Aspen Pharmacare Holdings Ltd is the holding company of the
Group and is domiciled and incorporated in the Republic of
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. Except
as otherwise disclosed, these policies are consistent in all material
respects with those applied in previous years.
Financial reporting terms
These definitions of financial reporting terms are provided to
ensure clarity of meaning as certain terms may not always have
the same meaning or interpretation in all countries.
Associate: An entity in which the Group has significant influence,
but not control or joint control, over financial and operating
policies. Significant influence is presumed to exist when the
Group holds between 20% and 50% of the voting power of
Company: A legal business entity registered in terms of the
applicable legislation of that country.
Entity: Aspen Pharmacare Holdings Ltd or a subsidiary, joint
venture, associate or special purpose entity within the Group.
Foreign operation: An entity whose activities are based or
conducted in a country or currency other than that of the
reporting entity (Aspen Pharmacare Holdings Ltd).
Group: The Group comprises Aspen Pharmacare Holdings Ltd,
its subsidiaries and its interest in joint ventures, associates and
special purpose entities.
Joint venture: An economic activity over which the Group
exercises joint control established under a contractual
Operation: A component of a Group
- that represents a separate major line of business or
geographical area of operation; and
- is distinguished separately for financial and operating
Subsidiary: Any entity over which the Group has the power to
exercise control. This is usually accompanied by a shareholding of
more than one half of the voting rights.
Special purpose entity (“SPE”): An entity established to
accomplish a narrow and well defined objective. At this stage
limited to the share trusts. An SPE is consolidated when the
substance of the relationship between the entity and the SPE
indicates that the SPE is controlled by that entity.
General accounting terms
Acquisition date: The date on which control in subsidiaries,
special purpose entities, joint ventures and significant influence in
Assets under construction: A non-current asset which includes
expenditure capitalised for work-in-progress in respect of
activities to develop, expand or enhance items of property, plant
and equipment and intangible assets.
Cash-generating unit: The smallest identifiable group of assets
which can generate cash inflows independently from other assets
or groups of assets.
Control: The ability, directly or indirectly, to govern the financial
and operating policies of an entity so as to obtain economic
benefits from its activities. When assessing the ability to control
an entity, the existence and effect of potential voting rights that
are presently exercisable or convertible are taken into account.
Discontinued operation: An operation that, pursuant to a single
plan, has been disposed of or abandoned or is classified as an
Disposal date: The date on which control of subsidiaries and
special purpose entities, joint control in joint ventures and
significant influence in associates ceases.
Financial results: Comprise the financial position (assets, liabilities
and equity), results of operations (income and expenses) and
cash flows of an entity and of the Group.
Functional currency: The currency of the primary economic
environment in which the entity operates.
Non-current: A period longer than 12 months from reporting
Other comprehensive income: Comprises items of income
and expense (including reclassification adjustments) that are not
recognised in the income statement and includes the effect of
translation of foreign operations, cash flow hedges and changes
in revaluation reserves.
Presentation currency: The currency in which financial results of
an entity are presented.
Qualifying asset: An asset that necessarily takes a substantial
period of time (normally in excess of 12 months) to get ready
for its intended use or sale.
Recoverable amount: The amount that reflects the greater of
the asset’s fair value less costs to sell and value-in-use that can be
attributed to an asset as a result of its ongoing use by the entity.
In determining the value-in-use, expected future cash flows are
discounted to their present values using the discount rate.
Revenue: Comprises turnover with dividends received and
interest received included in investment income.
Share-based payment transaction: A transaction in which the
entity receives goods or services as consideration for equity
instruments of the entity (including share options and appreciation
rights), or acquires goods or services by incurring liabilities to the
supplier of those goods or services for amounts that are based
on the price of the entity’s shares or other equity instruments
of the entity.
Significant influence: The ability, directly or indirectly, to
participate in, but not exercise control over, the financial and
operating policy decisions of an entity so as to obtain economic
benefit from its activities.
Turnover: Comprises revenue generated by operating activities
and includes sales of products, services rendered, licence fees and
royalties net of indirect taxes, rebates and trade discounts.
Financial instrument terms
Cash and cash equivalents: Comprise cash-on-hand, demand
deposits and other short-term highly liquid investments readily
convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value. These investments
typically have a maturity period of three months or less at the
date of purchase.
Cash flow hedge: A hedge of the exposure to variability in cash
flows that is attributable to a particular risk associated with a
recognised asset or liability (such as all or some future interest
payments on variable rate debt) or a highly probable forecast
transaction, and could affect profit or loss.
Derivative instrument: A financial instrument
- whose value changes in response to changes in a specified
interest rate, commodity price, foreign exchange rate or similar
variable (the ‘underlying’) provided that in the case of a non-financial variable that variable is not specific to a party to the
- that requires minimal initial net investment; and
- whose terms require or permit settlement at a future date.
Equity instrument: Any contract (including investments) that
evidences a residual interest in the assets of an entity after
deducting all of its liabilities.
Financial asset: Cash and cash equivalents, a contractual right to
receive cash, an equity instrument of another entity or a right to
exchange a financial instrument under favourable conditions. A
contract that may be settled in the entity’s own equity instruments
other than by an exchange of a fixed amount of cash for a fixed
number of the entity’s own equity instruments.
Financial liability: A contractual obligation to deliver cash or an
obligation to exchange a financial instrument under unfavourable
conditions or a contract that may be settled in the entity’s own
equity instruments other than by an exchange of a fixed amount
of cash for a fixed number of the entities own equity instruments.
This includes debt.
Financial guarantee contract: A contract that requires the issuer
to make specified payments to reimburse the holder for a loss
it incurs because a specified debtor fails to make payment when
due in accordance with the original or modified terms of the
Loans and receivables: A non-derivative financial asset with fixed
or determinable repayments that are not quoted in an active
market, other than those that the entity intends to sell in the near
term which shall be classified as held for trading.
Monetary item: A unit of currency held and assets and liabilities
to be received or paid in a fixed or determinable number of units
Transaction date: The date an entity commits itself to purchase
or sell a financial instrument.