Kimlun Corporation Berhad Annual Report 2020

200901023978 (867077-X) Kimlun Corporation Berhad (Incorporated in Malaysia) 2. Summary of significant accounting policies (cont'd) 2.5 Fair value measurement (cont'd) 2.6 Basis of consolidation The Group controls an investee if and only if the Group has all the following: (i) (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. (i) (ii) Potential voting rights held by the Group, other vote holders or other parties; (iii) Rights arising from other contractual arrangements; and (iv) The size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders; When the Group has less than a majority of the voting rights of an investee, the Group considers the following in assessing whether or not the Group’s voting rights in an investee are sufficient to give it power over the investee: Any additional facts and circumstances that indicate that the Group 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. Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); External valuers are involved for valuation of significant assets and significant liabilities. Involvement of external valuers is decided by senior management. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The senior management decides, after discussions with the external valuers, which valuation techniques and inputs to use for each case. For the purpose of fair value disclosures, classes of assets and liabilities are determined based on the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Group. Consistent accounting policies are applied for like transactions and events in similar circumstances. - 30 - 087 Kimlun Corporation Berhad Registration No. 200901023978 (867077-X) NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020