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(b) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group but not yet

effective and have not been early adopted. (continued)

The Group will apply the following new standards, amendments to standards and interpretations from annual period beginning on 1

January 2011: (continued) Improvements to FRSs: (continued)

• FRS 138 “Intangible Assets” (effective from 1 July 2010) clarifes that a group of complementary intangible assets acquired in a

business combination may be recognised as a single asset if each asset has similar useful lives. The amendment to this standard is not anticipated to have material impact on the Group’s fnancial statements.

• IC Interpretation 9 (effective from 1 July 2010) clarifes that this interpretation does not apply to embedded derivatives in contracts

acquired in a business combination, businesses under common control or the formation of a joint venture. The amendment to this standard is not anticipated to have material impact on the Group’s fnancial statements.

Subsidiaries are those corporations, partnerships or other entities (including special purpose entities) in which the Group has

power to exercise control over the fnancial and operating policies so as to obtain benefts from their activities, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are consolidated using the acquisition method of accounting except for Johor Specialist Hospital Sdn Bhd and Ipoh

Specialist Hospital Sdn Bhd which were consolidated using the merger method of accounting. The subsidiaries were consolidated prior to 1 April 2002 in accordance with Malaysia Accounting Standard 2 “Accounting for Acquisitions and Mergers”, the generally accepted accounting principles prevailing at that time.

“Business Combinations” to apply the standard prospectively. Accordingly, business combinations entered into prior to 1 January 2008 have not been restated with this standard.

Under the acquisition method of accounting, subsidiaries are fully consolidated from the date on which control is transferred to

the Group and are de-consolidated from the date that control ceases. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.

Identifable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at

their fair values at the date of acquisition, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifable net assets acquired at the date of acquisition is refected as goodwill (see accounting policy Note 4(e)(i) on goodwill). If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in proft or loss.

Minority interest represents that portion of the proft or loss and net assets of a subsidiary attributable to equity interests that

are not owned, directly or indirectly through subsidiaries, by the Company. It is measured at the minorities’ share of the fair value of the subsidiaries’ identifable assets and liabilities at the date of acquisition and the minorities’ share of changes in the subsidiaries’ equity since that date.

All inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised

losses are also eliminated but considered an impairment indicator of the asset transferred. Where necessary, adjustments are made to the fnancial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

The gain or loss on disposal of a subsidiary, which is the difference between net disposal proceeds and the Group’s share of its

net assets as of the date of disposal, including the cumulative amount of any exchange differences that relate to the subsidiary, is recognised in the consolidated statement of comprehensive income.