Page 288 - Tata Chemical Annual Report_2022-2023

Integrated Annual Report 2022-23 01-83 84-192 193-365
Integrated Report
differences are re-attributed to NCI and are not Measurement period adjustments are adjustments 2.9 Property, plant and equipment
recognised in the Consolidated Statement of Profit that arise from additional information during the
and Loss. For all other partial disposal (i.e. partial ‘measurement period’ (which cannot exceed one
disposals of joint arrangements that do not result in year from the acquisition date) about facts and
the Group losing significant influence or joint control), circumstances that existed at the acquisition date.
the proportionate share of the accumulated exchange
differences is reclassified to the Consolidated The subsequent accounting for changes in the fair value
Statement of Profit and Loss. of the contingent consideration that do not qualify
as the measurement period adjustments depends
2.7 Business combinations on how the contingent consideration is classified.
The Group accounts for its business combinations Contingent consideration that is classified as equity is
under acquisition method of accounting. Acquisition not remeasured at subsequent reporting dates and its
related costs are recognised in the Consolidated subsequent settlement is accounted for within equity.
Statement of Profit and Loss as incurred. The Contingent consideration that is classified as an asset
acquiree’s identifiable assets, liabilities and contingent or a liability is remeasured at fair value at subsequent
liabilities that meet the condition for recognition are reporting dates with the corresponding gain or loss
recognised at their fair values at the acquisition date being recognised in profit or loss.
except deferred tax assets or liabilities, and assets or
liabilities related to employee benefit arrangements, When a business combination is achieved in stages,
which are recognised and measured in accordance the Group’s previously held equity interest in the
with Ind AS 12- Income taxes and Ind AS 19-Employee acquiree is remeasured to its acquisition-date fair
benefits, respectively. value and the resulting gain or loss, if any, is recognised
in profit or loss. Amounts arising from interests in
Goodwill is measured as the excess of the sum of the the acquiree prior to the acquisition date that have
consideration transferred, the amount of NCI in the previously been recognised in Other Comprehensive
aquiree, and the fair value of acquirer’s previously Income are reclassified to profit or loss where such
held equity instrument in the aquiree (if any) over treatment would be appropriate if that interest were
the net of acquisition date fair value of identifiable disposed off.
assets acquired and liabilities assumed. Where the fair
value of identifiable assets and liabilities exceed the If the initial accounting for a business combination
cost of acquisition, after reassessing the fair values of is incomplete by the end of the reporting period in
the net assets and contingent liabilities, the excess is which the combination occurs, the Group reports
recognised as capital reserve. provisional amount for the items for which the
accounting is incomplete. Those provisional amount
The interest of non-controlling shareholders is are adjusted during the measurement period, or
initially measured either at fair value or at the NCI’s additional assets or liabilities are recognised, to
proportionate share of the acquiree’s identifiable net reflect new information obtained about facts and
assets. The choice of measurement basis is made on circumstances that existed at the acquisition date
an acquisition-by-acquisition basis. that, if known, would have affected the amount
recognised at that date.
When the consideration transferred by the Group in
a business combination includes assets or liabilities 2.8 Changes in the proportion held by NCI
resulting in a contingent consideration arrangement, Changes in the proportion of the equity held by
such contingent consideration, on the acquisition NCI are accounted for as equity transactions. The
date, is measured at fair value and included as a carrying amount of the controlling interests and NCI
part of the consideration transferred in a business are adjusted to reflect the changes in their relative
combination. Changes in the fair value of the interests in the subsidiaries. Any difference between
contingent consideration that qualify as measurement the amount by which the NCI are adjusted and the
period adjustments, are adjusted retrospectively, fair value of the consideration paid or received is
with corresponding adjustments against goodwill or recognised directly in equity and attributed to owners
capital reserve as the case may be. of the Group.
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Statutory Reports Financial Statements
Consolidated
their estimated useful lives. However, leasehold
An item of property, plant and equipment (‘PPE’) is improvements are depreciated on a straight-line
recognised as an asset if it is probable that the future method over the shorter of their respective useful
economic benefits associated with the item will flow lives or the tenure of the lease arrangement. Freehold
to the Group and its cost can be measured reliably. land is not depreciated.
These recognition principles are applied to the costs
incurred initially to acquire an item of PPE, to the pre- Schedule II to the Act prescribes the useful lives for
operative and trial run costs incurred (net of sales), if various class of assets. For certain class of assets,
any and also to the costs incurred subsequently to based on technical evaluation and assessment,
add to, replace part of, or service it and subsequently Management believes that, the useful lives adopted
carried at cost less accumulated depreciation and by it reflect the periods over which these assets are
accumulated impairment losses, if any. expected to be used. Accordingly for those assets,
the useful lives estimated by the management are
The cost of PPE includes interest on borrowings different from those prescribed in the Schedule.
directly attributable to the acquisition, construction Management’s estimates of the useful lives for various
or production of a qualifying asset. A qualifying asset class of PPE are as given below:
is an asset that necessarily takes a substantial period Asset Useful life
of time to be made ready for its intended use or Salt Works, Reservoirs and Pans 1-30 years
sale. Borrowing costs and other directly attributable Plant and Machinery** 1-60 years
cost are added to the cost of those assets until such Traction Lines and Railway Sidings 15 years
time as the assets are substantially ready for their Factory Buildings 5-60 years
intended use, which generally coincides with the Other Buildings 5-60 years
commissioning date of those assets. Water Works 15 years
Furniture and Fittings and Office
The present value of the expected cost for the Equipment (including Computers
decommissioning of an asset after its use is included and Data Processing Equipment) 1-10 years
in the cost of the respective asset if the recognition Vehicles 4-10 years
criteria for a provision is met. Mines and Quarries** 140 years
Machinery spares that meet the definition of PPE are ** Mines and quarries and certain plant and machinery which
are in relation to the USA subsidiaries mine are depreciated
capitalised and depreciated over the useful life of the using the units-of-production method. Approximately
principal item of an asset. 1% (previous year 1%) of plant and machinery and 100%
(previous year 100%) of mines and quarries are depreciated
All other repair and maintenance costs, including using the units-of-production method.
regular servicing, are recognised in the Consolidated
Statement of Profit and Loss as incurred. When a Useful lives and residual values of assets are reviewed
replacement occurs, the carrying value of the replaced at the end of each reporting period.
part is de-recognised. Where an item of property,
plant and equipment comprises major components Losses arising from the retirement of, and gains or
having different useful lives, these components are losses arising from disposal/adjustments of PPE are
accounted for as separate items. recognised in the Consolidated Statement of Profit
and Loss.
PPE acquired and put to use for projects are capitalised
and depreciation thereon is included in the project 2.10 Intangible assets
cost till the project is ready for commissioning. Goodwill
Goodwill represents the cost of the acquired
Depreciation methods, estimated useful lives and businesses in excess of the fair value of identifiable
residual value tangible and intangible net assets purchased. Goodwill
Depreciation on PPE (except leasehold improvements) is not amortised; however it is tested annually for
is calculated using the straight-line method to impairment and carried at cost less accumulated
allocate their cost, net of their residual values, over impairment losses, if any. The gains / (losses) on the
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