2011 Annual Report and Accounts - Investing In Africa

Notes to the Financial Statements (continued)
16 Retirement benefit obligations
Provision for employees’ entitlement to gratuity is based on the number of years worked by individual employees
up to the reporting date. The movement during the year is as follows:
group
2011 2010
Shs’000
Shs’000
At start of year 110,835 109,174
Charge to income statement 26,138 10,115
Benefits paid (5,284) (8,454)
At end of year 131,689 110,835
The amounts recognised in the consolidated income statement for the year are as follows:
Group
2011 2010
Shs’000
Shs’000
Current service cost 7,991 7,399
Interest cost 11,211 10,865
Net actuarial losses/(gains) recognised in the year 6,936 (8,149)
Total, included in employee benefits expense (Note 7) 26,138 10,115
The principal actuarial assumptions used were as follows:
Group
2011 2010
- discount rate 13.5% 10%
- future salary increases 10% 8%
Assumptions regarding future mortality experience are set based on actuarial advice, published statistics and
experience in the industry.
Five year summary:
2011 2010 2009 2008 2007
Shs’000 Shs’000 Shs’000 Shs’000 Shs’000
Present value of defined benefit obligation 131,689 110,835 109,174 95,103 121,701
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. The scheme has no dedicated assets
TPS EASTERN AFRICA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2011 69