Annual integrated report 2017

A provision for onerous contracts is recognised when the expected benefits to be derived by the group from a contract are lower than the

unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected

cost of terminating the contract and the expected net costs of continuing the contract. Before a provision is established, the group recognises

any impairment loss on the assets associated with that contract.

Customer loyalty points are accounted for at fair value of the consideration received or receivable in respect of the initial sale, and are

allocated between the loyalty points and the other components of the sale. The consideration allocated to the customer loyalty points is

measured by reference to their fair value, which is the amount for which the loyalty points could be sold at, multiplied by the probability of their

redemption. This amount is recognised as a provision until such time as the customer loyalty points are redeemed. Once the loyalty points are

redeemed, the amount will be recognised as revenue.

1.26 Stated capital and treasury shares

No par value ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new no par value ordinary

shares are deducted against the stated capital account.

Shares in the company, held by its subsidiary, are classified as the group’s shareholders’ interest as treasury shares. These shares are treated

as a deduction from the issued and weighted average number of shares. The cost price of the treasury shares is presented as a deduction

from total equity. Distributions received on treasury shares are eliminated on consolidation.

1.27 Vendors for acquisition

Vendors for acquisition are recognised when the group or company becomes party to acquisition contractual arrangements in the form of

earn-out targets and contingent consideration. They are measured at fair value through profit or loss, with the resultant gain or loss being

recognised in the statement of profit or loss. The gain or loss in the statement of profit or loss excludes interest.

1.28 Segmental reporting

The reportable segments of the group have been identified based on the geographies of the businesses. This basis is representative of the

internal structure for management purposes.

“Segmental trading profit” is defined as operating profit excluding items of a capital nature and is the basis on which management’s

performance is assessed. Share-based payment costs are also excluded from the result as this is not a criteria used in the management of

the reportable segments.

“Segmental operating profit” includes revenue and expenses directly relating to a business segment but excludes net finance charges and

taxation, which cannot be allocated to any specific segment.

Segment operating assets and liabilities includes property, plant and equipment, investments, inventories, trade and other receivables and

trade and other payables, but excludes cash, post-retirement obligations, borrowings, current taxation, and deferred taxation.

Certain segments were reclassified during the year. The comparative year’s segmental information has been represented to reflect these

insignificant changes.

Annual integrated report 2017

Bid Corporation Limited