VSL » Topics » Gratuity

This excerpt taken from the VSL 20-F filed Oct 15, 2009.

-Gratuity

The Company makes annual contributions for Employee’s Gratuity scheme to a fund administered by trustees covering all eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment in an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The Company accounts for the liability for gratuity benefits payable in future based on an actuarial valuation. The difference between the fair value of plan assets and benefit obligation recognized, is reported in the balance sheet as a net asset or liability.

 

F-12


Table of Contents

Notes to Consolidated Financial Statements—(Continued)

 

This excerpt taken from the VSL 20-F filed Oct 1, 2007.

Gratuity

The Group records a liability for gratuity benefits on the basis of an independent actuarial valuation. Under Indian GAAP, the actuary can choose a method for (i) expense determination, (ii) determining the discount rate and (iii) valuing plan assets.

Under US GAAP, the liability for gratuity benefits requires the use of the projected unit credit method. The discount rate (reflecting the rate of interest which would provide the necessary future cash flows to pay the accumulated benefits when due) reflects current market rates for high quality debt instruments.

 

41


Table of Contents

Tata Teleservices Limited

Schedules Forming Part of the Consolidated Financial Statements (Continued)

Schedule R: Notes to the accounts (continued)

 

22. Differences between Indian and United States Generally Accepted Accounting Principles (continued)

This excerpt taken from the VSL 20-F filed Oct 2, 2006.

Gratuity

The Group records a liability for gratuity benefits on the basis of an independent actuarial valuation. Under Indian GAAP, the actuary can choose a method for (i) expense determination, (ii) determining the discount rate and (iii) valuing plan assets.

Under US GAAP, the liability for gratuity benefits requires the use of the projected unit credit method. The discount rate (reflecting the rate of interest which would provide the necessary future cash flows to pay the accumulated benefits when due) reflects current market rates for high quality debt instruments.

 

41


Table of Contents

Tata Teleservices Limited

Schedules Forming Part of the Consolidated Financial Statements (Continued)

Schedule R: Notes to the accounts (continued)

 

22. Differences between Indian and United States Generally Accepted Accounting Principles (continued)

This excerpt taken from the VSL 20-F filed Oct 17, 2005.

Gratuity

 

The Group records a liability for gratuity benefits on the basis of an independent actuarial valuation. Under Indian GAAP, the actuary can choose a method for (i) expense determination, (ii) determining the discount rate and (iii) valuing plan assets.

 

Under US GAAP, the liability for gratuity benefits requires the use of the projected unit credit method. The discount rate (reflecting the rate of interest which would provide the necessary future cash flows to pay the accumulated benefits when due) reflects current market rates for high quality debt instruments.

 

41


Table of Contents

Tata Teleservices Limited

Schedules Forming Part of the Consolidated Financial Statements (Continued)

 

Schedule R: Notes to the accounts (continued)

 

22. Differences between Indian and United States Generally Accepted Accounting Principles (continued)

 

This excerpt taken from the VSL 20-F filed Sep 30, 2005.

Gratuity

 

The Group records a liability for gratuity benefits on the basis of an independent actuarial valuation. Under Indian GAAP, the actuary can choose a method for (i) expense determination, (ii) determining the discount rate and (iii) valuing plan assets.

 

Under US GAAP, the liability for gratuity benefits requires the use of the projected unit credit method. The discount rate (reflecting the rate of interest which would provide the necessary future cash flows to pay the accumulated benefits when due) reflects current market rates for high quality debt instruments.

 

39


Table of Contents

Tata Teleservices Limited

Schedules Forming Part of the Consolidated Financial Statements (Continued)

 

Schedule T: Notes Forming Part of the Accounts (Continued)

 

17. Differences between Indian and United States Generally Accepted Accounting Principles (continued)

 

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