46
A n n u a l R e p o r t
2 0 1 2
notes to the financial Statements
for the year ended 31 March 2012
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or
no longer qualifies for hedge accounting. At that time, for forecast transactions, any cumulative gain or loss on
the hedging instrument recognised in other comprehensive income is retained in other comprehensive income
equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in equity is transferred to profit or loss for the period.
Non-derivative financial instruments
Non-derivative financial instruments comprise of investments in equity and debt securities, trade and other
receivables, cash and cash equivalents, loans to subsidiaries, loans and borrowings, and trade and other
payables. Non derivative financial instruments are recognised when the Group becomes a party to the
contractual provisions of the instrument. Non-derivative financial instruments are recognised initially at
fair value less any attributable transaction costs. Subsequent to initial recognition non-derivative financial
instruments are measured as described below.
Loans and borrowings
Interest-bearing bank loans and overdrafts are initially measured at fair value, less transaction costs and are
subsequently measured at amortised cost, using the effective interest rate method. Any difference between
the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the
term of the borrowings in accordance with the Group’s accounting policy for borrowing costs.
Trade payables
Trade payables and other accounts payable are recognised when the Group becomes obligated to make future
payments resulting from the purchase of goods and services.
n) Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, the future
sacrifice of economic benefits is probable and the amount of the provision can be measured reliably.
Provisions are measured at the Directors’ best estimate of the consideration required to settle the obligation at
balance date, and are discounted to present value where the effect is material.
o) Leasing
Finance leases
The Group is not party to any financial lease arrangements.
Operating leases
Operating leases payments are recognised as an expense on a straight-line basis over the lease term, except
where another systematic basis is more representative of the time pattern in which economic benefits from
the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense
in the period in which they are incurred.
p) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts
receivable for goods and services, including lines charges provided in the normal course of business.
Network revenue, including network, revenue collection and meters & relays is recognised when the billing
transactions are applied to network customers’ accounts.
Revenue from construction contracts is recognised in accordance with the Group’s accounting policy described
previously on construction contracts.
46
A n n u a l R e p o r t
2 0 1 2