AJ Lucas Group annual report 2007-08

21. PROVISIONS
Consolidated
Company
2008 2007 2008 2007
Note
$’000 $’000 $’000 $’000
Current
Employee benefits 23 4,751 2,702 — —
Provision for contractual dispute 3,799 — — —
8,550 2,702 — —
Non-current
Employee benefits 23 748 586 — —
Provision for contractual dispute — 2,941 — —
748 3,527 — —
The provision for contractual dispute relates to a contract undertaken in Hong Kong in 2000 and 2001 and has been settled since year end.
22. OPERATING LEASES
Consolidated
Company
2008 2007 2008 2007
$’000 $’000 $’000 $’000
Non-cancellable operating lease rentals are payable as follows:
Less than one year 985 532 — —
Between one and five years 1,164 226 — —
2,149 758 — —
The Group leases property under non-cancellable operating leases expiring from one to three years. The leases generally provide the Group with a right of
renewal. During the financial year, $1,109,000 (2007: $839,000) was recognised as an expense in the income statement in respect of operating leases.
23. EMPLOYEE BENEFITS
Consolidated
Company
2008 2007 2008 2007
Note
$’000 $’000 $’000 $’000
Provision for employee benefits, including on-costs:
Current 21 4,751 2,702 — —
Non-current 21 748 586 — —
5,499 3,288 — —
Superannuation plans
Benefits provided under the superannuation funds to which the Group contributes are based on accumulated contributions and earnings for each
employee. The Group has a legal obligation to contribute to the funds in accordance with the Superannuation Guarantee Charge legislation. The amount
recognised as an expense for the financial year was $4,375,341 (2007: $1,968,683).
Employee share plan
The Company has three employee incentive schemes approved by shareholders at the 2001, 2006 and 2007 annual general meetings. Total securities
granted but unissued under these schemes cannot exceed 15% of the total number of shares on issue.
a) Management rights plan: The management rights plan (MRP) is available to employees, non-executive directors and other persons at
the discretion of the Board. Nominated persons are granted rights to acquire shares in the Company. The issue of these rights can take the form of the
award of shares for no monetary consideration, traditional priced options or performance rights (which have no exercise price).
Each right is convertible to one ordinary share. There are no voting or dividend rights attaching to the rights nor are there voting rights attaching to
the unissued ordinary shares.
During the year, 250,000 (2007: 550,000) options were granted to the executive directors as approved by shareholders at the annual general
meeting held in November 2007. The options vest immediately but cannot be exercised for 3 years. The fair value of services received in return for the
share options granted was calculated using a Black-Scholes pricing model with the following inputs:
Grant date 23 Nov 2007 Expected volatility 51%
Expiry date 23 Nov 2012 Risk free interest rate 6.4%
Share price on grant date $3.40 Expected dividend yield 2.2%
Exercise price $2.11 Fair Value at grant date $1.70
a year of milestones 51