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AFRICAN DAWN ANNUAL REPORT 14

Accounting Policies 1. Presentation of Financial Statements The consolidated and separate annual financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), the requirements of the Companies Act, the JSE Listings Requirements, the SAICA Financial Reporting Guides as issued by the Accounting Practices Board and Financial Reporting Pronouncements as issued by Financial Reporting Standards Council. The consolidated and separate financial statements are prepared in accordance with the going concern principle under the historical cost basis, other than financial instruments. The accounting policies have been consistently applied throughout the group and for all the years presented unless otherwise stated. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a high degree of judgement, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 34. 1.1 Segmental reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision-maker, who is responsible for allocating resources and assessing the performance of the operating segments, has been identified as the executive management committee that makes strategic decisions. As the internal reporting is not done geographically and there is no significant geographic split in the business, the segments are indicated in operational segments only. 1.2 Consolidation Basis of consolidation Subsidiaries are all entities (including special purpose entities) over which the Group has the power over the investee and exposure, or rights to variable returns from its involvement with the investee and the ability to use it's power over the investee to affect the amount of the investor's returns. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition to the effective date of disposal, as appropriate. Subsidiaries are de-consolidated from the date that control ceases. The Group uses the purchase method of accounting to account for the acquisition of subsidiaries. The cost of an acquisition is measured, as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the statement of comprehensive income. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred. 1.3 Discontinued operations A discontinued operation is a component of the Group that either has been disposed of, or is classified as held for sale, and; represents a separate major line of business or geographical area of operations; is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or is a subsidiary acquired exclusively with a view to resale. The profit or loss from discontinued operations, including prior year's components of profit or loss, is presented in a single amount in the statement of comprehensive income. For further analysis of the discontinued operation and disposal, refer to note 13 and note 38. 1.4 Property, plant and equipment Property, plant and equipment is carried at historical cost less accumulated depreciation and any accumulating impairment losses. All fixed assets are shown at cost, less subsequent depreciation and impairment, except for land, which is shown at cost less impairment. Cost includes expenditure that is directly attributable to the acquisition of the items and the cost to bring it into use. Items of property, plant, and equipment are recognised as assets when it is probable that the future economic benefits associated with the asset will flow to the entity, and the cost of the asset can be measured reliably. AFRICAN DAWN 3 6 ANNUAL REPORT 2014


AFRICAN DAWN ANNUAL REPORT 14
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