HAW PAR CORPORATION LIMITED
68
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
For the financial year ended 31 December 2014
2.
SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(n)
Employee benefits
(1)
Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays fixed
contributions into separate entities such as Central Provident Fund on a mandatory, contractual or
voluntary basis. The Group has no further payment obligations once the contributions have been paid.
(2)
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 recognised as an expense in profit or loss
with a corresponding increase in share option reserve within equity over the vesting period. The total
amount to be recognised over the vesting period is determined by reference to the fair value of the
options granted on the date of grant. Non-market vesting conditions are included in the estimation of
the number of shares under options that are expected to become exercisable on vesting date. At the
end of each reporting period, the Group revises its estimates of the number of shares under options
that are expected to become exercisable on vesting date and recognises the impact of the revision
of estimates in profit or loss, with a corresponding adjustment to the share option reserve over the
remaining vesting period.
(o)
Hedging activities
The Group documents at the inception of the transaction the relationship between the hedging instruments
and hedged items, as well as its risk management objective and strategies for undertaking various hedge
transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of
whether the derivatives designated as hedging instruments are highly effective in offsetting changes in fair
value or cash flows of the hedged items. A non-derivative financial asset or non-derivative financial liability
may be designated as a hedging instrument for a hedge of a foreign currency risk.
The fair value changes on the hedged item resulting from currency risk are recognised in profit or loss. The
fair value changes on the portion of the hedging instrument designated as fair value hedges are recognised
in profit or loss within the same line item as the fair value changes from the hedged item.
(p)
Fair value estimation
The fair values of current financial assets and liabilities, carried at amortised cost, are assumed to approximate
their carrying amounts.
The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-
counter securities and derivatives) are based on quoted market prices obtained from stock exchange at the
end of the reporting period. The quoted market prices used for financial assets held by the Group are the
current bid prices; the appropriate quoted market prices for financial liabilities are the current asking prices.
The fair values of financial instruments that are not traded in an active market are determined by using
valuation techniques. The Group uses a variety of methods such as estimated discounted cash flow analyses.
