56
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2015
(In Singapore dollars)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
2.9 Employee benefits (cont'd)
Equity compensation plan (cont’d)
The cost of equity-settled share-based payment transactions with employees is measured by reference to the fair
value of the equity-settled awards at the date on which the awards are granted which takes into account market
conditions and non-vesting conditions. This cost is recognised in profit or loss, together with a corresponding
increase in the employee equity benefit reserve, over the vesting period. The cumulative expense recognised
at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the
Group’s best estimate of the awards that will ultimately vest. The charge or credit to profit or loss for a period
represents the movement in cumulative expense recognised as at the beginning and end of that period and is
recognised in employee benefits expense.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional
upon a market or non-vesting condition, which are treated as vested irrespective of whether or not the market
or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
In the case where the awards do not vest as the result of a failure to meet a non-vesting condition that is within
the control of the Group or the employee, it is accounted for as a cancellation. In such case, the amount of the
compensation cost that otherwise would be recognised over the remainder of the vesting period is recognised
immediately in profit or loss upon cancellation. The employee equity benefit reserve is transferred to retained
earnings upon expiry of the awards. The employee equity benefit reserve is transferred to share capital if new
shares are issued to settle the awards, or to treasury shares if awards are satisfied by the reissuance of treasury
shares. When the equity-settled awards issued by subsidiaries are exercised, the employee equity benefit reserve
is transferred to non-controlling interests.
2.10 Leases
As lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the
leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the
present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve
a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss.
Contingent rents, if any, are charged as expenses in the periods in which they are incurred.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease
term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease
term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense
over the lease term on a straight-line basis.
As lessor
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified
as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount
of the leased asset and recognised over the lease term on the same basis as rental income. The accounting policy
for rental income is set out in Note 2.8. Contingent rents are recognised as revenue in the period in which they
are earned.
