149 / 198
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
continued
For the year ended 31 May 2016
BLUE LABEL INTEGRATED ANNUAL REPORT 2016
147
10. Accounting framework
10.1 Basis of preparation
The principal accounting policies applied in the preparation of the Group and Company annual financial statements are
in the related notes and are consistent with those adopted in the prior year, unless otherwise specified.
The Group and Company annual financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, the JSE Listings
Requirements and the Companies Act, No 71 of 2008.
The term IFRS includes International Financial Reporting Standards (IFRS), International Accounting Standards (IAS) and
interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing
Interpretations Committee (SIC). The standards referred to are set by the International Accounting Standards Board (IASB).
The Group and Company annual financial statements are prepared under the historical cost convention. Amounts
are rounded to the nearest thousand with the exception of earnings per share, ordinary share capital and equity
compensation benefit. The preparation of financial statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRS that have a significant effect on the financial statements
and estimates with a significant risk of material adjustment in the next year are discussed in the notes to which they
relate.
10.2 Going concern
The Group and Company’s forecasts and projections, taking account of reasonably possible changes in trading
performance, show that the Group and Company should be able to operate within its current funding levels into the
foreseeable future.
After making enquiries, the directors have a reasonable expectation that the Group and Company have adequate
resources to continue in operational existence for the foreseeable future. The Group and Company therefore continue
to adopt the going-concern basis in preparing the financial statements.