FINANCIAL STATEMENTS - Mewah Group

MEWAH INTERNATIONAL INC.NOTES TOTHE FINANCIAL STATEMENTSFor the financial year ended 31 December 20122. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)2.20 Currency translation(a) Functional and presentation currencyItems included in the financial statements of each entity in the Group are measured using the currency of the primary economicenvironment in which the entity operates (“functional currency”). The financial statements are presented in United States Dollar(“presentation currency”), which is also the functional currency of the Company.(b) Transactions and balancesTransactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currencyusing the exchange rates at the dates of the transactions. Currency translation differences from the settlement of suchtransactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing ratesat the statement of financial position date are recognised in profit or loss.Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when thefair values are determined.(c) Translation of Group entities’ financial statementsThe results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) thathave a functional currency different from the presentation currency are translated into the presentation currency as follows:(i)Assets and liabilities are translated at the closing exchange rates at the reporting dates;(ii) Income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation ofthe cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translatedusing the exchange rates at the dates of the transactions); and(iii) All resulting currency translation differences are recognised in other comprehensive income and accumulated in thecurrency translation reserve.Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of theforeign operations and translated at the closing rates at the reporting date.2.21 Segment reportingOperating segments are reported in a manner consistent with the internal reporting provided to the executive committee whosemembers are responsible for allocating resources and assessing performance of the operating segments.2.22 Cash and cash equivalentsFor the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash on hand, deposits withfinancial institutions which are subject to an insignificant risk of change in value, and bank overdrafts. Bank overdrafts are presentedas current borrowings on the statement of financial position.64