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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST DECEMBER, 2010
(Expressed in Thousands of Trinidad and Tobago Dollars, except where otherwise stated)
(Continued)
2. Significant accounting policies (continued)
e) Property, plant and equipment
It is the Group’s policy to account for property, plant and equipment at cost less accumulated depreciation and/or accumulated
impairment losses, if any (Note 7). Such cost includes the cost of replacing part of the property, plant and equipment and borrowing
costs for long-term construction projects if the recognition criteria are met. All other repairs and maintenance are recognised in the
consolidated income statement.
Depreciation is provided on the straight line basis at rates estimated to write–off the assets over their expected useful lives. The
estimated useful lives of assets are reviewed periodically, taking account of commercial and technological obsolescence as well as
normal wear and tear, and the depreciation rates are adjusted if appropriate.
Current rates of depreciation are:
Buildings – 2% – 4%
Plant, machinery and equipment – 3% – 40%
Motor vehicles – 10% – 20%
Office furniture and equipment – 10% – 25%
Leasehold improvements are amortised over the remaining term of the lease. Land and work–in–progress are not depreciated.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use
or disposal. Any gain or loss arising on the derecognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of asset) is included in the statement of income in the year the asset is derecognised.
f) Inventories
Plant spares and raw materials are valued at the lower of cost and net realizable value using the average cost method. Work in progress
and finished goods are valued at the lower of cost, including attributable production overheads, and net realizable value. Net realizable
value is the estimate of the selling price less costs of completion and direct selling expenses.
g) Foreign currency translation
The consolidated financial statements are presented in Trinidad and Tobago dollars (expressed in thousands), which is the Group’s
functional and presentation currency. That is the currency of the primary economic environment in which the Group operates. Each
entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured
using that functional currency.
Foreign currency transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency at the rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into Trinidad and Tobago dollars at the rate of exchange
ruling at the reporting date. Non–monetary assets and liabilities are translated using exchange rates that existed when the values were
determined. Exchange differences on foreign currency transactions are recognized in the consolidated income statement.
Foreign entities
On consolidation, assets and liabilities of foreign entities are translated into Trinidad and Tobago dollars at the rate of exchange
ruling at the reporting date and their income statements are translated at exchange rates at the date of the transaction. The exchange
differences arising on re-translation are taken directly to Consolidated Statement of Comprehensive Income. On disposal of the
foreign entity, the deferred cumulative amount recognized in equity relates to that particular foreign operation is recognized in the
consolidated income statement.
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BUILD TO LAST FOR GENERATIONS