Download - Mintek

FINANCIAL STATEMENTS AND NOTES 2007NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2007such assets so as to bring them to the location and condition necessary for it to be capable of operating in the manner intended by management.Interest costs are not capitalised.Depreciation is calculated so as to write off the cost of property, plant and equipment on a straight-line basis, over the estimated useful lives to theestimated residual value. Useful lives and residual values are reviewed on an annual basis. Residual values are measured as the estimated amountcurrently receivable for an asset if the asset were already of the age and condition expected at the end of its useful life.expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. All assets under construction are carriedat cost and depreciation only commences once the asset is commissioned and ready for its intended use.The gains and losses arising on the disposal or retirement of an item of property, plant, equipment and vehicles is determined as the difference1.11 Investment propertyprofessional valuer based on market evidence of the most recent prices achieved in arms length transactions of similar properties in the samearea.1.13 Post-retirement health care costsThe Group uses the project unit credit actuarial method to determine the present value of its past service cost.Actuarial gains and losses are recognised in full in the reporting period it relates to and is the excess over the greater of the present value of thepast service obligation at the end of the reporting period before deducting the present value of assumed assets at the same date. Valuations of theseobligations are carried out annually by independent actuaries using appropriate mortality tables, long-term estimates of increases in medical costsand appropriate discount rates. General increases to medical aid contributions were estimated taking into account the projected future changes inan increased estimated liability.1.14 InventoriesInventories are valued stated at the lower of cost or net realisable value. Costs comprise direct materials and, where applicable, direct labour costsand those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weightedaverage method. Net realisable value represents the estimated selling price in the ordinary course of business less any costs of completion and coststo be incurred in marketing, selling and distribution.1.15 ProvisionsThe Group recognises its obligation for guaranteeing its product and services for periods as stipulated in its contracts with the Group’s customers.The Group is exposed to certain environmental liabilities relating to its operations. Provision for the cost of environmental and other remedial worksuch as reclamation costs, close down and restoration costs and pollution control is made when such expenditure is probable and the cost can bereasonably estimated.1.16 Financial instrumentsFinancial instruments recognised on the balance sheet include derivative instruments, investments, investments in debt securities, accountsreceivable, cash and cash equivalents, accounts payable and interest bearing debt. Financial instruments are initially measured at cost includingwith in the subsequent notes. When the Group can legally do so and the Group intends to settle on a net basis, or simultaneously, related positiveannual report 200768