Page 57 - Inegrated Annual Report 2020-Eng

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 31 DECEMBER 2020

Other income

Sale of scrap

Income from the sale of scrap is recognized at the time customers take delivery and risk and rewards are
transferred to customers as per agreed terms and conditions.

Dividend income

Dividend income is recognised in the consolidated statement of profit or loss on the date that the Group’s right
to receive payment is established, which in the case of quoted securities is the ex-dividend date.
Foreign currencies

Transactions in foreign currencies are translated to AED at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to AED at
the exchange rate at that date.

The foreign currency gain or loss on monetary items is the difference between the amortised cost in AED at the
beginning of the year, adjusted for effective interest and payments during the period and the amortised cost in
foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are
retranslated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities
denominated in foreign currencies that are measured at fair value are retranslated to AED at the exchange rate
at the date that the fair value was determined. Foreign currency differences arising on translation are recognised
in the consolidated statement of profit or loss, except for the exchange differences arising on the retranslation of
equity instruments at fair value through OCI and qualifying cash flow hedges to the extent the hedge is effective,
which are recognised in other comprehensive income. Foreign currency gains and losses on financial assets and
financial liabilities are reported on a net basis.

For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group’s
foreign operations are translated into AED using exchange rates prevailing at the end of each reporting period.
Income and expense items are translated at the average exchange rates for the period, unless exchange rates
fluctuate significantly during that period, in which case the exchange rates at the dates of transactions are used.
Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity
as foreign currency translation reserves.

Taxation

Income tax (expense) / benefit comprises current and deferred tax. Current and deferred taxes are recognised in
profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity
or in other comprehensive income.

Current tax

Current tax is the expected tax payable on the taxable income or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

The Group has determined that interest and penalties related to income taxes do not meet the definition of
income taxes, and therefore accounted for these under IAS 37 Provisions, Contingent Liabilities and Contingent
Assets.

2020 Integrated Annual Report 57