CFSL Integrated Report 2025

FINANCIAL

162

Risk Management

Corporate Governance

Statutory Disclosures

within the control of the entity. The Group and the Company record a contingent liability if the contingency is likely and the amount of the liability can be reasonably estimated. Where the contingency loss cannot be estimated, the contingent liability is disclosed in the notes to the financial statements. (u) Share-based payments Before modification: The Group and the Company operate an equity-settled, share-based compensation plan. The value of the employee services received in exchange for the grant of options is recognised as an expense with a corresponding increase in the share option reserve over the vesting period. The total amount to be recognised over the vesting period is determined by reference to the fair value of the options granted on grant date. At each balance sheet date, the Group and the Company revise its estimates of the number of shares under options that are expected to become exercisable on the vesting date and recognise the impact of the revision of the estimates in the statement of profit or loss, with a corresponding adjustment to the share option reserve over the remaining vesting period. When the options are exercised, the proceeds received (net of transaction costs) and the related balance previously recognised in the share option reserve are credited to the share capital account. In the event an employee ceases to be employed by the Group and the Company, the employee retains the ownership of the shares already subscribed to. Any share options which are not yet exercised at the date of the cessation of employment lapse within 60 days of such date and are treated as forfeited. After modification: The Group and the Company operate an equity-settled share-based compensation plan with a cash alternative subsequently added to the plan. The value of the employee services received in exchange for the grant of options is recognised as an expense with a corresponding liability that represents its obligation to make a payment of cash. The total amount to be recognised over the vesting period is determined by reference to the fair value of the options granted on grant date. At each reporting date and until the final settlement date, the liability for a cash-settled share-based payment transaction is remeasured at its fair value. Any differences in the fair value of the liability are recognized in profit or loss. In the event an employee ceases to be employed by the Group and the Company, any previously unrecognized expense is reversed, and the liability to pay is adjusted. (v) Non-controlling put options Put option liability issued to non-controlling interest, to be settled in cash by the Company, which do not grant present access to ownership interest to the Group is recognised at present value of the redemption amount. At the end of each reporting period, the put option liability with non-controlling interest is accounted for at fair value with changes to the put option liability being recognised in the statement of profit or loss (refer to Note 20). The preparation of the Group’s and the Company’s financial statements require management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. In the process of applying the Group’s and the Company’s accounting policies, management has made the following judgements and assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Existing circumstances and assumptions about future developments may change due to circumstances beyond the Group’s and the Company’s control and are reflected in the assumptions if and when they occur. Items with the most significant effect on the amounts recognised in the financial statements with substantial management judgement and/or estimates are collated below: (a) Incremental Borrowing rate The Group and the Company apply a number of significant judgements to estimate the Incremental Borrowing Rate for leases, such as: a) the credit risk, b) the term of the lease, and c) the economic environment (the country, the currency and the date that the lease is entered into) in which the transaction occurs. Refer to note 24

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS