219 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) For the financial year ended 31 January 2023 ACCOUNTABILITY (FINANCIAL STATEMENTS) 2. Summary of significant accounting policies (continued) 2.30 Operating segments An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the Chief Operating Decision Maker comprising the Board of Directors, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available. 2.31 Government grants Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance that the grant will be received and the Group will comply with all the attached conditions. Government grants receivable are recognised as income over the periods necessary to match them with the related costs which they are intended to compensate, on a systematic basis. Government grants relating to expenses are shown separately as other income. Government grants relating to assets are deducted against the carrying amount of the assets. 2.32 Contract assets Contract assets as defined in MFRS 15 represent the Group’s construction work-in-progress. Construction work-in-progress is the Group‘s right to consideration in exchange for goods and services that the Group has transferred to the customer. The Group‘s contract assets are measured as accumulated revenue recognised over time based on progress of the project net of installments invoiced to date. The invoiced installments represent the contractually agreed unconditional milestone payments during the construction period and these amounts are classified as trade receivables until the amount is paid. The Group recognises any losses from onerous contracts under provisions in line with MFRS 137. 2.33 Contract liabilities The Group recognises a contract liability where installments are invoiced or received in advance of satisfying the performance obligation towards the customer. Included in contract liabilities is also deferred income relating to charter income received in advance which are deferred and amortised on a straight-line basis over the contract period. 2.34 Put option liability The Group recognises a liability for an option granted to a non-controlling interest to sell its equity stake back to the Group at their original consideration less dividends and proceeds from capital reduction received by then upon occurrence of conditions set out in the shareholders agreement. A corresponding amount is recognised directly in equity as put option reserve. 2.35 Warrants reserve Warrants reserve arises from the issuance of free detachable warrants together with the Rights Issue, and represents the allocation of the proceeds from the Rights Issue based on the fair value of the warrants at issuance date. The fair value of warrants is credited to a warrants reserve which is part of the Company’s equity. When the warrants are exercised, the related amounts are transferred to share capital. When the warrants are not exercised and lapsed, the related warrant reserve is transferred to retained earnings.
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