O TTO M ARINE L IMITED - Microsoft Internet Explorer - SGX

OTTO MARINE LIMITED AND ITS SUBSIDIARIES
E. Notes to the Consolidated Financial Statements
1 General
The Company (Registration No. 197902647M) is a private limited company incorporated in
Singapore as Otto Industrial Co (Pte) Ltd, with its principal place of business and registered office at
9 Temasek Boulevard #33-01 Suntec Tower Two, Singapore 038989. On October 5, 2006, the Company
changed its name to Otto Marine Pte Ltd. On March 17, 2008, the Company converted to a public
limited company and changed its name to Otto Marine Limited. The consolidated financial statements
are expressed in Singapore dollars.
The principal activities of the Company and the Group consist of the construction, fabrication,
repair and conversion, and chartering of ships.
The principal activities of the subsidiaries and associates are disclosed in Notes 11 and 12 to the
financial statements.
The consolidated financial statements of the Group for the financial years ended December 31,
2007, 2006 and 2005 were authorised for issue by the Board of Directors on September 2, 2008.
2 Summary of Significant Accounting Policies
BASIS OF ACCOUNTING — The consolidated financial statements are prepared in accordance
with the historical cost convention, except as disclosed in the accounting policies below and are drawn
up in accordance with the Singapore Financial Reporting Standards (“FRS”).
In the preparation of the consolidated financial statements, the Group has adopted all the new and
revised FRSs and Interpretations of FRS (“INT FRS”) that are relevant to its operations and effective for
the periods presented in the consolidated financial statements. The adoption of these new/revised FRSs
and INT FRSs does not result in changes to the Group’s accounting policies and has no material effect
on the financial information except as disclosed below and in the notes to financial statements.
FRS 39 — Financial Instruments: Recognition and Measurement (Effective date: January 1, 2005)
FRS 39 requires the recognition and measurement of financial assets and liabilities. The new
standard moves measurement from a cost base to a fair value base for certain categories of financial
assets and liabilities. The change in accounting policy has been accounted for prospectively in
accordance with the transitional provisions of FRS 39. The adoption of FRS 39 has resulted in interestfree
advances extended by certain related parties to the Group being carried at its fair value.
In 2005, fair value adjustment of interest-free advance amounting to $294,000 was transferred to
capital reserve and the imputed interest expense is recognised in the profit and loss.
The opening retained earnings of the Group for 2005 was not adjusted as the impact of the
adjustment is not material.
At the date of authorisation of these financial statements, the following FRSs, INT FRSs and
amendments for FRS that are relevant to the Group were issued but not effective:
FRS 1 — Presentation of Financial Statements (Revised)
FRS 23 — Borrowing Costs (Revised)
FRS 107 — Financial Instruments: Disclosure
FRS 108 — Operating Segment
Amendments to FRS 1 Presentation of Financial Statements relating to Capital Disclosures.
Consequential amendments were also made to various standards as a result of these new/revised
standards.
Other than FRS 107 and FRS 108, the management anticipates that the adoption of the above FRS,
INT FRS and amendments to FRS that were issued but not yet effective until future periods will not
have a material impact on the financial statements of the Group.
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