Page 193 - Full Book_24.4.2021

NOTES TO THE
FINANCIAL STATEMENTS in retrospect

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for the financial year ended 31 december 2020 (continUed)
the Will to Suceed

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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.4 Cash and cash equivalents
cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which achieving a leading repute
have an insignificant risk of changes in fair value with original maturities of three months or less, and are used by the
Group and the company in the management of their short term commitments. for the purpose of the statement of cash
flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits. |
2.5 Financial instruments

financial instruments are classified and measured using accounting policies as mentioned below. the Group and the
company has consider the impact of the pandemic and there is no changes to the Group’s and the company’s business Paving the Way for a Sustainable future
model for managing the financial instruments.
(i) Initial recognition and measurement
a financial asset or a financial liability is recognised in the statement of financial position when, and only when,
the Group or the company becomes a party to the contractual provisions of the instrument.
a financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair 187
value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial
instrument.
(ii) Classification and subsequent measurement
the Group and the company categorise financial instruments as follows:
on initial recognition, a financial asset is classified and measured at: amortised cost; fvoci - debt instrument;
fvoci - equity instrument; or fvtPl. adhering to the best Governance Practices
financial assets are not reclassified subsequent to their initial recognition unless the Group and the company
change its business model for managing financial assets, in which case all affected financial assets are reclassified
on the first day of the first reporting period following the change in the business model.
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(a) Financial assets measured at amortised cost
a financial asset is measured at amortised cost if it meets both of the following conditions and is not
designated as at fvtPl:
• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and Laying the Foundation for Financial Growth

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
profit on the principal amount outstanding.
these assets are subsequently measured at amortised cost using effective profit rate method. these assets
are stated net of unearned income and any impairment loss. |
additional information & disclosure Summary
included in financial assets measured at amortised cost are financing, advances and others which consist
of sale-based contracts (namely bai’ bithaman ajil, bai al-inah, murabahah, bai al-dayn and at-tawarruq),
lease-based contracts (namely ijarah muntahiah bit-tamleek), construction-based contract (istisna’) and
ar-rahnu contract.

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24 th aGm information