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Integrated Report 2016
ANNUAL FINANCIAL STATEMENTS
(continued)
Leases are classified as finance leases where substantially all the risks and rewards associated with ownership of an asset are transferred from
the lessor to the Group as lessee. Finance lease assets and liabilities are recognised at the lower of the fair value of the leased property or the
present value of the minimum lease payments. Finance lease payments are allocated, using the effective interest rate method, between the
lease finance cost, which is included in finance costs, and the capital repayment, which reduces the liability to the lessor.
Capitalised lease assets are depreciated in line with the Group’s stated depreciation policy. If there is no reasonable certainty that the Group will
obtain ownership by the end of the lease term, the asset is depreciated over the shorter of its estimated useful life and lease term.
Operating leases are those leases which do not fall within the scope of the above definition.
Operating lease rentals are charged against trading profit on a straight-line basis over the lease term.
REVENUE
Revenue comprises turnover, dividend income and finance income. Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received/
receivable excluding value-added tax, normal discounts, rebates, settlement discounts, promotional allowances, and internal revenue which
is eliminated on consolidation.
The Group assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. The Group has
concluded that it is acting as a principal in all of its revenue arrangements.
Turnover from the sale of goods (including notional interest on those sales) is recognised when the significant risks and rewards of ownership
have passed to the buyer.
Dividend income is recognised when the Group’s right to receive payment is established.
Finance income is accrued on a time basis recognising the effective rate applicable on the underlying assets.
BORROWING COSTS
All borrowing costs are expensed in the period they occur, as none of the borrowing costs were directly attributable to the acquisition,
construction or production of an asset which qualify for capitalisation. Borrowing costs consist of interest and other costs that an entity incurs
in connection with the borrowing of funds.
TAXES
CURRENT INCOME TAX
Current income tax is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive
income because it excludes items of income or expense that are taxable or deductible in other years, and it further excludes items that are
never taxable or deductible.
Current tax relating to items recognised outside profit or loss is recognised in other comprehensive income and not in profit or loss. Current tax
items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid
to the taxation authorities. The Group’s liability or receivable for current tax is calculated using tax rates that have been enacted or substantively
enacted at the reporting date in the countries where the Group operates.
DEFERRED TAX
Deferred tax is provided using the liability method on all temporary differences at the reporting date. Temporary differences are differences
between the carrying amounts of assets and liabilities for financial reporting purposes and their tax base.
Deferred tax liabilities are recognised for taxable temporary differences, except:
•
where the liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and,
at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
•
in respect of taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, where the timing
of the reversal of the temporary differences can be controlled, and it is probable that the temporary differences will not reverse in the
foreseeable future.
ANNEXURE I – ACCOUNTING POLICIES
CONTINUED