Notes to the Financial Statements
73
Notes to the Financial Statements
continued
u
associate and, therefore, is profit after tax and 
non-controlling interests in the subsidiaries of 
the associate. After application of the equity 
method, the Group determines whether it is 
necessary to recognise an additional impairment 
loss on its investment in its associate. The Group 
determines at each reporting date whether 
there is any objective evidence that the invest-
ment in the associate is impaired. If this is the 
case, the Group calculates the amount of the 
impairment as the difference between the 
recoverable amount of the associate and its 
carrying value and recognises the amount in  
the income statement.
Upon loss of significant influence over the asso-
ciate, the Group measures and recognises any 
remaining investment at its fair value. Any differ-
ence between the carrying amount of the asso -
ciate upon loss of significant influence and the 
fair value of the retained investment and proceeds 
from disposal is recognised in profit or loss.
r . Trade and other payables
Trade and other payables represent liabilities for 
goods and services provided to the Group prior 
to the end of financial year which are unpaid.  
The amounts are unsecured and are usually paid 
within 30 days of recognition.
s . Borrowings
Borrowings are initially recognised at fair value, 
net of transaction costs incurred. Borrowings 
are subsequently measured at amortised cost. 
Any difference between the proceeds (net of 
transaction costs) and the redemption amount 
is recognised in the profit or loss over the period 
of the borrowings using the effective interest 
method. Fees paid on the establishment of loan 
facilities are recognised as transaction costs to 
the extent that it is probable that some or all of 
the facility will be drawn down. In this case, the 
fee is deferred until the draw down occurs. To 
the extent there is no evidence that it is prob-
able that some or all of the facility will be drawn 
down, the fee is capitalised and amortised over 
the period of the facility to which it relates. 
Preference shares, which are mandatorily 
redeemable on a specific date, are classified as 
liabilities. The dividends on these preference 
shares are recognised in the profit or loss as 
finance costs.
Borrowings are removed from the statement of 
financial position when the obligation specified 
in the contract is discharged, cancelled or 
expired. The difference between the carrying 
amount of a financial liability that has been 
extinguished or transferred to another party and 
the consideration paid, including any non-cash 
assets transferred or liabilities assumed, is 
recognised in other income or finance costs. 
Borrowings are classified as current liabilities 
unless the Group has an unconditional right to 
defer settlement of the liability for at least 12 
months after the reporting date. 
t . Borrowing costs
Borrowing costs directly attributable to the 
acquisition, construction or production of 
qualifying assets are added to the cost of those 
assets, until such time as the assets are substan-
tially ready for their intended use. 
Where the funds used to finance a qualifying 
asset form part of general borrowings, the 
amount capitalised is calculated using a weighted 
average of rates applicable to the relevant 
borrowings during the period. Where funds 
borrowed are directly attributable to a qualifying 
asset, the amount capitalised represents the 
borrowing costs specific to those borrowings. 
All other borrowing costs are recognised as 
expenses in the period in which they are incurred.
u . Provisions
Provisions for legal claims and service warranties 
are recognised when the Group has a present 
legal or constructive obligation as a result of 
past events, it is probable that an outflow of 
resources will be required to settle the obliga-
tion and the amount has been reliably esti-