The Company has a plan for covering seniority premiums which consists of a lump sum payment of 12 days’ wages for each year worked, calculated using the most recent salary, not to exceed twice the legal minimum wage established by law. Since 2005, the Company has recognized a liability for personal severance pay. The related liability and annual cost of such benefits are calculated by an independent actuary on the basis of formulas defined in the plans using the projected unit credit method.

As mentioned in Note 3, during 2008 the Company applied the provisions of new MFRS D-3, Employee Benefits which replaces the previous MFRS accounting Bulletin D-3, Labor Obligations. The most significant effects of its application were as follows:

i) Additional labor cost of Ps. 5,559 being recognized in its 2008 statement of income as compared to prior period.

ii) Elimination of the recognition of an additional liability and resulting recognition of an intangible asset and comprehensive income item. Upon the adoption of MFRS D-3 the Company reversed its intangible asset of Ps. 30,092 and additional liability of Ps. 34,189 resulting in a credit to shareholders equity of Ps. 4,097 in 2008.

uring 2010 the Company reduced its employee benefits obligations by canceling the non-statutory indemnity benefit contained its retirement plan. This curtailment resulting in a reduction of the net period pension cost during the year ended December 31, 2010. The benefit obligation that remains recorded as of December 31, 2010 corresponds to the legal indemnity benefit due to termination or severance as well as seniority premiums.

As of December 31, 2009 and 2008 and for the years ended 2010, 2009 and 2008, the present values of these obligations and the rates used for the calculations are as follows:

The following is an analysis at December 31 of the Company’s liabilities that make up its labor obligations related to seniority premiums and employee termination payments for reasons other than corporate restructuring:



Beginning in 2008, the transition liability is being amortized over a five-year period.

The rates used in the actuarial analysis are as follow:

At December 31, 2010, the Company has recognized accrued liabilities on trade accounts payable, as of other creditors, for the short-term direct benefits on vacation and vacation premium for Ps. 33,149 and Ps. 4,566, respectively.