Page 77 - MPA ANNUAL REPORT 2016-2017

DRIVEN BY PASSION AND PRIDE

MAURITIUS PORTS AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2017

2. SIGNIFICANT ACCOUNTING POLICIES (CONTD)

2.17. Revenue recognition

Revenue compris es of the fair valu e for the sale of s ervices, n et of rebates and discounts.
Sales of services are recognised in the accounting period in which the services are rendered (by reference to completion
of the specific transaction assessed on the basis of the actual service provided as a proportion of total services to be
provided).
The Authority has entered into a concession agreement with the Cargo Handling Corporation Limited whereby the
latter pro vides ca rgo servi ces at Te rminals I , II and II I as a car go opera tor. Conc ession f ees are receivable annually.
Other rev enues ea rned by the Auth ority are recognis ed on the following bases:
• Renta l income - on an a ccruals b asis in a ccordan ce with th e substance of the relevant agreements.
• Interest income - on a time-proportion basis using the effective interest method. When a receivable is impaired,
the Authority reduces the carrying amount to its recoverable amount, being the estimated future cash flow
discounted at original effective interest rate, and continues unwinding the discount as interest income. Interest
winacrorman et. o n im paired lo ans is re cognise d either as cash is collec ted or o n a cost-recovery basis as conditions

• Divide nd incom e - whe n the sha reholder ’s right to receive payment is established.
• Other income - in the accounting period in which it is receivable.

2 .18. Pr ovisions
Provisions are recognised when the Authority has a present obligation (legal or constructive) as a result of past
events. It is probable that the Authority will be required to settle the obligation and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required
to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties
surrounding the obligation.
When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount
is the present value of those cash flows (when the effect of the time value of money is material). When some or all
the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is
recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable
c an be measured reliably.
2.19. Funds and reserves

2.19.1. Capital account

Capital a ccount re presents investm ents in t he form of capita l by the government of Mauritius.
2.19.2. Other reserves

Other reserves include the following:
Capital reserve - Comprises gains & losses on revaluation on investment property and other reserves.
Reserve fund - This reserve represents funds transferred to Port Development Reserve, General Reserve and
Insurance Reserve. Revaluation reserve - Comprises gains and losses from revaluation of property, plant and
equipment. Investment fair value reserve - Comprises gains and losses on fair valuation of available-for-sale financial
assets.

2.19.3. Surplus and deficits

Accumul ated surp lus inclu de all cu rrent and prior periods results.
2.19.4. Dividend distribution

Dividend distribution to the Government of Mauritius is recognised as a liability in the Authority’s financial statements
in the period in which the dividends are declared.

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