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enacted or substantively enacted by the end of the tax liability. MAT asset is recognised as deferred tax
reporting period. assets in the Balance Sheet when the asset can be
measured reliably, and it is probable that the future
Current tax assets and current tax liabilities are offset
economic benefit associated with the asset will be
when there is a legally enforceable right to set off
realised.
the recognised amounts and there is an intention to
realise the asset or to settle the liability on a net basis. 2.27 Provisions and contingencies
Deferred tax is the tax expected to be payable or A provision is recognised when the Group has a
recoverable on differences between the carrying present obligation as a result of past events and it is
values of assets and liabilities in the financial probable that an outflow of resources will be required
statements and the corresponding tax bases used in to settle the obligation, in respect of which a reliable
the computation of taxable profit and is accounted estimate of the amount can be made. Provisions are
for using the balance sheet liability method. Deferred determined based on best estimate required to settle
tax liabilities are generally recognised for all taxable the obligation at the Balance Sheet date. When a
temporary differences arising between the tax base provision is measured using the cash flows estimated
of assets and liabilities and their carrying amount, to settle the present obligation, its carrying amount is
except when the deferred income tax arises from the the present value of those cash flows (when the effect
initial recognition of an asset or liability in a transaction of the time value of the money is material). The increase
that is not a business combination and affects neither in the provisions due to passage of time is recognised
accounting nor taxable profit or loss at the time of the as interest expense. Provisions are reviewed as at each
transaction. In contrast, deferred tax assets are only reporting date and adjusted to reflect the current
recognised to the extent that it is probable that future estimate.
taxable profits will be available against which the
Contingent liabilities are disclosed when there is
temporary differences can be utilised.
a possible obligation arising from past events, the
The carrying value of deferred tax assets is reviewed existence of which will be confirmed only by the
at the end of each reporting period and reduced to occurrence or non-occurrence of one or more
the extent that it is no longer probable that sufficient uncertain future events not wholly within the control
taxable profits will be available to allow all or part of of the Group or a present obligation that arises from
the asset to be recovered. past events where it is either not probable that an
outflow of resources will be required to settle or a
Deferred tax is calculated at the tax rates that are
reliable estimate of the amount cannot be made.
expected to apply in the period when the liability is
settled or the asset is realised based on the tax rates Contingent assets are not disclosed in the financial
and tax laws that have been enacted or substantially statements unless an inflow of economic benefits is
enacted by the end of the reporting period. The probable.
measurement of deferred tax liabilities and assets
2.28 Dividend
reflects the tax consequences that would follow from
the manner in which the Group expects, at the end Final dividend on shares are recorded as a liability, on
of the reporting period, to cover or settle the carrying the date of approval by the shareholders and interim
value of its assets and liabilities. dividends are recorded as a liability on the date of
declaration by the Company’s Board of Directors.
Deferred tax assets and liabilities are offset to the
extent that they relate to taxes levied by the same tax 3. Recent accounting pronouncements
authority and there are legally enforceable rights to set
Appendix B to Ind AS 21, Foreign currency transactions
off current tax assets and current tax liabilities within
and advance consideration:
that jurisdiction.
On 28 March, 2018, Ministry of Corporate Affairs (‘MCA’)
Current and deferred tax are recognised as an expense
has notified the Companies (Indian Accounting Standards)
or income in the statement of profit and loss, except
Amendment Rules, 2018 containing Appendix B to Ind AS
when they relate to items credited or debited either in
21, Foreign currency transactions and advance consideration
other comprehensive income or directly in equity, in
which clarifies the date of the transaction for the purpose of
which case the tax is also recognised in OCI or directly
determining the exchange rate to use on initial recognition
in equity.
of the related asset, expense or income, when an entity has
Deferred tax assets include a credit for the Minimum received or paid advance consideration in a foreign currency.
Alternate Tax (‘MAT’) paid in accordance with the tax
The amendment will come into force from 1 April, 2018. The
laws, which is likely to give future economic benefits in
Group is evaluating the requirements of the amendment and
the form of availability of set off against future income
its effect on the Consolidated Financial Statements.
210 Annual Report 2017-18