Page 299 - Tata Chemical Annual Report_2022-2023

Integrated Annual Report 2022-23 01-83 84-192 193-365
Integrated Report Statutory Reports Financial Statements
Consolidated

(ii) Defined benefit plans Capitalisation of borrowing costs is suspended and further excludes items that are never taxable or Current and deferred tax are recognised as an expense
The USA subsidiaries use standard actuarial charged to the Consolidated Statement of Profit deductible. The Group’s liability for current tax is or income in the statement of Consolidated Statement
methods and assumptions to account for and Loss during extended periods when active calculated using tax rates and tax laws that have been of Profit and Loss, except when they relate to items
pension and other post retirement benefit development activity on the qualifying assets is enacted or substantively enacted by the end of the credited or debited either in Other Comprehensive
plans. Pension and post retirement benefit interrupted. All other borrowing costs are recognised reporting period. Income or directly in equity, in which case the tax is
obligations are actuarially calculated using in the Consolidated Statement of Profit and Loss in the also recognised in OCI or directly in equity.
best estimates of the rate used to discount period in which they are incurred. Current tax assets and current tax liabilities are offset Deferred tax assets include a credit for the Minimum
the future estimated liability, the long-term when there is a legally enforceable right to set off Alternate Tax (‘MAT’) paid in accordance with the tax
rate of return on plan assets, and several 2.23 Government grants the recognised amounts and there is an intention to laws, which is likely to give future economic benefits in
assumptions related to the employee Government grants and subsidies are recognised realise the asset or to settle the liability on a net basis. the form of availability of set off against future income
workforce (compensation increases, health when there is reasonable assurance that the Group tax liability. MAT asset is recognised as deferred tax
care cost trend rates, expected service will comply with the conditions attached to them and Deferred tax is the tax expected to be payable or assets in the Consolidated Balance Sheet when the
period, retirement age and mortality). the grants and subsidies will be received. Government recoverable on differences between the carrying asset can be measured reliably, and it is probable that
Pension and post retirement benefit grants whose primary condition is that the Group values of assets and liabilities in the financial the future economic benefit associated with the asset
expense includes the actuarially computed should purchase, construct or otherwise acquire non- statements and the corresponding tax bases used in will be realised.
cost of benefits earned during the current current assets are recognised as deferred revenue in the computation of taxable profit and is accounted
service period. Actuarial gains and losses the Consolidated Balance Sheet and transferred to for using the balance sheet liability method. Deferred Deferred tax liabilities are recognised for taxable
are recognised in OCI in the period in the Consolidated Statement of Profit and Loss on tax liabilities are generally recognised for all taxable temporary differences associated with investments
which they occur. systematic and rational basis over the useful lives of temporary differences arising between the tax base of in subsidiaries and interests in joint ventures,
the related asset. assets and liabilities and their carrying amount, except except where the Group is able to control the
For UK subsidiaries, the cost of providing when the deferred income tax arises from the initial reversal of the temporary difference and it is
pension benefits is actuarially determined 2.24 Segment reporting recognition of an asset or liability in a transaction probable that the temporary difference will
using the projected unit credit method The operating segments are the segments for which that is not a business combination and affects neither not reverse in the foreseeable future. Deferred
and discounted at the current rate of separate financial information is available and for accounting nor taxable profit or loss at the time of tax assets arising from deductible temporary
return on a high quality corporate bond which operating profit/loss amounts are evaluated the transaction. In contrast, deferred tax assets are differences associated with such investments and
of equivalent term and currency to the regularly by the Managing Director and Chief only recognised to the extent that it is probable that interests are only recognised to the extent that
liability, with actuarial valuations being Executive Officer (who is the Group’s chief operating future taxable profits will be available against which it is probable that there will be sufficient taxable
carried out at each Balance Sheet date. decision maker) in deciding how to allocate resources the temporary differences can be utilised. profits against which to utilise the benefits of the
Actuarial gains and losses are recognised and in assessing performance. temporary differences and they are expected to
in OCI in the period in which they occur. The carrying value of deferred tax assets is reviewed reverse in the foreseeable future.
The accounting policies adopted for segment at the end of each reporting period and reduced to
Changes in the present value of the reporting are in conformity with the accounting the extent that it is no longer probable that sufficient 2.26 Provisions and contingencies
defined benefit obligation resulting policies of the Group. Segment revenue, segment taxable profits will be available to allow all or part of A provision is recognised when the Group has a
from plan amendments or curtailments expenses, segment assets and segment liabilities the asset to be recovered. present obligation as a result of past events and it is
are recognised immediately in the have been identified to segments on the basis of their probable that an outflow of resources will be required
Consolidated Statement Profit and Loss as relationship to the operating activities of the segment. Deferred tax is calculated at the tax rates that are to settle the obligation, in respect of which a reliable
past service cost. Inter segment revenue is accounted on the basis of expected to apply in the period when the liability is estimate of the amount can be made. Provisions are
transactions which are primarily determined based on settled or the asset is realised based on the tax rates determined based on best estimate required to settle
2.21 Termination benefits market / fair value factors. Revenue, expenses, assets and tax laws that have been enacted or substantially the obligation at the Balance Sheet date. When a
Termination benefits are expensed at the earlier of and liabilities which relate to the Group as a whole enacted by the end of the reporting period. The provision is measured using the cash flows estimated
when the Group can no longer withdraw the offer of and are not allocable to segments on a reasonable measurement of deferred tax liabilities and assets to settle the present obligation, its carrying amount
those benefits and when the Group recognises cost basis have been included under ‘unallocated revenue reflects the tax consequences that would follow from is the present value of those cash flows (when the
for restructuring. / expenses / assets / liabilities’. the manner in which the Group expects, at the end of effect of the time value of the money is material). The
the reporting period, to cover or settle the carrying increase in the provisions due to passage of time is
2.22 Borrowing costs 2.25 Income tax value of its assets and liabilities. recognised as interest expense.
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 on Deferred tax assets and liabilities are offset to the Provisions are reviewed at each balance sheet date
borrowings. General and specific borrowing costs taxable profit for the year. Taxable profit differs from extent that they relate to taxes levied by the same and adjusted to reflect the current best estimate. If
attributable to acquisition and construction of net profit as reported in the Statement of Profit and tax authority and there are legally enforceable rights it is no longer probable that the outflow of resources
qualifying assets is added to the cost of the assets Loss because it excludes items of income or expense to set off current tax assets and current tax liabilities would be required to settle the obligation, the
upto the date the asset is ready for its intended use. that are taxable or deductible in other years and it within that jurisdiction. provision is reversed.

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