Page 53 - ar2011

Notes to the Financial Statement
For the year ended 31st December 2011
NATURAL COOL HOLDINGS LIMITED
Annual Report 2011 51
3 Signifcant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in
these fnancial statements, and have been applied consistently by Group entities, except as
explained in note 2.5, which addresses changes in accounting policies.
3.1 Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. The fnancial statements of subsidiaries are
included in the consolidated fnancial statements from the date that control commences until
the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them
with the policies adopted by the Group. Losses applicable to the non-controlling interests in
a subsidiary are allocated to the non-controlling interests even if doing so causes the non-
controlling interests to have a defcit balance.
(ii) Acquisitions from entities under common control
Business combinations arising from transfers of interests in entities that are under the control
of the shareholder that controls the Group are accounted for as if the acquisition had occurred
at the beginning of the earliest comparative period presented or, if later, at the date that
common control was established; for this purpose comparatives are revised. The assets and
liabilities acquired are recognised at the carrying amounts recognised previously in the Group
controlling shareholder’s consolidated fnancial statements. The components of equity of the
acquired entities are added to the same components within Group equity. Any difference
between the cash paid for the acquisition and net assets acquired is recognised directly in
equity.
(iii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from
intra-group transactions, are eliminated in preparing the consolidated fnancial statements.
(iv) Accounting for subsidiaries
Investments in subsidiaries are stated in the Company’s balance sheet at cost less
accumulated impairment losses.
3.2 Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of
the Group entities at exchange rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the end of the reporting period are retranslated
to the functional currency at the exchange rate at that date. The foreign currency gain or loss
on monetary items is the difference between amortised cost in the functional currency at the
beginning of the year, adjusted for effective interest and payments during the year, and the
amortised cost in foreign currency translated at the exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at
fair value are retranslated to the functional currency at the exchange rate at the date that the
fair value was determined. Non-monetary items in a foreign currency that are measured in
terms of historical cost are translated using the exchange rate at the date of the transaction.
Foreign currency differences arising on retranslation are recognised in proft or loss.