FRENCKEN GROUP LIMITED
ANNUAL REPORT 2015
65
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT’D)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(p) Employee compensation (Cont’d)
(ii)
Defined retirement benefit plans (Cont'd)
(a)
Funded defined retirement benefit plan
Under the plan, the employees are entitled to retirement benefits on attainment of a retirement
age of 64 to 65. No other post-retirement benefits are provided.
The actuarial valuation of the plan assets and the present value of the defined obligation were
carried out at 31 March 2010 and 31 December 2010 by Expertisa AG, a pension fund specialist
in Switzerland. The present value of the defined benefit obligation, and the related current service
cost and past service cost, were measured using the Projected Unit Credit Method.
(b)
Unfunded defined retirement benefit plan
Under the plan for Thailand and Indonesia, the employees are entitled to a lump sum payment
based on the length of employment service, on attainment of a retirement age of 55. No other
post-retirement benefits are provided.
The actuarial valuation of the present value of the defined benefit obligation for both Thailand and
Indonesia subsidiaries were carried out at 31 December 2011 by Team Excellence Consulting Co.
Ltd. and Padma Radya Aktuaria respectively. The present value of the defined benefit obligation,
and the related current service cost and past service cost, were measured using the Projected Unit
Credit Method.
No disclosure was made for the above retirement benefit plans in the financial year ended 31 December
2015 and 2014 as the impact to the financial statements is not material.
(c)
Employees’ leave entitlements
Employees’ entitlements to annual leave are recognised when they accrue to employees. A
provision is made for the estimated liability for annual leave as a result of services rendered by
employees up to the balance sheet date.
(d)
Share-based compensation
The Group operates an equity-settled, share-based compensation plan. The value of the employee
services received in exchange for the grant of options is recognised as an expense in the income
statement with a corresponding increase in the share option 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 granted on the date of the grant. The movements in the share option reserve
account are set out in the consolidated statement of changes in equity.
Non-market vesting conditions are included in the estimation of the number of shares under
options that 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 options that are expected to
become exercisable on the vesting date and recognises the impact of the revision of the estimates
in the income statement with a corresponding adjustment to the share option reserve over the
remaining vesting period.
When the options are exercised, the proceeds received (net of transaction costs) and the related
balance previously recognised in the share option reserve is credited to share capital account,
when new ordinary shares are issued, or to the “treasury shares” account, when treasury shares
are re-issued to the employees.
