Page 189 - Tata_Chemicals_yearly-reports-2019-20

Integrated report Statutory reportS Financial StatementS
Standalone

identified asset for a define period of time in The lease liability is measured at amortised cost
exchange for consideration. To assess whether a using the effective interest method.
contract conveys the right to control the use of an
identified assets, the Company assesses whether: The Company has elected not to recognise right
(i) the contact involves the use of an identified of use assets and lease liabilities for short-term
asset (ii) the Company has substantially all of the leases that have a lease term of 12 months or
economic benefits from use of the asset through less and leases of low-value assets. The Company
the period of the lease and (iii) the Company has recognises the lease payments associated with
the right to direct the use of the asset. these leases as an expense on a straight-line basis
over the lease term. The Company applied a single
discount rate to a portfolio of leases of similar
As a lessee, The Company recognises a right
of use asset and a lease liability at the lease assets in similar economic environment with a
commencement date. The right of use asset similar end date.
is initially measured at cost, which comprises Refer note 2.15 Significant accounting policies –
the initial amount of the lease liability adjusted Leases in the Annual report of the Company for
for any lease payments made at or before the the year ended 31 March, 2019, for the policy as
commencement date, plus any initial direct costs per Ind AS 17.
incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the 2.16 Employee benefits plans
underlying asset or the site on which it is located, Employee benefits consist of provident fund,
less any lease incentives received.
superannuation fund, gratuity fund, compensated
absences, long service awards, post-retirement
The right of use asset is subsequently depreciated medical benefits, directors’ retirement obligations
using the straight-line method from the and family benefit scheme.
commencement date to the earlier of the end of
the useful life of the right of use asset or the end of 2.16.1 Post-employment benefit plans
the lease term. The estimated useful lives of right
of use assets are determined on the same basis Defined contribution plans
as those of property and equipment. In addition, Payments to a defined contribution retirement
the right of use asset is periodically reduced by benefit scheme for eligible employees in the form
impairment losses, if any, and adjusted for certain of superannuation fund are charged as an expense
remeasurements of the lease liability. as they fall due. Such benefits are classified as
Defined Contribution Schemes as the Company
The lease liability is initially measured at the does not carry any further obligations, apart from
present value of the lease payments that are not the contributions made.
paid at the commencement date, discounted
using the interest rate implicit in the lease or, if that Defined benefit plans
rate cannot be readily determined, the Company’s Contributions to a Provident Fund are made to
incremental borrowing rate. For leases with Tata Chemicals Limited Employees’ Provident
reasonably similar characteristics, the Company, Fund Trust, administered by the Company, and
on a lease by lease basis, may adopt either the are charged to the Standalone Statement of
incremental borrowing rate specific to the lease or Profit and Loss as incurred. The Trust invests in
the incremental borrowing rate for the portfolio as specific designated instruments as permitted by
a whole. Indian law. The remaining portion is contributed
to the government administered pension fund.
Lease payments included in the measurement of The Company is liable for the contribution and
the lease liability comprise the fixed payments, any shortfall in interest between the amount
including in-substance fixed payments and lease of interest realised by the investments and the
payments in an optional renewal period if the interest payable to members at the rate declared
Company is reasonably certain to exercise an by the Government of India in respect of the Trust
extension option; administered by the Company.

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