67
ANNUAL REPORT 2015/2016
Notes to Financial Statements
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(iv)
Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed
contributions into a separate entity and will have no legal or constructive obligation to pay further
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benefit expense in profit or loss in the periods during which related services are rendered by employees.
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as
the related service is provided. A liability is recognised for the amount expected to be paid under short-
term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation
to pay this amount as a result of past service provided by the employee, and the obligation can be
estimated reliably.
Share-based compensation
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with a share option plan component and a performance share plan component. The value of the
employee services received in exchange for the grant of options on shares or shares is recognised
as an expense with a corresponding increase in the share-based payment reserve over the vesting
period. The total amount to be recognised over the vesting period is determined by reference to
the fair value of the options on shares or share awards on the date of the grant. Non-market vesting
conditions are included in the estimation of the number of shares under the plan which are expected
to become exercisable on the vesting date. At each balance sheet date, the Group revises its estimates
of the number of shares under the plan which are expected to become exercisable on the vesting
date and recognises the impact of the revision of the estimates in profit or loss, with a corresponding
adjustment to the share-based payment reserve over the remaining vesting period.
When the shares are issued, the proceeds received (net of transaction costs) and the related balance
previously recognised in the share-based payment reserve are credited to share capital account when
new ordinary shares are issued to the employees.
