SINGAPORE WINDSOR HOLDINGS LIMITED
| Annual Report 2015
40
Year ended 31 March 2015
NOTES TO THE
FINANCIAL STATEMENTS
2.
Summary of significant accounting policies (cont’d)
Basis of preparation of the financial statements
The preparation of financial statements in conformity with generally accepted accounting principles requires the
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting year. Actual results could differ from those estimates. The estimates
and assumptions are reviewed on an ongoing basis. Apart from those involving estimations, management has
made judgements in the process of applying the entity’s accounting policies. The areas requiring management’s
most difficult, subjective or complex judgements, or areas where assumptions and estimates are significant to the
financial statements, are disclosed at the end of this footnote, where applicable.
Revenue recognition
The revenue amount is the fair value of the consideration received or receivable from the gross inflow of economic
benefits during the reporting year arising from the course of the ordinary activities of the entity and it is shown
net of related sales taxes and rebates. Revenue from the sale of goods is recognised when significant risks and
rewards of ownership are transferred to the buyer, there is neither continuing managerial involvement to the degree
usually associated with ownership nor effective control over the goods sold, and the amount of revenue and the
costs incurred or to be incurred in respect of the transaction can be measured reliably. Revenue from rendering of
services that are of short duration is recognised when the services are completed. Rental revenue is recognised on
a time-proportion basis that takes into account the effective yield on the asset on a straight-line basis over the lease
term. Interest is recognised using the effective interest method. Dividends from equity instrument are recognised as
income when the entity’s right to receive payment is established.
Employee benefits
Certain subsidiaries operate defined contribution retirement benefit plans in which employees are entitled to
join upon fulfilling certain conditions. The assets of the fund are held separately from those of the entity in an
independently administered fund. The entity contributes an amount equal to a fixed percentage of the salary of
each participating employee. Contributions are charged to profit or loss in the period to which they relate. This
plan is in addition to the contributions to government managed retirement benefit plans such as the Central
Provident Fund in Singapore which specifies the employer’s obligations which are dealt with as defined contribution
retirement benefit plans. For employee leave entitlement the expected cost of short-term employee benefits in
the form of compensated absences is recognised in the case of accumulating compensated absences, when the
employees render service that increases their entitlement to future compensated absences; and in the case of non-
accumulating compensated absences, when the absences occur. A liability for bonuses is recognised where the
entity is contractually obliged or where there is constructive obligation based on past practice.
Pursuant to the relevant regulations of the People’s Republic of China (“PRC”) government, the subsidiaries in the
PRC have participated in a local municipal government retirement benefits scheme (the “Scheme”), whereby the
subsidiaries in the PRC are required to contribute to a certain percentage to the basic salaries of its employees to
the Scheme to fund their retirement benefits. The local municipal government undertakes to assume the retirement
benefits obligations of those employees of the Group.
