Basic HTML Version
Notes To The Consolidated Financial Statements
(Expressed in Renminbi)
1
/ China Communications Services Corporation Limited
39 Retirement benefit obligations
In accordance with the labour regulations of the PRC, the Group participates in various defined contribution
retirement schemes organised by the municipal and provincial governments for its employees. The Group is
required to make contributions to the retirement schemes at rates ranging from 20% to 22% (2010: 18% to
22%) of the salaries, bonuses and certain allowances of the employees. A member of the scheme is entitled
to a pension equal to a fixed proportion of the salary prevailing at his or her retirement date.
The Group has no other material obligation for the payment of pension benefits associated with these
schemes beyond the annual contributions described above.
40 Share appreciation rights schemes
The Group implemented a share appreciation rights scheme for members of its management to provide
incentives to them. Under this plan, share appreciation rights are granted in units with each unit representing
one H share. No shares will be issued under the share appreciation rights scheme. Upon exercise of the
share appreciation rights, a recipient will receive, subject to any applicable withholding tax, a cash payment in
RMB, translated from the Hong Kong dollars amount equal to the product of the number of share appreciation
rights exercised and the difference between the exercise price and market price of the Company’s H shares
at the date of exercise based on the applicable exchange rate between RMB and Hong Kong dollars at the
date of the exercise. The Company recognises compensation expense of the share appreciation rights over
the applicable vesting period.
In Apri l 2007, the Company’s remuneration committee approved the granting of 38.3 mi l l ion share
appreciation right units to eligible employees (first batch of share appreciation rights). Under the terms of this
grant, all share appreciation rights had a contractual life of seven years from date of grant and an exercise
price of HK$4.92 per unit. A recipient of share appreciation rights may not exercise the rights in the first 24
months after the date of grant. As at each of the third, fourth and fifth anniversary of the date of grant, the
total number of share appreciation rights exercisable may not in aggregate exceed one-third, two-third and
100%, respectively, of the total share appreciation rights granted to such person.
In Apri l 2009, the Company’s remuneration committee approved the granting of 49.8 mi l l ion share
appreciation right units to eligible employees (second batch of share appreciation rights). Under the terms of
this grant, all share appreciation rights had a contractual life of five years from date of grant and an exercise
price of HK$4.53 per unit. A recipient of share appreciation rights may not exercise the rights in the first 24
months after the date of grant. As at each of the third, fourth and fifth anniversary of the date of grant, the
total number of share appreciation rights exercisable may not in aggregate exceed one-third, two-third and
100%, respectively, of the total share appreciation rights granted to such person.
In August 2011, the Company approved the granting of share appreciation right units to new eligible
employees (second batch of share appreciation rights). Under the terms of this grant, 22.6 million share
appreciation right units were granted to the employees who became eligible of this incentive plan since April
2009.
During the year ended 31 December 2011, RMB63 million was credited (2010: RMB63 million charged) to
the consolidated income statement arising from the fair value remeasurement of the accrued compensation
liability at the balance sheet date. The first and second batch of share appreciation rights have not been fully
granted to each eligible employee. As such, compensation expense of the share appreciation rights over the
applicable vesting period recognised has not been fully allocated to each eligible employees.