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Notes to the Consolidated Financial Statements

31st March 2018

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.21 Employee benefits

(a) Employee leave entitlements

Employee entitlements to annual leave are recognised when they accrue to employees. A
provision is made for the estimated liability for annual leave as a result of services rendered by
employees up to the balance sheet date.

Employee entitlements to sick leave, maternity leave and paternity leave are not recognised
until the time of leave.

(b) Pension obligations

The Group operates a number of defined contribution plans. A defined contribution plan is
a pension plan under which the Group pays fixed contributions into a separate entity. The
Group has no legal or constructive obligations to pay further contributions if the fund does
not hold sufficient assets to pay all employees the benefits relating to employee service in the
current and prior periods.

For defined contribution plans, the Group pays contributions to publicly or privately
administered pension insurance plans on a mandatory, contractual or voluntary basis. The
Group has no further payment obligations once the contributions have been paid. The
contributions are recognised as employee benefit expense when they are due. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in the
future payments is available.

(c) Termination benefits

Termination benefits are payable when employment is terminated by the Group before the
normal retirement date, or whenever an employee accepts voluntary redundancy in exchange
for these benefits. The Group recognises termination benefits when it is demonstrably
committed to a termination when the entity has a detailed formal plan to terminate the
employment of current employees without possibility of withdrawal. In the case of an offer
made to encourage voluntary redundancy, the termination benefits are measured based on
the number of employees expected to accept the offer. Benefits falling due more than 12
months after the end of the reporting period are discounted to their present values.

76 ALCO HOLDINGS LIMITED ANNUAL REPORT 2018