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Notes to the financial statements
31 December 2014
Bursa Malaysia
•
Annual Report 2014
112
2. Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(n) Employee benefits (cont’d.)
(iii) Defined benefit plan
The Group and the Company operate a funded, defined benefit retirement scheme (the Scheme) for its eligible employees. The Scheme was
closed to new entrants effective 1 September 2003.
The Group and the Company’s obligation under the Scheme, calculated using the Projected Unit Credit Method, is determined based on actuarial
computations by an independent actuary, through which the amount of benefit that employees have earned in return for their services up to
1 September 2003 is estimated.
The amount recognised in the statements of financial position represents the present value of the defined benefit obligation at each financial year
end less the fair value of plan assets. The present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows using interest rates of high quality corporate bonds in which the benefits will be paid, and that have terms to maturity approximating to
the terms of the pension obligation.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other
comprehensive income in the period in which they arise.
Net interest is recognised in profit or loss. Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.
(iv) Share-based compensation
The Company’s SGP (implemented on 18 April 2011), an equity-settled, share-based compensation plan, allows eligible employees of the Group
to be entitled for ordinary shares of the Company. The total fair value of shares granted to employees are recognised as an employee cost with a
corresponding increase in the share grant reserve within equity over the vesting period while taking into account the probability that the shares
will vest. The fair value of shares are measured at grant date, taking into account, if any, the market vesting conditions upon which the shares
were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions in
respect of the number of shares that are expected to be granted on vesting date.
At each financial year end, the Group and the Company revise its estimate of the number of shares that are expected to be granted on vesting
date. It recognises the impact of revision of original estimates, if any, in profit or loss, and a corresponding adjustment to equity over the
remaining vesting period. The equity amount is recognised in the share grant reserve.
(v) Separation benefits
Separation benefits are payable when employment ceases before the normal retirement date or expiry of employment contract date. The Group
and the Company recognise separation benefits as a liability and an expense when it is demonstrably committed to cease the employment of
current employees according to a detailed plan without possibility of withdrawal. Benefits falling due more than 12 months after the financial
year end are discounted to present value.
(o) Leases
(i) The Group and the Company as lessee
Finance leases which transfer to the Group and the Company substantially all the risks and rewards incidental to ownership of the leased items,
are capitalised at the inception of the leases at the fair value of the leased assets or, if lower, at the present value of the minimum lease payments.
All of the Group and the Company’s leases are classified as operating leases. Operating lease payments are recognised as an expense in profit
or loss on a straight-line basis over the lease term.