Page 86


for the year ended June 2006 continued

of post-retirement medical aid obligations to certain employees

Liabilities for profit sharing and bonus plans are expected to

and pensioners employed before the change in policy.

be settled within 12 months and are measured at the amounts expected to be paid when they are settled.

The present value of the expected future defined benefit obligation is quantified to the extent that service has been

Equity compensation plans

rendered, and is reflected on the balance sheet as a liability.

In share-based payment transactions, the Group measures the

Valuations of these obligations are carried out by independent

goods or services received, and the corresponding increase

actuaries on an annual basis using the projected unit credit

in equity, at the fair value of the goods or services received,


unless the fair value can not be estimated reliably. If so, the Group measures the fair value by reference to the fair value of

Annual charges incurred to reflect additional services rendered

the equity instruments granted.

by employees as well as any variation resulting from changes in the employee composition, and all actuarial gains and

Share options and share appreciation rights are granted to

losses from experience adjustments and changes in actuarial

management and key employees. The schemes in operation are

assumptions are charged/credited to the income statement in

classified as equity-settled share-based compensation plans. No

the year of incurral.

non-market vesting conditions are applicable. The fair value of the employee services received in exchange for the instruments

The Group has insured the pensioner contributions into the

is expensed over the vesting period. The fair value of the services

future through an approved pre-funding insurance policy.

received is determined with reference to the fair value of the

Contributions made to the policy together with investment

instruments granted. The fair value of the instruments granted is

returns thereon are disclosed as a “plan asset” in terms of

determined at grant date. At each balance sheet date, the entity

IAS 19, Employee Benefits and reduce the post-retirement

revises its estimates of the number of instruments expected to

medical aid obligation.

vest. The effect of any changes in this assumption is recognised in the income statement, with a corresponding adjustment to

Termination benefits


Termination benefits are payable whenever an employee’s employment is terminated before normal retirement date

When instruments are exercised, the proceeds received net of

or whenever an employee accepts voluntary redundancy

any directly attributable transaction costs are credited to share

in exchange for these benefits. The Group recognises

capital (nominal value) and share premium.

termination benefits when it is demonstrably committed to either terminate the employment of current employees

The Aspen Pharmacare share incentive trusts regulate the

according to a detailed plan without possibility of withdrawal

operation of the share incentive schemes, and are consolidated

or to provide termination benefits as a result of an offer made

into the Group financial statements. Refer to note 16 for more

to encourage voluntary redundancy. Benefits falling due more

details on the schemes.

than 12 months after balance sheet date are discounted to present value.

DIRECTORS’ EMOLUMENTS The directors’ emoluments disclosed in note 27 represent the

Profit sharing and bonus plans

emoluments paid to, or receivable by, directors in their capacity

A liability for employee benefits in the form of profit sharing and

as director or any other capacity. All amounts in respect of the

bonus plans is recognised in trade and other payables when

financial year reported on are presented; including bonuses

there is no realistic alternative but to settle the liability and at

not accrued for in the annual financial statements. The gain on

least one of the following conditions is met:

share options represents the actual gain realised in the year,

• there is a formal plan and amounts to be paid are determined

and represents the difference between grant price and exercise

before the time of issuing the financial statements; or • past practice has created a valid expectation by employees

price. This disclosure is provided in terms of the JSE listings requirements.

that they will receive a bonus/profit share and the amount can be determined before the time of issuing of the financial statements.


Aspen Annual Report 2006

Profile for Aspen Holdings

Aspen Annual Report 2006  

Aspen Annual Report 2006