9365206753

SGSP (Australia) Assets Pty Ltd

ABN 60 126 327 624

Notes to the financial statements

For the year ended 31 December 2016 2 Summary of significant accounting policies

Signifjcant accounting policies adopted in the preparation of these financial statements are set out below.

(a) Basis of consolidation

(i)    Subsidiańes

Subsidiaries are entities controlled by the Group. The Group Controls an entity when it is exposed to, or has rights to, variab!e returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the Consolidated financial statements from the datę on which control commences until the datę on which control ceases.

When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and other componenłs of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

(ii)    Intorosts in equity-aucounted investees

The Group's interests in equity-accounted investees comprise interests in associates and joint ventures.

Associates are those entities in which the Group has significant influence, but no control or joint control, over the financial or operating policies. Joint ventures are arrangements in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Interests in associates and joint ventures are accounted for using the equity method. They are recognised initially at cost, which includes transaction costs. Subsequent to initial recognition, the Consolidated financial statements include the Group’s share of profit or loss and other comprehensive income of equity-accounted investees, until the datę on which significant influence or joint control ceases.

(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 financial statements. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(iv)    Business combinations

For every business combination, the Group identifies the acquirer, which is the combining entity that obtains control of the other combining entities or businesses. The Group Controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The acquisition datę is the datę on which control is transferred to the acquirer. Judgement is applied in determining the acquisition datę and determining whether control is transferred from one party to another.

The purchase method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The purchase method requires the Identification of the acquirer, being the entity that obtains control of the other combining entities or businesses. The accounting acquirer may not be the legał acquirer.

The cost of the business combination is measured as the fair value of the assets given, equity issued or liabilities incurred or assumed by the accounting acquirer at the datę of exchange plus costs directly attributable to the acquisition.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition datę, irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill (refer to notę 2(m)). If the cost of acquisition is less than the Group's share of the fair va!ue of the identifiable net assets acquired, the difference is recognised directly in the income statement, but only after a reassessment of the Identification and measurement of the net assets acquired.

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