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ANNUAL FINANCIAL STATEMENTS
Notes to the financial statements
continued
for the year ended 30 September 2014
156
Tiger Brands Limited Integrated Annual Report
2014
Remeasurements, comprising of actuarial gains and
losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined
benefit liability and the return on plan assets
(excluding amounts included in net interest on the net
defined benefit liability), are recognised immediately
in the statement of financial position with a
corresponding debit or credit to retained earnings
through other comprehensive income in the period
in which they occur. Remeasurements are not
reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on
the earlier of:
Ϣ
Ϣ
the date of the plan amendment or curtailment;
and
Ϣ
Ϣ
The date that the group recognises related
restructuring costs.
Net interest is calculated by applying the discount
rate to the net defined benefit liability or asset. The
group recognises the following changes in the net
defined benefit obligation under “cost of sales”,
“administration expenses” and “selling and
distribution expenses” in consolidated statement
of profit or loss (by function):
Ϣ
Ϣ
Service costs comprising current service costs,
past-service costs, gains and losses on
curtailments and non-routine settlements
Ϣ
Ϣ
Net interest expense or income.
Post-retirement medical obligations
The group provides post-retirement healthcare
benefits to certain of its retirees based on the
qualifying employee remaining in service up to
retirement age in the form of a defined benefit
medical plan. The expected costs of these benefits
are accrued over the period of employment, using
the projected unit credit method. Valuations are
based on assumptions which include employee
turnover, mortality rates, discount rate based on
current bond yields of appropriate terms, healthcare
inflation costs and rates of increase in salary costs.
Valuations of these obligations are carried out by
independent qualified actuaries.
Actuarial gains or losses are recognised in the
same manner as those of defined benefit pension
obligations noted in the previous accounting policy.
Share-based payments
Certain employees (including senior executives)
of the group receive remuneration in the form of
share-based payment transactions, whereby
employees render services as consideration for equity
instruments (“equity-settled transactions”) or share
appreciation rights (that are classified as “cash-settled
transactions”).
Equity-settled share options granted before
7 November 2002
No expense is recognised in the income statement
for such awards.
The group has taken advantage of the voluntary
exemption provision of IFRS 1
First-time Adoption of
International Financial Reporting Standards
in respect
of equity-settled awards and has applied IFRS 2
Share-based Payment
– only to equity-settled awards
granted after 7 November 2002 that had not vested
on 1 January 2005.
Equity-settled and cash-settled share options
granted after 7 November 2002
Equity-settled transactions
Under the scheme, executives and selected
managers of Tiger Brands Limited and its subsidiaries
are offered, on an annual basis, a weighted
combination of share appreciation rights,
performance shares, restricted shares linked to the
annual cash bonus scheme (bonus matching) and
restricted shares linked to a deferred portion of
bonuses received by these employees. All these
components are accounted for as equity-settled
share-based payments in addition to the general
employee share option plan portion and the black
managers participation right scheme.
Shares awarded to employees in terms of the rules
of the Tiger Brands Long-Term Incentive Plan (LTIP) are