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Gamuda Berhad (29579-T) • Annual Report 2012
2.
Summary of significant accounting policies (cont’d.)
2.20 Employee benefits
(i)
Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year
in which the associated services are rendered by employees of the Group. Short term accumulating
compensated absences such as paid annual leave are recognised when services are rendered
by employees that increase their entitlement to future compensated absences. Short term non-
accumulating compensated absences such as sick leave are recognised when the absences occur.
(ii)
Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of the countries in which
it has operations. The Malaysian companies in the Group make contributions to the Employee Provident
Fund in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension
schemes are recognised as an expense in the period in which the related service is performed.
(iii) Defined benefit plans
The Group operates an unfunded Retirement Benefit Scheme (“the Scheme”) for its eligible employees.
The costs of providing benefits under defined benefit plans are determined using the projected unit
credit actuarial valuation method. Actuarial gains or losses are recognised as income or expense when
the net cumulative unrecognised actuarial gains and losses for each individual plan at the end of the
previous reporting year exceeded 10% of the defined benefit obligation at that date. These gains or
losses are recognised over the expected average remaining working lives of the employees participating
in the plans.
The past service cost is recognised as an expense on a straight-line basis over the average period until
the benefits become vested. If the benefits are already vested immediately following the introduction of,
or changes to, a pension plan, past service cost is recognised immediately.
The defined benefit liability is the aggregate of the present value of the defined benefit obligation and
actuarial gains and losses not recognised, reduced by past service cost not yet recognised. If such
aggregate is negative, the asset ismeasured at the lower of such aggregate or the aggregate of cumulative
unrecognised net actuarial losses and past service cost and the present value of any economic benefits
available in the form of refunds from the plan or reductions in the future contributions to the plan.
(iv)
Share based compensation
The Gamuda Berhad Employees’ Share option Scheme (“ESoS”), an equity-settled, share based
compensation plan, allows the Group’s employees to acquire ordinary shares of the Company. The total
fair value of share options granted to employees is recognised as an employee cost with a corresponding
increase in the share options reserve within equity over the vesting period and taking into account
the probability that the options will vest. The fair value of share options is measured at grant date,
taking into account, if any, the market vesting conditions upon which the options were granted but
excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included
in assumptions about the number of options that are expected to become exercisable on vesting date.
NoTES To ThE FINANCIAL STATEMENTS
31 July 2012