Page 289 - Tata Chemical Annual Report_2022-2023

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

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

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