Amal Ltd 2019-20

Amal Ltd | Annual Report 2019-2020 carrying amount that will be determined if no impairment loss had previously been recognised. h) Cash and cash equivalents: Cash and cash equivalents include cash in hand, demand deposits with bank and other short-term (three months or less from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value. i) Trade receivables: Trade receivables are recognised when the right to consideration becomes unconditional. These assets are held at amortised cost, using the effective interest rate (EIR) method where applicable, less provision for impairment based on expected credit loss. j) Trade and other payables: These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the EIR method. k) Inventories: Inventories are stated at cost or net realisable value whichever is lower. Cost is determined on first-in first-out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to effect the sale. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventory to the present location and condition. Due allowances are made for slow | non-moving, defective and obsolete inventories based on estimates made by the Company. Items such as spare parts, stand-by equipment and servicing equipment which are not plant andmachinery get classified as inventory. l) Investments and other financial assets: Classification: The Company classifies its financial assets in the following measurement categories: i) Those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss) ii) Those measured at amortised cost The classification depends on business model of the Company for managing financial assets and the contractual terms of the cash flows. Notes to the Financial Statements Note 1 Significant accounting policies (continued)