Trinidad Cement Limited
Annual Report 2012
58
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)
(xxiii) Cash and cash equivalents
For the purpose of the statement of cash flows,
cash and cash equivalents include all cash and
bank balances and overdraft balances with
maturities of less than three months from the
date of establishment.
(xxiv) Equity compensation benefits
The Group accounts for profit sharing
entitlements which are settled in the shares
of the Parent Company through an Employee
Share Ownership Plan (ESOP) as an expense
determined at market value. The cost incurred
in administering the Plan is recorded in the
statement of income of the Parent Company.
The cost of the unallocated shares of the Parent
Company is recognised as a separate component
within equity.
(xxv) Equity movements
Stated capital
Ordinary stated capital is classified within
equity and is recognised at the fair value of
the consideration received by the Company.
As equity is repurchased, the amount of
consideration paid is recognised as a charge
to equity and reported in the consolidated
statement of financial position as treasury
shares.
Dividends on ordinary shares are recognised as
a liability and deducted from equity when they
are approved by the Group’s Board of Directors.
Interim dividends are deducted from equity
when they are paid. Dividends for the year that
are approved after the statement of financial
position date are dealt with as an event after the
end of reporting date.
Treasury shares
Own equity instruments which are re-acquired
(“treasury shares”) are deducted from equity.
No gain or loss is recognised in the consolidated
income statement on the purchase, sale,
issue or cancellation of the Group’s own
equity instruments. Any difference between
the carrying amount and the consideration is
recognised in other reserves. Such treasury
shares are presented separately within equity
and are stated at cost.
(xxvi) Impairment of assets
Non-financial assets
The Group assesses at each reporting date
whether there is an indication that an asset
may be impaired. If any such indication exists,
or when annual impairment testing for an asset
is required, the Group makes an estimate of
the asset’s recoverable amount. An asset’s
recoverable amount is the higher of an asset’s
or cash generating unit’s fair value less costs
to sell and its value in use and is determined
for an individual asset, unless the asset does
not generate cash inflows that are largely
independent of those from other assets or
groups of assets.When the carrying amount of an
asset exceeds its recoverable amount, the asset
is considered impaired and is written down to its
recoverable amount. In assessing value in use,
the estimated future cash flows are discounted
to their present value using a pre-tax discount
rate that reflects current market assessments
of the time value of money and the risks specific
to the asset. Impairment losses of continuing
operations are recognised in the statement of
income in those expense categories consistent
with the function of the impaired asset.
For assets excluding goodwill, an assessment
is made at each reporting date as to whether
there is any indication that previously recognised
impairment losses may no longer exist or
may have decreased. If such indication exists,
the Group makes an estimate of recoverable
amount. A previously recognised impairment
loss is reversed only if there has been a change
in the estimates used to determine the asset’s
recoverable amount since the last impairment
loss was recognised. If that is the case the
carrying amount of the asset is increased to its
recoverable amount. That increased amount
cannot exceed the carrying amount that would
have been determined, net of depreciation,
had no impairment been recognised for the
asset in prior years. Such reversal is treated
as a revaluation increase. Impairment losses
recognised in relation to goodwill are not reversed
for subsequent increases in its recoverable
amounts.
