/ . 6 7
A N N U A L R E P O R T 2 0 1 5
T H E S T R E N G T H O F O U R B R A N D S
2 .
Summa r y o f S i gn i f i c an t ac coun t i ng Po l i c i e s ( Con t ’ d )
Leases (Cont’d)
For operating leases, lease payments are recognised as an expense in profit or loss on a straight-line basis over the
term of the relevant lease unless another systematic basis is representative of the time pattern of the user’s benefit,
even if the payments are not on that basis. Lease incentives received are recognised in profit or loss as an integral part
of the total lease expense. Rental income from operating leases is recognised in profit or loss on a straight-line basis
over the term of the relevant lease unless another systematic basis is representative of the time pattern of the user’s
benefit, even if the payments are not on that basis. Initial direct cost incurred in negotiating and arranging an operating
lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.
Segment reporting
The Group’s operating businesses are currently organised according to their nature of business activities. Such
structural organisation is determined by the nature of risks and returns associated to each business segment and
defines the management structure as well as the internal reporting system. Currently, the Group has only an automobile
segment and it represents the basis on which the Group reports its segment information. The Group mainly operated
in Singapore during the reporting year.
There are no customers with revenue transactions of over 10% of the group revenue. The watch segment is not significant.
Subsidiaries
A subsidiary is an entity including unincorporated and special purpose entity that is controlled by the reporting entity
and the reporting entity is exposed, or has rights, to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the investee. The existence and effect of substantive potential
voting rights that the reporting entity has the practical ability to exercise (that is, substantive rights) are considered
when assessing whether the reporting entity controls another entity.
In the Company’s separate financial statements, an investment in a subsidiary is accounted for at cost less any
allowance for impairment in value. Impairment loss recognised in profit or loss for a subsidiary is reversed only if
there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment
loss was recognised. The carrying value and the net book value of the investment in a subsidiary are not necessarily
indicative of the amount that would be realised in a current market exchange.
business Combinations
As disclosed in Note 1.2 of the financial statements, a restructuring exercise was undertaken in reporting year 2014. The
business combination involved entities or businesses under common control that is, a business combination in which
all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after
the business combination, and that control is not transitory. The business combination in such situation is accounted
for under the pooling-of-interests method.
