Page 175 - Tata_Chemicals_yearly-reports-2020-2021

Integrated Report Statutory Reports Financial Statements
1-59 60-146 Standalone

active development activity on the qualifying items that are never taxable or deductible. The
assets is interrupted. All other borrowing costs are Company’s liability for current tax is calculated
recognised in the Standalone Statement of Profit using tax rates and tax laws that have been
and Loss in the period in which they are incurred. enacted or substantively enacted by the end of
the reporting period.
2.19 Government grants Current tax assets and current tax liabilities are
Government grants and subsidies are recognised offset when there is a legally enforceable right to
when there is reasonable assurance that the set off the recognised amounts and there is an
Company will comply with the conditions intention to realise the asset or to settle the liability
attached to them and the grants and subsidies on a net basis.
will be received. Government grants whose Deferred tax is the tax expected to be payable or
primary condition is that the Company should recoverable on differences between the carrying
purchase, construct or otherwise acquire non- values of assets and liabilities in the Standalone
current assets are recognised as deferred revenue Financial Statements and the corresponding tax
in the Standalone Balance Sheet and transferred bases used in the computation of taxable profit
to the Standalone Statement of Profit and Loss on and is accounted for using the Standalone Balance
systematic and rational basis over the useful lives Sheet liability method. Deferred tax liabilities are
of the related asset. generally recognised for all taxable temporary
differences arising between the tax base of
2.20 Segment reporting assets and liabilities and their carrying amount,
The operating segments are the segments for except when the deferred income tax arises from
which separate financial information is available the initial recognition of an asset or liability in a
and for which operating profit/loss amounts are transaction that is not a business combination and
evaluated regularly by the Managing Director and affects neither accounting nor taxable profit or loss
Chief Executive Officer (who is the Company’s at the time of the transaction. In contrast, deferred
chief operating decision maker) in deciding how to tax assets are only recognised to the extent that
allocate resources and in assessing performance. it is probable that future taxable profits will be
available against which the temporary differences
The accounting policies adopted for segment can be utilised.
reporting are in conformity with the accounting
policies of the Company. Segment revenue, The carrying value of deferred tax assets is
segment expenses, segment assets and segment reviewed at the end of each reporting period and
liabilities have been identified to segments on reduced to the extent that it is no longer probable
the basis of their relationship to the operating that sufficient taxable profits will be available to
activities of the segment. Inter segment revenue is allow all or part of the asset to be recovered.
accounted on the basis of transactions which are Deferred tax is calculated at the tax rates that are
primarily determined based on market / fair value expected to apply in the period when the liability
factors. Revenue, expenses, assets and liabilities is settled or the asset is realised based on the
which relate to the Company as a whole and are tax rates and tax laws that have been enacted or
not allocable to segments on a reasonable basis substantially enacted by the end of the reporting
have been included under ‘unallocated revenue / period. The measurement of deferred tax liabilities
expenses / assets / liabilities’. and assets reflects the tax consequences that
would follow from the manner in which the
2.21 Income tax Company expects, at the end of the reporting

Tax expense for the year comprises current and period, to cover or settle the carrying value of its
deferred tax. The tax currently payable is based assets and liabilities.
on taxable profit for the year. Taxable profit differs Deferred tax assets and liabilities are offset to the
from net profit as reported in the Standalone extent that they relate to taxes levied by the same
Statement of Profit and Loss because it excludes tax authority and there are legally enforceable
items of income or expense that are taxable or rights to set off current tax assets and current tax
deductible in other years and it further excludes liabilities within that jurisdiction.

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