20. Retirement benefit obligations          
  Defined contribution plans          
  The Group provides retirement benefits through independent funds under the control of trustees and all contributions to those funds are charged to profit or loss. The large majority of South African employees, other than those employees required by legislation to be members of various industry funds, are members of the Imperial Group Pension Fund and the Imperial Group Provident Fund which are governed by the Pensions Funds Act, 1956.          
  Total cost charged to profit or loss 676     597  
  Defined benefit plans

Imperial Logistics International GmbH, a subsidiary located in Germany, operates a number of defined benefit plans for its employees in Europe with a majority of the plans being unfunded. Under the plans the employees are entitled to retirement benefits which are dependent on seniority, length of service and level of pay.

The benefit obligations in Europe are provided for based on actuarial valuations prepared using the projected unit credit method, with the following assumptions:


  – Discount rate 3,00     2,80  
  – Projected pension payment increase 1,75     2,00  
  – Projected salary and other contribution increase 2,00     2,00  
  – Fluctuation rate (depends on the age of male or female) 0 - 8,00     0 - 8,00  
  The latest actuarial valuation was performed in June 2014. In the opinion of the actuary, the provision for the defined benefit obligations is adequate. The next valuation will be conducted in June 2015.          
  The amounts, included in staff costs, recognised in profit or loss in respect of the plans are as follows:

  Current service cost 25     14  
  Expected return on plan assets       (1)  
  Interest costs 30     33  
    55     46  
  The amount included on the statement of financial position arising from the Group’s obligations are as follows:          
  Defined retirement benefit obligations          
  Carrying value at beginning of year 1 014     590  
  Adjustment resulting from the adoption of amendments to IAS 19 - Employee Benefits       61  
  Remeasurement in other comprehensive income (64)     186  
  Payments to retired employees (38)     (32)  
  Plan assets transferred 2     4  
  Currency adjustments 114     159  
  Amounts charged to profit or loss 55     46  
  Carrying value at end of year 1 083     1 014  
  The adoption of amendments to IAS19 - Employee Benefits, as outlined in note 2, resulted in the recognition of all previously unrecognised actuarial gains and losses so that the net pension liability reflect the full value of the plan deficit.

The expected payments to retired employees for the next financial year is R40 million and the average duration of the retirement plans varies from 9 to 37 years with a median of 15 years.

A quantitative sensitivity analysis for significant assumptions as at 30 June 2014 is as shown below:


Discount rate

Future pension cost

Sensitivity level 1% increase 1% decrease 1% increase 1% decrease
Impact on defined benefit obligation (R million) (155) 195 140 (118)

Based on past experience life expectancy is assumed to remain unchanged.

The sensitivity analysis have been determined based on a method that extrapolates the impact on the defined benefit obligation as a result of reasonable changes in the key assumptions occurring at the end of the reporting period.