k) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense
relating to any provision is presented in the statement of profit or loss, net of any reimbursement. If the
effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the
provision due to the passage of time is recognised as part of finance costs.
l) Contingent Liability
A contingent liability is a possible obligation that arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control
of the Company or a present obligation that is not recognized because it is not probable that an outflow of
resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases
where there is a liability that cannot be recognized because it cannot be measured reliably. The Company
does not recognize a contingent liability but discloses its existence in the financial statements.
m) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits
with an original maturity of three months or less, which are subject to an insignificant risk of changes in
value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of
the Company’s cash management.
n) Investments and other financial assets
(i) Classification
The Company classifies its financial assets in the following measurement categories:
(1) Those to be measured subsequently at fair value (either through other comprehensive income, or
through the Statement of Profit and Loss), and
(2) Those measured at amortised cost.
The classification depends on the Company’s business model for managing the financial assets and the
contractual terms of the cash flows.
(ii) Measurement
At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of
financial assets carried at fair value through the Profit and Loss are expensed in the Statement of Profit
and Loss.
Debt Instruments:
Subsequent measurement of debt instruments depends on the Company’s business model for managing
the asset and the cash flow characteristics of the asset. The Company classifies its debt instruments into
following categories:
Amortised Cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. Interest income from
these financial assets is included in other income using the effective interest rate method.
Fair value through profit and loss: Assets that do not meet the criteria for amortised cost are measured
at fair value through Profit and Loss. Interest income from these financial assets is included in other
income.
Equity instruments:
The Company measures its equity investment other than in subsidiaries, joint ventures and associates at
fair value through profit and loss.
(iii) Impairment of financial assets
The Company measures the expected credit loss associated with its assets based on historical trend,
industry practices and the business environment in which the entity operates or any other appropriate basis.
The impairment methodology applied depends on whether there has been a significant increase in credit
risk.
o) Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing:
- The profit attributable to owners of the Company
- By the weighted average number of equity shares outstanding during the financial year, adjusted for
bonus elements in equity shares issued during the year and excluding treasury shares.
Diluted earnings per shares
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account:
- The after income tax effect of interest and other financing costs associated with dilutive potential
equity shares, and
The weighted average number of additional equity shares that would have been outstanding assuming the
conversion of all dilutive potential equity shares.
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