Page 140 - Kolte Patil AR 2019-20
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Notes forming part of the standalone financial statements

                 Investment in Subsidiaries:
                 The entire carrying amount of the investment is tested for impairment in accordance with Ind AS 36 Impairment of Assets as a
                 single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying
                 amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss
                 is recognised in accordance with Ind AS 36 to the extent that the recoverable amount of the investment subsequently increases.
          R.   Provisions, Contingent Liabilities and Contingent Assets:
              A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of
              resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement
              benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at
              the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent
              liabilities are disclosed in the Notes. Contingent assets are not recognised in the financial statements but are disclosed.

          S.   Operating Cycle:
              Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in
              cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets
              and liabilities as current and non-current.
          T.   Financial Instruments:
              Initial recognition
              Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.

              Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or
              issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are
              added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.
              Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are
              recognised in profit or loss.
              Effective interest method:

              The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income
              over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all
              fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or
              discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on
              initial recognition.
              Financial assets at amortised cost:
              Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to
              hold these 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.
              Financial assets at fair value:
              Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-
              measurement recognised as profit or loss.
              Financial liabilities and equity instruments:
              Financial  liabilities  and  equity  instruments  issued  by  the  Company  are  classified  according  to  the  substance  of  the  contractual
              arrangements entered into and the definitions of a financial liability and an equity instrument.
              Financial liabilities are measured at amortised cost using the effective interest method.
              Financial labilities at FVTPL are stated at fair value, with gains and losses arising on re-measurement recognised in Statement of profit and loss.

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