57
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)
(xv) Pension plans and post-retirement medical
benefits
(continued)
The pension obligation is measured as the present
value of the estimated future cash outflows using
interest rates of government securities which have
terms to maturities approximating the terms of the
related liabilities. All actuarial gains and losses to
be recognised are spread forward over the average
remaining service lives of employees.
Defined contribution plans are accounted for on the
accrual basis, as the Group’s liabilities are limited to
its contributions.
Certain subsidiaries provide post-retirement
healthcare benefits to their retirees. The expected
costs of these benefits are measured and
recognised in a manner similar to that for defined
benefit pension plans.Valuation of these obligations
is carried out by independent professional actuaries
using an accounting methodology similar to that
for the defined benefit pension plans.
(xvi) Revenue recognition
Revenue is recognised to the extent that it is
probable that the economic benefits will flow
to the Group and the revenue can be reliably
measured. Revenue is measured at the fair value
of the consideration received, excluding discounts,
rebates and sales taxes. The following specific
recognition criteria must be met before revenue is
recognised:
Sales of goods
Revenue from the sale of goods is recognised when
the significant risks and rewards of ownership of
the goods have passed to the buyer, usually on
delivery of the goods.
Interest and investment income
Interest and investment income are recognised as
they accrue unless collectability is in doubt.
(xvii) Trade and other receivables
Trade and other receivables are carried at
anticipated realisable value. Provision is made for
specific doubtful receivables based on a review of
all outstanding amounts at the year-end.
(xviii) Trade and other payables
Liabilities for trade and other payables, which are
normally settled on 30-90 day terms are carried
at cost, which is the fair value of the consideration
to be paid in the future for goods and services
received or not billed to the Group.
(xix) Interest bearing loans and borrowings
Borrowings are initially recognised at the fair
value of the consideration received less directly
attributable transaction costs. In subsequent
periods, borrowings are stated at amortised
cost using the effective interest method,
any differences between proceeds and the
redemption value is recognised in the statement
of income over the period of the borrowings.
(xx) Borrowing costs
Borrowing costs directly attributable to the
acquisition, construction or production of an
asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are
capitalised as part of the cost of the respective
assets. All other borrowing costs are expensed in
the period they occur. Borrowing costs consist of
interest and other costs that an entity incurs in
connection with the borrowing of funds.
(xxi) Provisions
Provisions are recorded when the Group has a
present or constructive obligation as a result
of past events, it is probable that an outflow of
resources will be required to settle the obligation
and a reliable estimate of the amount can be
made.
(xxii) Earnings per share
Earnings per share is computed by dividing net
profit attributable to the shareholders of the
Parent for the year by the weighted average
number of ordinary shares in issue during the
year. Diluted earnings per share is computed
by adjusting the weighted average number
of ordinary shares in issue for the assumed
conversion of potential dilutive ordinary shares
into issued ordinary shares. The Group has no
dilutive potential ordinary shares in issue.
