Page 174 - Tata_Chemicals_yearly-reports-2020-2021

Integrated Annual Report 2020-21

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

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