Annual - Johnson Electric

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2. Principal accounting policies (Cont’d) NOTES TO THE ACCOUNTS 2.18 EMPLOYEE BENEFITS (Cont’d) (a) Pension obligations (Cont’d) Past-service costs are recognised immediately as income, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period. For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due and are reduced by contributions forfeited by those employees who leave the scheme prior to vesting fully in the contributions. (b) Share-based compensation The Group operates an equity-settled, share-based compensation plan. The fair value of the option granted for the employee services is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each balance sheet date, the entity revises its estimates of the number of options that are expected to become exercisable. It recognizes the impact of the revision of original estimates, if any, in the profit and loss account, and a corresponding adjustment to equity over the remaining vesting period. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. (c) Employee leave entitlements Employee entitlements to annual leave and long services leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave and long-service leave as a result of services rendered by employees up to the balance sheet date. (d) Profit sharing and bonus plan Provisions for profit sharing and bonus plans due wholly within twelve months after balance sheet date are recognised when the Group has a legal or constructive obligation as a result of services rendered by employees and a reliable estimate of the obligation can be made. 2.19 PROVISIONS Provisions are recognised when the company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the company expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. Johnson Electric Holdings Limited 67
NOTES TO THE ACCOUNTS 2. Principal accounting policies (Cont’d) 2.20 REVENUE RECOGNITION (a) Sales of goods Revenue from the sale of goods is recognised on the transfer of risks and rewards of ownership, which generally coincides with the time when the goods are delivered to customers and title has passed. (b) Interest income Interest income is recognised when it is earned on a time-proportion basis using the effective interest method. (c) Gross earnings from investments in finance leases Gross earnings from investments in finance leases are recognised on the basis as set out in note 2.21(a). (d) Rental income Rental income is recognised on a straight-line basis over the period of the lease. (e) Royalty income Royalty income is recognised on an accrual basis. 2.21 LEASES (a) Finance leases (as the lessor) HKAS 17 defines a lease as being an agreement whereby the lessor conveys to the lessee in return for a payment, or series of payments, the right to use an asset for an agreed period of time. When assets are leased out under a finance lease, the present value of the lease payments is recognised as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income. Lease income is recognised over the term of the lease using the net investment method, which reflects a constant periodic rate of return. (b) Operating leases (as the lessee) Leases where substantially all the risks and rewards of ownership of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases net of any incentives from the leasing company are charged to the profit and loss account on a straight-line basis over the lease term. 68 Johnson Electric Holdings Limited
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Annual Report 2006 Johnson Electric
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CORPORATE PROFILE CONTENTS 2 Johnso
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FINANCIAL HIGHLIGHTS FINANCIAL HIGH
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A MESSAGE FROM PATRICK WANG A MESSA
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A MESSAGE FROM PATRICK WANG The acq
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BUSINESS REVIEW AUTOMOTIVE MOTORS G
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BUSINESS REVIEW Power Tools Hand To
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BUSINESS REVIEW JOHNSON ELECTRIC CA
Page 17 and 18: FINANCIAL REVIEW FINANCIAL REVIEW O
Page 19 and 20: FINANCIAL REVIEW Group Turnover 18
Page 21 and 22: FINANCIAL REVIEW Other Gains Other
Page 23 and 24: FINANCIAL REVIEW Stocks and work in
Page 25 and 26: FINANCIAL REVIEW At the balance she
Page 27 and 28: CORPORATE GOVERNANCE REPORT CORPORA
Page 29 and 30: CORPORATE GOVERNANCE REPORT The com
Page 31 and 32: CORPORATE GOVERNANCE REPORT In addi
Page 33 and 34: CORPORATE GOVERNANCE REPORT INTERNA
Page 35 and 36: CORPORATE GOVERNANCE REPORT Neither
Page 37 and 38: REPORT OF THE DIRECTORS Directors T
Page 39 and 40: REPORT OF THE DIRECTORS B SUBSTANTI
Page 41 and 42: REPORT OF THE DIRECTORS 5. Subscrip
Page 43 and 44: REPORT OF THE DIRECTORS Public Floa
Page 45 and 46: BIOGRAPHICAL DETAILS OF DIRECTORS A
Page 51 and 52: AUDITORS’ REPORT AUDITORS’ REPO
Page 53 and 54: CONSOLIDATED BALANCE SHEET (cont’
Page 55 and 56: CONSOLIDATED PROFIT AND LOSS ACCOUN
Page 57 and 58: CONSOLIDATED CASH FLOW STATEMENT Fo
Page 59 and 60: NOTES TO THE ACCOUNTS NOTES TO THE
Page 61 and 62: NOTES TO THE ACCOUNTS 2. Principal
Page 67: NOTES TO THE ACCOUNTS 2. Principal
Page 71 and 72: NOTES TO THE ACCOUNTS 3. Financial
Page 73 and 74: NOTES TO THE ACCOUNTS 5. Segment in
Page 75 and 76: NOTES TO THE ACCOUNTS 6. Properties
Page 77 and 78: NOTES TO THE ACCOUNTS 9. Intangible
Page 79 and 80: NOTES TO THE ACCOUNTS 11. Jointly c
Page 81 and 82: NOTES TO THE ACCOUNTS 15. Derivativ
Page 83 and 84: NOTES TO THE ACCOUNTS 18. Investmen
Page 85 and 86: NOTES TO THE ACCOUNTS 22. Trade and
Page 87 and 88: NOTES TO THE ACCOUNTS 24. Provision
Page 93 and 94: NOTES TO THE ACCOUNTS 25. Deferred
Page 95 and 96: NOTES TO THE ACCOUNTS 27. Reserves
Page 97 and 98: NOTES TO THE ACCOUNTS 27. Reserves
Page 99 and 100: NOTES TO THE ACCOUNTS 31. Expenses
Page 101 and 102: NOTES TO THE ACCOUNTS 32. Employee
Page 103 and 104: NOTES TO THE ACCOUNTS 34. Income ta
Page 105 and 106: NOTES TO THE ACCOUNTS 39. Contingen
Page 107 and 108: NOTES TO THE ACCOUNTS 41. Cash gene
Page 109 and 110: NOTES TO THE ACCOUNTS 42. Business
Page 111 and 112: NOTES TO THE ACCOUNTS 44. Effect of
Page 113 and 114: NOTES TO THE ACCOUNTS 44. Effect of
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NOTES TO THE ACCOUNTS 47. Principal
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JOHNSON ELECTRIC GROUP TEN-YEAR SUM
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Annual - Johnson Electric

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