Page 245 - Tata_Chemicals_yearly-reports-2020-2021

Integrated Report Statutory Reports Financial Statements
1-59 60-146 Consolidated
The present value of the said obligation is
determined by discounting the estimated
future cash outflows, using market yields
of government bonds of equivalent term
and currency to the liability.
The interest income / (expense) are
calculated by applying the discount rate
to the net defined benefit liability or asset.
The net interest income / (expense) on the
net defined benefit liability is recognised
in the Consolidated Statement of Profit
and Loss.
Remeasurements, comprising of
actuarial gains and losses, the effect of
the asset ceiling (if any), are recognised
immediately in the Consolidated Balance
Sheet with a corresponding charge
or credit to retained earnings through
OCI in the period in which they occur.
Remeasurements are not reclassified 2.20.2
to the Consolidated Statement of Profit
and Loss in subsequent periods.
Changes in the present value of the
defined benefit obligation resulting
from plan amendments or curtailments
are recognised immediately in the
Consolidated Statement Profit and Loss as
past service cost.
(ii) Short-term employee benefits
The short-term employee benefits
expected to be paid in exchange for
the services rendered by employees is
recognised during the period when the
employee renders the service. These
benefits include compensated absences
such as paid annual leave and performance
incentives which are expected to occur
within twelve months after the end of the
period in which the employee renders the
related services.
The cost of compensated absences is
accounted as under:
(a) In case of accumulating
compensated absences, when
employees render service that
increase their entitlement of
future compensated absences;
and
(b) In case of non - accumulating
compensated absence, when the
absences occur.
(iii) Other long-term employee benefits
Compensated absences which are
not expected to occur within twelve
months after the end of the period in
which the employee renders the related
services are recognised as a liability. The
cost of providing benefits is actuarially
determined using the projected unit
credit method, with actuarial valuations
being carried out at each Balance Sheet
date. Long Service Awards are recognised
as a liability at the present value of the
obligation at the Balance Sheet date. All
gains/losses due to actuarial valuations
are immediately recognised in the
Consolidated Statement of Profit and Loss.
In respect of overseas subsidiaries, the
liabilities for employee benefits are determined
and accounted as per the regulations and
principles followed in the respective countries.
(i) Defined contribution schemes
The USA subsidiaries sponsors defined
contribution retirement savings plans.
Participation in one of these plans is
available to substantially all represented
and non-represented employees.
These subsidiaries match employee
contributions up to certain predefined
limits for non-represented employees
based upon eligible compensation
and the employee’s contribution rate.
Contributions are charged as expense as
they fall due.
For the UK and Kenyan subsidiaries, the
contributions payable during the period
under defined contribution schemes are
charged to the Consolidated Statement of
Profit and Loss.
(ii) Defined benefit plans
The USA subsidiaries use standard actuarial
methods and assumptions to account for
pension and other post retirement benefit
plans. Pension and post retirement benefit
obligations are actuarially calculated
using best estimates of the rate used to
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