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NOTES TO FINANCIAL STATEMENTS
For the fnancial year ended 31 March 2014
2. Summary of significant accounting policies (cont’d)
2.6 Basis of consolidation and business combination (cont’d)
(b) Business combinations (cont’d)
Business combinations prior to 1 January 2010 (cont’d)
Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outfow was more likely
than not and a reliable estimate was determinable. Subsequent adjustments to the contingent consideration were recognised as
part of goodwill.
Pursuant to an agreement dated 9 November 2007, the Company acquired the entire issued and paid-up capital of Ten & Han
Trading Pte Ltd, comprising 5,600,000 ordinary shares with effect from 12 November 2007. As this arrangement constitutes a re-
organisation of companies under common control, the pooling of interest method of accounting was adopted in the preparation of
the consolidated fnancial statements of the Group. Under this method of accounting, the results and cash fows of the Company
and Ten & Han Trading Pte Ltd are combined from the beginning of the fnancial year in which the re-organisation occurred and their
assets and liabilities combined at the amounts at which they were previously recorded as if they had been part of the Group for the
whole of the current and preceding periods.
2.7 Associated companies
An associated company is an entity, not being a subsidiary company or a joint venture, in which the Group has signifcant infuence. An
associated company is equity accounted for from the date the Group obtains signifcant infuence until the date the Group cease to have
signifcant infuence over the associate company.
The Group’s investments in associated companies are accounted for using the equity method. Under the equity method, the investment
in associated companies is carried in the balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the
associated companies. Goodwill relating to associated companies is included in the carrying amount of the investment and is neither
amortised nor tested individually for impairment. Any excess of the Group’s share of the net fair value of the associated companies
identifable assets, liabilities and contingent liabilities over the cost of the investment is included as income in the determination of the
Group’s share of results of the associated companies in the period in which the investment is acquired.
The proft or loss refects the share of the results of operations of the associated companies. Where there has been a change recognised
in other comprehensive income by the associated companies, the Group recognises its share of such changes in other comprehensive
income. Unrealised gains and losses resulting from transactions between the Group and the associated companies are eliminated to the
extent of the interest in the associated companies.
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Annual Report 2014 •