Page 238 - Tata_Chemicals_yearly-reports-2019-20

Litigations and claims (refer notes 2.3.5, 2.27, 21 and 47 to the Consolidated Financial Statements)
The Key Audit Matter How the matter was addressed in our audit
the group operates in various countries exposing it to a variety Our audit procedures included:
of different laws, regulations and interpretations thereof. the • obtaining an understanding of actual and potential
provisions and contingent liabilities relate to ongoing litigations outstanding litigations and claims against the group from
and claims with various authorities. litigations and claims may the respective entity’s in-house legal Counsel and other
arise from direct and indirect tax proceedings, legal proceedings, senior personnel of the group and assessing their responses.
including regulatory and other government/department
proceedings, as well as investigations by authorities and • assessing status of the litigations and claims based on
commercial claims.
correspondence between the group and the various tax/
legal authorities and legal opinions obtained by the group.
resolution of litigations and claims proceedings may span over
multiple years beyond 31 March 2020 due to the complexity • testing completeness of litigations and claims recorded by
and magnitude of the legal matters involved and may involve assessing the group’s legal expenses and the minutes of the
protracted negotiation or litigation.
Board meetings.
the computation of a provision or contingent liability requires • assessing and challenging the group’s estimate of the
significant judgement by the group because of the inherent possible outcome of litigations and claims. this is based on
complexity in estimating future costs. the amount recognised as the applicable tax laws and legal precedence by involving
a provision is the best estimate of the expenditure. the provisions our tax specialists in taxation related matters. [and internal/
and contingent liabilities are subject to changes in the outcomes external legal counsel.
of litigations and claims over time as new facts emerge as each
legal case progresses and positions taken by the group. • evaluating judgements made by the group by comparing
the estimates of prior year to the actual outcome;
there is inherent complexity and magnitude of potential
exposures is significant across the group. Significant judgment is • assessing and testing the adequacy and completeness of the
necessary to estimate the likelihood, timing and amount of the group’s disclosures in respect of litigations and claims.
cash outflows, interpretations of the legal aspects, legislations and
judgements previously made by the authorities. accordingly, this
is identified as a key audit matter.

236 I Integrated annual report 2019-20