Annual Report

Accounting for Our Investments

NOTE 7

EVENTS AFTER THE REPORTING DATE

Since the end of the financial year, the following matters or circumstances not referred to elsewhere in this report

have arisen that have or will significantly affect the operations of the Group, the results of those operations or the

state of affairs of the Group in subsequent financial years:

The market value of Washington H. Soul Pattinson and Company Limited’s holding in TPG Telecom Limited as at

19 October 2016, was $1.628 billion which was $1.110 billion below the market value as at 31 July 2016. Whilst

movements in market values have an impact on the net asset value of the Parent company, there is no impact on

the statutory financial statements of the Group as TPG Telecom Limited is accounted for as an equity accounted

associate. The carrying value of TPG Telecom Limited as at 31 July 2016 was $447.036 million.

The Group invests in equities (subsidiaries, joint arrangements, associated entities, and other equity investments),

investment properties, term deposits and cash. This section describes how each of these investments are

recognised and measured in the consolidated financial statements.

NOTE 8

INVESTMENTS IN CONTROLLED ENTITIES (SUBSIDIARIES)

Accounting policy

– Investments in controlled entities

Investments in controlled entities such as New Hope Corporation Limited, the PSRE Urban Regeneration Trust,

CopperChem Limited and Exco Resources Limited (refer to segment note for a detailed listing of subsidiaries) are

not recognised as individual investments in the consolidated financial statements. The assets and liabilities of

each controlled entity are instead recognised in the statement of financial position. Dividends from controlled

entities are not recognised in the consolidated income statement, instead the results from each controlled entity

are included in profit and loss.

Washington H. Soul Pattinson and Company Limited, the Parent company has a 59.65% shareholding in its

subsidiary, New Hope Corporation Limited. New Hope Corporation Limited is a diversified energy company,

with operations covering coal mining and production, coal port operations and oil and gas production and

exploration. Operations are mainly based in South East Queensland and most recently in the Hunter Valley

region, NSW with the Bengalla Joint Venture.

The remaining 40.35% shareholding in New Hope Corporation Limited (non-controlling interests) has a

proportional share in the results and equity of New Hope Corporation Limited.

The Group consolidates the net assets and results of subsidiaries in full, and discloses separately for each, the

amounts not controlled by the Group (non-controlling interests).

The following provides a summary of the financial information of New Hope Corporation Limited:

Total assets $2.019 billion (2015: 2.075 billion); Total liabilities $268.137 million (2015: $222.533 million);

Net assets $1.750 billion (2015; $1.853 billion) and a net increase in cash and cash equivalents $64.266 million

(2015: decrease $35.107 million), Non-controlling interest share of net assets $706.289 million (2015: $747.685

million), loss after income tax for the year $20.013 million (2015: $8.806 million).