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4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
4.1 Basis of accounting (cont’d)
The preparation of financial statements in conformity with MFRSs requires the Directors to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of
contingent assets and contingent liabilities. In addition, the Directors are also required to exercise their judgement in
the process of applying the accounting policies. The areas involving such judgements, estimates and assumptions
are disclosed in Note 6 to the financial statements. Although these estimates and assumptions are based on the
Directors’ best knowledge of events and actions, actual results could differ from those estimates.
4.2 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries.
Subsidiaries are entities over which the Company has the power to govern the financial operating policies, generally
accompanied by a shareholding giving rise to the majority of the voting rights, as to obtain benefits from their
activities.
The Group also assesses the existence of control where it does not have more than half of the voting power of an
investee but is able to govern the financial and operating policies by virtue of de facto control. De facto control arises
in circumstances where the size of the Group’s voting rights relative to the size and dispersion of holdings of other
shareholders provides the Group with the power to govern the financial and operating policies.
Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on
which control ceases, as appropriate.
Intragroup balances, transactions, income and expenses are eliminated on consolidation. Unrealised gains arising
from transactions with associates and joint ventures are eliminated against the investment to the extent of the
Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to
the extent that there is no impairment.
The financial statements of the subsidiaries are prepared for the same reporting period as that of the Company,
using consistent accounting policies. Where necessary, accounting policies of subsidiaries are changed to ensure
consistency with the policies adopted by the other entities in the Group.
Non-controlling interests represents the equity in subsidiaries that are not attributable, directly or indirectly, to
owners of the Company, and is presented separately in the consolidated statement of profit or loss and other
comprehensive income and within equity in the consolidated statement of financial position, separately from equity
attributable to owners of the Company. Profit or loss and each component of other comprehensive income are
attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed
to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders
to a proportionate share of the entity’s net assets in the event of liquidation are initially measured at the present
ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets.
All other components of non-controlling interests shall be measured at their acquisition-date fair values, unless
another measurement basis is required by MFRSs. The choice of measurement basis is made on an combination-by-
combination basis. Subsequent to initial recognition, the carrying amount of non-controlling interests is the amount
of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity.
Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-
controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference
between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or
received is recognised directly in equity and attributed to owners of the parent.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between:
(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest; and
NOTES TO THE FINANCIAL STATEMENTS
30 June 2013 (cont’d)