Connecting the nation. and Beyond. - ChartNexus

182 / MRCB annual report 2011 /
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2011
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.14 EMPLOYEE BENEFITS (cont’d)
(c) Share-based compensation (cont’d)
The total amount to be expensed over the vesting period is determined by reference to the fair value of the share
options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales
growth targets). Non-market vesting conditions are included in assumptions about the number of options that are
expected to vest. At each reporting date, the Group and the Company revise its estimates of the number of share
options that are expected to vest. It recognises the impact of the revision of original estimates, if any, in the profit or
loss, with a corresponding adjustment to equity.
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value)
and share premium when the options are exercised.
2.15 PROVISIONS
Provisions are recognised when the Group and the Company have a present legal or constructive obligation as a result
of past events, when it is probable that an outflow of resources will be required to settle the obligation, and when a
reliable estimate of the amount can be made. Where the Group and the Company expect a provision to be reimbursed
(for example, under an insurance contract), the reimbursement is recognised as a separate asset but only when the
reimbursement is virtually certain. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a
pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.
The increase in the provision due to passage of time is recognised as interest expense.
The Group provides for estimated liability on projects still under progress at the reporting date. This provision is calculated
based on contract agreements/past histories.
2.16 PAYABLES
Payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Payable are classified as current liabilities if payment is due within one year or less (or in the normal operating
cycle of the business if longer). Otherwise, they are presented as non-current liabilities.
Payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method.
2.17 SENIOR AND JUNIOR SUKUK
The Senior and Junior Sukuk (Sukuk) are Islamic securities issued in accordance with the Syariah principle of Istisna’.
Sukuk issued by the Group are stated at net proceeds received on issue. The Sukuk issuance expenses which represent
the difference between the net proceeds and the total amount of the payment of the Sukuk are allocated to the periods
over the term of the Sukuk at a constant rate on the carrying amounts. Both the finance charges and issuance expenses
are capitalised in the construction costs of the Eastern Dispersal Link Highway project.
2.18 CASH AND CASH EQUIVALENTS
For the purpose of the statements of cash flows, cash and cash equivalents comprise cash in hand, bank balances, demand
deposits, short term, highly liquid investments with original maturities of three months or less and bank overdrafts.
Bank overdrafts are presented within borrowings in current liabilities on the statement of financial position.