Annual Report 2016-17

Notes forming part of consolidated onancial statements (Contd.)

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Annual Report 2016-17

Gains or losses on liabilities held for trading are recognized in statement of proot and loss. Fair value gains

or losses on liabilities designated as FVTP/ attributable to changes in own credit risk are recognized in other

comprehensive income. All other changes in fair value of liabilities designated as FVTP/ are recognized in the

statement of proot and loss. The Group has not designated any onancial liability as at FVTP/.

Derecognition

The Group derecognises onancial liabilities when the Group’s obligations are discharged, cancelled or

have expired. The difference between the carrying amount of the onancial liability derecognised and the

consideration paid and payable is recognised in proot or loss.

(h) Impairment

i) Financial assets

The Group applies Expected Credit /oss (EC/) model for measurement and recognition of impairment loss on

onancial assets measured at amortized cost and onancial assets that are debts instruments and are measured at

fair value through other comprehensive income (FVTOCI). EC/ is the difference between contractual cash pows

that are due and the cash pows that the Group expects to receive, discounted at the original effective interest rate.

For trade receivables, the Group recognizes impairment loss allowance based on lifetime EC/ at each reporting

date, right from its initial recognition. For other onancial assets, the Group determines whether there has been a

signiocant increase in the credit risk since initial recognition. If credit risk has not increased signiocantly, 12 month

EC/ is used to provide for impairment loss. However, if credit risk has increased signiocantly, lifetime EC/ is used.

ii) Non-onancial assets

The carrying amounts of Property, Plant and Equipment and Goodwill are reviewed at each balance sheet date

or whenever there is any indication of impairment based on internal/external factors. If any indications exist, the

Group estimates the asset’s recoverable amount.

Recoverable amount of intangible under development that is not yet available for use is estimated at least at each

onancial year end even if there is no indication that the asset is impaired.

An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount.

The recoverable amount is the greater of the asset’s fair value and its value in use. In assessing value in use, the

estimated future cash pows are discounted to their present value using a pre-tax discount rate that repects current

market assessments of the time value of money and risks specioc to the asset.

(i) Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of

borrowings.

Borrowing costs directly attributable to the acquisition, construction or development of an asset that necessarily

takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the

respective asset. All other borrowing costs are expensed in the year they occur.

(j) Leases

Where the Group is a lessee

/eases, where the lessor effectively retains substantially all the risks and beneots of ownership of the leased item,

are classioed as operating leases.

Operating lease payments are recognized as an expense in the statement of proot and loss as per the terms of the

lease agreements.

(k) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable taking into account the amount

of any trade discounts and volume rebates allowed by the Group. Revenue is recognized to the extent it is probable

that the economic beneots will pow to the Group and the revenue can be reliably measured. The following specioc

recognition criteria must also be met before revenue is recognized: