Page 215 - Tata Chemical Annual Report_2022-2023

Integrated Annual Report 2022-23 01-83 84-192 193-365
Integrated Report Statutory Reports Financial Statements
Standalone

2.3.3 Employee benefit obligations On initial recognition, all foreign currency components having different useful lives, these 2.6 Intangible assets
Employee benefit obligations are determined transactions are recorded at exchange rates components are accounted for as separate items. Intangible assets comprise software licenses,
using actuarial valuations. An actuarial valuation prevailing on the date of the transaction. product registration fees and rights to use
involves making various assumptions that may Monetary assets and liabilities, denominated PPE acquired and put to use for projects are railway wagon.
differ from actual developments. These include in a foreign currency, are translated at the capitalised and depreciation thereon is included
the estimation of the appropriate discount rate, exchange rate prevailing on the balance sheet in the project cost till the project is ready Intangible assets are measured on initial
future salary increases and mortality rates. Due date and the resultant exchange gains or losses for commissioning. recognition at cost and subsequently are carried
to the complexities involved in the valuation are recognised in the Standalone Statement of at cost less accumulated amortisation and
and its long-term nature, the employee benefit Profit and Loss. Depreciation methods, estimated useful lives accumulated impairment losses, if any.
obligation is highly sensitive to changes in these and residual value
assumptions. All assumptions are reviewed at 2.5 Property, plant and equipment Depreciation on PPE (except leasehold The intangible assets with a finite useful life
each reporting date. An item of property, plant and equipment (‘PPE’) improvements) is calculated using the straight- are amortised using straight line method over
is recognised as an asset if it is probable that the line method to allocate their cost, net of their their estimated useful lives. The management’s
2.3.4 Provisions and contingencies future economic benefits associated with the residual values, over their estimated useful estimates of the useful lives for various class of
From time to time, the Company is subject to item will flow to the Company and its cost can be lives. However, leasehold improvements are Intangibles are as given below:
legal proceedings, the ultimate outcome of measured reliably. These recognition principles depreciated on a straight-line method over the Asset Useful life
each being subject to uncertainties inherent are applied to the costs incurred initially to shorter of their respective useful lives or the Computer software 5 years
in litigation. A provision for litigation is made acquire an item of PPE, to the pre-operative and tenure of the lease arrangement. Freehold land Other intangible assets 4- 20 years
when it is considered probable that a payment trial run costs incurred (net of sales), if any and is not depreciated.
will be made and the amount can be reasonably also to the costs incurred subsequently to add The estimated useful life is reviewed annually by
estimated. Significant judgement is required to, replace part of, or service it and subsequently Schedule II to the Act prescribes the useful the management.
when evaluating the provision including, the carried at cost less accumulated depreciation and lives for various class of assets. For certain class
probability of an unfavourable outcome and accumulated impairment losses, if any. of assets, based on technical evaluation and Gains or losses arising from the retirement or
the ability to make a reasonable estimate of the assessment, Management believes that the disposal of an intangible asset are determined
amount of potential loss. Litigation provisions are The cost of PPE includes interest on borrowings useful lives adopted by it reflect the periods as the difference between the net disposal
reviewed at each accounting period and revisions directly attributable to the acquisition, over which these assets are expected to be used. proceeds and the carrying amount of the asset
made for the changes in facts and circumstances. construction or production of a qualifying asset. Accordingly for those assets, the useful lives and recognised as income or expense in the
Contingent liabilities are disclosed in the notes A qualifying asset is an asset that necessarily estimated by the management are different from Standalone Statement of Profit and Loss.
forming part of the Standalone Financial takes a substantial period of time to be made those prescribed in the Schedule. Management’s
Statements. Contingent assets are not disclosed ready for its intended use or sale. Borrowing estimates of the useful lives for various class of 2.7 Capital work-in-progress (‘CWIP’) and
in the Standalone Financial Statements unless an costs and other directly attributable cost are PPE are as given below: intangible assets under development
inflow of economic benefits is probable. added to the cost of those assets until such time
as the assets are substantially ready for their Asset Useful life Projects under commissioning and other CWIP/
2.3.5 Impairment of investment in subsidiaries and intended use, which generally coincides with the Salt Works, Water works, 1-30 years intangible assets under development are carried
goodwill commissioning date of those assets. Reservoirs and Pans at cost, comprising direct cost, related incidental
The Company reviews its carrying value of The present value of the expected cost for the Plant and Machinery 1-60 years expenses and attributable borrowing cost.
investment in subsidiaries and goodwill carried decommissioning of an asset after its use is Traction Lines and Railway Sidings 15 years Subsequent expenditures relating to property,
at cost (net of impairment, if any) annually, or included in the cost of the respective asset if the Factory Buildings 5-60 years plant and equipment are capitalised only when
more frequently when there is indication for recognition criteria for a provision is met. Other Buildings 5-60 years it is probable that future economic benefit
impairment. If the recoverable amount is less Furniture and Fittings and Office 1-10 years associated with these will flow to the Company
than its carrying amount, the impairment loss Machinery spares that meet the definition of PPE Equipment (including Computers and the cost of the item can be measured reliably.
is accounted for in the Standalone Statement of are capitalised and depreciated over the useful and Data Processing Equipment)
Profit and Loss. Vehicles 4-10 years
life of the principal item of an asset. Advances given to acquire property, plant and
equipment are recorded as non-current assets
2.4 Foreign currency translation Useful lives and residual values of assets are
All other repair and maintenance costs, including and subsequently transferred to CWIP on
The functional currency of the Company (i.e. the regular servicing, are recognised in the Standalone reviewed at the end of each reporting period. acquisition of related assets.
currency of the primary economic environment Statement of Profit and Loss as incurred. When
in which the Company operates) is the Indian a replacement occurs, the carrying value of the Losses arising from the retirement of, and gains or 2.8 Investment property
Rupee in (`). The financial statements have been replaced part is de-recognised. Where an item of losses arising from disposal/adjustments of PPE Investment properties are land and buildings
rounded off to the nearest ` crore. property, plant and equipment comprises major are recognised in the Standalone Statement of that are held for long term lease rental yields
Profit and Loss.

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