Final Sameer Annual Report 2010 - Sameer Africa Limited

Notes to the consolidated financial statements
for the year ended 31 december 2010
• Inventory impairment
Critical estimates and judgements are made in in determining the impairment loss on stocks as described in Note 3 (g).
(b) Critical judgements in applying the entity’s accounting policies
In the process of applying the company’s accounting policies, management has made judgements in determining whether
assets are impaired.
7. GROUP OPERATING PROFIT
The following items have been charged/ (credited) in arriving at operating profit:
X 36 SAMEER Annual Report 2010 2009
2010 2009
KShs‘000 KShs‘000
Depreciation on property, plant and equipment (Note 17) 121,297 134,709
Depreciation on investment property (Note 18) 6,275 6,279
Investment property:
- Rental income (69,851 ) (75,042 )
- Operating expense 35,409 20,354
Provision for impairment losses:
- Receivables 8,784 15,711
- Inventory 35,408 46,789
Repairs and maintenance 96,254 74,920
Employee benefits expense (Note 8) 380,454 375,190
Auditors’ remuneration 4,305 4,100
8. GROUP EMPLOYEE BENEFITS EXPENSE
The following items are included within employee benefits expense:
Salaries and wages 357,744 354,997
Defined contribution scheme 8,823 9,128
National Social Security Fund 3,137 2,655
Defined benefit scheme (Note 16) 10,750 8,410
380,454 375,190
9. GROUP FINANCE COSTS
Interest expense on bank borrowings 38,085 47,385
Interest income (2,709 ) (3,352 )
Net foreign exchange losses 19,120 1,875
Net finance costs 54,496 45,908
10. GROUP INCOME TAX EXPENSE
Current income tax 12,895 52,377
Under/(over) provision of current tax in prior year (8,456 ) -
Deferred income tax charge (Note 15) 327 11,082
Under provision of deferred tax in prior year 37 -
Income tax expense 4,803 63,459
The tax on the Group’s profit before income tax differs from the theoretical amount that would arise using the statutory
income tax rate as follows: