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Annual Report 2020
147
Notes to the Financial Statements
As at 31 March 2020
kumpulan Fima Berhad
(197201000167)(11817-V)
2.
Significant accounting policies (cont'd.)
2.4 Summary of significant accounting policies (cont'd.)
(a) Subsidiaries and basis of consolidation (cont'd.)
(i)
Subsidiaries (cont'd.)
A subsidiary company is an entity over which the Group has the following (cont'd.):
(iii) The ability to use its power over the investee to affect its returns.
In the Company’s separate financial statements, investments in subsidiary companies are accounted for
at cost less impairment losses. On disposal of such investments, the difference between net disposal
proceeds and their carrying amounts is included in profit or loss.
(ii) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its
subsidiary companies as at the reporting date. The financial statements of the subsidiary companies
used in the preparation of the consolidated financial statements are prepared for the same reporting
date as the Company. Consistent accounting policies are applied for like transactions and events in
similar circumstances.
The Company controls an investee if and only if the Company has the following:
(i)
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant
activities of the investee);
(ii) Exposure, or rights, to variable returns from its investment with the investee; and
(iii) The ability to use its power over the investee to affect its returns.
When the Company has less than a majority of the voting rights of an investee, the Company considers
the following in assessing whether or not the Company’s voting rights in an investee are sufficient to give
it power over the investee:
(i)
The size of the Company’s holding of voting rights relative to the size and dispersion of holdings
of the other vote holders;
(ii) Potential voting rights held by the Company, other vote holders or other parties;
(iii) Rights arising from other contractual arrangements; and
(iv) Any additional facts and circumstances that indicate that the Company has, or does not have, the
current ability to direct the relevant activities at the time that decisions need to be made, including
voting patterns at previous shareholders’ meetings.