Page 283 - Tata_Chemicals_yearly-reports-2021-22

01 INTEGRATED 73 STATUTORY 178 FINANCIAL
REPORT
STATEMENTS
REPORTS
Consolidated

the time of the transaction. In contrast, deferred tax assets arising from deductible temporary
tax assets are only recognised to the extent that differences associated with such investments and
it is probable that future taxable profits will be interests are only recognised to the extent that
available against which the temporary differences it is probable that there will be sufficient taxable
can be utilised. profits against which to utilise the benefits of the
temporary differences and they are expected to
The carrying value of deferred tax assets is
reviewed at the end of each reporting period and reverse in the foreseeable future.
reduced to the extent that it is no longer probable 2.26 Provisions and contingencies
that sufficient taxable profits will be available to
allow all or part of the asset to be recovered. A provision is recognised when the Group has a
present obligation as a result of past events and
Deferred tax is calculated at the tax rates that are it is probable that an outflow of resources will
expected to apply in the period when the liability be required to settle the obligation, in respect
is settled or the asset is realised based on the of which a reliable estimate of the amount can
tax rates and tax laws that have been enacted or be made. Provisions are determined based on
substantially enacted by the end of the reporting best estimate required to settle the obligation
period. The measurement of deferred tax liabilities at the Balance Sheet date. When a provision is
and assets reflects the tax consequences that measured using the cash flows estimated to settle
would follow from the manner in which the Group the present obligation, its carrying amount is the
expects, at the end of the reporting period, to present value of those cash flows (when the effect
cover or settle the carrying value of its assets and of the time value of the money is material). The
liabilities. increase in the provisions due to passage of time is
Deferred tax assets and liabilities are offset to the recognised as interest expense.
extent that they relate to taxes levied by the same Provisions are reviewed at each balance sheet
tax authority and there are legally enforceable date and adjusted to reflect the current best
rights to set off current tax assets and current tax estimate. If it is no longer probable that the
liabilities within that jurisdiction. outflow of resources would be required to settle
the obligation, the provision is reversed.
Current and deferred tax are recognised as an
expense or income in the Consolidated Statement Contingent liabilities are disclosed when there
of Profit and Loss, except when they relate to items is a possible obligation arising from past events,
credited or debited either in other comprehensive the existence of which will be confirmed only
income or directly in equity, in which case the tax by the occurrence or non-occurrence of one or
is also recognised in OCI or directly in equity. more uncertain future events not wholly within
the control of the Group or a present obligation
Deferred tax assets include a credit for the that arises from past events where it is either
Minimum Alternate Tax (‘MAT’) paid in accordance not probable that an outflow of resources will
with the tax laws, which is likely to give future be required to settle or a reliable estimate of the
economic benefits in the form of availability of amount cannot be made.
set off against future income tax liability. MAT
asset is recognised as deferred tax assets in the Contingent assets are not disclosed in the financial
Consolidated Balance Sheet when the asset can statements unless an inflow of economic benefits
be measured reliably, and it is probable that the is probable.
future economic benefit associated with the asset 2.27 Emissions Trading Allowances
will be realised.
At each period-end the Group estimates its
Deferred tax liabilities are recognised for outstanding obligation to surrender allowances
taxable temporary differences associated with under United Kingdom emission trading scheme
investments in subsidiaries and interests in joint (“UKETS”). Where these obligations are already
ventures, except where the Group is able to matched by allowances either held or purchased
control the reversal of the temporary difference forward by the Group, the provisions is calculated
and it is probable that the temporary difference using the same cost as the allowances. To the
will not reverse in the foreseeable future. Deferred extent that the Group has obligations to surrender

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