Table of contents

Loans to/(from) shareholders
These financial assets/liabilities are classified as loans and
receivables/payables.
Loan book and other receivables
Loan book and other receivables are measured at initial
recognition at fair value, and are subsequently measured
at amortised cost using the effective interest method.
The allowance recognised is measured as the difference
between the asset’s carrying amount and the present value
of estimated future cash flows discounted at the effective
interest rate computed at initial recognition.
Loan book and other receivables are classified as loans and
receivables.
Other receivables are classified as non-current assets if
expected payment is more than one year.
Trade and other payables
Trade payables are initially measured at fair value, and
are subsequently measured at amortised cost, using the
effective interest method . If collection is expected in one
year or less (or in normal operating cycle of business if
longer), they are classified as current liabilities. If not, they
are presented as non-current liabilities.
Cash and cash equivalents
In the consolidated statement of cash flows, cash and
cash equivalents includes cash in hand, deposits held
at call with banks, other short-term highly liquid
investments not subject to fair value movement with
original maturities of three months or less and bank
overdrafts. In the Consolidated Combined Statement
of Financial Position, bank overdrafts are shown within
borrowings in current liabilities.
All deposits with original maturity of more than three
months are classified as short-term deposits under
other receivables.
Bank overdraft and borrowings
Bank overdrafts and borrowings are initially measured
at fair value net of transaction costs incurred, and are
subsequently measured at amortised cost, using the
effective interest method. Any difference between the
proceeds (net of transaction costs) and the settlement
or redemption of borrowings is recognised in the
Consolidated Combined Statement of Profit or Loss
and Other Comprehensive Income over the term of the
borrowings using the effective interest method.
Bank overdrafts and borrowings are classified as current
liabilities unless the group has an unconditional right to
defer settlement of the liability for at least 12 months
after the Consolidated Combined Statement of Financial
Position date.
Borrowings are subsequently measured at amortised cost,
using the effective interest rate method. Any difference
between the proceeds (net of transaction costs) and the
settlement of redemption of borrowings is recognised
over the term of the borrowings on an effective interest
rate basis.
Derivatives
Derivatives are initially recognised at fair value on the date a
derivative contract is entered into and are subsequently remeasured
at their fair value. The method of recognising the
resulting gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of
the item being hedged.
Hedging activities
The company documents at the inception of the transaction
the relationship between hedging instruments and hedged
items, as well as its risk management objectives and
strategy for undertaking various hedging transactions.
The company also documents its assessment, both at
hedge inception and on an ongoing basis, of whether the
derivatives that are used in hedging transactions are highly
effective in offsetting changes in cash flows of hedged
items. The fair values of various derivative instruments used
for hedging purposes are disclosed in note 24.
The full fair value of a hedging derivative is classified as a
non-current asset or liability when the remaining hedged
item will be settled more than 12 months from year end,
and as a current asset or liability when the remaining
maturity of the hedged item is less than 12 months. Trading
derivatives are classified as a current asset or liability.
Cash flow hedge
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow
hedges is recognised from other comprehensive income
and accumulated in equity. The gain or loss relating to
the ineffective portion is recognised immediately in the
Consolidated Combined Statement of Profit or Loss within
'other income'.
Amounts accumulated in equity are reclassified from other
comprehensive income to profit or loss in the periods
when the hedged item affects profit or loss. The gain
or loss relating to the effective portion of interest rate
swaps hedging fixed rate borrowings is recognised in the
Consolidated Combined Statement of Profit or Loss within
‘finance costs’.
However, when the forecast transaction that is hedged
results in the recognition of a non-financial item (for
example, inventory or fixed assets) the gains and losses
previously deferred in equity are transferred from equity
in other comprehensive income and included in the
initial measurement of the cost of the asset. The deferred
amounts are ultimately recognised in cost of goods sold
in the case of inventory or in depreciation in the case of
fixed assets.
When a hedging instrument expires or is sold, or when a
hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in other comprehensive
income at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in
the Consolidated Combined Statement of Profit or Loss
and Comprehensive Income. When a forecast transaction
is no longer expected to occur, the cumulative gain or loss
that was reported in equity is immediately transferred to
the Consolidated Combined Statement of Profit or Loss and
Comprehensive Income within ‘Finance costs’.
Movements on the hedging reserve in other
comprehensive income are shown in note 24.
1.9 Share capital and equity
Ordinary shares are classified as equity. Any premium
received over and above the par value of the share is
classified as 'share premium' in equity.
1.10 Share premium
Proceeds from issue of shares above the nominal value
is recorded as share premium. Incremental costs directly
attributable to the issue of new shares or options are
shown in share premium as a deduction, net of tax, from
the proceeds. For equity-settled options, the proceeds
received net of any directly attributable transaction costs
are credited to share capital (nominal value) and share
premium when the options are exercised.
1.11 Reserves
Share application fund reserve
Proceeds received from investors for the purchases of
shares not yet issued in their name are credited to the
share application fund reserve and transferred to stated
capital upon formal issue and registration of the purchased
shares to the investor.
Hedging reserve
The value of the reserve consists of the cash flow hedge.
The hedging reserve accumulates net gains and losses on
the effective portion of the cash flow hedge transactions
entered into. A hedge is effective when the movement
in the hedged item and the movement in the hedging
instrument fall within the benchmark of 80% and 125% in
relation to each other.
Share-based payment reserve
Share-based compensation benefits are provided to
employess via an Employee Share Option Plan. Information
relating to this plan are set out in note 21.
Employee options
The fair value of the options granted under the Employee
Share Option Plan is recognised as an employee benefits
expense with a corresponding increase in equity. The total
amount to be expensed is determined by reference to the
fair value of the options granted:
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Including any market performance conditions;
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Excluding the impact of any service and non-market
performance vesting conditions; and
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Including the impact of any non-vesting conditions.
The total expense is recognised over the vesting period,
which is the period over which all the specified vesting
conditions are satisfied. At the end of each period, the
Group revises its estimates of the number of options that
are expected to vest based on the non-market vesting
and service conditions. It recognises the impact of the
revision to original estimates, if any, in profit or loss, with a
corresponding adjustment to equity.
1.12 Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
»»
the profit attributable to owners of the company,
excluding any costs of servicing equity other than
ordinary shares;
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by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during the
year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share for:
»»
the after income tax effect of interest and other
financing costs associated with dilutive potential
ordinary shares;
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the weighted average number of additional ordinary
shares that would have been outstanding assuming
the conversion of all dilutive potential ordinary shares.
1.13 Income tax
Current income tax assets and liabilities
The current income tax charge is calculated on the basis
of the tax laws enacted or substantively enacted at the
balance sheet date in the countries where the company
and its subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in tax
returns with respects to situations in which applicable
tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred income tax assets and liabilities
A deferred tax liability is recognised for all taxable
temporary differences, except to the extent that the
deferred tax liability arises from the initial recognition of an
asset or liability in a transaction which at the time of the
transaction, affects neither accounting profit nor taxable
profit (tax loss).
Deferred income tax is recognised on temporary
differences arising between the tax bases of assets and
liabilities and their carrying amounts in the Consolidated
Combined Financial Statements. However, deferred
tax liabilities are not recognised if they arise from the
initial recognition of goodwill; deferred income tax is not
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MyBucks Annual Report 2016 88
89 MyBucks Annual Report 2016