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These consolidated financial statements of AFGRI Limited have been prepared in accordance with International Financial Reporting Standards (IFRS).
These consolidated financial statements have been
prepared under the historical cost convention, as modified
by the revaluation of available-for-sale financial assets,
financial assets and financial liabilities (including derivative
instruments) and biological assets at fair value through
profit or loss.
The preparation of financial statements in conformity
with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its
judgement in the process of applying the Company’s
and Group’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the
consolidated financial statements are disclosed in note 1 (Critical accounting estimates and judgements).
New standards, interpretations and amendments to
published standards early adopted in 2009
The following new standards, amendments and
interpretations to standards have been early adopted
in these financial statements:
- IFRS 8, Operating segments: requires an entity to adopt
the ‘management approach’ to reporting on the financial
performance of its operating segments. The Standard
sets out requirements for disclosure of information
about an entity’s operating segments and also about the
entity’s products and services, the geographical areas in
which it operates, and its major customers.
- IAS 1, Presentation of financial statements – Revised: requires information in financial statements to be
aggregated on the basis of shared characteristics and to
introduce a statement of comprehensive income. This
will enable readers to analyse changes in a company’s
equity resulting from transactions with owners in
their capacity as owners separately from ‘non-owner’
changes.
- IAS 23 (Amendment), Borrowing costs: requires an
entity to capitalise borrowing costs directly attributable
to the acquisition, construction or production of a
qualifying asset (one that takes a substantial period of
time to get ready for use or sale) as part of the cost of the asset. The option of immediately expensing those
borrowing costs will be removed. The Group has applied
IAS 23 (Amended) from 1 July 2008.
New standards, interpretations and amendments to
published standards effective in 2009
The following new standards, amendments and
interpretations to standards have been adopted in these
financial statements:
- IAS 39 and IFRS 7 (Amendments), Financial instruments:
Recognition and Measurement and Financial
instruments: Disclosures: introduce the possibility of
reclassification for certain financial assets previously
classified as ‘held for trading’ or ‘available-for-sale’ to
another category under limited circumstances. Various
disclosures are required where a reclassification has
been made. Derivatives and assets designated as ‘at fair
value through profit or loss’ under the fair value option
are not eligible for this reclassification.
New standards, interpretations and amendments to published standards effective in 2009 but not
relevant for the Group’s operations
The following new interpretations of existing standards are
effective but are not relevant for the Group’s operations:
- IFRIC 12, Service concession arrangements (effective
from 1 January 2008). IFRIC 12 applies to contractual
arrangements whereby a private sector operator
participates in the development, financing, operation and
maintenance of infrastructure for public sector services.
IFRIC 12 is not relevant to the Group’s operations
because none of the Group’s companies provide for the
public sector services.
- IFRIC 13, Customer loyalty programmes (effective
from 1 July 2008). IFRIC 13 clarifies that where goods
or services are sold together with a customer loyalty
incentive (for example, loyalty points or free products),
the arrangement is a multiple element arrangement
and the consideration receivable from the customer is
allocated between the components of the arrangement
in using fair values. IFRIC 13 is not relevant to the Group’s
operations because none of the Group’s companies
operates any loyalty programmes.
- IFRIC 14, The limit on a defined benefit asset, minimum
funding requirements and their interaction: IFRIC 14
provides general guidance on how to assess the limit in
IAS 19 on the amount of the surplus that can be recognised
as an asset. It also explains how the pension asset or
liability may be affected when there is a statutory or
contractual minimum funding requirement. IFRIC 14 is not
relevant to the Group’s operations because none of the
Group’s companies operate defined benefit plans.
New standards, interpretations and amendments to
published standards effective in 2010
The following new standards, amendments and
interpretations to standards are mandatory for the Group’s
accounting periods beginning on or after 1 July 2009:
- IFRS 2 (Amendment), Share-based payment: (effective
from1 January 2009): the amendment deals with two
matters. It clarifies that vesting conditions are service
conditions and performance conditions only. Other
features of a share-based payment are not vesting
conditions. It also specifies that all cancellations, whether
by the entity or by other parties, should receive the same
accounting treatment.
- IFRS 3, Business combinations – Revised: (effective from
1 July 2009): continues to apply the acquisition method to
business combinations, with some significant changes.
For example, all payments to purchase a business are
to be recorded at fair value at the acquisition date, with
some contingent payments subsequently remeasured at
fair value through income. Goodwill may be calculated
based on the parent’s share of net assets or it may
include goodwill related to the minority interest. All
transaction costs will be expensed.
- IAS 27, Consolidated and separate financial statements –
Revised (effective from 1 July 2009): requires the effects
of all transactions with non-controlling interests to be
recorded in equity if there is no change in control. They
will no longer result in goodwill or gains and losses. The
standard also specifies the accounting when control is
lost. Any remaining interest in the entity is remeasured to
fair value and a gain or loss is recognised in profit or loss.
- AS 32 (Amendment); Financial Instruments: Presentation
and IAS 1 Presentation of financial statements –
Puttable Financial Instruments and Obligations Arising
on Liquidation (effective from 1 January 2009): the
amendments require entities to classify the following types
of financial instruments as equity, provided they have
particular features and meet specific conditions: a) puttable
financial instruments (for example, some shares issued
by co-operative entities); b) instruments, or components
of instruments, that impose on the entity an obligation
to deliver to another party a pro rata share of the net
assets of the entity only on liquidation (for example, some
partnership interests an some shares issued by limited
life entities). Additional disclosure is required about the
instruments affected by the amendments.
- IAS 39 (Amendment), Financial instruments: Recognition
and Measurement: prohibits both designating inflation
as a hedgeable component of a fixed rate debt and including time value in the one-sided hedged risk when
designating options as hedges.
- IFRIC 16, Hedges of a net investment in a foreign operation (effective from 1 October 2008): provides
guidance on identifying the foreign currency risks that
qualify as a hedged risk (in the hedge of a net investment
in a foreign operation). It secondly provides guidance
on where, within a group, hedging instruments that are
hedges of a net investment in a foreign operation can be
held to qualify for hedge accounting. Thirdly, it provides
guidance on how an entity should determine the
amounts to be reclassified from equity to profit or loss
for both the hedging instruments and the hedged item.
Interpretations to existing standards that are
not yet effective and not relevant for the Group’s
operations
The following interpretations to existing standards have been
published and are mandatory for the Group’s accounting
periods beginning on or after 1 July 2009 or later periods but
are not relevant for the Group’s operations:
- IFRIC 15, Agreement for the construction of real estate (effective from 1 January 2009): addresses diversity
in accounting for real estate sales. It clarifies how to
determine whether an agreement is within the scope of
IAS 11 – Construction contracts or IAS 18 – Revenue and
when revenue from construction should be recognised.
The guidance replaces example 9 in the appendix to IAS 18.
- IFRIC 17, Distribution of non-cash assets to owners:
Applies to the accounting for distributions of non-cash
assets (commonly referred to as dividends in specie)
to the owners of the entity. The interpretation clarifies
that: a dividend payable should be recognised when the
dividend is appropriately authorised and is no longer at
the discretion of the entity; an entity should measure the
dividend payable at the fair value of the net assets to be
distributed; and an entity should recognise the difference
between the dividend paid and the carrying amount of
the net assets distributed in profit or loss.
- IFRIC 18, Transfers of assets from customers: clarifies
the accounting treatment for the transfers of property,
plant and equipment received from customers. This
interpretation applies to agreements with customers in
which the entity receives cash from a customer when
that amount of cash must be used only to construct
or acquire an item of property, plant or equipment and
the entity must then use the item of property, plant or
equipment either to connect the customer with ongoing
access to a supply of goods and services or do both.
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Subsidiaries are entities (including special purpose entities)
over which the Group has the power to govern the financial
and operating policies. The existence and effect of potential
voting rights that are currently exercisable or convertible
are considered when assessing whether the Group controls
another entity.
Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are
de-consolidated from the date that control ceases.
The cost of an acquisition is measured at the fair value of the
assets given, equity instruments issued and liabilities incurred
or assumed at the date of exchange, plus costs directly
attributable to the acquisition. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date, irrespective of the extent of any minority
interest. The excess of the cost of acquisition over the fair
value of the Group’s share of the identifiable net assets
acquired is recorded as goodwill. If the cost of acquisition
is less than the fair value of the Group’s share of the net
assets of the subsidiary acquired, the difference is recognised
directly in profit or loss.
The Group treats transactions with minority interests as
transactions with parties external to the Group. Disposals to
minority interests result in gains and losses for the Group
that is recorded in profit or loss. Purchases from minority
interests result in goodwill, being the difference between
any consideration paid and the relevant share acquired of
the carrying value of net assets of the subsidiary.
Intercompany transactions, balances and unrealised
gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the
asset transferred.
Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies
adopted by the Group. |
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Associates are all entities over which the Group
has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of
the voting rights. Investments in associates are accounted for under the equity method of accounting and are initially
recognised at cost.
The Group’s investment in associates includes goodwill
(net of any accumulated impairment loss) identified on
acquisition.
The Group’s share of its associates’ post-acquisition profits
or losses is recognised in profit or loss, and its share of
post-acquisition movements in reserves is recognised in
reserves. The cumulative post-acquisition movements are
adjusted against the carrying amount of the investment.
When the Group’s share of losses in an associate equals
or exceeds its interest in the associate, including any other
unsecured receivables, the Group does not recognise
further losses, unless it has incurred obligations or made
payments on behalf of the associate.
Unrealised gains on transactions between the Group and
its associates are eliminated to the extent of the Group’s
interest in the associates. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred.
Accounting policies of associates have been changed
where necessary to ensure consistency with the policies
adopted by the Group. |
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The Group’s interests in jointly controlled entities are
accounted for by proportionate consolidation.
The Group combines its share of the joint ventures,
individual income and expenses, assets and liabilities and
cash flows on a line-by-line basis with similar items in the
Group’s financial statements.
The Group recognises the portion of gains or losses on
the sale of assets by the Group to the joint venture that
is attributable to the other ventures. The Group does not
recognise its share of profits or losses from the joint venture
that result from the Group’s purchase of assets from the joint
venture until it resells the assets to an independent party.
However, a loss on the transaction is recognised immediately
if the loss provides evidence of a reduction in the net
realisable value of current assets, or an impairment loss.
Accounting policies of joint ventures have been changed
where necessary to ensure consistency with the policies
adopted by the Group. |
