Page 165 - Tata_Chemicals_yearly-reports-2020-2021

Integrated Report Statutory Reports Financial Statements
1-59 60-146 Standalone

Notes forming part of the Standalone Financial Statements

1. Corporate information 2.3 Critical accounting estimates, assumptions
and judgements
Tata Chemicals Limited (the ‘Company’) is a public limited
company domiciled in India. Its shares are listed on two The preparation of the Standalone Financial
stock exchanges in India; the Bombay Stock Exchange (‘BSE’) Statements requires management to make
and the National Stock Exchange (‘NSE’). The Company is estimates, assumptions and judgments that affect
a diversified business dealing in basic chemistry products the reported balances of assets and liabilities
and specialty products. The Company has a global and disclosures as at the date of the Standalone
presence with key subsidiaries in United States of America Financial Statements and the reported amounts of
(‘USA’), United Kingdom (‘UK’) and Kenya that are engaged income and expense for the periods presented.
in the manufacture and sale of soda ash, industrial salt and The estimates and associated assumptions are
related products. During the previous year, the Company based on historical experience and other factors
had demerged consumer product business as per Scheme that are considered to be relevant. Actual results
of Arrangement amongst Tata Consumer Products Limited may differ from these estimates considering
(formerly Tata Global Beverages Limited) (“TCPL”) and the different assumptions and conditions.
Company and their respective shareholders and creditors
(note 34). Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to
2. Summary of basis of compliance, basis accounting estimates are recognised in the period
of preparation and presentation, critical in which the estimates are revised and future
accounting estimates, assumptions and periods are affected.
judgements and significant accounting
policies The estimates and assumptions that have a
significant risk of causing a material adjustment to
2.1 Basis of compliance the carrying values of assets and liabilities within
the next financial year are discussed below.
The Standalone Financial Statements comply,
in all material aspects, with Indian Accounting 2.3.1. Deferred income tax assets and liabilities
Standards (‘Ind AS’) notified under Section 133
of the Companies Act, 2013 (‘the Act’ or 'the Significant management judgment is required to
2013 Act') read with Rule 3 of the Companies determine the amount of deferred tax assets that
(Indian Accounting Standards) Rules, 2015 and can be recognised, based upon the likely timing
other relevant provisions of the Act. and the level of future taxable profits.
2.2 Basis of preparation and presentation The amount of total deferred tax assets could
change if management estimates of projected
The Standalone Financial Statements have been future taxable income or if tax regulations undergo
prepared on the historical cost basis, except for a change.
certain financial instruments and defined benefit
plans which are measured at fair value at the end 2.3.2 Useful lives of property, plant and equipment
of each reporting period. Historical cost is generally (‘PPE’) and intangible assets
based on the fair value of the consideration given
in exchange for goods and services. Fair value is Management reviews the estimated useful lives
the price that would be received to sell an asset or and residual value of PPE and Intangibles at the end
paid to transfer a liability in an orderly transaction of each reporting period. Factors such as changes
between market participants at the measurement in the expected level of usage, technological
date. developments and product life-cycle, could
significantly impact the economic useful lives and
All assets and liabilities have been classified as the residual values of these assets. Consequently,
current or non-current as per the Company’s the future depreciation charge could be revised
normal operating cycle and other criteria set out and may have an impact on the profit of the future
in the Schedule III to the Act. years.

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