Page 211 - Tata_Chemicals_yearly-reports-2017-18

the employee’s contribution rate. Contributions are General and specific borrowing costs attributable to
charged as expense as they fall due. acquisition and construction of qualifying assets is
added to the cost of the assets upto the date the asset
For the UK and Kenyan subsidiaries, the
is ready for its intended use. Capitalisation of borrowing
contributions payable during the period under
costs is suspended and charged to the Consolidated
defined contribution schemes are charged to the
Statement of Profit and Loss during extended periods
Consolidated Statement of Profit and Loss.
when active development activity on the qualifying
(ii) Defined benefit plans assets is interrupted. All other borrowing costs are
recognised in the Consolidated Statement of Profit
The USA subsidiaries use standard actuarial
and Loss in the period in which they are incurred.
methods and assumptions to account for pension
and other post retirement benefit plans. Pension 2.24 Government grants
and post retirement benefit obligations are
Government grants and subsidies are recognised
actuarially calculated using best estimates of the
when there is reasonable assurance that the Group
rate used to discount the future estimated liability,
will comply with the conditions attached to them and Integrated Report
the long-term rate of return on plan assets, and
the grants and subsidies will be received. Government
several assumptions related to the employee
grants whose primary condition is that the Group
workforce (compensation increases, health
should purchase, construct or otherwise acquire non-
care cost trend rates, expected service period,
current assets are recognised as deferred revenue
retirement age and mortality). Pension and post
in the Consolidated Balance Sheet and transferred
retirement benefit expense includes the actuarially
to the Consolidated Statement of Profit and Loss on
computed cost of benefits earned during the
systematic and rational basis over the useful lives of
current service period. Actuarial gains and losses
the related asset.
are recognised in OCI in the period in which they
occur. 2.25 Segment reporting
For UK subsidiaries, the cost of providing pension The operating segments are the segments for which
benefits is actuarially determined using the separate financial information is available and for which
projected unit credit method and discounted operating profit/loss amounts are evaluated regularly
at the current rate of return on a high quality by the Managing Director and Chief Executive Officer
corporate bond of equivalent term and currency to (who is the Group’s chief operating decision maker) in Statutory Reports
the liability, with actuarial valuations being carried deciding how to allocate resources and in assessing
out at each Balance Sheet date. Actuarial gains and performance.
losses are recognised in OCI in the period in which
The accounting policies adopted for segment
they occur.
reporting are in conformity with the accounting
Changes in the present value of the defined benefit policies of the Group. Segment revenue, segment
obligation resulting from plan amendments or expenses, segment assets and segment liabilities
curtailments are recognised immediately in the have been identified to segments on the basis of their
Consolidated Statement Profit and Loss as past relationship to the operating activities of the segment.
service cost. Inter segment revenue is accounted on the basis of
transactions which are primarily determined based on
2.21 Termination benefits
market / fair value factors. Revenue, expenses, assets
Termination benefits are expensed at the earlier of and liabilities which relate to the Group as a whole
when the Group can no longer withdraw the offer of and are not allocable to segments on a reasonable
those benefits and when the Group recognises cost basis have been included under ‘unallocated revenue Financial Statements
for restructuring. / expenses / assets / liabilities’.
2.22 Employee separation compensation 2.26 Income tax
Compensation paid / payable to employees who have Tax expense for the year comprises current and
opted for retirement under a Voluntary Retirement deferred tax. The tax currently payable is based on
Scheme including ex-gratia is charged to the taxable profit for the year. Taxable profit differs from
Consolidated Statement of Profit and Loss in the year net profit as reported in the statement of profit and
of separation. loss because it excludes items of income or expense
that are taxable or deductible in other years and
2.23 Borrowing costs
it further excludes items that are never taxable or
Borrowing costs are interest and ancillary costs incurred deductible. The Group’s liability for current tax is
in connection with the arrangement of borrowings. calculated using tax rates and tax laws that have been

Consolidated Financial Statements 209