Page 209 - Tata_Chemicals_yearly-reports-2021-22

01 INTEGRATED 73 STATUTORY 178 FINANCIAL
REPORT
REPORTS
STATEMENTS
Standalone

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