AFRICAN DAWN ANNUAL REPORT 2019 51 Accounting Policies continued Recognition and measurement They are recognised when the company becomes a party to the contractual provisions, and are measured, at initial recognition, at fair value plus transaction costs, if any. They are subsequently measured at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability. If trade and other payables contain a significant financing component, and the effective interest method results in the recognition of interest expense, then it is included in profit or loss in finance costs (Note 25). Trade and other payables expose the company to liquidity risk and possibly to interest rate risk. Refer to Note 33 for details of risk exposure and management thereof. 1.16 Segment reporting The identification of reportable segments and the measurement of segment results are determined based on Group’s internal reporting to management as well as a consideration of products and services, organisational structures, geographical areas, economic and regulatory environments and the separable nature of activities or conversely inherent interconnectedness and whether these meet the criteria for aggregation. The Group accounts for inter-segment revenues and transfers as if the transactions were with third parties at current market prices. Additional information relating to major clients and other performance measures is provided. The Group has three operating segments: * Investment advisory and investment management * Micro finance * Head Office In the prior year there was also a segment called Rentals of property in possession which has been discontinued.All inter-segment transfers are carried out at arm’s length prices based on prices charged to unrelated customers in standalone sales of identical goods or services. For management purposes, the Group uses the same measurement policies as those used in its financial statements. 1.17 Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary equity holders of the Group by the weighted average number of ordinary shares in issue during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary equity holders and the weighted average number of ordinary shares in issue for the effect of all dilutive potential ordinary shares. 1.18 Significant judgements and sources of estimation uncertainty When preparing the financial statements, management and the board make a number of judgements, estimates and assumptions. The following are the most significant judgements, estimates and assumptions that have been made in preparing the financial statements. Significant judgements Going concern judgement The consolidated and separate financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. The material uncertainties relating to events or conditions which may cast doubt upon the ability to continue as a going concern are outlined below:
AFDAWN AR FINAL 2019
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