MS AR 2018 (1)

5.18 Dividend and reserve appropriations
Final dividend distributions to the Company’s shareholders are recognised as a liability in the financial statements
in the period in which the dividends are approved by the Company’s shareholders at the Annual General Meeting,
while interim dividend distributions are recognised in the period in which the dividends are approved by the
Board of Directors. Movement in reserves is recognized in the year in which the appropriation is approved by the
Board of Directors.
5.19 Earnings per share
The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit
or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding
for the effects of all dilutive potential ordinary shares.
5.20 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The Chief Executive Officer has been identified as the ‘chief operating decision-maker’, who
is responsible for allocating resources and assessing performance of the operating segments. Information
reported to chief operating decision maker for the purpose of resource allocation and assessment of segment
performance focuses on type of products being delivered. The operations principally comprise of two classes of
products namely “steel re-bars” and “girders”. For financial statements presentation purposes, these individual
operating segments have been aggregated into a single operating segment.
5.21 Operating leases
Rentals payable / receivable under operating leases are charged to / recognized in statement of profit or loss on
a straight line basis over the term of the relevant lease.
5.22 Finance income and finance costs
Finance income comprises interest income on funds invested in term deposit receipts and saving accounts.
Interest income is recognized as it accrues in statement of profit or loss, using effective interest method.
Finance costs comprise interest expense on borrowings and impairment losses recognized on financial assets.
The Company’s policy relating to borrowing costs is mentioned note. 5.16. Foreign currency gains and losses
are reported on a net basis.
6. STANDARDS, INTERPRETATIONS AND AMENDMENTS TO PUBLISHED APPROVED ACCOUNTING
STANDARDS
6.1 New standards, interpretations and amendments to published approved accounting standards that are
effective in the current year
There were certain standards, interpretations and amendments to published approved accounting standards
that became effective during the current year. However, only those standards, interpretations and amendments
to approved accounting standards, which are considered to be relevant to the Company’s financial statements
are detailed below:
Amendments to IAS 7 - Statement of Cash Flows - Disclosure Initiative
The Company has applied these amendments for the first time in the current year. The amendments require an
entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising
from financing activities, including both cash and non-cash changes. The Company’s liabilities arising from
financing activities consist of long-term financing, unclaimed dividend, accrued profit / interest / mark-up, short-
102 MUGHAL IRON & STEEL INDUSTRIES LIMITED