HAW PAR CORPORATION LIMITED
70
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
For the financial year ended 31 December 2014
2.
SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(r)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the management
committee and Investment Committee whose members are responsible for allocating resources and assessing
performance of the operating segments.
(s)
Cash and cash equivalents
For purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents include
cash and bank balances, deposits with financial institutions, bank overdrafts, if any and excludes bank deposits
pledged as security. For cash subjected to restriction, assessment is made on the economic substance of the
restriction and whether they meet the definition of cash and cash equivalents.
(t)
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary
shares are deducted against the share capital account. When the Company’s ordinary shares are repurchased,
the weighted average cost of each share is written off against the share capital, with the remaining amounts
written off against the retained earnings of the Company.
(u)
Dividends
Final dividends to the Company’s members are recognised when the dividends are approved by the members.
(v)
Government grants
Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance
that the grant will be received and the Group will comply with all the attached conditions.
Government grants receivable are recognised as income over the periods necessary to match them with the
related costs which they are intended to compensate on a systematic basis. Government grants relating to
expenses are shown separately as other income.
(w) Financial guarantees
The Company had issued corporate guarantees to banks for credit facilities of its subsidiaries. These guarantees
are financial guarantee contracts as they require the Company to reimburse the banks if the subsidiaries fail
to make principal or interest payments when due in accordance with terms of their credit facilities.
Financial guarantee contracts are initially recognised at their fair values plus transaction costs in the Company’s
statement of financial position.
Financial guarantee contracts are subsequently amortised to profit or loss over the period of the subsidiaries’
borrowings, unless it is probable that the Company will reimburse the bank for an amount higher than the
unamortised amount. In this case, the financial guarantee contracts shall be carried at the expected amount
payable to the bank in the Company’s statement of financial position.
