalone Balance to the Standalone Statement of Profit and Loss in
Sheet with a corresponding charge or credit the year of separation.
to retained earnings through OCI in the period 2.18 Borrowing costs
in which they occur. Remeasurements are not
reclassified to the Standalone Statement of Profit Borrowing costs are interest and ancillary costs
and Loss in subsequent periods. incurred in connection with the arrangement of
borrowings. General and specific borrowing costs
Changes in the present value of the defined benefit attributable to acquisition and construction of
obligation resulting from plan amendments or qualifying assets is added to the cost of the assets
curtailments are recognised immediately in the upto the date the asset is ready for its intended
Standalone Statement of Profit and Loss as past use. Capitalisation of borrowing costs is suspended
service cost. and charged to the Standalone Statement of
Profit and Loss during extended periods when
2.16.2 Short-term employee benefits active development activity on the qualifying
The short-term employee benefits expected to assets is interrupted. All other borrowing costs are
be paid in exchange for the services rendered by recognised in the Standalone Statement of Profit
employees is recognised during the period when and Loss in the period in which they are incurred.
the employee renders the service. These benefits 2.19 Government grants
include compensated absences such as paid
annual leave and performance incentives which Government grants and subsidies are recognised
are expected to occur within twelve months after when there is reasonable assurance that the
the end of the period in which the employee Company will comply with the conditions
renders the related services. attached to them and the grants and subsidies

188 I INTEGRATED ANNuAL REPORT 2019-20