content_image/75541.jpg
## NOTES TO THE FINANCIAL STATEMENTS CONTINUED Notes to and forming part of the Consolidated Financial Statements For the period from incorporation to 26 June 2004 

## (h) Depreciation and amortisation of property, plant and equipment 

Depreciation and amortisation are calculated on a straight line or diminishing value basis so as to write off the net cost of an item of property, plant and equipment over the expected useful life of each asset to the consolidated entity. Estimates of remaining useful lives are made on a regular basis for all assets, with annual re- assessments for major items. The depreciation rates used for each class of assets are: 

<img src='content_image/75541.jpg'>

## (i) Leased non-current assets 

A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incident to ownership of leased non-current assets, and operating leases, under which the lessor effectively retains substantially all such risks and benefits. 

Finance leases are capitalised by establishing a lease asset and lease liability at the present value of the minimum lease payments. Lease payments are allocated between the principal component of the lease liability and the interest expense. The lease asset is amortised on a straight line basis over the term of the lease or, where it is likely that the consolidated entity will obtain ownership of the asset, the life of the asset. Lease assets at the reporting date are being amortised at rates ranging from 10% to 37.5%. 

Operating lease payments are charged to the statement of financial performance in the periods in which these are incurred, as this represents the pattern of benefits derived from the leased assets. 

## (j) Intangible assets and expenditure carried forward 

## (i) Goodwill and brand 

Goodwill is recorded at the amount by which the purchase price of an entity exceeds the fair value attributed to the identifiable net assets at the date of acquisition. Goodwill is amortised on a straight line basis over a period of twenty years. The balances are reviewed annually and any balance representing future benefits, the realisation of which is considered to no longer be probable, is written off. 

## (ii) Trademarks 

Significant expenditure associated with trademarks are deferred and amortised on a straight line basis over the periods during which the expected benefits will be derived. 

## (iii) Other items of expenditure 

Significant items of expenditure, such as costs incurred in store set-ups, are expensed in the financial period in which these costs are incurred. 

## (k) Trade and other creditors 

Trade and other creditors are payables for goods and services provided to the consolidated entity prior to the end of the financial period and which are unpaid at that date. The amounts are unsecured and are normally paid within thirty days of recognition. 

## (l) Interest bearing liabilities 

Loans are carried at the amount that represents the present value of the future cash flows associated with servicing the debt. Interest is accrued over the period it becomes due and is recognised as other creditors. 

## (m) Dividends 

Provision is made for the amount of any dividend declared by the Directors on or before the end of the financial period but not distributed at balance date. 

## (n) Employee benefits 

Provision is made for the economic entity’s liability for employee benefits arising from services rendered by employees to balance date. A liability for employee benefits in the form of bonus payments is recognised in other creditors when the bonus criteria have been satisfied and the amount of the bonus can be reliably determined. Employee benefits expected to be settled within one year, together with benefits arising from wages and salaries and annual leave which will be settled after one year, have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Other employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. 

