Serba Dinamik Annual Report 2021

Registration No: 201501042584 (1167905-P) Serba Dinamik Holdings Berhad (Incorporated in Malaysia) 27 2. Basis of preparation of the financial statements (continued) Notwithstanding, the financial statements of the Group and the Company have been prepared on a going concern basis. The going concern assumption is highly dependent on the successful formulation, approval and implementation of a regularisation plan, and the ability of the Group and the Company to attain profitable, sustainable and viable operations so as to generate sufficient cash flows to fulfil their obligations as and when they fall due. The individual financial statements of each entity in the Group are presented in the functional currency of the primary economic environment in which the entity operates. These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency and presentation currency. All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated. 3. Significant accounting policies All significant accounting policies set out below are consistent with those applied in the previous financial period, except as disclosed in Note 4. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities, including structured 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 Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return. Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction costs. (ii) Business combinations Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.