Name of the company

Address of the company

Statement of Financial Position
As at 31st Ashad 2077 (16th July, 2020 )

Assets Notes 2077 2076

Non Current Assets
Property, Plant and Equipment
Intangible Assets
Total Non-Current Assets - -
Current Assets
Inventories
VAT receivable
Trade and other receivables
Cash and cash equivalents
Total Current Assets - -
Total Assets - -
Equity
Share Capital
Reserves
Total Equity - -
Liabilities
Non Current Liabilities
Loans and Borrowings
Total Non-Current Liabilities - -
Current Liabilities
Loans and borrowings
Trade and other payables
Income Tax Liability
Total Current Liabilities - -
Total Liabilities - -
Total Equity and Liabilities - -

As per our attached report of even

date

For the company For the firm

Proprietor Registered Auditor

Dated :
 Name of the company
Address of the company

Profit or Loss Statement

For the year ended 2076/77
Particulars Notes 2077 2076
Revenue from Operations
Other Income
Changes in Inventories of finished goods
and W-I-P
Raw materials and consumables used
Staff Costs/Expenses
Depreciation and amortization expense
Distribution Expenses
Administrative Expenses
Other Operating Expenses
Profit From Operations - -
Finance Costs
Profit Before Tax - -
Income Tax Expense
Net Profit for the year - -

As per our attached report of even

date

For the company For the firm

Proprietor Registered Auditor

Dated :
 Name of the company
Address of the company
Profit or Loss Statement
For the year ended 2076/77
Particulars Notes 2077 2076
Revenue from operations
Cost of Sales
Gross Profit - -
Other Income
Distribution Expenses
Administrative Expenses
Other Operating Expenses
Profit From Operations - -
Finance Costs
Profit Before Tax - -
Income Tax Expense
Net Profit for the year - -

As per our attached report of even

date

For the company For the firm

Proprietor Registered Auditor

Dated :
 Name of the Company
Address of the Company

Statement of Changes in Equity

For the year ended as at 31st Ashad, 2077

Particulars Notes Share Other Retained Total

Capital Reserve Earnings
Balance at 1st Shrawan 2076 -
Profit for the year -
Issue of Share Capital -
Balance at 31 Ashad 20X2 - - - -

As per our attached report of even date

For the company For the firm

Proprietor Registered Auditor

Dated :
 Name of the Company
Address of the Company

Statement of Cash Flow

As at 31st Ashad 2077 ( )

Cash Flows from Operating Activities Note 2077 2076

Profit for the Year
Adjustment for:
Depreciation on Property, Plant and Equipment
Amortization of Intangible Assets
Finance Income
Finance Expense
Loss/ (gain) on sale of Property, plant and equipment

Income Tax Expense charged to profit or loss

statement

Increase / Decrease in Trade and other receivables

Increase / Decrease in Inventories
Increase / Decrease in Trade and other payables
Increase/Decrease in Provisions
Increase / Decrease in other Liabilities
Cash generated from Operations. - -
Interest Paid
Income Tax Paid
Net Cash Flows from Operating Activities - -
Cash Flow from Investing Activities
Proceeds from sale of Property, Plant and Equipment
Interest Received
Dividends Received
Acquisition of Property, plant and Equipment
Purchase of Intangibles
Net Cash flows from Investing Activities - -
Cash Flow from Financing Activities
Proceeds from the issue of share capital
Proceeds from other non- current borrowings
Repayment of Borrowings
Net Cash Flows from Financing Activities - -
Net Increase in Cash and Cash Equivalents - -
Cash and Cash Equivalents at the beginning -
Cash and Cash Equivalents at the end - -

As per our attached report of

even date

For the company For the firm

Proprietor Registered Auditor

Dated :
1 General Information

2 Significant Accounting Policies

2.1 Basis of preparation

2.1.1 Statement of Compliance

The financial statements have been prepared in accordance with Accounti

2.1.2 Basis of Measurement

Ø 
Investme
nt
property
is
measured
at fair
value.

Ø 
Liabilities
for cash-
settled,
share-
based-
payment
arrangem
ents are
measured
at fair
value.
Ø 
Biological
assets are
measured
at fair
value less
cost to
sell.

Ø 
Available
for sale
financial
assets are
measured
at fair
value.

Ø 
Investme
nts held-
for-trade
is
measured
at fair
value.

Ø 
Derivative
financial
instrumen
ts are
measured
at fair
value.
Ø 
Defined
benefit
schemes,
surpluses
and
deficits
are
measured
at fair
value.

Ø 
Impairme
nt of
asset is
measured
at fair
value and
related
disposal
cost.

Ø  Assets
acquired
&Liabilitie
s
assumed
in a
business
combinati
on are
recognize
d at fair
value.

2.1.3 Critical Accounting Estimates

g policies.
The
company
makes
certain
estimates
and
assumpti
ons
regarding
the future
events.
Estimates
and
judgment
s are
continuou
sly
evaluated
based on
historical
experienc
e and
other
factors,
including
expectati
ons of
future
events
that are
believed
to be
reasonabl
e under
the
circumsta

2.1.4 Functional and Presentation Currency

The
financial
statemen
ts are
prepared
in
Nepalese
Rupees,
which is
the
company’
s
functional
currency.
All the
financial
informati
on
presented
in
Nepalese
Rupees
has been
rounded
to the
nearest
thousand
s, except
otherwise
indicated.

2.2 Accounting policies

statemen
ts are set
out
below.
The
policies
have
been
consistent
ly applied
to all the
years
presented
, unless
otherwise
stated.
The
preparati
on of
financial
statemen
ts
requires
the use of
certain
accountin
g
estimates
. The
areas
where
significant
judgment
s and
estimates
have
been
made in
2.2.1 Basis of consolidation (If consolidation financial statements is required)
has the
power,
either
directly or
indirectly,
to govern
the
financial
and
operating
policies of
another
entity or
business
so as to
obtain
benefits
from its
activities,
it is
classified
as a
subsidiary
. The
consolida
ted
financial
statemen
ts present
the
results of
the
company
and its
subsidiari
es ("the
Group")
as if they
position,
the
acquiree's
identifiabl
e assets,
liabilities
and
contingen
t liabilities
are
initially
recognise
d at their
fair values
at the
acquisitio
n date.
The
results of
acquired
operation
s are
included
in the
consolida
ted
statemen
t of
income
from the
date on
which
control is
obtained.
They are
de-
consolida

2.2.2 Non-controlling interests

For
business
combinati
ons the
company
recognise
d any
non-
controllin
g interest
in the
acquiree
at the
non-
controllin
g
interest’s
proportio
nate
share of
the
acquiree’s
net
assets.

2.2.3 Associates
another
entity, it
is
classified
as an
associate.

Associate
s are
initially
recognize
d in the
consolida
ted
statemen
t of
financial
position
at cost.
The
company'
s share of
post-
acquisitio
n profits
and losses
is
recognize
d in the
Consolida
ted
Income
Statemen
t, except
that
losses in
excess of
losses
arising on
transactio
ns
between
the
company
and its
associates
are
recognize
d only to
the
extent of
unrelated
investors'
interests
in the
associate.
The
investor's
share in
the
associate'
s profits
and losses
resulting
from
these
transactio
ns is
eliminate
d against
the
carrying
value of
the
of the
company'
s share of
the
identifiabl
e assets,
liabilities
and
contingen
t liabilities
acquired
is
capitalize
d and
included
in the
carrying
amount
of the
associate.
Where
there is
objective
evidence
that the
investme
nt in an
associate
has been
impaired
the
carrying
amount
of the
investme
nt is
tested for

2.2.4 Joint ventures/Jointly Controlled Entities

Jointly
controlled
entities
are
included
in the
financial
statemen
ts using
proportio
nate
consolida
tion. The
share of
each of
the jointly
controlled
entity's
assets,
liabilities,
income
and
expenses
are
combined
on a line-
by-line
basis with
those of
the
company.
between
the
company
and
jointly
controlled
entities
are
recognize
d only to
the
extent of
unrelated
investors'
interests
in the
entity.
The
investor's
share in
the jointly
controlled
entity's
profits
and losses
resulting
from
these
transactio
ns is
eliminate
d against
the asset
or liability
of the
jointly
controlled

2.2.5 Transactions Eliminated on Consolidation

ted
financial
statemen
ts.
Unrealise
d gains
arising
from
transactio
ns with
associates
and
jointly
controlled
entities
are
eliminate
d to the
extent of
the
Group’s
interest in
the
enterpris
e.
Unrealise
d gains
arising
from
transactio
ns with
associates
are
eliminate
d against
the
investme

2.2.6 Impairment of non- financial assets (excluding inventories, investment properties and deferred tax assets)
lives are
undertak
en
annually
at the
financial
year end.
Other
non-
financial
assets are
subject to
impairme
nt tests
whenever
events or
changes
in
circumsta
nces
indicate
that their
carrying
amount
may not
be
recoverab
le.
Where
the
carrying
value of
an asset
exceeds
its
recoverab
le amount
(i.e. the
le amount
of an
individual
asset, the
impairme
nt test is
carried
out on
the
smallest
parts of
assets to
which it
belongs
for which
there are
separatel
y
identifiabl
e cash
flows and
its cash
generatin
g units
(‘CGUs’).
Goodwill
is
allocated
on initial
recognitio
n to each
of the
company'
s CGUs
that are
expected
to benefit
Impairme
nt
charges
are
included
in profit
or loss,
except to
the
extent
they
reverse
gains
previously
recognise
d in other
comprehe
nsive
income.
An
impairme
nt loss
recognise
d for
goodwill
is not
reversed.

2.2.7 Foreign currency

currency
monetary
assets
and
liabilities
are
translated
at the
rates
ruling at
the
reporting
date.
Exchange
difference
s arising
on the
retranslati
on of
unsettled
monetary
assets
and
liabilities
are
recognise
d
immediat
ely in
profit or
loss,
except for
foreign
currency
borrowin
gs
qualifying
as a

2.2.8 Property, plant and equipment

property,
plant and
equipmen
t are
initially
recognise
d at cost.
Cost
includes
the
purchase
price and
other
directly
attributab
le costs as
well as
the
estimated
present
value of
any
future
unavoida
ble costs
of
dismantli
ng and
removing
items.
The
correspon
ding
liability is
recognise
d within
provisions
ns are
made
with
sufficient
regularity
to ensure
that the
carrying
amount
does not
differ
materially
from that
which
would be
determin
ed using
fair value
at the end
of the
reporting
period.
Changes
in fair
value are
recognise
d in other
comprehe
nsive
income
and
accumula
ted in the
revaluatio
n reserve
except to
the

2.2.9 Depreciation
Freehold
land is
not
depreciat
ed.
Depreciati
on on
assets
under
constructi
on does
not
commenc
e until
they are
complete
and
available
for use.
Depreciati
on is
provided
on all
other
items of
property,
plant and
equipmen
t so as to
write-off
their
carrying
value
over the
expected
useful
economic
lives.

Depreciati
on has
been
computed
on SLM/
WDV
Method.
The
estimate
useful
lives for
the assets
are as
follows:
Freehold .............Y
Buildings ears

Plant and
Machiner .............Y
ears
y

Fixtures .............Y
and
Fittings ears

Computer
.............Y
Equipmen
ears
t

Motor .............Y
Vehicles ears

revalued
amount
of the
asset.
The
excess
depreciati
on on
revalued
freehold
buildings,
over the
amount
that
would
have
been
charged
on a
historical
cost basis,
is
transferre
d from
the
revaluatio
n reserve
to
retained
earnings
when
freehold
land and
buildings
are
expensed
through
the

2.2.10 Leased Assets

d as an
asset is
the lower
of the fair
value of
the
leased
property
and the
present
value of
the
minimum
lease
payments
payable
over the
term of
the lease.
The
correspon
ding lease
commitm
ent is
shown as
a liability.
Lease
payments
are
analyzed
between
principal
and
interest.
The
interest
element
rewards
incidental
to
ownershi
p are not
transferre
d to the
company
(an
“operatin
g lease"),
the total
rentals
payable
under the
lease are
charged
to the
statemen
t of
comprehe
nsive
income
over the
lease
term.
The
aggregate
benefit of
lease
incentives
is
recognize
d as a
reduction
of the
rental
expense

2.2.11 Intangible Assets

Goodwill (If there is a goodwill arising on acquisition)

Goodwill
represent
s excess
of the
cost of
acquisitio
n over the
fair value
of net
identifiabl
e assets
acquired
at the
date of
acquisitio
n.
Goodwill
is stated
at cost
less
accumula
ted
amortizati
on and
impairme
nt losses.

Negative goodwill (if there is a goodwill arising on acquisition)

Negative
goodwill
arising on
acquisitio
n
represent
s excess
of the fair
value of
net
identifiabl
e assets
acquired
over the
cost of
acquisitio
n.

Computer Software
Purchase
d
computer
software
licenses
are
capitalize
d on the
basis of
the costs
incurred
to acquire
and bring
to use the
software.
These
costs are
amortized
over the
estimated
useful
lives.

Research and Development

Expenditu
re on
research
activities,
undertak
en with
the
prospect
of gaining
new
scientific/
technical
knowledg
e and
understan
ding, is
recognize
d in the
income
statemen
t as an
expense
as
incurred.
capitalize
d if the
product
or
process is
technicall
y and
commerci
ally
feasible
and the
company
has
sufficient
resources
to
complete
developm
ent. The
expenditu
re
capitalize
d includes
the cost
of
materials,
direct
labor and
an
appropria
te
proportio
n of
overhead
s. Other
developm
ent
expenditu
Other Intangible Assets
Other
intangible
assets
that are
acquired
by the
company
are stated
at cost
less
accumula
ted
amortisati
on and
impairme
nt losses.
Expenditu
re on
internally
generated
goodwill
and
brands is
recognise
d in the
income
statemen
t as an
expense
as
incurred.
to be
recognize
d as an
intangible
concessio
n asset
and
amortized
over the
concessio
n period
as per
Service
Concessio
n
Arrangem
ents
(SCA).
According
ly
additions
to the
infrastruc
ture
incurred
by the
operator
to be
accounte
d for as a
constructi
on
contract
with the
regulator,
with
revenues
and
Amortisation
Amortisa
tion is
charged
to the
income
statemen
t on a
straight-
line basis
over the
estimated
useful
lives of
intangible
assets.
Goodwill
is
amortised
from the
date of
initial
recognitio
n; other
intangible
assets are
amortised
from the
date they
are
available
for use.
The
estimated
useful
lives are
as
follows:
.......Years
Ø    Patents and Trademarks
Ø    Goodwill Computer Software .......Years Ø
.......Years Ø Capitalised.......Years
Development Costs

2.2.12 Biological Assets ( disclosed if there are any biological assets)

Biological
assets are
stated at
fair value
less
estimated
point-of-
sale costs,
with any
resultant
gain or
loss
recognise
d in the
income
statemen
t. Point-
of-sale
costs
include all
costs that
would be
necessary
to sell the
assets,
excluding
costs
necessary
to get the
assets to
market.

2.2.13 Investments
Investments in debt and equity securities
fair value,
with any
resultant
gain or
loss
recognise
d in the
income
statemen
t. Where
the
company
has intent
and
ability to
hold
governme
nt bonds
to
maturity,
they are
stated at
amortised
cost less
impairme
nt losses.
Other
investme
nts held
by the
company
are
classified
as being
available-
for-sale
and are
stated at
The fair
value of
investme
nts held
for
trading
and
investme
nts
available-
for-sale is
their
quoted
bid price
at the
reporting
date/bala
nce sheet
date.

Investment property (disclosed if there are any investment properties)

nt
property
is stated
at fair
value
determin
ed
annually
by an
independ
ent
valuer.
Fair value
is based
on
current
prices in
an active
market
for similar
propertie
s in the
same
location
and
condition.
Any gain
or loss
arising
from a
change in
fair value
is
recognise
d in the
income
statemen
t
becomes
an
investme
nt
property
following
a change
in its use,
any
difference
arising at
the date
of
transfer
between
the
carrying
amount
of the
item and
its fair
value is
recognise
d directly
in equity
if it is a
gain.
Upon
disposal
of the
item, the
gain is
transferre
d to
retained
earnings.
Any loss is

2.2.14 Trade and other receivables

Trade and
other
receivable
s are
stated at
their cost
less
provision
for
impairme
nt. The
amount
of the
provision
is
recognize
d in the
income
statemen
t.

2.2.15 Inventories
Inventori
es are
initially
recognise
d at cost,
and
subseque
ntly at the
lower of
cost and
net
realisable
value.
Net
realisable
value is
the
estimated
selling
price in
the
ordinary
course of
business,
less the
variable
selling
expenses.
first-out
(FIFO)
method
or
weighted
average
method
and
includes
expenditu
re
incurred
in
acquiring
the
inventorie
s and
bringing
them to
their
present
location
and
condition.
In the
case of
manufact
ured
inventorie
s and
work-in-
progress,
cost
includes
an
appropria
te share
of

2.2.16 Cash and cash equivalents

cash
equivalen
ts
comprises
cash
balances,
call
deposits
and other
short
term
highly
liquid
investme
nts. Bank
overdrafts
that are
repayable
on
demand
and form
an
integral
part of
the
company’
s cash
managem
ent are
included
within
borrowin
gs in
current
liabilities
on the
balance

2.2.17 Impairment
sheet
date to
determin
e whether
there is
any
indication
of
impairme
nt. If any
such
indication
exists, the
asset’s
recoverab
le amount
is
estimated
.
Intangible
assets
that are
not yet
available
for use,
the
recoverab
le amount
are
estimated
at each
balance
sheet
date. An
impairme
nt loss is
recognise
d when

2.2.18 Share capital

Financial
instrumen
ts issued
by the
company
are
classified
as equity
only to
the
extent
that they
do not
meet the
definition
of a
financial
liability or
financial
asset. The
company’
s equity
shares are
classified
as equity
instrumen
ts.
capital is
classified
as equity
if it is
non-
redeemab
le and any
dividends
are
discretion
ary at the
option of
the
directors.
Preferenc
e share
capital is
classified
as a
liability if
it is
redeemab
le on a
specific
date or at
the
option of
the
sharehold
ers and
dividends
thereon is
recognize
d in the
income
statemen
t as

2.2.19 Convertible debt

the
discounte
d cash
flows
using a
market
rate of
interest
that
would be
payable
on a
similar
debt
instrumen
t that
does not
include
an option
to
convert.
Subseque
ntly, the
debt
compone
nt is
accounte
d for as a
financial
liability
measured
at
amortized
cost until
extinguish
ed on
conversio
n or

2.2.20 Borrowing costs

gs are
recognise
d initially
at cost,
net of
attributab
le
transactio
n costs.
Subseque
nt to
initial
recognitio
n,
interest-
bearing
borrowin
gs are
stated at
amortised
cost with
any
difference
between
cost and
redempti
on value
being
recognise
d in the
income
statemen
t over the
period of
the
borrowin
gs using
the

2.2.21 Retirement Benefits

Defined contribution schemes

Contributi
ons to
defined
contributi
on
pension
schemes
are
charged
to the
statemen
t of
comprehe
nsive
income in
the year
to which
they
relate.

Defined benefit schemes

plan
assets at
the
reporting
date; less
plan
liabilities
calculated
using the
projected
unit
credit
method
discounte
d to its
present
value
using
yields
available
on high
quality
corporate
bonds
that have
maturity
dates
approxim
ating to
the terms
of the
liabilities;
plus
unrecogni
zed past
service
costs; less
the effect
Any
difference
between
the
expected
return on
assets
and that
actually
achieved,
and any
changes
in the
liabilities
over the
year due
to
changes
in
assumpti
ons or
experienc
e within
the
scheme,
are
recognize
d in other
comprehe
nsive
income in
the
period in
which
they
arise.
Past
service
costs are
recognize
d directly
in
income,
unless the
changes
to the
pension
plan are
condition
al on the
employee
s
remaining
in service
for a
specified
period of
time. In
this case,
the past
service
costs are
amortized
on a
straight
line basis
over the
vesting
period.

Other long-term service benefits

cash
equivalen
t after
certain
years’ of
continued
service to
the
company,
but no
entitleme
nt if the
employee
leaves
earlier.
The
obligation
is
calculated
using the
projected
unit
credit
method
and is
discounte
d to its
present
value
using
yields
available
on high
quality
corporate
bonds
that have
maturity

2.2.22 Share-based Payments

number
of equity
instrumen
ts
expected
to vest at
each
reporting
date so
that the
cumulativ
e amount
recognize
d over the
vesting
period is
based on
the
number
of options
that
eventuall
y vest.
Non-
vesting
condition
s and
market
vesting
condition
s are
factored
into the
fair value
of the
options
granted.
When
equity
instrumen
ts are
granted
to
persons
other
than
employee
s, the
statemen
t of
comprehe
nsive
income is
charged
with the
fair value
of goods
and
services
received.

2.2.23 Taxation (including deferred taxes)

comprises
current
taxes and
deferred
taxes.
Income
tax is
recognize
d in the
income
statemen
t except
to the
extent
that it
relates to
items
recognize
d directly
to equity.
Current
tax is the
expected
tax
payable
on the
taxable
income
for the
year using
tax rates
at the
balance
sheet
date and
any
adjustme
for
temporar
y
difference
s
between
the
carrying
amounts
of assets
and
liabilities
for
financial
reporting
purposes
and the
amounts
used for
taxation
purposes.
The
amount
of
deferred
tax
provided
is based
on the
expected
on
realizatio
n or
settlemen
t of the
carrying
amount
A
deferred
tax asset
is
recognize
d only to
the
extent
that it is
probable
that
future
taxable
profits
will be
available
against
which the
asset 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.
Additional
income
taxes that
arise from
the
distributio
n of
dividends
are
recognise
d at the
same
time as
the
liability to
pay the
related
dividend.

2.2.24 Treasury shares

the
purchase/
sale of
treasury
shares is
recognise
d directly
in equity.
The cost
of
treasury
shares
held is
presented
as a
separate
reserve
(the
"treasury
share
reserve").
Any
excess of
the
considera
tion
received
on the
sale of
treasury
shares
over the
weighted
average
cost of
the
shares
sold is

2.2.25 Non-current assets held for sale and disposal

Non-
current
assets
and
disposals
are
classified
as held
for sale
when:

Ø  They
are
available
for
immediat
e sale
Ø 
Managem
ent is
committe
d to a
plan to
sell

Ø  It is
unlikely
that
significant
changes
to the
plan will
be made
or the
plan will
be
withdraw
n;

Ø  Active
program
me to
locate a
buyer has
been
initiated;
Ø  Asset
or
disposal
company
is being
marketed
at a
reasonabl
e price in
relation
to its fair
value and

Ø  Sale is
expected
to
complete
within 12
months
from the
date of
classificati
on.

Non-
current
assets
and
disposals
classified
as held
for sale
are
measured
at the
lower of:
Ø  Their
carrying
amount
immediat
ely prior
to being
classified
as held
for sale in
accordanc
e with the
Company'
s
accountin
g policy;
and Ø
Fair value
less costs
to sell.
After
their
classificati
on as held
for sale,
non-
current
assets
(including
those in a
disposal
company)
are not
depreciat
ed. The
results of
operation
s
disposed
during
the year
are
included
in the
statemen
t of
comprehe
nsive
income
up to the
date of
disposal.
ued
operation
is a
compone
nt of the
company'
s business
that
represent
s a
separate
major line
of
business
or
geographi
cal area
of
operation
s or is a
subsidiary
acquired
exclusivel
y with a
view to
resale,
that has
been
disposed
of has
been
discontin
ued or
that
meets the
criteria to
be
classified
presented
in the
statemen
t of
comprehe
nsive
income as
a single
line which
comprises
the post-
tax profit
or loss of
the
discontin
ued
operation
along
with the
post-tax
gain or
loss
recognise
d on the
re-
measure
ment to
fair value
less costs
to sell or
on
disposal
of the
assets or
disposal
company’
s

2.2.26 Government grants / Deferred Revenue

purchase
d. Grants
for
revenue
expenditu
re are
netted
against
the cost
incurred
by the
company.
Where
retention
of a
governme
nt grant is
dependen
t on the
company
satisfying
certain
criteria, it
is initially
recognise
d as
deferred
income.
When the
criteria
for
retention
have
been
satisfied,
the
deferred

2.2.27 Trade and other payables

Trade and
other
payables
are stated
at their
cost.

2.2.28 Provisions
amount
include
those for
onerous
leases,
warranty
claims,
leasehold
dilapidati
ons and
legal
disputes.
The
provision
is
measured
at the
best
estimate
of the
expenditu
re
required
to settle
the
obligation
at the
reporting
date,
discounte
d at a pre-
tax rate
reflecting
current
market
assessme
nts of the

2.2.29 Revenue
Where
the buyer
has a
right of
return,
the
company
defers
recognitio
n of
revenue
until the
right to
return
has
lapsed.
However,
where
high
volumes
of sales
are made
to
establishe
d
wholesale
customer
s,
revenue
is
recognise
d in the
period
where the
goods are
delivered
less an

2.2.30 Expenses

Operating lease payments

Payments
made
under
operating
leases are
recognise
d in the
income
statemen
t on a
straight-
line basis
over the
term of
the lease.
Lease
incentives
received
are
recognise
d in the
income
statemen
t as an
integral
part of
the total
lease
expense.

Net financing costs

Net
financing
costs
comprise
interest
payable
on
borrowin
gs
calculated
using the
effective
interest
rate
method,
dividends
on
redeemab
le
preferenc
e shares,
foreign
exchange
gains and
losses.
Interest
income is
recognise
d in the
income
statemen
t as it
accrues,
taking
into
account
the
effective
yield on
the asset.
Dividend
income is
recognise
d in the
income
statemen
t when
the right
to receive
payment
is
establishe
d.
The
interest
expense
compone
nt of
finance
lease
payments
is
recognise
d in the
income
statemen
t using
the
effective
interest
rate
method.

2.2.31 Segment reporting

segment
is a
distinguis
hable
compone
nt of the
company
that is
engaged
either in
providing
products
or
services/b
usiness
segment,
or in
providing
products
or
services
within a
particular
economic
environm
ent/geogr
aphical
segment,
which is
subject to
risks and
rewards
that are
different
from
those of
other

2.2.32 Discontinued operations

A
discontin
ued
operation
is a
clearly
distinguis
hable
compone
nt of the
company’
s business
that is
discontin
ued or
terminate
d
pursuant
to a single
plan, and
which
represent
s a
separate
major line
of
business
or
geographi
cal area
of
operation
s.
s and deferred tax assets)