Financial Statement Notes 6-10

6. DIRECT OPERATING EXPENSES ARISING FROM INVESTMENT PROPERTY

Other direct operating expenses include principally expenses related to 'safe shopping' initiatives, repairs and maintenance, gardening maintenance costs, hardware tools and consumables.

7. ADMINISTRATIVE EXPENSES

Other administrative expenses principally include corporate strategy costs and investor relations, bank charges and other sundry administrative costs.

* Impairment of TDS receivable in the prior year has been reclassified from Net impairment losses on financial assets to Administrative expenses given that TDS is not considered as a financial asset.

8. NET IMPAIRMENT LOSSES ON FINANCIAL ASSETS

Please refer to Note 16 for further information on trade receivables.

9. NET FINANCE COSTS

Accounting policy - Net finance costs

The Group’s finance income and finance costs include:

Interest income or expense is recognised using the effective interest method. The 'effective interest rate' is the rate that exactly discounts estimated future cash payments through the expected life of the financial instrument to:

the gross carrying amount of the financial asset; or
the amortised cost of the financial liability.

Interest income from loan from related parties and interest on rental in arrears and penalty interest are both calculated using the effective interest rate as described above.

In calculating interest income or expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the net amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

(a) Finance income

(b) Finance costs

Total interest income on financial assets that are measured at amortised cost for the year was Rs 12.6m (2020 Rs 18.1m) for the Group and
Rs 10.9m (2020: Rs 8.9m) for the Company.

10. TAX CHARGE

Accounting policy

The tax expense comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current tax

The current income tax charge is based on taxable income for the year calculated on the basis of tax laws enacted or substantively enacted by the end of the reporting year.