| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a)
Basis of preparation (i)
Compliance with International Financial Reporting Standards as issued by the International Accounting Standards Board The
general purpose financial statements of Genetic Technologies Limited and its subsidiaries have been prepared in accordance with International
Financial Reporting Standards, as issued by the International Accounting Standards Board and Australian equivalent International Financial
Reporting Standards, as issued by the Australian Accounting Standards Board. Genetic Technologies Limited is a for-profit entity for
the purpose of preparing the financial statements. (ii)
Historical cost convention These
financial statements have been prepared under the historical cost convention except for financial assets and liabilities (including derivative
instruments) which are measured at fair value. (iii)
Critical accounting estimates The
preparation of financial statements requires the use of certain critical accounting estimates. It also requires Management to exercise
its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are critical to the financial statements, are disclosed in Note 3. (iv)
Going concern For
the year ended June 30, 2022, the Company incurred a total comprehensive loss of $ 7,103,134
(2021: $ 7,115,087 )
and net cash outflow from operations of $ 5,659,456
(2021: $ 6,295,929 ).
As at June 30, 2022, the Company held total cash and cash equivalents of $ 11,731,325
and total net current assets of $ 10,905,081 . The
Company expects to continue to incur losses and cash outflows for the foreseeable future as it continues to invest resources in expanding
the research and development activities in support of the distribution of existing and new products. The Company has $ 11,731,325 (v)
Comparative figures Certain
comparative figures within the consolidated statement of profit or loss and comprehensive income have been reclassified to conform with
the current year’s presentation. The current presentation is in line with the Company management’s monthly reporting of the
Group’s results and performance presented to the Board of Directors. NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (a)
Basis of preparation (cont.) (v)
Comparative figures (cont.) The
below tables summarise the changes that were made to comparative figures for periods presented. SUMMARY
OF CHANGES MADE TO COMPARATIVE FIGURES
As
reported 2021 Reclass Revised 2021
$ $ $
Cost of sales
-
Inventories used (115,934 ) 115,934 -
-
Inventories written-off (54,523 ) 54,523 -
-
Direct labor costs (110,894 ) 110,894 -
-
Depreciation expense (79,676 ) 79,676 -
Changes
in inventory - 14,463 14,463
Raw
materials - (184,920 ) (184,920 )
Other
income 1,564,456 (4,495 ) 1,559,961
-
Interest income 62,394 (62,394 ) -
Selling
and marketing expenses (1,119,851 ) 1,119,851 -
General
and administrative expenses (4,158,318 ) 4,158,318 -
Laboratory,
research and development costs (3,109,383 ) 3,109,383 -
Finance
costs (14,049 ) (2,289 ) (16,338 )
Other
gains/(losses) - - -
Finance
income - 62,394 62,394
Employee
benefits expenses - (3,868,331 ) (3,868,331 )
Advertising
and promotional expenses - (436,274 ) (436,274 )
Professional
fees - (1,461,401 ) (1,461,401 )
Research
and development expenses - (1,165,531 ) (1,165,531 )
Depreciation
and amortisation - (386,277 ) (386,277 )
Impairment
expense - (32,048 ) (32,048 )
Other
expenses - (1,283,871 ) (1,283,871 ) NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (a)
Basis of preparation (cont.) (v)
Comparative figures (cont.) The
below tables summarise the changes that were made to comparative figures for periods presented.
As
reported 2020 Reclass Revised 2020
$ $ $
Cost of sales
-
Inventories used (82,516 ) 82,516 -
-
Inventories written-off (18,917 ) 18,917 -
-
Direct labor costs (107,590 ) 107,590 -
-
Depreciation expense (42,488 ) 42,488 -
Changes
in inventory - (59,525 ) (59,525 )
Raw
materials - (41,908 ) (41,908 )
Other
income 1,140,647 (22,507 ) 1,118,140
-
Interest income 22,507 (22,507 ) -
Selling
and marketing expenses (637,295 ) 637,295 -
General
and administrative expenses (4,058,557 ) 4,058,557 -
Laboratory,
research and development costs (2,477,578 ) 2,477,578 -
Finance
costs (14,823 ) (57,257 ) (72,080 )
Other
gains/(losses) (5,522 ) 5,522 -
Finance
income - 22,525 22,525
Employee
benefits expenses - (2,066,111 ) (2,066,111 )
Advertising
and promotional expenses - (279,312 ) (279,312 )
Professional
fees - (2,035,395 ) (2,035,395 )
Research
and development expenses - (865,627 ) (865,627 )
Depreciation
and amortisation - (258,361 ) (258,361 )
Impairment
expense - - -
Other
expenses - (1,766,985 ) (1,766,985 ) NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (a)
Basis of preparation (cont.) (v)
Comparative figures (cont.) Representative
warrants (prior period corrections) Genetic
Technologies Limited raised capital in April 2020 and May 2020, and representative warrants were included as part of these public offerings.
These representative warrants had been accounted for as a financial liability and was subsequently adjusted to fair value at each subsequent
reporting date. The
Company determined that these representative warrants originally classified as a financial liability should have been accounted for as
an equity-settled share-based payment in the consolidated financial statements as of and for the year ended June 30, 2020. The Company
assessed the effects of this correction based on both quantitative and qualitative factors and determined that the correction was not
material. Accordingly, the Company corrected the errors as of and for the year ended June 30, 2020 in the accompanying consolidated financial
statements and related footnotes. The
below tables summarise the adjustments that were made to correct the immaterial errors for the periods presented. Extract
from the Consolidated Statements of Profit or Loss and Other Comprehensive Income/(Loss) SCHEDULE
OF FINANCIAL ADJUSTMENTS
Year
ended June
30, 2020 Revision Year
ended June
30, 2020
Revised
$ $ $
Fair
value gains on financial instruments 195,845 (195,845 ) -
Loss
from operations before income tax (6,098,930 ) (195,845 ) (6,294,775 )
Loss
for the year (6,098,930 ) (195,845 ) (6,294,775 )
Total
comprehensive loss for the year (6,132,105 ) (195,845 ) (6,327,950 )
Loss
per share (cents per share)
Basic
and diluted net loss per ordinary share (0.15 ) (0.15 )
Weighted-average
shares outstanding 4,155,017,525 4,155,017,525 Extract
from the Consolidated Balance Sheet
2020 Revision 2020
Revised
$ $ $
Non-Current
Liabilities
Other
financial liabilities 977,237 (977,237 ) -
Total
Non-Current Liabilities 1,220,037 (977,237 ) 242,800
TOTAL
LIABILITIES 2,617,609 (977,237 ) 1,640,372
NET
ASSETS 13,015,370 977,237 13,992,607
EQUITY
Reserves 8,755,489 1,173,082 9,928,571
Accumulated
losses (135,851,192 ) (195,845 ) (136,047,037 )
TOTAL
EQUITY 13,015,370 977,237 13,992,607 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (a)
Basis of preparation (cont.) (v)
Comparative figures (cont.) Other
Gains / (Losses)
2020 $ Revision $ 2020
Revised $
Net
foreign exchange gains/(losses) (5,522 ) - (5,522 )
Fair
value gains on financial liabilities through profit or loss 195,845 (195,845 ) -
Net
impairment losses - - -
Total
other gains / (losses) 190,323 (195,845 ) (5,522 ) Loss
per Share
2020 $ Revision $ 2020
Revised $
Loss
for the year attributable to the owners of Genetic Technologies Limited (6,098,930 ) (195,845 ) (6,294,775 )
Weighted average
number of Ordinary Shares used in calculating loss per share (number of shares) 4,155,017,525 - 4,155,017,525 Reserves
2020 $ Revision $ 2020
Revised $
Foreign
currency translation 756,423 - 756,423
Share-based
payments 7,999,066 1,173,082 9,172,148
Total
reserves 8,755,489 1,173,082 9,928,571
Reconciliation
of foreign currency translation reserve
Balance
at the beginning of the financial year 789,598 - 789,598
Add:
net currency translation gain / (loss) (33,175 ) - (33,175 )
Balance
at the end of the financial year 756,423 - 756,423
Reconciliation
of share-based payments reserve
Balance
at the beginning of the financial year 5,220,334 - 5,220,334
Add:
share-based payments expense 67,542 195,845 263,387
Add:
Issue of options/warrants to underwriters 2,793,174 977,237 3,770,411
Less:
Reversal of Performance Rights expenses in prior year (81,984 ) - (81,984 )
Balance
at the end of the financial year 7,999,066 1,173,082 9,172,148 Accumulated
Losses
2020 Revision 2020
Revised
$ $ $
Balance
at the beginning of the financial year (129,737,550 ) - (129,737,550 )
Add:
Initial adoption of IFRS 16 (14,712 ) - (14,712 )
Add:
net loss attributable to owners of Genetic Technologies Limited (6,098,930 ) (195,845 ) (6,294,775 )
Balance
at the end of the financial year (135,851,192 ) (195,845 ) (136,047,037 ) NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (a)
Basis of preparation (cont.) (vi)
New standards and interpretations The
Group has applied the following standards and amendments for the first time for their annual reporting period commencing 1 July 2021:
● Interest
Rate Benchmark Reform - Phase 2
● COVID-19
Relates Rent Concessions The
amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect
the current or future periods. (vii)
New standards and interpretations not yet adopted. There
are no standards that are not yet effective and that would be expected to have a material impact on the Company in the current or future
reporting years and on foreseeable future transactions. (b)
Principles of consolidation (i)
Subsidiaries Subsidiaries
are all entities (including structured entities) over which the Company has control. The Company controls an entity when the Company
is exposed to, or has rights to, variable returns from its involvement with the Company and has the ability to affect those returns through
its power to direct the activities of the Company. Subsidiaries are fully consolidated from the date on which control is transferred
to the Company. They are deconsolidated from the date that control ceases. The
acquisition method of accounting is used to account for business combinations by the Company. Intercompany
transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the Company. (c)
Segment reporting Operating
segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The acquisition
of EasyDNA has resulted in a change in how the Company reports segment information as compared to the prior year. The prior
period presentation of segment information has been recast to conform with the current segment reporting structure. (d)
Foreign currency translation (i)
Functional and presentation currency Items
included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic
environment in which the company operates (‘the functional currency’). The consolidated financial statements are presented
in Australian dollar ($), which is Genetic Technologies Limited’s functional and presentation currency. (ii)
Transactions and balances Foreign
currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. All
foreign exchange gains and losses are presented in the consolidated statement of profit or loss on a net basis, within other expenses
or other income, respectively. NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (d)
Foreign currency translation (cont.) (ii)
Transactions and balances (cont.) Non-monetary
items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was
determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.
For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss
are recognised in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equities
classified as at fair value through other comprehensive income are recognised in other comprehensive income. (iii)
Group companies The
results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional
currency different from the presentation currency are translated into the presentation currency as follows:
● assets
and liabilities for each consolidated balance sheet presented are translated at the closing rate at the date of that consolidated
balance sheet;
● income
and expenses for each consolidated statement of profit or loss and consolidated statement of profit or loss and other comprehensive
income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
● all
resulting exchange differences are recognised in other comprehensive income. On
consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other
financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation
is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit
or loss, as part of the gain or loss on sale. (e)
Revenue recognition Under
IFRS 15, revenue is recognised based on contract with customers when performance obligations were satisfied. The following recognition
criteria must also be met before revenue is recognised: Genetic
testing revenues Revenues
from the provision of genetic and clinical risk testing for cancer and other serious diseases under the geneType brand are recognised
at a point time when the Company has provided the customer with their test results, the single performance obligation. Revenue
from provision of genetic test direct to consumer under the EasyDNA brand is recognised at a point in time when the Company has provided
the customer with their test results, the single performance obligation. No
discounts are provided for genetic testing revenues and payments are made upfront when the test is ordered. Any unsatisfied performance
obligations are recognised as deferred income. Revenue
from services - license fees Revenue
from contracts with service providers is recognised when the contracted sales parameters are met, the single performance obligation.
Revenue is recognised over time based on the higher of actual sales incurred or minimum fees requirement on a quarterly basis. Variable
consideration in relation to licence payments were constrained during the year. No discounts are provided for revenue from services. Deferred
income The
Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these
amounts as deferred income in its consolidated statement of financial position. Similarly, if the Group satisfies a performance obligation
before it receives the consideration, the Group recognises either a contract asset or a receivable in its consolidated statement
of financial position, depending on whether something other than the passage of time is required before the consideration is due. NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (f)
Other income (i)
Research and development tax incentive income The
Australian government replaced the research and development tax concession with research and development (R&D) tax incentive from
July 1, 2011. The R&D tax incentive applies to expenditure incurred and the use of depreciating assets in an income year commencing
on or after July 1, 2011. A refundable tax offset is available to eligible companies with an annual aggregate turnover of less than $ 20 20 18.5 Management
has assessed the Company’s activities and expenditure to determine which are likely to be eligible under the incentive scheme.
The Company accounts for the R&D tax incentive as a government grant. The grant is recognised as other income over the period in
which the R&D expense is recognised. (ii)
Government Grants Income
from government grants is recognised in the consolidated income statement on a systematic basis over the periods in which the Company
recognises as expense the related costs for which the grants are intended to compensate in accordance with IAS 20 Accounting for Government
Grants and Disclosure of Government Assistance. The
receivable for reimbursable amounts that have not been collected is reflected in trade and other receivables on our consolidated balance
sheets. (g)
Finance income and finance costs The
Group’s finance income and finance costs include interest income and interest expenses. Interest income or expense is recognised
using the effective interest method. (h)
Income tax The
income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income
tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to
unused tax losses. The
current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period
in the countries where the Company and its subsidiaries and associates operate and generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred
income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise
from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset
or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable
profit or loss. Deferred
income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period
and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred
tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences
and losses. NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (i)
Leases For
any new contracts entered into on or after July 1, 2019, the Group considers whether a contract is, or contains a lease. A lease is defined
as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange
for consideration’. To apply this definition the Company assesses whether the contract meets three key evaluations which are whether:
● the
contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified
at the time the asset is made available to the Group,
● the
Company has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period
of use, considering its rights within the defined scope of the contract,
● the
Company has the right to direct the use of the identified asset throughout the period of use. The Company assess whether it has the
right to direct ‘how and for what purpose’ the asset is used throughout the period of use. Leases
are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the
Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use
asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. Assets
and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value
of the following lease payments:
● fixed
payments (including in-substance fixed payments), less any lease incentives receivable,
● amounts
expected to be payable by the lessee under residual value guarantees,
● the
exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
● payments
of penalties for terminating the lease, if the lease term reflects the lessee exercising that option. The
lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the Group’s incremental
borrowing rate. Right-of-use
assets are measured at cost comprising the following:
● the
amount of the initial measurement of lease liability,
● any
lease payments made at or before the commencement date, less any lease incentives received,
● any
initial direct costs, and
● restoration
costs. Payments
associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss.
Short-term leases are leases with a lease term of 12 months or less. Short-term
leases and leases of low-value assets The
Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including
IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease
term. NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (j)
Impairment of assets Non
financial asset The
Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, the
Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value
less costs of disposal or its value in use and is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or group of assets and the asset’s value-in-use cannot be estimated to
be close to its fair value. In such cases, the asset is tested for impairment as part of the cash-generating unit to which it belongs.
Cash generating unit is the smallest group of assets that generates cash inflows from continuing use that are largely independent of
the cash inflows of other assets or CGUs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount,
the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to operations are
recognised as a separate line in the statement of profit or loss unless the asset is carried at its revalued amount, in which case the
impairment loss is treated as a revaluation decrease. An
assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer
exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss
is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment
loss was recognised. If so, the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed
the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in profit or loss unless it reverses a decrement previously charged to equity, in which case the reversal
is treated as a revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s
revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. An impairment loss in respect
of goodwill is not reversed. Financial
asset The
Group records the impairment losses for financial assets as lifetime expected credit losses. These are the expected shortfalls in contractual
cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Group
uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision
matrix. (k)
Cash and cash equivalen For
the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.
Bank overdrafts are shown within borrowings in current liabilities in the consolidated balance sheet. (l)
Trade and other receivables Trade
receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less
loss allowance. Refer
Note 31 for details of management of interest rate, foreign exchange and liquidity risks applicable to trade and other payables for which,
due to their short-term nature, their carrying value approximates their fair value. (m)
Inventories (i)
Raw materials and stores, work in progress and finished goods Raw
materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable value. Cost comprises direct
materials, direct labor and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis
of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased
inventory are determined after deducting rebates and discounts. 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. NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (n)
Property, plant and equipment Property,
plant and equipment is stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Subsequent
costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged
to profit or loss during the reporting period in which they are incurred. Depreciation
is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated
useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows: SCHEDULE OF ESTIMATED USEFUL LIFE
Plant
and equipment 3 5
Furniture,
fittings and equipment 3 5
Leasehold
improvements 1 3
Leased
plant and equipment 3 The
assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An
asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount (note 2(j)). Gains
and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. When revalued
assets are sold, it is Company policy to transfer any amounts included in other reserves in respect of those assets to retained earnings. (o)
Intangible assets and goodwill (i)
Goodwill Goodwill
arises on the acquisition of a business combination. Goodwill is calculated as the excess sum of:
● the
consideration transferred;
● any
non-controlling interest; and
● the
acquisition date fair value of any previously held equity interest; over the acquisition date fair value of net identifiable assets
acquired. Goodwill
is not amortised. Instead, goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate
that it might be impaired, and is carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit
or loss and are not subsequently reversed. Goodwill
is allocated to the Group’s cash-generating units representing the lowest level at which goodwill is monitored. (ii)
Brand name and customer contracts Brand,
trademark, trade names and domain names acquired in a business combination that qualify for separate recognition are recognised as intangible
assets at their fair values. Brand,
trademark, trade names and domain names are amortised on a straight-lined basis over their estimated useful lives of 5 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (p)
Trade and other payables Trade
payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Company prior
to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the
purchase of these goods and services. Trade payables and other payables generally have terms of between 30 and 60 days. (q)
Provisions Provisions
for legal claims, service warranties and make good obligations are recognised when the Company has a present legal or constructive obligation
as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can
be reliably estimated. Provisions are not recognised for future operating losses. Where
there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering
the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included
in the same class of obligations may be small. Provisions
are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at
the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market
assessments of the time value of money and the r |
