This - As spoken today, when we review balance sheet items, please keep in mind the core rule: 1. Assets – should not be overstated 2. Liabilities – should not be understated This reflects the principle of prudence in financial reporting. Note : The below outlines the key concepts and principles to guide our review of balance sheet items. It is important to note that this list is not exhaustive, and specific situations may require additional consideration based on the relevant accounting standards and judgement. For assets, the treatment depends on how they are measured: 1. Historical Cost 2. - e.g. Investment in subsidiaries/associates (in separate FS), Property, Plant & Equipment (PPE) 3. - We assess for impairment in line with: 4. • FRS 36 (Impairment of Assets) – for PPE and cost-based investments 5. • FRS 27 (Separate Financial Statements) – allows cost method for investments in subsidiaries/associates The carrying amount should not exceed the recoverable amount (i.e. higher of fair value less costs to sell and value in use). 2. Amortised cost • e.g. Trade receivables, loan receivables • We apply the Expected Credit Loss (ECL) model under FRS 109 (Financial Instruments), where this model considers past events, current conditions, and forward-looking information to recognise expected losses due to credit risk. 3. FVTPL • e.g. Investment securities, derivatives • No impairment required because the carrying amount is updated to fair value at each reporting date so the risk of overstatement in minimal and the changes are recognised directly in profit or loss under FRS 109 (Financial Instruments) Note : FRS 113 (Fair Value Measurement), fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.On the other hand, for liabilities side: • We must ensure that all present obligations (e.g. provisions, accruals) as of the reporting date are fully recognised in accordance with FRS 37 (Provisions, Contingent Liabilities and Contingent Assets) This ensures we don’t understate what the company owes, especially for obligations that are probable and reliably measurable as of end of the reporting period.

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When reviewing balance sheet items, we must follow the core principle of prudence in financial reporting. This principle has two fundamental rules: first, assets should not be overstated, and second, liabilities should not be understated. This conservative approach ensures that financial statements provide reliable and trustworthy information for stakeholders making important business decisions. Assets are measured using three main methods. First, historical cost is used for investments in subsidiaries and property, plant and equipment, assessed for impairment under FRS 36 and FRS 27. Second, amortised cost applies to trade and loan receivables, using the Expected Credit Loss model under FRS 109. Third, fair value through profit and loss is used for investment securities and derivatives, with no impairment needed as values are updated to fair value under FRS 109 and FRS 113. The impairment assessment process follows three key steps. First, we identify impairment indicators such as significant decline in market value, adverse changes in business environment, or evidence of obsolescence. Second, we calculate the recoverable amount, which is the higher of fair value less costs to sell and value in use based on discounted cash flows. Finally, we compare the carrying amount with the recoverable amount, and if the carrying amount exceeds the recoverable amount, we recognize an impairment loss. For liabilities, we must ensure all present obligations as of the reporting date are fully recognized according to FRS 37. This prevents understating what the company owes. The recognition criteria include having a present obligation, probable outflow of resources, and reliable measurement. Examples include provisions for warranties, legal claims, restructuring costs, and environmental obligations. This comprehensive approach ensures stakeholders have a complete picture of the company's financial obligations. To summarize our balance sheet review principles: The prudence principle ensures assets are not overstated and liabilities are not understated. Assets require different assessment approaches based on their measurement method. Impairment testing compares carrying amounts with recoverable amounts. All present obligations must be recognized to prevent liability understatement. This comprehensive approach ensures reliable financial reporting for stakeholder decision-making.