2007 / 2008 Annual Report - Eastern Cape Development Corporation

EASTERN CAPE DEVELOPMENT CORPORATION 2007/08NOTES TO THECONSOLIDATED ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 200835 Categories and fair value of financial instruments (CONTINUED)35.3.3 Unlisted shares carried at costIn accordance with the accounting policy on available-for-sale financial assets, certain unlisted shares are carried atcost as their fair values could not be reliably determined, due to a lack of an active market for these instruments.35.3.4 Held to maturity investments, loans advanced and interest bearing borrowingsThe fair values of these financial instruments are determined based on discounted cash flow techniques, taking accountof market related discount rates appropriate to the instrument and economic conditions current at the balance sheetdate. At this date, the fair value of the financial instruments approximated their carrying values.36 New standards, amendments and interpretationsStandards, amendments and interpretations effective in 2008IFRS 7, ‘Financial instruments: Disclosures’, and the complementary amendment to IAS 1, ‘Presentation of financialstatements – Capital disclosures’, introduces new disclosures relating to financial instruments and does not have anyimpact on the classification and valuation of the group’s financial instruments, or the disclosures relating to taxationand trade and other payables.IFRIC 8, ‘Scope of IFRS 2’, requires consideration of transactions involving the issuance of equity instruments, wherethe identifiable consideration received is less than the fair value of the equity instruments issued in order to establishwhether or not they fall within the scope of IFRS 2. This standard does not have any impact on the group’s financialstatements.IFRIC 10, ‘Interim financial reporting and impairment’, prohibits the impairment losses recognised in an interim periodon goodwill and investments in equity instruments and in financial assets carried at cost to be reversed at a subsequentbalance sheet date. This standard does not have any impact on the group’s financial statements.Standards, amendments and interpretations effective in 2008 but not relevant to the groupThe following standards, amendments and interpretations to published standards are mandatory for accountingperiods beginning on or after 1 April 2007 but they are not relevant to the group’s operations:• IFRS 4, ‘Insurance contracts’;• IFRIC 7, ‘Applying the restatement approach under IAS 29, Financial reporting in hyper-inflationary economies’; and• IFRIC 9, ‘Re-assessment of embedded derivatives’.• IFRIC 11 IFRS 2 Group and Treasury Share TransactionsNew standards, amendments and interpretations effective in future periodsNew standardsThe following standards, mandatory for the group’s accounting periods commencing on or after 1 April 2008, have notbeen early-adopted by the group:IFRS 8 Operating SegmentsIFRS 8 requires an entity to adopt a management approach to reporting the financial performance of its operatingsegments. Generally, the information to be reported would be what management is currently using internally forevaluating segment performance and deciding how to allocate resources to operating segments. The application of theIFRS is not expected to change the disclosure and measurement basis applied to segment reporting by the group and isnot expected to have a significant impact on the group. The group will apply IFRS 8 from its effective date, which is forannual periods commencing on or after 1 January 2009.104