Cover

Cover
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XYZ Holdings (Singapore) Limited
Preface

About this publication
This publication includes the following components:
XYZ Holdings (Singapore) Limited Illustrative report on directors report, statement
by directors and financial statements
Appendix A Additional illustrative disclosures
Appendix B Comparison between Singapore Financial Reporting Standards and
International Financial Reporting Standards
The illustrative financial statements are an illustration of the annual financial statements of a
Singapore-incorporated listed company, XYZ Holdings (Singapore) Limited, prepared in
accordance with:
Singapore Financial Reporting Standards
The Singapore Companies Act, Cap. 50.
The illustrative financial statements serve to provide illustration of annual consolidated
financial statements of a group of companies whose activities include manufacturing,
property development and investment holding. The disclosures contained in these illustrative
financial statements are made based on a hypothetical group of entities and certain
assumptions have been made about the applicability of the disclosures required by Singapore
Financial Reporting Standards. In addition to the aforementioned standards and regulation,
certain disclosure requirements of the Singapore Exchange Securities Trading Limiteds
(SGX-ST) Listing Manual have also been included in these illustrative financial statements.
Readers should note that the disclosure requirements of the SGX-ST may be included in other
parts of the entitys annual report instead.
This 2012 edition includes illustrative disclosures for the amendments to FRS 12 Deferred
Tax: Recovery of Underlying Assets and amendments to FRS 107: Disclosures Transfers of
Financial Assets. Also included are additional illustrative disclosures for the early adoption of
amendments to FRS 1 Presentation of Other Comprehensive Income, Revised FRS 19
Employee Benefits, FRS 110 Consolidated Financial Statements, FRS 111 Joint Arrangements,
FRS 112 Disclosure of Interests in Other Entities and FRS 113 Fair Value Measurement.
To provide the user with insight of changes in this publication as compared to the 2011
edition, we have sidelined the new illustrations, disclosure requirements and other editorial
changes in this manner.
Important notices
This publication is intended as an illustrative guide rather than a definitive
statement.
While the illustrative financial statements contain most of the usual disclosures
typically found in the financial statements of a group of companies whose activities
include manufacturing, property development and investment holding, the
disclosures and commentaries in this publication are not meant to be exhaustive.
Reference should be made to the relevant standards and regulations for specific
disclosure requirements.
This publication should not be relied upon as a substitute for seeking professional
advice concerning the appropriate accounting treatment for specific individual
situations or ensuring compliance with the Singapore Financial Reporting Standards
and/or Singapore Companies Act, Cap. 50.

Preface

Singapore Financial Reporting Standards (FRS)
For financial periods beginning on or after 1 January 2012, a number of new and revised
FRSs apply.
A list of the FRSs and INT FRS is provided in Appendix B, which also provides a brief summary
of the major differences with International Financial Reporting Standards (IFRS).
This publication reflects the requirements of the FRSs as at 31 August 2012. No new
accounting standards that would be applicable to financial statements covering periods
beginning on 1 January 2012 are expected. Nevertheless, the situation needs to be
monitored for any developments that may affect 2012 financial statements.
The following FRSs have not been dealt with in this publication:
FRS 26 Accounting and Reporting by Retirement Benefit Plans
FRS 29 Financial Reporting in Hyperinflationary Economies
FRS 34 Interim Financial Reporting
FRS 41 Agriculture
FRS 101 First-time Adoption of Financial Reporting Standards
FRS 104 Insurance Contracts
FRS 106 Exploration for and Evaluation of Mineral Resources
INT FRS 112 Service Concession Arrangements
INT FRS 113 Customer Loyalty Programmes
INT FRS 117 Distributions of Non-Cash Assets to Owners
INT FRS 118 Transfer of Assets from Customers
INT FRS 120 Stripping Costs in the Production of a Surface Mine
The following exposure drafts (ED) and Draft Interpretations (DI) are outstanding on the date
of this publication:
Proposed Amendments to FRS 37 Provisions, Contingent Liabilities and Contingent
Assets
Proposed Amendments to FRS 33 Simplifying Earnings Per Share
Proposed Amendments to FRS 105 Discontinued Operations
Proposed Amendments to FRS 107 Investments in Debt Instruments
ED Rate-regulated Activities
ED Financial Instruments: Amortised Cost and Impairment
ED Measurement Liabilities in IAS 37
ED Conceptual Framework for Financial Reporting The Reporting Entity
ED Revenue from Contracts with Customers
ED Insurance Contracts
ED Leases
ED Improvements to IFRSs 2010 2012 cycle
DI Levies Charged by Public Authorities on Entities that Operate in a Specific Market
DI Put Options Written on Non-Controlling Interests

Preface

Singapore Financial Reporting Standards (FRS) (continued)
Abbreviations
The following abbreviations are used in this publication:
BC Basis for Conclusions
CA Singapore Companies Act, Cap. 50
FRS Singapore Financial Reporting Standards
INT FRS Interpretations of FRSs
FRS AG FRS Application Guidance
FRS IG FRS Implementation Guidance
IAS International Accounting Standards
IFRS International Financial Reporting Standards
SSA Singapore Standards on Auditing
SGX Singapore Exchange Securities Trading Limited (SGX-ST)s Listing Manual

Contents
Page

General information .............................................................................................................. 1
Directors report ................................................................................................................... 2
Statement by directors .......................................................................................................... 7
Independent auditors report ............................................................................................... . 8
Consolidated income statement ........................................................................................... 10
Consolidated statement of comprehensive income ................................................................ 11
Balance sheets ................................................................................................... 16
Statement of changes in equity ............................................................................................ 18
Consolidated cash flow statement ........................................................................................ 26
Notes to the financial statements
1. Corporate information ................................................................................................. 30
2. Summary of significant accounting policies .................................................................... 30
2.1 Basis of preparation ........................................................................................... 30
2.2 Changes in accounting policies ............................................................................ 32
2.3 Standards issued but not yet effective ............................................................... 34
2.4 Basis of consolidation and business combinations ................................................. 39
2.5 Transactions with non-controlling interests .......................................................... 44
2.6 Foreign currency................................................................................................ 44
2.7 Property, plant and equipment ............................................................................ 45
2.8 Investment properties ........................................................................................ 47
2.9 Intangible assets ................................................................................................ 49
2.10 Land use rights .................................................................................................. 51
2.11 Impairment of non-financial assets ...................................................................... 52
2.12 Subsidiaries ....................................................................................................... 53
2.13 Associates ......................................................................................................... 53
2.14 Joint venture ..................................................................................................... 55
2.15 Financial assets ................................................................................................. 56
2.16 Impairment of financial assets ............................................................................. 60
2.17 Cash and cash equivalents .................................................................................. 62
2.18 Construction contracts ....................................................................................... 62
2.19 Development properties ..................................................................................... 64
2.20 Inventories ........................................................................................................ 65
2.21 Provisions ......................................................................................................... 65
2.22 Government grants ............................................................................................ 67
2.23 Financial liabilities .............................................................................................. 68
2.24 Financial guarantee ............................................................................................ 69
2.25 Borrowing costs ................................................................................................. 69
2.26 Convertible redeemable preference shares .......................................................... 70
Contents
Page

Notes to the financial statements (continued)
2.27 Employee benefits ............................................................................................. 71
2.28 Leases .............................................................................................................. 75
2.29 Non-current assets held for sale and discontinued operations ................................ 76
2.30 Revenue ............................................................................................................ 76
2.31 Taxes ................................................................................................................ 77
2.32 Segment reporting ............................................................................................. 79
2.33 Share capital and share issuance expenses .......................................................... 80
2.34 Treasury shares ................................................................................................. 80
2.35 Contingencies .................................................................................................... 80
2.36 Related parties .................................................................................................. 81
3. Significant accounting judgments and estimates ............................................................ 82
3.1 Judgments made in applying accounting policies .................................................. 82
3.2 Key sources of estimation uncertainty ................................................................. 84
4. Revenue ............ ........................................................................................................ 89
5. Interest income ........................................................................................................... 89
6. Other income .............................................................................................................. 89
7. Finance costs .............................................................................................................. 90
8. Other expenses ........................................................................................................... 90
9. Profit before tax from continuing operations ................................................................. 91
10. Income tax expense ..................................................................................................... 93
11. Discontinued operation and disposal group classified as held for sale ............................... 96
12. Earnings/loss per share ............................................................................................... 99
13. Property, plant and equipment ................................................................................... 101
14. Investment properties ................................................................................................ 105
15. Intangible assets........................................................................................................ 108
16. Land use rights .......................................................................................................... 112
17. Investment in subsidiaries .......................................................................................... 113
18. Investment in associates ............................................................................................ 119
19. Investment in joint venture ......................................................................................... 122
20. Deferred tax .............................................................................................................. 123
21. Trade and other receivables ....................................................................................... 125
22. Investment securities ................................................................................................. 129
23. Gross amount due from/(to) customers for contract work-in-progress ........................... 130
24. Development property ............................................................................................... 131
25. Inventories .... ........................................................................................ 132
26. Derivatives ................................................................................................................ 133
27. Cash and short-term deposits ..................................................................................... 134
Contents
Page

Notes to the financial statements (continued)
28. Provisions ................................................................................................................. 135
29. Deferred capital grants .............................................................................................. 136
30. Loans and borrowings ................................................................................................ 137
31. Trade and other payables ........................................................................................... 140
32. Other liabilities .......................................................................................................... 141
33. Share capital and treasury shares ............................................................................... 143
34. Other reserves ........................................................................................................... 145
35. Employee benefits ...................................................................................................... 146
36. Related party transactions ......................................................................................... 149
37. Commitments ............................................................................................................ 152
38. Contingencies ............................................................................................................ 155
39. Fair value of financial instruments .............................................................................. 156
40. Financial risk management objectives and policies ........................................................ 167
41. Capital management .................................................................................................. 181
42. Segment information ................................................................................................. 183
43. Dividends .................................................................................................................. 188
44. Events occurring after the reporting period ................................................................. 189
45. Authorisation of financial statements for issue ............................................................. 189

Appendices
Appendix A-1 Consolidated statement of comprehensive income in one statement
Illustrating the analysis of expense by nature and early adoption of amendments
to FRS 1 ..................................................................................................... 190
Appendix A-2 Defined benefit plan .................................................................................... 193
Appendix A-3 Agreements for the construction of real estate ............................................. 200
Appendix A-4 Employee benefits (revisions to FRS 19) .......................................................... 203
Appendix A-5 Consolidated financial statements, joint arrangements and disclosure of
interests in other entities............................................................................. 217
Appendix A-6 Fair value measurement............................................................................... 252
Appendix B Comparison between FRS and IFRS ............................................................... 270

Co. Reg. No 123456789Z

and its subsidiaries
Illustrative financial statements
for the financial year ended 31 December 2012

The names of people and corporations included as illustrations are fictitious. Any resemblance to
any person or business is purely coincidental.
XYZ Holdings (Singapore) Limited and its subsidiaries
General information

XYZ Holdings (Singapore) Limited 1
General information
Directors
Ang Beng Choo Chairman
De Silva Elizabeth Frances Chief Executive Officer
Goh Hock Inn
Jee Kim Leng
Musa Nasir Osman
Pek Que Ru
See Tong Tong

Company secretary
Lee Yiew Hong

Registered office
[Address, telephone number, facsimile number and electronic mail address (if any)]

Solicitors
Laura & Co. LLP

Bankers
Good Bank Limited
South Bank Limited
CPA Bank Limited

Share registrar
[Address]

Auditors
Ernst & Young LLP
One Raffles Quay
North Tower, Level 18
Singapore 048583
Partner in charge: Alex Yang (Date of appointment: since financial year ended 31 December
2011)

SGX 1207.1

SGX 1207.2

SGX 1207.3

SGX 713.1
Directors report

Directors report
The directors are pleased to present their report to the members together with the audited
consolidated financial statements of XYZ Holdings (Singapore) Limited (the Company) and its
subsidiaries (collectively, the Group) and the balance sheet and statement of changes in equity
of the Company for the financial year ended 31 December 2012.

1. Directors
The directors of the Company in office at the date of this report are:
Ang Beng Choo
De Silva Elizabeth Frances (appointed on 2 February 2012)
Goh Hock Inn
Jee Kim Leng
Musa Nasir Osman
Pek Que Ru
See Tong Tong
In accordance with Articles 93 and 94 of the Companys Articles of Association, Jee Kim
Leng, Pek Que Ru and See Tong Tong retire and, being eligible, offer themselves for re-
election.

2. Arrangements to enable directors to acquire shares and debentures
Except as described in paragraph five below, neither at the end of nor at any time during
the financial year was the Company a party to any arrangement whose objects are, or one
of whose objects is, to enable the directors of the Company to acquire benefits by means
of the acquisition of shares or debentures of the Company or any other body corporate.

3. Directors interests in shares and debentures
The following directors, who held office at the end of the financial year, had, according to
the register of directors shareholdings required to be kept under section 164 of the
Singapore Companies Act, Cap. 50, an interest in shares and share options of the
Company and related corporations (other than wholly-owned subsidiaries) as stated
below:

Direct interest Deemed interest
Name of director
At the
beginning of
financial year
or date of
appointment
At the end of
financial year
At the
beginning of
financial year
or date of
appointment
At the end of
financial year

Ordinary shares of the Company

Goh Hock Inn
340,000 345,000 2,100,000 2,100,000
De Silva Elizabeth Frances
5,000 10,000
Share options of the Company

Goh Hock Inn
50,000 60,000
43,000 60,000

CA 201.6A

CA 201.5

CA 201.6A.a
CA 201.6.a

CA 201.6A.g
CA 201.6.f

CA 201.6A.h
CA 201.6.g

Directors report

3. Directors interests in shares and debentures (continued)

Direct interest Deemed interest
Name of director
At the
beginning of
financial year
or date of
appointment
At the end of
financial year
At the
beginning of
financial year
or date of
appointment
At the end of
financial year
Ordinary shares of 1 each of the
holding company (Good Group
(International) Ltd)

Goh Hock Inn
10,000 10,000
25,000 25,000

There was no change in any of the above-mentioned interests in the Company between
the end of the financial year and 21 January 2013.
Except as disclosed in this report, no director who held office at the end of the financial
year had interests in shares, share options, warrants or debentures of the Company, or of
related corporations, either at the beginning of the financial year, or date of appointment
if later, or at the end of the financial year.

4. Directors contractual benefits
Except as disclosed in the financial statements, since the end of the previous financial
year, no director of the Company has received or become entitled to receive a benefit by
reason of a contract made by the Company or a related corporation with the director, or
with a firm of which the director is a member, or with a company in which the director has
a substantial financial interest.

5. Options
At an Extraordinary General Meeting held on 23 December 2007, shareholders approved
the Senior Executive Option Plan and the General Employee Share Option Plan for the
granting of non-transferable options that are settled by physical delivery of the ordinary
shares of the Company, to eligible senior executives and employees respectively.
The committee administering the employee share option plans comprise three directors,
Musa Nasir Osman, Pek Que Ru and See Tong Tong.
During the financial year:
The Company has granted 37,000 share options under the Senior Executive Option
Plan. These options expire on 30 June 2017 and are exercisable if and when the
Groups earnings per share amount increases by 12% within three years from the date
of grant.
The Company has also granted 163,000 share options under the General Employee
Share Option Plan. These options expire on 30 June 2017 and are exercisable if the
employee remains in service for three years from the date of grant and that certain
market conditions as detailed in Note 35 to the financial statements are met.
75,000 treasury shares were reissued at a weighted average exercise price of S$1.08
each, upon the exercise of options granted pursuant to the employee share option
plans.

SGX 1207.7

CA 201.8

CA 201.11.b and
11B

SGX 853

SGX 852.1.a

CA 201.11.b-d

CA 201.11.b-d

CA 201.12.a

Directors report

5. Options (continued)
Details of all the options to subscribe for ordinary shares of the Company pursuant to the
employee share option plans as at 31 December 2012 are as follows:
Expiry date Exercise price (S$) Number of options
31 December 2013 1.05 45,000
30 November 2014 1.18 55,000
1 January 2015 1.22 100,000
31 December 2016 1.26 125,000
30 June 2017 1.30 200,000
Total 525,000

Details of the options to subscribe for ordinary shares of the Company granted to
directors of the Company pursuant to the Senior Executive Option Plan are as follows:
Name of director
Options
granted
during
financial
year
Aggregate
options granted
since
commencement
of plan to end of
financial year
Aggregate options
exercised since
commencement of
plan to end of
financial year
Aggregate
options
outstanding as
at end of
financial year
Goh Hock Inn
15,000 105,000 (35,000) 60,000
22,000 75,000 (15,000) 60,000
Total 37,000
1
180,000 (50,000) 120,000
1
These options are exercisable between the periods from 30 June 2015 to 30 June 2017
at the exercise price of S$1.30 if the vesting conditions are met.

Since the commencement of the employee share option plans till the end of the financial
year:
No options have been granted to the controlling shareholders of the Company and their
associates
No participant other than the two directors mentioned above has received 5% or more
of the total options available under the plans
No options have been granted to directors and employees of the holding company and
its subsidiaries
No options that entitle the holder to participate, by virtue of the options, in any share
issue of any other corporation have been granted
No options have been granted at a discount

CA 201.12.b

SGX 852.1.b.i

SGX 852.2

SGX 852.1.b.ii

SGX 852.1.b.iii

SGX 852.c.i

SGX 852.1.c. ii

CA 201.11

SGX 852.1.d
Directors report

6. Audit committee
The audit committee (AC) carried out its functions in accordance with section 201B (5) of
the Singapore Companies Act, Cap. 50, including the following:
Reviews the audit plans of the internal and external auditors of the Company, and
reviews the internal auditors evaluation of the adequacy of the Companys system of
internal accounting controls and the assistance given by the Companys management
to the external and internal auditors
Reviews the quarterly and annual financial statements and the auditors report on the
annual financial statements of the Company before their submission to the board of
directors
Reviews effectiveness of the Companys material internal controls, including financial,
operational and compliance controls and risk management via reviews carried out by
the internal auditors
Meets with the external auditors, other committees, and management in separate
executive sessions to discuss any matters that these groups believe should be
discussed privately with the AC
Reviews legal and regulatory matters that may have a material impact on the financial
statements, related compliance policies and programmes and any reports received
from regulators
Reviews the cost effectiveness and the independence and objectivity of the external
auditors
Reviews the nature and extent of non-audit services provided by the external auditors
Recommends to the board of directors the external auditors to be nominated, approves
the compensation of the external auditors, and reviews the scope and results of the
audit
Reports actions and minutes of the AC to the board of directors with such
recommendations as the AC considers appropriate
Reviews interested person transactions in accordance with the requirements of the
Singapore Exchange Securities Trading Limiteds Listing Manual
The AC, having reviewed all non-audit services provided by the external auditors to the
Group, is satisfied that the nature and extent of such services would not affect the
independence of the external auditors. The AC has also conducted a review of interested
person transactions.
The AC convened four meetings during the year with full attendance from all members,
except for one where a member was absent. The AC has also met with internal and
external auditors, without the presence of the Companys management, at least once a
year.
Further details regarding the AC are disclosed in the Report on Corporate Governance.

CA 201B.9

SGX 1207.6.b

Directors report

7. Auditor
Ernst & Young LLP have expressed their willingness to accept reappointment as auditor.

On behalf of the board of directors:

____________________________ ___________________________
Ang Beng Choo De Silva Elizabeth Frances
Director Director
27 February 2013

Commentary:
Section 201B (5) of the Companies Act requires a description of the nature and extent of the
functions performed by the audit committee pursuant to section 201B (5). If the nature and
extent of the functions are described in the Report on Corporate Governance and the Directors
Report makes reference to the Report on Corporate Governance instead, the directors must
ensure that the Report on Corporate Governance describes the functions pursuant to section
201B (5) of the Companies Act.

CA 201.5

CA 201B.5

Statement by directors

Statement by directors
We, Ang Beng Choo and De Silva Elizabeth Frances, being two of the directors of XYZ Holdings
(Singapore) Limited, do hereby state that, in the opinion of the directors,
(i) the accompanying balance sheets , consolidated income statement , consolidated
statement of comprehensive income, statements of changes in equity, and consolidated
cash flow statement together with notes thereto are drawn up so as to give a true and
fair view of the state of affairs of the Group and of the Company as at 31 December
2012 and the results of the business, changes in equity and cash flows of the Group and
the changes in equity of the Company for the year ended on that date, and
(ii) at the date of this statement, there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they fall due.

On behalf of the board of directors:

___________________________ ___________________________
Ang Beng Choo De Silva Elizabeth Frances
Director Director
27 February 2013

Commentary:
FRS 1 uses the terms statement of financial position and statement of cash flows. However, an
entity is not obliged to use these terminologies.
In this illustration, the Group has chosen to use the terms balance sheet and cash flow statement.
If an entity has chosen to use the terms introduced by FRS 1, the entity should make reference to
the new terms used in its financial statements.
In this illustration, the Group has chosen to present its comprehensive income in two linked
statements. If an entity has chosen to present its comprehensive income in one single statement,
the reference to consolidated income statement should be removed.
Presentation of the statement of changes in equity for the Company when consolidated financial
statements are presented is optional. In this illustration, the Company has chosen to present the
statement of changes in equity for the Company together with the consolidated financial
statements and balance sheet of the Company. Accordingly, the statement by directors includes
the directors opinion on whether the statement of changes in equity is drawn up so as to give a
true and fair view of the changes in equity of the Company. This applies to the auditors opinion
expressed in the auditors report as well.

CA 201.15.a
CA 201.15.b

CA 201.15.c

FRS 1.10
Independent auditors report
For the financial year ended 31 December 2012

Independent Auditors Report to the Members of XYZ Holdings (Singapore) Limited

Report on the Financial Statements
We have audited the accompanying financial statements of XYZ Holdings (Singapore) Limited (the
Company) and its subsidiaries (, the Group) set out on pages 10 to 189, which comprise the balance
sheets of the Group and the Company as at 31 December 2012, the statements of changes in equity of
the Group and the Company and the consolidated income statement , consolidated statement of
comprehensive income and consolidated cash flow statement of the Group for the year then ended, and
a summary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore
Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls
sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised
use or disposition; and transactions are properly authorised and that they are recorded as necessary to
permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain
accountability of assets.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted
our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the entitys preparation of
financial statements that give a true and fair view in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the consolidated financial statements of the Group and the balance sheet and statement
of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act
and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the
Group and of the Company as at 31 December 2012 and the results, changes in equity and cash flows of
the Group and the changes in equity of the Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company and by
those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in
accordance with the provisions of the Act.

___________________________
Ernst & Young LLP
Public Accountants and
Certified Public Accountants
Singapore
27 February 2013

SSA 700.22,
CA 207.1

SSA 700.39

SSA 700.23

SSA 700.25

SSA 700.26

SSA 700.28

SSA 700.29 and
30

SSA 700.31

SSA 700.33

SSA 700.34

SSA 700.35
CA 207.2.a

SSA 700.38

CA 207.2.b

SSA 700.40

SSA 700.42

SSA 700.41


Commentary:
Please refer to commentary no. 1 of the statement by directors.

Consolidated income statement

(Illustrating the analysis of expenses by function)

Note
2012

$000
2011
(Restated)
$000 FRS 1.81.b and 103
Continuing operations

Revenue 4 136,720 142,571 FRS 1.82.a and 103
Cost of sales (104,271) (111,820) FRS 1.103
Gross profit 32,449 30,751 FRS 1.103

Other items of income FRS 1.103
Interest income 5 430 327 FRS 18.35.b.iii
Dividend income from investment securities

526 406 FRS 18.35.b.v
Other income 6 1,725 1,085

Other items of expense
Marketing and distribution (4,895) (4,195) FRS 1.103
Research and development

(320) (327) FRS 1.103, FRS 38.126
Administrative expenses (20,329) (19,023) FRS 1.103
Finance costs 7 (1,715) (1,512) FRS 1.82.b
Other expenses 8 (1,471) (724) FRS 1.103

Share of results of associates

657 328 FRS 1.82.c, FRS 28.38
Profit before tax from continuing operations 9 7,057 7,116 FRS 1.85
Income tax expense 10 (1,557) (1,687) FRS 1.82.d, FRS 12.77
Profit from continuing operations, net of tax 5,500 5,429 FRS 1.85

Discontinued operation

Loss from discontinued operation, net of tax 11 (544) (188)
FRS 1.82.e, FRS 105.33.a
& 33A

Profit for the year 4,956 5,241 FRS 1.82.f

Attributable to:
Owners of the Company
Profit from continuing operations, net of tax 5,320 5,029 FRS 105.33.d
Loss from discontinued operation, net of tax (544) (188) FRS 105.33.d
Profit for the year attributable to owners of the Company 4,776 4,841 FRS 1.83.a.ii

Non-controlling interests
Profit from continuing operations, net of tax 180 400
Loss from discontinued operation, net of tax
Profit for the year attributable to non-controlling interests 180 400 FRS 1.83.a.i

Earnings per share from continuing operations attributable
to owners of the Company (cents per share)
Basic 12(a) 22.98 21.81 FRS 33.66 and 67A
Diluted 12(a) 22.73 21.58 FRS 33.66 and 67A

Earnings per share (cents per share)
Basic 12(b) 20.63 21.00 FRS 33.66 and 67A
Diluted 12(b) 20.17 20.53 FRS 33.66 and 67A
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Consolidated statement of comprehensive income


2012
$000
2011
(Restated)
$000
Profit for the year 4,956 5,241 FRS 1.82.f
Other comprehensive income:
Net gain on fair value changes of available-for-sale financial
assets 174 98 FRS 1.82.g
Net surplus on revaluation of freehold land and buildings 1,250 2,404
FRS 1.82.g,
FRS 16.77.f
Foreign currency translation (181) (82)
FRS 1.82.g,
FRS 21.52.b
Share of gain on property revaluation of associates 62 10
FRS 1.82.h,
FRS 28.39
Other comprehensive income for the year, net of tax 1,305 2,430

Total comprehensive income for the year 6,261 7,671 FRS 1.82.i

Attributable to:
Owners of the Company 6,091 7,211 FRS 1.83.b.ii
Non-controlling interests 170 460 FRS 1.83.b.i
Total comprehensive income for the year 6,261 7,671

Attributable to:
Total comprehensive income from continuing operations,
net of tax 6,585 7,379 FRS 105.33.d
Total comprehensive income from discontinued operation,
net of tax (494) (168) FRS 105.33.d
Total comprehensive income for the year attributable to
owners of the Company 6,091 7,211


Commentary:
Complete set of financial statements
Under FRS 1, a complete set of financial statements comprises:
(a) A statement of financial position as at the end of the period*
(b) A statement of comprehensive income for the period
(c) A statement of changes in equity for the period
(d) A statement of cash flows for the period*
(e) Notes, comprising a summary of significant accounting policies and other explanatory
information
(f) A statement of financial position as at the beginning of the earliest comparative period when an
entity applies an accounting policy retrospectively or makes a retrospective restatement of
items in its financial statements, or when it reclassifies items in its financial statements**
* FRS 1 replaces the term balance sheet with statement of financial position, and cash flow
statement with statement of cash flows. However, an entity is not obliged to use these new
titles.
** In such cases, a complete set of financial statements will include three statements of financial
position and the related notes.
Presentation of statement of comprehensive income and analysis of expenses
FRS 1 requires all items of income and expenses (including those accounted for directly in equity) to
be presented in the statement of comprehensive income. This statement can be presented either as
one single statement or as two linked statements.
An entity shall present an analysis of expenses using a classification based on either the nature of
expenses or their function within the entity, whichever provides information that is reliable and more
relevant. The main consideration in choosing an appropriate analysis for disclosure purposes should
be the entitys accounting system and management reporting system.
In this illustration, the format adopted is two linked statements with analysis of expenses by their
function within the entity. An illustration of a statement of comprehensive income in a single
statement with analysis of expenses by their nature is provided in Appendix A-1 Consolidated
statement of comprehensive income in one statement illustrating the analysis of expenses by
nature and early adoption of amendments to FRS 1. Where the former format is adopted (as in the
case of this illustration), the entity shall disclose additional information on the nature of expenses,
including depreciation and amortisation as well as employee benefits expense in the notes.
In this illustration, the Group presented its comprehensive income in two linked statements. When an
entity presents two linked statements, the income statement is part of a complete set of financial
statements and shall be displayed immediately before the statement of comprehensive income.

FRS 1.10

FRS 1.10

FRS 1.10 and 39

FRS 1.81

FRS 1.99

FRS 1.104

FRS 1.12


Commentary (continued) :
Reporting of continuing and discontinued operations
The separate reporting of continuing and discontinued operations in the statement of
comprehensive income is required only where there are discontinued operations as defined by FRS
105 Non-current Assets Held for Sale and Discontinued Operations.
An entity shall re-present the disclosures required for discontinued operations for prior periods
presented in the financial statements so that the disclosures relate to all operations that have been
discontinued by the end of the reporting period for the latest period presented.
On disposal of the disposal group, the gain or loss from discontinued operation presented on the
statement of comprehensive income includes the gain or loss on disposal of the disposal group
constituting the discontinued operation.
Other additional disclosures
Additional line items, heading and subtotals should be presented on the face of the statement of
comprehensive income, when such presentation is relevant to the understanding of the entitys
financial performance.
Commentary on certain line items illustrated in the statement of comprehensive income
Interest income and dividend income
Interest income and dividend income exclude interest income and dividends respectively, from
financial assets at fair value through profit or loss. As disclosed in Note 2.15(a), XYZ Holdings
(Singapore) Limited has made a policy choice to include interest and dividend income in the net gains
or net losses on financial assets at fair value through profit or loss, instead of recognising them
separately.
Research and development
Research and development costs represent the aggregate amount of research and development
expenditure recognised as an expense during the period, including amortisation of deferred
development cost.
Share of results of associates
Share of results of associates is presented net of tax and non-controlling interests in the
associates.
Terminology used
Although FRS 1 uses the terms other comprehensive income, profit or loss and total
comprehensive income, an entity may use other terms to describe the totals as long as the meaning
is clear. For example, an entity may use the term net income to describe profit or loss.

FRS 105.30 and 33

FRS 105.34

FRS 105.33.b.iii

FRS 1.85

FRS 107 AGB5.e

FRS 38.126 and
127

FRS 1.IG6

FRS 1.8


Commentary (continued) :
Components of other comprehensive income
Other comprehensive income comprises items of income and expenses (including reclassification
adjustments) that are not recognised in profit or loss as required or permitted by other FRSs.
The components of comprehensive income include:
- Changes in revaluation surplus relating to property, plant and equipment and/or intangible
assets
- Actuarial gains and losses on defined benefit plans recognised in accordance with paragraph
93A of FRS 19 Employee Benefits
- Gains and losses arising from translating the financial statements of a foreign operation
- Gains and losses on remeasuring available-for-sale financial assets
- The effective portion of gains and losses on hedging instruments in a cash flow hedge
- Income tax relating to components of other comprehensive income
- Share of other comprehensive income (after tax) of associates and equity accounted joint
ventures
Tax effects related to each component of other comprehensive income
An entity may present components of other comprehensive income either:
(a) net of related tax effects, as illustrated in the statement of comprehensive income, or
(b) before related tax effects with one amount shown for the aggregate amount of income tax
relating to those components.
Extract of statement of comprehensive income illustrating other comprehensive income presented
at gross before related tax effects:

2012
$000
2011
$000
Net gain on fair value changes of available-for-sale financial
assets 230 120
Net surplus on revaluation of freehold land and buildings 1,506 2,868
Foreign currency translation (181) (82)
Share of gain on property revaluation of associates 75 12
Income tax relating to components of other comprehensive
income (325) (488)
Other comprehensive income for the year, net of tax 1,305 2,430
Either way, the amount of income tax relating to each component of other comprehensive income
must be disclosed either in the statement of comprehensive income or in the notes. In this
illustration, the entity has chosen to disclose the related tax effects in the Note 10 Income tax
expense.
The amendments to FRS 1 effective for annual periods beginning on or after 1 July 2012 requires
entities to group items presented in other comprehensive income on the basis of whether they are
potentially reclassifiable to profit or loss subsequently (reclassification adjustments).
For illustration of early adoption of the amendments to FRS 1, please refer to Appendix A-1
Consolidated statement of comprehensive income in one statement illustrating the analysis of
expenses by nature and early adoption of amendments to FRS 1.

FRS 1.7

FRS 1.91

FRS 1.90
FRS 12.81.ab

FRS 1A.82A


This page has been left blank intentionally.

Balance sheets
As at 31 December 2012

Balance sheets Group Company
2012
31 December
2011
(Restated)
1 January
2011
(Restated) 2012 2011
Note $'000 $'000 $000 $'000 $'000
Assets

Non-current assets
Property, plant and equipment 13 30,718 31,064 28,155 1,079 603 FRS 1.54.a
Investment properties 14 4,645 3,955 3,825 - - FRS 1.54.b
Intangible assets 15 2,419 1,333 1,368 - - FRS 1.54.c
Land use rights 16 5,811 5,733 5,730 - - FRS 1.55
Investment in subsidiaries 17 - - - 12,147 10,582 FRS 1.55
Investment in associates 18 10,595 10,321 10,125 - - FRS 1.54.e
Deferred tax assets 20 470 463 455 21 26 FRS 1.54.o and 56
Other receivables 21 2,793 2,778 2,715 16,753 17,401 FRS 1.54.h
Investment securities 22 4,608 3,106 3,630 - - FRS 1.54.d
62,059 58,753 56,003 30,000 28,612
Current assets
Gross amount due from customers for
contract work-in-progress 23 651 398

67 - - FRS 11.42.a
Development property 24 2,900 2,650 2,450 - - FRS 1.54.g
Inventories 25 24,020 24,400 25,300 - - FRS 1.54.g
Prepaid operating expenses 122 250 312 53 122 FRS 1.55
Trade and other receivables 21 25,921 26,936 23,465 338 350 FRS 1.54.h
Investment securities 22 1,512 1,260 1,150 - - FRS 1.54.d
Derivatives 26 170 105 95 - - FRS 1.54.d
Cash and short-term deposits 27 6,117 4,858 3,668 4,621 4,145 FRS 1.54.i
61,413 60,857 56,507 5,012 4,617
Assets of disposal group classified as held for
sale 11 2,270 -

- 2,300 -
FRS 1.54.j,
FRS 105.38
63,683 60,857 56,507 7,312 4,617

Total assets 125,742 119,610 112,510 37,312 33,229

Equity and liabilities

Current liabilities
Provisions 28 801 295 156 - - FRS 1.54.l
Deferred capital grants 29 300 210 150 - - FRS 20.24
Income tax payable 2,927 6,734 6,362 1,447 2,115 FRS 1.54.n
Loans and borrowings 30 1,189 2,290 2,350 - - FRS 1.54.m
Gross amount due to customers for contract
work-in-progress 23 358 586

942 - - FRS 11.42.b
Trade and other payables 31 17,517 19,140 18,366 470 414 FRS 1.54.k
Other liabilities 32 3,659 2,579 3,067 1,166 446 FRS 1.54.m
Derivatives 26 22 - - - - FRS 1.54.m
26,773 31,834 31,393 3,083 2,975
Liabilities directly associated with disposal
group classified as held for sale 11 3,071 -

- - -
FRS 1.54.p,
FRS 105.38
29,844 31,834 31,393 3,083 2,975

Net current assets 33,839 29,023 25,114 4,229 1,642

Non-current liabilities
Provisions 28 1,525 1,841 1,898 - - FRS 1.54.l
Deferred capital grants 29 3,488 1,754 954 - - FRS 20.24
Deferred tax liabilities 20 2,273 1,904 1,517 226 231 FRS 1.54.o and 56
Loans and borrowings 30 13,660 13,428 14,290 5,750 5,628 FRS 1.54.m
Other payables 31 200 - - - - FRS 1.54.k
21,146 18,927 18,659 5,976 5,859

Total liabilities 50,990 50,761 50,052 9,059 8,834

Net assets 74,752 68,849 62,458 28,253 24,395

Equity attributable to owners of the Company
Share capital 33(a) 11,090 9,665 9,510 11,090 9,665 FRS 1.54.r
Treasury shares 33(b) (159) - - (159) - FRS 1.54.r
Retained earnings 54,657 51,627 48,477 16,700 14,309 FRS 1.54.r
Other reserves 7,058 5,657 3,031 622 421 FRS 1.54.r
Reserve of disposal group classified as held
for sale 11 128 -

- - - FRS 105.38
72,774 66,949 61,018 28,253 24,395
Non-controlling interests 1,978 1,900 1,440 - - FRS 1.54.q
Total equity 74,752 68,849 62,458 28,253 24,395

Total equity and liabilities 125,742 119,610 112,510 37,312 33,229
Balance sheets
As at 31 December 2012

Commentary:
Complete set of financial statements
Please refer to commentary no. 1 of the consolidated statement of comprehensive income.
An entity shall disclose the amount expected to be recovered or settled after more than twelve
months for each asset and liability line item that combines amounts expected to be recovered or
settled:
(a) no more than twelve months after the reporting period, and
(b) more than twelve months after the reporting period.

FRS 1.61

Statements of changes in equity


Statement of changes in equity

Attributable to owners of the Company
2012
Group Note
Equity,
total
Equity
attributable
to owners
of the
Company,
total
Share
capital
Treasury
shares
Retained
earnings
Other
reserves,
total
Fair value
adjustment
reserve
Asset
revaluation
reserve
Statutory
reserve
fund
Foreign
currency
translation
reserve
Premium
paid on
acquisition
of non-
controlling
interests
Employee
share
option
reserve
Gain or loss
on
reissuance
of treasury
shares
Equity
component of
convertible
redeemable
preference
shares
Reserve of
disposal
group
classified as
held for sale
Non-
controlling
interests
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Opening balance at 1 January
2012 (As previously stated) 2.2 68,827 66,927 9,665 - 51,605 5,657 436 4,404 740 (344) - 341 - 80 - 1,900
Cumulative effects of adopting
FRS 12 22 22 - - 22 - - - - - - - - - - - FRS 1.106.b
Opening balance at 1 January
2012 (As restated) 2.2 68,849 66,949 9,665 - 51,627 5,657 436 4,404 740 (344) - 341 - 80 - 1900

Profit for the year 4,956 4,776 - 4,776 - - - - - - - - - - 180 FRS 1.106.d.i

Other comprehensive income
Net gain on fair value changes of
available-for-sale financial
assets 174 174 174 174
FRS 1.106.d.ii, FRS
1.82,g and FRS
107.20.a.II
Net surplus on revaluation of
freehold land and buildings 1,250 1,250 1,250 1,250
FRS 1.106.d.ii,
FRS 1.82.g, FRS 16.77.f
Foreign currency translation (181) (171) (171) (171) (10)
FRS 1.106.d.ii, FRS
1.82.g, FRS 21.52.b
Share of other comprehensive
income of associates 62 62 62 62
FRS 1.106.d.ii, FRS
1.82.h, FRS 28.39
for the year, net of tax
1,305 1,315 1,315 236 1,250 (171) (10)

Total comprehensive income for
the year 6,261 6,091 - - 4,776 1,315 236 1,250 - (171) - - - - 170 FRS 1.106.a


2012
Group Note
Equity,
total
Equity
attributable
to owners
of the
Company,
total
Share
capital
Treasury
shares
Retained
earnings
Other
reserves,
total
Fair value
adjustment
reserve
Asset
revaluation
reserve
Statutory
reserve
fund
Foreign
currency
translation
reserve
Premium
paid on
acquisition
of non-
controlling
interests
Employee
share
option
reserve
Gain or loss
on
reissuance
of treasury
shares
Equity
component of
convertible
redeemable
preference
shares
Reserve of
disposal
group
classified as
held for sale
Non-
controlling
interests

Contributions by and
distributions to owners FRS 1.106.d.iii
Shares issued for acquisition of a
subsidiary 33(a) 1,475 1,475 1,475 - - - - - - - - - - - - - FRS 1.106.d.iii
Share issuance expense 33(a) (50) (50) (50) - - - - - - - - - - - - - FRS 32.39
Grant of equity-settled share
options to employees 35 245 245 - - - 245 - - - - - 245 - - - - FRS 102.50
Purchase of treasury shares 33(b) (254) (254) - (254) - - - - - - - - - - - - FRS 32.33
Treasury shares reissued
pursuant to employee share
option plans 33(b) 81 81 - 95 - (14) - - - - - (79) 65 - - -
FRS 102.50,
FRS 32.33
Dividends on ordinary shares 43 (1,613) (1,613) - - (1,613) - - - - - - - - - - - FRS 1.106.d.iii
Total contributions by and
distributions to owners (116) (116) 1,425 (159) (1,613) 231 - - - - 166 65 - - FRS 1.106.d.iii

Changes in ownership interests in
subsidiaries FRS 1.106.d.iii
Acquisition of subsidiary 17 558 - - - - - - - - - - - - - - 558
Acquisition of non-controlling
interests without a change in
control 17 (800) (150) - - - (150) - - - - (150) - - - - (650)
Total changes in ownership
interests in subsidiaries (242) (150) - - - (150) - - - - (150) - - - - (92) FRS 1.106.d.iii

Total transactions with owners
in their capacity as owners (358) (266) 1,425 (159) (1,613) 81 - - - - (150) 166 65 - - (92) FRS 1.106.d.iii


2012
Group Note
Equity,
total
Equity
attributable
to owners
of the
Company,
total
Share
capital
Treasury
shares
Retained
earnings
Other
reserves,
total
Fair value
adjustment
reserve
Asset
revaluation
reserve
Statutory
reserve
fund
Foreign
currency
translation
reserve
Premium
paid on
acquisition
of non-
controlling
interests
Employee
share
option
reserve
Gain or loss
on
reissuance
of treasury
shares
Equity
component of
convertible
redeemable
preference
shares
Reserve of
disposal
group
classified as
held for sale
Non-
controlling
interests

Others
Reserve attributable to disposal
group classified as held for
sale 11 - - - - - (128) - (128) - - - - - - 128 - FRS 105.38
Expiry of employee share options - - - - 30 (30) - - - - - (30) - - - - FRS 102.50
Transfer to statutory reserve
fund - - - - (163) 163 - - 163 - - - - - - - FRS 1.106.d.iii
Total Others - - - - (133) 5 - (128) 163 - - (30) - - 128 -

Closing balance at 31 December
2012 74,752 72,774 11,090 (159) 54,657 7,058 672 5,526 903 (515) (150) 477 65 80 128 1,978





2011
Group Note
Equity,
total
Equity
attributable
to owners of
the Company,
total
Share
capital
Retained
earnings
Other
reserves,
total
Fair value
adjustment
reserve
Asset
revaluation
reserve
Statutory
reserve
fund
Foreign
currency
translation
reserve
Employee
share
option
reserve
Equity
component of
convertible
redeemable
preference
shares
Non-
controlling
interests
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Opening balance at 1 January 2011 (As
previously stated) 2.2 62,457 61,017 9,510 48,476 3,031 328 2,000 613 (202) 292 - 1,440
Cumulative effects of adopting FRS 12 1 1 - 1 - - - - - - - - FRS 1.106.b
Opening balance at 1 January 2011 (As restated) 2.2 62,458 61,018 9,510 48,477 3,031 328 2,000 613 (202) 292 - 1440
Profit for the year 5,241 4,841 - 4,841 - - - - - - - 400 FRS 1.106.d.i

Net gain on fair value changes of available-for-
sale financial assets 98 98 - - 98 98 - - - - - -
FRS 1.106.d.ii, FRS
1.82.g and FRS
107.20.a.II
Net surplus on revaluation of freehold land and
buildings 2,404 2,404 - - 2,404 - 2,404 - - - - -
FRS 1.106.d.ii,
FRS 1.82.g, FRS
16.77.f
Foreign currency translation (82) (142) - - (142) - - - (142) - - 60
FRS 1.106.d.ii, FRS
1.82.g, FRS 21.52.b
Share of other comprehensive income of
associates 10 10 - - 10 10 - - - - - -
FRS 1.106.d.ii, FRS
1.82.h, FRS 28.39
Other comprehensive income for the year, net of
tax 2,430 2,370 2,370 108 2,404 (142) 60

Total comprehensive income for the year 7,671 7,211 - 4,841 2,370 108 2,404 - (142) - - 460 FRS 1.106.a




2011
Group Note
Equity,
total
Equity
attributable
to owners of
the Company,
total
Share
capital
Retained
earnings
Other
reserves,
total
Fair value
adjustment
reserve
Asset
revaluation
reserve
Statutory
reserve
fund
Foreign
currency
translation
reserve
Employee
share
option
reserve
Equity
component of
convertible
redeemable
preference
shares
Non-
controlling
interests
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000

Contributions by and distributions to owners FRS 1.106.d.iii
Grant of equity-settled share options to
employees 35 150 150 - - 150 - - - - 150 - - FRS 102.50
Exercise of employee share options 33(a) 72 72 155 - (83) - - - - (83) - - FRS 102.50
Dividends on ordinary shares 43 (1,582) (1,582) - (1,582) - - - - - - - - FRS 1.106.d.iii
Equity component of redeemable preference
shares 80 80 - - 80 - - - - - 80 - FRS 32.28
Total transactions with owners in their capacity
as owners (1,280) (1,280) 155 (1,582) 147 - - - - 67 80 - FRS 1.106.d.iii

Others
Expiry of employee share options - - - 18 (18) - - - - (18) - - FRS 102.50
Transfer to statutory reserve fund - - - (127) 127 - - 127 - - - - FRS 1.106.d.iii
Total others - - - (109) 109 - - 127 - (18) - -
Closing balance at 31 December 2011 68,849 66,949 9,665 51,627 5,657 436 4,404 740 (344) 341 80 1,900


2012
Company Note Equity, total Share capital Treasury shares Retained earnings
Other reserves,
total
Employee share
option reserve
Gain or loss on
reissuance of
treasury shares
Equity component
of convertible
redeemable
preference shares
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Opening balance at 1 January 2012 24,395 9,665 - 14,309 421 341 - 80
Profit for the year, representing total comprehensive income for
the year 3,974 - - 3,974 - - - -
FRS 1.106.d.i ,FRS
1.106.a

Shares issued for acquisition of a subsidiary 33(a) 1,475 1,475 - - - - - - FRS 1.106.d.iii
Share issuance expense 33(a) (50) (50) - - - - - - FRS 32.39
Grant of equity-settled share options to employees 35 245 - - - 245 245 - - FRS 102.50
Expiry of employee share options - - - 30 (30) (30) - - FRS 102.50
Purchase of treasury shares 33(b) (254) - (254) - - - - - FRS 32.33
Treasury shares reissued pursuant to employee share option plans 81 - 95 - (14) (79) 65 - FRS 102.50, FRS 32.33
Dividends on ordinary shares 43 (1,613) - - (1,613) - - - - FRS 1.106.d.iii
Total transactions with owners in their capacity as owners (116) 1,425 (159) (1,583) 201 136 65 - FRS 1.106.d.iii

Closing balance at 31 December 2012 28,253 11,090 (159) 16,700 622 477 65 80




2011
Company Note Equity, total Share capital Treasury shares Retained earnings
Other reserves,
total
Employee share
option reserve
Gain or loss on
reissuance of
treasury shares
Equity component
of convertible
redeemable
preference shares
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Opening balance at 1 January 2011 23,226 9,510 - 13,424 292 292 - -
Profit for the year, representing total comprehensive income for
the year 2,449 - - 2,449 - - - -
FRS 1.106.d.i , FRS
1.106.a

Grant of equity-settled share options to employees 35 150 - - - 150 150 - - FRS 102.50
Exercise of employee share options 33(a) 72 155 - - (83) (83) - - FRS 102.50
Expiry of employee share options - - - 18 (18) (18) - - FRS 102.50
Equity component of redeemable preference shares 80 - - - 80 - - 80 FRS 32.28
Dividends on ordinary shares 43 (1,582) - - (1,582) - - - - FRS 1.106.d.iii
Total transactions with owners in their capacity as owners (1,280) 155 - (1,564) 129 49 - 80 FRS 1.106.d.iii

Closing balance at 31 December 2011 24,395 9,665 - 14,309 421 341 - 80



Commentary:
Analysis of other comprehensive income for each component of equity in the statement of changes in
equity
FRS 1 Presentation of Financial Statements requires an analysis of other comprehensive income for
each component of equity to be presented either in the statement of changes in equity or in the notes
to the financial statements.
In this illustration, the Group has chosen to present an analysis of other comprehensive income for
each component of equity in the statement of changes in equity.
Statement of changes in equity for the company
Presentation of the statement of changes in equity for the Company when consolidated financial
statements are presented is optional. Information relating to the equity items presented in the
Companys balance sheet may be presented in the notes to the financial statements instead.

FRS 1.106.d.ii
FRS 1.106A

Consolidated cash flow statement


Consolidated cash flow statement 2012 2011
Note $'000 $'000 FRS 7.18.b
Operating activities
Profit before tax from continuing operations 7,057 7,116
Loss before tax from discontinued operation 11 (551) (193)
Profit before tax, total 6,506 6,923
Adjustments for: FRS 7.20.b and c
Amortisation of deferred capital grant 29 (239) (180)
Amortisation of intangible assets 15 220 252
Amortisation of land use rights 16 132 130
Depreciation of property, plant and equipment 13 3,043 2,838
Grant of equity-settled share options to employees 35 245 150
Net fair value gains on investment properties 14 (489) (129)
Net fair value gains on held for trading investment securities 6 (135) (95)
Net fair value gains on derivatives 6 (43) (56)
Net fair value gains on available-for-sale financial assets (transferred from
equity on disposal of investment securities) 6 (120) (15)
Fair value adjustment of contingent consideration for a business
combination 17 235
Impairment loss on property, plant and equipment 13 500
Impairment loss on intangible assets 15 200
Impairment loss on investment securities 22 198 210
Net loss/(gain) on disposal of property, plant and equipment 76 (120)
Finance costs 1,715 1,512
Dividend income from investment securities (526) (406)
Interest income (430) (327)
Loss recognised on re-measurement to fair value less costs to sell 11 450
Provisions 476 105
Share of results of associates (657) (328)
Unrealised exchange loss 154 120 FRS 7.28
Total adjustments 5,005 3,661
Operating cash flows before changes in working capital 11,511 10,584
Changes in working capital FRS 7.20.a
Increase in development property (250) (200)
Increase in gross amount due from customer for contract work-in-progress (253) (331)
Decrease in gross amount due to customer for contract work-in-progress (228) (356)
Decrease/(increase) in inventories 1,132 (1,575)
Decrease in trade and other receivables 2,089 781
Decrease in prepaid operating expenses 128 62
Decrease in trade and other payables (2,661) (1,864)
Increase/(decrease) in other liabilities 377 (496)
Total changes in working capital 334 (3,979)
Cash flows from operations 11,845 6,605
Interest received 430 327 FRS 7.31
Interest paid (1,742) (1,550) FRS 7.31
Income taxes paid (6,523) (3,641) FRS 7.35
Net cash flows from operating activities 4,010 1,741 FRS 7.10



2012 2011
Note $'000 $'000
Investing activities FRS 7.21
Net cash inflow on acquisition of a subsidiary 17 217 FRS 7.39
Dividend income from investment securities 526 406 FRS 7.31
Proceeds from disposal of investment securities 328 278 FRS 7.16.d
Proceeds from government grants 29 2,040 1,030 FRS 20.28
Proceeds from disposal of property, plant and equipment 6,867 1,559 FRS 7.16.b
Purchase of investment securities (1,650) (588) FRS 7.16.c
Purchase of property, plant and equipment 13 (7,426) (4,358) FRS 7.16.a
Subsequent expenditure on investment properties 14 (500) FRS 7.16.a
Additions to intangible assets 15 (200) (200) FRS 7.16.a
Net cash flows generated from/(used in) investing activities 202 (1,873) FRS 7.10

Financing activities FRS 7.21
Acquisition of non-controlling interests 17 (800) FRS 7.42A
Dividends paid on ordinary shares 43 (1,613) (1,582) FRS 7.31
Purchase of treasury shares 33(b) (254) FRS 7.17.b
Proceeds from re-issuance of treasury shares 33(b) 81 FRS 7.17.a
Proceeds from exercise of employee share options 72 FRS 7.17.a
Proceeds from loans and borrowings 2,259 3,000 FRS 7.17.c
Share issuance expense 17 (50)
Repayment of loans and borrowings (1,158) FRS 7.17.d
Repayment of obligations under finance leases (135) (132) FRS 7.17.e
Net cash flows (used in)/from financing activities (1,670) 1,358 FRS 7.10

Net increase in cash and cash equivalents 2,542 1,226
Effect of exchange rate changes on cash and cash equivalents (87) 35 FRS 7.28
Cash and cash equivalents at 1 January 3,414 2,153 FRS 7.45
Cash and cash equivalents at 31 December 27 5,869 3,414 FRS 7.45



Commentary:
Presentation of consolidated cash flow statement using direct method
In this illustration, consolidated cash flow statement is presented using indirect method whereby
profit or loss is adjusted for the effects of non-cash transactions, deferrals, accruals and investing or
financing cash flows. FRS 7.18 allows entities to report cash flows from operating activities using
either the direct method or indirect method. The cash flow from operating activities prepared using
the direct method is illustrated below:
Group
2012 2011
$'000 $'000
Operating activities

Receipts from customers XXX XXX
Payments to suppliers and employees (XXX) (XXX)
Cash generated from operations XXX XXX
Interest paid (XXX) (XXX)
Income taxes paid (XXX) (XXX)
Net cash flows from/(used in) operating activities XXX (XXX)
The cash flow from financing and investing activities under the direct method are identical to that
prepared under indirect method.
Disposal of subsidiary
In this illustration, there is no disposal of subsidiary or other business units during the financial year.
If there is such disposal, an entity should disclose:
- The total disposal consideration;
- The portion of the disposal consideration discharged by means of cash and cash equivalents;
- The amount of cash and cash equivalents in the subsidiary or business unit disposed of; and
- The amount of the assets and liabilities other than cash and cash equivalents in the subsidiary or
business unit disposed of, summarised by each major category.
Illustrative note disclosure:
The company disposed of XXX Limited, a wholly owned subsidiary, on 30 November 2012 at its
carrying value. The disposal consideration was fully settled in cash.
The value of assets and liabilities of XXX Limited recorded in the consolidated financial
statements as at 30 November 2012, and the cash flow effect of the disposal were:
$000
Property, plant and equipment XXX
Trade and other receivables XXX
Inventories XXX
Cash and cash equivalents XXX
XXX
Trade and other payables (XXX)
Income tax payable (XXX)
Carrying value of net assets XXX

Total consideration XXX
Cash and cash equivalents of the subsidiary (XXX)
Net cash inflow on disposal of a subsidiary XXX

FRS 7.18

FRS 7.App A

FRS 7.40.a-d

FRS 7.40.b

FRS 7.40.d

FRS 7.40.c

FRS 7.40.a and b
FRS 7.40.c
FRS 7.39


Commentary (continued):
Contingent consideration for business combination
In this illustration, there is no payment of contingent consideration for business combination
during the year. For illustrative disclosure of contingent consideration for business combination in
the year when the amount is paid and its impact on the presentation in the statement of cash
flows, please refer to commentary no.1 of Note 32 Other liabilities.


1. Corporate information
XYZ Holdings (Singapore) Limited (the Company) is a limited liability company
incorporated and domiciled in Singapore and is listed on the Singapore Exchange
Securities Trading Limited (SGX-ST). The immediate and ultimate holding company is
Good Group (International) Ltd.
The registered office and principal place of business of the Company is located at [insert
address].
The principal activity of the Company is investment holding. The principal activities of the
subsidiaries are disclosed in Note 17 to the financial statements.

Commentary:
Disclosures required by FRS 1.138
The following information may be provided in the notes to the financial statements or
disclosed elsewhere in information published with the financial statements:
- the domicile and legal form of the entity, its country of incorporation and the address of
its registered office (or principal place of business, if different from the registered
office);
- a description of the nature of the entitys operations and its principal activities; and
- the name of the parent and ultimate parent of the group.
If the entity changes its name during the financial year, the change shall be disclosed.
Illustrative disclosure where the entity changes its name during the financial year:
With effect from [insert effective date of change], the name of the company was
changed from [XXX] to [XXX].
Disclosures of name of the ultimate controlling party
FRS 24 requires an entity to disclose the name of the entitys parent and, if different, the
ultimate controlling party. The ultimate controlling party can be either an entity or a person.

2. Summary of significant accounting policies
2.1 Basis of preparation
The consolidated financial statements of the Group and the balance sheet and
statement of changes in equity of the Company have been prepared in accordance with
Singapore Financial Reporting Standards (FRS).
The financial statements have been prepared on the historical cost basis except as
disclosed in the accounting policies below.
The financial statements are presented in Singapore Dollars (SGD or $) and all values
in the tables are rounded to the nearest thousand ($000) as indicated.

FRS 1.138.a and c
FRS 24.13
CA 201.10

FRS 1.138.a

FRS 1.138.b

FRS 1.138

FRS 1.51.a

FRS 24.13

FRS 1.117

FRS 1.16, 51.b
and 112.a
SGX 1207.5.d

FRS 1.117.a

FRS 1.51.d and e


2. Summary of significant accounting policies (continued)
2.1 Basis of preparation (continued)
Commentary:
Going concern uncertainty
When preparing financial statements, management shall make an assessment of an
entitys ability to continue as a going concern. Where the effect of the judgment made in
relation to the entitys ability to continue as a going concern has significant effect on the
amounts recognised in the financial statements, the judgment made should be disclosed.
Financial statements shall be prepared on a going concern basis unless management
either intends to liquidate the entity or to cease trading, or has no realistic alternative but
to do so. When management is aware, in making its assessment, of material uncertainties
related to events or conditions that may cast significant doubt upon the entitys ability to
continue as a going concern, those uncertainties shall be disclosed.
Illustrative disclosure where the ability of the company to continue as a going concern is
dependent on the holding company undertaking to provide continuing financial support to
the company to enable it to continue as a going concern:
The Company incurred a net loss of $XXX (2011: $XXX) during the financial year
ended 31 December 2012 and as at that date, the Companys current and total
liabilities exceeded its current and total assets by $XXX (2011: $XXX) and $XXX
(2011: $XXX) respectively. These factors indicate the existence of a material
uncertainty which may cast significant doubt about the Companys ability to continue
as a going concern. The ability of the Company to continue as a going concern
depends on the holding company undertaking to provide continuing financial support
to enable the Company to continue as a going concern.
If the Company is unable to continue in operational existence for the foreseeable
future, the Company may be unable to discharge its liabilities in the normal course of
business and adjustments may have to be made to reflect the situation that assets
may need to be realised other than in the normal course of business and at amounts
which could differ significantly from the amounts at which they are currently recorded
in the balance sheet. In addition, the Company may have to reclassify non-current
assets and liabilities as current assets and liabilities. No such adjustments have been
made to these financial statements.
Functional and presentation currency
When the presentation currency is different from the functional currency of the company,
that fact shall be stated, together with disclosure of the functional currency and the
reasons for using a different presentation currency.

FRS 1.25
FRS 1.122

FRS 1.25

FRS 21.53


2.2 Changes in accounting policies
The accounting policies adopted are consistent with those of the previous financial year
except in the current financial year, the Group has adopted all the new and revised
standards that are effective for annual periods beginning on or after 1 January 2012.
The adoption of these standards did not have any effect on the financial performance
or position of the Group and the Company except as discussed below:

Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets

On 1 January 2012, the Group adopted the Amendments to FRS 12 Deferred Tax:
Recovery of Underlying Assets.

The Amendments to FRS 12 apply to the measurement of deferred tax liabilities and
assets arising from investment properties measured using the fair value model under
FRS 40 Investment Property, including investment property acquired in a business
combination and subsequently measured using the fair value model. For the purposes
of measuring deferred tax, the Amendments introduce a rebuttable presumption that
the carrying amount of an investment property measured at fair value will be
recovered entirely through sale. The presumption can be rebutted if the investment
property is depreciable and is held within a business model whose objective is to
consume substantially all of the economic benefits over time, rather than through sale.

The Group previously recognised deferred taxes on change in fair value of investment
properties on the basis that the carrying amounts of the properties are recovered
through use.

The change in accounting policy has been applied retrospectively. The effects of
adoption of the Amendments to FRS 12 are as follows:

Group

As at 31
December
2012
As at 31
December
2011
(Restated)
As at 1
January
2011
(Restated)
$000 $000 $000
(Decrease)/increase in:
Consolidated balance sheet
Deferred tax liabilities (83) (21) (1)
Retained earnings 83 21 1
2012 2011
(Restated)
$000 $000
Income tax expense (83) (21)
Profit for the year 83 21
Basic earnings per share (cents) 0.36 0.09
Diluted earnings per share (cents) 0.36 0.08

FRS 12.98

FRS 12.51B

FRS 12.51C


2.2 Changes in accounting policies (continued)
Commentary:
FRS 8 Accounting Policies, Changes in Accounting Estimates and Errors requires the
disclosure of financial effect on the current period or any prior period (except that it is
impracticable to determine the amount of the adjustment) upon initial application of a
Standard or an Interpretation.

FRS 8.28


2.3 Standards issued but not yet effective
The Group has not adopted the following standards and interpretations that have been
issued but not yet effective:
Description
Effective for annual periods
beginning on or after

Amendments to FRS 1 Presentation of Items of Other
Comprehensive Income
1 July 2012
Revised FRS 19 Employee Benefits 1 January 2013
FRS 113 Fair Value Measurement 1 January 2013
Amendments to FRS 107 Disclosures Offsetting Financial Assets
and Financial Liabilities
1 January 2013
Improvements to FRSs 2012 1 January 2013
- Amendment to FRS 1 Presentation of Financial Statements 1 January 2013
- Amendment to FRS 16 Property, Plant and Equipment 1 January 2013
- Amendment to FRS 32 Financial Instruments: Presentation 1 January 2013
Revised FRS 27 Separate Financial Statements 1 January 2014
Revised FRS 28 Investments in Associates and Joint Ventures 1 January 2014
FRS 110 Consolidated Financial Statements 1 January 2014
FRS 111 Joint Arrangements 1 January 2014
FRS 112 Disclosure of Interests in Other Entities 1 January 2014
Amendments to FRS 32 Offsetting Financial Assets and Financial
Liabilities
1 January 2014

Except for the Amendments to FRS 1, FRS 111, Revised FRS 28 and FRS 112, the
directors expect that the adoption of the other standards and interpretations above will
have no material impact on the financial statements in the period of initial application.
The nature of the impending changes in accounting policy on adoption of the
Amendments to FRS 1, FRS 111, Revised FRS 28 and FRS 112 are described below.
Amendments to FRS 1 Presentation of Items of Other Comprehensive Income
The Amendments to FRS 1 Presentation of Items of Other Comprehensive Income (OCI)
is effective for financial periods beginning on or after 1 July 2012.
The Amendments to FRS 1 changes the grouping of items presented in OCI. Items that
could be reclassified to profit or loss at a future point in time would be presented
separately from items which will never be reclassified. As the Amendments only affect
the presentations of items that are already recognised in OCI, the Group does not
expect any impact on its financial position or performance upon adoption of this
standard.
FRS 111 Joint Arrangements and Revised FRS 28 Investments in Associates and Joint
Ventures
Ventures are effective for financial periods beginning on or after 1 January 2014.
FRS 111 classifies joint arrangements either as joint operations or joint ventures. Joint
operation is a joint arrangement whereby the parties that have rights to the assets and
obligations for the liabilities whereas joint venture is a joint arrangement whereby the
parties that have joint control of the arrangement have rights to the net assets of the
arrangement.

FRS 8.30, 31


2.3 Standards issued but not yet effective (continued)
Ventures (continued)
FRS 111 requires the determination of joint arrangements classification to be based
on the parties rights and obligations under the arrangement, with the existence of a
separate legal vehicle no longer being the key factor. FRS 111 disallows proportionate
consolidation and requires joint ventures to be accounted for using the equity method.
The revised FRS 28 was amended to describe the application of equity method to
investments in joint ventures in addition to associates.
The Group currently applies proportionate consolidation for its joint ventures. Upon
adoption of FRS 111, the Group expects the change to equity accounting for these joint
ventures will affect the Groups financial statement presentation.
FRS 112 Disclosure of Interests in Other Entities
FRS 112 Disclosure of Interests in Other Entities is effective for financial periods
beginning on or after 1 January 2014.
FRS 112 is a new and comprehensive standard on disclosure requirements for all forms
of interests in other entities, including joint arrangements, associates, special purpose
vehicles and other off balance sheet vehicles. FRS 112 requires an entity to disclose
information that helps users of its financial statements to evaluate the nature and risks
associated with its interests in other entities and the effects of those interests on its
financial statements. As this is a disclosure standard, it will have no impact to the
financial position and financial performance of the Group when implemented in 2014.

Commentary:
Standards issued but not yet effective
FRS 8 requires an entity to:
(a) disclose those standards or interpretations that have been issued which are not yet
effective; and
(b) provide known or reasonably estimable information to assess the possible impact that
the application of such FRSs will have on the entitys financial statements in the
period of initial application.
Therefore, the Group has listed those standards and interpretations that are issued but
not yet effective and relevant to the Group. For example, INT FRS 120 Stripping Costs in
the Production of a Surface Mine is not relevant and has been excluded.
The following are IFRSs that have been issued by International Accounting Standards
Board (IASB) but have not been adopted as FRS in Singapore:
IFRS 9 Financial Instruments, effective for annual periods beginning on or after 1
January 2015
If any of the above IFRSs are adopted as FRSs before the financial statements for the year
ended 31 December 2012 are authorised for issue, Note 2.3 should be updated to:
(a) include the new standards; and
(b) provide known or reasonably estimable information to assess the possible impact that
the application of such FRSs will have on the entitys financial statements in the
period of initial application.

FRS 8.30

FRS 8.30


Standards issued but not yet effective (continued)
Amendments to FRS 1 Presentation of Items of Other Comprehensive Income
In this illustration, it is assumed that the Group does not early adopt the Amendments to
FRS 1.
The illustrative disclosure of early adoption of the Amendments to FRS 1 is illustrated in
Appendix A-1 Consolidated statement of comprehensive income in one statement
illustrating the analysis of expenses by nature and early adoption of amendments to FRS 1.
Revised FRS 19 Employee Benefits
In this illustration, it is assumed that the Group does not early adopt Revised FRS 19 and
adoption of Revised FRS 19 will have no material impact on the financial statements of the
Group in the period of initial application.
The illustrative disclosure of early adoption of the Revised FRS 19 is illustrated in
Appendix A-4 Employee benefits.
FRS 113 Fair Value Measurement
In this illustration, it is assumed that the Group does not early adopt FRS 113 and
adoption of FRS 113 will have no material impact to the financial statement of the Group
in the period of initial application.
The following is an illustrative disclosure of impending changes in accounting policy on
adoption of FRS 113.
FRS 113 Fair Value Measurement provides a single source of guidance for all fair
value measurements. FRS 113 does not change when an entity is required to use fair
value, but rather provides guidance on how to measure fair value under FRS when fair
value is required or permitted by FRS. The adoption of FRS 113 does not have any
impact to the financial position and financial performance of the Group.
The illustrative disclosure of early adoption of FRS 113 is illustrated in Appendix A-6 Fair
value measurement.
Amendments to FRS 107: Disclosures Offsetting Financial Assets and Financial Liabilities
In this illustration, it is assumed that the adoption of Amendments to FRS 107 will have no
material impact to the financial statement of the Group in the period of initial application.
The following is an illustrative disclosure of the nature of the impending changes in
disclosures on adoption of Amendments to FRS 107.
The Amendments to FRS 107 provides disclosure requirements that are intended to
help investors and other financial statement users better assess the effect or potential
effect of offsetting arrangements on a companys financial position. The new
disclosures require information about the gross amount of financial assets and
liabilities before offsetting and the amounts set off in accordance with offsetting
model in FRS 32. As the Amendments only affect disclosures, it will not have any
impact to the financial position or financial performance of the Group upon adoption.


Amendments to FRS 32: Offsetting Financial Assets and Financial Liabilities
In this illustration, it is assumed that the adoption of Amendments to FRS 32 will have no
material impact on the financial statements of the Group in the period of initial application.
The following is an illustrative disclosure of the impending changes in accounting policy on
adoption of Amendments to FRS 32.
The Amendments to FRS 32 Offsetting Financial Assets and Financial Liabilities
clarifies the meaning of currently has a legally enforceable right to set-off; and that
some gross settlement systems may be considered equivalent to net settlement. The
Group expects to offset certain assets and liabilities and hence affecting the financial
position upon adoption of the Amendments.
Improvements to FRSs 2012
The Accounting Standards Council issued Improvements to FRSs 2012 on 16 August 2012
that is effective for annual periods beginning on or after 1 January 2013. Some of the key
amendments are listed below:
Amendment to FRS 1 Presentation of Financial Statements
The amendment clarifies that an entity must include comparative in the related notes
to the financial statements when it voluntarily provides comparative information
beyond the minimum required comparative period. However, unlike the voluntary
comparative information, the related notes are not required to accompany the third
balance sheet.
Amendment to FRS 16 Property, Plant and Equipment
The amendment provides clarification that major spare parts and servicing equipment
that meet the definition of property, plant and equipment are not inventory.
Amendment to FRS 32 Financial Instruments: Presentation
The amendment clarifies that income tax arising from distributions to equity holders
are accounted for in accordance with FRS 12 Income Taxes.
Previously, FRS 32 requires that distributions to holders of an equity instrument to be
recognised directly in equity net of any related income tax while FRS 12 requires that
tax consequences of dividends generally to be recognised in profit or loss unless
certain conditions are met. FRS 32 was amended to address the inconsistencies by
referring to FRS 12 for the accounting for income tax relating to distributions to
holders of an equity instrument and transaction costs of an equity transaction.
In this illustration, the adoption of the amendments in the improvements to FRSs issued in
2012 will not have any impact to the accounting policies of the Group in the period of initial
application.
If the adoption of the amendments in the improvements to FRSs has an impact to the
financial position and financial performance of the Group, please refer to disclosure
requirements in commentary .


FRS 110 Consolidated Financial Statements and Revised FRS 27 Separate Financial
Statements
In this illustration, it is assumed that the adoption of FRS 110 Consolidated Financial
Statements and Revised FRS 27 Separate Financial Statements will have no material
impact to the financial statement of the Group in the period of initial application.
The following is an illustrative disclosure of the impending changes in accounting policy on
adoption of FRS 110 and Revised FRS 27.
FRS 110 establishes a single control model that applies to all entities including special
purpose entities. The changes introduced by FRS 110 will require management to
exercise significant judgment to determine which entities are controlled, and
therefore are required to be consolidated by the Group, compared with the
requirements that were in FRS 27. Therefore, FRS 110 may change which entities are
consolidated within a group. The revised FRS 27 was amended to address accounting
for subsidiaries, jointly controlled entities and associates in separate financial
statements.
The Group is currently determining the impact of the changes to control and expect
that the adoption of FRS 110 in 2014 will likely lead to more entities being
consolidated to the Group.
FRS 110 Consolidated Financial Statements, FRS 111 Joint Arrangements, FRS 112 Disclosure
of Interests in Other Entities, Revised FRS 27 Separate Financial Statements and Revised FRS
28 Investments in Associates and Joint Ventures
In this illustration, it is assumed that the Group does not early adopt FRS 110, FRS 111,
FRS 112, Revised FRS 27 and Revised FRS 28.
The illustrative disclosures of early adoption of FRS 110, FRS 111, FRS 112, Revised FRS
27 and Revised FRS 28 at the same time are illustrated in Appendix A-5 Consolidated
financial statements, joint arrangements and disclosure of interests in other entities.
The Accounting Standard Council announced on 31 August 2012 that it will allow
stakeholders more time to implement FRS 110, FRS 111, FRS 112, Revised FRS 27 and
Revised FRS 28 (collectively the Relevant Standards). The mandatory effective date of the
Relevant Standards is deferred for a year from annual periods beginning on or after 1
January 2013 to annual periods beginning on or after 1 January 2014.
Earlier application of the Relevant Standards continues to be permitted, subject to the
requirements for earlier application as set out in the Relevant Standards.


2.4 Basis of consolidation and business combinations
A) Basis of consolidation
Basis of consolidation from 1 January 2010
The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries as at the end of the reporting period. The financial
statements of the subsidiaries used in the preparation of the consolidated financial
statements are prepared for the same reporting date as the Company. Consistent
accounting policies are applied to like transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses
resulting from intra-group transactions and dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the
Group obtains control, and continue to be consolidated until the date that such control
ceases.
Losses within a subsidiary are attributed to the non-controlling interest even if that
results in a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is
accounted for as an equity transaction. If the Group loses control over a subsidiary, it:
- de-recognises the assets (including goodwill) and liabilities of the subsidiary at their
carrying amounts at the date when controls is lost;
- de-recognises the carrying amount of any non-controlling interest;
- de-recognises the cumulative translation differences recorded in equity;
- recognises the fair value of the consideration received;
- recognises the fair value of any investment retained;
- recognises any surplus or deficit in profit or loss;
- re-classifies the Groups share of components previously recognised in other
comprehensive income to profit or loss or retained earnings, as appropriate.

Basis of consolidation prior to 1 January 2010
Certain of the above-mentioned requirements were applied on a prospective basis. The
following differences, however, are carried forward in certain instances from the
previous basis of consolidation:
- Acquisition of non-controlling interests, prior to 1 January 2010, were accounted
for using the parent entity extension method, whereby, the difference between the
consideration and the book value of the share of the net assets acquired were
recognised in goodwill.
- Losses incurred by the Group were attributed to the non-controlling interest until
the balance was reduced to nil. Any further losses were attributed to the Group,
unless the non-controlling interest had a binding obligation to cover these. Losses
prior to 1 January 2010 were not reallocated between non-controlling interest and
the owners of the Company.
- Upon loss of control, the Group accounted for the investment retained at its
proportionate share of net asset value at the date control was lost. The carrying
value of such investments as at 1 January 2010 have not been restated.

FRS 27.12

FRS 27.22

FRS 27.24

FRS 27.20

FRS 27.26

FRS 27.28

FRS 27.30
FRS 27.34


2.4 Basis of consolidation and business combinations (continued)
B) Business combinations
Business combinations from 1 January 2010
Business combinations are accounted for by applying the acquisition method.
Identifiable assets acquired and liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. Acquisition-related costs
are recognised as expenses in the periods in which the costs are incurred and the
services are received.
When the Group acquires a business, it assesses the financial assets and liabilities
assumed for appropriate classification and designation in accordance with the
contractual terms, economic circumstances and pertinent conditions as at the
acquisition date. This includes the separation of embedded derivatives in host
contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at
fair value at the acquisition date. Subsequent changes to the fair value of the
contingent consideration which is deemed to be an asset or liability, will be recognised
in accordance with FRS 39 either in profit or loss or as a change to other
comprehensive income. If the contingent consideration is classified as equity, it is not
remeasured until it is finally settled within equity.
In business combinations achieved in stages, previously held equity interests in the
acquiree are remeasured to fair value at the acquisition date and any corresponding
gain or loss is recognised in profit or loss.
The Group elects for each individual business combination, whether non-controlling
interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at
the non-controlling interests proportionate share of the acquirees identifiable net
assets.
Any excess of the sum of the fair value of the consideration transferred in the business
combination, the amount of non-controlling interest in the acquiree (if any), and the
fair value of the Groups previously held equity interest in the acquiree (if any), over
the net fair value of the acquirees identifiable assets and liabilities is recorded as
goodwill. The accounting policy for goodwill is set out in Note 2.9(a). In instances
where the latter amount exceeds the former, the excess is recognised as gain on
bargain purchase in profit or loss on the acquisition date.

FRS 103.4
FRS 103.10 and
18

FRS 103.53

FRS 103.15
FRS 103.16

FRS 103.39, 40
and 58

FRS 103.42

FRS 103.19

FRS 103.32

FRS 103.34


B) Business combinations (continued)
Business combinations prior to 1 January 2010
In comparison to the above mentioned requirements, the following differences applied:
Business combinations are accounted for by applying the purchase method.
Transaction costs directly attributable to the acquisition formed part of the acquisition
costs. The non-controlling interest (formerly known as minority interest) was measured
at the proportionate share of the acquirees identifiable net assets.
Business combinations achieved in stages were accounted for as separate steps.
Adjustments to those fair values relating to previously held interests are treated as a
revaluation and recognised in equity. Any additional acquired share of interest did not
affect previously recognised goodwill.
When the Group acquired a business, embedded derivatives separated from the host
contract by the acquiree were not reassessed on acquisition unless the business
combination resulted in a change in the terms of the contract that significantly
modified the cash flows that otherwise would have been required under the contract.
Contingent consideration was recognised if, and only if, the Group had a present
obligation, the economic outflow was more likely than not and a reliable estimate was
determinable. Subsequent adjustments to the contingent consideration were
recognised as part of goodwill.

Commentary:
Reporting date of subsidiary
The financial statements of the parent and its subsidiaries used in the preparation of the
consolidated financial statements shall be prepared as of the same reporting date. When
the end of the reporting period of the parent is different from that of a subsidiary, the
subsidiary prepares, for consolidation purposes, additional financial statements as of the
same date as the financial statements of the parent, unless it is impracticable to do so.
Where it is impracticable to do so, the parent may use the financial statements of a
subsidiary prepared as of a reporting date different from that of the parent, provided
adjustments are made for the effects of significant transactions or events that occur
between that date and the date of the parents financial statements, and the difference
between the reporting dates of the subsidiary and parent is no more than three months. In
addition, the length of the reporting periods and any difference in the reporting dates shall
be the same from period to period.

FRS 27.22

FRS 27.23


Business combinations involving entities under common control
In this illustration, there is no business combination involving entities under common
control. Where a business combination involves entities or businesses under common
control, it is outside the scope of FRS 103 and may be accounted for using the pooling of
interest method or the acquisition method (when the transaction has substance from the
perspective of the reporting entity).
Illustrative accounting policy where the pooling of interest method is applied:
Business combinations involving entities under common control are accounted for by
applying the pooling of interest method which involves the following:
The assets and liabilities of the combining entities are reflected at their carrying
amounts reported in the consolidated financial statements of the controlling
holding company.
No adjustments are made to reflect the fair values on the date of combination,
or recognise any new assets or liabilities.
No additional goodwill is recognised as a result of the combination.
Any difference between the consideration paid/transferred and the equity
acquired is reflected within the equity as merger reserve.
The statement of comprehensive income reflects the results of the combining
entities for the full year, irrespective of when the combination took place.
Comparatives are presented as if the entities had always been combined since
the date the entities had come under common control.
Contingent liabilities recognised in a business combination
In this illustration, there is no contingent liabilities recognised in a business combination.
Illustrative accounting policy where there is contingent liabilities assumed in the business
combination:
A contingent liability recognised in a business combination is initially measured at its
fair value. Subsequently, it is measured at the higher of:
- The amount that would be recognised in accordance with the accounting policy for
provisions set out in Note 2.21; or
- The amount initially recognised less, when appropriate, cumulative amortisation
recognised in accordance with guidance for revenue recognition.
Measurement of non-controlling interest
FRS 103 provides acquirers with the option of measuring non-controlling interest arising
in a business combination at either:
- Fair value; or
- The non-controlling interests proportionate interest in the acquirees identifiable net
assets.
The option is elected for each individual business combination and does not constitute an
accounting policy choice for similar transactions. Selecting the option will require
management to carefully consider their future intentions regarding transactions with non-
controlling interest, since the two options, combined with the revisions to accounting for
changes in ownership interest of a subsidiary will potentially result in significantly
different amounts of goodwill and equity.

FRS 103.56

FRS 103.19


Commentary:
Measurement of non-controlling interest (continued)
The measurement choice for non-controlling interest is limited to only the components of
non-controlling interest that are present ownership interests that entitle their holders to a
proportionate share of the acquirees net assets, in the event of liquidation. Other
components of non-controlling interests are measured at their acquisition date fair value,
unless another measurement basis is required by another FRS, e.g., FRS 102.
Changes in the ownership of a subsidiary that do not result in loss of control
The paragraph is to be included only if the parent entity extension method was applied
prior to 1 January 2010.

FRS 103.19


2.5 Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiaries not attributable, directly
or indirectly, to owners of the Company, and are presented separately in the
consolidated statement of comprehensive income and within equity in the consolidated
balance sheet, separately from equity attributable to owners of the Company.
Changes in the Companys ownership interest in a subsidiary that do not result in a loss
of control are accounted for as equity transactions. In such circumstances, the carrying
amounts of the controlling and non-controlling interests are adjusted to reflect the
changes in their relative interests in the subsidiary. Any difference between the
amount by which the non-controlling interest is adjusted and the fair value of the
consideration paid or received is recognised directly in equity and attributed to owners
of the Company.
2.6 Foreign currency
The Groups consolidated financial statements are presented in Singapore Dollars,
which is also the Companys functional currency. Each entity in the Group determines
its own functional currency and items included in the financial statements of each
entity are measured using that functional currency.
a) Transactions and balances
Transactions in foreign currencies are measured in the respective functional
currencies of the Company and its subsidiaries and are recorded on initial
recognition in the functional currencies at exchange rates approximating those
ruling at the transaction dates. Monetary assets and liabilities denominated in
foreign currencies are translated at the rate of exchange ruling at the end of
the reporting period. Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using the exchange rates as
at the dates of the initial transactions. Non-monetary items measured at fair
value in a foreign currency are translated using the exchange rates at the date
when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on
translating monetary items at the end of the reporting period are recognised in
profit or loss except for exchange differences arising on monetary items that
form part of the Groups net investment in foreign operations, which are
recognised initially in other comprehensive income and accumulated under
foreign currency translation reserve in equity. The foreign currency translation
reserve is reclassified from equity to profit or loss of the Group on disposal of
the foreign operation.

FRS 27.4
FRS 27.27

FRS 27.30

FRS 27.31

FRS 1.51.d

FRS 21.21

FRS 21.23

FRS 21.28 and 32,
48


2.6 Foreign currency (continued)
b) Consolidated financial statements
For consolidation purpose, the assets and liabilities of foreign operations are
translated into SGD at the rate of exchange ruling at the end of the reporting
period and their profit or loss are translated at the exchange rates prevailing at
the date of the transactions. The exchange differences arising on the
translation are recognised in other comprehensive income. On disposal of a
foreign operation, the component of other comprehensive income relating to
that particular foreign operation is recognised in profit or loss.
In the case of a partial disposal without loss of control of a subsidiary that
includes a foreign operation, the proportionate share of the cumulative amount
of the exchange differences are re-attributed to non-controlling interest and
are not recognised in profit or loss. For partial disposals of associates or jointly
controlled entities that are foreign operations, the proportionate share of the
accumulated exchange differences is reclassified to profit or loss.
2.7 Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent to
recognition, plant and equipment and furniture and fixtures are measured at cost less
accumulated depreciation and any accumulated impairment losses. The cost includes
the cost of replacing part of the property, plant and equipment and borrowing costs
that are directly attributable to the acquisition, construction or production of a
qualifying property, plant and equipment. The accounting policy for borrowing costs is
set out in Note 2.25. The cost of an item of property, plant and equipment is
recognised as an asset if, and only if, it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be
measured reliably.
When significant parts of property, plant and equipment are required to be replaced in
intervals, the Group recognises such parts as individual assets with specific useful lives
and depreciation, respectively. Likewise, when a major inspection is performed, its cost
is recognised in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs are recognised
in profit or loss as incurred.
Freehold land and buildings are measured at fair value less accumulated depreciation
on buildings and impairment losses recognised after the date of the revaluation.
Valuations are performed with sufficient regularity to ensure that the carrying amount
does not differ materially from the fair value of the freehold land and buildings at the
end of the reporting period.

FRS 21.39

FRS 21.48

FRS 21.48C

FRS 16.15 and 16
FRS 16.30

FRS 16.7

FRS 16.12 and 13

FRS 16.14

FRS 16.31 and
73.a


2.7 Property, plant and equipment (continued)
Any revaluation surplus is recognised in other comprehensive income and accumulated
in equity under the asset revaluation reserve, except to the extent that it reverses a
revaluation decrease of the same asset previously recognised in profit or loss, in which
case the increase is recognised in profit or loss. A revaluation deficit is recognised in
profit or loss, except to the extent that it offsets an existing surplus on the same asset
carried in the asset revaluation reserve.
Any accumulated depreciation as at the revaluation date is eliminated against the gross
carrying amount of the asset and the net amount is restated to the revalued amount of
the asset. The revaluation surplus included in the asset revaluation reserve in
respect of an asset is transferred directly to retained earnings on retirement or
disposal of the asset.
Freehold land has an unlimited useful life and therefore is not depreciated.
Depreciation is computed on a straight-line basis over the estimated useful lives of the
assets as follows:
- Buildings: 40 years
- Plant and equipment: 3 to 15 years
- Furniture and fixtures: 5 to 20 years
Assets under construction included in plant and equipment are not depreciated as
these assets are not yet available for use.
The carrying values of property, plant and equipment are reviewed for impairment
when events or changes in circumstances indicate that the carrying value may not be
recoverable.
The residual value, useful life and depreciation method are reviewed at each financial
year-end, and adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no
future economic benefits are expected from its use or disposal. Any gain or loss on de-
recognition of the asset is included in profit or loss in the year the asset is
derecognised.
Commentary:
Revaluation of property, plant and equipment
When an item of property, plant and equipment is revalued, any accumulated depreciation
at the date of the revaluation may instead be restated proportionately with the change in
the gross carrying amount of the asset so that the carrying amount of the asset after
revaluation equals its revalued amount. This method is often used when an asset is
revalued by means of applying an index to its depreciated replacement cost.
Alternatively, the entity may adopt a policy to make an annual transfer of the revaluation
surplus to retained earnings as the asset is used. In such a case, the amount of the
surplus transferred would be the difference between depreciation based on the revalued
carrying amount of the asset and depreciation based on the assets original cost.

FRS 16.39

FRS 16.40

FRS 16.35.b

FRS 16.41

FRS 16.73.b and c

FRS 36.9

FRS 16.51
FRS 16.61

FRS 16.67
FRS 16.68

FRS 16.35.a

FRS 16.41


2.8 Investment properties
Investment properties are properties that are either owned by the Group or leased
under a finance lease in order to earn rentals or for capital appreciation, or both,
rather than for use in the production or supply of goods or services, or for
administrative purposes, or in the ordinary course of business. Investment properties
comprise completed investment properties and properties that are being constructed
or developed for future use as investment properties. Properties held under operating
leases are classified as investment properties when the definition of investment
properties is met and they are accounted for as finance leases.
Investment properties are initially measured at cost, including transaction costs. The
carrying amount includes the cost of replacing part of an existing investment property
at the time that cost is incurred if the recognition criteria are met.
Subsequent to initial recognition, investment properties are measured at fair value
which reflects market conditions at the end of the reporting period. Gains or losses
arising from changes in the fair values of investment properties are included in profit or
loss in the year in which they arise.
Investment properties are derecognised when either they have been disposed of or
when the investment property is permanently withdrawn from use and no future
economic benefit is expected from its disposal. Any gain or loss on the retirement or
disposal of an investment property is recognised in profit or loss in the year of
retirement or disposal.
Transfers are made to or from investment property only when there is a change in use.
For a transfer from investment property to owner-occupied property, the deemed cost
for subsequent accounting is the fair value at the date of change in use. For a transfer
from owner-occupied property to investment property, the property is accounted for in
accordance with the accounting policy for property, plant and equipment set out in
Note 2.7 up to the date of change in use.

Commentary:
Investment properties
Judgment is needed to determine whether a property qualifies as investment property.
When classification is difficult, the entity should disclose the criteria developed by the
entity so that it can exercise that judgment consistently in accordance with the definition
of investment property.
Alternatively, the entity may adopt the cost model which is to measure investment
properties at cost less accumulated depreciation and accumulated impairment losses. In
these circumstances, disclosure about the cost basis and depreciation rates would be
required. This option is not available if the entity accounts for property interest held under
an operating lease as investment property.
In addition, for any investment properties recorded at cost, FRS 40 requires disclosure
about the fair value, including disclosures about the methods and significant assumptions
used to determine the fair value. Therefore, companies would still need to determine the
fair value of the investment properties. In the exceptional cases when an entity cannot
determine the fair value of investment properties reliably, it shall disclose:
(a) a description of the investment properties;
(b) an explanation of why fair value cannot be determined reliably; and
(c) if possible, the range of estimate within which fair value is highly likely to lie.

FRS 40.5

FRS 40.8.e

FRS 40.6

FRS 40.20

FRS 40.33

FRS 40.35

FRS 40.66

FRS 40.69

FRS 40.57
FRS 40.60

FRS 40.61

FRS 40.14 and 75.c

FRS 40.30 and 56

FRS 40.34

FRS 40.79.e


2.8 Investment properties (continued)
If an owner-occupied property becomes an investment property that will be carried at fair
value, the entity shall treat any difference at that date between the carrying amount of
the property in accordance with FRS 16 and its fair value in the same way as a revaluation
in accordance with FRS 16.

FRS 40.61


2.9 Intangible assets
a) Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is
measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each of the Groups
cash-generating units that are expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the acquiree
are assigned to those units.
The cash-generating unit to which goodwill has been allocated is tested for
impairment annually and whenever there is an indication that the cash-
generating unit may be impaired. Impairment is determined for goodwill by
assessing the recoverable amount of each cash-generating unit (or group of
cash-generating units) to which the goodwill relates. Where the recoverable
amount of the cash-generating unit is less than the carrying amount, an
impairment loss is recognised in profit or loss. Impairment losses recognised
for goodwill are not reversed in subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation
within that cash-generating unit is disposed of, the goodwill associated with
the operation disposed of is included in the carrying amount of the operation
when determining the gain or loss on disposal of the operation. Goodwill
disposed of in this circumstance is measured based on the relative fair values
of the operations disposed of and the portion of the cash-generating unit
retained.
Goodwill and fair value adjustments arising on the acquisition of foreign
operation on or after 1 January 2005 are treated as assets and liabilities of
the foreign operations and are recorded in the functional currency of the
foreign operations and translated in accordance with the accounting policy set
out in Note 2.6.
Goodwill and fair value adjustments which arose on acquisitions of foreign
operation before 1 January 2005 are deemed to be assets and liabilities of the
Company and are recorded in SGD at the rates prevailing at the date of
acquisition.

Commentary:
Goodwill
FRS 36 Impairment of Assets permits annual impairment test for goodwill and
intangible assets with indefinite useful lives to be performed at any time during
the year provided it is at the same time each year. Different goodwill and
intangible assets may be tested at different times.

FRS 103.B63.a

FRS 36.80

FRS 36.90

FRS 36.124

FRS 36.86

FRS 21.47

FRS 21.59

FRS 36.96 and
10


2.9 Intangible assets (continued)
b) Other intangible assets
Intangible assets acquired separately are measured initially at cost. The cost of
intangible assets acquired in a business combination is their fair value as at the
date of acquisition. Following initial acquisition, intangible assets are carried at
cost less any accumulated amortisation and any accumulated impairment
losses. Internally generated intangible assets, excluding capitalised
development costs, are not capitalised and expenditure is reflected in profit or
loss in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite useful lives are amortised over the estimated
useful lives and assessed for impairment whenever there is an indication that
the intangible asset may be impaired. The amortisation period and the
amortisation method are reviewed at least at each financial year-end. Changes
in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset is accounted for by changing the
amortisation period or method, as appropriate, and are treated as changes in
accounting estimates. The amortisation expense on intangible assets with
finite useful lives is recognised in profit or loss in the expense category
consistent with the function of the intangible asset.
Intangible assets with indefinite useful lives or not yet available for use are
tested for impairment annually , or more frequently if the events and
circumstances indicate that the carrying value may be impaired either
individually or at the cash-generating unit level. Such intangible assets are not
amortised. The useful life of an intangible asset with an indefinite useful life is
reviewed annually to determine whether the useful life assessment continues
to be supportable. If not, the change in useful life from indefinite to finite is
made on a prospective basis.
Gains or losses arising from de-recognition of an intangible asset are measured
as the difference between the net disposal proceeds and the carrying amount
of the asset and are recognised in profit or loss when the asset is
derecognised.
i) Brands
The brands were acquired in business combinations. The useful lives of
the brands are estimated to be indefinite because based on the
current market share of the brands, management believes there is no
foreseeable limit to the period over which the brands are expected to
generate net cash inflows for the Group.
ii) Research and development costs
Research costs are expensed as incurred. Deferred development costs
arising from development expenditures on an individual project are
recognised as an intangible asset when the Group can demonstrate
the technical feasibility of completing the intangible asset so that it
will be available for use or sale, its intention to complete and its ability
to use or sell the asset, how the asset will generate future economic
benefits, the availability of resources to complete and the ability to
measure reliably the expenditures during the development.

FRS 38.24
FRS 38.33

FRS 38.74

FRS 38.88

FRS 38.97 and
118.b
FRS 36.9

FRS 38.104

FRS 36.10.a

FRS 36.9

FRS 38.107
FRS 38.109

FRS 38.113

FRS 38.118.a
FRS 38.122.a

FRS 38.54
FRS 38.57


2.9 Intangible assets (continued)
b) Other intangible assets (continued)
ii) Research and development costs (continued)
Following initial recognition of the deferred development costs as an
intangible asset, it is carried at cost less accumulated amortisation
and any accumulated impairment losses. Amortisation of the
intangible asset begins when development is complete and the asset is
available for use. Deferred development costs have a finite useful life
and are amortised over the period of expected sales from the related
project (ranging from 4 to 8 years) on a straight line basis.
iii) Club membership
Club membership was acquired separately and is amortised on a
straight line basis over its finite useful life of 10 years.

Commentary:
Intangible assets
Alternatively, the entity may adopt the revaluation model which is to measure
intangible assets at fair value less accumulated amortisation and accumulated
impairment losses. This option is only available if the fair value can be
determined by reference to an active market.
Please refer to commentary no.1 of Note 2.9(a) Goodwill.
2.10 Land use rights
Land use rights are initially measured at cost. Following initial recognition, land use
rights are measured at cost less accumulated amortisation. The land use rights are
amortised on a straight-line basis over the lease term of 50 years.

Commentary:
Land use rights
Long-term land-use rights are leases under the definition of FRS 17. In this illustration, it
is assumed that the lease does not transfer substantially all the risks and rewards
incidental to ownership of the land. Therefore, the lease is an operating lease and the
payments made on acquiring the land-use right represent prepaid lease payments.

FRS 38.74

FRS 38.118.a and b

FRS 38.118.a and b

FRS 38.75

FRS 17.8

2.11 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset
may be impaired. If any indication exists, or when an annual impairment testing for an
asset is required, the Group makes an estimate of the assets recoverable amount.
An assets recoverable amount is the higher of an assets or cash-generating units fair
value less costs to sell and its value in use and is determined for an individual asset,
unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets. Where the carrying amount of an asset or cash-
generating unit exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount. In assessing value in use, the estimated future
cash flows expected to be generated by the asset are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In determining fair value less costs
to sell, recent market transactions are taken into account, if available. If no such
transactions can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples or other available fair value
indicators.
The Group bases its impairment calculation on detailed budgets and forecast
calculations which are prepared separately for each of the Groups cash-generating
units to which the individual assets are allocated. These budgets and forecast
calculations are generally covering a period of five years. For longer periods, a long-
term growth rate is calculated and applied to project future cash flows after the fifth
year.
Impairment losses of continuing operations are recognised in profit or loss in those
expense categories consistent with the function of the impaired asset, except for
assets that are previously revalued where the revaluation was taken to other
comprehensive income. In this case, the impairment is also recognised in other
comprehensive income up to the amount of any previous revaluation.
For assets excluding goodwill, an assessment is made at each reporting date as to
whether there is any indication that previously recognised impairment losses may no
longer exist or may have decreased. If such indication exists, the Group estimates the
assets or cash-generating units recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in the estimates used to
determine the assets recoverable amount since the last impairment loss was
recognised. If that is the case, the carrying amount of the asset is increased to its
recoverable amount. That increase cannot exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been recognised
previously. Such reversal is recognised in profit or loss unless the asset is measured at
revalued amount, in which case the reversal is treated as a revaluation increase.

FRS 36.9

FRS 36.18 and 22

FRS 36.59

FRS 36.30 and 31

FRS 36.33

FRS 36.60

FRS 36.110

FRS 36.114

FRS 36.117

FRS 36.119


2.12 Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the financial
and operating policies so as to obtain benefits from its activities.
In the Companys separate financial statements, investments in subsidiaries are
accounted for at cost less impairment losses.

Commentary:
Subsidiaries
Alternatively, the entity may choose to account for its investment in subsidiary in
accordance with FRS 39. The same accounting must be applied for all investments in
subsidiaries. When an entity accounts for a subsidiary at fair value in accordance with FRS
39, this treatment continues when the subsidiary is subsequently classified as held for
sale.
2.13 Associates
An associate is an entity, not being a subsidiary or a joint venture, in which the Group
has significant influence. An associate is equity accounted for from the date the Group
obtains significant influence until the date the Group ceases to have significant
influence over the associate.
The Groups investments in associates are accounted for using the equity method.
Under the equity method, the investment in associates is carried in the balance sheet
at cost plus post-acquisition changes in the Groups share of net assets of the
associates. Goodwill relating to associates is included in the carrying amount of the
investment and is neither amortised nor tested individually for impairment. Any excess
of the Groups share of the net fair value of the associates identifiable assets, liabilities
and contingent liabilities over the cost of the investment is included as income in the
determination of the Groups share of results of the associate in the period in which the
investment is acquired.
The profit or loss reflects the share of the results of operations of the associates.
Where there has been a change recognised in other comprehensive income by the
associates, the Group recognises its share of such changes in other comprehensive
income. Unrealised gains and losses resulting from transactions between the Group
and the associate are eliminated to the extent of the interest in the associates.
The Groups share of the profit or loss of its associates is the profit attributable to
equity holders of the associate and, therefore is the profit or loss after tax and non-
controlling interests in the subsidiaries of associates.
When the Groups share of losses in an associate equals or exceeds its interest in the
associate,

the Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.

FRS 27.4

FRS 27.38 and 43.c

FRS 27.38

FRS 28.2
FRS 28.18

FRS 28.13

FRS 28.11

FRS 28.23.a

FRS 28.23.b

FRS 28.39

FRS 28.22

FRS 28.29 and 30


2.13 Associates (continued)
After application of the equity method, the Group determines whether it is necessary to
recognise an additional impairment loss on the Groups investment in its associates.
The Group determines at the end of each reporting period whether there is any
objective evidence that the investment in the associate is impaired. If this is the case,
the Group calculates the amount of impairment as the difference between the
recoverable amount of the associate and its carrying value and recognises the amount
in profit or loss.
The financial statements of the associates are prepared as of the same reporting date
as the Company. Where necessary, adjustments are made to bring the accounting
policies in line with those of the Group.
Upon loss of significant influence over the associate, the Group measures and
recognises any retained investment at its fair value. Any difference between the
carrying amount of the associate upon loss of significant influence and the fair value of
the aggregate of the retained investment and proceeds from disposal is recognised in
profit or loss.

Commentary:
Associates
The interest in an associate is the carrying amount of the investment in the associate
under the equity method together with any long-term interests that, in substance, form
part of the investors net investment in the associate. For example, an item for which
settlement is neither planned nor likely to occur in the foreseeable future is, in substance,
an extension of the entitys investment in that associate. Such items may include
preference shares and long-term receivables or loans but do not include trade receivables,
trade payables or any long-term receivables for which adequate collateral exists, such as
secured loans.
The financial statements of the associate are prepared as of the same reporting date as
the Company unless it is impracticable to do so. When the financial statements of an
associate used in applying the equity method are prepared as of a different reporting date
from that of the Company, adjustments are made for the effects of significant
transactions or events that occur between that date and the reporting date of the
Company.
When the financial statements of an associate used in applying the equity method are as
of a reporting date or for a period that is different from that of the Company, the
reporting date of the financial statements of the associate and the reason for using a
different reporting date or different period shall be disclosed.

FRS 28.31

FRS 28.33

FRS 28.24 and 25
FRS 28.26

FRS 28.18

FRS 28.29

FRS 28.24 and 25

FRS 28.37.e


2.14 Joint venture
A joint venture is a contractual arrangement whereby two or more parties undertake
an economic activity that is subject to joint control, where the strategic financial and
operating decisions relating to the activity require the unanimous consent of the
parties sharing control. The Group recognises its interest in the joint venture using the
proportionate consolidation method. The Group combines its proportionate share of
each of the assets, liabilities, income and expenses of the joint venture with the similar
items, line by line, in its consolidated financial statements. The joint venture is
proportionately consolidated from the date the Group obtains joint control until the
date the Group ceases to have joint control over the joint venture.
Adjustments are made in the Group's consolidated financial statements to eliminate the
Group's share of intragroup balances, income and expenses and unrealised gains and
losses on such transactions between the Group and its jointly controlled entity. Losses
on transactions are recognised immediately if the loss provides evidence of a reduction
in the net realisable value of current assets or an impairment loss.
The financial statements of the joint venture are prepared as of the same reporting
date as the Company. Where necessary, adjustments are made to bring the
accounting policies into line with those of the Group.
Upon loss of joint control, the Group measures and recognises any retained investment
at its fair value. Any difference between the carrying amount of the former jointly
controlled entity upon loss of joint control and the aggregate of the fair value of the
retained investment and proceeds from disposal is recognised in profit or loss.

Commentary:
Joint venture
In this illustration, interest in joint venture which is a jointly controlled entity is accounted
for using proportionate consolidation. The entity may instead choose to account for its
interest in joint venture using the equity method. This accounting policy does not apply to
jointly controlled assets and jointly controlled operations.
Alternatively, the entity may include separate line items for its share of the assets,
liabilities, income and expenses of the joint venture in its financial statements.
The financial statements of the joint venture are prepared as of the same reporting date
as the Company unless it is impracticable to do so.
Please refer to commentary no. 1 of Note 2.4 when the financial statements of the joint
venture used in applying the proportionate consolidation are prepared as of a different
reporting date from that of the Company. The same principles apply.
Please refer to commentary no. 2 of Note 2.13 when the financial statements of the joint
venture used in applying the equity method are prepared as of a different reporting date
from that of the Company. The same principles apply.

FRS 31.3

FRS 31.30

FRS 31.34

FRS 31.36

FRS 31.48

FRS 31.45

FRS 31.38

FRS 31.34

FRS 31.33

FRS 31.40


2.15 Financial assets
Initial recognition and measurement
Financial assets are recognised when, and only when, the Group becomes a party to the
contractual provisions of the financial instrument. The Group determines the
classification of its financial assets at initial recognition.
When financial assets are recognised initially, they are measured at fair value, plus, in
the case of financial assets not at fair value through profit or loss, directly attributable
transaction costs.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as
follows:
a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held
for trading and financial assets designated upon initial recognition at fair value
through profit or loss. Financial assets are classified as held for trading if they
are acquired for the purpose of selling or repurchasing in the near term. This
category includes derivative financial instruments entered into by the Group
that are not designated as hedging instruments in hedge relationships as
defined by FRS 39. Derivatives, including separated embedded derivatives are
also classified as held for trading unless they are designated as effective
hedging instruments.
The Group has not designated any financial assets upon initial recognition at
fair value through profit or loss.
Subsequent to initial recognition, financial assets at fair value through profit or
loss are measured at fair value. Any gains or losses arising from changes in fair
value of the financial assets are recognised in profit or loss. Net gains or net
losses on financial assets at fair value through profit or loss include exchange
differences, interest and dividend income.
Derivatives embedded in host contracts are accounted for as separate
derivatives and recorded at fair value if their economic characteristics and
risks are not closely related to those of the host contracts and the host
contracts are not held for trading or designated at fair value through profit or
loss. These embedded derivatives are measured at fair value with changes in
fair value recognised in profit or loss. Reassessment only occurs if there is a
change in the terms of the contract that significantly modifies the cash flows
that would otherwise be required.
b) Loans and receivables
Non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market are classified as loans and receivables.
Subsequent to initial recognition, loans and receivables are measured at
amortised cost using the effective interest method, less impairment. Gains and
losses are recognised in profit or loss when the loans and receivables are
derecognised or impaired, and through the amortisation process.

FRS 107.21

FRS 39.14

FRS 39.43

FRS 39.9

FRS 39.46
FRS 39.55.a

FRS 107.AGB5.e

FRS 39.11

INT FRS 109.7

FRS 39.9

FRS 39.46.a

FRS 39.56
FRS 107.AGB5.e


2.15 Financial assets (continued)
Subsequent measurement (continued)
c) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed
maturity are classified as held-to-maturity when the Group has the positive
intention and ability to hold the investment to maturity. Subsequent to initial
recognition, held-to-maturity investments are measured at amortised cost
using the effective interest method, less impairment. Gains and losses are
recognised in profit or loss when the held-to-maturity investments are
derecognised or impaired, and through the amortisation process.
d) Available-for-sale financial assets
Available-for-sale financial assets include equity and debt securities. Equity
investments classified as available-for-sale are those, which are neither
classified as held for trading nor designated at fair value through profit or loss.
Debt securities in this category are those which are intended to be held for an
indefinite period of time and which may be sold in response to needs for
liquidity or in response to changes in the market conditions.
After initial recognition, available-for-sale financial assets are subsequently
measured at fair value. Any gains or losses from changes in fair value of the
financial assets are recognised in other comprehensive income, except that
impairment losses, foreign exchange gains and losses on monetary
instruments and interest calculated using the effective interest method are
recognised in profit or loss. The cumulative gain or loss previously recognised
in other comprehensive income is reclassified from equity to profit or loss as a
reclassification adjustment when the financial asset is de-recognised.
Investments in equity instruments whose fair value cannot be reliably
measured are measured at cost less impairment loss.
De-recognition
A financial asset is derecognised where the contractual right to receive cash flows
from the asset has expired. On de-recognition of a financial asset in its entirety,
the difference between the carrying amount and the sum of the consideration
received and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in profit or loss.
Regular way purchase or sale of a financial asset
All regular way purchases and sales of financial assets are recognised or
derecognised on the trade date i.e., the date that the Group commits to purchase
or sell the asset. Regular way purchases or sales are purchases or sales of financial
assets that require delivery of assets within the period generally established by
regulation or convention in the marketplace concerned.

FRS 39.9

FRS 39.46.b

FRS 39.56
FRS 107.AGB5.e

FRS 107.AGB5.b
FRS 39.9

FRS 39.46

FRS 39.55.b

FRS 107.AGB5.e

FRS 39.46.c

FRS 39.17.a
FRS 39.26

FRS 107.AGB5.c
FRS 39.38
FRS 39.9


Financial assets or financial liabilities designated as at fair value through profit or loss
In this illustration, no financial instrument has been designated as financial assets or
financial liabilities at fair value through profit or loss. The following disclosures of
accounting policies apply if there is any financial asset or financial liability designated as at
fair value through profit or loss:
- The nature of the financial assets or financial liabilities the entity has designated as at
fair value through profit or loss;
- The criteria for so designating such financial assets or financial liabilities on initial
recognition; and
- How the entity has satisfied the conditions in paragraph 9, 11A or 12 of FRS 39 for
such designation. For instruments designated as at fair value through profit or loss in
accordance with FRS 39.9.b.i, that disclosure includes a narrative description of the
circumstances underlying the measurement or recognition inconsistency that would
otherwise arise. For instruments designated as at fair value through profit or loss in
accordance with paragraph FRS 39.9.b.ii, that disclosure includes a narrative
description of how designation at fair value through profit or loss is consistent with the
entitys documented risk management or investment strategy.
Net gain or loss on financial assets at fair value through profit or loss
Alternatively, interest and dividend income may be recognised separately.

FRS 107.AGB5.a

FRS 107.AGB5.e


Commentary:
De-recognition of financial assets
In this illustration, there is no transfer of financial asset.
Illustrative accounting policy when the entity transfers the financial asset:
A financial asset (or, where applicable a part of a financial asset or part of a group of
similar financial asset) is de-recognised when:
(a) The Group transfers the contractual rights to receive the cash flows of the
financial asset; or
(b) The Group retains the contractual rights to receive the cash flows of the financial
asset, but assumes a contractual obligation to pay the cash flows to one or more
recipients in a past-through arrangement; or
(c) The Group has transferred its rights to receive cash flows from the asset and
either has transferred substantially all the risks and rewards of the asset, or has
neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
Where the Group has transferred its rights to receive cash flows from an asset and has
neither transferred nor retained substantially all the risks and rewards of the asset nor
transferred control of the asset, the asset is recognised to the extent of the Groups
continuing involvement in the asset. Continuing involvement that takes the form of a
guarantee over the transferred asset, is measured at the lower of the original carrying
amount of the asset and the maximum amount of consideration that the Group could
be required to repay.
Where continuing involvement takes the form of a written and/or purchased option on
the transferred asset, the extent of the groups continuing involvement is the amount
of the transferred asset that the group may repurchase, except that in the case of a
written put option on an asset measured at fair value, the extent of the groups
continuing involvement is limited to the lower of the fair value of the transferred asset
and the option exercise price.
If the Group have transfers of financial assets that are not derecognised in their entirety
or transfers of financial assets that are derecognised in their entirety but retains
continuing involvement, please refer to disclosure requirements under of paragraphs 42A
to 42G of FRS 107.
Regular way purchases and sales
Alternatively, regular way purchases and sales can be accounted for on settlement dates.

FRS 39.18.a

FRS 39.18.b and
19

FRS 39.20

FRS 39.20.c.ii

FRS 39.30.a

FRS 39.30.b and
c

FRS 107.42A
42G

FRS 39.38


2.16 Impairment of financial assets
The Group assesses at each reporting date whether there is any objective evidence that
a financial asset is impaired.
a) Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first assesses whether
objective evidence of impairment exists individually for financial assets that are
individually significant, or collectively for financial assets that are not
individually significant. If the Group determines that no objective evidence of
impairment exists for an individually assessed financial asset, whether
significant or not, it includes the asset in a group of financial assets with similar
credit risk characteristics and collectively assesses them for impairment.
Assets that are individually assessed for impairment and for which an
impairment loss is, or continues to be recognised are not included in a
collective assessment of impairment.
If there is objective evidence that an impairment loss on financial assets
carried at amortised cost has been incurred, the amount of the loss is
measured as the difference between the assets carrying amount and the
present value of estimated future cash flows discounted at the financial assets
original effective interest rate. If a loan has a variable interest rate, the
discount rate for measuring any impairment loss is the current effective
interest rate. The carrying amount of the asset is reduced through the use of
an allowance account. The impairment loss is recognised in profit or loss.
When the asset becomes uncollectible, the carrying amount of impaired
financial assets is reduced directly or if an amount was charged to the
allowance account, the amounts charged to the allowance account are written
off against the carrying value of the financial asset.
To determine whether there is objective evidence that an impairment loss on
financial assets has been incurred, the Group considers factors such as the
probability of insolvency or significant financial difficulties of the debtor and
default or significant delay in payments.
If in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment
was recognised, the previously recognised impairment loss is reversed to the
extent that the carrying amount of the asset does not exceed its amortised
cost at the reversal date. The amount of reversal is recognised in profit or loss.
b) Financial assets carried at cost
If there is objective evidence (such as significant adverse changes in the
business environment where the issuer operates, probability of insolvency or
significant financial difficulties of the issuer) that an impairment loss on
financial assets carried at cost has been incurred, the amount of the loss is
measured as the difference between the assets carrying amount and the
present value of estimated future cash flows discounted at the current market
rate of return for a similar financial asset. Such impairment losses are not
reversed in subsequent periods.

FRS 107.21

FRS 39.58

FRS 39.64

FRS 39.63

FRS 39.AG84

FRS 107.16

FRS 107.AGB5.d

FRS 107.AGB5.f

FRS 39.65

FRS 39.66
FRS 107.AGB5.f


2.16 Impairment of financial assets (continued)
c) Available-for-sale financial assets
In the case of equity investments classified as available-for-sale, objective
evidence of impairment include (i) significant financial difficulty of the issuer or
obligor, (ii) information about significant changes with an adverse effect that
have taken place in the technological, market, economic or legal environment
in which the issuer operates, and indicates that the cost of the investment in
equity instrument may not be recovered; and (iii) a significant or prolonged
decline in the fair value of the investment below its costs. Significant is to be
evaluated against the original cost of the investment and prolonged against
the period in which the fair value has been below its original cost.

If an available-for-sale financial asset is impaired, an amount comprising the
difference between its acquisition cost (net of any principal repayment and
amortisation) and its current fair value, less any impairment loss previously
recognised in profit or loss, is transferred from other comprehensive income
and recognised in profit or loss. Reversals of impairment losses in respect of
equity instruments are not recognised in profit or loss; increase in their fair
value after impairment are recognised directly in other comprehensive income.

In the case of debt instruments classified as available-for-sale, impairment is
assessed based on the same criteria as financial assets carried at amortised
cost. However, the amount recorded for impairment is the cumulative loss
measured as the difference between the amortised cost and the current fair
value, less any impairment loss on that investment previously recognised in
profit or loss. Future interest income continues to be accrued based on the
reduced carrying amount of the asset, using the rate of interest used to
discount the future cash flows for the purpose of measuring the impairment
loss. The interest income is recorded as part of finance income. If, in a
subsequent year, the fair value of a debt instrument increases and the
increases can be objectively related to an event occurring after the impairment
loss was recognised in profit or loss, the impairment loss is reversed in profit
or loss.

Commentary:
Financial assets that are the subject of renegotiated terms
When the terms of financial assets that would otherwise be past due or impaired have
been renegotiated, the entity shall disclose the accounting policy for financial assets that
are the subject of renegotiated terms.
Impairment of financial assets carried at amortised cost
When there is an impairment loss, the carrying amount of the asset may be reduced either
directly or through the use of an allowance account.
Determination of significant or prolonged decline in fair value of financial instruments
The determination of what is significant or prolonged depends on the circumstances at
the end of the reporting period. This requires judgment and so it varies among entities.

FRS 39.59 and
61
FRS 107.AGB5.f

FRS 39.67 and
68

FRS 39.69

FRS 39.AG93

FRS 39.70

FRS 107.AGB5.g

FRS 39.63

FRS 39.59 and
61


2.17 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and
short-term, highly liquid investments that are readily convertible to known amount of
cash and which are subject to an insignificant risk of changes in value. These also
include bank overdrafts that form an integral part of the Groups cash management.
2.18 Construction contracts
The Group principally operates fixed price contracts. Contract revenue and contract
costs are recognised as revenue and expenses respectively by reference to the stage of
completion of the contract activity at the end of the reporting period (the percentage
of completion method), when the outcome of a construction contract can be estimated
reliably.
The outcome of a construction contract can be estimated reliably when: (i) total
contract revenue can be measured reliably; (ii) it is probable that the economic benefits
associated with the contract will flow to the entity; (iii) the costs to complete the
contract and the stage of completion can be measured reliably; and (iv) the contract
costs attributable to the contract can be clearly identified and measured reliably so
that actual contract costs incurred can be compared with prior estimates.
When the outcome of a construction contract cannot be estimated reliably (principally
during early stages of a contract), contract revenue is recognised only to the extent of
contract costs incurred that are likely to be recoverable and contract costs are
recognised as expense in the period in which they are incurred.
An expected loss on the construction contract is recognised as an expense immediately
when it is probable that total contract costs will exceed total contract revenue.
In applying the percentage of completion method, revenue recognised corresponds to
the total contract revenue (as defined below) multiplied by the actual completion rate
based on the proportion of total contract costs (as defined below) incurred to date and
the estimated costs to complete.
Contract revenue Contract revenue corresponds to the initial amount of revenue
agreed in the contract and any variations in contract work, claims and incentive
payments to the extent that it is probable that they will result in revenue; and they are
capable of being reliably measured.
Contract costs Contract costs include costs that relate directly to the specific
contract and costs that are attributable to contract activity in general and can be
allocated to the contract. Costs that relate directly to a specific contract comprise: site
labour costs (including site supervision); costs of materials used in construction;
depreciation of equipment used on the contract; costs of design, and technical
assistance that is directly related to the contract.
The Groups contracts are typically negotiated for the construction of a single asset or
a group of assets which are closely interrelated or interdependent in terms of their
design, technology and function. In certain circumstances, the percentage of
completion method is applied to the separately identifiable components of a single
contract or to a group of contracts together in order to reflect the substance of a
contract or a group of contracts.

FRS 7.46

FRS 7.8

FRS 11.22
FRS 11.25

FRS 11.23

FRS 11.32

FRS 11.36
FRS 11.22
FRS 11.32

FRS 11.30.a

FRS 11.11

FRS 11.16
FRS 11.17

FRS 11.4

FRS 11.7


2.18 Construction contracts (continued)
Assets covered by a single contract are treated separately when:
- Separate proposals have been submitted for each asset
- Each asset has been subject to separate negotiation and the contractor and
customer have been able to accept or reject that part of the contract relating
to each asset
- The costs and revenues of each asset can be identified
A group of contracts are treated as a single construction contract when:
- The group of contracts are negotiated as a single package; the contracts are
so closely interrelated that they are, in effect, part of a single project with an
overall profit margin
- The contracts are performed concurrently or in a continuous sequence

Commentary:
Stage of completion
The stage of completion of a contract may be determined in a variety of ways. The entity
uses the method that measures reliably the work performed. Depending on the nature of
the contract, other acceptable methods include surveys of work performed and
completion of a physical proportion of the contract work.

FRS 11.8

FRS 11.9

FRS 11.30

2.19 Development properties
Development properties are properties acquired or being constructed for sale in the
ordinary course of business, rather than to be held for the Groups own use, rental or
capital appreciation.
Development properties are held as inventories and are measured at the lower of cost
and net realisable value.
The costs of development properties include:
- Freehold and leasehold rights for land;
- Amounts paid to contractors for construction; and
- Borrowing costs, planning and design costs, costs of site preparation, professional
fees for legal services, property transfer taxes, construction overheads and other
related costs.
Non-refundable commissions paid to sales or marketing agents on the sale of real
estate units are expensed when incurred.
Net realisable value of development properties is the estimated selling price in the
ordinary course of the business, based on market prices at the end of the reporting
period and discounted for the time value of money if material, less the estimated costs
of completion and the estimated costs necessary to make the sale.
The costs of development properties recognised in profit or loss on disposal are
determined with reference to the specific costs incurred on the property sold and an
allocation of any non-specific costs based on the relative size of the property sold.
Commentary:
Sale of completed development property and pre-completion contracts for sale of development
property
In this illustration, the Group does not have any sale of completed development property
and pre-completion contracts for sale of development property.
For illustration of accounting policies relating to sale of completed development property
and pre-completion contracts for sale of development property, please refer to Appendix
A-3 Agreements for the construction of real estate.

FRS 2.6.a and b

FRS 2.9

FRS 2.23

FRS 2.6 and 36.a

2.20 Inventories
Inventories are stated at the lower of cost and net realisable value. Costs incurred in
bringing the inventories to their present location and condition are accounted for as
follows:
- Raw materials: purchase costs on a first-in first-out basis.
- Finished goods and work-in-progress: costs of direct materials and labour and a
proportion of manufacturing overheads based on normal operating capacity. These
costs are assigned on a first-in first-out basis.
Where necessary, allowance is provided for damaged, obsolete and slow moving items
to adjust the carrying value of inventories to the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business,
less estimated costs of completion and the estimated costs necessary to make the sale.
Commentary:
Cost formulas
Alternatively, the costs may be assigned by using the weighted average cost formula. An
entity shall use the same cost formula for all inventories having a similar nature and use to
the entity. For inventories with a different nature or use, different cost formulas may be
justified.
2.21 Provisions
General
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and the amount
of the obligation can be estimated reliably.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the
current best estimate. If it is no longer probable that an outflow of economic resources
will be required to settle the obligation, the provision is reversed. If the effect of the
time value of money is material, provisions are discounted using a current pre tax rate
that reflects, where appropriate, the risks specific to the liability. When discounting is
used, the increase in the provision due to the passage of time is recognised as a finance
cost.
Warranty provisions
Provisions for warranty-related costs are recognised when the product is sold or
service provided. Initial recognition is based on historical experience. The initial
estimate of warranty-related costs is revised annually.

FRS 2.9, 10 and
36.a

FRS 2.25

FRS 2.12 and 13

FRS 2.6 and 36.a

FRS 2.25

FRS 37.14

FRS 37.59

FRS 37.45-47

FRS 37.60

2.21 Provisions (continued)
Commentary:
In this illustration, the Group does not have any decommissioning liability, greenhouse gas
emission liability or waste electric and electronic equipment liability.

Provision for de-commissioning cost
Illustrative accounting policy for de-commissioning liability when the related asset is
measured using the cost model:
The provision for de-commissioning costs arose on construction of a manufacturing
facility for the production of fire retardant materials. De-commissioning costs are
provided at the present value of expected costs to settle the obligation using
estimated cash flows and are recognised as part of the cost of that particular asset.
The cash flows are discounted at a current pre tax rate that reflects the risks specific
to the de-commissioning liability. The unwinding of the discount is expensed as
incurred and recognised in profit or loss as a finance cost. The estimated future costs
of decommissioning are reviewed annually and adjusted as appropriate. Changes in
the estimated future costs or in the discount rate applied are added to or deducted
from the cost of the asset.
Provision for greenhouse gas emission
Emission rights received could be recognised as intangible assets at their fair value with all
the disclosures required by FRS 38, or an entity may also apply the net liability approach
based on FRS 20.23. The following is an illustrative accounting policy for provision for
greenhouse gas emission when an entity apply the net liability approach:
The Group receives free emission rights in certain European countries as a result of
the European Emission Trading Schemes. The rights are received on an annual basis
and in return the Group is required to remit rights equal to its actual emissions. The
Group has adopted the net liability approach to the emission rights granted.
Therefore, a provision is only recognised when actual emissions exceed the
emission rights granted and still held. The emission costs are recognised as other
operating costs. Where emission rights are purchased from other parties, they are
recorded at cost, and treated as a reimbursement right, whereby they are matched
to the emission liabilities and remeasured to fair value, and the changes in fair value
recognised in profit or loss.
Provision for waste electric and electronic equipment:
Illustrative accounting policy for provision for waste electric and electronic equipment:
The Group is a provider of electrical equipment that falls under the EU Directive on
Waste Electrical and Electronic Equipment. The directive distinguishes between
waste management of equipment sold to private households prior to a date as
determined by each Member State (historical waste) and waste management of
equipment sold to private households after that date (new waste). A provision for
the expected costs of management of historical waste is recognised when the
Group participates in the market during the measurement period as determined by
each Member State, and the costs can be reliably measured. These costs are
recognised as other operating costs in profit or loss.
With respect to new waste, a provision for the expected costs is recognised when
products that fall within the directive are sold and the disposal costs can be reliably
measured. De-recognition takes place when the obligation expires, is settled or is
transferred. These costs are recognised as part of costs of sales.
With respect to equipment sold to entities other than private households, a
provision is recognised when the Group becomes responsible for the costs of this
waste management, with the costs recognised as other operating costs or cost of
sales as appropriate.

FRS 16.16.c

FRS 37.45

FRS 37.47
INT FRS 101.8

FRS 37.59
INT FRS 101.5

FRS 8.10

INT FRS 106


2.21 Provisions (continued)
In this illustration, the Group does not have restructuring provisions.
Restructuring provisions
Illustrative accounting policy for restructuring provisions:
Restructuring provisions are only recognised when general recognition criteria for
provisions are fulfilled. Additionally, the Group needs to follow a detailed formal plan
about the business or part of the business concerned, the location and number of
employees affected, a detailed estimate of the associated costs and appropriate time-
line. The people affected have a valid expectation that the restructuring is being
carried out or the implementation has been initiated already.
2.22 Government grants
Government grants are recognised at their fair value where there is reasonable
assurance that the grant will be received and all attaching conditions will be complied
with. Where the grant relates to an asset, the fair value is recognised as deferred
capital grant on the balance sheet and is amortised to profit or loss over the expected
useful life of the relevant asset by equal annual instalments.

Commentary:
Government grants related to an asset
Alternatively, government grants related to an asset may be presented in the balance
sheet by deducting the grant in arriving at the carrying amount of the asset.
Government grants related to income
Government grant shall be recognised in profit or loss on a systematic basis over the
periods in which the entity recognises as expenses the related costs for which the grants
are intended to compensate. Grants related to income may be presented as a credit in
profit or loss, either separately or under a general heading such as Other income.
Alternatively, they are deducted in reporting the related expenses.
Non-monetary grant
In this illustration, it is assumed that the Group did not receive non-monetary government
grants. If an entity receives non-monetary government grant, the asset and the grant may
be accounted for either at fair value or at nominal amount. The following is an illustrative
accounting policy when an entity chooses to recognised such grant at nominal amount:
Where the Group receives non-monetary government grant, the asset and that grant
are recorded at nominal amount. The grant is deducted in arriving at the carrying
amount of the asset. The grant is then recognised as income over the life of the
depreciable asset by way of a reduced depreciation charge.
Where loans or similar assistance are provided by governments or related institutions
with an interest rate below the current applicable market rate, the effect of this
favourable interest is regarded as additional government grant.

FRS 37.71
FRS 37.72

FRS 20.39.a
FRS 20.7

FRS 20.23 and
24

FRS 20.26

FRS 20.24

FRS 20.12

FRS 20.29

FRS 20.23

FRS 20.23
FRS 20.24

FRS 20.27

FRS 20.10A

2.23 Financial liabilities
Initial recognition and measurement
Financial liabilities are recognised when, and only when, the Group becomes a party to
the contractual provisions of the financial instrument. The Group determines the
classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value plus in the case of financial
liabilities not at fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
a) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss includes financial
liabilities held for trading and financial liabilities designated upon initial
recognition at fair value through profit or loss. Financial liabilities are classified
as held for trading if they are acquired for the purpose of selling in the near
term. This category includes derivative financial instruments entered into by
the Group that are not designated as hedging instruments in hedge
relationships. Separated embedded derivatives are also classified as held for
trading unless they are designated as effective hedging instruments.
Subsequent to initial recognition, financial liabilities at fair value through profit
or loss are measured at fair value. Any gains or losses arising from changes in
fair value of the financial liabilities are recognised in profit or loss.
The Group has not designated any financial liabilities upon initial recognition at
fair value through profit or loss.
b) Other financial liabilities
After initial recognition, other financial liabilities are subsequently measured at
amortised cost using the effective interest rate method. Gains and losses are
recognised in profit or loss when the liabilities are derecognised, and through
the amortisation process.
De-recognition
A financial liability is de-recognised when the obligation under the liability is discharged
or cancelled or expires. When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as a de-recognition
of the original liability and the recognition of a new liability, and the difference in the
respective carrying amounts is recognised in profit or loss.

FRS 107.21

FRS 39.14

FRS 39.43

FRS 39.9
FRS 39.47.a

FRS 39.47

FRS 39.55.a
FRS 107.B5.e

FRS 39.56
FRS 107.B5.e

FRS 39.39

FRS 39.40 and 41


2. Summary of significant accounting policie (continued)
2.24 Financial guarantee
A financial guarantee contract is a contract that requires the issuer to make specified
payments to reimburse the holder for a loss it incurs because a specified debtor fails to
make payment when due in accordance with the terms of a debt instrument.
Financial guarantees are recognised initially as a liability at fair value, adjusted for
transaction costs that are directly attributable to the issuance of the guarantee.
Subsequent to initial recognition, financial guarantees are recognised as income in
profit or loss over the period of the guarantee. If it is probable that the liability will be
higher than the amount initially recognised less amortisation, the liability is recorded at
the higher amount with the difference charged to profit or loss.
2.25 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are
directly attributable to the acquisition, construction or production of that asset.
Capitalisation of borrowing costs commences when the activities to prepare the asset
for its intended use or sale are in progress and the expenditures and borrowing costs
are incurred. Borrowing costs are capitalised until the assets are substantially
completed for their intended use or sale. All other borrowing costs are expensed in the
period they occur. Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.

Commentary:
Borrowing costs
If the entitys policy prior to 1 January 2009 is to expense off the borrowing costs, the
following is an illustrative accounting policy for borrowing costs:
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are
directly attributable to the acquisition, construction or production of that asset.
Capitalisation of borrowing costs commences when the activities to prepare the asset
for its intended use or sale are in progress and the expenditures and borrowing costs
are incurred. Borrowing costs are capitalised until the assets are substantially
completed for their intended use or sale.
The Group capitalises borrowing costs for all eligible assets where construction was
commenced on or after 1 January 2009. The Group continues to expense borrowing
costs relating to construction projects that commence prior to 1 January 2009.
All other borrowing costs are expensed in the period they occur. Borrowing costs
consist of interest and other costs that an entity incurs in connection with the
borrowing of funds.

FRS 107.21

FRS 39.9

FRS 39.43

FRS 39.47.c

FRS 23.8

FRS 23.17

FRS 23.22

FRS 23.8

FRS 23.5

FRS 23.27


2.26 Convertible redeemable preference shares
Convertible redeemable preference shares are separated into liability and equity
components based on the terms of the contract.
On issuance of the convertible redeemable preference shares, the fair value of the
liability component is determined using a market rate for an equivalent non-convertible
bond. This amount is classified as a financial liability measured at amortised cost (net
of transaction costs) until it is extinguished on conversion or redemption in accordance
with the accounting policy set out in Note 2.23.
The remainder of the proceeds is allocated to the conversion option that is recognised
and included in shareholders equity. Transaction costs are deducted from equity, net
of associated income tax. The carrying amount of the conversion option is not
remeasured in subsequent years.
Transaction costs are apportioned between the liability and equity components of the
convertible redeemable preference shares based on the allocation of proceeds to the
liability and equity components when the instruments are initially recognised.

Commentary:
Convertible instruments with embedded derivative
In this illustration, the convertible preference shares are classified as compound financial
instruments with liability and equity components based on the terms of the contract.
Illustrative accounting policy if the convertible instruments are classified as hybrid
instruments with embedded derivative:
Convertible loans with conversion option are accounted as financial liability with an
embedded equity conversion derivative based on the terms of the contract.
On issuance of convertible loans, the embedded option is recognised at its fair value as
derivative liability with subsequent changes in fair value recognised in profit or loss.
The remainder of the proceeds is allocated to the liability component that is carried at
amortised cost until the liability is extinguished on conversion or redemption.
When an equity conversion option is exercised, the carrying amounts of the liability
component and the equity conversion option are derecognised with a corresponding
recognition of share capital.

FRS 107.21

FRS 32.28

FRS 32.32

FRS 32.31

FRS 32.38

FRS 39.AG28


2.27 Employee benefits
a) Defined contribution plans
The Group participates in the national pension schemes as defined by the laws
of the countries in which it has operations. In particular, the Singapore
companies in the Group make contributions to the Central Provident Fund
scheme in Singapore, a defined contribution pension scheme. Contributions to
defined contribution pension schemes are recognised as an expense in the
period in which the related service is performed.
b) Employee share option plans
Employees of the Group receive remuneration in the form of share options as
consideration for services rendered. The cost of these equity-settled share
based payment transactions with employees for awards granted after 22
November 2002 is measured by reference to the fair value of the options at
the date on which the options are granted which takes into account market
conditions and non-vesting conditions. This cost is recognised in profit or
loss, with a corresponding increase in the employee share option reserve, over
the vesting period. The cumulative expense recognised at each reporting date
until the vesting date reflects the extent to which the vesting period has
expired and the Groups best estimate of the number of options that will
ultimately vest. The charge or credit to profit or loss for a period represents
the movement in cumulative expense recognised as at the beginning and end
of that period and is recognised in employee benefits expense.
No expense is recognised for options that do not ultimately vest, except for
options where vesting is conditional upon a market or non-vesting condition,
which are treated as vested irrespective of whether or not the market
condition or non-vesting condition is satisfied, provided that all other
performance and/or service conditions are satisfied. In the case where the
option does not vest as the result of a failure to meet a non-vesting condition
that is within the control of the Group or the employee, it is accounted for as a
cancellation. In such case, the amount of the compensation cost that otherwise
would be recognised over the remainder of the vesting period is recognised
immediately in profit or loss upon cancellation. The employee share option
reserve is transferred to retained earnings upon expiry of the share option.

FRS 19.44

FRS 102.16

FRS 102.21A

FRS 102.10

FRS 102.19-21

FRS 102.19 and 21
FRS 102.21A

FRS 102.28A

2.27 Employee benefits (continued)
Commentary:
Employee leave entitlement
In this illustration, it is assumed that employee leave entitlement is not significant and is
not included in the list of significant accounting policies.
Illustrative accounting policy for employee leave entitlement (if significant):
Employee entitlements to annual leave are recognised as a liability when they accrue
to the employees. The estimated liability for leave is recognised for services rendered
by employees up to the end of the reporting period.
Termination benefit
In this illustration, the Group does not provide any termination benefit to its employees.
Illustrative accounting policy for termination benefit:
Termination benefits are payable when employment is terminated before the normal
retirement date or whenever an employee accepts voluntary redundancy in exchange
for these benefits. The Group recognises termination benefits when it is demonstrably
committed to either terminate the employment of current employees according to a
detailed plan without possibility of withdrawal; or providing termination benefits as a
result of an offer made to encourage voluntary redundancy. In the case of an offer
made to encourage voluntary redundancy, the measurement of termination benefits is
based on the number of employees expected to accept the offer. Benefits falling due
more than 12 months after end of the reporting period are discounted to present
value.
Defined benefit plan
For illustration of accounting policies relating to defined benefit plan, please refer to
Appendix A-2 Defined benefit plan.
Revised FRS 19 Employee Benefits
The Accounting Standards Council issued Revisions to FRS 19 Employee Benefits on 20
September 2011 that is effective for annual periods beginning on or after 1 January
2013.
For illustration of change in accounting policies relating to Revised FRS 19, please refer
to Appendix A-4 Employee benefits.

FRS 19.11

FRS 19.133

FRS 19.140

FRS 19.139

Modification or cancellation of employee share option plan
In this illustration, there is no modification or cancellation of employee share option plan.
Illustrative accounting policy for modification or cancellation of employee share option
plan:
Where the terms of an equity-settled transaction award are modified, the minimum
expense recognised is the expense as if the terms had not been modified, if the original
terms of the award are met. An additional expense is recognised for any modification
that increases the total fair value of the share-based payment transaction, or is
otherwise beneficial to the employee as measured at the date of modification.
Where the employee share option plan is cancelled, it is treated as if it vested on the
date of cancellation, and any expense that otherwise would have been recognised for
services received over the remaining vesting period is recognised immediately. This
includes any award where non-vesting conditions within the control of either the
entity or the employee are not met. However, if a new award is substituted for the
cancelled award, and designated as a replacement award on the date that it is
granted, the cancelled and new awards are treated as if they were a modification of
the original award, as described in the previous paragraph. All cancellations of equity-
settled transaction awards are treated equally.
Cash-settled share-based payment transactions
In this illustration, the employee share option plans are equity-settled share-based
payment transactions. Cash-settled share-based payment transactions are not illustrated.
Illustrative accounting policy for cash-settled share-based payment transactions:
The cost of a cash-settled share-based payment transaction is measured initially at
fair value at the grant date. This fair value is recognised in profit or loss over the
vesting period with recognition of a corresponding liability. Until the liability is settled,
it is remeasured at each reporting date with changes in fair value recognised in profit
or loss.
Measurement of unidentifiable goods or services
In situations where equity instruments are issued and some or all of the goods or services
received by the entity as consideration cannot be specifically identified, the unidentified
goods or services received (or to be received) are measured as the difference between the
fair value of the share-based payment transaction and the fair value of any identifiable
goods or services received at the grant date. This is then capitalised or expensed as
appropriate.

FRS 102.28,
B42-44

FRS 102.28

FRS 102.30
FRS 102.32
FRS 102.33

FRS 102.13A


Vesting and non-vesting conditions
Vesting condition are conditions that determine whether the entity receives the services
that entitle the counterparty to receive cash, other assets or equity instruments of the
entity under a share-based payment arrangement.
Vesting conditions are limited to two types:
- Service condition (e.g., requires counterparty to complete a specified period of
service); and
- Performance condition (e.g., require the counterparty to complete a specified period of
service and specified performance target to be met, for example, a target profit or EPS
of the entity, or a target share price of the entitys equity instruments).
Any condition that is neither a service condition nor a performance condition would be
regarded as a non-vesting condition. Examples of non-vesting conditions are:
- A requirement to make monthly savings during the vesting period
- A requirement for a commodity index to reach a minimum level
- Restrictions on the transfer of vested equity instruments
- An agreement not to work for a competitor after the award has vested
Non-vesting conditions are to be taken into account when estimating the fair value of the
equity instruments granted.
Transfer of share option reserve
The transfer of the employee share option reserve to retained earnings upon expiry of the
option is not mandatory. Alternatively, the employee share option reserve may be kept as
a separate reserve upon expiry of the option.

FRS 102.App A

FRS 102.App A

FRS 102.IG24
and BC171B

FRS 102.21A


2.28 Leases
The determination of whether an arrangement is, or contains a lease is based on the
substance of the arrangement at inception date: whether fulfilment of the arrangement
is dependent on the use of a specific asset or assets and the arrangement conveys a
right to use the asset, even if that right is not explicitly specified in an arrangement.
For arrangements entered into prior to 1 January 2005, the date of inception is
deemed to be 1 January 2005 in accordance with the transitional requirements of INT
FRS 104.
a) As lessee
Finance leases which transfer to the Group substantially all the risks and
rewards incidental to ownership of the leased item, are capitalised at the
inception of the lease at the fair value of the leased asset or, if lower, at the
present value of the minimum lease payments. Any initial direct costs are also
added to the amount capitalised. Lease payments are apportioned between the
finance charges and reduction of the lease liability so as to achieve a constant
rate of interest on the remaining balance of the liability. Finance charges are
charged to profit or loss. Contingent rents, if any, are charged as expenses in
the periods in which they are incurred.
Capitalised leased assets are depreciated over the shorter of the estimated
useful life of the asset and the lease term, if there is no reasonable certainty
that the Group will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in profit or loss on a
straight-line basis over the lease term. The aggregate benefit of incentives
provided by the lessor is recognised as a reduction of rental expense over the
lease term on a straight-line basis.
b) As lessor
Leases where the Group retains substantially all the risks and rewards of
ownership of the asset are classified as operating leases. Initial direct costs
incurred in negotiating an operating lease are added to the carrying amount of
the leased asset and recognised over the lease term on the same bases as
rental income. The accounting policy for rental income is set out in Note
2.30(e). Contingent rents are recognised as revenue in the period in which
they are earned.

INT FRS 104.6

INT FRS 104.17

FRS 17.8

FRS 17.20

FRS 17.25

FRS 17.27

FRS 17.33
INT FRS 15.5

FRS 17.8
FRS 17.52

2.29 Non-current assets held for sale and discontinued operations
Non-current assets and disposal groups classified as held for sale are measured at the
lower of their carrying amount and fair value less costs to sell. Non-current assets and
disposal groups are classified as held for sale if their carrying amounts will be
recovered principally through a sale transaction rather than through continuing use.
This condition is regarded as met only when the sale is highly probable and the asset or
disposal group is available for immediate sale in its present condition. Management
must be committed to the sale, which should be expected to qualify for recognition as a
completed sale within one year from the date of classification. A component of the
Group is classified as a discontinued operation when the criteria to be classified as
held for sale have been met or it has been disposed of and such a component
represents a separate major line of business or geographical area of operations or is
part of a single coordinated plan to dispose of a separate major line of business or
geographical area of operations.
In profit or loss of the current reporting period, and of the comparative period of the
previous year, all income and expenses from discontinued operations are reported
separately from income and expenses from continuing operations, down to the level of
profit after taxes, even when the Group retains a non-controlling interest in the
subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately
in profit or loss.
Property, plant and equipment and intangible assets once classified as held for sale are
not depreciated or amortised.
2.30 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will
flow to the Group and the revenue can be reliably measured, regardless of when the
payment is made. Revenue is measured at the fair value of consideration received or
receivable, taking into account contractually defined terms of payment and excluding
taxes or duty. The Group assesses its revenue arrangements to determine if it is acting
as principal or agent. The Group has concluded that it is acting as a principal in all of its
revenue arrangements. The following specific recognition criteria must also be met
before revenue is recognised:
a) Sale of goods
Revenue from sale of goods is recognised upon the transfer of significant risk
and rewards of ownership of the goods to the customer, usually on delivery of
goods. Revenue is not recognised to the extent where there are significant
uncertainties regarding recovery of the consideration due, associated costs or
the possible return of goods.
b) Rendering of services
Revenue from the installation of fire prevention equipment is recognised by
reference to the stage of completion at the end of the reporting period. Stage
of completion is determined by reference to labour hours incurred to date as a
percentage of total estimated labour hours for each contract. Where the
contract outcome cannot be measured reliably, revenue is recognised to the
extent of the expenses recognised that are recoverable.

FRS 105.15

FRS 105.6

FRS 105.7

FRS 105.8

FRS 105.32

FRS 105.33 and 34

FRS 105.25

FRS 18.14, 20 and 29
FRS 18.35.a
FRS 18.9

FRS 18.14

FRS 18.20

FRS 18.26


2.30 Revenue (continued)
c) Interest income
Interest income is recognised using the effective interest method.
d) Dividend income
Dividend income is recognised when the Groups right to receive payment is
established.
e) Rental income
Rental income arising from operating leases on investment properties is
accounted for on a straight-line basis over the lease terms. The aggregate
costs of incentives provided to lessees are recognised as a reduction of rental
income over the lease term on a straight-line basis.
2.31 Taxes
a) Current income tax
Current income tax assets and liabilities for the current and prior periods are
measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted at the end of the reporting period, in
the countries where the Group operates and generates taxable income.
Current income taxes are recognised in profit or loss except to the extent that
the tax relates to items recognised outside profit or loss, either in other
comprehensive income or directly in equity. Management periodically
evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.

FRS 18.30.a

FRS 18.30.c

FRS 17.50
INT FRS 15.5

FRS 12.46

FRS 12.58 and 61A


2.31 Taxes (continued)
b) Deferred tax
Deferred tax is provided using the liability method on temporary differences at
the end of the reporting period between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
- Where the deferred tax liability arises from the initial recognition of
goodwill or of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
- In respect of taxable temporary differences associated with investments in
subsidiaries, associates and interests in joint ventures, where the timing of
the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable
future.
Deferred tax assets are recognised for all deductible temporary differences,
carry forward of unused tax credits and unused tax losses, to the extent that it
is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and unused
tax losses can be utilised except:
- Where the deferred tax asset relating to the deductible temporary
difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss;
and
- In respect of deductible temporary differences associated with
investments in subsidiaries, associates and interests in joint ventures,
deferred tax assets are recognised only to the extent that it is probable
that the temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary differences can
be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each
reporting period and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are reassessed at the
end of each reporting period and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to
be recovered.

FRS 12.22.c

FRS 12.39

FRS 12.34

FRS 12.24

FRS 12.44

FRS 12.56

FRS 12.37


2.31 Taxes (continued)
b) Deferred tax (continued)
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the end of each reporting period.
Deferred tax relating to items recognised outside profit or loss is recognised
outside profit or loss. Deferred tax items are recognised in correlation to the
underlying transaction either in other comprehensive income or directly in
equity and deferred tax arising from a business combination is adjusted against
goodwill on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current income tax assets against current
income tax liabilities and the deferred taxes relate to the same taxable entity
and the same taxation authority.
Tax benefits acquired as part of a business combination, but not satisfying the
criteria for separate recognition at that date, would be recognised
subsequently if new information about facts and circumstances changed. The
adjustment would either be treated as a reduction to goodwill (as long as it
does not exceed goodwill) if it incurred during the measurement period or in
profit or loss.
c) Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax
except:
- Where the sales tax incurred on a purchase of assets or services is not
recoverable from the taxation authority, in which case the sales tax is
recognised as part of the cost of acquisition of the asset or as part of the
expense item as applicable; and
- Receivables and payables that are stated with the amount of sales tax
included.
The net amount of sales tax recoverable from, or payable to, the taxation
authority is included as part of receivables or payables in the balance sheet.
2.32 Segment reporting
For management purposes, the Group is organised into operating segments based on
their products and services which are independently managed by the respective
segment managers responsible for the performance of the respective segments under
their charge. The segment managers report directly to the management of the
Company who regularly review the segment results in order to allocate resources to
the segments and to assess the segment performance. Additional disclosures on each
of these segments are shown in Note 42, including the factors used to identify the
reportable segments and the measurement basis of segment information.

FRS 12.47

FRS 12.58, 61A and
66

FRS 12.71

FRS 12.68

FRS 18.8

FRS 108.5


2.33 Share capital and share issuance expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity.
Incremental costs directly attributable to the issuance of ordinary shares are deducted
against share capital.
2.34 Treasury shares
The Groups own equity instruments, which are reacquired (treasury shares) are
recognised at cost and deducted from equity. No gain or loss is recognised in profit or
loss on the purchase, sale, issue or cancellation of the Groups own equity instruments.
Any difference between the carrying amount of treasury shares and the consideration
received, if reissued, is recognised directly in equity. Voting rights related to treasury
shares are nullified for the Group and no dividends are allocated to them respectively.
2.35 Contingencies
A contingent liability is:
a) a possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the Group; or
b) a present obligation that arises from past events but is not recognised because:
(i) It is not probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; or
(ii) The amount of the obligation cannot be measured with sufficient
reliability.
A contingent asset is a possible asset that arises from past events and whose existence
will be confirmed only by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the Group.
Contingent liabilities and assets are not recognised on the balance sheet of the Group,
except for contingent liabilities assumed in a business combination that are present
obligations and which the fair values can be reliably determined.

FRS 32.37

FRS 32.33

FRS 37.10

FRS 37.27 and 31
FRS 103.23


2.36 Related parties
A related party is defined as follows:
a) A person or a close member of that persons family is related to the Group and
Company if that person:
(i) has control or joint control over the Company;
(ii) has significant influence over the Company; or
(iii) is a member of the key management personnel of the Group or
Company or of a parent of the Company.
b) An entity is related to the Group and the Company if any of the following
conditions applies :
(i) the entity and the Company are members of the same group (which
means that each parent, subsidiary and fellow subsidiary is related to
the others).
(ii) one entity is an associate or joint venture of the other entity (or an
associate or joint venture of a member of a group of which the other
entity is a member).
(iii) both entities are joint ventures of the same third party.
(iv) one entity is a joint venture of a third entity and the other entity is an
associate of the third entity.
(v) the entity is a post-employment benefit plan for the benefit of
employees of either the Company or an entity related to the Company.
If the Company is itself such a plan, the sponsoring employers are also
related to the Company;
(vi) the entity is controlled or jointly controlled by a person identified in
(a);
(vii) a person identified in (a) (i) has significant influence over the entity or
is a member of the key management personnel of the entity (or of a
parent of the entity).

FRS 24.9


3. Significant accounting judgments and estimates
The preparation of the Groups consolidated financial statements requires management to
make judgments, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the
end of each reporting period. However, uncertainty about these assumptions and
estimates could result in outcomes that require a material adjustment to the carrying
amount of the asset or liability affected in the future periods.
3.1 Judgments made in applying accounting policies
In the process of applying the Groups accounting policies, management has made the
following judgments, apart from those involving estimations, which have the most
significant effect on the amounts recognised in the consolidated financial statements:
a) Impairment of available-for-sale investments
The Group records impairment charges on available-for-sale equity
investments when there has been a significant or prolonged decline in the
fair value below their cost. The determination of what is significant or
prolonged requires judgment. In making this judgment, the Group
evaluates, among other factors, historical share price movements and the
duration and extent to which the fair value of an investment is less than its
cost. For the financial year ended 31 December 2012, the amount of
impairment loss recognised for available-for-sale financial assets was
$198,000 (2011: $210,000).
b) Operating lease commitments as lessor
The Group has entered into commercial property leases on its investment
properties. The Group has determined, based on an evaluation of the terms
and conditions of the arrangements, that it retains all the significant risks and
rewards of ownership of these properties and so accounts for the contracts as
operating leases.
c) Discontinued operation
On 15 May 2012, the Board of Directors announced its decision to dispose of
one of its wholly-owned subsidiary, Good Fire Prevention Pte Ltd (GFP Pte
Ltd), which was previously reported in the fire prevention equipment and
services segment and, therefore classified it as disposal group held for sale.
The Board considered the subsidiary met the criteria to be classified as held for
sale at that date for the following reasons:
GFP Pte Ltd is available for immediate sale and can be sold to a potential
buyer in its current condition;
The Board had a plan to sell GFP Pte Ltd and had entered into preliminary
negotiations with a potential buyer. Should negotiations with the party
not lead to a sale, a number of other potential buyers have been
identified; and
The Board expects negotiations to be finalised and the sale to be
completed within 12 months from the reporting date.

For more details on the discontinued operations refer to Note 11.

FRS 1.122


3. Significant accounting judgments and estimates (continued)
3.1 Judgments made in applying accounting policies (continued)
Commentary:
Judgments made in applying accounting policies
In this illustration, it is assumed that these are the judgments made in applying
accounting policies that has the most significant effect on the amounts recognised
in the financial statements.
Illustrative disclosures of other judgments made in applying accounting policies:
Determination of functional currency
The Group measures foreign currency transactions in the respective functional
currencies of the Company and its subsidiaries. In determining the functional
currencies of the entities in the Group, judgment is required to determine the
currency that mainly influences sales prices for goods and services and of the
country whose competitive forces and regulations mainly determines the sales
prices of its goods and services. The functional currencies of the entities in the
Group are determined based on managements assessment of the economic
environment in which the entities operate and the entities process of
determining sales prices.
Consolidation of special purpose entities
In February 2012, the Group and a third party partner formed an entity to
acquire land and construct and operate a fire equipment safety facility. The
Group holds a 20% equity interest in this entity. However, the Group has
majority representation on the entitys board of directors and is required to
approve all major operational decisions. The operations, once they commence,
will be solely used by the Group. Based on these facts and circumstances,
management concluded that the Group controls this entity and, therefore,
consolidates the entity in its financial statements. Additionally, the Group is
effectively guaranteeing the returns to the third party. The shares of the third
party partner are recorded as a long term loan and return on investment is
recorded as interest expense.


3.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation
uncertainty at the end of each reporting period, that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below. The Group based its assumptions and
estimates on parameters available when the financial statements was prepared.
Existing circumstances and assumptions about future developments, however, may
change due to market changes or circumstances arising beyond the control of the
Group. Such changes are reflected in the assumptions when they occur.
a) Fair value of financial instruments
Where the fair values of financial instruments recorded on the balance
sheet cannot be derived from active markets, they are determined using
valuation techniques including the discounted cash flow model. The inputs
to these models are derived from observable market data where possible,
but where this is not feasible, a degree of judgment is required in
establishing fair values. The judgments include considerations of liquidity
and model inputs regarding the future financial performance of the
investee, its risk profile, and economic assumptions regarding the industry
and geographical jurisdiction in which the investee operates. Changes in
assumptions about these factors could affect the reported fair value of
financial instruments. The valuation of financial instruments is described in
more detail in Note 39.
b) Development costs
Development costs are capitalised in accordance with the accounting policy in
Note 2.9. Initial capitalisation of costs is based on managements judgment
that technological and economical feasibility is confirmed, usually when a
product development project has reached a defined milestone according to an
established project management model. In determining the amounts to be
capitalised, management makes assumptions regarding the expected future
cash generation of the project, discount rates to be applied and the expected
period of benefits. The carrying amount of development costs capitalised at
the end of the reporting period was $620,000 (2011: $818,000).
c) Impairment of non-financial assets
An impairment exists when the carrying value of an asset or cash generating
unit exceeds its recoverable amount, which is the higher of its fair value less
costs to sell and its value in use. The fair value less costs to sell calculation is
based on available data from binding sales transactions in an arms length
transaction of similar assets or observable market prices less incremental
costs for disposing the asset. The value in use calculation is based on a
discounted cash flow model. The cash flows are derived from the budget for
the next five years and do not include restructuring activities that the Group is
not yet committed to or significant future investments that will enhance the
assets performance of the cash generating unit being tested. The recoverable
amount is most sensitive to the discount rate used for the discounted cash flow
model as well as the expected future cash inflows and the growth rate used for
extrapolation purposes. Further details of the key assumptions applied in the
impairment assessment of goodwill and brands, are given in Note 15 to the
financial statements.

FRS 1.125

3.2 Key sources of estimation uncertainty (continued)
d) Impairment of loans and receivables
The Group assesses at the end of each reporting period whether there is any
objective evidence that a financial asset is impaired. To determine whether
there is objective evidence of impairment, the Group considers factors such as
the probability of insolvency or significant financial difficulties of the debtor
and default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of
future cash flows are estimated based on historical loss experience for assets
with similar credit risk characteristics. The carrying amount of the Groups
loans and receivable at the end of the reporting period is disclosed in Note 21
to the financial statements. If the present value of estimated future cash flows
decrease by 10% from managements estimates, the Groups allowance for
impairment will increase by $104,000 (2011: increase by $113,000).
e) Employee share options
The Group measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which they
are granted. Estimating fair value for share-based payment transactions
requires determining the most appropriate valuation model, which is
dependent on the terms and conditions of the grant. This estimate also
requires determining the most appropriate inputs to the valuation model
including the expected life of the share option, volatility and dividend yield and
making assumptions about them. The assumptions and models used for
estimating fair value for share-based payment transactions are disclosed in
Note 35.
f) Fair value measurement of contingent consideration on business
combination
Contingent consideration, resulting from business combinations, is valued at
fair value at the acquisition date as part of the consideration transferred for
business combination. Where the contingent consideration meets the
definition of a derivative and thus financial liability, it is subsequently
remeasured to fair value at each reporting date. The determination of the fair
value is based on discounted cash flows. The key assumptions take into
consideration the probability of meeting each performance target and the
discount factor. As part of the purchase price allocation for its acquisition of
MSAX, the Group identified an element of contingent consideration. The
carrying amount of the contingent consideration on business combination at
the end of the reporting period is disclosed in Note 17 to the financial
statements.

FRS 1.125

Commentary:
Key sources of estimation uncertainty
In this illustration, it is assumed that these are the key assumptions and estimation
uncertainty that have a significant risk of causing a material adjustment to the carrying
amounts of the assets and liabilities within the next financial year.
Illustrative disclosures of other key sources of estimation uncertainty:
Useful lives of plant and equipment
The cost of plant and equipment for the manufacture of electronic components is
depreciated on a straight-line basis over the plant and equipments estimated
economic useful lives. Management estimates the useful lives of these plant and
equipment to be within X to XX years. These are common life expectancies applied in
the electronics industry. Changes in the expected level of usage and technological
developments could impact the economic useful lives of these assets, therefore,
future depreciation charges could be revised. The carrying amount of the Groups
plant and equipment at the end of each reporting period is disclosed in Note X to the
financial statements. A X% difference in the expected useful lives of these assets
from managements estimates would result in approximately X% (2011: X %)
variance in the Groups profit before tax.
Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations and
the amount and timing of future taxable income. Given the wide range of
international business relationships and the long-term nature and complexity of
existing contractual agreements, differences arising between the actual results and
the assumptions made, or future changes to such assumptions, could necessitate
future adjustments to tax provisions already recorded. The Group establishes
provisions, based on reasonable estimates, for possible consequences of audits by
the tax authorities of the respective countries in which it operates. The amount of
such provisions is based on various factors, such as experience of previous tax
audits and differing interpretations of tax regulations by the taxable entity and the
relevant tax authority. Such differences of interpretation may arise on a wide variety
of issues depending on the conditions prevailing in the respective Group companys
domicile.
Deferred tax assets are recognised for all unused tax losses to the extent that it is
probable that taxable profit will be available against which the losses can be utilised.
Significant management judgment is required to determine the amount of deferred
tax assets that can be recognised, based upon the likely timing and level of future
taxable profits together with future tax planning strategies.

Key sources of estimation uncertainty (continued)
Taxes (continued)
The Group has tax losses carried forward amounting to $XXX (2011: $XXX). These
losses relate to subsidiaries that have a history of losses, do not expire and may not
be used to offset taxable income elsewhere in the Group. The subsidiary has neither
temporary taxable differences nor any tax planning opportunities available that
could support the recognition of any of these losses as deferred tax assets.
If the Group was able to recognise all unrecognised deferred tax assets, profit would
increase by $XXX (2011:$XXX).
The carrying value of recognised tax losses at 31 December 2012 was $XXX (2011:
$XXX) and the unrecognised tax losses at 31 December 2012 was $XXX (2011:
$XXX).
Construction contracts
The Group recognises contract revenue by reference to the stage of completion of
the contract activity at the end of each reporting period, when the outcome of a
construction contract can be estimated reliably. The stage of completion is
measured by reference to the proportion that contract costs incurred for work
performed to date bear to the estimated total contract costs. Significant
assumptions are required to estimate the total contract costs and the recoverable
variation works that affect the stage of completion. In making these estimates,
management has relied on past experience and knowledge of the project engineers.
The carrying amounts of assets and liabilities arising from construction contracts at
the end of each reporting period are disclosed in Note X to the financial statements.
Provision for decommissioning
The Group has recognised a provision for decommissioning obligations associated
with a factory owned by XXX Limited. In determining the amount of the provision,
assumptions and estimates are made in relation to discount rates, the expected cost
to dismantle and remove all plant from the site and the expected timing of those
costs. The carrying amount of the provision as at 31 December 2012 was $XXX
(2011: nil). If the estimated pre-tax discount rate used in the calculation had been
XX% higher than management's estimate, the carrying amount of the provision
would have been $XXX lower.
Provisions for waste electrical and electronic equipment (WEEE)
The Group recognises a provision for liabilities associated with participation in the
market for WEEE in accordance with the accounting policy stated in Note X.X. The
Group has made assumptions in relation to historical waste, regarding the level of
market participation, the quantity of products disposed of and the expected cost of
disposal. In relation to future waste, the Group has made assumptions about the age
profile of products in the market and the cost of disposal. At 31 December 2012, the
carrying amount of the provision WEEE was $XXX (2011: $XXX).


Key sources of estimation uncertainty (continued)
Revaluation of investment properties
The Group carries its investment properties at fair value, with changes in fair values
being recognised in profit or loss. The Group engaged independent valuation
specialists to determine fair value as at 31 December 2012.
The fair value of investment properties is determined by independent real estate
valuation experts using recognised valuation techniques. These techniques comprise
both the Yield Method and the Discounted Cash Flow Method.
The determination of the fair value of the investment properties requires the use of
estimates such as future cash flows from assets (such as lettings, tenants profiles,
future revenue streams, capital values of fixtures and fittings, plant and machinery,
any environmental matters and the overall repair and condition of the property) and
discount rates applicable to those assets. These estimates are based on local market
conditions existing at the end of each reporting date.
The key assumptions used to determine the fair value of the investment properties
are further explained in Note X.


4. Revenue

Group

2012
$000
2011
$000

Sale of goods 105,827 104,455 FRS 18.35.b.i
Construction revenue 30,893 38,116 FRS 11.39.a
136,720 142,571

5. Interest income

Group

2012
$000
2011
$000

Interest income from:

- Loans and receivables 355 255 FRS 107.20.a.iv
- Available-for-sale financial assets 48 47 FRS 107.20.a.ii
- Held-to-maturity investment 27 25 FRS 107.20.a.iii
430 327 FRS 107.20.a.b

Included in interest income from loans and receivables is interest of $98,000 (2011:
$92,000) from an impaired loan to a fellow subsidiary (Note 21).

6. Other income

Group

2012
$000
2011
$000

Amortisation of deferred capital grants (Note 29) 239 180 FRS 20.39
Rental income from investment properties (Note 14) 559 490 FRS 40.75.f.i
Net gain from fair value adjustment of investment properties (Note 14) 489 129 FRS 40.76.d
Net gain on disposal of property, plant and equipment 120 FRS 1.98.c
Net fair value gains on financial instruments:
- Held for trading investment securities 135 95 FRS 107.20.a.i
- Derivatives 43 56 FRS 107.20.a.i
- Available-for-sale financial assets (transferred from equity on
disposal of investment securities) 120 15 FRS 107.20.a.ii
Gain on remeasurement of investment in associate to fair value upon
business combination achieved in stages (Note 17)
140 FRS 103.B64.p.ii
1,725 1,085

FRS 107.20.d


7. Finance costs

Group

2012
$000
2011
$000

Interest expense on: FRS 107.20.a.v
- Bank loans, bonds and bank overdrafts 1,640 1,506

- Obligations under finance leases 75 30
- Convertible redeemable preference shares 62 59
1,777 1,595 FRS 107.20.b
Provisions discount adjustment (Note 28) 30 10

Less: interest expense capitalised in:

- Plant and equipment (Note 13) (57) (60)

- Development property (Note 24) (35) (33)

Total finance costs 1,715 1,512

8. Other expenses

The following items have been included in arriving at other expenses:

Group

2012
$000
2011
$000

Net loss on disposal of property, plant and equipment 76 FRS 1.98.c
Impairment loss on property, plant and equipment (Note 13) 500 FRS 1.98.a
Direct operating expenses arising from investment properties (Note 14) 72 65
Fair value adjustment of contingent consideration of business
combination (Note 17) 235 -
FRS 1.97
Net foreign exchange loss 136 145 FRS 21.52.a
Impairment loss on financial assets : FRS 107.20.e
- Trade receivables (Note 21) 135 115 FRS 107.20.a.iv
- Loan to a fellow subsidiary (Note 21) 100
FRS 107.20.a.iv
FRS 24.18.d
- Available-for-sale investment securities (Note 22)
- Equity instruments (quoted) 70 150 FRS 107.20.e
- Equity instruments (unquoted) 11 35 FRS 107.20.e
- Equity instruments (unquoted), at cost 100 FRS 107.20.e
- Other debt securities (unquoted) 17 25 FRS 107.20.e

9. Profit before tax from continuing operations
The following items have been included in arriving at profit before tax from continuing
operations:
Group

2012
$000
2011
$000

Audit fees paid to:

- Auditors of the Company 400 400
- Other auditors 50 50
Non-audit fees paid to:
- Auditors of the Company 250 250
- Other auditors 30 30
Depreciation of property, plant and equipment 2,893 2,713
Amortisation of intangible assets (Note 15) 220 252
Transactions costs incurred in a business combination 300
Employee benefits expense (Note 35) 20,502 19,024
Inventories recognised as an expense in cost of sales (Note 25) 80,567 82,122
Operating lease expense (Note 37(b)) 484 387
Utility charges 1,428 1,486
Transportation charges 2,450 2,584
Legal and other professional fees 325 228

Commentary:
Separate disclosure of income and expenses
FRS 107.20.b only requires total income (calculated using the effective interest method) for
financial assets that are not at fair value through profit or loss to be disclosed.
In this illustration, we have illustrated interest income aggregated by categories of financial
asset. Although this level of aggregation is optional, when items of income and expense are
material, their nature and amount should be disclosed separately.
When items of income and expense are material, their nature and amount should be disclosed
separately. Circumstances that would give rise to the separate disclosure of items of income
and expense include:
(a) Write-downs of inventories to net realisable value or of property, plant and equipment to
recoverable amount, as well as reversals of such write-downs;
(b) Restructurings of the activities of an entity and reversals of any provisions for the costs of
restructuring;
(c) Disposals of items of property, plant and equipment;
(d) Disposals of investments;
(e) Discontinued operations;
(f) Litigation settlements; and
(g) Other reversals of provisions.

FRS 1.97 and 104

SGX 1207.6a

SGX 1207.6a

FRS 1.104

FRS 1.104

FRS 1.97

FRS 1.104

FRS 2.36.d

FRS 17.35.c

FRS 1.97 and 104

FRS 1.97 and 104

FRS 1.97 and 104

FRS 107.20.b

FRS 1.97

FRS 1.97 and 98


9. Profit before tax from continuing operations (continued)

An entity shall disclose the fee income and expense (other than amounts included in
determining the effective interest rate) arising from financial assets or financial liabilities that
are not at fair value through profit or loss and trust and other fiduciary activities that result in
the holding or investing of assets on behalf of individuals, trusts, retirement benefit plans, and
other institutions, either on the face of the financial statements or in the notes.
Classes of financial instruments
FRS 107 specifies a number of disclosure requirements on the following topics to be provided
by class of financial instruments:
- Impairment losses;
- Allowance account for credit losses if an entity chooses under FRS 39 to have a separate
allowance account;
- Credit risk;
- Fair value of financial instruments;
- Day 1 profit or loss; and
- Transfers of financial assets that are not derecognised in their entirety.
FRS 107 requires an entity to group financial instruments into classes that are appropriate to
the nature of information disclosed and that take into account the characteristics of those
financial instruments. These classes are determined by the reporting entity and are distinct
(usually lower in level) from the categories of financial instruments (e.g., available-for-sale
financial asset, loans and receivables) specified in FRS 39.
In determining classes of financial instruments, an entity shall, at a minimum:
- Distinguish instruments measured at amortised cost from those measured at fair value
- Treat as a separate class or classes those financial instruments outside the scope of FRS
107
The entity is also required to provide sufficient information to permit reconciliation of the
classes of financial instruments to the line items presented in the balance sheet.
These expense items have been disclosed separately as they are considered to be material in
the assumed scenario due to their size or nature.
Reclassification adjustments
In this illustration, the entity has chosen to disclose the reclassification adjustments and
current year gain or loss in the notes. An entity may choose to present this information in the
statement of comprehensive income itself.
Reclassification adjustments are amounts reclassified to profit or loss in the current period
that were recognised in other comprehensive income in the current or previous periods. Such
amounts must be separately disclosed. For example, when an available-for-sale financial asset
is sold, accumulated amounts previously recognised in fair value adjustment reserve will be
reclassified into profit or loss for the period.

FRS 107.20.c.i and ii

FRS 107.20.e

FRS 107.16

FRS 107.36

FRS 107.25

FRS 107.28

FRS 107.42D

FRS 107.6 and 26

FRS 107.B1

FRS 107.B2

FRS 107.6

FRS 1.97

FRS 1.94

FRS 1.7

FRS 1.92

FRS 1.93


10. Income tax expense

Major components of income tax expense
The major components of income tax expense for the years ended 31 December 2012
and 2011 are:

Group

2012
$000
2011
(Restated)
$000

Consolidated income statement:

Current income tax continuing operations:
- Current income taxation 1,422 1,344 FRS12.80.a
- (Over)/under provision in respect of previous years (50) 91 FRS 12.80.b
1,372 1,435
Deferred income tax continuing operations (Note 20):
- Origination and reversal of temporary differences 191 260 FRS 12.80.c
- Benefits from previously unrecognised tax losses (6) (8) FRS 12.80.f
185 252
Income tax attributable to continuing operations 1,557 1,687
Income tax attributable to discontinued operation (Note 11) (7) (5) FRS 12.80.h
Income tax expense recognised in profit or loss 1,550 1,682

Statement of comprehensive income:

Group Company

2012
$000
2011
$000
2012
$000
2011
$000

Deferred tax expense related to other comprehensive
income: FRS 12.81.ab
- Net gain on fair value changes of available-for-sale
financial assets 56 26
- Net surplus on revaluation of freehold land and
buildings 256 460 FRS 16.42
- Share of other comprehensive income of associates 13 2
325 488

Statement of changes in equity:

Deferred tax expense charged directly to equity:
- Convertible redeemable preference shares - 16 16 FRS 12.81.a

10. Income tax expense (continued)

Relationship between tax expense and accounting profit
A reconciliation between tax expense and the product of accounting profit multiplied by
the applicable corporate tax rate for the years ended 31 December 2012 and 2011 is as
follows:

Group

2012

$000
2011
(Restated)
$000

Profit before tax from continuing operations 7,057 7,116
Loss before tax from discontinued operation (Note 11) (551) (193)
Accounting profit before tax 6,506 6,923

Tax at the domestic rates applicable to profits in the countries where the
Group operates 1,322 1,571
Adjustments:
Non-deductible expenses 560 473
Income not subject to taxation (170) (388)
Effect of partial tax exemption and tax relief (35) (20)
Deductions on treasury shares issued pursuant to employee share option
plan (3)
Deferred tax on convertible redeemable preference shares (4) (3)
Benefits from previously unrecognised tax losses (6) (8)
Deferred tax assets not recognised 46 21
(Over)/under provision in respect of previous years (50) 91
Share of results of associates (112) (56)
Others 2 1
Income tax expense recognised in profit or loss 1,550 1,682
The above reconciliation is prepared by aggregating separate reconciliations for each
national jurisdiction.

FRS 12.81.c.i


10. Income tax expense (continued)

Commentary:
Presentation of tax reconciliation
Alternatively, an entity may present a numerical reconciliation between the average effective
tax rate (i.e., tax expense/income divided by the accounting profit) and the applicable tax rate,
disclosing also the basis on which the applicable tax rate is computed.
Income tax rate for tax reconciliation
In explaining the relationship between tax expense/income and accounting profit, an entity
uses an applicable tax rate that provides the most meaningful information to the users of its
financial statements. Often, the most meaningful rate is the domestic rate of tax in the
country in which the entity is domiciled, aggregating the tax rate applied for national taxes
with the rates applied for any local taxes which are computed on a substantially similar level of
taxable profit (tax loss). However, for an entity operating in several jurisdictions, it may be
more meaningful to aggregate separate reconciliations prepared using the domestic rate in
each individual jurisdiction.
Tax deduction for treasury shares transferred under employee share scheme
A Singapore company is granted a tax deduction for the cost incurred in acquiring treasury
shares which are transferred to any person under a stock option scheme or share award
scheme by reason of any office or employment held in Singapore by that person.
Disclosure of nature of expenses that are not deductible for income tax purposes
The nature of :
- expenses that are not deductible for income tax purposes; and
- income not subject to taxation
that give rise to a tax effect should be disclosed if the amount was material in accordance with
FRS 1.29
Illustrative note disclosure on the nature of expenses that are not deductible for income tax
purposes :
The nature of expenses that are not deductible for income tax purposes are as follows:

Group
2012 2011
$000 $000
Transaction costs related to acquisition of a
subsidiary XXX -
Exchange loss arising from revaluation of non-trade
balances XXX XXX
Private car expenses XXX XXX
Entertainment and transportation expenses incurred
for personal purposes XXX XXX
XXX XXX

FRS 12.81.c.ii and 86

FRS 12.85

FRS 1.29

11. Discontinued operation and disposal group classified as held for sale

On 15 May 2012, the Company announced the decision of its board of directors to
dispose of one of its wholly-owned subsidiary, Good Fire Prevention Pte Ltd (GFP), which
was previously reported in the fire prevention equipment and services segment. The
decision is consistent with the Groups strategy to focus on its core electronics and
property businesses and to divest its fire prevention equipment business, which has been
under performing for the last five years. As at 31 December 2012, the assets and
liabilities related to GFP have been presented in the balance sheet as Assets of disposal
group classified as held for sale and Liabilities directly associated with disposal group
classified as held for sale, and its results are presented separately on profit or loss as
Loss from discontinued operation, net of tax. The disposal of GFP was completed on 15
February 2013 (Note 44).
Balance sheet disclosures
The major classes of assets and liabilities of GFP classified as held for sale and the related
asset revaluation reserve as at 31 December are as follows:

Group

2012
$000
2011
$000
Assets:
Property, plant and equipment 1,016
Inventories 190
Trade and other receivables 814
Cash and short-term deposits 250
Assets of disposal group classified as held for sale 2,270

Liabilities:
Trade and other payables (1,043)
Deferred tax liabilities (28)
8.5% p.a. fixed rate SGD bank loan due 1 January 2015 (2,000)
Liabilities directly associated with disposal group classified as held for sale (3,071)

Net liabilities directly associated with disposal group classified as held for
sale (801)

Reserve:
Asset revaluation reserve 128

FRS 105.41.a, b and d

FRS 105.38 and 40


11. Discontinued operation and disposal group classified as held for sale (continued)

Income statement disclosures
The results of GFP for the years ended 31 December are as follows:

Group

2012
$000
2011
$000

Revenue 13,152 14,598 FRS 105.33.b.i
Expenses (12,983) (14,708) FRS 105.33.b.i
Profit/(loss) from operations 169 (110)
Finance costs (70) (83)
Impairment loss on deferred development costs (Note 15) (200)
Loss recognised on remeasurement to fair value less costs to sell (450)
FRS 105.33.b.iii
and 41.c
Loss before tax from discontinued operation (551) (193) FRS 105.33.b.i
Taxation:
- Related to loss from ordinary activities of the discontinued operation 4 5
FRS 105.33.b.ii
FRS 12.81.h.ii
- Related to re-measurement to fair value less costs to sell 3
FRS 105.33.b.iv
FRS 12.81.h.i
Loss from discontinued operation, net of tax (544) (188)

Cash flow statement disclosures
The cash flows attributable to GFP are as follows:

Group

2012
$000
2011
$000

Operating (1,025) 483
Investing 268 (189)
Financing (137) (114)
Net cash (outflows)/inflows (894) 180

Loss per share disclosures

Group

2012

2011

Loss per share from discontinued operation attributable to owners of
the Company (cents per share)
Basic (2.35) (0.82) FRS 33.68
Diluted (2.30) (0.80) FRS 33.68
The basic and diluted loss per share from discontinued operation are calculated by dividing
the loss from discontinued operation, net of tax, attributable to owners of the Company by
the weighted average number of ordinary shares for basic earnings per share computation
and weighted average number of ordinary shares for diluted earnings per share
computation respectively. These loss and share data are presented in the tables in Note
12(a).

FRS 105.33.b

FRS 105.33.c


11. Discontinued operation and disposal group classified as held for sale (continued)
Immediately before the classification of GFP as a discontinued operation, the recoverable
amount was estimated for certain items of property, plant and equipment and no
impairment loss was identified. Following the classification, an impairment loss of
$450,000 (2011: nil) was recognised to reduce the carrying amount of the assets in the
disposal group to the fair value less costs to sell. This amount was included as part of the
Loss from discontinued operation, net of tax.

Commentary:
Discontinued operation and disposal group classified as held for sale
These analysis/disclosures are not required for disposal groups that are newly acquired
subsidiaries that meet the criteria to be classified as held for sale on acquisition.
Alternatively, these analysis/disclosures may be presented on the face of the financial
statements. If so presented for the purposes of the statement of comprehensive income, a
separate section identified as relating to discontinued operations is required.
An entity should re-present the disclosures in FRS 105.33 for prior periods presented in the
statement of comprehensive income and cash flow statement so that the disclosures relate to
all operations that have been discontinued by the end of the reporting period for the latest
period presented.
Loss per share from discontinued operation
In this illustration, loss per share from discontinued operations has been presented in the note.
Alternatively, this information may be presented on the face of the statement of
comprehensive income.

FRS 105.33.b and 39

FRS 105.33.b

FRS 105.34

FRS 33.68


12. Earnings/loss per share
a) Continuing operations
Basic earnings per share from continuing operations are calculated by dividing profit
from continuing operations, net of tax, attributable to owners of the Company by the
weighted average number of ordinary shares outstanding during the financial year.
Diluted earnings per share from continuing operations are calculated by dividing profit
from continuing operations, net of tax, attributable to owners of the Company (after
adjusting for interest expense on convertible redeemable preference shares) by the
weighted average number of ordinary shares outstanding during the financial year plus
the weighted average number of ordinary shares that would be issued on the
conversion of all the dilutive potential ordinary shares into ordinary shares.
The following tables reflect the profit and share data used in the computation of basic
and diluted earnings per share for the years ended 31 December:

Group

2012

$000
2011
(Restated)
$000

Profit for the year attributable to owners of the Company 4,776 4,841
Add back: Loss from discontinued operation, net of tax, attributable
to owners of the Company 544 188
Profit from continuing operations, net of tax, attributable to owners
of the Company used in the computation of basic earnings per share
from continuing operations 5,320 5,029
Interest expense on convertible redeemable preference shares 62 59
Profit from continuing operations, net of tax, attributable to owners
of the Company used in the computation of diluted earnings per
share 5,382 5,088

No. of
shares
000
No. of
shares
000
Weighted average number of ordinary shares for basic earnings per
share computation * 23,150 23,055
Effects of dilution :
- Share options 18 15
- Convertible redeemable preference shares 505 505
Weighted average number of ordinary shares for diluted earnings per
share computation * 23,673

23,575

* The weighted average number of shares takes into account the weighted average
effect of changes in treasury shares transactions during the year.
325,000 (2011: 200,000) share options granted to employees under the existing
employee share option plans have not been included in the calculation of diluted
earnings per share because they are anti-dilutive.
Since the end of the financial year, senior executives have exercised the options to
acquire 2,000 (2011: nil) ordinary shares. There have been no other transactions
involving ordinary shares or potential ordinary shares since the reporting date and
before the completion of these financial statements.

FRS 33.10 and 12

FRS 33.31 and 33

FRS 33.70.a

FRS 33.12

FRS 33.70.b

FRS 33.70.b

FRS 33.70.b

FRS 33.70.c

FRS 33.70.d

12. Earnings/loss per share (continued)
b) Earnings per share computation
The basic and diluted earnings per share are calculated by dividing the profit for the year
attributable to owners of the Company by the weighted average number of ordinary
shares for basic earnings per share computation and weighted average number of
ordinary shares for diluted earnings per share computation respectively. These profit
and share data are presented in the tables in Note 12(a) above.

Commentary:
Earnings per share
If the number of ordinary or potential ordinary shares outstanding increases as a result of a
capitalisation, bonus issue or share split, or decreases as a result of a reverse share split, the
calculation of basic and diluted earnings per share for all periods presented shall be adjusted
retrospectively. If these changes occur after the end of the reporting period but before the
financial statements are authorised for issue, the per share calculations for current and prior
period presented shall be based on the new number of shares and this fact should be
disclosed. In addition, basic and diluted earnings per share of all periods presented shall be
adjusted for the effects of errors and adjustments resulting from changes in accounting
policies accounted for retrospectively.
In this illustration, it is assumed that the discontinued operation is not attributable to non-
controlling interests.
Amortisation of discount on convertible redeemable preference shares is treated as an
interest expense for the purposes of calculating earnings per share.
Where applicable, the entity should account for the tax effect of interest expense.
Potential ordinary shares shall be treated as dilutive only when their conversion to ordinary
shares would decrease earnings per share or increase loss per share from continuing
operations.
An entity shall disclose a description of ordinary share transactions or potential ordinary share
transactions, other than those resulted from share capitalisation, bonus issue or share split,
that occur after the end of the reporting period and that would have changed significantly the
number of ordinary shares or potential ordinary shares outstanding at the end of the period if
those transactions had occurred before the end of the reporting period.
Example of such transactions include:
- An issue of shares for cash;
- An issue of shares when the proceeds are used to repay debt or preference shares
outstanding at the end of the reporting period;
- The redemption of ordinary shares outstanding;
- The conversion or exercise of potential ordinary shares outstanding at the end of the
reporting period into ordinary shares;
- An issue of options, warrants, or convertible instruments; and
- The achievement of conditions that would result in the issue of contingently issuable
shares.
Earnings per share amounts are not adjusted for such transactions occurring after the end of
the reporting period because such transactions do not affect the amount of capital used to
produce profit or loss for the period.

FRS 33.70.a and
b

FRS 33.64

FRS 33.15

FRS 33.41

FRS 33.70.d

FRS 33.71


13. Property, plant and equipment

Group
Freehold
land Buildings
Plant and
equipment
Furniture
and
fixtures
Total
$000 $000 $000 $000 $000
Cost or valuation: At valuation At cost

FRS 16.73.a
At 1 January 2011 7,468 1,075 25,079 2,331 35,953 FRS 16.73.d
Additions 1,160 1,824 1,028 441 4,453 FRS 16.73.e.i
Disposals (2,054) (2,054) FRS 16.73.e.ii
Revaluation surplus 2,128 740 2,868 FRS 16.73.e.iv
Elimination of accumulated depreciation on
revaluation (50) (50)

FRS 16.35.b
Exchange differences (30) (15) (120) (20) (185) FRS 16.73.e.viii
At 31 December 2011 and 1 January 2012 10,726 3,574 23,933 2,752 40,985 FRS 16.73.d
Additions 4,000 1,194 2,008 1,252 8,454 FRS 16.73.e.i
Transfer from investment properties (Note 14) 300 300 FRS 16.73.e.ix
Disposals (3,068) (1,710) (3,328) (8,106) FRS 16.73.e.ii
Acquisition of a subsidiary (Note 17) 1,111 158 1,269 FRS 16.73.e.iii
Attributable to discontinued operation
(Note 11) (1,010) (310) (377) (150) (1,847) FRS 16.73.e.ii
Revaluation surplus 1,206 300 1,506 FRS 16.73.e.iv
revaluation (67) (67) FRS 16.35.b
Exchange differences 20 10 50 12 92 FRS 16.73.e.viii
At 31 December 2012 11,874 3,291 23,397 4,024 42,586 FRS 16.73.d

Accumulated depreciation and impairment loss:
At 1 January 2011 6,461 1,337 7,798 FRS 16.73.d
Depreciation charge for the year 50 2,558 230 2,838 FRS 16.73.e.vii
Disposals (615) (615) FRS 16.73.e.ii
Exchange differences (40) (10) (50) FRS 16.73.e.viii
At 31 December 2011 and 1 January 2012 8,364 1,557 9,921 FRS 16.73.d
Depreciation charge for the year 115 2,628 300 3,043 FRS 16.73.e.vii
Impairment loss 500 500 FRS 16.73.e.v
Disposals (10) (1,153) (1,163) FRS 16.73.e.ii
Attributable to discontinued operation
(Note 11) (38) (245) (98) (381) FRS 16.73.e.ii
Exchange differences 10 5 15 FRS 16.73.e.viii
At 31 December 2012 10,104 1,764 11,868 FRS 16.73.d

Net carrying amount:
At 31 December 2011 10,726 3,574 15,569 1,195 31,064
At 31 December 2012 11,874 3,291 13,293 2,260 30,718

FRS 1.77 and 78.a

13. Property, plant and equipment (continued)

Company
Furniture
and fixtures

$000

Cost: FRS 16.73.a
At 1 January 2011 1,166 FRS 16.73.d
Additions 221 FRS 16.73.e.i
At 31 December 2011 and 1 January 2012 1,387 FRS 16.73.d
Additions 626 FRS 16.73.e.i
At 31 December 2012 2,013 FRS 16.73.d

Accumulated depreciation:
At 1 January 2011 669 FRS 16.73.d
Depreciation charge for the year 115 FRS 16.73.e.vii
At 31 December 2011 and 1 January 2012 784 FRS 16.73.d
Depreciation charge for the year 150 FRS 16.73.e.vii
At 31 December 2012 934 FRS 16.73.d

At 31 December 2011 603
At 31 December 2012 1,079
Assets under construction
The Groups plant and equipment included $800,000 (2011: $750,000) which relate to
expenditure for a plant in the course of construction.
Capitalisation of borrowing costs
The Groups plant and equipment include borrowing costs arising from bank loans borrowed
specifically for the purpose of the construction of a plant and equipment. During the financial
year, the borrowing costs capitalised as cost of plant and equipment amounted to $57,000
(2011: $60,000). The rate used to determine the amount of borrowing costs eligible for
capitalisation was 4.5% (2011: 5.0%), which is the effective interest rate of the specific
borrowing.
Revaluation of freehold land and buildings
The Group engaged Chartered Surveyors Pte Ltd, an independent valuer to determine the fair
value of the freehold land and buildings. Fair value is determined by reference to market based
evidence. This means that valuations performed by the valuer are based on active market
prices, adjusted for any difference in the nature, location or condition of the specific property.
The date of the revaluation was 31 December 2012 (2011: 31 December 2011).
If the freehold land and buildings were measured using the cost model, the carrying
amounts would be as follows:

Group

2012
$000
2011
$000

Freehold land at 31 December:
- Cost and net carrying amount 9,560 8,336
Buildings at 31 December:
- Cost 2,730 3,048
- Accumulated depreciation and impairment (150) (200)
- Net carrying amount 2,580 2,848

FRS 16.74.b

FRS 23.26.a

FRS 23.26 b

FRS 16.77.a-d

SGX 1207.11

FRS 16.77.e



Assets held under finance leases
During the financial year, the Group acquired plant and equipment and furniture and
fixtures with an aggregate cost of $1,028,000 (2011: $95,000) by means of finance
leases. The cash outflow on acquisition of property, plant and equipment amounted to
$7,426,000 (2011: $4,358,000).
The carrying amount of plant and equipment and furniture and fixtures held under finance
leases at the end of the reporting period were $815,000 (2011: $65,000) and $85,000
(2011: $30,000) respectively.
Leased assets are pledged as security for the related finance lease liabilities.
Assets pledged as security
In addition to assets held under finance leases, the Groups freehold land and buildings
with a carrying amount of $7,822,000 (2011: $6,833,000) are mortgaged to secure the
Groups bank loans (Note 30).
Impairment of assets
During the financial year, a subsidiary of the Group within the electronic components
segment, XYZ Vietnam Ltd carried out a review of the recoverable amount of its
production equipment because a particular line of specialised electronic component
products had been persistently making losses. An impairment loss of $500,000 (2011:
nil), representing the write-down of these equipment to the recoverable amount was
recognised in Other expenses (Note 8) line item of profit or loss for the financial year
ended 31 December 2012. The recoverable amount of the production equipment was
based on its value in use and the pre-tax discount rate used was 12.4% (2011: 11.2%).

FRS 7.43

FRS 17.31.a

FRS 16.74.a

FRS 16.74.a

FRS 36.126.a,
130.a-c, e and g


Commentary:
Changes in estimates
In this illustration, there was no change in the useful life of property, plant and equipment of
the Group. Where applicable, an entity should disclose the nature and effect of a change in
accounting estimate that has an effect in the current or subsequent periods.
Illustrative note disclosure for change in estimated useful life of equipment:
During the financial year, the Group conducted an operational efficiency review on its
production lines. The Group revised the estimated useful lives of some automation
machines from five to eight years, after refurbishments that will enable these automation
machines to remain in production for an additional three years. The revision in estimate
has been applied on a prospective basis from 1 January 2012. The effect of the above
revision on depreciation charge in current and future periods are as follows:
2012
$000
2013
$000
2014
$000
Later
$000
Decrease in depreciation expense (xxx) (xxx) (xxx) (xxx)

Entities are also encouraged to disclose the following information, which users of financial
statements may find relevant to their needs:
- The carrying amount of temporarily idle property, plant and equipment;
- The gross carrying amount of any fully depreciated property, plant and equipment that is still
in use;
- The carrying amount of property, plant and equipment retired from active use and not
classified as held for sale in accordance with FRS 105; and
- When the cost model is used, the fair value of property, plant and equipment when this is
materially different from the carrying amount.
If the amount of borrowing costs eligible for capitalisation have been determined by applying
a capitalisation rate to the expenditures on a qualifying asset because funds used for the
purpose of obtaining the qualifying asset are borrowed generally (rather than specifically), the
capitalisation rate should be the weighted average of the borrowing costs applicable to the
borrowings of the entity that are outstanding during the period, other than borrowings made
specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs
capitalised during a period should not exceed the amount of borrowing costs incurred during
that period.

FRS 8.39
FRS 16.76

FRS 16.79

FRS 23.14 and
26.b


14. Investment properties

Group

2012
$000
2011
$000

Balance sheet: FRS 40.76
At 1 January 3,955 3,825
Additions (subsequent expenditure) 500 FRS 40.76a
Net gains from fair value adjustments recognised in profit or loss 489 129 FRS 40.76.d
Transfer to property, plant and equipment

(Note 13) (300) FRS 40.76.f
Exchange differences

1 1 FRS 40.76.e
At 31 December 4,645 3,955

Income statement:
Rental income from investment properties:
- Minimum lease payments 538 445
- Contingent rent based on tenants turnover 21 45 FRS 17.56.b
559 490 FRS 40.75.f.i

Direct operating expenses (including repairs and maintenance) arising
from:
- Rental generating properties (60) (55) FRS 40.75.f.ii
- Non-rental generating properties (12) (10) FRS 40.75.f.iii
(72) (65)

The Group has no restrictions on the realisability of its investment properties and no
contractual obligations to purchase, construct or develop investment property or for
repairs, maintenance or enhancements.
Valuation of investment properties
Investment properties are stated at fair value, which has been determined based on
valuations performed as at 31 December 2012 and 31 December 2011. The valuations
were performed by Chartered Surveyors Pte Ltd, an independent valuer with a
recognised and relevant professional qualification and with recent experience in the
location and category of the properties being valued. The valuations are based on
comparable market transactions that consider the sales of similar properties that have
been transacted in the open market.
Properties pledged as security
Certain investment properties amounting to $2,145,000 (2011: $2,055,000) are
mortgaged to secure bank loans (Note 30).
Transfer to property, plant and equipment
On 30 December 2012, the Group transferred one condominium unit that was held as
investment property to owner-occupied property. On that date, the Group has
commenced using the condominium unit for employee accommodation purposes.

FRS 40.75.g
FRS 40.75.h

FRS 40.75.a
FRS 40.75.e

FRS 40.75.d

FRS 40.75.g


14. Investment properties (continued)

The investment properties held by the Group as at 31 December are as follows:

Description and Location Existing Use Tenure
Unexpired
lease term

8-storey shopping podium, 3 basements and twin 27-storey
office towers along South Park, Singapore
Shops Leasehold 983 years
Five condominium units, River Valley, Singapore Residential Leasehold 92 years
18-storey office tower along Xujing Road, Qingpu District,
Shanghai
Offices Leasehold 58 years

Commentary
Contractual obligations relating to investment properties
Contractual obligations to purchase, construct or develop investment property or for repairs,
maintenance or enhancements should be disclosed, if applicable.
Additions to investment properties
Additions to investment properties resulting from: i) acquisitions of properties; ii) subsequent
expenditure recognised in the carrying amount of an asset; and iii) acquisitions through business
combinations should be disclosed separately.
Valuation of investment properties
When a valuation obtained for investment property is adjusted significantly for the purpose of
the financial statements, for example to avoid double-counting of assets or liabilities that are
recognised as separate assets and liabilities, the entity should disclose a reconciliation between
the valuation obtained and the adjusted valuation included in the financial statements, showing
separately the aggregate amount of any recognised lease obligations that have been added
back, and any other significant adjustments.
If there has been no such valuation performed by an independent valuer, that fact should be
disclosed.
FRS 40 requires disclosure of a statement whether the determination of fair value of the
investment property was supported by market evidence or was more heavily based on other
factors (which the entity should disclose) because of the nature of the property and lack of
comparable market data.
In this illustration, the independent valuer has relied on comparable market transactions in
arriving at the estimates of the fair value of the investment properties.
If the fair value of the investment properties is not based on comparable market transactions
and determined by independent valuer using recognised valuation techniques, the methods and
significant assumptions applied in determining the fair value of investment should be disclosed.
To determine whether an assumption is significant is a matter of judgment. FRS 40.75.d does
not provide specific guidance. Examples of significant assumptions are:
- Capitalisation rate
- Discount rate
- Rental rate per square feet per month

SGX 1207.11.b

FRS 40.75.h

FRS 40.76.a and b

FRS 40.77

FRS 40.75.e

FRS 40.75.d


14. Investment properties (continued)

List of properties held for investment
This disclosure is only required for entities listed on the SGX-ST, where the aggregate value for
all properties for development, sale or for investment purposes held by the entity represent
more than 15% of the value of the consolidated net tangible assets, or contribute more than
15% of the consolidated pre-tax operating profit. This disclosure may be included in other parts
of the entitys annual report instead.

SGX 1207.11


15. Intangible assets

Group

Goodwill

Brands

Club
Membership
Deferred
Development
Costs

Total
FRS 1.77

$000 $000

$000 $000 $000

Cost:
At 1 January 2011 245 240 100 984 1,569 FRS 38.118.c
Additions internal development 200 200 FRS 38.118.e.i
Exchange differences 5 5 12 22 FRS 38.118.e.vii
At 31 December 2011 and 1 January 2012 250 245 100 1,196 1,791
FRS 103.75.a
FRS 38.118.c
Additions:
- Internal development 200 200 FRS 38.118.e.i
- Acquisition of a subsidiary (Note 17) 772 500 1,272
FRS 103.75.b
FRS 38.118.e.i
Attributable to discontinued operation (250) (250) FRS 38.118.e.ii
Exchange differences 15 7 14 36
FRS 103.75.f
FRS 38.118.e.vii
At 31 December 2012 1,037 752 100 1,160 3,049
FRS 103.75.h
FRS 38.118.c

Accumulated amortisation and impairment:
At 1 January 2011 70 131 201 FRS 38.118.c
Amortisation 10 242 252 FRS 38.118.e.vi
Exchange differences 5 5 FRS 38.118.e.vii
At 31 December 2011 and 1 January 2012 80 378 458

FRS 38.118.c
Amortisation 10 210 220 FRS 38.118.e.vi
Impairment loss 200 200
FRS 36.130.b
FRS 38.118.e.iv
Attributable to discontinued operation (250) (250) FRS 38.118.e.ii
Exchange differences 2 2

FRS 38.118.e.vii
At 31 December 2012 90 540 630

FRS 38.118.c

At 31 December 2011 250 245 20 818 1,333
At 31 December 2012 1,037 752 10 620 2,419 FRS 38.122.b

Brands and deferred development costs
Brands relate to the Gao-Feng, You-Yue and MSAX-Q (acquired in 2012) brand
names for the Groups specialised electronic components that were acquired in business
combinations. As explained in Note 2.9(b)(i), the useful life of these brands is estimated to
be indefinite.
Deferred development costs relate to energy efficiency improvement projects for
analogue electronic components and have an average remaining amortisation period of
four years (2011: five years).
All research costs and development costs not eligible for capitalisation have been
expensed and are recognised in Research and development line item in profit or loss.

FRS 38.122.b

15. Intangible assets (continued)

Amortisation expense
The amortisation of deferred development costs and club membership is included in the
Research and development and Administrative expenses line items in profit of loss
respectively.
Impairment testing of goodwill and brands
Goodwill acquired through business combinations and brands have been allocated to two
cash-generating units (CGU), which are also the reportable operating segments, for
impairment testing as follows:
- Electronic components segment
- Property segment
The carrying amounts of goodwill and brands allocated to each CGU are as follows:

Electronic
components
segment
Property
segment Total

2012
$000
2011
$000
2012
$000
2011
$000
2012
$000
2011
$000
Goodwill 782 255 250 1,037 250
Brands 752 245 752 245

The recoverable amounts of the CGUs have been determined based on value in use
calculations using cash flow projections from financial budgets approved by management
covering a five-year period. The pre-tax discount rate applied to the cash flow projections
and the forecasted growth rates used to extrapolate cash flow projections beyond the
five-year period are as follows:

Electronic
components segment
Property
segment

2012

2011

2012

2011

Growth rates 5.1% 4.8% 6.1% 5.5%
Pre-tax discount rates 11.3% 11.1% 12.3% 12.8%

The calculations of value in use for the CGUs are most sensitive to the following
assumptions:
Budgeted gross margins Gross margins are based on average values achieved in the
three years preceding the start of the budget period. These are increased over the budget
period for anticipated efficiency improvements. An increase of 1.5% per annum was
applied for the electronic components segment and 2.2% for the property segment.
Growth rates The forecasted growth rates are based on published industry research and
do not exceed the long-term average growth rate for the industries relevant to the CGUs.

FRS 38.118.d

FRS 36.80.b

FRS 36.134.a

FRS 36.134.b

FRS 36.130.e. 134.c
and d.iii

FRS 36.134.d.iv

FRS 36.134.d.v

FRS 36.134.d.i

FRS 36.134.d.i and ii

FRS 36.134.d.i,ii and
iv



Impairment testing of goodwill and brands (continued)
Pre-tax discount rates Discount rates represent the current market assessment of the
risks specific to each CGU, regarding the time value of money and individual risks of the
underlying assets which have not been incorporated in the cash flow estimates. The
discount rate calculation is based on the specific circumstances of the Group and its
operating segments and derived from its weighted average cost of capital (WACC). The
WACC takes into account both debt and equity. The cost of equity is derived from the
expected return on investment by the Groups investors. The cost of debt is based on the
interest bearing borrowings the Group is obliged to service. Segmentspecific risk is
incorporated by applying individual beta factors. The beta factors are evaluated annually
based on publicly available market data.
Market share assumptions These assumptions are important because, as well as using
industry data for growth rates (as noted above), management assesses how the CGUs
position, relative to its competitors, might change over the budget period. Management
expects the Groups share of the electronics and property markets to be stable over the
budget period.
Impairment loss recognised
During the financial year, an impairment loss was recognised to write-down the carrying
amount of deferred development costs attributable to the fire prevention equipment
segment that has been classified as discontinued operation (Note 11). The impairment
loss of $200,000 (2011: nil) has been recognised in profit or loss under the line item loss
from discontinued operation, net of tax.
Commentary:
Description of intangible assets
The disclosure of a description, the carrying amount and remaining amortisation period are
required for any individual intangible asset that is material to the entitys financial
statements.
Recoverable amount of CGU containing goodwill or intangible assets with indefinite lives
determined based on fair value less costs to sell
In this illustration, the recoverable amounts of such CGUs were determined based on value in
use calculations. If an entity uses fair value less costs to sell (FVLCTS) to measure the
recoverable amount of CGU, the entity should disclose the methodology used. If FVLCTS is
not determined using an observable market price, the entity should disclose a description of
each key assumption and a description of managements approach to determine the value
assigned to each key assumption (whether those values reflect past experience or are
consistent with external information, and if not, how and why they differ).
The recoverable amounts of CGU A, CGU B and CGU C are determined based on fair value
less costs to sell (FVLCTS) of the CGUs. To calculate these values, an appropriate multiple
was applied to the maintainable operating earnings of the CGUs.
The FVLCTS of the CGUs are determined by applying an appropriate market multiple to
its earnings before interest, tax, depreciation and amortisation (EBITDA), which
management believes is sustainable in view of the current and anticipated business
conditions.
The FVLCTS of CGU A, CGU B and CGU C are estimated based on current EBITDAs and
market multiple of X.XX. The market multiples are calculated based on the median of
comparable companies indications, after adjustments for differences in risks and growth.
The control premium of XX% was calculated based on the investment climate, industry
dynamic and recent comparable transactions. The discount rate of XX% has been derived
based on studies of liquidity discounts and adjusted for the size of the Company.



FRS 36.126.a,
FRS 36.130.a-c

FRS 38.122.b

FRS 36.134.e.i-ii



Recoverable amount of CGU containing goodwill or intangible assets with indefinite lives
determined based on fair value less costs to sell (continued)
If fair value less costs to sell is determined using discounted cash flow projections, the
following information shall also be disclosed:
- The period over which management has projected cash flows
- The growth rate used to extrapolate cash flow projections
- The discount rate(s) applied to the cash flow projections
Forecasted growth rates used to extrapolate cash flow projections beyond the five-year period
The entity is required to disclose the justification if the growth rate used to extrapolate cash
flows projections beyond the period covered by the most recent budgets/forecasts exceeds
the long-term average growth rate for the products, industries, or countries in which the
entity operates.
The growth rate used to extrapolate the cash flows of the electronics component
segment exceeds the average growth rate for the industry in which the electronics
segment operates by three quarters of a percentage point. Management of the
electronics component segment believes this growth rate is justified based on the
acquisition of XXX Limited that has resulted in the control of an industry patent,
preventing other entities from manufacturing a specialised product for a period of 10
years with the option for renewal after the 10 years period have expired.
Sensitivity to changes in assumptions
If a reasonably possible change in any key assumptions used by management would cause
the carrying values of CGUs to materially exceed the recoverable amounts, an entity should
disclose: the amount by which the CGUs recoverable amount exceeds its carrying amount,
the value assigned to the key assumption, and the amount by which the value assigned to the
key assumption must change, after incorporating any consequential effects of that change
on the other variables used to measure recoverable amount, in order for the CGUs
recoverable amount to be equal to its carrying amount.
Illustration of sensitivity analysis:
For the electronic components segment, its recoverable amount exceeds its carrying
amount by $XXX. The key assumptions used in determining its recoverable amount is
sensitive in the following areas:
- Management has considered the possibility of greater than budgeted increase in raw
material price inflation. This may occur if anticipated regulatory changes result in an
increase in demand which cannot be met by suppliers. Budgeted price inflation lies
within a range of X% to X%, depending on the country from which materials are
purchased. Should the Group be unable to pass on, or absorb the additional cost
increases of an average of X%, this segments recoverable amount would be reduced
to its carrying amount.
- Management recognises that the speed of technological change and the possibility of
new entrants can have a significant impact on growth rate assumptions. The effect of
new entrants is not expected to have an adverse impact on forecasts included in the
budget, but could yield a reasonably possible alternative to the estimated long-term
growth rate of X%. A reduction of X% in long-term growth rate would give a
recoverable amount equal to the carrying amount of the segment.

FRS 36.134.e.iii-v

FRS 36.134.d.iv

FRS 36.134.f

16. Land use rights

Group

2012
$000
2011
$000
Cost:
At 1 January 6,500 6,360
At 31 December 6,720 6,500

Accumulated amortisation:
At 1 January 767 630
Amortisation for the year 132 130

Net carrying amount 5,811 5,733

Amount to be amortised:
- Not later than one year 137 132
- Later than one year but not later than five years 548 528
- Later than five years 5,126 5,073

The Group has land use rights over two plots of state-owned land in Peoples Republic of
China (PRC) where the Groups PRC manufacturing and storage facilities reside. The land
use rights are not transferable and have a remaining tenure of 43 years (2011: 44 years).

FRS 17.35.a

FRS 17.35.d

17. Investment in subsidiaries

Company

2012
$000
2011
$000

Shares, at cost 11,132 11,042
Discount on loans to subsidiaries 540 540
Issuance of shares for acquisition of subsidiary 1,475
Impairment losses (1,000) (1,000)
12,147 10,582
Name
Country of
incorporation Principal activities
Proportion (%) of
ownership interest

2012 2011
Held by the Company:

XYZ Technologies Pte Ltd
i
Singapore Manufacture of electronic
components
100 100
XYZ Investment Pte Ltd
i
Singapore Investment holding 100 100
XYZ Land Pte Ltd
i
Good Fire Prevention Pte
Ltd (Note 11)
i

Singapore Installation of fire
prevention equipment
and provision of
installation services
100 100
Held through XYZ Technologies Pte Ltd:
XYZ China Co. Ltd
ii
Peoples
Republic of
China
Manufacture of electronic
components
75 75
XYZ Vietnam Ltd
ii
Vietnam Manufacture of electronic
components
100 80
MSAX Sdn Bhd
ii
Malaysia Manufacture of electronic
components
80 25
Held through XYZ Land Pte Ltd:
XYZ Developers Pte Ltd
i
Singapore Property development 100 100
XYZ Constructors Sdn Bhd
ii
Malaysia Property development 100 100
Lion Land Pte Ltd
i
Singapore Property investment 100 100

i
Audited by Ernst & Young LLP, Singapore
ii
Audited by member firms of Ernst & Young Global in the respective countries
Impairment testing of investment in subsidiaries
During the last financial year, management performed an impairment test for the
investment in XYZ Vietnam Ltd as this subsidiary had been persistently making losses. An
impairment loss of $nil (2011: $1,000,000) was recognised for the year ended 31
December 2011 to write down this subsidiary to its recoverable amount. The recoverable
amount of the investment in XYZ Vietnam Ltd has been determined based on a value in
use calculation using cash flow projections from financial budgets approved by
management covering a five-year period. The pre-tax discount rate applied to the cash
flow projection and the forecasted growth rate used to extrapolate cash flow projections
beyond the five year period are 12.4% (2011: $11.2%) and 5.1% (2011: 4.8%),
respectively.

FRS 27.38.a

FRS 27.43.b
FRS 24.12

SGX 717

FRS 36.126.a,
130.a-c, e,g and
134.d.iv


17. Investment in subsidiaries (continued)
Acquisition of subsidiary
On 18 October 2012 (the acquisition date), the Groups subsidiary company, XYZ
Technologies Pte Ltd (XYZ Technologies) acquired an additional 55% equity interest in its
25% owned associate, MSAX Sdn Bhd (MSAX), a manfucaturer of electronic
components in Malaysia. Upon the acquisition, MSAX became a subsidiary of the Group.
The Group has acquired MSAX in order to strengthen its position as a leading
manufacturer of electronic components in the ASEAN region and to enlarge the range of
products it can offer to its clients. The acqusition is also expected to reduce costs through
economies of scale.
The Group has elected to measure the non-contolling interest at the non-controlling
interests proportionate share of MSAXs net identifiable assets.
The fair value of the identifiable assets and liabilities of MSAX as at the acquisition date
were:

Fair value
recognised on
acquisition
$000
Property, plant and equipment 1,269
Brand 500
Trade and other receivables 1,089
Inventories 752
Cash and cash equivalents 417
4,027

Trade and other payables (1,038)
Provision for maintenance warranties (50)
Deferred tax liability (48)
Income tax payable (100)
(1,236)

Total identifiable net assets at fair value 2,791
Non-controlling interest measured at the non-controlling interests
proportionate share of MSAXs net idenfiable assets (558)
Goodwill arising from acquisition 772
3,005

Consideration transferred for the acquisition of MSAX
Cash paid 200
Equity instruments issued (1,305,310 ordinary shares of XYZ Holdings
(Singapore) Limited) 1,475
Deferred cash settlement 200
Contingent consideration recognised as at acquisition date 450
Total consideration transferred 2,325
Fair value of equity interest in MSAX held by the Group immediately before
the acquisition 680
3,005

FRS 103.B64.a-c

FRS 103.B64.d

FRS 103.B64.i

FRS 103.B64.o

FRS 103.B64.k

FRS 103.B64.f.i

FRS 103.B64.f.iv

FRS 103.B64.f.iii

FRS 103.B64.f.iii,

FRS 103.B64.g.i
FRS 103.B64.f

FRS 103.B64.p.i


Acquisition of subsidiary (continued)

$000
Effect of the acqusition of MSAX on cash flows
Total consideration for 55% equity interest acquired 2,325
Less: non-cash consideration (2,125)
Consideration settled in cash 200
Less: Cash and cash equivalents of subsidiay acquired (417)
Net cash inflow on acquisition 217
Equity instruments issued as part of consideration transferred
In connection with the acquisition of additional 55% equity interest in MSAX, XYZ Holdings
(Singapore) Limited issued 1,305,310 ordinary shares with a fair value of $1.13 each.
The fair value of these shares is the published price of the shares at the acquisition date.
The attributable cost of the issuance of the shares as consideration of $50,000 have been
recognised directly in equity as a deduction from share capital.
Contingent consideration arrangement
As part of the purchase agreement with the previous owner of MSAX, a contingent
consideration has been agreed. Additional cash payments shall be due to the previous
owner of MSAX of:
a) $385,000, if the entity generates $1,000,000 profit before tax for a period of 12
months after the acquisition date, or
b) $705,000 if the entity generates $1,500,000 profit before tax for a period of 12
months after the acquisition date.
As at the acquisition date, the fair value of the contingent consideration was estimated at
$450,000.
As of 31 December 2012, the key performance indicators of MSAX show clearly that
target (a) will be achieved and the achievement of target (b) is probable due to a
significant expansion of the business and synergies implemented. Accordingly, the fair
value of the contingent consideration has been adjusted to reflect this development and
such change has been recognised through profit or loss.
The fair value of the contingent consideration as at 31 December 2012 has been
increased by $235,000 to $685,000. The fair value of the contingent consideration was
calculated by applying the income approach using the probability-weighted payout
approach and at a discount rate of 8%. This fair value adjustment of contingent
consideration is recognised in the Other expenses line item in the Groups profit or loss
for the year ended 31 December 2012.
Transaction costs
Transaction costs related to the acquisition of $300,000 have been recognised in the
Administrative expenses line item in the Groups profit or loss for the year ended 31
December 2012.

FRS 7.40.a

FRS 7.43

FRS 7.40.b

FRS 7.40.c

FRS 103.B64.f.iv

FRS 103.B64.l and m

FRS 103.B64.g.ii

FRS 103.B64.g.iii

FRS 103.B64.g.i

FRS 103.58
FRS 103.B67.b

FRS 103.B64.l and m


Acquisition of subsidiary (continued)

Gain on remeasuring previously held equity interest in MSAX to fair value at acquisition
date

The Group recognised a gain of $140,000 as a result of measuring at fair value its 25%
equity interest in MSAX held before the business combination. The gain is included in the
Other income line item in the Groups profit or loss for the year ended 31 December
2012.
Trade and other receivables acquired
Trade and other receivables acquired comprise of trade receivables and bills of exchange
and promissory notes with fair values of $600,000 and $489,000, respectively. Their
gross amounts are $655,000 and $489,000, respectively. At the acquisition date,
$55,000 of the contractual cash flows pertaining to trade receivables are not expected to
be collected. It is expected that the full contractual amount of the bills of exchange and
promissory notes can be collected.
Goodwill arising from acquisition
The goodwill of $772,000 comprises the value of strengenthing the Groups market
position in the ASEAN region, improved resilience to sector specific volatilities, and cost
reduction syngeries expected to arise from the acquisition. It also includes the value of a
customer list, which has not been recognised seperately. Goodwill is allocated entirely to
the electronic components segment. Due to the contractual terms imposed on the
acquisition, the customer list is not seperable and therefore does not meet the criteria for
recognition as an intangible asset under FRS 38. None of the goodwill recognised is
expected to be deductible for income tax purposes.
Impact of the acquisition on profit or loss
From the acquisition date, MSAX has contributed $8,000,000 of revenue and $301,000
to the Groups profit for the year. If the business combination had taken place at the
beginning of the year, the revenue from continuing operations would have been
$33,680,000 and the Groups profit from continuing operations, net of tax would have
been $1,035,000.
Provisional accounting of the acquisition of MSAX
A brand has been identified as an intangible asset arising from this acquisition. The Group
has engaged an independent valuer to determine the fair value of the brand. As at 31
December 2012, the fair value of the brand amounting to $500,000 has been determined
on a provisional basis as the final results of the independent valuation have not been
received by the date the financial statements was authorised for issue. Goodwill arising
from this acquisition, the carrying amount of the brand, deferred tax liability, and
amortisation of the brand will be adjusted accordingly on a retrospective basis when the
valuation of the brand is finalised.

FRS 103.B64.p.ii

FRS 103.B64.h

FRS 103.B64.e

FRS 103.B64.k

FRS 103.B64.q.i

FRS 103.B64.q.ii

FRS 103.B67.a


Acquisition of non-controlling interests
On 31 March 2012, the Groups subsidiary company, XYZ Technologies, acquired an
additional 20% equity interest in XYZ Vietnam Ltd (XYZ Vietnam) from its non-controlling
interests for a cash consideration of $800,000. As a result of this acquisition, XYZ
Vietnam became a wholly-owned subsidiary of XYZ Technologies. The carrying value of
the net assets of XYZ Vietnam at 31 March 2012 was $3,250,000 and the carrying value
of the additional interest acquired was $650,000. The difference of $150,000 between
the consideration and the carrying value of the additonal interest acquired has been
recognised as Premium paid on acquisition of non-controlling interests within equity.
The following summarises the effect of the change in the Groups ownership interest in
XYZ Vietnam on the equity attributable to owners of the Company:
$000

Consideration paid for acqusition of non-controlling interests 800
Decrease in equity attributable to non-controlling interests (650)
Decrease in equity attributable to owners of the Company 150

Commentary:
Investment in subsidiaries
Where applicable, an entity should disclose the following:
- The nature of the relationship between the parent and a subsidiary when the parent does
not own, directly or indirectly through subsidiaries, more than half of the voting power;
- The reasons why the ownership, directly or indirectly through subsidiaries, of more than
half of the voting or potential voting power of an investee does not constitute control;
- The reporting date of the financial statements of a subsidiary when such financial
statements are used to prepare consolidated financial statements and are as of a
reporting date or for a period that is different from that of the parent, and the reason for
using a different reporting date or period; and
- The nature and extent of any significant restrictions (e.g., resulting from borrowing
arrangements or regulatory requirements) on the ability of subsidiaries to transfer funds
to the parent in the form of cash dividends or to repay loans or advances.
In this illustration, it is assumed that there was no reversal of impairment loss on investment
in subsidiaries. Where applicable, an entity should disclose the events and circumstances that
led to the reversal of such impairment loss.
An entity should disclose proportion of voting power held if different from proportion of
ownership interest.

FRS 27.41.e

FRS 27.41.a

FRS 27.41.b

FRS 27.40.c

FRS 27.40.d

FRS 36.130.a

FRS 27.42.b



Acquisition of subsidiary
An entity shall also make disclosures of business combinations in accordance to FRS 103.B64
even if they were effected after the end of the reporting date but before the financial
statements are authorised for issue, unless the initial accounting for the business
combination is incomplete at the time the financial statements are authorised for issue. In
that situation, the entity shall describe which disclosures cannot be made and the reasons
why they cannot be made.
For individually immaterial business combinations occurring during the reporting period that
are material collectively, an entity shall disclose in aggregate the information required by FRS
103.B64.e-q.
An acquirer shall also disclose information that enables users of its financial statements to
evaluate the financial effects of adjustments recognised in the current reporting period that
relate to business combinations that occurred in the current period or previous reporting
periods.
Illustrative disclosure for adjustments to initial accounting for a business combination that
was determined provisionally in the previous reporting period:
The purchase price allocation of the acquisition of Acquiree Group (Acquiree) in the
financial year ended 31 December 2011 were provisional as the Group had sought an
independent valuation for the land and buildings owned by Acquiree. The results of this
valuation had not been received at the date the 2011 financial statements were
authorised for issue. The valuation of the land and buildings was received in April 2012
and showed that the fair value at the date of acquisition was $XXX, an increase of $XXX
compared to the provisional value.
The 2011 comparative information has been restated to reflect this adjustment. The
value of the land and buildings increased by $XXX, there was an increase in the deferred
tax liability of $XXX and an increase in non-controlling interest of $XXX. There was also a
corresponding reduction in goodwill of $XXX, to give total goodwill arising on the
acquisition of $XXX. The depreciation charge on the buildings from the acquisition date
to 31 December 2011 increased by $XXX.
In this illustration, no contingent liabilities are recognised in the business combination.
Illustrative note disclosure where an entity recognised contingent liabilities in a business
combination:
A contingent liability at a fair value of $XXX has been determined at the acquisition date
resulting from a claim for payment by a supplier whose shipment has been rejected and
payment has been refused by the Group due to deviations from the defined technical
specifications of the goods. The claim is subject to legal arbitration and is only expected
to be finalised in late 2012. As at the reporting date, the contingent liability has been
reassessed and is determined to be $XXX, which is based on the expected probable
outcome (see Note X on Contingent Liability). The charge has been recognised in profit or
loss.

FRS 103.59.b and
B66

FRS 103.B65

FRS 103.61 and
B67

FRS 103.B67.a

FRS 103.B64.j

FRS 103.56



Please refer to commentary no. 4 of Note 2.4 Basis of consolidation.
In this illustration, the Group has elected to measure non-controlling interest arising from
acquisition of MSAX at the non-controlling interests proportionate share of MSAXs
identifiable net assets. The following is an illustrative disclosure when an entity chooses to
measure non-controlling interest arising in a business combination at fair value:
Fair value of non-controlling interest in Acquiree
The fair value of the non-controlling interest in Acquiree, an unlisted company, was
estimated by applying the income approach that is corroborated by market approach. The
fair value estimates are based on:
- A discount rate range of XX% to XX%;
- Terminal value, calculated based on the long term sustainable growth rate for the
industry ranging from XX% to XX%, which has been used to determine income for the
future years; and
- Adjustments because of the lack of control and marketability that market participants
would consider when estimating the fair value of the non-controlling interest in
Acquiree.
If the acquisition results in a bargain purchase instead of goodwill recognised, the acquirer
shall disclose the amount of the gain recognised and the line item in the consolidated
statement of comprehensive income in which the gain is recognised, and a description of the
reasons why the transaction resulted in a gain.

18. Investment in associates

Group

2012
$000
2011
$000

Shares, at cost 9,060 9,500
Share of post-acquisition reserves 1,283 726
Share of changes recognised directly in associates equity 72 10
10,595 10,321

Fair value of investment in an associate for which there is published price
quotation 10,600 10,400

FRS 103.B64.o.ii

FRS 103.B64.n

FRS 28.37.a


18. Investment in associates (continued)
Name
Country of
Proportion (%) of
ownership interest

2012 2011
Held through subsidiaries:
QSpeed Pte Ltd
i
components
35 35
MSAX Sdn Bhd
ii
components
25
Heart Land Ltd
i
Singapore Investment properties 45 45
HKI Pte Ltd
i

i

ii
Audited by member firm of Ernst & Young Global in Malaysia

The Group has not recognised losses relating to QSpeed Pte Ltd where its share of losses
exceeds the Groups interest in this associate. The Groups cumulative share of
unrecognised losses at the end of the reporting period was $50,000 (2011: $35,000), of
which $15,000 (2011: $5,000) was the share of the current years losses. The Group has
no obligation in respect of these losses.
The Group has not recognised its share of the current year profit of $8,000 (2011: nil)
relating to HKI Pte Ltd as the Groups cumulative share of unrecognised losses with
respect to that associate was $17,000 (2011: $25,000) at the end of the reporting
period.
On 18 October 2012, the Groups subsidiary company, XYZ Technologies Pte Ltd (XYZ
Technologies) acquired an additional 55% equity interest in its 25%-owned associate,
MSAX Sdn Bhd (MSAX). Upon the acquisition, MSAX became a subsidiary of the Group
(Note 17).
The Groups contingent liabilities in respect of its investment in associates are disclosed in
Note 38(a).
The summarised financial information of the associates, not adjusted for the proportion of
ownership interest held by the Group, is as follows:

Group

2012
$000
2011
$000

Assets and liabilities:
Total assets 32,867 31,970
Total liabilities (14,647) (15,905)

Results:
Revenue 60,807 55,400
Profit for the year 1,643 2,747

FRS 27.43

SGX 717

FRS 28.29 and
37.g

FRS 28.30

FRS 28.37.b


18. Investment in associates (continued)

Commentary:
Investment in associates
Where applicable, an entity should disclose the following:
- The reasons why the presumption that an investor does not have significant influence is
overcome if the investor holds, directly or indirectly through subsidiaries, less than 20 per
cent of the voting or potential voting power of the investee but concludes that it has
significant influence.
- The reasons why the presumption that an investor has significant influence is overcome if
the investor holds, directly or indirectly through subsidiaries, 20 per cent or more of the
voting or potential voting power of the investee but concludes that it does not have
significant influence.
- The reporting date of the financial statements of an associate, when such financial
statements are used in applying the equity method and are as of a reporting date or for a
period that is different from that of the investor, and the reason for using a different
reporting date or different period.
Illustrative note disclosure where the reporting date of financial statements of an
associate is different from that of the investor:
For the current financial year, the Group recognised its share of the associates
operating results based on its audited financial statements drawn up to the most
recent reporting date, which is 30 November 2012. The associate company, being
listed on the SGX-ST, is unable to release information other than those publicly
published.
- The nature and extent of any significant restrictions (e.g., resulting from borrowing
arrangements or regulatory requirements) on the ability of associates to transfer funds to
the investor in the form of cash dividends, or repayment of loans or advances.
Illustrative note disclosure where the significant restrictions on associate apply:
The Group has associates in certain countries which impose foreign exchange
controls such that payment of dividends declared or principal repayment in respect
of foreign currency denominated obligations are subject to the approval of the
relevant government authorities.
- The fact that an associate is not accounted for using the equity method in accordance with
FRS 28.13.
- Summarised financial information of associates, either individually or in groups, that are
not accounted for using the equity method, including the amounts of total assets, total
liabilities, revenues and profit or loss.
An entity should disclose proportion of voting power held if different from proportion of
ownership interest.
In this illustration, the summarised financial information of the associates has not been
adjusted for the proportion of ownership interest held by the Group. Alternatively, the
summarised financial information can be presented based on the Groups share in the
associates. Whichever approach is selected, it must be applied consistently and be clearly
disclosed in the financial statements.

FRS 28.37.c

FRS 28.37.d

FRS 28.37.e

FRS 28.37.f

FRS 28.37.h

FRS 28.37.i

FRS 27.43


19. Investment in joint venture

The Group has 50% (2011: 50%) equity interest in a jointly-controlled entity, XYZABC JV
Co. Ltd that is held through a subsidiary. This joint venture is incorporated in Peoples
Republic of China and is in the business of property investment.
The Groups commitments in respect of its interest in XYZ-ABC JV Co. Ltd are disclosed in
Note 37(a).
The Groups contingent liabilities in respect of its investment in joint venture are disclosed
in Note 38(a).
The aggregate amounts of each of current assets, non-current assets, current liabilities,
non-current liabilities, income and expenses related to the Groups interests in the jointly-
controlled entity are as follows:

Group

2012
$000
2011
$000
Assets and liabilities:
Current assets 250 100
Non-current assets 1,880 600
Total assets 2,130 700

Current liabilities (109) (120)
Non-current liabilities (606) (587)
Total liabilities (715) (707)

Income and expenses:
Income 214 199
Expenses (63) (71)

FRS 31.56

FRS 31.56


20. Deferred tax

Deferred tax as at 31 December relates to the following:

Group Company

Consolidated balance
sheet
Consolidated
income
statement
Balance sheet

2012
$000
31.12.2011
(Restated)
$000
1.1.2011
(Restated)
$000
2012
$000
2011
(Restated)
$000
2012
$000
2011
$000
Deferred tax liabilities:
Differences in depreciation
for tax purposes (601) (633) (760) 146 251 (217) (218)
Differences in amortisation
of intangible assets (62) (111) (131) (47) (20)
Impairment of intangible
assets
(60) - 60
Revaluations to fair value:
- Freehold land and
buildings (1,159) (903) (415)
- Available-for-sale financial
assets (150) (94) (68)
Fair value adjustments on
acquisition of subsidiary (48) -
Convertible redeemable
preference shares (9) (13) (16) (4) (3) (9) (13)
Undistributed earnings of
associates (176) (145) (125) 31 20
Other items (8) (5) (2) 3 3
(2,273) (1,904) (1,517) (226) (231)
Deferred tax assets:
Provisions 419 427 422 8 (5)
Unutilised tax losses 23 19 18 (4) (1) 9 8
Other items 28 17 15 (8) 7 12 18
470 463 455 21 26
Deferred tax expense

185 252

Unrecognised tax losses
At the end of the reporting period, the Group has tax losses of approximately $867,000
(2011: $682,000) that are available for offset against future taxable profits of the
companies in which the losses arose, for which no deferred tax asset is recognised due to
uncertainty of its recoverability. The use of these tax losses is subject to the agreement of
the tax authorities and compliance with certain provisions of the tax legislation of the
respective countries in which the companies operate.

FRS 12.81.g.i
and ii

FRS 12.81.e


20. Deferred tax (continued)
Unrecognised temporary differences relating to investments in subsidiaries and joint
venture
At the end of the reporting period, no deferred tax liability (2011: nil) has been
recognised for taxes that would be payable on the undistributed earnings of certain of the
Groups subsidiaries and joint venture as:
- The Group has determined that undistributed earnings of its subsidiaries will not be
distributed in the foreseeable future; and
- The joint venture of the Group cannot distribute its earnings until it obtains the
consent of both the venturers. At the end of the reporting period, the Group does not
foresee giving such consent.
Such temporary differences for which no deferred tax liability has been recognised
aggregate to $450,000 (2011: $340,000). The deferred tax liability is estimated to be
$81,000 (2011: $68,000).
Tax consequences of proposed dividends
There are no income tax consequences (2011: nil) attached to the dividends to the
shareholders proposed by the Company but not recognised as a liability in the financial
statements (Note 43).

Commentary:
Deferred tax income or expense recognised in profit or loss
This disclosure is required in situations where the amount of the deferred tax income or
expense recognised in profit or loss relating to each type of deferred tax assets/liabilities is
not apparent from the changes in the amounts recognised in the balance sheet.

FRS 12.81.f

FRS 12.87

FRS 12.81.i

FRS 12.81.g.ii


21. Trade and other receivables

Group Company

2012
$000
2011
$000
2012
$000
2011
$000
Trade and other receivables (current):
Trade receivables 24,763 26,160
Bills of exchange and promissory notes 540 507
Amounts due from related companies 361 288 300
Staff loans 155 150 50 50
Refundable deposits 102 119
25,921 26,936 338 350
Other receivables (non-current):
Amounts due from subsidiaries

3,409 2,061
SGD loans to subsidiaries 10,563 12,574
SGD loans to associates

1,230 1,230 1,230 1,230
SGD loan to a fellow subsidiary 1,500 1,500 1,500 1,500
Staff loans 63 48 51 36
2,793 2,778 16,753 17,401
Total trade and other receivables (current and
non-current) 28,714 29,714 17,091 17,751
Add: Cash and short-term deposits (Note 27) 6,117 4,858 4,621 4,145
Total loans and receivables 34,831 34,572 21,712 21,896

Trade receivables
Trade receivables are non-interest bearing and are generally on 30 to 90 days terms.
They are recognised at their original invoice amounts which represent their fair values on
initial recognition.
At the end of the reporting period, trade receivables arising from export sales amounting
to $1,560,000 (2011: $1,750,000) are arranged to be settled via letters of credit issued
by reputable banks in countries where the customers are based. Trade receivables from
first-time customers that are insured by trade credit insurance underwritten by a
reputable insurer in Singapore amount to $520,000 (2011: nil) at the end of the
reporting period.
Trade receivables denominated in foreign currencies at 31 December are as follows:

Group Company

2012
$000
2011
$000
2012
$000
2011
$000
United States Dollar 4,128 4,525
Renminbi 1,567 2,015

Bills of exchange and promissory notes
These receivables bear interest at market rates and have an average maturity of 30 days
(2011: 20 days) from the end of the reporting period.

FRS 1.77-78.b
FRS 107.7 and
31

FRS 24.18.b

FRS 24.18.b

FRS 24.18.b

FRS 24.18.b

FRS 24.18.b

FRS 107.8.c

FRS 107.7 and
31

FRS 107.36.b

FRS 107.34.a

FRS 107.7 and
31


21. Trade and other receivables (continued)

Related party balances and staff loans
- Amounts due from related companies are non-trade related, unsecured, non-interest
bearing, repayable upon demand and are to be settled in cash.
- Amounts due from subsidiaries and loans to subsidiaries are unsecured, non-interest
bearing and are to be settled in cash. The former are not expected to be repaid within
the next 12 months while the latter are due on 30 June 2015.
- Loans to associates bear interest at SIBOR + 2% p.a. (2011: SIBOR + 2% p.a.), have an
average maturity of 1.5 years (2011: 2.5 years), secured by corporate guarantees
issued by their respective holding companies and are to be settled in cash.
- Loan to a fellow subsidiary is unsecured, bears interest at SIBOR + 2% p.a. (2011:
SIBOR + 2% p.a.), repayable on 30 September 2014 and is to be settled in cash.
- Staff loans are unsecured and non-interest bearing. Non-current amounts have an
average maturity of 1.5 years (2011: 1.5 years). The loans are recognised initially at
fair value. The difference between the fair value and the absolute loan amount
represents payment for services to be rendered during the period of the loan and is
recorded as part of prepaid operating expenses.
Receivables that are past due but not impaired
The Group has trade receivables amounting to $5,760,000 (2011: $6,852,000) that are
past due at the end of the reporting period but not impaired. These receivables are
unsecured and the analysis of their aging at the end of the reporting period is as follows:

Group

2012
$000
2011
$000
Trade receivables past due but not impaired:
Lesser than 30 days 4,105 5,234
30 - 60 days 568 832
61- 90 days 822 524
91-120 days 245 262
More than 120 days 20
5,760 6,852

FRS 107.7,31
and 36.b
FRS 24.18.b

FRS 107.37.a
FRS 107.36.b
FRS 107.IG28


Receivables that are impaired
The Groups trade receivables that are impaired at the end of the reporting period and the
movement of the allowance accounts used to record the impairment are as follows:
Group

Collectively impaired Individually impaired

2012
$000
2011
$000
2012
$000
2011
$000
Trade receivables nominal amounts 1,220 1,350 150 80
Less: Allowance for impairment (350) (410) (100) (50)
870 940 50 30
Movement in allowance accounts:
At 1 January 410 510 50 60
Charge for the year 85 95 50 20
Written off (130) (205) (30)
Exchange differences (15) 10
At 31 December 350 410 100 50

Trade receivables that are individually determined to be impaired at the end of the
reporting period relate to debtors that are in significant financial difficulties and have
defaulted on payments. These receivables are not secured by any collateral or credit
enhancements.

Receivables that are impaired

At the end of the reporting period, the Group and the Company have provided an
allowance of $100,000 (2011: $100,000) for impairment of the unsecured loan to a
fellow subsidiary company with a nominal amount of $1,600,000 (2011: $1,600,000).
This related party has been suffering significant financial losses for the current and past
two financial years.
There has been no movement in this allowance account for the financial year ended 31
December 2012 (2011: charge of $100,000 for impairment loss).

FRS 107 IG29.a

FRS 107.37.b

FRS 107.IG29.b

FRS 107.16

FRS 107.37.b
FRS 107.36.b

FRS 107.37.b
FRS 107.36.b
FRS 24.18.c

FRS 107.16 and 6
FRS 24.18.d



Commentary:
Collateral and other credit enhancements
When an entity holds collateral (of financial or non-financial assets) and is permitted to sell or
repledge the collateral in the absence of default by the owner of the collateral, it shall disclose:
(a) the fair value of the collateral held; (b) the fair value of any such collateral sold or
repledged, and whether the entity has an obligation to return it; and (c) the terms and
conditions associated with its use of the collateral.
When an entity obtains financial or non-financial assets during the period by taking possession
of collateral it holds as security or calling on other credit enhancements (e.g., guarantees), and
such assets meet the recognition criteria under FRS, an entity shall disclose for such assets
held at the reporting date:
(a) the nature and carrying amount of the assets; and
(b) when the assets are not readily convertible into cash, its policies for disposing of such
assets or for using them in its operations.
The above disclosure required for financial assets obtained by taking possession of collateral or
other credit enhancements are only applicable to assets still held at the reporting date.
An entity shall disclose a description of collateral held as security and of other credit
enhancements, and their financial effect (e.g. a quantification of the extent to which collateral
or other credit enhancements mitigate credit risk) in respect of the amount that best
represents the maximum exposure to credit risk.
Categories of financial assets and financial liabilities
Please refer to commentary no. 1 of Note 22 Investment securities.
Ageing analysis of financial assets that are past due but not impaired
FRS 107 requires the disclosure of an analysis by class of the age of financial assets that are
past due but not impaired. Any entity uses its judgment to determine the appropriate time
bands to be disclosed.
Allowance account for credit losses
FRS 107 requires disclosure requirements where financial assets are impaired by credit losses
and the entity records the impairment in a separate account (e.g., an allowance account used
to record individual impairments or a similar account used to record a collective impairment of
assets) rather than directly reducing the carrying amount of the asset. In such circumstances,
the entity shall disclose a reconciliation of changes in that account (the reconciliation) during
the period for each class of financial assets.
In this illustration, the entity has presented the reconciliation of changes in the two allowance
accounts that it has used to record impairment of trade receivables, i.e., trade receivables that
are collectively impaired and those that are individually impaired.

FRS 107.15

FRS 107.38

FRS 107.36.b

FRS 107.37.a and
IG28

FRS 107.16


22. Investment securities

Group

2012
$000
2011
$000
Current:
Held for trading investments
- Equity securities (quoted) 1,512 1,260

Non-current:
Available-for-sale financial assets
- 6% p.a. SGD corporate bonds due 30 June 2013 (unquoted)

866 800
- Other debt securities (unquoted) 697 180
- Equity securities (quoted) 1,746 848
- Equity securities (unquoted) 139 28
- Equity securities (unquoted), at cost 500 600

3,948 2,456

Held-to-maturity investment

- 3% p.a. SGD government bonds due 31 March 2015 (quoted) 660 650
4,608 3,106
Investments pledged as security
The Groups investment in government bonds amounting to $660,000 (2011:$650,000)
has been pledged as security for a bank loan (Note 30). Under the terms and conditions of
the loan, the Group is prohibited from disposing of this investment or subjecting it to
further charges without furnishing a replacement security of similar value.
Impairment losses
During the financial year, the Group recognised the following impairment losses:
Impairment loss of $70,000 (2011: $150,000) and $11,000 (2011: $35,000) for
quoted and unquoted equity securities respectively as there were significant or
prolonged decline in the fair value of these investments below their costs. The Group
treats significant generally as X% and prolonged as greater than X months.
Impairment loss of $100,000 (2011: nil) pertaining to unquoted equity securities
carried at cost, reflecting the write-down in the carrying value of this private equity
investment in a Singapore company that was placed under receivership.
Impairment loss of $17,000 (2011: $25,000) for unquoted other debt securities after
taking into considerations the probability of default or significant delay in repayments
by the debtors.
Commentary:
FRS 107 required disclosure of the carrying amounts of financial instruments under each of
the classification in FRS 39, either on the face of the balance sheet or in the notes. The
categories of financial instruments include financial assets and financial liabilities that are
classified as held for trading, those that are designated upon initial recognition as financial
assets or financial liabilities at fair value through profit or loss, held-to-maturity investments,
loans and receivables, available-for-sale financial assets, and financial liabilities measured at
amortised cost. In this illustration, the disclosure requirement is met in the respective notes to
the financial statements (refer to this note, Note 21, 26 and 31). Alternatively, the disclosure
of the carrying amounts of financial instruments under each of the classifications in FRS 39
may be presented in a separate centralised note.

FRS 107.7 and 31

FRS 107.8.a.ii

FRS 107.8.d

FRS 107.31

FRS 107.8.b

FRS 107.14

FRS 107.20.e and 37.b

FRS 107.8


22. Investment securities (continued)

Nature and extent of risks arising from financial instruments
Information such as the interest rates and maturity dates of the debt securities, and countries
where the equity securities are listed should be disclosed if material and enables the users of
the financial statements to evaluate the nature and extent of the risks arising from financial
instruments to which the entity is exposed to at the reporting date. In this illustration, the
countries where the equity securities are listed are disclosed in Note 40 (e) Market price risk.
Reclassification of financial assets at cost or amortised cost to fair value
If an entity has reclassified any financial asset measured at cost or amortised cost to fair value
or reclassified any financial asset at fair value, rather than at cost or amortised cost, FRS 107
requires disclosure of the amount and reason for the reclassification.
Illustrative disclosure for reclassification of financial assets at cost to fair value:
On 30 November 2012, the Group reclassified its investment in equity instruments of a
private Singapore company (XXX Pte Ltd) that was previously measured at cost of $XXX
to available-for-sale investments measured at fair value of $XXX, when a reliable measure
of fair value became available upon its listing on the SGX-ST.
Determination of significant or prolonged decline in fair value of financial instruments
Please refer to commentary no. 3 of Note 2.16 (c) Impairment of available-for-sale financial
assets.

23. Gross amount due from/(to) customers for contract work-in-progress

Group

2012
$000
2011
$000
Aggregate amount of costs incurred and recognised profits (less
recognised losses) to date 34,089 24,552
Less: Progress billings and advances (33,796) (24,740)
293 (188)
Presented as:
Gross amount due from customers for contract work 651 398
Gross amount due to customers for contract work (358) (586)
293 (188)

Advances received included in gross amount due to customers for
contract work 65 80 45 60
Retention sums on construction contract included in trade receivables 65 80

Commentary:
Advances received before the related work is performed
Where applicable, an entity is required to disclose the amount of advances received from
customer before the related construction work is performed.

FRS 107.31

FRS 107.12

FRS 11.40.a

FRS 11.42.a

FRS 11.42.b

FRS 11.40.b

FRS 11.40.c

FRS 11.40.b


24. Development property

Group

2012
$000
2011
$000

Freehold land 1,800 1,800
Development costs 1,100 850
2,900 2,650

During the financial year, borrowing costs of $35,000 (2011: $33,000), arising from
borrowings obtained specifically for the development property were capitalised under
Development costs. The rate used to determine the amount of borrowing costs eligible
for capitalisation was 7.5% (2011: 7.2%), which is the effective interest rate of the specific
borrowing.
The freehold land under development has been pledged as security for a bank loan (Note
30).
Commentary:
List of development properties
Where the aggregate value for all properties for development, sale or for investment purposes
held by the entity represent more than 15% of the value of the consolidated net tangible
assets, or contribute more than 15% of the consolidated pre-tax operating profit, entities
listed on the SGX-ST are required to disclose further information regarding development
properties.
Illustrative disclosure pursuant to requirements of SGX 1207.11:
In this illustration, the entire amount included in development property is expected to be
recovered or settled no more than twelve months after the reporting period.
If the amount includes amounts expected to be recovered more than twelve months after the
reporting period, an entity shall disclose the amount expected to be recovered more than
twelve months after the reporting period.
Borrowing costs capitalised
Please refer to commentary no. 3 of Note 13 Property plant and equipment.
Description and location %
owned
Site area
(square
metre)
Gross floor
area
(square
metre)
Stage of completion
as at date of annual
report (expected
year of completion)

An 8-storey luxurious condominium (Snow
Queen Palace) development along
Paterson Road, Singapore
100% 20,500 220,000 60% (2013)
A 35-storey integrated development with
residential apartments, offices and
retail components along Tian Shan
Road, Changning District, Shanghai,
Peoples Republic of China
100% 98,000 450,000 70% (2013)
A 20-storey luxurious condominium (Link
Spring Tower) along HuBei Road,
Hanggu District, Tianjin, Peoples
Republic of China
100% 88,000 300,000 30% (2014)

FRS 23.26.a and
b

FRS 2.36.h

SGX 1207.11

FRS 1.61

25. Inventories

Group

2012
$000
2011
$000
Balance sheet:
Raw materials 4,994 5,552
Work-in-progress 3,823 3,491
Finished goods 15,203 15,357
24,020 24,400
Income statement:
Inventories recognised as an expense in cost of sales 80,567 82,122
Inclusive of the following charge/(credit):
- Inventories written-down 352 257
- Reversal of write-down of inventories (190)

The reversal of write-down of inventories was made when the related inventories were
sold above their carrying amounts in 2012.
The Group has subjected finished goods amounting to $1,500,000 (2011: $1,500,000),
to a floating charge as security for bank overdraft facilities (Note 30).

FRS 1.77 and 78.c

FRS 2.36.b

FRS 2.36.d

FRS 2.36.e

FRS 2.36.f

FRS 2.36.g

FRS 2.36.h


26. Derivatives

Group

2012
$000
2011
$000

Contract/
Notional
Amount

Assets

Liabilities
Contract/
Notional
Amount

Assets

Liabilities

Forward currency contracts 9,850 150 (22) 8,560 60
Interest rate swap 2,500 20 2,500 45
170 (22) 105

Total derivatives 170 (22) 105
Add: Held for trading
investments (Note 22) 1,512 1,260
Add: Contingent consideration
for business combination (Note
32) (685)
Total financial assets/(liabilities)
at fair value through profit or
loss 1,682 (707) 1,365

At the Company level, the carrying amount of financial liability at fair value through profit
or loss is the contingent consideration for business combination amounting to
$685,000 as at 31 December 2012 (2011: Nil).
Forward currency contracts are used to hedge foreign currency risk arising from the
Groups sales and purchases denominated in USD for which firm commitments existed at
the end of the reporting period, extending to March 2013 (2011: March 2012) (Note
40(d)).
The interest rate swap receives floating interest equal to SIBOR + 3% p.a. (2011: SIBOR +
3% p.a.), pays a fixed rate of interest of 7.5% p.a. (2011: 7.5% p.a.) and matures on 30
November 2013 (2011: 30 November 2012).
Commentary:

FRS 107.7
and 31

FRS 107.8.a
and e

FRS 107.8.e


27. Cash and short-term deposits

Group Company

2012
$000
2011
$000
2012
$000
2011
$000

Cash at banks and on hand 5,697 4,598 4,256 3,985
Short-term deposits 420 260 365 160
Cash and short-term deposits 6,117 4,858 4,621 4,145

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-
term deposits are made for varying periods of between one day and three months,
depending on the immediate cash requirements of the Group and the Company, and earn
interests at the respective short-term deposit rates. The weighted average effective
interest rates as at 31 December 2012 for the Group and the Company were 2.60%
(2011:2.80%) and 0.15% (2011:0.20%) respectively.
Cash and short-term deposits denominated in foreign currencies at 31 December are as
follows:

Group Company

2012
$000
2011
$000
2012
$000
2011
$000
United States Dollar 442 325 108 120
Renminbi 20 15 8 5
For the purpose of the consolidated cash flow statement, cash and cash equivalents
comprise the following at the end of the reporting period:

Group
Cash and short-term deposits:
2012
$000
2011
$000
- Continuing operations 6,117 4,858
- Discontinued operation (Note 11) 250
6,367 4,858
Bank overdrafts (Note 30) (498) (1,444)
Cash and cash equivalents 5,869 3,414

Commentary:
In this illustration, it is assumed that the Group does not have any cash and cash equivalents
that are not available for use by the Group.
Where applicable, disclosure is required, together with a commentary by management, for the
amount of significant cash and cash equivalent balances held by the enterprise that are not
available for use by the group. There are various circumstances in which cash and cash
equivalent balances held by an enterprise are not available for use by the group. Examples
include cash and cash equivalent balances held by a subsidiary that operates in a country
where exchange controls or other legal restrictions apply when the balances are not available
for general use by the parent or other subsidiaries.
Cash and cash equivalents which are restricted in its use for more than twelve months shall be
classified as non-current assets.

FRS 107.7 and
31

FRS 107.7,31
and 34

FRS 107.34.a

FRS 7.45

FRS 7.48

FRS 7.49

FRS 1.66.d


28. Provisions

Group

Maintenance
warranties Legal claim Total

$000 $000 $000
At 1 January 2012 2,136 2,136
Acquisition of a subsidiary (Note 17) 50 50
Arose during the financial year 116 420 536
Utilised (415) (415)
Unused amounts reversed (60) (60)
Discount rate adjustment 30 30
Exchange differences 45 4 49
At 31 December 2012 1,902 424 2,326

Current 2012 377 424 801
Non-current 2012 1,525 1,525
1,902 424 2,326

Current 2011 295 295
Non-current 2011 1,841 1,841
2,136 2,136
Maintenance warranties
A provision is recognised for expected warranty claims on certain specialised electronic
components sold during the last two years, based on past experience of the level of
repairs and returns. It is expected that most of these costs will be incurred in the next two
financial years and all will have been incurred within three years from the end of the
reporting period. Assumptions used to calculate the provision for maintenance warranties
were based on current sales levels and current information available about returns based
on the three-year warranty period for the relevant specialised electronic components
sold.
During the financial year, based on the earlier mentioned statistics and warranty claims
experience, management concluded that the provision for maintenance warranties
exceeded the amount necessary to cover warranty claims on products sold during the last
two years. Accordingly, $60,000 (2011: nil) of the warranty provision has been reversed.
Legal claim
On 30 June 2012, a competitor of the Group made a claim against one of the Groups
subsidiaries for infringing its technology licence from 2011 to 2012. At the end of the
reporting period, the management is in the process of negotiating a settlement
agreement with the plaintiff. The provision made represents the managements estimate
of the settlement consideration, being the account of profit for the periods covered by the
licence. The settlement and compensation is expected to be concluded in 2013.
Commentary:
Comparative of movements in provision
FRS 37 does not require comparatives of movements in provision to be presented.

FRS 1.77 and
78.d

FRS 37.84.a

FRS 37.84.b
FRS 37.84.c

FRS 37.84.d

FRS 37.84.e

FRS 37.84.a

FRS 37.85

FRS 1.98.g

FRS 37.85

FRS 37.84


28. Provisions (continued)

Contingent liability
In this illustration, no contingent liabilities are recognised in the business combination.
For contingent liabilities recognised in a business combination, the acquirer is required to
disclose the information required by paragraphs 84 and 85 of FRS 37 Provisions,
Contingent Liabilities and Contingent Assets for each class of provision.

29. Deferred capital grants

Group

2012
$000
2011
$000
Cost:
At 1 January 2,694 1,644
Received during the financial year 2,040 1,030
At 31 December 4,768 2,694

Accumulated amortisation:
At 1 January 730 540
Amortisation 239 180

Current 300 210
Non-current 3,488 1,754
3,788 1,964

Deferred capital grants relate to government grants received for the acquisition of
equipment for research activities undertaken by the Groups subsidiary in Peoples
Republic of China to promote technology advancement and transfer. There are no
unfulfilled conditions or contingencies attached to these grants.

FRS 103.B67.c

FRS 20.39.b

FRS 20.39.c


30. Loans and borrowings

Maturity
Group Company

Maturity
2012
$000
2011
$000
2012
$000
2011
$000
Current:
Obligations under finance leases (Note
37(d)) 2013 216 16
Bank overdrafts On demand 498 1,444
6% p.a. fixed rate SGD bank loan 2013 475 830
1,189 2,290
Non-current:
Obligations under finance leases (Note
37(d)) 2014-2022 720 160
7.5% p.a. fixed rate SGD bonds 2014-2018 3,100 3,000 3,100 3,000
Bank loans:
- 8% p.a. fixed rate USD loan 31 July 2018 1,545
- SGD loan at LIBOR + 2.0% p.a. 2014-2018 2,200 2,200 2,200 2,200
- SGD loan at SIBOR + 3.0% p.a. 30 November 2016 5,400 5,400
- 8.5% p.a. fixed rate SGD loan 2,000
Share of joint ventures loan 30 June 2014 245 240
Convertible redeemable preference shares 2015-2018 450 428 450 428
13,660 13,428 5,750 5,628
Total loans and borrowings 14,849 15,718 5,750 5,628

Obligations under finance leases
These obligations are secured by a charge over the leased assets (Note 13). The average
discount rate implicit in the leases is 8.5% p.a. (2011: 8.8% p.a.). These obligations are
denominated in the respective functional currencies of the relevant entities in the Group.
Bank overdrafts
Bank overdrafts are denominated in SGD, bear interest at SIBOR + 3.0% p.a. (2011:
SIBOR + 3.0% p.a.) and are secured by a floating charge over certain inventories (Note
25).
6% p.a. fixed rate SGD bank loan
This loan is fully repayable on 30 June 2013 (2011: 30 June 2012) and is secured by a
charge over freehold land under development (Note 24).
7.5% p.a. fixed rate SGD bonds
These bonds with a face value of $3,200,000 are unsecured and are repayable in 5 equal
annual instalments commencing on 1 January 2014.
8% p.a. fixed rate USD bank loan
This loan has been drawn down under a six-year multi-option facility (MOF). The loan is
repayable within 12 months after the reporting date, but has been classified as long-term
because the Group expects and has the discretion to exercise its rights under the MOF to
refinance this funding. Such immediate replacement funding is available until 31 January
2018. The total amount repayable on maturity is $1,600,000. The facility is secured by a
first mortgage over certain freehold land and buildings of the Group (Note 13).

FRS 107.7 and
31

FRS 1.73


30. Loans and borrowings (continued)

SGD bank loan at LIBOR + 2.0% p.a.
This loan is secured by a first mortgage over certain investment properties (Note 14) of
the Group and is repayable in two equal instalments due on 31 December 2014 and 31
January 2018. The loan includes a financial covenant which requires the Group to
maintain a gearing ratio not exceeding 50%.
SGD bank loan at SIBOR + 3.0% p.a.
This loan is secured by a first mortgage over certain of the Groups freehold land and
buildings (Note 13), a charge over certain investment securities (Note 22) of the Group
and corporate guarantee provided by the Company (Note 38(a)). Repayment of this loan
is due on 30 November 2016. The loan includes a financial covenant which requires the
Group to maintain a net current asset and net asset positions throughout the tenure of
the loan.
8.5% p.a. fixed rate SGD loan
As at 31 December 2012, this loan has been presented as part of the liabilities of the
disposal group classified as held for sale (Note 11).
Share of joint ventures loan
This relates to the Groups 50% share of the joint ventures unsecured fixed rate RMB
2,500,000 (2011: RMB 2,500,000) bank loan that is due on 30 June 2014. This loan
bears interest at 8.5% p.a. (2011: 8.5% p.a.).
Convertible Redeemable Preference Shares
As at 31 December 2012 and 2011, there were 505,000 Convertible Redeemable
Preference Shares (CRPS) issued and fully paid. The shares were issued at $1 each and
are convertible at the option of the shareholders into ordinary shares of the Company on
1 January 2015 on the basis of one ordinary share for every preference share held. Any
preference shares not converted will be redeemed on 31 December 2018 at a price of
$1.20 per share. The preference shares carry a dividend of 8% p.a., payable half-yearly in
arrears on 30 June and 31 December. The dividend rights are non-cumulative and the
shareholders have no voting rights.
The carrying amount of the liability component of CRPS at the end of the reporting period
is arrived at as follows:
Group and Company

2012
$000
2011
$000
Face value of CRPS 505 505
Equity component (96) (96)
Liability component of CRPS at initial recognition 409 409
Add: Accumulated amortisation of discount
- Opening balance at 1 January 19
- Amortisation of discount during the financial year 22 19
- Closing balance at 31 December 41 19
Liability component of CRPS at the end of the reporting period 450 428

FRS 107.7
FRS 32.28 and 31

FRS 32.28

FRS 32.28


30. Loans and borrowings (continued)

Commentary:
Defaults or breaches
If during the period, there were defaults or breaches of loan agreement terms, the entity
should disclose:
(a) Details of any defaults during the period of principal, interest, sinking fund, or
redemption terms of those loans payable;
(b) The carrying amount of the loans payable in default at the reporting date; and
(c) Whether the default was remedied, or the terms of the loans payable were renegotiated,
before the financial statements were authorised for issue.
These disclosure requirements are also applicable to breaches of loan agreement terms other
than those mentioned above whose breaches permitted the lender to demand accelerated
repayment (unless the breaches were remedied, or the terms of the loan were renegotiated,
on or before the reporting date).
Illustrative note disclosure for default on interest payment:
The Company has defaulted in interest payment of $XXX on bank borrowings carried at
$XXX at the end of the reporting period. The Company experienced a temporary shortage
of fund due to decrease in market demand in the Companys products in the first two
quarters. The interest payable of $XXX which was overdue since October 2012 remained
unpaid as at the date when these financial statements are authorised for issue.
Illustrative note disclosure for breach of loan covenant:
During the current financial year, the Company has breached a covenant of a bank loan.
The Company did not fulfil the requirement to maintain gearing ratio at X.XX for a credit
line of $XXX. The credit line is fully drawn down and presented as current liability at the
end of the reporting period. The bank is contractually entitled to request for immediate
repayment of the outstanding loan amount in the event of breach of covenant.
The bank had not requested for immediate repayment of the outstanding loan amount as
at the date when these financial statements are authorised for issue. Management
commenced renegotiation of the loan agreement terms in December 2012. As of the date
the financial statements are authorised for issue, the renegotiation is still in progress.
Compound financial instruments with multiple embedded derivatives
If an entity has issued an instrument that contains both a liability and an equity component
and the instrument has multiple embedded derivatives whose values are interdependent (such
as a callable convertible debt instrument), it shall disclose the existence of those features.

FRS 107.18

FRS 107.19

FRS 107.17


31. Trade and other payables

Group

Company

2012
$000
2011
$000
2012
$000
2011
$000
Trade and other payables (current):

Trade payables 15,698 17,426 332 290
Other payables 1,531 1,335 138 124
Amounts due to related companies 288 379
17,517 19,140 470 414
Other payables (non-current):
Deferred cash settlement (Note 17) 200

Total trade and other payables 17,717 19,140 470 414
Add:
- Other liabilities (Note 32) 2,974 2,579 481 446
- Loans and borrowings (Note 30) 14,849 15,718 5,750 5,628
Total financial liabilities carried at amortised
cost
35,540 37,437 6,701 6,488

Trade payables/other payables
These amounts are non-interest bearing. Trade payables are normally settled on 60-day
terms while other payables have an average term of six months.
Trade payables denominated in foreign currencies as at 31 December are as follows:

Group

Company

2012
$000
2011
$000
2012
$000
2011
$000
United States Dollar 3,140 2,962 66 49

Amounts due to related companies
These amounts are trade related, unsecured, non-interest bearing, repayable on demand
and are to be settled in cash.
Purchases from related companies are made at terms equivalent to those prevailing in
arms length transactions with third parties.
Commentary:
Disclosures that related party transactions were made on terms equivalent to those that
prevail in arms length transactions are made only if such terms can be substantiated.

FRS 1.77
FRS 107.7 and 31

FRS 24.18

FRS 107.8.f

FRS 107.7 and 31

FRS 107.34.a

FRS 107.7 and 31
FRS 24.18

FRS 24.23

FRS 24.23


32. Other liabilities

Group Company

2012
$000
2011
$000
2012
$000
2011
$000
Accrued operating expenses 2,948 2,571 401 346
Financial guarantees (Note 38(a)) 26 8 80 100
2,974 2,579 481 446
Contingent consideration for business
combination (Note 17)
685 685
3,659 2,579 1,166 446

As part of the purchase agreement with the previous owner of MSAX, a contingent
consideration has been agreed. This consideration is dependent on the profit before tax of
MSAX during a 12-month period. The fair value at the acquisition date was $450,000,
which has been adjusted as of 31 December 2012 due to a significantly enhanced
performance compared to budget to a fair value of $685,000. The consideration is due
for final measurement and payment to the former shareholders on 18 October 2013. No
further significant change to the consideration is expected.

FRS 1.77
FRS 107.7 and 31


32. Other liabilities (continued)

Commentary:
Illustrative note disclosure for contingent consideration for business combination when the
amount is finalised in 2013:
Note X Other liabilities
As part of the purchase agreement with the previous owners of MSAX dated 18 October
2012, a portion of the consideration was determined to be contingent on the
performance of the acquired entity. At 18 October 2013, a total of $700,000 was paid to
the previous owner of MSAX under this arrangement.

As of 31 December 2012 and prior to payment, the fair value of the contingent
consideration was reassessed which led to additional cost charged to profit or loss.
The initial fair value of the consideration of $450,000 is included in cash flows from
investing activities, the remainder, totalling to $250,000, is recognised in cash flows
from operating activities.

Extract of Consolidated Cash Flow Statement

Group

2013
$000
Initial fair value of the contingent consideration at acquisition date 450
Fair value adjustment as at 31 December 2012 235
Financial liability for the contingent consideration as of 31 December
2012

685
Fair value adjustment as at 18 October 2013
15
Total consideration paid 700

Group

2013
$000
Cash flows from operating activities:
Settlement of contingent consideration for business combination ( 250)

Cash flows from investing activities:
Settlement of contingent consideration for business combination (450)

FRS 103.B64.g.i

FRS 103.58

FRS 7.16


33. Share capital and treasury shares
a) Share capital

Group and Company
FRS 1.79

2012 2011

No. of
shares
000 $000
No. of
shares
000 $000

Issued and fully paid ordinary shares FRS 1.79.a.ii
At 1 January 23,080 9,665 22,940 9,510 FRS 1.79.a. iv
Issued for acquisition of a subsidiary
(Note 17) 1,305 1,475
Share issuance expense (Note 17) (50) FRS 32.37
Exercise of employee share options
(Note 35) 140 155 FRS 102.50
At 31 December 24,385 11,090 23,080 9,665
FRS 1.79.a.ii and
iv

The holders of ordinary shares (except treasury shares) are entitled to receive
dividends as and when declared by the Company. All ordinary shares carry one vote per
share without restrictions. The ordinary shares have no par value.
The Company has two employee share option plans under which options to subscribe
for the Companys ordinary shares have been granted to employees of the Group.

FRS 1.79.a.v

FRS 1.79.a.iii

FRS 1.79.a.vii

FRS 1.77 and 78.e


33. Share capital and treasury shares (continued)
b) Treasury shares

Group and Company

2012 2011

No. of
shares
000 $000
No. of
shares
000 $000
At 1 January
Acquired during the financial year (200) (254)
Reissued pursuant to employee share option
plans:
- For cash on exercise of employee share
options (Note 35) 75 81
- Transferred from employee share option
reserve 79
- Gain transferred to gain or loss on reissuance
of treasury shares (65)
75 95
At 31 December (125) (159)
Treasury shares relate to ordinary shares of the Company that is held by the Company.
The Company acquired 200,000 (2011: nil) shares in the Company through purchases
on the Singapore Exchange during the financial year. The total amount paid to acquire
the shares was $254,000 (2011: nil) and this was presented as a component within
shareholders equity.
The Company reissued 75,000 (2011: nil) treasury shares pursuant to its employee
share option plans at a weighted average exercise price of $1.08 (2011: nil) each.

FRS 1.79.a.vi

FRS 32.33


34. Other reserves
a) Fair value adjustment reserve
Fair value adjustment reserve represents the cumulative fair value changes, net of tax,
of available-for-sale financial assets until they are disposed of or impaired.
b) Asset revaluation reserve
The asset revaluation reserve represents increases in the fair value of freehold land
and buildings, net of tax, and decreases to the extent that such decrease relates to an
increase on the same asset previously recognised in other comprehensive income.
c) Statutory reserve fund
In accordance with the Foreign Enterprise Law applicable to the subsidiary in the
Peoples Republic of China (PRC), the subsidiary is required to make appropriation to a
Statutory Reserve Fund (SRF). At least 10% of the statutory profits after tax as
determined in accordance with the applicable PRC accounting standards and
regulations must be allocated to the SRF until the cumulative total of the SRF reaches
50% of the subsidiarys registered capital. Subject to approval from the relevant PRC
authorities, the SRF may be used to offset any accumulated losses or increase the
registered capital of the subsidiary. The SRF is not available for dividend distribution to
shareholders.
d) Foreign currency translation reserve
The foreign currency translation reserve represents exchange differences arising from
the translation of the financial statements of foreign operations whose functional
currencies are different from that of the Groups presentation currency.
e) Employee share option reserve
Employee share option reserve represents the equity-settled share options granted to
employees (Note 35). The reserve is made up of the cumulative value of services
received from employees recorded over the vesting period commencing from the grant
date of equity-settled share options, and is reduced by the expiry or exercise of the
share options.
f) Gain or loss on reissuance of treasury shares
This represents the gain or loss arising from purchase, sale, issue or cancellation of
treasury shares. No dividend may be paid, and no other distribution (whether in cash or
otherwise) of the Companys assets (including any distribution of assets to members on
a winding up) may be made in respect of this reserve.
g) Equity component of convertible redeemable preference shares
This represents the residual amount of convertible redeemable preference shares
(CRPS) after deducting the fair value of the liability component. This amount is
presented net of transaction costs and deferred tax liability arising from the CRPS.
FRS 1.79.b


35. Employee benefits

Group

2012
$000
2011
$000
Employee benefits expense (including directors):
Salaries and bonuses 17,758 16,332
Central Provident Fund contributions 2,107 2,166
Share-based payments (Employee share option plans) 245 150
Other short-term benefits 392 376
20,502 19,024

Employee share option plans
Senior executive option plan
Under the senior executive option plan (SEOP), share options are granted to senior
executives with more than 12 months service. The exercise price of the options is equal
to the market price of the shares on the date of grant. The options vest if and when the
Groups earnings per share amount increases by 12%, within three years from the date of
grant. If this increase is not met, the options lapse. The contractual life of each option
granted is five years. There are no cash settlement alternatives. The Group does not have
a past practice of cash settlement for these share options.

General employee share option plan
All other employees are entitled to a grant of options, under the general employee share
option plan (GESP), once they have been in service for two years. The vesting of the
options is dependent on the total shareholder return (TSR) of the Group as compared to a
group of principal competitors. Employees must remain in service for a period of three
years from the date of grant. The exercise price of the options is equal to the market price
of the shares on the date of grant. The contractual life of the options is five years. There
are no cash settlement alternatives. The Group does not have a past practice of cash
settlement for these awards.
There has been no cancellation or modification to the SEOP and GEOP during both 2012
and 2011.

Movement of share options during the financial year
The following table illustrates the number (No.) and weighted average exercise prices
(WAEP) of, and movements in, share options during the financial year:

2012 2011

No. WAEP ($) No. WAEP ($)

Outstanding at 1 January 425,000 1.22 480,000 1.20 FRS 102.45.b.i
- Granted

200,000 1.30 125,000 1.26 FRS 102.45.b.ii
- Forfeited (25,000) 1.05 FRS 102.45.b.iii
- Exercised (75,000) 1.08 (140,000) 1.11 FRS 102.45.b.iv
- Expired (25,000) 1.16 (15,000) 1.15 FRS 102.45.b.v
Outstanding at 31 December

525,000 1.24 425,000 1.22 FRS 102.45.b.vi

Exercisable at 31 December 200,000 1.18 195,000 1.10 FRS 102.45.b.vii

FRS 19.46

FRS 102.51.a

FRS 1.104

FRS 102.44

FRS 102.45.a

FRS 102.45.a


35. Employee benefits (continued)
Employee share option plans (continued)
Movement of share options during the financial year (continued)
- The weighted average fair value of options granted during the financial year was
$1.14 (2011: $1.03).
- The weighted average share price at the date of exercise of the options exercised
during the financial year was $1.30 (2011: $1.20).
- The range of exercise prices for options outstanding at the end of the year was $1.05
to $1.30 (2011: $1.05 to $1.26). The weighted average remaining contractual life
for these options is 3.90 years (2011: 3.86 years).

Fair value of share options granted
The fair value of the share options granted under the SEOP is estimated at the grant date
using a binomial option pricing model, taking into account the terms and conditions upon
which the share options were granted.
The fair value of share options granted under the GESP is estimated at the date of the
grant using a Monte Carlo simulation model, taking into account the terms and conditions
upon which the options were granted. The model simulates the TSR and compares it
against the group of principal competitors. It takes into account historic dividends, share
price fluctuation covariance of the Company and each entity of the group of competitors
to predict the distribution of relative share performance.
The following table lists the inputs to the option pricing models for the years ended 31
December 2012 and 2011:

SEOP (Binomial) GESP (Monte Carlo)

2012

2011

2012

2011

Dividend yield (%)
3.13 3.01 3.13 3.01
Expected volatility (%)
15.00 16.30 16.00 17.50
Risk-free interest rate (% p.a.)
4.10 4.00 4.10 4.00
Expected life of option (years)
4.05 4.25 4.85 4.65
Weighted average share price ($)
1.30 1.20 1.30 1.20

The expected life of the share options is based on historical data and is not necessarily
indicative of exercise patterns that may occur. The expected volatility reflects the
assumption that the historical volatility over a period similar to the life of the options is
indicative of future trends, which may not necessarily be the actual outcome.

FRS 102.47.a

FRS 102.45.c

FRS 102.45.d

FRS 102.46

FRS 102.47.a.i

FRS 102.47.a.i and iii

FRS 102.47.a.i

FRS 102.47.a.ii


35. Employee benefits (continued)

Commentary:
Cash-settled share-based payment transactions
In this illustration, all the share-based payment transactions are equity-settled. If an entity has
share-based payment transactions that are either cash-settled or with cash alternatives (for
example, share appreciation rights), the entity should disclose:
- The total expense recognised for the period arising from the share-based payment
transactions;
- The total carrying amount of liabilities at the end of the period; and
- The total intrinsic value at the end of the period of liabilities for which the counterpartys
right to cash or other assets had vested by the end of the period (e.g., vested share
appreciation rights).
Illustrative note disclosures:
Share Appreciation Rights (SARs) Plan
Business development managers in the electronic components segment are granted share
options, which can only be settled in cash. These SARs will vest when a specified target
number of new sales contracts are closed. The contractual life of the options is six years.
The expense recognised in profit or loss granted under the Share Appreciation Rights Plan
during the financial year is $XXX (2011: $XXX).
The carrying amount of the liability recognised in the Groups and the Companys balance
sheets relating to such share options at 31 December 2012 is $XXX (2011: $XXX).
No Share Appreciation Rights granted under this plan had vested at the end of the
reporting period (2011: nil).
Weighted average share price
If options were exercised on a regular basis throughout the period, an entity may instead
disclose the weighted average share price during the period.
Range of exercise prices
If the range of exercise prices is wide, the outstanding options shall be divided into ranges that
are meaningful for assessing the number and timing of additional shares that may be issued
and the cash that may be received upon exercise of those options.

FRS 102.51.a and b

FRS 102.45.a

FRS 102.51.a

FRS 102.51.b.i

FRS 102.51.b.ii

FRS 102.45.c

FRS 102.45.d


36. Related party transactions
a) Sale and purchase of goods and services
In addition to the related party information disclosed elsewhere in the financial
statements, the following significant transactions between the Group and related
parties took place at terms agreed between the parties during the financial year:

Group

2012
$000
2011
$000

Sale of finished goods to:
- Related companies 700 890
- Associates 50 30
- A company related to a director 225 135
Purchase of raw materials from:
- Related companies 1,058 1,200
- Associates 140 106
Purchase of accounting services from a firm related to a director 25 18
Management fees from joint venture 50 60
Interest income from:
- Associates 80 76
- A fellow subsidiary 98 92

Related companies:
These are subsidiaries and associates of Good Group (International) Ltd and its
subsidiaries, excluding entities within the Group.
Company / firm related to a director:
- One of the directors of the Company, through his 25% (2011: 25%) equity interest in
Unik-One Pte Ltd (UOPL), had an interest in a contract for the supply of specialised
digital components to UOPL. During the financial year, the Group sold specialised
digital components of $225,000 (2011: $135,000) to UOPL. No balance with UOPL
was outstanding at the end of the reporting period (2011: nil).
- The Group has entered into a contract with LPS Associates LLP, a firm of which the
wife of one of the directors of the Company is the managing partner, for the
provision of consolidation accounting services to the Company for an amount of
$25,000 (2011: $18,000). No balance with the firm was outstanding at the end of
the reporting period (2011: nil).
b) Commitments with related parties
On 1 July 2012, XYZ Technologies Pte Ltd entered into a two-year agreement ending
30 June 2014 with XYZ China Co. Ltd to purchase specific electrical and optional
cables that XYZ Technologies Pte Ltd uses in its production cycle. XYZ Technologies
Pte Ltd expects the potential purchase volume to be $400,000 in 2013 and $300,000
in the first 3 months of 2014. The purchase price is based on XYZ China Co. Ltds
actual cost plus 5% margin and will be settled in cash within 30 days after receiving the
inventory.

FRS 24.18

FRS 24.19

FRS 24.18
CA 201.8

FRS 24.18.b


36. Related party transactions (continued)
c) Compensation of key management personnel

Group

2012
$000
2011
$000

Short-term employee benefits 4,938 4,352
Central Provident Fund contributions 355 357
Other short-term benefits 25 80
Share-based payments 80 60
5,398 4,849
Comprise amounts paid to:
Directors of the Company 3,470 3,119
Other key management personnel 1,928 1,730
5,398 4,849

Directors interests in employee share option plan
During the financial year:
- 37,000 (2011: 25,000) share options were granted to two of the Company's
executive directors under the SEOP (Note 35) at an exercise price of $1.30 (2011:
$1.26) each.
- These directors exercised options for 10,000 (2011: 5,000) ordinary shares of the
Company at a price of $1.05 (2011: $1.05) each, with a total cash consideration of
$10,500 (2011: $5,250) paid to the Company.
At the end of the reporting period, the total number of outstanding share options
granted by the Company to the abovementioned directors under the SEOP amount to
120,000 (2011: 93,000). No share options have been granted to the Company's non-
executive directors.

Commentary:
Related party transactions
An entity should make disclosures for transactions with related parties separately for each of
the following categories:
(a) the parent;
(b) entities with joint control or significant influence over the entity;
(c) subsidiaries;
(d) associates;
(e) joint ventures in which the entity is a venturer;
(f) key management personnel of the entity or its parent; and
(g) other related parties.
Such categorisation help provide a more comprehensive analysis of related party balances and
transactions.

FRS 24.17

FRS 19.47 and 124.b

FRS 24.18

FRS 24.19 and 20


36. Related party transactions (continued)

Related party transactions
The following are examples of transactions that are disclosed if they are with a related party:
(a) purchases or sales of goods (finished or unfinished);
(b) purchases or sales of property and other assets;
(c) rendering or receiving of services;
(d) leases;
(e) transfers of research and development;
(f) transfers under licence agreements;
(g) transfers under finance arrangements (including loans and equity contributions in cash or
in kind);
(h) provision of guarantees or collateral;
(i) commitments to do something if a particular event occurs or does not occur in the future,
including executor contracts (recognised and unrecognised); and
(j) settlement of liabilities on behalf of the entity or by the entity on behalf of another party.
Items of a similar nature may be disclosed in aggregate except when separate disclosure is
necessary for an understanding of the effects of related party transactions on the financial
statements of the entity.
Key management personnel
Key management personnel are those persons having authority and responsibility for planning,
directing and controlling the activities of the entity, directly or indirectly, including any director
(whether executive or otherwise) of that entity.
Transactions with key management personnel
In this illustration, the Group does not have any transactions and outstanding balances,
including commitments with key management personnel, close family members of key
management personnel and entities which the key management personnel have control or joint
control.
Illustrative disclosure when the Group have such transactions are as follows:
The transactions and outstanding balances related to key management personnel, close
family members of key management personnel and entities in which the key management
personnel have control or joint control were as follows:
Group
Transactions during
the year
Outstanding
balances as at 31
December
Related parties Transactions 2012
$000
2011
$000
2012
$000
2011
$000
Mrs. May Lim Legal fees (a) - XXX - XXX
Draco Pte. Ltd. Purchase of office
stationeries (b) XXX XXX XXX -
(a) The Group uses the legal services provided by Mrs. May Lim who is a close family member
of Mr. Goh Hock Inn, a Director of the Company. The legal fees paid were in relation to
purchase of certain non-current assets of the Group. The fees charged were based on
normal market rates for such services and were due and payable under normal payment
terms.
(b) The Group purchases its office stationeries from Draco Pte. Ltd., a Company controlled by
Mr. Goh Hock Inn, a Director of the Company. These purchases are based on normal
market rates for such supplies and were due and payable under normal payment terms.

FRS 24.21

FRS 24.24

FRS 24.9

FRS 24.18.a,b

FRS 24.18.b

37. Commitments
a) Capital commitments
Capital expenditure contracted for as at the end of the reporting period but not
recognised in the financial statements are as follows:

Group Company

2012
$000
2011
$000
2012
$000
2011
$000

Capital commitments in respect of
property, plant and equipment 1,690 550 90 55
Share of joint ventures capital
commitments in relation to investment
properties 63 168
1,753 718 90 55
b) Operating lease commitments as lessee
In addition to the land use rights disclosed in Note 16, the Group has entered into
commercial leases on certain motor vehicles and office equipment. These leases have
an average tenure of between three and six years with no renewal option or contingent
rent provision included in the contracts. The Group is restricted from subleasing the
leased equipment to third parties.
Minimum lease payments, including amortisation of land use rights recognised as an
expense in profit or loss for the financial year ended 31 December 2012 amounted to
$484,000 (2011: $387,000).

FRS 16.74.c

FRS 31.55.b
FRS 40.75.h

FRS 17.35.d

FRS 17.35.c


37. Commitments (continued)
b) Operating lease commitments as lessee (continued)
Future minimum rental payable under non-cancellable operating leases (excluding land
use rights) at the end of the reporting period are as follows:

Group

2012
$000
2011
$000

Not later than one year 370 352
Later than one year but not later than five years 800 926
Later than five years 115 126
1,285 1,404
c) Operating lease commitments as lessor
The Group has entered into commercial property leases on its investment properties.
These non-cancellable leases have remaining lease terms of between two and eight
years. All leases include a clause to enable upward revision of the rental charge on an
annual basis based on prevailing market conditions.
Future minimum rental receivable under non-cancellable operating leases at the end of
the reporting period are as follows:

Group

2012
$000
2011
$000

Not later than one year 492 440
Later than one year but not later than five years 1,968 1,760
Later than five years 1,400 1,110
3,860 3,310

Commentary:
Future minimum lease payments under non-cancellable operating leases
The disclosure of future minimum lease payments according to time bands relates only to non-
cancellable operating leases. A non-cancellable lease is a lease that is cancellable only:
(a) upon the occurrence of some remote contingency;
(b) with the permission of the lessor;
(c) if the lessee enters into a new lease for the same or an equivalent asset with the same
lessor; or
(d) upon payment by the lessee of such an additional amount that, at inception of the lease,
continuation of the lease is reasonably certain.
A leasing arrangement where the lessee has the right to terminate lease by providing a written
notice to the lessor without incurring losses significant in comparison to the value of remaining
lease payments is generally not considered a non-cancellable lease and is not included in such
disclosure.

FRS 17.35.a

FRS 17.56.c

FRS 17.56.a

FRS 17.4


37. Commitments (continued)
d) Finance lease commitments
The Group has finance leases for certain items of plant and equipment and furniture
and fixtures. These leases have terms of renewal but no purchase options and
escalation clauses. Renewals are at the option of the specific entity that holds the
lease.
Future minimum lease payments under finance leases together with the present value
of the net minimum lease payments are as follows:

Group

2012
$000
2011
$000

Minimum
lease
payments
Present
value of
payments
(Note 30)
Minimum
lease
payments
Present
value of
payments
(Note 30)
Not later than one year 251 216 30 16
Later than one year but not later than five
years 392 252 265 120
Later than five years 643 468 117 40
Total minimum lease payments 1,286 936 412 176
Less: Amounts representing finance
charges (350) (236)
Present value of minimum lease payments 936 936 176 176

FRS 17.31.e

FRS 17.31.b


38. Contingencies
a) Contingent liabilities
Legal claim
On 30 November 2012, a customer has commenced an action against the Group in
respect of construction works claimed to be sub-standard. The estimated payout is
$250,000 should the action be successful. A trial date has not yet been set and
therefore it is not practicable to state the timing of any payment. The Group has been
advised by its legal counsel that it is possible, but not probable, that the action will
succeed and accordingly no provision for any liability has been made in these financial
statements.
Guarantees
The Group has provided the following guarantees at the end of the reporting period:
- It has guaranteed its share of $20,000 (2011: $15,000) of the associates
contingent liabilities which have been incurred jointly with other investors.
- It has guaranteed part of the bank overdraft of the associate to a maximum
amount of $300,000 (2011: nil), which it is severally liable for in the event of
default by the associate.
- It has guaranteed its interest in its share of the joint ventures loan of $245,000
(2011: $240,000) (Note 30).
- It has guaranteed to an unrelated party the performance of a contract for the
joint venture. No liability is expected to arise (2011: nil).
The Company has provided a corporate guarantee to a bank for a $5,400,000 (2011:
$5,400,000) loan (Note 30) taken by a subsidiary.
b) Contingent asset
i) A legal claim for defamation of $500,000 was lodged against one of the
Groups competitors in October 2011. Based on advice from the legal counsel,
the Group is confident that the dispute will be settled in its favour.
ii) The Group is claiming amounts (such as variations and additional works under
the construction contracts) and pending proceedings and disputes with clients.
It is not possible to reasonably determine the extent and timing of possible
inflow of economic benefits. These claims are therefore not recognised in
these financial statements.

FRS 37.86

FRS 11.45

FRS 24.20.h

FRS 28.40.a

FRS 28.40.b

FRS 31.54.a

FRS 31.54.b

FRS 24.20.h

FRS 37.89

FRS 11.45

39. Fair value of financial instruments
A. Fair value of financial instruments that are carried at fair value
The following table shows an analysis of financial instruments carried at fair value by
level of fair value hierarchy:

Group

2012
$000

Quoted prices
in active
markets for
identical
instruments
Significant
observable
inputs other
than quoted
prices
Significant
unobservable
inputs

Total

(Level 1) (Level 2) (Level 3)
Financial assets:
Held for trading investments (Note 22)
Equity securities (quoted) 1,512 1,512
Available-for-sale financial assets (Note 22)
6% p.a. SGD corporate bonds due 30
June 2013 (unquoted) 866 866
Other debt securities (unquoted) 697 697
Equity securities (unquoted) 139 139
Derivatives (Note 26)
Forward currency contracts 150 150
Interest rate swap 20 20

At 31 December 2012 3,258 1,036 836 5,130

Financial liabilities:
Forward currency contracts (22) (22)
combination (Note 17, 32) (685) (685)

At 31 December 2012 (22) (685) (707)

FRS 107.27A, 27B and
IG13A


39. Fair value of financial instruments (continued)
A. Fair value of financial instruments that are carried at fair value (continued)

Group

2011
$000

Quoted prices
in active
markets for
identical
instruments
Significant
observable
inputs other
than quoted
prices
Significant
unobservable
inputs

Total

(Level 1) (Level 2) (Level 3)
Financial assets:
Held for trading investments (Note 22)
Available-for-sale financial assets (Note 22)
6% p.a. SGD corporate bonds due 30
June 2013 (unquoted) 800 800
Other debt securities (unquoted) 180 180
Equity securities (quoted) 848 848
Equity securities (unquoted) 28 28
Forward currency contracts 60 60
Interest rate swap 45 45

At 31 December 2011 2,108 905 208 3,221

Fair value hierarchy
The Group classifies fair value measurement using a fair value hierarchy that reflects
the significance of the inputs used in making the measurements. The fair value
hierarchy has the following levels:
Level 1 Quoted prices (unadjusted) in active markets for identical assets or
liabilities
Level 2 Inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived
from prices), and

Level 3 Inputs for the asset or liability that are not based on observable market
data (unobservable inputs)

FRS 107.27A, 27B and
IG13A

FRS 107.27A

FRS 107.27A.a

FRS 107.27A.b

FRS 107.27A.c


Determination of fair value
Quoted equity securities (Note 22): Fair value is determined by direct reference to their
bid price quotations in an active market at the end of the reporting period.
Unquoted corporate bonds (Note 22): Fair value is estimated by using a discounted
cash flow model based on various assumptions, including current and expected future
credit losses, market rates of interest, prepayment rates and assumptions regarding
market liquidity.
Other debt securities and equity securities (unquoted) (Note 22): These investments
are valued using valuation models which uses both observable and non-observable
data. The non-observable inputs to the models include assumptions regarding the
future financial performance of the investee, its risk profile, and economic assumptions
regarding the industry and geographical jurisdiction in which the investee operates.
Derivatives (Note 26): Forward currency contracts and interest rate swap contracts are
valued using a valuation technique with market observable inputs. The most frequently
applied valuation techniques include forward pricing and swap models, using present
value calculations. The models incorporate various inputs including the credit quality of
counterparties, foreign exchange spot and forward rates, interest rate curves and
forward rate curves.
Contingent consideration for business combination (Note 17, 32): Please see Note 17
and Note 32 for details in relation to the determination of fair value of contingent
consideration for business combination.

FRS 107.27


Movements in Level 3 financial instruments measured at fair value
The following table presents the reconciliation for all financial assets measured at fair value
based on significant unobservable inputs (Level 3).

Group

2012

$000

Available-for-sale financial
assets
Contingent
consideration
for business
combination
Total

Equity
securities
(unquoted)
Other debt
securities
(unquoted)

Opening balance 28 180 208
Total gains or losses
in other comprehensive income 42 18 60 FRS 107.27B.c.ii
in profit or loss - - (235)
(i)
(235) FRS 107.27B.c.i
Purchases 103 520 623 FRS 107.27B.c.iii
Sales (34) (21) (55) FRS 107.27B.c.iii
Arising from acquisition of subsidiary
(Note 17)

(450) (450) FRS 107.27B.c.iii
Closing balance 139 697 (685) 151

Total fair value adjustment of
contingent consideration (Note 9)
for the period included in profit or
loss for liabilities held at 31
December 2012

(235) (235)

(i) Relates to fair value adjustment of contingent consideration for business combination
recognised in the Other expenses line item in profit or loss

FRS 107.27B.c and d

FRS 107.27B.d

FRS 107.27B.c.i


Movements in Level 3 financial instruments measured at fair value (continued)
The following table presents the reconciliation for all financial instruments measured at
fair value based on significant unobservable inputs (Level 3).

Group

2011
$000

assets
Total

Equity
securities
(unquoted)
Other debt
securities
(unquoted)

FRS 107.27B.c and d

Opening balance 40 226 266
in other comprehensive income 15 9 24 FRS 107.27B.c.ii
Purchases 16 5 21 FRS 107.27B.c.iii
Sales (43) (70) (113) FRS 107.27B.c.iii
Transfer from Level 2 - 10 10 FRS 107.27B.c.iv
Closing balance 28 180 208

Financial instruments transferred from Level 2 to Level 3

During the financial year ended 31 December 2011, the Group transferred certain
financial instruments from Level 2 to Level 3 of the fair value hierarchy. The carrying
amount of the total financial assets transferred was $10,000.
The reason for the transfers from Level 2 to Level 3 is that inputs to the valuation
models for the other debt securities ceased to be observable. Prior to transfer, the fair
value of the instruments was determined using observable market transactions or
binding broker quotes for the same or similar instruments. Since the transfer, these
instruments have been valued using valuation models incorporating significant non
market-observable inputs.

FRS 107.27B.c.iv


Impact of changes to key assumptions on fair value of Level 3 financial instruments
The following table shows the impact on the fair value of level 3 financial instruments
of using reasonably possible alternative assumptions by class of instrument. The
positive and negative effects are approximately the same.

Group

2012
$000

Effect of reasonably possible
alternative assumptions
Carrying
amount
Profit or loss Other
comprehensive
income

Available-for-sale financial assets:
- Unquoted equity securities 139 - 15
- Other debt securities 697 - 56
combination (685) 35 -

Group

2011
$000

Carrying
amount
comprehensive
income

- Unquoted equity securities 28 - 10
- Other debt securities 180 - 18

FRS 107.27B.e


Impact of changes to key assumptions on fair value of Level 3 financial instruments
(continued)
In order to determine the effect of reasonably possible alternative assumptions, the
Group adjusted the following key unobservable inputs used in the valuation techniques:
- For unquoted equity securities, the Group adjusted the discount for lack of
marketability by increasing and decreasing the assumptions by 5% to 8% (2011: 4%
to 7%) depending on the individual characteristics of the instruments.
- For other debt securities, the Group adjusted the probability of default and loss
assumption rate used to calculate the credit valuation adjustment. The adjustment
made was to increase and decrease the assumptions by 6%, (2011: 6%) which is a
range that is consistent with the Groups internal credit risk ratings for the
counterparties.
- For contingent consideration for business combination, the Group adjusted the
probability of meeting the contractual earnings target by increasing and decreasing the
assumptions by 3% (2011: Nil).
B. Fair value of financial instruments by classes that are not carried at fair value
and whose carrying amounts are reasonable approximation of fair value
Current trade and other receivables and payables, Non-current other receivables at
floating rate (Notes 21 and 31), Accrued operating expenses (Note 32), and Non-
current loans and borrowings at floating rate (Note 30)
The carrying amounts of these financial assets and liabilities are reasonable
approximation of fair values, either due to their short-term nature or that they are
floating rate instruments that are re-priced to market interest rates on or near the end
of the reporting period.

FRS 107.27B.e

FRS 107.27 and 29


C. Fair value of financial instruments by classes that are not carried at fair value
and whose carrying amounts are not reasonable approximation of fair value
The fair value of financial assets and liabilities by classes that are not carried at fair
value and whose carrying amounts are not reasonable approximation of fair value are
as follows:

Group Company
Note
2012
$000
2011
$000
2012
$000
2011
$000

Carrying
amount
Fair
value
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Financial assets:
Government bonds 22 660 675 650 665
Equity securities, at cost 22 500
T
600
T

Amounts and loans due
from subsidiaries
21 13,972 13,432 14,635 14,161
Staff loans (non-
current)
21 63 60 48 45 51 49 36 34
Deferred cash
settlement
31 (200) (205)
Loans and borrowings
(non-current)
30
- Obligations under
finance leases
(720) (769) (160) (169)
- Fixed rate bank
loans and bonds
(4,890) (4,983) (5,240) (5,342) (3,100) (3,162) (3,000) (3,060)
- Convertible
redeemable
preference shares (450) (509) (428) (459) (450) (509) (428) (459)

T Investment in equity securities carried at cost
Fair value information has not been disclosed for the Groups investments in equity
securities that are carried at cost because fair value cannot be measured reliably.
These equity securities represent ordinary shares in an Israeli high-technology
company that is not quoted on any market and does not have any comparable industry
peer that is listed. In addition, the variability in the range of reasonable fair value
estimates derived from valuation techniques is significant. The Group does not intend
to dispose of this investment in the foreseeable future. The Group intends to eventually
dispose of this investment through sale to institutional investors.

Government bonds
Fair value is determined directly by reference to their published market bid price at the
end of the reporting period.
Amounts and loans due from subsidiaries, Staff loans, Deferred cash, Lease obligations,
Fixed rate bank loans and bonds, and Convertible redeemable preference shares
The fair values as disclosed in the table above are estimated by discounting expected
future cash flows at market incremental lending rate for similar types of lending,
borrowing or leasing arrangements at the end of the reporting period.
FRS 107.7 and 31
FRS 107.25,26 and 29

FRS 107.30.a-d

FRS 107.27



Commentary:
Alternative approach of disclosure
In this illustration, fair value information required by FRS 107.25-30 regarding financial assets
and liabilities has been disclosed in one centralised note. Alternatively, an entity may disclose
such information in the respective balance sheet item notes.
Three-level hierarchy fair value disclosures
The three-level hierarchy fair value disclosures are only required for financial instruments
recorded at fair value. Therefore, financial instruments such as loans and receivables that are
recorded at amortised cost are excluded.
Classes of financial instruments
Please refer to commentary no. 4 of Note 9 Profit before tax from continuing operations.
Measurement of contingent consideration for business combination
FRS 103.58 requires contingent consideration classified as a financial asset or financial
liability within the scope of FRS 39 to be measured at fair value, with any resulting gain or loss
recognised either in profit or loss or in other comprehensive income in accordance with FRS
39 as applicable.
Day 1 profit or loss
In this illustration, it is assumed there was no transaction that gave rise to Day 1 profit or
loss during the financial year. FRS 39 does not permit a profit or loss to be recorded when a
financial instrument is initially recognised (a Day 1 profit or loss) if the fair value of the
instrument is established using a valuation technique based on assumptions not supported by
observable market prices or data. FRS 107 requires disclosures of Day 1 profit and loss not
recognised in profit or loss, including a reconciliation of changes in the amount not recognised
in profit or loss, and the accounting policy for determining when it is recognised in profit or
loss. FRS 107.IG14 provides an illustration of such disclosures.

FRS 107.27B

FRS 103.58.b

FRS 107.28


Transfers between Level 1 and 2
FRS 107 requires disclosure of any significant transfers between Level 1 and Level 2 and the
reasons for the transfers. Significant for this purpose is defined in terms of profit and loss as
well as total assets and liabilities. In this illustration, it is assumed that there was no financial
instrument transferred between Level 1 and 2.
Illustrative disclosure if an entity had such transfer:
Transfers between Level 1 and 2
The following table shows transfers from Level 1 to Level 2 of the fair value hierarchy for
financial assets and liabilities which are recorded at fair value:

The above financial assets were transferred from Level 1 to Level 2 as they ceased to be
actively traded during the year and fair values were consequently obtained using valuation
techniques using observable market inputs.
Group

2012
$000
2011
$000
Financial assets held-for-trading
- Quoted equity securities XXX XXX
Financial investments available-for-sale

- Other debt securities XXX XXX
Fair value of financial assets and liabilities
FRS 107.25 requires the fair value of each class of financial assets and liabilities to be
disclosed in a way that permits it to be compared with its carrying amount. However,
disclosures of fair value are not required:
- When the carrying amount is a reasonable approximation of fair value (e.g., short-term
trade and other receivables and payables, and long-term loans that are re-priced to market
rate);
- For an investment in equity instruments that do not have a quoted market price in an active
market, or derivatives linked to such equity instruments, that is measured at cost in
accordance with FRS 39 because its fair value cannot be measured reliably; or
- For a contract containing a discretionary participation feature (as described in FRS 104) if
the fair value of that feature cannot be measured reliably.
In this illustration, in addition to the above exemptions, the comparison between carrying
amount and fair value of financial assets or liabilities that are carried at fair value (e.g., held
for trading investments and derivatives) has not been disclosed as these assets are carried at
fair value.

FRS 107.27B.b

FRS 107.25 and 29



Financial instruments whose fair value cannot be reliably measured
FRS 107 requires the disclosure of fair value information for financial instruments whose fair
value cannot be reliably measured to include disclosure of whether and how the entity intends
to dispose of such financial instruments.
If financial instruments whose fair value previously could not be reliably measured are
derecognised, that fact, their carrying amounts at the time of de-recognition, and the amount
of gain or loss recognised shall be disclosed.

FRS 107.30.d

FRS 107.30.e


40. Financial risk management objectives and policies

The Group and the Company is exposed to financial risks arising from its operations and
the use of financial instruments. The key financial risks include credit risk, liquidity risk,
interest rate risk, foreign currency risk and market price risk. The board of directors
reviews and agrees policies and procedures for the management of these risks, which are
executed by the Chief Financial Officer, Head of Treasury and Head of Credit Control. The
audit committee provides independent oversight to the effectiveness of the risk
management process. It is, and has been throughout the current and previous financial
year, the Groups policy that no trading in derivatives for speculative purposes shall be
undertaken.
The following sections provide details regarding the Groups and Companys exposure to
the above-mentioned financial risks and the objectives, policies and processes for the
management of these risks.
There has been no change to the Groups exposure to these financial risks or the manner
in which it manages and measures the risks, excepts as disclosed in Note 40 (a) Credit risk
section.

Commentary:
Nature and extent of risks arising from financial instruments
FRS 107 requires an entity to disclose qualitative and quantitative information that enables
users of its financial statements to evaluate the nature and extent of risks arising from
financial instruments to which the entity is exposed at the reporting date, including the
entitys policies and processes for accepting, measuring, monitoring and controlling such
risks. In addition, an entity is required to disclose any change in the qualitative information
from the previous period and explain the reasons for the change.
The disclosures in response to FRS 107 illustrated in this note are based on assumed
circumstances of XYZ Holdings (Singapore) Limited and may not be applicable or
relevant to other entities. Each entity should customise the information disclosed
according to the specific circumstances, financial risk exposures, and risk management
policies and procedures relevant to the entity.

Alternative approaches of disclosure
Decentralised disclosures
In this illustration, most of the information regarding the nature and extent of risks arising
from financial instruments required by FRS 107.31-42, has been disclosed in one centralised
note. Alternatively, an entity may disclose such information in the respective balance sheet
item notes where appropriate.
Incorporating disclosures by cross reference
The disclosures of information regarding the nature and extent of risks arising from financial
instruments may instead be incorporated in the financial statements by cross-reference from
the financial statements to some other statement, such as management commentary or risk
report, that is available to users of the financial statements on the same terms as the financial
statements and at the same time. Without the information incorporated by cross-reference,
the financial statements are incomplete.

FRS 107.7 and 31

FRS 107.31-33
and IG15

FRS 107.33.c

FRS 107.31, 33
and IG17

FRS 107.AGB6

40. Financial risk management objectives and policies (continued)
a) Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should
a counterparty default on its obligations. The Groups and the Companys exposure to
credit risk arises primarily from trade and other receivables. For other financial assets
(including investment securities, cash and short-term deposits and derivatives), the
Group and the Company minimise credit risk by dealing exclusively with high credit
rating counterparties.
The Groups objective is to seek continual revenue growth while minimising losses
incurred due to increased credit risk exposure. The Group trades only with recognised
and creditworthy third parties. It is the Groups policy that all customers who wish to
trade on credit terms are subject to credit verification procedures. In addition,
receivable balances are monitored on an ongoing basis with the result that the Groups
exposure to bad debts is not significant. For transactions that do not occur in the
country of the relevant operating unit, the Group does not offer credit terms without
the approval of the Head of Credit Control. During the financial year, the Group has
adopted a new policy to enter into trade credit insurance for first-time customers who
wish to trade on credit terms in order to mitigate heightened credit risks arising from
revenue growth strategies.
Excessive risk concentration
Concentration arise when a number of counterparties are engaged in similar business
activities, or activities in the same geographical region, or have economic features that
would cause their ability to meet contractual obligations to be similarly affected by
changes in economic, political or other conditions. Concentrations indicate the relative
sensitivity of the groups performance to developments affecting a particular industry.
In order to avoid excessive concentrations of risk, the groups policies and procedures
include specific guidelines to focus on maintaining a diversified portfolio. Identified
concentrations of credit risks are controlled and managed accordingly. Selective
hedging is used within the group to manage risk concentrations at both the relationship
and industry levels.
Exposure to credit risk
At the end of the reporting period, the Groups and the Companys maximum exposure
to credit risk is represented by:
- A nominal amount of $565,000 (2011: $255,000) relating to a corporate
guarantee provided by the Group to the banks on associates and joint ventures
loans
- A nominal amount of $5,400,000 (2011: $5,400,000) relating to a corporate
guarantee provided by the Company to a bank on a subsidiarys bank loan
Information regarding credit enhancements for trade and other receivables is disclosed
in Note 21.

FRS 107.33.a-b and
IG15

FRS 107.33.c

FRS 107.33.a-b
FRS 107.IG15.c

FRS 107 AGB9-B10

FRS 107.36.b


a) Credit risk (continued)
Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the country and
industry sector profile of its trade receivables on an ongoing basis. The credit risk
concentration profile of the Groups trade receivables at the end of the reporting
period is as follows:

Group

2012 2011

$000 % of total $000 % of total
By country:
Singapore 12,629 51% 14,399 55%
Peoples Republic of China 5,448 22% 5,515 21%
Malaysia 3,467 14% 3,442 13%
Vietnam 1,981 8% 1,619 6%
Other countries 1,238 5% 1,185 5%
24,763 100% 26,160 100%
By industry sectors:

Multi-industry conglomerates 10,200 41% 11,438 44%
Electronics 7,539 31% 7,496 29%
Property 6,178 25% 6,403 24%
Others 846 3% 823 3%
24,763 100% 26,160 100%

At the end of the reporting period, approximately:
- 21% (2011: 19%) of the Groups trade receivables were due from 5 major
customers who are multi-industry conglomerates located in Singapore.
- 11% (2011: 9%) of the Groups trade and other receivables were due from related
parties while almost all of the Companys receivables were balances with related
parties.
Financial assets that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are with
creditworthy debtors with good payment record with the Group. Cash and short-term
deposits, investment securities and derivatives that are neither past due nor impaired
are placed with or entered into with reputable financial institutions or companies with
high credit ratings and no history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed
in Note 21 (Trade and other receivables) and Note 22 (Investment securities).

FRS 107.34.a
and AGB8

FRS 107.34.a,
34.c and AGB8

FRS 107.36.c

FRS 107.37


a) Credit risk (continued)

Commentary:
Credit risk relating to financial assets or financial liabilities at fair value through profit or loss
In this illustration, no financial instrument has been designated as financial assets or financial
liabilities at fair value through profit or loss. If an entity has designated a loan or receivable or
financial liability as at fair value through profit or loss, FRS 107 requires further disclosures
regarding the maximum credit risk exposures of such receivables and the amount by which
any related credit derivatives or similar instruments mitigate that credit risk exposure;
changes in fair value during the period and cumulatively, of such loan or receivable or financial
liabilities that is attributable to changes in credit risk (including the methods of determining
such fair value changes) and of any related credit derivatives or similar instruments; and the
difference between the financial liabilitys carrying amount and the contractual repayment
amount.
Disclosure of maximum exposure to credit risk
For financial instruments where carrying amount best represents the maximum exposure to
credit risk, the disclosure of the maximum exposure to credit risk is not required.
Quantitative disclosures
FRS 107 requires the disclosure of summary quantitative data about an entitys exposure to
financial risk (e.g., credit risk, liquidity risk and market risk) that is based on the information
provided internally to key management personnel of the entity (as defined in FRS 24, Related
Party Disclosures), e.g., the board of directors or CEO. As such, the disclosures would be
defined by the actual information used by management in managing financial risks, which may
be different from those disclosed in this illustration.
In addition, if the above-mentioned quantitative data disclosed as at the end of the reporting
period are unrepresentative of the entitys exposure to risk during the period, the entity shall
provide further information that is representative e.g., an entity might disclosed the highest,
lowest and average amount of risk to which it was exposed during the period to meet the
disclosure requirement.
The identification of concentrations of credit risk requires judgment taking into account the
circumstances of the entity. Apart from country and industry sectors, other measures of
credit risk concentrations may include credit rating or other measures of credit quality, limited
number of individual counterparties, or groups of closely related counterparties.

FRS 107.9-11

FRS 107.36.a

FRS 107.34.a

FRS 107.35 and
IG20

FRS 107.AGB8 and
IG18


b) Liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in
meeting financial obligations due to shortage of funds. The Groups and the Companys
exposure to liquidity risk arises primarily from mismatches of the maturities of financial
assets and liabilities. The Groups and the Companys objective is to maintain a balance
between continuity of funding and flexibility through the use of stand-by credit
facilities.
The Groups and the Companys liquidity risk management policy is that not more than
20% (2011: 20%) of loans and borrowings (including overdrafts and convertible
redeemable preference shares) should mature in the next one year period, and that to
maintain sufficient liquid financial assets and stand-by credit facilities with three
different banks. At the end of the reporting period, approximately 8% (2011: 15%) of
the Groups loans and borrowings will mature in less than one year based on the
carrying amount reflected in the financial statements, excluding discontinued
operation. None (2011: none) of the Companys loans and borrowings will mature in
less than one year at the end of the reporting period.
The Group assessed the concentration of risk with respect to refinancing its debt and
concluded it to be low. Access to sources of funding is sufficiently available and debt
maturing within 12 months can be rolled over with existing lenders.
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Groups and the Companys
financial assets and liabilities at the end of the reporting period based on contractual
undiscounted repayment obligations.

2012
$000
2011
$000
Group
One year or
less
One to
five
years
Over five
years Total
One year
or less
One to
five years
Over five
years Total
Financial assets:
Trade and other
receivables 25,921 2,984 28,905 26,936 2,980 29,916
Cash and short-term
deposits 6,117 6,117 4,858 4,858
Derivatives 170 170 105 105

Total undiscounted
financial assets 32,208 2,984 35,192 31,899 2,980 34,879

Trade and other payables 17,517 250 17,767 19,140 19,140
Other liabilities 2,974 2,974 2,579 2,579
Loans and borrowings 1,189 12,817 4,275 18,281 2,290 12,659 3,277 18,226
Contingent consideration
for business combination 685 685
Derivatives 22 22

Total undiscounted
financial liabilities 22,387 13,067 4,275 39,729 24,009 12,659 3,277 39,945

Total net undiscounted
financial assets/
(liabilities) 9,821 (10,083) (4,275) (4,537) 7,890 (9,679) (3,277) (5,066)

FRS 107.33.a-b,
39.c and IG5

FRS 107.33.b, 39.c
and AGB11F.e

FRS 107.AGB11F.a
and c

FRS 107.34.a, 34.c
and AGB8

FRS 107.39.a, b and
AGB11D


b) Liquidity risk (continued)

2012
$000
2011
$000
Company
One year or
less
One to
five years
Over five
years Total
One year
or less
One to
five years
Over five
years Total
Financial assets:
Trade and other
receivables 338 17,289 17,627 350 17,855 18,205
Cash and short-term
deposits 4,621 4,621 4,145 4,145

Total undiscounted
financial assets 4,959 17,289 22,248 4,495 17,855 22,350

Trade and other payables 470 470 414 414
Other liabilities 481 481 446 446
Loans and borrowings 4,682 2,084 6,766 3,796 2,540 6,336

Total undiscounted
financial liabilities 951 4,682 2,084 7,717 860 3,796 2,540 7,196

Total net undiscounted
financial assets/
(liabilities) 4,008 12,607 (2,084) 14,531 3,635 14,059 (2,540) 15,154

The table below shows the contractual expiry by maturity of the Group and Companys
contingent liabilities and commitments. The maximum amount of the financial
guarantee contracts are allocated to the earliest period in which the guarantee could
be called.

2012
$000
2011
$000

One year or
less
One to
five
years
Over five
years Total
One year
or less
One to
five years
Over five
years Total
Group
Financial guarantees 320 245 565 15 240 255

Company
Financial guarantees 5,400 5,400 5,400 5,400

FRS 107.AGB11C.c



Commentary:
Please refer to commentary no. 3 of Note 40(a) (Credit risk)
Other factors to consider in disclosing liquidity risk
The application guidance in FRS 107 illustrates the other factor that an entity might also
consider disclosing which include, but are not limited to, whether the entity:
(a) has committed borrowing facilities (e.g., commercial paper facilities) or other lines of
credit (e.g., stand-by credit facilities) that it can access to meet liquidity needs;
(b) holds deposits at central banks to meet liquidity needs;
(c) has very diverse funding sources;
(d) has significant concentrations of liquidity risk in either its assets or its funding sources;
(e) has internal control processes and contingency plans for managing liquidity risk;
(f) has instruments that include accelerated repayment terms (e.g., on the downgrade of
the entitys credit rating);
(g) has instruments that could require the posting of collateral (e.g., margin calls for
derivatives);
(h) has instruments that allows the entity to choose whether it settles its financial liabilities
by delivering cash (or another financial asset) or by delivering its own shares; or
(i) has instruments that are subject to master netting agreements.

Maturity analysis for financial liabilities
In this illustration, certain undiscounted payments presented differ from the carrying amount
included in the balance sheet because the balance sheet amount is based on discounted cash
flows.
When the amount payable is not fixed, the maturity analysis is determined by reference to the
conditions existing at the reporting date. For example, when the amount payable varies with
changes in an index, the amount disclosed may be based on the level of the index at the
reporting date.
The number of time bands illustrated is only an example. An entity should use its judgment to
determine the number of time bands that is suitable for the entity.
When the counterparty has a choice of when an amount is paid, the liability is included on the
basis of the earliest date on which the entity can be required to pay. For example, financial
liabilities that the entity can be required to repay on demand are included in the earliest time
band.

FRS 107.AGB11F

FRS 107.AGB11D

FRS 107.AGB11



Maturities of financial assets held for liquidity purposes
FRS 107.39.c requires an entity to describe how it manages the liquidity risk inherent in the
items disclosed in the quantitative disclosures required in FRS 107.39.a and b. An entity shall
disclose a maturity analysis of financial assets it holds for managing liquidity risk (e.g.,
financial assets that are readily saleable or expected to generate cash inflows to meet cash
outflows on financial liabilities), if that information is necessary to enable users of its financial
statements to evaluate the nature and extent of liquidity risk.
Quantitative liquidity risk disclosures
FRS 107 specified minimum liquidity risk disclosures, i.e., the contractual maturity analysis of
financial liabilities, required by FRS 107.39.
FRS 107 permits derivative liabilities to be excluded from the paragraph 39 maturity analysis,
unless the contractual maturities are essential for an understanding of the timing of the cash
flows. The application guidance cites an interest rate swap designated in a cash flow hedging
relationship as an example of such an essential case. Given that the hedged cash flows are
required to be highly probable, the swap would normally be expected to be held to maturity.
For those derivatives included in the contractual maturity analysis, the guidance still requires
gross cash flows to be disclosed for those derivatives which will involve a gross exchange of
cash flows, such as currency swaps. Below is an illustration of such a presentation:

Group
$000

One year
or less
One to
five years
Over five
years
Total
Derivatives:
- Interest rate swaps settled net XXX XXX
- Forward currency contracts gross payments XXX XXX
- Forward currency contracts gross receipts (XXX) (XXX)
Financial guarantees issued
FRS 107 requires issued financial guarantee contracts to be recorded in the contractual
maturity analysis based on the maximum amount guaranteed. They are to be allocated to the
earliest date they can be drawn down, irrespective of whether it is likely that those
guarantees will be drawn or the amount that is expected to be paid.

FRS 107.AGB11E

FRS 107.AGB11B

FRS 107.AGB11D

FRS 107.AGB11C.c

c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Groups and
the Companys financial instruments will fluctuate because of changes in market
interest rates. The Groups and the Companys exposure to interest rate risk arises
primarily from their loans and borrowings, interest-bearing loans given to related
parties and investments in debt securities. The Group does not hedge its investment in
fixed rate debt securities as they have active secondary or resale markets to ensure
liquidity. The Companys loans at floating rate given to related parties form a natural
hedge for its non-current floating rate bank loan. All of the Groups and the Companys
financial assets and liabilities at floating rates are contractually re-priced at intervals of
less than 6 months (2011: less than 6 months) from the end of the reporting period.
The Groups policy is to manage interest cost using a mix of fixed and floating rate
debts. The Groups policy is to keep 40% to 70% (2011: 40% to 70%) of its loans and
borrowings at fixed rates of interest. To manage this mix in a cost-efficient manner, the
Group enters into interest rate swaps. At the end of the reporting period, after taking
into account the effect of an interest rate swap, approximately 62% (2011: 58%) of the
Groups borrowings are at fixed rates of interest.
Sensitivity analysis for interest rate risk
At the end of the reporting period, if SGD interest rates had been 75 (2011: 75)
basis points lower/higher with all other variables held constant, the Groups profit
before tax would have been $20,000 (2011: $18,000) higher/lower, arising mainly as
a result of lower/higher interest expense on floating rate loans and borrowings,
higher/lower interest income from floating rate loans to related parties and
lower/higher positive fair value of an interest rate swap, and the Groups other reserve
in equity would have been $30,000 (2011: $30,000) higher/lower, arising mainly as a
result of an increase/decrease in the fair value of fixed rate debt securities classified as
available-for-sale. The assumed movement in basis points for interest rate sensitivity
analysis is based on the currently observable market environment, showing a
significantly higher volatility as in prior years.

FRS 107.33.a- b
and IG16

FRS 107.33.b
and 34.a

FRS 107.40,
IG36 and AGB18


c) Interest rate risk (continued)

Commentary:
Sources of interest rate risk
Interest rate risk arises on interest-bearing financial instruments recognised in the balance
sheet (e.g., loans and receivables and debt instruments issued) and on some financial
instruments not recognised in the balance sheet (e.g., some loan commitments).
Sensitivity analysis for market risk
FRS 107 requires disclosure of sensitivity analysis for each type of market risk to which an
entity is exposed at the reporting date, showing how profit or loss and equity would have been
affected by changes in the relevant risk variable that were reasonably possible at that date.
These analyses shall be provided for the whole of an entitys business. However, an entity may
also drill down to provide different types of sensitivity analysis for different classes of
financial instruments.
The sensitivity analysis should be based on changes in the risk variable that were reasonably
possible at the reporting date having considered the economic environments in which the
entity operates, the type of market risk concerned and the time frame over which the
assessment is being made i.e., the period until the entity will next present the analysis e.g.,
next annual reporting period. A reasonably possible change should not include remote or
worst case scenarios or stress test.
An entity should also disclose the methods and assumptions used in preparing the sensitivity
analysis, and changes from the previous period in the methods and assumptions used,
including the reasons for such changes.
Instead of the sensitivity analysis illustrated, FRS 107 permits an entity to use a sensitivity
analysis that reflects interdependencies between risk variables, such as a value-at-risk
methodology, if it uses this analysis to manage its exposure to financial risks. This applies
even if such a methodology measures only the potential for loss and does not measure the
potential for gain. In such cases, the entity should also disclose an explanation of the method
and objective of the analysis (e.g., whether the model relies on Monte Carlo simulations), the
main parameters and assumptions used (e.g., the holding period and confidence level), and
limitations that may result in the information disclosed not fully reflecting the fair value of
assets and liabilities involved.
When the sensitivity analyses disclosed are unrepresentative of a risk inherent in a financial
instrument (e.g., because the end of the reporting period exposure does not reflect exposure
during the financial year), the entity shall disclose that fact and the reason it believes the
sensitivity analyses are unrepresentative, including additional disclosures regarding the risk
inherent in that financial instrument.
In this illustration, company-level sensitivity analysis has not been disclosed because
according to the assumed scenario, XYZ Holdings (Singapore) Limited is an investment holding
company with no significant net exposure to market price risk. If this is not the case, the entity
should provide company-level disclosures as appropriate.

FRS 107.AGB22

FRS 107.40.a

FRS 107.AGB21

FRS 107.AGB19 and
IG35

FRS 107.40.b and c

FRS 107.41 and
AGB20

FRS 107.42 and
IG37-40

FRS 107.34.b


c) Interest rate risk (continued)

Sensitivity analysis for interest rate risk
In this illustration, the interest rate risk sensitivity analysis has been performed for the effect of
a change in SGD interest rates because it is relevant to the interest rate risk exposure of XYZ
Holdings (Singapore) Limited. An entity might disclose a sensitivity analysis for interest rate
risk for each currency in which the entity has material exposure to interest rate risk.
Illustrative tabular disclosure of interest rate risk sensitivity analysis where more than one
currency is involved:
The table below demonstrates the sensitivity to a reasonably possible change in interest
rates with all other variables held constant, of the Groups profit before tax (through the
impact on interest expense on floating rate loans and borrowings) and the Groups equity
(through the impact on other reserves for fixed rate debt securities classified as available-
for-sale).

Group
$000

Increase/
decrease in
basis points
Effect on profit
before tax
Effect on
equity
2012

- Singapore dollar +15 (XX) (XX)
- US dollar +20 (XX) (XX)

- Singapore dollar -10 XX XX
- US dollar -15 XX XX
2011

- Singapore dollar +15 (XX) (XX)
- US dollar +20 (XX) (XX)

- Singapore dollar -10 XX XX
- US dollar -15 XX XX

FRS 107.IG34

d) Foreign currency risk
The Group has transactional currency exposures arising from sales or purchases that
are denominated in a currency other than the respective functional currencies of Group
entities, primarily SGD, Malaysian Ringgit (Ringgit) and Renminbi (RMB). The foreign
currencies in which these transactions are denominated are mainly United States
Dollars (USD). Approximately 23% (2011: 25%) of the Groups sales are denominated in
foreign currencies whilst almost 80% (2011: 83%) of costs are denominated in the
respective functional currencies of the Group entities. The Groups trade receivable and
trade payable balances at the end of the reporting period have similar exposures.
The Group and the Company also hold cash and short-term deposits denominated in
foreign currencies for working capital purposes. At the end of the reporting period,
such foreign currency balances are mainly in USD.
The Group requires all of its operating entities to use forward currency contracts to
eliminate the currency exposures on any individual transactions in excess of $100,000
for which payment is anticipated more than one month after the Group has entered
into a firm commitment for a sale or purchase. The forward currency contracts must be
in the same currency as the hedged item. It is the Groups policy not to enter into
forward contracts until a firm commitment is in place. It is the Groups policy to
negotiate the terms of the forward currency contracts to match the terms of the firm
commitment to maximise hedge effectiveness.
At 31 December 2012, the Group had hedged 75% (2011: 68%) and 70% (2011: 65%)
of its foreign currency denominated sales and purchases respectively, for which firm
commitments existed at the end of the reporting period, extending to March 2013
(2011: March 2012).
The Group is also exposed to currency translation risk arising from its net investments
in foreign operations, including Malaysia, Peoples Republic of China (PRC) and
Vietnam. The Groups investment in its Vietnam subsidiary is hedged by a USD
denominated bank loan, which mitigates structural currency exposure arising from the
subsidiarys net assets. The Groups net investments in Malaysia and PRC are not
hedged as currency positions in Ringgit and RMB are considered to be long-term in
nature.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Groups profit before tax to a
reasonably possible change in the USD, RMB and Ringgit exchange rates against the
respective functional currencies of the Group entities, with all other variables held
constant.

Group

2012
$000
2011
$000

Profit before tax Profit before tax
USD/SGD - strengthened 3% (2011: 3%) 30 30
- weakened 3% (2011: 3%) +28 +28
USD/RMB - strengthened 4% (2011: 4%) 15 12
- weakened 4% (2011: 4%) +15 +12
RMB/SGD - strengthened 4% (2011: 4%) +57 +66
- weakened 4% (2011: 4%) 57 66
Ringgit/SGD - strengthened 3% (2011: 4%) +40 +68
- weakened 3% (2011: 4%) 40 68

FRS 107.33.a
and 34.a

FRS 107.33.a
and 34.a

FRS 107.33.b

FRS 107.34.a

FRS 107.40 and
AGB18


d) Foreign currency risk (continued)

Commentary:
Disclosure of amounts denominated in foreign currencies
The disclosure of exposures to foreign currency amounts is required under the disclosure
principles of FRS 107.31 (nature and extent of risks) as well as the specific requirement in FRS
107.34 to disclose summary quantitative data about the entity's exposure to risks (including
foreign currency risks) arising from financial instruments. In this illustration, most of the
information regarding foreign currency risk exposures is presented in Note 40(d), Note 21,
Note 27 and Note 31. These disclosures include a mixture of quantitative data that are
measured in dollar amounts (e.g., cash and short-term deposits amount denominated in foreign
currency) as well as data that are not measured in dollar amounts, e.g., the exposures arising
from trade receivables are represented by the percentage of total trade receivables
denominated in foreign currencies.
Each entity should customise the information disclosed according to its specific circumstances.
Please refer to commentary no. 3 of Note 40(c) (Interest rate risk)
According to FRS 107, foreign currency risk arises on financial instruments that are
denominated in a foreign currency i.e., in a currency other than the functional currency in
which they are measured. For the purpose of FRS 107, currency risk does not arise from
financial instruments that are non-monetary items or from financial instruments denominated
in the functional currency. Currency translation risk arising from its net investments in foreign
operations does not fall within the definition of foreign currency risk according to FRS 107.
In the scenario illustrated, there is no impact (other than those affecting net profit) to equity
arising from exposures to currency risk as defined by FRS 107.
Illustrative disclosure if there are impact to equity arising from exposures to currency risk:
The following table demonstrates the sensitivity of the Groups profit before tax and equity to
a reasonably possible change in the USD, RMB and Ringgit exchange rates against the
respective functional currencies of the Group entities, with all other variables held constant.
Group
2012
$000
2011
$000
Profit
before
tax
Equity Profit
before
tax
Equity
USD/SGD - strengthened X% (2011: X%) XX XX XX XX
- weakened X% (2011: X%) +XX +XX +XX +XX
USD/RMB - strengthened X% (2011: X%) XX XX XX XX
RMB/SGD - strengthened X% (2011: X%) XX XX XX XX
Ringgit/SGD - strengthened X% (2011: X%) XX XX XX XX

FRS 107.31 and 34

FRS 107.AG B23



e) Market price risk
Market price risk is the risk that the fair value or future cash flows of the Groups
financial instruments will fluctuate because of changes in market prices (other than
interest or exchange rates). The Group is exposed to equity price risk arising from its
investment in quoted equity securities. These securities are quoted on the Singapore
Exchange Securities Trading Limited (SGX-ST) in Singapore and are classified as held
for trading or available-for-sale financial assets. The Group does not have exposure to
commodity price risk.
The Groups objective is to manage investment returns and equity price risk using a mix
of investment grade shares with steady dividend yield and non-investment grade
shares with higher volatility. The Groups policy is to limit its interest in the latter type
of investments to 25% (2011: 25%) of its entire equity portfolio. Any deviation from
this policy is required to be approved by the CEO and audit committee. At the end of
the reporting period, 24% (2011: 19%) of the Groups equity portfolio consist of non-
investment grade shares of companies operating in PRC and Singapore, while the
remaining portion of the equity portfolio comprise investment grade shares included in
the Straits Times Index (STI).
Sensitivity analysis for equity price risk
At the end of the reporting period, if the STI had been 2% (2011: 2%) higher/lower with
all other variables held constant, the Groups profit before tax would have been
$88,000 (2011: $78,000) higher/lower, arising as a result of higher/lower fair value
gains on held for trading investments in equity instruments, and the Groups other
reserve in equity would have been $66,000 (2011: $77,000) higher/lower, arising as a
result of an increase/decrease in the fair value of equity securities classified as
available-for-sale.

Commentary:
Please refer to commentary no. 3 of Note 40(c) (Interest rate risk)
In this illustration, the sensitivity analysis for equity price risk has been performed by
analysing the effect of a reasonably possible change in STI on the fair value of the equity
instruments held by the Group, as it is assumed that all the quoted equity securities held by
the Group are listed in Singapore.

FRS 107.33.a

FRS 107.33.b
and 34.a

FRS 107.40,
AGB17-18 and
AGB25-27


41. Capital management
Capital includes debt and equity items as disclosed in the table below.
The primary objective of the Groups capital management is to ensure that it maintains a
strong credit rating and healthy capital ratios in order to support its business and
maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes
in economic conditions. To maintain or adjust the capital structure, the Group may adjust
the dividend payment to shareholders, return capital to shareholders or issue new shares.
No changes were made in the objectives, policies or processes during the years ended 31
December 2012 and 31 December 2011.
As disclosed in Note 34(c), a subsidiary of the Group is required by the Foreign Enterprise
Law of the PRC to contribute to and maintain a non-distributable statutory reserve fund
whose utilisation is subject to approval by the relevant PRC authorities. This externally
imposed capital requirement has been complied with by the above-mentioned subsidiary
for the financial years ended 31 December 2012 and 2011.
The Group monitors capital using a gearing ratio, which is net debt divided by total capital
plus net debt. The Groups policy is to keep the gearing ratio between 30% and 40%. The
Group includes within net debt, loans and borrowings (excluding convertible redeemable
preference shares), trade and other payables, other liabilities, less cash and short-term
deposits. Capital includes convertible redeemable preference shares, equity attributable
to the owners of the Company less the fair value adjustment reserve and the
abovementioned restricted statutory reserve fund.

Group

2012
$000
2011
$000
Loans and borrowings (Note 30) 14,849 15,718
Trade and other payables (Note 31) 17,717 19,140
Other liabilities (Note 32) 3,659 2,579
Less: - Convertible redeemable preference shares (Note 30) (450) (428)
- Cash and short-term deposits (Note 27) (6,117) (4,858)
Financial liabilities, net of cash and short-term deposits attributable to
discontinued operation (Note 11) 2,793
Net debt 32,451 32,151

Convertible redeemable preference shares 450 428
Equity attributable to the owners of the Company 72,669 66,927
Less: - Fair value adjustment reserve (672) (436)
- Statutory reserve fund (903) (740)
Total capital 71,544 66,179

Capital and net debt 103,995 98,330

Gearing ratio 31% 33%
FRS 1.134

FRS 1.135.a.i

FRS 1.135.a

FRS 1.135.a and c

FRS 1.135.a.ii and d

FRS 1.135.a

FRS 1.135.b


41. Capital management (continued)

Commentary:
Disclosure of capital management information according to entity specific circumstances
FRS 1 requires the disclosure of information (as provided to key management personnel) that
enables users of financial statements to evaluate the entitys objectives, policies and processes
for managing capital, including (but not limited to) a description and summary quantitative data
of what it manages as capital, the presence and impact of externally imposed capital
requirements and how the entity is meeting its objectives for managing capital etc. This note as
well as FRS 1.IG10 provide illustrative examples of such disclosures of an entity that is not a
regulated financial institution.
It is important to note that the illustration provided in this note is based on certain
assumed facts regarding circumstances surrounding XYZ Holdings (Singapore) Limited
and its objectives, policies and processes for managing capital. For example, a gearing
ratio with a specific measurement basis has been disclosed as this is the measure used to
monitor capital. The Group considers both capital and net debt as relevant components of
funding, hence part of its capital management. Other entities may use different methods
to monitor capital or use gearing ratios with different measurement bases. Disclosures
would have to be customised in the light of specific facts and circumstances applicable to
the entity.
Also, an entity may manage capital in a number of ways and be subject to a number of different
capital requirements. For example, a conglomerate may include entities that undertake
insurance and banking activities, and those entities may also operate in several jurisdictions.
When an aggregate disclosure of capital requirements and how capital is managed would not
provide useful information or distorts a financial statement users understanding of an entitys
capital resources, the entity shall disclose separate information for each capital requirement to
which the entity is subject to.
Externally imposed capital requirement
In this illustration, it is assumed that the externally imposed capital requirement has been
complied with. When an entity has not complied with externally imposed capital requirements,
the consequences of such non-compliance shall be disclosed. FRS 1.IG 11 has an example that
illustrates the application of FRS 1.135.e when an entity has not complied with externally
imposed capital requirement during the period.

FRS 1.134 and
135

FRS 1.136

FRS 1.135.e


42. Segment information
For management purposes, the Group is organised into business units based on their
products and services, and has four reportable segments as follows:
I. The electronic components segment is a supplier of digital and analogue electronic
components for consumer and industrial-grade electronics manufacturers. It offers
products and services in the areas of common and specialised electronic components,
energy efficiency, and electrical architecture.
II. The property segment is in the business of constructing, developing and leasing out of
residential and commercial properties. This reportable segment has been formed by
aggregating the property construction/development operating segment and the
investment properties operating segment, which are regarded by management to
exhibit similar economic characteristics.
III. The corporate segment is involved in Group-level corporate services, treasury
functions and investments in marketable securities.
IV. The fire prevention equipment and services segment produces and installs
extinguishers, fire prevention equipment and fire retardant fabrics. This segment has
been classified as a discontinued operation during the financial year (Note 11).
Except as indicated above, no operating segments have been aggregated to form the
above reportable operating segments.
Management monitors the operating results of its business units separately for the
purpose of making decisions about resource allocation and performance assessment.
Segment performance is evaluated based on operating profit or loss which in certain
respects, as explained in the table below, is measured differently from operating profit or
loss in the consolidated financial statements. Group financing (including finance costs)
and income taxes are managed on a group basis and are not allocated to operating
segments.
Transfer prices between operating segments are on an arms length basis in a manner
similar to transactions with third parties.

FRS 108.20, 21.a

FRS 108.22

FRS 108.12

FRS 108.27

FRS 108.28.b

FRS 108.27.a


42. Segment information (continued)

Electronic
components Property Corporate
Fire prevention
equipment and
services
(Discontinued
operation)
Adjustments and
eliminations Notes
Per consolidated
financial
statements FRS 108.20,21.b
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Revenue:
External customers 105,292 103,965 31,428 38,606 13,152 14,598 (13,152) (14,598) A 136,720 142,571
FRS 108.23.a
and 32
Inter-segment 265 120 (265) (120) B FRS 108.23.b
Total revenue 105,292 103,965 31,428 38,606 265 120 13,152 14,598 (13,417) (14,718) 136,720 142,571

Results:
Interest income 430 327 430 327 FRS 108.23.c
Dividend income 526 406 526 406 FRS 108.23.f
Fair value gains on investment properties 495 125 495 125 FRS 108.23.f
Depreciation and amortisation 2,038 1,967 925 883 150 115 150 125 (150) (125) A 3,113 2,965 FRS 108.23.e
Share of results of associates 94 657 234 657 328 FRS 108.23.g
Impairment of non-financial assets 500 650 (650) A 500
FRS 36.129.a
FRS 108.23.f
Other non-cash expenses 1,121 754 107 95 310 218 C 1,538 1,067 FRS 108.23.i
Segment profit/(loss) 6,035 5,698 2,152 2,763 452 438 (551) (193) (1,031) (1,590) D 7,057 7,116 FRS 108.23

Assets:
Investment in associates 566 10,595 9,755 10,595 10,321 FRS 108.24.a
Additions to non-current assets 8,134 2,872 2,803 1,560 758 221 E 11,695 4,653 FRS 108.24.b
Segment assets 77,689 73,426 22,518 21,169 12,450 11,960 2,270 2,450 10,815 10,605 F 125,742 119,610 FRS 108.23

Segment liabilities 16,076 15,748 10,533 8,358 1,314 1,189 1,043 1,130 22,129 24,358 G 51,095 50,783 FRS 108.23


Notes Nature of adjustments and eliminations to arrive at amounts reported in the
consolidated financial statements
A The amounts relating to the fire prevention equipment and services segment
has been excluded to arrive at amounts shown in profit or loss as they are
presented separately in the statement of comprehensive income within one line
item, loss from discontinued operation, net of tax.
B Inter-segment revenues are eliminated on consolidation.
C Other non-cash expenses consist of amortisation of land use rights, share-
based payments, inventories written-down, provisions, and impairment of
financial assets as presented in the respective notes to the financial
statements.
D The following items are added to/(deducted from) segment profit to arrive at
profit before tax from continuing operations presented in the consolidated
income statement:

2012
$000
2011
$000
Segment results of discontinued operation 551 193
Share of results of associates 657 328
Profit from inter-segment sales (105) (50)
Finance costs (1,715) (1,512)
Unallocated corporate expenses (419) (549)
(1,031) (1,590)
E Additions to non-current assets consist of additions to property, plant and
equipment, investment properties and intangible assets.
F The following items are added to/(deducted from) segment assets to arrive at
total assets reported in the consolidated balance sheet:

2012
$000
2011
$000
Investment in associates 10,595 10,321
Deferred tax assets 470 463
Inter-segment assets (250) (179)
10,815 10,605
G The following items are added to/(deducted from) segment liabilities to arrive
at total liabilities reported in the consolidated balance sheet:

2012
$000
2011
$000
Deferred tax liabilities 2,378 1,926
Income tax payable 2,927 6,734
Loans and borrowings (including discontinued operation) 16,849 15,718
Inter-segment liabilities (25) (20)
22,129 24,358
FRS 108.21.c

FRS 108.28.a and b

FRS 108.28.a

FRS 108.28.e

FRS 108.28.b

FRS 108.28.c

FRS 108.28.d


Geographical information

Revenue and non-current assets information based on the geographical location of
customers and assets respectively are as follows:

Revenues Non-current assets

2012 2011 2012 2011

$000 $000 $000 $000
Singapore 76,432 86,464 20,570 19,346
Peoples Republic of China 32,970 33,005 15,896 15,591
Malaysia 20,990 20,440 5,061 4,138
Vietnam and others 19,480 17,260 3,082 3,010
Discontinued operation (13,152) (14,598) (1,016) -
136,720 142,571 43,593 42,085
Non-current assets information presented above consist of property, plant and equipment,
investment properties, intangible assets, and land use rights as presented in the
consolidated balance sheet.
Information about a major customer
Revenue from one major customer amount to $15,102,000 (2011: $16,080,000), arising
from sales by the electronics components segment.

Commentary:
Information about segment profit or loss

In addition to a measure of profit or loss and total assets for each reportable segments, entities
are required to disclose the following about each reportable segment if the specified amounts
are included in the measure of segment profit or loss reviewed by the chief operating decision
maker (CODM), or are otherwise regularly provided to the CODM, even if not included in that
measure of segment profit or loss:
(a) Revenues from external customers
(b) Revenues from transactions with other operating segments of the same entity
(c) Interest revenue
(d) Interest expense*
(e) Depreciation and amortisation
(f) Material items of income and expense disclosed in accordance with paragraph 86 of FRS 1
Presentation of Financial Statements
(g) The entitys interest in profit or loss of associates and joint ventures accounted for by the
equity method
(h) Income tax expense or income*
(i) Material non-cash items other than depreciation and amortisation
* In this illustration, interest expense and income tax expense have not been disclosed by
segment as these items are managed on a group basis, and are not provided to the CODM at
the operating segment level.

FRS 108.33.a and b
FRS 108.20

FRS 108.33.a.i and b.i

FRS 108.34

FRS 108.23



In this illustration, an entire reportable segment has been classified as discontinued operation in
the current period. As this operating segment still meet the quantitative thresholds for separate
reporting, it continues to be reported in the segment information.
Interest income
An entity shall report interest revenue separately from interest expense for each reportable
segment unless a majority of the segments revenues are from interest and the CODM relies
primarily on net interest revenue to assess the performance of the segment and make decisions
about resources to be allocated to the segment. In that situation, an entity may report that
segments interest revenue net of its interest expense and disclose that it has done so.
Disclosure of operating segment assets and segment liabilities
Disclosure of operating segment assets and liabilities are required only where such measures are
provided to the CODM.
Explanation of measurements of segment profit or loss, segment assets and segment liabilities
If not apparent from the disclosures of reconciliations in this note, entities are required to disclose
further information regarding the nature of differences between the measurements of segment
profit or loss, segment assets, segment liabilities, and the entitys profit or loss before tax and
discontinued operations, assets and liabilities. Those differences could include accounting policies
and policies for allocation of centrally incurred costs, jointly used assets, jointly utilised liabilities
that are necessary for an understanding of the reported segment information.
The following should also be disclosed, where applicable:
- The nature of any changes from prior periods in the measurement methods used to
determine reported segment profit or loss and the effect, if any, of those changes on the
measure of segment profit or loss.
- The nature and effect of any asymmetrical allocations to reportable segments. For example,
an entity might allocate depreciation expense to a segment without allocating the related
depreciable assets to that segment.

FRS 108.13

FRS 108.23

FRS 108.23

FRS 108.27.b-d

FRS 108.27.e-f



Commentary:
Information about segment profit or loss
An entity should disclose:
a. Revenues from external customers (i) attributed to the entitys country of domicile; and (ii)
attributed to all foreign countries in total from which the entity derives revenues. If
revenues from external customers attributed to an individual foreign country are material,
those revenues should be disclosed separately. An entity should disclose the basis for
attributing revenues from external customers to individual countries.
b. Non-current assets other than financial instruments, deferred tax assets, post-employment
benefit assets, and rights arising under insurance contracts (i) located in the entitys
country of domicile and (ii) located in all foreign countries in total in which the entity holds
assets. If assets in an individual foreign country are material, those assets should be
disclosed separately.
Information about major customers
For the purposes of disclosing information about major customers, a group of entities known to
a reporting entity to be under common control shall be considered a single customer, and a
government (national, state, provincial, territorial, local or foreign) and entities known to the
reporting entity to be under the control of that government shall be considered a single
customer.

43. Dividends

Group and Company

2012
$000
2011
$000

Declared and paid during the financial year:
Dividends on ordinary shares:
- Final exempt (one-tier) dividend for 2011: 4.34 cents (2010: 4.45 cents)
per share 1,001 1,025
- Interim exempt (one-tier) dividend for 2012: 2.49 cents (2011: 2.41
cents) per share 612 557
1,613 1,582
Proposed but not recognised as a liability as at 31 December:

Dividends on ordinary shares, subject to shareholders approval at the AGM:
- Final exempt (one-tier) dividend for 2012: 4.10 cents (2011: 6.50 cents)
per share 1,008 1,501

FRS 108.33

FRS 108.34

FRS 1.137.a,
FRS 10.12


44. Events occurring after the reporting period
On 14 January 2013, a building of the Group, with net carrying value of $900,000, was
severely damaged by fire and inventories with net carrying value of $157,000 were lost.
It is expected that insurance proceeds will fall short of the costs of rebuilding and loss of
inventories by $250,000. The financial statements for the year ended 31 December 2012
have not been adjusted for the financial effect of this incident.
On 15 February 2013, the Company completed the disposal of one of its wholly-owned
subsidiary, Good Fire Prevention Pte Ltd (GFP), which has been classified as discontinued
operation (Note 11) as at 31 December 2012, for a cash consideration of $150,000.

45. Authorisation of financial statements for issue
The financial statements for the year ended 31 December 2012 were authorised for issue
in accordance with a resolution of the directors on 27 February 2013.

FRS 10.21 and 22.d

FRS 10.21 and 22.a

FRS 10.17
Appendix A-1 Consolidated statement of comprehensive
income in one statement illustrating the
analysis of expenses by nature and early
adoption of amendments to FRS 1

The amendments to FRS 1 Presentation of Financial Statements - Presentation of Items of
Other Comprehensive Income is applicable for annual periods beginning on or after 1 July
2012. The following illustrates the presentation of the consolidated statement of
comprehensive income and the accounting policies upon adoption, assuming the
amendments to FRS 1 had been early adopted for the year ending 31 December 2012.

Extract of summary of significant accounting policies illustrating accounting policies on
adoption of amendments to FRS 1:
X. Summary of significant accounting policies
X.X Changes in accounting policies
X Amendments to FRS 1 Presentation of Financial Statements - Presentation of Items of
Other Comprehensive Income
On 1 January 2012, the Group early adopted the amendments to FRS 1 which are
effective for annual periods beginning on or after 1 July 2012.
The amendments to FRS 1 changes the grouping of items presented in other
comprehensive income. Items that will be reclassified subsequently to profit or loss when
specific conditions are met would be presented separately from items that will not be
reclassified subsequently to profit or loss. As the amendments only affect the presentation
of items that are already recognised in other comprehensive income, there is no impact on
the financial position or performance of the Group upon adoption of these amendments.

FRS 8.28

FRS 1A.82A


Illustrating the Statement of Comprehensive Income in one statement with the analysis of
expenses by nature:

Note
2012
$000
2011
(Restated)
$000 FRS 1A.81.10A, FRS 1A.102
Continuing operations
Revenue X 136,720 142,571 FRS 1A.82.a, FRS 1A.102

Other items of income FRS 1A.102
Interest income X 430 327 FRS 18.35.b.iii
Dividend income from investment securities

526 406 FRS 18.35.b.v
Other income X 1,725 1,195

Items of expense FRS 1A.99
Raw materials and consumables used (98,607) (92,477) FRS 1A.102
Changes in inventories of finished goods and work-in-progress (2,203) (16,631)
FRS 1A.102
Employee benefits expense X (20,502) (19,024)
FRS 1A.102
Depreciation and amortisation expense (3,113) (2,965)
FRS 1A.102
Impairment losses (833) (425) FRS 1A.85
Net foreign exchange loss (136) (145) FRS 21.52.a
Finance costs (1,715) (1,512) FRS 1A.82.b
Other expenses (5,892) (4,532) FRS 1A.102

Share of results of associates 657 328 FRS 1A.82.c, FRS 28.38
Profit before tax from continuing operations X 7,057 7,116 FRS 1A.85
Income tax expense X (1,557) (1,687) FRS 1A.82.d, FRS 12.77
Profit from continuing operations, net of tax 5,500 5,429 FRS 1A.85
Loss from discontinued operation, net of tax X (544) (188)
FRS 1A.82.ea, FRS 105.33.a &
33A
Profit for the year 4,956 5,241 FRS 1A.81A.a
Items that will not be reclassified to profit or loss: FRS 1A.82A.a
Net surplus on revaluation of freehold land and buildings 1,250 2,404 FRS 1A.82A.a, FRS 16.77.f
Share of gain on property revaluation of associates 62 10 FRS 1A.82A.a, FRS 28.39
1,312 2,414
Items that may be reclassified subsequently to profit or loss: FRS 1A.82A.b
Net gain on fair value changes of available-for-sale financial assets 174 98 FRS 1A.82A.b
Foreign currency translation (181) (82) FRS 1A.82A.b, FRS 21.52.b
(7) 16

Other comprehensive income for the year, net of tax 1,305 2,430 FRS 1A.81A.b

Total comprehensive income for the year 6,261 7,671 FRS 1A.81A.c

Profit for the year attributable to:
Profit from continuing operations, net of tax 5,320 5,029 FRS 105.33.d
Loss from discontinued operation, net of tax (544) (188) FRS 105.33.d
4,776 4,841 FRS 1A.81B.a.ii
Non-controlling interests
Profit from continuing operations, net of tax 180 400
Loss from discontinued operation, net of tax - -
180 400 FRS 1A.81B.a.i
Total comprehensive income attributable to:
Owners of the Company 6,091 7,211 FRS 1A.81B.b.ii
Non-controlling interests 170 460 FRS 1A.81B.b.i
6,261 7,671
Attributable to:
Total comprehensive income from continuing operations, net of tax X 6,585 7,379 FRS 105.33.d
Total comprehensive income from discontinued operations, net of tax X (494) (168) FRS 105.33.d
6,091 7,211


Note
2012
$000
2011
(Restated)
$000 FRS 1A.81.a, FRS 1A.102

Earnings per share from continuing operations attributable to owners
of the Company (cents per share)
Basic X 22.98 21.81 FRS 33.66
Diluted X 22.73 21.58 FRS 33.66

Earnings per share (cents per share)
Basic X 20.63 21.00 FRS 33.66
Diluted X 20.17 20.53 FRS 33.66

Commentary:
Tax effects related to each component of other comprehensive income
An entity may present components of other comprehensive income either:
(a) net of related tax effects, as illustrated in the statement of comprehensive income,
or
(b) before related tax effects with one amount shown for the aggregate amount of
income tax relating to those items.
If an entity elects alternative (b), it shall allocate the tax between the items that might be
reclassified subsequently to the profit or loss section and those that will not be
reclassified subsequently to the profit or loss section.
In this illustration, the share of other comprehensive income of associates relates to
property revaluation attributable to owners of the associates, an item which will not be
reclassified to profit or loss subsequently.
If an entity has share of other comprehensive income of associates which relates to items
that may be reclassified subsequently to profit or loss, the item shall be presented under
the group of items that may be reclassified subsequently to profit or loss.

FRS 1A.91

FRS 1A.82A

Appendix A-2 Defined benefit plan

Extracts of summary of significant accounting policies illustrating accounting policies relating to
defined benefit plan:
X.X Defined benefit plan
The cost of providing benefits under the defined benefit plans is determined separately for
each plan using the projected unit credit method. Actuarial gains and losses are recognised as
income or expense when the net cumulative unrecognised actuarial gains and losses for each
individual plan at the end of the previous reporting period exceed 10% of the higher of the
defined benefit obligation and the fair value of plan assets at that date. These gains or losses
are recognised over the expected average remaining working lives of the employees
participating in the plans.
The unvested past service costs are recognised as an expense on a straight-line basis over
the average period until the benefits become vested. If the benefits are already vested,
immediately following the introduction of, or changes to, a pension plan, past service costs
are recognised immediately.
The defined benefit asset or liability is the aggregate of the present value of the defined
benefit obligation (derived using a discount rate based on high quality corporate bonds) at the
end of the reporting period plus any actuarial gains (less any actuarial losses) not recognised,
reduced by past service costs not yet recognised and the fair value of plan assets out of
which the obligations are to be settled directly. If such aggregate is negative, the asset is
measured at the lower of such aggregate or the aggregate of cumulative unrecognised net
actuarial losses and past service costs and the present value of any economic benefits
available in the form of refunds from the plan or reductions in the future contributions to the
plan.
If the asset is measured at the aggregate of cumulative unrecognised net actuarial losses and
past service costs and the present value of any economic benefits available in the form of
refunds from the plan or reductions in the future contributions to the plan:
Net actuarial losses of the current period and past service costs of the current period are
recognised immediately to the extent that they exceed any reduction in the present value
of those economic benefits. If there is no change or an increase in the present value of the
economic benefits, the entire net actuarial losses of the current period and past service
costs of the current period are recognised immediately.
Net actuarial gains of the current period after the deduction of past service costs of the
current period exceeding any increase in the present value of the economic benefits stated
above are recognised immediately. If there is no change or a decrease in the present value
of the economic benefits, the entire net actuarial gains of the current period after the
deduction of past service costs of the current period are recognised immediately.
Plan assets are assets that are held by a long-term employee benefit fund or qualifying
insurance policies. Plan assets are not available to the creditors of the Group, nor can they be
paid directly to the Group. Fair value of plan assets is based on market price information and
in the case of quoted securities, it is based on the published bid price. The value of any
defined benefit asset recognised is restricted to the sum of any past service costs and
actuarial gains and losses not yet recognised and the present value of any economic benefits
available in the form of refunds from the plan or reductions in the future contributions to the
plan.
The Groups right to be reimbursed of some or all of the expenditure required to settle a
defined benefit obligation is recognised as a separate asset at fair value when and only when
reimbursement is virtually certain.

FRS 19.64
FRS 19.120A.a
FRS 19.92 and
93

FRS 19.96

FRS 19.54

FRS 19.58

FRS 19.58A.a

FRS 19.58A.b

FRS 19.7

FRS 19.58A

FRS 19.104A


Commentary:
The Accounting Standards Council issued revisions to FRS 19 Employee Benefits that is effective for
annual periods beginning on or after 1 January 2013.
In this illustration, it is assumed that the Group does not early adopt the revised FRS 19. If the entity
elect to early adopt the revised FRS 19, please refer to Appendix A-4 for illustrative disclosure of
defined benefit plan.
The Groups policy for defined benefit plans is to recognise actuarial gains and losses when the net
cumulative unrecognised actuarial gains and loss of the previous reporting period exceed 10% of the
higher of the defined benefit obligation and the fair value of the plan asset at that date. This is
sometimes referred to as the corridor approach.
FRS 19 also allows two other alternative approaches to account for actuarial gains and losses,
namely:
(a) An entity may adopt any systematic method that results in faster recognition of actuarial gains
and losses, provided that the same basis is applied to both gains and losses and the basis is
applied consistently from period to period. Such permitted methods include immediate
recognition of all actuarial gains and losses to profit or loss.
The following is an illustration of accounting policy relating to the adoption of a policy to
recognise all actuarial gains and losses in profit or loss:
All actuarial gains and losses for all the defined benefit plans are recognised in profit or loss
in the period in which they arise.
(b) An entity is also allowed to recognise actuarial gains and losses as they occur, in other
comprehensive income. This allowed alternative must be applied to all defined benefits plans
and all actuarial gains and losses. Any actuarial gains or losses recognised directly in other
comprehensive income cannot be recognised in profit or loss in a subsequent period.
The following is an illustration of accounting policy relating to the adoption of a policy to
recognise actuarial gains and losses in other comprehensive income:
All actuarial gains and losses for all the defined benefit plans are recognised in other
comprehensive income in the period in which they arise. Such actuarial gains and losses are
also immediately recognised in retained earnings and are not reclassified to profit or loss in
subsequent periods.

FRS 19.92

FRS 19.93

FRS 19.93A

FRS 19.93D


Extracts of summary of significant accounting estimates and judgments relating to defined
benefit plan:
X. Significant accounting judgments and estimates
X.X Key sources of estimation uncertainty
The cost of defined benefit pension plans and other post employment medical benefits as well as
the present value of the pension obligation are determined using actuarial valuations. The
actuarial valuation involves making various assumptions. These include the determination of the
discount rates, expected rates of return of assets, future salary increases, mortality rates and
future pension increases. Due to the complexity of the valuation, the underlying assumptions and
its long-term nature, defined benefit obligations are highly sensitive to changes in these
assumptions. All assumptions are reviewed at each reporting date. The net benefit liability as at
31 December 2012 is $XXX (2011: $XXX). Further details are provided in Note X.
In determining the appropriate discount rate, management considers the interest rates of high
quality corporate bonds in the respective currencies with at least AA rating, with extrapolated
maturities corresponding to the expected duration of the defined benefit obligation. The
underlying bonds are further reviewed for quality, and those having excessive credit spreads are
removed from the population of bonds on which the discount rate is based, on the basis that they
do not represent high quality bonds.
The mortality rate is based on publicly available mortality tables for the specific country and is
modified accordingly with estimates of mortality improvements. Future salary increases and
pension increases are based on expected future inflation rates for the specific country.
Further details about the assumptions used are provided in Note X.

FRS 1.125


Extracts of notes to the financial statements illustrating the disclosures relating to defined
benefit plan:
X. Defined benefit plan
The Group operates two defined benefit pension plans, both of which require contributions to
be made to separately administered funds. One provides a pension of 2% of final salary for each
year of service (Singapore plan), while the other provides 2.5% of average salary (US plan).
Both benefit plans become vested after five years of service and require contributions to be
made to separately administered funds.
The Group also provides additional post employment healthcare benefits to certain senior
employees in Singapore. These benefits are unfunded.
The following tables summarise the components of net benefit expense recognised in profit or
loss and the funded status and amounts recognised in the balance sheets for the plans.

Net benefit expense
(recognised in cost of
sales)
Funded pension plans
Unfunded
post-employment
medical
benefits Singapore plan US plan Total
2012
$000
2011
$000
2012
$000
2011
$000
2012
$000
2011
$000
2012
$000
2011
$000
Current service cost
(XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX)
Interest cost on benefit
obligation (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX)
Expected return on
plan assets XXX XXX XXX XXX XXX XXX
Net actuarial gain/
(loss) recognised in
the year
XXX (XXX) XXX XXX XXX XXX
Past service cost
(XXX) (XXX) (XXX) (XXX)
Net benefit expense

Actual return on plan
assets XXX XXX XXX XXX XXX XXX
Benefit
asset/(liability)
Unfunded
post-employment
medical
benefits
Singapore plan US plan Total

2012
$000
2011
$000
2012
$000
2011
$000
2012
$000
2011
$000
2012
$000
2011
$000
Defined benefit
obligation (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX)
Fair value of plan assets XXX XXX XXX XXX XXX XXX
(XXX) (XXX) XXX (XXX) (XXX) (XXX) (XXX) (XXX)
Unrecognised net
actuarial (gain)/loss XXX (XXX) XXX XXX XXX XXX
Unrecognised past
service cost XXX XXX XXX XXX
Benefit liability (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX)

FRS 19.120A.b

FRS 19.120A.g

FRS 19.120A.m

FRS 19.120A.f


X. Defined benefit plan (continued)
Changes in present value of defined benefit obligations are as follows:

Unfunded
post-
employment
medical
benefits

2012
$000
2011
$000
2012
$000
2011
$000
2012
$000
2011
$000
2012
$000
2011
$000
At 1 January XXX XXX XXX XXX XXX XXX XXX XXX
Interest cost
XXX XXX XXX XXX XXX XXX XXX XXX
Benefits paid
Actuarial (gains)/
losses on obligation XXX (XXX) XXX (XXX) XXX (XXX) XXX (XXX)
XXX (XXX) XXX (XXX) XXX (XXX)
At 31 December XXX XXX XXX XXX XXX XXX XXX XXX
Changes in fair value of plan assets are as follows:


2012
$000
2011
$000
2012
$000
2011
$000
2012
$000
2011
$000
At 1 January XXX XXX XXX XXX XXX XXX
Expected return XXX XXX XXX XXX XXX XXX
Contributions by employer XXX XXX XXX XXX XXX XXX
Benefits paid (XXX) (XXX) (XXX) (XXX) (XXX) (XXX)
Actuarial gains/(losses) XXX (XXX) XXX (XXX) XXX (XXX)
Exchange differences XXX XXX XXX XXX
At 31 December XXX XXX XXX XXX XXX XXX
The Group expects to contribute $XXX to the defined benefit pension plans in 2013.
The major categories of plan assets as a percentage of the fair value of total plan assets are as
follows:
Singapore plan US plan

2012
%
2011
%
2012
%
2011
%
Singapore equities XX XX XX XX
American equities XX XX XX XX
Singapore bonds XX XX XX XX
American bonds XX XX XX XX
Property
1
XX XX XX XX
1
The property in the plan assets is occupied by the Group and has a fair value of $XXX (2011: $XXX).

FRS 19.120A.c

FRS 19.120A.e

FRS 19.120A.q

FRS 19.120A.j

FRS 19.120A.k

The principal assumptions used in determining pension and post-employment medical benefit
obligations for the defined benefit plans are shown below:

2012
%
2011
%
Discount rates:
Singapore plan/ post employment medical plan XX XX
US plan XX XX
Expected rate of return on assets
1
:
Singapore plan XX XX
US plan XX XX
Future salary increases:
US plan XX XX
Future pension increases:
US plan XX XX
Post retirement mortality for pensioners at 65:
Singapore plan/ post employment medical plan
Male XX XX
Female XX XX
US plan
Male XX XX
Female XX XX
Healthcare cost increase rate
2
: XX XX
1
The expected rate of return is calculated by weighting the expected rates of return on individual
categories of plan assets in accordance with the anticipated balance in the plans investment portfolio.
These expected rates of return are determined based on the market prices prevailing on that date,
applicable to the period over which the obligation is to be settled. There has been a significant change
in the expected rate of return on assets due to the improved stock market scenario.
2
A one percentage point change in the assumed rate of increase in healthcare costs would have the
following effects:

Increase
$000
Decrease
$000
2012

Effect on the aggregate current service cost and interest cost
XXX (XXX)
Effect on the defined benefit obligation
XXX (XXX)

2011

Effect on the aggregate current service cost and interest cost
XXX (XXX)
Effect on the defined benefit obligation
XXX (XXX)

FRS 19.120A.n

FRS 19.120A.I

FRS 19.120A.o


Amounts for the current and previous four periods are as follows:

Singapore plan

2012
$000
2011
$000
2010
$000
2009
$000
2008
$000
Defined benefit obligation (XXX) (XXX) (XXX) (XXX) (XXX)
Plan assets XXX XXX XXX XXX XXX
(Deficit)/surplus (XXX) (XXX) (XXX) XXX XXX
Experience adjustments on plan
liabilities XXX XXX XXX (XXX) XXX
Experience adjustments on plan assets XXX (XXX) (XXX) (XXX) (XXX)

US plan

2012
$000
2011
$000
2010
$000
2009
$000
2008
$000
Plan assets XXX XXX XXX XXX XXX
Surplus/(deficit) XXX (XXX) (XXX) XXX (XXX)
liabilities
(XXX) XXX XXX (XXX) XXX
Experience adjustments on plan assets XXX (XXX) (XXX) XXX XXX

Post-employment benefits

2012
$000
2011
$000
2010
$000
2009
$000
2008
$000
liabilities XXX (XXX) (XXX) (XXX) (XXX)

FRS 19.120A.p

Appendix A-3 Agreements for the construction of real
estate


Extract of summary of significant accounting policies illustrating accounting policies relating to
agreements for the construction of real estate:

Commentary:
Stage of completion
The stage of completion of a contract may be determined in a variety of ways. The entity uses the
method that measures reliably the work performed. Depending on the nature of the contract, other
acceptable methods include surveys of work performed and completion of a physical proportion of
the contract work.

X. Significant accounting policies
X.X Revenue
X) Sale of completed development property
A development property is regarded as sold when the significant risks and returns have
been transferred to the buyer, which is normally on unconditional exchange of contracts.
For conditional exchanges, sales are recognised only when all the significant conditions are
satisfied.
XX) Sale of development property under construction
Where development property is under construction and agreement has been reached to sell
such property when construction is complete, the Directors consider whether the contract
comprises:
- A contract to construct a property; or
- A contract for the sale of completed property
a) Where a contract is judged to be for the construction of a property, revenue is
recognised using the percentage of completion method as construction progresses.
b) Where the contract is judged to be for the sale of a completed property, revenue is
recognised when the significant risks and rewards of ownership of the real estate have
been transferred to the buyer (i.e. revenue is recognised using the completed contract
method).
i) If, however, the legal terms of the contract are such that the construction
represents the continuous transfer of work in progress to the purchaser, the
percentage of completion method of revenue recognition is applied and revenue
is recognised as work progresses.
ii) In Singapore context, INT FRS 115 includes an accompanying note on application
of INT FRS 115 in Singapore which requires the percentage of completion method
of revenue recognition to be applied to sale of private residential properties in
Singapore prior to completion of the properties that are regulated under the
Singapore Housing Developers (Control and Licensing) Act (Chapter 130) and
uses the standard form of sale and purchase agreements (SPAs) prescribed in the
Housing Developers Rules. The accompanying note to INT FRS 115 does not
address the accounting treatment for other SPAs, including SPAs with a Deferred
Payment Scheme feature in Singapore.
In the above situations (i) and (ii), the percentage of work completed is measured based
on the costs incurred up until the end of the reporting periods as a proportion of total
costs expected to be incurred.

FRS 18.14

INT FRS 115.13

INT FRS 115.17

INT FRS 115.20.a

INT FRS 115.17,
INT FRS 115.20.c

INT FRS 115.17
FRS 11.30

estate

Extract of summary of significant accounting judgments and estimates relating to revenue
recognition on development property under construction:
X) Revenue recognition on development property under construction
The Group recognises revenue for pre-completion sales of certain types of properties by
reference to the stage of completion using the percentage of completion method. The stage
of completion is measured based on the costs incurred up until the end of the reporting
periods as a proportion of total costs expected to be incurred. Significant assumptions are
required to estimate the total contract costs and the recoverable variation works that affect
the stage of completion and the revenue respectively. In making these estimates,
management has relied on past experience and knowledge of the project engineers. The
carrying amounts of assets and liabilities as well as the revenue from sale of development
property (recognised on percentage of completion basis) are disclosed in Note X
(Development Property) and Note Y (Revenue) to the financial statements respectively.

FRS 1.125

estate

Extract of notes to financial statements illustrating the disclosure of revenue from sale of
development property:

X. Revenue

Group

2012
$000
2011
$000
Revenue from sale of development properties (recognised on
completed contract basis)

XXX

XXX
Revenue from sale of development properties (recognised on
percentage of completion basis)

XXX

XXX

Extract of notes to the financial statements illustrating the disclosure of development property:

X. Development property
The following table provides information about agreements that are in progress at the reporting
date whose revenue are recognised on a percentage of completion basis:

Group

2012
$000
2011
$000
Aggregate costs incurred and recognised to date

XXX

XXX
Profit before tax recognised to date XXX XXX
Advances received XXX XXX
Group

2012
$000
2011
$000
Development properties recognised as an expense in cost of sales

XXX

XXX

FRS 18.35.b.i

FRS 18.35.b.i,
INT FRS 115.20.b

INT FRS 115.21.a

INT FRS 115.21.b

FRS 2.36.d

Appendix A-4 Employee benefits

Revisions to FRS 19 Employee Benefits is effective for annual periods beginning on or after 1
January 2013. The following is an illustration of disclosures relating to employee benefits, assuming
the Revised FRS 19 has been adopted for the year ending 31 December 2012.
Extract of summary of significant accounting policies illustrating changes in accounting policies
on adoption of Revised FRS 19:
X Revised FRS 19 Employee Benefits
On 1 January 2012, the Group adopted the Revised FRS 19 Employee Benefits, which is
effective for annual periods beginning on or after 1 January 2013.
For defined benefit plans, the Revised FRS 19 requires all actuarial gains and losses to be
recognised in other comprehensive income and unvested past service costs previously
recognised over the average vesting period to be recognised immediately in profit or loss
when incurred.
Prior to adoption of the Revised FRS 19, the Group recognised actuarial gains and losses as
income or expense when the net cumulative unrecognised gains and losses for each
individual plan at the end of the previous period exceeded 10% of the higher of the defined
benefit obligation and the fair value of the plan assets and recognised unvested past service
costs as an expense on a straight-line basis over the average vesting period until the benefits
become vested. Upon adoption of the revised FRS 19, the Group changed its accounting
policy to recognise all actuarial gains and losses in other comprehensive income and all past
service costs in profit or loss in the period they occur.
The Revised FRS 19 replaced the interest cost and expected return on plan assets with the
concept of net interest on defined benefit liability or asset which is calculated by multiplying
the net balance sheet defined benefit liability or asset by the discount rate used to measure
the employee benefit obligation, each as at the beginning of the annual period.
The Revised FRS 19 also amended the definition of short-term employee benefits and
requires employee benefits to be classified as short-term based on expected timing of
settlement rather than the employees entitlement to the benefits. In addition, the Revised
FRS 19 modifies the timing of recognition for termination benefits. The modification requires
the termination benefits to be recognised at the earlier of when the offer cannot be
withdrawn or when the related restructuring costs are recognised.
Changes to definition of short-term employee benefits and timing of recognition for
termination benefits do not have any impact to the Groups financial position and financial
performance.
The changes in accounting policies have been applied retrospectively. The effects of early
adoption on the financial statements are as follows:

FRS 19R.172


X. Summary of significant accounting policies (continued)
X.X Changes in accounting policies (continued)
X Revised FRS 19 Employee Benefits (continued)

Group

As at 31
December
2012
As at 31
December
2011
(Restated)
As at 1
January
2011
(Restated)
$000 $000 $000
Increase/(decrease) in:
Employee benefit liability XXX XXX XXX
Deferred tax liabilities (XXX) (XXX) (XXX)
Retained earnings (XXX) (XXX) (XXX)
2012 2011
(Restated)
$000 $000
Net benefit cost XXX XXX
Income tax expense (XXX) (XXX)
Profit for the year
Attributable to the owners of the Company (XXX) (XXX)
Attributable to non-controlling interests (XXX) (XXX)
Basic earnings per share (cents) (XXX) (XXX)
Diluted earnings per share (cents) (XXX) (XXX)

2012 2011
(Restated)
$000 $000
Remeasurement of defined benefit obligation XXX XXX
Income tax effects XXX XXX
Other comprehensive income for the year, net of tax
Attributable to the owners of the Company (XXX) (XXX)
Attributable to non-controlling interests (XXX) (XXX)


X.X Defined benefit plan
The net defined benefit liability or asset is the aggregate of the present value of the defined
benefit obligation (derived using a discount rate based on high quality corporate bonds) at
the end of the reporting period reduced by the fair value of plan assets (if any), adjusted for
any effect of limiting a net defined benefit asset to the asset ceiling. The asset ceiling is the
present value of any economic benefits available in the form of refunds from the plan or
reductions in future contributions to the plan.
The cost of providing benefits under the defined benefit plans is determined separately for
each plan using the projected unit credit method.
Defined benefit costs comprise the following:
- Service cost
- Net interest on the net defined benefit liability or asset
- Remeasurements of net defined benefit liability or asset
Service costs which include current service costs, past service costs and gains or losses on
non-routine settlements are recognised as expense in profit or loss. Past service costs are
recognised when plan amendment or curtailment occurs.
Net interest on the net defined benefit liability or asset is the change during the period in
the net defined benefit liability or asset that arises from the passage of time which is
determined by applying the discount rate based on high quality corporate bonds to the net
defined benefit liability or asset. Net interest on the net defined benefit liability or asset is
recognised as expense or income in profit or loss.
Remeasurements comprising actuarial gains and losses, return on plan assets and any
change in the effect of the asset ceiling (excluding net interest on defined benefit liability)
are recognised immediately in other comprehensive income in the period in which they
arise. Remeasurements are recognised in retained earnings within equity and are not
reclassified to profit or loss in subsequent periods.
Plan assets are assets that are held by a long-term employee benefit fund or qualifying
insurance policies. Plan assets are not available to the creditors of the Group, nor can they
be paid directly to the Group. Fair value of plan assets is based on market price information.
When no market price is available, the fair value of plan assets is estimated by discounting
expected future cash flows using a discount rate that reflects both the risk associated with
the plan assets and the maturity or expected disposal date of those assets (or, if they have
no maturity, the expected period until the settlement of the related obligations).
The Groups right to be reimbursed of some or all of the expenditure required to settle a
defined benefit obligation is recognised as a separate asset at fair value when and only when
reimbursement is virtually certain.

FRS 19R.8

FRS 19R.67

FRS 19R.120

FRS 19R.8
FRS 19R.103

FRS 19R.8
FRS 19R.123

FRS 19R.127
FRS 19R.122

FRS 19R.8
FRS 19R.113

FRS 19R.116

X.X Termination benefit
Termination benefits are employee benefits provided in exchange for the termination of an
employees employment as a result of either an entitys decision to terminate an employees
employment before the normal retirement date or an employees decision to accept an offer
of benefits in exchange for the termination of employment.
A liability and expense for a termination benefit is recognised at the earlier of when the
entity can no longer withdraw the offer of those benefits and when the entity recognises
related restructuring costs. Initial recognition and subsequent changes to termination
benefits are measured in accordance with the nature of the employee benefit, as either
post-employment benefits, short-term employee benefits, or other long-term employee
benefits.
X.X Employee leave entitlement
Employee entitlements to annual leave are recognised as a liability when they are accrued to
the employees. The undiscounted liability for leave expected to be settled wholly before
twelve months after the end of the annual reporting period is recognised for services
rendered by employees up to the end of the reporting period.

FRS 19R.8

FRS 19R.165

FRS 19R.169

FRS 19R.13


Extracts of summary of significant accounting estimates and judgments relating to defined
benefit plan:
The cost of defined benefit pension plans and other post employment medical benefits as
well as the present value of the pension obligation are determined using actuarial
valuations. The actuarial valuation involves making various assumptions. These include the
determination of the discount rates, expected rates of return of assets, future salary
increases, mortality rates and future pension increases. Due to the complexity of the
valuation, the underlying assumptions and its long-term nature, defined benefit obligations
are highly sensitive to changes in these assumptions. All assumptions are reviewed at each
reporting date. The net benefit liability as at 31 December 2012 is $XXX (2011: $XXX).
Further details are provided in Note X.
In determining the appropriate discount rate, management considers the interest rates of
high quality corporate bonds in the respective currencies with at least AA rating, with
extrapolated maturities corresponding to the expected duration of the defined benefit
obligation. The underlying bonds are further reviewed for quality, and those having
excessive credit spreads are removed from the population of bonds on which the discount
rate is based, on the basis that they do not represent high quality bonds.
The mortality rate is based on publicly available mortality tables for the specific country and
is modified accordingly with estimates of mortality improvements. Future salary increases
and pension increases are based on expected future inflation rates for the specific country.
Further details about the assumptions used are provided in Note X.

FRS 1.125


Extracts of notes to the financial statements illustrating the disclosures relating to defined benefit plan:
X. Defined benefit plan
The Group operates two defined benefit pension plans, both of which require contributions to be made to separately administered funds. One provides a pension
of 2% of final salary for each year of service (Singapore plan), while the other provides 2.5% of average salary (US plan). Both benefit plans become vested after
five years of service and require contributions to be made to separately administered funds.
The Group also provides additional post employment healthcare benefits to certain senior employees in Singapore. These benefits are unfunded.
The amount included in the consolidated balance sheet arising from the entitys obligation in respect of its defined benefit plans is as follows:

Unfunded
post-employment medical
31
December
2012
$000
31 December
2011
(Restated)
$000
1 January
2011
(Restated)
$000
31
December
2012
$000
31 December
2011
(Restated)
$000
1 January
2011
(Restated)
$000
31
December2
012
$000
31 December
2011
(Restated)
$000
1 January
2011
(Restated)
$000
31
December
2012
$000
31 December
2011
(Restated)
$000
1 January
2011
(Restated)
$000

Present value of defined
benefit obligation

XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Fair value of plan assets
(XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) -

XXX (XXX) XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Restrictions on asset
recognised
- XXX - - - - - XXX - - -
Net liability arising from
defined benefit
obligation
XXX (XXX) XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

FRS 19R.135.a
FRS 19R.139.a.i


Changes in present value of the defined benefit obligations are as follow:

Unfunded
post-employment
medical

2012

$000
2011
(Restated)
$000
2012

$000
2011
(Restated)
$000
2012

$000
2011
(Restated)
$000
2012

$000
2011
(Restated)
$000
At 1 January
Interest cost
XXX XXX XXX XXX XXX XXX - -
Remeasurement
(gains)/losses
Actuarial gains and
losses arising from
changes in
demographic
assumptions (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX)
Actuarial gains and
losses arising from
changes in financial
assumptions
Past service cost XXX XXX XXX XXX XXX XXX - -
(Gains)/Losses on
settlements (XXX) XXX (XXX) XXX (XXX) XXX XXX XXX
Contributions from
plan participants
- - - - - - XXX XXX
Liabilities
extinguished on
settlements
- - (XXX) - (XXX) - - -
Benefits paid
Effects of business
combinations and
disposal XXX (XXX) - - XXX (XXX) - -
At 31 December

FRS 19R.140.a.ii
FRS 19R.141


Changes in fair value of plan assets are as follow:



2012

$000
2011
(Restated)
$000
2012

$000
2011
(Restated)
$000
2012

$000
2011
(Restated)
$000
At 1 January XXX XXX XXX XXX XXX XXX
Interest income XXX XXX XXX XXX XXX XXX
Remeasurement
gains/(losses)
Return on plan assets XXX XXX XXX XXX XXX XXX
Contributions by employer XXX - - - XXX -
Contributions from plan
participants XXX XXX XXX XXX - XXX
Benefits paid (XXX) (XXX) (XXX) (XXX) (XXX) (XXX)
Assets distributed on
settlements - - (XXX) - (XXX) -
Effects of business
combinations and disposal XXX (XXX) - - XXX (XXX)
Exchange differences XXX (XXX) XXX (XXX)
At 31 December XXX XXX XXX XXX XXX XXX
Changes in the effect of the asset ceiling are as follow:


Singapore plan

2012

$000
2011
(Restated)
$000
At 1 January XXX -
Interest income XXX -
Remeasurement
gains/(losses)
Changes in the effect of
limiting to asset ceiling
1
(XXX) XXX
At 31 December - XXX

1
The maximum economic benefit available is a combination of expected refunds from the plan and reductions
in future contributions.

FRS 19R.140.a.i
FRS 19R.141

FRS 19R.140.a.iii
FRS 19R.141

The fair value of plan assets by each classes as at the end of the reporting period are as follow:

31 December
2012

$000
31 December
2011
(Restated)
$000
1 January
2011
(Restated)
$000
31
December
2012

$000
31 December
2011
(Restated)
$000
1 January
2011
(Restated)
$000
31
December
2012

$000
31 December
2011
(Restated)
$000
1 January
2011
(Restated)
$000
Cash and cash equivalents XXX XXX XXX XXX XXX XXX XXX XXX XXX
Equity instruments
- Manufacturing XXX XXX XXX XXX XXX XXX XXX XXX XXX
- Financial institutions XXX XXX XXX XXX XXX XXX XXX XXX XXX
- Telecommunications XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX
Debt instruments
- Government securities XXX XXX XXX XXX XXX XXX XXX XXX XXX
- AAA rated debt securities XXX XXX XXX XXX XXX XXX XXX XXX XXX
- Not rated debt securities XXX XXX XXX XXX XXX XXX XXX XXX XXX
Property
- Singapore XXX XXX XXX XXX XXX XXX XXX XXX XXX
- Australia XXX XXX XXX XXX XXX XXX XXX XXX XXX
Derivatives
- Interest rate swaps XXX XXX XXX XXX XXX XXX XXX XXX XXX
- Forward currency contracts XXX XXX XXX XXX XXX XXX XXX XXX XXX
Asset-backed securities XXX XXX XXX XXX XXX XXX XXX XXX XXX
Structured debts XXX XXX XXX XXX XXX XXX XXX XXX XXX
Fair value of plan assets XXX XXX XXX XXX XXX XXX XXX XXX XXX

All equity and debt instruments held have quoted prices in active market. The remaining plan assets do not have quoted market prices in active market.
The plan assets include a property occupied by a subsidiary of the Group with a fair value of $XXX (2011:$XXX) and ordinary shares of XYZ Holdings Limited with
a fair value of $XXX (2011: $XXX).

FRS 19R.142

FRS 19R.143

The cost of defined benefit pension plans and other post employment medical benefits as well
as the present value of the pension obligation are determined using actuarial valuations. The
actuarial valuation involves making various assumptions. The principal assumptions used in
determining pension and post-employment medical benefit obligations for the defined benefit
plans are shown below:

2012
%
2011
%
Discount rates:
Singapore plan/ post employment medical plan XX XX
US plan XX XX
Expected rate of return on assets
1
:
US plan XX XX
Future salary increases:
US plan XX XX
Future pension increases:
US plan XX XX
Post retirement mortality for pensioners at 65:
Singapore plan/ post employment medical plan
Male XX XX
Female XX XX
US plan
Male XX XX
Female XX XX
Healthcare cost increase rate: XX XX
1
The expected rate of return is calculated by weighting the expected rates of return on individual
categories of plan assets in accordance with the anticipated balance in the plans investment portfolio.
These expected rates of return are determined based on the market prices prevailing on that date,
applicable to the period over which the obligation is to be settled. There has been a significant change
in the expected rate of return on assets due to the improved stock market scenario.

FRS 19R.144


The sensitivity analysis below has been determined based on reasonably possible changes of
each significant assumption on the defined benefit obligation as of the end of the reporting
period, assuming if all other assumptions were held constant:

Increase/(decrease)
31 December 2012

Singapore
Plan US Plan
Unfunded
post-
employment
medical
benefits
Discount rates +XX basis points (XXX) (XXX) (XXX)
- XX basis points XXX XXX XXX
Expected rate of return on assets +XX % XXX XXX -
- XX % (XXX) (XXX) -
Future salary increases +XX % XXX XXX XXX
- XX % (XXX) (XXX) (XXX)
Future pension increases +XX % XXX XXX XXX
Post retirement mortality for
pensioners at 65:
Male +XX % XXX XXX XXX
Female +XX % XXX XXX XXX
Healthcare cost increase rate +XX % XXX XXX XXX

The management performed an Asset-Liability Matching Study (ALM) annually. The principal
technique of the Groups ALM is to ensure the expected return on assets to be sufficient to support
the desired level of funding arising from the defined benefit plans. The Groups current strategic
investment strategy consists of 50% of equity instruments, 30% of debt instruments, 15% of
investment properties and 5% of cash. The use of debt instruments in combination with interest rate
swaps will reduce the sensitivities caused by the term of the defined benefit obligation by 25%.
The Groups defined benefit pension plans are funded by its subsidiaries. The employees of the Group
contribute 6% of the pensionable salary and the remaining residual contributions are paid by the
subsidiaries of the Group.
The Group expects to contribute $XXX (2011: $XXX) to the defined benefit pension plans in 2012.
The average duration of the defined benefit obligation at the end of the reporting period is 18.4
years (2011: 17.5 years).

FRS 19R.145

FRS19R.146

FRS19R.147.a

FRS19R.147.b

FRS19R.147.c

Commentary
To meet the disclosure objective of Revised FRS 19 for defined benefit plans, an entity shall
consider all the following:
a. the level of detail necessary to satisfy the disclosure requirements,
b. how much emphasis to place on each of the various requirements,
c. how much aggregation or disaggregation to undertake; and
d. whether users of financial statements need additional information to evaluate the
quantitative information disclosed.
If the disclosures provided in accordance with the specific requirements of Revised FRS 19 are
insufficient to meet the objectives above, the entity shall disclose additional information
necessary to meet those objectives. For example, an entity may present an analysis of the
present value of defined benefit obligation that distinguishes the nature, characteristics and
risks of the obligation. Such a disclosure could distinguish:
- between amounts owing to active members, deferred members, and pensioners
- between vested benefits and accrued but not vested benefits
- between conditional benefits, amounts attributable to future salary increases and other
benefits
An entity shall assess whether all or some disclosures should be disaggregated to distinguish
plans or groups of plans with materially different risks. For example, an entity may
disaggregate disclosure about plans showing one or more of the following features:
- different geographical locations
- different characteristics such as flat salary pension plans, final salary pension plans or
post-employment medical plans
- different regulatory environments
- different reporting segments
- different funding arrangements (e.g. wholly unfunded, wholly or partly funded)
When disclosing the characteristics of defined benefit plans and risks associated with them, an
entity shall disclose:
a. information about the characteristics including
- the nature of benefits provided by the plan (e.g. final salary defined benefit plan or
contribution-based plan with guarantee).
- a description of the regulatory framework in which the plan operates, for example the
level of any minimum funding requirements, and any effect of the regulatory
framework on the plan, such as the asset ceiling.
- a description of any other entitys responsibilities for the governance of the plan, for
example responsibilities of trustees or of board members of the plan.
b. a description of the risks to which the plan exposes the entity, focused on any unusual
entity-specific or plan-specific risks, and of any significant concentrations of risk. For
example, if plan assets are invested primarily in one class of investments, e.g. property,
the plan may expose the entity to a concentration of property market risk.
c. a description of any plan amendments, curtailments and settlements.
An entity shall provide reconciliation from the opening balance to the closing balance for any
reimbursement rights and the related obligation, if applicable.

FRS 19R.136

FRS 19R.137

FRS 19R.138

FRS 19R.139

FRS 19R.140.b


Commentary (continued)
Past service cost and gains and losses arising from settlements need not be distinguished if
they occur together.
In the financial statements for periods beginning before 1 January 2014, an entity need not
present comparative information for the disclosures about the sensitivity of the defined benefit
obligation.
Revised FRS 19 introduces a number of new disclosure requirements. These include:
Sensitivity analysis
- A sensitivity analysis for each significant assumption as of the end of the reporting
period, showing how the defined benefit obligation would have been affected by
changes in the relevant assumption that were reasonably possible at that date.
- The method and assumptions used in preparing the sensitivity analyses and the
limitation of those methods.
- Changes from the previous period in the methods and assumptions used in preparing
the sensitivity analyses, and the reasons for such changes.
Asset-liability matching strategies
- A description of any asset-liability matching strategies used by the plan or the entity,
including the use of annuities and other techniques, such as longevity swaps, to manage
risk.
Cash flow information
- A description of any funding arrangements, and funding policy that affect future
contributions to the defined benefit plan.
- Expected contributions to the plan for the next annual reporting period.
- Information about the maturity profile of the defined benefit obligation (including, but
not limited to, weighted average duration of the defined benefit obligation).
Multi-employer plans
In this illustration, we do not illustrate multi-employer plans. If the Group participates in a
multi-employer plan and accounts for that plan as a defined benefit plan, it shall disclose the
following in addition to information required by paragraphs 135-147 of the Revised FRS 19:
a. a description of the funding arrangements, including the method used to determine the
entitys rate of contributions and any minimum funding requirements.
b. a description of the extent to which the entity can be liable to the plan for other entities
obligations under the terms and conditions of the multi-employer plan.
c. a description of any agreed allocation of a deficit or a surplus on:
i. wind-up of the plan; or
ii. the entitys withdrawal from the plan.
d. if the entity accounts for that plan as if it were a defined contribution plan, it shall disclose
the following, in addition to the information required by (a) (c) and instead of the
information required by paragraph 139 to 147 of the Revised FRS 19:
i. the fact that the plan is a defined benefit plan.
ii. the reason why sufficient information is not available to enable the entity to account
for the plan as a defined benefit plan.

FRS 19R.141.d

FRS 19R.173.b

FRS 19R.145.a

FRS 19R.145.b

FRS 19R.145.c

FRS 19R.146

FRS 19R.147.a

FRS 19R.147.b

FRS 19R.147.c

FRS 19R.33.b

FRS 19R.148


Multi-employer plans (continued)
iii. the expected contributions to the plan for the next annual reporting period.
iv. information about any deficit or surplus in the plan that may affect the amount of
future contributions, including the basis used to determine that deficit or surplus and
the implications, if any, for the entity.
v. an indication of the level of participation of the entity in the plan compared with
other participating entities. Examples of measures that might provide such an
indication include the entitys proportion of the total contributions to the plan or the
entitys proportion of the total number of active members, retired members, and
former members entitled to benefits, if that information is available.
Defined benefit plans that share risks between entities under common control
In this illustration, we do not illustrate defined benefit plans that share risks between entities
under common control. If an entity participates in a defined benefit plan that shares risks
between entities under common control, it shall disclose:
a. the contractual agreement or stated policy for charging the net defined benefit cost or the
fact that there is no such policy.
b. the policy for determining the contribution to be paid by the entity.
c. if the entity accounts for an allocation of the net defined benefit cost as noted in
paragraph 41 of Revised FRS 19 , all the information about the plan as a whole required
by paragraph 135-147 of Revised FRS 19.
d. if the entity accounts for the contribution payable for the period as noted in paragraph 41
of Revised FRS 19 , the information about the plan as a whole required by paragraphs
135 137, 142 - 144 and 147 (a) and (b) of Revised FRS 19.
The information required by (c) and (d) can be disclosed by cross-reference to disclosures in
another group entitys financial statements if:
a. that group entitys financial statements separately identify and disclose the information
required about the plan; and
b. that group entitys financial statements are available to users of the financial statements
on the same terms as the financial statements of the entity and at the same time as, or
earlier than, the financial statements of the entity.
Paragraph 41 of Revised FRS 19 requires an entity participating in a defined benefit plan that
share risks between entities under common control to obtain information about the plan as a
whole measured in accordance with Revised FRS 19 on the basis of assumptions that apply to
the plan as a whole. If there is a contractual agreement or stated policy for charging to
individual group entities the net defined benefit cost for the plan as a whole measured in
accordance with Revised FRS 19, the entity shall, in its separate or individual financial
statements, recognise the net defined benefit cost so charged. If there is no such agreement or
policy, the net defined benefit cost shall be recognised in the separate or individual financial
statements of the group entity that is legally the sponsoring employer for the plan. The other
group entities shall, in their separate or individual financial statements, recognise a cost equal
to their contribution payable for the period.

FRS 19R.148

FRS 19R.149

FRS 19R.150

FRS 19R.41
Appendix A-5 Consolidated financial statements, joint
arrangements and disclosure of interests in
other entities

FRS 110 Consolidated Financial Statements, FRS 111 Joint Arrangements, FRS 112 Disclosure
of Interests in Other Entities and the consequential amendments to FRS 27 Separate Financial
Statements and FRS 28 Investments in Associates and Joint Ventures are effective for annual
periods beginning on or after 1 January 2014. The following is an illustration of disclosures
assuming FRS 110, FRS 111, FRS 112, Revised FRS 27 and Revised 28 have been early
adopted for the year ending 31 December 2012.
Extract of summary of significant accounting policies illustrating accounting policies on adoption
of FRS 110, FRS 111, FRS 112 and the consequential amendments to Revised FRS 27 and
Revised FRS 28:

X FRS 110, FRS 111, FRS 112, Revised FRS 27 and Revised FRS 28
On 1 January 2012, the Group early adopted FRS 110, FRS 111, FRS 112 and the
consequential amendments to Revised FRS 27 and Revised FRS 28 which are effective for
annual periods beginning on or after 1 January 2014.
Statements
FRS 27 was amended to address accounting for subsidiaries, jointly controlled entities and
associates in separate financial statements.
FRS 110 establishes a new control model that applies to all entities including special purpose
entities. The new control model broadens the situations when an entity is considered to be
controlled by another entity and includes new guidance for applying the model to specific
situations.
Prior to the adoption of FRS 110, the Group controls an investee when the Group has the
power to govern the financial and operating policies so as to obtain benefits from its
activities. Upon application of FRS 110, the Group has reassessed its investments in
accordance with the new definition of control. As a result of the reassessment, the Group
concluded that it has control over ABC Ltd which was previously accounted for as an
associated company.
The Group acquired 47% of ownership interest in ABC Ltd in 2005 and there was no change
in the Groups ownership in ABC Ltd since then. The remaining 53% of the ordinary shares of
ABC Ltd are owned by thousands of shareholders, which none of the shareholders hold more
than 1 per cent of the voting rights individually.
In assessing whether the Group has control over an investee where the Group holds less than
a majority of voting rights, the Group considers factors such as the size of the Groups
holding of voting rights relative to the size and dispersion of holdings of other vote holders
as well as any additional facts and circumstances that indicate the Group has, or does not
have, the current ability to direct the relevant activities of the investee, including the voting
patterns at the investees previous shareholders meetings.

FRS 110.C1
FRS 111.C1
FRS 112.C1
FRS 27R.18
FRS 28R.45

other entities

Statements (continued)
The change in accounting policy has been applied retrospectively in accordance with the
transitional provisions in FRS 110. The assets, liabilities and non-controlling interests in
ABC Ltd are measured as if ABC Ltd had been consolidated from the date when the Group
obtained control in 2005, by applying the requirements of FRS 103 (issued in 2004).
The retrospective effects of adoption on the financial statements are as follows:

Group

As at 31
December
2011
(Restated)
As at 1
January
2011
(Restated)
$000 $000
Investment in associate (XXX) (XXX)
Property, plant and equipment XXX XXX
Investment property XXX XXX
Trade and other receivables XXX XXX
Cash and cash equivalents XXX XXX
Trade and other payables XXX XXX
Current tax liabilities XXX XXX
Provisions XXX XXX
Loans and borrowings XXX XXX
Deferred tax liabilities XXX XXX
Impact on net assets XXX XXX

Non-controlling interests XXX XXX
Others reserves XXX XXX
Impact on equity XXX XXX

FRS 8.28.b

FRS 8.28.d
FRS 110.C4.a
other entities

Statements (continued)

Group
2011
(Restated)
$000
Increase/(decrease) in
Revenue XXX
Cost of sales XXX
Interest income XXX
Other income XXX
Marketing and distribution XXX
Administrative expenses XXX
Share of results of associates (XXX)
Finance costs XXX
Income tax expenses XXX
Profit for the year XXX

Profit for the year attributable to
Owners of the Company -
Non-controlling interests XXX

Basic earnings per share (cents) -
Diluted earnings per share (cents) -

Net surplus on revaluation of freehold land and buildings XXX
Foreign currency translation XXX
Share of other comprehensive income of associates (XXX)
Income tax effects XXX
Other comprehensive income for the year, net of tax XXX
Total comprehensive income for the year XXX

Non-controlling interests XXX

The Group has determined that it is impracticable to determine the amount of the
adjustment for the current period presented upon adoption of FRS 110.

other entities

FRS 111 Joint Arrangements and Revised FRS 28 Investments in Associates and
Joint Ventures
FRS 111 uses the principle of control in FRS 110 to define joint control and removes the
option to account for joint ventures using proportionate consolidation. Accounting for a
joint arrangement is dependent on the nature of the rights and obligations arising from the
arrangement. Joint operations that give the parties a right to the underlying assets and
obligations is accounted for by recognising the share of those assets and obligations. Joint
ventures that give the parties a right to the net assets is accounted for using the equity
method. The revised FRS 28 was amended to describe the application of equity method to
investments in joint ventures in addition to associates.
The adoption of FRS 111 has resulted in the Group having to revise its method of
accounting for its joint arrangement. Investment in jointly controlled entity had been
previously consolidated proportionately. Under FRS 111, this arrangement is classified as
joint venture to be equity accounted.
The change in accounting policy has been applied in accordance with the transitional
provision in FRS 111. The initial investment was measured as the aggregate of the carrying
amounts of the assets and liabilities that the Group previously proportionately
consolidated. The retrospective effects of adoption on the financial statements are as
follows:

Group

As at 31
December
2011
(Restated)
As at 1
January
2011
(Restated)
$000 $000
Investment in joint venture XXX XXX
Property, plant and equipment (XXX) (XXX)
Trade and other receivables (XXX) (XXX)
Goodwill (XXX) (XXX)
Cash and cash equivalents (XXX) (XXX)

FRS 8.28.b
FRS 8.28.d
FRS 111.C2

other entities

FRS 111 Joint Arrangements and Revised FRS 28 Investments in Associates and
Joint Ventures (continued)

Group

As at 31
December
2011
(Restated)
As at 1
January
2011
(Restated)
$000 $000
Decrease in:
Trade and other payables (XXX) (XXX)
Current tax liabilities (XXX) (XXX)
Provisions (XXX) (XXX)
Deferred tax liabilities (XXX) (XXX)
Group
2011
(Restated)
$000
Revenue (XXX)
Cost of sales (XXX)
Interest income (XXX)
Other income (XXX)
Marketing and distribution (XXX)
Administrative expenses (XXX)
Income tax expenses (XXX)
Share of profits of a joint venture XXX

The Group has determined that it is impracticable to determine the amount of the
adjustment for the current period presented upon adoption of FRS 111.

other entities

Commentary
FRS 110, FRS 111, FRS 112 and the consequential amendments to FRS 27 and FRS 28 are
effective for annual periods beginning on or after 1 January 2014. The new standards may be
adopted early, but must all be adopted as of the same date, except that an entity may early
adopt the disclosure provisions for FRS 112 without adopting the other new standards.
The Accounting Standard Council announced on 31 August 2012 that it will allow
stakeholders more time to implement FRS 110, FRS 111, FRS 112, Revised FRS 27 and
Revised FRS 28 (collectively the Relevant Standards). The mandatory effective date of the
Relevant Standards is deferred for a year from annual periods beginning on or after 1
January 2013 to annual periods beginning on or after 1 January 2014.
Earlier application of the Relevant Standards continues to be permitted, subject to the
requirements for earlier application as set out in the Relevant Standards.
Potential voting rights
In this illustration, the Group does not have potential voting rights in its investee.
The following is an illustrative change in accounting policy when the Group has potential
voting rights in its investee:
Prior to the adoption of FRS 110, the Group controls an investee when the Group has the
power to govern the financial and operating policies so as to obtain benefits from its
activities. Upon application of FRS 110, the Group has reassessed its investments in
accordance with the new definition of control. As a result of the reassessment, the Group
concluded that it does not have control over JJJ Ltd which was previously accounted for as
a subsidiary.
The Group holds 33.33% of voting rights in JJJ Ltd. In addition to its equity instruments,
the Group also holds debt instruments that are convertible into ordinary shares of JJJ Ltd
at any time for a fixed price. If the debt were converted, the Group would hold 60% of the
voting rights of the investee.
In reassessing whether the Group have control over an investee, the Group considers the
voting rights and potential voting rights that it holds, as well as the rights and potential
voting rights held by others. Potential voting rights are only considered if they are
substantive.
Upon adoption of FRS 110, the Group concluded that it does not have power over JJJ Ltd
as the potential voting rights are not substantive as the conversion option is deeply out of
the money. Accordingly, the Group accounts for JJJ Ltd as an associate using the equity
method.
The change in accounting policy has been applied retrospectively in accordance with the
transitional provisions in FRS 110. The retained interest in JJJ Ltd is measured at the
amount at which it would have been measured if the requirements of FRS 110 had been
effective when the Group became involved with JJJ Ltd. The retrospective effects of
adoption on the financial statements are as follows:

FRS 110.C1
FRS 111.C1
FRS 27R.18
FRS 28R.45
FRS 112.C1 and C2

FRS 8.28.b
FRS 8.28.d
FRS 110.C5

other entities

Potential voting rights (continued)

Group

As at 31
December
2011
(Restated)
As at 1
January
2011
(Restated)

$000 $000
Investment in associate XXX XXX
Property, plant and equipment (XXX) (XXX)
Investment property (XXX) (XXX)
Trade and other receivables (XXX) (XXX)
Trade and other payables (XXX) (XXX)
Current tax liabilities (XXX) (XXX)
Provisions (XXX) (XXX)
Loans and borrowings (XXX) (XXX)
Deferred tax liabilities (XXX) (XXX)
Impact on net assets (XXX) (XXX)

Group
2011
(Restated)
$000
Revenue (XXX)
Cost of sales (XXX)
Interest income (XXX)
Other income (XXX)
Marketing and distribution (XXX)
Administrative expenses (XXX)
Share of results of associates XXX
Finance costs (XXX)
Income tax expenses (XXX)
Profit for the year (XXX)

Profit for the year attributable to
Non-controlling interests (XXX)

Basic earnings per share (cents) -
Diluted earnings per share (cents) -

other entities

Potential voting rights (continued)

Group
2011
(Restated)
$000
Net surplus on revaluation of freehold land and buildings (XXX)
Foreign currency translation (XXX)
Share of other comprehensive income of associates XXX
Income tax effects (XXX)
Other comprehensive income for the year, net of tax (XXX)
Total comprehensive income for the year (XXX)

Non-controlling interests (XXX)

The Group has determined that it is impracticable to determine the amount of the adjustment
for the current period presented upon adoption of FRS 111.
In this illustration, the Group measures the assets, liabilities and non-controlling interests in the
investee, ABC Ltd as if that investee had been consolidated from the date when the Group
obtained control of that investee. If measuring the investees assets, liabilities and non-
controlling interests retrospectively is impracticable, the deemed acquisition date shall be the
beginning of the earliest period for which retrospective application is practicable, which may be
the current period.
FRS 110 allows an entity to apply either FRS 103 (2008) or FRS 103 (issued in 2004). In this
illustration, the Group applied the requirements of FRS 103 (issued in 2004). Alternatively, the
Group may apply FRS 103 (issued in 2008).
In this illustration, the Group measures the retained interest in the investee, JJJ Ltd at the
amount at which it would have been measured if the requirements of FRS 110 had been
effective when the Group became involved with that investee. If measurement of the retained
interest is impracticable, the Group shall account for the loss of control at the beginning of the
earliest period for which application of FRS 110 is practicable, which may be the current
period. The Group shall recognise any difference between the previously recognised amount of
the assets, liabilities and non-controlling interest and the carrying amount of the Groups
involvement with the investee as an adjustment to equity for that period. In addition, the Group
shall provide comparative information and disclosures of the circumstances that led to the
condition that makes retrospective application impracticable and from when the change in
accounting policy has been applied.

FRS 110.C4.c.i

FRS 110.C4B

FRS 110.C5

FRS 8.28.h

other entities

X.X Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company
and its subsidiaries as at the end of the reporting period. The financial statements of the
subsidiaries used in the preparation of the consolidated financial statements are prepared
for the same reporting date as the Company. Consistent accounting policies are applied to
like transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting
from intra-group transactions and dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the
Group obtains control, and continue to be consolidated until the date that such control
ceases.
Losses and other comprehensive income are attributed to the non-controlling interest even
if that results in a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted
for as an equity transaction. If the Group loses control over a subsidiary, it
- de-recognises the assets (including goodwill) and liabilities of the subsidiary at their
carrying amounts as at the date when controls is lost;
- de-recognises the carrying amount of any non-controlling interest;
- de-recognises the cumulative translation differences recorded in equity;
- recognises the fair value of the consideration received;
- recognises the fair value of any investment retained;
- recognises any surplus or deficit in profit or loss;
- re-classifies the Groups share of components previously recognised in other
comprehensive income to profit or loss or retained earnings, as appropriate.
X.X Subsidiaries
A subsidiary is an investee that is controlled by the Group. The Group controls an investee
when it is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee.
Thus, the Group controls an investee if an only if the Group has all of the following:
- power over the investee
- exposure, or rights or variable returns from its involvement with the investee; and
- the ability to use its power over the investee to affect its returns
The Group reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control listed above.
In the Companys separate financial statements, investments in subsidiaries are accounted
for at cost less impairment losses.

FRS 110.4
FRS 110.Appendix A
FRS 110.B92

FRS 110.19 and B87

FRS 110.B86.c

FRS 110.20 and B88

FRS 110.B94

FRS 110.23
FRS 110.B98

FRS 110.6

FRS 110.7

FRS 110.8

FRS 27R.17.c
other entities

X.X Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiaries not attributable, directly or
indirectly, to owners of the Company, and are presented separately in the consolidated
statement of comprehensive income and within equity in the consolidated balance sheet,
separately from equity attributable to owners of the Company.
Changes in the Company owners ownership interest in a subsidiary that do not result in a
loss of control are accounted for as equity transactions. In such circumstances, the carrying
amounts of the controlling and non-controlling interests are adjusted to reflect the changes
in their relative interests in the subsidiary. Any difference between the amount by which the
non-controlling interest is adjusted and the fair value of the consideration paid or received is
recognised directly in equity and attributed to owners of the Company.

Commentary
The financial statements of the parents and its subsidiaries used in the preparation of the
consolidated financial statements shall be prepared as of the same reporting date. When the
end of the reporting period of the parent is different from that of a subsidiary, the subsidiary
prepares, for consolidation purposes, additional financial statements as of the same date as the
financial statements of the parent, unless it is impracticable to do so.
Where it is impracticable to do so, the parent may use the financial statements of a subsidiary
prepared as of a reporting date different from that of the parent, provided adjustments are
made for the effects of the significant transactions or events that occur between that date and
the date of the parents financial statements, and the difference between the reporting dates of
the subsidiary and the parent is no more than three months. In addition, the length of the
reporting periods and any difference in the reporting dates shall be the same from period to
period.
When the financial statements of a subsidiary used in the preparation of consolidated financial
statements are as of a date or for a period that is different from that of the consolidated
financial statements, an entity shall disclose the date of the end of the reporting period of the
financial statements of that subsidiary and the reason for using a different date or period.

FRS 110.Appendix A
FRS 110.22

FRS 110.23
FRS 110.B96

FRS 110.B92

FRS 110.B93

FRS 112.11

other entities

X.X Joint arrangements
A joint arrangement is a contractual arrangement whereby two or more parties have joint
control. Joint control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require the unanimous
consent of the parties sharing control.
A joint arrangement is classified either as joint operation or joint venture, based on the
rights and obligations of the parties to the arrangement.
To the extent the joint arrangement provides the Group with rights to the assets and
obligations for the liabilities relating to the arrangement, the arrangement is a joint
operation. To the extent the joint arrangement provides the Group with rights to the net
assets of the arrangement, the arrangement is a joint venture.
The Group reassesses whether the type of joint arrangement in which it is involved has
changed when facts and circumstances change.
a) Joint operations
The Group recognises in relation to its interest in a joint operation,
- its assets, including its share of any assets held jointly;
- its liabilities, including its share of any liabilities incurred jointly;
- its revenue from the sale of its share of the output arising from the joint operation;
- its share of the revenue from the sale of the output by the joint operation; and
- its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest
in a joint operation in accordance with the accounting policies applicable to the particular
assets, liabilities, revenues and expenses.
When the Group enters into transaction involving a sale or contribution of assets with a
joint operation in which it is a joint operator, the Group recognises gains and losses
resulting from such a transaction only to the extent of the interests held by the other
parties to the joint operation.
When the Group enters into a transaction involving purchase of assets with a joint
operation in which it is a joint operator, the Group does not recongise its share of the gains
and losses until it resells those assets to a third party. When such transactions provide
evidence of a reduction in the net realisable value of the assets to be purchased or of an
impairment loss of those assets, the Group recognises it share of those losses.
b) Joint ventures
The Group recognises its interest in a joint venture as an investment and accounts for the
investment using the equity method. The accounting policy for investment in joint venture
is set out in Note X.X.

FRS 111.4
FRS 111.7

FRS 111.14

FRS 111.15

FRS 111.16

FRS 111.19

FRS 111.20

FRS 111.21

FRS 111.B34

FRS 111.B36

FRS 111.B37

FRS 112.21.b.i
other entities

X.X Joint ventures and associates
An associate is an entity over which the Group has the power to participate in the financial
and operating policy decisions of the investee but is not control or joint control of those
policies.
The Group account for its investments in associates and joint ventures using the equity
method from the date on which it becomes an associate or joint venture.
On acquisition of the investment, any excess of the cost of the investment over the Groups
share of the net fair value of the investees identifiable assets and liabilities is accounted as
goodwill and is included in the carrying amount of the investment. Any excess of the
Groups share of the net fair value of the investees identifiable assets and liabilities over
the cost of the investment is included as income in the determination of the entitys share
of the associate or joint ventures profit or loss in the period in which the investment is
acquired.
Under the equity method, the investment in associates or joint ventures are carried in the
balance sheet at cost plus post-acquisition changes in the Groups share of net assets of
the associates or joint ventures. The profit or loss reflects the share of results of
operations of the associates or joint ventures. Distributions received from joint ventures or
associates reduce the carrying amount of the investment. Where there has been a change
recognised in other comprehensive income by the associates or joint ventures, the Group
recognises its share of such changes in other comprehensive income. Unrealised gains and
losses resulting from transactions between the Group and the associate or joint venture
are eliminated to the extent of the interest in the associates or joint ventures.
When the Groups share of losses in an associate or joint venture equals or exceeds its
interest in the associate or joint venture , the Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the associate or joint
venture.
After application of the equity method, the Group determines whether it is necessary to
recognise an additional impairment loss on the Groups investment in associate or joint
ventures. The Group determines at the end of each reporting period whether there is any
objective evidence that the investment in the associate or joint venture is impaired. If this
is the case, the Group calculates the amount of impairment as the difference between the
recoverable amount of the associate or joint venture and its carrying value and recognises
the amount in profit or loss.
The financial statements of the associates and joint ventures are prepared as the same
reporting date as the Company. Where necessary, adjustments are made to bring the
accounting policies in line with those of the Group.
Upon loss of significant influence or joint control over the associate or joint venture, the
Group measures the retained interest at fair value. Any difference between the fair value
of the aggregate of the retained interest and proceeds from disposal and the carrying
amount of the investment at the date the equity method was discontinued is recognised in
profit or loss.
The Group accounts for all amounts previously recognised in other comprehensive income
in relation to that associate or joint venture on the same basis as would have been required
if that associate or joint venture had directly disposed of the related assets or liabilities.
When an investment in an associate becomes an investment in a joint venture or an
investment in joint venture becomes an investment in an associate, the Group continues to
apply the equity method and does not remeasure the retained interest.

FRS 28R.3

FRS 28R.16
FRS 28R.32

FRS 28R.32

FRS 28R.10

FRS 28R.28

FRS 28R.38 and 39

FRS 28R.40

FRS 28R.42

FRS 28R.33 and 34
FRS 28R.35

FRS 28R.22

FRS 28R.22.c

FRS 28R.24

other entities

X.X Joint ventures and associates (continued)
If the Groups ownership interest in an associate or a joint venture is reduced, but the
Group continues to apply the equity method, the Group reclassifies to profit or loss the
proportion of the gain or loss that had previously been recognised in other comprehensive
income relating to that reduction in ownership interest if that gain or loss would be
required to be reclassified to profit or loss on the disposal of the related assets or
liabilities.

Commentary
Associates and joint ventures
The interest in an associate or a joint venture is the carrying amount of the investment in the
associate or joint venture under the equity method together with any long-term interests that,
in substance, form part of the investors net investment in the associate or joint venture. For
example, an item for which settlement is neither planned nor likely to occur in the foreseeable
future is, in substance, an extension of the entitys investment in that associate or joint
venture. Such items may include preference shares and long-term receivables or loans but do
not include trade receivables, trade payables or any long-term receivables for which adequate
collateral exists, such as secured loans.
The financial statements of the associate or joint venture are prepared as of the same
reporting date as the Company unless it is impracticable to do so. When the financial
statements of an associate or joint venture used in applying the equity method are prepared
as of a different reporting date from that of the Company, adjustments are made for the
effects of significant transactions or events that occur between that date and the reporting
date of the Company.
When the financial statements of an associate or a joint venture used in applying the equity
method are as of a reporting date or for a period that is different from that of the Company,
the reporting date of the financial statements of the associate or joint venture and the reason
for using a different reporting date or different period shall be disclosed.

FRS 28R.38

FRS 28R.33 and 34

FRS 112.22.b

FRS 28R.25

other entities

X. Judgments made in applying accounting policies
X.X Consolidation of entities in which the Group holds less than 50%
In the process of applying the Groups accounting policies, management has made
significant judgments in relation to the following subsidiary controlled by the Group:
ABC Ltd:
The Group is the largest shareholder with a 47% equity interest. The remaining
shareholders are widely dispersed with no one owning more than 1% equity interest. Based
on these facts and circumstances, the Group determined that it has sufficiently dominant
voting interests that gives it control over ABC Ltd. Details of ABC Ltd are set out in Note X.
X.X Significant influence over Drill Pte. Ltd
Management concluded that Drill Pte. Ltd is an associate of the Group although the Group
only has 19% voting interest in Drill Pte. Ltd. The Group determined that it has significant
influence over Drill Pte. Ltd as the Group has the power to participate in the financial and
operating policy decisions via its representatives on the Board of Directors of Drill Pte. Ltd.

Commentary
An entity shall disclose information about significant judgements and assumptions it has
made (and changes to those judgements and assumptions) in determining:
a. that it has control of another entity,
b. that it has joint control of an arrangement or significant influence over another entity; and
c. the type of joint arrangement (ie joint operation or joint venture) when the arrangement
has been structured through a separate vehicle.
Such disclosures, for example, includes significant judgements and assumptions made in
determining that:
a. it does not control another entity even though it holds more than half of the voting rights
of the other entity.
b. it controls another entity even though it holds less than half of the voting rights of the
other entity.
c. it is an agent or a principal
d. it does not have significant influence even though it holds 20% or more of the voting rights
of another entity.
e. it has significant influence even though it holds less than 20% of the voting rights of
another entity.
When changes in facts and circumstances are such that the conclusion about whether it has
control, joint control or significant influence changes during the reporting period, an entity
shall disclose the significant judgements and assumptions made by the entity as set out above.

FRS 1.122

FRS 112.7.a

FRS 112.7

FRS 112.9

FRS 112.8

other entities

Extracts of notes to the financial statements illustrating the disclosures relating to subsidiaries:
X. Interests in subsidiaries
A) Composition of the Group
The Group has the following investment in subsidiaries.
Name
Principal
place of
business Principal activities
Proportion (%)
of ownership
interest

2012 2011
Held by the Company:

XYZ Technologies Pte Ltd
i
components
100 100
XYZ Investment Pte Ltd
i
XYZ Land Pte Ltd
i
Good Fire Prevention Pte
Ltd
i

Singapore Installation of fire prevention
equipment and provision
of installation services
100 100

Held through XYZ Technologies Pte Ltd:
XYZ China Co. Ltd
ii
Peoples
Republic of
China
components
70 75
XYZ Vietnam Ltd
ii
Vietnam Manufacture of electronic
components
100 80
MSAX Sdn Bhd
ii
components
80 -*
Sun Pte Ltd
i
Singapore
components
-
#
100
ABC Ltd
ii
Vietnam
components
47 47
Held through XYZ Land Pte Ltd:
XYZ Developers Pte Ltd
i
Singapore Property development 100 100
XYZ Constructors Sdn Bhd
ii
Malaysia Property development 100 100
Lion Land Pte Ltd
i
Singapore Property investment 100 100
i
ii
Audited by member firms of Ernst & Young Global in the respective countries
* The Group holds 25% ownership interest in MSAX Sdn Bhd in 2011 and account for it as an associate
(Note X).
#
The Group accounts the remaining interest in Sun Pte Ltd of 15% as available-for-sale financial
assets.

FRS 112.10.a.i
FRS 27R.17.b

SGX 717

other entities

X. Interests in subsidiaries (continued)
B) Interest in subsidiaries with material non-controlling interest (NCI)
The Group has the following subsidiaries that have NCI that are material to the Group.
31 December 2012:
Name of
Subsidiary
Principal
place of
business
Proportion of
ownership
interest held
by non-
controlling
interest
Profit/(Loss)
allocated to
NCI during
the reporting
period
Accumulated
NCI at the end
of reporting
period
Dividends
paid to NCI
ABC Ltd Vietnam 53% XXX XXX XXX
MSAX Sdn
Bhd
Malaysia 20% XXX XXX XXX
31 December 2011:
Name of
Subsidiary
Principal
place of
business
Proportion of
ownership
interest held
by non-
controlling
interest
Profit/(Loss)
allocated to
NCI during
the reporting
period
Accumulated
NCI at the end
of reporting
period
Dividends
paid to NCI
ABC Ltd Vietnam 53% XXX XXX XXX
Significant restrictions:
The nature and extent of significant restrictions on the Groups ability to use or access
assets and settle liabilities of subsidiaries with material non-controlling interests are:
Cash and cash equivalents of $XXX held in Vietnam are subject to local exchange control
regulations. These regulations places restriction on the amount of currency being exported
other than through dividends.

FRS 112.12

FRS 112.B10.a

FRS 112.10.b.i
FRS 112.13

other entities

C) Summarised financial information about subsidiary with material NCI
Summarised financial information including goodwill on acquisition and consolidation
adjustments but before intercompany eliminations of subsidiaries with material non-
controlling interests are as follows:
Summarised balance sheet
ABC Ltd MSAX Sdn Bhd

As at 31
December 2012
$000
As at 31
December 2011
$000
As at 31
December 2012
$000
As at 31
December 2011
$000
Current
Assets XXX XXX XXX XXX
Liabilities (XXX) (XXX) (XXX) (XXX)
Net current assets XXX XXX XXX XXX
Non current
Assets XXX XXX XXX XXX
Liabilities (XXX) (XXX) (XXX) (XXX)
Net non current assets XXX XXX XXX XXX
Net assets XXX XXX XXX XXX
Summarised statement of comprehensive income

2012
$000
2011
$000
2012
$000
2011
$000
Revenue XXX XXX XXX XXX
Profit before income tax XXX XXX XXX XXX
Income tax expense (XXX) (XXX) (XXX) (XXX)
Profit after tax continuing
operations
XXX XXX XXX XXX
Profit after tax discontinued
operations
- - - -
Other comprehensive income XXX XXX XXX XXX
Total comprehensive income XXX XXX XXX XXX
Other summarised information


2012
$000
2011
$000
2012
$000
2011
$000
Net cash flows from
operations XXX XXX XXX XXX
Acquisition of significant
Property, Plant &
Equipment XXX XXX XXX XXX

FRS 112.12.g
FRS 112.B10.b

other entities

D) Changes in group ownership interests in a subsidiary without loss of control
Disposal of ownership interest in subsidiary, without loss of control
On 13 June 2012, the Group disposed of a 5% equity interest in XYZ China Co. Ltd.
Following the disposal, the Group still controls XYZ China Co. Ltd., retaining 70% of the
ownership interests. The transaction has been accounted for as an equity transaction with
non-controlling interests, resulting in:

Acquisition of ownership interest in subsidiary
On 31 March 2012, the Groups subsidiary company, XYZ Technologies Pte Ltd (XYZ
Technologies), acquired an additional 20% equity interest in XYZ Vietnam Ltd (XYZ
Vietnam) from its non-controlling interests. As a result of this acquisition, XYZ Vietnam
became a wholly-owned subsidiary of XYZ Technologies. The difference between the
consideration and the carrying value of the additional interest acquired has been
recognised as Premium paid on acquisition of non-controlling interests within equity.
The following summarises the effect of the change in the Groups ownership interest in
XYZ Vietnam on the equity attributable to owners of the Company:

2012
$000
Proceeds from sale of 5% ownership interest XXX
Net assets attributable to NCI (XXX)
Increase in equity attributable to parent XXX
Represented by:
Decrease in foreign currency translation reserve (XXX)
Decrease in asset revaluation reserve (XXX)
Other reserves XXX
Increase in equity attributable to parent entity XXX
2012

$000
Purchase consideration for the acquisition of 20% ownership interest XXX
Carrying value of additional interest acquired (XXX)
Increase in equity attributable to parent XXX
Represented by:
Increase in asset revaluation reserve XXX
Other reserves XXX
Increase in equity attributable to parent entity XXX

FRS 112.10.b.iii
FRS 112.18

FRS 112.10.b.iii
FRS 112.18

other entities

E) Loss of control in subsidiary
On 27 February 2012, the Group entered into a sale agreement to dispose of 85% of its
interest in its wholly-owned subsidiary, Sun Pte Ltd., at its carrying value. The disposal
consideration was fully settled in cash. The disposal was completed on 30 April 2012, on
which date control of Sun Pte Ltd. passed to the acquirer.
The value of assets and liabilities of Sun Pte Ltd. recorded in the consolidated financial
statements as at 27 February 2012, and the effects of the disposal were:

Gain on disposal:

The gain or loss on disposal attributable to measuring the retained interest amounted to
$XXX was included in other income in profit or loss.

2012
$000
Property, plant and equipment
XXX
Trade and other receivables
XXX
Inventories
XXX
Cash and cash equivalents
XXX

XXX
Trade and other payables
(XXX)
Income tax payable
(XXX)
Carrying value of net assets
(XXX)

Cash consideration
XXX
Cash and cash equivalents of the subsidiary
(XXX)
Net cash inflow on disposal of a subsidiary
XXX

2012
$000

Cash received
XXX
Net assets derecognised
(XXX)
Fair value of retained interest
XXX
Cumulative exchange differences in respect of the net assets of the
subsidiary reclassified from equity on loss of control of subsidiary
XXX
Gain on disposal
XXX

FRS 112.10.b.iv

FRS 7.40.d

FRS 112.19
other entities

Commentary
An entity shall disclose information that enables users of its consolidated financial statements
a. to understand:
i. the composition of the group; and
ii. the interest that non-controlling interests have in the groups activities and cash flows;
and
b. to evaluate:
i. the nature and extent of significant restrictions on its ability to access or use assets,
and settle liabilities, of the group
ii. the nature of, and changes in, the risks associated with its interests in consolidated
structured entities
iii. the consequences of changes in its ownership interest in a subsidiary that do not result
in a loss of control; and
iv. the consequences of losing control of a subsidiary during the reporting period.
An entity shall decide, in the light of its circumstances, how much detail it provides to satisfy
the information needs of users, how much emphasis it places on different aspects of the
requirements and how it aggregates the information. It is necessary to strike a balance
between burdening financial statements with excessive detail that may not assist users of
financial statements and obscuring information as a result of too much aggregation.
An entity shall disclose the country of incorporation if different from the principal place of
business of the subsidiary.
An entity shall disclose the proportion of voting rights if different from the proportion of
ownership interests held.
An entity shall disclose:
a. Significant restrictions (e.g. statutory, contractual and regulatory restrictions) on its
ability to access or use the assets and settle the liabilities of the group, such as:
i. those that restrict the ability of a parent or its subsidiaries to transfer cash or other
assets to (or from) other entities within the group.
ii. guarantee or other requirements that may restrict dividends and other capital
distributions being paid, or loans and advances being made or repaid, to (or from)
other entities within the group.
b. The nature and extent to which protective rights of non-controlling interests can
significantly restrict the entitys ability to access or use the assets and settle the liabilities
of the group (such as when a parent is obliged to settle liabilities of a subsidiary before
settling its own liabilities, or approval of non-controlling interests is required either to
access the assets or to settle the liabilities of a subsidiary).
c. The carrying amounts in the consolidated financial statements of the assets and liabilities
to which those restrictions apply.
The summarised financial information presented shall be the amounts before inter-company
eliminations.

FRS 112.10

FRS 112.B2

FRS 112.12.b
FRS 27R.17.b.ii

FRS 112.12.d
FRS 27R.17.b.iii

FRS 112.13

FRS 112.B11

other entities

Nature of the risks associated with an entitys interests in consolidated structured entities
In this illustration, the Group does not consolidate any structured entity. If the Group provides
financial support to consolidated structured entities, please refer to the following disclosure
requirements:

An entity shall disclose the terms of any contractual arrangements that could require the
parent or its subsidiaries to provide financial support to a consolidated structured entity,
including events or circumstances that could expose the reporting entity to a loss (e.g.
liquidity arrangements or credit rating triggers associated with obligations to purchase
assets of the structured entity or provide financial support).

If during the reporting period a parent or any of its subsidiaries has, without having a
contractual obligation to do so, provided financial or other support to a consolidated
structured entity (e.g. purchasing assets of or instruments issued by the structured entity),
the entity shall disclose:
a. the type and amount of support provided, including situations in which the parents or its
subsidiaries assisted the structured entity in obtaining financial support; and
b. the reasons for providing the support.
If during the reporting period a parent or any of its subsidiaries has, without having a
contractual obligation to do so, provided financial or other support to a previously
unconsolidated structured entity and that provision of support resulted in the entity
controlling the structured entity, the entity shall disclose an explanation of the relevant
factors in reaching that decision.
An entity shall disclose any current intentions to provide financial or other support to a
consolidated structured entity, including intentions to assist the structured entity in
obtaining financial support.

FRS 112.14

FRS 112.15

FRS 112.16

FRS 112.17

other entities

Extract of notes to the financial statements illustrating the disclosures relating to joint
arrangements:

X. Investment in joint arrangements
Investment in joint venture
The Groups investment in joint venture is summarised below:

As at 31
December
2012
As at 31
December
2011
$000 $000
XYZ-ABC JV Co.Ltd XXX XXX
The Group has 50% (2011: 50%) interest in the ownership and voting rights in a joint venture,
XYZ-ABC JV Co. Ltd that is held through a subsidiary. This joint venture is incorporated in
Peoples Republic of China and is a strategic venture in the business of property investment.
The Group jointly controls the venture with other partner under the contractual agreement and
requires unanimous consent for all major decisions over the relevant activities.
Dividends of $XXX (2011:$XXX) were received from XYZ-ABC JV Co. Ltd.
Summarised financial information in respect of XYZ-ABC JV Co. Ltd is as follows:
2012 2011
$000 $000
Other current assets XXX XXX
Total current assets XXX XXX
Non-current assets excluding goodwill XXX XXX
Total assets XXX XXX

Current financial liabilities (excluding trade, other payables and
provisions) (XXX) (XXX)
Other current liabilities (XXX) (XXX)
Total current liabilities (XXX) (XXX)

Non-current financial liabilities (excluding trade, other payables and
provisions) (XXX) (XXX)
Other non- current liabilities (XXX) (XXX)
Total non-current liabilities (XXX) (XXX)
Total comprehensive income (XXX) (XXX)

Net assets excluding goodwill XXX XXX

FRS 112.21.a.i

FRS 112.21
FRS 27R.17.b

FRS 112.B12.a

FRS 112.21.b.ii
FRS 112.B12
FRS 112.B13

other entities

X. Investment in joint arrangements (continued)
X.X Investment in joint venture (continued)

2012 2011
$000 $000
Revenue XXX XXX
Depreciation and amortisation XXX XXX
Interest income XXX XXX
Interest expense (XXX) (XXX)
Profit before tax XXX XXX
Income tax expense (XXX) (XXX)
Profit after tax XXX XXX
Other comprehensive income XXX XXX
Total comprehensive income XXX XXX
The summarised financial information presented is the amounts included in the financial
statements of the joint venture prepared in accordance with FRS adjusted for fair value
adjustments made at the time of acquisition and for difference in accounting policies as detailed
in the reconciliation below.
A reconciliation of the summarised financial information to the carrying amounts of XYZ-ABC
JV Co.Ltd is as follows:

2012 2011
$000 $000
Group share of 50% of net assets excluding goodwill of $XXX (2011:
$XXX) XXX XXX
Goodwill on acquisition XXX XXX
Fair value adjustments XXX XXX
XXX XXX
Significant restrictions
ABC-XYZ JV Co. Ltd is restricted by regulatory requirements by paying dividends greater than
50% of the annual profit.

FRS 112.21.b.ii
FRS 112.B13

FRS 112.B14.a

FRS 112.B14.b

FRS 112.22.a

other entities

X. Investment in joint arrangements (continued)
X.X Investment in joint venture (continued)
Commitments
The Groups commitments made jointly with its joint venture, ABC-XYZ JV Co. Ltd is as follows:

2012 2011
$000 $000
Commitments to contribute funds for the acquisition of property,
plant and equipment XXX XXX
Contingent liabilities

2012 2011
$000 $000
Contingent liabilities incurred by the Group arising from its interests
in joint venture XXX XXX
Groups share of joint ventures contingent liabilities XXX XXX

FRS 112.23.a

FRS 112.23.b

other entities

Extract of notes to the financial statements illustrating the disclosures relating to associates:
X. Investment in associates
The Groups material investments in associates are summarised below:

i

ii
Audited by member firm of Ernst & Young Global in Malaysia
*The Group holds 100% of ownership interest in MSAX Sdn Bhd in 2012 and accounts for it as
a subsidiary (Note X).
2012 2011
$000 $000
QSpeed Pte Ltd XXX XXX
HKI Pte Ltd XXX XXX
Other associates XXX XXX
XXX XXX
Fair value of investment in an associate for which there is a
published price quotation XXX XXX

Name
Country of
Proportion (%) of
ownership
interest

2012 2011
Held through subsidiaries:
QSpeed Pte Ltd
i
Singapore Manufacture of
electronic
components
35 35
MSAX Sdn Bhd
ii
Malaysia Manufacture of
electronic
components
* 25
Heart Land Ltd
i
HKI Pte Ltd
i
Drill Pte Ltd
i

The activities of the associates are strategic to the Group activities.
The Group has not recognised losses relating to QSpeed Pte Ltd where its share of losses
exceeds the Groups interest in this associate. The Groups cumulative share of unrecognised
losses at the end of the reporting period was $XXX (2011: $XXX), of which $XXX (2011: $XXX)
was the share of the current years losses. The Group has no obligation in respect of these
losses.
The Group has not recognised its share of the current year profit of $XXX (2011: $XXXl)
relating to HKI Pte Ltd as the Groups cumulative share of unrecognised losses with respect to
that associate was $XXX (2011: $XXX) at the end of the reporting period.
Dividends of $XXX (2011: $XXX) and $XXX (2011: $XXX) were received from QSpeed Pte Ltd
and HKI Pte Ltd respectively.

FRS 112.21.a.i

FRS 112.B16

FRS 112.21.b.iii

FRS 112.21
FRS 27R.17.b

SGX 717

FRS 112.21.a.ii

FRS 112.22.c

FRS 112.B12.a
other entities

X. Investment in associates (continued)
Aggregate information about the Groups investments in associates that are not individually
material are as follows:

2012 2011
$000 $000

Profit or loss after tax from continuing operations XXX XXX
Other comprehensive income XXX XXX
Total comprehensive income XXX XXX
The summarised financial information in respect of QSpeed Pte Ltd and HKI Pte Ltd, which are
material to the Group are as follows:

QSpeed Pte Ltd HKI Pte Ltd

As at
December
2012
As at
December
2011
As at
December
2012
As at
December
2011
$000 $000 $000 $000
Current assets XXX XXX XXX XXX
Non-current assets excluding
goodwill XXX XXX XXX XXX
Total assets XXX XXX XXX XXX

Current liabilities (XXX) (XXX) (XXX) (XXX)
Non- current liabilities (XXX) (XXX) (XXX) (XXX)
Total liabilities (XXX) (XXX) (XXX) (XXX)

Net assets excluding goodwill XXX XXX XXX XXX

FRS 112.21.c
FRS 112.B16

FRS 112.21.b
FRS 112.B12
other entities


The summarised financial information presented is the amounts included in the financial
statements of the associates prepared in accordance with FRS adjusted for fair value
adjustments made at the time of acquisition and for difference in accounting policies as detailed
in the reconciliation below.
QSpeed Pte Ltd HKI Pte Ltd
2012 2011 2012 2011
$000 $000 $000 $000
Revenue XXX - XXX XXX
Profit after tax from continuing
operations XXX - XXX XXX
Other comprehensive income XXX - XXX XXX
Total comprehensive income XXX - XXX XXX
A reconciliation of the summarised financial information to the carrying amounts of QSpeed Pte
Ltd and HKI Pte Ltd are as follows:

QSpeed Pte Ltd 2012 2011
$000 $000
$XXX) XXX XXX
XXX XXX
HKI Pte Ltd

$XXX) XXX XXX
XXX XXX

FRS 112.21.b
FRS 112.B12

FRS 112.B14.a

FRS 112.B14.b

other entities

Significant restrictions
QSpeed Pte Ltd. is restricted by regulatory requirements by paying dividends greater than 60%
of the annual profit.
Contingent liabilities

2012 2011
$000 $000
Contingent liabilities incurred by the Group arising from its interests
in its associates XXX XXX
Groups share of associates contingent liabilities XXX XXX

FRS 112.22.a

FRS 112.23.b
other entities

Commentary
In this illustration, the group does not have investment in joint operation.
The following disclosures are required for investments in joint operations:
a. the name of the joint operation
b. the nature of the entitys relationship with the joint operations, (by, for example,
describing the nature of the activities of the joint operation and whether it is strategic to
the entitys activities)
Other disclosures required for joint ventures are not applicable for joint operations.
For interests in joint arrangements and associates, an entity shall disclose information that
enables users of its financial statements to evaluate:
a. the nature, extent and financial effects of its interests in joint arrangements and
associates, including the nature and effects of its contractual relationship with the other
investors with joint control of, or significant influence over, joint arrangements and
associates; and
b. the nature of, and changes in, the risks associated with its interests in joint ventures and
associates.
If the joint venture or associate is accounted for using the equity method, the entity shall
disclose the fair value of its investment in the joint venture or associate, if there is a quoted
market price for the investment.
An entity shall disclose the proportion of voting rights held by each joint arrangement or
associate if different from the proportion of ownership interests held.
An entity shall disclose the principal place of business if different from the country of
incorporation of the joint arrangement of associate.
In this illustration, the Group have only one investment in joint venture which is material and
does not have any immaterial associate that is classified as discontinued operation.
The following disclosures are required, in aggregate for all individually immaterial joint
ventures and separately for all individually immaterial associates:
- the carrying amount of its interests
- its share of the joint ventures or associates
a. profit or loss from continuing operations
b. post-tax profit or loss from discontinued operations
c. other comprehensive income
d. total comprehensive income
These disclosures above shall be disclosed separately for joint ventures and associates.

FRS 112.21.a

FRS 112.20

FRS 112.21.b.iii

FRS 112.21.a.iv

FRS 112.21.a.iii

FRS 112.21.c

FRS 112.B16

other entities

In this illustration, the Group does not have any unrecognised share of losses of its investment
in joint venture.
If the Group have stopped recognising its share of losses of its joint venture or associate when
applying the equity method, it shall disclose the unrecognised share of losses of the joint
venture or associate, both for the reporting period and cumulatively.
An entity may present the summarised financial information on the basis of the joint ventures
or associates financial statements if:
a. the entity measures its interest in the joint venture or associate at fair value; and
b. the joint venture or associate does not prepare FRS financial statements and preparation
on that basis would be impracticable or cause undue cost.
In that case, the entity shall disclose the basis on which the summarised financial information
has been prepared.
An entity shall also disclose the nature and extent of any significant restrictions (e.g. resulting
from borrowing arrangements, regulatory requirements or contractual arrangements between
investors with joint control of or significant influence or an associate) on the ability of joint
ventures or associates to transfer funds to the entity in the form of cash dividends, or to repay
loans and advances.
An entity shall disclose total commitments it has made but not recognised at the reporting
date (including its share of commitments made jointly with other investors with joint control of
a joint venture) relating to its interests in joint ventures. Commitments are those that may give
rise to a future outflow of cash or other resources.
Unrecognised commitments that may give rise to a future outflow of cash or other resources
include:
a. unrecognised commitments to contribute funding or resources as a result of, for example:
i. the constitution or acquisition agreements of a joint venture (that, for example,
require an entity to contribute funds over a specific period).
ii. capital-intensive projects undertaken by a joint venture.
iii. unconditional purchase obligations, comprising procurement of equipment, inventory
or services that an entity is committed to purchasing from, or on behalf of, a joint
venture.
iv. unrecognised commitments to provide loans or other financial support to a joint
venture.
v. unrecognised commitments to contribute resources to a joint venture, such as assets
or services.
vi. other non-cancellable unrecognised commitments relating to a joint venture.
b. Unrecognised commitments to acquire another partys ownership interest (or a portion of
that ownership interest) in a joint venture if a particular event occurs or does not occur in
the future.

FRS 112.22.c

FRS 112.B15

FRS 112.22.a

FRS 112.B18

FRS 112.B19

other entities

Extract of notes to the financial statements illustrating the disclosures relating to interest in
unconsolidated structured entities:

X. Interests in unconsolidated structured entities
A) Disclosure of the nature of interests in unconsolidated structured entities
The Group has sponsored a number of unconsolidated structured entities to dispose of its
interests in collateralised mortgage obligations, collateralised mortgage back securities and
credit card receivables. In respect of these entities in which the group no longer has an interest
at the reporting date details of income received and the carrying amounts of financial assets
transferred to these entities are as follows:
Income from unconsolidated structured entities in which no interest is held at 31 December
2012:
2012 2011
$000 $000
Fee income XXX XXX
Gains on re-measurement of assets transferred to structured
entities XXX XXX
XXX XXX

Split by:
Collateralised debt obligation XXX -
Commercial mortgage backed securities XXX XXX
Credit card receivables - XXX
XXX XXX

Carrying amounts of assets transferred to unconsolidated structured entities in the reporting
period as at date of transfer:

Transferred
in 2012
Transferred
in 2011

$000 $000
Collateralised debt obligation XXX XXX
Commercial mortgage backed securities XXX XXX
Credit card receivables XXX XXX
XXX XXX

FRS 112.26
FRS 112.27.a

FRS 112.27.b
FRS 112.28

FRS 112.27.c

other entities

X. Interests in unconsolidated structured entities (continued)
B) Disclosure of the nature of risks of unconsolidated structured entities
The Group has interest in a number of unconsolidated structured entities. These are
summarised as follows:

Carrying
amount
recognised
in financial
statements
of the
Group
Maximum
loss
exposure
Carrying
amount
recognised
in financial
statements
of the
Group
Maximum
loss
exposure
2012 2011 2012 2011
Note $000 $000 $000 $000
Senior loan notes (a) XXX XXX XXX XXX
Junior loan notes (b) XXX XXX XXX XXX
Interest rate swaps (asset) (c) XXX XXX XXX XXX
Credit default swap (liability) (d) XXX XXX XXX XXX
Lease receivables (e) XXX XXX XXX XXX
(a) The senior loan notes are included in the balance sheet in the line item assets available-for-
sale (AFS). The maximum loss exposure represents the fair value at the reporting date.
(b) The junior loan notes are included in the balance sheet in the line of loans and receivables.
The maximum loss exposure represents the amortised cost at the reporting date. The lease
receivables included in the balance sheet in the line item other receivables.
(c) The interest rate swap is included in the balance sheet in the line item derivative assets
and is measured at fair value through profit or loss. The 10 year swap pays a floating rate of
interest which is uncapped and therefore maximum loss exposure is the potentially
unlimited and not quantifiable. If SIBOR was to increase by 1,000 basis points for the entire
life of the swap, an event which the directors consider is extremely remote, it would cause a
loss of $XXX.
(d) The credit default swap is included in the balance sheet in the line item derivative
liabilities and is measured at fair value through profit or loss. The maximum loss exposure
assume the 100% default of all principal and interest payments on the loan portfolio of the
structured entity to which the credit default swap has been issued. The probability of this
occurring is extremely remote.
(e) The maximum loss exposure represents the carrying amount of the receivable.

FRS 112.29

other entities

X. Interests in unconsolidated structured entities (continued)
C) Provision of financial support no contractual obligation
During the reporting period the Company provided financial support in the form of assets with a
fair value of $XXX (2011:$XXX) and credit rating of AAA to PCC Ltd., in exchange for assets
with an equivalent fair value. There was no contractual obligation to exchange these assets.
The transaction was initiated because the assets held by PCC Ltd. Has a credit rating of less
than AA and a further ratings downgrade could potentially trigger calls on loan note issued by
PCC Ltd. The parent did not suffer a loss on the transaction.
D) Provision of financial support contractual obligation
The Company has given a contractual commitment to SPE Pte. Ltd, whereby if the assets held
as collateral by SPE Pte. Ltd for its issued loan notes fall below a credit rating of AAA then
the parent will substitute assets of an equivalent fair value with an AAA rating. The maximum
fair value of assets to be substituted is $XXX. The parent is not expecting to suffer a loss on any
transaction arising from this commitment but will receive assets with a lower credit rating from
those substituted.

FRS 112.30

FRS 112.31

other entities

Commentary
A structured entity is an entity that has been designed so that voting or similar rights are not
the dominant factor in deciding who controls the entity, such as when any voting rights relate
to administrative tasks only and the relevant activities are directed by means of contractual
arrangements.
A structured entity often has some or all of the following features or attributes:
a. restricted activities.
b. a narrow and well-defined objective, such as to effect a tax-efficient lease, carry out
research and development activities, provide a source of capital or funding to an entity or
provide investment opportunities for investors by passing on risks and rewards associated
with the assets of the structured entity to investors.
c. insufficient equity to permit the structured entity to finance its activities without
subordinated financial support.
d. financing in the form of multiple contractually linked instruments to investors that create
concentrations of credit or other risks (tranches).
Examples of entities that are regarded as structured entities include, but are not limited to:
a. securitisation vehicles.
b. asset-backed financings.
c. some investment funds.
An entity that is controlled by voting rights is not a structured entity simply because, for
example, it receives funding from third parties following a restructuring.
An entity shall disclose information that enables users of its financial statements
a. to understand the nature and extent of its interests in unconsolidated structured entities;
b. to evaluate the nature of, and changes in, the risks associated with its interests in
unconsolidated structured entities.
The information required by commentary includes information about an entitys exposure to
risk from involvement that it had with unconsolidated structured entities in previous periods
(e.g. sponsoring the structured entity), even if the entity no longer has any contractual
involvement with the structured entity at the reporting date.
Nature of interests:
An entity shall disclose qualitative and quantitative information about its interests in
unconsolidated structured entities, including, but not limited to, the nature, purpose, size and
activities of the structured entity and how the structured entity is financed.

FRS 112.B21

FRS 112.B22

FRS 112.B23

FRS 112.B24

FRS 112.24

FRS 112.25

FRS 112.26
other entities

Commentary
Examples of additional information that, depending on the circumstances, might be relevant to
an assessment of the risks to which an entity is exposed when it has an interest in an
unconsolidated structured entity are:
a. the terms of an arrangement that could require the entity to provide financial support to
an unconsolidated structured entity (e.g. liquidity arrangements or credit rating triggers
associated with obligations to purchase assets of the structured entity or provide financial
support including:
i. a description of events or circumstances that could expose the reporting entity to a
loss.
ii. whether there are any terms that would limit the obligation.
iii. whether there are any other parties that provide financial support and, if so, how the
reporting entitys obligation ranks with those of other parties.
b. losses incurred by the entity during the reporting period relating to its interests in
c. the types of income the entity received during the reporting period from its interest in
d. whether the entity is required to absorb of an unconsolidated structured entity before
other parties, the maximum limit of such losses for the entity, and (if relevant) the ranking
and amounts of potential losses borne by parties whose interests rank lower than the
entitys interest in the unconsolidated structured entity.
e. information about any liquidity arrangements, guarantees or other commitments with third
parties that may affect the fair value or risk of the entitys interests in unconsolidated
structured entities.
f. any difficulties an unconsolidated structured entity has experienced in financing its
activities during the reporting period.
g. in relation to the funding of an unconsolidated structured entity, the forms of funding (e.g.
commercial paper or medium-term notes) and their weighted-average life. That
information might include maturity analysis of the assets and funding of an unconsolidated
structured entity if the structured entity has loner-term assets funded by shorter-term
funding.

FRS 112.B26

Appendix A-6 Fair value measurement

FRS 113 Fair Value Measurement is effective for annual periods beginning on or after 1 January
2013. The following is an illustration of disclosures relating to fair value measurements, assuming
FRS 113 has been adopted for the year ending 31 December 2012.
Extract of summary of significant accounting policies illustrating changes in accounting policies
on adoption of FRS 113:
X FRS 113 Fair value measurement
On 1 January 2012, the Group adopted FRS 113 Fair Value Measurement, which is effective
for annual periods beginning on or after 1 January 2013.
FRS 113 Fair Value Measurement provides a single source of guidance for all fair value
measurements. FRS 113 does not change when an entity is required to use fair value, but
rather provides guidance on how to measure fair value under FRS when fair value is required
or permitted by FRS. FRS 113 expanded the required disclosures related to fair value
measurements to help users understand the valuation techniques and inputs used to develop
fair value measurements and the effect of fair value measurements on profit or loss.
According to the transition provisions of FRS 113, FRS 113 has been applied by the Group
prospectively on 1 January 2012 and its application did not have any impact to the financial
position of the Group.
X.X Transfers between levels of the fair value hierarchy
Transfers between levels of the fair value hierarchy are deemed to have occured on the date
of the event or change in circumstances that caused the transfer.

FRS 113.C1

FRS 8.28.b
FRS 8.28.d

FRS 113.95


Commentary
An entity shall disclose information that helps users of its financial statements assess both of
the following:
a. for assets and liabilities that are measured at fair value on a recurring or non-recurring
basis in the balance sheet after initial recognition, the valuation techniques and inputs
used to develop those measurements.
b. for recurring fair value measurements using significant unobservable inputs (Level 3) ,
the effect of the measurements on profit or loss or other comprehensive income for the
period.
To meet the objective above, an entity shall consider all the following:
a. the level of detail necessary to satisfy the disclosure requirements;
b. how much emphasis to place on each of the various requirements;
c. how much aggregation and disaggregation to undertake; and
d. whether users of financial statements need additional information to evaluate the
quantitative information disclosed.
If the disclosures provided in accordance with FRS 113 and other FRSs are insufficient to
meet the objectives above, an entity shall disclose additional information necessary to meet
those objectives.
Level 3 inputs are unobservable inputs for the asset or liability. The examples of Level 3
inputs for particular assets and liabilities are provided in FRS 113.B36.
An entity shall disclose the fact if it makes an accounting policy decision to use the exception
in FRS 113 to measure the fair value of a group of financial assets and financial liabilities on
the basis of the price that would be received to sell a net long position (i.e. an asset) for a
particular risk exposure or to transfer a net short position (i.e. a liability) for a particular risk
exposure in an orderly transaction between market participants at the measurement date
under current market conditions.
In this illustration, the adoption of FRS 113 does not have any impact to the financial position
and financial performance of the Group.
If the adoption of FRS 113 has an impact to the financial position and financial performance of
the Group, the Group shall disclose:
- for current period presented, to the extent practicable, the amount of adjustment:
(i) For each financial line item affected; and
(ii) If FRS 33 Earnings per Share applies to the entity, for basic and diluted earnings per
share
An entity shall disclose and consistently follow its policy for determining when transfers
between levels of the fair value hierarchy are deemed to have occurred. The policy about the
timing of recognising transfers shall be the same for transfers into levels as for transfers out
of the levels. Examples of policies for determining the timing of transfers include the
following:
a. the date of the event or change in circumstances that caused the transfer.
b. the beginning of the reporting period.
c. the end of the reporting period.

FRS 113.91

FRS 113.92

FRS 113.86
FRS 113.B36

FRS 113.96

FRS 113.48

FRS 108.28.f

FRS 113.95


Extract of notes to the financial statements illustrating disclosures relating to fair value:
X. Fair value of assets and liabilities
A) Fair value hierarchy
The Group categories fair value measurements using a fair value hierarchy that is
dependent on the valuation inputs used as follows:
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities
that the Group can access at the measurement date,
Level 2 Inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly or indirectly, and
Level 3 Unobservable inputs for the asset or liability.
Fair value measurements that use inputs of different hierarchy levels are categorised in its
entirety in the same level of the fair value hierarchy as the lowest level input that is
significant to the entire measurement.

FRS 113.72

FRS 113.76

FRS 113.81

FRS 113.86

FRS 113.73


X. Fair value of assets and liabilities (continued)
B) Assets and liabilities measured at fair value
The following table shows an analysis of each class of assets and liabilities measured at
fair value at the end of the reporting period:

Group
2012
$000
Fair value measurements at the end of the reporting period using

Quoted prices in
active markets
for identical
assets
(Level 1)
Significant
observable
inputs other
than quoted
prices
(Level 2)
Significant
unobservable
inputs
(Level 3)
Total

Recurring fair value measurements
Assets

Financial assets:
Held for trading financial assets:
Quoted equity securities:
Quoted on Singapore exchange XXX - - XXX
Other XXX - - XXX
Total equity securities XXX - - XXX
Total held for trading financial assets XXX - - XXX

Equity securities:
Quoted equity securities XXX - - XXX
Unquoted equity securities - - XXX XXX
Total equity securities XXX - XXX XXX

Debt securities:
Quoted debt securities XXX - - XXX
Unquoted debt securities - - XXX XXX
Total debt securities XXX - XXX XXX
Total available-for-sale financial assets XXX - XXX XXX

Derivatives
Forward currency contracts - XXX - XXX
Interest rate swap - XXX - XXX
Total derivatives - XXX - XXX
Financial assets as at 31 December
2012 XXX XXX XXX XXX

FRS 113.93.a and b


B) Assets and liabilities that are measured at fair value (continued)

Group
2012
$000
Fair value measurements at the end of the reporting period using
Quoted prices
in active
markets for
identical
assets
(Level 1)
Significant
observable
inputs other
than quoted
prices
(Level 2)
Significant
unobservable
inputs
(Level 3)
Total

(continued)

Assets (continued)

Non-financial assets
Freehold land - - XXX XXX
Buildings - - XXX XXX
Total property, plant and equipment - - XXX XXX

Residential - XXX - XXX
Commercial - - XXX XXX
Total investment properties - XXX XXX XXX
Non-financial assets as at 31
December 2012 - XXX XXX XXX

Liabilities

Derivatives
Forward currency contracts - (XXX) - (XXX)

combination - - (XXX) (XXX)
Financial liabilities as at 31 December
2012 - (XXX) (XXX) (XXX)

Non-recurring fair value
measurements

Disposal group classified as held for
sale* - - (XXX) (XXX)

* Disposal group classified as held for sale with a carrying amount of $XXX were written down to
their fair value of $XXX, less costs to sell of $XXX (or $XXX), resulting in a net loss of $XXX,
which was included in profit or loss for the period.

FRS 113.93.a and b

FRS 113.93.a


C) Level 2 fair value measurements
The following is a description of the valuation techniques and inputs used in the fair value
measurement for assets and liabilities that are categorised within Level 2 of the fair value
hierarchy:
Derivatives
Forward currency contracts and interest rate swap contracts are valued using a valuation
technique with observable inputs. The most frequently applied valuation techniques include
forward pricing and swap models, using present value calculations. The models incorporate
various inputs including the credit quality of counterparties, foreign exchange spot and
forward rates, interest rate curves and forward rate curves.
Residential investment properties
The valuation of residential investment properties are based on comparable market
transactions that consider sales of similar properties that have been transacted in the open
market.

FRS 113.93.d


D) Level 3 fair value measurements
i) Information about significant unobservable inputs used in Level 3 fair value measurements

The following table shows the information about fair value measurements using significant
unobservable inputs (i.e. Level 3 fair value measurements).
Description Fair value at
31 December
2012
Valuation
techniques
Unobservable inputs Range
(weighted
average)
Recurring fair value
measurements

Available-for-sale
financial assets:

Unquoted equity
securities
XXX

Discounted
cash flow
Cost of equity
Dividend yield
Discount for lack of
marketability
X% to X% (X%)
X% to X% (X%)

X% to X% (X%)
Unquoted debt
securities
XXX Discounted
cash flow
Probability of default
Loss severity

X% to X% (X%)
X% to X% (X%)
Contingent
consideration for
business combination
XXX Discounted
cash flow
Probability of meeting
contractual earnings
target
Own credit risk

X% to X% (X%)

X% to X% (X%)
Property, plant and
equipment

Freehold land XXX Market
comparable
approach
Yield adjustments
based on
managements
assumptions*

X% to X% (X%)
Buildings XXX Market
comparable
approach
Yield adjustments
based on
managements
assumptions*

X% to X% (X%)
Investment properties:
Commercial XXX Market
comparable
approach
Yield adjustments
based on
managements
assumptions*

X% to X% (X%)
Non-recurring fair value
measurements

Disposal group
classified as held for
sale
XXX Discounted
cash flow
Weighted average
cost of capital
Long-term revenue
growth rate
Long-term pre-tax
operating margin
Discount for lack of
marketability
X% to X% (X%)

X% to X% (X%)

X% to X% (X%)

X% to X% (X%)

*The yield adjustments are made for any difference in the nature location or condition of the
specific property.

FRS 113.93.d


D) Level 3 fair value measurements (continued)
(continued)
For unquoted equity securities, a significant increase (decrease) in the expected dividend yield
would result in a significantly higher (lower) fair value measurement. A significant increase
(decrease) in discount for lack of marketability would result in a significantly lower (higher) fair
value measurement. A change in assumption used for dividend yield may warrant a directionally
opposite change in the assumption for discount for lack of marketability.
For unquoted debt securities, significant increases (decreases) in prepayment rates, probability
of default and loss severity in the event of default would result in a significant lower (higher) fair
value measurement. Generally, a change in the assumption used for the probability of default is
accompanied by a directionally similar change in the assumption used for the loss severity and a
directionally opposite change in the assumption used for prepayment rates.
For contingent consideration, a significant increase (decrease) in the probability of meeting the
contractual earnings target would result in a significantly higher (lower) fair value
measurement.
For freehold land and buildings, a significant increase (decrease) in the yield adjustments based
on managements assumptions would result in a significantly higher (lower) fair value
measurement.
For commercial investment properties, a significant increase (decrease) in the yield adjustments
based on managements assumptions would result in a significantly higher (lower) fair value
measurement.

FRS 113.93.h.i


(continued)
The following table shows the impact on the Level 3 fair value measurement of assets and
liabilities that are sensitive to changes in unobservable inputs that reflect reasonably possible
alternative assumptions. The positive and negative effects are approximately the same.
31 December 2012

Carrying
amount
comprehensive
income
$000 $000 $000
Unquoted equity securities XXX - XXX
Unquoted debt securities XXX - XXX

Freehold land XXX - XXX
Buildings XXX - XXX
Investment property:

Commercial XXX XXX -
combination (XXX) XXX -

In order to determine the effect of the above reasonably possible alternative assumptions, the
Group adjusted the following key unobservable inputs used in the fair value measurement:
- For unquoted equity securities, the Group adjusted the discount for lack of marketability by
increasing and decreasing the assumptions by X% to X% depending on the individual
characteristics of the instruments.
- For unquoted debt securities, the Group adjusted the probability of default and loss severity
assumptions used to calculate the credit valuation adjustment. The adjustments made were
to increase and decrease the assumptions by X%, which within the range based on the
Groups internal credit risk assessment for the counterparties.
- For contingent consideration for business combination, the Group adjusted the probability of
meeting the contractual earnings target by increasing and decreasing the assumption by X%.
- For freehold land and buildings, the Group adjusted the yield adjustments based on
managements assumptions by increasing and decreasing the adjustments by X% depending
on the nature, location or condition of the specific property.
For commercial investment properties, the Group adjusted the yield adjustments based on
managements assumptions by increasing and decreasing the adjustments by X% nature,
location or condition of the specific property.

FRS 113.93.h.ii


D) Level 3 fair value measurements
ii) Movements in Level 3 assets and liabilities measured at fair value
The following table presents the reconciliation for all assets and liabilities measured at fair value
based on significant unobservable inputs (Level 3):
Group
2012
$000
Fair value measurements using significant unobservable inputs (Level 3)
assets
Property, plant and
equipment
Investment
properties
Contingent
consideration
Total
Equity
securities
Debt
securities
Freehold
land
Buildings Commercial
Unquoted
equity
securities
Unquoted
debt
securities

Opening balance XXX XXX XXX XXX XXX - XXX
for the period
Included in profit or
loss - - - - XXX (XXX) XXX
Included in other
comprehensive
income XXX XXX XXX XXX - - XXX
Purchases, issues,
sales and settlements
Purchases XXX XXX XXX XXX XXX - XXX
Sales (XXX) (XXX) (XXX) (XXX) - - (XXX)
Arising from
acquisition of
subsidiary - - - - - (XXX) (XXX)
Closing balance XXX XXX XXX (XXX) XXX XXX (XXX)

FRS 113.93.e

FRS 113.93.e.i

FRS 113.93.e.ii

FRS 113.93.e.iii


X. Fair value of assets and liabilities
ii) Movements in Level 3 assets and liabilities measured at fair value (continued)
The following table presents the reconciliation for all assets and liabilities measured at fair value
using significant unobservable inputs (Level 3 fair value measurements):
Group
2012
$000
Fair value measurements using significant unobservable inputs (Level 3)
assets
Property, plant and
equipment
Investment
properties
Contingent
consideration
Total
Equity
securities
Debt
securities
Freehold
land
Buildings Commercial
Unquoted
equity
securities
Unquoted
debt
securities

Total gains and losses
for the period
included in
Profit or loss:
- Other income
Net gain from
fair value
adjustment of
investment
properties
(i)
- - - - XXX - XXX
- Other expenses
Fair value
adjustment of
contingent
consideration
of business
combination
(ii)
- - - - - (XXX) (XXX)

Other
comprehensive
income:
- Net gain on fair
value changes of
available-for-sale
financial assets XXX XXX - - - - XXX
- Net surplus on
revaluation of
land and buildings - - XXX XXX - - XXX

(i)
Relates to net gain from fair value adjustment of investment properties held as at 31
December 2012.
(ii)
Relates to unrealised loss from fair value adjustment of contingent consideration for business
combination as at 31 December 2012.

FRS 113.93.e.i

FRS 113.93.e.ii

FRS 113.93.f

FRS 113.93.f

iii) Valuation policies and procedures
The Groups Chief Financial Officer (CFO), who is assisted by the Head of Treasury and senior
controller (collectively referred to as the CFO office) oversees the Groups financial reporting
valuation process and is responsible for setting and documenting the Groups valuation policies
and procedures. In this regard, the CFO office reports to the Groups audit committee.
For all significant financial reporting valuations using valuation models and significant
unobservable inputs, it is the Groups policy to engage external valuation experts to perform the
valuation. The CFO office is responsible for selecting and engaging valuation experts that possess
the relevant credentials and knowledge on the subject of valuation, valuation methodologies, and
the FRS 113 fair value measurement guidance.
For valuations performed by external valuation experts, the CFO office reviews the
appropriateness of the valuation methodologies and assumptions adopted. The CFO office also
evaluates the appropriateness and reliability of the inputs (including those developed internally
by the Group) used in the valuations.
In selecting the appropriate valuation models and inputs to be adopted for each valuation that
uses significant non-observable inputs, external valuation experts are requested to calibrate the
valuation models and inputs to actual market transactions (which may include transactions
entered into by the Group with third parties as appropriate) that are relevant to the valuation if
such information are reasonably available. For valuations that are sensitive to the unobservable
inputs used, external valuation experts are required, to the extent practicable to use a minimum
of two valuation approaches to allow for cross-checks.
Significant changes in fair value measurements from period to period are evaluated by the CFO
office for reasonableness. Key drivers of the changes are identified and assessed for
reasonableness against relevant information from independent sources, or internal sources if
necessary and appropriate.
The CFO office documents and reports its analysis and results of the external valuations to the
Audit Committee on a quarterly basis. The Audit Committee performs a high-level independent
review of the valuation process and results and recommends if any revisions need to be made
before presenting the results to the Board of Directors for approval.

FRS 113.93.g


E) Assets and liabilities not carried at fair value but for which fair value is disclosed
The following table shows an analysis of the Groups assets and liabilities not measured at fair value
at 31 December 2012 but for which fair value is disclosed:

Group

2012
$000

Fair value measurements at the end of the reporting period
using

Quoted
prices in
active
markets for
identical
assets
(Level 1)
Significant
observable
inputs other
than quoted
prices
(Level 2)
Significant
unobservable
inputs
(Level 3)
Total

Assets
Government bonds XXX - - XXX
Investment in associates XXX - - XXX
Staff loans (non-current) - - XXX XXX
Liabilities:
Deferred cash settlement - - (XXX) (XXX)
Loans and borrowings (non-current)
- Obligations under finance leases - - (XXX) (XXX)
- Fixed rate bank loans and bonds - - (XXX) (XXX)
- Convertible redeemable
preference shares - - (XXX) (XXX)

Company
Assets
Amounts and loans due from
subsidiaries - XXX - XXX
Staff loans (non-current) - - XXX XXX
Liabilities:
Fixed rate bank loans and bonds - - (XXX) (XXX)
Convertible redeemable preference
shares - - (XXX) (XXX)

FRS 113.97


E) Assets and liabilities not carried at fair value but for which fair value is disclosed (continued)

Amounts and loans due from subsidiaries, Staff loans, Deferred cash, Lease obligations under
finance leases, Fixed rate bank loans and bonds, and Convertible redeemable preference shares
The fair values as disclosed in the table above are estimated by discounting expected future
cash flows at market incremental lending rate for similar types of lending, borrowing or leasing
arrangements at the end of the reporting period.

FRS 113.97
FRS 113.93.d


Commentary
An entity shall present the quantitative disclosures required by FRS 113 in a tabular format
unless another format is more appropriate. The disclosure requirements of FRS 113 need not
be applied in comparative information provided for periods before initial application.

An entity shall determine appropriate classes of assets and liabilities on the basis of the
following:
a. The nature, characteristics and risks of the asset or liability; and
b. The level of the fair value hierarchy within which the fair value measurement is
categorised.
The number of classes may need to be greater for fair value measurements categorised
within Level 3 of the fair value hierarchy because those measurements have a greater
degree of uncertainty and subjectivity. Determining appropriate classes of assets and
liabilities for which disclosures about fair value measurements should be provided
requires judgement. A class of assets and liabilities will often require greater
disaggregation than the line items presented in the balance sheet. If another FRS
specifies the class for an asset or a liability, an entity may use that class in providing
the disclosures required in FRS 113 if that class meets the requirements in this
paragraph.

In this illustration, the current use of the non-financial assets does not differ from their
highest and best use. If for recurring and non-recurring fair value measurements, the highest
and best use of a non-financial asset differs from its current use, an entity shall disclose the
fact and why the non-financial asset is being used in a manner that differs from its highest and
best use.
In this illustration, the Groups properties are categorised within Level 3 of the fair value
hierarchy as the properties fair values are determined based on comparable market
transactions adjusted for significant unobservable inputs such as yield adjustments relating to
nature, location and condition of the specific property.
In this illustration, the Groups residential investment properties are categorised within Level
2 of the fair value hierarchy as the propertys fair value are determined solely based on
observable inputs other than quoted prices.
In this illustration, the Group does not have any liability measured at fair value and issued with
an inseparable third-party credit enhancement.
For a liability measured at fair value and issued with an inseparable third-party credit
enhancement, an issuer shall disclose the existence of that credit enhancement and whether it
is reflected in the fair value measurement of the liability.

FRS 113.99

FRS 113.C3

FRS 113.94

FRS 113.93.i

FRS 113.98


Transfers between Level 1 and Level 2
FRS 113 requires disclosures of the amount of any transfers between Level 1 and Level 2 of
the fair value hierarchy for assets and liabilities held at the end of the reporting period that
are measured at fair value on a recurring basis and the reasons for those transfers. Transfers
into each level shall be disclosed and discussed separately from transfers out of each level.
In this illustration, there were no assets or liabilities transferred between Level 1 and Level 2.
Illustrative disclosure if an entity has transfers of assets or liabilities between Level 1 and
Level 2.
The following table shows transfers from Level 1 to Level 2 of the fair value hierarchy for
assets and liabilities which are recorded at fair value.

The above financial assets were transferred from Level 1 to Level 2 as they were delisted from
the stock exchange and therefore ceased to be actively traded during the year and fair values
were consequently measured using valuation techniques and using observable market inputs.
Group

2012
$000
Financial assets held-for-trading
- Quoted equity securities XXX
Financial investments available-for-sale
- Other debt securities XXX
Transfers into or out of Level 3
FRS 113 requires disclosures of the amount of any transfers into or out of Level 3 of the fair
value hierarchy, the reasons for those transfers and the entitys policy for determining when
transfers between levels are deemed to have occurred. Transfers into Level 3 shall be
disclosed and discussed separately from transfers out of Level 3.
In this illustration, there were no assets or liabilities transferred from Level 1 and Level 2 to
Level 3 during the financial period ended 31 December 2012.
Illustrative disclosure if there were transfers of assets or liabilities into Level 3.
During the financial year ended 31 December 2012, the Group transferred certain financial
instruments from Level 2 to Level 3 of the fair value hierarchy. The carrying amount of the
total financial assets transferred was $XXX.
The reason for the transfers from Level 2 to Level 3 is that inputs to the valuation models
for the other debt securities ceased to be observable. Prior to transfer, the fair value of the
instruments was determined using observable market transactions or binding broker
quotes for the same or similar instruments. Since the transfer, these instruments have
been valued using valuation models incorporating significant non market-observable inputs.

FRS 113.93.c

FRS 113.93.e.iv

FRS 113.93.h

Transfers into or out of Level 3 (continued)
Illustrative disclosure if there were transfers of assets or liabilities out of Level 3.
The Group also transferred an unquoted equity security from Level 3 to Level 1 of the fair
value hierarchy.The carrying amount of the total financial assets transferred was $XXX.
The security was transferred from Level 3 into level 1 as it was listed on stock exchange
during the financial year. Prior to the transfer, the fair value of the security was
determined using valuation model incorporating significant non market-observable inputs.
Since the transfer, the fair value of the security is determined based on market price
quoted in the stock exchange.
In this illustration, there has been no change in valuation technique for recurring and non-
recurring fair value measurements categorised within Level 2 and Level 3 of the fair value
hierarchy. If there has been a change in valuation technique (e.g. changing from a market
approach to an income approach or use of an additional valuation technique), the entity shall
disclose that change and the reason(s) for making it.
An entity shall disclose for recurring fair value measurements categorised within Level 3 of
the fair value hierarchy:
i. for all such measurements, a narrative description of the sensitivity of the fair value
measurement to changes in unobservable inputs if a change in those inputs to a different
amount might result in a significantly higher or lower fair value measurement. If there
are interrelationships between those inputs and other unobservable inputs used in the
fair value measurement, an entity shall also provide a description of those
interrelationships and of how they might magnify or mitigate the effect of changes in the
unobservable inputs on the fair value measurement. To comply with that disclosure
requirement, the narrative description of the sensitivity to changes in unobservable
inputs shall include, at a minimum, the unobservable inputs disclosed when complying
with FRS 113.93(d).
ii. for financial assets and financial liabilities, if changing one or more of the unobservable
inputs to reflect reasonably possible alternative assumptions would change fair value
significantly, an entity shall state the fact and disclose how the effect of a change to
reflect a reasonably possible alternative assumption was calculated. For that purpose,
significance shall be judged with respect to profit or loss, and total assets or total
liabilities, or, when changes in fair value are recognised in other comprehensive income,
total equity.

FRS 113.93.e.iv

FRS 113.93.d

FRS 113.93.h


For recurring and non-recurring fair value measurements categorised within Level 3 of the
fair value hierarchy, a description of valuation processes used by the entity (including, for
example, how an entity decides its valuation policies and procedures and analyses changes in
fair value measurements from period to period.
An entity might disclose the following:
(a) for the group within the entity that decides the entitys valuation policies and
procedures:
(i) its description;
(ii) to whom that group reports; and
(iii) the internal reporting procedures in place (e.g. whether and, if so, how pricing, risk
management or audit committees discuss and assess the fair value measurements;
(b) the frequency and methods for calibration, back testing and other testing procedures of
pricing models;
(c) the process for analysing changes in fair value measurements from period to period;
(d) how the entity determined that third-party information, such as broker quotes or pricing
services, used in the fair value measurement was developed in accordance with FRS 113;
and
(e) the methods used to develop and substantiate the unobservable inputs used in a fair
value measurement.

It is important to note that the illustration on valuation policies and procedures for
recurring and non-recurring fair value measurements categorised within Level 3 of the
fair value hierarchy is based on certain assumed facts regarding circumstances
surrounding XYZ Holdings (Singapore) Limited. The valuation policies and procedures of
other entities may be different and disclosures would have to be customised in the light
of specific facts and circumstances applicable to the entity.

FRS 113.93.g

FRS 113.IE65

Appendix B Comparison between FRS and IFRS

S and
Reference
Description
Aligned with IFRS?
Yes. No. Notes
Preface Preface to the Financial Reporting Standards
P

Framework Framework for the Preparation and Presentation of Financial
Statements
P

FRS 1 Presentation of Financial Statements
P

FRS 2 Inventories
P

FRS 7 Cash Flow Statements
P

FRS 8 Accounting Policies, Changes in Accounting Estimates and Errors
P

FRS 10 Events After the Reporting Period
P

FRS 11 Construction Contracts
P

FRS 12 Income Taxes
P

i
FRS 14 Segment Reporting
P

FRS 16 Property, Plant and Equipment

P

FRS 17 Leases
P

FRS 18 Revenue
P

FRS 19 Employee Benefits
P

FRS 20 Accounting for Government Grants and Disclosure of Government
Assistance
P

FRS 21 The Effects of Changes in Foreign Exchange Rates
P

FRS 23 Borrowing Costs
P

FRS 24 Related Party Disclosures
P

FRS 26 Accounting and Reporting by Retirement Benefit Plans
P

FRS 27 Consolidated and Separate Financial Statements

P

FRS 28 Investments in Associates

P

FRS 29 Financial Reporting in Hyperinflationary Economies
P

FRS 31 Interests in Joint Ventures

P

FRS 32 Financial Instruments: Presentation
P

FRS 33 Earnings Per Share
P

FRS 34 Interim Financial Reporting
P

FRS 36 Impairment of Assets
P

FRS 37 Provisions, Contingent Liabilities and Contingent Assets
P

FRS 38 Intangible Assets
P

FRS 39 Financial Instruments: Recognition and Measurement
P

FRS 40 Investment Property
P

FRS 41 Agriculture
P

FRS 101 First-Time Adoption of Financial Reporting Standards
P

FRS 102 Share-based Payment

P

FRS 103 Business Combinations

P

FRS 104 Insurance Contracts
P

FRS 105 Non-current Assets Held for Sale and Discontinued Operations
P

FRS 106 Exploration for and Evaluation of Mineral Resources
P

FRS 107 Financial Instruments: Disclosure
P

FRS 108 Operating Segments
P

FRS 110 Consolidated Financial Statements

P

FRS 111 Joint Arrangements

P

FRS 112 Disclosure of Interest in Other Entities

P

FRS 113 Fair Value Measurement
P


Notes on differences between FRS and IFRS

FRS 16 has a transitional provision which exempts an entity which had
Revalued its property, plant and equipment before 1 January 1984; or
Performed any one-off revaluation on its property, plant and equipment between 1
January 1984 and 31 December 1996 (both dates inclusive), from complying with the
requirement to keep the valuation current by periodic valuation.
IAS 16 does not have such a transitional provision and therefore, all property, plant and
equipment that had been revalued prior to adoption of IAS 16 would have to be revalued on a
periodic basis.

One of the conditions for exemption from preparing consolidated financial statements, equity
accounting or proportionate consolidation under IAS 27, IAS 28 and IAS 31 is the ultimate or
any intermediate parent of the parent produces consolidated financial statements available for
public use that comply with International Financial Reporting Standards. The requirement that
the consolidated financial statements comply with IFRS is not required under FRS 27, FRS 28
and FRS 31.

IFRS 3 applies to the accounting for business combinations for which the agreement date is on
or after 31 March 2004.
FRS 103 is effective for annual periods beginning on or after 1 July 2004.

FRS 102 is aligned with IFRS 2 except for the scope and the effective date for non-listed
companies. IFRS 2 applies to grants of shares, share options or other equity instruments that
were granted after 7 November 2002 and had not yet vested at the effective date of IFRS 2.
However, the reference date in FRS 102 is 22 November 2002 instead of 7 November 2002.
For non-listed companies, FRS 102 is effective only for financial periods beginning from 1
January 2006 whereas IFRS 2 applies to all companies for financial periods beginning from 1
January 2005.

IFRS 10, IFRS 11, IFRS 12, Revised IAS 27 and Revised IAS 28 are effective for annual periods
beginning on or after 1 January 2013. FRS 110, FRS 111, FRS 112, Revised FRS 27 and
Revised FRS 28 are effective only for annual periods beginning on or after 1 January 2014.

The following IFRS have not been adopted as FRS:
IFRS 9 Financial Instruments, effective for annual periods beginning on or after 1 January
2015


Recommended Accounting Practice (RAP) in Singapore
The following RAP issued by the Institute of Certified Public Accountants of Singapore set out
recommendations on accounting treatment relating to foreign income not remitted to Singapore.

i Foreign income not remitted to Singapore
The practice in Singapore is to recognise and account for a deferred tax liability in respect of
foreign-sourced income not remitted to Singapore in the same way as temporary differences
associated with investments in subsidiaries etc. as set out in accordance with FRS 12.39. Thus,
some companies do not provide deferred tax in respect of foreign income on the basis that they
do not intend to remit the funds to Singapore in the foreseeable future.


INT FRS vs. IFRIC Interpretations
Reference Description
Aligned with IFRIC
Interpretations
Yes. No. Notes
INT FRS 7 Introduction of the Euro
P

INT FRS 10 Government Assistance No Specific Relation to Operating Activities
P

INT FRS 12 Consolidation Special Purpose Entities
P

INT FRS 13 Jointly Controlled Entities Non-Monetary Contributions by
Venturers
P

INT FRS 15 Operating Leases Incentives
P

INT FRS 21 Income Taxes Recovery of Revalued Non-Depreciable Assets
P

INT FRS 25 Income Taxes Changes in the Tax Status of an Enterprise or its
Shareholders
P

INT FRS 27 Evaluating the Substance of Transactions Involving the Legal Form
of a Lease
P

INT FRS 29 Disclosure Service Concession Arrangements
P

INT FRS 31 Revenue Barter Transactions Involving Advertising Services
P

INT FRS 32 Intangible Assets - Web Site Costs
P

INT FRS 101 Changes in Existing Decommissioning, Restoration and Similar
Liabilities
P

INT FRS 104 Determining Whether an Arrangement Contains a Lease
P

INT FRS 105 Rights to Interests Arising from Decommissioning, Restoration and
Environmental Rehabilitation Funds
P

INT FRS 106 Liabilities Arising from Participating in a Specific Market Waste
Electrical and Electronic Equipment
P

INT FRS 107 Applying the Restatement Approach under FRS 29 Financial
Reporting in Hyperinflationary Economies
P

INT FRS 108 Scope of FRS 102
P

INT FRS 109 Reassessment of Embedded Derivatives
P

INT FRS 110 Interim Financial Reporting and Impairment
P

INT FRS 111 Group and Treasury Share Transactions
P

INT FRS 112 Service Concession Arrangements
P

INT FRS 113 Customer Loyalty Programmes
P

INT FRS 114 FRS 19 - The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their interaction
P

INT FRS 115 Agreements for the Construction of Real Estate
P

INT FRS 116 Hedges of a Net Investment in a Foreign Operation
P

INT FRS 117 Distributions of Non-cash Assets to Owners
P

INT FRS 118 Transfers of Assets from Customers
P

INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments
P

INT FRS 120 Stripping Costs in the Production Phase of a Surface Mine
P


IFRIC 15 is effective for annual periods beginning on or after 1 January 2009. INT FRS 115 is
effective only for annual periods beginning on or after 1 January 2011.
INT FRS 115 includes an accompanying note on application of INT FRS 115 in Singapore. The
accompanying note deals with the accounting treatment for revenue and associated expenses
by housing developers who develop more than four units of private residential properties in
Singapore for sale prior to completion of the properties. These developers are regulated under
the Singapore Housing Developers (Control and Licensing) Act (Chapter 130) and use the
standard form of the sales and purchase agreement prescribed in the schedule to the Housing
Developers Rules.

The following IFRIC Interpretation has not been adopted as INT FRS:
IFRIC 2 Members Shares in Co-operative Entities and Similar Instruments, effective for
annual periods beginning on or after 1 January 2005



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