DIPPED PRODUCTS PLC / ANNUAL REPORT 2008—2009

Accounting Policies
5.2. Agents’ indemnity fund
Provision has been made for amount payable to agents of ICOGUANTI S.p.A.-Italy on cessation of contracts. The
basis of calculation is given below;
Length of contract (Years)
Percentage of invoice value
1 - 3 3.0
4 - 6 3.5
above 6 4.0
6. Trade and other payables
Trade and other payables are stated at cost.
6.1. Capital commitments and contingencies
Capital commitments and contingent liabilities of the Group are disclosed in the respective Notes to the Financial
Statements.
7. Income Statement
For the purpose of presentation of the Income Statement, the function of expenses method is adopted, as it represents
fairly the elements of company performance.
7.1. Revenue
Revenue is accounted for on sale of goods when all significant risks and rewards of ownership have been
transferred to the buyer, which normally occur upon the delivery of goods.
Revenue from rendering services is recognised in the accounting period in which the services are rendered or
performed.
Rental income is recognised in profit & loss on a straight-line basis over the term of the lease.
Grants related to income are recognised in the profit & loss in the year in which it was received, except for
plantations as explained in 11.5.
Dividend income is recognised in profit & loss, when the Group’s right to receive payment is established.
Interest income is recognised in profit & loss as it accrues.
Gains/(losses) on the disposal of the investments held by the Group have been accounted for in profit & loss.
7.2. Expenditure
All expenditure incurred in the running of the business has been charged to profit & loss in arriving at the profit for
the year.
7.3. Operating leases
Leases where the lessor effectively retains substantially all the risks and rewards of ownership over the lease term
are classified as operating leases. Payments made under operating leases are recognised in profit & loss on a
straight-line basis over the term of the lease.
7.4. Borrowing costs
Borrowing costs related to investments in “qualified assets” that require a substantial period for completion are
capitalised with the cost of the asset. Other borrowing costs are recognised as an expense in the period in which
they are incurred.
7.5. Financing income and expenses
Finance income comprises interest income on funds invested, dividend income and gain on translation of
foreign currency.
Financing expenses comprises interest payable on borrowings and loss on translation of foreign currency. The
interest expense component of finance lease payments is recognised in Income Statements using the effective
interest rate method.
7.6. Income tax expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit & loss except
to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the reporting
date and any adjustments to tax payable in respect of previous years.
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