BAKERTECHNOLOGYLIMITED
ANNUALREPORT2013
102
Notes to the
Financial Statements
for the financial year ended 31December 2013
3.
Significantaccounting judgementsand estimates (CONT’)
3.2
Key sources of estimationuncertainty (cont’d)
(c)
Income taxes
Significant judgement is involved indetermining theGroup-wideprovision for income taxes.Therearecertain transactions
and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The
Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where
the final tax outcome of these matters is different from the amounts that were initially recognised, such differences
will impact the income tax and deferred tax provisions in the period inwhich such determination ismade. The carrying
amount of the Group’s income tax payables and deferred tax assets as at 31 December 2013 was $3,767,092 and
$876,000 (2012: $4,073,458and$392,000), respectively. Thegainondisposal of a subsidiary andassociates are capital
in nature and not taxable.
(d)
Contract revenue
The Group recognises contract revenue by reference to the stage of completion of the contract activity at the end of
each reportingperiod, when the outcome of a construction contract canbe estimated reliably. The stage of completion
ismeasuredby reference to theproportion that contract costs incurred forworkperformed todatebear to theestimated
total contract costs. Significant assumptionsare required toestimate the total contract costsand the recoverablevariation
works thatwill affect the stage of completion. The estimates aremade basedonpast experience and knowledge of the
project engineers. For project inprogress, allowance for foreseeable losses ismadewhen the contract revenuehas fallen
below contract cost. The carrying amounts of assets and liabilities arising from construction contracts at the balance
sheet date are disclosed inNote 17 to the financial statements.
4.
Segment information
Formanagement purposes, theGroup isorganised intobusinessunitsbasedon their products and services, andhas three reportable
operating segments as follows :
(i)
Themarine offshore segment is essentially theGroup’s principal business activity. This segment consists of SeaDeep Shipyard
Pte. Ltd. and its subsidiary.Collectively, theyare themanufacturers andprovidersof specialisedmarineoffshoreequipment and
services for the oil andgas industry.
(ii)
The investments segment relates to theGroup’s investments in associates andother investments, including the corresponding
gains on disposals of investments and the recognition of the deferred gain on disposal of subsidiary.
(iii) The corporate segment is involved inGroup-level corporate services and treasury functions.
Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.
Management monitors the operating results of its business units separately for the purpose of making decisions about resource
allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain
respects, asexplained in the tablebelow, ismeasureddifferently fromoperatingprofitor loss in theconsolidatedfinancial statements.
Transfer prices betweenoperating segments, if any, are on arm’s length basis in amanner similar to transactionswith thirdparties.
