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TNB Financial Report 2002
26
Notes to the Financial Statements
– 31 August 2002
1. General Information
The principal activities of the Group and of the Company are the generation, transmission, distribution and sale of electricity.
There have been no significant changes in these activities during the financial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Board of the Kuala Lumpur
Stock Exchange.
The address of the registered office of the Company is 129 Jalan Bangsar, 59200 Kuala Lumpur, Malaysia.
2. Summary of Significant Accounting Policies
The principal accounting policies of the Group and of the Company which are consistent with those adopted in the previous financial year are
summarised below:
(a)
Basis of accounting
The financial statements are prepared under the historical cost convention except as disclosed in this summary of significant accounting
policies. For example, certain property, plant and equipment are stated at revalued amount.
The financial statements comply with the applicable approved accounting standards in Malaysia and the provisions of the Companies Act,
1965. The new applicable approved accounting standards adopted in these financial statements are as follows:
(i)
Retrospective application
Comparative figures have been adjusted or extended to conform with changes in presentation due to the requirements of Malaysian
Accounting Standards Board (‘MASB’) Standard No. 19 “Events After Balance Sheet Date”. The adoption of the Standard resulted in a
change in accounting policy as disclosed in Note 37 to the financial statements.
(ii) Prospective application from 1 September 2001
In respect of MASB Standard No. 21 “Business Combinations”, the Group has taken advantage of the exemption provided to apply
the Standard prospectively. Accordingly, business combinations entered into prior to 1 September 2001 have not been restated to
comply with the Standard.
(b)
Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the
financial year. Subsidiaries are those enterprises in which the Group has power to exercise control over the financial and operating policies
as to obtain benefits from their activities. Subsidiaries are consolidated from the date on which control is transferred to the Group and are
no longer consolidated from the date that control ceases.
The consolidated income statement includes the results of subsidiaries acquired or disposed during the financial year from the date of their
acquisition or up to the date of their disposal respectively using the acquisition method of accounting. At the date of the acquisition, the
fair values of the subsidiaries’ net assets are determined and these values are reflected in the consolidated financial statements. All
intergroup transactions, balances and unrealised surpluses and deficits on transactions have been eliminated.
(c)
Associates
Associates are enterprises in which the Group exercises significant influence. Significant influence is the power to participate in the financial
and operating policy decisions of the associates but not control over those policies. Investments in associates are accounted for in the
consolidated financial statements by the equity method of accounting.
Equity accounting involves recognising in the income statement the Group’s share of the results of associates for the financial year. The
Group’s investments in associates are carried in the balance sheet at an amount that reflects its share of the net assets of the associates.
Premium paid on acquisition is written off against reserves.