EAPCC_Annual_Report_.. - Investing In Africa

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2010/2011 EAST AFRICAN PORTLAND CEMENT COMPANY LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 30 JUNE 2011 3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS <strong>In</strong> the process of applying the company’s accounting policies, management has made estimates and assumptions that affect the reported amounts of assets and liabilities within current and future financial years. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The critical areas of accounting estimates and judgements in relation to the preparation of these financial statements are as set out below: Impairment of assets At each reporting date, the company reviews the carrying amount of its assets to determine whether there is any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment. Property, plant and equipment Critical estimates are made by directors in determining the useful lives and residual values to property, plant and equipment based on the intended use of the assets and the economic lives of those assets. Subsequent changes in circumstances or prospective utilisation of the assets concerned could result in the actual useful lives or residual values differing from initial estimates. <strong>In</strong>tangible assets Critical estimates are made by directors in determining the useful lives and residual values to intangible assets based on the intended use of the assets and the economic lives of those assets. Subsequent changes in circumstances or prospective utilisation of the assets concerned could result in the actual useful lives or residual values differing from initial estimates. 54 EAST AFRICAN PORTLAND CEMENT COMPANY LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2010/2011
EAST AFRICAN PORTLAND CEMENT COMPANY LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2010/2011 NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 30 JUNE 2011 4. PROPERTY, PLANT AND EQUIPMENT (a) Year ended 30 June 2011 Computers, office Freehold land Buildings Plant and machinery Motor vehicles equipment, furniture and fittings Total KShs’000 KShs’000 KShs’000 KShs’000 KShs’000 KShs’000 COST OR VALUATION At 1 July 2010 166,335 1,124,964 5,085,952 453,763 213,716 7,044,730 Additions - - 29,584 165,344 41,915 236,843 Disposals Transfer from capital- work- in - - - (2,618) - (2,618) progress ( note 5) - - 1,243,418 - - 1,243,418 At 30 June 2011 166,335 1,124,964 6,358,954 616,489 255,631 8,522,373 COMPRISING Valuation adjustment at 30 June 2009 98,898 1,096,017 3,113,628 354,386 (250,231) 4,412,698 Cost 67,437 28,947 3,245,326 262,103 505,862 4,109,675 166,335 1,124,964 6,358,954 616,489 255,631 8,522,373 DEPRECIATION At 1 July 2010 - 28,125 267,228 77,056 27,050 399,459 Charge for the year - 28,125 293,100 104,603 32,092 457,920 Eliminated on disposal - - - (655) - (655) Impairment of equipment - - - 7,726 - 7,726 At 30 June 2011 - 56,250 560,328 188,730 59,142 864,450 NET BOOK VALUE At 30 June 2011 166,335 1,068,714 5,798,626 427,760 196,489 7,657,923 The property, plant and equipment were revalued by Crystal Valuers Limited, registered valuers, as at 30 June 2009. The land was valued on an Open Market Value basis while the other assets were valued on a Depreciated Replacement Cost basis. The company’s policy is to revalue property, plant and equipment at least once every five years refer to note 2(d). EAST AFRICAN PORTLAND CEMENT COMPANY LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2010/2011 55
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