Second Quarterly Results Report

2. Basis of Presentation (Continued)2.2 Basis of preparationImprovements to HKFRSs 2009 include another set of certain nonurgentbut necessary amendments to the HKFRSs. In particular,the amendment to HKFRS 8 “Operating Segments” involves aclarification that assets and liabilities need only be reported whenthey are included in measures of segment performance that are usedby the chief operating decision maker. The Group decides to earlyadopt this amendment since no assets nor liabilities are included insuch measures to its chief operating decision maker.2. 2.2 8These condensed consolidated financial statements have beenprepared in accordance with HKAS 34 “Interim Financial Reporting”issued by HKICPA, accounting principles generally accepted in HongKong and the applicable disclosure required by the GEM ListingRules. These condensed consolidated financial statements havebeen prepared under the historical cost convention, as modifiedby the revaluation of certain investments which are carried at theirfair values. These condensed consolidated financial statements arepresented in Renminbi (“RMB”), which is the Company’s functionaland presentation currency, and all values are rounded to the nearestthousand (RMB’000) except when otherwise indicated.34Save for the new and revised HKFRSs adopted, the accountingpolicies and method of computation adopted in preparing theseunaudited condensed consolidated financial statements are consistentwith those used in the Company’s annual audited consolidatedfinancial statements for the year ended 31 December 2008. Thesecondensed consolidated financial statements should be read inconjunction with these mentioned audited financial statements.Basis of consolidationThe condensed consolidated financial statements include thefinancial statements of the Company and its subsidiaries made up to30 June. Subsidiaries are entities over which the Group has control.Control is the power to govern the financial and operating policiesof an entity so as to obtain benefits from its activities. The existenceand effect of potential voting rights that are currently exercisable orconvertible are considered when assessing whether the Group hascontrol.Subsidiaries are fully consolidated from the date on which control istransferred to the Group. They are de-consolidated from the datethe control ceases.The gain or loss on the disposal of a subsidiary represents thedifference between the proceeds of the sale and the Group’sshare of its net assets together with any goodwill relating to thesubsidiary which was not previously charged or recognised in theconsolidated statement of comprehensive income and also anyrelated accumulated foreign currency translation reserve.Inter-company transactions, balances and unrealised profits ontransactions between Group companies are eliminated. Unrealisedlosses are also eliminated unless the transaction provides evidenceof an impairment of the asset transferred. Accounting policiesof subsidiaries have been changed where necessary to ensureconsistency with the policies adopted by the Group.10 Beijing Beida Jade Bird Universal Sci-Tech Company Limited