ASCENDAS india trust ANNUAL REPORT 2014/15
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
For the financial year ended 31 March 2015
3.
Critical accounting judgements, estimates and assumptions (continued)
3.2 Key Sources of Estimation Uncertainty (Continued)
(c)
Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future
taxable income. Given the wide range of business relationships and the long-term nature and complexity of existing
contractual agreements, differences arising between the actual results and the assumptions made, or future changes
to such assumptions, could necessitate future adjustments to tax provisions already recorded.
The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax
authorities of the respective countries in which it operates. The amount of such provisions is based on various factors,
such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and
the relevant tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the
conditions prevailing in the respective entity’s domicile.
Deferred tax assets are recognised for all unused tax losses and Minimum Alternative Tax (“MAT”) credits to the
extent that it is probable that taxable profit will be available against which the losses and MAT credits can be utilised.
Significant management judgment is required to determine the amount of deferred tax assets that can be recognised,
based upon the likely timing and level of future taxable profits.
Under Section 80IA of the India Income Tax Act, a subsidiary is eligible to claim deduction of an amount equal to one
hundred percent of the profits and gains derived from industrial park developed. The deduction specified, may at the
option of the subsidiary, be claimed for any ten consecutive years out of fifteen years beginning from the year in which
the industrial park commences operation. To avail such deduction, the subsidiary is required to get the industrial park
approved by the tax authorities as an eligible undertaking as defined under Section 80IA of the India Income Tax Act.
As at 31 March 2015, the application for deduction under Section 80IA by Ascendas IT Park (Chennai) Limited is
pending approval by the tax authorities and the cumulative potential tax benefit is estimated to be INR 740 million
(equivalent to $16,354,000) (2014: INR 586 million which is equivalent to $12,247,000).
4.
Interest income
Group
2015
2014
$'000
$'000
Interest income
– Financial institutions
5,740
3,970
– Investment in available-for-sale financial assets
6,202
4,545
– Others
1,678
857
13,620
9,372
