China Communications Services Corporation Limited Annual Report 2015
146
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
37. 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 18% to 22% (2014: 18% to 22%) of the salaries, bonuses
and certain allowances of the employees.
The Group has no other material obligation for the payment of pension benefits associated with these schemes beyond the
annual contributions described above.
38. SHARE APPRECIATION RIGHTS SCHEME
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 April 2007, the Company’s remuneration committee approved the granting of 38.3 million share appreciation right units
to eligible employees (first batch of first phase 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 HKD4.92 per unit.
In April 2009, the Company’s remuneration committee approved the granting of 49.8 million share appreciation right units
to eligible employees (second batch of first phase 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 HKD4.53 per unit.
In August 2011, the Company’s remuneration committee approved the granting of share appreciation right units to new
eligible employees (second batch of first phase 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.
In January 2012, the Company’s remuneration committee approved the granting of 198.3 million share appreciation right
units to eligible employees (the second phase share appreciation rights). Under the terms of this grant, all share
appreciation rights have a contractual life of five years from date of grant and an exercise price of HKD3.41 per unit.
A recipient of share appreciation rights cannot 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
cannot in aggregate exceed one-third, two-thirds and 100%, respectively, of the total share appreciation rights granted to
such person.
