Page 68 - Inegrated Annual Report 2020-Eng

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 31 DECEMBER 2020

Provision for staff terminal benefits

The Group provides end of service benefits to its employees. The entitlement to these benefits is based on
the employees’ final salary and length of service, subject to the completion of a minimum service period. The
expected costs of these benefits are accrued over the period of employment.

Monthly pension contributions are made in respect of UAE National employees, who are covered by the Law No.
2 of 2000. The pension fund is administered by the Government of Abu Dhabi, Finance Department, represented
by the Abu Dhabi Retirement Pensions and Benefits Fund.

Dividend

Dividend is recognised as a liability in the period in which the dividends are approved by the Company’s
shareholders and are recognised as distributions within equity.

Provisions

Provisions are recognised if, as a result of past events, the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle
the obligation. Where the effect of time value of money is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of
money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

The provisions are reviewed and adjusted at each reporting date, and if outflow is no longer probable, the
provision is reversed to income.

Onerous contracts

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous
contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting
the obligations under the contract exceed the economic benefits expected to be received under it.

Contingent liabilities

Unless the possibility of any outflow in settlement is remote, the Group discloses each class of contingent
liability at the end of the reporting period and a brief description of the nature of the contingent liability. Where
practicable, the Group discloses an estimate of its financial effect; an indication of the uncertainties relating to
the amount or timing of any outflow; and the possibility of any reimbursement.

decision maker and used to allocate resources to the segments and to assess their performance.

Current versus non-current classification

The Group presents assets and liabilities in the consolidated statement of financial position based on current/
non-current classification. An asset is current when it is:

• Expected to be realised or intended to be sold or consumed in the normal operating cycle,

• Held primarily for the purpose of trading,

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.

68 2020 Integrated Annual Report