Page 125 - Interloop Annual Report 2018-2019

NOTES TO THE UNCONSOLIDATED NOTES TO THE UNCONSOLIDATED

FINANCIAL STATEMENTS FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2019 FOR THE YEAR ENDED JUNE 30, 2019

ECLs are based on the difference between the contractual cash flows due in accordance with the contract and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are
all the cash flows that the Company expects to receive. The shortfall is then discounted at an approximation recognized in the statement of profit or loss when the liabilities are derecognized as well as through the EIR
to the asset’s original effective interest rate. amortization process.

For trade and other receivables, the Company has applied the standard’s simplified approach and has Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs
calculated ECLs based on lifetime expected credit losses. The Company has established a provision matrix that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit
that is based on the Company’s historical credit loss experience, adjusted for forward-looking factors specific or loss.
to the debtors and the economic environment. However, in certain cases, the Company may also consider a
financial asset to be in default when internal or external information indicates that the Company is unlikely to This category generally applies to interest-bearing loans and borrowings.
receive the outstanding contractual amounts in full before taking into account any credit enhancements held
by the Company. B. Derecognition

D. Hedge accounting A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different
IFRS 9 requires that hedge accounting relationships are aligned with its risk management objectives and terms, or the terms of an existing liability are substantially modified, such an exchange or modification is
strategy and to apply a more qualitative and forward-looking approach to assessing hedge effectiveness. treated as the derecognition of the original liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognized in the unconsolidated statement of profit or loss.
There is no impact of the said change on these unconsolidated financial statements as there is no hedge
activity carried on by the Company during the year ended June 30, 2019. 6.1.3 Offsetting of financial assets and liabilities

6.1.2 Financial liabilities Financial assets and financial liabilities are set off and the net amount is reported in the unconsolidated financial
statements when there is a legally enforceable right to set off and the company intends either to settle on a net
A. Classification and measurement basis, or to realize the assets and to settle the liabilities simultaneously.

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, 6.1.4 Impacts of adoption of IFRS 9 on these unconsolidated financial statements
loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge,
as appropriate. At transition date to IFRS 9, the Company has financial assets measured at amortized cost and investments
in mutual funds at fair value through profit or loss. The new classification and measurement of the Company’s
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and financial assets are, as follows:
payables, net of directly attributable transaction costs.
Debt instruments at amortized cost for financial assets that are held within a business model with the objective to
i) Financial liabilities at fair value through profit or loss hold the financial assets in order to collect contractual cash flows that meet the SPPI criterion.

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial Investments in mutual funds that are held for trading in near term and has recognized initially and subsequently at
liabilities designated upon initial recognition as at fair value through profit or loss. Gains or losses on liabilities fair value through profit or loss. On application of IFRS - 9 the Company has not opted to recognize investments
held for trading are recognized in the unconsolidated statement of profit or loss. Financial liabilities designated in mutual funds at fair value through other comprehensive income (FVTOCI). These are recognized as fair value
upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and through profit or loss.
only if the criteria in IFRS 9 are satisfied. The Company has not designated any financial liability as at fair
value through profit or loss. Further all financial assets previously classified under the head ‘loans and receivables’ are now classified as
‘amortized cost’. 2018 - 19
ii)
Loans and borrowings
Interloop Limited This is the category most relevant to the Company. After initial recognition, interest-bearing loans and The accounting for the Company’s financial liabilities remains largely the same as it was under IAS 39. Annual Report

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