2007 / 2008 Annual Report - Eastern Cape Development Corporation

More documents

Recommendations

Info

EASTERN CAPE DEVELOPMENT CORPORATION 2007/08CONSOLIDATED ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2008ACCOUNTING POLICIES1.11 ProvisionsProvisions are recognised when:• the Group has a present obligation as a result of a past event;• it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;and• a reliable estimate can be made of the obligation.The amount of a provision is the present value of the expenditure expected to be required to settle the obligation.Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party,the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received ifthe Group settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for thereimbursement shall not exceed the amount of the provision.Provisions are not recognised for future operating losses.When the Group has a contract that is onerous, the present obligation under the contract is recognised and measuredas a provision.1.12 RevenueRevenue is measured at the fair value of the consideration received or receivable and represents the amountsreceivable for goods, services and operating lease income provided in the normal course of business, net of valueadded tax.Interest is recognised, in profit or loss, using the effective interest rate method.Operating lease income is recognised as income on a straight-line basis over the lease term or another systematicbasis, if more representative of the time pattern of the user’s benefit.Dividends are recognised, in profit or loss, when the Group’s right to receive payment has been established.1.13 Employee benefits1.14 LeasesShort-term employee benefitsEmployee benefits cost include all forms of consideration given in exchange for services rendered by employees. Thecost of providing employee benefits is recognised in profit or loss in the period they are earned by employees. The costof shortterm employee benefits is recognised in the period in which the service is rendered and is not discounted.The expected cost of short-term accumulating compensated abscences is recognised as an expense as the employeesrender service that increases their entitlement or, in the case of non-accumulating abscences, when the abscencesoccur. The expected cost of performance bonus payments is recognised as an expense when there is a legal orconstructive obligation to make such payments as a result of past performance.Post-employment benefit obligationsThe cost of providing defined benefits is determined using the projected unit credit method. Valuations are conductedannually. The amount recognised in the balance sheet represents the present value of the defined benefit obligation asadjusted for unrecognised actuarial gains and losses.A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership.A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental toownership.80
EASTERN CAPE DEVELOPMENT CORPORATION 2007/081.15 TaxOperating leases – lesseeRentals payable under operating leases are recognised in profit or loss on a straight-line basis over the term of therelevant lease, or another basis if more representative of the time pattern of the Group’s benefit. Any contingent rentsare expensed in the period they are incurred.Current taxThe charge for current tax is based on the results for the year as adjusted for income that is exempt and expenses thatare not deductible using tax rates that are applicable to the taxable income.Deferred taxA deferred tax asset is the amount of income taxes recoverable in future periods in respect of deductible temporarydifferences, the carry forward of unused tax losses and the carry forward of unused tax credits.A deferred tax asset is only recognised to the extent that it is probable that taxable profits will be available againstwhich deductible temporary differences can be utilised, unless specifically exempt. It is measured at the tax rates thathave been enacted or substantially enacted at the balance sheet date and is not discounted.A deferred tax liability is recognised for taxable temporary differences, unless specifically exempt, at the tax rates thathave been enacted or substantially enacted at the balance sheet date and is not discounted. A deferred tax liability isthe amount of income taxes payable in future periods in respect of taxable temporary differences. Temporary differencesare differences between the carrying amount of an asset or liability and its tax base.Deferred tax arising on investments in subsidiaries, associates and joint ventures is recognised except where theGroup is able to control the reversal of the temporary difference and it is probable that the temporary difference will notreverse in the foreseeable future.A deferred tax asset is recognised for the carry forward of unused tax losses and unused STC credits to the extent that itis probable that future taxable profit will be available against which the unused tax losses and unused STC credits canbe utilised.Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the assetis realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enactedby the balance sheet date.1.16 Key assumptions concerning the future and key sources of estimationThe financial statements are prepared in accordance with and comply with SA GAAP and its interpretations adopted bythe Accounting Practices Board. In the preparation of the financial statements the corporation has assumed certain keysources of estimation in recording various assets and liabilities, as set out below.Credit impairment of loans and advancesThe Group adopted an incurred-loss approach to impairment in accordance with accounting policy 1.6. Impairmentlosses are incurred only if there is objective evidence of impairment as a result of one or more past events that hasoccurred since initial recognition. This necessitates the establishment of ‘impairment triggers’ on the occurrence ofwhich an impairment loss may be recognised.Credit impairment is based on discounted estimated future cashflows on an asset or group of assets, where suchobjective evidence of impairment exists. The discount rates used to calculate the recoverable amount excludeconsideration of any anticipated future credit losses.81
Page 1 and 2:
EASTERN CAPE DEVELOPMENT CORPORATIO
Page 3:
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
HUMAN RESOURCES MANAGEMENT2007/08 A
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25:
Page 28 and 29:
PHOTOGRAPH: Alicedale, home to the
Page 30 and 31:
Page 33 and 34: INVESTMENT PROMOTION2007/08 ANNUAL
Page 35 and 36: EASTERN CAPE DEVELOPMENT CORPORATIO
Page 37: EASTERN CAPE DEVELOPMENT CORPORATIO
Page 40 and 41: PHOTOGRAPH: The Mercedes Benz South
Page 44 and 45: PHOTOGRAPH: Citrus, chicory, vegeta
Page 49 and 50: DEVELOPMENT SUPPORT SERVICES2007/08
Page 53: EASTERN CAPE DEVELOPMENT CORPORATIO
Page 56 and 57: PHOTOGRAPH: The Automotive Supplier
Page 60 and 61: PHOTOGRAPH: The deepwater port of N
Page 114: www.ecdc.co.za
show all

2007 / 2008 Annual Report - Eastern Cape Development Corporation

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

Delete template?

Save as template?