Page 244 - Tata_Chemicals_yearly-reports-2020-2021

Integrated Annual Report 2020-21

control the use of an identified assets, the Group term. The Group applied a single discount rate
assesses whether: (i) the contact involves the use to a portfolio of leases of similar assets in similar
of an identified asset (ii) the Group has substantially economic environment with a similar end date.
all of the economic benefits from use of the asset 2.20 Employee benefits plans
through the period of the lease and (iii) the Group
has the right to direct the use of the asset. 2.20.1 In respect of the Company and domestic
subsidiaries
As a lessee, The Group recognises a right- Employee benefits consist of provident fund,
of-use asset and a lease liability at the lease
commencement date. The right-of-use asset superannuation fund, gratuity fund, compensated
is initially measured at cost, which comprises absences, long service awards, post-retirement
the initial amount of the lease liability adjusted medical benefits, directors’ retirement obligations
for any lease payments made at or before the and family benefit scheme.
commencement date, plus any initial direct costs (i) Post-employment benefit plans
incurred and an estimate of costs to dismantle Defined contribution plans
and remove the underlying asset or to restore the
underlying asset or the site on which it is located, Payments to a defined contribution
less any lease incentives received. retirement benefit scheme for eligible
employees in the form of superannuation
The right-of-use asset is subsequently depreciated fund are charged as an expense as they fall
using the straight-line method from the due. Such benefits are classified as Defined
commencement date to the earlier of the end of Contribution Schemes as the Group does
the useful life of the right-of-use asset or the end of not carry any further obligations, apart
the lease term. The estimated useful lives of right- from the contributions made.
of-use assets are determined on the same basis
as those of property and equipment. In addition, Defined benefit plans
the right-of-use asset is periodically reduced by Contributions to a Provident Fund are
impairment losses, if any, and adjusted for certain made to Trusts administered by the Group/
remeasurements of the lease liability. Regional Provident Fund Commissioners
and are charged to the Consolidated
The lease liability is initially measured at the present
value of the lease payments that are not paid Statement of Profit and Loss as incurred.
at the commencement date, discounted using The Group is liable for the contribution
the interest . For leases with reasonably similar and any shortfall in interest between
characteristics, the Group, on a lease by lease basis, the amount of interest realised by the
may adopt either the incremental borrowing rate investments and the interest payable
specific to the lease or the incremental borrowing to members at the rate declared by the
rate for the portfolio as a whole. Government of India in respect of the Trust
administered by the Group companies.
Lease payments included in the measurement of For defined benefit schemes in the form
the lease liability comprise the fixed payments, of gratuity fund, provident fund, post-
including in-substance fixed payments and retirement medical benefits, pension
lease payments in an optional renewal period liabilities (including directors) and family
if the Group is reasonably certain to exercise an benefit scheme, the cost of providing
extension option;
benefits is actuarially determined using
The lease liability is measured at amortised cost the projected unit credit method, with
using the effective interest method. actuarial valuations being carried out at
each Balance Sheet date.
The Group has elected not to recognise right-of-
use assets and lease liabilities for short-term leases The retirement benefit obligation
that have a lease term of 12 months or less and recognised in the Consolidated Balance
leases of low-value assets. The Group recognises Sheet represents the present value of the
the lease payments associated with these leases as defined benefit obligation as reduced by
an expense on a straight-line basis over the lease the fair value of scheme assets.

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