The performance obligation is satisfied at the acceptance of the invoice for which it provides the factoring service and the revenue is recognised at this point. (iv) Interest and similar income For all financial instruments measured at amortised cost, interest income is recorded using the effective interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset. Income that the Group and the Company consider to be an integral part of these financial instruments are recognised in the EIR. Earnings from finance leases are recognised over the term of the lease using the net investment method, which reflects a constant periodic rate of return. Income or discounts received from merchants on financing of credit agreements, commitment fees and signing fees are initially recognised and presented in net investment in leases and other credit agreements, other liabilities in the statement of financial position. The release to profit or loss is recognised in interest income line in the statement of profit or loss. (v) Rental income Rental income is derived from operating leases. Rental net of value added tax is recognised on a straight line basis over the lease term. (vi) Penalty and late payment fees Penalty and late payment fees on card activities are recognised over the period to which they accrue. Also included in penalty and late payment fees, contingent rent arising on leases, hire purchase and other credit agreement which are recognised as income in the period they are incurred. (vii) Dividend Income Dividend Income is recognised when the Group’s and the Company’s right to receive the payment is established. (viii) Management and administration fees Revenue from management and administration services are recognised over time as the services are received and consumed simultaneously, measured at the transaction price as per agreements. (f) Foreign currencies (i) Functional and presentation currency Items included in the financial statements of each of the Group’s and the Company’s entities are measured using Mauritian Rupee, the currency of the primary economic environment in which the entity operates (“functional currency”). The consolidated and separate financial statements are presented in Mauritian Rupees, which is the Company’s functional currency. (ii) Transactions and balances Foreign currency transactions are translated into Mauritian Rupees using exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in statement of profit or loss. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date the fair value was determined. (iii) Group companies The results and financial position of the Group entities that have a functional currency different from Mauritian Rupee are translated into the presentation currency as follows: • assets and liabilities for each statement of financial position presented are translated at the closing rate at the reporting date; • income and expenses for each statement representing profit or loss and other comprehensive income are translated at average exchange rates; 113 OUR YEAR AT A GLANCE OUR PEOPLE GOVERNANCE FINANCIAL STATEMENTS
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