Frontken Corporation Berhad 200401012517 (651020-T) • ANNUAL REPORT 2022 93 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) Employee Benefits (Cont’d) (iii) Defined Benefit Plans (Cont’d) The Group determines the net interest expense or income on the net defined liability or asset for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual reporting period to the then net defined benefit liability or asset, taking into account any changes in the net defined benefit liability or asset during the period as a result of contributions and benefit payments. The net interest expense or income is recognised in profit or loss under the staff costs. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income and will not be reclassified to profit or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains or losses on the settlement of a defined benefit plan when the settlement occurs. (iv) Share-based Payment Transactions The Group operates an equity-settled share-based compensation plan, under which the Group receives services from employees as consideration for equity instruments of the Company (known as “share grant plan”). At grant date, the fair value of the share grant plan is recognised as an expense on a straight-line method, based on the Group’s estimate of equity instruments that will vest immediately, with a corresponding credit to share grant plan reserve in equity. The amount recognised as an expense is adjusted to reflect the actual number of the share grant plan that are expected to vest. Service and non-market performance conditions attached to the transaction are not taken into account in determining the fair value. In the Company’s separate financial statements, the grant of the share grant plan to the subsidiaries’ employees is not recognised as an expense. Instead, the fair value of the share grant plan measured at the grant date is accounted for as an increase to the investment in subsidiary undertaking with a corresponding credit to the share grant plan reserve. When the share grant plan are transferred, the share grant plan reserve is transferred to share capital if new ordinary shares are issued, or to treasury shares if the share grant plan are satisfied by the reissuance of treasury shares. Any recharge for the share grant plan granted to a subsidiary’s employees is to be offset against the investments in subsidiaries in the Company’s separate financial statements with any excess goes to profit or loss as a distribution from the subsidiary.
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