| ACCOUNTING POLICIES CONTINUED |
| for the year ended 30 June 2007 |
| |
| Interest and dividend income |
Interest is recognised on a time proportion basis, taking account
of the principal outstanding and the effective rate over the period
to maturity.
Dividend income is recognised when the right to receive
payment is established. |
| |
| Long-term and construction contracts |
Where the outcome of a long-term and construction contract
can be reliably measured, revenue and costs are recognised by
reference to the stage of completion of the contract at the
balance sheet date, as measured by the proportion that contract
costs incurred for work to date bear to the estimated total
contract costs. Variations in contract work, claims and incentive
payments are included to the extent that collection is probable
and the amounts can be reliably measured. Anticipated losses
to completion are immediately recognised as an expense in
contract costs.
Where the outcome of the long-term and construction contracts
cannot be estimated reliably, contract revenue is recognised to
the extent that the recoverability of incurred costs is probable. |
| |
| EXCEPTIONAL ITEMS |
| Exceptional items are material items which derive from events or
transactions that fall outside the ordinary trading activities of the
Group and which individually or, if of a similar type, in aggregate,
need to be disclosed by virtue of their size or incidence if the
financial statements are to give a true and fair view. |
| |
| BORROWING COSTS |
| Borrowing costs are not capitalised but recognised in the income
statement in the period incurred. |
| |
| DIVIDENDS |
| Dividends are accounted for on the date of declaration and are
not accrued as a liability in the financial statements until declared. |
| |
| SEGMENTAL REPORTING |
A business segment is a group of assets and operations
engaged in providing products or services that are subject to
risks and returns that are different from those of other business
segments. A geographical segment is engaged in providing
products or services within a particular economic environment
that are subject to risks and returns that are different from those
of segments operating in other economic environments.
The Group's primary format for reporting segmental information
is determined in accordance with the nature of business and
its secondary format is determined with reference to the
geographical location of the operations. |
| |
| Inter-segment transfers |
| Segment revenue, segment expenses and segment results
include transfers between business segments and between
geographical segments. Such transfers are accounted for
at arms-length prices. These transfers are eliminated
on consolidation. |
| |
| Segmental revenue and expenses |
| All segment revenue and expenses are directly attributable
to the segments. Segment revenue and expenses are allocated
to the geographic segments based on the location of the
operating activity. |
| |
| Segmental assets |
| All operating assets used by a segment, principally property,
plant and equipment, investments, inventories, contracts in
progress, and receivables, net of allowances. Cash balances are
excluded. Segment assets are allocated to the geographic
segments based on where the assets are located. |
| |
| Segmental liabilities |
| All operating liabilities of a segment, principally accounts payable,
sub-contractor liabilities and external interest bearing borrowings. |
| |
| BLACK ECONOMIC EMPOWERMENT |
| IFRS 2 - Share Based Payment requires share-based payments
to be recognised as an expense in the income statement. This
expense is measured at the fair value of the equity instruments
issued at the date of grant. |
| |
| Letsema Vulindlela Black Executives Trust |
| Once selected black executives become vested beneficiaries of
the Letsema Vulindlela Black Executives Trust and are granted
Murray & Roberts shares in terms of their vesting rights, the fair
value of these equity instruments, valued at the various dates on
which the grants take place, are recognised as an expense over
the related vesting periods. |
| |
| Letsema Khanyisa Black Employee Benefits Trust and
Letsema Sizwe Broad-Based Community Trust |
| These trusts are established as 100-year trusts. However,
after the lock-in period ending 31 December 2015, they may,
at the discretion of the trustees, be dissolved in which event
any surplus in these trusts after the satisfaction of all the
liabilities in these trusts will be transferred to organisations
which engage in similar public benefit activities to these trusts,
which may include the beneficiaries of these trusts. An
IFRS 2 expense will have to be recognised at such point in
time when this surplus is distributed to an independent public
benefit organisation. |
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