20645_Scapa_AR_160504

GROUP ACCOUNTING POLICIES CONTINUED
FINANCIAL STATEMENTS
EMPLOYEE BENEFITS
(a) Pension obligations
Group companies operate various pension schemes. The schemes are funded through payments to trustee-administered funds, determined
by periodic actuarial calculations. The Group has both defined benefit and defined contribution plans. A defined benefit plan is a pension
plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such
as age, years of service and compensation.
The liability recognised in the Balance Sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation
at the Balance Sheet date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past
service costs. The defined benefit obligation is calculated by independent actuaries using the projected unit credit method. The present value
of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate
bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of
the related pension liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to
shareholders’ equity.
Past-service costs are recognised immediately in the Income Statement, 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.
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal
or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to
employee service in the current and prior periods.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory,
contractual or voluntary basis. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are
recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
(b) Share-based compensation
The Group operates an equity-settled, share-based compensation plan. The fair value of the employee services received in exchange for the
grant of the options is calculated using appropriate valuation models and is recognised as an expense over the vesting period.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted. At each Balance
Sheet date, the entity revises its estimates of the number of options that are expected to become exercisable.
It recognises the impact of the revision of original estimates, if any, in the Income Statement, 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) Holiday pay
The Group recognises an asset or liability relating to holiday pay obligations at the Balance Sheet date. Movements in the period are taken
to the Income Statement.
(d) Bonus plans
The Group recognises a liability and an expense for bonuses based on a pre-determined formula for key performance indicators. The Group
recognises a provision where contractually obliged or where past practice has created a constructive obligation.
(e) Share Price Incentive Plan
The Group accounts for the Share Price Incentive Plan in line with IAS 19 as the basis of compensation is not an award of shares and
therefore does not fall under the remit of IFRS 2.
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Scapa Group plc Annual Report and Accounts 2016
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ANNUAL REPORT AND ACCOUNTS 2016 SCAPA GROUP PLC