NOTICE OF ANNUAL GENERAL MEETING
statisTICS OF SHAREHOLDINGs
FINANCIAL CONteNts
CORPORATE GOVERNANCE REPORT
69
Navigating Challenges • EMBRACING DIVERSITY | ANNUAL REPORT 2015
Notes to the financial statements
3 Significant accounting policies (Cont’d)
3.11 Revenue recognition (Cont’d)
(ii)
Chartering, towage and rental of equipment
Chartering, towage and equipment rental income are recognised on an accrual basis over the period for
which the vessels are chartered and the period of rental of equipment.
(iii) Rendering of services
Revenue from marine offshore support services and freight income is recognised upon rendering of
services.
(iv) Contract revenue
Revenue arising from shipbuilding and fabrication contracts is recognised in profit or loss in accordance
with the agreed stage of completion which is assessed by reference to survey of work performed and
agreement with customers or the proportion of contract costs incurred for work performed to date to the
estimated total contract costs, to the extent that it is probable that the contracts will result in revenue
that can be measured reliably. Contract revenue includes the initial amount agreed in the contract plus
any variations in contract work, claims and incentive payments, to the extent that it is probable that they
will result in revenue and can be measured reliably. Contract expenses are recognised as incurred unless
they create an asset related to future contract activity.
When the outcome of a contract cannot be estimated reliably, revenue is recognised only to the
extent of contract costs incurred that are probable to be recoverable. An expected loss on a contract is
recognised immediately in profit or loss.
No revenue is recognised if there are significant uncertainties regarding recovery of the consideration
due and associated costs.
3.12 Finance income and finance costs
Finance income comprises interest income on funds invested. Interest income is recognised as it accrues in
profit or loss, using the effective interest method.
Finance costs comprise interest expense on borrowings. Borrowing costs are recognised in profit or loss using
the effective interest method.
Foreign currency gains and losses on financial assets and financial liabilities are reported on a net basis as either
finance income or finance cost depending on whether foreign currency movements are in net gain or net loss
position.
3.13 Lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of
the lease. Lease incentives received are recognised as an integral part of the total lease expense over the term
of the lease.
Minimum lease payments are apportioned between the finance expense and reduction of the outstanding
liability. The finance expense is allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability.
Contingent lease payments are accounted for by revising the minimum lease payments over the remaining
term of the lease when the lease adjustment is confirmed.
