Accounting policies
The consolidated and separate financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), the interpretations adopted by the International Accounting Standards Board and South African interpretations of statements of Generally Accepted Accounting Practice.
1. Basis of preparation

The consolidated and separate financial statements are 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.

Non-current assets and disposal groups held-for-sale are stated at the lower of carrying amount and fair value less costs to sell.

The preparation of 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 39.

The accounting policies have been applied consistently to all periods presented in these consolidated financial statements.

These 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.

2. Adoption of new and revised accounting standards

There have been no changes in accounting policies. However the Group and Company adopted the following new and revised accounting standards, amendments to standards and new interpretations during the year: IFRS 2 Share-based Payments; IFRS 3 Business Combinations; IFRS 7 Financial Instruments, IFRS 8 Operating Segments; IAS 1 Presentation of Financial Statements; IAS 16 Property, Plant and Equipment, IAS 19 Employee Benefits, IAS 23 Borrowing Costs, IAS 27 Consolidated and Separate Financial Statements; IAS 28 Investments in Associates; IAS 31 Interests in Joint Ventures, IAS 32 Financial Instruments: Presentation, IFRS 39 Financial Instruments, IFRIC 16 Hedges of a Net Investment in a Current Operation, IFRIC 17 Distribution of Non-Cash Assets to Owners and IFRIC 18 Transfer of Assets from Customers.

The adoption of the amendments to IFRS 3 has resulted in costs relating to acquisitions of R61,2 million being charged to profit during the period as compared to prior periods, where these costs were included as part of the cost of the acquisition. Changes to IAS 27 have resulted in a surplus of R82,6 million resulting from changes in shareholding in a subsidiary being recognised directly in equity as opposed to being included in profit for the period.

The adoption of IFRS 3 and IAS 27 has resulted in a reduction to profit attributable to shareholders of the Company of R143,8 million. Had these changes not taken place basic earnings per share for the half year would have been 1 109,3 cents an increase of 20,0%, and headline earnings per share would have been 1 089,4 cents, an increase of 17,1%.  

Results for the comparative periods have not been restated as the transitional arrangements for both IFRS 3 and IAS 27 provide exemption from retrospective application.

On review of how the operating segments are managed in accordance with IFRS 8 it was decided to remove the costs in respect of share-based payment expenses from each of the operating segments, and disclose this cost as a reconciling item in the segmental analysis of trading profit and segmental result, as this is not a criterion used in the measurement of management of the various segments.

In addition to this, the leasing and fleet management business previously included with Bidvest Automotive, has been reallocated to the Bidvest Services segment. The comparative period’s results have been restated to reflect these changes.

Other than the aforementioned, the adoption of the new and modified standards and interpretations, has only affected disclosure, and has had no effect on the results of the Group or Company.

3. Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. Operating results of businesses acquired or disposed of during the year are included from or to the effective date of acquisition or disposal, being the date that control commences until the date control ceases. The assets and liabilities of companies acquired are assessed and included in the statement of financial position at their estimated fair values to the Group at acquisition date.

Any increases and decreases in ownership interests in subsidiaries without a change in control are recognised as equity transactions in the Group financial statements. Accordingly, any premiums or discounts on subsequent purchases of equity instruments from, or sales of equity instruments to non-controlling shareholders are recognised directly in the equity of the Group.

Transaction costs that the Group incurs with respect to an acquisition of a business are expensed as incurred.

Inter-group transactions and balances are eliminated on consolidation. Unrealised gains arising from transactions with jointly controlled entities and equity-accounted associates are eliminated to the extent of the Group’s interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

The Company carries its investments in subsidiaries at cost less accumulated impairment losses.

4. Revenue  

Revenue comprises amounts invoiced to customers for goods and services and include finance charges, insurance premiums, gross billings, and commissions related to clearing and forwarding transactions and excludes value added tax. Revenue is net of returns and allowances, trade discounts and volume rebates. Total revenue also includes dividends received and finance income.

5. Revenue recognition

The sale of goods is recognised when significant risks and rewards of ownership of the goods are transferred to the buyer, recovery of the consideration is considered probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods.  

Revenue from services rendered is recognised in the income statement in proportion to the stage of completion of the transaction at the statement of financial position date. The stage of completion is assessed by reference to the terms of the contracts.  

Revenue relating to banking activities consists primarily of margins earned on the purchase and sale of foreign exchange products and general commissions and transaction fees and is recognised when the services are provided. Net profits or losses on the revaluation of foreign currency denominated assets and liabilities are also included in revenue.

In the event that a profit or loss arises from full maintenance motor contracts, this is recognised on termination of individual contracts after taking cognisance of any additional costs required. Provision is made for known losses during the contract period on an individual contract basis.

Insurance premiums are stated before deducting reinsurance and commission. Gross premiums are accounted for when they become due.

Finance income comprises interest receivable on funds invested and dividend income on preference shares.

Interest is recognised on an accrual basis, taking account of the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the Group.

Dividends are recognised when the right to receive payment is established.

6. Non-current assets held-for-sale and discontinued operations

Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held-for-sale and are carried at the lower of carrying value and fair value less cost to sell. Immediately before classification as assets held-for-sale, the measurement of the assets (and all assets and liabilities in a disposal group) is determined in accordance with applicable IFRS. Then, on initial classification as assets held-for-sale, non-current assets and disposal groups are recognised at the lower of the carrying amounts and fair value less costs to sell. Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, and employee benefit assets, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held-for-sale and subsequent gains or losses on remeasurement are recognised in the income statement. Gains are not recognised in excess of any cumulative impairment loss.

A discontinued operation results from the sale or abandonment of an operation that represents a separate major line of business or geographical area of operations and of which the assets, net profit or loss and activities can be distinguished physically, operationally and for financial reporting purposes. A subsidiary acquired exclusively with the view to resale is also classified as a discontinued operation. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held-for-sale, if earlier. When an operation is classified as a discontinued operation, the comparative income statement is restated as if the operation had been discontinued from the start of the comparative period.

7. Distributions to shareholders

Distributions to shareholders are accounted for once they have been approved by the board of directors.

8. Finance income and charges

Finance charges comprise interest payable on borrowings calculated using the effective interest rate method. The interest expense component of finance lease payments is recognised in the income statement using the effective interest rate method.

9. Capitalisation of expenditure/borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially complete. Capitalisation is suspended during extended periods in which active development is interrupted. All other borrowing costs are expensed in the period in which they are incurred.

10. Cash and cash equivalents

For the purpose of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held on call with banks net of bank overdrafts, investment in money market instruments and variable rate cumulative redeemable preference shares, all of which are available for use by the Group unless otherwise stated.

11. Property, plant and equipment

Property, plant and equipment are reflected at cost to the Group, less accumulated depreciation and accumulated impairment losses. Land is stated at cost. The present value of the estimated cost of dismantling and removing items and restoring the site in which they are located is provided for as part of the cost of the asset. Depreciation is provided for on the straight-line basis over the estimated useful lives of the property, plant and equipment which are as follows:

Buildings Up to 50 years
Leasehold premises Over the period of the lease
Plant and equipment 5 to 20 years
Office equipment, furniture and fittings   3 to 15 years
Vehicles and craft 3 to 10 years
Vessels 28 to 55 years
Rental assets 3 to 5 years
Full maintenance leased assets Over the period of the lease
Capitalised leased assets The same basis as owned assets

Residual values, depreciation method and useful lives are reassessed annually.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied in the item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement as an expense when incurred.