9365206754

SGSP (Australia) Assets Pty Ltd

ABN 60 126 327 624

Notes to the financial statements

For the year ended 31 December 2016 2 Summary of significant accounting policies (continued)

(r) Employee benefits

(i)    Wages and salańes, annualleave and sick leave

Liabilities for wages and salaries, including non-monetary benefits and annual !eave expected to be settled within 12 months of balance datę are recognised in provisions in respect of employees' services up to balance datę and are measured at the undiscounted amounts expected to be paid when the liabilities are settled. Non-vesting sick !eave is recognised in the income statement when the leave is taken and measured at the rates paid or payable.

Annual leave that is not expected to be settled within 12 months after the end of the reporting period is recognised and measured at the present value of amounts expected to be paid when the liabilities are settled using the remuneration ratę expected to apply at the time of settlement.

When assessing expected futurę payments consideration is given to employee wagę increases as well as the experience of employee departures and periods of service. The expected futurę payments are discounted using market yielris at the end of the reporting period on Australian corporale bonds willi terms to matunty that match the expected timing of cash outflows.

The provision for annual leave is classified as a current liability as the Group does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

(ii)    Long service leave

The liability for long service leave expected to be settled within 12 months of balance datę is recognised in the current provi$ion for employee benefits and is measured in accordance with (i) above. The liability for long service leave expected to be settled morę than 12 months from balance datę is recognised in the non-current provision for employee benefits and measured as the present value of expected futurę payments to be madę in respect of services provided by employees up to balance datę. Consideration is given to the expected futurę wagę and salary Ievels, experience of employee departures and periods of service. Expected futurę payments are discounted using market yields at balance datę on Australian corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated futurę cash outflows.

(iii)    Superannuation plans

Defined benefit superannuation plans:

The Group's net asset/liability in respect of defined benefit superannuation plans is calculated separately for each plan by estimating the amount of futurę benefit that employees have earned in the current and prior years, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qua!ified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value of economic benefits available in the form of any futurę refunds from the plan or reductions in futurę contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit superannuation plans asset/(liability), which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income. The Group determines the net interest expense/(income) on the net defined benefit superannuation plans asset/(liability) for the year by applying the discount ratę used to measure the defined benefit obligation at the beginning of the year to the then-net defined benefit superannuation plans asset/(liability), taking into account any changes in the net defined benefit superannuation plans asset/(liability) during the year as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit superannuation plans are recognised in the income statement.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in the income statement. The Group recognises gains and losses on the settlement of a defined benefit superannuation plan when the settlement occurs.

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