Investor Presentaiton
MRP
Level 1-Quoted (unadjusted) market prices in active markets
for identical assets or liabilities.
Level 2
Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable.
Level 3
Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable.
Financial assets and financial liabilities that are recognised
at fair value on a recurring basis, the Company determines
whether transfers have occurred between levels in the
hierarchy by re-assessing categorization at the end of each
reporting period.
21) Financial Instruments:
A)
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity. The Company recognises a
financial asset or financial liability in its balance sheet only
when the entity becomes party to the contractual provisions of
the instrument.
Financial Assets
A financial asset inter-alia includes any asset that is cash,
equity instrument of another entity or contractual rights to
receive cash or another financial asset or to exchange financial
asset or financial liability under condition that are potentially
favourable to the Company.
Investments in subsidiaries
Investments in equity shares of subsidiaries are carried at cost
less impairment. Impairment is provided for on the basis
explained in Paragraph (4) of Note C above.
Financial assets other than investment in subsidiaries
Financial assets of the Company comprise trade receivable,
cash and cash equivalents, Bank balances, Investments
in equity shares of companies other than in subsidiaries,
Investment in units of Mutual Funds, loans/Debt instrument/
advances to employee related parties / others, security
deposit, claims recoverable etc.
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in
the case of financial assets not recorded at fair value through
profit or loss, transaction costs that are attributable to the
acquisition of the financial asset. However, Trade receivables
that do not contain a significant financing component are
measured at Transaction Price. Transaction costs of financial
assets carried at fair value through profit or loss are expensed
in Statement of Profit and Loss. Where transaction price is not
the measure of fair value and fair value is determined using
a valuation method that uses data from observable market,
the difference between transaction price and fair value is
recognised in Statement of Profit and Loss on the date of
recognition if the fair value pertains to Level 1 or Level 2 of the
fair value hierarchy and in other cases spread over life of the
financial instrument using effective interest method.
Subsequent measurement
For purposes of subsequent measurement financial assets are
classified in three categories:
•
Financial assets measured at amortized cost
-
Financial assets at fair value through OCI Debt
Instruments
Financial assets at fair value through profit or loss
Financial assets measured at amortized cost
Financial assets are measured at amortized cost if the financials
asset is held within a business model whose objective is to hold
financial assets in order to collect contractual cash flows and
the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. These financials
assets are amortized using the effective interest rate (EIR)
method, less impairment. Amortized cost is calculated by taking
into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortization
is included in finance income in the statement of profit and
loss. The losses arising from impairment are recognised in the
statement of profit and loss in finance costs.
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