DIPPED PRODUCTS PLC / ANNUAL REPORT 2008—2009

Accounting Policies
11.1.2. Permanent land development cost
Permanent land development costs are those costs incurred in making major infrastructure development
and building new access roads on leasehold lands.
These costs have been capitalised and amortised over the remaining lease period.
Permanent impairments to land development costs are charged to profit & loss in full or reduced to the net
carrying amounts of such asset in the year of occurrence after ascertaining the loss.
11.1.3. Limited life land development cost (immature and mature plantations)
The cost of land preparation, rehabilitation, new planting, re-planting, crop diversification, inter-planting
and fertilizing etc., incurred between the time of planting and harvesting (when the planted area attains
the maturity), are classified as immature plantations. These immature plantations are shown at direct costs
plus attributable overheads, including interest attributable to long-term loans used for financing immature
plantations.
Permanent impairments to land development costs are charged to profit & loss in full or reduced to the net
carrying amounts of such assets in the year of occurrence after ascertaining the loss.
The expenditure incurred on perennial crop (tea/rubber) fields, which come into bearing during the year,
has been transferred to mature plantations.
11.2. Depreciation
Depreciation is recognised in profit & loss on the straight line basis over the estimated useful economic lives of
such assets based on the cost or valuation of all property, plant & equipment. Assets are depreciated over the
shorter of the lease term or their useful economic lives.
The estimated useful lives are as follows :
Freehold assets
No of Years
Buildings & roads 40
Plant & machinery 13
Hydro power plants 30
Motor vehicles 5
Equipment 8
Furniture & fittings 10
Sanitation, water & electricity supply 20
Computer accessories 4
Mature plantations - tea 33
- rubber 20
No depreciation is provided for immature plantations.
11.3. Amortisation
The leasehold rights of assets taken from JEDB / SLSPC are amortised in equal annual amounts over the following
years:
Leasehold right
No of years
Bare land 53
Mature plantations 30
Buildings 25
Machinery 15
Improvements to land 30
11.4. Inventories
The value of each category of inventory is determined on the following basis:
Input material - At actual cost on weighted average basis
Spares and consumables - At actual cost on weighted average basis
Nurseries - At the cost of direct materials, direct labour and an appropriate proportion of
directly attributable overheads less provision for overgrown plants.
Produce stock - Manufactured up to the Balance Sheet date and sold since then until the time
of preparation of the Financial Statements are valued at since realised prices.
The balance stocks are valued at estimated selling price. The prices are net of all
attributable expenses relating to the public auction.
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