By Himanshu V. Kishnadwala
Chartered Accountant
Disclosures related to investment property
TATA CHEMICALS LTD. (31ST MARCH, 2021)
From Notes to financial results
(consolidated)
|
Rs. in crores
|
|
|
Land
|
Building
|
Total
|
|
Gross Block
|
|
|
|
|
Balance as at 1st April, 2019
|
3.58
|
26.52
|
30.10
|
|
Disposals
|
*
|
(3.22)
|
(3.22)
|
|
Reclassified to assets held for sale (Note 26)
|
(2.45)
|
–
|
(2.45)
|
|
Balance as at 31st March, 2020
|
1.13
|
23.30
|
24.43
|
|
Transferred from Property, Plant and Equipment (Note 4)
|
15.47
|
24.34
|
39.81
|
|
Balance as at 31st March,
2021
|
16.60
|
47.64
|
64.24
|
|
Accumulated depreciation
|
|
|
|
|
Balance as at 1st April, 2019
|
–
|
2.89
|
2.89
|
|
Depreciation for the year
|
–
|
0.66
|
0.66
|
|
Disposals
|
–
|
(0.36)
|
(0.36)
|
|
Balance as at 31st March, 2020
|
–
|
3.19
|
3.19
|
|
Depreciation for the year
|
–
|
0.61
|
0.61
|
|
Transferred from Property, Plant and Equipment (Note 4)
|
–
|
5.58
|
5.58
|
|
Balance as at 31st March,
2021
|
–
|
9.38
|
9.38
|
|
Net Block as at 31st March, 2020
|
1.13
|
20.11
|
21.24
|
|
Net Block as at 31st
March, 2021
|
16.60
|
38.26
|
54.86
|
|
* value below Rs, 50,000
|
|
|
|
Footnotes:
a) Disclosures relating to fair valuation of investment property
Fair value of the above investment property as at 31st March, 2021 is Rs. 279.74 crores (2020: Rs. 139.00 crores) based on external valuation.
Fair value hierarchy
The fair value of investment property has been determined by external independent property valuers, having appropriate recognised professional qualification and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a level 3 fair value based on the inputs to the valuation techniques used.
Description of valuation technique used
The Group obtains independent valuations of its investment property after every three years. The fair value of the investment property has been derived using the Direct Comparison Method. The direct comparison approach involves a comparison of the investment property to similar properties that have actually been sold at arm’s length distance from investment property or are offered for sale in the same region. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market, and is particularly useful in estimating the value of the land and properties that are typically traded on a unit basis. This approach leads to a reasonable estimation of the prevailing price. Given that the comparable instances are located in close proximity to the investment property, these instances have been assessed for their locational comparative advantages and disadvantages while arriving at the indicative price assessment for investment property.
b) The Group has not earned any material rental income on the above properties.
TATA CONSUMER PRODUCTS LTD. (31ST MARCH, 2021)
From Notes to financial results (consolidated)
4. Investment property
Investment properties of the Group comprise of land, commercial and residential property.
|
Rs.
in crores
|
|
|
2021
|
2020
|
|
Cost
Opening balance
Disposal
Transfer
|
55.04
(17.97)
–
|
56.06
–
(1.02)
|
|
Closing balance
|
37.07
|
55.04
|
|
Accumulated depreciation
Opening balance
Depreciation for the year
Deductions / Adjustments
|
5.00
0.89
(1.99)
|
4.46
0.91
(0.37)
|
|
Closing balance
|
3.90
|
5.00
|
|
Net Carrying Value
|
33.17
|
50.04
|
Amount recognised in the statement of profit and loss for investment property
Rs. in
crores
|
|
2021
|
2020
|
|
Rental income
Direct operating expenses
Profit from investment property before depreciation
Depreciation for the year
Profit / (loss) from investment property
|
3.81
(0.60)
3.21
(0.89)
2.32
|
3.14
(0.34)
2.80
(0.91)
1.89
|
Fair value
Fair valuation of the land is Rs. 96.14 crores and of the buildings is Rs. 32.03 crores based on valuation (sales comparable approach – level 2) by recognised independent valuers.
Leasing arrangements
For investment property leased to tenants under long-term operating lease, the minimum lease payment receivable under non-cancellable operating leases is:
Rs. in crores
|
|
2021
|
2020
|
|
Within one year
Later than one year but not later than five years
|
2.48
5.44
|
3.93
8.26
|
