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Consolidated Financials
179
CORPORATE OVERVIEW (1-31)
STATUTORY REPORTS (46-122)
FINANCIALS
(v) Severance indemnity
Tata Daewoo Commercial Vehicle Company Ltd andTata Daewoo Commercial Vehicle ServiceCompany Ltd, subsidiary companies incorporated in Korea
has an obligation towards severance indemnity, a defined benefit retirement plan, covering eligible employees. The plan provides for a lump sum
payment to all employees with more than one year of employment equivalent to 30 days’ salary payable for each completed year of service.
(vi) Post-retirementmedicare scheme
Under this scheme, employees of the Company and some of its subsidiaries get medical benefits subject to certain limits of amount, periods after
retirement and types of benefits, depending on their grade and location at the time of retirement. Employees separated from the Company as part of
Early Separation Scheme, on medical grounds or due to permanent disablement are also covered under the scheme. The Company and the said
subsidiaries account for the liability for post-retirement medical scheme based on an independent actuarial valuation.
(vii) Provident fundand familypension
The eligible employees of the Company and some of its subsidiaries are entitled to receive benefits in respect of provident fund, a defined contribution
plan, inwhich both employees and the company/subsidiaries makemonthly/annual contributions at a specified percentage of the covered employees’
salary (currently 12% of employees’ salary). The contributions, as specified under the law, are made to the provident fund and pension fund set up as
irrevocable trust by the Company and its subsidiaries or to respective Regional Provident Fund Commissioner and the Central Provident Fund under
the State Pension scheme. The Company and some of its subsidiaries are generally liable for monthly/annual contributions and any shortfall in the fund
assets based on the government specified minimum rates of return or pension and recognises such contributions and shortfall, if any, as an expense
in the year incurred.
(viii) Compensatedabsences
The Company and some of its subsidiaries provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled
to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each
balance sheet date on basis of an independent actuarial valuation.
(l)
Investments
i.
Long term investments are stated at cost less other than temporary diminution in value, if any.
ii.
Investment in associate companies are accounted as per the 'Equity method', and accordingly, the share of post acquisition reserves of each of the
associate companies has been added to / deducted from the cost of investments.
iii.
Current investments are stated at lower of cost and fair value. Fair value of investments in mutual funds are determined on portfolio basis.
(m) Income taxes
Tax expense comprises current and deferred taxes. Current taxes are determined based on respective taxable income of each taxable entity and tax rules
applicable for respective tax jurisdictions. Current tax is net of credit for entitlement for Minimum Alternative Tax.
Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting income that originate in one period and are
capable of reversal in one or more subsequent periods.Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised
if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.Such deferred tax assets and liabilities are
computed separately for each taxable entity and for each taxable jurisdiction.
Deferred tax assets and liabilities are measured based on the tax rates that are expected to apply in the period when asset is realised or the liability is settled,
based on tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.
The tax expense is not comparable with the profit before tax, since it is consolidated on a line-by-line addition for each subsidiary company and no tax effect
is recorded in respect of consolidation adjustments. This accounting treatment is as per accounting standard AS-21.
(n) Redemption premium on Foreign Currency Convertible Notes (FCCN) / Convertible Alternative Reference Securities (CARS) / Non
Convertible Debentures (NCD)
Premium payable on redemption of FCCN / CARS / NCD as per the terms of issue, is provided fully in the year of issue by adjusting against the Securities
Premium Account (SPA) (net of tax). Any change in the premium payable, consequent to conversion or exchange fluctuations is adjusted to the SPA.
(o) Borrowingcosts
Fees towards structuring / arrangements and underwriting and other incidental costs incurred in connection with borrowings are amortised over the period
of the loan.
(p) Liabilitiesandcontingent liabilities
The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial
statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but
does not record a liability in its accounts unless the loss becomes probable.
NOTESFORMINGPARTOFCONSOLIDATEDFINANCIALSTATEMENTS
FINANCIAL HIGHLIGHTS (32-45)