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NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 28 — ADDITIONAL FINANCIAL INSTRUMENTS DISCLOSURE (CONTINUED)

Estimation of fair values

The following summarises the major methods and assumptions used in estimating the fair values of financial instruments reflected
in the table above:

Quoted Investments

Fair value is determined by reference to the securities exchange quoted market prices at close of business on the balance sheet
date, without any deduction for transaction costs.

Derivatives

Bank mark-to-market valuations have been used to determine the fair value of interest rate swaps and forward exchange
contracts. These have been back tested against valuations generated by the Group’s treasury system pricing module, using market
quoted data as at balance date. The system uses discounted cash flow techniques to value financial instruments.

Interest bearing loans and borrowings

Fair value is calculated based on discounted expected future principal and interest cash flows.

Finance lease liabilities

The fair value is estimated as the present value of future cash flows, discounted at market interest rates for similar lease
arrangements. The estimated fair value reflects the assessed current interest rate for a similar lease where this rate has been
determined to be different from the rate charged.

Trade and other receivables/payables

For receivables/payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value. All other
receivables/payables are discounted to determine the fair value where an appropriate rate of interest is not received/charged in
respect of the amount.

Interest rates used for determining fair value

The Group uses the bank quoted interest rate swap curve as of 30 June 2007 plus assessed risk factors/credit spread to discount
financial instruments.

The Group Parent Entity

Note
2007
$’000
2006
$’000
2007
$’000
2006
$’000
NOTE 29 — EMPLOYEE BENEFITS
Employee benefits
Aggregate liability for employee benefits including on-costs:
Current
Employee benefits provision
Non-current
Employee benefits provision
24
24
10,278
2,323
9,343
1,933
996
682
937
602
12,601 11,276 1,678 1,539

Management Share Option Plan
There were no options granted during the current or previous financial year.
Unissued ordinary shares of the Company under option are:
Grant date Expiry date Exercise price Number of options
20 November 2003 30 September 2008 $2.75 250,000
11 December 2003 30 September 2008 $3.35 770,800
17 June 2004 30 September 2008 $3.14 50,000
16 September 2004 30 September 2008 $3.72 250,000
1,320,800

The weighted average remaining contractual life of options outstanding at the end of the year was 1.25 years (2006: 2.01 years).

Options granted to each eligible employee ranged from 2,500 to 1,225,000 options. At reporting date 38 employees hold options.
During the year, employees exercised options to acquire 1,592,200 fully paid ordinary shares at a weighted average exercise price
of $3.03. No options have been exercised since the end of the year.

Set out below are summaries of options granted:

Grant Date Expiry Date Exercise Price
Balance
at the start
of the year
Granted
during the
year
Exercised
during
the year
Expired
during
the year
Balance
at the end
of the year
Exercisable
at the end
of the year
Number Number Number Number Number Number
The Group and Parent Entity — 2007
05 February 2002 30 September 2006 $2.26 355,500 — (355,500) — — —
20 November 2003 30 September 2008 $2.75 450,000 — (200,000) — 250,000 250,000
11 December 2003 30 September 2008 $3.35 1,807,500 — (1,036,700) — 770,800 770,800
17 June 2004 30 September 2008 $3.14 50,000 — — — 50,000 50,000
16 September 2004 30 September 2008 $3.72 250,000 — — — 250,000 250,000
Total 2,913,000 — (1,592,200) — 1,320,800 1,320,800
Weighted average exercise price $3.15 — $3.03 — $3.30 $3.30
The Group and Parent Entity — 2006
30 October 2000 30 October 2005 $2.27 225,000 — (225,000) — — —
05 February 2002 30 September 2006 $2.26 473,500 — (118,000) — 355,500 355,500
20 December 2002 30 September 2006 $2.22 250,000 — (250,000) — — —
20 November 2003 30 September 2008 $2.75 450,000 — — — 450,000 —
11 December 2003 30 September 2008 $3.35 1,827,500 — — (20,000) 1,807,500 —
17 June 2004 30 September 2008 $3.14 50,000 — — — 50,000 —
16 September 2004 30 September 2008 $3.72 250,000 — — — 250,000 —
Total 3,526,000 — (593,000) (20,000) 2,913,000 355,500
Weighted average exercise price $3.00 — $2.25 $3.35 $3.15 $2.26