2013 Apr 15 Annual Report 2012 - Phosphagenics

Notes to the consolidated fi nancial statements
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n) Trade and other payables
Trade payables and other payables are carried at amortised costs and are not discounted due to their
short term nature. They represent liabilities for goods and services provided to the Group prior to the end
of the fi nancial year that are unpaid and arise when the Group becomes obliged to make future payments
in respect of the purchase of these goods and services. The amounts are not secured and are usually paid
within 30 days of recognition.
(o) Share-based payment transactions
The Group provides benefi ts to its employees, including Key Management Personnel (KMP), in the form
of sharebased payments, whereby employees render services in exchange for shares or rights over
shares (equity-settled transactions). There is currently two plans in place to provide these benefi ts being
the Employee Share Option Plan (ESOP), and the Employee Conditional Rights Scheme (ECRS) which
provides benefi ts to key management personnel.
In valuing equity-settled transactions, no account is taken of any vesting conditions, other than conditions
linked to the price of the shares of Phosphagenics Limited.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which the performance and/or service conditions are fulfi lled (the vesting period), ending
on the date on which the relevant party becomes fully entitled to the award (the vesting date).
The charge to the statement of comprehensive income for the period is the cumulative amount as calculated
above less the amounts already charged in previous periods. There is a corresponding entry to equity.
Where the terms of an equity-settled award are modifi ed, as a minimum an expense is recognised
as if the terms had not been modifi ed. In addition, an expense is recognised for any increase in the value
of the transaction as a result of the modifi cation, as measured at the date of modifi cation.
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Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award, and designated as a replacement award on the date that it is granted,
the cancelled and new award are treated as if they were a modifi cation of the original award, as described
in the previous paragraph.
In reporting periods where a net loss is reported, options are considered anti-dilutive and therefore
are excluded in the calculation of diluted earnings per share. Where a net profi t is reported, options
are considered dilutive and therefore included in the calculation of diluted earnings per share.
(p) Leases
Leases where the lessor retains substantial risks and reward of ownership are classifi ed as operating
leases.
Operating lease payments are recognised as an expense in the statement of comprehensive income
on a straight-line basis over the lease term.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS