NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
BORROWING COSTS – Borrowing costs directly attributable to the acquisition, construction or production of
qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use
or sale, are added to the cost of these assets, until such time as the assets are substantially ready for their intended use
or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
RETIREMENT BENEFIT COSTS – Payments to defined contribution retirement benefit plans are charged as an
expense when employees have rendered the services entitling them to the contributions. Payments made to state-
managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to
defined contribution plans where the Group’s obligations under the plans are equivalent to those arising in a defined
contribution retirement benefit plan.
Pursuant to the relevant regulations of the PRC government, the PRC subsidiaries of the Group (“PRC Subsidiaries”)
have participated in central pension schemes (“the Schemes”) operated by local municipal governments whereby
the PRC Subsidiaries are required to contribute a certain percentage of the basic salaries of their employees to the
Schemes to fund their retirement benefits. The local municipal governments undertake to assume the retirement
benefit obligations of all existing and future retired employees of the PRC Subsidiaries. The only obligation of the
PRC Subsidiaries with respect to the Schemes is to pay the ongoing required contributions under the Schemes
mentioned above. Contributions under the Schemes are charged as expense when incurred.
EMPLOYEE LEAVE ENTITLEMENT – Employee entitlements to annual leave are recognised when they accrue
to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by
employees up to the end of the reporting period.
INCOME TAX – Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the
consolidated statement of profit or loss because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax
is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the
Company and subsidiaries operate by the end of the reporting period.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that
it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial
recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and
associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
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