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Notes to the

financial statements

for the year ended 30 September 2015


2. Significant accounting policies


Where the Group acquires the use of assets under

finance leases, the amounts representing the fair value

of the leased asset, or, if lower, the present value of the

minimum lease payments, of such assets is included

in fixed assets and the corresponding liabilities, net of

finance charges, are recorded as obligations under

finance leases. Depreciation is provided at rates that

write-off the cost or valuation of the assets over the term

of the relevant lease or, where it is likely the Group will

obtain ownership of the asset, the life of the asset, as

set out in Note 2(f). Finance charges implicit in the lease

payments are charged to profit or loss over the period of

the leases so as to produce an approximately constant

periodic rate of charge on the remaining balance of the

obligations for each accounting period. Contingent rentals

are charged to profit or loss in the accounting period in

which they are incurred.

Where the Group has the use of assets held under

operating leases, payments made under the leases are

charged to profit or loss in equal instalments over the

accounting periods covered by the lease term, except

where an alternative basis is more representative of the

pattern of benefits to be derived from the leased asset.

Lease incentives received are recognised in profit or loss

as an integral part of the aggregate net lease payments

made. Contingent rentals are charged to profit or loss in

the accounting period in which they are incurred.

i. Impairment of assets

i. Impairment of investments in equity securities and

other receivables

Investments in other current and non-current receivables

that are stated at cost or amortised cost are reviewed

at each balance sheet date to determine whether there

is objective evidence of impairment. Objective evidence

of impairment includes observable data that comes to

the attention of the Group regarding one or more of the

following loss events:

Significant financial difficulty of the debtor

A breach of contract, such as a default or delinquency

in interest or principal payments

It becoming probable that the debtor will enter

bankruptcy or other financial reorganisation

Significant changes in the technological, market,

economic or legal environment that have an adverse

effect on the debtor

A significant or prolonged decline in the fair value of

an investment in an equity instrument below its cost.

If any such evidence exists, any impairment loss is

determined and recognised as follows:

For unquoted equity securities carried at cost, the

impairment loss is measured as the difference between

the carrying amount of the financial asset and the

estimated future cash flows, discounted at the current

market rate of return for a similar financial asset where

the effect of discounting is material. Impairment losses

for equity securities carried at cost are not reversed.

For trade and other current receivables, the

impairment loss is measured as the difference between

the asset’s carrying amount and the present value

of estimated future cash flows, discounted at the

financial asset’s original effective interest rate (i.e. the

effective interest rate computed at initial recognition

of these assets), where the effect of discounting is

material. This assessment is made collectively where

financial assets carried at amortised cost share similar

risk characteristics, such as similar past due status,

and have not been individually assessed as impaired.

Future cash flows for financial assets that are assessed

for impairment collectively are based on historical loss

experience for assets with credit risk characteristics

similar to the collective group.

If in a subsequent period the amount of an impairment

loss decreases and the decrease can be linked

objectively to an event occurring after the impairment loss

was recognised, the impairment loss is reversed through

profit or loss. A reversal of an impairment loss shall not

result in the asset’s carrying amount exceeding that

which would have been determined had no impairment

loss been recognised in prior years.

Impairment losses are written-off against the

corresponding assets directly, except for impairment

losses recognised in respect of other receivables whose

recovery is considered doubtful but not remote. In this

case, the impairment losses for doubtful debts are

recorded using an allowance account. When the Group is

satisfied that recovery is remote, the amount considered

irrecoverable is written-off against other receivables

directly and any amounts held in the allowance account

relating to that debt are reversed. Subsequent recoveries

of amounts previously charged to the allowance account

are reversed against the allowance account. Other

changes in the allowance account and subsequent

recoveries of amounts previously written-off directly are

recognised in profit or loss.