Investor Presentaiton
MRP
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
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 in the country of domicile of these leases. Lease liabilities
are remeasured with a corresponding adjustment to the related
right of use asset if the Group 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 Balance Sheet and lease payments have been classified
as financing cash flows.
The Group as a lessor
Leases for which the Group 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
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8)
lessee, the contract is classified as a finance lease. All other
leases are classified as operating leases.
When the Group 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 group will
comply with the conditions attached to them, and (ii) the
grant/subsidy will be received.
When the grant or subsidy relates to revenue, it is recognised
as income on a systematic basis in the Consolidated Statement
of Profit and Loss over the periods necessary to match them
with the related costs, which they are intended to compensate.
Where the grant relates to an asset, it is recognised as income in
equal amounts over the expected useful life of the related asset
or by deducting the grant in arriving at the carrying amount of
the assets. Where the assets have been fully depreciated with
no future related cost, the grant is recognised in profit or loss.
When loans or similar assistance are provided by governments
or related institutions, with an interest rate below the current
applicable market rate, the effect of this favourable interest
is regarded as a government grant. The loan or assistance
is initially recognised and measured at fair value and the
government grant is measured as the difference between the
initial carrying value of the loan and the proceeds received.
The loan is subsequently measured as per the accounting
policy applicable to financial liabilities in respect of loans/
assistance received subsequent to the date of transition.
Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised when there is a present legal
or constructive obligation as a result of a past event and it
is probable (i.e. more likely than not) that an outflow of
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