FINANCIAL AND ACCOUNTING INFORMATION 3.9 Share capital income as the related service is provided. A liability is recognized for the amount expected to be paid Repurchase of equity instruments under short-term cash bonus or profit sharing plans When the company purchases its own equity if the Group has a present legal or constructive instruments, the amount of the consideration paid, obligation to pay this amount as a result of past including directly attributable costs, is recognized as service provided by the employee and the obligation a reduction in equity. can be estimated reliably. Dividends 3.11.2 Post-employment and other long-term Dividends paid in cash are recognized as a liability benefits in the period in which the distribution has been Post-employment and other long-term benefits approved by the shareholders. include: 3.10 Interest-bearing borrowings Post-employment benefits including pensions, • Interest-bearing borrowings are recognized initially retirement supplements and medical benefits at fair value less directly attributable transaction after retirement; costs. Subsequent to initial recognition, interest- Other long-term benefits (during employment) bearing borrowings are stated at amortized cost. • mainly including jubilees and long service awards. Effective interest rate These benefits are classified as either: The effective interest rate is the rate that discounts the expected stream of future cash flows through •Defined contribution plans when the employer to maturity to the current net carrying amount of pays fixed contributions into a separate entity the liability on initial recognition. When calculating recognized as an expense in profit and loss and the effective interest rate of a financial l iabil ity, will have no legal or constructive obligation to pay future cash flows are determined on the basis of further contributions, or contractual commitments. •Defined benefit plans when the employer Transaction costs guarantees a future level of benefits. Transaction costs are incremental costs that are Post-employment benefits directly attributable to the issue of the credit line. They include fees and commissions paid to agents The Group’s net obligation in respect of defined post- and advisers, levies by regulatory agencies and employment benefit plans, including pension plans, securities exchanges, and transfer taxes and duties. is calculated separately for each plan by estimating Transaction costs do not include debt premiums, the amount of future benefit that employees have or allocations of internal administrative or overhead earned in return for their service in the current and expenses. prior periods. That benefit is discounted to determine For financial liabilities that are carried at amortized its present value. The discount rate is the yield at cost, transaction costs are included in the calculation the balance sheet date on high quality corporate of amortized cost using the effective interest rate bonds that have maturity dates approximating the method and, in effect, amortized through the income terms of the Group’s obligations. The calculation is statement over the life of the instrument. performed periodically by an independent actuary using the projected unit credit method. 3.11 Employee benefits The l iabi l ity recognized in the balance sheet in 3.11.1 Short-term employee benefits respect of defined benefit schemes is the present value of the defined benefit obligation at the balance Short-term employee benefits include wages, sheet date less the fair value of plan assets. salaries, social security contributions, compensated absences, profit-sharing and bonuses and are When the calculation results in plan assets exceeding expected to be settled wholly before twelve months liability, the recognized asset is limited to the present after the end of the reporting period. Short-term value of any currently available future refunds from employee benefit obligations are measured on an the plan or reductions in future contributions to the undiscounted basis and are recognized in operating plan. REXEL 2017 – REGISTRATION DOCUMENT 226