Notes forming part of the financial statements (continued)
Consolidated Parent entity
2007
$’000
2006
$’000
2007
$’000
2006
$’000
Note 16. Non-current assets – Retirement benefit asset
continued
(e) Amounts recognised in income statement
The amounts recognised in the income statement are as follows:
Current service cost
Expected return on plan assets
1,049
(1,690)
1,677
(1,703)
—
—
—
—
Total included in employee benefits expense
Interest cost
(641)
1,095
(26)
1,044
—
—
—
—
454 1,018 — —
Actual return on plan assets 4,093 5,753 — —
(f) Amounts recognised in equity
Actuarial (gains) and losses (1,366) (2,505) — —
Consolidated Parent entity
2007 2006 2007 2006
(g) Principal actuarial assumptions
The principal actuarial assumptions used
(expressed as weighted averages ) were as follows:
Discount rate net of tax
Expected return on plan assets net of tax
Future salary increases
5.1%
7.7%
4.0%
4.8%
7.3%
4.0%
—
—
—
—
—
—
The expected rate of return on assets has been based on historical and future
expectations of returns for each of the major categories
of asset classes as well as the expected and actual allocation of plan assets
to these major categories. This resulted in the selection of
an 8.1% (2006: 7.7%) rate of return gross of tax (and net of expenses) and
a 7.7% (2006: 7.3%) rate of return net of tax (and expenses).
(h) Employer contributions
Employer contributions to the defined benefit section of the plan are based
on recommendations by the plan’s actuary. Actuarial
assessments are made at no more than three yearly intervals, and the last
such assessment was made as at 30 June 2005.
The objective of funding is to ensure that the benefit entitlements of members
and other beneficiaries are fully funded by the time they
become payable. To achieve this objective, the actuary has adopted a method
of funding benefits known as aggregate funding method.
This funding method seeks to have benefits funded by means of a total contribution
which is expected to be a constant percentage of
members’ salaries over their working lifetimes.
Using the funding method described above and particular actuarial assumptions
as to the plan’s future experience (as detailed below), the
actuary recommended in the actuarial review as at 30 June 2005, the payment
of employer contributions to the fund of 13.5% of salaries
for employees who are members of the WSP. These contributions rates have been
adopted by the Group from 1 July 2005, and are the
same as the existing rate of contribution.
The employer contributions expected to be paid by Group companies for the
year ending 30 June 2008 are $1,147,000 (parent entity: $Nil)
The economic assumptions used by the actuary to make the funding recommendations
were a long-term investment earning rate of 6% pa
(net of fees and taxes), a salary increase rate of 4% pa together with an age
related promotions scale, and an inflation rate of 2.5% pa.
(i) Net financial position of plan
In accordance with AAS 25 Financial Reporting by Superannuation Plans the plan’s
net financial position is determined as the difference
between the present value of the accrued benefits and the net market value
of plan assets. This has been determined as at the date of
the most recent financial report of the superannuation fund (30 June 2005)
and a surplus of $425,000 was reported.
The surplus as at 30 June 2005, under AAS25 differs from the net asset of
$3,023,000 recognised in the balance sheet as at
30 June 2007 due to different measurement rules in the relevant accounting
standards AAS 25 and AASB 119 Employee Benefits
and different measurement dates.
Note 16. Non-current assets – Retirement benefit asset continued
(j) Historic Summary
2007 2006 2005
$’000 $’000 $’000
Defined benefit plan obligation 23,117 26,771 28,339
Plan assets (26,140) (27,902) (26,511)
(Surplus)/deficit (3,023) (1,131) 1,828
Experience adjustments arising on plan liabilities 820 1,676 (1,116)
Experience adjustments arising on plan assets (2,445) (4,050) 170
Information for the years prior to 2005 is not available.
Consolidated Parent entity
2007
$’000
2006
$’000
2007
$’000
2006
$’000
Note 17. Current liabilities –
Trade and other payables
Accounts payable and accruals
Other creditors
Amounts owing to controlled entities
46,942
6,183
—
47,747
6,791
—
3
—
—
—
—
15,299
53,125 54,538 3 15,299
Note 18. Current liabilities – Borrowings
Secured
Bank overdraft
Bank Loans
—
—
26
42,140
—
—
—
—
— 42,166 — —
Details of the security relating to each of the secured liabilities and further
information on the bank overdrafts are set out in note 21. Bank
loans were renegotiated in August 2006 and for a three year term.
Consolidated Parent entity
2007
$’000
2006
$’000
2007
$’000
2006
$’000
Note 19. Current liabilities – Provisions
Employee entitlements
Claims
Restructuring
7,762
2,293
1,506
7,420
2,440
3,622
—
—
—
—
—
—
11,561 13,482 — —
Claims
In the normal course of business commercial claims are periodically made against
entities in the consolidated entity. These claims are
regularly reviewed and provisions are made where exposure is believed to exist.
Restructuring
On exit of its US businesses in 2004, the group made provision for expected
future payments including legal, regulatory and environmental
costs. These provisions are regularly reviewed and adjusted to reflect current
estimates.
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