Integrated Reports Senwes Financial Review 2018 - Page 66

FINANCIAL REVIEW 66 grant date to the vesting date. The length of this period will vary from tranche to tranche. Where the employees are employed by another Senwes group company (subsidiary of Senwes), this company would be the entity receiving the services, and would have to account for the transaction as an equity-settled share-based payment, with a corresponding increase in capital contributed by Senwes. Senwes would be the settling entity that needs to account for the transaction as equity-settled, as it settles the transaction in its own shares with an increase in its investment in the subsidiary. As the shares vest, the investment will be converted to an interest- bearing loan, interest will be charged at a market related rate. 2.9 Revenue recognition Revenue includes income earned from the sale of goods, storage and handling fees, income from services rendered, commission income, finance and dividend income. Interest received as a result of credit extension is also stated as revenue but only to the extent that collection is reasonably assured. Revenue is measured at fair value of the consideration received or receivable, net of any discounts, rebates and related taxes. The group assesses its revenue agreements in order to determine if it is acting as a principal or agent. Intragroup sales are eliminated on consoli- dation. Services rendered Revenue from services provided is recognised by taking into account the stages of completion at reporting date and if results can be determined with reasonable accuracy. If revenue cannot be determined with reasonable accuracy, it is only recognised to the extent of recoverable expenses incurred. Direct delivery transactions with regard to fuel, fertiliser, seed and other farming inputs are net accounted in revenue, since their nature is in line with agency principles rather than acting as principal. The underlying reason for the transactions is credit extension. Commission income is recognised on receipt of evidence that the goods or services have been delivered to the buyer. Other commission is recognised as income as and when the service is rendered or, if applicable, in terms of the contract agreement. Finance income Interest income on all financial instruments measured at amortised cost is recorded using the effective interest rate (EIR) method. EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. Interest income is included in finance income in the statement of ٚ]܈˂SSPSUQU‚BBBBH[YHH[Hو’[YHH\][X]]Y\\\Hو[YHXZ]YHH[HوۈܘZ[[[\وYX[\][ۈ[\H\˂BBBH][YHH[\و\Xۚ\Y[HX]\X[\[]\وۙ\\قH\H[ٙ\YH^Y\[X\ۘXH\\[H^\]HXۛZX˜[Y]وH[X[ۈ[H\[\˂BBBBBH[YHH[[]HY[’[ܘZ[[[[X[ۜXH\^\H]Y\\\\\YYH[[›ۈH]\\^[KY^ \HHؚX]H\Y[]\[[]\HY^ \H[X[ۜ\H]X[Y[ٚ]܈˂BBBBBH܈[H[\\\HYܙY[Y[ۈ[\]\[H[[X[\]H\\وBYܙY[Y[YYH[[\Y]\Z[H]\H[\\[ٙ\YH\[]\وۙ\\H^Y\[[H][YH\Xۚ\Y [H[\\œ]Z[YH\[]\وۙ\\ ][YHY[]H\Y[[ٙ\Y B[X[ۈ\H[[[YܙY[Y[[\]H\H][YKBH]Y[XZ]YBH]Y[XZ]YH[\Y[\HXۚ\Y[H\Z\&HYXZ]BB^[Y[\\X\Y BBBBBBBBBBBBBBBBH LH[[X[[[Y[‚BBL BHSSPSTU΂BBBH[]X[Xۚ][ۈ[YX\\[Y[BBBBBBBBBBBBBBBBBBBBBB[[X[\]][HHوPT H\H\YYY\[[XZ]X\]ZppKBXKY܋\[H܈]Z\[YHYٚ][[[X[\]܈\\]]]\™\Yۘ]Y\Y[[[Y[[[YX]HYK\\X]KHܛ\]\Z[\H\YX][ۈو][[X[\]][]X[Xۚ][ۋ[[[X[\]˜\HXۚ\Y[]X[H]Z\[YH\[H\Hو[[X[\]XܙY]Z\[YKYٚ]܈[X[ۈ]\H]X]XHHX]Z\][ۂوH[[X[\]