Annual Report - Bina Puri

Notes to and Forming Part of the Financial Statements (Cont’d)1. SIGNIFICANT ACCOUNTING POLICIES (cont’d)(c) SubsidiariesSubsidiaries are entities over which the Group has the power to control the financial and operating policies so asto obtain benefits from their activities. The existence and effect of potential voting rights that are currentlyexercisable or convertible are considered when assessing whether the Group has such power over another entity.In the Company’s balance sheet, investments in subsidiaries are stated at cost less accumulated impairment losses,unless the investment is classified as held for sale or included in a disposal group that is classified as held for sale.On disposal of such investments, the difference between net disposal proceeds and their carrying amounts isincluded in the income statement.(d) Basis of consolidationThe consolidated financial statements comprise the financial statements of the Company and all its subsidiariesmade up to the end of the financial year. Uniform accounting policies are adopted for like transactions and eventsin similar circumstances.The financial statements of the subsidiaries are prepared for the same reporting date asthe Company.All subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control,and continue to be consolidated until the date that such control ceases.All intra-group balances, transactions, income and expenses are eliminated in full on consolidation and theconsolidated financial statements reflect external transactions only. Unrealised profits and losses resulting fromintra-group transactions that are recognised in assets are also eliminated in full.The temporary differences arisingfrom the elimination of unrealised profits and losses are recognised in accordance with Note 1(z).Acquisitions of subsidiaries are accounted for using the purchase method of accounting.The purchase method ofaccounting involves allocating the cost of a business combination to the fair value of the assets acquired andliabilities and contingent liabilities assumed at the date of acquisition.The cost of an acquisition is measured as theaggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed and equityinstruments issued, plus any costs directly attributable to the acquisition. The excess of the cost of a businesscombination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingentliabilities represents goodwill.Any excess of Group’s interest in the net fair value of identifiable assets, liabilities andcontingent liabilities recognised, over the Group’s cost of a business combination is recognised immediately in theconsolidated income statement after reassessment.Minority interests represent the portion of profit or loss and net assets of subsidiaries, attributable to equityinterests that are not owned, directly or indirectly through subsidiaries, by the Company. Minority interests arepresented separately in the consolidated balance sheet within equity while minority interests in the profit or lossof the Group are separately disclosed in the consolidated income statement.BINA PURI HOLDINGS BHDAnnual Report 200749