Page 171 - CJ 2019 INTEGRATED REPORT

169
NOTES TO THE FINANCIAL
STATEMENTS 31 DECEMBER 2019
(CONTINUED)
1 SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(a) Critical accounting estimates and assumptions (Continued)
• Life assurance fund (Note 24) - - estimates of future benefit payments under the long-term insurance contracts
The determination of of of the the the the the liabilities under long-term insurance contracts
is is dependent on on on on estimates made made by the the the the the actuary actuary Estimates are made made as as to to to the the the the the the expected number of of of deaths for each of of of the the the the the the years in in in in which the the the the the the Group is is is is exposed to to to to risk The The actuary actuary actuary bases these estimates on standard industry mortality mortality tables that reflect reflect recent historical mortality mortality experience experience adjusted where appropriate to to to reflect reflect the the the the the the actuary’s own experience experience The The The estimated number of of of of deaths determines the the the the the value value of of of of the the the the the benefit payments and and and the the the the the value value of of of of the the the the the valuation premiums The The main source of of of of uncertainty is is that epidemics such such as as as as AIDS and and and wide-ranging lifestyle changes such such as as as as in in in in in in in in in in in eating smoking and and and exercise habits could result in in in in in in in in in future mortality mortality being significantly worse than in in in in in in in in in the the the the past for the the the the age groups in in in in in in in in in which the the the the Group has significant significant exposure to mortality mortality mortality risk risk For contracts
that insure the the the the risk risk of longevity appropriate but not excessively prudent allowance is is is made for for expected mortality mortality improvements improvements improvements However continuing improvements improvements improvements in in in in in in in in medical care and social conditions could result in in in in in in in in improvements improvements improvements in in in in in in in in longevity longevity in in in in in in in in excess of those allowed for for for in in in in in in in in the the the estimates used to to determine the the liability for contracts
where the the Group is is exposed to longevity longevity risk Long-term business technical provisions are are computed using statistical or mathematical methods methods The computations are are made by by by the the the the the the Group’s actuaries on on on on the the the the the the basis of recognised actuarial actuarial actuarial methods methods with due regard to to the the the the the the actuarial actuarial actuarial principles laid down by by by by the the the the the the the the law and and and by by by by actuarial actuarial actuarial best practices The methodology takes into account the the the the the the the the risks and and and uncertainties of of the the the the the the particular classes of of long-term business written and and and the the the the the the results are certified by by by the the the the the the actuaries undertaking the the valuations For long-term insurance contracts
with fixed and and guaranteed terms estimates are are made made in in in in in in two stages Estimates of of future deaths voluntary terminations investment returns and and and administration expenses are are made made at at at at at at at the the the the the the inception of of of the the the the the the the the the contract contract contract and and and form the the the the the the the the the assumptions assumptions assumptions used for for for for calculating the the the the the the the the the liabilities during the the the the the the the the the life of of of the the the the the the the the the contract contract contract A margin for for for for risk and and uncertainty is is added to to these assumptions assumptions assumptions These assumptions assumptions assumptions are are are ‘locked in’ for for for for the the the the the the the the the the duration of of the the the the the the the the the the contract contract contract New estimates estimates are are are are are are made each subsequent year in in in in in order to to determine whether the the the the the the the the the the previous liabilities liabilities are are are are are are adequate adequate in in in in in the the the the the the the the the light of these latest estimates estimates If If the the the the the the the the the liabilities liabilities are are are are are are considered adequate adequate adequate the the the the the the the the the assumptions assumptions assumptions are are are are are are not not altered altered If If they are are are are are are not not adequate adequate the the the the the the assumptions assumptions assumptions are are are altered (‘unlocked’) to reflect the the the the the the best estimate estimate assumptions assumptions assumptions The The reasonableness of of of the the the estimation process of of of future benefit payments is is is tested by an an an an an analysis analysis of of of sensitivity under several different scenarios The The analysis analysis enables the the the the Group to to assess the the the the most significant assumptions and monitor the emerging variations accordingly Liabilities in in in in in relation to death and disability benefits
are amortised by reinsuring the the yearly sums at at at risk above the the retention limit against payment of respective reassurance premiums The sensitivity analysis has been disclosed in in in in in Note 3(d) • Provision for asset retirement obligation In one of of the the the the the the Group’s subsidiaries the the the the the the directors have have estimated the the the the the the costs of of dismantling removing antennas and restoring the the the the the the the the the the leased sites to to to to their their original conditions which have have been provided in in in in in in fin in in in in full in in in in in in fin in in in in the the the the the the the the the the financial statements This assumes that the the the the the the the the effect of the the the the the the the the inflationary increase on on on on on on the the the the the the the the costs costs will be be minimised on on on on on on discounting such costs costs to to to their their present values These assumptions and the the the the sensitivity analysis are set out in in in in Note 27 • Fair value estimates of property plant and equipment
The The fair fair value value value value at at at 31 December 2019
comprises the the best best estimate of of market market value value value value by by independent valuations performed by by external property valuers The The best best evidence of of fair fair value value value value is is the the current price in in in an active market market for for similar properties as set out in Note 10 • Fair value estimates of investment properties The The fair fair value value value value at at at 31 December 2019
comprises the the best best estimate of of market market value value value value by by independent valuations performed by by external property valuers The The best best evidence of of fair fair value value value value is is the the current price in in an active market market for for similar properties please refer to Note 11 • Income taxes
The The Group is is is subject to income income taxes
taxes
at at at an an an an an average tax tax tax rate 17% 17% (2018 – 17%) Significant judgement is is is required in in in in in determining the the worldwide provision for for for income income taxes
taxes
There are many transactions and calculations for for for which the the ultimate tax tax tax tax tax determination is is is is is uncertain The The Group recognises liabilities for for for anticipated tax tax tax tax tax audit issues based on on on on on on estimates of of whether additional taxes
will will be due Where the the the the the final tax tax tax tax tax outcome of of these matters is is is is different from the the the the the amounts that were initially recorded such such differences will will impact the the the the the the current current and and deferred income tax tax tax tax assets and and liabilities in in in in in the the period in in in in in which such such determination is made The Group has a a a a a a a a a a a a a a a a current current tax tax receivable of Rs 93 4 million please refer to Note 18 INTEGRATED REPORT 2019