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Notes to the consolidated financial statements
for the year ended June 30
BASIS OF PREPARATION
The consolidated and separate financial statements have been prepared on the historical cost basis, except that derivative financial instruments,
financial instruments held-for-trading and financial instruments classified as available-for-sale are stated at their fair value.
The preparation of the consolidated and separate financial statements, in conformity with IFRS, requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Although
estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the
circumstances (the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily
apparent from other sources), the actual outcome may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
Judgements made in the application of IFRS that have had an effect on the financial statements and estimates with a risk of adjustment in the next
year are discussed in note 36.
The consolidated financial statements as at and for the year ended June 30 2017 comprise the company and its subsidiaries (together referred to
as the “group” or “consolidated” and separately “separate” or “company”).
Except as detailed below, the accounting policies have been applied consistently to all periods presented in these financial statements. The financial
statements are presented in South African rand, which is the group’s functional currency. All financial information has been rounded to the nearest
thousand unless stated otherwise.
1.
SIGNIFICANT ACCOUNTING POLICIES
The consolidated and separate financial statements (financial statements) have been prepared in accordance with International Financial
Reporting Standards (IFRS), the interpretations adopted by the International Accounting Standards Board, the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and the Financial Reporting Pronouncements as issued by the Financial Reporting
Standards Council and in terms of the requirements of the Companies Act of South Africa.
1.1 New and revised accounting standards
With the exception of the new accounting policy for the investment in jointly controlled entity (refer 1.18), there were no changes to the group’s
accounting policies during the year.
Details of new standards and interpretations that apply to the group are contained in note 40 to the financial statements.
1.2 Basis of consolidation
The consolidated financial statements include the financial statements of the company and its subsidiaries. Subsidiaries are entities controlled
by the group. Control is achieved when the company has the power over an investee, is exposed or has rights to variable returns from its
involvement with an investee and has the ability to use its power to affect its returns. The company reassesses whether or not it controls an
investee if facts and circumstances indicate that there are changes to one or more of these three elements. When the company has less than
a majority of the voting rights of an investee, it considers that it has power over the investee when the voting rights are sufficient to give it
the practical ability to direct the relevant activities of the investee unilaterally. The company considers all relevant facts and circumstances in
assessing whether or not the company’s voting rights in an investee are sufficient to give it power, including the size of the company’s holding
of voting rights relative to the size and dispersion of holdings of the other vote holders; potential voting rights held by the company, other vote
holders or other parties; rights arising from other contractual arrangements; and any additional facts and circumstances that indicate that the
company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting
patterns at previous shareholders’ meetings.
Consolidation of a subsidiary begins when the company obtains control over the subsidiary and ceases when the company loses control of
the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of
profit or loss from the date the company gains control until the date when the company ceases to control the subsidiary.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with the
group’s significant accounting policies.
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Annual integrated report 2017
Bid Corporation Limited