notes to the financial statements - Far East Orchard Limited

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NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2008 2. Significant accounting policies (continued) 2.11 Financial assets (continued) 38 (c) Initial measurement Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets at fair value through profit or loss are recognised immediately in the income statement. (d) Subsequent measurement Financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method. Changes in the fair values of “financial assets at fair value through profit or loss” including the effects of currency translation, interest and dividend, are recognised in the income statement when the changes arise. (e) Impairment The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired and recognises an allowance for impairment when such evidence exists. Loans and receivables Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy, and default or significant delays in payments are objective evidence that these financial assets are impaired. The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same item in the income statement. The allowance for impairment loss account is reduced through the income statement in a subsequent period when the amount of impairment loss decreases and the related decrease can be objectively measured. The carrying amount of the asset previously impaired is increased to the extent that the new carrying amount does not exceed the amortised cost had no impairment been recognised in prior periods. 2.12 Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits with financial institutions and bank overdrafts. Bank overdrafts are presented as current borrowings on the balance sheet. ANNUAL REPORT 2008 ORCHARD PARADE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2008 2. Significant accounting policies (continued) 2.13 Borrowings Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. 2.14 Trade and other payables Trade and other payables are initially measured at fair value, and subsequently carried at amortised cost using the effective interest method. 2.15 Fair value estimation of financial assets and liabilities The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-counter securities and derivatives) are based on quoted market prices at the balance sheet date. The quoted market prices used for financial assets are the current bid prices; the appropriate quoted market prices for financial liabilities are the current asking prices. The fair values of current financial assets and liabilities carried at amortised cost approximate their carrying amounts. 2.16 Operating leases The Group leases investment properties under operating leases to third parties and related parties [Note 35(a)]. Leases of investment properties where the Group retains substantially all risks and rewards incidental to ownership are classified as operating leases. Rental income from operating leases (net of any incentives given to the lessees) is recognised in the income statement on a straight-line basis over the lease term. Initial direct costs incurred by the Group in negotiating and arranging operating leases are added to the carrying amount of the leased assets and recognised as an expense in the income statement over the lease term on the same basis as the lease income. 2.17 Inventories Inventories are carried at the lower of cost and net realisable value. Cost is determined using the first-in, first-out method and includes all costs in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. ORCHARD PARADE HOLDINGS LIMITED ANNUAL REPORT 2008 39
Page 1 and 2: Orchard Parade Holdings Limited Ann
Page 3 and 4: Corporate Information BOARD OF DIRE
Page 5 and 6: The Group sold 12 units of The Flor
Page 7 and 8: Profile of the Board of Directors &
Page 9 and 10: Organisation Chart as at 27 March 2
Page 11 and 12: Corporate Governance Statement as a
Page 21 and 22: DIRECTORS’ REPORT For the financi
Page 23 and 24: DIRECTORS’ REPORT For the financi
Page 25 and 26: INDEPENDENT AUDITOR’S REPORT TO T
Page 27 and 28: CONSOLIDATED INCOME STATEMENT For t
Page 29 and 30: CONSOLIDATED STATEMENT OF CHANGES I
Page 31 and 32: NOTES TO THE FINANCIAL STATEMENTS F
Page 39: NOTES TO THE FINANCIAL STATEMENTS F
Page 87 and 88: STATISTICS OF SHAREHOLDINGS as at 2
Page 89 and 90: NOTICE OF ANNUAL GENERAL MEETING NO
Page 91 and 92:
NOTICE OF ANNUAL GENERAL MEETING No
Page 93 and 94:
ORCHARD PARADE HOLDINGS LIMITED (Re
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Orchard Parade Holdings Limited (Re
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notes to the financial statements - Far East Orchard Limited

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