## 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): 

(i) Employee benefits: 

(i) Pension benefit plans: 

The Company provides post-employment benefits through defined benefit and defined contribution plans. The Company also sponsors Supplemental Executive Retirement Plans (“SERP”), which are neither registered nor pre-funded. Finally, the Company sponsors defined benefit life insurance, disability plans and medical benefits, for some retirees and employees. 

## Defined contribution plans 

 The Company’s obligations for contributions to employee defined contribution pension plans are recognized as employee benefit expense in profit or loss in the periods during which services are rendered by employees. 

## Defined benefit plans 

 The Company maintains some contributory defined benefit plans that provide for pensions to employees based on years of service and the employee’s compensation. The Company’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The Company accrues its obligations under employee benefit plans as the employees render the services necessary to earn pension and other employee future benefits.The Company has adopted the following policies: 

•  The cost of pensions and other retirement benefits earned by employees is actuarially determined using the projected unit credit method. 

•  For the purpose of calculating the expected return on plan assets, those assets are valued at fair value at the year-end date. 

• The discount rate used to value the defined benefit obligation is the yield at the reporting date on AA credit-rated bonds that have maturity dates approximating the terms of the Company’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. 

•  Past service costs from plan amendments are recognized in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognized immediately in profit or loss in cost of sales or administration and selling expenses, depending on which benefit plans it pertains to. 

• Actuarial gains (losses) arise from the difference between the actual long-term rate of return on plan assets for a period and the expected long-term rate of return on plan assets for that period or from changes in actuarial assumptions used to determine the accrued benefit obligation. The Company recognizes all actuarial gains or losses immediately in other comprehensive income and in retained earnings (deficit). 

 The difference between the cumulative amounts expensed and the funding contributions is recognized on the statement of financial position as a pension asset or a pension liability, as the case may be. 

(ii) Short-term employee benefits: 

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

