bold spirit - ArcelorMittal South Africa

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158 ArcelorMittal South Africa Annual Report 2010 13. PROPERTY, PLANT AND EQUIPMENT continued Land register and asset pledges A register of land is available for inspection at the registered office of the company. The group and company have not pledged property, plant and equipment to secure banking facilities granted. Critical judgements and estimates Useful lives and residual values of property, plant and equipment and intangible assets The estimates of depreciation and amortisation rates and the residual lives of the assets are reviewed annually taking cognisance of: • forecasted commercial and economic realities; • benchmarking within the greater ArcelorMittal Group; and • guidance received from expert international valuers. Useful life range Land Not depreciated Buildings 10 to 50 years Steel plant equipment 15 to 30 years Other facilities 15 to 30 years Vehicles and general equipment 5 to 20 years These useful lives represent management’s current best estimates. Impairment indicator assessment for the carrying amount of the cash-generating units An impairment indicator review was performed on all operating cash generation units of the group including subsidiaries. However, it was necessary only to perform an impairment assessment on the export focused Saldanha Works. The principle assumptions applied in the determination of the recoverable amount of the Saldanha cash-generating unit represents averages over a 20-year valuation timeframe and are as follows: • Discount rate: 11.6% to 13.9% (2009: 14.4% to 16.4%) • ZAR/USD average rate of exchange for 2010: R7.50 (2009: R7.75) • Average annual risk-free interest rate differential between SA and the USA: 3.34% (2009: 3.98%) • Average annual sales volumes: 1.2 million tonnes (2009: 1.2 million tonnes) • Cumulative nominal growth rate in USD per tonne steel prices over coming five years: 6.4% (2009: 32%) • Cost of production is per the budget for 2011 and thereafter consensus view of analysts • The carrying amount of the property, plant and equipment of the Saldanha cash-generating unit amounted to R6 368 million at 31 December 2010 (31 December 2009: R6 745 million)
159 ArcelorMittal South Africa Annual Report 2010 Patents and trademarks Rm Nonintegrated software Rm 14. INTANGIBLE ASSETS Group For the year ended 31 December 2010 Net carrying amount Carrying amount at beginning of year 20 52 72 Additions 24 24 Disposals (1) (1) Amortisation charge (2) (9) (11) Carrying amount at end of year 17 67 84 At 31 December 2010 Cost 40 279 319 Accumulated amortisation and impairment (23) (212) (235) Net carrying amount 17 67 84 Group For the year ended 31 December 2009 Net carrying amount Carrying amount at beginning of year 22 49 71 Additions 14 14 Amortisation charge (2) (11) (13) Carrying amount at end of year 20 52 72 At 31 December 2009 Cost 41 260 301 Accumulated amortisation and impairment (21) (208) (229) Net carrying amount 20 52 72 Company For the year ended 31 December 2010 Net carrying amount Carrying amount at beginning of year 51 51 Additions 13 13 Amortisation charge (9) (9) Carrying amount at end of year 55 55 At 31 December 2010 Cost 266 266 Accumulated amortisation and impairment (211) (211) Net carrying amount 55 55 Company For the year ended 31 December 2009 Net carrying amount Carrying amount at beginning of year 48 48 Additions 13 13 Amortisation charge (10) (10) Carrying amount at end of year 51 51 At 31 December 2009 Cost 257 257 Accumulated amortisation and impairment (206) (206) Net carrying amount 51 51 Total Rm
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Annual Report 2010 bold spirit
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I in brief
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Brand values Our goal is to provide
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Financial features Headline earning
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bold spirit - ArcelorMittal South Africa

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