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A M A R Q U E A B O V E T H E R E S T

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E U R O S P O R T S G L O B A L L I M I T E D

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2 0 1 4 A N N U A L R E P O R T

31 March 2014

NOTES TO THE

F INANCI AL STATEMENTS

2.

Summary of Significant Accounting Policies (Cont’d)

Basis of Presentation

The consolidated financial statements include the financial statements made up to the end of the reporting

year of the Company and its subsidiaries. The consolidated financial statements are the financial statements

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subsidiaries are presented as those of a single economic entity and are prepared using uniform accounting

policies for like transactions and other events in similar circumstances. All significant intragroup balances and

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financial statements include the income and expenses of a subsidiary from the date the entity gains control

until the date when the entity ceases to control the subsidiary. Income and expenses of the subsidiary are

based on the amounts of the assets and liabilities recognised in the consolidated financial statements at the

acquisition date.

Changes in the Group’s ownership interest in a subsidiary that do not result in the loss of control are

accounted for within equity as transactions with owners in their capacity as owners. The carrying amounts

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the subsidiary. When the Group loses control of a subsidiary it derecognises the assets and liabilities and

related equity components of the former subsidiary. Any gain or loss is recognised in profit or loss. Any

investment retained in the former subsidiary is measured at fair value at the date when control is lost and is

subsequently accounted as available-for-sale financial assets in accordance with FRS 39.

The Company’s separate financial statements have been prepared on the same basis, and as permitted by the

Companies Act, Chapter 50, the Company’s separate statement of profit or loss and other comprehensive

income is not presented.

Revenue Recognition

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economic benefits during the reporting year arising from the course of the activities of the entity and it is

shown net of any related sales taxes, returns and rebates. Revenue from the sale of goods is recognised

when significant risks and rewards of ownership are transferred to the buyer, there is neither continuing

managerial involvement to the degree usually associated with ownership nor effective control over the goods

sold, and the amount of revenue and the costs incurred or to be incurred in respect of the transaction can

be measured reliably. Revenue

from rendering of services that are not significant transactions is recognised

as the services are provided or when the significant acts have been completed. Rental revenue is recognised

on a time-proportion basis that takes into account the effective yield on the asset on a straight-line basis

over the lease term. Interest is recognised using the effective interest method.

Employee Benefits

Contributions to a defined contribution retirement benefit plan are recorded as an expense as they fall

due. The entity’s legal or constructive obligation is limited to the amount that it agrees to contribute

to an independently administered fund (such as the Central Provident Fund in Singapore, a government

managed defined contribution retirement benefit plan). 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 entity is contractually obliged or where there

is constructive obligation based on past practice.

1.

General (Cont’d)

1.2. The Restructuring Exercise (Cont’d)

(g) Disposal of shares in Brickfree Pte. Ltd. and E-Elements Pte. Ltd.

As part of the Restructuring Exercise to dispose of the non-luxury lifestyle businesses prior to the

Listing, the Company completed the following disposals:

(a)

On 30 September 2012, EuroSports Auto disposed 500,000 ordinary shares in Brickfree Pte.

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(b)

On 12 September 2012, EuroSports Auto transferred 15,000 ordinary shares in E-Elements

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The subsidiaries held by the Company as of the date of this report are disclosed in Note 13.

2.

Summary of Significant Accounting Policies

Accounting Convention

The financial statements have been prepared in accordance with the Singapore Financial Reporting

Standards (“

FRS

”) and the related Interpretations to FRS (“

INT FRS

”) as issued by the Singapore Accounting

Standards Council and the Companies Act, Chapter 50. The financial statements are prepared on a going

concern basis under the historical cost convention except where an FRS requires an alternative treatment

(such as fair values) as disclosed where appropriate in these financial statements. The accounting policies in

FRS need not be applied when the effect of applying them is immaterial. The disclosures required by FRS

need not be made if the information is immaterial. Other comprehensive income comprises items of income

and expense (including reclassification adjustments) that are not recognised in the income statement, as

required or permitted by FRS. Reclassification adjustments are amounts reclassified to profit or loss in the

income statement in the current period that were recognised in other comprehensive income in the current

or previous periods.

Basis of Preparation of the Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles

requires the management to make estimates and assumptions that affect the reported amounts of assets

and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements

and the reported amounts of revenues and expenses during the reporting year. Actual results could differ

from those estimates. The estimates and assumptions are reviewed on an ongoing basis. Apart from those

involving estimations, management has made judgements in the process of applying the entity’s accounting

policies. The areas requiring management’s most difficult, subjective or complex judgements, or areas

where assumptions and estimates are significant to the financial statements, are disclosed at the end of this

Note, where applicable.