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ACCOUNTING Policies –

for the year ended June 2006 continued

Deferred tax

flow statement, cash and cash equivalents comprise cash-

Deferred tax is provided in full, using the liability method, at currently

on-hand, deposits held on call with banks, other highly liquid

enacted or substantively enacted tax rates in operation at the

investments with original maturities of three months or less and

year-end, that are expected to apply when the related deferred tax

bank overdrafts which form an integral part of the entity’s cash

asset is realised or the deferred tax liability is settled. Full provision

management. Bank overdrafts are shown within borrowings in

is made for all temporary differences between the tax base of an

current liabilities on the balance sheet.

asset or liability and its balance sheet carrying amount. SHARE CAPITAL AND SHARE PREMIUM No deferred tax liability is recognised in those circumstances,

Ordinary shares are classified as equity. Incremental external

other than a business combination, where the initial recognition

costs directly attributable to the issue of new shares are

of an asset or liability has no impact on accounting profit or

deducted from share premium.

taxable income. TREASURY SHARES Deferred tax assets are recognised to the extent that it is

Equity shares in Aspen held by any Group company are classified

probable that future taxable profit will be available against which

as treasury shares. These shares are treated as a deduction

the temporary differences can be utilised.

from the issued and weighted average number of shares. The consideration paid, including any directly attributable incremental

Current tax and deferred tax is charged or credited directly to

costs (net of income taxes), is deducted from Group equity until

equity if the tax relates to items that are credited or charged, in

the shares are cancelled, reissued or disposed of. When such

the same or a different period, directly to equity.

shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction

Deferred tax is provided on temporary differences arising on

costs and the related income tax effects, is included in equity

investments in subsidiaries and associates, except where the

attributable to Aspen’s equity holders. Distributions received on

timing of the reversal of the temporary difference is controlled

treasury shares are eliminated on consolidation.

by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

CONVERTIBLE CUMULATIVE VARIABLE RATE PREFERENCE SHARES

Dividend taxes, including STC

Where financial instruments are issued that contain both

Dividend taxes are recognised as a part of the income tax

liability and equity elements, their component parts are

charge in the income statement in the same period as the

classified separately as liabilities or equity on initial recognition,

related dividend.

in accordance with the substance of the contractual arrangements.

The dividend tax effect of dividends paid on equity instruments is recognised in the period in which the Group declares the

For purposes of balance sheet presentation, such instruments

dividend. For financial instruments that are classified as liabilities,

comprise two components: a financial liability (a contractual

the dividend tax relating to any contractual payments is accrued

arrangement to deliver cash or other financial assets) and an

in the same period as the interest accrual.

equity instrument (a call option granting the holder the right, for a specified period of time, to convert into Aspen ordinary

Deferred tax assets are recognised for dividend tax credits to

shares). Accordingly, such liability and equity elements are

the extent that it is probable that dividends will be declared

presented separately on the balance sheet.

against which unused dividend tax credits can be utilised. The sum of the carrying amounts assigned to the liability and CASH AND CASH EQUIVALENTS

equity components on initial recognition equals the fair value

Cash and cash equivalents are carried in the balance sheet at

ascribed to the instrument as a whole. No gain or loss arises

cost. For the purposes of the balance sheet, cash and cash

from recognising and presenting the components of the

equivalents comprise cash-on-hand, deposits held on call

instrument separately. The liability component is measured by

with banks, and other highly liquid investments with original

discounting the stream of future cash flows at the prevailing

maturities of three months or less. For the purposes of the cash

market rate for a similar liability that does not have an

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Aspen Annual Report 2006

Profile for Aspen Holdings

Aspen Annual Report 2006  

Aspen Annual Report 2006