Page 246 - Tata_Chemicals_yearly-reports-2020-2021

Integrated Annual Report 2020-21

discount the future estimated liability, the Profit and Loss during extended periods when
long-term rate of return on plan assets, active development activity on the qualifying
and several assumptions related to the assets is interrupted. All other borrowing costs are
employee workforce (compensation recognised in the Consolidated Statement of Profit
increases, health care cost trend rates, and Loss in the period in which they are incurred.
expected service period, retirement 2.24 Government grants
age and mortality). Pension and post
retirement benefit expense includes the Government grants and subsidies are recognised
actuarially computed cost of benefits when there is reasonable assurance that the
earned during the current service period. Group will comply with the conditions attached
Actuarial gains and losses are recognised to them and the grants and subsidies will be
in OCI in the period in which they occur. received. Government grants whose primary
condition is that the Group should purchase,
For UK subsidiaries, the cost of providing construct or otherwise acquire non-current
pension benefits is actuarially determined assets are recognised as deferred revenue in the
using the projected unit credit method Consolidated Balance Sheet and transferred to
and discounted at the current rate of the Consolidated Statement of Profit and Loss on
return on a high quality corporate bond systematic and rational basis over the useful lives
of equivalent term and currency to the of the related asset.
liability, with actuarial valuations being 2.25 Segment reporting
carried out at each Balance Sheet date.
Actuarial gains and losses are recognised The operating segments are the segments for
in OCI in the period in which they occur. which separate financial information is available
and for which operating profit/loss amounts are
Changes in the present value of the evaluated regularly by the Managing Director and
defined benefit obligation resulting Chief Executive Officer (who is the Group’s chief
from plan amendments or curtailments operating decision maker) in deciding how to
are recognised immediately in the allocate resources and in assessing performance.
Consolidated Statement Profit and Loss as
past service cost. The accounting policies adopted for segment
reporting are in conformity with the accounting
2.21 Termination benefits policies of the Group. Segment revenue, segment
Termination benefits are expensed at the earlier of expenses, segment assets and segment liabilities
when the Group can no longer withdraw the offer have been identified to segments on the basis
of those benefits and when the Group recognises of their relationship to the operating activities of
cost for restructuring. the segment. Inter segment revenue is accounted
on the basis of transactions which are primarily
2.22 Employee separation compensation determined based on market / fair value factors.
Compensation paid / payable to employees who Revenue, expenses, assets and liabilities which
have opted for retirement under a Voluntary relate to the Group as a whole and are not allocable
Retirement Scheme including ex-gratia is charged to segments on a reasonable basis have been
to the Consolidated Statement of Profit and Loss in included under ‘unallocated revenue / expenses /
the year of separation. assets / liabilities’.

2.23 Borrowing costs 2.26 Income tax
Borrowing costs are interest and ancillary costs Tax expense for the year comprises current and
incurred in connection with the arrangement of deferred tax. The tax currently payable is based
borrowings. General and specific borrowing costs on taxable profit for the year. Taxable profit differs
attributable to acquisition and construction of from net profit as reported in the Statement
qualifying assets is added to the cost of the assets of Profit and Loss because it excludes items of
upto the date the asset is ready for its intended income or expense that are taxable or deductible
use. Capitalisation of borrowing costs is suspended in other years and it further excludes items that are
and charged to the Consolidated Statement of never taxable or deductible. The Group’s liability

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