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NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2016 currency borrowings; assets is deducted from the borrowing costs eligible for capitalisation. The borrowing costs capitalised may not exceed the actual interest incurred by the Group. 2.7 Foreign currency 2.7.1 Functional and presentation currency These consolidated and separate financial statements are presented in the Nigerian Naira (₦), which is the Company’s functional currency. All financial information presented in Naira has been rounded to the nearest million unless where otherwise stated. 2.7.2 Foreign currency transactions In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Nonmonetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for: . exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign Currency South African Rand to Naira Central Africa Franc to Naira Ethiopian Birr to Naira Zambian Kwacha to Naira Tanzanian Shilling to Naira Ghanaian Cedi to Naira United States dollar to Naira 154 Annual Report 2016 18.1383 0.4392 11.6926 25.5159 0.1185 . exchange differences on transactions entered into in order to hedge certain foreign currency risks; and . exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the subsidiaries. The schedule below shows the exchange rates presented in one unit of foreign currency to Naira for the significant currencies used in the group 2.7.3 Foreign operations In the Group’s consolidated financial statements, all assets and liabilities of Group entities with a functional currency other than the Naira are translated into Naira upon consolidation. On consolidation, assets and liabilities have been translated at the closing rate at the reporting date. Income and expenses have been translated into the Naira at the average rate over the reporting period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences are charged or credited to other comprehensive income and recognized in currency translation reserve in equity. On the partial or total disposal of a foreign entity with a loss of control, the related share in the cumulative translation differences recognised in equity is recognised in the consolidated 2016 22.8428 0.4929 13.4721 71.4286 304.2000 2015 Average rate Year End Rate Average rate Year End Rate 15.3977 30.6808 0.1392 66.2698 259.9772 0.3332 9.4307 23.5025 0.0968 52.5003 198.0433 12.8400 0.3299 9.2515 18.1074 0.0919 52.3560 199.0000

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