I
annual report 2014
Notes to the Financial Statements
31 December 2014 (Cont’d)
64
4.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
4.2 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and all its
subsidiaries.
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 interest of the Group 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.
(i)
Business combination involving entities under common control
A business combination involving entities under common control is a business combination in which all
of the combining entities are ultimately controlled by the same party or parties both before and after the
business combination, and that control is not transitory. The assets and liabilities were brought into the
consolidated statement of financial position at their existing carrying amounts at the combination date.
In the consolidated financial statements of the merged enterprise, the cost of the merger would be
cancelled against the nominal values of the shares/paid-up capital received. The difference between the
cost of the merger and nominal values of the shares/paid-up capital received will remain and continue
to be classified as part of equity of the Group and will be adjusted against suitable reserve in future,
where appropriate. The combination date is the date on which one combining entity effectively obtains
control of the other combining entities.
(ii)
Business combination involving entities not under common control
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with
the investee and has the ability to affect those returns through its power over the investee. Specifically,
the Group controls an investee if and only if the Group has:
(a)
Power over the investee;
(b)
Exposure, or rights, to variable returns from its involvement with the investee; and
(c)
The ability to use its power over the investee to affect its returns.
If the Group has less than a majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an investee, including:
(a)
The contractual arrangement with the other vote holders of the investee;
(b)
Rights arising from other contractual agreements; and
(c)
The voting rights of the Group and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control. 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. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during
the financial year are included in the statement of profit or loss and other comprehensive income from
the date the Group gains control until the date the Group ceases to control the subsidiary.
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.
