NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2011
These Notes are integral to the financial statements. The consolidated financial statements for the year ended
31 December 2011 were authorised for issue by the directors on 9 February 2012.
1 DOMICILE AND ACTIVITIES
The Company, DBS Group Holdings Ltd, is incorporated and domiciled in the Republic of Singapore and has its
registered office at 6 Shenton Way, DBS Building Tower One, Singapore 068809.
The Company is listed on the Singapore Exchange. The principal activity of the Company is that of an investment
holding company and the principal activity of its main wholly- owned subsidiary, DBS Bank Ltd the Bank, is the provision of
retail, small and medium-sized enterprise, corporate and investment banking services.
The financial statements relate to the Company and its subsidiaries the Group and the Group’s interests in associates
and joint ventures.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
The consolidated financial statements of the Group are prepared in accordance with Singapore Financial Reporting
Standards FRS including related Interpretations promulgated by the Accounting Standards Council ASC. In accordance
with Section 20119 of the Companies Act the Act, the requirements of FRS 39 Financial Instruments: Recognition
and Measurement in respect of loan loss provisioning are modified by the requirements of Notice to Banks No. 612
“Credit Files, Grading and Provisioning” issued by the Monetary Authority of Singapore.
The financial statements of the Company are prepared in accordance with FRS including related Interpretations to FRS
INT FRS promulgated by the ASC. As permitted by Section 2014B of the Act, the Company’s income statement has not
been included in these financial statements.
The financial statements are presented in Singapore dollars and rounded to the nearest million, unless otherwise stated. They
are prepared on the historical cost convention, except as disclosed in the accounting policies below.
The preparation of financial statements in conformity with FRS requires management to exercise judgement, use estimates and
make assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses.
Although these estimates are based on management’s best knowledge of current events and actions, actual results may
differ from these estimates. Critical accounting estimates and assumptions used that are significant to the financial
statements, and areas involving a higher degree of judgement and complexity, are disclosed in Note 4.
On 1 January 2011, the Group adopted the new or revised FRS and INT FRS that are applicable in the current financial year.
The financial statements have been prepared in accordance with the relevant transitional provisions in the respective FRS
and INT FRS.
The adoption of these new or revised FRS and INT FRS did not result in substantial changes to the Group’s and Company’s
accounting policies and had no material effect on the amounts reported for the current or prior financial years.
FRS 24 Amendments: Related Party Disclosures The revised standard simplifies the definition of a related party.
It clarifies its intended meaning and eliminates inconsistencies from the definition.
The amendment also removes the requirement for government- related entities to disclose details of all transactions with the
government and other government-related entities and replaces it with a requirement to disclose information which is
considered sufficient for the financial statement users to understand the effects of related party transactions. For
example, the nature and amount of each individually significant transaction needs to be disclosed.
The following amendments to FRS and INT FRS are of a technical or clarifying nature and their adoption does not have
any material impact on the Group’s financial statements.
FRS 32 Amendments Financial Instruments: Presentation
INT FRS 119 Extinguishing Financial Liabilities
with Equity Instruments
2.2 Group accounting
Subsidiaries Subsidiaries are entities over which the Group has the power
to govern the financial and operating policies so as to obtain benefits from their activities. It is generally accompanied by a
shareholding of more than 50 of voting rights. Potential voting rights that are currently exercisable or convertible are
considered when determining whether an entity is considered a subsidiary.
The acquisition method is used to account for business combinations. Subsidiaries are consolidated from the date
control is transferred to the Group to the date control ceases. The consideration transferred for an acquisition is measured as
83 DBS Annual Report 2011
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2011
the acquisition-date fair values of the assets transferred, the liabilities incurred and the equity interests issued. Acquisition-
related costs are expensed as incurred. Identifiable assets acquired, and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair value on the date of acquisition.
Refer to Note 2.10 for the Group’s accounting policy on “Goodwill on consolidation”.
Special purpose entities Entities in which the Group holds little or no equity are
consolidated as subsidiaries if the Group is assessed to have control over them. Such control can be demonstrated through
predetermination of the entities’ activities, exposure to and retention of majority of their residual or ownership risks, and
decision-making powers to obtain a majority of benefits from the entities.
Joint ventures Joint ventures are entities that are jointly controlled by the
Group together with one or more parties through contractual arrangements. The Group recognises its interests in joint
ventures using the proportionate consolidation method.
Proportionate consolidation involves combining the Group’s share of the joint venture’s income, expenses, assets and
liabilities on a line-by-line basis with similar items in the Group’s financial statements.
Associates Associates are entities over which the Group has significant
influence, but not control, and generally holds a shareholding of between and including 20 and 50 of the voting rights.
The Group recognises its investments in associates using the equity method of accounting.
Under the equity method of accounting, an investment in associate is initially carried at cost. The initial cost of an
acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities assumed at the date of
acquisition, plus costs directly attributable to the acquisition. The carrying amount is increased or decreased to recognise the
Group’s share of net assets of the associate, less any impairment in value after the date of acquisition. Where the Group’s share
of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless
it has incurred obligations or made payments on behalf of the associate.
The results of the associates are taken from the latest audited accounts or unaudited management accounts of the associates,
prepared at dates not more than three months prior to the end of the financial year of the Group. Adjustments are made for
the effects of significant transactions or events that occur between the two dates.
Investments in subsidiaries, associates and joint ventures Investments in subsidiaries, associates and joint ventures are
stated at cost less accumulated impairment losses in the balance sheet of the parentinvestorventurer. On disposal
of the investments, the difference between the net proceeds and the carrying amounts of the investments is taken to the
income statement.
Intra-group transactions All intra-group transactions, balances, income and expenses are
eliminated on consolidation. Profits resulting from transactions between the Group and its associates and joint ventures are
eliminated to the extent of the Group’s interests in these companies. Losses are also eliminated unless the transaction
provides evidence of an impairment of an asset transferred.
Alignment of accounting policies Where necessary, adjustments are made to the financial
statements of subsidiaries, associates and joint ventures to ensure consistency with the accounting policies adopted by
the Group.
2.3 Foreign currency translation
