Page 120 - Index

Notes
to the Consolidated Financial Statements for the year ended 31 March 2022
118
Annual Report 2021-22
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 amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the inception date of the lease along with any initial direct costs, restoration obligations and lease incentives received.
Subsequently, the right-of-use assets is measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The groupt applies Ind AS 36 to determine whether a ROU asset is impaired and accounts for any identified impairment loss as described in the accounting policy 2.10 on “Impairment of non-financial assets”.
The lease liability is initially measured at present value of the lease payments that are not paid at that date.
The interest cost on lease liability is expensed in the Statement of Profit and Loss, unless eligible for capitalization as per accounting policy 2.9 on “Borrowing costs”.
Lease liability and ROU asset have been separately presented in the financial statements and lease payments have been classified as financing cash flows.
ii) As a Lessor
A lease is classified at the inception date as a finance lease or an operating lease.
a) Finance leases
A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is classified as a finance lease.
Net investment in leased assets is recorded at the lower of the fair value of the leased property and the present value of the minimum lease payments as Lease Receivables under current and non-current other financial assets.
The interest element of lease is accounted in the Statement of Profit and Loss over the lease period based on a pattern reflecting a constant periodic rate of return on the net investment.
b) Operating leases
An operating lease is a lease other than a finance lease. Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
For operating leases, the asset is capitalized as property, plant and equipment and depreciated over its economic life. Rental income from operating lease is recognized over the term of the arrangement.
2.14 Employee benefits
Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment.
Short-term employee benefits are employee benefits (other than termination benefits) that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service.
Employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided
2.15 Financial Instruments
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.
Financial Assets
Classification
The group classifies its financial assets in the following categories:
• at amortised cost,
• at fair value through other comprehensive income
The classification depends on the following:
• the entity’s business model for managing the financial assets and
• the contractual cash flow characteristics of the financial asset
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair