Page 233 - InterloopAnnualReport2020

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

For the year ended June 30, 2020

Deferred tax liability is recognized for all taxable temporary differences and deferred tax asset is recognized
for all deductible temporary differences and carry forward of unused tax losses and unused tax credits, if any,
to the extent that it is probable that future taxable profit will be available against which these can be utilized.

Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be
realized. Significant management judgment is required to determine the amount of deferred tax assets that
can be recognized, based upon the likely timing and level of future taxable profits together with future tax
planning strategies.

7.20 Earnings per share
The group presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is calculated
by dividing the profit by weighted average number of shares outstanding during the period. Diluted EPS is
calculated by adjusting for the effects of all dilutive potential ordinary shares.

7.21 Dividend
Dividend distribution to the group’s shareholders is recognized as a liability in the group’s consolidated
financial statements in the period in which dividends are approved.

7.22 Segment reporting
Segment reporting is based on the operating (business) segments of the group. An operating segment
is a component of the group that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to the transactions with any of the group’s
other components. An operating segment’s operating results are reviewed regularly by the chief operating
decision maker (‘CODM’) to make decisions about resources to be allocated to the segment and assess
its performance, and for which discrete financial information is available. The CODM, who is responsible
for allocating resources and assessing performance of the operating segments, has been identified as the
Board of Directors of the group that makes the strategic decisions.
Segment results that are reported to the CODM include items directly attributable to a segment as well
as those that can be allocated on a reasonable basis. Those incomes, expenses, assets, liabilities and
other balances which cannot be allocated to a particular segment on a reasonable basis are reported as
unallocated.

Transactions among the business segments are recorded at cost. Inter segment sales and purchases are
eliminated from the total.

7.23 Related party transactions
All transactions with related parties are carried out at arm’s length prices. Each transaction is evaluated to
be characterized as an “arm’s length transaction” and approximated to the arm’s length criteria using one of
the following methodologies:
– Market - based pricing
– Negotiated pricing
– Cost - based pricing

7.24 Financial Instruments:
7.24.1 Financial assets
A financial asset is measured at amortized cost if it is held in order to collect contractual cash flows which
arise on specified dates and that are ‘solely payment of principal and interest (SPPI)’ on the principal
amount outstanding. A debt investment is measured at fair value through other comprehensive income if it
is held in order to collect contractual cash flows which arise on specified dates that are solely principal and
interest and as well as selling the asset on the basis of its fair value. All other financial assets are classified
and measured at fair value through profit or loss unless the group makes an irrevocable election on initial

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