housing - National Housing Finance Corporation

More documents

Recommendations

Info

GROUP ACCOUNTING POLICIES 1. CORPORATE INFORMATION The consolidated financial statements of the National Housing Finance Corporation Limited (“NHFC”) for the year ended 31 March 2006 were approved by the Board on 29 June 2006. National Housing Finance Corporation is a public company incorporated and domiciled in South Africa, the shares of which are held by the Government of the Republic of South Africa. 2. BASIS OF PREPARATION The consolidated financial statements have been prepared on a historical-cost basis, except as otherwise indicated. The consolidated financial statements are presented in Rand and all values are rounded to the nearest thousand (R’000) except when otherwise indicated. Consolidated financial statements are prepared on a going-concern basis. Statement of compliance The NHFC has applied IFRS for the first time in preparing the consolidated financial statements and its subsidiaries. Basis of consolidation The consolidated financial statements comprise the financial statements of NHFC Limited and its subsidiaries as at 31 March 2006. All intra-group balances, transactions, income and expenses, and profits and losses resulting from intra-group transactions that are recognised in assets, are eliminated in full. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Summary of significant accounting policies Interest in a joint venture The Group’s interest in its joint venture is accounted for under the equity method of accounting. Property, plant and equipment Plant and equipment is stated at cost, excluding the cost of day-to-day servicing, less accumulated depreciation and accumulated impairment in value. Depreciation is calculated on a straight-line basis over the useful life of the assets. The carrying value of plant and equipment is reviewed for impairment when events or changes in circumstance indicate that the carrying value may not be recoverable. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognised. The asset’s residual values, useful lives and methods are reviewed, and adjusted if appropriate, at each financial year-end. 32 NHFC ANNUAL REPORT 2006
GROUP ACCOUNTING POLICIES CONTINUED 2. BASIS OF PREPARATION (continued) Investment in an associate The Group’s investment in an associate is accounted for under the equity method of accounting. An associate is an entity in which the Group has significant influence and which is neither a subsidiary nor a joint venture. Under the equity method, the investment in the associate is carried in the balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the associate. Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net investment in the associate. The income statement reflects the share of the results of operations of the associate. Where there has been a change recognised directly in the equity of the associate, the Group recognises its share of the change and discloses this, when applicable, in the statement of changes in equity. Impairment of assets The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less cost to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds it recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. Impairment losses of continuing operations are recognised in the income statement in those expense categories consistent with the function of the impaired asset. An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried in a revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. Financial assets Financial assets within the scope of IAS 39 are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value though profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end. All regular purchases and sales of financial assets are recognised on the trade date, i.e. the date that the Group commits to purchase the asset. Regular purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the market-place. NHFC ANNUAL REPORT 2006 33
Page 1 and 2: A N N U A L R E P O R T 2 0 0 6 u O
Page 4 and 5: A TRIBUTE TO OUR CHAIRMAN IN MEMORY
Page 6 and 7: KEY FINANCIAL FEATURES 2006 % 2005
Page 8 and 9: HIGHLIGHTS NHFC - TEN YEARS ON NHFC
Page 10 and 11: BOARD OF DIRECTORS Mr Tim Middleton
Page 12 and 13: “EVERY TIME YOU ARE TEMPTED TO RE
Page 14 and 15: CHIEF EXECUTIVE’S REPORT CONTINUE
Page 16 and 17: CHIEF EXECUTIVE’S REPORT CONTINUE
Page 18 and 19: CORPORATE GOVERNANCE INTRODUCTION C
Page 20 and 21: CORPORATE GOVERNANCE CONTINUED Boar
Page 22 and 23: CORPORATE GOVERNANCE CONTINUED MCC
Page 24 and 25: CORPORATE GOVERNANCE CONTINUED inte
Page 26 and 27: ANNUAL FINANCIAL STATEMENTS FOR THE
Page 28 and 29: REPORT OF THE INDEPENDENT AUDITORS
Page 30 and 31: REPORT OF THE DIRECTORS The Directo
Page 32 and 33: BALANCE SHEETS AS AT 31 MARCH 2006
Page 34 and 35: STATEMENT OF CHANGES IN EQUITY FOR
Page 38 and 39: GROUP ACCOUNTING POLICIES CONTINUED
Page 44 and 45: NOTES TO THE ANNUAL FINANCIAL STATE
Page 72: ADMINISTRATION REGISTRATION NUMBER

housing - National Housing Finance Corporation

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?