notes to the financial statements for the year ... - Investing In Africa

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NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2009 (continued)1. SIGNIFICANT ACCOUNTING POLICIES (continued)(q)Employee benefi tsEast African Portland Cement Co. Ltd Annual Report and Financial Statements FY 2008/200944i) Short-term benefi tsShort-term benefi ts consist of salaries, bonuses and any non-monetary benefi ts such as medical aid contributions andfree services. They exclude equity based benefi ts and termination benefi ts.Short-term employee benefi t obligations are measured on an undiscounted basis and are expensed as the relatedservice is provided.A provision is recognized for the amount expected to be paid under a short-term cash bonus only if the company hasa present legal or constructive obligation to pay this amount as a result of past services provided by the employeeand if the obligation can be measured reliably.ii)(r)(s)Retirement benefi t costsThe company operates a funded defi ned contribution pension scheme for senior and supervisory staff, as well asan in house gratuity scheme for unionisable employees. The company also contributes to the statutory NationalSocial Security Fund. This is a defi ned contribution scheme registered under the National Social Security Act. Thecompany’s obligations under the scheme are limited to specifi c contributions legislated from time to time and arecurrently limited to a maximum of KShs 200 per month per employee.The company’s obligations to all staff retirement benefi ts schemes are charged to the income statement as they falldueProvision for employee entitlementsEmployee entitlements to annual leave are recognised when they accrue to employees. A provision is made for theestimated liability for annual leave accrued at the balance sheet date.The company’s unionisable staff who resign or whose services are terminated either due to illness or other reasonsafter completion of ten years of continuous and meritorious service are entitled to twenty one days pay for eachcompleted year of service by way of gratuity, based on the wages or salary at the time of such resignation ortermination of services, as provided for in the trade union agreement. An employee who is dismissed or terminatedfor gross misconduct is not entitled to gratuity. The service gratuity is provided for in the fi nancial statements atpresent value of benefi ts payable as it accrues to each employee.Mining and exploration costsAll exploration costs for the mining of limestone are expensed in the period that they occur and form part of cost ofsales.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2009 (continued)1. SIGNIFICANT ACCOUNTING POLICIES (continued)(t)Provisions(u)Provisions are recognised when the company has a present legal or constructive obligation as a result of past eventsand it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligationand a reliable estimate of the amount of the obligation can be made.Where the effect of the time value of money is material, the amount of a provision is the present value of theexpenditure expected to be required to settle the obligation, discounted at a rate that refl ects current marketassessments of the time value of money and the risks specifi c to the liability.OffsettingFinancial assets and liabilities are offset and the net amounts reported on the balance sheet when there is a legallyenforceable right to set off the recognised amount and there is an intention to settle on a net basis, or to realise theassets and settle the liability simultaneously.2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTSIn the process of applying the company’s accounting policies, management has made estimates and assumptionsthat affect the reported amounts of assets and liabilities within current and future fi nancial years. Estimates andjudgements are continually evaluated and are based on historical experience and other factors, including expectationsof future events that are believed to be reasonable under the circumstances. The critical areas of accountingestimates and judgements in relation to the preparation of these fi nancial statements are as set out below:Impairment of assetsAt each balance sheet date, the company reviews the carrying amount of its assets to determine whether thereis any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverableamount of the asset is estimated in order to determine the extent of impairment.Property, plant and equipmentCritical estimates are made by directors in determining the useful lives and residual values to property, plant andequipment based on the intended use of the assets and the economic lives of those assets. Subsequent changes incircumstances or prospective utilisation of the assets concerned could result in the actual useful lives or residualvalues differing from initial estimates.Intangible assetsCritical estimates are made by directors in determining the useful lives and residual values to intangible assets basedon the intended use of the assets and the economic lives of those assets. Subsequent changes in circumstances orprospective utilisation of the assets concerned could result in the actual useful lives or residual values differing frominitial estimates.Biological assetsLivestock is stated at fair value less estimated point of sale costs. The company discontinued farming activities afteryear end and all the biological assets were disposed off.East African Portland Cement Co. Ltd Annual Report and Financial Statements FY 2008/200945
Page 3: ContentsBusiness ReviewFive Year Fi
Page 6 and 7: FINANCIAL HIGHLIGHTSKshs million100
Page 8 and 9: CHAIRMAN’S STATEMENTEast African
Page 10 and 11: MANAGING DIRECTOR’S BUSINESS REVI
Page 12 and 13: CORPORATE SOCIAL RESPONSIBILITY (CS
Page 14 and 15: SportsEvery year the Company sponso
Page 16 and 17: BOARD OF DIRECTORSEast African Port
Page 18 and 19: THE BOARD AND STATUTORY INFORMATION
Page 20 and 21: STATEMENT ON CORPORATE GOVERNANCEEa
Page 22 and 23: East African Portland Cement Co. Lt
Page 24 and 25: STATEMENT OF DIRECTORS’ RESPONSIB
Page 30 and 31: INCOME STATEMENTFOR THE YEAR ENDED
Page 32 and 33: STATEMENT OF CHANGES IN EQUITYFOR T
Page 34 and 35: NOTES TO THE FINANCIAL STATEMENTSFO
Page 72 and 73: NOTICE OF ANNUAL GENERAL MEETINGNot
Page 74: NOTESEast African Portland Cement C

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