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FoR BetteR RetuRns Annual Report 2022 173

notes to the
financial statements
for the year ended 31 december 2022

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.26 Pension Contribution

pension contributions are recognised upon receipt of contributions from statutory bodies, local authorities and
other agencies as well as government’s share, gratuities and other deductions in accordance with the statutory
and local authorities pensions act, 1980 (act 239) and service circular no. 12/2008. penalty for late contribution
payments are recognised upon receipt.

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

the preparation of the consolidated financial statements requires the establishment of judgements, estimates and
assumptions by the group and KWap that affect the reported amounts of revenues, expenses, assets and liabilities
as well as the accompanying disclosures and the disclosure of contingent assets and liabilities in accordance with
the relevant mfrs. uncertainties in relation to the assumptions and estimates may result in outcomes which require
material adjustments to the carrying amount of affected assets or liabilities in future periods.
Judgements applied by the group and KWap in the application of accounting policies, key assumptions concerning the
future and other key sources of uncertainty estimation at the reporting date with significant risk of material adjustments
to the carrying amount of affected assets and liabilities within the next financial year are discussed as follows:

(a) Impairment of interest in subsidiaries and associates
assessment on the objective evidence for impairment of investments are conducted at each reporting date.
factors such as, amongst others, the prolonged shortfall between the indicative fair value and the carrying
amount, significant changes with adverse effects on the investments as well as the deterioration of the financial
performance of investments are taken into consideration to determine the objective evidence for impairment,
if any.

Judgements are applied by the group and KWap in the selection of a suitable method of valuation such as,
amongst others, the discounted cash flow, realisable net asset value and sector average price-earning ratio
depending on the nature as well as the industries in relation to the investment.
upon the selection of a suitable method of valuation, certain assumptions are established to estimate the future
recoverable amount of the investment. such assumptions may include, amongst others, assumptions on the
expected future cash flows, revenue growth, discount rate used for the purpose of discounting the future cash
flows, which incorporates the relevant risks, as well as the expected future outcome of certain past events relating
to the specific investment.