ANNUAL REPORT

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3.9. Inventories Inventories are stated at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The cost of inventories is based on the weighted average principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes the direct cost of materials, direct manufacturing expenses and an appropriate, systematically allocated share of overheads, based on normal operating capacity. 3.10. Trade and other receivables Trade and other receivables are stated at their cost less impairment losses. An estimate is made for doubtful receivables based on a review of all outstanding amounts at each balance sheet date. Impairment losses are recorded during the year in which they are identified. 3.11. Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts repayable on demand are included as cash and cash equivalents for the purpose of the cash-flow statement if and when they form an integral part of the entity’s cash management. 3.12. Impairment 3.12.1. Methodology The carrying amounts of the Company’s assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date. An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in the income statement. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units (group of units) and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. 3.12.2. Calculation of recoverable amount The recoverable amount of the Company’s investments in heldto-maturity securities and receivables carried at amortized cost is calculated as the present value of estimated future cash flows, discounted at the original effective interest rate (i.e., the effective interest rate computed at initial recognition of these financial assets). Receivables with a short duration are not discounted. The recoverable amount of other assets is the greater of their fair value less cost to sell and value in use. 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. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. 3.12.3. Reversals of impairment A previously recognized impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. An impairment loss recognized for goodwill shall not be reversed in a subsequent period. 3.13. Share capital When share capital recognized as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. Repurchased shares are classified as treasury shares and presented as a deduction from total equity. Dividends are recognized as a liability in the period in which they are declared. Transaction costs related to the issuance of shares are accounted for as a deduction from equity, net of any tax effects. 46
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED MARCH 31, 2009 3.14. Loans and borrowings Loans and borrowings are recognized initially at fair value less attributable transaction costs. Subsequent to initial recognition, borrowings are stated at amortized cost with any difference between cost and redemption value being recognized in the income statement over the period of the borrowings on an effective interest basis. 3.15. Employee benefits 3.15.1. Defined contribution plans Obligations for contributions to defined contribution pension plans are recognized as an expense in the income statement as incurred. 3.15.2. Defined benefit plans The net obligation in respect of defined benefit pension plans, recognized in the balance sheet, is calculated as the present value of the defined benefit obligation (future benefit that employees have earned in return for their service in the current and prior periods), adjusted for the unrecognized actuarial gains and losses and less any past service costs not yet recognized and the fair value of any plan assets. The discount rate is the yield at the balance sheet date on high quality credit rated bonds that have maturity dates approximating to the terms of the obligations. The calculation is performed by a qualified actuary using the projected unit credit method. When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognized as an expense in the income statement on a straightline basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognized immediately in the income statement. In respect of actuarial gains and losses, to the extent that any cumulative unrecognized actuarial gain or loss exceeds 10% of the greater of the present value of the defined benefit obligation and the fair value of plan assets, that portion will be recognized in the income statement over the expected average remaining working lives of the employees participating in the plan. Otherwise, the actuarial gain or loss is not recognized. Where the calculation results in a benefit to the Company, the recognized asset is limited to the net total of any unrecognized actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan. 3.15.3. Other post-retirement obligations Some consolidated businesses provide post-retirement healthcare benefits to their retirees. The entitlement to these benefits is usually based on the employee remaining in service up to retirement age. The expected costs of these benefits are accrued over the period of employment, using an accounting methodology similar to that for defined benefit pension plans and determined by independent qualified actuaries. 3.15.4. Equity and equity-related compensation benefits The Company operates a number of share-based compensation plans, allowing Company employees to acquire shares in their respective companies. In addition, certain members of the Company’s management team and other employees received RHJI ordinary shares from a significant shareholder of the Company in the context of the initial public offering. The fair value of stock options and share grants is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options or shares granted. The fair value of the options is measured using a Black-Scholes-Merton model, taking into account the terms and conditions upon which the options were granted. The fair value of share grants is measured using the Finnerty model to reflect transferability restrictions resulting from certain terms and conditions upon which the shares were granted. The amount recognized as an expense is adjusted to reflect the actual number of stock options and shares that vest. 3.15.5. Termination benefits Termination benefits are recognized as an expense when the Company is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognized as an expense if the Company has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. 3.15.6. Bonuses Bonuses received by employees and management of the Company are recognized as an expense in the year the related service is provided. 47
Page 1: ANNUAL REPORT Year Ended March 31,
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FINANCIAL STATEMENTS FOR THE FISCAL
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PART III CORPORATE GOVERNANCE
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CORPORATE GOVERNANCE The Belgian Co
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CORPORATE GOVERNANCE The following
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CORPORATE GOVERNANCE (1997 to 2000)
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CORPORATE GOVERNANCE INVESTMENT AND
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CORPORATE GOVERNANCE Mr. Fischer ha
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CORPORATE GOVERNANCE OTHER TERMS RH
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CORPORATE GOVERNANCE STATUTORY AUDI
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CORPORATE GOVERNANCE 121
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PART IV SHAREHOLDERS’ INFORMATION
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SHAREHOLDERS’ INFORMATION SHARE P
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NOTES 127
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Co-ordination and Production : IPAC
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ANNUAL REPORT

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