ACCOUNTING POLICIES THE FINANCIAL STATEMENTS HAVE BEEN PREPARED ON THE HISTORICAL COST BASIS.  THE FINANCIAL STATEMENTS INCORPORATE THE FOLLOWING PRINCIPAL ACCOUNTING POLICIES WHICH ARE IN ACCORDANCE WITH SOUTH AFRICAN STATEMENTS   OF   GENERALLY   ACCEPTED   ACCOUNTING   PRACTICE   AND   WITH   THE   EXCEPTION   OF   THE   ADOPTION OF   AC140,    BUSINESS   COMBINATIONS,   AND   AC501,   ACCOUNTING   FOR   SECONDARY   TAX   ON   COMPANIES   (STC), ARE CONSISTENT WITH THE PREVIOUS YEAR. BASIS OF CONSOLIDATION The   group   financial   statements   include   the   results   and financial  position  of   the  company  and  all  its  subsidiaries. The  results  of   subsidiaries  are  included  from  the  effective dates of  acquisition. All   material   inter-company   balances   and   transactions   are eliminated. ASSOCIATE COMPANIES Associate companies are those in which the group exercises significant influence over the financial and operating policies. The  attributable  net  income  and  the  investment  in  associate companies   are   included   in   the   consolidated   financial statements on an equity accounting basis. JOINT VENTURES A  joint  venture  is  a  contractual  arrangement  whereby  the group and other parties undertake an economic activity that is subject   to   joint   control.   The   group’s   interest   in   jointly controlled  entities  is  accounted  for  using  the  proportional consolidated  method;  the  attributable  share  of   the  assets, liabilities,  revenue,  expenses  and  cash  flows  being  included within similar items on a line by line basis. Interests in jointly controlled entities that are acquired with a view of  disposal in the near future are recorded at cost. TRANSLATION OF FINANCIAL STATEMENTS PREPARED IN FOREIGN CURRENCIES A foreign entity is a foreign operation,  the activities of  which are not an integral part of  those of  the reporting enterprise. Balance sheets of  consolidated foreign entities are translated into South African currency at rates of  exchange ruling at the year end.  Profits and losses arising on the translation of  the opening  net  investments  and  retained  earnings  of   foreign currency    denominated    entities    are    included    in    non- distributable  reserves.  Income  statements  are  translated  at the  weighted  average  exchange  rates  for  the  period  with material  transactions  being  translated  at  the  actual  rate  at transaction   date.    Previously   deferred   foreign   currency translation  gains  are  recognised  in  income  in  the  period  in which the net investment in the foreign entity is disposed of  or when the permanent loan or capital funding is repaid. The   financial   statements   of    foreign   operations   that   are integral  to  the  operations  of   the  reporting  enterprise  are translated   in   terms   of    the   accounting   policy   on   foreign currencies. FOREIGN CURRENCIES Transactions or net exposures involving foreign currencies are converted into reporting currency at the exchange rate ruling at the date of  the transaction. Foreign    currency    monetary    assets    and    liabilities    are converted into reporting currency at the exchange rate ruling at the balance sheet date. Gains and losses are included in the income statement in the current period. DEFERRED TAXATION Deferred  taxation  is  calculated  using  taxation  rates  at  the balance  sheet  date.  Deferred  tax  is  accounted  for  using  the balance   sheet   liability   method   in   respect   of    temporary differences   arising   from   differences   between   the   carrying amount of  assets and liabilities in the financial statements and the   corresponding   tax   basis   used   in   the   computation   of taxable income. Deferred  tax  assets  are  raised  only  to  the  extent  that  their recoverability is probable in the foreseeable future. Deferred  tax  assets  are  raised  on  STC  credits  to  the  extent that it is probable that profits will be available,  against which the deductible temporary differences can be utilised.