Page 221 - Tata Chemical Annual Report_2022-2023

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

As at the year end, there were no designated Financial assets (other than at fair value) for in the Standalone Statement of Profit and Loss. An 2.14.3 Dividend income
accounting hedges. The Company assesses on a forward looking basis the impairment loss recognised for goodwill is not reversed Dividend income is accounted for when
expected credit losses associated with its assets carried at in a subsequent period. Company’s right to receive the income
The entire fair value of a hedging derivative is amortised cost and debt instruments carried at FVTOCI. is established.
classified as a Non-current asset or liability when The impairment methodology applied depends on 2.13 Inventories
the remaining maturity of the hedged item whether there has been a significant increase in credit Inventories are valued at lower of cost (on weighted 2.14.4 Insurance claims
exceeds 12 months; it is classified as a current risk. In respect of trade receivables the Company average basis) and net realisable value after providing Insurance claims are accounted for on the basis
asset or liability when the remaining maturity of applies the simplified approach permitted by Ind AS for obsolescence and other losses, where considered of claims admitted and to the extent that there
the hedged item does not exceed 12 months. 109 - Financial Instruments, which requires expected necessary on an item-by-item basis. Cost includes all is no uncertainty in receiving the claims.
lifetime losses to be recognised upon initial recognition charges in bringing the goods to their present location
2.11.5 Financial guarantee contracts
of the receivables. For all other financial assets, expected and condition, including other levies, transit insurance 2.15 Leases
Financial guarantee contracts are recognised credit losses are measured at an amount equal to the and receiving charges. Work-in-progress and finished The Company assesses whether a contract contains a
as a financial liability at the time of issuance of 12-months expected credit losses or at an amount equal goods include appropriate proportion of overheads and, lease, at inception of a contract. A contract is, or contains,
guarantee. The liability is initially measured at fair to the life time expected credit losses if the credit risk where applicable, taxes and duties. Net realisable value a lease if the contract conveys the right to control the
value and is subsequently measured at the higher on the financial asset has increased significantly since is the estimated selling price in the ordinary course of use of an identified asset for a define period of time in
of the amount of loss allowance determined, initial recognition. The gross carrying amount of a business, less the estimated costs of completion and the exchange for consideration. To assess whether a contract
or the amount initially recognised less, the financial asset is written off (either partially or in full) to estimated costs necessary to make the sale. conveys the right to control the use of an identified
cumulative amount of income recognised. the extent that there is no realistic prospect of recovery. assets, the Company assesses whether: (i) the contact
Financial assets that are written off could still be subject 2.14 Revenue recognition involves the use of an identified asset (ii) the Company
2.11.6 Offsetting of financial instruments to enforcement activities in order to comply with the 2.14.1 Sale of goods has substantially all of the economic benefits from use
Financial assets and financial liabilities are offset Company's procedures. Revenue is recognised upon transfer of control of of the asset through the period of the lease and (iii) the
when the Company has a legally enforceable promised goods to customers in an amount that Company has the right to direct the use of the asset.
right (not contingent on future events) to off- PPE, CWIP, intangible assets and goodwill reflects the consideration which the Company
set the recognised amounts either to settle on For the purpose of assessing impairment, the smallest expects to receive in exchange for those goods. As a lessee, The Company recognises a right-of-use
a net basis, or to realise the assets and settle the identifiable group of assets that generates cash inflows asset and a lease liability at the lease commencement
liabilities simultaneously. from continuing use that are largely independent of Revenue from the sale of goods is recognised date. The right¬-of-use asset is initially measured at
the cash inflows from other assets or groups of assets at the point in time when control is transferred cost, which comprises the initial amount of the lease
2.11.7 Fair value of financial instruments is considered as a cash generating unit (“CGU”). The to the customer which is usually on dispatch liability adjusted for any lease payments made at or
In determining the fair value of its financial carrying values of assets / CGU at each balance sheet / delivery of goods, based on contracts with before the commencement date, plus any initial direct
instruments, the Company uses a variety of date are reviewed to determine whether there is the customers. costs incurred and an estimate of costs to dismantle and
methods and assumptions that are based on any indication that an asset may be impaired. If any remove the underlying asset or to restore the underlying
market conditions and risks existing at each indication of such impairment exists, the recoverable Revenue towards satisfaction of performance asset or the site on which it is located, less any lease
reporting date. The methods used to determine amount of such assets / CGU is estimated and in case obligation is measured based on the transaction incentives received.
fair value include discounted cash flow analysis, the carrying amount of these assets exceeds their price, which is the consideration, adjusted for
available quoted market prices and dealer recoverable amount, an impairment loss is recognised volume discounts, price concessions, incentives, The right-of-use asset is subsequently depreciated using
quotes. All methods of assessing fair value result in the Standalone Statement of Profit and Loss. The and returns, if any, as specified in the contracts the straight-line method from the commencement date
in general approximation of value. recoverable amount is the higher of the net selling with the customers. Revenue excludes taxes to the earlier of the end of the useful life of the right-
price and their value in use. Value in use is arrived at by collected from customers on behalf of the of-use asset or the end of the lease term. The estimated
2.12 Impairment discounting the future cash flows to their present value government. Accruals for discounts/incentives useful lives of right-of-use assets are determined on
Investments in subsidiaries and joint ventures based on an appropriate discount factor. Assessment and returns are estimated (using the most likely the same basis as those of property and equipment. In
is also done at each balance sheet date as to whether method) based on accumulated experience addition, the right-of-use asset is periodically reduced
The Company reviews its carrying value of investment there is indication that an impairment loss recognised for
in subsidiaries and joint ventures carried at cost (net an asset in prior accounting periods no longer exists or and underlying schemes and agreements with by impairment losses, if any, and adjusted for certain
of impairment, if any) when there is indication for may have decreased, consequent to which such reversal customers. Due to the short nature of credit remeasurements of the lease liability.
impairment. If the recoverable amount is less than its of impairment loss is recognised in the Standalone period given to customers, there is no financing The lease liability is initially measured at the present
carrying amount, the impairment loss is accounted for Statement of Profit and Loss. component in the contract. value of the lease payments that are not paid at the
in the Standalone Statement of Profit and Loss. The 2.14.2 Interest income commencement date, discounted using the interest
recoverable amount requires estimates of operating The Company reviews its carrying value of goodwill rate implicit in the lease or, if that rate cannot be readily
margin, discount rate, future growth rate, terminal annually, or more frequently when there is indication For all debt instruments measured either at determined, the Company's incremental borrowing rate.
values, etc. based on management’s best estimate. amortised cost or at FVTOCI, interest income is
for impairment. If the recoverable amount is less than recorded using the EIR method. For leases with reasonably similar characteristics, the
its carrying amount, the impairment loss is accounted Company, on a lease by lease basis, may adopt either the

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