Chemical Company of Malaysia Berhad Annual Report 2019

2. Significant accounting policies (continued) (m) Employee benefits (i) Short-term employee benefits Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit- sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. (ii) State plans The Group’s contributions to statutory pension funds are charged to profit or loss in the financial year to which they relate. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. (n) Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. (o) Revenue and other income (i) Revenue from contracts with customers Revenue is measured based on the consideration specified in a contract with a customer in exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties. The Group or the Company recognises revenue when (or as) it transfers control over a product or service to customer. An asset is transferred when (or as) the customer obtains control of the asset. The Group or the Company transfers control of a good or service at a point in time unless one of the following overtime criteria is met: (a) the customer simultaneously receives and consumes the benefits provided as the Group or the Company performs; (b) the Group’s or the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or (c) the Group’s or the Company’s performance does not create an asset with an alternative use and the Group or the Company has an enforceable right to payment for performance completed to date. BUSINESS OVERVIEW OTHER INFORMATION GOVERNANCE STRUCTURE 147 ANNUAL REPORT 2019 FINANCIAL STATEMENTS