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Appendix B(F)Notes to the Pro Forma Consolidated Balance Sheet1. Summary of significant accounting policiesThe following is a summary of the significant accounting policies of the Pro Forma Group which has beenconsistently applied in preparing the Pro Forma Consolidated Balance Sheet set out in this report.Accounting convention—The financial statements are prepared under the historical cost convention except where SingaporeFinancial Reporting Standards (“FRS”) require an alternative treatment (such as fair values) as disclosedwhere appropriate in these financial statements.Basis of preparation—The Pro Forma Consolidated Balance Sheet is prepared in accordance with the bases set out in section Cand applied to financial information prepared in accordance with the Statement of RecommendedAccounting Practice (“RAP”) 7 “Reporting Framework for Unit Trusts” issued by the Institute ofCertified Public Accountants of Singapore, FRS and the applicable requirements of the Code onCollective Investment Schemes issued by the Monetary Authority of Singapore (“MAS”) and theprovisions of the Trust Deed.The Pro Forma Consolidated Balance Sheet is presented in Singapore dollar and rounded to the nearestthousand, unless otherwise stated.The preparation of financial statements in conformity with generally accepted accounting principlesrequires the management to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during the reporting period. Actualresults could differ from those estimates. The estimates and assumptions are reviewed on an ongoingbasis. Apart from those involving estimations, management has made judgments in the process ofapplying the entity’s accounting policies. The areas requiring management’s most difficult, subjective orcomplex judgments, or areas where assumptions and estimates are significant to the financial statements,are disclosed at the end of this footnote, where applicable.Basis of presentation—The consolidation accounting method is used for the consolidated financial statements which include thefinancial statements made up to the balance sheet date of the Trust and of those companies in which itholds, directly or indirectly through subsidiaries, over 50 percent of the shares and voting rights (itssubsidiaries including special purpose entities). Consolidated financial statements are the financialstatements of the group presented as those of a single economic entity. The consolidated financialstatements are prepared using uniform accounting policies for like transactions and other events in similarcircumstances. All significant intragroup balances and transactions, including income, expenses anddividends, are eliminated in full on consolidation. The results of the investees acquired or disposed ofduring the financial year are consolidated from the respective dates of acquisition or up to the dates ofdisposal. On disposal the attributable amount of goodwill is included in the determination of the gain or losson disposal.Subsidiaries—A subsidiary is an entity including unincorporated and special purpose entity that is controlled by the group.Control is the power to govern the financial and operating policies of an entity so as to obtain benefits fromits activities accompanying a shareholding of more than one half of the voting rights or the ability to appointor remove the majority of the members of the board of directors or to cast the majority of votes at meetingsof the board of directors. The existence and effect of potential voting rights that are currently exercisable orconvertible are considered when assessing whether the group controls another entity. In the Trust’s ownseparate financial statements, the investments in subsidiaries are stated at cost less any provision forimpairment in value. Impairment loss recognised in profit or loss for a subsidiary is reversed only if therehas been a change in the estimates used to determine the asset’s recoverable amount since the lastimpairment loss was recognised. The net book values of the subsidiaries are not necessarily indicative ofthe amounts that would be realised in a current market exchange.B-10