Year ended 31 March 2016
NOTES TO THE
FINANCIAL STATEMENTS
SINGAPORE MYANMAR INVESTCO LIMITED
| Annual Report 2016
48
3.
Significant accounting policies and other explanatory information
3A. Significant accounting policies
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 income, including income arising from other financial instruments, is recognised using the effective
interest method.
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.
Borrowing costs
Borrowing costs are interest and other costs incurred in connection with the borrowing of funds. Interest
expense is calculated using the effective interest rate method. Borrowing costs are recognised as an
expense in the period in which they are incurred except that borrowing costs that are directly attributable
to the acquisition, construction or production of a qualifying asset that necessarily take a substantial
period of time to get ready for their intended use or sale are capitalised as part of the cost of that asset
until substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are
complete.
