Strength & Stability - ECS Holdings Limited

2 Summary of Significant Accounting Policies (Cont’d)
2.9 Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is calculated using the weighted average cost formula and comprises all costs of purchase, costs of conversion and other costs
incurred in bringing the inventories to their present location and condition.
Work-in-progress is stated at cost incurred plus attributable profits. Cost includes direct materials, sub-contracted costs, an appropriate
share of production overheads based on normal operating capacity and other related costs incurred. Progress billings received and
receivable are shown as a deduction from the value of work-in-progress. Provision is made for anticipated losses on uncompleted
projects when foreseeable.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the
estimated costs necessary to make the sale. In arriving at net realisable value, due allowance is made for all obsolete and slow moving
inventories.
2.10 Dividends
Dividends on ordinary shares are recognised as a liability in the period in which it is declared.
2.11 Employee Benefits
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as
incurred.
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has
a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation
can be estimated reliably.
Share-based payments
The share option programme allows Group employees to acquire shares of the Company. The fair value of options granted is
recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread
over the vesting period. At each balance sheet date, the Company revises its estimates of the number of options that are expected
to become exercisable. It recognises the impact of the revision of original estimates in employee expense and in a corresponding
adjustment to equity over the remaining vesting period.
The proceeds received net of any directly attributable transaction costs are credited to share capital when the options are exercised.
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Notes to the
Financial Statements
These notes form an integral part of the financial statements.
ECS Holdings Limited