Income statement  |  Balance sheet  |  Statement of changes in equity  |  Cash flow statement  |  Notes  |  IFRS Notes
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ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS         1. Basis of preparation                 The Group has adopted International Financial Reporting Standards (IFRS) for the year ending 28 February 2006. The interim results have been prepared and presented in accordance with IAS 34 - Interim financial reporting. The financial statements for the year ending 28 February 2006 will be the group's first consolidated IFRS-compliant financial statements and hence IFRS 1 First time adoption of IFRS has been applied in preparing this interim report.          2. Significant changes to  the group's accounting policies as a result of the adoption of IFRS         Financial statements of foreign operations         The assets and liabilities of all foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to Rands at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated to Rands at rates approximating the foreign exchange rates ruling at the date of the transactions.  Foreign exchange differences arising on translation are recognised directly in a separate component of equity - foreign currency translation reserve. The foreign currency translation reserve applicable to a foreign operation is released to the income statement upon disposal of that foreign operation.  Previously, the non-monetary assets and liabilities of all foreign subsidiaries considered to be integrated foreign operations were translated at historic exchange rates, and the foreign exchange gains and losses arising on translation of monetary assets and liabilities were recognised in operating income.         Goodwill         All business combinations are accounted for by applying the "purchase method". Goodwill represents amounts arising on acquisition of subsidiaries and associates. In respect of business combinations that have occurred since the IFRS transition date, 1 March 2004, goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets and contingent liabilities acquired. The group made an election in terms of IFRS 1 that in respect of acquisitions prior to this date, goodwill is included on the basis of its deemed cost, which represents the amount recorded under SA GAAP. The classification and accounting treatment of business combinations that occurred prior to 1 March 2004 has not been reconsidered in preparing the groups opening IFRS balance sheet at 1 March 2004. Goodwill is stated at cost less accumulated impairment losses. Goodwill is allocated to cash-generating units and is no longer amortised but tested annually for impairment. Previously goodwill arising on each acquisition was amortised over its useful life on a straight line basis and subjected to annual impairment testing.         Premium on disposal of minority interests in subsidiaries       Following the presentation of minority interests in equity any increase or decrease in ownership interests in subsidiaries without a change in control are recognised as equity transactions in the consolidated financial statements. Accordingly any premium on subsequent sales of equity instruments to minority interests are recognised directly in the equity of the parent shareholder. Previously premiums on subsequent sales of equity instruments to minorities were taken to profit as a capital item in the income statement.         Intangible assets         Intangible assets other than goodwill that are acquired by the group are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life are tested systematically for impairment at each balance sheet date.  Other intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows: Patents and trademarks 5 years       Distribution rights term of distribution agreements           Previously distribution rights were classified as goodwill on the balance sheet and amortised to the income statement as goodwill amortisation on a straight line basis over the useful life of the intangible asset.         Share-based payment transactions         The fair value of share options and deferred delivery shares granted to employees is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and expensed over the period during which the employee becomes unconditionally entitled to the equity instruments. The fair value of the instruments granted is measured using generally accepted valuation techniques, taking into account the terms and conditions upon which the instruments are granted. This accounting policy has been applied to all equity instruments granted after 7 November 2002 that had not yet vested at 1 January 2005. The fair value of share based payments was not recognised under the group's  previous accounting policies.         Application of IFRS 2 to Black Economic Empowerment (BEE) transactions           The sale of 30% Aberdare Cables to the Izingwe Consortium and the 27% of BTG SA to Kagiso were equity instruments that was considered to have fully vested in the hands of the participants before 1 January 2005.  Under the exemption offered by IFRS 1: First time adoption of IFRS the transactions were not accounted for as share based payments.         The Group continues to account for the BEE transaction in Namitech with Pamodzi on the same basis as disclosed in the 2005 annual financial statements, pending the finalisation of the accounting standards relating to these transactions. On the assumption that Pamodzi had acquired their full economic interest in Namitech in 2005, an amount of R 114 million would have been reflected as their minority interest in the company.         Straight-lining of operating lease payments         Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease.  Past practice, whereby operating lease payments were expensed on a payments basis, was based on an interpretation that was generally accepted in the South African community. This interpretation considered the contractual payments basis as being most representative of the time pattern of the entity's benefit obtained from the leased property. The global spotlight has led to the view that the entity is obliged to adopt the straight-line basis of accounting for all lease payments. The adjustment has been made as required by IAS 8 with the necessary restatement of comparative figures.         Fair valuing of held-to-maturity investments         Investments held-to maturity are non-derivative financial assets with fixed or determinable payments and fixed maturity that the group has the positive intention and ability to hold to maturity other than:          (a) those that the group upon initial recognition designates as at fair value through profit or loss;  (b) those that the group designates as available for sale; and (c) those that meet the definition of loans and receivables. Gains or losses from fair valuing these investments shall be recognised directly in equity, through the statement of changes in equity. The investment in Fintech Receivables One meets this criteria and as such has been fair valued. The comparative figures have been restated.         3. Reconciliation of equity           28-Feb 31-Aug 01-Mar In R millions   2005 2004 2004         Equity previously reported under SA GAAP            3,566          3,393          3,571 Adjustment upon adoption of IFRS               126            (106)              15 Equity reported under IFRS            3,692          3,287          3,586                 -                 -                 -   Equity adjustments         Retained earnings:         Net reversal of goodwill amortised and impaired                95              43               -   Expensing of share based payments                 (2)               (1)               -   Foreign operations                  3                1               -   PPE and intangible assets                  2                1               -   Operating leases                 (4)               (2)               (3) Derecognition of Izingwe minorities *                 -                55               -   Reversal of premium on minority equity transactions                 -               (14)   Share based payment reserve                  2                1               -   Foreign currency translation reserve                 (3)               (1)               -   Derecognition of Izingwe minorities *                 -              (225)               -   Premium on minority equity transactions                 -                14   Revaluation reserve                35              26              18 Minorities                 (2)               (4)                 126            (106)              15         Assets and liabilities adjustments         PPE and intangible assets                  2                1               -   Goodwill                95              43               -   Associates and other investments                35              26              18 Deferred tax                  3                1               -   Empowerment funding obligation *                 -              (170)               -   Accounts payable                 (9)               (7)               (3)               126            (106)              15 * The Izingwe deal was derecognised in the February 2005 accounts.     4. Reconciliation of profit for the year ended 28 February 2005                As reported   Effect of   IFRS     previously   IFRS   restated     (Audited)              Operating income before goodwill         amortisation and capital items               968               (1)             967 Investment income               100               -               100 Finance costs               (62)               -               (62) Income from associates                24               -                24 Goodwill amortised and impaired              (300)              95            (205) Capital items               114               -               114 Income before taxation               844              94             938 Taxation              (340)                1            (339) Income for the period               504              95             599 Attributable to :         Altron shareholders               400              51             451 Minority shareholders               104              44             148               504              95             599         EPS               145              18             163 HEPS               161                1             162         5. Reconciliation of profit for the six months ended 31 August 2004                As reported   Effect of   IFRS     previously   IFRS   restated     (Unaudited)              Operating income before goodwill         amortisation and capital items               443               (1)             442 Investment income                51               -                51 Finance costs               (17)               (5)             (22) Income from associates                  6               -                  6 Goodwill amortised and impaired              (177)              43            (134) Capital items                  9              25              34 Income before taxation               315              62             377 Taxation              (178)                1            (177) Income for the period               137              63             200 Attributable to :         Altron shareholders                89              62             151 Minority shareholders                48                1              49               137              63             200         EPS                32              23              55 HEPS                69                1              70         6. Further to Altron's trading statement published on 12 September 2005, in restating the previous corresponding periods results to comply with IFRS, the increase in basic earnings per share compared to the restated figure for the previous year (anticipated to be 120% to 130%) is lower than originally anticipated due to the reversal of a loss on disposal of 30% of Powertech's shareholding in Aberdare to Izingwe in derecognising this transaction. This has resulted in the increase in basic earnings per share being 54%.