notes to the financial statements - Investor Relations

NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2011
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.14 Employee benefits (cont’d)
Pension obligations (cont’d)
Annual Report 2011
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.
Other employee benefits
The Group operates other long-term employee benefit schemes. Every year the Group calculates the amount to be debited/
credited to the bonus pool under the schemes. Such amounts are recognised in the statement of comprehensive income.
Payments to beneficiaries are dependent on certain conditions such as minimum service period and long-term profitability.
Payments within 12 months to beneficiaries after the service period are reclassified from non current liabilities to current
liabilities.
3.15 Finance income and expenses
Finance income comprises interest income on funds invested, dividend income, gain on disposal of available-for-sale financial
assets, changes in the fair value of derivative financial instruments and net foreign currency gains that are recognised in profit
or loss. Interest income is recognised as it accrues, using the effective interest method. Dividend income is recognised on
the date that the Group’s right to receive payment is established.
Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, loss on disposal of
available-for-sale financial assets, net foreign currency losses, impairment losses recognised on financial assets and losses
on derivative instruments that are recognised in profit or loss. All borrowing costs are recognised in profit or loss using
the effective interest method, except to the extent that they are capitalised as being directly attributable to the acquisition,
construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended
use or sale.
3.16 Government grants
Government grants received in relation to the purchase or construction of assets are deducted against the costs of the assets
acquired. These government grants are recognised in profit or loss on a straight-line basis over the useful lives of the assets
by way of a reduced depreciation charge.
Jobs Credit Scheme
Cash grants received from the government in relation to the jobs credit scheme are recognised in profit or loss upon receipt.
3.17 Income tax expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the
extent that it relates to a business combination or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax payable in respect of previous years.
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