FORGING AHEAD - Tradewinds Plantation Berhad

4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.7 Investments
(a) Subsidiaries
A subsidiary is an entity in which the Group and the Company have power to control the financial and operating
policies so as to obtain benefits from its activities. The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when assessing whether the Group has such power over
another entity.
An investment in subsidiary, which is eliminated on consolidation, is stated in the Company’s separate financial
statements at cost less impairment losses, if any. On disposal of such an investment, the difference between the
net disposal proceeds and its carrying amount is included in profit or loss.
(b) Associates
FINANCIAL STATEMENTS
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an
interest in a joint venture. Significant influence is the power to participate in the financial and operating policy
decisions of the investee but not control or joint control over those policies.
In the Company’s separate financial statements, an investment in associate is stated at cost less impairment losses,
if any.
An investment in associate is accounted for in the consolidated financial statements using the equity method of
accounting. The investment in associate in the consolidated statement of financial position is initially recognised
at cost and adjusted thereafter for the post acquisition change in the Group’s share of net assets of the investment.
The interest in the associate is the carrying amount of the investment in the associate under the equity method
together with any long term interest that, in substance, forms part of the Group’s net investment in the associate.
The Group’s share of the profit or loss of the associate during the financial year is included in the consolidated
statement of comprehensive income, after adjustments to align the accounting policies with those of the Group,
from the date that significant influence commences until the date that significant influence ceases. Distributions
received from the associate reduce the carrying amount of the investment. Adjustments to the carrying amount
may also be necessary for changes in the Group’s proportionate interest in the associate arising from changes in
the associate’s equity that have not been recognised in the associate’s profit or loss. Such changes include those
arising from the revaluation of property, plant and equipment and from foreign exchange translation differences.
The Group’s share of those changes is recognised directly in equity of the Group.
Unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of
the Group’s interest in the associate; unrealised losses are eliminated unless the transaction provides evidence on
the impairment of the asset transferred.
TRADEWINDS PLANTATION BERHAD
Annual Report 2010
115