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Cordlife Group Limited
Annual Report 2016
Notes to
The Financial Statements
for the financial year ended 30 June 2016
2.
Summary of significant accounting policies (cont’d)
2.21 Employee benefits
(a)
Defined contribution plan
The Group participates in the national pension schemes as defined by the laws of the countries in which
it has operations. The Singapore companies in the Group make contributions to the Central Provident
Fund scheme in Singapore, a defined contribution pension scheme. The Hong Kong company makes
contributions to a defined contribution fund under the Mandatory Provident Fund Schemes Ordinance,
of which the assets are held separately in an independently administered fund. These contributions are
recognised as an expense in the period in which the related service is performed.
(b)
Employee leave entitlement
Employee entitlements to annual leave are recognised as a liability when they accrue to employees. The
estimated liability for leave is recognised for services rendered by employees up to the reporting date.
(c)
Employee equity compensation plans
Employees (including senior executives) of the Group receive remuneration in the form of share awards
as consideration for services rendered. The cost of these equity-settled share-based transactions with
employees is measured by reference to the fair value of the 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, with a corresponding increase in the share-based compensation 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
number of 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 condition or non-vesting condition is satisfied, provided that all other performance and/
or service conditions are satisfied. In the case where the award does 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.
2.22 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the
arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific
asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified
in an arrangement.
As lessee
Finance leases, which transfer to the Group substantially all the risks and benefits 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.
