45 l BRADKEN LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014
(continued)
2 Summary of significant accounting policies (continued)
(iii) Bonus plans
(iv) Employee share and rights plans
(v) Retirement benefit obligations
(vi) Healthcare reserves
(v) Contributed equity
(w) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the
entity, on or before the end of the financial year but not distributed at balance date.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or rights are shown
in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or
rights for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
Share based compensation benefits are provided to employees and directors via the Performance Rights Plan ('PRP') and the
Non-Executive Director Share Acquisition Plan ('NEDSAP') respectively.
A liability for employee benefits in the form of bonus plans is recognised in current provisions when there is no realistic
alternative but to settle the liability and at least one of the following conditions is met:
Liabilities for bonus plans are expected to be settled within 12 months and are measured at the amounts expected to be paid
when they are settled.
the amounts to be paid are determined before the time of completion of the financial report
past practice gives clear evidence of the amount of the obligation.
The fair value of shares issued under the NEDSAP are recognised as an employee benefit expense with a corresponding
increase in equity. The fair value is measured at grant date.
The fair value of Rights granted under the PRP are recognised as an employee benefit expense with a corresponding increase
in equity. The fair value is measured at grant date taking into account market performance conditions only, and spread over the
vesting period during which the employees become unconditionally entitled to the Rights. The fair value of Rights granted are
measured using the Black & Scholes Pricing Model, taking into account the terms and conditions attached to the Rights. The
amount recognised as an expense is adjusted to reflect the actual number of Rights that vest except where forfeiture is due to
market related conditions.
there are formal terms in the plan for determining the amount of the benefit
If the entity reacquires its own equity instruments, eg as the result of a share buy-back, those instruments are deducted from
equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid
including any directly attributable incremental costs (net of income taxes) is recognised directly in equity.
The Group recognises a liability or asset in respect of defined benefit superannuation plans in the statement of financial position
measured as the present value of the defined benefit obligation at the end of the reporting period less the fair value of the
superannuation fund's assets at that date. The present value of the defined benefit obligation is based on expected future
payments which arise from membership of the fund to the end of the reporting period, calculated on a regular basis by
independent actuaries using the projected unit credit method.
Expected future payments are discounted using market yields at the end of the reporting period on national government bonds
with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the
period in which they occur, directly in other comprehensive income.
All employees of the Group are entitled to benefit from various superannuation or pension plans on retirement, disability or
death. The Group operates three defined benefit plans in its North American operations, two in the United States and the other
in Canada. The United States plans are closed to new members and cover hourly employees hired before May 10, 1993 at one
of the US subsidiaries. The Canadian plan is currently active at one of the Canadian subsidiaries for hourly employees but
closed on March 1, 2010 to salaried employees.
The Group's U.S. operations primarily self-insure employee healthcare expenses. Reserves are based on historical claims
experience.
Page 45
Bradken Limited
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(CONTINUED)
1...,72,73,74,75,76,77,78,79,80,81 83,84,85,86,87,88,89,90,91,92,...136