Sunny Tew

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2007 (Continued)2. Summary of significant accounting policies (Continued)(m)Share capitalOrdinary shares are classified as equity. Incremental costs directly attributable to the issuance of new equity instruments are shown in equity as a deduction fromthe proceeds.(n)Revenue recognitionRevenue is measured at the fair value of the consideration received or receivable for the sale of goods and rending of services in the ordinary course of business.Revenue is presented, net of rebates and discounts and sales related taxes.Revenue from services rendered is recognised on the completion of services provided.Revenue from sale of goods is recognised upon passage of title to customers, which generally coincides with their deliveries and acceptances, and collectibility ofthe related receivables is reasonably assured.Rental income under operating leases is recognised in the income statement on a straight-line basis over the term of the lease.Dividend income is recognised in the income statement when the shareholder’s right to receive the payment is established.Interest income is recognised on a time-apportionment basis using the effective interest method.(o)Foreign currenciesThe individual financial statements of each entity in the Group are measured and presented in the currency of the primary economic environment in which the entityoperates (“functional currency”).The consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company are presented in Singapore dollars,which is the functional currency of the Company and the presentation currency of the consolidated financial statements.In preparing the financial statements, transactions in currencies other than the entity’s functional currency (“foreign currency”) are recorded at the rates of exchangeprevailing on the date of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are re-translated at the rates prevailing onthe balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are re-translated at the rates prevailing on the date whenthe fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.HG METAL MANUFACTURING LIMITED ANNUAL REPORT 200753