Notes to the Financial Statements
(Cont’d)
For the financial year ended 30 April 2016
(In Singapore Dollar)
ANNUAL REPORT 2016
DRIVING IT UP
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2.
Summary of significant accounting policies (cont’d)
2.18
Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to
the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when
the activities to prepare the asset for its intended use or sale are in progress and the expenditures and
borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for
their intended use or sale. All other borrowing costs are expensed in the period they occur. Borrowing costs
consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
2.19
Employee benefits
(a)
Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of the countries in
which it has operations. In particular, the Singapore companies in the Group make contributions
to the Central Provident Fund scheme in Singapore, a defined contribution pension scheme.
Contributions to defined contribution schemes 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 end of
each reporting period.
(c)
Executives’ Share Option Scheme
The Company had in place the STC Share Option Scheme 2001 (the “Scheme”) for the granting
of share options to eligible employees of the Group to subscribe for ordinary shares in the
Company, whereby employees render services as consideration for share options (“equity-settled
transactions”).
The cost of equity-settled transactions with employees was measured by reference to the fair value
at the date on which the share options are granted. In valuing the share options, no account was
taken of any performance conditions, other than conditions linked to the price of the shares of the
Company (‘market conditions’), if applicable.
The cost of equity-settled transactions was recognised in profit or loss with a corresponding increase
in the employee share option reserve, over the period in which the performance and/or service
conditions were fulfilled, ending on the date on which the relevant employees became fully entitled
to the award (‘the vesting date’). The cumulative expense recognised for equity-settled transactions
at each reporting date until the vesting date reflects the extent to which the vesting period had
expired and the Group’s best estimate of the number of share options that would 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 was recognised in the employee
benefits expense.
