revises the way other comprehensive income is presented. This revised standard is effective for periods beginning on or after July 1, 2012, and has not been applied in preparing these consolidated financial statements. The Company is currently evaluating the impact of the amended IAS 1 on its financial statements. 

IAS 12, Deferred Tax: Recovery of Underlying Assets (“IAS 12”) was amended by the IASB in December 2010 to include the requirement that deferred tax on non-depreciable assets measured using the revaluation model in IAS 16, Property, Plant and Equipment should be measured on the sale basis. This new standard is effective for the periods beginning on or after January 1, 2012. The Company is assessing the impact of this new standard on its consolidated financial statements. 

IAS 19, Employee Benefits (“IAS 19”) was amended by the IASB in June 2011. This amendment eliminates the use of the ‘corridor’ approach and requires that all remeasurement impacts be recognized in other comprehensive income. It also enhances the disclosure requirements by providing more information regarding the characteristics of defined benefit plans and the risk that entities are exposed to through participation in those plans. This revised standard is effective for periods beginning on or after January 1, 2013, and has not been applied in preparing these consolidated financial statements. The Company is currently evaluating the impact of the revised IAS 19 on its consolidated financial statements. 

## 4. DETERMINATION OF FAIR VALUES 

A number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. 

## (i) Property, plant and equipment 

The fair value of property, plant and equipment recognized as a result of a business combination is based on the amount for which a property could be exchanged on the date of valuation between knowledgeable, willing parties in an arm’s length transaction. 

## (ii) Intangible assets 

The fair value of customer relationships acquired in a business combination is determined using the multi-period excess earnings method, whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related cash flows. 

## (iii) Inventories 

The fair value of inventories acquired in a business combination is determined based on the estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories. 

## (iv) Derivatives 

The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds). 

The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date. 

Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the group entity and counterparty when appropriate. 

## (v) Non-derivative financial liabilities 

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance leases the market rate of interest is determined by reference to similar lease agreements. 

## (vi) Other financial instruments 

The carrying values of cash and cash equivalents, trade and other receivables, trade and other payables approximate fair values due to the short-term maturities of these financial instruments. 

