GAAP Singapore Ltd

and its subsidiaries

(Registration No. 200001999A)

Directors’ statement and

financial statements

Year ended December 31, 2022

Preface

Scope Illustrative in nature

This publication provides a set of sample financial The sample disclosures in this set of illustrative
statements of a fictitious group of companies. GAAP financial statements should not be considered to be
Singapore Ltd is a company incorporated in Singapore the only acceptable form of presentation. The form
and its shares are listed on the Main Board of the and content of each reporting entity’s financial
Singapore Exchange Securities Trading Limited (‘SGX- statements are the responsibility of the entity’s
ST’). The names of people and entities included in this directors and management, and other forms of
publication are fictitious. Any resemblance to a presentation which are equally acceptable may be
person or entity is purely coincidental. preferred and adopted, provided they include the
specific disclosures prescribed in the Companies Act
GAAP Singapore Ltd presented its consolidated 1967, SGX-ST Listing Manual, SFRS(I)s and SFRS(I)
financial statements in accordance with Singapore INTs.
Financial Reporting Standards (International)
(‘SFRS(I)s’). For the purposes of presenting the statement of profit
or loss and other comprehensive income, and
Effective date statement of cash flows, the alternatives allowed
under SFRS(I)s for those statements have been
The illustrative financial statements include the illustrated. Preparers of financial statements should
disclosures required by the Companies Act 1967, select the alternatives most appropriate to their
SGX-ST Listing Manual, SFRS(I)s and Interpretations circumstances and apply the chosen presentation
of SFRS(I) (‘SFRS(I) INT’) that are issued as at method consistently.
November 30, 2022.
Note that in this set of illustrative financial statements,
Standards issued but not yet effective as at line items that are not applicable to GAAP Singapore
December 31, 2022 have not been early adopted in Ltd have been included so as to illustrate items that
these illustrative financial statements. are commonly encountered in practice. This does not
mean that all possible disclosures have been
illustrated, nor should it be taken to mean that
entities are required to display such line items in
practice.

The illustrative financial statements contain general

information and are not intended to be a substitute
for reading the legislation or accounting standards
themselves, or for professional judgement as to
adequacy of disclosures and fairness of presentation.
They do not encompass all possible disclosures
required by the Companies Act 1967, SGX-ST Listing
Manual, SFRS(I)s and SFRS(I) INTs. Depending on
the circumstances, further specific information may
be required in order to ensure fair presentation and
compliance with laws and accounting standards and
securities exchange regulations in Singapore.

Illustrative Financial Statements 2022 i

Preface

Guidance notes Abbreviations used

Direct references to the source of disclosure References are made in this publication to the
requirements are included in the reference column on Companies Act 1967, Singapore accounting
each page of the illustrative financial statements. pronouncements, guidelines and SGX-ST listing rules
Guidance notes are provided where additional that require a particular disclosure or accounting
matters may need to be considered in relation to a treatment. The abbreviations used to identify the
particular disclosure. These notes are inserted within source of authority are as follows:
the relevant section or note.
AD Agenda Decision issued by the IFRS IC
The illustrative financial statements are prepared by Alt Alternative
the Professional Practice Department of Deloitte & App Appendix
Touche LLP in Singapore (‘Deloitte Singapore’) for the ASC Accounting Standards Council
use of clients and staff and are written in general CA Companies Act 1967
terms. Accordingly, we recommend that readers seek CCG Code of Corporate Governance
appropriate professional advice regarding the IAS International Accounting Standards
application of its contents to their specific situations issued by the IASB
and circumstances. The illustrative financial IASB International Accounting Standards
statements should not be relied on as a substitute for Board
such professional advice. Partners and professional IFRIC Interpretation of International
staff of Deloitte Singapore would be pleased to advise Financial Reporting Standards issued
you. While all reasonable care has been taken in the by the IFRS IC
preparation of these illustrative financial statements, IFRS International Financial Reporting
Deloitte Singapore accepts no responsibility for any Standards issued by the IASB
errors it might contain, whether caused by negligence IFRS IC IFRS Interpretations Committee
or otherwise, or for any loss, howsoever caused, ISCA Institute of Singapore Chartered
incurred by any person as a result of relying on it. Accountants
LM Singapore Exchange Securities Trading
(SGX-ST) Listing Manual
RAP Recommended Accounting Practice
issued by the ISCA
Sch Schedule
SFRS(I) Singapore Financial Reporting
Standards (International) issued by
the ASC
SFRS(I) INT Interpretation of Singapore Financial
Reporting Standards (International)
issued by the ASC
SSA Singapore Standards on Auditing

ii
Summary of key changes
from the 2021 version of the
Illustrative Financial
Statements

This section covers:

• an overview of new and revised SFRS(I)s that are mandatorily effective for the year ending December 31, 2022;
and

• an overview of new and revised SFRS(I)s that are not yet mandatorily effective but allow early application for
the year ending December 31, 2022.

For this purpose, the discussion below reflects a cut-off date of November 30, 2022. The potential impact of the
application of any new and revised SFRS(I)s and SFRS(I) INTs issued after November 30, 2022 but before the financial
statements are issued should also be considered and disclosed. In this set of illustrative financial statements, it is
assumed that the group had early adopted the Amendment to SFRS(I) 16: Covid-19-Related Rent Concessions beyond
30 June 2021 in the prior year.

Mandatorily effective for the year ending December 31, 2022

The following is the list of revised SFRS(I)s that are mandatorily effective for the annual period beginning on or after
January 1, 2022.

Amendment to SFRS(I) 16: Covid-19-Related Rent Concessions beyond 30 June 2021

In May 2020, SFRS(I) 16 was amended to provide lessees with a practical expedient that relieves a lessee from
assessing whether a COVID-19-related rent concession is a lease modification. Lessees that apply the practical
expedient account for COVID-19-related rent concessions as if they were not lease modifications.

The amendment in March 2021 extends the availability of the practical expedient above so that it applies to rent
concessions for which any reduction in lease payments affects only payments originally due on or before June 30,
2022, provided the other conditions for applying the practical expedient are met.

The amendment is effective for annual periods beginning on or after April 1, 2021, with early application permitted.

Amendments to SFRS(I) 3: Reference to the Conceptual Framework

The amendments update a reference in SFRS(I) 3 Business Combinations to The Conceptual Framework for Financial
Reporting. They also add to SFRS(I) 3 a requirement that, for obligations within the scope of SFRS(I) 1-37 Provisions,
Contingent Liabilities and Contingent Assets, an acquirer applies SFRS(I) 1-37 to determine whether at the acquisition
date a present obligation exists as a result of past events. For a levy that would be within the scope of SFRS(I) INT
21 Levies, the acquirer applies SFRS(I) INT 21 to determine whether the obligating event that gives rise to a liability
to pay the levy has occurred by the acquisition date.

Finally, the amendments add an explicit statement that an acquirer does not recognise contingent assets acquired in
a business acquisition.

The amendments are effective for business combinations for which the date of acquisition is on or after the beginning
of the first annual period beginning on or after January 1, 2022. Early application is permitted if an entity also applies
all other updated references (published together with the updated Conceptual Framework) at the same time or earlier.

Illustrative Financial Statements 2022 iii

Summary of key changes
from the 2021 version of the
Illustrative Financial
Statements

Amendments to SFRS(I) 1-16: Property, Plant and Equipment—Proceeds before Intended Use

The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from
selling items produced before that asset is available for use, i.e. proceeds while bringing the asset to the location and
condition necessary for it to be capable of operating in the manner intended by management. Consequently, an entity
recognises such sales proceeds and related costs in profit or loss. The entity measures the cost of those items in
accordance with SFRS(I) 1-2 Inventories.

The amendments also clarify the meaning of ‘testing whether an asset is functioning properly’. SFRS(I) 1-16 now
specifies this as assessing whether the technical and physical performance of the asset is such that it is capable of
being used in the production or supply of goods or services, for rental to others, or for administrative purposes.

If not presented separately in the statement of comprehensive income, the financial statements shall disclose the
amounts of proceeds and cost included in profit or loss that relate to items produced that are not an output of the
entity’s ordinary activities, and which line item(s) in the statement of comprehensive income include(s) such proceeds
and cost.

The amendments are applied retrospectively, but only to items of property, plant and equipment that are brought to
the location and condition necessary for them to be capable of operating in the manner intended by management on
or after the beginning of the earliest period presented in the financial statements in which the entity first applies the
amendments.

The entity shall recognise the cumulative effect of initially applying the amendments as an adjustment to the opening
balance of retained earnings (or other component of equity, as appropriate) at the beginning of that earliest period
presented.

The amendments are effective for annual periods beginning on or after January 1, 2022, with early application
permitted.

Amendments to SFRS(I) 1-37: Onerous Contracts—Cost of Fulfilling a Contract

The amendments specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’.
Costs that relate directly to a contract consist of both the incremental costs of fulfilling that contract (examples would
be direct labour or materials) and an allocation of other costs that relate directly to fulfilling contracts (an example
would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the
contract).

The amendments apply to contracts for which the entity has not yet fulfilled all its obligations at the beginning of the
annual reporting period in which the entity first applies the amendments. Comparatives are not restated. Instead,
the entity shall recognise the cumulative effect of initially applying the amendments as an adjustment to the opening
balance of retained earnings or other component of equity, as appropriate, at the date of initial application.

The amendments are effective for annual periods beginning on or after January 1, 2022, with early application
permitted.

iv
Summary of key changes
from the 2021 version of the
Illustrative Financial
Statements

Annual Improvements to SFRS(I)s 2018–2020

The Annual Improvements include amendments to four Standards as set out below:

SFRS(I) 1 First-time Adoption of International Financial Reporting Standards

The amendment provides additional relief to a subsidiary which becomes a first-time adopter later than its parent in
respect of accounting for cumulative translation differences. As a result of the amendment, a subsidiary that uses the
exemption in SFRS(I) 1:D16(a) can now also elect to measure cumulative translation differences for all foreign
operations at the carrying amount that would be included in the parent’s consolidated financial statements, based on
the parent’s date of transition to SFRS(I) Accounting Standards, if no adjustments were made for consolidation
procedures and for the effects of the business combination in which the parent acquired the subsidiary. A similar
election is available to an associate or joint venture that uses the exemption in SFRS(I) 1:D16(a).

SFRS(I) 9 Financial Instruments

The amendment clarifies that in applying the ‘10 per cent’ test to assess whether to derecognise a financial liability,
an entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or
received by either the entity or the lender on the other’s behalf.

The amendment is applied prospectively to modifications and exchanges that occur on or after the date the entity
first applies the amendment.

SFRS(I) 16 Leases

The amendment removes the illustration of the reimbursement of leasehold improvements.

As the amendment to SFRS(I) 16 only regards an illustrative example, no effective date is stated.

SFRS(I) 1-41 Agriculture

The amendment removes the requirement for entities to exclude cash flows for taxation when measuring fair value.
This aligns the fair value measurement in SFRS(I) 1-41 with the requirements of SFRS(I) 13 Fair Value Measurement
to use internally consistent cash flows and discount rates and enables preparers to determine whether to use pre-tax
or post-tax cash flows and discount rates for the most appropriate fair value measurement.

The amendment is applied prospectively, i.e. for fair value measurements on or after the date an entity initially
applies the amendment.

These amendments are effective for annual periods beginning on or after January 1, 2022, with early application
permitted.

Guidance notes

See Note 2 for the illustrative disclosures on the effects of the adoption of the new and revised SFRS(I)
pronouncements that are mandatorily effective for the year ending December 31, 2022.

Illustrative Financial Statements 2022 v

Summary of key changes
from the 2021 version of the
Illustrative Financial
Statements

Not yet mandatorily effective but early application allowed for the year ending December 31, 2022

The following is the list of new and revised SFRS(I)s that are not yet mandatorily effective for the year ending
December 31, 2022 but early application is permitted.

• Amendments to SFRS(I) 10 Consolidated Financial Statements and SFRS(I) 1-28 Investments in Associates and
Joint Ventures: Sale or Contribution of Assets between Investor and its Associate or Joint Venture

• SFRS(I) 17 Insurance Contracts (including November 2020 and December 2021 Amendments to SFRS(I) 17)

• Amendments to SFRS(I) 1-1 Presentation of Financial Statements: Classification of Liabilities as Current or

Non-current

• Amendments to SFRS(I) 1-1 Presentation of Financial Statements and SFRS(I) Practice Statement 2: Disclosure
of Accounting Policies

• Amendments to SFRS(I) 1-8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of
Accounting Estimates

• Amendments to SFRS(I) 1-12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single
Transaction

Guidance notes

See Note 58 for the illustrative disclosures on the effects of the new SFRS(I)s, SFRS(I) INTs and amendments to
SFRS(I) that are issued but not effective at the date of authorisation of financial statements. The list is updated
up to November 30, 2022.

vi
Summary of key changes
from the 2021 version of the
Illustrative Financial
Statements

Guidance notes

Climate change
Climate change continues to be an area of specific focus for investors, regulators and other business stakeholders
globally who increasingly demand better disclosures on climate change matters and challenge companies who are
not factoring the effects of climate change into their critical accounting judgements. Investors and stakeholders
want:

• to see how the impacts of climate change have been reflected in the recognition and measurement of assets
and liabilities;

• more transparency on the assumptions used and sensitivities to those assumptions; and

• to be confident that there is consistency between climate scenarios included in the narratives in other
sections within the annual report and the numbers disclosed in the financial statements.

There are several aspects of SFRS(I) Accounting Standards that require an entity to ‘predict the future’ by
developing expectations that affect the items recognised or disclosed in financial statements. These assumptions
can be driven by external factors (macroeconomic conditions, government action, etc.), planned actions of the
entity itself or a combination of the two.

Symbol as shown in the margin column indicates areas in this set of illustrative financial statements that could be
impacted by the effects of climate change and disclosures might need to be adapted to explain how the group
affects and/or is affected by climate change. The table in Appendix A gives an overview of the possible areas
affected by climate change.

Geopolitical and macroeconomic uncertainties

Political events and sanctions are continually changing and differ across the globe. While entities with operations
and investments in the affected jurisdictions were directly impacted, other entities have also experienced the
indirect impact to varying extent. The severity and duration from geopolitical uncertainties could have significant
impact on an entity’s assets and liabilities. Entities must carefully consider their unique circumstances and risk
exposures when analysing how the geopolitical uncertainties may affect their financial reporting. Specifically,
financial reporting and related financial statement disclosures need to convey all material current or potential
effects of such events. Those impact related to the following topics could be among the most pervasive and
challenging:
• Supply-chain disruption
• Preparation of forecast cash flow estimates
• Recoverability and impairment of assets
• Loss of control, joint control or the ability to exercise significant influence, or cessation of operations
• Foreign currency
• Events after the end of the reporting period
• Going concern

Supply-chain disruptions have also pushed up energy, agricultural and commodity prices globally and inflationary
pressures were intensified by overall manpower shortages and an increase in labour costs. To curb inflation, central
banks around the world have tightened their monetary policies. Rising interest rates would likely lead to higher
discount rates being used to compute value in use or fair value less costs of disposal and a lower recoverable
amount could lead to impairment loss. Entities which are highly leveraged and dependent on debt financing should
also evaluate if they are still able to service their debt obligations and interest payments with the rising interest
rates and this may have an impact on the entity’s going concern assessment and classification of liabilities. Impact
arising from supply-chain disruptions, increasing operation costs, loss of customers and overall economic
uncertainty should be considered concurrently with the impact of rising interest rates when entities perform going
concern assessment.

Illustrative Financial Statements 2022 vii

Content

Directors’ statement 1

Independent auditor’s report 8

Statements of financial position 18

Consolidated statement of profit or loss and other comprehensive income

Alt 1 – Consolidated statement of profit or loss and other comprehensive income 24

Alt 2 – Consolidated statement of profit or loss 28

Alt 2 – Consolidated statement of profit or loss and other comprehensive income 30

Statements of changes in equity 35

Consolidated statement of cash flows

Alt 1 – Direct method of reporting cash flows from operating activities 38

Alt 2 – Indirect method of reporting cash flows from operating activities 40

Notes to financial statements 43

Appendix A – Areas of financial statements disclosures affected by climate change 227

Index to the notes to
financial statements

1. General 43
2. Summary of significant accounting policies 044
3. Critical accounting judgements and key sources of estimation uncertainty 083
4. Financial instruments, financial risks and capital management 088
5. Holding company and related company transactions 116
6. Other related party transactions 117
7. Cash and cash equivalents 119
8. Trade and other receivables 120
9. Contract assets 124
10. Contract costs 126
11. Right to returned goods asset 127
12. Finance lease receivables 127
13. Investments in financial assets 129
14. Derivative financial instruments 132
15. Inventories 138
16. Assets classified as held for sale 139
17. Property, plant and equipment 140
18. Right-of-use assets 145
19. Investment property 147
20. Goodwill 150
21. Other intangible assets 152
22. Subsidiaries 153
23. Associates 158
24. Joint venture 162
25. Deferred tax 165
26. Borrowings 169
27. Trade and other payables 173
28. Contract liabilities 175
29. Refund liability 176
30. Lease liabilities 176
31. Provisions 177
32. Convertible loan notes 178
33. Retirement benefit obligations 179
34. Share-based payments 185
Index to the notes to
financial statements

35. Share capital 187

36. Treasury shares 188
37. Capital reserves 188
38. Revaluation reserves 189
39. Hedging and translation reserves 190
40. Revenue 192
41. Segment information 195
42. Finance income 199
43. Other gains and losses 200
44. Finance costs 201
45. Income tax expense 202
46. Discontinued operation 205
47. Profit for the year 206
48. Earnings per share 208
49. Dividends 210
50. Disposal of subsidiary 211
51. Acquisition of subsidiary 212
52. Non-cash transactions 217
53. Contingent liabilities 218
54. Commitments 218
55. Operating lease arrangements 219
56. Events after the reporting period 219
57. Reclassifications and comparative figures 220
58. Standards issued but not effective 221
Directors’ statement

Source

GAAP Singapore Ltd and its subsidiaries

Directors’ statement

CA 201(16) The directors present their statement together with the audited consolidated financial statements of the group and statement
of financial position and statement of changes in equity of the company for the financial year ended December 31, 2022(1)

CA Sch(12) In the opinion of the directors(2), the consolidated financial statements of the group and the statement of financial position
CA Sch(12)(1)(a) and statement of changes in equity of the company as set out on pages 18 to 225 are drawn up so as to give a true and fair
CA Sch(12)(1)(b) view of the financial position of the group and of the company as at December 31, 2022, and the financial performance,
changes in equity and cash flows of the group and changes in equity of the company for the financial year then ended and
at the date of this statement, there are reasonable grounds to believe that the company will be able to pay its debts when
they fall due.

CA Sch(12)(7) 1 Directors(3)

The directors of the company in office at the date of this statement are:

Ang Boey Chwee

Desmond Ee Fong Guan
Heng Ing Jong
Kenneth Lim Meng Nam (Appointed on July 11, 2022)
Ooi Puay Quan (Appointed on September 7, 2022)
Raymond See Teoh Ung (Appointed on November 6, 2022)
Vanessa Wong Xiao Ying (Alternate to Ang Boey Chwee and appointed on January 3, 2022)

CA Sch(12)(8)(a) 2 Arrangements to enable directors to acquire benefits by means of the acquisition of shares and debentures
CA Sch(12)(8)(b)
Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose
object is to enable the directors of the company to acquire benefits by means of the acquisition of shares or debentures in
the company or any other body corporate, except for the options mentioned in paragraph 4 of the Directors’ statement.

1
Directors’ statement

Source

GAAP Singapore Ltd and its subsidiaries

Directors’ statement

CA Sch(12)(9)(a) 3 Directors’ interests in shares and debentures(4)

CA Sch(12)(9)(b)
CA 164 The directors of the company holding office at the end of the financial year had no interests in the share capital and
debentures of the company and related corporations as recorded in the register of directors’ shareholdings kept by the
company under section 164 of the Companies Act 1967 except as follows:

Name of directors and companies Shareholdings registered Shareholdings in which directors

in which interests are held in name of director are deemed to have an interest
At beginning At beginning
of year or date of year or date
of appointment, At end of appointment, At end
if later of year if later of year

GAAP Singapore Ltd

(Ordinary shares)

Ang Boey Chwee 40,000,000 50,000,000 250,000 250,000

Kenneth Lim Meng Nam 100,000 575,000 - -

Raymond See Teoh Ung - 25,000 - -

GAAP Holdings Ltd

(Ordinary shares)

Ang Boey Chwee 10,000 10,000 - -

GAAP Pacific Inc.

(Ordinary shares)

Raymond See Teoh Ung 1,000 1,000 - -

CA 7 By virtue of section 7 of the Companies Act 1967, Mr Ang Boey Chwee is deemed to have an interest in all the related
CA 164 corporations of the company.

LM 1207(7) The directors’ interests in the shares and options of the company at January 21, 2023 were the same at December 31, 2022.

Illustrative Financial Statements 2022 2

Directors’ statement

Source

GAAP Singapore Ltd and its subsidiaries

Directors’ statement

CA Sch(12)(4) 4 Share options(5)

(a) Options to take up unissued shares

LM 843(3) The Employee Share Option Scheme (the ‘Scheme’) in respect of unissued ordinary shares in the company was approved by
the shareholders of the company at an Extraordinary General Meeting held on March 15, 2016.

LM 852(1)(a) The scheme is administered by the Remuneration and Share Option Committee whose members are:

Heng Ing Jong (Chairman)

Desmond Ee Fong Guan
Kenneth Lim Meng Nam
Ooi Puay Quan

LM 849 Mr Kenneth Lim Meng Nam did not participate in any deliberation or decision in respect of the options granted to him.

CA Sch(12)(2)(c) Under the Scheme, options granted to the directors and employees may, except in certain special circumstances,
CA Sch(12)(5) be exercised at any time after two years but no later than the expiry date. The ordinary shares of the company (‘Shares’)
CA Sch(12)(6) under option may be exercised in full or in respect of 100 Shares or a multiple thereof, on the payment of the exercise price.
LM 852(1)(d) The exercise price is based on the average of closing prices of the Shares on the Singapore Exchange Securities Trading
LM 852(2) Limited for the three market days immediately preceding the date of grant. The Remuneration and Share Option Committee
LM 845(5) may at its discretion fix the exercise price at a discount not exceeding 20 percent to the above price. No options have been
granted at a discount.

LM 845(1) (b) Unissued shares under option and options exercised

CA Sch(12)(2)(a)
CA Sch(12)(2)(b) The number of Shares available under the Scheme shall not exceed 15% of the issued share capital of the company.
CA Sch(12)(5) The number of outstanding share options under the Scheme are as follows:
CA Sch(12)(6)
Number of options to subscribe for ordinary shares of the company

Date of grant Balance at Granted Exercised Cancelled/ Outstanding at Exercise Exercisable period
January 1, Lapsed December 31, price
2022 2022 per share

July 1, 2019 2,500,000 - (650,000) (61,000) 1,789,000 $4.45 July 1, 2021 to

June 30, 2023

June 30, 2021 1,000,000 - - - 1,000,000 $4.22 July 1, 2023 to

June 30, 2025

December 31, 2021 1,000,000 - - - 1,000,000 $4.22 January 1, 2024 to

December 31, 2026

March 31, 2022 - 250,000 - - 250,000 $4.85 April 1, 2024 to

March 31, 2026

June 30, 2022 - 1,150,000 - - 1,150,000 $4.35 July 1, 2024 to

June 30, 2026

October 31, 2022 - 300,000 - - 300,000 $4.84 November 1, 2024 to

October 31, 2026

Total 4,500,000 1,700,000 (650,000) (61,000) 5,489,000

3
Directors’ statement

Source

GAAP Singapore Ltd and its subsidiaries

Directors’ statement

CA Sch(12)(3) Particulars of the options granted in 2019 and 2021 under the Scheme were set out in the Directors’ statement for the
financial year ended December 31, 2019 and December 31, 2021 respectively.

LM 852(1)(c)(ii) In respect of options granted to employees of related corporations, a total of 920,000 options were granted during the
financial year, making it a total of 2,085,000 options granted to employees of related corporations from the commencement
of the Scheme to the end of the financial year.

CA Sch(12)(2)(d) Holders of the above share options have no right to participate in any share issues of any other company. No employee or
LM 852(1)(b)(iii) employee of related corporations has received 5% or more of the total options available under this Scheme.
LM 852(2)
LM 852(1)(b)(ii) There are no options granted to any of the company’s controlling shareholders or their associates (as defined in the Singapore
LM 852(2) Exchange Securities Trading Listing Manual).

LM 852(1)(b)(i) The information on directors of the company participating in the Scheme is as follows:

Name of director Options Aggregate Aggregate Aggregate Aggregate

granted during options options options options
the financial granted since exercised since lapsed since outstanding as
year commencement commencement commencement at the end of
of the Scheme of the Scheme of the Scheme financial year
to the end of to the end of to the end of
financial year financial year financial year

Kenneth Lim Meng Nam 8,000 28,000 (13,000) - 15,000

5 Audit Committee(6)

CA 201B(9) The Audit Committee of the company, consisting all non-executive directors, is chaired by Mr Ooi Puay Quan, an independent
CA 201B(2),(3) director, and includes Mr Desmond Ee Fong Guan, an independent director and Mr Raymond See Teoh Ung. The Audit
CA 201B(5)(a) Committee has met four times since the last Annual General Meeting (‘AGM’) and has reviewed the following, where relevant,
with the executive directors and external and internal auditors of the company:

(a) The audit plans and results of the internal auditor’s examination and evaluation of the group’s systems of internal
accounting controls;

(b) The group’s financial and operating results and accounting policies;

(c) The audit plans of the external auditors;

(d) The financial statements of the company and the consolidated financial statements of the group before their submission
to the directors of the company and external auditor’s report on those financial statements;

(e) The quarterly, half-yearly and annual announcements as well as the related press releases on the results and financial
position of the company and the group;

(f) The co-operation and assistance given by management to the group’s external auditors; and

(g) The re-appointment of the external auditors of the group.

CA 201B(6) The Audit Committee has full access to and has the co-operation of management and has been given the resources required
for it to discharge its function properly. It also has full discretion to invite any director and executive officer to attend its
meetings. The external and internal auditors have unrestricted access to the Audit Committee.

CA 201B(5)(b) The Audit Committee has recommended to the directors the nomination of Deloitte & Touche LLP for re-appointment as
external auditors of the group at the forthcoming AGM of the company.

Illustrative Financial Statements 2022 4

Directors’ statement

Source

GAAP Singapore Ltd and its subsidiaries

Directors’ statement

6 Auditors(7)

The auditors, Deloitte & Touche LLP, have expressed their willingness to accept re-appointment.

CA 201(16) On behalf of the directors(8)

Ang Boey Chwee

Desmond Ee Fong Guan

March 16, 2023

5
Directors’ statement

Source

Guidance notes – Directors’ statement

CA 4 1. Financial year
If the company’s financial year is less than 12 months, the term ‘financial year’ is defined in the first paragraph of the
Directors’ statement and therefore the rest of the report can still be ‘year’ and does not require amendment to ‘period’.
Where there is a change of financial year end, the reason for the change should be disclosed in the Directors’ statement
as well as the notes to the financial statements.

CA Sch(12)(1) 2. Opinion of the directors

A statement is to be made as to whether in the opinion of the directors:

(a) the financial statements and, where applicable, the consolidated financial statements are drawn up so as to give a
true and fair view of the financial position and performance of the company and, if applicable, of the financial position
and performance of the group for the period covered by the financial statements or consolidated financial
statements; and

(b) at the date of the statement there are reasonable grounds to believe that the company will be able to pay its debts
as and when they fall due.

CA Sch(12)(7) 3. Directors in office at the date of the statement

If a director was appointed during the financial year and up to the date of the Directors’ statement, the date of the
appointment, although not required, is recommended to be disclosed clearly to identify the new director. There is no
requirement to give details of director(s) who resigned during the financial year and up to the date of the Directors’
statement.

CA Sch(12)(9)(a) 4. Directors’ interests in shares and debentures

CA Sch(12)(9)(b) Directors’ interests include personal holdings, beneficial interest of their immediate family and deemed interests as defined
CA 7 by Section 7 of the Companies Act 1967. Directors’ interests in rights or share options are also to be disclosed accordingly.

If a director resigns after the end of the financial year but before the date of the Directors’ statement, his interest at the
end of the financial year should be disclosed.

Where the company is a wholly owned subsidiary of another company (the ‘holding company’), the company may be
CA 164(3) deemed to have complied with section 164 of the Companies Act 1967 in relation to a director who is also a director of
that other company if the particulars required by this section to be shown in the register of the company are shown in the
register of the holding company. The following should be disclosed:

The directors, Mr/Ms _________ and Mr/Ms __________ are also directors of GAAP Holdings Ltd, incorporated in
Singapore, which owns all the shares of the company. Their interests in shares are recorded in the register of directors’
shareholdings kept under section 164 of the Companies Act 1967 by the holding company and are therefore not disclosed
in this statement.

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CA Sch(12)(2) 5. Share options

CA Sch(12)(3) The disclosures required by section Twelfth Schedule (2) of the Companies Act 1967 relate to options granted by the
company. Where any of the disclosures have been made in a previous report, the company need only make reference to
that report.

For options granted by the company during the financial year, the following disclosures have to be made:

(a) The number and class of shares in respect of which the option has been granted;

(b) The date of expiration of the option;

(c) The basis upon which the option may be exercised; and

(d) Whether the person to whom the option has been granted has any right to participate by virtue of the option in any
share issue of any other company.

CA Sch(12)(4) Where there are share options of subsidiary corporations, the following should be disclosed:

CA Sch(12)(2) At the end of the financial year, there were XX,XXX ordinary shares of GAAP Logistics Pte Ltd under option relating to the
(name of option scheme) Share Option Scheme. Details and terms of the options have been disclosed in the Directors’
statement of GAAP Logistics Pte Ltd.

CA Sch(12)(5) If there are no options to take up unissued shares during the financial year, the following should be disclosed:

Options to take up unissued shares

During the financial year, no options to take up unissued shares of the company or any corporation in the group were
granted.

If no options were exercised during the financial year, the following should be disclosed:

Options exercised
During the financial year, there were no shares of the company or any corporation in the group issued by virtue of the
exercise of an option to take up unissued shares.

If there are no unissued shares under option at the end of the financial year, the following should be disclosed:

CA Sch(12)(6) Unissued shares under option

At the end of the financial year, there were no unissued shares of the company or any corporation in the group under
option.

CA 201B(1) 6. Audit committee

CA 201B(9) Every listed company shall have an audit committee. For listed companies, the details and functions of the audit committee
should be disclosed in the Directors’ statement if the statutory accounts (which would not contain a section on corporate
governance), rather than the annual report, is filed with the Accounting and Corporate Regulatory Authority of Singapore.

7. Auditor
The information on the auditor is not compulsory, but it is often disclosed.

CA 201(9)(a) 8. Dating and signing of the Directors’ statement

CA 201(16) The phrase ‘On behalf of the directors’ is not necessary if the company only has 2 directors.
LM 707
The Directors’ statement shall be made out not less than 14 days before the date of the company’s annual general meeting
(‘AGM’). The report shall be made in accordance with a resolution of the board of directors, which will specify the day on
which it is to be made out and be signed by 2 directors.

CA 175(1)(a),(b) AGMs should be held within 4 and 6 months of the end of each financial year for listed and non-listed companies
LM App 2.2(10) respectively.

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SSA 700R(21-22) Independent Auditor’s Report to the members(1) of GAAP Singapore Ltd

SSA 700R(45) Report on the Audit of the Financial Statements(2)

SSA 700R(23) Opinion(3),(4),(5)

SSA 700R(24-27) We have audited the financial statements of GAAP Singapore Ltd (the ‘company’) and its subsidiaries
(the ‘group’), which comprise the consolidated statement of financial position of the group and the statement of financial
position of the company as at December 31, 2022, and the consolidated statement of profit or loss and other comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows of the group and the
statement of changes in equity of the company for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, as set out on pages 18 to 225.

In our opinion, the accompanying consolidated financial statements of the group and the statement of financial position and
statement of changes in equity of the company are properly drawn up in accordance with the provisions of the
Companies Act 1967 (the ‘Act’) and Singapore Financial Reporting Standards (International) (‘SFRS(I)s’) so as to give a true
and fair view of the consolidated financial position of the group and the financial position of the company as at
December 31, 2022 and of the consolidated financial performance, consolidated changes in equity and consolidated cash
flows of the group and of the changes in equity of the company for the year ended on that date.

SSA 700R(28) Basis for Opinion(5)

We conducted our audit in accordance with Singapore Standards on Auditing (‘SSAs’). Our responsibilities under those
Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report. We are independent of the group in accordance with the Accounting and Corporate Regulatory Authority Code of
Professional Conduct and Ethics for Public Accountants and Accounting Entities (‘ACRA Code’) together with the ethical
requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.

[Material Uncertainty Related to Going Concern(5),(6a)]

[Include ‘Material Uncertainty Related to Going Concern’ section and the related disclosures, if applicable.]

SSA 700R(30-31) Key Audit Matters(5),(6b),(7)

SSA 701(11) Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current year. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

SSA 701(13) [Description of each key audit matter in accordance with SSA 701 Communicating Key Audit Matters in the Independent
Auditor’s Report.]

Key audit matter(s) How the matter was addressed in the audit

Description of key audit matter shall To describe how the key audit matter was addressed in
• include a reference to the related disclosure(s), if any, the audit.
in the financial statements; and
• address why the matter was considered to be one of most
significance in the audit and therefore determined to be a
key audit matter.

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SSA 700R(21) Independent Auditor’s Report to the members(1) of GAAP Singapore Ltd

[Other Matter(5),(8)]
[Include ‘Other Matter’ section and the related disclosures, if applicable.]

SSA 700R(32) Information Other than the Financial Statements and Auditor’s Report Thereon(5),(7),(9)

SSA 720R(21-22) [In accordance with SSA 720 The Auditor’s Responsibilities Relating to Other Information, a separate section is required to
SSA 720R(A53) report on other information, whether financial or non-financial information (other than financial statements and the auditor’s
report thereon), included in an entity’s annual report, regardless of whether the other information is obtained by the auditor
prior to, or after, the date of the auditor’s report. Please refer to Guidance notes – Independent auditor’s report for illustrative
examples.]

SSA 700R(33) Responsibilities of Management and Directors for the Financial Statements

SSA 700R(34-36) Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the
provisions of the Act and SFRS(I)s, and for devising and maintaining a system of internal accounting controls sufficient to
provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions
are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial
statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the group or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the group’s financial reporting process.

SSA 700R(37) Auditor’s Responsibilities for the Audit of the Financial Statements(10)

SSA 700R(38-40) Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:

(a) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.

(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.

ISCA FAQ 7 (d) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
(June 2018) evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the group to cease to continue as a going concern(10a).

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SSA 700R(21) Independent Auditor’s Report to the members(1) of GAAP Singapore Ltd

(e) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.

(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion (10b).

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, related safeguards (10c).

From the matters communicated with the directors, we determine those matters that were of most significance in the audit
of the financial statements of the current year and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such communication (10d).

SSA 700R(43) Report on Other Legal and Regulatory Requirements

CA 207(2)(b), In our opinion, the accounting and other records required by the Act to be kept by the company and by those subsidiary
SSA 700R(A58) corporations incorporated in Singapore of which we are the auditors have been properly kept in accordance with the
provisions of the Act.

SSA 700R(46) The engagement partner on the audit resulting in this independent auditor’s report is [name](11).

Deloitte & Touche LLP

Public Accountants and
Chartered Accountants
Singapore(12)

March 16, 2023(13)

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Guidance notes – Independent auditor’s report

SSA 700R(22), 1. Addressee

CA 207(1) The independent auditor’s report should be appropriately addressed as required by the circumstances of the engagement
and local regulations. The report is ordinarily addressed to those for whom the report is prepared, often either to the
shareholders or to those charged with governance of the company. For Singapore-incorporated companies, the report is
required to be addressed to members of the company in accordance with CA 207(1).

SSA 700R 2. Sub-title

Illustration 2 The sub-title ‘Report on the Audit of the Financial Statements’ is unnecessary in circumstances when the second sub-title
‘Report on Other Legal and Regulatory Requirements’ is not applicable.

ISCA FAQ 5 3. For financial statements prepared in accordance with SFRS(I)s and IFRSs
(April 2018) For an entity that has elected to state simultaneous compliance with both SFRS(I)s and IFRSs issued by the International
Accounting Standards Board (IASB) in its financial statements since the initial adoption of SFRS(I), the following options
for presentation of the audit opinions would apply.

Option 1: Presentation of the audit opinions in a single sentence

Opinion

We have audited the financial statements of GAAP Singapore Ltd (the ‘company’) and its subsidiaries (the ‘group’),
which comprise the consolidated statement of financial position of the group and the statement of financial position of the
company as at December 31, 2022, and the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows of the group and the statement of
changes in equity of the company for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, as set out on pages [x] to [x].

In our opinion, the accompanying consolidated financial statements of the group and the statement of financial position
and statement of changes in equity of the company are properly drawn up in accordance with the provisions of the
Companies Act 1967 (the ‘Act’), Singapore Financial Reporting Standards (International) (‘SFRS(I)s’) and International
Financial Reporting Standards (‘IFRSs’) so as to give a true and fair view of the consolidated financial position of the group
and the financial position of the company as at December 31, 2022 and of the consolidated financial performance,
consolidated changes in equity and consolidated cash flows of the group and of the changes in equity of the company for
the year ended on that date.

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Option 2: Presentation of the audit opinions separately

Opinion

We have audited the financial statements of GAAP Singapore Ltd (the ‘company’) and its subsidiaries (the ‘group’),
which comprise the consolidated statement of financial position of the group and the statement of financial position of the
company as at December 31, 2022, and the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows of the group and the statement of
changes in equity of the company for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, as set out on pages [x] to [x].

In our opinion, the accompanying consolidated financial statements of the group and the statement of financial position
and statement of changes in equity of the company are properly drawn up in accordance with the provisions of the
Companies Act 1967 (the ‘Act’) and Singapore Financial Reporting Standards (International) (‘SFRS(I)s’) so as to give a
true and fair view of the consolidated financial position of the group and the financial position of the company as at
December 31, 2022 and of the consolidated financial performance, consolidated changes in equity and consolidated cash
flows of the group and of the changes in equity of the company for the year ended on that date.

Separate opinion in relation to International Financial Reporting Standards

As explained in Note [x] to the financial statements, the group and the company, in addition to applying SFRS(I)s,
have also applied International Financial Reporting Standards (‘IFRSs’).

In our opinion, the accompanying consolidated financial statements of the group and the statement of financial position
and statement of changes in equity of the company give a true and fair view of the consolidated financial position of the
group and the financial position of the company as at December 31, 2022 and of the consolidated financial performance,
consolidated changes in equity and consolidated cash flows of the group and of the changes in equity of the company for
the year then ended in accordance with IFRSs.

Under both options, the ‘Responsibilities of Management and Directors for the Financial Statements’ section of the auditor’s
report would also be amended as follows:

Responsibilities of Management and Directors for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with
the provisions of the Act, SFRS(I)s and IFRSs, and for devising and maintaining a system of internal accounting controls
sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition;
and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and
fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the group or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the group’s financial reporting process.

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SSA 700R 4. For group and holding companies only

Illustration 2 Where the complete set of financial statements of the company is also presented, the following opinion paragraphs would
be appropriate:

Opinion

We have audited the financial statements of GAAP Singapore Ltd (the ‘company’) and its subsidiaries (the ‘group’),
which comprise the consolidated statement of financial position of the group and the statement of financial position of the
company as at December 31, 2022, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows of the group and the statement of
profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows of the company
for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as
set out on pages [x] to [x].

In our opinion, the accompanying consolidated financial statements of the group and the financial statements of the
company are properly drawn up in accordance with the provisions of the Companies Act 1967 (the ‘Act’) and Singapore
Financial Reporting Standards (International) (‘SFRS(I)s’) so as to give a true and fair view of the consolidated financial
position of the group and the financial position of the company as at December 31, 2022 and of the consolidated financial
performance, consolidated changes in equity and consolidated cash flows of the group and of the financial performance,
changes in equity and cash flows of the company for the year ended on that date.

5. Ordering and placement of sections in the Auditor’s Report

The ‘Opinion’ section must be presented first in the auditor’s report and immediately followed by the ‘Basis for Opinion’
section. The ordering of the remaining sections in the auditor’s report may be determined based on the auditor’s judgement
on the relative importance of the matters discussed in the remaining sections.

SSA 570R(22) 6a. Material uncertainty related to going concern

In accordance with SSA 570(R) Going Concern, when use of going concern basis of accounting is appropriate but a material
uncertainty exists, and if adequate disclosure about the material uncertainty is made in the financial statements, a separate
section under the heading ‘Material Uncertainty Related to Going Concern’ shall be required to be made in the auditor’s
report. This section would ordinarily be included before the section of Key Audit Matters.

SSA 570R(20) 6b. ‘Close call’ related to going concern

SSA 570R(A24) When there are events or conditions identified that may cast significant doubt on the group and company’s ability to
SSA 570R(A25) continue as a going concern, but based on the audit evidence obtained the auditor concludes that no material uncertainty
SSA 701(A41) exists, the auditor may determine that one or more matters relating to this conclusion arising from the auditor’s work
effort under SSA570(R) are key audit matters.

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SSA 700R(30-31) 7. Key audit matters

The Key Audit Matters section is required for listed entities only. When the auditor is otherwise required by law or regulation
or decides to communicate key audit matters in the independent auditor’s report, the auditor shall do so in accordance
with SSA 701.

SSA 570R When there is material uncertainty related to going concern, the following paragraph shall be used under the Key Audit
Illustration 1 Matters section instead:

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current year. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters .
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.

SSA 705R When a qualified or adverse opinion on the financial statements is issued, the following paragraph shall be used under the
Illustration 1 Key Audit Matters section instead:

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current year. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Basis for Qualified/Adverse Opinion section we have determined the matters
described below to be the key audit matters to be communicated in our report.

SSA 701(A6) Note: When a qualified or adverse opinion is expressed, and/or Material Uncertainty Related to Going Concern section is
SSA 701(A58) included, there may be no other matters identified as key audit matters. In such a situation, the following paragraph
should be used under the Key Audit Matters section:

Except for the matter described in the Basis for Qualified/Adverse Opinion section and/or Material Uncertainty Related to
Going Concern section, we have determined that there are no other key audit matters to communicate in our report.

SSA 705R(28) When a disclaimer of opinion on the financial statements is issued, the independent auditor’s report shall not include a
Key Audit Matters section in accordance with SSA 701 or an Other Information section in accordance with SSA 720(R).

8. First year engagements

For first year engagements, the following shall be added to the independent auditor’s report if the financial statements for
the preceding year had an unmodified opinion issued by the predecessor auditors:

SSA 710(17) Other Matter

Illustration 3
The financial statements of the group and the company for the year ended December 31, 2021 were audited by another
auditor who expressed an unmodified opinion on those financial statements on Mm, Dd, Yyyy.

SSA 710(17) If the predecessor auditor’s opinion was modified, the following shall be added:

The financial statements of the group and the company for the year ended December 31, 2021 were audited by another
auditor who expressed a/an qualified/adverse/disclaimer of opinion on those financial statements on Mm, Dd, Yyyy as
extracted below:

<<Quote modification by predecessor auditors>>

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9. Information other than the financial statements and auditor’s report thereon
SSA 720R (21) The auditor’s report shall include ‘Information other than the financial Statements and auditor’s report thereon’ section at
the date of the auditor’s report:-
(i) For an audit of financial statements of a listed entity, the auditor has obtained, or expects to obtain the other
information; or
(ii) For an audit of financial statements of an entity other than a listed entity, the auditor has obtained some or all of the
other information.

SSA 720R (22) SSA 720R requires an identification of other information, if any, obtained by the auditor prior to the date of the auditor’s
report; and for an audit of financial statements of a listed entity, other information, if any, expected to be obtained after
the date of the auditor’s report. For 9(i) above, a more specific description of the other information expected to be obtained
after the date of auditor’s report, such as ‘Chairman’s statement, Operating and financial review reports’ shall be disclosed.

Illustrative disclosures depending on the circumstances are provided below.

SSA 720R For an independent auditor’s report of any Singapore incorporated company, whether listed or other than listed, containing
Illustration 1 an unmodified opinion when the auditor has obtained all of the other information prior to the date of the auditor’s report
and has not identified a material misstatement of the other information, to disclose the following:

Management is responsible for the other information. The other information comprises the [information included in the
X report, but does not include the financial statements and our auditor’s report thereon.]

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.

SSA 720R For an independent auditor’s report of a Singapore incorporated company, whether listed or other than listed, containing
Illustration 2 an unmodified opinion when the auditor has obtained part of the other information prior to the date of the auditor’s report,
Illustration 3 has not identified a material misstatement of the other information, and expects to obtain other information after the date
of the auditor’s report, to disclose the following:

Management is responsible for the other information. The other information comprises the [X report but does not include
the financial statements and our auditor’s report thereon], which we obtained prior to the date of this auditor’s report,
and the Y report, which is expected to be made available to us after that date.

(Note: If the company is not a listed company, replace this paragraph with ‘Management is responsible for the other
information. The other information obtained at the date of this auditor’s report is [information included in the X rep ort,
but does not include the financial statements and our auditor’s report thereon.]’)

Our opinion on the financial statements does not cover the other information and we do not and will not express any form
of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above
and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s
report, we conclude that there is material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.

When we read the Y report, if we conclude that there is a material misstatement therein, we are required to communicate
the matter to directors and take appropriate actions in accordance with SSAs. (Note: Remove this paragraph if the
company is not a listed company.)

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SSA 720R For an independent auditor’s report of a Singapore incorporated listed company containing an unmodified opinion when
Illustration 4 the auditor has obtained no other information prior to the date of the auditor’s report but expects to obtain other
information after the date of the auditor’s report, to disclose the following:

Management is responsible for the other information. The other information comprises the [information included in the
X report, but does not include the financial statements and our auditor’s report thereon]. The X report is expected to be
made available to us after the date of this auditor’s report.

Our opinion on the financial statements does not cover the other information and we will not express any form of assurance
conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above
when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the X report, if we conclude that there is a material misstatement therein, we are required to communicate
the matter to directors and take appropriate actions in accordance with SSAs.

SSA 720R NOTE: Depending on the Key Audit Matters discussed, when a material misstatement of the other information exists, the
Illustration 5 Other Information section including the description of material misstatement of the other information may be included
before the section of Key Audit Matters.

For other specimens of modified reports and material misstatements identified in other information, refer to
SSA 720 The Auditor’s Responsibilities Relating to Other Information.

10. Auditor’s Responsibilities for the Audit of the Financial Statements

SSA 570R(A27) 10a. Financial statements prepared on a basis other than going concern
For paragraph (d), where the financial statements are prepared on a basis other than going concern, the description of
the auditor’s responsibilities relating to going concern should be tailored accordingly so as to provide relevant and useful
information to users of the financial statements and the auditor’s report thereon.

ISCA FAQ 7 An example of how the auditor’s responsibilities can be described is provided below for reference. The auditor should tailor
(June 2018) the wordings as appropriate depending on the circumstances.

Conclude on the appropriateness of management’s use of the going concern basis of accounting. When such use is
inappropriate and management uses an alternative basis of accounting, we conclude whether the alternative basis used
by management is acceptable in the circumstances. We also evaluate the adequacy of the disclosures describing the
alternative basis of accounting and reasons for its use. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report.

SSA 700R(39)(c) 10b. This paragraph in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements’ section is required only
when SSA 600 Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors)
applies.

SSA 700R(40)(b) 10c. This paragraph in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements’ section is required for audits
of financial statements of listed entities only.

SSA 700R(40)(c) 10d. This paragraph in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements’ section is required for
audits of financial statements of listed entities and any other entities for which key audit matters are communicated in
accordance with SSA 701.

Illustrative Financial Statements 2022 16

Independent auditor’s report

Source

SSA 700R(46) 11. Name of audit partner

The name of the engagement partner shall be included in the independent auditor’s report on financial statements of listed
entities unless, in rare circumstances, such disclosure is reasonably expected to lead to a significant personal security
threat. In the rare circumstances that the auditor intends not to include the name of the engagement partner in the
auditor’s report, the auditor shall discuss this intention with those charged with governance to inform the auditor’s
assessment of the likelihood and severity of a significant personal security threat.

LM 713(1) The listing manual requires an issuer to disclose in its annual report the date of appointment and the name of the audit
partner in charge of auditing the issuer and its group of companies. An issuer may typically disclose this information in
the corporate information section of its annual report.

SSA 700R(48) 12. Auditor’s address

The report should name a specific location, which is ordinarily the city where the auditor maintains the office that has
responsibility for the audit.

SSA 700R(49) 13. Date of independent auditor’s report

SSA 700R(49) The auditor should date the report on the financial statements no earlier than the date on which the auditor has obtained
sufficient appropriate audit evidence on which to base the auditor’s opinion on the financial statements and those with the
recognised authority have asserted that they have taken responsibility for those financial statements.

SSA 700R(A67) Since the auditor’s opinion is provided on the financial statements and the financial statements are the responsibility of
management and directors, the auditor is not in a position to conclude that sufficient appropriate audit evidence has been
obtained until the auditor obtains evidence that a complete set of financial statements have been prepared and
management and directors have accepted responsibility for them.

CA 201(9)(a) The directors shall take reasonable steps to ensure that the financial statements are audited not less than 14 days before
the annual general meeting of the company.

14. Other specimens and modified reports

For other specimens and modified reports, refer to SSA 700R, SSA 701, SSA 705R, SSA 706R, SSA 710, SSA 720R and
AGS 1.

17
Statements of financial
position

Source

SFRS(I) 1-1:51(a),(b) GAAP Singapore Ltd and its subsidiaries

SFRS(I) 1-1:10(a),(ea) Statements of financial position(8)

SFRS(I) 1-1:51(c) December 31, 2022
LM 1207(5)(a),(b)
CA 201(5)(a),(b)

Group Company
SFRS(I) 1-1:38
SFRS(I) 1-1:113 Assets Note 2022 2021 2022 2021
SFRS(I) 1-1:51(d),(e) $’000 $’000 $’000 $’000

SFRS(I) 1-1:60-61 Current assets

SFRS(I) 1-1:66-68
SFRS(I) 1-1:54(i) Cash and cash equivalents 7 34,759 1,175 2,074 647
SFRS(I) 1-1:54(h) Trade and other receivables 8 123,499 109,729 89,371 55,895
SFRS(I) 15:116(a)
SFRS(I) 1-1:55 Contract assets(6) 9 14,610 13,898 - -
SFRS(I) 15:105
SFRS(I) 15:116(a)
SFRS(I) 1-1:55 Contract costs(6) 10 749 735 - -
SFRS(I) 15:105
SFRS(I) 15:91
SFRS(I) 15:95
SFRS(I) 1-1:55 Right to returned goods asset(6) 11 626 672 - -
SFRS(I) 15:B21(c)
SFRS(I) 1-1:54(d) Finance lease receivables 12 12,713 13,674 - -
SFRS(I) 1-1:55
SFRS(I) 1-1:54(d) (5)
Investments in financial assets 13 13,074 12,490 - -
SFRS(I) 1-1:55
SFRS(I) 1-1:54(d) (5)
Derivative financial instruments 14 2,466 2,338 - -
SFRS(I) 1-1:55
SFRS(I) 1-1:54(g) Inventories 15 116,918 107,920 - -
319,414 262,631 91,445 56,542
SFRS(I) 1-1:54(j) Assets classified as held for sale 16 1,922 - - -
SFRS(I) 5:38
Total current assets 321,336 262,631 91,445 56,542

SFRS(I) 1-1:60-61 Non-current assets

SFRS(I) 1-1:66-68
SFRS(I) 1-1:54(a) Property, plant and equipment 17 655,355 565,442 - -
SFRS(I) 1-1:55 Right-of-use assets(7) 18 3,788 3,393 - -
SFRS(I) 16:47(a)
FRS(I) 1-1:54(b) Investment property 19 12,000 11,409 - -
SFRS(I) 1-1:55 Goodwill 20 4,038 2,538 - -
SFRS(I) 1-1:54(c) Other intangible assets 21 26,985 21,294 - -
SFRS(I) 1-1:55 Subsidiaries(1) 22 - - 111,650 110,000
SFRS(I) 1-1:54(e) Associates(3) 23 45,060 12,274 - -
SFRS(I) 1-1:55
SFRS(I) 1-1:54(e) Joint venture(3) 24 3,946 3,662 - -
SFRS(I) 1-1:55
SFRS(I) 1-1:54(d) Finance lease receivables 12 13,784 27,489 - -
SFRS(I) 1-1:55
SFRS(I) 1-1:54(d) (5)
Investments in financial assets 13 50,865 44,149 - -
SFRS(I) 1-1:55
SFRS(I) 1-1:54(d) (5)
Derivative financial instruments 14 1,779 - - -
SFRS(I) 1-1:55
SFRS(I) 1-1:54(o) Deferred tax assets 25 2,884 3,291 - -
SFRS(I) 1-1:56
Total non-current assets 820,484 694,941 111,650 110,000

SFRS(I) 1-1:55-55A Total assets 1,141,820 957,572 203,095 166,542

Illustrative Financial Statements 2022 18

Statements of financial
position

Source

Group Company
SFRS(I) 1-1:38
SFRS(I) 1-1:113 Liabilities and Equity Note 2022 2021 2022 2021
SFRS(I) 1-1:51(d),(e) $’000 $’000 $’000 $’000

SFRS(I) 1-1:60-61 Current liabilities

SFRS(I) 1-1:69-76
SFRS(I) 1-1:54(m) Borrowings 26 70,907 70,909 - -
SFRS(I) 1-1:55
SFRS(I) 1-1:54(k) Trade and other payables 27 186,571 130,248 7,065 7,586
SFRS(I) 1-1:55 Contract liabilities(6) 28 6,215 6,793 - -
SFRS(I) 15:105
SFRS(I) 15:116(a)
SFRS(I) 1-1:55 Refund liability(6) 29 1,083 1,139 - -
SFRS(I) 15:B21(b)
SFRS(I) 15:119(d)
SFRS(I) 1-1:54(m) Lease liabilities(7) 30 1,242 1,380 - -
SFRS(I) 1-1:55
SFRS(I) 16:47(b)
SFRS(I) 1-1:54(m) Derivative financial instruments(5) 14 273 - - -
SFRS(I) 1-1:55
SFRS(I) 1-1:54(l) Provisions 31 6,432 2,065 - -
SFRS(I) 1-1:54(n) Income tax payable 8,269 1,986 - -
SFRS(I) 1-1:56
280,992 214,520 7,065 7,586
SFRS(I) 1-1:54(p) Liabilities directly associated with
SFRS(I) 5:38 assets classified as held for sale 16 247 - - -
Total current liabilities 281,239 214,520 7,065 7,586

SFRS(I) 1-1:60-61 Non-current liabilities

SFRS(I) 1-1:69-76
SFRS(I) 1-1:54(m) Borrowings 26 273,845 343,394 - -
SFRS(I) 1-1:55
SFRS(I) 1-1:54(m) Convertible loan notes 32 24,327 - 24,327 -
SFRS(I) 1-1:55
SFRS(I) 1-1:54(k) Other payables 27 75 - - -
SFRS(I) 1-1:55 Contract liabilities(6) 28 2,854 1,798 - -
SFRS(I) 15:105
SFRS(I) 15:116(a)
SFRS(I) 1-1:54(m) Lease liabilities(7) 30 2,745 2,240 - -
SFRS(I) 1-1:55
SFRS(I) 16:47(b)
SFRS(I) 1-1:54(l) Provisions 31 2,118 - - -
SFRS(I) 1-1:55 Retirement benefit obligations 33 33,928 38,474 - -
SFRS(I) 1-1:54(m) Share-based payments 34 6,680 3,516 6,680 3,516
SFRS(I) 1-1:55
SFRS(I) 1-1:54(o) Deferred tax liabilities 25 13,173 5,772 117 -
SFRS(I) 1-1:56
Total non-current liabilities 359,745 395,194 31,124 3,516

SFRS(I) 1-1:54(r) Capital, reserves and

non-controlling interests
SFRS(I) 1-1:78(e) Share capital 35 158,098 152,098 158,098 152,098
SFRS(I) 1-1:55 Treasury shares 36 (500) - (500) -
SFRS(I) 1-1:55 Capital reserves 37 4,633 1,202 4,883 1,202
SFRS(I) 1-1:55 Revaluation reserves 38 85,598 35,941 - -
SFRS(I) 1-1:55 Hedging and translation reserves 39 (2,109) (1,492) - -
SFRS(I) 1-1:55 Retained earnings 250,531 157,533 2,425 2,140
SFRS(I) 1-1:54(r) Equity attributable to owners of the company 496,251 345,282 164,906 155,440
SFRS(I) 1-1:54(q) Non-controlling interests 4,585 2,576 - -
SFRS(I) 10:22
Total equity 500,836 347,858 164,906 155,440

SFRS(I) 1-1:55-55A Total liabilities and equity 1,141,820 957,572 203,095 166,542

See accompanying notes to financial statements.

19
Statements of financial
position

Source

Guidance notes – Statements of financial position

SFRS(I) 10:4(a) 1. Exemption from presenting consolidated financial statements

CA 201(5)(a),(b) A parent shall consolidate all subsidiaries in its consolidated statement of financial position. A parent is exempted from
presenting consolidated financial statements if and only if the following conditions are all met:
(a) The parent is itself a wholly-owned subsidiary, or is a partially-owned subsidiary of another entity and its other
owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the parent
not presenting consolidated financial statements;
(b) The parent’s debt or equity instruments are not traded in a public market (a domestic or foreign stock exchange or
an over-the-counter market, including local and regional markets);
(c) The parent did not file, nor is it in the process of filing, its financial statements with a securities commission or other
regulatory organisation for the purpose of issuing any class of instruments in a public market; and
(d) The ultimate or any intermediate parent of the parent produces consolidated financial statements that are available
for public use and comply with SFRS(I)s (or International Financial Reporting Standards), in which subsidiaries are
consolidated or are measured at fair value through profit or loss.

SFRS(I) 1-27:16 If a parent company satisfies all the above conditions and elects not to present consolidated financial statements, it shall
disclose the following:
(a) The fact that the financial statements are separate financial statements;
(b) That the exemption from consolidation has been used;
(c) The name and principal place of business (and country of incorporation, if different) of the entity whose consolidated
financial statements have been produced for public use;
(d) The address where those consolidated financial statements are obtainable;
(e) A list and description of significant investments in subsidiaries, joint ventures and associates, including the name,
country of incorporation and principal place of business (and country of incorporation, if different), proportion of
ownership interest and, if different, proportion of voting power held; and
(f) The method used to account for investments listed under (e).

The following disclosure should be included in the notes on the summary of significant accounting policies:

SFRS(I) 1-27:16(a) Consolidated financial statements – The financial statements of the subsidiaries have not been consolidated with the
company’s financial statements as the company itself is a wholly-owned subsidiary of (name of holding company),
incorporated in (country of holding company), which prepares consolidated financial statements on a worldwide basis.
Such financial statements are publicly available.

The registered address of (name of holding company) is (address of holding company).

Investments in subsidiaries in the financial statements of the company are stated at cost, less any impairment in
recoverable value.

2. Investment entities
SFRS(I) 10:4B An investment entity need not present consolidated financial statements or apply SFRS(I) 3 when it obtains control of
SFRS(I) 10:31 another entity, instead, the entity shall measure the investment in subsidiaries at fair value through profit or loss.

SFRS(I) 10:32 If an investment entity has a subsidiary that provides services that relate to the investment entity’s investment activities,
it shall consolidate that subsidiary in accordance with paragraphs 19–26 of SFRS(I) 10 and apply the requirements of
SFRS(I) 3 to the acquisition of any such subsidiary.

SFRS(I) 10:33 A parent of an investment entity shall consolidate all entities that it controls, including those controlled through an
investment entity subsidiary, unless the parent itself is an investment entity.

Illustrative Financial Statements 2022 20

Statements of financial
position

Source

SFRS(I) 1-28:17 3. Exemption from equity accounting for joint ventures and associates
SFRS(I) 1-28:16 A company shall equity account for all joint ventures and associates. A company is exempted from equity accounting for
SFRS(I) 11:24 joint ventures and associates if and only if in the following circumstances or the following conditions are met:

SFRS(I) 1-28:20 (a) The investment is classified as held for sale in accordance with SFRS(I) 5 Non-current Assets Held for Sale and
Discontinued Operations and is accounted for in accordance with SFRS(I) 5;

SFRS(I) 1-28:18 (b) The company is a venture capital organisation, mutual fund, unit trust or similar entity, including investment-linked
insurance funds, that upon initial recognition of the associate or joint venture, elects to measure that investment at
fair value through profit or loss in accordance with SFRS(I) 9 Financial Instruments; or

SFRS(I) 1-28:17 (c) If all of the following apply:

(i) The company is a wholly-owned subsidiary, or is a partially-owned subsidiary of another entity and its other
owners, including those not otherwise entitled to vote, have been informed about, and do not object to,
the company not applying the equity method;
(ii) The company debt or equity instruments are not traded in a public market (a domestic or foreign stock
exchange or an over-the-counter market, including local and regional markets);
(iii) The company did not file, nor is it in the process of filing, its financial statements with a securities commission
or other regulatory organisation, for the purpose of issuing any class of instruments in a public market; and
(iv) The ultimate or any intermediate parent of the company produces consolidated financial statements available
for public use that comply with SFRS(I)s ( or International Financial Reporting Standards), in which subsidiaries
are consolidated or are measured at fair value through profit or loss.

4. Restatements and reclassifications

SFRS(I) 1-1:40A SFRS(I) 1-1:40A requires an entity to present a statement of financial position as at the beginning of the preceding period
(third statement of financial position) if:
(a) It applies an accounting policy retrospectively, makes a retrospective restatement of items in its financial statements
or reclassifies items in its financial statements; and
(b) The retrospective application, retrospective restatement or the reclassification has a material effect on the
information in the third statement of financial position.

SFRS(I) 1-1:40C Other than disclosures of certain specified information as required by SFRS(I) 1-1:41 to SFRS(I) 1-1:44 and SFRS(I) 1-8
Accounting Policies, Changes in Accounting Estimates and Errors, the related notes to the third statement of financial
position are not required to be disclosed.

SFRS(I) 1-1:41 Where the presentation or classification of items in the statements is amended, comparative amounts shall be reclassified
SFRS(I) 1-1:42 unless the reclassification is impracticable. When comparative amounts are reclassified, an entity shall disclose the nature
of the reclassification, the amount of each item or class of items that is reclassified and the reason for the reclassification
(See Note 57 for a sample disclosure format as required by SFRS(I) 1-1:41).

21
Statements of financial
position

Source

5. Classification and presentation of financial instruments in the statement of financial position

Financial instruments have been classified into categories in accordance with sections 4.1 and 4.2 of SFRS(I) 9.

SFRS(I) 1-1:54 and SFRS(I) 7:8 do not require separate line items for financial instruments measured at fair value through
profit or loss, at fair value through other comprehensive income and at amortised cost. Hence, it is acceptable to combine
them into one-line item on the statement of financial position with details in a note. However, depending on the significance
of these items, each can be separately shown as a line item.

SFRS(I) 7:8 SFRS(I) 7:8 requires the carrying amounts of each of the following categories as defined in SFRS(I) 9, to be disclosed
either in the statement of financial position or in the notes [see illustration in Note 4(a)]:
(a) Financial assets measured at fair value through profit or loss, showing separately (i) those designated as such upon
initial recognition or subsequently in accordance with paragraph 6.7.1 of SFRS(I) 9 and (ii) those mandatorily
measured at fair value through profit or loss in accordance with SFRS(I) 9;
(b) [deleted];
(c) [deleted];
(d) [deleted];
(e) Financial liabilities at fair value through profit or loss, showing separately (i) those designated as such upon initial
recognition or subsequently in accordance with paragraph 6.7.1 of SFRS(I) 9 and (ii) those that meet the definition
of held-for-trading in SFRS(I) 9;
(f) Financial assets measured at amortised cost;
(g) Financial liabilities measured at amortised cost; and
(h) Financial assets measured at fair value through other comprehensive income, showing separately (i) financial assets
that are measured at fair value through other comprehensive income in accordance with paragraph 4.1.2A of SFRS(I)
9 and (ii) investments in equity instruments designated as such upon initial recognition in accordance with paragraph
5.7.5 of SFRS(I) 9.

SFRS(I) 1-1:55 SFRS(I) 1-1 clarifies that an entity shall present additional line items (including by disaggregating the line items listed in
SFRS(I) 1-1:54), headings and subtotals in the statement of financial position when such presentation is relevant to an
understanding of the entity’s financial position. Additional guidance is provided below:

SFRS(I) 1-1:55A When an entity presents subtotals in accordance with SFRS(I) 1-1:55, those subtotals shall:
(a) be comprised of line items made up of amounts recognised and measured in accordance with SFRS(I);
(b) be presented and labelled in a manner that makes the line items that constitute the subtotal clear and
understandable;
(c) be consistent from period to period, in accordance with SFRS(I) 1-1:45; and
(d) not be displayed with more prominence than the subtotals and totals required in SFRS(I) for the statement of
financial position.

Illustrative Financial Statements 2022 22

Statements of financial
position

Source

6. Assets and liabilities arising from contracts with customers

SFRS(I) 15:105 SFRS(I) 15:105 states that when either party to a contract has performed, an entity shall present the contract in the
statement of financial position as a contract asset or a contract liability, depending on the relationship between the entity’s
performance and the customer’s payment. Any unconditional rights to consideration (i.e. amounts that relate to completed
performance obligations for which payment is due under the contract) should be presented separately as a receivable.

SFRS(I) 15:116(a) SFRS(I) 15:116(a) requires disclosure of the opening and closing balances of receivables, contract assets and contract
liabilities from contracts with customers, if not otherwise separately presented or disclosed. Whether these balances are
disclosed separately on the face of the financial statements will be a materiality judgement to be made by individual
entities based on their own facts and circumstances. They are disclosed separately here for illustrative purposes (ignoring
the size of the balances involved).

Contract costs has been added as a line item for costs to obtain construction contracts that meet the criteria for
capitalisation in SFRS(I) 15.

A refund asset relating to customers’ right to return products has been presented as a separate line item, ‘Right to returned
goods asset’. In many cases, entities may conclude that it is not necessary to present this balance separately from
inventories. In such a case, separate disclosure of this balance should be made in the notes to the financial statements.
A refund liability is presented relating to those products expected to be returned.

7. Right-of-use assets and lease liabilities

SFRS(I) 16:47 SFRS(I) 16.47 states that a lessee shall either present in the statement of financial position, or disclose in the notes:

(a) right-of-use assets separately from other assets. If a lessee does not present right-of-use assets separately in the
statement of financial position, the lessee shall:
(i) include right-of-use assets within the same line item as that within which the corresponding underlying assets
would be presented if they were owned; and
(ii) disclose which line items in the statement of financial position include those right-of-use assets.

(b) lease liabilities separately from other liabilities. If the lessee does not present lease liabilities separately in the
statement of financial position, the lessee shall disclose which line items in the statement of financial position include
those liabilities.

The group has chosen to present right-of-use-assets as well as lease liabilities on the face of the statements of financial
position, instead of disclosing the amounts in the notes.

SFRS(I) 16:48 The requirement to present separately (on the statement of financial position or in the notes) the right-of-use assets does
not apply to right-of-use assets that meet the definition of investment property, which should be presented in the
statement of financial position as investment property. For this illustrative, the group does not have right-of-use assets
that meet the definition of investment property.

SFRS(I) 1-1:66 A right-of-use asset should be classified in its entirety as a single unit of account as current or non-current in accordance
with SFRS(I) 1-1:66. This would typically result in a right-of-use asset being classified similarly to the underlying asset in
the lease. Assets that are subject to depreciation or amortisation are typically non-current.

SFRS(I) 1-1:66(c) If an entity elects not to use the short-term lease recognition exemption, the resulting right-of-use asset is classified as
current because the right-of-use asset will be realised within 12 months after the reporting period.

The classification of a right-of-use asset as current or non-current is not impacted by whether it is presented separately
on the face of the statement of financial position or included within the same line item as the underlying asset.

8. Terminology used in the financial statements

The use of titles of the financial statements such as ‘Statement of Financial Position’ is not mandatory. The use of
‘Balance Sheet’ and ‘Statement of Financial Position’ may be used interchangeably. The reference in the independent
auditor’s report should be updated accordingly.

23
 [Alt 1]

Consolidated statement of
profit or loss and other
comprehensive income
Source

SFRS(I) 1-1.51(a),(b) GAAP Singapore Ltd and its subsidiaries

SFRS(I) 1-1.10(b) Consolidated statement of profit or loss and other comprehensive income (11)
SFRS(I) 1-1.51(c) Year ended December 31, 2022
LM 1207(5)(a)
CA 201(5)(a)

Group
SFRS(I) 1-1:113 Note 2022 2021
SFRS(I) 1-1:51(d),(e) $’000 $’000
Continuing operations

SFRS(I) 1-1:82(a) Revenue 40 1,064,660 728,250

SFRS(I) 15:113(a)

SFRS(I) 1-1:82(a) Finance income – interest income 42 2,926 3,138

Finance income - other 42 1,086 1,132
SFRS(I) 1-1:85 Other operating income 2,892 3,745
SFRS(I) 1-1:99 Changes in inventories of finished goods and work in progress 5,089 7,589
SFRS(I) 1-1:99 Raw materials and consumables used (668,794) (465,961)
SFRS(I) 1-1:99 Employee benefits expense (223,183) (188,809)
SFRS(I) 1-1:99 Depreciation and amortisation expense (32,556) (18,136)
SFRS(I) 1-1:82(ba) Impairment losses (including reversals of impairment losses) on 47 (3,577) (253)
financial assets and contract assets(3)
SFRS(I) 1-1:99 Other operating expenses (33,634) (36,331)
SFRS(I) 1-1:82(c) Share of results of associates and joint venture 1,270 1,517
SFRS(I) 1-1:82(aa) Gains and losses arising from the derecognition of financial assets - -
SFRS(I) 7:20A measured at amortised cost
SFRS(I) 1-1:82(ca) Gains and losses on reclassification of financial assets from - -
amortised cost to FVTPL
SFRS(I) 1-1:82(cb) Gains and losses on reclassification of financial assets from - -
FVTOCI to FVTPL
SFRS(I) 1-1:85 Other gains and losses 43 120 (171)
SFRS(I) 1-1:82(b) Finance costs 44 (12,162) (16,508)
SFRS(I) 16:49

SFRS(I) 1-1:85 Profit before tax 104,137 19,202

SFRS(I) 1-1:85A
SFRS(I) 1-1:85B
SFRS(I) 1-1:82(d) Income tax expense 45 (16,166) (3,810)
SFRS(I) 1-12:77

SFRS(I) 1-1:85 Profit for the year from continuing operations 87,971 15,392
SFRS(I) 1-1:85A
SFRS(I) 1-1:85B

Discontinued operation(5)

SFRS(I) 1-1:82(ea) Profit for the year from discontinued operation 46 10,676 4,171
SFRS(I) 5:33(a)

SFRS(I) 1-1:81A(a) Profit for the year 47 98,647 19,563

Illustrative Financial Statements 2022 24

 [Alt 1]

Consolidated statement of
profit or loss and other
comprehensive income
Source

Group
SFRS(I) 1-1:113 Note 2022 2021
SFRS(I) 1-1:51(d),(e) $’000 $’000
SFRS(I) 1-1:91(b) Other comprehensive income(4)(10)

SFRS(I) 1-1:82A(a)(i) Items that will not be reclassified subsequently to profit or loss
Gain (Loss) on revaluation of property 38 53,283 (2,845)
Remeasurement of defined benefit obligation 33 - -
SFRS(I) 7:20(a)(vii) Fair value gain (loss) on investments in equity instruments designated 38 46 47
as at FVTOCI
SFRS(I) 7:20(a)(i) Fair value gain (loss) on financial liabilities designated as at FVTPL - -
SFRS(I) 9:B5.7.9 attributable to changes in credit risk
SFRS(I) 1-1:82A(b)(i) Share of other comprehensive income of associates and joint venture - -
SFRS(I) 1-1:90 Income tax relating to items that will not be reclassified subsequently 45 (3,692) 320
SFRS(I) 1-1:91(b) to profit or loss

49,637 (2,478)

SFRS(I) 1-1:82A(a)(ii) Items that may be reclassified subsequently to profit or loss

SFRS(I) 7:20(a)(viii) Fair value gain (loss) on investments in debt instruments measured 38 20 10
SFRS(I) 9:5.7.10 at FVTOCI
SFRS(I) 7:24E(a) Fair value gain (loss) arising on hedging instruments during the period 39 1,076 586
SFRS(I) 1-1:96
SFRS(I) 9:6.5.11(d)(i)
SFRS(I) 1-21:52(b) Foreign exchange differences on translation of foreign operations 39 (1,693) 730
SFRS(I) 1-1:82A(b)(ii) Share of other comprehensive income of associates and joint venture - -
SFRS(I) 1-1:90 Income tax relating to items that may be reclassified subsequently 45 - -
SFRS(I) 1-1:91(b) to profit or loss

(597) 1,326

SFRS(I) 1-1:81A(b) Other comprehensive income for the year, net of tax 49,040 (1,152)

SFRS(I) 1-1:81A(c) Total comprehensive income for the year 147,687 18,411

25
 [Alt 1]

Consolidated statement of
profit or loss and other
comprehensive income
Source

Group
SFRS(I) 1-1:113 Note 2022 2021
SFRS(I) 1-1:51(d),(e) $’000 $’000
Profit attributable to:

SFRS(I) 1-1:81B(a)(ii) Owners of the company 98,038 19,466

SFRS(I) 1-1:81B(a)(i) Non-controlling interests 609 97

98,647 19,563

Total comprehensive income attributable to:

SFRS(I) 1-1:81B(b)(ii) Owners of the company 147,078 18,314

SFRS(I) 1-1:81B(b)(i) Non-controlling interests 609 97

147,687 18,411

SFRS(I) 1-33:2-3 Earnings per share(6) 48

SFRS(I) 1-33:4A
SFRS(I) 1-33:66 From continuing and discontinued operations:
SFRS(I) 1-33:69
Basic 82.1 cents 16.8 cents

Diluted 59.4 cents 16.5 cents

From continuing operations:

Basic 73.2 cents 13.3 cents

Diluted 53.1 cents 13.1 cents

See accompanying notes to financial statements.

Illustrative Financial Statements 2022 26

 [Alt 1]

Consolidated statement of
profit or loss and other
comprehensive income
Source

Guidance notes – Consolidated statement of profit or loss and other comprehensive income

An entity may use titles for the statements other than those used in SFRS(I) 1-1. For example, an entity may use the title
‘statement of comprehensive income’ instead of ‘statement of profit or loss and other comprehensive income’.

One statement vs. two statements

SFRS(I) 1-1 provides the option to present profit or loss and other comprehensive income (OCI) either in a single statement
or in two separate but consecutive statements. Alt 1 above illustrates the presentation of profit or loss and OCI in one
statement. Alt 2 (see the following pages) illustrates the presentation of profit or loss and OCI in two separate but
consecutive statements.

Whichever presentation approach is adopted, the distinction is retained between items recognised in profit or loss and
items recognised in OCI. Under both approaches, profit or loss, total OCI, as well as total comprehensive income for the
period (being the total of profit or loss and OCI) should be presented. Under the two-statement approach, the separate
statement of profit or loss ends at ‘profit for the year’, and this ‘profit for the year’ is then the starting point for the
statement of profit or loss and other comprehensive income, which is required to be presented immediately following the
statement of profit or loss. In addition, the analysis of ‘profit for the year’ between the amount attributable to the owners
of the company and the amount attributable to non-controlling interests is presented as part of the separate statement of
profit or loss.

OCI: items that may or may not be reclassified

Irrespective of whether the one-statement or the two-statement approach is followed, the items of OCI should be classified
by nature and grouped into those that, in accordance with other SFRS(I)s:
(a) Will not be reclassified subsequently to profit or loss; and
(b) May be reclassified subsequently to profit or loss when specific conditions are met.

An entity should present its share of OCI of associates and joint ventures accounted for using the equity method separately
from those arising from the group.

Presentation options for reclassification adjustments

SFRS(I) 1-1:94 An entity may present reclassification adjustments in the statement of profit or loss and other comprehensive income or
in the notes. An entity presenting reclassification adjustments in the notes presents the components of other
comprehensive income after any related reclassification adjustments.

Presentation of information
SFRS(I) 1-1:85 SFRS(I) 1-1 clarifies that an entity shall present additional line items (including by disaggregating the line items listed in
SFRS(I) 1-1:82), headings and subtotals in the statement(s) presenting profit or loss and other comprehensive income
when such presentation is relevant to an understanding of the entity’s financial performance. When items of income and
expense are material, their nature and amount shall be disclosed separately.

SFRS(I) 1-1:85A When a company presents subtotals in accordance with SFRS(I) 1-1:85, those subtotals shall:
(a) be comprised of line items made up of amounts recognised and measured in accordance with SFRS(I);
(b) be presented and labelled in a manner that makes the line items that constitute the subtotal clear and
understandable;
(c) be consistent from period to period, in accordance with SFRS(I) 1-1:45; and
(d) not be displayed with more prominence than the subtotals and totals required in SFRS(I) for the statement(s)
presenting profit or loss and other comprehensive income.

SFRS(I) 1-1:85B A company shall present the line items in the statement(s) presenting profit or loss and other comprehensive income that
reconcile any subtotals presented in accordance with SFRS(I) 1-1:85 with the subtotals or totals required in SFRS(I).

Immaterial items
An entity need not provide a specific disclosure required by an SFRS(I) Accounting Standard if the information resulting
from that disclosure is not material. This is the case even if the SFRS(I) Accounting Standards contain a list of specific
requirements or describes them as minimum requirements.

27
 [Alt 2]

Consolidated statement of
profit or loss

Source

SFRS(I) 1-1:51(a),(b) GAAP Singapore Ltd and its subsidiaries

SFRS(I) 1-1:10A Consolidated statement of profit or loss

SFRS(I) 1-1:51(c) Year ended December 31, 2022
LM 1207(5)(a)
CA 201(5)(a)

Group
SFRS(I) 1-1:113 Note 2022 2021
SFRS(I) 1-1:51(d),(e) $’000 $’000
Continuing operations

SFRS(I) 1-1:82(a) Revenue 40 1,064,660 728,250

SFRS(I) 15:113(a)

SFRS(I) 1-1:82(a) Finance income – interest income 42 2,926 3,138

Finance income - other 42 1,086 1,132
SFRS(I) 1-1:85 Other operating income 2,892 3,745
SFRS(I) 1-1:99 Changes in inventories of finished goods and work in progress 5,089 7,589
SFRS(I) 1-1:99 Raw materials and consumables used (668,794) (465,961)
SFRS(I) 1-1:99 Employee benefits expense (223,183) (188,809)
SFRS(I) 1-1:99 Depreciation and amortisation expense (32,556) (18,136)
SFRS(I) 1-1:82(ba) Impairment losses (including reversals of impairment losses) on 47 (3,577) (253)
financial assets and contract assets(3)
SFRS(I) 1-1:99 Other operating expenses (33,634) (36,331)
SFRS(I) 1-1:82(c) Share of results of associates and joint venture 1,270 1,517
SFRS(I) 1-1:82(aa) Gains and losses arising from the derecognition of financial assets - -
SFRS(I) 7:20A measured at amortised cost
SFRS(I) 1-1:82(ca) Gains and losses on reclassification of financial assets from - -
amortised cost to FVTPL
SFRS(I) 1-1:82(cb) Gains and losses on reclassification of financial assets from - -
FVTOCI to FVTPL
SFRS(I) 1-1:85 Other gains and losses 43 120 (171)
SFRS(I) 1-1:82(b) Finance costs 44 (12,162) (16,508)
SFRS(I) 16:49

SFRS(I) 1-1:85 Profit before tax 104,137 19,202

SFRS(I) 1-1:85A
SFRS(I) 1-1:85B
SFRS(I) 1-1:82(d) Income tax expense 45 (16,166) (3,810)
SFRS(I) 1-12:77

SFRS(I) 1-1:85 Profit for the year from continuing operations 87,971 15,392
SFRS(I) 1-1:85A
SFRS(I) 1-1:85B

Discontinued operation(5)

SFRS(I) 1-1:82(ea) Profit for the year from discontinued operation 46 10,676 4,171
SFRS(I) 5:33(a)

SFRS(I) 1-1:81A(a) Profit for the year 47 98,647 19,563

Illustrative Financial Statements 2022 28

 [Alt 2]

Consolidated statement of
profit or loss

Source

Group
SFRS(I) 1-1:113 Note 2022 2021
SFRS(I) 1-1:51(d),(e) $’000 $’000
Profit attributable to:

SFRS(I) 1-1:81B(a)(ii) Owners of the company 98,038 19,466

SFRS(I) 1-1:81B(a)(i) Non-controlling interests 609 97

98,647 19,563

SFRS(I) 1-33:2-3 Earnings per share(6) 48

SFRS(I) 1-33:4A
SFRS(I) 1-33:66 From continuing and discontinued operations:
SFRS(I) 1-33:69
Basic 82.1 cents 16.8 cents

Diluted 59.4 cents 16.5 cents

From continuing operations:

Basic 73.2 cents 13.3 cents

Diluted 53.1 cents 13.1 cents

See accompanying notes to financial statements.

29
 [Alt 2]

Consolidated statement of
profit or loss and other
comprehensive income
Source

Group
SFRS(I) 1-1:113 Note 2022 2021
SFRS(I) 1-1:51(d),(e) $’000 $’000

SFRS(I) 1-1:81A(a) Profit for the year 47 98,647 19,563

SFRS(I) 1-1:91(b) Other comprehensive income(4)(10)

SFRS(I) 1-1:82A(a)(i) Items that will not be reclassified subsequently to profit or loss
Gain (Loss) on revaluation of property 38 53,283 (2,845)
Remeasurement of defined benefit obligation 33 - -
SFRS(I) 7:20(a)(vii) Fair value gain (loss) on investments in equity instruments designated 38 46 47
as at FVTOCI
SFRS(I) 7:20(a)(i) Fair value gain (loss) on financial liabilities designated as at FVTPL - -
SFRS(I) 9:B5.7.9 attributable to changes in credit risk
SFRS(I) 1-1:82A(b)(i) Share of other comprehensive income of associates and joint venture - -
SFRS(I) 1-1:90 Income tax relating to items that will not be reclassified subsequently 45 (3,692) 320
SFRS(I) 1-1:91(b) to profit or loss

49,637 (2,478)

SFRS(I) 1-1:82A(a)(ii) Items that may be reclassified subsequently to profit or loss

SFRS(I) 7:20(a)(viii) Fair value gain (loss) on investments in debt instruments measured 38 20 10
SFRS(I) 9:5.7.10 at FVTOCI
SFRS(I) 7:24E(a) Fair value gain (loss) arising on hedging instruments during the period 39 1,076 586
SFRS(I) 1-1:96
SFRS(I) 9:6.5.11(d)(i)
SFRS(I) 1-21:52(b) Foreign exchange differences on translation of foreign operations 39 (1,693) 730
SFRS(I) 1-1:82A(b)(ii) Share of other comprehensive income of associates and joint venture - -
SFRS(I) 1-1:90 Income tax relating to items that may be reclassified subsequently 45 - -
SFRS(I) 1-1:91(b) to profit or loss

(597) 1,326

SFRS(I) 1-1:81A(b) Other comprehensive income for the year, net of tax 49,040 (1,152)

SFRS(I) 1-1:81A(c) Total comprehensive income for the year 147,687 18,411

Total comprehensive income attributable to:

SFRS(I) 1-1:81B(b)(ii) Owners of the company 147,078 18,314

SFRS(I) 1-1:81B(b)(i) Non-controlling interests 609 97

147,687 18,411

See accompanying notes to financial statements.

Illustrative Financial Statements 2022 30

 [Alt 2]

Consolidated statement of
profit or loss and other
comprehensive income
Source

Guidance notes – Consolidated statement of profit or loss and other comprehensive income

CA 201(5) 1. Statement of profit or loss and other comprehensive income and statement of cash flows
LM 1207(5)(a) Where consolidated financial statements are required, the statement of profit or loss and other comprehensive income
and statement of cash flows of the company need not be presented. However, the statement of financial position of the
company has to be presented. If consolidated financial statements are not required, for reasons such as exemption under
SFRS(I) 1-27:10, the statement of profit or loss and other comprehensive income and statement of cash flows of the
company shall be presented.

SFRS(I) 1-1:99 2. Alternative formats of the analysis of expenses recognised in profit or loss
The entity shall present an analysis of expenses recognised in profit or loss using a classification based on either their
nature or their function, whichever provides information that is reliable and more relevant. The formats outlined under
Alt 1 and Alt 2 above aggregate expenses according to their nature. The format outlined below aggregates expenses
according to their function (SFRS(I) 1-1:99):
Group
Note 2022 2021
$’000 $’000
Continuing operations

SFRS(I) 1-1:82(a) Revenue 40 1,064,660 728,250

SFRS(I) 15:113(a)

SFRS(I) 1-1:99-103 Cost of sales (797,027) (570,343)

SFRS(I) 1-1:85 Gross profit 267,633 157,907

SFRS(I) 1-1:85A
SFRS(I) 1-1:85B
SFRS(I) 1-1:85 Other operating income 2,892 3,745
SFRS(I) 1-1:99-103 Distribution costs (66,298) (45,609)
SFRS(I) 1-1:99-103 Administrative expenses (64,940) (61,356)
SFRS(I) 1-1:99-103 Other operating expenses (24,813) (24,340)
SFRS(I) 1-1:82(c) Share of results of associates and joint venture 1,270 1,517
SFRS(I) 1-1:82(a) Finance income – interest income 42 2,926 3,138
Finance income - other 42 1,086 1,132
SFRS(I) 1-1:82(aa) Gains and losses arising from the derecognition of financial assets - -
SFRS(I) 7:20A measured at amortised cost
SFRS(I) 1-1:82(ca) Gains and losses on reclassification of financial assets from amortised cost to FVTPL - -
SFRS(I) 1-1:82(cb) Gains and losses on reclassification of financial assets from FVTOCI to FVTPL - -
SFRS(I) 1-1:82(ba) Impairment losses (including reversals of impairment losses) on financial assets 47 (3,577) (253)
and contract assets(3)
SFRS(I) 1-1:85 Other gains and losses 43 120 (171)
SFRS(I) 1-1:82(b) Finance costs 44 (12,162) (16,508)
SFRS(I) 16:49

SFRS(I) 1-1:85 Profit before tax 104,137 19,202

SFRS(I) 1-1:85A
SFRS(I) 1-1:85B
SFRS(I) 1-1:82(d) Income tax expense 45 (16,166) (3,810)
SFRS(I) 1-12:77

SFRS(I) 1-1:85 Profit for the year from continuing operations 87,971 15,392
SFRS(I) 1-1:85A
SFRS(I) 1-1:85B

Discontinued operation(5)
SFRS(I) 1-1:82(ea)
SFRS(I) 5:33(a) Profit for the year from discontinued operation 46 10,676 4,171

SFRS(I) 1-1:81A(a) Profit for the year 47 98,647 19,563

31
 [Alt 2]

Consolidated statement of
profit or loss and other
comprehensive income
Source

Profit attributable to:

SFRS(I) 1-1:81B(a)(ii) Owners of the company 98,038 19,466

SFRS(I) 1-1:81B(a)(i) Non-controlling interests 609 97

98,647 19,563

3. Impairment losses (including reversals of impairment losses) on financial assets and contract assets
SFRS(I) 1-1:82(ba) requires impairment losses (including reversals of impairment losses or impairment gains) determined
in accordance with Section 5.5 of SFRS(I) 9 to be presented separately in the profit or loss section or the statement of
profit or loss. These impairment losses may arise from operating activities or from investing/financing activities. Therefore,
when presenting a sub-total for operating profit it will be more meaningful to split the impairment losses into those which
arise from operating activities, for example from trade and other receivables above operating profit, and those which arise
from investing/financing activities, for example from debt securities, below operating profit.

4. Alternative presentation for components of other comprehensive income

The company may present components of other comprehensive income either before related tax effects with one amount
shown for the aggregate amount of income tax relating to those components (as shown in the preceding pages) or net of
related tax effects as shown below:
Group
Note 2022 2021
$’000 $’000
SFRS(I) 1-1:91(a) Other comprehensive income, after tax

SFRS(I) 1-1:82A(a)(i) Items that will not be reclassified subsequently to profit or loss
Gain (Loss) on revaluation of property 38 49,591 (2,525)
Remeasurement of defined benefit obligation 33 - -
SFRS(I) 7:20(a)(vii) Fair value gain (loss) on investments in equity instruments designated 38 46 47
as at FVTOCI
SFRS(I) 7:20(a)(i) Fair value gain (loss) on financial liabilities designated as at FVTPL - -
SFRS(I) 9:B5.7.9 attributable to changes in credit risk
SFRS(I) 1-1:82A(b)(i) Share of other comprehensive income of associates and joint venture - -

49,637 (2,478)

SFRS(I) 1-1:82A(a)(ii) Items that may be reclassified subsequently to profit or loss

SFRS(I) 7:20(a)(viii) Fair value gain (loss) on investments in debt instruments measured 38 20 10
SFRS(I) 9:5.7.10 at FVTOCI
SFRS(I) 7:24E(a) Fair value gain (loss) arising on hedging instruments during the period 39 1,076 586
SFRS(I) 1-1:96
SFRS(I) 9:6.5.11(d)(i)
SFRS(I) 1-21:52(b) Foreign exchange differences on translation of foreign operations 39 (1,693) 730
SFRS(I) 1-1:82A(b)(ii) Share of other comprehensive income of associates and joint venture - -

(597) 1,326

SFRS(I) 1-1:81A(b) Other comprehensive income for the year, net of tax 49,040 (1,152)

Whichever option is selected, the income tax relating to each component of comprehensive income must be disclosed,
either in the statement of comprehensive income or in the notes (see Note 45).

Illustrative Financial Statements 2022 32

 [Alt 2]

Consolidated statement of
profit or loss and other
comprehensive income
Source

SFRS(I) 5:33A 5. Discontinued operation

If an entity presents the components of profit or loss in a separate statement as described in SFRS(I) 1-1:10A i.e. Alt 2,
a section identified as relating to discontinued operation is presented in that statement.

SFRS(I) 5 specifies the disclosures required in respect of assets (or disposal groups) classified as held for sale or
discontinued operations. Consequently, disclosures in other SFRS(I)s do not apply to such assets (or disposal groups)
unless:

• Those SFRS(I)s specifically require disclosures in respect of non-current assets (or disposal groups) classified as held
for sale or discontinued operations; or

• The disclosures relate to the measurement of assets or liabilities within a disposal group that are outside the scope of
SFRS(I) 5’s measurement requirements and the information is not disclosed elsewhere in the financial statements.

For earnings per share on discontinued operation, please see 6 below.

6. Earnings per share

SFRS(I) 1-33:66 The company should present both basic and diluted earnings per share on the statement of comprehensive income for
SFRS(I) 1-33:67A each class of ordinary shares that has a different right to share in the net profit for the year. If a company presents the
components of profit or loss in a separate statement as described in SFRS(I) 1-1:10A i.e. Alt 2, it presents basic and
SFRS(I) 1-33:66 diluted earnings per share only in that separate statement. An entity shall present basic and diluted earnings per share
SFRS(I) 1-33:69 with equal prominence for all periods presented, even should the amounts disclosed be the same or be negative.

SFRS(I) 1-33:68 Where the company reports a discontinued operation, it shall disclose the basic and diluted earnings per share in the
SFRS(I) 1-33:68A statement of comprehensive income or in the notes to the financial statements. If an entity presents the components of
profit or loss in a separate statement as described in SFRS(I) 1-1:10A i.e. Alt 2, it presents basic and diluted earnings per
share for the discontinued operation, in that separate statement or in the notes.

SFRS(I) 1-33:12 requires that basic and diluted earnings per share be computed based on the amounts attributable to
ordinary owners of the parent entity in respect of (a) profit or loss from continuing operations attributable to the parent
entity; and (b) profit or loss attributable to the parent entity.

Voluntary ‘per-share’ disclosures

Entities may voluntarily disclose per share amounts for other components of total comprehensive income or separate
income statement, subject to the requirements of paragraphs 73 and 73A of SFRS(I) 1-33 i.e. provided that:
• Such amounts are calculated using the weighted average number of ordinary shares determined in accordance with
SFRS(I) 1-33;
• Basic and diluted amounts per share relating to such a component are disclosed with equal prominence and presented
in the notes; and
• The entity discloses the basis on which the numerator(s) is (are) determined, including whether amounts per share
are before tax or after tax.

If a component of the statement of comprehensive income (or separate statement as described in SFRS(I) 1-1:10A) is
used that is not reported as a line item in the statement of comprehensive income (or separate statement as described in
SFRS(I) 1-1:10A), a reconciliation shall be provided between the component used and a line item that is reported in the
statement of comprehensive income (or separate statement as described in SFRS(I) 1-1:10A).

33
 [Alt 2]

Consolidated statement of
profit or loss and other
comprehensive income
Source

SFRS(I) 1-1:36 7. Financial years of different lengths

SFRS(I) 1-1:38 Where the length of the current financial year is of a different timeframe from the comparative financial year, additional
disclosure is required in the notes to financial statements to highlight the fact that the amounts disclosed are not
comparable. The following should be disclosed in the notes:

Comparative figures
The financial statements for 2022 covered the period from July 1, 2021 to December 31, 2022.

The financial statements for 2021 covered the twelve months ended June 30, 2021.

SFRS(I) 1-1:41 8. Restatements and reclassifications

SFRS(I) 1-1:42 Where the presentation or classification of items in the statements is amended, comparative amounts shall be reclassified
unless the reclassification is impracticable. When comparative amounts are reclassified, an entity shall disclose the nature
of the reclassification, the amount of each item or class of items that is reclassified and the reason for the reclassification
(See Note 57 for a sample disclosure format as required by SFRS(I) 1-1:41).

SFRS(I) 1-1:87 9. Extraordinary items

The company shall not present any items of income and expense as extraordinary items, either in the statement of
comprehensive income or the separate income statement (if presented under Alt 2), or in the notes.

SFRS(I) 1-1:82A(b) 10. Share of other comprehensive income of associates and joint ventures accounted for using the equity
method
SFRS(I) 1-1 clarifies that a company’s share of other comprehensive income of equity-accounted associates and joint
ventures should be presented in aggregate as single line items based on whether or not it will subsequently be reclassified
to profit or loss.

SFRS(I) 1-1:82A(b) requires disclosure of the share of other comprehensive income of associates and joint ventures
accounted for using the equity method, separated into the share of items that, in accordance with other SFRS(I)s:
(i) will not be reclassified subsequently to profit or loss; and
(ii) will be reclassified subsequently to profit or loss when specific conditions are met.

11. Terminology used in the Financial Statements

The use of titles of the Financial Statements such as ‘Statement of Profit or Loss and Other Comprehensive Income’ is not
mandatory. The reference in the independent auditor’s report should be updated accordingly.

12. Reference to consolidated statement of profit or loss and other comprehensive income
The notes to the financial statements of the illustrative financial statements hereafter will be based on Alt 1. Reference
will be made to the consolidated statement of profit or loss and other comprehensive income, as applicable.

Illustrative Financial Statements 2022 34

Statements of changes in equity
Source

SFRS(I) 1-1:51(a),(b) GAAP Singapore Ltd and its subsidiaries

SFRS(I) 1-1:10(c) Statements of changes in equity

SFRS(I) 1-1:51(c) Year ended December 31, 2022

Group
Equity
Share Property Investments attributable Non-
Share Treasury Equity options revaluation revaluation Translation Hedging Retained to owners of controlling
capital shares reserves reserves reserves reserves reserves reserves earnings the company interests Total
SFRS(I) 1-1:51(d),(e) $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
(Note 35) (Note 36) (Note 37) (Note 37) (Note 38) (Note 38) (Note 39) (Note 39)

SFRS(I) 1-1:106(d) Balance as at January 1, 2021 152,098 - - - 37,977 432 (4,098) 1,290 146,107 333,806 2,479 336,285

SFRS(I) 1-1:106(a) Total comprehensive income for the year

SFRS(I) 1-1:106(d)(i) Profit for the year - - - - - - - - 19,466 19,466 97 19,563
SFRS(I) 1-1:106(d)(ii) Other comprehensive loss for the year - - - - (2,525) 57 730 586 - (1,152) - (1,152)
Total - - - - (2,525) 57 730 586 19,466 18,314 97 18,411

SFRS(I) 1-1:106(d)(iii) Transactions with owners, recognised

directly in equity
SFRS(I) 1-1:106(d)(iii) Recognition of share-based payments - - - 1,202 - - - - - 1,202 - 1,202
SFRS(I) 1-1:107 Dividends (Note 49) - - - - - - - - (8,040) (8,040) - (8,040)
Total - - - 1,202 - - - - (8,040) (6,838) - (6,838)

SFRS(I) 1-1:106(d) Balance as at December 31, 2021 152,098 - - 1,202 35,452 489 (3,368) 1,876 157,533 345,282 2,576 347,858

SFRS(I) 1-1:106(a) Total comprehensive income for the year

SFRS(I) 1-1:106(d)(i) Profit for the year - - - - - - - - 98,038 98,038 609 98,647
SFRS(I) 1-1:106(d)(ii) Other comprehensive income for the year - - - - 49,591 66 (1,693) 1,076 - 49,040 - 49,040
Total - - - - 49,591 66 (1,693) 1,076 98,038 147,078 609 147,687

SFRS(I) 1-1:106(d)(iii) Transactions with owners, recognised

directly in equity
SFRS(I) 1-1:106(d)(iii) Non-controlling interest arising from
acquisition of a subsidiary (Note 51) - - - - - - - - - - 1,500 1,500
SFRS(I) 1-1:106(d)(iii) Effects of acquiring part of non-controlling
interests in a subsidiary - - (250) - - - - - - (250) (100) (350)
SFRS(I) 1-1:106(d)(iii) Recognition of equity component of
convertible loan notes - - 995 - - - - - - 995 - 995
SFRS(I) 1-1:106(d)(iii) Deferred tax liability on recognition of equity
component of convertible loan notes - - (174) - - - - - - (174) - (174)
SFRS(I) 1-1:106(d)(iii) Recognition of share-based payments - - - 2,860 - - - - - 2,860 - 2,860
SFRS(I) 1-1:107 Dividends (Note 49) - - - - - - - - (5,040) (5,040) - (5,040)
SFRS(I) 1-1:106(d)(iii) Issue of share capital 6,000 - - - - - - - - 6,000 - 6,000
SFRS(I) 1-1:106(d)(iii) Repurchase of shares - (500) - - - - - - - (500) - (500)
Total 6,000 (500) 571 2,860 - - - - (5,040) 3,891 1,400 5,291

SFRS(I) 1-1:106(d) Balance as at December 31, 2022 158,098 (500) 571 4,062 85,043 555 (5,061) 2,952 250,531 496,251 4,585 500,836

35
Statements of changes in equity
Source

SFRS(I) 1-1:51(a),(b) GAAP Singapore Ltd and its subsidiaries

SFRS(I) 1-1:10(c) Statements of changes in equity

SFRS(I) 1-1:51(c) Year ended December 31, 2022

Company(3)
Share
Share Treasury Equity options Retained
capital shares reserves reserves earnings Total
SFRS(I) 1-1:51(d),(e) $’000 $’000 $’000 $’000 $’000 $’000
(Note 35) (Note 36) (Note 37) (Note 37)

SFRS(I) 1-1:106(d) Balance as at January 1, 2021 152,098 - - - 1,819 153,917

SFRS(I) 1-1:106
(d)(i),(ii) Profit for the year, representing total comprehensive income for the year - - - - 8,361 8,361

SFRS(I) 1-1:106(d)(iii) Transactions with owners, recognised directly in equity

SFRS(I) 1-1:106(d)(iii) Recognition of share-based payments - - - 1,202 - 1,202
SFRS(I) 1-1:107 Dividends (Note 49) - - - - (8,040) (8,040)
Total - - - 1,202 (8,040) (6,838)

SFRS(I) 1-1:106(d) Balance as at December 31, 2021 152,098 - - 1,202 2,140 155,440
SFRS(I) 1-1:106
(d)(i),(ii) Profit for the year, representing total comprehensive income for the year - - - - 5,325 5,325

SFRS(I) 1-1:106(d)(iii) Transactions with owners, recognised directly in equity

SFRS(I) 1-1:106(d)(iii) Recognition of equity component of convertible loan notes - - 995 - - 995
SFRS(I) 1-1:106(d)(iii) Deferred tax liability on recognition of equity component of convertible loan notes - - (174) - - (174)
SFRS(I) 1-1:106(d)(iii) Recognition of share-based payments - - - 2,860 - 2,860
SFRS(I) 1-1:107 Dividends (Note 49) - - - - (5,040) (5,040)
SFRS(I) 1-1:106(d)(iii) Issue of share capital 6,000 - - - - 6,000
SFRS(I) 1-1:106(d)(iii) Repurchase of shares - (500) - - - (500)
Total 6,000 (500) 821 2,860 (5,040) 4,141

SFRS(I) 1-1:106(d) Balance as at December 31, 2022 158,098 (500) 821 4,062 2,425 164,906

See accompanying notes to financial statements.

Illustrative Financial Statements 2022 36

Statements of changes in
equity

Source

Guidance notes – Statements of changes in equity

1. Level of detail presented in the statement of changes in equity

SFRS(I) 1-1:106A An entity may present the analysis of other comprehensive income by item for each component of equity either in the
statement of changes in equity or in the notes to the financial statements. SFRS(I) 1-1 also allows that some of the details
regarding items of other comprehensive income (e.g. income tax and reclassification adjustments) may be disclosed in
the notes rather than in the statement of comprehensive income.

SFRS(I) 1-1:79(b) SFRS(I) 1-1 also permits the description of the nature and purpose of each reserve within equity to be presented either
in the statement of financial position or the statement of changes in equity, or in the notes.

Entities will determine the most appropriate presentation for their circumstances – electing to present much of the detail
in the notes ensures that the primary financial statements are not cluttered by unnecessary detail.

Whichever presentation is selected, entities will need to ensure that the following requirements are met:
• Detailed reconciliations are required for each class of share capital (in the statement of changes in equity or in the
notes) – See Note 35;
• Detailed reconciliations are required for each component of equity – separately disclosing the impact on each such
component of (i) profit or loss, (ii) each component of other comprehensive income, and (iii) transactions with owners
in their capacity as owners (in the statement of changes in equity or in the notes) – In this illustrative financial
statements, details of non-owner changes in equity are available from the statement of comprehensive income; and
details of owner changes in equity are available from the statements of changes in equity itself;
• The amount of income tax relating to each component of other comprehensive income should be disclosed (in the
statement of comprehensive income or in the notes); and
• Reclassification adjustments should be presented separately from the related component of other comprehensive
income (in the statement of comprehensive income or in the notes).

2. Changes in accounting policy

SFRS(I) 1-1:106(b) If a new accounting policy is adopted during the year, a sample disclosure of the effects of retrospective application on the
SFRS(I) 1-8:22 opening balance of each affected component of equity for the earliest prior period presented (i.e. January 1, 2021) on the
statement of changes in equity is as follows:

Share
Share Treasury Equity options Retained
capital shares reserves reserve earnings Total
$’000 $’000 $’000 $’000 $’000 $’000
(Note 35) (Note 36) (Note 37) (Note 37)

Balance as at January 1, 2021 [XXX] [XXX] [XXX] [XXX] [XXX] [XXX]

Effect of change in accounting

policy for [insert as relevant]
[Note X] [XXX] [XXX] [XXX] [XXX] [XXX] [XXX]

Balance as at January 1, 2021

(as restated) [XXX] [XXX] [XXX] [XXX] [XXX] [XXX]

3. Company’s statement of changes in equity

A holding company may choose to present the statement of changes in equity of the company, in addition to the statement
of financial position of the company and the consolidated financial statements of the group, as illustrated in this set of
illustrative financial statements.

37
 [Alt 1]

Consolidated statement of
cash flows

Source

SFRS(I) 1-1.51(a),(b) GAAP Singapore Ltd and its subsidiaries

SFRS(I) 1-1.10(d) Consolidated statement of cash flows(6)

SFRS(I) 1-1.51(c) Year ended December 31, 2022
LM 1207(5)(c)

Group
SFRS(I) 1-1:113 Note 2022 2021
SFRS(I) 1-1:51(d),(e) $’000 $’000

SFRS(I) 1-7:10 Operating activities

SFRS(I) 1-7:12-15
SFRS(I) 1-7:18-20
Cash receipts from customers 1,231,752 832,082
Cash paid to suppliers and employees (1,040,537) (826,892)
Cash generated from operations 191,215 5,190

SFRS(I) 1-7:35-36 Income taxes paid (5,589) (1,489)

SFRS(I) 1-7:31 Interest paid (16,099) (16,508)
SFRS(I) 16:50(b)

Net cash from (used in) operating activities 169,257 (12,807)

SFRS(I) 1-7:10 Investing activities

SFRS(I) 1-7:16
SFRS(I) 1-7:21-24
SFRS(I) 9:IG.G.2
SFRS(I) 1-7:31 Interest received 2,926 3,138
SFRS(I) 1-7:38 Dividends received from associates and joint venture - -
SFRS(I) 1-24:19(d),(e)
SFRS(I) 1-7:31 Dividends received from equity instruments designated at FVTOCI 1,086 1,132
Proceeds on disposal of equity instruments held at FVTOCI - -
SFRS(I) 1-7:39 Proceeds on disposal of subsidiary 50 6,517 -
SFRS(I) 1-7:16(b) Proceeds on disposal of property, plant and equipment 799 4,000
SFRS(I) 1-7:16(a) Purchase of property, plant and equipment (67,245) (33,805)
SFRS(I) 1-7:16(c) Acquisition of investment in an associate (31,800) -
SFRS(I) 1-7:16(c) Purchases of financial assets mandatorily measured at FVTPL (863) (7,018)
SFRS(I) 1-7:16(a) Purchases of patents and trademarks (3,835) (18,617)
SFRS(I) 1-7:16(c) Purchases of quoted debt securities (6,650) -
SFRS(I) 1-7:16(a) Expenditure on product development (3,600) -
Repayments of finance lease receivables 13,606 13,800
SFRS(I) 1-7:39 Acquisition of subsidiary 51 (3,670) -

Net cash used in investing activities (92,729) (37,370)

Illustrative Financial Statements 2022 38

 [Alt 1]

Consolidated statement of
cash flows

Source

Group
SFRS(I) 1-1:113 Note 2022 2021
SFRS(I) 1-1:51(d),(e) $’000 $’000

SFRS(I) 1-7:10 Financing activities

SFRS(I) 1-7:17
SFRS(I) 1-7:21-24
SFRS(I) 9:IG.G.2
SFRS(I) 1-7:42A Acquisition of non-controlling interests in a subsidiary (350) -
SFRS(I) 1-7:31 Dividends paid (5,040) (8,040)
SFRS(I) 1-7:34
SFRS(I) 1-7:17(c) Proceeds from loans and borrowings 26 - 59,419
SFRS(I) 1-7:17(d) Repayments of borrowings 26 (63,647) -
SFRS(I) 1-7:17(e) Repayments of lease liabilities 26 (1,523) (2,077)
SFRS(I) 16:50(a)
SFRS(I) 1-7:17(c) Proceeds on issue of convertible loan notes 26 25,000 -
SFRS(I) 1-7:17(a) Proceeds on issue of shares 6,000 -
Loan from holding company 26 34 (543)
SFRS(I) 1-7:17(b) Purchase of treasury shares (500) -

Net cash (used in) from financing activities (40,026) 48,759

Net increase (decrease) in cash and cash equivalents 36,772 (1,418)

Cash and cash equivalents at beginning of year (734) 155

SFRS(I) 1-7:28 Effect of foreign exchange rate changes on the balance of (3,186) 529
cash held in foreign currencies(5)

SFRS(I) 1-7:45 Cash and cash equivalents at end of year (1)(2) 7 32,852 (734)

Guidance notes

The above illustrates the direct method of reporting cash flows from operating activities.

See accompanying notes to financial statements.

39
 [Alt 2]

Consolidated statement of
cash flows

Source

SFRS(I) 1-1.51(a),(b) GAAP Singapore Ltd and its subsidiaries

SFRS(I) 1-1.10(d) Consolidated statement of cash flows(6)

SFRS(I) 1-1.51(c) Year ended December 31, 2022
LM 1207(5)(c)

Group
SFRS(I) 1-1:113 Note 2022 2021
SFRS(I) 1-1:51(d),(e) $’000 $’000

SFRS(I) 1-7:10 Operating activities

SFRS(I) 1-7:18(b) Profit before tax(3) 116,630 23,762

Adjustments for:
Share of results of associates and joint venture (1,270) (1,517)
Finance income (4,012) (4,270)
Other gains and losses 279 (25)
Foreign exchange loss (gain) 858 (944)
Finance costs 44 12,655 17,338
Gain on disposal of discontinued operation 46 (8,493) -
Depreciation of property, plant and equipment 47 29,867 19,042
Depreciation of right-of-use assets 47 1,495 898
Impairment loss on plant and equipment 47 4,130 -
Amortisation of other intangible assets 47 2,614 846
Impairment of goodwill 47 463 -
Impairment losses, net of reversals, on financial assets 47 3,577 253
Share-based payment expenses 47 6,024 4,718
Fair value gain (loss) on investment property (500) -
Increase (decrease) in provisions 15,174 1,138
Inventories written down 2,340 1,820
Defined benefit costs 10,236 8,545
Rent concessions - (220)
Operating cash flows before movements in working capital 192,067 71,384

Inventories (20,799) (33,244)

Trade and other receivables 4,825 (31,265)
Contract assets 2,852 (1,864)
Contract costs (14) (25)
Right to returned goods assets 46 (68)
Trade and other payables 32,374 23,316
Contract liabilities 478 377
Refund liability (56) 127
Utilisation of provision (8,710) (3,458)
Contribution or benefits paid or retirement benefits (11,848) (20,090)
Cash generated from operations 191,215 5,190

SFRS(I) 1-7:35-36 Income taxes paid (5,589) (1,489)

SFRS(I) 1-7:31, Interest paid (16,099) (16,508)
SFRS(I) 16:50(b)

Net cash from (used in) operating activities 169,527 (12,807)

Illustrative Financial Statements 2022 40

 [Alt 2]

Consolidated statement of
cash flows

Source

Group
SFRS(I) 1-1:113 Note 2022 2021
SFRS(I) 1-1:51(d),(e) $’000 $’000

SFRS(I) 1-7:10 Investing activities

SFRS(I) 1-7:16
SFRS(I) 1-7:21-24
SFRS(I) 9:IG.G.2
SFRS(I) 1-7:31 Interest received 2,926 3,138
SFRS(I) 1-7:38 Dividends received from associates and joint venture - -
SFRS(I) 1-24:19(d),(e)
SFRS(I) 1-7:31 Dividends received from equity instruments designated at FVTOCI 1,086 1,132
Proceeds on disposal of equity instruments held at FVTOCI - -
SFRS(I) 1-7:39 Proceeds on disposal of subsidiary 50 6,517 -
SFRS(I) 1-7:16(b) Proceeds on disposal of property, plant and equipment 799 4,000
SFRS(I) 1-7:16(a) Purchase of property, plant and equipment (67,245) (33,805)
SFRS(I) 1-7:16(c) Acquisition of investment in an associate (31,800) -
SFRS(I) 1-7:16(c) Purchases of financial assets mandatorily measured at FVTPL (863) (7,018)
SFRS(I) 1-7:16(a) Purchases of patents and trademarks (3,835) (18,617)
SFRS(I) 1-7:16(c) Purchases of quoted debt securities (6,650) -
SFRS(I) 1-7:16(a) Expenditure on product development (3,600) -
Repayments of finance lease receivables 13,606 13,800
SFRS(I) 1-7:39 Acquisition of subsidiary 51 (3,670) -

Net cash used in investing activities (92,729) (37,370)

SFRS(I) 1-7:10 Financing activities

SFRS(I) 1-7:17
SFRS(I) 1-7:21-24
SFRS(I) 9:IG.G.2
SFRS(I) 1-7:42A Acquisition of non-controlling interests in a subsidiary (350) -
SFRS(I) 1-7:31 Dividends paid (5,040) (8,040)
SFRS(I) 1-7:34
SFRS(I) 1-7:17(c) Proceeds from loans and borrowings 26 - 59,419
SFRS(I) 1-7:17(d) Repayments of borrowings 26 (63,647) -
SFRS(I) 1-7:17(e) Repayments of lease liabilities 26 (1,523) (2,077)
SFRS(I) 16:50(a)
SFRS(I) 1-7:17(c) Proceeds on issue of convertible loan notes 26 25,000 -
SFRS(I) 1-7:17(a) Proceeds on issue of shares 6,000 -
Loan from holding company 26 34 (543)
SFRS(I) 1-7:17(b) Purchase of treasury shares (500) -

Net cash (used in) from financing activities (40,026) 48,759

Net increase (decrease) in cash and cash equivalents 36,772 (1,418)

Cash and cash equivalents at beginning of year (734) 155

SFRS(I) 1-7:28 Effect of foreign exchange rate changes on the balance of (3,186) 529
cash held in foreign currencies(5)

SFRS(I) 1-7:45 Cash and cash equivalents at end of year (1)(2) 7 32,852 (734)

Guidance notes

The above illustrates the indirect method of reporting cash flows from operating activities.

See accompanying notes to financial statements.

41
Consolidated statement of
cash flows

Source

Guidance notes – Consolidated statement of cash flows

SFRS(I) 1-7:48 1. Restricted cash and cash equivalents

SFRS(I) 1-7:49 An entity shall disclose, together with a commentary by management, the amount of significant cash and cash equivalent
balances held by the enterprise that are not available for use by the group. Examples include cash and cash equivalent
balances held by a subsidiary that operates in a country where exchange controls or other legal restrictions apply where
the balances are not available for general use by the parent or other subsidiaries.

SFRS(I) 1-7:6 2. Definition of cash and cash equivalents

An investment normally qualifies as a cash equivalent only when it is a short-term, highly liquid investment that is readily
convertible to known amounts of cash, and which is subject to an insignificant risk of changes in value.

3. Reconciliation to statement of comprehensive income

The balance reflected as profit before income tax in the consolidated statement of cash flows (indirect method) is derived
from the aggregate of profit before tax from discontinued operation $4,000,000 (2021 : $4,560,000) (Note 46), the gain
on disposal of discontinued operation $8,493,000 (2021 : $Nil) (Note 46) and profit before tax from continuing operations
$104,137,000 (2021 : $19,202,000) (statement of profit or loss and other comprehensive income).

SFRS(I) 1-7:20(b) 4. Net unrealised foreign exchange gains or losses (if material)
If unrealised foreign exchange gains or losses recognised in profit or loss for the year arises from cash flow items other
than operating cash flows, they should be included as an adjustment to profit or loss before tax, in arriving at the operating
cash flows under the indirect method.

SFRS(I) 1-7:28 5. Effects of exchange rate changes on the balance of cash

Unrealised gains and losses arising from changes in foreign currency exchange rates are not cash flows. However,
the effect of exchange rate changes on cash and cash equivalents held or due in a foreign currency is reported in the cash
flow statement in order to reconcile cash and cash equivalents at the beginning and the end of the period. This amount is
presented separately from cash flows from operating, investing and financing activities and includes the differences, if any,
had those cash flows been reported at end of period exchange rates.

6. Terminology used in the Financial Statements

The use of title ‘Statement of Cash Flows’ of the Financial Statements is not mandatory. The reference in the independent
auditor’s report should be updated accordingly.

SFRS(I) 1-7:44A- 7. SFRS(I) 1-7 Statement of Cash Flows

44E SFRS(I) 1-7 requires an entity to provide disclosures that enable users of financial statements to evaluate changes in
liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.
A reconciliation of liabilities arising from financing activities is provided in Note 26.

Illustrative Financial Statements 2022 42

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

1. General

SFRS(I) 1-1:138(a) The company (Registration Number 200001999A) is incorporated in Singapore with its principal place of business and
registered office at 1 Gaap Avenue, #01-00, GAAP Building, Singapore 099001. The company is listed on the Singapore
SFRS(I) 1-1:51(d) Exchange Securities Trading Limited. The financial statements are expressed in Singapore dollars.

SFRS(I) 1-1:138(b) The principal activity of the company is that of investment holding.

The principal activities of the subsidiaries are disclosed in Note 22.

SFRS(I) 1-10:17 The consolidated financial statements of the group and statement of financial position and statement of changes in equity
of the company for the year ended December 31, 2022 were authorised for issue by the board of directors on March 16, 2023.

Guidance notes – Going concern assessment

SFRS(I) 1-1:25 When preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going
concern. An entity shall prepare financial statements on a going concern basis unless management either intends to
liquidate the entity or to cease trading, or has no realistic alternative but to do so. When management is aware, in making
its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the entity’s
ability to continue as a going concern, the entity shall disclose those uncertainties. When an entity does not prepare
financial statements on a going concern basis, it shall disclose that fact, together with the basis on which it prepared the
financial statements and the reason why the entity is not regarded as a going concern.

SFRS(I) 1-1:122 An entity may have exercised significant judgement in reaching the conclusion that no material uncertainties exist.
In cases where the entity concludes that a material uncertainty does not exist but the conclusion reached required the
application of significant judgement, SFRS(I) 1-1:122 requires the disclosure of this judgement.

An entity shall disclose, along with its significant accounting policies or other notes, the judgements, apart from those
involving estimations, that management has made in the process of applying the entity’s accounting policies and that have
the most significant effect on the amounts recognised in the financial statements.

43
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

2. Summary of significant accounting policies

Guidance notes

SFRS(I) 1-1:17(b) Entities are required to disclose in the summary of significant accounting policies the measurement basis (or bases) used
SFRS(I) 1-1:112(a) in preparing the financial statements and the other accounting policies used that are relevant to an understanding of the
SFRS(I) 1-1:117 financial statements. An accounting policy may be significant because of the nature of the entity’s operations even if
amounts for the current and prior periods are not material.

In deciding whether a particular accounting policy should be disclosed, management considers whether disclosure would
assist users in understanding how transactions, other events and conditions are reflected in the reported financial
performance and financial position. Disclosure of particular accounting policies is especially useful to users when those
policies are selected from alternatives allowed in SFRS(I).

Each entity considers the nature of its operations and the policies that users of its financial statements would expect to be
disclosed for that type of entity. It is also appropriate to disclose each significant accounting policy that is not specifically
required by SFRS(I) Accounting Standards, but that is selected and applied in accordance with SFRS(I) 1-8 Accounting
Policies, Changes in Accounting Estimates and Errors.

SFRS(I) 1-1 Presentation of Financial Statements

Materiality and aggregation

SFRS(I) 1-1 clarifies that useful information should not be obscured by aggregating or disaggregating information; and that
materiality considerations apply to primary statements, notes and any specific disclosure requirements in SFRS(I)s.

SFRS(I) 1-1:30A Decision on how information is aggregated in the financial statements, including the notes, should take into consideration
all relevant facts and circumstances. Understandability of financial statements should not be reduced by obscuring material
information with immaterial information or by aggregating material items that have different natures or functions.

Note:
SFRS(I) 1-1 also clarifies that entities have flexibility when designing the structure of the notes and provides guidance on
how to determine a systematic order of the notes.

SFRS(I) 1-1:113 Notes on significant accounting policies should be presented in a systematic manner, considering the effect on the
understandability and comparability of financial statements. The company shall cross-reference each item in the
statements of financial position and in the statement(s) of profit or loss and other comprehensive income, and in the
statements of changes in equity and of cash flows to any related information in the notes.

SFRS(I) 1-1:114 Examples of systematic ordering or grouping of the notes include:

(a) giving prominence to the areas of its activities that the company considers to be most relevant to an understanding
of its financial performance and financial position, such as grouping together information about particular operating
activities;

(b) grouping together information about items measured similarly such as assets measured at fair value; or

(c) following the order of line items in the statement(s) of profit or loss and other comprehensive income and the
statement of financial position.

For completeness, in this set of illustrative financial statements, accounting policies have been provided for some
immaterial items, although this is not required under the Standards. In general, immaterial and irrelevant policies should
be omitted.

Illustrative Financial Statements 2022 44

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-1:16 Basis of accounting – The financial statements have been prepared on the historical cost basis, except as disclosed in the
accounting policies below, and are drawn up in accordance with the provisions of the Companies Act 1967 and Singapore
Financial Reporting Standards (International) (‘SFRS(I)s’).

SFRS(I) 1-1:17(b) Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
SFRS(I) 1-1:112(a)
SFRS(I) 1-1:117
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value of an asset or a liability, the group takes into a ccount the
characteristics of the asset or liability if market participants would take those characteristics into account when pricing the
asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated
financial statements is determined on such a basis, except for share-based payment transactions that are within the scope
of SFRS(I) 2 Share-based Payment, leasing transactions that are within the scope of SFRS(I) 16 Leases, and measurements
that have some similarities to fair value but are not fair value, such as net realisable value in SFRS(I) 1-2 Inventories or
value in use in SFRS(I) 1-36 Impairment of Assets.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the
degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value
measurement in its entirety, which are described as follows:

a) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access
at the measurement date;

b) Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability,
either directly or indirectly; and

c) Level 3 inputs are unobservable inputs for the asset or liability.

45
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-8:28 Adoption of new and revised Standards – On January 1, 2022, the group and the company adopted all the new and
revised SFRS(I) pronouncements that are mandatorily effective and are relevant to its operations. The adoption of these
new/revised SFRS(I) pronouncements does not result in changes to the group’s and the company’s accounting policies and
has no material effect on the disclosures or on the amounts reported for the current or prior years.

Guidance notes

1. Refer to above Summary of key changes from the 2021 version of the Illustrative Financial Statements for the list of
amendments to SFRS(I) mandatorily effective for the year ending December 31, 2022.

2. It is assumed that the application of the new or revised SFRS(I) pronouncements has no material impact to the amounts
recognised or the disclosures in this set of illustrative financial statements. Entities should analyse the impact of these
new or revised SFRS(I)s on their financial statements based on their specific facts and circumstances and make
appropriate disclosures in accordance with SFRS(I) 1-8 Accounting Policies, Changes in Accounting Estimates and
Errors.

SFRS(I) 1-8:28 When initial application of a SFRS(I) has an effect on the current period or any prior period, would have such an effect
except that it is impracticable to determine the amount of the adjustment, or might have an effect on future periods,
an entity shall disclose:

a) the title of the SFRS(I);

b) when applicable, that the change in accounting policy is made in accordance with its transitional provisions;

c) the nature of the change in accounting policy;

d) when applicable, a description of the transitional provisions;

e) when applicable, the transitional provisions that might have an effect on future periods;

f) for the current period and each prior period presented, to the extent practicable, the amount of the adjustment:
(i) for each financial statement line item affected; and
(ii) if SFRS(I) 1-33 Earnings per Share applies to the entity, for basic and diluted earnings per share;

g) the amount of the adjustment relating to periods before those presented, to the extent practicable; and

h) if retrospective application required by SFRS(I) 1-8:19(a) or (b) is impracticable for a particular prior period,
or for periods before those presented, the circumstances that led to the existence of that condition and a
description of how and from when the change in accounting policy has been applied.

Financial statements of subsequent periods need not repeat these disclosures.

Illustrative Financial Statements 2022 46

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 8:14 3. Change in accounting policy

SFRS(I) 8:15
SFRS(I) 8:28 [Describe the nature of the change in accounting policy, describe the transitional provisions (when applicable) and
describe the transitional provisions that might have an effect on future periods (when applicable)].

SFRS(I) 8:28(f) The following table summarises the impact of the change in policy on the financial statements of the group. The
impact of the change in policy on both basic and diluted earnings per share is presented in Note 48.

2022 2021
$’000 $’000

Consolidated statement of profit or loss

[Describe captions affected] x x
Increase (Decrease) in profit for the year xx xx

Consolidated statement of financial position

[Describe captions affected] x x
Increase (Decrease) in net assets xx xx

SFRS(I) 8:28(g) [Describe the amount of the adjustment relating to periods before those presented (to the extent practicable)].

SFRS(I) 8:28(h) [If retrospective application is impracticable for a particular prior period, or for periods before those presented, describe
the circumstances that led to the existence of that condition and describe how and from when the change in accounting
policy has been applied].

SFRS(I) 8:41 4. Prior period errors

SFRS(I) 8:49(a) [Describe the nature of the prior period error].

SFRS(I) 8:49(b)(i) The following table summarises the impact of the prior period error on the financial statements of the group. The
impact of the prior period error on both basic and diluted earnings per share is presented in Note 48.

2021
$’000

Consolidated statement of profit or loss

[Describe captions affected] x
Increase (Decrease) in profit for the year xx

Consolidated statement of financial position

[Describe captions affected] x
Increase (Decrease) in net assets xx

SFRS(I) 8:49(d) [If retrospective application is impracticable for a particular prior period, describe the circumstances that led to the
existence of that condition and describe how and from when the error has been corrected].

47
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes - New and revised SFRS(I) pronouncements that are mandatorily effective in 2022

It is not required to list all SFRS(I)s, SFRS(I) INTs and amendments to SFRS(I)s that are effective in the current year. Only
those relevant to the entity should be indicated. In this set of illustrative financial statements, it is assumed that the gr oup
had early adopted the Amendment to SFRS(I) 16: Covid-19-Related Rent Concessions beyond 30 June 2021 in the prior
year.

Sample disclosures
Include where applicable.

SFRS(I) 3:64Q Amendments to SFRS(I) 3 Reference to the Conceptual Framework

The group has adopted the amendments to SFRS(I) 3 Business Combinations for the first time in the current year. The
amendments update a reference in SFRS(I) 3 to the Conceptual Framework for Financial Reporting. They also add to SFRS(I) 3
a requirement that, for obligations within the scope of SFRS(I) 1-37 Provisions, Contingent Liabilities and Contingent Assets,
an acquirer applies SFRS(I) 1-37 to determine whether at the acquisition date a present obligation exists as a result of past
events. For a levy that would be within the scope of SFRS(I) INT 21 Levies, the acquirer applies SFRS(I) INT 21 to determine
whether the obligating event that gives rise to a liability to pay the levy has occurred by the acquisition date.

[Describe impact on the financial statements in the period of initial application.]

SFRS(I) 1-16:80D Amendments to SFRS(I) 1-16: Property, Plant and Equipment—Proceeds before Intended Use

The group has adopted the amendments to SFRS(I) 1-16 Property, Plant and Equipment for the first time in the current year.
The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling
items produced before that asset is available for use, i.e. proceeds while bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by management. Consequently, an entity recognises
such sales proceeds and related costs in profit or loss. The entity measures the cost of those items in accordance with
SFRS(I) 1-2 Inventories.

The amendments also clarify the meaning of ‘testing whether an asset is functioning properly’. SFRS(I) 1-16 now specifies
this as assessing whether the technical and physical performance of the asset is such that it is capable of being used in the
production or supply of goods or services, for rental to others, or for administrative purposes.

If not presented separately in the statement of comprehensive income, the financial statements shall disclose the amounts
of proceeds and cost included in profit or loss that relate to items produced that are not an output of the entity’s ordinary
activities, and which line item(s) in the statement of comprehensive income include(s) such proceeds and cost.

[Describe impact on the financial statements in the period of initial application.]

SFRS(I) 1-37:94A Amendments to SFRS(I) 1-37: Onerous Contracts—Cost of Fulfilling a Contract

SFRS(I) 1-37:105
The group has adopted the amendments to SFRS(I) 1-37 for the first time in the current year. The amendments specify that
the cost of fulfilling a contract comprises the costs that relate directly to the contract. Costs that relate directly to a contract
consist of both the incremental costs of fulfilling that contract (examples would be direct labour or materials) and an allocation
of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an
item of property, plant and equipment used in fulfilling the contract).

[Describe impact on the financial statements in the period of initial application.]

Illustrative Financial Statements 2022 48

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Annual Improvements to SFRS(I)s 2018–2020

The group has adopted the amendments included in the Annual Improvements to SFRS(I) Accounting Standards 2018 -
2020 for the first time in the current year. The Annual Improvements include amendments to four Standards as set out
below:

SFRS(I) 1:39AG SFRS(I) 1 First-time Adoption of International Financial Reporting Standards

The amendment provides additional relief to a subsidiary which becomes a first-time adopter later than its parent in respect
of accounting for cumulative translation differences. As a result of the amendment, a subsidiary that uses the exemption
in SFRS(I) 1:D16(a) can now also elect to measure cumulative translation differences for all foreign operations at the
carrying amount that would be included in the parent’s consolidated financial statements, based on the parent’s date of
transition to SFRS(I) Accounting Standards, if no adjustments were made for consolidation procedures and for the effects
of the business combination in which the parent acquired the subsidiary. A similar election is available to an associate or
joint venture that uses the exemption in SFRS(I) 1:D16(a).

SFRS(I) 9 Financial Instruments

SFRS(I) 9:7.1.9 The amendment clarifies that in applying the ‘10 per cent’ test to assess whether to derecognise a financial liability, an
SFRS(I) 9:7.2.35 entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received
by either the entity or the lender on the other’s behalf.

SFRS(I) 16:IE5 SFRS(I) 16 Leases

The amendment removes the illustration of the reimbursement of leasehold improvements.

SFRS(I) 1-41 Agriculture

SFRS(I) 1-41:65 The amendment removes the requirement for entities to exclude cash flows for taxation when measuring fair value. This
aligns the fair value measurement in SFRS(I) 1-41 with the requirements of SFRS(I) 13 Fair Value Measurement to use
internally consistent cash flows and discount rates and enables preparers to determine whether to use pre-tax or post-tax
cash flows and discount rates for the most appropriate fair value measurement.

[Describe impact on the financial statements arising from each of the above amendments where applicable, in the period
of initial application.]

49
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – IFRS IC Agenda Decisions

The IFRS IC is the interpretative body of the IASB and works with the IASB in supporting the understanding and consistent
application of IFRS Accounting Standards. The IFRS IC projects typically begin as an application question submitted for
consideration and the IFRS IC decides whether a standard-setting project should be added to the work plan to address the
question submitted.

An IFRS IC Agenda Decision (“Agenda Decision”) explains why a standard-setting project has not been added to the work
plan and may include explanatory materials to improve the consistency of application of IFRS Accounting Standards.
Agenda Decisions (and the included explanatory materials) do not add or change requirements in IFRS Accounting
Standards. The explanatory material explains how the applicable principles and requirements in IFRS Accounting Standards
apply to the transaction or fact pattern described in the Agenda Decision.

Once an Agenda Decision is finalised it becomes a relevant piece of information in applying IFRS Accounting Standards.
Explanatory material set out in Agenda Decisions, in essence, affirms the application of existing requirements. Therefore,
an entity is required to apply the applicable IFRS Accounting Standard(s), reflecting the explanatory material in an Agenda
Decision. An entity would be entitled to sufficient time to implement any necessary change in accounting policy that results
from a published Agenda Decision. Nonetheless, it would be expected to implement the change on a timely basis i.e. as
soon and as quickly as possible.

Entities applying the framework under SFRS(I), which is based on the IFRS Accounting Standards issued by the IASB,
should also consider the impact of the Agenda Decisions on their financial statements. Where a change in accounting policy
is required, an entity must account for the change applying SFRS(I) 1-8 and consider the related disclosures required
leading up to the implementation of the change.

The compilations of Agenda Decisions are available at the IFRS website.

SFRS(I) 10:7 Basis of consolidation - The consolidated financial statements incorporate the financial statements of the company and
entities (including structured entities) controlled by the company and its subsidiaries. Control is achieved when the company:

• Has power over the investee;

• Is exposed, or has rights, to variable returns from its involvement with the investee; and

• Has the ability to use its power to affect its returns.

SFRS(I) 10:8 The company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control listed above.

SFRS(I) 10:B38 When the company has less than a majority of the voting rights of an investee, it has power over the investee when the
voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally.
The company considers all relevant facts and circumstances in assessing whether or not the company’s voting rights in an
investee are sufficient to give it power, including:

• The size of the company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

• Potential voting rights held by the company, other vote holders or other parties;

• Rights arising from other contractual arrangements; and

• Any additional facts and circumstances that indicate that the company has, or does not have, the current ability to direct
the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’
meetings.

Illustrative Financial Statements 2022 50

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 10:B88 Consolidation of a subsidiary begins when the company obtains control over the subsidiary and ceases when the company
loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are includ ed
in profit or loss from the date the company gains control until the date when the company ceases to control the subsidiary.

SFRS(I) 10:B87 When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line
with the group’s accounting policies.

SFRS(I) 10:B86(c) All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members
of the group are eliminated on consolidation.

Non-controlling interests in subsidiaries are identified separately from the group’s equity therein. Those interests of
non-controlling shareholders that are present ownership interests entitling their holders to a proportionate share of net
assets upon liquidation may initially be measured at fair value or at the non-controlling interests’ proportionate share of the
fair value of the acquiree’s identifiable net assets. The choice of measurement is made on an acquisition-by-acquisition basis.
Other non-controlling interests are initially measured at fair value. Subsequent to acquisition, the carrying amount of
non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of
subsequent changes in equity.

SFRS(I) 10:B94 Profit or loss and each component of other comprehensive income are attributed to the owners of the company and to the
non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the company and to the
non-controlling interests even if this results in the non-controlling interests having a deficit balance.

SFRS(I) 10:B96 Changes in the group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions.
The carrying amount of the group’s interests and the non-controlling interests are adjusted to reflect the changes in their
relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted
and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the
company.

SFRS(I) 10:B97 When the group loses control of a subsidiary, the gain or loss on disposal recognised in profit or loss is calculated as the
SFRS(I) 10:B98 difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest
SFRS(I) 10:B99 and (ii) the previous carrying amount of the assets (including goodwill), less liabilities of the subsidiary and any
non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary
are accounted for as if the group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified
to profit or loss or transferred to another category of equity as required/permitted by applicable SFRS(I) Accounting
Standards). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded
as the fair value on initial recognition for subsequent accounting under SFRS(I) 9 Financial Instruments when applicable, or
the cost on initial recognition of an investment in an associate or a joint venture.

SFRS(I) 1-27:10 In the company’s separate financial statements, investments in subsidiaries, associates and joint ventures are carried at
cost less any impairment in net recoverable value that has been recognised in profit or loss.

SFRS(I) 3:4 Business combinations - Acquisitions of businesses are accounted for using the acquisition method. The consideration
SFRS(I) 3:37 transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair
SFRS(I) 3:38 values of assets transferred by the group, liabilities incurred by the group to the former owners of the acquiree and the
SFRS(I) 3:53 equity interest issued by the group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit
or loss as incurred.

51
Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 3:18 At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at t he
SFRS(I) 3:21 acquisition date, except that:

SFRS(I) 3:24 • Deferred tax assets or liabilities and assets or liabilities related to employee benefits arrangements are recognised and
SFRS(I) 3:26 measured in accordance with SFRS(I) 1-12 Income Taxes and SFRS(I) 1-19 Employee Benefits respectively;

SFRS(I) 3:30 • Liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment
arrangements of the group entered to replace share-based payment arrangements of the acquiree are measured in
accordance with SFRS(I) 2 Share-based Payment at the acquisition date; and

SFRS(I) 3:31 • Assets (or disposal groups) that are classified as held for sale in accordance with SFRS(I) 5 Non-current Assets Held for
Sale and Discontinued Operations are measured in accordance with that Standard.

SFRS(I) 3:32 Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests
SFRS(I) 3:36 in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net o f
the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net
of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the
consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s
previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase
gain.

SFRS(I) 3:39 When the consideration transferred by the group in a business combination includes a contingent consideration arrangement,
SFRS(I) 3:58 the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration
transferred in a business combination. Changes in fair value of the contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period
adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot
exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as
equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity.
Other contingent consideration is remeasured to fair value at subsequent reporting dates with changes in fair value
recognised in profit or loss.

SFRS(I) 3:42 When a business combination is achieved in stages, the group’s previously held interests (including joint operations) in the
acquired entity are remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit
or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in
other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest
were disposed of.

SFRS(I) 3:45 If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination
occurs, the group reports provisional amounts for the items for which the accounting is incomplete. Those provisional
amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect
new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have
affected the amounts recognised as of that date.

SFRS(I) 7:21 Financial instruments - Financial assets and financial liabilities are recognised in the group’s statement of financial position
when the group becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a
significant financing component which are measured at transaction price. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Illustrative Financial Statements 2022 52

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:21 Financial assets

SFRS(I) 7:B5(c) All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way
purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established
by regulation or convention in the marketplace.

All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on
the classification of the financial assets.

Classification of financial assets

Debt instruments that meet the following conditions are measured subsequently at amortised cost:

• the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual
cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive
income (FVTOCI):

• the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows
and selling the financial assets; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.

By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).

Despite the foregoing, the group may make the following irrevocable election/designation at initial recognition of a financial
asset:

• the group may irrevocably elect to present subsequent changes in fair value of an equity investment in other
comprehensive income if certain criteria are met; and

• the group may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured
at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.

Amortised cost and effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest
income over the relevant period.

For financial assets other than purchased or originated credit-impaired financial assets (i.e. assets that are credit-impaired
on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all
fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums
or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate,
a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased or originated
credit-impaired financial assets, a credit-adjusted effective interest rate is calculated by discounting the estimated future
cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus
the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between
that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset
is the amortised cost of a financial asset before adjusting for any loss allowance.

53
Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:B5(e) Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised
cost and at FVTOCI. For financial instruments other than purchased or originated credit-impaired financial assets, interest income
is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial
assets that have subsequently become credit-impaired. For financial assets that have subsequently become credit-impaired,
interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent
reporting periods, the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer
credit-impaired, interest income is recognised by applying the effective interest rate to the gross carrying amount of the
financial asset.

For purchased or originated credit-impaired financial assets, the group recognises interest income by applying the
credit-adjusted effective interest rate to the amortised cost of the financial asset from initial recognition. The calculation
does not revert to the gross basis even if the credit risk of the financial asset subsequently improves so that the financial
asset is no longer credit-impaired.

Interest income is recognised in profit or loss and is included in the ‘Finance income – interest income’ line item.

Debt instruments classified as at FVTOCI

The corporate bonds held by the group are classified as at FVTOCI. Fair value is determined in the manner described in
Note 4(c)(i). The corporate bonds are initially measured at fair value plus transaction costs. Subsequently, changes in the
carrying amount of these corporate bonds as a result of foreign exchange gains and losses, impairment gains or losses,
and interest income calculated using the effective interest method are recognised in profit or loss. The amounts that are
recognised in profit or loss are the same as the amounts that would have been recognised in profit or loss if these corporate
bonds had been measured at amortised cost. All other changes in the carrying amount of these corporate bonds are
recognised in other comprehensive income and accumulated under the heading of investments revaluation reserve. When these
corporate bonds are derecognised, the cumulative gains or losses previously recognised in other comprehensive income are
reclassified to profit or loss.

Equity instruments designated as at FVTOCI

On initial recognition, the group may make an irrevocable election (on an instrument-by-instrument basis) to present in
other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is neither
held for trading nor contingent consideration recognised by an acquirer in a business combination to which SFRS(I) 3 applies.

Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently, they are
measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income
and accumulated in the investments revaluation reserve. The cumulative gain or loss is not reclassified to profit or loss on
disposal of the equity investments, instead, it is transferred to retained earnings.

Dividends on these investments in equity instruments are recognised in profit or loss in accordance with SFRS(I) 9, unless the
dividends clearly represent a recovery of part of the cost of the investment. Dividends are included in the ‘Finance income
– other’ line item in profit or loss.

The group designated all investments in equity instruments that are not held for trading as at FVTOCI on initial recognition
(Note 13).

A financial asset is held for trading if either:

• it has been acquired principally for the purpose of selling it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the group manages together and
has evidence of a recent actual pattern of short-term profit-taking; or

• it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging
instrument).

Illustrative Financial Statements 2022 54

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Financial assets at FVTPL

Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL.
Specifically:

• Investments in equity instruments are classified as at FVTPL, unless the group designates an equity investment that is
neither held for trading nor a contingent consideration arising from a business combination as at FVTOCI on initial
recognition.

• Debt instruments that do not meet the amortised cost criteria or the FVTOCI criteria are classified as at FVTPL.
In addition, debt instruments that meet either the amortised cost criteria or the FVTOCI criteria may be designated as
at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition
inconsistency (so called ‘accounting mismatch’) that would arise from measuring assets or liabilities or recognising the
gains and losses on them on different bases. The group has not designated any debt instruments as at FVTPL.

SFRS(I) 7:B5(e) Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses
recognised in profit or loss to the extent they are not part of a designated hedging relationship (see hedge accounting
policy). The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset and
is included in the ‘Other gains and losses’ line item (Note 43). Fair value is determined in the manner described in
Note 4(c)(i).

Foreign exchange gains and losses

The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency
and translated at the spot rate at the end of each reporting period. Specifically,

• for financial assets measured at amortised cost that are not part of a designated hedging relationship, exchange
differences are recognised in profit or loss in the ‘Other gains and losses’ line item;

• for debt instruments measured at FVTOCI that are not part of a designated hedging relationship, exchange differences
on the amortised cost of the debt instrument are recognised in profit or loss in the ‘Other gains and losses’ line item.
As the foreign currency element recognised in profit or loss is the same as if it was measured at amortised cost,
the residual foreign currency element based on the translation of the carrying amount (at fair value) is recognised in
other comprehensive income in the investments revaluation reserves;

SFRS(I) 7:B5(e) • for financial assets measured at FVTPL that are not part of a designated hedging relationship, exchange differences are
recognised in profit or loss in the ‘Other gains and losses’ line item as part of the fair value gain or loss; and

• for equity instruments measured at FVTOCI, exchange differences are recognised in other comprehensive income in the
investments revaluation reserves.

See hedge accounting policy regarding the recognition of exchange differences where the foreign currency risk component
of a financial asset is designated as a hedging instrument for a hedge of foreign currency risk.

SFRS(I) 7:35F Impairment of financial assets

The group recognises a loss allowance for expected credit losses (‘ECL’) on investments in debt instruments that are
measured at amortised cost or at FVTOCI, lease receivables, trade receivables and contract assets, as well as on financial
guarantee contracts [and loan commitments]. The amount of expected credit losses is updated at each reporting date to
reflect changes in credit risk since initial recognition of the respective financial instrument.

The group always recognises lifetime ECL for trade receivables, contract assets and lease receivables. The expected credit
losses on these financial assets are estimated using a provision matrix based on the group’s historical credit loss experience,
adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as
well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

55
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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

For all other financial instruments, the group recognises lifetime ECL when there has been a significant increase in credit
risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial
recognition, the group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life o f
a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from
default events on a financial instrument that are possible within 12 months after the reporting date.

Significant increase in credit risk

SFRS(I) 7:35F(a) In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition , the group
SFRS(I) 7:35G(b) compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default
occurring on the financial instrument as at the date of initial recognition. In making this assessment, the group considers
both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking
information that is available without undue cost or effort. Forward-looking information considered includes the future
prospects of the industries in which the group’s debtors operate, obtained from economic expert reports, financial analysts,
governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external
sources of actual and forecast economic information that relate to the group’s core operations.

SFRS(I) 7:35F(a) In particular, the following information is taken into account when assessing whether credit risk has increased significantly
SFRS(I) 7:35G(a)(ii) since initial recognition:

• [an actual or expected significant deterioration in the financial instrument’s external (if available) or internal credit
rating;

• significant deterioration in external market indicators of credit risk for a particular financial instrument, e.g. a significant
increase in the credit spread, the credit default swap prices for the debtor, or the length of time or the extent to which
the fair value of a financial asset has been less than its amortised cost;

• existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant
decrease in the debtor’s ability to meet its debt obligations;

• an actual or expected significant deterioration in the operating results of the debtor;

• significant increases in credit risk on other financial instruments of the same debtor; and

• an actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor
that results in a significant decrease in the debtor’s ability to meet its debt obligations.]

Irrespective of the outcome of the above assessment, the group presumes that the credit risk on a financial asset has
increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the group
has reasonable and supportable information that demonstrates otherwise.

Despite the foregoing, the group assumes that the credit risk on a financial instrument has not increased significantly since
initial recognition if the financial instrument is determined to have low credit risk at the reporting date. A financial instrument
is determined to have low credit risk if

• the financial instrument has a low risk of default;

• the debtor has a strong capacity to meet its contractual cash flow obligations in the near term; and

• adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability
of the borrower to fulfil its contractual cash flow obligations.

Illustrative Financial Statements 2022 56

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:35F(a)(i) The group considers a financial asset to have low credit risk when the asset has external credit rating of ‘investment grade’
in accordance with the globally understood definition or if an external rating is not available, the asset has an internal rating
of ‘performing’. Performing means that the counterparty has a strong financial position and there are no past due amounts.

For financial guarantee contracts [and loan commitments], the date that the group becomes a party to the irrevocable
commitment is considered to be the date of initial recognition for the purposes of assessing the financial instrument for
impairment. In assessing whether there has been a significant increase in the credit risk since initial recognition of a financial
guarantee contract, the group considers the changes in the risk that the specified debtor will default on the contract.
[For loan commitment, the group considers changes in the risk of a default occurring on the loan to which a loan commitment
relates.]

The group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase
in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in
credit risk before the amount becomes past due.

Definition of default

SFRS(I) 7:35F(b) The group considers the following as constituting an event of default for internal credit risk management purposes as
historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable:

• when there is a breach of financial covenants by the debtor; or

• information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its
creditors, including the group, in full (without taking into account any collaterals held by the group).

Irrespective of the above analysis, the group considers that default has occurred when a financial asset is more than
90 days past due unless the group has reasonable and supportable information to demonstrate that a more lagging default
criterion is more appropriate.

Credit-impaired financial assets

SFRS(I) 7:35F(d) A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash
SFRS(I) 7:35G(a)(iii) flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about
the following events:

• significant financial difficulty of the issuer or the borrower;

• a breach of contract, such as a default or past due event;

• the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty,
having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;

• it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or

• the disappearance of an active market for that financial asset because of financial difficulties.

Write-off policy

SFRS(I) 7:35F(e) The group writes off a financial asset when there is information indicating that the counterparty is in severe financial difficult y
and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into
bankruptcy proceedings, or in the case of trade receivables, when the amounts are over two years past due, whichever occurs
sooner. Financial assets written off may still be subject to enforcement activities under the group’s recovery procedures,
taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss.

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Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Measurement and recognition of expected credit losses

SFRS(I) 7:35G(a) The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude
of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given
default is based on historical data adjusted by forward-looking information as described above. As for the exposure at
default, for financial assets, this is represented by the assets’ gross carrying amount at the reporting date; for financial
guarantee contracts [and loan commitments], the exposure includes the amount of drawn down as at the reporting date,
together with any additional amounts expected to be drawn down in the future by default date determined based on historical
trend, the group’s understanding of the specific future financing needs of the debtors, and other relevant forward-looking
information.

For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due
to the group in accordance with the contract and all the cash flows that the group expects to receive, discounted at the
original effective interest rate. For a lease receivable, the cash flows used for determining the expected credit losses is
consistent with the cash flows used in measuring the lease receivable in accordance with SFRS(I) 16.

For a financial guarantee contract, as the group is required to make payments only in the event of a default by the debtor
in accordance with the terms of the instrument that is guaranteed, the expected loss allowance is the expected payments
to reimburse the holder for a credit loss that it incurs less any amounts that the group expects to receive from the holder,
the debtor or any other party.

Guidance notes - Basis of measurement and recognition of expected credit losses for undrawn loan
commitments
Include where applicable.

SFRS(I) 9:B5.5.30 For undrawn loan commitments, the expected credit loss is the present value of the difference between the contractual
cash flows that are due to the group if the holder of the loan commitment draws down the loan, and the cash flows that
the group expects to receive if the loan is drawn down.

If the group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous
reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met,
the group measures the loss allowance at an amount equal to 12-month ECL at the current reporting date, except for assets
for which the simplified approach was used.

The group recognises an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment
to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured
at FVTOCI, for which the loss allowance is recognised in other comprehensive income and accu mulated in the investments
revaluation reserves, and does not reduce the carrying amount of the financial asset in the statement of financial position.

Derecognition of financial assets

The group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the
group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the
transferred asset, the group recognises its retained interest in the asset and an associated liability for amounts it may have
to pay. If the group retains substantially all the risks and rewards of ownership of a transferred financial asset, the group
continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and
the sum of the consideration received and receivable is recognised in profit or loss. In addition, on derecognition of an
investment in a debt instrument classified as at FVTOCI, the cumulative gain or loss previously accumulated in the
investments revaluation reserves is reclassified to profit or loss. In contrast, on derecognition of an investment in equity
instrument which the group has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously
accumulated in the investments revaluation reserves is not reclassified to profit or loss, but is transferred to retained
earnings.

Illustrative Financial Statements 2022 58

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:21 Financial liabilities and equity

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the
contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the group are recognised at the proceeds received, net of direct issue costs.

Repurchase of the company’s own equity instruments is recognised and deducted directly in equity. No gain or loss is
recognised in profit or loss on the purchase, sale, issue or cancellation of the company’s own equity instruments.

Compound instruments

The component parts of convertible loan notes issued by the group are classified separately as financial liabilities and equity
in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity
instrument. A conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset for
a fixed number of the company’s own equity instruments is an equity instrument.

At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar
non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest
method until extinguished upon conversion or at the instrument’s maturity date.

A conversion option classified as equity is determined by deducting the amount of the liability component from the fair value
of the compound instrument as a whole. This is recognised and included in equity, net of income tax effects, and is not
subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion
option is exercised, in which case, the balance recognised in equity will be transferred to [share premium/other equity
[describe]]. Where the conversion option remains unexercised at the maturity date of the convertible loan notes, the balance
recognised in equity will be transferred to [retained earnings/other equity [describe]]. No gain or loss is recognised in profit
or loss upon conversion or expiration of the conversion option.

Transaction costs that relate to the issue of the convertible loan notes are allocated to the liability and equity components
in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognised
directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liabilit y
component and are amortised over the lives of the convertible loan notes using the effective interest method.

Financial liabilities

All financial liabilities are measured subsequently at amortised cost using the effective interest method or at FVTPL.

However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the
continuing involvement approach applies, and financial guarantee contracts issued by the group are measured in accordance
with the specific accounting policies set out below.

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Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is (i) contingent consideration of an acquirer in a
business combination, (ii) held for trading, or (iii) it is designated as at FVTPL.

A financial liability is classified as held for trading if either:

• it has been acquired principally for the purpose of repurchasing it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the group manages together and has
a recent actual pattern of short-term profit-taking; or

• it is a derivative, except for a derivative that is a financial guarantee contract or a designated and effective hedging
instrument.

A financial liability other than a financial liability held for trading or contingent consideration of an acquirer in a busin ess
combination may be designated as at FVTPL upon initial recognition if either:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise
arise; or

• the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its
performance is evaluated on a fair value basis, in accordance with the group’s documented risk management or
investment strategy, and information about the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and SFRS(I) 9 permits the entire combined
contract to be designated as at FVTPL.

SFRS(I) 7:B5(e) Financial liabilities at FVTPL are measured at fair value, with any gains or losses arising on changes in fair value recognised
in profit or loss to the extent that they are not part of a designated hedging relationship (see Hedge accounting policy).
The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liabilities and is included in
the ‘Other gains and losses’ line item (Note 43) in profit or loss.

However, for financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial
liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income,
unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or
enlarge an accounting mismatch in profit or loss. The remaining amount of change in the fair value of liability is recognised
in profit or loss. Changes in fair value attributable to a financial liability’s credit risk that are recognised in other
comprehensive income are not subsequently reclassified to profit or loss; instead, they are transferred to retained earnings
upon derecognition of the financial liability.

Gains or losses on financial guarantee contracts issued by the group that are designated by the group as at FVTPL are
recognised in profit or loss.

Fair value is determined in the manner described in Note 4(c)(i).

Financial liabilities measured subsequently at amortised cost

Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held-for-trading,
or (iii) designated as at FVTPL, are measured subsequently at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating intere st
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments
(including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the
amortised cost of a financial liability.

Illustrative Financial Statements 2022 60

Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Financial guarantee contract liabilities

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for
a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt
instrument.

Financial guarantee contract liabilities are measured initially at their fair values and, if not designated as at FVTPL and do
not arise from a transfer of a financial asset, are measured subsequently at the higher of:

• the amount of the loss allowance determined in accordance with SFRS(I) 9; and

• the amount recognised initially less, where appropriate, cumulative amortisation recognised in accordance with the
revenue recognition policies.

Guidance notes - Accounting policies for other commitments

Include where applicable.

Commitments to provide a loan at a below-market interest rate

Commitments to provide a loan at a below-market interest rate are initially measured at their fair values and, if not
designated as at FVTPL, are subsequently measured at the higher of:
• the amount of the loss allowance determined in accordance with SFRS(I) 9; and
• the amount recognised initially less, where appropriate, cumulative amount of income recognised in accordance with
the revenue recognition policies.

Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each
reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments.
These foreign exchange gains and losses are recognised in the ‘Other gains and losses’ line item in profit or loss (Note 43)
for financial liabilities that are not part of a designated hedging relationship. For those which are designated as a hedging
instrument for a hedge of foreign currency risk foreign exchange gains and losses are recognised in other comprehensive
income and accumulated in a separate component of equity.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated
at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange
component forms part of the fair value gains or losses and is recognised in profit or loss for financial liabilities that are not
part of a designated hedging relationship.

Derecognition of financial liabilities

The group derecognises financial liabilities when, and only when, the group’s obligations are discharged, cancelled or have
expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable is recognised in profit or loss.

When the group exchanges with the existing lender one debt instrument into another one with the substantially different
terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new
financial liability. Similarly, the group accounts for substantial modification of terms of an existing liability or part of it as an
extinguishment of the original financial liability and the recognition of a new liability. It is assumed that the terms are
substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of
any fees received and discounted using the original effective rate is at least 10 per cent different from the discounted present
value of the remaining cash flows of the original financial liability. If the modification is not substantial, the difference
between: (1) the carrying amount of the liability before the modification; and (2) the present value of the cash flows after
modification is recognised in profit or loss as the modification gain or loss within other gains and losses.

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Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7.21 Derivative financial instruments

The group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign
exchange rate risks, including foreign currency forward contracts and interest rate swaps. Further details of derivative
financial instruments are disclosed in Note 14.

Derivatives are recognised initially at fair value at the date a derivative contract is entered into and are subsequently
remeasured to their fair value as at each reporting date. The resulting gain or loss is recognised in profit or loss immediately
unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in
profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is
recognised as a financial liability. Derivatives are not offset in the financial statements unless the group has both a legally
enforceable right and intention to offset. The impact of the master netting agreements on the group’s financial position is
disclosed in Note 14. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of
the instrument is more than 12 months and it is not due to be realised or settled within 12 months. Other derivatives are
presented as current assets or current liabilities.

Embedded derivatives

An embedded derivative is a component of a hybrid contract that also includes a non-derivative host - with the effect that
some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative.

Derivatives embedded in hybrid contracts with a financial asset host within the scope of SFRS(I) 9 are not separated. The
entire hybrid contract is classified and subsequently measured as either amortised cost or fair value as appropriate.

Derivatives embedded in hybrid contracts with hosts that are not financial assets within the scope of SFRS(I) 9 (e.g. financial
liabilities) are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristi cs
are not closely related to those of the host contracts and the host contracts are not measured at FVTPL.

If the hybrid contract is a quoted financial liability, instead of separating the embedded derivative, the group generally
designates the whole hybrid contract at FVTPL.

An embedded derivative is presented as a non-current asset or non-current liability if the remaining maturity of the hybrid
instrument to which the embedded derivative relates is more than 12 months and is not expected to be realised or settled
within 12 months.

SFRS(I) 7.21 Hedge accounting

The group designates certain derivatives as hedging instruments in respect of foreign currency risk and interest rate risk in
fair value hedges, cash flow hedges, or hedges of net investments in foreign operations as appropriate. Hedges of foreign
exchange risk on firm commitments are accounted for as cash flow hedges.

At the inception of the hedge relationship, the group documents the relationship between the hedging instrument and the
hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions.
Furthermore, at the inception of the hedge and on an ongoing basis, the group documents whether the hedging instrument
is effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk, which is
when the hedging relationships meet all of the following hedge effectiveness requirements:

• there is an economic relationship between the hedged item and the hedging instrument;

• the effect of credit risk does not dominate the value changes that result from that economic relationship; and

• the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the
group actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity
of hedged item.

Illustrative Financial Statements 2022 62

Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk
management objective for that designated hedging relationship remains the same, the group adjusts the hedge ratio of the
hedging relationship (i.e. rebalances the hedge) so that it meets the qualifying criteria again.

The group designates the full change in the fair value of a forward contract (i.e. including the forward elements) as the
hedging instrument for all of its hedging relationships involving forward contracts.

The group designates only the intrinsic value of option contracts as a hedged item, i.e. excluding the time value of the
option. The changes in the fair value of the aligned time value of the option are recognised in other comprehensive income
and accumulated in the cost of hedging reserve. If the hedged item is transaction-related, the time value is reclassified to
profit or loss when the hedged item affects profit or loss. If the hedged item is time-period related, then the amount
accumulated in the cost of hedging reserve is reclassified to profit or loss on a rational basis – the group applies straight-line
amortisation. Those reclassified amounts are recognised in profit or loss in the same line as the hedged item. If the hedged
item is a non-financial item, then the amount accumulated in the cost of hedging reserve is removed directly from equity
and included in the initial carrying amount of the recognised non-financial item. Furthermore, if the group expects that some
or all of the loss accumulated in cost of hedging reserve will not be recovered in the future, that amount is immediately
reclassified to profit or loss.

Note 14 sets out details of the fair values of the derivative instruments used for hedging purposes.

Movements in the hedging reserve in equity are detailed in Note 39.

Fair value hedges

The fair value change on qualifying hedging instruments is recognised in profit or loss except when the hedging instrument
hedges an equity instrument designated at FVTOCI in which case it is recognised in other comprehensive income.

The carrying amount of a hedged item not already measured at fair value is adjusted for the fair value change attributable
to the hedged risk with a corresponding entry in profit or loss. For debt instruments measured at FVTOCI, the carrying
amount is not adjusted as it is already at fair value, but the hedging gain or loss is recognised in profit or loss instead of
other comprehensive income. When the hedged item is an equity instrument designated at FVTOCI, the hedging gain or loss
remains in other comprehensive income to match that of the hedging instrument.

Where hedging gains or losses are recognised in profit or loss, they are recognised in the same line as the hedged item.

The group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying
criteria (after rebalancing, if applicable). This includes instances when the hedging instrument expires or is sold, terminated
or exercised. The discontinuation is accounted for prospectively. The fair value adjustment to the carrying amount of the
hedged item arising from the hedged risk is amortised to profit or loss from that date.

Cash flow hedges

The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated
and qualify as cash flow hedges is recognised in other comprehensive income and accumulated under the heading of cash
flow hedge reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge.
The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, and is included in the
‘Other gains and losses’ line item.

Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss
in the periods when the hedged item affects profit or loss, in the same line as the recognised hedged item. However, when
the hedged forecast transaction results in the recognition of a non-financial asset or a non-financial liability, the gains and
losses previously recognised in other comprehensive income and accumulated in equity are removed from equity and
included in the initial measurement of the cost of the non-financial asset or non-financial liability. This transfer does not
affect other comprehensive income. Furthermore, if the group expects that some or all of the loss accumulated in other
comprehensive income will not be recovered in the future, that amount is immediately reclassified to profit or loss.

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Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

The group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying
criteria (after rebalancing, if applicable). This includes instances when the hedging instrument expires or is sold, terminated
or exercised. The discontinuation is accounted for prospectively. Any gain or loss recognised in other comprehensive income
and accumulated in cash flow hedge reserve at that time remains in equity and is reclassified to profit or loss when the
forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in the
cash flow hedge reserve is reclassified immediately to profit or loss.

Hedges of net investments in foreign operations

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the
hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income and
accumulated under the heading of foreign exchange translation reserve. The gain or loss relating to the ineffective portion
is recognised immediately in profit or loss, and is included in the ‘Other gains and losses’ line item.

Gains and losses on the hedging instrument relating to the effective portion of the hedge accumulated in the foreign exchange
translation reserve are reclassified to profit or loss on the disposal or partial disposal of the foreign operation.

SFRS(I) 16:51 Leases

The group as lessee

SFRS(I) 16:5 The group assesses whether a contract is or contains a lease, at inception of the contract. The group recognises a right-of-
SFRS(I) 16:6 use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for
SFRS(I) 16:9 short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets
SFRS(I) 16:60 and personal computers, small items of office furniture and telephones). For these leases, the group recognises the lease
payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is
more representative of the time pattern in which economic benefits from the leased assets are consumed.

SFRS(I) 16:26 The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the group uses its
incremental borrowing rate.

The incremental borrowing rate depends on the term, currency and start date of the lease and is determined based on a
series of inputs including: the risk-free rate based on government bond rates; a country-specific risk adjustment; a credit
risk adjustment based on bond yields; and an entity-specific adjustment when the risk profile of the entity that enters into
the lease is different to that of the group and the lease does not benefit from a guarantee from the group.

Guidance notes – Incremental borrowing rate

If the group uses an incremental borrowing rate it shall explain how the rate is determined. The rate is defined as the rate
of interest that the lessee would have to pay to borrow over a similar term and with a similar security the funds necessary
to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.

Illustrative Financial Statements 2022 64

Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 16:27 Lease payments included in the measurement of the lease liability comprise:

• fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

• variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement
date;

• the amount expected to be payable by the lessee under residual value guarantees;

• the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the
lease.

SFRS(I) 16:47 The lease liability is presented as a separate line in the statement of financial position.

SFRS(I) 16:36 The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

SFRS(I) 16:36(c) The group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
SFRS(I) 16:39
SFRS(I) 16:40 • the lease term has changed or there is a significant event or change in circumstances resulting in a change in the
assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised
lease payments using a revised discount rate;

SFRS(I) 16:42 • the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed
residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an
unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which
case a revised discount rate is used); or

SFRS(I) 16:45(c) • a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease
liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using
a revised discount rate at the effective date of the modification.

The group did not make any such adjustments during the periods presented.

SFRS(I) 16:24 The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or
SFRS(I) 16:30 before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and impairment losses.

Whenever the group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is
located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is
recognised and measured under SFRS(I) 1-37. To the extent that the costs relate to a right-of-use asset, the costs are
included in the related right-of-use asset, unless those costs are incurred to produce inventories.

SFRS(I) 16:32 Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. If a lease
transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the group expects to exercise
a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.

SFRS(I) 16:47 The right-of-use assets are presented as a separate line in the consolidated statement of financial position.

The group applies SFRS(I) 1-36 to determine whether a right-of-use asset is impaired and accounts for any identified
impairment loss as described in the ‘Property, Plant and Equipment’ policy.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 16:38(b) Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the
right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that
triggers those payments occurs and are included in the line ‘Other operating expenses’ in profit or loss.

SFRS(I) 16:12 As a practical expedient, SFRS(I) 16 permits a lessee not to separate non-lease components, and instead account for any
SFRS(I) 16:15 lease and associated non-lease components as a single arrangement. The group has not used this practical expedient. For a
contract that contains a lease component and one or more additional lease or non-lease components, the group allocates
the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease
component and the aggregate stand-alone price of the non-lease components.

SFRS(I) 16:89 The group as lessor

SFRS(I) 16:61 The group enters into lease agreements as a lessor with respect to its investment property. The group also rents certain
SFRS(I) 16:62 electronic equipment manufactured by the group.

Leases for which the group is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases
are classified as operating leases.

SFRS(I) 16:B58 When the group is an intermediate lessor, it accounts for the head lease and the sublease as two separate contracts.
The sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.

SFRS(I) 16:81 Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct
SFRS(I) 16:83 costs 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.

SFRS(I) 16:67 Amounts due from lessees under finance leases are recognised as receivables at the amount of the group’s net investment
SFRS(I) 16:75 in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on
the group’s net investment outstanding in respect of the leases.

Subsequent to initial recognition, the group regularly reviews the estimated unguaranteed residual value and applies the
impairment requirements of SFRS(I) 9, recognising an allowance for expected credit losses on the lease receivables.

Finance lease income is calculated with reference to the gross carrying amount of the lease receivables, except for credit-impaired
financial assets for which interest income is calculated with reference to their amortised cost (i.e. after a deduction of the
loss allowance).

SFRS(I) 16:17 When a contract includes both lease and non-lease components, the group applies SFRS(I) 15 to allocate the consideration
under the contract to each component.

SFRS(I) 5:15 Non-current assets held for sale and discontinued operations - Non-current assets (and disposal groups) classified
as held for sale are measured at the lower of carrying amount and fair value less costs to sell.

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a
sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable
and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed
to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of
classification.

SFRS(I) 5:8A When the group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that
subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the group will
retain a non-controlling interest in its former subsidiary after the sale.

Illustrative Financial Statements 2022 66

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

When the group is committed to a sale plan involving disposal of an investment in an associate or, a portion of an investment
in an associate, the investment, or the portion of the investment in the associate, that will be disposed of is classified as
held for sale when the criteria described above are met. The group then ceases to apply the equity method in relation to the
portion that is classified as held for sale. Any retained portion of an investment in an associate that has not been classified
as held for sale continues to be accounted for using the equity method.

SFRS(I) 5:32 A discontinued operation is a component of an entity that either has been disposed of, or is classified as held for sale, and:

(a) represents a separate major line of business or geographical area of operations,

(b) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations
or

(c) is a subsidiary acquired exclusively with a view to resale.

SFRS(I) 1-2:36(a) Inventories - Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and,
where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present
location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated
selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Cash and cash equivalents - In the statement of financial position, cash and bank balances comprise cash (i.e. cash in
SFRS(I) 1-7:6 hand, and on-demand deposits) and cash equivalents. Cash equivalents are short-term (generally with original maturity of
three months or less), highly liquid investments that are readily convertible to a known amount of cash and which are subject
SFRS(I) 1-7:7 to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting short-term cash
commitments rather for investment or other purposes.

SFRS(I) 1-7:46 For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts which are repayable on demand and form an integral part of the group’s cash
management. Such overdrafts are presented as short-term borrowings in the statement of financial position.

Guidance notes – Restricted cash and cash equivalents

In April 2022, the IFRS IC published the agenda decision on Demand deposits with restrictions on use arising from a
contract with a third party. The IFRS IC discussed whether an entity includes a demand deposit as a component of cash
and cash equivalents in the statements of cash flows and financial position when the demand deposit is subject to
contractual restrictions on use agreed with a third party. The IFRS IC concluded that restrictions on use of a demand
deposit arising from a contract with a third party do not result in the deposit no longer being cash, unless those restrictions
change the nature of the deposit in a way that it would no longer meet the definition of cash in IAS 7. The IFRS IC also
discussed the presentation and disclosure considerations for the demand deposit subject to contractual restrictions on use.

See below for an illustration of disclosures related to a demand deposit subject to third party restrictions:

SFRS(I) 1-7:48 Bank balances for which use by the group is subject to third party contractual restrictions are included as part of cash
unless the restrictions result in a bank balance no longer meeting the definition of cash. Contractual restrictions affecting
use of bank balances are disclosed in Note 7. If the contractual restrictions to use the cash extend beyond 12 months after
the end of the reporting period, the related amounts are classified as non-current in the statement of financial position.

SFRS(I) 1-16:73(a) Property, plant and equipment - Land and buildings held for use in the production or supply of goods or services for
SFRS(I) 1-16:31 rental to others (excluding investment properties), or for administrative purposes, are stated in the statement of financial
position at their revalued amounts, being the fair value at the date of revaluation, less any accumulated depreciation and
accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does
not differ materially from that which would be determined using fair values at the reporting date.

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GAAP Singapore Ltd and its subsidiaries

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December 31, 2022

SFRS(I) 1-16:39 Any revaluation increase arising on the revaluation of such land and buildings is credited to the properties revaluation
SFRS(I) 1-16:40 reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense,
in which case the increase is credited to profit or loss to the extent of the decrease previously expensed. A decrease in
carrying amount arising on the revaluation of such land and buildings is charged as an expense to the extent that it exceeds
the balance, if any, held in the properties revaluation reserve relating to a previous revaluation of that asset.

Depreciation on revalued buildings is recognised in profit or loss. On the subsequent sale or retirement of a revalued property,
the attributable revaluation surplus remaining in the properties revaluation reserve is transferred directly to retained
earnings.

Properties in the course of construction for production, supply or administrative purposes, or for purposes not yet
determined, are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying
assets, borrowing costs capitalised in accordance with the group’s accounting policy. Depreciation of these assets,
determined on the same basis as other property assets, commences when the assets are ready for their intended use.

Freehold land is not depreciated.

SFRS(I) 1-16:30 Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss.

SFRS(I) 1-16:73(b) Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and properties under
construction) less their residual values over their useful lives, using the straight-line method, on the following bases:

SFRS(I) 1-16:73(c) Buildings 5%

Plant and equipment 10% to 33%

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for on a prospective basis.

Right-of-use assets are depreciated over the shorter period of the lease term and the useful life of the underlying asset. If
a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the group expects to
exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected
to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined
as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

Guidance notes

Provide additional explanation if the group has elected to use fair value or a previous revaluation as deemed cost on
transition to SFRS(I) Accounting Standards.

SFRS(I) 1-40:75(a) Investment property - Investment property, which is property held to earn rentals and/or for capital appreciation, including
property under construction for such purposes, is measured initially at cost, including transaction costs. Subsequent to initial
recognition, investment property is measured at fair value. Gains or losses arising from changes in the fair value of
investment property are included in profit or loss for the period in which they arise.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use
and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit
or loss in the period in which the property is derecognised.

Illustrative Financial Statements 2022 68

Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes

A group that elects to use the cost model for investment property (not illustrated in this set of illustrative financial
statements) should disclose an appropriate policy and make reference, if relevant, to the use of the elections to use fair
value or previous revaluations as deemed cost on transition.

Goodwill - Goodwill is initially recognised and measured as set out in the business combinations accounting policy.

SFRS(I) 1-36:80 Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is
SFRS(I) 1-36:90 allocated to each of the group’s cash-generating units (or groups of cash-generating units) expected to benefit from the
SFRS(I) 1-36:104 synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually,
or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating
unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in
SFRS(I) 1-36:124 the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a cash generating unit, the attributable amount of goodwill is included in the determination of the profit or
loss on disposal.

The group’s policy for goodwill arising on the acquisition of an associate is described in the associates and joint venture
accounting policy.

Intangible assets

SFRS(I) 1-38:118(a) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and
accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives which
are disclosed in Note 21. The estimated useful life and amortisation method are reviewed at the end of each reporting period,
with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful
lives that are acquired separately are carried at cost less accumulated impairment losses.

SFRS(I) 1-38:118(b) Internally-generated intangible assets - research and development expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an internal project)
is recognised if, and only if, all of the following have been demonstrated:

• The technical feasibility of completing the intangible asset so that it will be available for use or sale;

• The intention to complete the intangible asset and use or sell it;

• The ability to use or sell the intangible asset;

• How the intangible asset will generate probable future economic benefits;

• The availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset; and

• The ability to measure reliably the expenditure attributable to the intangible asset during its development.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the
date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible
asset can be recognised, development expenditure is recognised to profit or loss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation
and accumulated impairment losses, on the same basis as intangible assets acquired separately.

SFRS(I) 1-38:118(b) Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognised separately from goodwill are recognised initially at their
fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets acquired separately.

Derecognition of intangible assets

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal.
Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal
proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.

Patents and trademarks

Patents and trademarks are measured initially at purchase cost and are amortised on a straight-line basis over their
estimated useful lives.

SFRS(I) 1-36:9 Impairment of property, plant and equipment, right-of-use assets and intangible assets excluding goodwill - At
each reporting date, the group reviews the carrying amounts of its property, plant and equipment, right-of-use assets and
intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if
any). Where the asset does not generate cash flows that are independent from other assets, the group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of
allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are
allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be
identified.

Intangible assets with an indefinite useful life are tested for impairment at least annually and whenever there is an indication
at the end of a reporting period that the asset may be impaired.

SFRS(I) 1-36:6 Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated
SFRS(I) 1-36:30 future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been
adjusted.

SFRS(I) 1-36:59 If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
SFRS(I) 1-36:60 amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised
immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is
treated as a revaluation decrease and to the extent that the impairment loss is greater than the related revaluation surplus,
the excess impairment loss is recognised in profit or loss.

SFRS(I) 1-36:119 Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased
to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in prior years. A reversal of an impairment loss is recognised immediately in profit or loss to the extent that it eliminates the
impairment loss which has been recognised for the asset in prior years. Any increase in excess of this amount is treated as
a revaluation increase.

Illustrative Financial Statements 2022 70

Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-28:3 Associates and joint venture - An associate is an entity over which the group has significant influence and that is neither
SFRS(I) 1-28:6 a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating
policy decisions of the investee but is not control or joint control over those policies.

SFRS(I) 1-28:3 A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists
only when decisions about the relevant activities require unanimous consent of the parties sharing control.

SFRS(I) 1-28:10 The results and assets and liabilities of associates or joint ventures are incorporated in these financial statements using the
SFRS(I) 1-28:15 equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in
SFRS(I) 1-28:38 accordance with SFRS(I) 5.
SFRS(I) 1-28:39
Under the equity method, an investment in an associate or a joint venture is recognised initially in the consolidated statement
of financial position at cost and adjusted thereafter to recognise the group’s share of the profit or loss and other
comprehensive income of the associate or joint venture. When the group’s share of losses of an associate or a joint venture
exceeds the group’s interest in that associate or joint venture (which includes any long-term interests that, in substance,
form part of the group’s net investment in the associate or joint venture), the group discontinues recognising its share of
further losses. Additional losses are recognised only to the extent that the group has incurred legal or constructive obligations
or made payments on behalf of the associate or joint venture.

SFRS(I) 1-28:32 An investment in an associate or a joint venture is accounted for using the equity method from the date on which the
investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture,
any excess of the cost of the investment over the group’s share of the net fair value of the identifiable assets and liabilities
of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the
group’s share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment,
is recognised immediately in profit or loss in the period in which the investment is acquired.

SFRS(I) 1-28:40 If there is objective evidence that the group’s net investment in an associate or joint venture is impaired, the requirements
SFRS(I) 1-28:42 of SFRS(I) 1-36 are applied to determine whether it is necessary to recognise any impairment loss with respect to the
group’s investment in an associate or a joint venture. When necessary, the entire carrying amount of the investment
(including goodwill) is tested for impairment in accordance with SFRS(I) 1-36 as a single asset by comparing its recoverable
amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised
is not allocated to any asset, including goodwill that forms part of the carrying amount of the investment. Any reversal of
that impairment loss is recognised in accordance with SFRS(I) 1-36 to the extent that the recoverable amount of the
investment subsequently increases.

SFRS(I) 1-28:22 The group discontinues the use of the equity method from the date when the investment ceases to be an associate or a joint
SFRS(I) 1-28:23 venture. When the group retains an interest in the former associate or a joint venture and the retained interest is a financial
asset, the group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on
initial recognition in accordance with SFRS(I) 9. The difference between the carrying amount of the associate or a joint
venture at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from
disposing of a part interest in the associate or a joint venture is included in the determination of the gain or loss on disposal
of the associate or joint venture. In addition, the group accounts for all amounts previously recognised in other
comprehensive income in relation to that associate on the same basis as would be required if that associate had directly
disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income
by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities,
the group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the associate or
joint venture is disposed of.

SFRS(I) 1-28:25 When the group reduces its ownership interest in an associate or a joint venture but the group continues to use the equity
method, the group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other
comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or
loss on the disposal of the related assets or liabilities.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-28:28 When a group entity transacts with an associate or a joint venture of the group, profits and losses resulting from the
transactions with the associate or joint venture are recognised in the group’s consolidated financial statements only to the
extent of interests in the associate or joint venture that are not related to the group.

The group applies SFRS(I) 9, including the impairment requirements, to long-term interests in an associate or joint venture
to which the equity method is not applied and which form part of the net investment in the investee. Furthermore, in applying
SFRS(I) 9 to long-term interests, the group does not take into account adjustments to their carrying amount required by
SFRS(I) 1-28 (i.e. adjustments to the carrying amount of long-term interests arising from the allocation of losses of the
investee or assessment of impairment in accordance with SFRS(I) 1-28).

SFRS(I) 11:15 Interests in joint operations - A joint operation is a joint arrangement whereby the parties that have joint control of the
SFRS(I) 11:7 arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the
contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control.

SFRS(I) 11:20 When a group entity undertakes its activities under joint operations, the group as a joint operator recognises in relation to
its interest in a joint operation:

• Its assets, including its share of any assets held jointly;

• Its liabilities, including its share of any liabilities incurred jointly;

• Its revenue from the sale of its share of the output arising from the joint operation;

• Its share of the revenue from the sale of the output by the joint operation; and

• Its expenses, including its share of any expenses incurred jointly.

SFRS(I) 11:21 The group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance
with the SFRS(I) Accounting Standards applicable to the particular assets, liabilities, revenues and expenses.

SFRS(I) 11:B34 When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a sale or contribution
of assets), the group is considered to be conducting the transaction with the other parties to the joint operation, and gains
and losses resulting from the transactions are recognised in the group’s consolidated financial statements only to the extent
of other parties’ interests in the joint operation.

SFRS(I) 11:B36 When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a purchase of
assets), the group does not recognise its share of the gains and losses until it resells those assets to a third party.

SFRS(I) 1-37:14 Provisions - Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past
event, it is probable that the group will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at
the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows
(when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a
receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the
receivable can be measured reliably.

Warranties

Provisions for the expected cost of warranty obligations are recognised at the date of sale of the relevant products,
at management’s best estimate of the expenditure required to settle the group’s obligation.

Illustrative Financial Statements 2022 72

Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Accounting policies for specific types of provisions

Include where applicable.

Restructurings
A restructuring provision is recognised when the group has developed a detailed formal plan for the restructuring and has
raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or
announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct
expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the
restructuring and not associated with the ongoing activities of the entity.

Onerous contracts
Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is
considered to exist where the group has a contract under which the unavoidable costs of meeting the obligations under
the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect
the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or
penalties arising from failure to fulfil it. The cost of fulfilling a contract comprises the costs that relate directly to the
contract which include both the incremental costs of fulfilling that contract and an allocation of other costs that relate
directly to fulfilling contracts. Before a separate provision for an onerous contract is established, the group recognises any
impairment loss that has occurred on assets used in fulfilling the contract.

Restoration provisions
Provisions for the costs to restore leased plant assets to their original condition, as required by the terms and conditions
of the lease, are recognised when the obligation is incurred, either at the commencement date or as a consequence of
having used the underlying asset during a particular period of the lease, at management’s best estimate of the expenditure
that would be required to restore the assets. Estimates are regularly reviewed and adjusted as appropriate for new
circumstances.

Contingent liabilities acquired in a business combination

The group applies SFRS(I) 1-37 to determine whether at the acquisition date a present obligation exists as a result of past
events. Contingent liabilities acquired in a business combination are initially measured at fair value at the acquisition date.
At the end of subsequent reporting periods, such contingent liabilities are measured at the higher of the amount that
would be recognised in accordance with SFRS(I) 1-37 and the amount recognised initially less cumulative amount of
income recognised in accordance with the principles of SFRS(I) 15.

Share-based payments

Share-based payment transactions of the company

SFRS(I) 2:10 Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of
the equity instruments at the grant date. The fair value excludes the effect of non-market-based vesting conditions. Details
regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 34.

SFRS(I) 2:19 The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis
SFRS(I) 2:20 over the vesting period, based on the group’s estimate of the number of equity instruments that will eventually vest. At each
reporting date, the group revises its estimate of the number of equity instruments expected to vest as a result of the effect
of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in profit
or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to reserves.

SFRS(I) 2:13 Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the
goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at
the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty
renders the service.

SFRS(I) 2:30 For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at the
fair value of the liability. At each reporting date until the liability is settled, and at the date of settlement, the fair value of
the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Share-based payment transactions of the acquiree in a business combination

Include where applicable.

Share-based payment transactions of the acquiree in a business combination

When the share-based payment awards held by the employees of an acquiree (acquiree awards) are replaced by the
group’s share-based payment awards (replacement awards), both the acquiree awards and the replacement awards are
measured in accordance with SFRS(I) 2 (‘market-based measure’) at the acquisition date. The portion of the replacement
awards that is included in measuring the consideration transferred in a business combination equals the market -based
measure of the acquiree awards multiplied by the ratio of the portion of the vesting period completed to the greater of the
total vesting period or the original vesting period of the acquiree award. The excess of the market-based measure of the
replacement awards over the market-based measure of the acquiree awards included in measuring the consideration
transferred is recognised as remuneration cost for post-combination service.

However, when the acquiree awards expire as a consequence of a business combination and the group replaces those
awards when it does not have an obligation to do so, the replacement awards are measured at their market-based measure
in accordance with SFRS(I) 2. All of the market-based measure of the replacement awards is recognised as remuneration
cost for post-combination service.

At the acquisition date, when the outstanding equity-settled share-based payment transactions held by the employees of
an acquiree are not exchanged by the group for its share-based payment transactions, the acquiree share-based payment
transactions are measured at their market-based measure at the acquisition date. If the share-based payment transactions
have vested by the acquisition date, they are included as part of the non-controlling interest in the acquiree. However,
if the share-based payment transactions have not vested by the acquisition date, the market-based measure of the
unvested share-based payment transactions is allocated to the non-controlling interest in the acquiree based on the ratio
of the portion of the vesting period completed to the greater of the total vesting period or the original vesting period of
the share-based payment transaction. The balance is recognised as remuneration cost for post-combination service.

SFRS(I) 1-20:39(a) Government grants - Government grants are not recognised until there is reasonable assurance that the group will comply
with the conditions attaching to them and that the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the group recognises as
expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary
condition is that the group should purchase, construct or otherwise acquire non-current assets (including property,
plant and equipment) are recognised as deferred income in the consolidated statement of financial position and transferred
to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving
immediate financial support to the group with no future related costs are recognised in profit or loss in the period in which
they become receivable.

The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the
difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

Illustrative Financial Statements 2022 74

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Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes

Governments may be providing support to entities through programmes that do not result in recognition of income in the
financial statements of the participating entities.

For example, certain governments are offering short-term debt facilities, sometimes in the form of commercial paper,
to support liquidity of entities that were financially sound before the COVID-19 pandemic. To the extent that the interest
rate paid by the borrower and other terms of the debt instruments reflect market conditions, the borrowing does not
include a government grant that requires recognition in the financial statements. Nevertheless, such support is considered
government assistance under SFRS(1) 1-20.

Entities will need to consider if the significance of the benefit received is such that disclosure of the nature, extent and
duration of the assistance is necessary in order to avoid the financial statements from being misleading.

Revenue recognition – The group recognises revenue from the following major sources:

• Sale of leisure goods and electronic equipment, including the related loyalty programme ‘Maxi–Points Scheme’,
maintenance included in the price of products sold, as well as warranty granted under local legislation;

• Installation of computer software for specialised business applications; and

• Construction of residential properties.

SFRS(I) 15:31 Revenue is measured based on the consideration to which the group expects to be entitled in a contract with a customer
SFRS(I) 15:46 and excludes amounts collected on behalf of third parties. The group recognises revenue when it transfers control of a
SFRS(I) 15:47 product or service to a customer.

Sale leisure goods

SFRS(I) 15:119 The group sells sport shoes, sport equipment and outdoor play equipment both to the wholesale market and directly to
customers through its own retail outlets.

SFRS(I) 15:125 For sales of leisure goods to the wholesale market, revenue is recognised when control of the goods has transferred,
being when the goods have been shipped to the wholesaler’s specific location (delivery). Following delivery, the wholesaler
has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility when onselling
SFRS(I) 15:108 the goods and bears the risks of obsolescence and loss in relation to the goods. A receivable is recognised by the group
when the goods are delivered to the wholesaler as this represents the point in time at which the right to consideration
becomes unconditional, as only the passage of time is required before payment is due.

SFRS(I) 15:125 For sales of goods to retail customers, revenue is recognised when control of the goods has transferred, being at the point
the customer purchases the goods at the retail outlet. Payment of the transaction price is due immediately at the point the
customer purchases the goods.

SFRS(I) 15:55 Under the group’s standard contract terms, customers have a right of return within 30 days. At the point of sale, a refund
SFRS(I) 15:119(d) liability and a corresponding adjustment to revenue is recognised for those products expected to be returned. At the same
SFRS(I) 15:126(b) time, the group has a right to recover the product when customers exercise their right of return so consequently recognises
SFRS(I) 15:126(d) a right to returned goods asset and a corresponding adjustment to cost of sales. The group uses its accumulated historical
SFRS(I) 15:B21 experience to estimate the number of returns on a portfolio level using the expected value method. It is considered highly
probable that a significant reversal in the cumulative revenue recognised will not occur given the consistent level of returns
over previous years.

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Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Sale electronic equipment

SFRS(I) 15:119(e) The group sells electronic equipment to the wholesale market and directly to customers both through its own retail outlets
SFRS(I) 15:B30 and through internet sales. Sales-related warranties associated with electronic equipment cannot be purchased separately
and they serve as an assurance that the products sold comply with agreed-upon specifications. Accordingly, the group
accounts for warranty in accordance with SFRS(I) 1-37 (Note 31).

SFRS(I) 15:55 For sales of electronic equipment to the wholesale market and through retail outlets and internet sales, revenue is recognised
SFRS(I) 15:119(d) by the group at a point in time in line with the policy outlined above for the sale of leisure goods. For sale to retail customers
SFRS(I) 15:125 (from both retail outlet and internet sales) there exists the same 30-day right of return and accordingly a refund liability
SFRS(I) 15:B21 and a right to the returned goods are recognised in relation to electronic equipment expected to be returned.

SFRS(I) 15:106 For internet sales, revenue is recognised when control of the goods has transferred to the customer, being at the point the
SFRS(I) 15:117 goods are delivered to the customer. Delivery occurs when the goods have been shipped to the customer’s specific location.
SFRS(I) 15:125 When the customer initially purchases the goods online, the transaction price received by the group is recognised as a
contract liability until the goods have been delivered to the customer.

‘Maxi-Points’ customer loyalty programme

SFRS(I) 15:B39 The group operates a ‘Maxi-Points’ loyalty programme through which retail customers accumulate points on purchases of
SFRS(I) 15:B40 leisure goods and electronic equipment that entitle them to discounts on future purchases. These points provide a discount
to customers that they would not receive without purchasing the leisure goods or electronic equipment (i.e. a material right).
The promise to provide the discount to the customer is therefore a separate performance obligation.

SFRS(I) 15:74 The transaction price is allocated between the product, the maintenance services (if the product is electronic equipment,
SFRS(I) 15:106 as described below) and the points on a relative stand-alone selling price basis. The stand-alone selling price per point is
SFRS(I) 15:117 estimated based on the discount to be given when the points are redeemed by the customer and the likelihood of redemption,
SFRS(I) 15:B42 as evidenced by the group’s historical experience. A contract liability is recognised for revenue relating to the loyalty points
at the time of the initial sales transaction. Revenue from the loyalty points is recognised when the points are redeemed by
the customer. Revenue for points that are not expected to be redeemed is recognised in proportion to the pattern of rights
exercised by customers.

Maintenance relating to electronic equipment

SFRS(I) 15:B41 Included in the transaction price for the sale of electronic equipment is an after–sales service. This service relates to
maintenance work that may be required to be carried out on the equipment for a three–year period after sale. This period
can then be extended if the customer requires additional years of maintenance services. The renewal of services after the
three–year period will be for the price at which these are sold by the group to all of its customers as at the date of renewal
regardless of the existence of a renewal option. Consequently, the option to extend the renewal period does not provide
customers with any advantage when they enter into the initial contract and therefore no revenue has been deferred relating
to this renewal option.

SFRS(I) 15:27 The maintenance service is considered to be a distinct service as it is both regularly supplied by the group to other customers
SFRS(I) 15:74 on a stand-alone basis and is available for customers from other providers in the market. A portion of the transaction price
SFRS(I) 15:81 is therefore allocated to the maintenance services based on the stand-alone selling price of those services. Discounts are
SFRS(I) 15:126(c) not considered as they are only given in rare circumstances and are never material.
SFRS(I) 15:B29
SFRS(I) 15:35(a) Revenue relating to the maintenance services is recognised over time. The transaction price allocated to these services is
SFRS(I) 15:106 recognised as a contract liability at the time of the initial sales transaction and is released on a straight line basis over the
SFRS(I) 15:117 period of service (i.e. three years when the services are purchased together with the underlying equipment).
SFRS(I) 15:123(a)
SFRS(I) 15:124

Illustrative Financial Statements 2022 76

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Installation of software services

SFRS(I) 15:35(b) The group provides a service of installation of various software products for specialised business operations. Such services
SFRS(I) 15:107 are recognised as a performance obligation satisfied over time. Revenue is recognised for these installation services based
SFRS(I) 15:117 on the stage of completion of the contract. Management has assessed that the stage of completion determined as the
SFRS(I) 15:124 proportion of the total time expected to install that has elapsed at the end of the reporting period is an appropriate measure
of progress towards complete satisfaction of these performance obligations under SFRS(I) 15. Payment for installation of
software services is not due from the customer until the installation services are complete and therefore a contract asset is
recognised over the period in which the installation services are performed representing the entity’s right to consideration
for the services performed to date.

Construction of residential properties

SFRS(I) 15:35(c) The group constructs and sells residential properties under long-term contracts with customers. Such contracts are entered
into before construction of the residential properties begins. Under the terms of the contracts, the group is contractually
restricted from redirecting the properties to another customer and has an enforceable right to payment for work done.
SFRS(I) 15:124 Revenue from construction of residential properties is therefore recognised over time on a cost–to–cost method, i.e. based
on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs.
Management considers that this input method is an appropriate measure of the progress towards complete satisfaction of
these performance obligations under SFRS(I) 15.

SFRS(I) 15:106 The group becomes entitled to invoice customers for construction of residential properties based on achieving a series of
SFRS(I) 15:107 performance-related milestones. When a particular milestone is reached, the customer is sent a relevant statement of work
SFRS(I) 15:117 signed by a third party assessor and an invoice for the related milestone payment. The group will previously have recognised
SFRS(I) 15:126 a contract asset for any work performed but not yet invoiced. Any amount previously recognised as a contract asset is
reclassified to trade receivables at the point at which it is invoiced to the customer. If the milestone payment exceeds the
revenue recognised to date under the cost–to–cost method then the group recognises a contract liability for the difference.
There is not considered to be a significant financing component in construction contracts with customers as the period
between the recognition of revenue under the cost–to–cost method and the milestone payment is always less than one year.

SFRS(I) 15:63 Guidance notes – Practical expedient on significant financing component

As a practical expedient, an entity need not adjust the promised amount of consideration for the effects of a significant
financing component if the entity expects, at contract inception, that the period between when the entity transfers a
SFRS(I) 15:129 promised good or service to a customer and when the customer pays for that good or service will be one year or less.

When the above practical expedient is applied, the entity shall disclose that fact.

SFRS(I) 1-23:12 Borrowing costs - Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
SFRS(I) 1-23:22 which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

To the extent that variable rate borrowings are used to finance a qualifying asset and are hedged in an effective cash flow
hedge of interest rate risk, the effective portion of the derivative is recognised in other comprehensive income and reclassified
to profit or loss when the qualifying asset impacts profit or loss. To the extent that fixed rate borrowings are used to finance
a qualifying asset and are hedged in an effective fair value hedge of interest rate risk, the capitalised borrowing costs reflect
the hedged interest rate.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalisation.

SFRS(I) 1-23:8 All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

77
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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-19:44 Retirement benefit costs - Payments to defined contribution retirement benefit plans are recognised as an expense when
employees have rendered service entitling them to the contributions. Payments made to state-managed retirement benefit
plans are accounted for as payments to defined contribution plans where the group’s obligations under the plans are
equivalent to those arising in a defined contribution retirement benefit plan.

SFRS(I) 1-19:120 For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit
method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurements comprising
actuarial gains and losses, the effect of the asset ceiling (if applicable) and the return on plan assets (excluding interest)
are recognised immediately in the statement of financial position with a charge or credit to other comprehensive income in
the period in which they occur. Remeasurements recognised in other comprehensive income are not reclassified. Past service
cost is recognised in profit or loss when the plan amendment or curtailment occurs, or when the group recognises related
restructuring costs or termination benefits, if earlier. Gains or losses on settlement of a defined benefit plan are recognised
when the settlement occurs. Net interest is calculated by applying a discount rate to the net defined benefit liability or asset.
Defined benefit costs are split into three categories:

• Service costs, which includes current service cost, past service cost and gains and losses on curtailments and
settlements;

• Net interest expense or income; and

• Remeasurements.

The group recognises service costs within profit or loss as cost of sales and administrative expenses (Note 33).

Net interest expense or income is recognised within finance costs (Note 44).

The retirement benefit obligation recognised in the consolidated statement of financial position represents the deficit or
surplus in the group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any
economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the
termination benefit and when the entity recognises any related restructuring costs.

Discretionary contributions made by employees or third parties reduce service cost upon payment of these contributions to
the plan.

When the formal terms of the plans specify that there will be contributions from employees or third parties, the accounting
depends on whether the contributions are linked to service, as follows:

• If the contributions are not linked to services (e.g. contributions are required to reduce a deficit arising from losses on
plan assets or from actuarial losses), they are reflected in the remeasurement of the net defined benefit liability (asset).

• If contributions are linked to services, they reduce service costs. For the amount of contribution that is dependent on
the number of years of service, the entity reduces service cost by attributing the contributions to periods of service
using the attribution method required by SFRS(I) 1-19:70 for the gross benefits. For the amount of contribution that
is independent of the number of years of service, the entity [reduces service cost in the period in which the related
service is rendered/reduces service cost by attributing contributions to the employees’ periods of service in accordance
with SFRS(I) 1-19:70].

Employee leave entitlement - Employee entitlements to annual leave are recognised when they accrue to employees.
A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end
of the reporting period.

Illustrative Financial Statements 2022 78

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Income tax - The income tax expense represents the sum of the tax currently payable and deferred tax.

SFRS(I) 1-12:5 The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in profit or
loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes
items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the end of the reporting period.

A provision is recognised for those matters for which the tax determination is uncertain but it is considered probable that
there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount
expected to become payable. The assessment is based on the judgement of tax professionals within the company supported
by previous experience in respect of such activities and in certain cases based on specialist independent tax advice.

SFRS(I) 1-12:15 Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and
SFRS(I) 1-12:24 liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is
accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference
arises from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit. In addition, a deferred tax liability is not recognised if the
temporary difference arises from the initial recognition of goodwill.

SFRS(I) 1-12:39 Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the group is able to control the reversal of the temporary difference and it is
SFRS(I) 1-12:44 probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible
temporary differences associated with such investments and interests are only recognised to the extent that it is probable
that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are
expected to reverse in the foreseeable future.

SFRS(I) 1-12:56 The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

SFRS(I) 1-12:47 Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset
is realised based on tax laws and rates that have been enacted or substantively enacted at the reporting date.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in
which the group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities.

SFRS(I) 1-12:51C For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured
using the fair value model, the carrying amounts of such properties are presumed to be recovered entirely through sale,
unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is held
within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment
property over time, rather than through sale. Management reviewed the group's investment property portfolios and concluded
that none of the group's investment properties are held under a business model whose objective is to consume substantially
all of the economic benefits embodied in the investment properties over time, rather than through sale. Therefore,
management has determined that the ‘sale’ presumption set out in the amendments to SFRS(I) 1-12 is not rebutted. As a
result, the group has not recognised any deferred taxes on changes in fair value of the investment properties as the group
is not subject to any income taxes on the fair value changes of the investment properties on disposal.

SFRS(I) 1-12:71 Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
(a),(b) current tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends to
settle its current tax assets and liabilities on a net basis.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-12:58 Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other
comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting
for a business combination, the tax effect is included in the accounting for the business combination.

FRS(I) 1-21:51 Foreign currency transactions and translation - The individual financial statements of each group entity are measured
SFRS(I) 1-21:17 and presented in the currency of the primary economic environment in which the entity operates (its functional currency).
SFRS(I) 1-21:18 The consolidated financial statements of the group and the statement of financial position and statement of changes in
SFRS(I) 1-21:19 equity of the company are presented in Singapore dollars, which is the functional currency of the company and the
presentation currency for the consolidated financial statements.

SFRS(I) 1-21:21 In preparing the financial statements of the group entities, transactions in currencies other than the entity’s functional
SFRS(I) 1-21:23 currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At each
reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated
at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.

SFRS(I) 1-21:32 Exchange differences are recognised in profit or loss in the period in which they arise except for:
SFRS(I) 1-21:28
SFRS(I) 1-21:30 • exchange differences on foreign currency borrowings relating to assets under construction for future productive use,
which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those
foreign currency borrowings;

• exchange differences on transactions entered into to hedge certain foreign currency risks (see above under hedge
accounting); and

• exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is
neither planned nor likely to occur in the foreseeable future (therefore forming part of the net investment in the foreign
operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss
on disposal or partial disposal of the net investment.

SFRS(I) 1-21:39 For the purpose of presenting consolidated financial statements, the assets and liabilities of the group’s foreign operations
SFRS(I) 1-21:40 are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average
exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange
rates at the date of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive
income and accumulated in a foreign exchange translation reserve (attributed to non-controlling interests as appropriate).

SFRS(I) 1-21:48 On the disposal of a foreign operation (i.e. a disposal of the group’s entire interest in a foreign operation, or a disposal
SFRS(I) 1-21:48A involving loss of control over a subsidiary that includes a foreign operation or a partial disposal of an interest in a joint
SFRS(I) 1-21:48B arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset),
all of the exchange differences accumulated in a foreign exchange translation reserve in respect of that operation attributable
to the owners of the company are reclassified to profit or loss.

SFRS(I) 1-21:48C In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the group
SFRS(I) 1-21:48D losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to
non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of
associates or joint arrangements that do not result in the group losing significant influence or joint control), the proportionate
share of the accumulated exchange differences is reclassified to profit or loss.

SFRS(I) 1-21:47 Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.

Illustrative Financial Statements 2022 80

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Currency and hyperinflation

Another symptom of uncertainty in the world economy is the increasing levels of inflation which may reach
hyperinflationary level in some economies and result in governments imposing restrictions on exchange between local and
internationally traded currencies. These issues present financial reporting challenges in:

• Determining whether an economy is hyperinflationary (as that term is defined in SFRS(I) 1-29 Financial Reporting in
Hyperinflationary Economies, which includes several characteristics of hyperinflation, including a cumulative inflation
rate over three years that approaches or exceeds 100%) and, if so, which general price index should be applied to
amounts in the financial statements.

• Determining an entity’s functional currency in circumstances where both a local and international currency are in
common use. This can be particularly significant where the local currency is hyperinflationary as SFRS(I) 1-29 is only
applied by entities whose functional currency is the currency of a hyperinflationary economy (rather than by any
entity operating in that economy).

• Identifying a suitable exchange rate for translating monetary items in individual financial statements and in
retranslating the financial statements of a foreign operation in its parent’s presentation currency.

When inflation or exchange issues result in a significant judgement or give rise to a source of estimation uncertainty,
disclosure should be provided as required by SFRS(I) 1-1:122 and SFRS(I) 1-1:125.

SFRS(I) 1-21:14 If the functional currency of the entity is the currency of a hyperinflationary economy, the entity’s financial statements are
restated in accordance with SFRS(I) 1-29 Financial Reporting in Hyperinflationary Economies. An entity cannot avoid
restatement in accordance with SFRS(I) 1-29 by, for example, adopting as its functional currency a currency other than
the functional currency determined in accordance with this Standard (such as the functional currency of its parent).

SFRS(I) 1-21:42 The results and financial position of an entity whose functional currency is the currency of a hyperinflationary economy
shall be translated into a different presentation currency using the following procedures:

(a) all amounts (i.e. assets, liabilities, equity items, income and expenses, including comparatives) shall be translated
at the closing rate at the date of the most recent statement of financial position, except that

(b) when amounts are translated into the currency of a non-hyperinflationary economy, comparative amounts shall be
those that were presented as current year amounts in the relevant prior year financial statements (i.e. not adjusted
for subsequent changes in the price level or subsequent changes in exchange rates).

SFRS(I) 1-21:43 When an entity’s functional currency is the currency of a hyperinflationary economy, the entity shall restate its financial
statements in accordance with SFRS(I) 1-29 before applying the translation method set out in paragraph 42, except for
comparative amounts that are translated into a currency of a non-hyperinflationary economy (see paragraph 42(b)). When
the economy ceases to be hyperinflationary and the entity no longer restates its financial statements in accordance with
SFRS(I) 1-29, it shall use as the historical costs for translation into the presentation currency the amounts restated to the
price level at the date the entity ceased restating its financial statements.

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Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes - Supplier financing arrangements and factoring of receivables

An entity may enter into arrangements under which a ‘factor’ (typically, a financial institution) pays a supplier on its behalf,
with the entity (i.e. the purchaser) then reimbursing the factor. Such arrangements may be referred to as, for example,
‘supplier financing’, ‘reverse factoring’ or ‘structured payable arrangements’. When such arrangements are material,
clear disclosure should be provided of the following:

SFRS(I) 1-1:122 • the approach to the presentation of significant supplier financing arrangements and, in accordance with SFRS(I) 1-1:122,
the judgements made in applying that policy;

SFRS(I) 1-7:21 • how supplier financing transactions have been reflected in the statement of cash flows;

SFRS(I) 1-1:54 • the carrying amount of the liabilities in question and the line item(s) in which they are presented; and

SFRS(I) 7:39(c) • when supplier financing arrangements have been used as a tool to manage liquidity risk, the disclosures required by
SFRS(I) 7:39(c).

When an entity enters into arrangements for factoring of receivables where they are not fully derecognised, it is important
that the policy adopted for the treatment of cash flows arising is clearly explained and that any non-cash financing
transactions are disclosed in accordance with SFRS(I) 1-7:43. In particular, an explanation of whether the cash flows
received on the receivables are treated as operating inflows with associated financing outflows that are deemed to repay
SFRS(I) 1-7:44A- the financing liability that was recognised when the receivables were transferred. Balances that will give rise to financing
44E cash flows should also be included in the disclosure of changes in such balances required by SFRS(I) 1-7:44A-44E.

In December 2020, the IFRS IC published an agenda decision on supply chain financing arrangements that explains the
requirements in IFRS Accounting Standards that an entity applies to such arrangements.

Illustrative Financial Statements 2022 82

Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

3. Critical accounting judgements and key sources of estimation uncertainty

Guidance notes

The following are examples of the types of disclosures that might be required in this area. The nature of these disclosures
is very specific to an individual group’s particular circumstances. Although the illustrative financial statements illustrate
disclosures to comply with these requirements, it is unlikely that these specific sample disclosures would be appropriate
other than in very rare circumstances.

In applying the group’s accounting policies, which are described in Note 2, management is required to make judgements
(other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates
and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.

SFRS(I) 1-1:122 Critical judgements in applying the group’s accounting policies

The following are the critical judgements, apart from those involving estimations (which are presented separately below),
that management has made in the process of applying the group’s accounting policies and that have the most significant
effect on the amounts recognised in the financial statements.

SFRS(I) 15:123(a) Revenue recognition – determining the timing of satisfaction of performance obligations
SFRS(I) 15:125
Note 47 describes the expenditure required in the year for rectification work to be carried out on goods supplied to one of
the group’s major customers. These goods were delivered to the customer in the months of January to July 2022, and shortly
thereafter the defects were identified by the customer. Following negotiations, a schedule of works was agreed, which will
involve expenditure by the group until 2024. In the light of the problems identified, management was required to consider
whether it was appropriate to recognise the revenue from these transactions of $102.0 million in the current year, in line
with the group’s general policy of recognising revenue when goods are delivered, or whether it was more appropriate to
defer recognition until the rectification work was complete.

In making their judgement, management considered the detailed criteria for the recognition of revenue set out in SFRS(I) 15
and, in particular, whether the group had transferred control of the goods to the customer. Following the detailed
quantification of the group’s liability in respect of rectification work, and the agreed limitation on the customer’s ability to
require further work or to require replacement of the goods, management is satisfied that control has been transferred and
that recognition of the revenue in the current year is appropriate, in conjunction with the recognition of an appropriate
warranty provision for the rectification costs.

Capitalisation of borrowing costs

As described in Note 2, the group capitalises borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets. Capitalisation of the borrowing costs relating to construction of the group’s premises in
[Country X] was suspended in 2021, while the development was delayed as management reconsidered its detailed plans.
Capitalisation of borrowing costs recommenced in 2022 - following the finalisation of revised plans, and the resumption of
the activities necessary to prepare the asset for its intended use. Although construction of the premises was not restarted
until May 2022, borrowing costs have been capitalised from February 2022, at which time the technical and administrative
work associated with the project recommenced.

83
Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Business model assessment

Classification and measurement of financial assets depends on the results of the SPPI and the business model test
(please see financial assets sections of Note 2). The group determines the business model at a level that reflects how groups
of financial assets are managed together to achieve a particular business objective. This assessment includes judgement
reflecting all relevant evidence including how the performance of the assets is evaluated and their performance measured,
the risks that affect the performance of the assets and how these are managed and how the managers of the assets are
compensated. The group monitors financial assets measured at amortised cost or fair value through other comprehensive
income that are derecognised prior to their maturity to understand the reason for their disposal and whether the reasons
are consistent with the objective of the business for which the asset was held. Monitoring is part of the group’s continuous
assessment of whether the business model for which the remaining financial assets are held continues to be appropriate and
if it is not appropriate whether there has been a change in business model and so a prospective change to the classification
of those assets. No such changes were required during the periods presented.

Significant increase in credit risk

As explained in Note 2, ECL are measured as an allowance equal to 12-month ECL for stage 1 assets, or lifetime ECL for
stage 2 or stage 3 assets. An asset moves to stage 2 when its credit risk has increased significantly since initial recognition.
SFRS(I) 9 does not define what constitutes a significant increase in credit risk. In assessing whether the credit risk of an
asset has significantly increased the group takes into account qualitative and quantitative reasonable and supportable
forward-looking information.

Deferred taxation on investment properties

For the purposes of measuring deferred tax liabilities or deferred tax assets arising from investment properties that are
measured using the fair value model, management has reviewed the group’s investment property portfolios and concluded
that the group’s investment properties are not held under a business model whose objective is to consume substantially all
of the economic benefits embodied in the investment properties over time, rather than through sale. Therefore, in determining
the group’s deferred taxation on investment properties, management has determined that the presumption that the carrying
amounts of investment properties measured using the fair value model are recovered entirely through sale is not rebutted.
As a result, the group has not recognised any deferred taxes on changes in fair value of investment properties as the group
is not subject to any income taxes on the fair value changes of the investment properties on disposal.

SFRS(I) 12:7(a) Control over GAAP Manufacturing Limited

SFRS(I) 12:9(b)
Note 22 describes that GAAP Manufacturing Limited is a subsidiary of the group even though the group has only a 45%
ownership interest and has only 45% of the voting rights in GAAP Manufacturing Limited. GAAP Manufacturing Limited is
listed on the Hong Kong Stock Exchange. The group has held its 45% ownership since June 2017 and the remaining 55% of
the ownership interests are held by thousands of shareholders that are unrelated to the group.

Management assessed whether or not the group has control over GAAP Manufacturing Limited based on whether the group
has the practical ability to direct the relevant activities of GAAP Manufacturing Limited unilaterally. In making their
judgement, management considered the group’s absolute size of holding in GAAP Manufacturing Limited and the relative
size and dispersion of the shareholdings owned by the other shareholders. After assessment, management concluded that
the group has a sufficiently dominant voting interest to direct the relevant activities of GAAP Manufacturing Limited and
therefore the group has control over GAAP Manufacturing Limited.

If management had concluded that the 45% ownership interest was insufficient to give the group control, GAAP Manufacturing
Limited would instead have been classified as an associate and the group would have accounted for it using the equity
method of accounting.

Illustrative Financial Statements 2022 84

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Control over GAAP Leisure Pte Ltd

Note 22 describes that GAAP Leisure Pte Ltd is a subsidiary of the group although the group only owns a 45% ownership
interest in GAAP Leisure Pte Ltd. Based on the contractual arrangements between the group and other investors, the group
has the power to appoint and remove the majority of the board of directors of GAAP Leisure Pte Ltd that has the power to
direct the relevant activities of GAAP Leisure Pte Ltd. Therefore, management concluded that the group has the practical
ability to direct the relevant activities of GAAP Leisure Pte Ltd unilaterally and hence the group has control over GAAP Leisure
Pte Ltd.

SFRS(I) 12:7(b) Significant influence over PAAG Pte Ltd

SFRS(I) 12:9(e)
Note 23 describes that PAAG Pte Ltd is an associate of the group although the group only owns a 17% ownership interest in
PAAG Pte Ltd. The group has significant influence over PAAG Pte Ltd by virtue of its contractual right to appoint two out of
seven directors to the board of directors of that company.

SFRS(I) 12:7(b),(c) Classification of JV Electronics Limited as a joint venture

JV Electronics Limited is a limited liability company whose legal form confers separation between the parties to the joint
arrangement and the company itself. Furthermore, there is no contractual arrangement or any other facts and circumstances
that indicate that the parties to the joint arrangement have rights to the assets and obligations for the liabilities of the joint
arrangement. Accordingly, JV Electronics Limited is classified as a joint venture of the group. See Note 24 for details.

Identifying whether a contract includes a lease - Contract for the supply of sports shoes

The group has entered into a contract with [Manufacturer A] for the supply of sports shoes for a three-year period.
Each month the type of sports shoes and the production volume, up to a limit of [X] pairs, are determined by the group and
are not specified in the contract.

[Manufacturer A] has only one factory that can meet the needs of the group and is unable to supply the sports shoes from
another factory or source the sports shoes from a third party supplier. [Manufacturer A] makes all decisions about the
operations of the factory, including the production level at which to run the factory and which customer contracts to fulfil
with the output of the factory that is not used to fulfil the group’s contract for that month.

Management assessed whether or not the group has contracted for the rights to substantially all of the capacity of the factory
and whether the contract with [Manufacturer A] contains a lease for the factory. After making inquiries based on forecast
production volumes over the contract term, management has established that [Manufacturer A] can regularly use the factory
for other purposes during the course of the contract to supply other customers and therefore the group does not have the
right to obtain substantially all of the economic benefits from the use of the factory. As a result management concluded that
the group has not contracted for substantially all of the capacity of the factory, including the plant therein, and therefore
the contract does not contain a lease.

SFRS(I) 16:59(b)(ii) Determination of lease term

SFRS(I) 16:B50
In determining the lease term of the respective lease arrangement, management considers all facts and circumstances that
create an economic incentive to exercise an extension option, or not to exercise a termination option, including any expected
changes in facts and circumstances from the commencement date until the exercise date of the option. Extension options
(or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended
(or not terminated).

Potential future cash outflows of $1.3 million have not been included in the lease liability because it is not reasonably certain
that the leases will be extended (or not terminated).

SFRS(I) 16:20 If a significant event or a significant change in circumstances occurs which affects this assessment and that is within the
control of the lessee, the above assessment will be reviewed further. During the financial year ended December 31, 2022,
the effect of exercising extension and termination options was an increase in recognised lease liabilities and right-of-use
assets of $0.9 million.

85
Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-1:125 Key sources of estimation uncertainty

SFRS(I) 1-1:128
SFRS(I) 1-1:129 The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting
SFRS(I) 1-1:131 period, that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year, are discussed below.

Guidance notes

Where applicable, corresponding information for the previous financial year should also be disclosed.

Taxation provisions

The group’s current tax provision of $__ relates to management’s assessment of the amount of tax payable on open tax
positions where the liabilities remain to be agreed with [insert name of relevant Tax Authority]. Uncertain tax items for
which a provision of $__ is made, relate principally to the interpretation of tax legislation regarding arrangements entered
into by the group. Due to the uncertainty associated with such tax items, there is a possibility that, on conclusion of open
tax matters at a future date, the final outcome may differ significantly. Whilst a range of outcomes is reasonably possible,
the extent of the reasonably possible range is from additional liabilities of up to $__ to a reduction in liabilities of up to $__.

Impairment of goodwill

Following the assessment of the recoverable amount of goodwill allocated to ‘Electronic equipment’, to which goodwill of
$3.7 million is allocated, management considers the recoverable amount of goodwill allocated to ‘Electronic equipment’ to
be most sensitive to the achievement of the 2023 budget. Budgets comprise forecasts of revenue, staff costs and overheads
based on current and anticipated market conditions that have been considered and approved by the board of directors.
Whilst the group is able to manage most of ‘Electronic equipment’ costs, the revenue projections are inherently uncertain
due to the short-term nature of the business and the changes in technological environment.

The market for ‘Electronic equipment’ products has seen a significant slowdown over the past 18 months due to increases
in new product launch by rivals in the sector. It is possible that further underperformance may occur in 2023 if prevailing
trends continue.

The sensitivity analysis in respect of the recoverable amount of ‘Electronic equipment’ goodwill is presented in Note 20.

Calculation of loss allowance

When measuring ECL, the group uses reasonable and supportable forward-looking information, which is based on
assumptions for the future movement of different economic drivers and how these drivers will affect each other.

Loss given default is an estimate of the loss arising on default. It is based on the difference between the contractual cash
flows due and those that the lender would expect to receive, taking into account cash flows from collateral and integral
credit enhancements.

Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of default
over a given time horizon, the calculation of which includes historical data, assumptions and expectations of future
conditions.

SFRS(I) 1-1:129(b) If the ECL rates on trade receivables between 61 and 90 days past due had been [xx]% higher (lower) as of December 31, 2022,
the loss allowance on trade receivables would have been $__ million (2021 : $__ million) higher (lower).

If the ECL rates on trade receivables between 31 and 60 days past due had been [xx]% higher (lower) as of December 31, 2022,
the loss allowance on trade receivables would have been $__ million (2021 : $__ million) higher (lower).

Illustrative Financial Statements 2022 86

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 13:93(g) Fair value measurements and valuation processes

SFRS(I) 13:IE65
Some of the group’s assets and liabilities are measured at fair value for financial reporting purposes. The board of directors
of the company has set up a valuation committee, which is headed up by the Chief Financial Officer of the company,
to determine the appropriate valuation techniques and inputs for fair value measurements.

In estimating the fair value of an asset or a liability, the group uses market-observable data to the extent it is available.
Where Level 1 inputs are not available, the group engages third party qualified valuers to perform the valuation.
The valuation committee works closely with the qualified external valuers to establish the appropriate valuation techniques
and inputs to the model. The Chief Financial Officer reports the valuation committee’s findings to the board of directors of
the company every quarter to explain the cause of fluctuations in the fair value of the assets and liabilities.

The valuations of private equity investments, contingent consideration in business combinations and non-derivative financial
assets held for trading are particularly sensitive to changes in one or more unobservable inputs which are considered
reasonably possible within the next financial year. Further information on the carrying amounts of these assets and the
sensitivity of those amounts to changes in unobservable inputs are provided in Note 4(c)(i).

Provision for restoration of contaminated land

On December 15, 2022, new legislation in [Country X] was enacted which resulted in the requirement for the group to clean
up historically contaminated waste sites in [Country X] and bear the costs thereof. Consequently, a provision of $1.5 million
has been recognised. In estimating the provision, management has made assumptions regarding the interpretation of the
legislation and have estimated costs based on currently available information about the likely extent of contamination and
potential clean-up techniques. Due to the associated uncertainty, it is possible that estimates may need to be revised during
the next year as interpretations of the legislation evolve and the extent of contamination and potential approaches to
clean-up are assessed in more detail. Whilst a range of outcomes is possible, management believes that the reasonably
possible range is an increase in provisions of up to $1.8 million to a reduction in provisions of up to $1.3 million. See Note 31
for further details.

Recoverability of internally-generated intangible asset

During the year, management reconsidered the recoverability of its internally-generated intangible asset, which is included
in its statement of financial position at December 31, 2022 at $3.2 million (2021 : $Nil). The project continues to progress
in a very satisfactory manner, and customer reaction has reconfirmed management’s previous estimates of anticipated
revenues from the project. However, increased competitor activity has caused management to reconsider its assumptions
regarding future market shares and anticipated margins on these products. Detailed sensitivity analysis has been carried
out and management is confident that the carrying amount of the asset will be recovered in full, even if returns are reduced.
This situation will be closely monitored, and adjustments will be made in future periods, if future market activity indicates
that such adjustments are appropriate.

Useful lives of property, plant and equipment

As described in Note 2, the group reviews the estimated useful lives of property, plant and equipment at each reporting
date. During the financial year, management determined that the useful life of certain items of equipment should be
shortened, due to developments in technology.

The financial effect of this reassessment, assuming the assets are held until the end of their estimated useful lives, is to
increase the consolidated depreciation expense in the current financial year and for the next 3 years, by the following amounts:
$’000

2022 9
2023 7
2024 4
2025 2

87
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Change in accounting estimate in final interim period

SFRS(I) 1-34:26 If an estimate of an amount reported in an interim period is changed significantly during the final interim period of the
financial year but a separate financial report is not published for that final interim period, the nature and amount of that
change in estimate shall be disclosed in a note to the annual financial statements for that financial year.

4. Financial instruments, financial risks and capital management

SFRS(I) 7:8 (a) Categories of financial instruments

Guidance notes - Categories of financial instruments

The categories of financial assets and financial liabilities can be presented in the statement of financial position or in the
notes as shown below.

The following table sets out the financial instruments as at the end of the reporting period:

Group Company
2022 2021 2022 2021
$’000 $’000 $’000 $’000
Financial Assets

SFRS(I) 7:8(f) Financial assets at amortised cost 185,813 131,809 91,445 56,542
SFRS(I) 7:8(a) Financial assets mandatorily measured at FVTPL 13,074 12,490 - -
Derivatives designated in hedge relationships 4,845 2,938 - -
SFRS(I) 7:8(h) Financial assets at FVTOCI:
Debt instruments classified as at FVTOCI 8,750 8,730 - -
Equity instruments designated as at FVTOCI 14,560 14,514 - -

Financial Liabilities

SFRS(I) 7:8(g) Financial liabilities at amortised cost 555,626 544,521 31,392 7,586
Financial liabilities at FVTPL:
SFRS(I) 7:8(e) Mandatorily measured at FVTPL - - - -
SFRS(I) 7:8(e) Designated as at FVTPL - - - -
Derivatives designated in hedge relationships 273 - - -
Financial guarantee contracts 24 30 - -
Contingent consideration for a business combination 75 - - -

Illustrative Financial Statements 2022 88

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

(b) Financial risk management policies and objectives

Guidance notes – Financial risk management

SFRS(I) 7:31 The following are examples of the types of disclosures that might be required in this area. The matters disclosed will be
SFRS(I) 7:32 dictated by the circumstances of the individual entity, by the significance of judgements and estimations made to the
SFRS(I) 7:33 results and financial position, and the information provided to key management personnel.

Given the uncertainties and volatilities in economy which will impact market risk, credit risk and liquidity risk, entities should
carefully consider their unique circumstances and risk exposures and provide adequate disclosures on the management of
risks arising from financial instruments as a result of climate change and macroeconomic uncertainties.

An entity shall also disclose if there are changes from the previous period in the exposures to risk and how they arise and
the entity’s objectives, policies and processes for managing the risk and the methods used to measure the risk.

The group’s Corporate Treasury function provides services to the business, coordinates access to domestic and international
financial markets, monitors and manages the financial risks relating to the operations of the group through internal risk
reports which analyses exposures by degree and magnitude of risks. These risks include market risk (including currency
risk, interest rate risk and price risk), credit risk and liquidity risk.

The group seeks to minimise the effects of these risks by using derivative financial instruments to hedge these risk
exposures. The use of financial derivatives is governed by the group’s policies approved by the board of directors,
which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and
non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is
reviewed by the internal auditors on a continuous basis. The group does not enter into or trade financial instruments,
including derivative financial instruments, for speculative purposes.

The Corporate Treasury function reports quarterly to the group’s risk management committee, an independent body that
monitors risks and policies implemented to mitigate risk exposures.

SFRS(I) 7:21A(a) The group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest
rates. The group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign
currency risk, including:
• Forward exchange contracts to hedge the exchange rate risks arising from trade receivables and trade payables,
and firm commitments to buy or sell goods; and
• Interest rate swaps to mitigate the risk of rising interest rates.

SFRS(I) 7:33(c) There has been no change to the group’s exposure to market risks or the manner in which these risks are managed and
SFRS(I) 7:40(c) measured. Market risk exposures are measured using sensitivity analysis indicated below.

89
Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Sensitivity analysis

SFRS(I) 7:41 If the entity prepares a sensitivity analysis such as value-at-risk that reflects interdependencies between risk variables
(e.g. interest rates and exchange rates) and uses it to manage financial risks, it may use that value-at-risk sensitivity
analysis in place of the analysis specified in SFRS(I) 7:40 which are as illustrated in the following sections for each type
of market risk.

SFRS(I) 7:B19 In determining what a reasonably possible change in the relevant risk variable is for sensitivity analysis, an entity should
consider:
(a) the economic environments in which it operates. A reasonably possible change should not include remote or ‘worst
case’ scenarios or ‘stress tests’. Moreover, if the rate of change in the underlying risk variable is stable, the entity
need not alter the chosen reasonably possible change in the risk variable. For example, assume that interest rates
are 5 per cent and an entity determines that a fluctuation in interest rates of ±50 basis points is reasonably possible.
It would disclose the effect on profit or loss and equity if interest rates were to change to 4.5 per cent or 5.5 per
cent. In the next period, interest rates have increased to 5.5 per cent. The entity continues to believe that interest
rates may fluctuate by ±50 basis points (i.e. that the rate of change in interest rates is stable). The entity would
disclose the effect on profit or loss and equity if interest rates were to change to 5 per cent or 6 per cent. The entity
would not be required to revise its assessment that interest rates might reasonably fluctuate by ±50 basis points,
unless there is evidence that interest rates have become significantly more volatile.
(b) the time frame over which it is making the assessment. The sensitivity analysis shall show the effects of changes
that are considered to be reasonably possible over the period until the entity will next present these disclosures,
which is usually its next annual reporting period.

SFRS(I) 7:33 (i) Foreign currency risk management

SFRS(I) 7:34
The group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations
arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

Guidance notes – Information on foreign currency balances

SFRS(I) 7:34(a) The table below provides an example of summary quantitative data about exposure to foreign exchange risks arising from
monetary assets and liabilities at the end of the reporting period that an entity may provide internally to key management
personnel.

SFRS(I) 7:34(a) The carrying amounts of the group’s foreign currency denominated monetary assets and monetary liabilities at the reporting
date are as follows:

Group
Liabilities Assets
2022 2021 2022 2021
$’000 $’000 $’000 $’000

United States dollar 54,111 32,988 61,392 84,313

Euro 13,669 10,643 4,507 4,062
Japanese yen 530 842 4,450 5,521

Company
Liabilities Assets
2022 2021 2022 2021
$’000 $’000 $’000 $’000

United States dollar 1,332 1,824 37,394 29,226

Euro 560 485 - -
Japanese yen - - - -

Illustrative Financial Statements 2022 90

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

The company has a number of investments in foreign subsidiaries, whose net assets are exposed to currency translation
risk. The group does not currently designate its foreign currency denominated debt as a hedging instrument for the purpose
of hedging the translation of its foreign operations.

Guidance notes – Quantitative data disclosures

SFRS(I) 7:35 If the quantitative data disclosed as at the reporting date are unrepresentative of an entity’s exposure to risk during the
period, an entity shall provide further information that is representative.

SFRS(I) 7:IG20 To meet this requirement, an entity might disclose the highest, lowest and average amount of risk to which it was exposed
during the period. For example, if an entity typically has a large exposure to a particular currency, but at year-end unwinds
the position, the entity might disclose a graph that shows the exposure at various times during the period, or disclose the
highest, lowest and average exposures.

SFRS(I) 7:40(a),(b) Foreign currency sensitivity analysis

The group is mainly exposed to United States dollar, Euro and Japanese yen.

The following table details the group’s sensitivity to a 10% increase and decrease in the functional currency of each group
entity against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally
to key management personnel and represents management’s assessment of the reasonably possible change in foreign
exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts
their translation at the year-end for a 10% change in foreign currency rates.

The sensitivity analysis includes external loans as well as loans to foreign operations within the group where the
denomination of the loan is in a currency other than the currency of the lender or the borrower. A positive number below
indicates an increase in profit and other equity where functional currency of each group entity strengthens 10% against the
relevant foreign currency. For a 10% weakening of functional currency of each group entity against the relevant foreign
currency, there would be a comparable impact on the profit and other equity, and the balances below would be negative.

SFRS(I) 7:40(c) [Where the assumptions used have changed from previous years, include detail of and reasons for those changes.]

United States dollar impact Euro impact Japanese yen impact

2022 2021 2022 2021 2022 2021
$’000 $’000 $’000 $’000 $’000 $’000
Group

SFRS(I) 7:40(a) Profit or loss (728) (5,132) (i) 916 658 (i) (392) (468) (i)
SFRS(I) 7:40(a) Other equity (33) (47) (ii) 70 69 (ii) - -

Company

SFRS(I) 7:40(a) Profit or loss (3,606) (2,740) (iii) 56 49 (i) - -

SFRS(I) 7:40(a) Other equity - - - - - -

(i) This is mainly attributable to the exposure outstanding on receivables and payables in the group at the reporting date.

(ii) This is the result of the changes in fair value of derivative instruments designated as cash flow hedges.

(iii) This is mainly attributable to the exposure to outstanding US dollar inter-company receivables at the reporting date.

91
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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:33(c) The group’s sensitivity to foreign currency has decreased during the current year mainly due to the disposal of US dollar
investments and the reduction in US dollar sales in the last quarter of the financial year which has resulted in lower US dollar
denominated trade receivables.

Guidance notes – Sensitivity analysis

SFRS(I) 7:42 When the sensitivity analyses disclosed in accordance with SFRS(I) 7:40 or SFRS(I) 7:41 are unrepresentative of a risk
inherent in a financial instrument (for example because the year-end exposure does not reflect the exposure during the
year), the entity shall disclose that fact and the reason it believes the sensitivity analyses are unrepresentative. An example
of such a disclosure may be as follows:

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year
end exposure does not reflect the exposure during the year. US dollar denominated sales are seasonal with lower sales
volume in the last quarter of the financial year, which results in a reduction in US dollar receivables at the end of the
reporting period.

SFRS(I) 7:33 (ii) Interest rate risk management

SFRS(I) 7:34
Guidance notes – Financial Reporting Bulletin 9

In February 2022, the Institute of Singapore Chartered Accountants (ISCA) has issued the Financial Reporting Bulletin
(FRB) 9 (Revised February 2022): Accounting Implications of the Interest Rate Benchmark Reform in Singapore to provide
an update to the existing FRB 9 (issued in October 2021), which shares the accounting guidance and key considerations
on specific matters to assist entities in their understanding of the accounting for financial instruments and hedge accounting
which are affected by the replacement of interest rate benchmarks within these contracts. For further details on the above
FRB, please refer to ISCA website.

Guidance notes

Entities applying Interest Rate Benchmark Reform - Phase 1 amendments to SFRS(I) 9, SFRS(I) 1-39 and SFRS(I) 7, and
Phase 2 amendments to SFRS(I) 9, SFRS(I) 1-39, SFRS(I) 7, SFRS(I) 4 and SFRS(I) 16 should apply the disclosure
requirements contained in SFRS(I) 7:24H to 24J accordingly, which are outlined below.

The Phase 1 disclosures only apply if the temporary hedge accounting exceptions under the Phase 1 amendments are
applied in the reporting periods presented (e.g., for hedging relationships that are still subject to the exceptions). Once
the Phase 1 amendments no longer apply (e.g., the Phase 2 amendments begin to be applied because all hedging
instruments and/or hedged items are modified to reference an alternative benchmark rate), the Phase 1 disclosures will
also no longer apply. The Phase 2 disclosures require information about an entity’s transition to alternative benchmark
rates until the transition is complete for all financial instruments subject to the interest rate benchmark reform and not
only those in hedging relationships. They are therefore broader than the Phase 1 disclosures.

Phase 1 disclosures
(a) the significant interest rate benchmarks to which the entity’s hedging relationships are exposed;
(b) the extent of the risk exposure the entity manages that is directly affected by the interest rate benchmark reform;
(c) how the entity is managing the process to transition to alternative benchmark rates;
(d) a description of significant assumptions or judgements the entity made in applying these paragraphs (e.g. assumptions
or judgements about when the uncertainty arising from interest rate benchmark reform is no longer present with
respect to the timing and the amount of the interest rate benchmark-based cash flows); and
(e) the nominal amount of the hedging instruments in those hedging relationships.

Illustrative Financial Statements 2022 92

Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Phase 2 disclosures
(a) the nature and extent of risks to which the entity is exposed arising from financial instruments subject to interest rate
benchmark reform, and how the entity manages these risks; and
(b) the entity’s progress in completing the transition to alternative benchmark rates, and how the entity is managing the
transition.

The following illustrative examples are designed to show how an entity could apply the disclosure requirements arising
from the Phase 2 amendments. Our fact pattern assumes that all the affected financial instruments and hedging
relationships were either transitioned to alternative benchmark rates or the contracts were amended to introduce fallback
clauses which will change the existing benchmark rates to alternative benchmark rates at an agreed point in time, during
the reporting period. Illustrative disclosures relating to the Phase 1 and the Phase 2 amendments for which some contracts
were transitioned to alternative benchmark rates, some contracts remain subject to transition, or the entity is still in the
process of negotiating the replacement rate with their counterparties for the IBOR-based contracts, were illustrated in the
2021 version of this publication, where applicable.

The illustrative examples are not intended to be exhaustive or represent the only way in which the disclosed information
may be presented, e.g. depending on the transition of IBOR to alternative benchmark rates may differ across jurisdiction
and may affect how the entity monitors and manages its transition process to the alternative benchmark rates, the way
contracts are being renegotiated or amended may also differ across entities, and depending on the volume of instruments,
the quantitative disclosures may be presented on a more aggregated basis. Therefore, application of the disclosure
requirements will differ depending on an entity’s particular facts and circumstances. Please tailor the disclosures accordingly.

The group is exposed to interest rate risk because entities in the group borrow funds at both fixed and floating interest rates.
The risk is managed by the group by maintaining an appropriate mix between fixed and floating rate borrowings, and by the
use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined
risk appetite; ensuring the most cost-effective hedging strategies are applied.

The group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management
section of this note.

SFRS(I) 7:24I - The group is exposed to Singapore Overnight Rate Average (‘SORA’). The exposures arise on derivatives and non-derivative
24J(a) financial assets and liabilities (e.g. bank borrowings and leases).

Some of the group’s cash flow hedge relationships were affected by the interest rate benchmark reform. All the affected
hedged items and hedging instruments were either transitioned to SORA or the contracts were amended to introduce fallback
clauses which will change the basis for determining the interest cash flows from Singapore Interbank Offered Rate (‘SIBOR’)
to SORA at an agreed point in time. The hedge documentation has been amended accordingly.

The group has closely monitored the market and the updates of the interest rate benchmark transition in Singapore from the
various industry working groups, including announcements made by the Association of Banks in Singapore (ABS), the
Singapore Foreign Exchange Market Committee (SFEMC), and the Steering Committee for SOR Transition to SORA (SC-STS)
(the ‘Committees’). The Committees have identified SORA as the alternative risk‐free rate to replace the Singapore Dollar
Swap Offer Rate (‘SOR’) and SIBOR in Singapore. The timelines for SOR and SIBOR are set to be discontinued by June 30,
2023, and December 31, 2024, respectively. [To tailor disclosures accordingly if the entity has exposures to applicable IBOR
reform in other jurisdictions.]

In response to the announcements, the group has set up an IBOR transition programme which comprised of the following
work streams: risk management, tax, treasury, legal, accounting and systems. The programme is under the governance of
the Chief Financial Officer who reports to the Board.

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Notes to financial statements

December 31, 2022

SFRS(I) 7:24J(b) Interest rate benchmark transition for non-derivative financial instruments

The group transitioned $268 million of the 6-month SIBOR bank borrowings to SORA. The group accounted for the change
to SORA using the practical expedient in SFRS(I) 9 which allows the group to change the basis for determining the contractual
cash flows prospectively by revising the effective interest rate.

[Include where applicable:

For the group’s $__ million lease liabilities linked to SIBOR maturing in 2026, the fallback clauses were incorporated in H1
2022.]

Interest rate benchmark transition for derivatives and hedge relationships

The group has transitioned $268 million of its bank borrowings to SORA of which $200 million are designated in a cash flow
hedge using a 6-month SIBOR to fixed interest rate swap contract. During the first quarter of 2022 the group entered into
an equal but offsetting derivative against the original derivative and a new off-market derivative based on SORA plus fixed
spread on the same terms as the original derivative (i.e. the fair value on day one of the new SORA derivative was the same
as the original SIBOR derivative). This change was effected as a direct consequence of the reform and on an economically
equivalent basis. The group updated the hedge documentation to include the new derivatives and amended the designated
hedged risk to "variability in the cash flows of the bank borrowings resulting from changes in SORA". The hedge relationship
was not discontinued and the accumulated gain in the cash flow hedge reserve is deemed to be based on SORA.

Guidance notes – Disclosures for interest rate benchmark transition for derivatives not designated in hedge
relationships

A possible disclosure may be as follows:

For the group’s derivatives with nominal amount $__ million that reference to 6-month SIBOR maturing in ___ but were
not designated in hedge relationships, the International Swaps and Derivatives Association’s (ISDA) fallback clauses were
made available in the first quarter of 2022 and the group has signed up to the protocol, along with each of the group’s
counterparties. This ensures all legacy trades will, on cessation of SIBOR, follow the fallback clause provided in the protocol.

Guidance notes – Illustrative examples

For more illustrative examples related to the disclosure requirements introduced by Phase 1 amendments to SFRS(I) 9, SFRS(I)
1-39 and SFRS(I) 7 and Phase 2 amendments to SFRS(I) 9, SFRS(I) 1-39, SFRS(I) 7, SFRS(I) 4 and SFRS(I) 16 on Interest
Rate Benchmark Reform, please refer to Deloitte’s Global publication on December 2, 2020, ‘A Closer Look - Financial
instrument disclosures when applying Interest Rate Benchmark Reform – Phase 1 amendments to IFRS 9 and IAS 39 and
Phase 2 amendments to IFRS 9, IAS 39, IFRS 4 and IFRS 16, available on IAS plus website.

SFRS(I) 7:34(a) Interest rate sensitivity analysis

SFRS(I) 7:40(b)
The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and
non-derivative instruments at the reporting date. For floating rate liabilities, the analysis is prepared assuming the amount
of liability outstanding at the reporting date was outstanding for the whole year. A 100 basis points (2021 : 50 basis points)
increase or decrease is used when reporting interest rate risk internally to key management personnel and represents
management’s assessment of the reasonably possible change in interest rates.

SFRS(I) 7:40(c) The change in basis points for the sensitivity analyses during the year is due to the interest rate volatility observed in th e
current market environment in which the group operates and management’s expectation for possible future change of interest
rates over the financial year.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:40(a) If interest rates had been 100 basis points (2021 : 50 basis points) higher or lower and all other variables were held constant,
the group’s:

• Profit for the year ended December 31, 2022 would decrease/increase by $0.7 million (2021 : decrease/increase by
$1.7 million). This is mainly attributable to the group’s exposure to interest rates on its variable rate borrowings; and

• Other comprehensive income would decrease/increase by $90,000 (2021 : decrease/increase by $45,000) mainly as a
result of the changes in the fair value of investment in corporate bonds classified as at FVTOCI.

SFRS(I) 7:33(c) The group’s sensitivity to interest rates has decreased during the current year mainly due to the reduction in variable rate
debt instruments and the increase in interest rate swaps to swap floating rate debt to fixed rate debt.

The company’s profit and other comprehensive income are not affected by the changes in interest rates as the interest-bearing
instruments carry fixed interest and are measured at amortised cost.

Guidance notes – Sensitivity analysis

SFRS(I) 7:B17-21 SFRS(I) 7:B17 to B21 and SFRS(I) 7:IG32 to IG36 provide further guidance in respect of the sensitivity analysis for market
SFRS(I) 7:IG32–36 risks.

SFRS(I) 7:33 (iii) Equity price risk management

SFRS(I) 7:34
The group is exposed to equity price risks arising from equity investments.

Equity investments in unlisted entities (Note 13) are held for strategic rather than trading purposes. The group does not
actively trade these investments.

The group invested in a portfolio of listed shares which are held for trading (Note 13). This type of investment is approved
by the board of directors as the alternative to investment in money market funds in order to generate higher investment
return on the spare funds.

SFRS(I) 7:40(a),(b) Equity price sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to equity price risks at the reporting date.

If equity prices had been 10% higher/lower:

• Net profit for the year ended December 31, 2022 would increase/decrease by $1.3 million (2021 : increase/decrease by
$1.2 million) as a result of the changes in fair value of the investments in listed shares; and

• Other comprehensive income would increase/decrease by $1.4 million (2021 : increase/decrease by $1.3 million) as a
result of the changes in fair value of the investments in equity instruments.

The methods and assumptions used in preparing the sensitivity analysis above have not changed significantly from the prior
year.

SFRS(I) 7:40(c) [Where the assumptions used have changed from previous years, include detail of and reasons for those changes.]

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December 31, 2022

SFRS(I) 7:33-34 (iv) Credit risk management

SFRS(I) 7:35B
SFRS(I) 7:35F(a)(i) In order to minimise credit risk, the group has adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The group only
transacts with entities that are rated the equivalent of investment grade. Investments in instruments, including debentures
and redeemable notes as detailed in Note 13, where the counterparties have a minimum BBB- credit rating, are considered
to have low credit risk for the purpose of impairment assessment. The credit rating information is supplied by independent
rating agencies where available and, if not available, the group uses other publicly available financial information and its
own trading records to rate its major customers. The group's exposure and the credit ratings of its counterparties are
continuously monitored, and the aggregate value of transactions concluded is spread amongst approved counterparties.

SFRS(I) 7:34(c) Before accepting any new customer, a dedicated team responsible for the determination of credit limits uses an external
credit scoring system to assess the potential customer's credit quality and defines credit limits by customer. Limits and
scoring attributed to customers are reviewed and approved twice a year by the risk management committee. 80% of the
trade receivables have the best credit scoring attributable under the external credit scoring system used by the group.

Credit approvals and other monitoring procedures are also in place to ensure that follow-up action is taken to recover
overdue debts. Furthermore, the group reviews the recoverable amount of each trade debt and debt investment on an
individual basis at the end of the reporting period to ensure that adequate loss allowance is made for irrecoverable amounts.
In this regard, management considers that the group’s credit risk is significantly reduced.

Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing
credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit guarantee
insurance cover is purchased.

SFRS(I) 7:B8 Of the trade receivables balance at the end of the year, $8.3 million (2021 : $9.8 million) is due from Company A, the group's
SFRS(I) 7:34(c) largest customer. Apart from this, the group does not have significant credit risk exposure to any single counterparty or any
SFRS(I) 7:35B(c) group of counterparties having similar characteristics. The group defines counterparties as having similar characteristics if
they are related entities. Concentration of credit risk related to Company A did not exceed 20% of gross monetary assets at
any time during the year. Concentration of credit risk to any other counterparty did not exceed 5% of gross monetary assets
at any time during the year. The concentration of credit risk is limited due to the fact that the customer base is large and
unrelated.

SFRS(I) 7:B10(b) The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high
credit-ratings assigned by international credit-rating agencies.

SFRS(I) 7:B10(c) In addition, the group is exposed to credit risk in relation to financial guarantees given to banks. The group's maximum
exposure in this respect is the maximum amount the group could have to pay if the guarantee is called on.

[If there is an amount of loss allowance on financial guarantee contracts provided by the entity, the following is applicable
illustrative disclosure:
As at December 31, 2022, an amount of $__ million (2021 : $__ million) has been estimated as a loss allowance in
accordance with SFRS(I) 9, however, no loss allowance was recognised in profit or loss because the premium received less
cumulative amount recognised in profit or loss was higher than the expected amount of loss allowance (Note 27).]

Collateral held as security and other credit enhancements

SFRS(I) 7:35K(b) The group does not hold any collateral or other credit enhancements to cover its credit risks associated with its financial
assets, except that the credit risk associated with finance lease receivables is mitigated because they are secured over the
leased equipment. The carrying amount of finance lease receivables amounts to $26.5 million (2021 : $41.2 million) and
the fair value of the leased assets is estimated to be approximately $35.2 million (2021 : $43.9 million). The group is not
permitted to sell or repledge the collateral in the absence of default by the lessee. There have not been any significant
changes in the quality of the collateral held for finance lease receivables. The group has not recognised a loss allowance for
the finance lease receivables as a result of these collaterals.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes - Disclosure of collateral held as security and other credit enhancements

For all financial instruments to which the impairment requirements in SFRS(I) 9 are applied, SFRS(I) 7:35K(b) and (c)
specifies that entities should disclose the following:

• a narrative description of collateral held as security and other credit enhancements, including:

(i) a description of the nature and quality of the collateral held;

(ii) an explanation of any significant changes in the quality of that collateral or credit enhancements as a result of
deterioration or changes in the collateral policies of the entity during the reporting period; and

(iii) information about financial instruments for which an entity has not recognised a loss allowance because of the
collateral.

• quantitative information about the collateral held as security and other credit enhancements (for example, quantification
of the extent to which collateral and other credit enhancements mitigate credit risk) for financial assets that are
credit-impaired at the reporting date. For all financial instruments within the scope of SFRS(I) 7, but to which the
impairment requirements in SFRS(I) 9 are not applied, SFRS(I) 7:36(b) specifies that entities should give a description
of collateral held as security and of other credit enhancements, and their financial effect (e.g. a quantification of the
extent to which collateral and other credit enhancements mitigate credit risk) in respect of the amount that best
represents the maximum exposure to credit risk.

SFRS(I) 7:7 Overview of the group’s exposure to credit risk

SFRS(I) 7:31
SFRS(I) 7:35K(a) Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
group. As at December 31, 2022, the group’s maximum exposure to credit risk without taking into account any collateral
held or other credit enhancements, which will cause a financial loss to the group due to failure to discharge an obligation by
the counterparties and financial guarantees provided by the group arises from:

• the carrying amount of the respective recognised financial assets as stated in the consolidated statement of financial
position; and

SFRS(I) 7:35M • the maximum amount the group would have to pay if the financial guarantee is called upon, irrespective of the likelihood
SFRS(I) 7:B10(c) of the guarantee being exercised as disclosed in Note 4(c)(v). The related loss allowance is disclosed in the respective
notes to the financial statements.

The group’s current credit risk grading framework comprises the following categories:

Category Description Basis for recognising

expected credit losses (ECL)
Performing The counterparty has a low risk of default and does not 12-month ECL (other than trade
have any past-due amounts. receivables without significant
financing component and contract
assets)

Doubtful Amount is >30 days past due or there has been a Lifetime ECL – not credit-impaired
significant increase in credit risk since initial recognition.

In default Amount is >90 days past due or there is evidence Lifetime ECL – credit-impaired
indicating the asset is credit-impaired.

Write-off There is evidence indicating that the debtor is in severe Amount is written off
financial difficulty and the group has no realistic prospect
of recovery.

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December 31, 2022

Guidance notes

SFRS(I) 7:35M SFRS(I) 7:35M requires the disclosure of information about an entity’s credit risk exposure and significant concentrations
SFRS(I) 7:B8I of credit risk by credit risk grading at the reporting date. The number of credit risk rating grades used to disclose such
information should be consistent with the number that the entity reports to key management personnel for credit risk
management purposes. However, in some cases, delinquency and past due information may be the only borrower-specific
information available without undue cost or effort, which is used to assess whether credit risk has increased significantly
since initial recognition. In such cases, an entity should provide an analysis of those financial assets by past due status.

SFRS(I) 7:35M The tables below detail the credit quality of the group’s financial assets, contract assets and financial guarantee contracts,
SFRS(I) 7:35N as well as the group’s maximum exposure to credit risk by credit risk rating grades:
SFRS(I) 7:36(a)
Gross
carrying Net carrying
External Internal amount / amount /
credit credit 12-month or credit Loss credit
Note rating rating lifetime ECL exposure allowance exposure (i)
$’000 $’000 $’000
Group

2022

Trade receivables 8 n.a. (ii) Lifetime ECL 106,515 (7,540) 98,975

(simplified approach)
Other receivables 8 n.a. Performing 12-month ECL 24,524 - 24,524

Contract assets 9 n.a. (ii) Lifetime ECL 14,758 (148) 14,610

(simplified approach)
Finance lease receivables 12 n.a. (ii) Lifetime ECL 26,497 - 26,497
(simplified approach)
Corporate bonds 13 BBB Performing 12-month ECL 8,750 - 8,750
(low credit risk asset)
Redeemable notes 13 AA Performing 12-month ECL 25,255 - 25,255
(low credit risk asset)
Debentures 13 BBB- Performing 12-month ECL 2,300 - 2,300
(low credit risk asset)
Financial guarantee 27 n.a. Performing 12-month ECL 1,800 - -
contracts

(7,688)

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Notes to financial statements

December 31, 2022

Gross
carrying Net carrying
External Internal amount / amount /
credit credit 12-month or credit Loss credit
Note rating rating lifetime ECL exposure allowance exposure (i)
$’000 $’000 $’000
Group

2021

Trade receivables 8 n.a. (ii) Lifetime ECL 113,486 (4,430) 109,056

(simplified approach)
Other receivables 8 n.a. Performing 12-month ECL 673 - 673

Contract assets 9 n.a. (ii) Lifetime ECL 14,039 (141) 13,898

(simplified approach)
Finance lease receivables 12 n.a. (ii) Lifetime ECL 41,163 - 41,163
(simplified approach)
Corporate bonds 13 BBB Performing 12-month ECL 8,730 - 8,730
(low credit risk asset)
Redeemable notes 13 AA Performing 12-month ECL 18,605 - 18,605
(low credit risk asset)
Debentures 13 BBB- Performing 12-month ECL 2,300 - 2,300
(low credit risk asset)
Financial guarantee 27 n.a. Performing 12-month ECL 1,800 - -
contracts

(4,571)

Company

2022

Other receivables 8 n.a. Performing 12-month ECL 89,371 - 89,371

2021

Other receivables 8 n.a. Performing 12-month ECL 55,895 - 55,895

(i) For financial guarantee contracts, the gross credit exposure represents the maximum amount the group has guaranteed
under the respective contracts, and the net credit exposure represents the amount, net of loss allowance recognised
for the contracts.

(ii) For trade receivables, contract assets and finance lease receivables, the group has applied the simplified approach in
SFRS(I) 9 to measure the loss allowance at lifetime ECL. The group determines the expected credit losses on these
items by using a provision matrix, estimated based on historical credit loss experience based on the past due status of
the debtors, adjusted as appropriate to reflect current conditions and estimates of future economic conditions.
Accordingly, the credit risk profile of these assets is presented based on their past due status in terms of the provision
matrix. Notes 8, 9 and 12 include further details on the loss allowance for these assets respectively.

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December 31, 2022

The loss allowance on corporate bonds measured at FVTOCI is recognised against other comprehensive income and
accumulated in the investment revaluation reserve (Note 38).

SFRS(I) 7:36(a),(b) The carrying amount of the group’s financial assets at FVTPL as disclosed in Note 13 best represents their respective
SFRS(I) 7:B10(b) maximum exposure to credit risk. The group holds no collateral over any of these balances.

Guidance notes

For all financial instruments within the scope of SFRS(I) 7, but to which the impairment requirements in SFRS(I) 9 are not
applied, SFRS(I) 7:36(a) requires an entity to disclose by class of financial instrument the amount that best represents
the entity’s maximum credit risk exposure at the end of the reporting period, excluding the effect of any collateral and
other amounts that do not qualify for offset in accordance with SFRS(I) 1-32. Examples of financial instruments that are
within the scope of SFRS(I) 7 but that are not subject to the SFRS(I) 9 impairment requirements include:

• Financial assets and derivatives measured at FVTPL;

• Financial guarantee contracts issued measured at FVTPL; and

• Loan commitments issued measured at FVTPL.

Equity investments, regardless of whether they are measured at FVTPL or FVTOCI, are also in the scope of SFRS(I) 7 but
not subject to the SFRS(I) 9 impairment requirements; however, they do not give rise to an exposure to credit risk and
therefore are not subject to the SFRS(I) 7 credit risk disclosures.

SFRS(I) 7:33 (v) Liquidity risk management

SFRS(I) 7:39(c)
Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate
liquidity risk management framework for management of the group’s short, medium and long-term funding and liquidity
management requirements. The group manages liquidity risk by maintaining adequate reserves, banking facilities and
reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles
of financial assets and liabilities. The group is using a combination of the cash inflows from the financial assets and the
available bank facilities to manage the liquidity.

SFRS(I) 1-7:50 The group has access to financing facilities of which $200 million (2021 : $200 million) were unused at the reporting date.
The group expects to meet its obligations from operating cash flows and proceeds of maturing financial assets.

SFRS(I) 7:34-35 Liquidity and interest risk analyses

SFRS(I) 7:39(a)
Non-derivative financial liabilities

The following tables detail the group’s and the company’s remaining contractual maturity for non-derivative financial
liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the group and the company can be required to pay. The table includes both
interest and principal cash flows.

SFRS(I) 7:B10(c) The amounts included in the following table for financial guarantee contracts are the maximum amount the group could be
forced to settle under the arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the
guarantee (Note 27). Based on expectations at the end of the reporting period, the group considers that it is more likely
than not that no amount will be payable under the arrangement. However, this estimate is subject to change depending on
the probability of the counterparty claiming under the guarantee which is a function of the likelihood that the financial
receivables held by the counterparty which are guaranteed suffer credit losses.

The contractual maturity is based on the earliest date on which the group may be required to pay.

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Notes to financial statements

December 31, 2022

Guidance notes – Liquidity and interest risk analyses

SFRS(I) 7:34(a) The tables below include the weighted average effective interest rate and the carrying amount of the respective financial
liabilities as reflected in the statements of financial position as an example of summary quantitative data about exposure
to interest rates at the end of the reporting period that an entity may provide internally to key management personnel.
An entity must use its judgement to determine an appropriate number of time bands. For a non-financial institution, an
appropriate time band could be: ‘On demand or within 1 year’, ‘Within 2 to 5 years’ and ‘After 5 years’.

Weighted
average On demand
effective or within Within After
Group interest rate 1 year 2 to 5 years 5 years Adjustment Total
% $’000 $’000 $’000 $’000 $’000
2022

Non-interest bearing - 186,547 - - - 186,547

Lease liabilities (fixed rate) 4.8 1,304 3,508 - (825) 3,987
Variable interest rate instruments 3.8 73,115 209,726 - (12,934) 269,907
Fixed interest rate instruments 7.8 1,250 118,807 - (20,885) 99,172
Financial guarantee contracts - - 1,800 - (1,776) 24
Contingent consideration - - 75 - - 75

2021

Non-interest bearing - 130,218 - - - 130,218

Lease liabilities (fixed rate) 4.2 1,350 2,922 - (652) 3,620
Variable interest rate instruments 3.2 73,531 294,552 - (29,174) 338,909
Fixed interest rate instruments 8.0 - 96,504 - (21,110) 75,394
Financial guarantee contracts - - 1,800 - (1,770) 30
Contingent consideration - - - - - -

Company

2022

Non-interest bearing - 7,065 - - - 7,065

Fixed interest rate instruments 7.0 1,250 29,062 - (5,985) 24,327

2021

Non-interest bearing - 7,586 - - - 7,586

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December 31, 2022

Guidance notes

SFRS(I) 7 clarifies the following:

SFRS(I) 7 App A • Liquidity risk disclosures apply only to financial liabilities that are settled by delivering cash or another financial asset.
This excludes financial liabilities that are settled by the entity by delivering its own equity instruments or
non-financial assets.
SFRS(I) 7:B10A • An entity has to disclose summary quantitative data about its exposure to liquidity risk on the basis of information
provided internally to key management personnel, and explain how the data is determined.
SFRS(I) 7:B10A • If outflows of cash (or another financial asset) included in those data could either occur significantly earlier than
indicated in the data, or for significantly different amounts from those indicated in the data, an entity has to state the
fact and provide quantitative information that enables users to evaluate the extent of risk, unless information is
included in the liquidity risk management or maturity analysis disclosures above.
SFRS(I) 7:B11C(c) • For issued financial guarantee contracts, an entity should disclose the maximum amount of guarantee in the
contractual maturity analysis, allocated to the earliest period in which it could be called.

SFRS(I) 7:B11E Non-derivative financial assets

The following tables detail the group’s and the company’s expected maturity for non-derivative financial assets. The inclusion
of information on non-derivative financial assets is necessary in order to understand the group’s liquidity risk management
as the group’s liquidity risk is managed on a net asset and liability basis. The tables have been drawn up based on the
undiscounted cash flows of financial assets including interest that will be earned on those assets except where the group
and the company anticipates that the cash flow will occur in a different period.

Weighted
average On demand
effective or within Within After 5
Group interest rate 1 year 2 to 5 years years Adjustment Total
% $’000 $’000 $’000 $’000 $’000
2022

Non-interest bearing - 158,258 - - - 158,258

Finance lease receivables 6.5 13,475 17,076 - (4,054) 26,497
(fixed rate)
Fixed interest rate instruments 2.8 1,254 29,381 10,440 (4,770) 36,305

2021

Non-interest bearing - 110,904 - - - 110,904

Finance lease receivables 6.5 14,454 32,454 - (5,745) 41,163
(fixed rate)
Fixed interest rate instruments 3.0 1,089 14,767 19,021 (5,242) 29,635

Company

2022

Non-interest bearing - 91,445 - - - 91,445

2021

Non-interest bearing - 56,542 - - - 56,542

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December 31, 2022

Guidance notes

SFRS(I) 7:B11E There is an apparent conflict between SFRS(I) 7 which requires the disclosure of a liquidity analysis for all financial liabilities
and SFRS(I) 1-1:65 which states that ‘SFRS(I) 7 requires disclosure of the maturity dates of financial assets and financial
liabilities’ [emphasis added]. An entity is not required to disclose a maturity analysis for financial assets in all cases.
The minimum required disclosure is for a maturity analysis for financial liabilities only. However, a maturity analysis shall
be disclosed for financial assets if it holds financial assets for managing liquidity risk and that information is necessary to
enable users of its financial statements to evaluate the nature and extent of liquidity risk.

SFRS(I) 7:39(b) Derivative financial instruments

The following table details the group’s and the company’s liquidity analysis for derivative financial instruments based on
contractual maturities. The table has been drawn up based on the undiscounted net cash inflows and outflows on derivative
instruments that settle on a net basis, and the undiscounted gross inflows and outflows on those derivatives that require
gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by
reference to the projected interest rates as illustrated by the yield curves existing at the reporting date.

On demand or Within After

Group within 1 year 2 to 5 years 5 years
$’000 $’000 $’000
2022

Net settled:
Interest rate swaps - 1,779 -

Gross settled:
Foreign currency forward contracts
Gross inflows 495,600 - -
Gross outflows (493,407) - -

2,193 1,779 -

2021

Gross settled:
Foreign currency forward contracts
Gross inflows 341,400 - -
Gross outflows (339,062) - -

2,338 - -

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes

SFRS(I) 7:B11B 1. Derivatives

For derivatives, an entity should disclose a quantitative maturity analysis for derivative financial liabilities that shows
remaining contractual maturities if the contractual maturities are essential for an understanding of the timing of the cash
flows. For example, this would be the case for:

a. An interest rate swap with a remaining maturity of five years in a cash flow hedge of a variable rate financial asset
or liability.

b. All loan commitments.

SFRS(I) 7:B11A For embedded derivatives, an entity should not separate it from the hybrid financial instrument. For such an instrument,
the entity should disclose the contractual maturity of the entire instrument.

2. Alternative presentation by narration

The group’s derivative financial instruments comprise of interest rate swaps amounting to $1.8 million (2021 : $Nil) with
contracted net cash inflows due within 2 to 5 years, and foreign currency forward contracts gross inflows amounting to
$495.6 million (2021 : $341.4 million) and gross outflows amounting $493.4 million (2021 : $339.1 million) with
contracted gross cash flows due within 1 year.

Illustrative Financial Statements 2022 104

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

(c) Fair value of financial assets and financial liabilities

SFRS(I) 13:91 (i) Fair value of the group’s financial assets and financial liabilities that are measured at fair value on a recurring basis

Group

SFRS(I) 13:93(a), Some of the group’s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these
(b),(d),(g),(h),(i) financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).

Financial assets/ Fair value as at ($’000) Fair value Valuation technique(s) Significant Relationship and sensitivity of
financial liabilities 2022 2021 hierarchy and key input(s) unobservable unobservable inputs to fair
Assets Liabilities Assets Liabilities input(s) value

Financial assets mandatorily

measured at FVTPL
(Note 13)
1) Held-for-trading shares 13,074 - 12,490 - Level 1 Quoted bid prices in an n.a. n.a.
active market.

Derivative financial instruments

(Note 14)
2) Foreign currency forward 2,466 (273) 2,338 - Level 2 Discounted cash flow. n.a. n.a.
contracts Future cash flows are
estimated based on forward
exchange rates (from
observable forward
exchange rates at the end of
the reporting period) and
contract forward rates,
discounted at a rate that
reflects the credit risk of
various counterparties.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Financial assets/ Fair value as at ($’000) Fair value Valuation technique(s) Significant Relationship and sensitivity of
financial liabilities 2022 2021 hierarchy and key input(s) unobservable unobservable inputs to fair
Assets Liabilities Assets Liabilities input(s) value

3) Interest rate swaps 1,779 - - - Level 2 Discounted cash flow. n.a. n.a.
Future cash flows are
estimated based on forward
interest rates (from
observable yield curves at
the end of the reporting
period) and contract interest
rates, discounted at a rate
that reflects the credit risk
of various counterparties.

Financial assets measured

at FVTOCI (Note 13)
4) Listed corporate bonds 8,750 - 8,730 - Level 1 Quoted bid prices in an n.a. n.a.
active market.

5) Investments in listed 13,560 - 13,464 - Level 1 Quoted bid prices in an n.a. n.a.
shares active market.

6) Investments in unlisted 1,000 - 1,050 - Level 3 Income approach. Long-term revenue growth rates, The higher the revenue growth rate,
shares In this approach, the taking into account management’s the higher the fair value.
discounted cash flow experience and knowledge of
method was used to capture market conditions of the specific If the revenue growth was 1%
the present value of the industries, ranging from 4.9% to higher/lower while all other
expected future economic 5.5% per annum (2021 : 4.8% to variables were held constant,
benefits to be derived from 5.4% per annum). the carrying amount would increase/
the ownership of these decrease by $90,000 (2021 :
investees. increase/decrease by $85,000).

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Financial assets/ Fair value as at ($’000) Fair value Valuation technique(s) Significant Relationship and sensitivity of
financial liabilities 2022 2021 hierarchy and key input(s) unobservable unobservable inputs to fair
Assets Liabilities Assets Liabilities input(s) value

Long-term pre-tax operating The higher the pre-tax operating

margin taking into account margin, the higher the fair value.
management’s experience and
knowledge of market conditions of If the pre-tax operating margin was
the specific industries, ranging 2% higher/lower while all other
from 5% to 12% per annum (2021 variables were held constant, the
: 5% to 10% per annum). carrying amount would
increase/decrease by $50,000 (2021
: increase/decrease by $45,000).

Weighted average cost of capital The higher the weighted average

(WACC), determined using a cost of capital, the lower the fair
Capital Asset Pricing Model, value.
ranging from 11.9% to 12.5% per
annum (2021 : 11.2% to 12.1% If the weighted average cost of
per annum). capital was 1% higher/lower while
all other variables were held
constant, the carrying amount would
decrease/increase by $68,000 (2021
: decrease/increase by $62,000).

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Financial assets/ Fair value as at ($’000) Fair value Valuation technique(s) Significant Relationship and sensitivity of
financial liabilities 2022 2021 hierarchy and key input(s) unobservable unobservable inputs to fair
Assets Liabilities Assets Liabilities input(s) value

Discount for lack of marketability, The higher the discount, the lower
determined by reference to the the fair value.
share price of listed entities in
similar industries, ranging from 5% If the discount was 5% higher/lower
to 20% per annum (2021 : 4% to while all other variables were held
19% per annum). constant, the carrying amount would
decrease/increase by $30,000 (2021
: decrease/increase by $25,000).

Contingent consideration in
a business combination (Note 51)
7) Contingent consideration - 75 - - Level 3 Discounted cash flow method Discount rate of 13% per annum The higher the discount rate, the
was used to capture the determined using a Capital Asset lower the fair value.
present value of the Pricing Model.
expected future economic If the discount rate was 2%
benefits that will flow out of higher/lower while all other variables
the group arising from the were held constant, the carrying
contingent consideration. amount would decrease/ increase by
$5,000.

Probability-adjusted profits, with a The higher the amount of profit, the

range from $1 million to 2 million. higher the fair value.

If the profit was 10% higher/lower

while all other variables were held
constant, the carrying amount would
increase/decrease by $25,000.

Illustrative Financial Statements 2022 108

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Sensitivity of unobservable inputs to fair value

For financial assets and financial liabilities that are categorised within the Level 3 fair value hierarchy, if changing one or
more of the unobservable inputs to reflect reasonably possible alternative assumptions would significantly change the fair
value determined, an entity should state that fact and disclose the effect of those changes. The entity should also disclose
how the effect of a change to reflect a reasonably possible alternative assumption was calculated.

Company

The company had no financial assets or liabilities carried at fair value in 2021 and 2022.

SFRS(I) 13:93(c) There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy during the current or prior year.

Guidance notes – Transfers

For any significant transfers between Level 1 and Level 2, the reasons for the transfers need to be disclosed. Transfers into
each level shall be disclosed and discussed separately from transfers out of each level. For this purpose, significance shall
be judged with respect to profit or loss, and total assets or total liabilities.

SFRS(I) 13:93(e) (ii) Reconciliation of Level 3 fair value measurements of financial instruments

The following table only includes financial assets. The only financial liabilities measured subsequently at fair value on Level
3 fair value measurement represent contingent consideration relating to a business combination. No gain or loss for the year
relating to this contingent consideration has been recognised in profit or loss.

Equity
investments -
Group unlisted shares
$’000

Balance at January 1, 2021 1,100

Total gains or losses
- In profit or loss -
- In other comprehensive income 47
Purchases -
Issues -
Disposals/settlements (97)
Transfers out of Level 3 -
Transfers into Level 3 -

Balance at December 31, 2021 1,050

Total gains or losses

- In profit or loss -
- In other comprehensive income 46
Purchases -
Issues -
Disposals/settlements (96)
Transfers out of Level 3 -
Transfers into Level 3 -

Balance at December 31, 2022 1,000

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 13:93(e)(ii) All gains and losses included in other comprehensive income relate to listed corporate bonds and quoted and unquoted
equities held at the reporting date and are reported as changes of ‘Investments revaluation reserves’ (Note 38).

Guidance notes

For any transfers into and out of Level 3, the reasons for the transfers need to be disclosed. For significant transfers,
transfers into Level 3 shall be disclosed and discussed separately from transfers out of Level 3. For this purpose,
significance shall be judged with respect to profit or loss, and total assets or total liabilities.

For recurring level 3 fair value measurements, an entity should disclose the amount of total unrealised gains or losses for
the period included in profit or loss relating to those assets and liabilities held at the end of the reporting period, and t he
line item(s) in profit or loss in which those unrealised gains or losses are recognised.

SFRS(I) 13:97 (iii) Fair value of the group’s financial assets and financial liabilities that are not measured at fair value on a
recurring basis (but fair value disclosures are required)

SFRS(I) 7:25 Except as detailed in the following table, management considers that the carrying amounts of financial assets and financial
SFRS(I) 7:29(a) liabilities recorded at amortised cost in the financial statements to approximate their respective fair values:
SFRS(I) 13:97
2022 2021
Carrying Carrying
Group amount Fair value amount Fair value
$’000 $’000 $’000 $’000

Financial Assets

Investments in financial assets:

Listed redeemable notes 25,255 26,000 18,605 19,000
Debentures 2,300 2,380 2,300 2,350
Finance lease receivables 26,497 27,000 41,163 42,000

Financial Liabilities

Borrowings 344,752 346,000 414,303 410,000

Convertible loan notes 24,327 24,000 - -

SFRS(I) 13:97 Fair value hierarchy as at December 31, 2022

SFRS(I) 13:93(b) Group Level 1 Level 2 Level 3 Total
$’000 $’000 $’000 $’000
Financial Assets

Investments in financial assets:

Listed redeemable notes 26,000 - - 26,000
Debentures - 2,380 - 2,380
Finance lease receivables - 27,000 - 27,000

Financial Liabilities

Borrowings - 346,000 - 346,000

Convertible loan notes - 24,000 - 24,000

Illustrative Financial Statements 2022 110

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Fair value hierarchy as at December 31, 2021

Level 1 Level 2 Level 3 Total
$’000 $’000 $’000 $’000
Financial Assets

Investments in financial assets:

Listed redeemable notes 19,000 - - 19,000
Debentures - 2,350 - 2,350
Finance lease receivables - 42,000 - 42,000

Financial Liabilities

Borrowings - 410,000 - 410,000

Convertible loan notes - - - -

Guidance notes

The categorisation of fair value measurements into the different levels of the fair value hierarchy depends on the degree
to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value
measurement. The above categorisations are for illustrative purpose only.

SFRS(I) 13:97 The fair value of the instruments classified as Level 1 was derived from quoted prices for that financial instrument. The fair
SFRS(I) 13:93(d) value of the instruments classified as Level 2 was calculated using the discounted cash flow method. A prevailing market
risk-free rate adjusted by credit risk was used for discounting future cash flows. There were no financial instruments that
are measured at amortised cost but for which fair value was disclosed classified as Level 3 either in current year or in prior
year.

Guidance notes – Financial assets and financial liabilities designated as at FVTPL

Information on financial assets and financial liabilities designated as at FVTPL is required only if the entity has such
categories of financial instruments. The information may be presented as follows:

(i) Financial assets designated as at FVTPL

Group Company
2022 2021 2022 2021
$’000 $’000 $’000 $’000

Carrying amount of debt instruments designated as at FVTPL xx xx xx xx

SFRS(I) 7:9(c) Cumulative changes in fair value attributable to changes
in credit risk xx xx xx xx
SFRS(I) 7:9(c) Changes in fair value attributable to changes
in credit risk recognised during the period xx xx xx xx

SFRS(I) 7:9(a) At the reporting date, there are no significant concentrations of credit risk for debt instruments designated at FVTPL.
The carrying amount reflected above represents the group’s maximum exposure to credit risk for such assets.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:9(b),(d) (ii) Credit derivatives over financial assets designated as at FVTPL
SFRS(I) 7:36(b)
Group Company
2022 2021 2022 2021
$’000 $’000 $’000 $’000

Opening fair value xx xx xx xx

Additions during the year xx xx xx xx
Realised during the period xx xx xx xx
Change in fair value xx xx xx xx
Closing fair value xx xx xx xx

Cumulative fair value changes in credit derivatives over financial assets designated as at FVTPL since the assets were
designated amount to $__ million (2021 : $__ million).

(iii) Financial liabilities designated as at FVTPL

Financial liabilities designated as at FVTPL (with changes attributable to the change in credit risk being recognised in other
comprehensive income)

Group Company
2022 2021 2022 2021
$’000 $’000 $’000 $’000

SFRS(I) 7:10(a) Cumulative gain (loss) on changes in fair value attributable

to changes in credit risk recognised in other
comprehensive income (i) xx xx xx xx
SFRS(I) 7:10(d) Cumulative gain (loss) on changes in fair value attributable
to changes in credit risk recognised in other
comprehensive income – relating to financial liabilities
derecognised during the year xx xx xx xx

SFRS(I) 7:10(b) Difference between carrying amount and contractual amount

at maturity:
Cumulative preference shares at fair value xx xx xx xx
Amount payable at maturity xx xx xx xx
xx xx xx xx

SFRS(I) 7:11(a),(c) (i) The change in fair value attributable to change in credit risk is calculated as the difference between the total change
in fair value of cumulative preference shares ($__) and the change in fair value of cumulative redeemable preference
shares due to change in market risk factors alone ($__). The change in fair value due to market risk factors was
calculated using benchmark interest yield curves as at the end of the reporting period holding credit risk margin
constant. The fair value of cumulative redeemable preference shares was estimated by discounting future cash flows
using quoted benchmark interest yield curves as at the end of the reporting period and by obtaining lender quotes
for borrowings of similar maturity to estimate credit risk margin.

SFRS(I) 7:11(c) A qualitative assessment of the terms of the cumulative preference shares and the matching interest rate swap
(Note xx) indicates that the effects of changes in the cumulative preference shares’ credit risk are not expected to
be offset by changes in the fair value of the interest rate swap. Accordingly, management determines that presenting
the effects of changes in the cumulative preference shares’ credit risk in other comprehensive income would not
create or enlarge an accounting mismatch in profit or loss.

Illustrative Financial Statements 2022 112

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Financial liabilities designated as at FVTPL (with changes attributable to the change in credit risk being recognised in profit
or loss)

Group Company
2022 2021 2022 2021
$’000 $’000 $’000 $’000

SFRS(I) 7:10A(a) Changes in fair value attributable to changes in credit risk

recognised in profit or loss during the year xx xx xx xx
SFRS(I) 7:10A(a) Cumulative gain (loss) on changes in fair value attributable
to changes in credit risk recognised in profit or loss xx xx xx xx

SFRS(I) 7:10A(b) Difference between carrying amount and contractual amount

at maturity:
Cumulative preference shares at fair value xx xx xx xx
Amount payable at maturity xx xx xx xx
xx xx xx xx

Note:

SFRS(I) 7:10A If an entity has designated a financial liability as at FVTPL and is required to present all changes in the fair value of that
SFRS(I) 7:11(c) liability (including the effects of changes in the credit risk of the liability) in profit or loss (because recognising changes in
the credit risk of the liability in other comprehensive income would enlarge an accounting mismatch in profit or loss),
it shall disclose:

• the amount of change, during the period and cumulatively, in the fair value of the financial liability that is attributable
to changes in the credit risk of that liability (see above);

• the difference between the financial liability’s carrying amount and the amount the entity would be contractually
required to pay at maturity to the holder of the obligation (see above); and

• a detailed description of the methodologies used to determine whether presenting the effects of changes in a liability’s
credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss, and a
detailed description of the economic relationship between the characteristics of the liability and the characteristics of
the other financial instrument, when the effects of changes in the liability’s credit risk are recognised in profit or loss.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-1:134 (d) Capital management policies and objectives

SFRS(I) 1-1:135
The group manages its capital to ensure that entities in the group will be able to continue as a going concern while maximising
the return to stakeholders through the optimisation of the debt and equity balance. The group’s overall strategy remains
unchanged from 2021.

The capital structure of the group consists of net debt and equity of the group. Debt is defined by the group as long-term
and short-term borrowings and lease liabilities and convertible loan notes as disclosed in Notes 26, 30 and 32 respectively.
Net debt is defined as debt after deducting cash and cash equivalents (including cash and bank balances in a disposal group
held for sale). Equity includes issued capital, reserves, retained earnings and non-controlling interests.

The group is not subject to any externally imposed capital requirements.

Guidance notes

Where the group discloses information that enables users of its financial statements to evaluate the entity’s objectives,
policies and processes for managing capital, quantitative disclosure should be added. Below is an illustrative disclosure
applicable to entities requiring quantitative disclosure on capital management.

The group’s risk management committee reviews the capital structure on a semi-annual basis. As a part of this review,
the committee considers the cost of capital and the risks associated with each class of capital. The group has a target
gearing ratio of x% - y% determined as the proportion of net debt to equity. The gearing ratio at December 31, 2022 of
xx% (see below) was at below the target range, and has returned to a more typical level of yy% since the reporting date.

Gearing ratio

The gearing ratio at the end of the reporting period was as follows:

Group
2022 2021
$’000 $’000

Debt (i) xxx xxx

Cash and cash equivalents (including cash and bank balances in a
disposal group held for sale) (xxx) (xxx)

Net debt xxx xxx

Equity (ii) xxx xxx

Net debt to equity ratio xx% xx%

(i) Debt is defined as long-term and short-term borrowings, lease liabilities and convertible loan notes (excluding
derivatives and financial guarantee contracts) as detailed in Notes 26, 30 and 32 respectively.

(ii) Equity includes all capital and reserves of the group that are managed as capital.

Illustrative Financial Statements 2022 114

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Disclosures on externally imposed capital requirements

When an entity is subject to externally imposed capital requirements, SFRS(I) 1-1:135 requires disclosures on:
• The nature of those requirements;
• How those requirements are incorporated into the management of capital;
• Any changes in those requirements from the previous period;
• Whether during the period, the entity complied with any externally imposed capital requirements to which it is subject
to; and
• When the entity has not complied with such externally imposed capital requirements, the consequences of such
non-compliance.

Only capital requirements imposed by external regulators are required to be disclosed under SFRS(I) 1-1:135(a)(ii).
Although SFRS(I) 1-1:135(a)(ii) do not provide any further guidance regarding what is meant by ‘externally imposed
capital requirements’, paragraphs BC92 to BC97 of the Basis for Conclusions to IAS 1 effectively narrow the scope of the
requirements to ‘entity-specific requirement[s] imposed on a particular entity by its prudential supervisor or other
regulator’. The entity bases these disclosures on the information provided internally to key management personnel.

SFRS(I) 1-1:135(a) Although disclosure of details regarding loan covenants is not required under SFRS(I) 1-1:135(a)(ii), entities should
consider whether such details should nevertheless be disclosed in line with the requirements in SFRS(I) 1-1:17(c) to
provide additional information to enable users of the financial statements to understand the impact of particular
transactions, other events and conditions on the entity’s financial position and financial performance.

SFRS(I) 1-1:135(a) An example of disclosures required by SFRS(I) 1-1:134 and SFRS(I) 1-1:135 for an entity that is subject to externally
(i),(ii) imposed capital requirements is as follows:

SFRS(I) 1-1:135 The group manages its capital to ensure that entities in the group will be able to continue as a going concern while
(b),(d) maximising the return to stakeholders through the optimisation of the debt and equity balance, and to ensure that all
externally imposed capital requirements are complied with.

The capital structure of the group consists of net debt and equity of the group. Debt is defined by the group as long-term
and short-term borrowings and lease liabilities and convertible loan notes as disclosed in Notes 26, 30 and 32 respectively.
Net debt is defined as debt after deducting cash and cash equivalents (including cash and bank balances in a disposal
group held for sale). Equity includes issued capital, reserves, retained earnings and non-controlling interests.

One of the subsidiaries of the group is required to set aside a minimum amount of X% of profits annually. Such profits are
accumulated in a separate reserve called ‘Statutory Reserves’. The Statutory Reserves may only be distributed to
shareholders upon liquidation of the subsidiary. The group is in compliance with externally imposed capital requirements
for the financial years ended December 31, 2022 and 2021.

SFRS(I) 1-1:135(a) The group’s risk management committee also reviews the capital structure on a semi-annual basis. As a part of this review,
(iii) the committee considers the cost of capital and the risks associated with each class of capital. The committee also ensures
that the group maintains gearing ratios within a set range to comply with the loan covenant imposed by a bank. Based on
recommendations of the committee, the group will balance its overall capital structure through the payment of dividends,
new share issues and share buy-backs as well as the issue of new debt or the redemption of existing debt.

SFRS(I) 1-1:135(c) The group’s overall strategy remains unchanged from 2021.

SFRS(I) 1-1:135(e) [Note - when the entity has not complied with such externally imposed capital requirements, it should disclose the
consequences of such non-compliance]

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

5. Holding company and related company transactions

SFRS(I) 1-24:13 The company is a subsidiary of GAAP Holdings Ltd, incorporated in the Republic of Singapore, which is also the company’s
SFRS(I) 1-1:138(c) ultimate holding company. Related companies in these financial statements refer to members of the holding company’s
group of companies.

Guidance notes

SFRS(I) 1-24:13 Disclosure of name of ultimate controlling party

An entity shall disclose the name of its parent and, if different, the ultimate controlling party. The ultimate controlling party
may or may not be a corporate entity. The requirement to disclose the entity’s ultimate controlling party means that,
where such control is exercised by an individual, or by a group of individuals acting in concert, their identity must be
disclosed.

If neither the entity’s parent nor the ultimate controlling party produces consolidated financial statements available for
public use, the name of the next most senior parent that does so shall also be disclosed.

A possible disclosure may be as follows:

The company is a subsidiary of GAAP International Ltd, incorporated in the Country KLM. The ultimate controlling party is
Mr Ang Beng Choo whose interest in the company is held through his shareholdings in ABC Ltd and XYZ Ltd. The next
senior parent of the company that prepares financial statements for public use is GAAP Holdings Pte Ltd, incorporated in
Singapore.

SFRS(I) 1-24:18 Some of the company’s transactions and arrangements are with its subsidiaries and the effect of these on the basis
determined between the parties is reflected in the separate financial statements of the company. The intercompany balances
are unsecured, interest-free and repayable on demand unless otherwise stated.

Trading transactions

SFRS(I) 1-24:18 During the year, group entities entered into the following trading transactions with related companies that are not members
SFRS(I) 1-24:19 of the group:
Sale of goods Purchases of goods
2022 2021 2022 2021
$’000 $’000 $’000 $’000

GAAP Holdings Ltd 693 582 439 427

Subsidiaries of GAAP Holdings Ltd 1,289 981 897 883

The following amounts were outstanding at the reporting date:

Amounts owed by related companies Amounts owed to related companies

2022 2021 2022 2021
$’000 $’000 $’000 $’000

GAAP Holdings Ltd 209 198 231 139

Subsidiaries of GAAP Holdings Ltd 398 323 149 78

Illustrative Financial Statements 2022 116

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-24:23 Sale of goods to related companies were made at the group’s usual list prices, less average discounts of 5%. Purchases
were made at market price discounted to reflect the quantity of goods purchased and the relationships between the
companies.

SFRS(I) 1-24:18 The amounts outstanding are unsecured and will be settled in cash. No expense has been recognised in the period for
(b),(c),(d) expected credit losses in respect of the amounts owed by related companies.

SFRS(I) 1-24:18 In addition to the above, GAAP Holdings Ltd performed certain administrative services for the company, for which a
SFRS(I) 1-24:19 management fee of $0.2 million (2021 : $0.2 million) was charged and paid, being an appropriate allocation of costs incurred
by relevant administrative departments of GAAP Holdings Ltd.

6. Other related party transactions

SFRS(I) 1-24:18 Some of the group’s transactions and arrangements are with related parties and the effect of these on the basis determined
SFRS(I) 1-24:19 between the parties is reflected in these financial statements. The balances are unsecured, interest-free and repayable on
demand unless otherwise stated.

During the year, group entities entered into the following trading transactions with related parties that are not members of
the group:

Sale of goods Purchases of goods

2022 2021 2022 2021
$’000 $’000 $’000 $’000

Associates 398 291 - -

Joint ventures of an investor who has

significant influence over the group - - 200 198

The following amounts were outstanding at the reporting date:

Amounts owed by related parties Amounts owed to related parties

2022 2021 2022 2021
$’000 $’000 $’000 $’000

Associates 85 152 - -

Joint ventures of an investor who has

significant influence over the group - - - -

The group also has a commitment to inject capital of up to $1.0 million (2021 : $1.0 million) into its associate.

SFRS(I) 1-24:23 Sale of goods to related parties were made at the group’s usual list prices. Purchases were made at market price discounted
to reflect the quantity of goods purchased.

SFRS(I) 1-24:18(b) The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received except that
the convertible loan notes (Note 32) issued during the year is secured by a personal guarantee of a director. No charge has
been made for this guarantee.

SFRS(I) 1-24:18 No expense has been recognised in the period for expected credit losses in respect of the amounts owed by related parties.
(c),(d)

117
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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes

Guarantees given by directors

It is not uncommon for directors to give guarantees in respect of the borrowings of an entity, often without making a
charge to the entity. The provision of such a guarantee will be a related party transaction and should be clearly disclosed
here.

SFRS(I) 1-24:17 Compensation of directors and key management personnel

The remuneration of directors and other members of key management during the year was as follows:

Group 2022 2021

$’000 $’000

Short-term employee benefits 13,681 10,270

Post-employment benefits 1,602 1,391
Other long-term benefits 1,153 1,769
Share-based payments 949 863

17,385 14,293

The remuneration of directors and key management is determined by the remuneration committee having regard to the
performance of individuals and market trends.

Guidance notes – Key management personnel compensation

1. Key management personnel compensation paid by another related entity

The disclosure required is in respect of services provided to the entity. Therefore, where key management personnel are
paid a single salary in respect of services to more than one entity within the group, it will be necessary to allocate the
amounts paid between the services provided to the different group entities for the purposes of disclosure in the separate
financial statements of each individual group entity.

Note: SFRS(I) 1-24 does not mandate inter-company billing arrangements. Therefore, the allocation would be for
disclosure purposes.

2. Non-monetary benefits to key management personnel

For the purposes of SFRS(I) 1-24:18, it would be appropriate to disclose non-monetary benefits granted to key
management personnel. For example, where a member of key management personnel is given, as part of his employment
package, the benefit of staying in a residential property owned by the reporting entity, it would be appropriate to disclose
the depreciation of the property recognised in the period, because that is the amount the entity has recogni sed in profit
or loss in respect of the benefits.

SFRS(I) 1-24 does not require disclosure of fair value of the benefit provided. The entity should consider whether the
amount recognised reflects the nature of the benefit provided. If the fair value of the benefit could be determined reliably,
disclosure of additional information that is relevant to users, including a description of the terms and conditions of the
compensation, would be encouraged.

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December 31, 2022

3. Directors’ and key executives’ remuneration

Where the company is listed, other than the disclosures required by SFRS(I) 1-24 in the financial statements, the issuer
should also make disclosure as recommended in the Code of Corporate Governance in the annual report (i.e. not
necessarily in the financial statements), or otherwise disclose and explain any deviation from the recommendation.

The requirements of the Code of Corporate Governance 2018 on disclosure of remuneration are reproduced below:

Principle
CCG.8 8. The company is transparent on its remuneration policies, level and mix of remuneration, the procedure for setting
remuneration, and the relationships between remuneration, performance and value creation.

Guidelines
CCG.8.1 8.1. The company discloses in its annual report the policy and criteria for setting remuneration, as well as names, amounts
and breakdown of remuneration of:
(a) each individual director and the CEO; and
(b) at least the top five key management personnel (who are not directors or the CEO) in bands no wider than $250,000
and in aggregate the total remuneration paid to these key management personnel.

CCG.8.2 8.2. The company discloses the names and remuneration of employees who are substantial shareholders of the company,
or are immediate family members of a director, the CEO or a substantial shareholder of the company, and whose
remuneration exceeds $100,000 during the year, in bands no wider than $100,000, in its annual report. The disclosure
states clearly the employee's relationship with the relevant director or the CEO or substantial shareholder.

CCG.8.3 8.3. The company discloses in its annual report all forms of remuneration and other payments and benefits, paid by the
company and its subsidiaries to directors and key management personnel of the company. It also discloses details of
employee share schemes.

Please also refer to Code of Corporate Governance 2018 Practice Guidance 8 in relation to Disclosure on Remuneration.

SFRS(I) 1-7:45 7. Cash and cash equivalents

Group Company
2022 2021 2022 2021
$’000 $’000 $’000 $’000

Cash and bank balances 34,759 1,175 2,074 647

Less: Bank overdrafts (Note 26) (1,907) (1,909) - -
Add: Cash and cash equivalents included in a
disposal group held-for-sale - - - -
Cash and cash equivalents
in the statement of cash flows 32,852 (734) 2,074 647

Guidance notes – Disclosures required by SFRS(I) 7

If information about contractual and effective interest rates, maturity dates, foreign currency denomination and fair values
have been presented in Note 4 ‘Financial Instruments, Financial Risks and Capital Management’, it is not necessary to
repeat the same information in this note.

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December 31, 2022

Guidance notes – Restricted cash and cash equivalents

See below for an illustration of disclosures related to a demand deposit subject to third party restrictions:

SFRS(I) 1-7:48 Cash and bank balances of the group include demand deposits of $__ million (2021 : $nil million) that are required to be
maintained as warranty and can be used only to settle future claims, if any, on the completed [Project X]. The contractual
restriction on the use of demand deposits ends on 1 August 2023.

SFRS(I) 7:6 8. Trade and other receivables

SFRS(I) 7:7
Group Company
2022 2021 2022 2021
$’000 $’000 $’000 $’000

Trade receivables 106,515 113,486 - -

Loss allowance (7,540) (4,430) - -
98,975 109,056 - -

Deferred consideration from the disposal of GAAP

Playsystems Limited (Note 50) 23,539 - - -

Other receivables due from holding company (Note 5) 209 198 - -

Other receivables due from related companies (Note 5) 398 323 - -

Other receivables due from associates (Notes 5 and 23) 378 152 - -

Other receivables due from subsidiaries (Notes 5 and 22) - - 89,371 55,895

123,499 109,729 89,371 55,895

Guidance notes – Disclosures required by SFRS(I) 7

If information about contractual and effective interest rates, maturity dates, foreign currency denomination and fair values
have been presented in Note 4 ‘Financial Instruments, Financial Risks and Capital Management’, it is not necessary to
repeat the same information in this note.

SFRS(I) 15:116(a) As at January 1, 2021, trade receivables from contracts with customers amounted to $76.9 million (net of loss allowance of
$4.2 million).

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Trade receivables

The average credit period on sale of goods is 60 days. No interest is charged on the trade receivables.

SFRS(I) 7:35G The group always measures the loss allowance for trade receivables at an amount equal to lifetime ECL. The expected credit
losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and
an analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtors, general economic
conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast
direction of conditions at the reporting date. The group has recognised a loss allowance of 100% against all receivables over
120 days past due because historical experience has indicated that these receivables are generally not recoverable.

SFRS(I) 7:35G(c) The group has significantly increased the expected loss rates for trade receivables from the prior year based on its judgement
of the impact of current economic conditions and the forecast direction at the reporting date. There has been no change in
the estimation techniques during the current reporting period.

SFRS(I) 7:35F(e) The group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty
SFRS(I) 7:35L and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into
bankruptcy proceedings, or when the trade receivables are over two years past due, whichever occurs earlier.

SFRS(I) 7:35M The following table details the risk profile of trade receivables based on the group’s provision matrix. As the group’s historical
SFRS(I) 7:35N, credit loss experience does not show significantly different loss patterns for different customer segments, the provision for
SFRS(I) 9:B5.5.35 loss allowance based on past due status is not further distinguished between the group’s different customer segments.

SFRS(I) 9:B5.5.35 Guidance notes – Segregation by customer base

Depending on the diversity of its customer base, the entity would use appropriate groupings if its historical credit loss
experience shows significantly different loss patterns for different customer segments. Examples of criteria that might be
used to group assets include geographical region, product type, customer rating, collateral or trade credit insurance and
type of customer (such as wholesale or retail).

Group
Trade receivables – days past due
< 30 31 – 60 61 – 90 91 – 120 > 120
2022 Not past due days days days days days Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000

Expected credit loss rate 2% 8% 13% 50% 80% 100%

Estimated total gross

carrying amount at
default 96,014 2,580 1,420 1,856 1,704 2,941 106,515

Lifetime ECL (1,919) (206) (185) (926) (1,363) (2,941) (7,540)

98,975

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December 31, 2022

Group
Trade receivables – days past due
< 30 31 – 60 61 – 90 91 – 120 > 120
2021 Not past due days days days days days Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000

Expected credit loss rate 1% 5% 10% 30% 50% 100%

Estimated total gross

carrying amount at
default 107,225 2,017 283 486 784 2,691 113,486

Lifetime ECL (1,072) (101) (28) (146) (392) (2,691) (4,430)

109,056

SFRS(I) 7:35H The following table shows the movement in lifetime ECL that has been recognised for trade receivables in accordance with
the simplified approach set out in SFRS(I) 9:

Collectively Individually
Group assessed assessed Total
$’000 $’000 $’000

Balance as at January 1, 2021 4,227 - 4,227

Net remeasurement of loss allowance 21 - 21
Amounts written off - - -
Amounts recovered (186) - (186)
Change in loss allowance due to new trade receivables
originated, net of those derecognised due to settlement 368 - 368
Foreign exchange gains or losses - - -
Changes in credit risk parameters - - -

Balance as at December 31, 2021 4,430 - 4,430

Net remeasurement of loss allowance 865 - 865
Amounts written off (460) - (460)
Amounts recovered - - -
Change in loss allowance due to new trade receivables
originated, net of those derecognised due to settlement 1,745 - 1,745
Foreign exchange gains or losses - - -
Changes in credit risk parameters 960 - 960

Balance as at December 31, 2022 7,540 - 7,540

SFRS(I) 7:35L Guidance notes – Amount written off that are still subject to enforcement activity

An entity shall disclose the contractual amount outstanding on financial assets that were written off during the reporting
period and are still subject to enforcement activity. A possible disclosure may be as follows:

The contractual amounts outstanding on trade receivables that were written off during the period but are still subject to
enforcement activities was $__ million (2021 : $__ million).

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Notes to financial statements

December 31, 2022

SFRS(I) 7:35B(b) The following table explains how significant changes in the gross carrying amount of the trade receivables contributed to
SFRS(I) 7:35I changes in the loss allowance:

Group
Increase (Decrease) in
lifetime ECL
2022 2021
$’000 $’000

One customer’s account went from within 30 days past due

as at January 1, 2022 to over 120 days past due as at December 31, 2022 865 -
Customer declared bankruptcy (460) -
Settlement in full by customers that were over 120 days past due - (186)
Origination of new trade receivables net of those settled, as well as increase
in days past due up to 120 days (2021 : 90 days) 1,745 368

Guidance notes – Analysis of loss allowance

SFRS(I) 7:B8D SFRS(I) 7:35H requires an entity to explain the reasons for the changes in the loss allowance during the period. In addition
to the reconciliation from the opening balance to the closing balance of the loss allowance, it may be necessary to provide
a narrative explanation of the changes. This narrative explanation may include an analysis of the reasons for changes in
the loss allowance during the period, including:

• the portfolio composition;

• the volume of financial instruments purchased or originated; and
• the severity of the expected credit losses.

Deferred consideration and other receivables

SFRS(I) 7:35G For purpose of impairment assessment, the deferred consideration and other receivables are considered to have low credit
SFRS(I) 7:35H risk as they are not due for payment at the end of the reporting period and there has been no significant increase in the risk
SFRS(I) 7:35M of default on the receivables since initial recognition. Accordingly, for the purpose of impairment assessment for these
receivables, the loss allowance is measured at an amount equal to 12-month ECL.

In determining the expected credit losses for these receivables, management has taken into account the historical default
experience and the financial position of the counterparties and considering various external sources of actual and forecast
economic information, as appropriate, in estimating the probability of default of each of these financial assets occurring
within their respective loss assessment time horizon, as well as the loss upon default in each case.

SFRS(I) 7:35G(c) There has been no change in the estimation techniques or significant assumptions made during the current reporting period
in assessing the loss allowance for deferred consideration and other receivables.

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December 31, 2022

Guidance notes – Derecognition of trade receivables

Below is an illustrative disclosure applicable to entities that have factored their trade receivables with recourse.

Disclosures based on SFRS(I) 7 Financial Instruments: Disclosures

SFRS(I) 7 requires disclosure for transactions involving transfers of financial assets, where an asset is transferred but is
not derecognised or where an asset is derecognised but the entity continues to have a continuing involvement to the asset
after the sale.

SFRS(I) 7:42A The following is a possible disclosure for factored receivables i.e. where an asset is transferred but is not derecognised.
SFRS(I) 7:42B
SFRS(I) 7:42D During the period, the group transferred $__ million (2021 : $__million) of trade receivables to an unrelated entity.
As part of the transfer, the group provided the transferors a credit guarantee over the expected losses of those receivables.
Accordingly, the group continues to recognise the full carrying amount of the receivables and has recognised the cash
received on the transfer as a secured borrowing (see Note x). At the end of the reporting period, the carrying amount of
the transferred short-term receivables is $__ million. The carrying amount of the associated liability is $__ million.

The transferee of the trade receivables has recourse only on those trade receivables. The fair values of the transferred
receivables and the associated liabilities as at December 31 are as follows:
Group
2022 2021
$’000 $’000

Transferred trade receivables – at fair value xxx xxx

Secured borrowings (Note X) – at fair value yyy yyy

Net position zzz zzz

9. Contract assets

Group
December 31, December 31, January 1,
2022 2021 2021
$’000 $’000 $’000

SFRS(I) 15:116(a) Construction contracts 12,747 12,165 10,345

Installation of software services 2,011 1,874 1,560
14,758 14,039 11,905
Loss allowance (148) (141) (122)
14,610 13,898 11,783

Analysed as:
Current 14,610 13,898 11,783
Non-current - - -
14,610 13,898 11,783

SFRS(I) 15:117 Amounts relating to construction contracts are balances due from customers under construction contracts that arise when
the group receives payments from customers in line with a series of performance related milestones. The group will
previously have recognised a contract asset for any work performed. Any amount previously recognised as a contract asset
is reclassified to trade receivables at the point at which it is invoiced to the customer.

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December 31, 2022

Payment for installation of software services is not due from the customer until the installation services are completed and
therefore a contract asset is recognised over the period in which the installation services are performed to represent the
group’s right to consideration for the services transferred to date.

Guidance notes

SFRS(I) 15:118 SFRS(I) 15:118 contains a requirement to explain the significant changes in the contract asset (and contract liability)
balance during the reporting period. This explanation should include qualitative and quantitative information. Examples of
changes in the contract asset and liability balances may include any of the following:

a) changes due to business combinations;

b) cumulative catch-up adjustments to revenue that affect the corresponding contract asset or contract liability,
including adjustments arising from a change in the measure of progress, a change in an estimate of the transaction
price (including any changes in the assessment of whether an estimate of variable consideration is constrained) or a
contract modification;
c) impairment of a contract asset;
d) a change in the time frame for a right to consideration to become unconditional (i.e. for a contract asset to be
reclassified to a receivable); and
e) a change in the time frame for a performance obligation to be satisfied (i.e. for the recognition of revenue arising
from a contract liability.

SFRS(I) 15:116(a) Entities are required to disclose the opening and closing balances of receivables, contract assets and contract liabilities
from contracts with customers, if not otherwise separately presented or disclosed. Hence, the balances as at January 1, 2021,
being the opening balances of the comparative period, are presented.

SFRS(I) 7:34(a) Management always measures the loss allowance on amounts due from customers at an amount equal to lifetime ECL,
SFRS(I) 7:35G taking into account the historical default experience, the nature of the customer and where relevant, the sector in which
they operate.

SFRS(I) 7:35G(c) There has been no change in the estimation techniques or significant assumptions made during the current reporting period
in assessing the loss allowance for the contract assets.

SFRS(I) 7:35M The following table details the risk profile of amounts due from customers based on the group’s provision matrix. As the
SFRS(I) 7:35N group’s historical credit loss experience does not shows significantly different loss patterns for different customer segments,
SFRS(I) 9:B5.5.35 the provision for loss allowance based on past due status is not further distinguished between the group’s different customer
base.

Group
2022 2021
$’000 $’000

Expected credit loss rate 1% 1%

Estimated total gross carrying amount at default
- amounts not past due 14,758 14,039
Lifetime ECL (148) (141)
Net carrying amount 14,610 13,898

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December 31, 2022

SFRS(I) 7:35H The following table shows the movement in lifetime ECL that has been recognised for contract assets in accordance with the
simplified approach set out in SFRS(I) 9.

Group
2022 2021
$’000 $’000

Balance at beginning of year 141 122

Net increase in loss allowance arising from new amounts recognised
in current year, net of those derecognised upon billing 7 19
Balance at end of year 148 141

SFRS(I) 7:35B(b) There has not been any significant change in the gross amounts of contract assets that has affected the estimation of the
SFRS(I) 7:35I loss allowance.

Guidance notes

SFRS(I) 9:5.5.15 As required by SFRS(I) 9, the entity uses the simplified approach in calculating ECL for contract assets that do not contain
SFRS(I) 9:B5.5.35 a significant financing component. The entity applies the practical expedient to calculate ECL using a provision matrix.
Such a matrix might be supported by historical credit loss experience, adjusted as appropriate to reflect current conditions
and estimates of future economic conditions), for example, based on days past due status.

However, given inherent limitations to develop a provision matrix for contract assets based on days past due status,
depending on the facts and circumstances of the entity and its contract asset portfolios, the entity shall consider historical
loss rates for each category of customers and adjusts to reflect current and forward-looking macroeconomic factors
affecting the ability of the customers to settle the receivables. Depending on the diversity of its customer base, the entity
would use appropriate groupings if its historical credit loss experience shows significantly different loss patterns for different
customer segments. Examples of criteria that might be used to group assets include geographical region, product type,
customer rating, collateral or trade credit insurance and type of customer (such as wholesale or retail).

10. Contract costs

Group
2022 2021
$’000 $’000

SFRS(I) 15:128(a) Costs to obtain contracts 749 735

Costs to obtain contracts relate to incremental commission fees of 2% paid to intermediaries as a result of obtaining
residential property sales contracts. The commission fees are the only cost that the group would not have incurred if the
contract had not been obtained. Whilst the group incurs other costs that are necessary to facilitate a sale, those costs would
have been incurred even if the customer decided not to execute the contract and therefore have not been capitalised.

SFRS(I) 15:127(a) These costs are amortised on a straight–line basis over the period of construction (in general, 2 years) as this reflects the
SFRS(I) 15:127(b) period over which the residential property is transferred to the customer. In 2022, amortisation amounting to $81,000
SFRS(I) 15:128(b) (2021 : $55,000) was recognised as part of the cost of sales in profit or loss. There was no impairment loss in relation to
the costs capitalised.

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December 31, 2022

Guidance notes – Practical expedient on incremental costs of obtaining a contract

SFRS(I) 15:94 As a practical expedient, incremental costs of obtaining a contract may be expensed off when incurred if the amortisation
period of the asset that the entity otherwise would have recognised is one year or less.

SFRS(I) 15:129 When the above practical expedient is applied, the entity shall disclose that fact.

11. Right to returned goods asset

Group
2022 2021
$’000 $’000

SFRS(I) 15:B21(c) Right to returned goods asset 626 672

SFRS(I) 15:126(a) The right to returned goods asset represents the group’s right to recover products from customers where customers exercise
SFRS(I) 15:126(d) their right of return under the group’s 30-day returns policy. The group uses its accumulated historical experience to estimate
the number of returns on a portfolio level using the expected value method.

12. Finance lease receivables

Group
2022 2021
$’000 $’000

SFRS(I) 16:94 Amounts receivable under finance leases

Year 1 13,475 14,454
Year 2 11,670 13,675
Year 3 5,056 11,897
Year 4 - 6,532
Year 5 - -
Year 6 and onwards - -
Undiscounted lease payments 30,201 46,558
Unguaranteed residual values 350 350
Gross investment in the lease 30,551 46,908
Less: Unearned finance income (4,054) (5,745)
Present value of lease payments receivable 26,497 41,163
Impairment loss allowance - -
Net investment in the lease 26,497 41,163

Undiscounted lease payments analysed as:

Recoverable within 12 months 13,475 14,454
Recoverable after 12 months 17,076 32,454
30,551 46,908

Net investment in the lease analysed as:

Recoverable within 12 months 12,713 13,674
Recoverable after 12 months 13,784 27,489
26,497 41,163

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SFRS(I) 16:93 During the year, the finance lease receivables decreased for the following reasons: [qualitative and quantitative explanation
of the significant changes in the carrying amount of the net investment in finance leases].

SFRS(I) 16:92 The group entered into finance leasing arrangements as a lessor for certain electronic equipment. The average term of
finance leases entered into is 5 years. Generally, these lease contracts do not include extension or early termination options.

SFRS(I) 16:92 The group is not exposed to foreign currency risk as a result of the lease arrangements, as all leases are denominated in
SFRS(I) 7:7 SGD. Residual value risk on equipment under lease is not significant, because of the existence of a secondary market with
respect to the equipment.

Guidance notes – Lessor (Lease modification)

SFRS(I) 16:80 Finance lease

For modifications to a finance lease that are not accounted for as a separate lease (i.e. modifications that do not meet
both of the conditions set out in SFRS(I) 16:79), SFRS(I) 16 requires a lessor to account for the modification applying
SFRS(I) 9 unless the lease would have been classified as an operating lease if the modification had been in effect at the
inception date.

SFRS(I) 16:87 Operating lease

A lessor shall account for a modification to an operating lease as a new lease from the effective date of the modification,
considering any prepaid or accrued lease payments relating to the original lease as part of the lease payments for the new
lease.

SFRS(I) 16:91 The following table presents the amounts included in profit or loss.

Group
2022 2021
$’000 $’000

SFRS(I) 16:90(a)(i) Selling profit (loss) for finance leases - -

SFRS(I) 16:90(a)(ii) Finance income on the net investment in finance leases 1,572 2,003
SFRS(I) 16:90(a)(iii) Income relating to variable lease payments not included in the
net investment in finance leases - -

The group’s finance lease arrangements do not include variable payments.

SFRS(I) 7:7 The average effective interest rate contracted is approximately 6.5% (2021 : 6.5%) per annum.

SFRS(I) 7:34(a) Management estimates the loss allowance on finance lease receivables at the end of the reporting period at an amount equal
to lifetime ECL. None of the finance lease receivables at the end of the reporting period is past due, and taking into account
the historical default experience and the future prospects of the industries in which the lessees operate, together with the
value of collateral held over these finance lease receivables, management consider that no finance lease receivable is
impaired.

SFRS(I) 7:35G(c) There has been no change in the estimation techniques or significant assumptions made during the current reporting period
in assessing the loss allowance for finance lease receivables.

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December 31, 2022

Guidance notes – Disclosures required by SFRS(I) 7

SFRS(I) 16:94 requires the lessor to disclose a maturity analysis of the undiscounted lease payments on an annual basis
for the first 5 years and a total of the amounts for the remaining years.

If information about contractual and effective interest rates, maturity dates, foreign currency denomination and fair values
have been presented in Note 4 ‘Financial Instruments, Financial Risks and Capital Management’, it is not necessary to
repeat the same information in this note.

SFRS(I) 7:6 13. Investments in financial assets

SFRS(I) 7:7
Group
Current Non-current
2022 2021 2022 2021
$’000 $’000 $’000 $’000

SFRS(I) 7:8(h) Investments in debt instruments classified

as at FVTOCI (i)

Corporate bonds - - 8,750 8,730

SFRS(I) 7:8(h) Investments in equity instruments designated

as at FVTOCI (ii)

SFRS(I) 7:11A(a)-(c) Shares - - 14,560 14,514

SFRS(I) 7:8(a) Financial assets mandatorily measured at FVTPL (iii)

Shares 13,074 12,490 - -

SFRS(I) 7:8(f) Financial assets measured at amortised cost (iv)

Debentures - - 2,300 2,300

Listed redeemable notes - - 25,255 18,605
- - 27,555 20,905

Total Investments in financial assets 13,074 12,490 50,865 44,149

SFRS(I) 9:4.1.2A (i) The investments in listed corporate bonds issued by CBond Limited are paying 7% of interest per annum and the bonds
SFRS(I) 7:42J(a) will mature in July 2025. At maturity the group will receive nominal amount of $9.0 million. The corporate bonds are
held by the group within a business model whose objective is both to collect their contractual cash flows which are
solely payments of principal and interest on the principal amount outstanding and to sell these financial assets. Hence the
corporate bonds are classified as at FVTOCI. See below for impairment assessment.

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SFRS(I) 12:9(d) (ii) The group holds 20% of the ordinary share capital of RCorp Limited, an entity involved in the commercial property
development. Management does not consider that the group is able to exercise significant influence over RCorp Limited
as the other 80% of the ordinary share capital is held by one shareholder, who also manages the day-to-day operations
of that entity. The fair value of the investment was $13.6 million (2021 : $13.5 million).

At December 31, 2022, the group also holds interests in companies that are engaged in research and development
activities and/or the commercial application of this knowledge. The fair value of the investment was $1 .0 million
(2021 : $1.0 million).

The valuation methodology for these investments is disclosed in Note 4(c)(i).

The dividends received in respect of these investments are disclosed in Note 42.

SFRS(I) 7:11A(b) These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term
SFRS(I) 7:42J(a) strategic purposes. Accordingly, management has elected to designate these investments in equity instruments as at
FVTOCI as they believe that recognising short-term fluctuations in these investments’ fair value in profit or loss would
not be consistent with the group’s strategy of holding these investments for long-term purposes and realising their
performance potential in the long run.

SFRS(I) 7:11B No shares have been disposed of during the current reporting period.

(iii) The group has also invested in a portfolio of listed shares which are held for trading.

(iv) The debentures return interest of 3% per annum payable monthly, and mature in September 2026. The counterparties
have a minimum BBB- credit rating. See below for impairment assessment.

The group holds listed redeemable notes returning 2.2% per annum. The notes are redeemable at par value from
February 2027 to June 2032. The notes are held with a single counterparty with an AA credit rating. The group holds
no collateral over these notes. See below for impairment assessment.

The debentures and redeemable notes are held by the group within a business model whose objective is to collect their
contractual cash flows which are solely payments of principal and interest on the principal amount outstanding. Hence
all of those financial assets are classified as at amortised cost.

The fair value of the investments carried at amortised cost is disclosed in Note 4(c)(iii).

Guidance notes – Disclosures required by SFRS(I) 7

If information about contractual and effective interest rates, maturity dates, foreign currency denomination and fair values
have been presented in Note 4 ‘Financial Instruments, Financial Risks and Capital Management’, it is not necessary to
repeat the same information in this note.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Impairment of financial assets

SFRS(I) 7:35F(a)(i) For the purposes of impairment assessment, the corporate bonds, investments in redeemable notes and debentures are
SFRS(I) 7:35G considered to have low credit risk as the counterparties to these investments have a minimum BBB- credit rating.
Accordingly, for the purpose of impairment assessment for these financial assets, the loss allowance is measured at an
amount equal to 12-month ECL.

In determining the expected credit losses for these assets, management has taken into account the historical default
experience, the financial position of the counterparties, as well as the future prospects of the industries in which the issuers
of the corporate bonds, redeemable notes and debentures operate obtained from economic expert reports, financial analyst
reports and considering various external sources of actual and forecast economic information, as appropriate, in estimating
the probability of default of each of these financial assets occurring within their respective loss assessment time horizon,
as well as the loss upon default in each case.

SFRS(I) 7:35F(a) There has been no change in the estimation techniques or significant assumptions made during the current reporting period
SFRS(I) 7:35G(c) in assessing the loss allowance for these financial assets.

SFRS(I) 7:35M Note 4(b)(iv) details the gross carrying amount, loss allowance as well as the measurement basis of expected credit losses
for each of these financial assets by credit risk rating grades.

SFRS(I) 7:35H The following table shows the movement in expected credit losses that has been recognised for the respective financial
assets.

12-month ECL
Redeemable Debentures
Group notes
$’000 $’000

Balance as at January 1, 2021 - -

SFRS(I) 7:35B(b) Increase in loss allowance arising from new financial assets
SFRS(I) 7:35I recognised in the year - -
Decrease in loss allowance from derecognition of financial assets in the year - -

Balance as at December 31, 2021 - -

SFRS(I) 7:35B(b) Increase in loss allowance arising from new financial assets
SFRS(I) 7:35I recognised in the year - -
Decrease in loss allowance from derecognition of financial assets in the year - -

Balance as at December 31, 2022 - -

The loss allowance for the corporate bonds measured at FVTOCI is recognised in other comprehensive income.
The movement in loss allowance is disclosed in Note 38.

Guidance notes – Impairment assessment on investments in equity instruments by SFRS(I) 9

SFRS(I) 9 states that investments in equity instruments are not subject to impairment assessment, because these
investments are now only measured at FVTPL or FVTOCI without recycling of fair value changes to profit or loss.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:6 14. Derivative financial instruments

SFRS(I) 7:7
Group
2022 2021
Assets Liabilities Assets Liabilities
$’000 $’000 $’000 $’000

SFRS(I) 7:8(a) Derivatives that are designated and effective as

hedging instruments carried at fair value:

Foreign currency forward contracts 2,466 (273) 2,338 -

Interest rate swaps 1,779 - - -

Held for trading derivatives that are not designated

in hedge accounting relationships:

Interest rate swap - - - -

4,245 (273) 2,338 -

Analysed as:
Current 2,466 (273) 2,338 -
Non-current 1,779 - - -

4,245 (273) 2,338 -

Guidance notes – Disclosures required by SFRS(I) 7

If information about contractual and effective interest rates, maturity dates, foreign currency denomination and fair values
have been presented in Note 4 ‘Financial Instruments, Financial Risks and Capital Management’, it is not necessary to
repeat the same information in this note.

SFRS(I) 7:33 Foreign currency forward contracts

SFRS(I) 7:34
The group enters into foreign currency forward contracts to manage the foreign currency risk associated with anticipated
sales and purchase transactions.

SFRS(I) 7:22B For hedges of highly probable forecast sales and purchases, as the critical terms (i.e. the notional amount, life and
underlying) of the foreign currency forward contracts and their corresponding hedged items are the same, the group
performs a qualitative assessment of effectiveness and it is expected that the value of the forward contracts and the value
of the corresponding hedged items will systematically change in opposite direction in response to movements in the
underlying exchange rates. The group uses the hypothetical derivative method for the hedge effectiveness assessment and
measurement of hedge ineffectiveness.

SFRS(I) 7:23D [Disclose the sources of hedge ineffectiveness in the hedging relationship by risk category, if any.]
SFRS(I) 7:23E The main source of hedge ineffectiveness in these hedging relationships is the effect of the counterparty and the group’s
own credit risk on the fair value of the forward contracts, which is not reflected in the fair value of the hedged item
attributable to changes in foreign exchange rates. No other sources of ineffectiveness emerged from these hedging
relationships.

Illustrative Financial Statements 2022 132

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Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:23B The following tables detail the foreign currency forward contracts outstanding at the end of the reporting period, as well as
SFRS(I) 7:24A(b) information regarding their related hedged items. Foreign currency forward contract assets and liabilities are presented in
the line ‘Derivative financial instruments’ (either as assets or as liabilities) within the consolidated statement of financial
position.

Change in fair
Notional value for Carrying amount
Average value: Notional recognising of the hedging
SFRS(I) 7:24A Hedging instruments exchange Foreign value: Local hedge instruments
(a),(c),(d) - outstanding contracts rate currency currency ineffectiveness assets (liabilities)
FC’000 $’000 $’000 $’000
Cash flow hedges
Group

2022

Sell US dollars
Less than 3 months 1.4 330,000 462,000 293 2,466
Buy Euro
Less than 3 months 1.5 22,400 33,600 (438) (273)

(145) 2,193

2021

Sell US dollars
Less than 3 months 1.4 187,500 262,500 637 2,173
Buy Euro
Less than 3 months 1.6 49,320 78,900 49 165

686 2,338

Balance in cash flow hedge

reserve/foreign exchange
Balance in cash flow hedge translation reserve arising
Change in value used for reserve/foreign exchange from hedging relationships for
calculating hedge translation reserve for which hedge accounting is no
SFRS(I) 7:24B(b) Hedged items ineffectiveness continuing hedges longer applied
2022 2021 2022 2021 2022 2021
$’000 $’000 $’000 $’000 $’000 $’000
Cash flow hedges
Group

Forecast sales (i) (183) (637) 1,344 1,798 - -

Forecast purchases (ii) 328 (49) 24 78 - -

145 (686) 1,368 1,876 - -

SFRS(I) 7:21A (i) The group expects to supply goods to customers in the United States. The expected sales are highly probable. The group
has entered into foreign currency forward contracts (for terms not exceeding 3 months) to hedge the exchange rate risk
arising from these anticipated future transactions. It is anticipated that the sales will take place during the first 3 months of
the next financial year, at which time the amount deferred in equity will be reclassified to profit or loss.

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Notes to financial statements

December 31, 2022

(ii) The group expects to purchase raw materials from suppliers in Europe. The expected purchases are highly probable.
The group has entered into foreign currency forward contracts (for terms not exceeding 3 months) to hedge the exchange
rate risk arising from these anticipated future purchases. It is anticipated that the purchases will take place during the first 3
months of the next financial year at which time the amount deferred in equity will be removed from equity and included in
the carrying amount of the raw materials. It is anticipated that the raw materials will be converted into inventory and sold
within 12 months after purchase.

The following tables details the effectiveness of the hedging relationships and the amounts reclassified from hedging reserve
to profit or loss:

Change in the fair

value of hedging Line item in profit or loss in
instrument recognised Hedge ineffectiveness which hedge ineffectiveness is
SFRS(I) 7:24C(b) in OCI recognised in profit or loss included
2022 2021 2022 2021
$’000 $’000 $’000 $’000
Cash flow hedges
Group

Forecast sales 183 637 - - Other gains and losses

Forecast purchases (328) 49 - - Other gains and losses

(145) 686 - -

Amount reclassified to Amount reclassified to

profit or loss profit or loss
SFRS(I) 7:24C(b) Due to hedged future Line item in profit or Line item in profit or
cash flows being no longer loss affected by the Due to hedged item loss affected by the
expected to occur (i) reclassification affecting profit or loss reclassification
2022 2021 2022 2021
$’000 $’000 $’000 $’000
Cash flow hedges
Group

Forecast sales (85) - Other gains and losses (294) (78) Revenue

Forecast purchases - - Other gains and losses 16 (22) Cost of inventories

(85) - (278) (100)

SFRS(I) 7:23F (i) At the start of the third quarter of 2022, the group reduced its forecast on sales of electronic equipment to United States
due to increased local competition and higher shipping costs. The group had previously hedged $270 million of future sales
of which $20 million are no longer expected to occur, and $250 million remains highly probable. Accordingly, the group has
reclassified $85,000 of gains on foreign currency forward contracts relating to forecast transactions that are no longer
expected to occur from the cash flow hedge reserve to profit or loss.

Guidance notes – Information on foreign currency forward contracts

The table above provides an example of summary quantitative data about exposure to foreign exchange risks at the end
of the reporting period that an entity may provide internally to key management personnel. Other presentations may also
be appropriate.

Illustrative Financial Statements 2022 134

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:22A Interest rate swap contracts

SFRS(I) 7:22B
SFRS(I) 7:33 Under interest rate swap contracts, the group agrees to exchange the difference between fixed and floating rate interest
SFRS(I) 7:34 amounts calculated on agreed notional principal amounts. Such contracts enable the group to mitigate the risk of changing
interest rates on the cash flow exposures on the issued variable rate debt. The fair value of interest rate swaps at the
reporting date is determined by discounting the future cash flows using the curves at the reporting date and the credit risk
inherent in the contract and is disclosed below. The average interest rate is based on the outstanding balances at the end
of the reporting period.

SFRS(I) 7:22B As the critical terms of the interest rate swap contracts and their corresponding hedged items are the same, the group
performs a qualitative assessment of effectiveness and it is expected that the value of the interest rate swap contracts and
the value of the corresponding hedged items will systematically change in opposite direction in response to movements in
the underlying interest rates.

SFRS(I) 7:23D [Disclose the sources of hedge ineffectiveness in the hedging relationship by risk category, if any.]
SFRS(I) 7:23E The main source of hedge ineffectiveness in these hedge relationships is the effect of the counterparty and the group’s own
credit risk on the fair value of the interest rate swap contracts, which is not reflected in the fair value of the hedged ite m
attributable to the change in interest rates. No other sources of ineffectiveness emerged from these hedging relationships.

SFRS(I) 7:23B The following tables detail various information regarding interest rate swap contracts outstanding at the end of the reporting
SFRS(I) 7:24A(b) period and their related hedged items. Interest rate swap contract assets and liabilities are included in the line ‘Derivative
financial instruments’ (either as assets or as liabilities) within the consolidated statement of financial position.

Change in fair
Hedging instruments Average value used for Carrying amount of the
SFRS(I) 7:24A - outstanding receive floating, contracted fixed Notional principal calculating hedge hedging instrument
(a),(c),(d) pay fixed contracts interest rate value ineffectiveness assets (liabilities)
% $’000 $’000 $’000
Cash flow hedges
Group

2022

2 to 5 years 7 200,000 1,779 1,779

Balance in cash flow

Notional amount Change in value Balance in cash hedge reserve arising from
of the hedged used for flow hedge hedging relationships for
SFRS(I) 7:24B(b) item assets calculating hedge reserve for which hedge accounting is
Hedged items (liabilities) ineffectiveness continuing hedges no longer applied
$’000 $’000 $’000 $’000
Cash flow hedges
Group

2022

Variable rate borrowings (200,000) (1,779) 1,584 -

(Note there is no interest rate swap and variable rate borrowings designated as cash flow hedges in 2021, hence
comparative not provided)

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December 31, 2022

SFRS(I) 7:23C The following table details the effectiveness of the hedging relationships and the amounts reclassified from hedging reserve
SFRS(I) 7:23E to profit or loss:

Amount reclassified to
profit or loss
Line item in Line item in
Current period Amount of profit or loss Due to hedged profit or loss in
hedging gains hedge in which future cash which
(losses) ineffectiveness hedge flows being no Due to hedged reclassification
recognised in recognised in ineffectiveness longer expected item affecting adjustment is
Hedged items OCI profit or loss is included to occur profit or loss included
2022 2021 2022 2021 2022 2021 2022 2021
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cash flow hedges
Group

Variable rate Other gains

borrowings 1,779 - - - and losses - - (195) - Finance costs

The interest rate swaps settle on a semi-annually basis. The floating rate on the interest rate swaps is based on SORA. The
group will settle the difference between the fixed and floating interest rate on a net basis.

SFRS(I) 7:22A All interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are designated as
SFRS(I) 7:23A cash flow hedges to reduce the group’s cash flow exposure resulting from variable interest rates on borrowings. The interest
rate swaps and the interest payments on the loan occur simultaneously and the amount accumulated in equity is reclassified
to profit or loss over the period that the floating rate interest payments on debt affect profit or loss.

Guidance notes – Information on interest rate swaps

The tables above provide an example of summary quantitative data about exposure to interest rate risks at the end of the
reporting period and the use of interest rate swaps that an entity may provide internally to key management personnel.
Other presentations may also be appropriate.

Illustrative Financial Statements 2022 136

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Master Netting Agreements

To include the following disclosure if the group has entered into master netting agreements:

SFRS(I) 7:13B The group has entered into master netting agreements with the following counterparties: [state the name]. Derivatives
SFRS(I) 7:13C subject to offsetting, master netting agreements and any collateral pledged or received are presented below.

Group
2022 2021
$’000 $’000
Counterparty A:
Derivative assets xx xx
Derivative liabilities xx xx
Net amount of financial assets (liabilities) presented in the
statement of financial position xx xx
Cash collateral (received) paid xx xx

Net amount xx xx

Counterparty B:
Derivative assets xx xx
Derivative liabilities xx xx

Net amount xx xx

The derivative asset and liability with Counterparty A meet the offsetting criteria in SFRS(I) 1-32. Consequently, the gross
derivative liability is set off against the gross derivative asset, resulting in the presentation of a net derivative asset of
$__ million in the group’s statement of financial position.

Cash collateral has also been received from Counterparty A for a portion of the net derivative asset ($__ million).
The cash collateral of $__ million does not meet the offsetting criteria in SFRS(I) 1-32, but it can be set off against the
net amount of the derivative asset and derivative liability in the case of default and insolvency or bankruptcy, in accordance
with associated collateral arrangements.

The derivative asset and liability with Counterparty B do not meet the offsetting criteria in SFRS(I) 1-32. Consequently,
the gross amount of the derivative asset ($__ million) and gross amount of derivative liability ($__ million) are presented
separately in the group’s statement of financial position.

The group did not enter into any other enforceable netting arrangements than discussed above.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-2:36(b) 15. Inventories

Group
2022 2021
$’000 $’000

SFRS(I) 1-2:37 Raw materials 84,413 80,504

SFRS(I) 1-2:37 Work-in-progress 2,578 1,893
SFRS(I) 1-2:37 Finished goods 29,927 25,523
116,918 107,920
Classified as part of a disposal group held for sale (Note 16) 202 -

117,120 107,920

The cost of inventories recognised as an expense includes $2.3 million (2021 : $1.9 million,) in respect of write-downs of
SFRS(I) 1-2:36 inventory to net realisable value, and has been reduced by $0.5 million (2021 : $0.4 million) in respect of the reversal of
(e)-(g) such write-downs. Previous write-downs have been reversed as a result of increased sales price in certain markets.

SFRS(I) 1-1:61 Inventories of $1.3 million (2021 : $0.9 million) are expected to be recovered after more than twelve months.

SFRS(I) 1-2:36(h) Inventories with carrying amounts of $26.4 million (2021 : $19.3 million) have been pledged as security for certain of the
group’s bank overdrafts.

Guidance notes – Reversal of write-downs

SFRS(I) 1-2:36 The reversal of any write-down of inventories shall be disclosed in the financial statements along with the circumstances
(f),(g) or events that led to the reversal of the write-down.

For example:
Due to an increase in the demand for certain goods and a result of changes in consumer preferences, the group reversed
$__ million, being part of an inventory write-down made in 2021, to the current year profit or loss. The reversal is included
in ‘Cost of Sales’.

Other reasons could also include having inventories sold above carrying amounts.

Illustrative Financial Statements 2022 138

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 5:41 16. Assets classified as held for sale

On December 20, 2022, the board of directors resolved to dispose of one of the group’s production lines for electronic goods.
Negotiations with several interested parties have subsequently taken place. The assets and liabilities attributable to the
production line, which are expected to be sold within 12 months, have been classified as a disposal group held for sale and
presented separately in the statement of financial position. The operations are included in the group’s electronic equipment
activities for segment reporting purposes (Note 41).

The proceeds of disposal are expected to substantially exceed the carrying amount of the related net assets and accordingly
no impairment loss has been recognised on the classification of this disposal group as held for sale.

SFRS(I) 5:38 The major classes of assets and liabilities comprising the disposal group classified as held for sale are as follows:

Group
2022
$’000

Goodwill 22
Property, plant and equipment 1,698
SFRS(I) 1-2:36(c) Inventories 202
Total assets classified as held for sale 1,922
Trade and other payables, and total liabilities directly associated with assets classified as
held for sale (247)

Net assets of disposal group 1,675

Guidance notes – Assets classified as held for sale

SFRS(I) 5:41(d) 1. For an entity presenting segment information in accordance with SFRS(I) 8 Operating Segments, the entity discloses
the reportable segment in which the non-current asset (or disposal group) is presented in accordance with SFRS(I) 8.

2. SFRS(I) 5 Non-current Assets Held for Sale and Discontinued Operations specifies the disclosures required in respect
of assets (or disposal groups) classified as held for sale or discontinued operations. Disclosures in other SFRS(I)s do
not apply to such assets (or disposal groups) unless:

• Those SFRS(I)s specifically require disclosures in respect of non-current assets (or disposal groups) classified as
held for sale or discontinued operations (e.g. SFRS(I) 1-16 Property, Plant and Equipment); or

• The disclosures relate to the measurement of assets or liabilities within a disposal group that are outside the scope
of SFRS(I) 5’s measurement requirements and the information is not disclosed elsewhere in the financial
statements (e.g. measurement of financial instruments in accordance with SFRS(I) 9 Financial Instruments).

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

17. Property, plant and equipment

Properties
Land and under Plant and
buildings construction equipment Total
$’000 $’000 $’000 $’000
Group

Cost or valuation:
SFRS(I) 1-16:73 At January 1, 2021 448,096 74,002 75,572 597,670
(d),(e)
SFRS(I) 1-16:74(b) Additions - 3,698 30,107 33,805
Exchange differences (1,569) - (142) (1,711)
Disposals - - (5,000) (5,000)
Revaluation decrease (12,745) - - (12,745)
At December 31, 2021 433,782 77,700 100,537 612,019

Additions - 7,260 64,985 72,245

Acquired on acquisition of a subsidiary - - 8,907 8,907
Exchange differences 2,103 - 972 3,075
Disposal of a subsidiary - - (22,402) (22,402)
Disposals - - (6,413) (6,413)
Reclassified as held for sale - - (3,400) (3,400)
Revaluation increase 40,060 - - 40,060
At December 31, 2022 475,945 84,960 143,186 704,091

SFRS(I) 1-16:73(a) Comprising:

December 31, 2021
At cost - 77,700 100,537 178,237
SFRS(I) 13:93(e) At valuation 433,782 - - 433,782
SFRS(I) 1-16:77 433,782 77,700 100,537 612,019

December 31, 2022

At cost - 84,960 143,186 228,146
SFRS(I) 13:93(e) At valuation 475,945 - - 475,945
SFRS(I) 1-16:77 475,945 84,960 143,186 704,091

Guidance notes – Revaluation model for property, plant and equipment

SFRS(I) 1-16:35 SFRS(I) 1-16 clarifies that when an item of property, plant and equipment is revalued, any accumulated depreciation at
(a),(b) the date of the revaluation is treated in one of the following ways:

(a) the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount of
the asset. For example, the gross carrying amount may be restated by reference to observable market data or it
may be restated proportionately to the change in the carrying amount. The accumulated depreciation at the date of
the revaluation is adjusted to equal the difference between the gross carrying amount and the carrying amount of
the asset after taking into account accumulated impairment losses; or

(b) the accumulated depreciation is eliminated against the gross carrying amount of the asset.

Illustrative Financial Statements 2022 140

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Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Properties
Land and under Plant and
buildings construction equipment Total
$’000 $’000 $’000 $’000
Group

Accumulated depreciation:
At January 1, 2021 - - 39,331 39,331
Depreciation 10,694 - 8,348 19,042
Exchange differences (794) - (102) (896)
Eliminated on disposals - - (1,000) (1,000)
Eliminated on revaluation (9,900) - - (9,900)
At December 31, 2021 - - 46,577 46,577

Depreciation 13,172 - 16,695 29,867

Exchange differences 51 - 927 978
Eliminated on disposal of a subsidiary - - (12,277) (12,277)
Eliminated on disposals - - (5,614) (5,614)
Assets reclassified as held for sale - - (1,702) (1,702)
Eliminated on revaluation (13,223) - - (13,223)
At December 31, 2022 - - 44,606 44,606

Impairment:
At January 1, 2021 - - - -
Impairment loss - - - -
At December 31, 2021 - - - -

SFRS(I) 1-36:126(a) Impairment loss - - 4,130 4,130

At December 31, 2022 - - 4,130 4,130

Carrying amount:
At December 31, 2022 475,945 84,960 94,450 655,355

At December 31, 2021 433,782 77,700 53,960 565,442

Guidance notes –Property, plant and equipment subject to operating lease as a lessor

SFRS(I) 16:95 Although not illustrated in this set of illustrative financial statements, for items of property, plant and equipment which
are subject to an operating lease, a lessor should apply the disclosure requirements of SFRS(I) 1-16.

For this purpose, each class of property, plant and equipment should be segregated into assets subject to operating leases
and assets not subject to operating leases i.e. the disclosures required by SFRS(I) 1-16 should be provided separately for
assets subject to an operating lease (by class of underlying asset) and owned assets held and used by the lessor.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Fair value measurement of the group’s freehold land and buildings

SFRS(I) 1-16:77 The group’s freehold land and buildings are stated at their revalued amounts, being the fair value at the date of revaluation,
(a),(b) less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value measurements
of the group’s freehold land and buildings as at December 31, 2022 and 2021 were performed by Messrs. Low, Poh & Koh,
independent valuers not connected with the group, who have appropriate qualifications and recent experience in the fair
value measurement of properties in the relevant locations. The valuation conforms to International Valuation Standards and
was based on recent market transactions on arm’s length terms for similar properties.

SFRS(I) 13:91(a) The fair value of the freehold land was determined [based on the market comparable approach that reflects recent
SFRS(I) 13:93(d) transaction prices for similar properties/other methods (describe)].
SFRS(I) 13:93(h)(i)
The fair value of the buildings was determined using [the cost approach that reflects the cost to a market participant to
construct assets of comparable utility and age, adjusted for obsolescence/other methods (describe)]. [The significant inputs
include the estimated construction costs and other ancillary expenditure of approximately $__ million (2021 : approximately
$__ million), and a depreciation factor applied to the estimated construction cost of approximately xx% (2021 :
approximately xx%). An increase in the depreciation factor would result in a decrease in the fair value of the buildings, and
an increase in the estimated construction costs would result in an increase in the fair value of the buildings, and vice versa.]

There has been no change to the valuation technique during the year.

SFRS(I) 13:93 Details of the group’s freehold land and buildings and information about the fair value hierarchy as at the end of the reporting
(a),(b) period are as follows:

Level 2 Level 3 Fair value

$’000 $’000 $’000
2022

Freehold land - 381,100 381,100

Buildings - 94,845 94,845

- 475,945 475,945

2021

Freehold land - 329,200 329,200

Buildings - 104,582 104,582

- 433,782 433,782

Illustrative Financial Statements 2022 142

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes

The categorisation of fair value measurements into the different levels of the fair value hierarchy depends on the degree
to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value
measurement. The above categorisations are for illustrative purposes only. It is worth noting the following points:

• The classification into the 3-level hierarchy is not an accounting policy choice. For land and buildings, given their
unique nature, it is extremely rare that the fair value measurement would be identified as a Level 1 measurement.
Whether the fair value measurement in its entirety should be classified into Level 2 or Level 3 would depend on the
extent to which the inputs and assumptions used in arriving at the fair value are observable. In many situations where
valuation techniques (with significant unobservable inputs) are used in estimating the fair value of the real estate
properties, the fair value measurement as a whole would be classified as Level 3.

• The level within which the fair value measurement is categorised bears no relation to the quality of the valuation.
For example, the fact that a real estate property is classified as a Level 3 fair value measurement does not mean that
the property valuation is not reliable – it merely indicates that significant unobservable inputs have been used and
significant judgement was required in arriving at the fair value.

SFRS(I) 13:95 Where there had been a transfer between different levels of the fair value hierarchy, the group should disclose the reasons
for the transfer and the group’s policy for determining when transfers between levels are deemed to have occurred
(for example, at the beginning or end of the reporting period or at the date of the event that caused the transfer).

SFRS(I) 1-16:77(e) Had the group’s freehold land and buildings (other than land and buildings classified as held for sale or included in a disposal
group) been measured on a historical cost basis, their carrying amount would have been as follows.

2022 2021
$’000 $’000

Freehold land 299,200 299,200

Buildings 81,702 94,925

380,902 394,125

At December 31, 2022, the group had entered into contractual commitments for the acquisition of property, plant and
equipment amounting to $10.0 million (2021 : $20.1 million).

Impairment losses recognised during the year

SFRS(I) 1-36:130 During the year, the group carried out a review of the recoverable amount of a manufacturing plant and the related
(a)-(g) equipment, having regard to its ongoing programme of modernisation and the introduction of new product lines.
SFRS(I) 1-36:126(a)
These assets are used in the group’s electronic goods reportable segment. The review led to the recognition of an impairment
loss of $4.1 million (2021 : $Nil) that has been recognised in profit or loss and included in the [other expenses/cost of sales]
line item. The group also estimated the fair value less costs of disposal of the manufacturing plant and the related equipment,
which is based on the recent market prices of assets with similar age and obsolescence. The fair value less costs of disposal
is less than the value in use and hence the recoverable amount of the relevant assets has been determined on the basis of
their value in use. The manufacturing plant and the related equipment were impaired to their recoverable amount based on
value in use of $11.5 million, which is their carrying value at year end.

The discount rate used in measuring value in use was 9% per annum. No impairment assessment was performed in 2021
as there was no indication of impairment.

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Notes to financial statements

December 31, 2022

Assets pledged as security

SFRS(I) 1-16:74(a) Freehold land and buildings with a carrying amount of $426.0 million (2021 : $380.2 million) have been pledged to secure
borrowings of the group (Note 26). The group is not allowed to pledge these assets as security for other borrowings or to
sell them to another entity.

Guidance notes – Property, plant and equipment

LM 1207(11)(a) 1. Details of properties

Where the company is listed, in respect of land and buildings, a breakdown of the value in terms of freehold and leasehold
shall be disclosed in the annual report. Where properties have been revalued, the portion of the aggregate value of land
and buildings that is based on valuation as well as the valuation date shall be stated. The valuation of real property must
be carried out by a property valuer in accordance with the property valuation standards. Where the aggregate value for
all properties for development or sale held by the group represents more than 15% of the value of the consolidated net
tangible assets, or contributes more than 15% of the consolidated pre-tax operating profit, the issuer must disclose the
following information as a note to the financial statements:

(i) A brief description and location of the property;

(ii) If in the course of construction, the stage of completion as at the date of the financial statements and the expected
completion date;

(iii) The existing use;

(iv) The site and gross floor area of the property; and

(v) The percentage interest in the property.

Provided that if, in the opinion of the directors, the number of such properties is such that compliance with this requirement
would result in particulars of excessive length being given, compliance is required only for properties, which in the opinion
of the directors, are material.

SFRS(I) 1-36:130 2. Impairment disclosures

(c)(ii) An entity that reports segment information in accordance with SFRS(I) 8 Operating Segments discloses the reportable
segment that the asset belongs to.

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

18. Right-of-use assets

Leasehold land Plant and

and buildings equipment IT equipment Total
$’000 $’000 $’000 $’000
Group

Cost:
At January 1, 2021 1,630 1,591 754 3,975
Additions 1,200 1,196 - 2,396
At December 31, 2021 2,830 2,787 754 6,371
Additions 860 1,030 - 1,890
At December 31, 2022 3,690 3,817 754 8,261

Accumulated depreciation:
At January 1, 2021 1,360 500 220 2,080
SFRS(I) 16:53(a) Depreciation 270 450 178 898
At December 31, 2021 1,630 950 398 2,978
SFRS(I) 16:53(a) Depreciation 641 676 178 1,495
At December 31, 2022 2,271 1,626 576 4,473

Carrying amount:
SFRS(I) 16:53(j) At December 31, 2022 1,419 2,191 178 3,788

SFRS(I) 16:53(j) At December 31, 2021 1,200 1,837 356 3,393

Guidance notes – Disclosure requirements

In addition to the disclosures required in SFRS(I) 16 paragraphs 53–58, a lessee is required to disclose additional
qualitative and quantitative information about its leasing activities necessary to meet the disclosure objective in SFRS(I)
16 paragraph 51. This additional information may include, but is not limited to, information that helps users of financial
statements to assess:

• the nature of the lessee’s leasing activities;

• future cash outflows to which the lessee is potentially exposed that are not reflected in the measurement of lease
liabilities. This includes exposure arising from:
- variable lease payments;
- extension options and termination options;
- residual value guarantees ; and
- leases not yet commenced to which the lessee is committed.

• restrictions or covenants imposed by leases; and

• sale and leaseback transactions.

SFRS(I) 16:52 The group leases several assets including leasehold land and buildings, plant and equipment and IT equipment. The average
SFRS(I) 16:59(a) lease term is 5 years (2021 : 5 years).

The group has options to purchase certain manufacturing equipment for a nominal amount at the end of the lease term.
The group’s obligations are secured by the lessors’ title to the leased assets for such leases.

There are no extension or termination options on the lease.

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December 31, 2022

SFRS(I) 16:53(h) Approximately one fifth of the leases for buildings and equipment expired in the current financial year. The expired contracts
were extended through exercising the extension options [or replaced by new leases for identical underlying assets].
This resulted in additions to right-of-use assets of $1.9 million in 2022 (2021 : $2.4 million).

Guidance notes – Additional information on future cash outflows to which the lessee is potentially exposed
that are not reflected in the measurement of lease liabilities
Include where applicable.

SFRS(I) 16:59(b) Some of the property leases in which the group is the lessee contain variable lease payment terms that are linked to sales
SFRS(I) 16:B49 generated from the leased stores. Variable payment terms are used to link rental payments to store cash flows and reduce
fixed cost. The breakdown of lease payments for these stores is as follows:

Group
2022 2021
$’000 $’000

Fixed payments xx xx
Variable payments xx xx
Total payments xx xx

SFRS(I) 16:59(b)(i) Overall the variable payments constitute up to x% of the group’s entire lease payments. The group expects this ratio to
SFRS(I) 16:B49 remain constant in future years. The variable payments depend on sales and consequently on the overall economic
development over the next few years. Taking into account the development of sales expected over the next x years,
variable rent expenses are expected to continue to present a similar proportion of store sales in future years.

On [date] 2022, [Subsidiary X Limited] entered into a 10-year lease to rent property, which had not commenced by the
year-end and as a result, a lease liability and right-of-use asset has not been recognised at December 31, 2022.
The aggregate future cash outflows to which the group is exposed in respect of this contract is fixed payments of $__ per year,
for the next 10 years.

Guidance notes – Right-of-use assets meeting the definition of investment property

SFRS(I) 16:56 If right-of-use assets meet the definition of investment property, a lessee shall apply the disclosure requirements in
SFRS(I) 1-40. In that case, a lessee is not required to provide the disclosures in paragraph 53(a), (f), (h) or (j) for those
right-of-use assets.

Illustrative Financial Statements 2022 146

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

19. Investment property

Group
2022 2021
$’000 $’000
SFRS(I) 1-40:76 At fair value
Balance at beginning of year 11,409 11,299
Additions through subsequent expenditure - -
Acquisitions through business combinations - -
Other acquisitions - -
Disposals - -
Property reclassified as held for sale - -
Increase in fair value during the year 500 -
Exchange differences 91 110
Transfers - -
Other changes - -

Balance at end of year 12,000 11,409

The fair value of the group’s investment property at December 31, 2022 and 2021 have been determined on the basis of
valuations carried out at the respective year end dates by [name of valuers], independent valuers having appropriate
SFRS(I) 1-40:75(a) recognised professional qualification and recent experience in the location and category of the properties being valued, and
SFRS(I) 1-40:75(e) not related to the group. The valuation conforms to International Valuation Standards. The fair value was determined [based
SFRS(I) 13:91(a) on the market comparable approach that reflects recent transaction prices for similar properties/capitalisation of net income
SFRS(I) 13:93(d) method, where the market rentals of all lettable units of the properties are assessed by reference to the rentals achieved in
the lettable units as well as other lettings of similar properties in the neighbourhood. The capitalisation rate adopted is made
by reference to the yield rates observed by the valuers for similar properties in the locality and adjusted based on the
valuers’ knowledge of the factors specific to the respective properties/other methods (describe)].

In estimating the fair value of the properties, the highest and best use of the properties is their current use. There has been
no change to the valuation technique during the year.

Guidance notes

In November 2019, ISCA issued FRG 1 Real Property Valuation for Financial Reporting – Best practices when engaging
valuers: Considerations for Scope of Work (“SOW”) and Valuation Report (“VR”) to facilitate the valuation process amongst
the Valuer, Client and Auditor for real property valuation. The FRG highlights key considerations relevant to SFRS(I) 13
when determining the scope of work for valuation of real property interest and deals with the relevant requirements in
SFRS(I) 13 about valuation information to be disclosed in the financial statements.

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December 31, 2022

SFRS(I) 13:93 Details of the group’s investment properties and information about the fair value hierarchy as at the end of the reporting
(a),(b) period are as follows:
Level 2 Level 3 Fair value
$’000 $’000 $’000
2022

Investment property
Units located in A Land - 7,000 7,000
Units located in B Land 5,000 - 5,000

2021

Investment property
Units located in A Land - 6,909 6,909
Units located in B Land 4,500 - 4,500

Guidance notes

SFRS(I) 13:93(c) Where there had been a transfer between different levels of the fair value hierarchy, the group should disclose the reasons
for the transfer and the group’s policy for determining when transfers between levels are deemed to have occurred (for
example, at the beginning or end of the reporting period or at the date of the event that caused the transfer).

The group shall transfer a property to, or from, investment property when, and only when, there is evidence of a change
in use. A change in use occurs if property meets, or ceases to meet, the definition of investment property. A change in
management’s intentions for the use of a property by itself does not constitute evidence of a change in use.

Fair value hierarchy

The categorisation of fair value measurements into the different levels of the fair value hierarchy depends on the degree
to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value
measurement. The above categorisations are for illustrative purposes only. It is worth noting the following points:

• The classification into the 3-level hierarchy is not an accounting policy choice. For land and buildings, given their
unique nature, it is extremely rare that the fair value measurement would be identified as a Level 1 measurement.
Whether the fair value measurement in its entirety should be classified into Level 2 or Level 3 would depend on the
extent to which the inputs and assumptions used in arriving at the fair value are observable. In many situations
where valuation techniques (with significant unobservable inputs) are used in estimating the fair value of the real
estate properties, the fair value measurement as a whole would be classified as Level 3.

• The level within which the fair value measurement is categorised bears no relation to the quality of the valuation.
For example, the fact that a real estate property is classified as a Level 3 fair value measurement does not mean
that the property valuation is not reliable – it merely indicates that significant unobservable inputs have been used
and significant judgement was required in arriving at the fair value.

Illustrative Financial Statements 2022 148

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Fair value disclosures for investment properties measured using the cost model
SFRS(I) 13:97 For investment properties that are measured using the cost model, SFRS(I) 1-40:79(e) requires the fair value of the
properties to be disclosed in the notes to the financial statements. In that case, the fair value of the properties for disclosure
purpose should be measured in accordance with SFRS(I) 13. In addition, SFRS(I) 13:97 requires the following disclosures:

• the level in which fair value measurement is categorised (i.e. Level 1, 2 or 3);

• when the fair value measurement is categorised within Level 2 or Level 3, a description of the valuation technique(s)
and the inputs used in the fair value measurement; and

• the highest and best use of the properties (if different from their current use) and the reasons why t he properties
are being used in a manner that is different from their highest and best use.

SFRS(I) 13:93(d) Valuation Significant unobservable input(s) Sensitivity

SFRS(I) 13:93(h)(i) techniques

Units located in Income Capitalisation rate, taking into account the A slight increase in the
A Land Capitalisation capitalisation of rental income potential, capitalisation rate used would
Approach nature of the property, and prevailing result in a significant decrease in
market condition, of x% - x% (2021 : x% - fair value, and vice versa.
x%).

Monthly market rent, taking into account A significant increase in the market
the differences in location, and individual rent used would result in a
factors, such as frontage and size, between significant increase in fair value,
the comparables and the property, at an and vice versa.
average of $[x] (2021 : $[x]) per square
metre (‘sqm’) per month.

Guidance notes

In considering the level of disaggregation of the properties for the above disclosure, management of the entity should take
into account the nature and characteristics of the properties in order to provide meaningful information to the users of the
financial statements regarding the fair value measurement information of the different types of properties. The breakdown
above is for illustrative purposes only.

As illustrated above, for fair value measurements categorised within Level 3 of the fair value hierarchy, an entity provides
quantitative information about the significant unobservable inputs used in the fair value measurement. An entity is not
required to create quantitative information to comply with this disclosure requirement if quantitative unobservable inputs
are not developed by the entity when measuring fair value (e.g. when an entity uses prices from prior transactions or
third-party pricing information without adjustment). However, when providing this disclosure an entity cannot ignore
quantitative unobservable inputs that are significant to the fair value measurement and are reasonably available to the
entity.

SFRS(I) 1-40:75(f) The property rental income earned by the group from its investment property, all of which is leased out under operating
(i),(ii) leases, amounted to $0.6 million (2021 : $0.7 million). Direct operating expenses arising on the investment property, all of
which generated rental income in the year, amounted to $0.4 million (2021 : $0.5 million).

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Notes to financial statements

December 31, 2022

LM 1207(11)(b) Guidance notes – Details of investment properties

Where the company is listed, in respect of land and buildings, a breakdown of the value in terms of freehold and leasehold
shall be disclosed in the annual report. Where properties have been revalued, the portion of the aggregate value of land
and buildings that is based on valuation as well as the valuation date shall be stated. The valuation of real property must
be carried out by a property valuer in accordance with the property valuation standards. Where the aggregate value for
all properties for investment purposes held by the group represents more than 15% of the value of the consolidated net
tangible assets, or contributes more than 15% of the consolidated pre-tax operating profit, the issuer must disclose the
following information as a note to the financial statements:
(i) A brief description and location of the property;
(ii) The existing use; and
(iii) Whether the property is leasehold or freehold. If leasehold, state the unexpired term of the lease.

Provided that if, in the opinion of the directors, the number of such properties is such that compliance with this requirement
would result in particulars of excessive length being given, compliance is required only for properties, which in the opinion
of the directors, are material.

20. Goodwill

Group
$’000
Cost:
At January 1, 2021 2,754
Exchange differences (216)

SFRS(I) 3:B67(d) At December 31, 2021 2,538

Recognised on acquisition of a subsidiary (Note 51) 3,658
Derecognised on disposal of a subsidiary (Note 50) (1,673)
Classified as held for sale (22)

SFRS(I) 3:B67(d) At December 31, 2022 4,501

Accumulated impairment losses:

At January 1, 2021 -
SFRS(I) 1-36:126 Impairment losses for the year -

SFRS(I) 3:B67(d) At December 31, 2021 -

SFRS(I) 1-36:126 Impairment losses for the year 463

SFRS(I) 3:B67(d) At December 31, 2022 463

SFRS(I) 3:B67(d) Carrying amount:

At December 31, 2022 4,038

At December 31, 2021 2,538

At January 1, 2021 2,754

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Notes to financial statements

December 31, 2022

SFRS(I) 1-36:134(a) The carrying amount of goodwill has been allocated to cash-generating units (‘CGUs’) as follows:

Group
2022 2021
$’000 $’000
Electronic equipment:
Huiji Electronic Systems (China) Limited (single CGU) 3,658 -

Construction (comprised several CGUs):

Residential property construction activities 380 843

Electronic toys operation:

GAAP Playsystems Limited (single CGU) - 1,695

4,038 2,538

The group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.

SFRS(I) 1-36:134 The recoverable amounts of the CGUs are determined based on value in use calculations which use cash flow projections
(b)-(d) based on financial budgets approved by the directors covering a five-year period. Management estimates discount rates
using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs.
SFRS(I) 1-36:130(g) The rates used to discount the forecast cash flows from Huiji Electronic Systems (China) Limited and the group’s residential
property construction activities are 8.9% (2021 : 9.2%) and 11.2% (2021 : 11.8%) respectively.

The key assumptions used by management in setting the financial budgets for the initial five-year period include forecast
sales growth rates, expected changes to selling prices and operating profits. Forecast sales growth rates are based on past
experience adjusted for [discuss reasons for adjusting the historic measures, for example, sales/market trends and the
strategic decisions made in respect of the cash-generating unit]. Expected changes to selling prices are based on past
practices and expectations of future changes in the market. Operating profits are forecast based on historical experience of
operating margins, adjusted for the impact of [describe reasons for adjusting the historical measures, for example, changes
to product costs and cost saving initiatives].

Cash flows beyond that five-year period have been extrapolated using a steady 3% (2021 : 3%) per annum growth rate.
This growth rate does not exceed the long-term average growth rate for the relevant markets. The steady growth rate of
3% is estimated by the directors based on past performance of the CGUs and their expectations of market development.

SFRS(I) 1-36:130 Goodwill of $0.8 million was allocated to the residential property construction CGUs within the construction business
(a),(b),(d),(e) segment. The business has continued to operate on a satisfactory basis but without achieving any significant increase in
market share. Management expects forecast operating profits to remain stagnant and has consequently determined to
recognise impairment loss of $0.5 million based on the recoverable amount of $0.3 million.

SFRS(I) 1-36:135(e) Sensitivity analysis

The group has conducted an analysis of the sensitivity of the impairment test to changes in the key assumptions used to
determine the recoverable amount for each of the group of CGUs to which goodwill is allocated. Management believes that
any reasonably possible change in the key assumptions on which the recoverable amount of ‘Electronic equipment’ is based
would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the related CGU.

In the current financial year, the carrying amount of the residential property construction CGUs exceeds its recoverable
amount by $0.5 million and an impairment loss has been recognised.

A 20% underperformance against forecast sales growth rates for the residential property construction CGUs is considered
reasonably possible based on recent experience and would lead to a further impairment charge of $0.1 million.

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December 31, 2022

Guidance notes – Impairment testing disclosures

SFRS(I) 1-36:130 An entity that reports segment information in accordance with SFRS(I) 8 Operating Segments discloses the amount of the
(d)(ii) impairment loss recognised or reversed by reportable segment accordance with SFRS(I) 8.

SFRS(I) 1-36:A7 An entity may determine that using an expected cash flow approach is the most effective means of reflecting the
uncertainties in its estimates of recoverable amount. This approach reflects all expectations about possible cash flows
instead of the single most likely cash flow. Under the expected cash flow approach, the uncertainty about the future cash
flows is reflected in the different probability-weighted cash flow projections used, rather than in the discount rate.
The expected cash flow approach inherently requires a more explicit consideration of the wider than normal range of
possible future outcomes. The discount rate(s) used to measure an asset’s value in use shall not reflect risks for which the
future cash flow estimates have been adjusted to avoid double-counting (SFRS(I) 1-36:56).

Where an expected cash flow approach is used, an entity should disclose the number of scenarios used and their
weightings, how the main assumptions used in the downside scenarios differ from the other scenarios and the reasoning
behind those.

SFRS(I) 1-38:118(c) 21. Other intangible assets

SFRS(I) 1-38:118(e)
Development Patents and
Group costs trademarks Total
$’000 $’000 $’000
Cost:
At January 1, 2021 - 13,000 13,000
Additions - 18,617 18,617
At December 31, 2021 - 31,617 31,617
Additions 3,600 3,835 7,435
Acquired on acquisition of a subsidiary - 870 870
At December 31, 2022 3,600 36,322 39,922

Amortisation:
At January 1, 2021 - 9,477 9,477
Amortisation for the year - 846 846
At December 31, 2021 - 10,323 10,323
Amortisation for the year 360 2,254 2,614
At December 31, 2022 360 12,577 12,937

Carrying amount:
At December 31, 2022 3,240 23,745 26,985

At December 31, 2021 - 21,294 21,294

At January 1, 2021 - 3,523 3,523

SFRS(I) 1-38:118(a) The amortisation period for development costs incurred on the group’s e-business development is three years.

Patents and trademarks are amortised over their estimated useful lives, which is on average 10 years.

SFRS(I) 1-38:118(d) The amortisation expense has been included in the line item ‘Depreciation and amortisation expense’ in profit or loss.

Illustrative Financial Statements 2022 152

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Notes to financial statements

December 31, 2022

SFRS(I) 1-38:122(b) The group’s patents protect the design and specification of its electronic goods produced in Singapore, the United States
and Europe. The carrying amount of the patents is $20.2 million (2021 : $18.4 million). The average remaining amortisation
period for these patents is 7 years (2021 : 8 years).

SFRS(I) 1-27:16(b) 22. Subsidiaries

Company
2022 2021
$’000 $’000

Unquoted equity shares, at cost 111,650 110,000

Details of the group’s significant subsidiaries at the end of the reporting period are as follows:

Proportion of ownership
Place of incorporation and interest and voting rights held
Name of subsidiaries Principal activities principal place of business by the group
2022 2021
% %

GAAP Construction Pte Ltd * Property investment Singapore 100 100

and construction

GAAP Manufacturing Limited ** Manufacture of leisure goods Hong Kong 45 45

GAAP Leisure Pte Ltd * Sale of leisure goods Singapore 45 45

GAAP Electronics Sdn Bhd ** Sale and manufacture Malaysia 100 100
of electronic equipment

GAAP Ventures Pte Ltd * Venture capital investments Singapore 100 100

GAAP Electronics (China) Sale and manufacture People’s Republic 70 65

Limited ** of electronic equipment of China

GAAP Pacific Inc ** Installation of U.S.A 90 90

computer software

Huiji Electronics Systems Sale and manufacture People’s Republic 80 -

(China) Limited # ** of electronic equipment of China

GAAP Playsystems Sale and manufacture Hong Kong - 100

Limited ## ** of electronic toys

LM 717 * Audited by Deloitte & Touche LLP, Singapore.

LM 718 ** Audited by overseas practices of Deloitte Touche Tohmatsu Limited.
# During the financial year, Huiji Electronic Systems (China) Limited was acquired pursuant to a conditional cash offer
(Note 51).
## GAAP Playsystems Limited was disposed during the financial year (Note 50).

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December 31, 2022

LM 717 Guidance notes

LM 718
Where significant subsidiaries are audited by another firm of auditors, the names of the auditing firms are to be disclosed
accordingly. A subsidiary is considered significant if its net tangible assets represent 20% or more of the issuer ’s
consolidated net tangible assets, or its pre-tax profits account for 20% or more of the issuer’s consolidated pre-tax profits.

SFRS(I) 12:18 The following schedule shows the effects of changes in the group’s ownership interest in a subsidiary that did not result in
change of control, on the equity attributable to owners of the parent:

2022 2021
$’000 $’000

Amount paid on changes in ownership interest in subsidiary 350 -

Non-controlling interest acquired (100) -

Difference recognised in equity reserves (Note 37) 250 -

SFRS(I) 12:10(a)(i) Guidance notes

Disclosure on composition of the group below serves as a guide. Management should exercise judgement on the extent of
disclosure that is required that clearly explains to users of financial statements the nature and extent of its interests in
those other entities.

SFRS(I) 12:4 Details of composition of the group

SFRS(I) 12:10(a)(i) Information about the composition of the group at the end of the reporting period is as follows:
SFRS(I) 12:B4(a)
SFRS(I) 12:B5-B6
Place of incorporation Number of wholly-owned
Principal activity and operation subsidiaries
2022 2021

Sale and manufacture of electronic equipment Malaysia 1 1

Property investment and construction Singapore 1 1
Venture capital investment Singapore 1 1
Sale and manufacture of electronic toys Hong Kong - 1
3 4

Place of incorporation Number of non-wholly

Principal activity and operation owned subsidiaries
2022 2021

Manufacture of leisure goods Hong Kong 1 1

Sale of leisure goods Singapore 1 1
Sale and manufacture of electronic equipment People’s Republic of China 2 1
Installation of computer software U.S.A. 1 1
5 4

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Notes to financial statements

December 31, 2022

Details of non-wholly owned subsidiaries that have material non-controlling interests

SFRS(I) 12:10(a)(ii) The table below shows details of non-wholly owned subsidiaries of the group that have material non-controlling interests:

SFRS(I) 12:12(a)-(f) Guidance notes

SFRS(I) 12:B11 For illustrative purposes, the following non-wholly owned subsidiaries are assumed to have non-controlling interests that
are material to the group. The amounts disclosed should not reflect the elimination of intragroup transactions.

Name of subsidiary Place of Proportion of ownership Profit (loss) allocated Non-controlling

incorporation and interests and voting rights to non-controlling interests
principal place of held by non-controlling interests for the year
business interests
2022 2021 2022 2021 2022 2021
% % $’000 $’000 $’000 $’000

GAAP Manufacturing Limited (i) Hong Kong 55 55 401 464 1,794 1,393

GAAP Leisure Pte Ltd (ii) Singapore 55 55 61 (258) 1,084 1,023

GAAP Electronics People’s Republic 30 35 34 (128) 137 103

(China) Limited of China

Huiji Electronics Systems People’s Republic 20 - 98 - 1,278 -

(China) Limited of China

Individually immaterial subsidiaries with non-controlling interests 15 19 292 57

Total 609 97 4,585 2,576

SFRS(I) 12:9(b) (i) GAAP Manufacturing Limited is listed on the Hong Kong Stock Exchange. Although the group has only 45% ownership
in GAAP Manufacturing Limited, management concluded that the group has a sufficiently dominant voting interest to
direct the relevant activities of GAAP Manufacturing Limited on the basis of the group’s absolute size of shareholding
and the relative size and dispersion of the shareholdings owned by other shareholders. The 55% ownership interests
in GAAP Manufacturing Limited are owned by thousands of shareholders that are unrelated to the group, none
individually holding more than 2%.

(ii) The group owns 45% of the equity shares of GAAP Leisure Pte Ltd. However, based on the contractual arrangements
between the group and other investors, the group has the power to appoint and remove the majority of the board of
directors of GAAP Leisure Pte Ltd. The relevant activities of GAAP Leisure Pte Ltd are determined by the board of
directors of GAAP Leisure Pte Ltd based on simple majority votes. Therefore, management concluded that the group
has control over GAAP Leisure Pte Ltd and GAAP Leisure Pte Ltd is consolidated in these financial statements.

155
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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 12:12(g) Summarised financial information in respect of each of the group’s subsidiaries that has material non-controlling interests is set out below. The summarised financial information below represents
SFRS(I) 12:B10-B11 amounts before intragroup eliminations.

GAAP Leisure GAAP Electronics Huiji Electronics Systems

GAAP Manufacturing Limited Pte Ltd (China) Limited (China) Limited
2022 2021 2022 2021 2022 2021 2022 2021
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Current assets 1,576 1,070 1,580 1,678 591 464 16,579 -

Non-current assets 2,568 2,317 1,298 987 212 334 13,409 -
Current liabilities (276) (266) (398) (356) (224) (345) (20,998) -
Non-current liabilities (606) (588) (509) (449) (122) (224) (2,598) -
Equity attributable to owners of the company 1,468 1,140 887 837 320 126 5,114 -
Non-controlling interests 1,794 1,393 1,084 1,023 137 103 1,278 -

Illustrative Financial Statements 2022 156

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

GAAP Leisure GAAP Electronics Huiji Electronics Systems

GAAP Manufacturing Limited Pte Ltd (China) Limited (China) Limited
2022 2021 2022 2021 2022 2021 2022 2021
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Revenue 2,918 2,285 3,109 3,408 2,453 2,678 6,908 -

Expenses (2,189) (1,441) (2,998) (3,877) (2,340) (2,962) (6,418) -
Profit (Loss) for the year 729 844 111 (469) 113 (284) 490 -

Profit (Loss) attributable to owners of the company 328 380 50 (211) 79 (156) 392 -
Profit (Loss) attributable to non-controlling interests 401 464 61 (258) 34 (128) 98 -
Profit (Loss) for the year 729 844 111 (469) 113 (284) 490 -

Other comprehensive income attributable to owners of the company - - - - - - - -

Other comprehensive income attributable to non-controlling interests - - - - - - - -
Other comprehensive income for the year - - - - - - - -

Total comprehensive income attributable to owners of the company 328 380 50 (211) 79 (156) 392 -
Total comprehensive income attributable to non-controlling interests 401 464 61 (258) 34 (128) 98 -
Total comprehensive income for the year 729 844 111 (469) 113 (284) 490 -

Dividends paid to non-controlling interests - - - - - - - -

Net cash inflow (outflow) from operating activities 321 359 130 119 98 78 2,089 -
Net cash inflow (outflow) from investing activities (251) (39) 24 (21) 34 5 (509) -
Net cash inflow (outflow) from financing activities 20 (120) (120) (73) (90) (12) (448) -
Net cash inflow (outflow) 90 200 34 25 42 71 1,132 -

157
Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 12:13 There are no significant restrictions on the ability of the group to access or use assets and settle liabilities.

Guidance notes – Significant restrictions

When there are significant restrictions on the company’s or its subsidiaries’ ability to access or use the assets and settle
the liabilities of the group, the group should disclose the nature and extent of significant restrictions. Please see
SFRS(I) 12:13 for details.

SFRS(I) 12:14-17 Guidance notes – Financial support

When the group gives financial support to a consolidated structured entity, the nature and risks (including the type and
amount of support provided) should be disclosed in the financial statements. Please see SFRS(I) 12:15 for details.

23. Associates

Group
2022 2021
$’000 $’000

Cost of investment in associates 32,920 1,120

Share of post-acquisition profit, net dividend received 12,140 11,154

45,060 12,274

Details of material associates

Guidance notes

For illustrative purposes, the following associates are assumed to be material to the group.

SFRS(I) 12:21(a) Details of each of the group’s material associates at the end of the reporting period are as follows:

Proportion of ownership
Place of incorporation and interest and voting rights held
Name of associates Principal activities principal place of business by the group
2022 2021
% %

LM 717,718 Apag Limited ** Construction Elbonia 45 40

PAAG Pte Ltd * Manufacture of electronic equipment Singapore 17 17

* Audited by Deloitte & Touche LLP, Singapore.

** Audited by overseas practices of Deloitte Touche Tohmatsu Limited.

Guidance notes

LM 717,718 Where significant associates are audited by another firm of auditors, the names of the auditing firms are to be disclosed
accordingly. An associate is considered significant if its net tangible assets represent 20% or more of the issuer ’s
consolidated net tangible assets, or its pre-tax profits account for 20% or more of the issuer’s consolidated pre-tax profits.

Illustrative Financial Statements 2022 158

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 12:21(b)(i) All of the above associates are accounted for using the equity method in these consolidated financial statements as set out
in the group’s accounting policies in Note 2.

SFRS(I) 12:22(b) (i) The financial year end date of Apag Limited is October 31. This was the reporting date established when that entity
SFRS(I) 12:21(b)(iii) was incorporated, and a change of reporting date is not permitted in Elbonia. For the purposes of applying the equity
SFRS(I) 13:97 method of accounting, the financial statements of Apag Limited for the year ended October 31, 2022 have been used,
and appropriate adjustments have been made for the effects of significant transactions between that date and
December 31, 2022. As at December 31, 2022, the fair value of the group’s interest in Apag Limited, which is listed
on the stock exchange of Elbonia, was $8.0 million (2021 : $7.8 million) based on the quoted market price available
on the stock exchange of Elbonia, which is a Level 1 input in terms of SFRS(I) 13.

SFRS(I) 12:9(e) (ii) Although the group holds less than 20% of the equity shares of PAAG Pte Ltd, and it has less than 20% of the voting
power at shareholder meetings, the group exercises significant influence by virtue of its contractual right to appoint
two out of seven directors to the board of directors of that entity.

SFRS(I) 12:21(b)(ii) Summarised financial information in respect of each of the group’s material associates is set out below. The summarised
SFRS(I) 12:B12 financial information below represents amounts included in the financial statements of the associate, not the entity’s share
SFRS(I) 12:B14(a) of these amounts, and are prepared in accordance with SFRS(I) Accounting Standards and are adjusted to reflect fair value
adjustments upon acquisition or accounting policy alignments. Dividends received from the associates represent the actual
amounts attributable and hence received by the group.

Summarised financial information

Apag Limited 2022 2021

$’000 $’000

Current assets 130,954 123,606

Non-current assets 120,993 91,457
Current liabilities (140,090) (167,772)
Non-current liabilities (18,190) (25,538)

2022 2021
$’000 $’000

Revenue 3,387 4,758

Profit or loss from continuing operations 1,016 1,332

Post-tax profit (loss) from discontinued operations - -

Profit for the year 1,016 1,332

Other comprehensive income for the year - -

Total comprehensive income for the year 1,016 1,332

Dividends received from the associate during the year - -

159
Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 12:B14(b) Reconciliation of the above summarised financial information to the carrying amount of the interest in Apag Limited
recognised in these consolidated financial statements:

2022 2021
$’000 $’000

Net assets of the associate 93,667 21,753

Proportion of the group’s ownership interest in Apag Limited 45% 40%
Goodwill - -
Other adjustments (please specify) - -

Carrying amount of the group’s interest in Apag Limited 42,150 8,701

SFRS(I) 12:21(b)(ii) PAAG Pte Ltd 2022 2021

SFRS(I) 12:B12 $’000 $’000
SFRS(I) 12:B14(a)
Current assets 19,151 18,442
Non-current assets 18,460 17,221
Current liabilities (15,981) (14,220)
Non-current liabilities (6,206) (8,290)

2022 2021
$’000 $’000

Revenue 5,790 5,890

Profit or loss from continuing operations 2,271 2,262

Post-tax profit (loss) from discontinued operations - -

Profit for the year 2,271 2,262

Other comprehensive income for the year - -

Total comprehensive income for the year 2,271 2,262

Dividends received from the associate during the year - -

SFRS(I) 12:B14(b) Reconciliation of the above summarised financial information to the carrying amount of the interest in PAAG Pte Ltd
recognised in these consolidated financial statements:

2022 2021
$’000 $’000

Net assets of the associate 15,424 13,153

Proportion of the group’s ownership interest in PAAG Pte Ltd 17% 17%
Goodwill - -
Other adjustments (please specify) - -
Carrying amount of the group’s interest in PAAG Pte Ltd 2,622 2,236

Illustrative Financial Statements 2022 160

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 12:21(c)(ii) Aggregate information of associates that are not individually material 2022 2021
SFRS(I) 12:B16 $’000 $’000

The group’s share of profit (loss) from continuing operations 143 358
The group’s share of post-tax profit (loss) from discontinued operations - -
The group’s share of other comprehensive income - -
The group’s share of total comprehensive income 143 358
Aggregate carrying amount of the group’s interests in these associates 288 1,337

SFRS(I) 12:22(c) Unrecognised share of losses of an associate 2022 2021

$’000 $’000

The unrecognised share of losses of an associate for the year - -

Cumulative share of losses of an associate - -

SFRS(I) 1-28:22 Change in the group’s ownership interest in an associate

Guidance notes

When there is a change in group’s ownership interest in associate, the group should disclose details as set out below.
Please see SFRS(I) 1-28:22 for details.

[In the prior year, the group held a 40% interest in E Plus Limited and accounted for the investment as an associate.
In December 2022, the group disposed of a 30% interest in E Plus Limited to a third party for proceeds of $__ million
(received in January 2023). The group has accounted for the remaining 10% interest as a financial asset measured at
FVTOCI whose fair value at the date of disposal was $__ million, which was determined using a discounted cash flow model
(please describe key factors and assumptions used in determining the fair value). This transaction has resulted in the
recognition of a gain in profit or loss, calculated as follows:

2022
$’000

Proceeds of disposal xx
Add: Fair value of investment retained (10%) xx
Less: Carrying amount of investment on the date of loss of significant influence xx

Gain recognised xx

The gain recognised in the current year comprises a realised profit of $__ million (being the proceeds of $__ million less
$__ million carrying amount of the interest disposed of) and an unrealised profit of $__ million (being the fair value less
the carrying amount of the 10% interest retained). A current tax expense of $__ arose on the gain realised in the current
year, and a deferred tax expense of $__ has been recognised in respect of the portion of the profit recognised that is not
taxable until the remaining interest is disposed of.]

SFRS(I) 12:22(a) Significant restrictions

Guidance notes

When there are significant restrictions on the ability of associates to transfer funds to the group in the form of cash
dividends, or to repay loans or advances made by the group, the group should disclose the nature and extent of significant
restrictions in the financial statements. Please see SFRS(I) 12:22(a) for details.

161
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

24. Joint venture

Group
2022 2021
$’000 $’000

Cost of investment in joint venture 1,800 1,800

Share of post-acquisition profit, net dividend received 2,124 1,840
Foreign exchange difference 22 22

3,946 3,662

Details of material joint venture

Guidance notes

In this set of illustrative financial statements, the group only has one joint venture, JV Electronics Limited, and for
illustrative purposes, JV Electronics Limited is assumed to be material to the group.

SFRS(I) 12:21(a) Details of the group’s material joint venture at the end of the reporting period are as follows:

Proportion of ownership
Place of incorporation and interest and voting rights held
Name of joint venture Principal activity principal place of business by the group
2022 2021
% %

JV Electronics Limited Manufacture of electronic equipment People’s Republic 33 33

of China

LM 717,718 Guidance notes

Where significant joint ventures are audited by another firm of auditors, the names of the auditing firms are to be disclosed
accordingly. Guidelines similar to those applicable for associates (see above) may be used to determine if a joint venture
is significant.

SFRS(I) 12:21(b)(i) The above joint venture is accounted for using the equity method in these consolidated financial statements as set out in
the group’s accounting policies in Note 2 and is audited by an overseas practice of Deloitte Touche Tohmatsu Limited.

Illustrative Financial Statements 2022 162

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 12:B14 Summarised financial information in respect of the group’s material joint venture is set out below. The summarised financial
information below represents amounts included in the financial statements of the joint venture, not the entity’s share of
these amounts, and are prepared in accordance with SFRS(I) Accounting Standards and are adjusted to reflect fair value
adjustments upon acquisition or accounting policy alignments. Dividends received from the joint venture represent the actual
amounts attributable and hence received by the group.

Summarised financial information

SFRS(I) 12:21(b)(ii) JV Electronics Limited 2022 2021

SFRS(I) 12:B12 $’000 $’000
SFRS(I) 12:B14(a)
Current assets 5,454 7,073
Non-current assets 23,221 20,103
Current liabilities (2,836) (3,046)
Non-current liabilities (13,881) (13,033)

SFRS(I) 12:B13 The above amounts of assets and liabilities include the following:

Cash and cash equivalents 231 553

Current financial liabilities (excluding trade and other payables and provisions) - -
Non-current financial liabilities (excluding trade and other payables and provisions) (12,881) (12,373)

2022 2021
$’000 $’000

Revenue 6,436 6,076

Profit or loss from continuing operations 861 733

Post-tax profit (loss) from discontinued operations - -

Profit (Loss) for the year 861 733

Other comprehensive income for the year - -

Total comprehensive income for the year 861 733

Dividends received from the joint venture during the year - -

SFRS(I) 12:B13 The above profit (loss) for the year includes the following:

Depreciation and amortisation 200 180

Interest income - -
Interest expense 56 48
Income tax expense (income) - -

163
Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 12:B14(b) Reconciliation of the above summarised financial information to the carrying amount of the interest in the joint venture
recognised in these consolidated financial statements:

2022 2021
$’000 $’000

Net assets of joint venture 11,958 11,097

Proportion of the group’s ownership interest in the joint venture 33% 33%
Goodwill - -
Other adjustments (please specify) - -

Carrying amount of the group’s interest in the joint venture 3,946 3,662

SFRS(I) 12:21(c)(ii) Aggregate information of joint ventures that are not individually material 2022 2021
SFRS(I) 12:B16 $’000 $’000

The group’s share of profit (loss) from continuing operations - -

The group’s share of post-tax profit (loss) from discontinued operations - -
The group’s share of other comprehensive income - -
The group’s share of total comprehensive income - -
Aggregate carrying amount of the group’s interests in these joint ventures - -

SFRS(I) 12:22(c) Unrecognised share of losses of a joint venture 2022 2021

$’000 $’000

The unrecognised share of loss of a joint venture for the year - -

Cumulative share of loss of a joint venture - -

Guidance notes

For the purposes of illustration, the disclosures above include line items with Nil values. Delete line items if not applicable.

SFRS(I) 12:22(a) Significant restrictions

Guidance notes

When there are significant restrictions on the ability of joint ventures to transfer funds to the group in the form of cash
dividends, or to repay loans or advances made by the group, the group should disclose the nature and extent of significant
restrictions in the financial statements. Please see SFRS(I) 12:22(a) for details.

Joint operations

SFRS(I) 12:21(a) The group has a material joint operation, Project GAAP. The group has a 25% share in the ownership of a property located
in Singapore. The property upon completion will be held for leasing purposes. The group is entitled to a proportionate share
of the rental income received and bears a proportionate share of the joint operation’s expenses. The joint operation is
audited by Deloitte & Touche LLP, Singapore.

Illustrative Financial Statements 2022 164

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

25. Deferred tax

SFRS(I) 1-12:81(g) The following are the major deferred tax liabilities and assets recognised by the group and the company, and the movements
(i),(ii) thereon, during the current and prior reporting periods:

SFRS(I) 1-12:81(a) Convertible

SFRS(I) 1-12:81(ab) Accelerated Deferred loan notes - Retirement
tax development Revaluation equity benefit
SFRS(I) 1-1:90
Group depreciation costs of building component obligations Others Tax losses Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

At January 1, 2021 3,304 - 1,046 - (2,561) - (295) 1,494

Charge (Credit) to other
comprehensive income - - (320) - - - - (320)
Charge (Credit) to
profit or loss (Note 45) 1,952 - (10) - - (291) (344) 1,307
At December 31, 2021 5,256 - 716 - (2,561) (291) (639) 2,481
Charge directly to equity - - - 174 - - - 174
Charge (Credit) to other
comprehensive income - - 3,692 - - - - 3,692
Charge (Credit) to
profit or loss (Note 45) 2,918 552 - (57) 181 100 639 4,333
Acquisition of subsidiary 150 - - - - - (351) (201)
Disposal of subsidiary (469) - (66) - 280 - - (255)
Exchange differences 99 - 35 - (13) - 20 141
Effect of change in tax rate (100) - (27) - 51 - - (76)

At December 31, 2022 7,854 552 4,350 117 (2,062) (191) (331) 10,289

SFRS(I) 1-12:81(a) Convertible

SFRS(I) 1-12:81(ab) loan notes -
SFRS(I) 1-1:90 equity
Company component
$’000

At January 1, 2021 -
Charge (Credit) to profit or loss -

At December 31, 2021 -

Charge directly to equity 174
Charge (Credit) to profit or loss (57)
Effect of change in tax rate -

At December 31, 2022 117

165
Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-12:74 Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends to
settle its current tax assets and liabilities on a net basis. The following is the analysis of the deferred tax balances (after
offset) for financial reporting purposes:

Group Company
2022 2021 2022 2021
$’000 $’000 $’000 $’000

Deferred tax liabilities 13,173 5,772 117 -

Deferred tax assets (2,884) (3,291) - -

10,289 2,481 117 -

SFRS(I) 1-12:81(e) Subject to the agreement by the tax authorities, at the reporting date, the group has unused tax losses of $2.2 million (2021
: $12.5 million) available for offset against future profits. A deferred tax asset has been recognised in respect of
$1.9 million (2021 : $3.7 million) of such losses. No deferred tax asset has been recognised in respect of the remaining
$0.3 million (2021 : $8.8 million) as it is not considered probable that there will be future taxable profits available. Included in
unrecognised tax losses are losses of $0.2 million (2021 : $3.3 million) that will expire in 2024. Other losses may be carried
forward indefinitely subject to the conditions imposed by law including the retention of majority shareholders as defined.

SFRS(I) 1-12:81(f) No deferred tax liability is recognised on temporary differences of $7.9 million (2021 : $6.3 million) relating to the unremitted
earnings of overseas subsidiaries as the group is able to control the timings of the reversal of these temporary differences
and it is probable they will not reverse in the foreseeable future. Temporary differences arising in connection with interests
in associates are insignificant.

SFRS(I) 1-12:80(d) Guidance notes – OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting

In October 2021, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting published a statement presenting
a two-pillar solution to address the tax challenges arising from the digitalisation of the economy. The Two-Pillar Solution
would ensure that multinational enterprises are subject to a minimum tax rate of 15%, and would re-allocate profit of the
largest and most profitable multinational enterprises to countries worldwide.

In Singapore, the Ministry of Finance provided an update in the February 2022 Budget speech on the possibility of
introducing the Minimum Effective Tax Rate regime to top up effective tax rate to 15%.

SFRS(I) 1-10 gives as an example of non-adjusting events that generally require disclosure of “changes in tax rates or tax
laws enacted or announced after the reporting period that have a significant effect on current and deferred tax assets and
liabilities.” Accordingly, if the new international tax rules are published before the date the financial statements are
authorised for issue, an entity would assess whether this constitutes the announcement of a change in tax laws in the
jurisdictions in which it operates. If this is the case and if the entity concludes that the rules may have a significant effect
on its current and deferred tax assets and liabilities, it would disclose that fact in its financial statements along with an
estimate of the impact or a statement that such an estimate cannot be made.

Illustrative Financial Statements 2022 166

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-12:80(d) Guidance notes – Alternative presentation of deferred tax information

1. Deferred tax balances

Deferred tax assets (liabilities) arise from the following:

2022/2021
Charged to
Charged to Charged other
Opening profit or directly to comprehensive Acquisitions/ Exchange Changes in Closing
Group/Company balance loss equity income Disposals differences tax rate balance
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
SFRS(I) 1-12:81 Temporary differences
(a),(g)
SFRS(I) 1-1:90
Cash flow hedges xx xx xx xx xx xx xx xx
Revaluation of
financial assets xx xx xx xx xx xx xx xx
Property, plant &
equipment xx xx xx xx xx xx xx xx
Leases xx xx xx xx xx xx xx xx
Intangible assets xx xx xx xx xx xx xx xx
Convertible loan notes xx xx xx xx xx xx xx xx
Exchange difference on
foreign subsidiary xx xx xx xx xx xx xx xx
Provisions xx xx xx xx xx xx xx xx
Expected credit losses xx xx xx xx xx xx xx xx
Other financial liabilities xx xx xx xx xx xx xx xx
Unclaimed share issue
and buy-back costs xx xx xx xx xx xx xx xx
Others [describe] xx xx xx xx xx xx xx xx
xx xx xx xx xx xx xx xx

Unused tax losses and credits

Tax losses xx xx xx xx xx xx xx xx
Foreign tax credits xx xx xx xx xx xx xx xx
Others xx xx xx xx xx xx xx xx
xx xx xx xx xx xx xx xx

xx xx xx xx xx xx xx xx

Deferred tax balances are presented in the statement of financial position as follows:

2022 2021
$’000 $’000

Deferred tax liabilities xx xx

Directly associated with assets classified as held for sale (Note x) xx xx

xx xx

167
Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

2. Unrecognised deferred tax assets

2022 2021
$’000 $’000
The following deferred tax assets have not been recognised
at the end of the reporting period:

Tax losses – revenue xx xx

Tax losses – capital xx xx
Unused tax credits (expire [date]) xx xx
Temporary differences xx xx

xx xx

The unrecognised tax losses will expire in 2024.

3. Unrecognised taxable temporary differences associated with investments and interests

2022 2021
$’000 $’000
Taxable temporary differences in relation to investments in subsidiaries, branches
and associates and interests in joint ventures for which deferred tax liabilities
have not been recognised are attributable to the following:

Domestic subsidiaries xx xx
Foreign subsidiaries xx xx
Associates and jointly controlled entities xx xx
Others [describe] xx xx

xx xx

Guidance notes – Deferred tax arising from leases

For the purpose of this set of illustrative financial statements, it is assumed that the deferred tax arising from leases is
not material.

Leasing transactions frequently give rise to deferred tax effects, but SFRS(I) 1-12 does not provide any specific guidance
on how to account for those effects.

Under SFRS(I) 16, subject to specified exemptions, a lessee is required to recognise a right-of-use asset and a
corresponding lease liability in its statement of financial position, it also recognises the asset’s depreciation and
impairment, and finance costs related to the lease liability in profit or loss.

In some jurisdictions, the tax treatment of leases is consistent with the accounting treatment. In other jurisdictions,
however, tax deductions may be available only for the lease payments as they are paid (i.e. no deduction for asset
depreciation or finance costs).

In September 2021, ASC issued Amendments to SFRS(I) 1-12: Deferred Tax related to Assets and Liabilities arising from
a Single Transaction. The amendments introduce an exception to the initial recognition exemption in SFRS(I) 1-12 so that
it does not apply to transactions that give rise to equal taxable and deductible temporary differences. Consequently,
entities will be required to recognise both a deferred tax asset and a deferred tax liability for the deductible and taxable
temporary differences on the initial recognition of a lease. Refer to Note 58 for the impact of the initial application of the
amendments.

Illustrative Financial Statements 2022 168

Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:7 26. Borrowings

Group
2022 2021
$’000 $’000
SFRS(I) 7:8(g) Unsecured borrowings at amortised cost

Bank overdrafts 807 809

Bank loans 74,845 75,394
75,652 76,203
Secured borrowings at amortised cost

Bank overdrafts 1,100 1,100

Bank loans 268,000 337,000
269,100 338,100

Total borrowings 344,752 414,303

Analysed as:
Current 70,907 70,909
Non-current 273,845 343,394
344,752 414,303

Guidance notes – Disclosures required by SFRS(I) 7

If information about contractual and effective interest rates, maturity dates, foreign currency denomination and fair values
have been presented in Note 4 ‘Financial Instruments, Financial Risks and Capital Management’, it is not necessary to
repeat the same information in this note.

Bank overdrafts are repayable on demand. Overdrafts of $1.1 million (2021 : $1.1 million) have been secured by a charge
over the group’s inventories. The average effective interest rate on bank overdrafts is approximately 5.8% (2021 : 5.2%)
per annum and rates are determined based on 0.5% plus prime rate.

The group has two principal bank loans:

a) A loan of $268 million (2021 : $337 million) was drawn on February 1, 2019. Repayments commenced on January 1, 2021
and will continue until January 31, 2026. The loan is secured by a floating charge over certain of the group’s properties,
whose carrying value is $426 million (2021 : $380 million). The loan carries interest rate at 2% above 6-month SIBOR.
However, in the first quarter of 2022, the group transitioned its $268 million bank borrowings to 6-month compounded
SORA. The $268 million bank borrowings that transitioned to SORA had an additional fixed spread added of 50 bps.
No other terms were amended as part of the transition. The group accounted for the change to SORA using the practical
expedient in SFRS(I) 9, which allows the group to change the basis for determining the contractual cash flows
prospectively by revising the effective interest rate. See Note 4(b)(ii).

b) An unsecured loan of $75 million (2021 : $75 million). This loan was advanced on July 1, 2020 and is due for repayment
in full on June 30, 2025. The bank loan carries fixed interest rate at 8% (2021 : 8%) per annum.

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Notes to financial statements

December 31, 2022

Guidance notes

SFRS(I) 7:14 If the entity has any financial assets pledged as collateral for liabilities or contingent liabilities, it shall disclose as required
by SFRS(I) 7:14(a) and (b), the carrying amount of financial assets it has pledged as collateral for liabilities or contingent
liabilities, including amounts that have been reclassified, and the terms and conditions relating to its pledge.

Guidance notes – Breach of a loan agreement

Include where applicable.

SFRS(I) 7:18 During the current year, the group was late in paying interest for the first quarter on one of its loans with a carrying
amount of $__ million. The delay arose because of a temporary lack of funds on the date interest was payable due to a
technical problem on settlement. The interest payment outstanding of $__ was repaid in full on the following day, including
the additional interest and penalty. The lender did not request accelerated repayment of the loan and the terms of the
loan were not changed. Management has reviewed the group’s settlement procedures to ensure that such circumstances
do not recur.

Guidance notes – Covenants

SFRS(I) 1-1:135(a) Although disclosure of details regarding loan covenants is not required under SFRS(I) 1-1:135(a)(ii), entities should
consider whether such details should nevertheless be disclosed in line with the requirements in SFRS(I) 1-1:17(c) to
provide additional information to enable users of the financial statements to understand the impact of particular
transactions, other events and conditions on the entity’s financial position and financial performance.

An example of disclosures is as follows:

The secured bank loan has been subject to a financial covenant which is tested semi-annually on 30 June and 31 December
each year. The covenant measures the group’s gearing ratio as calculated in Note X. The group has complied with this
covenant in 2022 and 2021.

Perpetual notes issued by the group do not contain financial covenants, however the group is required to provide
notification to the note holders following a change of control. Change of control may, at the discretion of the note holders,
trigger the establishment of additional guarantees or the early repayment of outstanding amounts.

Other borrowings issued by the group do not contain any covenants.

Illustrative Financial Statements 2022 170

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-7:44A- Changes in liabilities arising from financing activities

44E
The table below details changes in the group’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash
flows were, or future cash flows will be, classified in the group’s consolidated statement of cash flows as cash flows from financing activities.

Non-cash changes
Equity Fair value
Financing component of Acquisition Disposal of adjustments Foreign Other
January 1, cash flows convertible of subsidiary subsidiary (Notes 14, Deferred tax exchange changes December 31,
2022 (i) loan notes (Note 51) (Note 50) 38 and 39) New leases (Note 25) movement (ii) 2022
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Bank loans 412,394 (63,647) - - (6,398) - - - 496 - 342,845

Loans from holding company (Note 27) 15,008 34 - - - - - - - - 15,042

Contingent consideration (Note 27) (iii) - - - 75 - - - - - - 75

Lease liabilities (Note 30) 3,620 (1,523) - - - - 1,890 - - - 3,987

Convertible loan notes (Note 32) - 25,000 (821) - - - - (174) - 322 24,327

431,022 (40,136) (821) 75 (6,398) - 1,890 (174) 496 322 386,276

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Notes to financial statements

December 31, 2022

Non-cash changes
Equity Fair value
Financing component of Acquisition Disposal of adjustments Foreign Other
January 1, cash flows convertible of subsidiary subsidiary (Notes 14, Deferred tax exchange changes December 31,
2021 (i) loan notes (Note 51) (Note 50) 38 and 39) New leases (Note 25) movement (ii) 2021
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Bank loans 353,600 59,419 - - - - - - (625) - 412,394

Loans from holding company (Note 27) 15,551 (543) - - - - - - - - 15,008

Contingent consideration (Note 27) (iii) - - - - - - - - - - -

Lease liabilities (Note 30) 3,521 (2,077) - - - - 2,396 - - (220) 3,620

Convertible loan notes (Note 32) - - - - - - - - - - -

372,672 56,799 - - - - 2,396 - (625) (220) 431,022

(i) The cash flows make up the net amount of proceeds from borrowings and repayments of borrowings in the statement of cash flows.

(ii) Other changes include interest accruals and payments and rent concessions.

(iii) The contingent consideration arises on the acquisition of Huiji Electronic Systems (China) Limited (Note 51). The payment of contingent consideration will be presented as a financing cash
flow of the group.

Illustrative Financial Statements 2022 172

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:7 27. Trade and other payables

Group Company
2022 2021 2022 2021
$’000 $’000 $’000 $’000

Trade payables 120,984 93,925 - -

Loans from holding company (Note 5) 15,042 15,008 6,603 7,209
Financial guarantee contracts 24 30 - -
Other payables 5,000 - - -
Other payables due to holding company (Note 5) 231 139 - -
Other payables due to related companies (Note 5) 549 378 - -
Other payables due to subsidiaries (Notes 5 and 22) - - 111 79
Accruals 44,741 20,768 351 298
Contingent consideration recognised on the
acquisition of Huiji Electronics Systems
(China) Limited (Note 51) 75 - - -

186,646 130,248 7,065 7,586

Current 186,571 130,248 7,065 7,586

Non-current 75 - - -

186,646 130,248 7,065 7,586

SFRS(I) 7:7 Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average
credit period taken for trade purchases is 30 days (excluding the reverse factoring arrangements) [Include where applicable:
and __ days (including the reverse factoring arrangements)]. For most suppliers no interest is charged on the trade payables
for the first 30 days from the date of the invoice. Thereafter, interest is charged on the outstanding balances at various
interest rates. The group has financial risk management policies in place to ensure that all payables are paid within the pre-
agreed credit terms.

Guidance notes – Disclosures of reverse factoring arrangements

Include where applicable.

Furthermore, in order to ensure easy access to credit for its suppliers and facilitate early settlement, the group has entered
into reverse factoring arrangements. The contractual arrangements in place permit the supplier to obtain the amounts
billed less x% discount with the amounts paid by Bank A. The discount represents less than the trade discount for early
repayment commonly used in the market. The group will repay Bank A the full invoice amount on the scheduled payment
date as required by the invoice. As the arrangements do not permit the group to extend finance from Bank A by paying
Bank A later than the group would have paid its supplier, the group considers amounts payable to Bank A should be
classified as trade payables. The reverse factoring arrangements permit Bank A to early settle invoices equal to $__ per
month, the maximum amount used in a month during the year was $__. At the year-end x% of trade payables were
amounts owed under these arrangements.

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Notes to financial statements

December 31, 2022

Loans from the holding company are unsecured, interest-free and repayable on demand.

The group’s major supplier, Entity A, borrowed $1.8 million from Bank Z on June 30, 2021. The bank loan has a maturity of
3 years. The group guaranteed this bank loan and in the event of default of Entity A, the group will have to pay Bank Z.
The maximum group exposure is $1.8 million and the given guarantee covers the time until maturity of the underlying bank
loan. The group received a premium of $36,000. The carrying amount of the guarantee is established as the higher of:

(1) amount of loss allowance calculated in accordance with SFRS(I) 9; and

(2) premium received less cumulative amortisation of the premium to date (according to group’s policy amortisation is
calculated on straight-line basis until maturity of the contract).

SFRS(I) 7:35G At the end of the reporting period, management has assessed the past due status of the debts under guarantee, the financial
(a)-(b) position of the borrowers as well as the economic outlook of the industries in which the borrowers operate, and concluded
that there has not been a significant increase in the credit risk since initial recognition of the financial guarantee contract.
Accordingly, the loss allowance for financial guarantee contract issued by the group is measured at an amount equal to
12-month ECL.

SFRS(I) 7:35G(c) There has been no change in the estimation techniques or significant assumptions made during the current reporting period
in assessing the loss allowance for the financial guarantee contract.

In both years the amount of loss allowance is lower than the premium less cumulative amortisation, therefore no loss
allowance was recognised in profit or loss for the financial guarantee contract.

The company also provides financial guarantee to a bank in respect of loans borrowed by certain subsidiaries. No material
adjustment was required in the separate financial statements of the company to recognise the financial guarantee liability.

Guidance notes – Disclosures required by SFRS(I) 7

If information about contractual and effective interest rates, maturity dates, foreign currency denomination and fair values
have been presented in Note 4 ‘Financial Instruments, Financial Risks and Capital Management’, it is not necessary to
repeat the same information in this note.

SFRS(I) 3:B67(b) On the acquisition of Huiji Electronic Systems (China) Limited (Note 51), the group recognised a contingent consideration
payable with acquisition date fair values of $75,000. At the end of the reporting period, there have been no changes to the
amounts recognised arising from changes in range of outcomes or valuation techniques applied.

SFRS(I) 3:B67(b) Guidance notes – Contingent consideration from business combination

For each reporting period after the acquisition date until the entity collects, sells or otherwise loses the right to a contingent
consideration asset, or until the entity settles a contingent consideration liability or the liability is cancelled or expire s,
the acquirer shall disclose the following:

(i) Any changes in the recognised amounts, including any differences arising upon settlement;

(ii) Any changes in the range of outcomes (undiscounted) and the reasons for those changes; and

(iii) The valuation techniques and key model inputs used to measure contingent consideration.

Disclosures are made for each material business combination or in the aggregate for individually immaterial business
combinations that are material collectively.

Illustrative Financial Statements 2022 174

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

28. Contract liabilities

Group
December 31, December 31, January 1,
2022 2021 2021
$’000 $’000 $’000

SFRS(I) 15:116(a) Amounts received in advance of delivery for internet sale (i) 219 471 350
Maintenance services(ii) 4,790 4,342 3,985
Arising from customer loyalty programme(iii) 172 147 230
Amounts related to construction contracts(iv) 3,888 3,631 3,780
9,069 8,591 8,345

Analysed as:
Current 6,215 6,793 6,357
Non-current 2,854 1,798 1,988
9,069 8,591 8,345

SFRS(I) 15:117 (i) For internet sales, revenue is recognised when control of the goods has transferred to the customer, being at the point
the goods are delivered to the customer. When the customer initially purchases the goods online, the transaction price
received at that point by the group is recognised as contract liability until the goods have been delivered to the
customer.

(ii) Revenue relating to maintenance services is recognised over time although the customer pays up-front in full for these
services. A contract liability is recognised for revenue relating to the maintenance services at the time of the initial
sales transaction and is released over the service period.

(iii) A contract liability arises in respect of the group’s Maxi–Points Scheme as these points provide a benefit to customers
that they would not receive without entering into a purchase contract and the promise to provide loyalty points to the
customer is therefore a separate performance obligation. A contract liability is recognised for revenue relating to the
loyalty points at the time of the initial sales transaction.

(iv) Contract liabilities relating to construction contracts are balances due to customers under construction contracts.
These arise when a particular milestone payment exceeds the revenue recognised to date under the cost–to–cost
method.

SFRS(I) 15:118 There were no significant changes in the contract liability balances during the reporting period.

Guidance notes

SFRS(I) 15:118 SFRS(I) 15:118 contains a requirement to explain the significant changes in the contract asset and contract liability
balances during the reporting period. As there has been no significant movement on these balances in the period,
no further disclosure has been included.

SFRS(I) 15:116(a) Entities are required to disclose the opening and closing balances of receivables, contract assets and contract liabilities
from contracts with customers, if not otherwise separately presented or disclosed. Hence, the balances as at January 1, 2021,
being the opening balances of the comparative period, are presented.

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December 31, 2022

SFRS(I) 15:116(b) The following table shows how much of the revenue recognised in the current reporting period relates to brought –forward
SFRS(I) 15:116(c) contract liabilities. There was no revenue recognised in the current reporting period that related to performance obligations
that were satisfied in a prior year.

2022 2021
$’000 $’000

Amounts received in advance of delivery for internet sale 471 366

Maintenance services 2,569 1,984
Arising from customer loyalty programme 122 63
Amounts related to construction contracts 3,631 3,944
6,793 6,357

29. Refund liability

Group
2022 2021
$’000 $’000

SFRS(I) 15:B21(b) Refund liability 1,083 1,139

SFRS(I) 15:119(d) The refund liability relates to customers’ right to return products within 30 days of purchase. At the point of sale, a refund
SFRS(I) 15:126(d) liability and a corresponding adjustment to revenue is recognised for those products expected to be returned. The group
uses its accumulated historical experience to estimate the number of returns on a portfolio level using the expected value
method.

30. Lease liabilities

Group
2022 2021
$’000 $’000
SFRS(I) 16:58 Maturity analysis:
SFRS(I) 7:39(a)
SFRS(I) 7:B11 Year 1 1,304 1,350
Year 2 1,192 1,312
Year 3 980 1,287
Year 4 896 323
Year 5 440 -
4,812 4,272
Less: Unearned interest (825) (652)
3,987 3,620

Analysed as:
Current 1,242 1,380
Non-current 2,745 2,240
3,987 3,620

Illustrative Financial Statements 2022 176

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:39(c) The group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored wi thin
the group’s treasury function.

In the prior year, the group opted to account for rent concessions that are a direct consequence of the COVID-19 pandemic
as variable payments. The group benefited from a 2-month waiver of lease payments on buildings. The waiver of lease
payments which totalled $0.2 million was accounted for as negative variable lease payments in profit or loss for lease
payments waived in 2021. The group derecognised $0.2 million of the lease liability that has been extinguished by the
forgiveness of lease payments on buildings.

Guidance notes – Illustrative disclosures on other type of rent concession

Include where applicable.

Additionally, the group has benefited from a [x] month lease payment holiday on buildings. The payment holiday reduces
payments in the period to [date] by $__, and increases in payments in the period to [date] by $__. The group has
remeasured the lease liability using the revised lease payments and the discount rate originally applied to the lease,
resulting in a decrease in the lease liability of $__, which was recognised as a negative variable lease payment in profit or
loss.

SFRS(I) 16:53(g) The total cash outflow for leases (including short-term leases and leases of low value assets) amount to $2.3 million
(2021 : $3.6 million).

SFRS(I) 16:55 At December 31, 2022, the group is committed to $0.2 million (2021 : $0.1 million) for short-term leases.

Guidance notes – Disclosures required by SFRS(I) 7

SFRS(I) 16:58 Maturity analysis of the lease liabilities are based on undiscounted lease liabilities amount applying SFRS(I) 7:39 and B11
and are disclosed separately from the maturity analyses of other financial liabilities. The entity uses its judgement in
selecting the appropriate time bands for the maturity analysis.

SFRS(I) 1-37:84 31. Provisions

(a)-(e)
Provision for
Warranty rectification Restoration
Group provision work provision Other Total
$’000 $’000 $’000 $’000 $’000

SFRS(I) 1-37:84(a) At January 1, 2021 4,323 - - 62 4,385

SFRS(I) 1-37:84(b) Addition provision in the year 707 - - 431 1,138
SFRS(I) 1-37:84(c) Utilisation of provision (3,458) - - - (3,458)

SFRS(I) 1-37:84(a) At December 31, 2021 1,572 - - 493 2,065

Contingent liability recognised on acquisition of Huiji
Electronic Systems (China) Limited (Note 51) - - - 21 21
SFRS(I) 1-37:84(e) Unwinding of discount - - - - -
SFRS(I) 1-37:84(b) Addition provision in the year 946 12,670 1,500 58 15,174
SFRS(I) 1-37:84(c) Utilisation of provision (298) (8,112) - (300) (8,710)

SFRS(I) 1-37:84(a) At December 31, 2022 2,220 4,558 1,500 272 8,550

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Notes to financial statements

December 31, 2022

Group
2022 2021
$’000 $’000
SFRS(I) 1-1:61 Analysed as:
Current 6,432 2,065
Non-current 2,118 -

8,550 2,065

SFRS(I) 1-37:85 The warranty provision represents management’s best estimate of the group’s liability under 12-month warranties granted
on electronic products, based on past experience and industry averages for defective products.

SFRS(I) 1-37:85 The provision for rectification work relates to the estimated cost of work agreed to be carried out for the rectification of
goods supplied to one of the group’s major customers (Note 47). Anticipated expenditure for 2023 is $2.5 million, and for
2024 is $2.1 million. These amounts have not been discounted for the purpose of measuring the provision for rectification
work, because the effect is not material.

SFRS(I) 1-37:85 The restoration provision has been created upon the enactment of new environmental legislation in [Country X] on
December 15, 2022 which requires companies in [Country X] to clean up contaminated land by June 30, 2023 and bear the
associated costs thereof. Management is in the process of clarifying certain aspects of the legislation and therefore the final
assessment of costs that the group will need to incur may change materially based on the outcome of this process. Based on
the current interpretation of the legislation, management has estimated a liability of $1.5 million. In estimating the liability,
management has made assumptions regarding the local site volume of contamination, proximity to approved landfill sites,
technology available to decontaminate and costs required to dispose of specialised raw materials.

SFRS(I) 1-37:86 On the acquisition of Huiji Electronic Systems (China) Limited (Note 51), the group recognised an additional contingent
SFRS(I) 3:B64(j) liability in respect of employees’ compensation claims outstanding against that entity. The amount was settled prior to the
end of the reporting period.

SFRS(I) 1-37:85 Guidance notes – Disclosure of other types of provisions

(a),(b) Include where applicable.

(i) The restructuring provision relates to redundancy costs incurred on the disposal of [name of subsidiary] (Note x).
As at December 31, 2022, approximately 50% of the affected employees had left the group’s employment, with the
remainder departing in January 2023.

(ii) The restoration provision represents the present value of management’s best estimate of the future outflow of
economic benefits that will be required to remove leasehold improvements from leased property. The estimate has
been made on the basis of quotes obtained from external contractors. The unexpired term of the lease is 3 years.

SFRS(I) 7:17 32. Convertible loan notes

The convertible loan notes were issued on April 1, 2022 at an issue price of $10 per note and are secured by a personal
guarantee of a director. The notes are convertible into ordinary shares of the company at any time between the date of issue
of the notes and their settlement date at the option of the holder. On issue, the loan notes were convertible at 18 shares
per $10 loan note.

If the notes are not converted, they will be redeemed on April 1, 2027 at par. Interest of 5% will be paid annually until
settlement date.

Illustrative Financial Statements 2022 178

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-32:28 The net proceeds received from the issue of the convertible loan notes have been split between the financial liability element
and an equity component, representing the fair value of the embedded option to convert the financial liability into equity of
the company, as follows:

Group and
Company
2022
$’000

Proceeds of issue of convertible loan notes 25,000

Transaction costs -
Net proceeds from issue of convertible loan notes 25,000

Equity component 995

Transaction costs relating to equity component -
Amount classified as equity 995

Liability component at date of issue (net of transaction costs 24,005

Interest charged (using effective interest rate) 1,260
Interest paid (938)
Carrying amount of liability component at December 31, 2022 24,327

The equity component of $1.0 million has been credited to the equity reserves (Note 37)

SFRS(I) 7:17 The interest expense for the year is calculated by applying an effective interest rate of 7% to the liability component for the
nine months period since the loan notes were issued. The liability component is measured at amortised cost. The difference
between the carrying amount of the liability component at the date of issue and the amount reported in the reporting at
December 31, 2022 represents the effective interest rate less interest paid to that date.

Guidance notes – Disclosures required by SFRS(I) 7

If information about contractual and effective interest rates, maturity dates, foreign currency denomination and fair values
have been presented in Note 4 ‘Financial Instruments, Financial Risks and Capital Management’, it is not necessary to
repeat the same information in this note.

33. Retirement benefit obligations

SFRS(I) 1-19:43 Defined contribution plans

The employees of GAAP Singapore Ltd and its subsidiaries that are located in Singapore are members of a state -managed
retirement benefit plan, the Central Provident Board Fund, operated by the Government of Singapore. The company and the
subsidiaries are required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the
benefits. The only obligation of the group with respect to the retirement benefit plan is to make the specified contributions.

The group operates defined contribution retirement benefit plans for all qualifying employees of its subsidiaries in the People’s
Republic of China and U.S.A. The assets of the plans are held separately from those of the group in funds under the control
of trustees. Where employees leave the plans prior to the contributions fully vesting, the contributions payable by the group
are reduced by the amount of forfeited contributions.

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Notes to financial statements

December 31, 2022

SFRS(I) 1-19:53 The total expense recognised in profit or loss of $9.8 million (2021 : $7.3 million) represents contributions payable to these
plans by the group at rates specified in the rules of the plans. As at December 31, 2022, contributions of $0.7 million
(2021 : $0.8 million) due in respect of current reporting period had not been paid over to the plans. The amounts were paid
subsequent to the end of the reporting period.

Defined benefit plans

SFRS(I) 1-19:139 The group sponsors defined benefit plans for qualifying employees of its subsidiaries in the People’s Republic of China,
and previously for the employees of GAAP Playsystems Limited. The defined benefit plans are administered by a separate
fund that is legally separated from the group. The trustees of the pension fund are required by law to act in the interest of
the fund and of all relevant stakeholders in the plan. The trustees of the pension fund are responsible for the investment
policy with regard to the assets of the fund.

Under the plans, the employees are entitled to post-retirement yearly instalments varying between 40% and 65% of final
salary on attainment of a retirement age of 60. No other post-retirement benefits are provided to these employees.

The defined benefit plans require contributions from employees. Contributions are in the following two forms; one is based
on the number of years of service and the other one is based on a fixed percentage of salary of the employees. Employees
can also make discretionary contributions to the plans.

SFRS(I) 1-19:139(b) The plan in the People’s Republic of China typically exposes the group to actuarial risks such as: investment risk, interest
rate risk, longevity risk and salary risk. The risk relating to benefits to be paid to the dependents of the plan members is
re-insured by an external insurance company.

Investment risk The present value of the defined benefit plan liability is calculated using a discount rate determined by
reference to high quality corporate bond yields; if the return on plan asset is below this rate, it will
create a plan deficit. Currently the plan has a relatively balanced investment in equity securities,
debt instruments and real estate. Due to the long-term nature of the plan liabilities, the trustees of the
pension fund consider it appropriate that a reasonable portion of the plan assets should be invested in
equity securities and in real estate to leverage the return generated by the fund.

Interest risk A decrease in the bond interest rate will increase the plan liability but this will be partially offset by an
increase in the return on the plan’s debt investments.

Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of
the mortality of plan participants both during and after their employment. An increase in the life
expectancy of the plan participants will increase the plan’s liability.

Salary risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of
plan participants. As such, an increase in the salary of the plan participants will increase the plan’s
liability.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit liability were carried out
at December 31, 2022 by Ms L.H. Poh, Fellow of the Institute of Actuaries. The present value of the defined benefit liability,
and the related current service cost and past service cost, were measured using the projected unit credit method.

Illustrative Financial Statements 2022 180

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-19:144 The principal assumptions used for the purposes of the actuarial valuations were as follows:

Valuation at
2022 2021

Discount rate 7% 7%
Expected return on plan assets 9% 8%
Expected rate of salary increases 5% 5%
Future pension increases 4% 4%
Average longevity (in years) at retirement age for current pensioners*
Males 27.5 27.3
Females 29.8 29.6
Average longevity (in years) at retirement age for current employees
(future pensioners)*
Males 29.5 29.3
Females 31.0 30.0
Others [describe]

* Based on the People’s Republic of China’s standard mortality table with modifications to reflect expected changes in
mortality/others [describe].

SFRS(I) 1-19:140 The amount included in the statement of financial position arising from the group’s obligations in respect of its defined
benefit retirement benefit plan is as follows:

Group
2022 2021
$’000 $’000

Present value of defined benefit obligations 159,021 157,302

Fair value of plan assets (125,093) (118,828)

Net liability arising from defined benefit obligation 33,928 38,474

SFRS(I) 1-19:120 Amounts recognised in profit or loss in respect of these defined benefit plans are as follows.
SFRS(I) 1-19:135
Group
2022 2021
$’000 $’000
SFRS(I) 1-19:141 Service cost
Current service cost 17,561 12,297
Past service cost and (gain) loss from settlements (9,903) (6,306)
Net interest expense 2,578 2,554
Components of defined benefit costs recognised in profit or loss 10,236 8,545

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Notes to financial statements

December 31, 2022

SFRS(I) 1-19:135 The defined benefit costs for the year have been included in the employee benefits expense in profit or loss.
[Where analysis of expenses recognised in profit or loss is by nature]

OR

Of the expense (service cost) for the year, $7.8 million (2021 : $6.5 million) has been included in profit or loss as cost of
sales and $2.4 million (2021 : $2.0 million) has been included in administrative expenses. The net interest expense has
been included within finance costs (Note 44). The remeasurement of the net defined benefit liability is included in other
comprehensive income.
[Where analysis of expenses recognised in profit or loss is by function]

Amounts recognised in other comprehensive income are as follows:

Group
2022 2021
$’000 $’000

Return on plan assets (excluding amounts included in net interest expense) - -

Actuarial gains and losses arising from changes in financial assumptions - -
Actuarial gains and losses arising from changes in demographic assumptions - -
Actuarial gains and losses arising from experience adjustments - -
Others (describe) - -
Adjustments for restrictions on the defined benefit asset - -
Remeasurement of the net defined benefit liability (asset) - -

SFRS(I) 1-19:141 Movements in the present value of defined benefit obligation in the year are as follows:

Group
2022 2021
$’000 $’000

Opening defined benefit obligation 157,302 169,541

Current service cost 17,561 12,297
Interest cost 9,021 10,057
Remeasurement (gains) losses:
Actuarial gains and losses from changes in financial assumptions - -
Actuarial gains and losses from changes in demographic assumptions - -
Actuarial gains and losses from experience adjustments - -
Others (describe) - -
Contributions from plan participants - -
Past service cost (9,903) (6,306)
Losses (gains) on curtailments - -
Liabilities extinguished on settlements - -
Obligation transferred on disposal of subsidiary (4,932) -
Liabilities assumed in a business combination 2,436 -
Exchange differences on foreign plans - -
Benefits paid (12,464) (28,287)

Closing defined benefit obligation 159,021 157,302

Illustrative Financial Statements 2022 182

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-19:141 Movements in the fair value of plan assets in the year are as follows:

Group
2022 2021
$’000 $’000

Opening fair value of plan assets 118,828 119,736

Interest income 6,443 7,503
Remeasurement gains (losses):
Return on plan assets (excluding amounts included in net interest expense) - -
Others (describe) - -
Contributions from the employer 6,278 11,440
Contributions from plan participants 5,570 8,650
Exchange differences on foreign plans 438 (214)
Benefits paid (12,464) (28,287)
Assets acquired in a business combination - -
Assets distributed on settlements - -

Closing fair value of plan assets 125,093 118,828

SFRS(I) 1-19:142 The major categories and fair values of plan assets at the end of the reporting period for each category are as follows:

Group
2022 2021
$’000 $’000
Equity instruments (categorised by industry type)
- Consumer industry 1,182 2,629
- Energy and utilities 2,000 2,000
Subtotal 3,182 4,629

Debt instruments (categorised by issuer’s rating)

- AAA 24,096 28,735
- AA 10,000 10,000
Subtotal 34,096 38,735

Property (as categorised by nature and location)

- Retail shops in Shanghai 20,000 15,000
- Residential properties in Beijing 9,717 3,226
Subtotal 29,717 18,226

Derivatives:
- Interest rate swaps 40,000 40,000
- Foreign currency forward contracts 18,098 17,238
Subtotal 58,098 57,238

Total 125,093 118,828

SFRS(I) 1-19:142 Derivatives are classified as Level 2 instruments and property as Level 3 instruments. It is the policy of the plan to use
interest rate swaps to hedge its exposure to interest rate risk. This policy has been realised during the reporting and
preceding period. Foreign currency exposures are fully hedged by the use of the foreign currency forward contracts.

The actual return on plan assets was $6.4 million (2021 : $7.5 million).

183
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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-19:143 The plan assets do not include any of the group’s own financial instruments, nor any property occupied by, or other assets
used by, the group.

SFRS(I) 1-19:145(a) Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary
increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the
respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

• If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by $0.7 million
(increase by $0.7 million).

• If the expected salary growth increases (decreases) by 1%, the defined benefit obligation would increase by $0.1 million
(decrease by $0.1 million).

• If the life expectancy increases (decreases) by one year for both men and women, the defined benefit obligation would
increase by $0.2 million (decrease by $0.2 million).

SFRS(I) 1-19:145(b) The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as
it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be
correlated.

SFRS(I) 1-19:145(c) In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using
the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the
defined benefit obligation liability recognised in the statement of financial position.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

SFRS(I) 1-19:146 Each year an asset-liability-matching (‘ALM’) study is performed in which the consequences of the strategic investment
policies are analysed in terms of risk-and-return profiles. Investment and contribution policies are integrated within this
study.

The main strategic choices that are formulated in the actuarial and technical policy document of the fund are:

• Asset mix based on 25% equity instruments, 50% debt instruments and 25% investment property;

• Interest rate sensitivity caused by the duration of the defined benefit obligation should be reduced by 30% using debt
instruments in combination with interest rate swaps.

• Maintaining an equity buffer that gives a 97.5% assurance that assets are sufficient within the next 12 months.

There has been no change in the process used by the group to manage its risks from prior periods.

SFRS(I) 1-19:147 The group’s subsidiaries fund the cost of the entitlements expected to be earned on a yearly basis. Employees pay a fixed
5% percentage of pensionable salary. The residual contribution (including back service payments) is paid by the entities of
the group. The funding requirements are based on the local actuarial measurement framework. In this framework the
discount rate is set on a risk free rate. Furthermore, premiums are determined on a current salary base. Additional liabilities
stemming from past service due to salary increases (back-service liabilities) should be paid immediately to the plan.
Apart from paying the costs of the entitlements, the group’s subsidiaries are not liable to pay additional contributions in case
the plan does not hold sufficient assets. In that case, the plan should take other measures to restore its solvency, such as
a reduction of the entitlements of the plan members.

Illustrative Financial Statements 2022 184

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

The average duration of the benefit obligation at the end of the reporting period is 16.5 years (2021 : 15.6 years).
This number can be subdivided into the duration related to:

• Active members: 19.4 years (2021 : 18.4 years);

• Deferred members: 22.6 years (2021 : 21.5 years); and

• Retired members: 9.3 years (2021 : 8.5 years).

The group expects to make a contribution of $10 million (2021 : $8 million) to the defined benefit plans during the next
financial year. The group is committed to paying into the plan for [X] future years, $__ per annum in line with the agreed
Schedule of Contributions.

34. Share-based payments

Equity-settled share option plan

SFRS(I) 2:45(a) The company has a share option scheme for all employees of the group. The plan is administered by the Remuneration and
Share Option Committee. Options are exercisable at a price based on the average of the last done prices for the shares of
the company on the Singapore Exchange Securities Trading Limited for the three market days preceding the date of grant.
The Remuneration and Share Option Committee may at its discretion fix the exercise price at a discount not exceeding 20%
to the above price. The vesting period is 2 years. If the options remain unexercised after a period of 4 years from the date
of grant, the options expire. Options are forfeited if the employee leaves the group before the options vest.

SFRS(I) 2:45(b) Details of the share options outstanding during the year are as follows:

Group and Company

2022 2021
Weighted Weighted
Number of average Number of average
share options exercise price share options exercise price
$ $

Outstanding at the beginning of the year 4,500,000 4.31 2,500,000 4.45

Granted during the year 1,700,000 4.51 2,000,000 4.22
Forfeited during the year (1,000) 4.45 - -
Exercised during the year (650,000) 4.45 - -
Expired during the year (60,000) 4.45 - -

Outstanding at the end of the year 5,489,000 4.35 4,500,000 4.31

Exercisable at the end of the year 1,789,000 4.45 2,500,000 4.45

SFRS(I) 2:45(c),(d) The weighted average share price at the date of exercise for share options exercised during the year was $4.95
(2021 : $Nil). The options outstanding at the end of the year had a weighted average exercise price of $4.35 (2021 : $4.31),
and a weighted average remaining contractual life of 3.4 years (2021 : 4.4 years).

SFRS(I) 2:47(a) In 2022, options were granted on March 31, June 30 and October 31. The aggregate of the estimated fair values of the
options granted on those dates is $2.9 million. In 2021, options were granted on June 30 and December 31. The aggregate
of the estimated fair values of the options granted on those dates was $1.2 million.

185
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

The fair values for share options granted during the year were calculated using The Black-Scholes pricing model. The inputs
into the model are as follows:

2022 2021

Weighted average share price $4.95 $4.37

Weighted average exercise price $4.51 $4.22
Expected volatility 40% 35%
Expected life 4 4
Risk free rate 3.5% 3.0%
Expected dividend yields Nil Nil

SFRS(I) 2:47(a) Expected volatility was determined by calculating the historical volatility of the company’s share price over the previous
4 years. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of
non-transferability, exercise restrictions and behavioural considerations.

SFRS(I) 2:51(a) The group and the company recognised total expenses of $2.9 million (2021 : $1.2 million) related to equity-settled
share-based payment transactions during the year.

Guidance notes – Share-based payment modifications

SFRS(I) 2:47(c) requires that for share-based payment arrangements that were modified during the period, the entity is
required to disclose:

(i) An explanation of those modifications;

(ii) The incremental fair value granted (as a result of those modifications); and
(iii) Information of how the incremental fair value granted was measured, consistently with the requirements set out in
SFRS(I) 2:47(a) & (b).

Cash-settled share-based payments

SFRS(I) 2:45(a) The group issued to certain employees share appreciation rights (‘SARs’) that require the group to pay the intrinsic value of
SFRS(I) 2:51(a),(b) the SAR to the employee at the date of exercise. The group has recorded liabilities of $6.7 million (2021 : $3.5 million).
Fair value of the SARs is determined using the Black-Scholes pricing model using the assumptions noted above. The group
recorded total expenses of $3.2 million (2021 : $3.5 million) during the year in respect of SARs. The total intrinsic value of
the vested SARs at December 31, 2022 was $Nil (2021 : $Nil).

SFRS(I) 2:45(a) Guidance notes – Other share-based payment plans

Include where applicable.

Other share-based payment plans

The employee share purchase plans are open to almost all employees and provide for a purchase price equal to the daily
average market price on the date of grant, less 15%. The shares can be purchased during a two-week period each year.
The shares so purchased are generally placed in the employee share savings plan for a five-year period. Pursuant to these
plans, the group issued 1,000,000 ordinary shares in 2022, at weighted average share prices of $5.35. The discount of
$0.8 million will be expensed over the vesting period of 3 years.

Illustrative Financial Statements 2022 186

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-1:79(a) 35. Share capital

Group and Company

2022 2021 2022 2021
Number of ordinary shares $’000 $’000
Issued and paid up:
At the beginning of the year 120,000,000 120,000,000 152,098 152,098
Exercise of share options 650,000 - 650 -
Issued for cash 1,000,000 - 5,350 -

At the end of the year 121,650,000 120,000,000 158,098 152,098

Fully paid ordinary shares, which have no par value, carry one vote per share and a right to dividends as and when declared
by the company.

SFRS(I) 1-1:79(a) Share options over ordinary shares granted under the employee share option plan

As at December 31, 2022, employees held options over 5,489,000 ordinary shares (of which 3,700,000 are unvested) in
aggregate. The number of options and their expiry dates are as follows:

Date of grant Number of options Expiring on:

July 1, 2019 1,789,000 June 30, 2023

June 30, 2021 1,000,000 June 30, 2025
December 31, 2021 1,000,000 December 31, 2026
March 31, 2022 250,000 March 31, 2026
June 30, 2022 1,150,000 June 30, 2026
October 31, 2022 300,000 October 31, 2026

5,489,000

As at December 31, 2021, employees held options over 4,500,000 ordinary shares (of which 2,000,000 are unvested) in
aggregate. The number of options and their expiry dates are as follows:

Date of grant Number of options Expiring on:

July 1, 2019 2,500,000 June 30, 2023

June 30, 2021 1,000,000 June 30, 2025
December 31, 2021 1,000,000 December 31, 2026

4,500,000

Share options granted under the employee share option plan carry no rights to dividends and no voting rights. Further details
of the employee share option plan are contained in Note 34.

187
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-32:34 36. Treasury shares

Group and Company

2022 2021 2022 2021
Number of ordinary shares $’000 $’000

At the beginning of the year - - - -

Repurchased during the year 200,000 - 500 -

At the end of the year 200,000 - 500 -

The company acquired 200,000 of its own shares through purchases on the Singapore Exchange Securities Trading Limited
during the year. The total amount paid to acquire the shares was $0.5 million and has been deducted from shareholders’
equity. The shares are held as treasury shares. The company intends to reissue these shares to executives who exercise
their share options under the employee share option plan.

Guidance notes – Nature and purpose of reserve

SFRS(I) 1-1:79(b) requires an entity to disclose the description of the nature and purpose of each reserve within equity,
either in the statement of financial position or in the statement of changes in equity or in the notes to the financial
statements, e.g. in the accounting policy notes or as presented in the following paragraphs.

SFRS(I) 1-1:79(b) 37. Capital reserves

Equity reserve

The equity reserve represents:

(i) The equity component of convertible debt instruments (Note 32); and
(ii) Effects of changes in ownership interests in subsidiaries when there is no change in control (Note 22).

Share option reserve

The share option reserve arises on the grant of share options to employees under the employee share option plan.
Further information about share-based payments to employees is set in Notes 34 and 35.

Illustrative Financial Statements 2022 188

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-1:79(b) 38. Revaluation reserves

Property revaluation reserve

The property revaluation reserve arises on the revaluation of land and buildings. When revalued land or buildings are sold,
the portion of the property revaluation reserve that relates to that asset is transferred directly to retained earnings. Item s
of other comprehensive income included in the property revaluation reserve will not be reclassified subsequently to profit or
loss.

SFRS(I) 1-16:77(f) The property revaluation reserve is not available for distribution to the company’s shareholders.

SFRS(I) 1-1:106(d) Movement in property revaluation reserve:

(ii)
Group
2022 2021
$’000 $’000

Balance at beginning of year 35,452 37,977

Revaluation increase (decrease) on land and buildings 53,283 (2,845)
Deferred tax liability on revaluation of land and buildings (3,692) 320
Effect of change in tax rate - -
Balance at end of year 85,043 35,452

Investments revaluation reserves

SFRS(I) 1-1:79(b) The investments revaluation reserves represent the cumulative gains and losses arising on the revaluation of:
SFRS(I) 1-1:82A
(i) investments in equity instruments designated as at FVTOCI, net of cumulative gain/loss transferred to retained
earnings upon disposal; and

(ii) investments in debt instruments classified as at FVTOCI, net of cumulative loss allowance recognised on these
investments and cumulative gain/loss reclassified to profit or loss upon disposal or reclassification of these investments.

SFRS(I) 1-1:106(d) Movement in investments revaluation reserves:

(i),(ii)
Group
2022 2021
$’000 $’000

Balance at beginning of year 489 432

SFRS(I) 7:20(a)(vii) Fair value gain on investments in equity instruments designated as at FVTOCI 46 47
Income tax relating to fair value gain on investments in equity instruments
designated as at FVTOCI - -
SFRS(I) 7:20(a)(viii) Cumulative (gain) loss on investments in equity instruments designated as at FVTOCI
SFRS(I) 9:B5.7.1 transferred to retained earnings upon disposal - -
SFRS(I) 7:20(a)(viii) Fair value gain on investments in debt instruments classified as at FVTOCI 20 10
Income tax relating to fair value gain on investments in debt instruments classified
as at FVTOCI - -
SFRS(I) 7:20(a)(viii) Cumulative (gain) loss on investments in debt instruments classified as at FVTOCI
reclassified to profit or loss upon disposal - -
SFRS(I) 1-1:82(cb) Cumulative (gain) loss on investments in debt instruments classified as at FVTOCI
reclassified to profit or loss upon reclassification from FVTOCI to FVTPL - -
Balance at end of year 555 489

189
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 7:35H The following table shows the movement in 12-month ECL that has been recognised for corporate bonds classified as at
FVTOCI:
Group
2022 2021
$’000 $’000

Balance at beginning of year - -

Net movement for the year - -
Balance at end of year - -

SFRS(I) 7:11A(e) Investments in equity instruments designated as at FVTOCI are not subject to impairment.

39. Hedging and translation reserves

Cash flow hedge reserve

The cash flow hedge reserve represents the cumulative amount of gains and losses on hedging instruments deemed effective
in cash flow hedges. The cumulative deferred gain or loss on the hedging instrument is recognised in profit or loss only when
the hedged transaction affects the profit or loss, or is included directly in the initial cost or other carrying amount of the
hedged non-financial items (basis adjustment).

SFRS(I) 1-1:106(d) Movement in cash flow hedge reserve:

(i),(ii)
Foreign exchange
risk Interest rate risk Total
2022 2021 2022 2021 2022 2021
$’000 $’000 $’000 $’000 $’000 $’000
Group
Balance at beginning of year 1,876 1,290 - - 1,876 1,290
SFRS(I) 7:24C(b)(i) Gain (Loss) arising on changes in fair value of
hedging instruments (145) 686 1,779 - 1,634 686
Income tax related to gain (loss) recognised in
other comprehensive income - - - - - -
SFRS(I) 7:24C(b)(iv) (Gain) Loss reclassified to profit or loss
- hedged item has affected profit or loss (278) (100) (195) - (473) (100)
SFRS(I) 7:24C(b)(iv) (Gain) Loss reclassified to profit or loss
- forecast transaction no longer expected to occur (85) - - - (85) -
Income tax related to amounts reclassified to
profit or loss - - - - - -
SFRS(I) 7:24E(a) Cumulative (gain) loss transferred to initial carrying
amount of hedged items - - - - - -
Income tax related to amounts transferred to initial
carrying amount of hedged item - - - - - -
Balance at end of year 1,368 1,876 1,584 - 2,952 1,876

Illustrative Financial Statements 2022 190

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Foreign exchange translation reserve

Exchange differences relating to the translation of net assets in the group’s foreign operations, which relate to subsidiaries
only, from their functional currency into the parent’s functional currency, being Singapore dollars, are recognised directly in
the translation reserve.

SFRS(I) 1-1:106(d) Movement in foreign exchange translation reserve:

(i),(ii)
Group
2022 2021
$’000 $’000

Balance at beginning of year (3,368) (4,098)

SFRS(I) 7:24C(b)(i) Gain (Loss) arising on changes in fair value of hedging instruments designated in
net investment hedge - -
Income tax relating to gain (loss) on hedges of net assets in foreign operations - -
Exchange differences on translating the net assets of foreign operations (1,693) 730
Income tax relating to gain (loss) arising on translating the net assets of
foreign operations - -
SFRS(I) 7:24C(b)(iv) Gain (Loss) on hedging instruments reclassified to profit or loss on disposal of
foreign operations - -
Income tax related to gain (loss) on hedging instruments reclassified to profit or loss
on disposal of foreign operations - -
Gain (Loss) reclassified to profit or loss on disposal of foreign operations - -
Income tax related to gain (loss) reclassified to profit or loss on disposal of foreign operations - -
Share of other comprehensive income of associates and joint venture - -
Balance at end of year (5,061) (3,368)

Guidance notes – hedges of a net investment in a foreign operation

SFRS(I) 7:24B If applicable, SFRS(I) 7:24B requires an entity to disclose, in a tabular format, the following amounts related to hedged
items separately by risk category for cash flow hedges and hedges of a net investment in a foreign operation:

(i) the change in value of the hedged item used as the basis for recognising hedge ineffectiveness for the period (i.e. for
cash flow hedges the change in value used to determine the recognised hedge ineffectiveness in accordance with paragraph
6.5.11(c) of SFRS(I) 9);

(ii) the balances in the cash flow hedge reserve and the foreign currency translation reserve for continuing hedges that
are accounted for in accordance with paragraphs 6.5.11 and 6.5.13(a) of SFRS(I) 9; and

(iii) the balances remaining in the cash flow hedge reserve and the foreign currency translation reserve from any hedging
relationships for which hedge accounting is no longer applied.

191
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Other possible line items under ‘Reserves’ account

Include where applicable.

Movement in financial liabilities at FVTPL credit risk reserve:

Group
2022 2021
$’000 $’000

Balance at beginning of year xx xx

SFRS(I) 7:20(a)(i) Fair value gain (loss) on financial liabilities designated as at FVTPL attributable to
changes in credit risk xx xx
Income tax relating to fair value gain (loss) on financial liabilities designated
as at FVTPL attributable to changes in credit risk xx xx
Transfer of credit risk reserve to retained earnings upon derecognition of
related financial liabilities xx xx
Others [describe] xx xx
Balance at end of year xx xx

SFRS(I) 9:5.7.7 The changes in fair value of financial liabilities designated as at FVTPL attributable to the financial liabilities’ own credit
risk are recognised in other comprehensive income and accumulated in the financial liabilities at FVTPL credit risk reserve.
The cumulative gain or loss accumulated in this reserve is not subsequently reclassified to profit or loss.

40. Revenue

Guidance notes

SFRS(I) 15:113(a) SFRS(I) 15:113(a) requires revenue recognised from contracts with customers to be disclosed separately from its other
sources of revenue (e.g. rental income) unless that amount is presented separately in the statement of comprehensive
income in accordance with other Standards.

SFRS(I) 15:115 The group derives its revenue from contracts with customers for the transfer of goods and services over time and at a point
in time in the following major product lines. The disclosure of revenue by product line is consistent with the revenue
information that is disclosed for each reportable segment under SFRS(I) 8 (see Note 41).

Illustrative Financial Statements 2022 192

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 15:114 A disaggregation of the group’s revenue for the year, for both continuing and discontinued operations, is as follows:
SFRS(I) 15:B87-89
Group
2022 2021
$’000 $’000
Segment revenue
Continuing operations:
Electronic equipment - direct sale customers 143,549 76,988
- wholesale customers 290,439 230,956
- internet customers 150,013 77,126
Leisure goods - wholesale customers 91,149 84,036
- retail outlets 55,694 38,491
Computer software installation 29,743 11,091
Construction 304,073 209,562
1,064,660 728,250
Discontinued operation:
Sale of electronic toys - retail outlets 159,438 141,203

1,224,098 869,453

Timing of revenue recognition

At a point in time:
Electronic equipment 405,905 299,001
Leisure goods 146,843 122,527
Sale of electronic toys 159,438 141,203
712,186 562,731
Over time:
Electronic equipment 178,096 86,069
Computer software installation 29,743 11,091
Construction 304,073 209,562
511,912 306,722

1,224,098 869,453

Guidance notes – Disaggregation of revenue

SFRS(I) 15:114 SFRS(I) 15:114 requires an entity to disaggregate revenue recognised from contracts with customers into categories that
depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
This disaggregation will depend on the entity's individual facts and circumstances.

In the illustrative financial statements the group has assessed that the disaggregation of revenue by operating segments
is appropriate in meeting this disclosure requirement as this is the information regularly reviewed by the chief operating
decision maker (CODM) in order to evaluate the financial performance of the entity. The group also believes that presenting
a disaggregation of revenue based on the timing of transfer of goods or services (i.e. at a point in time or over time)
provides users of the financial statements with useful information as to the nature and timing of revenue from contracts
with customers.

If an entity discloses disaggregated revenue on a basis other than that used for revenue information disclosed for each
reportable segment the entity should disclose sufficient information to allow users of the financial statements to understand
the relationship between these two disclosures.

193
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 15:120(a) The transaction price allocated to [unsatisfied and/or partially unsatisfied] performance obligations as at the end of the
reporting period are set out below:
Group
2022 2021
$’000 $’000

Maintenance obligations relating to electronic equipment 10,800 9,600

Installation of software services 936 815
Construction of residential properties 6,936 7,428
18,672 17,843

SFRS(I) 15:120(b) Management expects that 72% (2021 : 60%) of the transaction price allocated to the [unsatisfied and/or partially
unsatisfied] contracts as of the end of the reporting period amounting to $13.4 million (2021 : $10.7 million) will be
recognised as revenue during the next reporting period. The remaining 28% (2021 : 40%) amounting to $4.4 million will be
recognised in the 2024 financial year and $0.9 million in the 2025 financial year (2021 : $5.8 million will be recognised in
the 2023 financial year and $1.3 million in the 2024 financial year).

Guidance notes – Practical expedient on disclosure of transaction price allocated to remaining performance
obligations

SFRS(I) 15:121 No disclosure of transaction price allocated to remaining performance obligations in accordance with SFRS(I) 15:120 is
necessary if either of the following conditions is met:
(a) the performance obligation is part of a contract that has an original expected duration of one year or less; or
(b) the entity recognises revenue from the satisfaction of the performance obligation based on the entity’s right to
invoice the customer in the amount that corresponds directly with the value of the entity’s performance completed
to date in accordance with SFRS(I) 15:B16.

SFRS(I) 15:122 When the practical expedient in SFRS(I) 15:121 is applied, SFRS(I) 15:122 requires disclosure of such application.
SFRS(I) 15:122 also requires qualitative disclosure of whether any consideration from contracts with customers is not
included in the transaction price (e.g. due to constraint on estimate of variable consideration) and, therefore, not included
in the information disclosed in accordance with SFRS(I) 15:120.

Guidance notes – presentation of contract balances

SFRS(I) 15:109 There is no requirement in SFRS(I) 15 for contract balances (i.e. contract assets, receivables and contract liabilities) to be
disclosed together at a single place in the financial statements. SFRS(I) 15 uses the terms ‘contract asset’ and ‘contract
liability’ but does not prohibit an entity from using alternative descriptions in the statement of financial position for those
items. If an entity uses an alternative description for a contract asset, the entity shall provide sufficient information for a
user of the financial statements to distinguish between receivables and contract assets.

Contract balances and the related disclosures have been included in the following places in the notes to the financial
statements:

Receivables Balance described as ‘Trade receivables’ (Note 8)

Contract assets Note 9
Contract costs Note 10
Contract liabilities Note 28

Materiality considerations will affect the line items to be disclosed separately within each relevant SFRS(I) 15 contract
balance. A single net contract asset or liability should be presented for each contract balance. For illustrative purposes, all
line items are disclosed separately (ignoring the size of the balances involved).

Illustrative Financial Statements 2022 194

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

41. Segment information

Guidance notes

The following segment information is required by SFRS(I) 8 Operating Segments, to be presented in the consolidated
financial statements of a group with a parent (and in the separate or individual financial statements of an entity):
• Whose debt or equity instruments are traded in a public market (a domestic or foreign stock exchange or an over
the counter market, including local and regional markets); or
• That files, or is in the process of filing, its (consolidated) financial statements with a securities commission or other
regulatory organisation for the purpose of issuing any class of instruments in a public market.

SFRS(I) 8:22 requires entities to give a brief description of the operating segments that have been aggregated and the
economic indicators that have been assessed in determining the aggregated operating segments share similar economic
characteristics.

According to SFRS(I) 8:12, two or more operating segments may be aggregated into a single operating segment if the
segments have similar economic characteristics and the segments are similar in each of the following respects:
• The nature of the products and services
• The nature of the production processes
• The type or class of customer for their products and services
• The methods used to distribute their products or provide their services
• If applicable, the nature of the regulatory environment, for example, banking, insurance or public utilities

SFRS(I) 15 Revenue from Contracts with Customers and SFRS(I) 8 Operating Segments do not have similar aggregation
criteria. More disaggregation may be required in Note 40, because SFRS(I) 8 permits aggregation in certain situations.
Management should not assume the two disclosures will be disaggregated at the same level, unless they can conclude
that the disaggregation level is the same in both Standards and segment revenue is measured on the same basis as the
revenue Standard. In that case, the segment disclosures presented in Note 40 need not be repeated in Note 41.

SFRS(I) 8:22 Products and services from which reportable segments derive their revenues

Information reported to the group’s chief operating decision maker (CODM) for the purposes of resource allocation and
assessment of segment performance is focused on the types of goods or services delivered or provided, and in respect of
the ‘electronic equipment’ and ‘leisure goods’ operations, the information is further analysed based on the category of
customer. Management has chosen to organise the group around differences in products and services. No operating
segments have been aggregated in arriving at the reportable segments of the group.

Specifically, the group’s reportable segments under SFRS(I) 8 are as follows:

Electronic equipment - Direct sale customers

- Wholesale customers
- Internet customers

Leisure goods - Wholesale customers

- Retail customers

Computer software installation - installation of computer software for specialised business applications

Construction - construction of residential properties

The leisure goods segments supply sports shoes and equipment, as well as outdoor play equipment.

The electronic equipment segments supply industrial electronic equipment to support the operations of heavy industrial
machinery, military equipment and automotive, electronic security systems and office electronic equipment (calculators,
computer peripherals etc.). It also supplied electronic toys prior to discontinuation (see below).

195
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 8:23 Segment revenues and profits

The following is an analysis of the group’s revenue and results by reportable segment:

Revenue Net Profit

Group 2022 2021 2022 2021
$’000 $’000 $’000 $’000
Continuing operations
Electronic equipment*
- Direct sale customers 143,549 76,988 29,975 6,052
- Wholesale customers 290,439 230,956 26,490 15,679
- Internet customers 150,013 77,126 5,740 3,014

Leisure goods
- Wholesale customers 91,149 84,036 19,931 10,361
- Retail customers 55,694 38,491 10,390 2,835

Computer software installation 29,743 11,091 19,465 5,981

Construction services 304,073 209,562 38,874 14,087

Total for continuing operations 1,064,660 728,250 150,865 58,009

Share of results of associates and joint venture 1,270 1,517

Finance income - interest income 2,926 3,138
Finance income – other 1,086 1,132
Central administration costs and directors’ salaries (34,116) (27,915)
Other gains and losses 120 (171)
Finance costs (12,162) (16,508)

SFRS(I) 8:28(b) Profit before tax (continuing operations) 104,137 19,202

Discontinued operation
Sale of electronic toys
- Retail customers 159,438 141,203 15,053 7,822

Total for discontinued operation 159,438 141,203 15,053 7,822

Central administration costs and directors’ salaries (2,067) (2,432)

Finance costs (493) (830)

SFRS(I) 8:28(b) Profit before tax (discontinued operation) 12,493 4,560

Income tax expense (continuing and discontinued operations) (17,983) (4,199)

SFRS(I) 8:28(a) Consolidated revenue and profit for the year 1,224,098 869,453 98,647 19,563

* excluding electronic toys

SFRS(I) 8:23(a) Revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the
SFRS(I) 8:23(b) current year (2021 : $Nil).

Illustrative Financial Statements 2022 196

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 8:27 The accounting policies of the reportable segments are the same as the group’s accounting policies described in Note 2.
Segment profit represents the profit earned by each segment without allocation of the share of results of associates and
joint venture, central administration costs and directors’ salaries, finance income, finance costs and income tax expense.
This is the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of
segment performance.

SFRS(I) 8:23(f) The exceptional rectification costs of $12.7 million disclosed in Note 47 relate to the electronic equipment - direct sale
customers reportable segment.

SFRS(I) 8:27 Segment assets

Group
2022 2021
$’000 $’000
Electronic equipment
- Direct sale customers 220,063 183,103
- Wholesale customers 169,857 101,960
- Internet customers 22,320 17,250

Leisure goods
- Wholesale customers 226,117 211,798
- Retail customers 28,680 27,750

Computer software installation 5,080 2,409

Construction services 300,233 283,233

Total segment assets 972,350 827,503

Assets relating to discontinued operations - -

Unallocated assets 169,470 130,069

SFRS(I) 8:28(c) Consolidated total assets 1,141,820 957,572

SFRS(I) 8:27(c) For the purposes of monitoring segment performance and allocating resources between segments, the chief operating
decision maker monitors the tangible, intangible and financial assets attributable to each segment. All assets are allocated
to reportable segments with the exception of investments in associates (Note 23), investments in joint venture (Note 24),
other financial assets (except for trade and other receivables) and tax assets. Goodwill has been allocated to reportable
segments as described in Note 20. Assets used jointly by reportable segments are allocated on the basis of the revenues
earned by individual reportable segments.

Guidance notes

An entity is required to disclose a measure of segment assets only if that measure is regularly reported to the chief
operating decision maker.

197
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Other segment information

Depreciation Additions to
and amortisation non-current assets*
SFRS(I) 8:23(e) Group 2022 2021 2022 2021
SFRS(I) 8:24(b) $’000 $’000 $’000 $’000
Electronic equipment
- Direct sale customers 10,627 7,650 23,723 12,318
- Wholesale customers 6,944 4,092 31,769 18,442
- Internet customers 1,212 800 6,280 3,631

Leisure goods
- Wholesale customers 4,135 1,861 8,910 4,181
- Retail customers 1,645 604 2,665 1,712

Computer software installation 900 400 300 200

Construction services 7,875 4,481 21,358 14,334

33,338 19,888 95,005 54,818

* The amounts exclude additions to financial instruments, deferred tax assets and net defined benefit assets.

SFRS(I) 8:23(i) In addition to the depreciation and amortisation reported above, impairment losses of $4.1 million (2021 : $Nil) and
SFRS(I) 1-36:129 $0.5 million (2021 : $Nil) were recognised in respect of property, plant and equipment, and goodwill, respectively.

These impairment losses were attributable to the following reportable segments:

2022
$’000
Electronic equipment
- Direct sale customers 2,130
- Wholesale customers 2,000

Construction services 463

4,593

SFRS(I) 8:32 Revenue from major products and services

The group’s revenue from its major products and services are disclosed in Note 40.

Illustrative Financial Statements 2022 198

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 8:33(a),(b) Geographical information

The group’s revenue from external customers and information about its segment assets (non-current assets excluding
investments in associates and joint venture, finance lease receivables, deferred tax assets and other financial assets) by
geographical location are detailed below:

Revenue from
external customers Non-current assets
2022 2021 2022 2021
$’000 $’000 $’000 $’000
Based on location of customer

U.S.A. 822,699 584,347 350,876 325,787

Singapore 171,486 121,803 218,551 118,446
Malaysia 52,701 37,432 101,501 127,850
South Korea 137,892 97,942 20,000 20,000
Others 39,320 27,929 11,238 11,993

1,224,098 869,453 702,166 604,076

SFRS(I) 8:34 Information about major customers

Included in revenues arising from sale of electronic equipment to wholesale customers are revenues of approximately $90.3
million (2021 : $40.2 million) which arose from sale to the group’s largest customer. No other single customers contributed
10% or more to the group’s revenue in 2022 and 2021.

42. Finance income

Group
2022 2021
$’000 $’000
Continuing operations

SFRS(I) 7:20(b) Interest income

Financial instruments measured at amortised cost:
Bank deposits 100 10
Other financial assets measured at amortised cost 624 495
Investment in debt instruments measured at FVTOCI 630 630
Finance lease receivables 1,572 2,003
2,926 3,138

Other
SFRS(I) 7:B5(e) Dividends received from equity investments designated as at FVTOCI:
SFRS(I) 7:11A(d)
Relating to investments derecognised during the year - -
Relating to investments held at the end of the reporting period 1,086 1,132
1,086 1,132

Total finance income 4,012 4,270

199
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

43. Other gains and losses

Group
2022 2021
$’000 $’000
Continuing operations

SFRS(I) 7:20(a)(i) Net gain (loss) arising on financial assets mandatorily measured at FVTPL (279) 25
SFRS(I) 7:20(a)(i) Net gain (loss) arising on financial liabilities designated as at FVTPL - -
SFRS(I) 7:20(a)(i) Net gain (loss) arising on financial liabilities mandatorily measured at FVTPL - -
SFRS(I) 7:20(a)(viii) Reclassification of net gain (loss) on debt investments classified as at FVTOCI
from equity to profit or loss upon disposal - -
SFRS(I) 7:20(a)(v) Net gain (loss) arising on derecognition of financial liabilities measured at amortised cost - -
SFRS(I) 7:20(a)(v) Net gain (loss) arising on modification of financial instruments measured at amortised cost
that were not derecognised - -
SFRS(I) 1-40:76(d) Change in fair value of investment property 500 -
SFRS(I) 7:24A(c) Hedge ineffectiveness on cash flow hedges - -
SFRS(I) 7:24C(b)(ii)
SFRS(I) 7:24A(c) Hedge ineffectiveness on net investment hedges - -
SFRS(I) 7:24C(b)(ii)
Net foreign exchange gain (loss) (101) (196)

120 (171)

Guidance notes

SFRS(I) 7:20A If the entity has gain or loss recognised in the statement of comprehensive income arising from the derecognition of
financial assets measured at amortised cost, to disclose:
(i) an analysis of the gain or loss, showing separately gains and losses arising from derecognition of those financial
assets; and
(ii) the reasons for derecognising those financial assets.

Illustrative Financial Statements 2022 200

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

44. Finance costs

Continuing operations Discontinued operation Total

2022 2021 2022 2021 2022 2021
$’000 $’000 $’000 $’000 $’000 $’000

Interest on borrowings 14,428 16,281 493 830 14,921 17,111

Interest on convertible loan notes (Note 32) 1,260 - - - 1,260 -
SFRS(I) 16:49 Interest on lease liabilities 240 227 - - 240 227
SFRS(I) 16:53(b)
SFRS(I) 7:20(b) Total interest expense 15,928 16,508 493 830 16,421 17,338

SFRS(I) 1-23:26(a) Less: Amounts included in the cost of

qualifying assets (3,571) - - - (3,571) -
12,357 16,508 493 830 12,850 17,338

SFRS(I) 7:24C(a)(ii) (Gain) Loss arising on derivatives designated

SFRS(I) 9:6.5.8(a) as hedging instruments in fair value hedges - - - - - -
SFRS(I) 9:6.5.8(b) (Gain) Loss arising on adjustment for hedged
item attributable to the hedged risk in a
designated fair value hedge accounting
relationship - - - - - -
SFRS(I) 7:24C(b)(iv) (Gain) Loss arising on interest rate swaps
SFRS(I) 9:6.5.11 designated as cash flow hedges
(d)(ii) reclassified from equity (Note 14) (195) - - - (195) -
Unwinding of discount on provisions - - - - - -
SFRS(I) 1-19:134 Net interest expense on defined benefit
obligation - - - - - -
Other finance costs - - - - - -

12,162 16,508 493 830 12,655 17,338

Guidance notes

For the purposes of illustration, the disclosures above include line items with Nil values. Delete line items if not applicable.

SFRS(I) 1-23:26(b) Borrowing costs included in the cost of qualifying assets during the year arose on the general borrowing pool and are
calculated by applying a capitalisation rate of 7% (2021 : 7%) to expenditure on such assets.

201
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-12:79-80 45. Income tax expense

Income tax recognised in profit or loss

Continuing operations Discontinued operation Total

Group 2022 2021 2022 2021 2022 2021
$’000 $’000 $’000 $’000 $’000 $’000

SFRS(I) 1-12:79 Tax expense (income) comprises:

SFRS(I) 1-12:80(a) Current tax expense (income) 11,403 2,408 1,673 252 13,076 2,660

SFRS(I) 1-12:80(b) Adjustments in respect of prior years 584 197 66 35 650 232

SFRS(I) 1-12:80(c) Deferred tax expense (income)

relating to the origination and
reversal of temporary differences 4,255 1,205 78 102 4,333 1,307

Deferred tax reclassified from equity

to income - - - - - -

16,242 3,810 1,817 389 18,059 4,199

SFRS(I) 1-12:80(d) Effect of changes in tax rates and laws (76) - - - (76) -

SFRS(I) 1-12:80(g) Write-downs (reversal of previous

write-downs) of deferred tax assets - - - - - -

SFRS(I) 1-12:80(h) Tax expense (income) associated with

changes in accounting policies that
cannot be accounted for
retrospectively - - - - - -

Total tax expense (income) 16,166 3,810 1,817 389 17,983 4,199

Guidance notes

For the purposes of illustration, the disclosures above include line items with Nil values. Delete line items if not applicable.

Illustrative Financial Statements 2022 202

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-12:81(c) Domestic income tax is calculated at 17% (2021 : 17%) of the estimated assessable profit for the year. Taxation for other
jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

SFRS(I) 1-12:81(c) The total charge for the year can be reconciled to the profit before tax as follows:

Group
2022 2021
$’000 $’000
Profit before tax:
Continuing operations 104,137 19,202
Discontinued operation 12,493 4,560

116,630 23,762

Income tax expense calculated at 17% (2021 : 17%) 20,019 4,153

Tax effect of income that are not taxable in determining taxable profit (736) -
Tax effect of expenses that are not deductible in determining taxable profit 79 51
Tax effect of share of results of associates and joint venture (216) (258)
Tax effect of utilisation of tax losses not previously recognised - -
Change in unrecognised deferred tax assets - -
Tax effect of previously unrecognised and unused tax losses and
tax offsets now recognised as deferred tax assets (1,751) -
Effect of different tax rates of subsidiaries operating in other jurisdictions 14 21
Effect on deferred tax balances due to the change in income tax rate from [xx]% to 17% (76) -
17,333 3,967

Adjustments in respect of prior years 650 232

Income tax expense recognised in profit or loss 17,983 4,199

Guidance notes

SFRS(I) 1-12:84 The reconciliation should enable users of financial statements to understand whether the relationship between tax expense
(income) and accounting profit is unusual and to understand the significant factors that could affect that relationship in
the future. Distinguishing between recurring and non-recurring items may assist with this. It is also informative to state
the effective tax rate. The relationship between tax expense (income) and accounting profit may be affected by such
factors as revenue that is exempt from taxation, expenses that are not deductible in determining taxable profit (tax loss),
the effect of tax losses and the effect of foreign tax rates and it is useful to explain these items.

203
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-12:81(ab) Income tax recognised in other comprehensive income

SFRS(I) 1-1:90
Group
2022 2021
$’000 $’000
Deferred tax
Items that will not be reclassified subsequently to profit or loss:
Gains (Losses) on property revaluation 3,692 (320)
Remeasurement of net defined benefit liability - -
Fair value gain (loss) on investment in equity instruments designated as at FVTOCI - -
3,692 (320)

Items that may be reclassified subsequently to profit or loss:

Fair value gain (loss) on investments in debt instruments measured at FVTOCI - -
Fair value gain (loss) arising on hedging instruments during the period - -
Exchange differences on translation of foreign operations - -
- -

Total income tax recognised in other comprehensive income 3,692 (320)

Guidance notes

For the purposes of illustration, the disclosures above include line items with Nil values. Delete line items if not applicable.

Income tax recognised directly in equity

Group
2022 2021
$’000 $’000
SFRS(I) 1-12:81(a) Current tax
Excess tax deductions related to share-based payments on exercised options - -

SFRS(I) 1-12:81(a) Deferred tax

Initial recognition of the equity component on issue of convertible loan notes 174 -
Change in estimated excess of tax deductions related to share-based payments - -
174 -

Total income tax recognised directly in equity 174 -

Guidance notes

For the purposes of illustration, the disclosures above include line items with Nil values. Delete line items if not applicable.

Illustrative Financial Statements 2022 204

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

46. Discontinued operation

SFRS(I) 5:30 On May 14, 2022, the group entered into a sale agreement to dispose of GAAP Playsystems Limited, which carried out all of
SFRS(I) 5:41 the group’s electronic toys manufacturing operations. The disposal was effected in order to generate cash flow for the
expansion of the group’s other businesses. The disposal was completed on November 30, 2022, on which date control of
GAAP Playsystems Limited passed to the acquirer. Details of the assets and liabilities disposed of, and the calculation of the
profit or loss on disposal, are disclosed in Note 50.

SFRS(I) 5:33(b) The results of the discontinued operation, which have been included in the profit for the year, were as follows:
SFRS(I) 5:34
Group
2022 2021
$’000 $’000

SFRS(I) 5:33(b)(i) Revenue 159,438 141,203

Cost of sales (97,431) (79,923)
Distribution costs (19,447) (16,458)
Administrative expenses (38,067) (39,432)
Finance costs (493) (830)
SFRS(I) 5:33(b)(i) Profit before tax 4,000 4,560
SFRS(I) 5:33(b)(ii) Income tax expense (1,817) (389)
SFRS(I) 1-12:81(h)
2,183 4,171
SFRS(I) 5:33(b)(iii) Gain on disposal of discontinued operation (Note 50) 8,493 -
SFRS(I) 5:33(b)(iv) Income tax expense - -
SFRS(I) 1-12:81(h)

SFRS(I) 5:33(d) Profit for the year from discontinued operation (attributable to owners of the company) 10,676 4,171

SFRS(I) 5:33(c) During the year, GAAP Playsystems Limited contributed $4.8 million (2021 : $4.3 million) to the group’s net operating cash
SFRS(I) 5:34 flows, paid $1.4 million (2021 : $2.9 million) in respect of investing activities and paid $0.9 million (2021 : $3.7 million) in
respect of financing activities.

205
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-1:104 47. Profit for the year

Profit for the year has been arrived at after charging (crediting):

Continuing operations Discontinued operation Total

Group 2022 2021 2022 2021 2022 2021
$’000 $’000 $’000 $’000 $’000 $’000

Depreciation and amortisation:

SFRS(I) 1-1:104 Depreciation of property, plant and

equipment 28,447 16,392 1,420 2,650 29,867 19,042
SFRS(I) 16:49 Depreciation of right-of-use assets 1,495 898 - - 1,495 898
SFRS(I) 16:53(a)
SFRS(I) 1-38:118(d) Amortisation of intangible assets 2,614 846 - - 2,614 846

SFRS(I) 1-1:104 Total depreciation and amortisation 32,556 18,136 1,420 2,650 33,976 20,786

SFRS(I) 1-36:126(a) Impairment of property, plant and

equipment 4,130 - - - 4,130 -

SFRS(I) 1-1:97-98 Gain (Loss) on disposal of property,

plant and equipment - - - - - -

SFRS(I) 1-36:126(a) Impairment of goodwill 463 - - - 463 -

Impairment loss on financial assets:

SFRS(I) 15:113(b) Loss allowance on trade receivables and

contract assets 3,577 253 - - 3,577 253
SFRS(I) 7:20(a)(vi) Loss allowance on other financial assets
measured at amortised cost - - - - - -
SFRS(I) 7:20(a)(viii) Loss allowance on debt investments
measured at FVTOCI - - - - - -
Total impairment loss (reversed) on
financial assets 3,577 253 - - 3,577 253

Employee benefits expense

(including directors’ remuneration):

SFRS(I) 2:50 Share-based payments

SFRS(I) 2:51(a) Equity-settled share-based payments 2,740 1,092 120 110 2,860 1,202
SFRS(I) 2:51(a) Cash-settled share-based payments 3,059 3,431 105 85 3,164 3,516
SFRS(I) 1-19:53 Defined contribution plans 8,200 5,760 1,600 1,540 9,800 7,300
SFRS(I) 1-19:135(b) Defined benefit plans 7,686 6,215 2,550 2,330 10,236 8,545
Other employee benefits 201,498 172,311 25,794 22,841 227,292 195,152

SFRS(I) 1-1:104 Total employee benefits expense 223,183 188,809 30,169 26,906 253,352 215,715

Directors’ remuneration:
- of the company 1,232 1,089 - - 1,232 1,089
- of the subsidiaries 726 655 121 135 847 790

Total directors’ remuneration 1,958 1,744 121 135 2,079 1,879

Illustrative Financial Statements 2022 206

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Continuing operations Discontinued operation Total

Group 2022 2021 2022 2021 2022 2021
$’000 $’000 $’000 $’000 $’000 $’000

SFRS(I) 1-21:52(a) Net foreign exchange losses (gains) 101 196 (98) (109) 294 87

SFRS(I) 1-38:126 Research and development costs 4,800 6,560 - - 4,800 6,560

SFRS(I) 1-20:20 Government grant (165) (238) - - (165) (238)

SFRS(I) 1-2:36(d) Cost of inventories recognised as expense 663,705 458,372 97,431 79,923 761,136 538,295

SFRS(I) 1-2:36(e) Write downs of inventories recognised

as an expense - - - - - -

SFRS(I) 1-2:36(f) Reversal of write downs of inventories

recognised in the year - - - - - -

SFRS(I) 16:53(c) Expense relating to short-term leases 535 788 - - 535 788

SFRS(I) 16:53(d) Expense relating to leases of 502 486 - - 502 486

low value assets

SFRS(I) 16:53(e) Expense relating to variable lease - - - - - -

payments not included in the
measurement of the lease liability

SFRS(I) 16:60A(b) Rent concessions - (220) - - - (220)

LM 1207(6)(a) Audit fees:

- paid to auditors of the company 110 100 - - 110 100
- paid to other auditors 70 60 - - 70 60

Total audit fees 180 160 - - 180 160

LM 1207(6)(a) Non-audit fees:

- paid to auditors of the company 20 20 - - 20 20
- paid to other auditors 40 35 - 5 40 40

Total non-audit fees 60 55 - 5 60 60

Aggregate amount of fees paid to auditors 240 215 - 5 240 220

SFRS(I) 1-1:97-98 Costs of $12.7 million have been recognised during the year in respect of rectification work to be carried out on goods
supplied to one of the group’s major customers, which have been included in [cost of sales/cost of inventories and employee
benefits expense]. The amount represents the estimated cost of work to be carried out in accordance with an agreed schedule
up to 2023. $8.1 million has been expended in the current year, with a provision of $4.6 million (2021 : $Nil) carried forward
to meet anticipated expenditure in 2023 and 2024 (Note 31).

207
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Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Government grants

Include where applicable.

SFRS(I) 1-20:20 In 2022, government grants of $__ were received as part of a government initiative to provide immediate financial support
SFRS(I) 1-20:39(b) as a result of [describe event that led to receipt of grants and the effect the grants have on the results]. There are no
future related costs in respect of these grants which were received solely as compensation for costs incurred in the year.

Guidance notes – Presentation and disclosure of grant income

SFRS(I) 1-20:29 According to SFRS(I) 1-20 paragraph 29, the grant income can be presented either (1) separately as grant income or
under ‘other income’; or (2) deducted against the salary costs.

Disclosure requirements of SFRS(I) 1-20 paragraphs 31 and 39 should also be considered. As part of the disclosure
requirements, where the grant income is deducted against the related expense, clear disclosures on the effects of the
grant income on the related expense will need to be included in the notes to the financial statements.

Guidance notes

1. Additional disclosure if analysis of expenses recognised in profit or loss is by function

Separate disclosure of employee benefits expense and depreciation is required where the analysis of expenses recognised
in profit or loss are presented by function.

LM 1207(6) 2. Audit fees disclosure

Where a company is listed, the disclosures relating to audit fees are required to be made in the annual report i.e. not
necessarily in the financial statements.

The specific disclosures required for listed companies are:

LM 1207(6)(a) a. The aggregate amount of fees paid to auditors, broken down into audit and non-audit services. If there are no audit
or non-audit fees paid, to make an appropriate negative statement.

LM 1207(6)(b) b. Confirmation by the audit committee that it has undertaken a review of all non-audit services provided by the auditors
and they would not, in the audit committee’s opinion, affect the independence of the auditors.

LM 1207(6)(c) c. A statement that the issuer complies with Rules 712, and Rule 715 or 716 in relation to appointment of its auditing
firms.

48. Earnings per share

Guidance notes – Earnings per share

SFRS(I) 1-33 Earnings Per Share requires that earnings per share (EPS) information be presented in the consolidated
financial statements of a group with a parent (and in the separate or individual financial statements of an entity):
• Whose ordinary shares or potential ordinary shares are traded in a public market (a domestic or foreign stock
exchange or an over-the-counter market, including local or regional markets); or
• That files, or is in the process of filing, its (consolidated) financial statements with a securities commission or other
regulatory organisation for the purpose of issuing ordinary shares in a public market.

If other entities choose to disclose EPS information voluntarily in their financial statements that comply with SFRS(I)
Accounting Standards, the disclosures in relation to the EPS information should comply fully with the requirements set out
in SFRS(I) 1-33.

Illustrative Financial Statements 2022 208

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

From continuing and discontinued operations

The calculation of the basic and diluted earnings per share is based on the following data:

SFRS(I) 1-33:70(a) Earnings 2022 2021

$’000 $’000

Earnings for the purpose of basic earnings per share

(profit for the year attributable to owners of the company) 99,166 20,134
Effect of dilutive potential ordinary shares:
Interest on convertible loan notes (net of tax) 1,040 -

Earnings for the purpose of diluted earnings per share 100,206 20,134

Number of shares 2022 2021

’000 '000

SFRS(I) 1-33:70(b) Weighted average number of ordinary shares for the purposes of basic earnings per share 120,825 120,000

SFRS(I) 1-33:70(c) Effect of dilutive potential ordinary shares:

Share options 2,860 1,872
Convertible loan notes 45,000 -

Weight average number of ordinary shares for the purposes of diluted earnings per share 168,685 121,872

From continuing operations

The calculation of the basic and diluted earnings per share from continuing operations is based on the following data.

SFRS(I) 1-33:70(a) Earnings

2022 2021
$’000 $’000

Profit for the year attributable to owners of the company 99,166 20,134
Less: Profit for the year from discontinued operation (10,676) (4,171)
Earnings from continuing operations for the purpose of basic earnings per share 88,490 15,963
Effect of dilutive potential ordinary shares:
Interest on convertible loan notes (net of tax) 1,040 -

Earnings from continuing operations for the purpose of diluted earnings per share 89,530 15,963

SFRS(I) 1-33:70(b) The denominators used are the same as those detailed above for both basic and diluted earnings per share from continuing
and discontinued operations.

SFRS(I) 1-33:68 From discontinued operation

Basic earnings per share for the discontinued operation is 8.9 cents per share (2021 : 3.5 cents per share) and diluted
earnings per share for the discontinued operation is 6.3 cents per share (2021 : 3.4 cents per share), based on the profit
for the year from the discontinued operation of $10.7 million (2021 : $4.2 million) and the denominators detailed above for
both basic and diluted earnings per share.

209
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Earnings per share

Impact of changes in accounting policy

SFRS(I) 1-8:28(f)(ii) Impact on profit for the

year from continuing Impact on basic earnings Impact on diluted
operations per share earnings per share
2022 2021 2022 2021 2022 2021
Cents per Cents per Cents per Cents per
$’000 $’000 share share share share

Changes in accounting policies

relating to:
- Application of the amendments to xxx xx xx xx xx xx xx
- Others (Please specify) xx xx xx xx xx xx

xx xx xx xx xx xx

Impact of prior period errors

SFRS(I) 1- Impact on profit for the

8:49(b)(ii) year from continuing Impact on basic earnings Impact on diluted
operations per share earnings per share
2022 2021 2022 2021 2022 2021
Cents per Cents per Cents per Cents per
$’000 $’000 share share share share

Changes relating to prior period errors:

- [Specify relevant prior period error] xx xx xx xx xx xx

xx xx xx xx xx xx

49. Dividends

SFRS(I) 1-1:107 On May 23, 2022, a dividend of 4.2 cents per share (total dividend $5.0 million) was paid to shareholders. In May 2021,
the dividend paid was 6.7 cents per share (total dividend $8.0 million).

SFRS(I) 1-1:137(a) In respect of the current year, the directors propose that a dividend of 9.8 cents per share will be paid to shareholders on
SFRS(I) 1-10:13 May 25, 2023. The proposed dividend is subject to approval by shareholders at the annual general meeting and has not
been included as a liability in these financial statements. The proposed dividend is payable to all shareholders on the register
of members on April 21, 2023. The total estimated dividend to be paid is $11.9 million.

Illustrative Financial Statements 2022 210

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

50. Disposal of subsidiary

SFRS(I) 1-7:40(d) As referred to in Note 46, on November 30, 2022, the group discontinued its electronic toys operation at the time of the
disposal of its interest in GAAP Playsystems Limited.

The net assets of GAAP Playsystems Limited at the date of disposal were as follows:

2022
$’000
Current assets
Cash and cash equivalents 4,382
Trade receivables 13,549
Inventories 11,976

Total current assets 29,907

Non-current asset
Property, plant and equipment 10,125

Current liabilities
Trade payables (2,321)
Income tax payable (1,854)

Total current liabilities (4,175)

Non-current liabilities
Bank loans (6,398)
Retirement benefit obligation (4,932)
Deferred tax liability (255)
Total non-current liabilities (11,585)

Attributable goodwill 1,673

Net assets disposed off 25,945

SFRS(I) 1-7:40(a) Consideration received:

SFRS(I) 1-7:40(b) Cash 10,899

Deferred consideration 23,539

Total consideration received 34,438

211
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

2022
$’000
Gain on disposal
Consideration received 34,438
Net assets derecognised (25,945)
Non-controlling interest derecognised -
Fair value of retained interest -
Cumulative gain (loss) on financial assets at FVTOCI
reclassified from equity on loss of control of subsidiary -
Cumulative exchange differences in respect of the net assets of the subsidiary
reclassified from equity on loss of control of subsidiary -

Gain on disposal 8,493

The gain on disposal is included in the profit for the year from discontinued operation (Note 46).

Guidance notes

For the purposes of illustration, the disclosures above include line items with Nil values. Delete line items if not applicable.

2022
$’000
SFRS(I) 1-7:40(c) Net cash inflow arising on disposal
Cash consideration received 10,899
Less: Cash and cash equivalents disposed of (4,382)

6,517

There were no disposals of subsidiaries made in 2021.

The deferred consideration will be settled in cash by the purchaser on or before May 30, 2023.

The impact of GAAP Playsystems Limited on the group’s results and cash flows in the current and prior periods is disclosed
in Note 46.

51. Acquisition of subsidiary

SFRS(I) 3:B64 On August 1, 2022, the group acquired 80% of the issued share capital of Huiji Electronic Systems (China) Limited (‘HESL’),
(a)-(d) obtaining control of HESL.

HESL is an entity incorporated in the People’s Republic of China with its principal activity being the sale and manufacture of
electronic equipment, and qualifies as a business as defined in SFRS(I) 3. HESL was acquired for various reasons, the primary
reason being to gain access to HESL’s already established manufacturing facilities and assembled workforce (instead of
setting up new facilities which may take time to reach optimum production efficiency levels).

Guidance notes

SFRS(I) 3:B66 The disclosures illustrated are also required for business combinations after the end of the reporting period but before the
financial statements are authorised for issue unless the initial accounting for the acquisition is incomplete at the time the
financial statements are authorised for issue. In such circumstances, the entity is required to describe which disclosures
could not be made and the reasons why they could not be made.

Illustrative Financial Statements 2022 212

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 3:B64(i) Identifiable assets acquired and liabilities assumed at the date of acquisition
SFRS(I) 1-7:40(d)
2022
$’000
Current assets
Cash and cash equivalents 4,272
Trade and other receivables 12,520
Inventories 2,854

Non-current assets
Plant and equipment 8,907
Trademarks 870
Deferred tax asset 351

Current liabilities
Trade and other payables (21,268)

Non-current liabilities
Contingent liability (21)
Retirement benefit obligation (2,436)
Deferred tax liabilities (150)

Total identifiable assets acquired and liabilities assumed 5,899

SFRS(I) 3:B64(h) The fair value of the financial assets includes receivables acquired (which principally comprised of trade receivables) with a
fair value of $12.5 million and a gross contractual value of $13.0 million. The best estimate at acquisition date of the
contractual cash flows not expected to be collected is $0.5 million.

SFRS(I) 3:B64(h) Guidance notes – Acquired receivables

The disclosures above in relation to acquired receivables should be provided by major class of receivables e.g. loans, direct
finance leases and any other class of receivables.

SFRS(I) 3:B64(j) A contingent liability of $21,000 has been recognised in respect of [provide description of nature of obligation]. We expect
that the majority of this expenditure will be incurred in 2023 and that all will be incurred by the end of 2024. The potential
undiscounted amount of all future payments that the group could be required to make in respect of this contingent liability
is estimated to be between $18,000 and $23,000.

SFRS(I) 3:B64(j) Guidance notes – Contingent liability assumed in a business combination

If a contingent liability is not recognised because its fair value cannot be measured reliably, the acquirer shall disclose the
information required by SFRS(I) 1-37:86, and the reasons why the liability cannot be measured reliably.

SFRS(I) 1-37:86 requires a brief description of the nature of the contingent liability and, where practicable:

a. An estimate of its financial effect;

b. An indication of the uncertainties relating to the amount or timing of any outflow; and
c. The possibility of any reimbursement.

213
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Non-controlling interest

SFRS(I) 3:B64(o) The non-controlling interest (20% ownership interest in HESL) recognised at the acquisition date was measured by reference
to the fair value of the non-controlling interest and amounted to $1.5 million. This fair value was estimated by applying an
income approach. The following were the key model inputs used in determining the fair value:

• Assumed discount rate ranging from 18% to 22%;

• Assumed long-term sustainable growth rates of 3% to 5%; and

• Assumed adjustments because of the lack of control or lack of marketability that market participants would consider
when estimating the fair value of the non-controlling interests in HESL.

SFRS(I) 3:B64(f) Consideration transferred (at acquisition date fair values)

SFRS(I) 1-7:40(a)
2022
$’000

Cash 7,942
Contingent consideration arrangement (i) 75
Effect of settlement of legal claim against HESL (ii) 40

Total 8,057

SFRS(I) 3:B64(g) (i) The contingent consideration arrangement requires the group to pay the vendors an additional $1 million if HESL’s profit
before interest and tax (PBIT) in each of the years 2022 and 2023 exceeds $2 million. HESL’s PBIT for the past three
years has been $1.2 million on average and the management does not consider it probable that this payment will be
required. $75,000 represents the estimated fair value of this obligation estimated by applying an income approach and
discounted at 13% per annum.

SFRS(I) 3:B64(l) (ii) Prior to the acquisition of HESL by the group, the entity was pursuing a legal claim against a freight company in respect
of damage to goods in transit to a customer. Although the entity was confident of recovery, this amount has not
previously been recognised as an asset. In line with the requirements of SFRS(I) 3, the group has recognised the
effective settlement of this legal claim on the acquisition of HESL by recognising $40,000 (being the estimated fair value
of the claim) as a gain in the statement of profit or loss and other comprehensive income within the ‘Other operating
income’ line item. This has resulted in a corresponding increase in the consideration transferred. The fair value of the
gain was determined after considering estimations of probabilities of outcomes of the lawsuit, and associated legal fees.

Illustrative Financial Statements 2022 214

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Transactions recognised separately from the acquisition of assets or assumption of liabilities
in a business combination

SFRS(I) 3:51 The illustrative disclosures above are on a settlement of pre-existing non-contractual relationship between acquirer and
acquiree, and is an example of a transaction to be recognised separately from the acquisition of assets or assumption of
liabilities in a business combination.

SFRS(I) 3:52 A transaction entered into by or on behalf of the acquirer or primarily for the benefit of the acquirer or the combined entity,
rather than primarily for the benefit of the acquiree (or its former owners) before the combination, is likely to be a separate
transaction. The following are examples of separate transactions that are not to be included in applying the acquisition
method:

a. A transaction that in effect settles pre-existing relationships between the acquirer and acquiree;

b. A transaction that remunerates employees or former owners of the acquiree for future services; and

c. A transaction that reimburses the acquiree or its former owners for paying the acquirer’s acquisition-related costs.

SFRS(I) 3:B50–B62 provide related application guidance.

SFRS(I) 3:B64(m) Acquisition-related costs amounting to $0.1 million have been excluded from the consideration transferred and have been
recognised as an expense in the period, within the ‘Other operating expenses’ line item in the statement of profit or loss and
other comprehensive income.

Goodwill arising on acquisition

2022
$’000

Consideration transferred 8,057

Add: Non-controlling interest 1,500
Less: Fair value of identifiable net assets acquired (5,899)

Goodwill arising on acquisition 3,658

SFRS(I) 3:B64(e) Goodwill arose in the acquisition of HESL because the cost of the combination included a control premium. In addition,
the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies,
revenue growth, future market development and the assembled workforce of HESL. These benefits are not recognised
separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.

The group also acquired the customer lists and customer relationships of HESL as part of the acquisition. These assets could
not be separately recognised from goodwill because they are not capable of being separated from the group and sold,
transferred, licensed, rented or exchanged, either individually or together with any related contracts. Consequently, they are
subsumed into goodwill.

SFRS(I) 3:B64(k) None of the goodwill is expected to be deductible for tax purposes.

215
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Bargain purchase

SFRS(I) 3:B64(n) In a bargain purchase the acquirer is required to disclose:

• The amount of any gain recognised and the line item in the statement of profit or loss and other comprehensive
income in which the gain is recognised; and
• A description of the reasons why the transaction resulted in a gain.

SFRS(I) 3 does not specify that the amount of the gain recognised must be shown as a separate line item. It could be
shown as part of ‘Other gains and losses’. However, the requirements of SFRS(I) 3:B64(n) ensure that the amount is
separately disclosed in the notes.

Net cash outflow arising on acquisition

2022
$’000

SFRS(I) 1-7:40(b) Consideration paid in cash 7,942

SFRS(I) 1-7:40(c) Less: Cash and cash equivalent balances acquired (4,272)

3,670

Impact of acquisitions on the results of the group

SFRS(I) 3:B64(q) HESL contributed $6.9 million revenue and $0.5 million to the group’s profit for the period between the date of acquisition
and the reporting date.

If the acquisition of HESL had been completed on the first day of the financial year, group revenue for the year would have
been $1.1 billion and group profit would have been $89.2 million.

Guidance notes – Impact of acquisitions on the results of the group

If disclosure of any of the information required by SFRS(I) 3:B64(q) above is impracticable, the acquirer should disclose
that fact and explain why the disclosure is impracticable.

Illustrative Financial Statements 2022 216

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Guidance notes – Other disclosures

SFRS(I) 3:B64(p) 1. Acquisitions achieved in stages

In a business combination achieved in stages, the acquirer is required to disclose:

• The acquisition-date fair value of the equity interest in the acquiree held by the acquirer immediately before the
acquisition date; and

• The amount of any gain or loss recognised as a result of remeasuring to fair value the equity interest in the acquiree
held by the acquirer before the business combination and the line item in the statement of profit or loss and other
comprehensive income in which that gain or loss is recognised.

The intended scope of the second bullet point is not completely clear. It will certainly capture gains or losses that arise
where the previous equity interest was not recognised at fair value, e.g. an interest in an associate to which equity
accounting has been applied. But it would appear appropriate also to disclose any gain or loss in respect of the previous
equity interest that is reclassified from other comprehensive income to the statement of profit or loss and other
comprehensive income, e.g. because the investment was classified as at fair value through other comprehensive income.

SFRS(I) 3:B67(a) 2. Initial accounting for a business combination determined provisionally

If the initial accounting for a business combination is incomplete for particular assets, liabilities, non-controlling interests
or items of consideration and the amounts recognised in the financial statements for the business combination thus have
been determined only provisionally, the acquirer shall disclose the following information:

(i) The reasons why the initial accounting for the business combination is incomplete;
(ii) The assets, liabilities, equity interests or items of consideration for which the initial accounting is incomplete; and
(iii) The nature and amount of any measurement period adjustments recognised during the reporting period.

An example of such a disclosure may be as follows:

The initial accounting for the acquisition of Huiji Electronic Systems (China) Limited has only been provisionally determined
at the end of the reporting period. At the date of finalisation of these consolidated financial statements,
the necessary market valuations and other calculations had not been finalised and they have therefore only been
provisionally determined based on the management’s best estimate of the likely values.

[List out assets, liabilities, non-controlling interests or items of consideration where fair values are provisionally determined]

Disclosures are made for each material business combination or in the aggregate for individually immaterial business
combinations that are material collectively.

SFRS(I) 1-7:43 52. Non-cash transactions

Additions to equipment amounting to $5 million in 2022 (2021 : $Nil) were acquired on deferred payment terms, the
settlement of which are still outstanding at year end.

217
Notes to financial statements

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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-37:86 53. Contingent liabilities

During the reporting period, a customer of the group instigated proceedings against it for alleged defects in an electronic
product which, it is claimed, were the cause of a major fire in the customer’s premises in February 2022. Total losses to the
customer have been estimated at $29.8 million and this amount is being claimed from the group.

The group’s lawyers have advised that they do not consider that the claim has merit, and they have recommended that it
be contested. No provision has been made in these financial statements as the group’s management does not consider that
there is any probable loss.

The group acquired $21,000 of contingent liability at the date of acquisition of Huiji Electronic Systems (China) Limited
(Note 51). This was recognised as a provision and was settled prior to the end of the reporting period (Note 31).

SFRS(I) 12:23(b) Contingent liabilities incurred by the group arising from its interest in associates
[disclose details]
Group
2022 2021
$’000 $’000

Group’s share of associates’ contingent liabilities - -

The amount disclosed represents the group’s share of contingent liabilities of associates. The extent to which an outflow of
funds will be required is dependent on the future operations of the associates being more or less favourable than currently
expected.

SFRS(I) 1-16:74(c) 54. Commitments

Group
2022 2021
$’000 $’000

Commitments for the acquisition of property, plant and equipment 9,965 20,066

SFRS(I) 1-40:75(h) In addition, the group has entered into a contract for the management and maintenance of its investment property for the
next 5 years, which will give rise to an annual charge of $0.1 million.

SFRS(I) 12:23 The group’s share of the capital commitments of its joint venture, JV Electronics Limited, is as follows:

Group
2022 2021
$’000 $’000

Commitments for the acquisition of property, plant and equipment 928 379

Illustrative Financial Statements 2022 218

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

55. Operating lease arrangements

SFRS(I) 16:89 Operating leases, in which the group is the lessor, relate to investment property owned by the group with lease terms of
between 6 to 8 years, with a three-year extension option. All operating lease contracts contain market review clauses in the
event that the lessee exercises its option to renew. The lessee does not have an option to purchase the property at the
expiry of the lease period.

SFRS(I) 16:92(b) The unguaranteed residual values do not represent a significant risk for the group, as they relate to property which is located
in a location with a constant increase in value over the last 10 years. The group did not identify any indications that this
situation will change.

SFRS(I) 16:97 Maturity analysis of operating lease payments:

Group
2022 2021
$’000 $’000

Year 1 600 600

Year 2 600 600
Year 3 600 600
Year 4 600 600
Year 5 600 600
Year 6 and onwards 860 1,460

Total 3,860 4,460

SFRS(I) 16:91 The following table represents the amounts reported in profit or loss:
Group
2022 2021
$’000 $’000

SFRS(I) 16:90(b) Lease income on operating leases 600 680

Lease income relating to variable lease payments that do not depend on an index or rate - -

Total 600 680

SFRS(I) 1-10:21 56. Events after the reporting period

On January 18, 2023, the premises of Huiji Electronic Systems (China) Limited were seriously damaged by fire. Insurance
claims have been put in hand but the cost of refurbishment is currently expected to exceed these by $8.3 million.

219
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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-1:41 57. Reclassifications and comparative figures

Guidance notes – Reclassification and comparative figures

If information on reclassifications and comparative figures are applicable for the year, the following wordings and format
could be used:

Certain reclassifications have been made to the prior year’s financial statements to enhance comparability with the current
year’s financial statements [state reasons].

As a result, certain line items have been amended in the statement of financial position, statement of profit or loss and other
comprehensive income, statement of changes in equity and statements of cash flow, and the related notes to the financial
statements. Comparative figures have been adjusted to conform to the current year’s presentation.

The items were reclassified as follows:

Group
Previously After
reported reclassification
2021 2021
$’000 $’000

[To provide details] xx xx

Illustrative Financial Statements 2022 220

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

58. Standards issued but not effective

SFRS(I) 1-8:30 At the date of authorisation of these financial statements, the group and company have not applied the following SFRS(I)
pronouncements that have been issued but are not yet effective: [List the SFRS(I), SFRS(I) INTs and amendments to
SFRS(I) where applicable.]

Guidance notes

Disclosures of SFRS(I) pronouncements issued but not effective

It is not required to list all SFRS(I)s, SFRS(I) INTs and amendments to SFRS(I) that were issued but not effective at date
of authorisation of financial statements. Only those relevant to the entity should be indicated.

The list of SFRS(I)s issued but not effective shown below is complete as of November 30, 2022. The potential impact of
any new or revised SFRS(I)s, SFRS(I) INTs and amendments to SFRS(I)s after that date but before the issue of the
financial statements should also be considered and disclosed.

Effective for annual periods beginning on or after January 1, 2023

• SFRS(I) 17 Insurance Contracts (including November 2020 and December 2021 Amendments to SFRS(I) 17)

• Amendments to SFRS(I) 1-1: Classification of Liabilities as Current or Non-current

• Amendments to SFRS(I) 1-1 and SFRS(I) Practice Statement 2: Disclosure of Accounting Policies

• Amendments to SFRS(I) 1-8: Definition of Accounting Estimates

• Amendments to SFRS(I) 1-12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction

Effective date is deferred indefinitely

• Amendments to SFRS(I) 10 and SFRS(I) 1-28: Sale or Contribution of Assets between Investor and its Associate or
Joint Venture

221
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GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-8:30(b) Management anticipates that the adoption of the above SFRS(I)s, SFRS(I) INTs and amendments to SFRS(I) in future periods
will not have a material impact on the financial statements of the group and of the company in the period of their initial
adoption except for the following:

Guidance notes

SFRS(I) 1-8:31 SFRS(I) 1-8:30 requires entities to give known or reasonably estimable information relevant to assessing the possible
(d),(e) impact that the application of any new or revised SFRS(I) Accounting Standard will have on the entity’s financial statements
in the period of initial application. To meet the requirements of SFRS(I) 1-8:30(b), an entity should consider disclosing:

• the date as at which it plans to apply the new SFRS(I), SFRS(I) INT or amendments to SFRS(I) initially, and

• either a discussion of the impact that initial application is expected to have on the entity’s financial statements, or if
the impact is not known or reasonably estimable, a statement to that effect.

The impact of the application of the new and revised SFRS(I) pronouncements below is for illustrative purposes only.
Entities should analyse the impact of these new or revised SFRS(I) pronouncements on their financial statements based
on their specific facts and circumstances and make appropriate disclosures.

Illustrative disclosures on the background and nature of SFRS(I) pronouncements issued but not effective - examples:
Include where applicable.

SFRS(I) 1-8:30(b) SFRS(I) 17 Insurance Contracts

SFRS(I) 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts
and supersedes SFRS(I) 4 Insurance Contracts.

SFRS(I) 17 outlines a general model, which is modified for insurance contracts with direct participation features, described
as the variable fee approach. The general model is simplified if certain criteria are met by measuring the liability for
remaining coverage using the premium allocation approach.

The general model uses current assumptions to estimate the amount, timing and uncertainty of future cash flows and it
explicitly measures the cost of that uncertainty. It takes into account market interest rates and the impact of policyholders’
options and guarantees.

In November 2020, ASC issued amendments to SFRS(I) 17 to address concerns and implementation challenges that were
identified after SFRS(I) 17 was published. The amendments defer the date of initial application of SFRS(I) 17 (incorporating
the amendments) to annual reporting periods beginning on or after January 1, 2023. At the same time, ASC issued
amendments to SFRS(I) 4 that extends the fixed expiry date of the temporary exemption from applying SFRS(I) 9 in
SFRS(I) 4 to annual reporting periods beginning on or after January 1, 2023.

In December 2021, ASC issued Initial Application of IFRS 17 and IFRS 9—Comparative Information (Amendment to
SFRS(I) 17) to address implementation challenges that were identified after SFRS(I) 17 was published. The amendment
addresses challenges in the presentation of comparative information.

SFRS(I) 17 must be applied retrospectively unless impracticable, in which case the modified retrospective approach or the
fair value approach is applied.

For the purpose of the transition requirements, the date of initial application is the start of the annual reporting period i n
which the entity first applies the Standard, and the transition date is the beginning of the period immediately preceding
the date of initial application.

Illustrative Financial Statements 2022 222

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-8:30(b) Amendments to SFRS(I) 1-1: Classification of Liabilities as Current or Non-current

The amendments affect only the presentation of liabilities as current or non-current in the statement of financial position
and not the amount or timing of recognition of any asset, liability, income or expenses, or the information disclosed about
those items.

The amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence
at the end of the reporting period, specify that classification is unaffected by expectations about whether an entity will
exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the
end of the reporting period, and introduce a definition of ‘settlement’ to make clear that settlement refers to the transfer
to the counterparty of cash, equity instruments, other assets or services.

The amendments are applied retrospectively for annual periods beginning on or after January 1, 2023, with early
application permitted.

SFRS(I) 1-8:30(b) Amendments to SFRS(I) 1-1 and SFRS(I) Practice Statement 2: Disclosure of Accounting Policies

The amendments change the requirements in SFRS(I) 1-1 with regard to disclosure of accounting policies. The
amendments replace all instances of the term ‘significant accounting policies’ with ‘material accounting policy information’.
Accounting policy information is material if, when considered together with other information included in an entity’s
financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose
financial statements make on the basis of those financial statements.

The supporting paragraphs in SFRS(I) 1-1 are also amended to clarify that accounting policy information that relates to
immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information
may be material because of the nature of the related transactions, other events or conditions, even if the amounts are
immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is
itself material.

Guidance and examples are also issued to explain and demonstrate the application of the ‘four-step materiality process’
described in SFRS(I) Practice Statement 2.

The amendments to SFRS(I) 1-1 are effective for annual periods beginning on or after January 1, 2023, with earlier
application permitted and are applied prospectively. The amendments to SFRS(I) Practice Statement 2 do not contain an
effective date or transition requirements.

SFRS(I) 1-8:30(b) Amendments to SFRS(I) 1-8: Definition of Accounting Estimates

The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates.
Under the new definition, accounting estimates are ‘monetary amounts in financial statements that are subject to
measurement uncertainty’.

The definition of a change in accounting estimates was deleted. However, the concept of changes in accounting estimates
was retained in the Standard with the following clarifications:

• A change in accounting estimate that results from new information or new developments is not the correction of an
error; and

• The effects of a change in an input or a measurement technique used to develop an accounting estimate are changes
in accounting estimates if they do not result from the correction of prior period errors.

Two examples (Examples 4-5) are added to the Guidance on implementing SFRS(I) 1-8, which accompanies the Standard,
and deleted one example (Example 3) as it could cause confusion in light of the amendments.

The amendments are effective for annual periods beginning on or after January 1, 2023 to changes in accounting policies
and changes in accounting estimates that occur on or after the beginning of that period, with earlier application permitted.

223
Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

SFRS(I) 1-8:30(b) Amendments to SFRS(I) 1-12: Deferred Tax related to Assets and Liabilities arising from a Single
Transaction

The amendments introduce a further exception from the initial recognition exemption. Under the amendments, an entity
does not apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary
differences.

Depending on the applicable tax law, equal taxable and deductible temporary differences may arise on initial recognition
of an asset and liability in a transaction that is not a business combination and affects neither accounting nor taxable
profit. For example, this may arise upon recognition of a lease liability and the corresponding right-of-use asset applying
SFRS(I) 16 at the commencement date of a lease.

Following the amendments to SFRS(I) 1-12, an entity is required to recognise the related deferred tax asset and liability,
with the recognition of any deferred tax asset being subject to the recoverability criteria in SFRS(I) 1-12.

An illustrative example was also added to SFRS(I) 1-12 that explains how the amendments are applied.

The amendments apply to transactions that occur on or after the beginning of the earliest comparative period presented.
In addition, at the beginning of the earliest comparative period an entity recognises:

• A deferred tax asset (to the extent that it is probable that taxable profit will be available against which the deductible
temporary difference can be utilised) and a deferred tax liability for all deductible and taxable temporary differences
associated with:
– Right-of-use assets and lease liabilities
– Decommissioning, restoration and similar liabilities and the corresponding amounts recognised as part of the cost
of the related asset

• The cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained
earnings (or other component of equity, as appropriate) at that date

The amendments are effective for annual reporting periods beginning on or after January 1, 2023, with earlier application
permitted.

SFRS(I) 1-8:30(b) Amendments to SFRS(I) 10 and SFRS(I) 1-28: Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture

The amendments to SFRS(I) 10 and SFRS(I) 1-28 deal with situations where there is a sale or contribution of assets
between an investor and its associate or joint venture. Specifically, the amendments state that gains or losses resulting
from the loss of control of a subsidiary that does not contain a business in a transaction with an associate or a joint venture
that is accounted for using the equity method, are recognised in the parent’s profit or loss only to the extent of the
unrelated investors’ interests in that associate or joint venture. Similarly, gains and losses resulting from the
remeasurement of investments retained in any former subsidiary (that has become an associate or a joint venture that is
accounted for using the equity method) to fair value are recognised in the former parent’s profit or loss only to the extent
of the unrelated investors’ interests in the new associate or joint venture.

The effective date of the amendments has yet to be set by ASC; however, earlier application of the amendments is
permitted.

Illustrative Financial Statements 2022 224

Notes to financial statements

Source

GAAP Singapore Ltd and its subsidiaries

Notes to financial statements

December 31, 2022

Illustrative disclosures on the discussion of possible impact arising from each relevant SFRS(I) pronouncements issued
but not effective:
Include where applicable.

Example 1 – where entity has assessed and the impact is known and reasonably estimable

Management anticipates that the initial application of the new SFRS(I) XXX will result in changes to the accounting policies
relating to [describe the type of transactions affected] and [account balances] are expected to be impacted by [describe
known or reasonably estimable effects]. Additional disclosures will also be made with respect of [describe the type of
transactions and balances affected], including any significant judgement and estimation made, and [describe any other
significant new disclosures]. Management does not plan to early adopt the new SFRS(I) XXX. [Or - Management plans to
early adopt the new SFRS(I) XXX with effect from annual periods beginning Mm Dd, Yyyy.]

Example 2 – where entity has not yet assessed and the impact is not known or not reasonably estimable

Management anticipates that the initial application of the new SFRS(I) XXX will result in changes to the accounting policies
relating to [describe the type of transactions affected]. Additional disclosures will also be made with respect of [describe
the type of transactions and balances affected], including any significant judgement and estimation made, and [describe
any other significant new disclosures]. Management has set up a committee to perform an assessment of the possible
impact of implementing SFRS(I) XXX. It is currently impracticable to disclose any further information on the known or
reasonably estimable impact to the entity’s financial statements in the period of initial application as management has yet
to complete its detailed assessment. Management does not plan to early adopt the new SFRS(I) XXX. [Or - Management
plans to early adopt the new SFRS(I) XXX with effect from annual periods beginning Mm Dd, Yyyy.]

Guidance notes – Financial statements prepared in accordance with SFRS(I)s and IFRSs

Entities that have elected to state simultaneous compliance with both SFRS(I)s issued by the ASC and IFRSs issued by
the IASB in its financial statements should consider the difference in issue dates of new/amended Standards and
Interpretations, and include the necessary disclosures where applicable.

As of November 30, 2022, the following amendments to IFRS have been issued by IASB but the equivalent SFRS(I)
accounting standards have yet to be issued by ASC:

• Amendments to IAS 1: Non-current Liabilities with Covenants

• Amendments to IFRS 16: Lease Liability in a Sale and Leaseback

225
Appendix A – Areas of
financial statements
disclosures affected by
climate change

Illustrative Financial Statements 2022 226

 Appendix A

Areas of financial statements

disclosures affected by
climate change
Source

Climate Change

Risks and uncertainties arising from climate change or the transition to a lower carbon economy could affect the following
areas of the financial statements.

Section Area Commentary

1. General Going concern SFRS(I) 1-1 requires disclosure of material uncertainties relating to events or
assessment conditions which may cast significant doubt upon an entity’s ability to
continue as a going concern, or of significant judgements made in concluding
there are no material uncertainties related to the going concern assumption.

Such uncertainties may arise from climate-related factors. For example, the
introduction of legislation directly affecting an entity’s business model, or
giving rise to increased compliance costs, may cast significant uncertainty
upon the entity’s ability to continue as a going concern. Alternatively,
management may have applied significant judgement about the effectiveness
of the entity’s planned response in concluding that there is no material
uncertainty.

3. Critical accounting Key judgements SFRS(I) 1-1:125 requires companies to disclose information about the
judgements and key and estimates assumptions management has made about the future, and other major
sources of estimation disclosures sources of estimation uncertainty at the end of the reporting period, that have
uncertainty a significant risk of resulting in a material adjustment to the carrying amounts
of assets and liabilities within the next financial year.

If assumptions related to the impact of climate change or the transition to a

lower carbon economy have a significant risk of resulting in a material
adjustment to the carrying amounts of assets and liabilities within the next
financial year, then information about the assumptions should be disclosed in
accordance with SFRS(I) 1-1:125. This includes longer-term assumptions
which are at risk of significant revision within the next year.

It may also be necessary to disclose other uncertainties that are not expected
to cause a material adjustment within one year to enable a better
understanding of the financial statements. Such disclosure should, however,
be clearly separated from uncertainties that have a significant risk of causing
material adjustment to the carrying amount of assets and liabilities within the
next financial year, per SFRS(I) 1-1:125.

227
 Appendix A

Areas of financial statements

disclosures affected by
climate change
Source

Section Area Commentary

SFRS(I) 1-1:122 also requires disclosure of the judgements (apart from those
involving estimations) that management has made that have the most
significant effect on the amounts recognised in the financial statements.
For example, a company operating in an industry particularly affected by
climate-related matters might test an asset for impairment applying
SFRS(I) 1-36 but recognise no impairment loss. That company would be
required to disclose judgements management has made, for example,
in identifying the asset’s cash-generating unit if such judgements are among
those that have the most significant effect on the amounts recognised in the
company’s financial statements.

The transition to a low carbon economy will also give rise to new transactions
for which significant judgements may be required in developing accounting
policies. For example, 'green' bonds, carbon offsetting or emission trading
schemes.

3. Critical accounting Information that If users of the financial statements could reasonably expect that climate
judgements and key is relevant to change-related risks will have significant impact on the company and this
sources of estimation understanding would qualitatively influence their decisions, then management should clearly
uncertainty the financial disclose information about the climate change assumptions that they have
statements made (if not disclosed elsewhere), including disclosures around the sensitivity
of those assumptions. This is to enable users to understand the basis of
forecasts on which the financial statements are prepared. This may mean that
disclosure is provided even if the effects of climate change on the company
may only be experienced in the medium to longer term.

Illustrative Financial Statements 2022 228

 Appendix A

Areas of financial statements

disclosures affected by
climate change
Source

Section Area Commentary

2. Summary of Impairment of Exposure to climate-related risks could be an indicator of impairment, for

significant accounting non-financial example, a significant decline in demand for products or services, or new
policies assets regulations that have a negative impact on an entity. Such factors could also
affect the estimated cash flows used in determining the recoverable amount
3. Critical accounting of an asset or group of assets.
judgements and key
sources of estimation The impact of changing policies and technology as we shift to a low-carbon
uncertainty economy may lead to potential impact to cash flow forecasts used in
impairments review. Climate-related risks can impact a value in use
17. Property, plant calculation in a number of ways, including:
and equipment
• Incorporation of expected changes in consumer behaviour and
18. Right-of-use government action into estimates of future cash flows when they
assets represent management’s best estimate supported by appropriate
evidence.
20. Goodwill • Incorporation of changes expected to occur beyond the period covered
by financial budgets and forecasts via modification to the expected
21. Other intangible long-term growth rate. Such changes could arise in a variety of ways,
assets for example from decreasing revenues as carbon-intensive production
facilities are phased out or increased costs due to the introduction of
23. Associates government levies (cost of compliance), increased cost of resources,
or rising cost of insurance.
24. Joint ventures • Consideration of whether a planned restructuring or replacement of
assets should be incorporated into forecast cash flows.
• Future cash flow forecast incorporating different climate scenarios,
for example, the varying degrees of change in temperature due to
global warming may produce very different outcome.
• Changes is forecast periods due to expected changes in policy.

Scenario analysis is useful to understand the potential impact of different

climate outcome. However, entities are to decide what is considered to be the
most likely scenario, as this would form the basis of the cash flow forecasting.

Disclosure of the key assumptions on which cash flow projections have been
based and management’s approach to determining the value assigned to
these key assumptions is also required (particularly for goodwill or indefinite-life
intangible assets), with information about how potentially significant effects
of climate-related risks have been factored into recoverable amount calculations
being relevant for the users of the financial statements.

Sensitivity disclosures under SFRS(I) 1-36:134 should reflect all reasonably

possible changes in the values assigned to key assumptions. Unlike SFRS(I)
1-1:125, this is not limited to changes within the next year and should address
all reasonably possible changes over the period of the impairment
assessment.

229
 Appendix A

Areas of financial statements

disclosures affected by
climate change
Source

Section Area Commentary

15. Inventories Valuation of Climate-related matters may cause a company’s inventories to become
inventories obsolete, their selling prices to decline or their costs of completion to increase.

When estimating net realisable value, entities are required to consider all
relevant facts and circumstances. Estimates of net realisable value could be
materially affected by, for example, a regulatory change that renders
inventories obsolete, a significant weather event that causes physical damage
to inventories, a decrease in demand for an entity’s goods resulting from
changes in consumer behaviour or an increase in completion costs because of
raw material sourcing constraints.

If, as a result, the cost of inventories is not recoverable, SFRS(I) 1-2 requires
the company to write down those inventories to their net realisable value.
Estimates of net realisable value are based on the most reliable evidence
available, at the time that estimates are made, of the amount the inventories
are expected to realise.

2. Summary of Changes in the When climate-related risks are significant, concerns over viability could mean
significant accounting recognition, that the criterion (in SFRS(I) 1-16:7 for property, plant and equipment and
policies useful lives or SFRS(I) 1-38:21 for intangible assets) that costs are only recognised as an
residual value of asset when it is probable that future economic benefits associated with the
3. Critical accounting assets asset will flow to the entity is not met. Climate-related risks could also affect
judgements and key the depreciation or amortisation of assets (through a change in their useful
sources of estimation lives) or the recognition of those assets (whether expenses satisfy the
uncertainty definition of an asset when incurred).

17. Property, plant The estimated useful lives of assets could be affected by physical factors
and equipment (for example, precipitation levels affecting the viability of agricultural
operations) or by economic or legislative ones (for example, fossil fuel power
18. Right-of-use generation equipment being taken out of use while still operational). Entities
assets also should not assume availability to dispose the asset at the end of the
useful lives at the current equivalent market prices. Therefore, entities should
21. Other intangible consider carefully the potential impact of climate change risk on existing
assets estimates of asset useful lives and residual values. In either case, a change
in the estimated useful life will be accounted for via a prospective change in
the depreciation or amortisation rate and should be disclosed and explained.

Adaption of an entity’s business to address climate issues could also result in

additional research and development activities, requiring disclosure and
consideration of the criteria for capitalisation.

In addition, intangible assets related to carbon offset schemes may need to

be recognised.

Illustrative Financial Statements 2022 230

 Appendix A

Areas of financial statements

disclosures affected by
climate change
Source

Section Area Commentary

31. Provisions Provisions, Climate-related risks could affect:

contingencies
53. Contingent and onerous • The recognition of provisions (if reductions in revenue or increases in
liabilities contracts cost mean that a customer contract becomes onerous, due to
regulatory requirements to remediate environmental damage,
restructurings or redesigning products or services to achieve climate-
related targets).
• The measurement of provisions (if regulatory changes or shortening of
project lives affect the timing or amount of expenses of decommissioning
assets or rehabilitating environmental damage). Cash flows and discount
rates used in measuring provisions needs to take into account the risks
and uncertainties of climate change and accompanying regulations.
• The recognition of liabilities or disclosure of contingent liabilities for
potential fines or penalties under environmental regulations or where
litigation is brought by another interested party.

This entails not only identifying new obligations, but also a reassessment of
existing obligations and its probability for provisions and a shift from
previously considered remote obligation becoming possible, that require
disclosures.

It should also be noted that liabilities under SFRS(I) 1-37 or levies accounted
for under SFRS(I) INT 21 are recognised only when incurred under enacted
legislation. In contrast, it is not necessary to wait for the enactment or
substantive enactment of a change in environmental or other regulation
before it is incorporated into a value in use calculation for the purposes of
impairment testing. The consequences of such expected government action
should be factored in when they reflect management’s best estimate of future
cash flows (based on reasonable and supportable assumptions).

Major assumptions about future events must be disclosed, which may include
an explanation of how climate-related risks have been factored into the best
estimate of the provision. Information may also need to be included to help
users understand the potential effect of changes in major assumptions used.

231
 Appendix A

Areas of financial statements

disclosures affected by
climate change
Source

Section Area Commentary

2. Summary of Impairment of Application of the expected credit loss approach requires lenders to consider
significant accounting financial assets whether any actual or expected adverse changes in a borrower’s regulatory,
policies economic or technological environment have changed significantly the
borrower’s ability to meet its debt obligations (and, therefore, whether credit
3. Critical accounting risk has increased significantly since initial recognition). Climate-related
judgements and key events, such as floods and hurricanes, can affect the creditworthiness of
sources of estimation borrowers due to business interruption, impacts on economic strength,
uncertainty asset values and unemployment. In addition, borrowers’ ability to pay debts
might be diminished if they are in industries that have fallen out of favour and
8. Trade and other are therefore depressed. The impact on receivables in entities operating in
receivables non-financial industries is likely to be less severe because the economic
conditions are less likely to change during the collection period of the debtors.
9. Contract assets However, where a significant climate-related event has occurred, the effect
of this event on trade receivables at balance sheet date should be assessed.
12. Finance lease
receivables

13. Investments in
financial assets

4. Financial Accounting for Investors are increasingly demanding that businesses set climate targets
instruments financial which they use in making their investment decision directly affecting the
instruments availability and cost of capital.

Innovative finance products such as green finance are emerging. For example,
green bond interest rate favour green behaviour and green activities.

Loan contracts might include terms linking contractual cash flows to a

company’s achievement of climate-related targets.

Those targets may affect how the loan is classified and measured (i.e. the
lender would need to consider those terms in assessing whether the
contractual terms of the financial asset give rise to cash flows that are solely
payments of principal and interest on the principal amount outstanding).

For the borrower, those targets may affect whether there are embedded
derivatives that need to be separated from the host contract.

Illustrative Financial Statements 2022 232

 Appendix A

Areas of financial statements

disclosures affected by
climate change
Source

Section Area Commentary

4. Financial Disclosure of SFRS(I) 7 requires disclosure of an entity’s exposure to market risks arising
instruments, financial market risks from financial instruments, its objectives in managing these risks and changes
risks and capital over financial from the previous period.
management assets
This could be relevant to entities (for example investment funds and insurance
companies) holding investments in industries that may be affected by climate-
related risk.

Quantitative information, such as an analysis of investments by industry or

sector, could specifically identify sectors exposed to climate-related risks and
explain the company’s policy of managing its exposure to those sectors.

Disclosures of this nature could also be relevant as investors look to assess

the strategies of large institutional investors from a sustainability point of view
and for consistency with any commitments made to divert capital away from
carbon intensive sectors.

3. Critical accounting Assets measured Fair valuation of assets applying the principles in SFRS(I) 13 is required for a
judgements and key on a fair value broad range of assets which could be affected by either climate change or
sources of estimation basis actions pursuant to the Paris Agreement and these factors could affect inputs
uncertainty into valuation models in a number of ways (adjustment to the cash flows or
discount rate used in a discounted cash flow calculation, to prices when
4. Financial applying the market approach etc.).
instruments
Equity premiums may change depending on the assumed future climate
17. Property, plant scenario and its impact on the underlying asset. Equity volatility may be
and equipment affected by the uncertainty of climate change.

19. Investment When fair value, rather than value in use, is used in an impairment test under
property SFRS(I) 1-36, the prohibition on including the effects of future restructurings
(SFRS(I) 1-36:44) does not apply. The effect of a restructuring is relevant to
33. Retirement benefit a fair value calculation if, and only if, a third party purchaser would factor that
obligations into the price they would be willing to pay for the asset (or cash-generating
unit). The entity’s own intentions are not directly relevant.

The broad scope of SFRS(I) 13’s requirements could also mean that the
effects of climate risks on fair values becomes significant for entities whose
own business might not be thought of as being directly affected by the more
apparent physical and economic risks of climate change. For example, the plan
assets of a defined benefit scheme and the investments held by an
investment entity are required to be measured at fair value under SFRS(I) 13
and those values should reflect the risks (including climate) to which the
underlying investee is exposed. Demographic assumptions and investment
performance can vary under different climate scenarios.

233
 Appendix A

Areas of financial statements

disclosures affected by
climate change
Source

Section Area Commentary

2. Summary of Impact on Pension trustees are required to consider all material financial risks, including
significant accounting pension risks the exposure of pension assets to climate change risk.
policies from climate
Demographic assumptions and investment performance can vary significantly
33. Retirement benefit under different climate change scenarios, affecting the measurement of
obligations pension asset and liability balances at the balance sheet date.

2. Summary of Recoverability of SFRS(I) 1-12 generally requires companies to recognise deferred tax assets
significant accounting deferred tax for deductible temporary differences and unused tax losses and credits,
policies assets to the extent it is probable that future taxable profit will be available against
which those amounts can be utilised. Climate-related matters may affect a
25. Deferred tax company’s estimate of future taxable profits and may result in the company
being unable to recognise deferred tax assets or being required to derecognise
deferred tax assets previously recognised.

Assumptions underlying the forecast of future taxable profits that supports

the recoverability of deferred tax assets should be consistent with
assumptions underlying other profit forecasts used in the preparation of the
financial statements or disclosed in the narrative reports.

3. Critical accounting New levies or New levies or taxes may be introduced to encourage decarbonisation.
judgements and key taxes Any levy liabilities should be recognised as the obligation is triggered under
sources of estimation law (per SFRS(I) INT 21) and any income tax effects should be incorporated
uncertainty into normal SFRS(I) 1-12 accounting. Care should be taken when
distinguishing between a levy and income tax and the application of SFRS(I)
31. Provisions INT 21 or SFRS(I) 1-12 as this has proven to be a challenging area as new
taxes/levies have been introduced in the past.
45. Income tax
expense

53. Contingent
liabilities

Illustrative Financial Statements 2022 234

 Appendix A

Areas of financial statements

disclosures affected by
climate change
Source

Section Area Commentary

21. Other intangible Carbon trading There are currently different acceptable approaches to account for carbon
assets schemes trading schemes. The accounting policy applied by the entity should be
disclosed if this is relevant for users to understand the financial statements.

34. Share-based Incentive Entities may introduce incentive schemes to incentivise management to
payments schemes decarbonise. Such schemes may either fall in the scope of SFRS(I) 1-19 or
SFRS(I) 2 depending on the nature of the awards. Decarbonisation targets
should be treated as any other uncertainties or actuarial assumptions for
SFRS(I) 1-19 benefits, and as any other performance conditions for share-
based payments under SFRS(I) 2.

40. Revenue Segmental and SFRS(I) 8 requires disclosure of information about operating segments. Such
disaggregated information may only be aggregated when segments have similar economic
41. Segment revenue characteristics and are similar in various other respects as set out in SFRS(I)
information disclosures 8:12. The anticipated impact of climate change is an indicator that segments
may not have similar economic characteristics in the long term.

SFRS(I) 15:114 requires revenue recognised from contracts with customers

to be disaggregated into categories that depict how the nature, amount,
timing and uncertainty of revenue and cash flows are affected by economic
factors. This could include climate-related factors which result in different
categories of revenue being subject to substantially different risks or
opportunities.

47. Profit for the year Government Governments may increasingly provide government grants and other forms of
grants government assistance to entities to encourage the transition to a lower
carbon economy in line with the government’s commitments to reduce
greenhouse gas emissions.

SFRS(I) 1-20 prescribes the accounting for, and disclosure of, government
grants and other forms of government assistance. Whether government
grants which are intended to compensate entities for costs related to 'green'
capital or operating expenditure are within the scope of SFRS(I) 1-20 and how
such grants should be recognised in profit or loss on a systematic basis, will
depend on the nature of the grants and the conditions attaching to them.

Climate-related risks can have a material impact on a company’s business model, cash flow, financial position and financial
performance. Thus, a company’s financial statements is a key source of information for stakeholders to understand the financial
impact of climate-related risks on the company. The financial statements also enable stakeholders to assess how the company
is managing risks and their impact on the company’s prospects.

Amid the sustainability push, companies are increasingly expected to disclose information about climate-related matters. Aimed
at enhancing financial reporting quality, the Institute of Singapore Chartered Accountants (ISCA) issued Technical Bulletin 1:
Addressing Climate-Related Risks in Financial Statements and Audits of such Financial Statements to raise awareness and
facilitate the incorporation of climate-related risks in the preparation and audit of financial statements. It highlights how
preparers can reflect climate-related risks in financial statements and comply with financial reporting standards.

The bulletin is applicable to entities with financial statements prepared in accordance with Singapore Financial Reporting
Standards (International) or Financial Reporting Standards issued by Singapore Accounting Standards Council.

235
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