3428 NEW ZEALAND GAZETTE, No. 131 21 AUGUST 2008

(h) Employee Benefits

Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

(i) Revenue

(i) Investment income

Investment income comprises interest income on funds invested, dividend income, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair value through profit or loss, foreign currency gains, and gains on hedging instruments that are recognised in the income statement. Interest income is recognised as it accrues, using the effective interest method. Dividend income is recognised on the date that the Group’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

(ii) Rental income

Rental income from investment property is recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.

(j) Lease Payments

Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

(k) Finance Expenses

Finance expenses comprise interest expense on foreign currency losses, changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets (except for trade receivables), losses on the disposal of available-for-sale financial assets, and losses on hedging instruments that are recognised in the income statement.

(l) Income Tax Expense

Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: The initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised.

(m) New Standards Adopted and Interpretations Not Yet Adopted

A number of new interpretations are not yet effective for the year ended 31 March 2008, and have not been applied in preparing these consolidated financial statements:

• NZ IFRS 8 Operating Segments. NZ IFRS 8, which becomes mandatory for the Group’s 2010 financial statements, is not expected to have any impact on the consolidated financial statements.

• NZ IFRS 1 Presentation of Financial Statements (revised). NZ IFRS 1 will become mandatory for the Group’s 2010 financial statements. The Group has not yet determined the potential effect of the interpretation.

• NZ IFRS 4 Insurance Contracts – Amendments. NZ IFRS 4, which becomes mandatory for the Group’s 2010 financial statements, is not expected to have any impact on the consolidated financial statements.

• NZ IAS 23 Borrowing Costs. NZ IAS 23 will become mandatory for the Group’s 2010 financial statements, and is not expected to have any impact on the consolidated financial statements.

• NZ IFRIC 12 Service Concession Arrangements. NZ IFRIC 12 will become mandatory for the Group’s 2009 financial statements, and is not expected to have any impact on the consolidated financial statements.

• NZ IFRIC 13 Customer Loyalty programmes. NZ IFRIC 13 will become mandatory for the Group’s 2009 financial statements, and is not expected to have any impact on the consolidated financial statements.

• NZ IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. NZ IFRIC 14 will become mandatory for the Group’s 2009 financial statements, and is not expected to have any impact on the consolidated financial statements.

(n) Change in Accounting Policies

The Group has changed certain accounting policies in the year. The impact on the balance sheet and income statement is shown in Note 24.