Asiaone 1-42

FINANCIAL STATEMENTS
2. Basis of preparation of the proforma financial statements (cont’d)
(ii) Cost of revenue
The cost of revenue comprises principally of staff costs and depreciation of fixed assets.
Staff costs attributable to the Multimedia division were identified on the basis of the
personnel employed in the Multimedia division. Depreciation charges were computed
based on the fixed assets identified under paragraph 2(b)(iv) below.
(iii) Operating expenses
During the period covered in this report, the Multimedia division utilised certain internal
management and administrative resources shared by all divisions in SPH. The proforma
financial information includes an allocation of such central overhead costs based on
an estimated time spent on its affairs by management and administrative resources of
SPH. In respect of accommodation-related costs, allocation was based on the estimated
floor-area occupied by the Multimedia division.
(iv) Other income
During the period covered in this report, SPH received grants from the Economic
Development Board of Singapore and the National Computer Board for the development
of the AsiaOne websites and SingaporeConnect respectively. Accordingly, the grants
received were directly attributed to the Multimedia division.
(v) Interest expense
During the period covered in this report, the Multimedia division utilised funds from
SPH for its operations. Interest was not imposed or attributed in respect of these
borrowings.
(vi) Income tax
There was no income tax charge for the Multimedia division as it was assessed for tax
as an integral part of SPH. The income tax charge of SPH was not attributed to the
proforma financial statements because the Multimedia division had incurred cumulative
net losses.
(b) Balance sheets
(i) Cash and bank balances
Cash and bank balances refers to SPH’s bank accounts which were used solely by
the Multimedia division.
(ii) Trade debtors
Trade debtors were attributed to the Multimedia division by specific identification of
SPH’s trade debtors.
(iii) Other debtors
Other debtors mainly relate to staff and car loans. These were identified by reference
to the relevant personnel who were employed in the Multimedia division.
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