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recognition of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit and loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and
are expected to apply when the related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will
be available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates,
except where the timing of the reversal of the temporary difference is controlled by the Company and it
is probable that the temporary difference will not reverse in the foreseeable future.
2.16 Employee Benefits
a) Pension Obligations
The Company has both defined benefit and defined contribution plans. A defined contribution plan is a
pension plan under which the Company pays fixed contributions into a separate entity. The Company has
no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets
to pay all employees the benefits relating to employee service in the current and prior periods. A defined
benefit plan is a pension plan that is not a defined contribution plan. Typically, defined benefit plans define
an amount of pension benefit that an employee will receive on retirement, usually dependent on one or
more factors such as age, years of service and compensation.
The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value
of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with
adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation
is calculated annually by independent actuaries using the projected unit credit method. The present value
of the defined benefit obligation is determined by discounting the estimated future cash outflows using
interest rates of high-quality corporate bonds that are denominated in the Currency in which the benefits
will be paid and that have terms to maturity approximating to the terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions in excess of the greater of 10% of the value of plan assets or 10% of the defined benefit
obligation are charged or credited to income over the employees’ expected average remaining working
lives.
Past-service costs are recognised immediately in income, unless the changes to the pension plan are conditional
on the employees remaining in service for a specified period of time (the vesting period). In this case, the
past-service costs are amortised on a straight-line basis over the vesting period.
For defined contribution plans, the Company pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment
obligations once the contributions have been paid. The contributions are recognised as employee benefit
expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
b) Other Post-employment Obligations
The Company does not provide any other post-employment benefits to employees upon their retirement. In
the event that the Company decides to provide such benefits at some future date, these will be accounted
for in terms of the pronouncements of IAS 19 “Employee Benefits”.
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transaction affects neither accounting nor taxable profit and loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and
are expected to apply when the related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will
be available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates,
except where the timing of the reversal of the temporary difference is controlled by the Company and it
is probable that the temporary difference will not reverse in the foreseeable future.
2.16 Employee Benefits
a) Pension Obligations
The Company has both defined benefit and defined contribution plans. A defined contribution plan is a
pension plan under which the Company pays fixed contributions into a separate entity. The Company has
no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets
to pay all employees the benefits relating to employee service in the current and prior periods. A defined
benefit plan is a pension plan that is not a defined contribution plan. Typically, defined benefit plans define
an amount of pension benefit that an employee will receive on retirement, usually dependent on one or
more factors such as age, years of service and compensation.
The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value
of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with
adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation
is calculated annually by independent actuaries using the projected unit credit method. The present value
of the defined benefit obligation is determined by discounting the estimated future cash outflows using
interest rates of high-quality corporate bonds that are denominated in the Currency in which the benefits
will be paid and that have terms to maturity approximating to the terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions in excess of the greater of 10% of the value of plan assets or 10% of the defined benefit
obligation are charged or credited to income over the employees’ expected average remaining working
lives.
Past-service costs are recognised immediately in income, unless the changes to the pension plan are conditional
on the employees remaining in service for a specified period of time (the vesting period). In this case, the
past-service costs are amortised on a straight-line basis over the vesting period.
For defined contribution plans, the Company pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment
obligations once the contributions have been paid. The contributions are recognised as employee benefit
expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
b) Other Post-employment Obligations
The Company does not provide any other post-employment benefits to employees upon their retirement. In
the event that the Company decides to provide such benefits at some future date, these will be accounted
for in terms of the pronouncements of IAS 19 “Employee Benefits”.
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