Notes to the Financial Statements

34. Provisions for Liabilities and Charges

31. Deferred Income Tax

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The offset amounts are as follows:

Group	2009 €’000	2008 €’000

Deferred income tax assets (deductible temporary differences):
Deficits on Group defined benefit pension obligations	4,109	3,610
Employee share options	515	785
Other deductible temporary differences	4,811	5,804
	9,435	10,199
Deferred income tax liabilities (taxable temporary differences):
Accelerated tax depreciation and fair value adjustments arising on acquisition	15,607	11,453
Rolled-over capital gains	220	253
	15,827	11,706

The gross movement on the deferred income tax account is as follows:	2009 €’000	2008 €’000

At 1 April	1,507	6,443
Exchange differences	(303)	193
Acquisition of subsidiary (note 46)	(1,130)	1,565
Income Statement charge/(credit) (note 15)	7,433	(5,515)
Tax credited to equity (note 15)	(1,115)	(1,179)
At 31 March	6,392	1,507

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32. Retirement Benefit Obligations
Group
The Group operates eight defined benefit pension schemes in the Republic of Ireland and three in the UK. The projected unit credit method has been employed in determining the present value of the defined benefit obligation arising, the related current service cost and, where applicable, past service cost.

Full actuarial valuations were carried out between 31 December 2005 and 31 March 2009. In general, actuarial valuations are not available for public inspection, although the results of valuations are advised to the members of the various pension schemes. Actuarial valuations have been updated to 31 March 2009 for International Accounting Standard 19 by a qualified actuary.

The principal actuarial assumptions used were as follows:

Republic of Ireland Schemes	2009	2008

Rate of increase in salaries	3.75% - 4.00%	3.75% - 4.25%
Rate of increase in pensions in payment	2.00% - 3.00%	2.50% - 3.00%
Discount rate	5.95%	5.60%
Inflation assumption	2.00%	2.50%

UK Schemes	2009	2008
Rate of increase in salaries	4.40%	4.50%
Rate of increase in pensions in payment	3.40%	3.50% - 4.50%
Discount rate	6.90%	5.85%
Inflation assumption	3.40%	3.50%

The expected long term rates of return on the assets of the schemes were as follows:

Republic of Ireland Schemes	2009	2008
Equities	8.00%	7.40%
Bonds	4.00%	3.90%
Property	7.00%	6.40%
Cash	3.00%	3.00%

UK Schemes	2009	2008
Equities	7.50%	8.10%
Bonds	4.00%	4.60%
Property	6.50%	7.10%
Cash	0.50%	3.50%

The expected rate of return for equities and property has been calculated assuming that equities and property will outperform bonds by 4.0% and 3.0% per annum respectively over the long term in the Republic of Ireland schemes and 3.5% and 2.5% per annum respectively over the long term in the UK schemes. The expected rate of return for bonds has been based on bond indices as at 31 March.

Assumptions regarding future mortality experience are set based on advice from published statistics and experience in both geographic regions. The average life expectancy in years of a pensioner retiring at age 65 is as follows:

	2009	2008

Current Pensioners
Male	21.5	21.1
Female	24.5	24.1

Future Pensioners
Male	22.5	22.1
Female	25.5	25.1

The Group does not operate any post-employment medical benefit schemes.

The net pension liability recognised in the Balance Sheet is analysed as follows:

	2009
	ROI €’000	UK €’000	Total €’000

Equities	25,086	5,148	30,234
Bonds	12,317	4,284	16,601
Property	2,167	27	2,194
Cash	2,485	751	3,236
Total market value at 31 March 2009	42,055	10,210	52,265
Present value of scheme liabilities	(68,843)	(12,920)	(81,763)
Net pension liability at 31 March 2009	(26,788)	(2,710)	(29,498)

	2008
	ROI €’000	UK €’000	Total €’000

Equities	37,515	7,415	44,930
Bonds	12,393	4,323	16,716
Property	3,084	171	3,255
Cash	1,944	1,062	3,006
Total market value at 31 March 2008	54,936	12,971	67,907
Present value of scheme liabilities	(70,989)	(18,769)	(89,758)
Net pension liability at 31 March 2008	(16,053)	(5,798)	(21,851)

The amounts recognised in the Group Income Statement in respect of defined benefit pension schemes is as follows:	2009 €’000	2008 €’000

Current service cost	3,090	3,246
Total, included in employee benefit expenses (note 9)	3,090	3,246

Interest cost, included in finance costs (note 12)	(5,006)	(4,405)
Expected return on plan assets, included in finance income (note 12)	4,272	4,989
Total	(734)	584

The actuarial gain recognised in the Group Statement of Recognised Income and Expense is as follows:	2009 €’000	2008 €’000

Actual return less expected return on pension scheme assets	(21,904)	(13,935)
Experience gains and losses arising on the scheme liabilities	(589)	(3,737)
Changes in assumptions underlying the present value of the scheme liabilities	12,976	8,586
Total, included in the Group Statement of Recognised Income and Expense	(9,517)	(9,086)

The movement in the fair value of plan assets is as follows:	2009 €’000	2008 €’000

At 1 April	67,907	74,980
Expected return on assets	4,272	4,989
Actuarial loss	(21,904)	(13,935)
Contributions by employers	5,137	5,269
Contributions by members	384	393
Benefits paid	(1,766)	(1,604)
Exchange	(1,765)	(2,185)
At 31 March	52,265	67,907

The actual return on plan assets was a loss of €17.632 million (2008: loss of €8.946 million).

The movement in the present value of defined benefit obligations is as follows:	2009 €’000	2008 €’000

At 1 April	89,758	91,352
Current service cost	3,090	3,246
Interest cost	5,006	4,405
Actuarial gain	(12,387)	(4,849)
Contributions by members	384	393
Benefits paid	(1,766)	(1,604)
Exchange	(2,322)	(3,185)
At 31 March	81,763	89,758

The level of contributions for the forthcoming financial year are expected to be in line with the current year amounts.

History of scheme assets, liabilities and actuarial gains and losses

The five-year history in respect of assets, liabilities and actuarial gains and losses for the Group are as follows:

	2009 €’000	2008 €’000	2007 €’000	2006 €’000	2005 €’000

Fair value of assets	52,265	67,907	74,980	67,294	54,659
Present value of liabilities	(81,763)	(89,758)	(91,352)	(87,973)	(80,039)
Net pension liability	(29,498)	(21,851)	(16,372)	(20,679)	(25,380)

Difference between the expected and actual return on scheme assets	(21,904)	(13,935)	904	8,697	1,277
As a percentage of scheme assets	(41.9%)	(20.5%)	1.2%	12.9%	2.3%

Experience gains and losses on scheme liabilities	(589)	(3,737)	884	(383)	(1,598)
As a percentage of the present value of the scheme liabilities	0.7%	4.2%	(1.0%)	0.4%	2.0%

Total recognised in the Group Statement of Recognised Income and Expense	(9,517)	(9,086)	1,576	1,779	(7,742)
As a percentage of the present value of the scheme liabilities	11.6%	10.1%	(1.7%)	(2.0%)	9.7%

Cumulatively since 1 April 2004, €22.990 million has been recognised as a charge in the Group Statement of Recognised Income and Expense.

Sensitivity analysis for principal assumptions used to measure scheme liabilities
There are inherent uncertainties surrounding the financial assumptions adopted in calculating the actuarial valuation of the Group’s defined benefit pension schemes. The following table analyses, for the Group’s Irish and UK pension schemes, the estimated impact on plan liabilities resulting from changes to key actuarial assumptions, whilst holding all other assumptions constant.

Assumption	Change in assumption	Impact on Irish plan liabilities	Impact on UK plan liabilities

Discount rate	Increase/decrease 0.25%	Increase/decrease by 5.6%	Increase/decrease by 6.0%
Price inflation	Increase/decrease 0.25%	Increase/decrease by 3.6%	Increase/decrease by 5.5%
Mortality	Increase/decrease by one year	Increase/decrease by 2.3%	Increase/decrease by 2.0%

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33. Deferred Acquisition Consideration
Group
The Group’s deferred acquisition consideration of €21.147 million (2008: €30.191 million) as stated on the Balance Sheet consists of €8.223 million of € floating rate financial liabilities (2008: €3.237 million) and €12.924 million of Stg£ floating rate financial liabilities (2008: €26.954 million) payable as follows:

	2009 €’000	2008 €’000

Within one year	6,090	14,036
Between one and two years	3,165	8,691
Between two and five years	11,892	7,464
	21,147	30,191
Analysed as:
Non-current liabilities	15,057	16,155
Current liabilities	6,090	14,036
	21,147	30,191

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34. Provisions for Liabilities and Charges
The reconciliation of the movement in provisions for liabilities and charges for the year ended 31 March 2009 is as follows:

Group	Environmental and remediation €’000	Insurance and other €’000	Rationalisation, restructuring and redundancy €’000	Total €’000

At 1 April 2008	5,399	3,463	4,501	13,363
Provided during the year	(194)	354	19,161	19,321
Utilised during the year	-	(426)	(13,073)	(13,499)
Exchange and other	(974)	777	75	(122)
At 31 March 2009	4,231	4,168	10,664	19,063

Analysed as:
Non-current liabilities	4,028	707	574	5,309
Current liabilities	203	3,461	10,090	13,754
	4,231	4,168	10,664	19,063

The reconciliation of the movement in provisions for liabilities and charges for the year ended 31 March 2008 is as follows:

Group	Environmental and remediation €’000	Insurance and other €’000	Total €’000

At 1 April 2007	6,122	4,807	10,929
Provided during the year	285	4,684	4,969
Utilised during the year	(93)	(2,015)	(2,108)
Arising on acquisition (note 46)	-	553	553
Exchange	(915)	(65)	(980)
At 31 March 2008	5,399	7,964	13,363

Analysed as:
Non-current liabilities	5,399	-	5,399
Current liabilities	-	7,964	7,964
	5,399	7,964	13,363

Environmental and remediation
This provision relates to obligations governing site remediation and improvement costs to be incurred in compliance with environmental regulations. The net present value of the estimated costs is capitalised as property, plant and equipment. The unwinding of the discount element on the provision is reflected in the Income Statement. Provision is made for the net present value of post closure costs based on the quantity of waste input into the landfill during the year. Ongoing costs incurred during the operating life of the sites are written off directly to the Income Statement and are not charged to the provision. The majority of the obligations will unwind over a 30-year timeframe.

Insurance and other
The insurance provision relates to employers liability and public and products liability and reflects an estimation of the excess not recoverable from insurers arising from claims against Group companies. A significant element of the provision is subject to external assessments. The claims triangles applied in valuation indicate that these provisions have an average life of four years (2008: four years).

Rationalisation and redundancy
This provision relates to various rationalisation and restructuring programs across the Group. The majority of this provision falls due within one year.

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35. Government Grants

Group	2009 €’000	2008 €’000

At 1 April	2,070	2,632
Amortisation in year	(830)	(288)
Received in year	1,130	92
Arising on acquisition (note 46)	6	-
Exchange and other adjustments	(240)	(366)
At 31 March	2,136	2,070
Disclosed as due within one year (note 25)	(141)	(129)
	1,995	1,941

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