Apata Limited and Group

More documents

Recommendations

Info

Notes to the financial statements (year ended 31 March 2008) apata (annual report 2007/08) 30 (b) Financial instruments The Group classifies its financial instruments in the following categories: fair value through profit and loss, available for sale, loans and receivables and other. The classification depends on the purpose for which the instruments were acquired. Management determines the classification at initial recognition and re–evaluates this designation at each reporting date. (i) Non-derivative financial instruments Non–derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables. Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Accounting for finance income and expense is discussed in note 3(k). Non–derivative financial instruments are recognised initially at fair value. Subsequent to initial recognition non–derivative financial instruments are measured as described below. Available–for–sale financial assets The Group’s investments in equity securities are classified as available–for–sale financial assets. Subsequent to initial recognition, they are measured at fair value and the changes therein are recognised directly in equity. When an investment is derecognised, the cumulative gain or loss in equity is transferred to profit and loss. Where there is no active market for the equity instrument and their fair value cannot be reliably measured, the instrument is measured at cost. Other Other non–derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses. Trade and other receivables Trade and other receivables are stated at their cost less impairment losses. Loans and borrowings Loans and borrowings are classified as other non– derivative financial instruments. Trade and other payables Trade and other payables are stated at cost. (ii) Derivative financial instruments The Group uses derivative financial instruments to hedge its exposure to interest rate risks arising from financing activities. The Group does not hold or issue derivative financial instruments for trading purposes. However, derivatives are accounted for as trading instruments. Derivative financial instruments are recognised initially at fair value and transaction costs are expensed immediately. Subsequent to initial recognition, derivative financial instruments are stated at fair value. The gain or loss on remeasurement to fair value is recognised immediately in the income statement. (c) Share capital Share capital is classified as equity as it is redeemable only at the Company’s option, and dividends are discretionary. Dividends thereon are recognised as distributions within equity. When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from paid in share capital. (d) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self–constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. (ii) Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day–to–day servicing of property, plant and equipment are recognised in the income statement as incurred. (iii) Depreciation Depreciation is recognised in the income statement on a straight–line basis over the estimated useful life for buildings and on diminishing value over the estimated useful lives for all other items. Land is not depreciated. The estimated useful lives for the current and comparative years are as follows: – buildings 10 - 50 years – plant and equipment 5 – 15 years – vehicles 5 – 15 years – office equipment and furniture 3 – 20 years Depreciation methods, useful lives and residual values are reassessed at each reporting date.
(e) Leased assets Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Other leases are operating leases and the leased assets are not recognised on the Group’s balance sheet. (f) Inventories Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first– in first–out principle, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. (g) Employee Benefits (i) Short-term benefits Short–term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. (h) Impairment The carrying amounts of the Group’s assets are reviewed at each reporting date to determine whether there is any objective evidence of impairment. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses directly reduce the carrying amount of assets and are recognised in the income statement. (i) Impairment of trade & other receivables The recoverable amount of the Group’s receivables carried at amortised cost is calculated as the present value of estimated future cash flows, discounted at the original effective interest rate (i.e., the effective interest rate computed at initial recognition of these financial assets). Receivables with a short duration are not discounted. Impairment losses on an individual basis are determined by an evaluation of the exposures on an instrument by instrument basis. All individual instruments that are considered significant are subject to this approach. (ii) Non-financial assets The carrying amounts of the Group’s non–financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (i) Revenue (i) Services Revenue from services rendered is recognised in the income statement in proportion to the stage of completion of the transaction at each reporting date. (ii) Goods sold Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods. (iii) Agency relationship When the Group acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognised is the net amount receivable from services provided by the Group. Apata Suppliers Limited has the ultimate contract to supply Zespri with kiwifruit. Apata Suppliers Limited also arrange the logistics services and receive revenue for this service performed on behalf of growers (via SouthLink Limited). On the basis that Apata Suppliers Limited is acting only as agent, and not owner of the fruit, the receipts and payments are not reflected as revenue and expenses, and instead treated as ‘pass–through’ money, having no impact on financial performance. Accordingly those receipts in respect of payments to growers are excluded from the income statement and the statement of cash flows. (j) Lease payments Payments made under operating leases are recognised in the income statement on a straight–line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease. (k) Finance income and expenses Finance income comprises interest income on funds invested and dividend income. Interest income is recognised as it accrues, using the effective interest method. Dividend income is recognised on the date that the Group’s right to receive payment is established. Finance expenses comprise interest expense on borrowings and changes in derivatives designated at fair value through profit and loss. All borrowing costs are recognised in the income statement using the effective interest method. apata (annual report 2007/08) 31
Page 1 and 2: Apata Limited and Group Financial S
Page 3 and 4: Balance sheet As at 31 March 2008 I
Page 5: Notes to the financial statements (
Page 9 and 10: Note 4 : Determination of fair valu
Page 11 and 12: Market valuation The property, plan
Page 13 and 14: Note 15 : Capital and reserves Reco
Page 15 and 16: Note 17 : Employee benefits (Compan
Page 17 and 18: Note 20 : Operating leases Leases a
Page 19 and 20: SouthLink Limited / Southlink Suppl
Page 21 and 22: Statutory information - Year ended
Page 23 and 24: Securities Act Exemption Notice inf
Page 25 and 26: Company details Company name Apata

Apata Limited and Group

Create successful ePaper yourself

Delete template?

Save as template?