SAILING THE SEAS OF SUCCESS - Swissco Holdings Limited

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2004
3. Significant accounting policies (continued)
(m)
Employee benefits
(1) Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays fixed
contributions into separate entities such as Central Provident Fund, and will have no legal or constructive
obligation to pay further contributions if any of the funds does not hold sufficient assets to pay all
employee benefits relating to employee service in the current and preceding financial years. The Group’s
contribution to defined contribution plans are recognised in the financial year to which they relate.
(2) 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
balance sheet date.
(n)
Impairment of assets
Non-current assets, including property, plant and equipment and investments in subsidiaries and associated
companies are reviewed for impairment losses whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount, which is the higher of an asset’s net selling price and its value
in use.
(o)
Foreign currency translation
(1) Measurement currency
Items included in the financial statements of each entity in the Group are measured using the currency that
best reflects the economic substance of the underlying events and circumstances relevant to that entity (“the
measurement currency”). The consolidated financial statements and balance sheet of the Company are presented
in Singapore Dollars, which is the measurement currency of the Company.
(2) Transactions and balances
Foreign currency transactions are translated into the measurement currency using the exchange rates prevailing
at the date of transactions. Foreign currency monetary assets and liabilities are translated into the measurement
currency at the rates of exchange prevailing at the balance sheet date or at contracted rates where they are
covered by forward exchange contracts. Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies, are taken to the income statement.
(3) Translation of Group entities’ financial statements
The results and financial position of group entities (none of which has the currency of a hyperinflationary
economy) that are in measurement currencies other than Singapore Dollars are translated into Singapore Dollars
as follows:
(i)
(ii)
(iii)
Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that
balance sheet;
Income and expenses for each income statement are translated at average exchange rates (unless
this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the dates of the transactions);
and
All resulting exchange differences are taken to the foreign currency translation reserve.
SWISSCO INTERNATIONAL LIMITED_34