Annual Report - 2008 - Colombo Stock Exchange

Ceylon Theatres PLC | Annual Report 2008 | 47Accounting Policies1. General1.1. Accounting Policies1.1.1. The Balance Sheet, Income Statement, CashFlow Statement, Statement of Changes in Equityand Accounting Policies and Notes (“FinancialStatements”) of the Group as at 31 March 2008are prepared in accordance with the AccountingStandards laid down by the Institute of CharteredAccountants of Sri Lanka. and in compliance with therequirement of the Companies Act No 7 of 20071.1.2. The Financial Statements of the Group are preparedunder the historical cost convention except thatcertain Property, Plant & Equipment are stated atvaluation.1.1.3. No adjustment has been made for inflationary factorsaffecting the Financial Statements.1.1.4 Where appropriate significant policies are explained insucceeding notes.1.1.5 The Financial Statements of the Group are prepared inSri Lankan Rupees Thousands (Rs.000’s).1.1.6 New Accounting Standard Effective as at the BalanceSheet date –Sri Lanka Accounting Standard 16 (revised 2006)– “Employee Benefits”which is applicable to financialstatements covering accounting periods beginningon or after 1st July 2007 and not effective for theyear ended 31st March 2008 has not been applied inpreparing these consolidated financial statements.SLAS 16 (revised 2006) requires extensive disclosuresabout the method adopted for the actuarial valuationof the defined benefit plan, measurements of theactuarial gains and losses and recognition of suchgains and losses. The Group / Company has not yetdetermined the potential effect of this standard.1.2. Accounting policy used for MergerAccountingThe Amalgamation of Ceylon Theatres PLC & MillersPLC has been accounted applying the purchasemethod as specified in Sri Lanka Accounting Standard25 (revised 2004) – “Business Combinations”.Accordingly the analogy of the said standard has beenused in accounting for the said merger.Applying the purchase method involves the following -a) Identifying an Acquirer ;b) Measuring the cost of the businesscombination ; andc) Allocating, at the date of acquisition the costof the business combination to the assetsacquired, liabilities and contingent liabilities.Ceylon Theatres PLC has been considered theacquirer for the above business combination.1.3. Consolidation Policies1.3.1. The Consolidated Financial Statements comprisea consolidation of the Financial Statements of theCompany and its subsidiaries except as stated underNote 11.8 All the companies in the Group have acommon financial year, which ends on 31st March.1.3.2. The total profits & losses of the subsidiary companiesare included in the Consolidated Income Statementand the proportion of the Profit or Loss after taxationapplicable to outside shareholders shown under theheading “Minority Interest”, is deducted in arriving atthe profit or loss attributable to the shareholders ofCeylon Theatres PLC.1.3.3. All assets and liabilities of the Company and itssubsidiaries are included in the Consolidated BalanceSheet. The interests of the outside shareholdersin the net assets employed, represented by thepaid up value of Share Capital held by the outsideshareholders together with their proportion of therespective reserves and accumulated profit or loss is