Home' Japara Healthcare Annual Report : Japara Healthcare Annual Report 2016 Contents Notes to the Financial Statements continued
For the year ended 30 June 2016
C. Employee remuneration continued
C2. Employee provisions
Provisions are recognised when the Group has a legal or constructive obligation as a result of past events, for which it is probable that an
outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the
amounts required to settle the obligation at reporting date.
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to reporting date. Employee
benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled,
plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash
outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that
the employee may not satisfy any vesting requirements. Those cash flows are discounted using corporate bond yields with terms to maturity
that match the expected timing of cash flows.
(a) Reconciliation of employee provisions
Provision for annual leave
Provision for long service leave
Provision for long service leave
C3. Share-based payment arrangements
The grant date fair value of equity settled share-based payment awards granted to employees of the Group is generally recognised as an
expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted
to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the
amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the
(a) Description of equity-settled share option arrangements
During the year ended 30 June 2016, the Group had the following share-based payment arrangements:
(i) Rights Plan
The Company’s Rights Plan is a long term incentive (LTI) Plan under which eligible employees of the Group that are invited by the Board to
participate in the Rights Plan are provided with performance rights. There were no performance rights on issue at the beginning of the year
under the Rights Plan. During the year, 684,075 performance rights have been issued to Senior Executives under the Rights Plan.
(ii) Loan Plan
The Company’s Loan Plan is an LTI Plan under which the Chief Executive Officer (CEO) and any other employee as determined by the Board
are entitled to acquire loan shares in the Company. There are currently no loan shares on issue.
Previously granted loan shares had been forfeited in the year ended 30 June 2015. During the year ended 30 June 2016, the loan shares were
sold to the trustee of the Rights Plan by the CEO, with the proceeds from sale being applied to fully offset the outstanding loan. Loan shares
have the same rights as ordinary shares. Participants will be provided with a limited recourse loan from the Company for the sole purpose of
subscribing for loan shares in the Company. The loan is recognised as a financial asset in the financial statements of the Group when the loan
shares vest. Eligibility to participate in the Loan Plan and the number of loan shares (and the associated loan amount) to be acquired by each
participant will be determined by the Board.
(iii) Offer bonus
On 17 April 2014, following the successful listing of the Company on the Australian Securities Exchange, a number of employees of the Group
received a one-off offer bonus in recognition of their contribution to the IPO. The offer bonus was delivered partly as a cash payment in the
period ended 30 June 2014, and partly as performance rights under the Company’s Rights Plan. A total of 745,300 rights were issued, of
which 671,100 of these rights vested on 18 April 2016 under the terms of the issue. The remaining 74,200 did not vest and were cancelled.
The vesting rights were converted into an equivalent number of ordinary shares in the Company, which were acquired by the trustee of the
48 Japara Healthcare Annual Report 2016
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