2008 Annual Report - Kenford Group Holdings Limited

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Notes to the Financial Statements For the year ended 31 March 2008 4. PRINCIPAL ACCOUNTING POLICIES (Continued) (e) Payments for leasehold land held for own use under operating leases Payments for leasehold land held for own use under operating leases represent up-front payments to acquire longterm interests in lessee-occupied properties. These payments are stated at cost and are amortised over the period of the lease on a straight-line basis to the consolidated income statement. When the lease payments cannot be allocated reliably between land and building elements, the entire lease payments are included in the cost of the leasehold land and buildings as a fi nance lease in property, plant and equipment. (f) Foreign currencies Transactions entered into by Group entities in currencies other than the currency of the primary economic environment in which it operates (the “functional currency”) are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are recognised in the consolidated income statement in the period in which they arise. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the consolidated income statement for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity, in which case, the exchange differences are also recognised directly in equity. On consolidation, the results of foreign operations are translated into the presentation currency of the Group (i.e. Hong Kong dollars) at the average exchange rates for the year, unless exchange rates fl uctuate significantly during the period, in which case, the rates approximating to those ruling when the transactions took place are used. All assets and liabilities of overseas operations are translated at the rate ruling at the balance sheet date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised directly in equity (the “exchange fluctuation reserve”). Exchange differences recognised in the income statement of group entities’ separate fi nancial statements on the translation of long-term monetary items forming part of the Group’s net investment in the overseas operation concerned are reclassified to the exchange fl uctuation reserve. On disposal of a foreign operation, the cumulative exchange differences recognised in the exchange fl uctuation reserve relating to that operation up to the date of disposal are transferred to the consolidated income statement as part of the profi t or loss on disposal. Goodwill and fair value adjustments on identifi able assets acquired arising on an acquisition of a foreign operation on or after 1 January 2005 are treated as assets and liabilities of that foreign operation and translated at the rate of exchange prevailing at the balance sheet date. Exchange differences arisen are recognised in the exchange fl uctuation reserve. Annual Report 2008 45
Notes to the Financial Statements For the year ended 31 March 2008 4. PRINCIPAL ACCOUNTING POLICIES (Continued) (g) Financial instruments (i) Financial assets The Group classifi es its fi nancial assets into one of the following categories, depending on the purpose for which the asset was acquired. The Group’s accounting policy for each category is as follows: Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition as at fair value through profi t or loss. Financial assets are classifi ed as held for trading if they are acquired for the purpose of sale in the near term. Derivatives, including separated embedded derivatives, are also classifi ed as held for trading unless they are designated as effective hedging instruments or fi nancial guarantee contracts. Gains or losses on investments held for trading are recognised in the consolidated income statement. Where a contract contains one or more embedded derivatives, the entire hybrid contract may be designated as a fi nancial asset at fair value through profi t or loss, except where the embedded derivative does not signifi cantly modify the cash fl ows or it is clear that the separation of the embedded derivative is prohibited. Financial assets may be designated upon initial recognition as at fair value through profit or loss if the following criteria are met: (i) the designation eliminates or signifi cantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or recognising gains or loss on them on a different basis; (ii) the assets are part of a group of fi nancial assets which is managed and its performance evaluated on a fair value basis according to a documented management strategy; or (iii) the financial asset contains an embedded derivative that would need to be separately recorded. At each balance sheet date subsequent to initial recognition, fi nancial assets at fair value through profi t or loss are measured at fair value, with changes in fair value recognised directly in the consolidated income statement in the period in which they arise. Loans and receivables: These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (trade and bills receivables), and also incorporate other types of contractual monetary asset. At each balance sheet date subsequent to initial recognition, they are carried at amortised cost using the effective interest method, less any identifi ed impairment losses. 46 KENFORD GROUP HOLDINGS LIMITED
Page 2 and 3: Contents Page 1. Corporate Informat
Page 4 and 5: Chairman’s Statement On behalf of
Page 6 and 7: Management Discussion and Analysis
Page 8 and 9: Management Discussion and Analysis
Page 10 and 11: Report of the Directors PROPERTY, P
Page 12 and 13: Report of the Directors DIRECTORS
Page 14 and 15: Report of the Directors SUBSTANTIAL
Page 16 and 17: Report of the Directors SHARE OPTIO
Page 18 and 19: Report of the Directors SHARE OPTIO
Page 20 and 21: Report of the Directors TAXATION OF
Page 22 and 23: Directors' and Senior Management's
Page 24 and 25: Directors' and Senior Management's
Page 26 and 27: Corporate Governance Report BOARD O
Page 28 and 29: Corporate Governance Report CHAIRMA
Page 30 and 31: Corporate Governance Report NOMINAT
Page 32 and 33: Corporate Governance Report INVESTO
Page 34 and 35: Corporate Structure CORPORATE STRUC
Page 36 and 37: Independent Auditor’s Report OPIN
Page 38 and 39: Consolidated Balance Sheet As at 31
Page 40 and 41: Consolidated Statement of Changes i
Page 42 and 43: Notes to the Financial Statements F
Page 84 and 85: Five Years Financial Summary CONSOL

2008 Annual Report - Kenford Group Holdings Limited

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