Investor Presentaiton
MRP
6)
Leases:
The Company has applied IND AS 116 using the modified
retrospective approach.
The Company as a lessee
The Company's lease asset classes primarily consist of leases
for land, buildings and vehicles. The Company assesses
whether a contract contains a lease, at inception of a contract.
A contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period
of time in exchange for consideration. To assess whether a
contract conveys the right to control the use of an identified
asset, the Company assesses whether: (i) the contract involves
the use of an identified asset (ii) the Company has substantially
all of the economic benefits from use of the asset through the
period of the lease and (iii) the Company has the right to direct
the use of the asset.
At the date of commencement of the lease, the Company
recognizes a right-of-use asset ("ROU") and a corresponding
lease liability for all lease arrangements in which it is a lessee,
except for leases with a term of twelve months or less (short-
term leases) and low value leases. For these short-term and
low value leases, the Company recognizes the lease payments
as an operating expense on a straight-line basis over the term
of the lease.
Certain lease arrangements include the options to extend or
terminate the lease before the end of the lease term. ROU
assets and lease liabilities includes these options when it is
reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or prior to the commencement
date of the lease plus any initial direct costs less any lease
incentives. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement
date on a straight-line basis over the shorter of the lease term
and useful life of the underlying asset. Right-of-use assets are
7)
evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not
be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost to
sell and the value-in-use) is determined on an individual asset
basis unless the asset does not generate cash flows that are
largely independent of those from other assets. In such cases,
the recoverable amount is determined for the Cash Generating
Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the
present value of the future lease payments. The lease payments
are discounted using the interest rate implicit in the lease or,
if not readily determinable, using the incremental borrowing
rates. Lease liabilities are remeasured with a corresponding
adjustment to the related right-of-use asset if the Company
changes its assessment if whether it will exercise an extension
or a termination option.
Lease liability and ROU asset have been separately presented
in the financial statements and lease payments have been
classified as financing cash flows.
The Company as a lessor
Leases for which the Company is a lessor is classified as a
finance or operating lease. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to
the lessee, the contract is classified as a finance lease. All other
leases are classified as operating leases.
When the Company is an intermediate lessor, it accounts for
its interests in the head lease and the sublease separately.
The sublease is classified as a finance or operating lease by
reference to the right-of-use asset arising from the head lease.
For operating leases, rental income is recognized on a straight-
line basis over the term of the relevant lease.
Government Grants:
Grants and subsidies from the government are recognised
when there is reasonable assurance that (i) the Company will
comply with the conditions attached to them, and (ii) the
grant/subsidy will be received.
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