Trinidad Cement Limited
Annual Report 2012
56
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December, 2012
(Expressed in Thousands of Trinidad and Tobago Dollars, except where otherwise stated)
2. Significant accounting policies
(continued)
(x) Segment information
The Group’s operating businesses are organised
and managed separately according to the nature
of the products and services provided, with each
segment representing a strategic business unit
that offers different products and serves different
markets.
The Group generally accounts for inter-segment
sales and transfers as if the sales or transfers were
to third parties at current market prices. Revenues
are attributable to geographic areas based on the
location of the assets producing the revenues.
(xi) Financial instruments
Financial instruments carried on the statement
of financial position include cash and bank
balances including advances/overdrafts, accounts
receivables, accounts payables, and borrowings.
The particular recognition methods adopted
are disclosed in the individual policy statements
associated with each item.
(xii) Derivative financial instruments and hedging
The interest rate swaparrangementwas terminated
on 13 April, 2011.
(xiii) Leases
Operating leases
Leases of assets under which all the risks and
benefits of ownership are effectively retained by the
lessor are classified as operating leases. Payments
made under operating leases are charged to the
statement of income on a straight-line basis over
the period of the lease.
Finance leases
Finance leases, which transfer to the Group
substantially all the risks and benefits incidental
to ownership of the leased item, are capitalised at
the inception of the lease at the fair value of the
leased assets or, if lower, at the present value of
the minimum lease payments. Lease payments
are apportioned between the finance charges and
reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance
of the liability. Finance charges are charged directly
against income. Capitalised leased assets are
depreciated over the shorter of the estimated
useful life of the asset or the lease term.
(xiv) Taxation
Current income tax
Current income tax assets and liabilities for the
current and prior periods are measured at the
amount expected to be recovered from or paid to
the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are
enacted or substantively enacted by the reporting
date.
Deferred income tax
A deferred tax charge is provided, using the liability
method, on all temporary differences between the
tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred tax assets are recognised for all deductible
temporary differences and unused tax losses, to the
extent that it is probable that future taxable profit
will be available against which these deductible
temporary differences and unused tax losses can
be utilised. The carrying amount of deferred tax
assets is reviewed at each statement of financial
position date and reduced to the extent that it is no
longer probable that sufficient future taxable profit
will be available to allow all or part of the deferred
tax assets to be utilised.
(xv) Pension plans and post-retirement medical
benefits
Defined benefit pension plans are generally
funded by payments from employees and by the
relevant Group companies, taking into account the
recommendations of independent professional
actuaries.
For defined benefit plans, the pension accounting
costs are assessed using the projected unit credit
method. Under this method, the annual cost of
providing pensions is charged to the statement of
income so as to spread the regular cost over the
service lives of employees in accordance with the
advice of independent professional actuaries who
carry out a full valuation of the plans every three
years.
