Page 136 - Kolte Patil AR 2019-20
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Notes forming part of the standalone financial statements

              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 the 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.
              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.
              For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
              Effective April 1, 2019, the Company adopted Ind AS 116 and applied the standard to all lease contracts existing on April 1, 2019
              using the modified retrospective method. On the date of initial application the Company has recognised equivalent lease liability
              and right of use asset without impacting opening reserves. Comparatives as at and for the year ended March 31, 2019 have not been
              retrospectively adjusted and therefore will continue to be reported as per the accounting policies included as part of the Company’s
              Annual Report for year ended March 31, 2019.
              On transition, the adoption of the new standard resulted in recognition of “Right of Use” asset of INR 2,190 Lakhs and “Lease liability” of
              the same amount.
              The following is the summary of practical expedients elected on initial application:
              1.  Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date
              2.   Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the
                 date of initial application
              3.  Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.
              4.   Applied the practical expedient to grandfather the assessment of which transactions are leases. Accordingly, Ind AS 116 is applied
                 only to contracts that were previously identified as leases under Ind AS 17.
              The difference between the lease obligation recorded as at March 31, 2019 under Ind AS 17 disclosed under Note 37 of the Annual
              Report for year ended March 31, 2019 and the value of the lease liabilities as at April 1, 2019 is primarily on account of inclusion of
              extension and termination options reasonably certain to be exercised, in measuring the lease liability in accordance with Ind AS 116
              and discounting the lease liabilities to the present value under Ind AS 116.
              The weighted average incremental borrowing rate applied to lease liabilities as at April 1, 2019 is 12%.
          I.   Revenue Recognition:
              i.   The Company develops and sells residential and commercial properties. Revenue from contracts is recognised when control over
                 the property has been transferred to the customer. An enforceable right to payment does not arise until the development of the
                 property is completed. Therefore, revenue is recognized at a point in time, when:

                 •   the Company has transferred to the customer all significant risks and rewards of ownership and the Company retains no effective
                  control of the real estate unit to a degree usually associated with ownership;
                 •   The Company has handed over physical possession of the real estate unit to the customer or deemed possession based on the
                  contract with the customer;
                 •   No significant uncertainty exists regarding the amount of consideration that will be derived from the sale of real estate unit; and

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