## 3. SIgNIFICANTACCOUNTINg POlICIES 

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements and in preparing the opening IFRS statement of financial position at January 3, 2010 for the purposes of the transition to IFRS, unless otherwise indicated. 

The accounting policies have been applied consistently by Company subsidiaries. 

## baSiS of conSolidation 

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at December 31, 2011. 

Subsidiaries are entities controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial 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 Company. A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction. 

Losses are attributed to the non-controlling interest even if that results in a deficit balance. If the Company loses control over a subsidiary, it: 

• Derecognizes the assets (including goodwill) and liabilities of the subsidiary; 

• Derecognizes the carrying amount of any non-controlling interest; 

• Derecognizes the cumulative translation differences, recorded in equity; 

• Recognizes the fair value of the consideration received; 

• Recognizes the fair value of any investment retained; 

• Recognizes any surplus or deficit in profit or loss; and 

• Reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss. 

## intereSt in a joint venture 

Joint ventures are those entities over whose activities the Company has joint control, established by contractual agreement, where the Company does not have rights to individual assets or obligations for expenses of the venture. Rather, the Company is entitled to a share of the outcome of the activities of the joint venture. The consolidated financial statements include the Company’s share of the profit or loss of its joint ventures accounted for using the equity method, and the carrying amount of those interests. 

## tranSactionS eliminated on conSolidation 

Intercompany balances and transactions, and any unrealized income and expenses arising from inter-company transactions, are eliminated in full in preparing the consolidated financial statements. 

## buSineSS combinationS 

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed. When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. 

Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration, which is deemed to be an asset or liability, will be recognized in accordance with IAS 39 either in profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it shall not be re-measured until it is finally settled within equity. 

For acquisitions, the Company measures goodwill as the fair value of the consideration transferred including the recognized amount of any non-controlling interest in the acquiree, less the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s operating segments that are expected to benefit from the combination. 

