Notes to CoNsolidated FiNaNCial statemeNts (In thousands of dollars except as noted and per share amounts) 3.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): (i)  Employee benefits (continued): (iii) Share-based compensation:  The Company has a Share Option Plan. Share based payment awards are measured at fair value at the grant  date which is recognized as an employee expense, with a corresponding increase in contributed surplus over  the vesting period, which is normally 5 years.The amount recognized as an expense is adjusted to reflect the  number of awards for which the related service conditions are expected to be met. Any consideration paid  by employees on exercise of share options is credited to share capital. (j) Provisions:  A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation  that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the  obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects  current market assessments of the time value of money and the risks specific to the liability.The unwinding of the  discount is recognized as finance costs. (i)  Asset retirement obligation:  The Company recognizes the estimated liability for future costs to be incurred in the remediation of site  restoration in regards to asbestos removal and disposal of such asbestos to a landfill for waste environment,  and for oil, chemical and other hazardous materials storage tanks, only when a present legal or constructive  obligation has been determined and that such obligation can be estimated reliably. Upon initial recognition  of the obligation, the corresponding costs are added to the carrying amount of the related items of property,  plant and equipment and amortized as an expense over the economic life of the asset or earlier, if a specific  plan of removal exists.This obligation is reduced every year by payments incurred during the year in relation  to these items.The obligation might be increased by any required remediation to the owned assets that would  be required through enacted legislation. (ii) Contingent liability:  A contingent liability is a possible obligation that arises from past events and of which the existence will be  confirmed only by the occurrence or non-occurrence of one or more uncertain future events not within the  control of the Company, or a present obligation that arises from past events (and therefore exists), but is  not recognized because it is not probable that a transfer or use of assets, provision of services, or any other  transfer of economic benefits will be required to settle the obligation, or the amount of the obligation cannot  be estimated reliably. Rogers Sugar Inc. 50