Download TPS, East Africa 2008 Annual Report - Serena Hotels

Notes to the Financial Statements (cont’d)
15 Deferred income tax (continued)
Deferred income tax of Shs 8,222,000 (2007: Shs 7,577,000) was transferred within shareholders' equity from
revaluation reserves to retained earnings. This represents deferred income tax on the difference between the actual
depreciation on the property and the equivalent depreciation based on the historical cost of the property.
16 Provisions for liabilities and charges (Non-current)
Provision for employees' entitlement to gratuity is based on the number of years worked by individual employees up to the
balance sheet date. The movement during the year is as follows:
Group
2008 2007
Shs'000 Shs'000
At start of year 121,701 117,493
Additional provisions 17,357 13,450
Unused amounts reversed (23,832) -
(Credit)/charge to income statement (6,475) 13,450
Utilised during year (20,213) (9,242)
95,013 121,701
No comparative information is provided with respect to analysing the (credit) / charge to the profit and loss account as the
provision was determined using actuarial principles for the first time in 2008. In previous years the provision was computed
based on the years of service and salary for each employee at each balance sheet date.
The movement in the provision for employees' entitlement over the year was as follows:
Group
2008
Shs'000
At start of year 121,701
Current service cost 7,550
Interest cost 8,527
Actuarial losses (22,552)
Benefits paid (20,213)
At end of year 95,013
The amount recognised in the consolidated profit and loss account for the year is as follows:
Current service cost 7,550
Interest cost 8,527
Net actuarial losses recognised in the year (22,552)
Total, included in employee benefits expense (Note 7) (6,475)
The principal actuarial assumptions used were as follows:
- discount rate 10%
- future salary increases 8%
In the opinion of the directors the provision for gratuity entitlement for employees fairly reflects the Group's future
obligation under the terms of the Collective Bargaining Agreement.
50 TPS EASTERN AFRICA LIMITED | ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
2008