2.
Summary of significant accounting policies (cont’d)
Employee benefits
Contributions to defined contribution retirement benefit plans are recorded as an expense as they fall due. The Group’s
legal or constructive obligation is limited to the amount that it agrees to contribute to independently administered funds,
such as the Central Provident Fund in Singapore and the Employees Provident Fund in Malaysia. For employee leave
entitlement, the expected cost of short-term employee benefits in the form of compensated absences is recognised in
the case of accumulating compensated absences, when the employees render service that increases their entitlement
to future compensated absences; and in the case of non-accumulating compensated absences, when the absences
occur. A liability for bonuses is recognised where the Group is contractually obliged or where there is constructive
obligation based on past practice.
Share-based compensation
Benefits to employees are also provided in the form of share-based payment transactions, whereby employees
render services in exchange for shares. As there is no vesting period, the fair value of the employee services rendered
is measured by reference to the fair value of the shares granted on the date of the grant which is expected to be the
prevailing market price per share on the date of grant multiplied by the number of shares under each grant. This fair
value amount is charged to profit or loss on the date of grant as an expense in the Group’s income statement with a
corresponding adjustment to the share capital account when new shares are issued, or to treasury shares account when
treasury shares are re-issued to the employees.
Income tax
Income taxes are accounted for using the asset and liability method that requires the recognition of taxes payable or
refundable for the current year and deferred tax liabilities and assets for the future tax consequence of events that have
been recognised in the financial statements or tax returns. The measurements of current and deferred tax liabilities and
assets are based on provisions of the enacted or substantively enacted tax laws at the end of each reporting period; the
effects of future changes in tax laws or rates are not anticipated. Tax expense/(tax income) is the aggregate amount
included in the determination of profit or loss for the reporting period in respect of current tax and deferred tax. Current
and deferred taxes are recognised as income or as an expense in profit or loss unless the tax relates to items that are
recognised in the same or a different period outside profit or loss. For such items recognised outside profit or loss, the
current tax and deferred tax are recognised (a) in other comprehensive income if the tax is related to an item recognised
in other comprehensive income and (b) directly in equity if the tax is related to an item recognised directly in equity.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same income tax authority.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and is reduced, if necessary,
by the amount of any tax benefits that, based on available evidence, are not expected to be realised. A deferred tax
amount is recognised for all temporary differences, unless the deferred tax amount arises from the initial recognition
of an asset or liability in a transaction which (i) is not a business combination; and (ii) at the time of the transaction,
affects neither accounting profit nor taxable profit/(tax loss). A deferred tax liability or asset is recognised for all taxable
temporary differences associated with investments in subsidiaries and associates except where the Group is able to
control the timing of the reversal of the taxable temporary difference and it is probable that the taxable temporary
difference will not reverse in the foreseeable future or for deductible temporary differences, they will not reverse in the
foreseeable future and they cannot be utilised against taxable profits.
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