DIPPED PRODUCTS PLC / ANNUAL REPORT 2008—2009

Accounting Policies
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognised for the initial recognition of goodwill, the initial recognition of assets
or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable
profit, and differences relating to investments in subsidiaries to the extent that they probably will not reverse
in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been enacted or substantively enacted
by the reporting date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to
the extent that it is no longer probable that the related tax benefit will be realised.
Tax withheld on dividend income from subsidiaries and associates is recognised as an expense in the Consolidated
Income Statement at the same time as the liability to pay the related dividend is recognised.
8. General
8.1. Discontinuing operations
A discontinued operation is a component of the Group’s business that represents a separate major line of
business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary
acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or
when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified
as a discontinued operation, the comparative Income Statement is re-presented as if the operation had been
discontinued from the start of the comparative period.
8.2. Events after the Balance Sheet date
All material post Balance Sheet events have been considered and where appropriate adjustments or disclosures
have been made in the respective notes to the Financial Statements.
9. Earnings per share
The Group presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the company by the weighted average number of ordinary
shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential
ordinary shares.
10. Segment reporting
A segment is a distinguishable component of the Group that is engaged either in providing products or services (business
segment), or in providing products or services within a particular economic environment (geographical segment), which is
subject to risks and rewards that are different from those of other segments.
Segmental information is presented in respect of the Group’s business / industry and geographical segments. The primary
format, business segments, is based on the Group’s management and internal reporting structure.
The secondary format, geographical segments, is based on the Group’s geographical spread of operations.
11. Plantations
The significant accounting policies of Kelani Valley Plantations PLC, which was acquired in December 1995, is given below.
No adjustments have been made in respect of accounting policies which differ from that of the Group.
11.1. Property, plant & equipment
11.1.1. Infilling cost
The land development costs incurred in the form of infilling have been capitalised to the relevant mature
field, only where the number of plants per hectare exceeded 3,000 plants and, also if it increases the
expected future benefits from that field, beyond its pre-infilling performance assessment. Infilling costs so
capitalised are depreciated over the newly assessed remaining useful economic life of the relevant mature
plantation, or the unexpired lease period, which ever is lower.
Infilling costs that are not capitalised have been charged to profit & loss in the year in which they are
incurred.
D I P P E D P R O D U C T S P L C A N N U A L R E P O R T 2 0 0 8 – 2 0 0 9
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