Singapore Airlines 2009 Annual Report Download - page 114

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NOTES TO THE FINANCIAL STATEMENTS
31 March 2009
2 Accounting Policies (continued)
(ac) Employee benefi ts (continued)
(i) Equity compensation plans (continued)
The Group has in place, the Singapore Airlines Limited Employee Share Option Plan, the Singapore
Airport Terminal Services Limited Employee Share Option Plan and the SIA Engineering Company
Limited Employee Share Option Plan for granting of share options to senior executives and all other
employees. The exercise price approximates the market value of the shares at the date of grant.
The Group has also implemented the Singapore Airlines Limited Restricted Share Plan and Performance
Share Plan, the Singapore Airport Terminal Services Limited Restricted Share Plan and Performance
Share Plan and the SIA Engineering Company Limited Restricted Share Plan and Performance Share
Plan for awarding of fully paid ordinary shares to senior executives and key senior management,
when and after pre-determined performance or service conditions are accomplished.
Details of the plans are disclosed in Note 13 to the fi nancial statements.
The cost of these equity-settled transactions with employees is measured by reference to the fair
value of the options or awards at the date on which the share options or awards are granted.
In valuing the share options, no account is taken of any performance conditions, other than
conditions linked to the price of the shares of the Company.
This cost is recognised in the profi t and loss account as share-based compensation expense, with a
corresponding increase in the share-based compensation reserve, over the vesting period in which
the service conditions are fulfi lled, ending on the date on which the relevant employees become
fully entitled to the award (“the vesting date”). Non-market vesting conditions are included in the
estimation of the number of shares under options that are expected to become exercisable on
the vesting date. At each balance sheet date, the Group revises its estimates of the number of
shares under options that are expected to become exercisable on the vesting date and recognises
the impact of the revision of the estimates in the profi t and loss account, with a corresponding
adjustment to the share-based compensation reserve over the remaining vesting period.
No expense is recognised for options or awards that do not ultimately vest, except for options
or awards where vesting is conditional upon a market condition, which are treated as vested
irrespective of whether or not the market condition is satisfi ed, provided that all other performance
and/or service conditions are satisfi ed.
The share-based compensation reserve is transferred to general reserve upon cancellation or
expiry of the vested options or awards. When the options are exercised or awards are released,
the share-based compensation reserve is transferred to share capital if new shares are issued.