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| COMPLIANCE
WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS
("IFRS") |
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In order to comply with IFRS
the Group has adopted the following accounting
policies. All comparative information has been
adjusted to comply with these new accounting policies.
- Operating leases with fixed rental escalations
are now charged to the income statement on
a straight line basis as opposed to a cash
basis in previous years. This has necessitated
the raising of a provision for lease expenses
and an asset for lease income on the balance
sheet. This provision and asset will be reversed
during the latter part of each lease term
when the actual cash flow exceeds the respective
income statement amounts.
- The valuation of inventory now takes account
of normal cash discounts which has the effect
of reducing the inventory valuation at the
reporting date.
- As the group holds a 25% interest in TM
Supermarkets in Zimbabwe we now recognise
our share of after tax profits per the equity
accounting method. Previously, we only accounted
for dividends actually received.
- Share options (share based payments) granted
to employees after November 2002 are valued
using a binomial valuation model and this
value is charged to the income statement over
the expected life of the option.
- Goodwill is no longer amortised and is now
stated at its carrying value as at 1 March
2004. This carrying value is reviewed annually
for impairment.
- We have changed various income statement
classifications to allow for the above changes
and also to comply with IFRS classifications.
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