Interim Report 2012 - TodayIR.com

Notes to Financial Statements30 June 20122.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Share-based payment transactions (Continued)Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yetrecognised for the award is recognised immediately. This includes any award where non-vesting conditions within the control ofeither the Group or the employee are not met. However, if a new award is substituted for the cancelled award, and is designated asa replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of theoriginal award, as described in the previous paragraph.The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.Other employee benefitsPension SchemeThe Group operates a defined contribution Mandatory Provident Fund retirement benefit scheme (the “MPF Scheme”) under theMandatory Provident Fund Schemes Ordinance for those employees who are eligible to participate in the MPF Scheme. Contributionsare made based on a percentage of the employees’ basic salaries and charged to the income statement as they become payable inaccordance with the rules of the MPF Scheme. The assets of the MPF Scheme are held separately from those of the Group in anindependently administered fund. The Group’s employer contributions vest fully with the employees when contributed into theMPF Scheme, except for the Group’s employer voluntary contributions, which are refunded to the Group when the employee leavesemployment prior to the contributions vesting fully, in accordance with the rules of the MPF Scheme.The employees of the Group’s subsidiaries which operate in Mainland China are required to participate in a central pension schemeoperated by the local municipal government. These subsidiaries are required to contribute certain percentage of their payroll costs tothe central pension scheme. The contributions are charged to the income statement as they become payable in accordance with therules of the central pension scheme. Details of the central pension scheme are set out in Note 27 below.DividendsFinal dividends proposed by the directors are classified as a separate allocation of retained profits within the equity section of thestatement of financial position, until they have been approved by the shareholders in a general meeting. When these dividends havebeen approved by the shareholders and declared, they are recognised as a liability.Interim dividends are simultaneously proposed and declared, because the Group’s memorandum and articles of association grant thedirectors the authority to declare interim dividends. Consequently, interim dividends are recognised immediately as a liability whenthey are proposed and declared.Foreign currenciesThese financial statements are presented in RMB. Each entity in the Group determines its own functional currency and items includedin the financial statements of each entity are measured using that functional currency. Foreign currency transactions recorded bythe entities in the Group are initially recorded using their respective functional currency rates ruling at the dates of the transactions.Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rates of exchange rulingat the end of the reporting period. All differences arising on settlement or translation of monetary items are taken to the incomestatement with the exception of monetary items that are designated as part of the hedge of the Group’s net investment of a foreignoperation. These are recognised in other comprehensive income until the net investment is disposed of, at which time the cumulativeamount is reclassified to the income statement. Tax charges and credits attributable to exchange differences on those monetary itemsare also recorded in equity.INTERIM REPORT 2012 39