105
ANNUAL REPORT 2016
NOTES TOTHE FINANCIAL STATEMENTS
30 JUNE 2016
(Continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.15 Provisions (continued)
Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the present obligation under the
contract shall be recognised and measured as a provision.
Provision for restoration costs
Provision for restoration costs is included in the carrying amounts of property, plant and equipment. This provision is recognised in
respect of the obligation of the Group to restore leased outlets to its original state upon the expiry of tenancy agreements.
4.16 Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from past events whose existence would be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised
because it is not probable that an outflow of resources would be required to settle the obligation. A contingent liability also arises in
extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not
recognise a contingent liability but discloses its existence in the financial statements.
A contingent asset is a possible asset that arises from past events whose existence would be confirmed by the occurrence or non-
occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent assets
but disclose its existence where inflows of economic benefits are probable, but not virtually certain.
In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured initially at
their fair value at the acquisition date.
4.17 Employee benefits
(a)
Short term employee benefits
Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefits are
measured on an undiscounted basis and are expensed when employees rendered their services to the Group.
Short term accumulating compensated absences such as paid annual leave are recognised as an expense when employees
render services that increase their entitlement to future compensated absences. Short term non-accumulating compensated
absences such as sick leave are recognised when the absences occur and they lapse if the current period’s entitlement is not
used in full and do not entitle employees to a cash payment for unused entitlement on leaving the Group.
Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as a
result of past events and when a reliable estimate can be made of the amount of the obligation.
(b)
Defined contribution plans
The Company and its subsidiaries incorporated in Malaysia make contributions to a statutory provident fund and foreign
subsidiaries make contributions to their respective countries’ statutory pension schemes. The contributions are recognised as
a liability after deducting any contribution already paid and as an expense in the period in which the employees render their
services.
4.18 Foreign currencies
(a)
Functional and presentation currency
Items included in the financial statements of each of the entities of the Group are measured using the currency of the primary
economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are
presented in Ringgit Malaysia, which is the functional and presentation currency of the Company.
