MDA HOLDINGS LTD
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ANNUAL REPORT 2016
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where
transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred
at the balance sheet date. Timing differences are differences between the company’s taxable profits and its results as stated in the
financial statements.
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected
to reverse, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax
is measured on a non-discounted basis.
Foreign currencies
Foreign currency transactions of individual companies are translated at the rates ruling when they occurred. Foreign currency
monetary assets and liabilities are translated at the rates ruling at the balance sheet date. Any differences are taken to the profit
and loss account.
The results of overseas operations and their balance sheets are translated into sterling at the rates of exchange ruling on the balance
sheet date. Exchange differences which arise from translation of the opening net assets and results of foreign subsidiary undertakings
and from translating the profit and loss account at an average rate are taken to reserves.
Pension costs and other post-retirement benefits
The company contributes to a group personal pension scheme for its employees. The assets of the scheme are held separately
from those of the company in an independently administered fund. The pension charge represents the amounts payable by the
company to the fund in respect of the period.
Current asset investments held for sale
Current asset investments are classified as held for sale on the basis that they are expected to be disposed of in the next 12
months. These are recognised at historical cost less any impairment.
Valuation of investments
Investments held as fixed assets are stated at cost less any provision for impairment. Investments held as current assets are stated
at the lower of cost and net realisable value.
Leased assets
Where assets are financed by leasing agreements that give rights approximating to ownership (finance leases), the assets are
treated as if they had been purchased outright. The amount capitalised is the present value of the minimum lease payments payable
over the term of the lease. The corresponding leasing commitments are shown as amounts payable to the lessor. Depreciation on
the relevant assets is charged to the profit and loss account over the shorter of estimated useful economic life and the period of
the lease.
All other leases are treated as operating leases. Their annual rentals are charged to the profit and loss account on a straight-line
basis over the term of the lease.
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