31 January 2013
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The fi nancial statements of the Group and of the Company have been prepared in accordance with the Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the requirements of the Companies Act, 1965 in Malaysia. These are the Group’s and the Company’s fi rst fi nancial statements prepared in accordance with MFRSs and MFRS 1, First-Time Adoption of Malaysian Financial Reporting Standards has been applied.
The fi nancial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.
In the previous fi nancial year, the Group and the Company prepared its fi nancial statements using Financial Reporting Standards.
On 1 February 2012, the Group and the Company have adopted the following new and revised MFRSs, issued by the Malaysian Accounting Standards Board (‘MASB’), effective for the annual periods beginning on or after 1 January 2012:
MFRSs that have been issued and effective
MFRSs/Interpretations
Effective for annual periods beginning on or after MFRS 1 First-Time Adoption of Malaysian Financial Reporting Standards 1 January 2012
MFRS 3 Business Combinations 1 January 2012
MFRS 5 Non-current Assets Held for Sale and Discontinued Operations 1 January 2012
MFRS 7 Financial Instruments: Disclosures 1 January 2012
MFRS 8 Operating Segments 1 January 2012
MFRS 102 Inventories 1 January 2012
MFRS 107 Statement of Cash Flows 1 January 2012
MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors 1 January 2012
MFRS 110 Events After the Reporting Period 1 January 2012
MFRS 111 Construction Contracts 1 January 2012
MFRS 112 Income Taxes 1 January 2012
MFRS 116 Property, Plant and Equipment 1 January 2012
Annual Report 2013 39
NOTES TO THE FINANCIAL STATEMENTS
31 January 2013
cont’d
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS cont’d MFRSs that have been issued and effective cont’d
MFRSs/Interpretations
Effective for annual periods beginning on or after
MFRS 117 Leases 1 January 2012
MFRS 118 Revenue 1 January 2012
MFRS 119 Employee Benefi ts 1 January 2012
MFRS 120 Accounting for Government Grants and Disclosure of Government Assistance 1 January 2012 MFRS 121 The Effects of Changes in Foreign Exchange Rates 1 January 2012
MFRS 123 Borrowing Costs 1 January 2012
MFRS 124 Related Party Disclosures 1 January 2012
MFRS 126 Accounting and Reporting by Retirement Benefi t Plans 1 January 2012 MFRS 127 Consolidated and Separate Financial Statements 1 January 2012
MFRS 128 Investments in Associates 1 January 2012
MFRS 132 Financial Instruments: Presentation 1 January 2012
MFRS 133 Earnings Per Share 1 January 2012
MFRS 134 Interim Financial Reporting 1 January 2012
MFRS 136 Impairment of Assets 1 January 2012
MFRS 137 Provisions, Contingent Liabilities and Contingent Assets 1 January 2012
MFRS 138 Intangible Assets 1 January 2012
MFRS 139 Financial Instruments: Recognition and Measurement 1 January 2012
MFRS 140 Investment Property 1 January 2012
The transition to MFRSs does not have any signifi cant impact on the fi nancial statements of the Group and of the Company except as discussed below:
MFRS 3 Business Combinations - MFRS 1 provides the option to apply MFRS 3 Business Combinations, prospectively from the date of transition. This provides relief from full retrospective application of MFRS 3 which would require restatement of all business combinations prior to the date of transition.
The Group has elected to apply MFRS 3 prospectively from the date of transition. In respect of acquisitions prior to the date of transition, the classifi cation of former business under FRS is maintained, no re-measurement of original fair values determined at the time of business combination (date of acquisition) and the carrying amount of goodwill recognised under FRS is not adjusted.
NOTES TO THE FINANCIAL STATEMENTS
31 January 2013
cont’d
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS cont’d
The Group and the Company have not adopted the following standards, amendments and interpretations that have been issued but not yet effective:
MFRSs that have been issued but are not yet effective
MFRSs/Interpretations
Effective for annual periods beginning on or after Amendments to MFRS 101 – Presentation of Items of Other Comprehensive Income 1 July 2012
MFRS 10 Consolidated Financial Statements 1 January 2013
MFRS 11 Joint Arrangements 1 January 2013
MFRS 12 Disclosure of Interests in Other Entities 1 January 2013
MFRS 13 Fair Value Measurement 1 January 2013
MFRS 119 Employee Benefi ts (2011) 1 January 2013
MFRS 127 Separate Financial Statements (2011) 1 January 2013
MFRS 128 Investment in Associates and Joint Ventures (2011) 1 January 2013 IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine 1 January 2013 Amendments to MFRS 7 Financial Instruments: Disclosures – Offsetting Financial Assets and
Financial Liabilities 1 January 2013
Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards –
Government Loans 1 January 2013
Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards
(Annual Improvements 2009-2011 Cycle) 1 January 2013
Amendments to MFRS 101 Presentation of Financial Statements (Annual Improvements 2009-
2011 Cycle) 1 January 2013
Amendments to MFRS 116 Property, Plant and Equipment (Annual Improvements 2009-2011
Cycle) 1 January 2013
Amendments to MFRS 132 Financial Instruments: Presentation (Annual Improvements 2009-
2011 Cycle) 1 January 2013
Amendments to MFRS 134 Interim Financial Reporting (Annual Improvements 2009-2011
Cycle) 1 January 2013
Amendments to MFRS 10 Consolidated Financial Statements: Transition Guidance 1 January 2013 Amendments to MFRS 11 Joint Arrangements: Transition Guidance 1 January 2013 Amendments to MFRS 12 Disclosure of Interests in Other Entities: Transition Guidance 1 January 2013 Amendments to MFRS 132 Financial Instruments: Presentation – Offsetting Financial Assets
and Financial Liabilities 1 January 2014
MFRS 9 Financial Instruments (2009) 1 January 2015
MFRS 9 Financial Instruments (2010) 1 January 2015
Amendments to MFRS 7, Financial Instruments: Disclosures – Mandatory Date of MFRS 9 and
Transition Disclosures 1 January 2015
Annual Report 2013 41
NOTES TO THE FINANCIAL STATEMENTS
31 January 2013
cont’d
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS cont’d
The adoption of these standards, amendments and interpretations that have been issued but not yet effective are not expected to have a material impact to the fi nancial statements of the Group and the Company except as discussed below:
MFRS 9, Financial Instruments replaces the guidance in MFRS 139 Financial Instruments: Recognition and Measurement on the classifi cation and measurement of fi nancial assets. Upon adoption of MFRS 9, fi nancial assets will be measured at either fair value or amortised cost.
The adoption of MFRS 9 will result in a change in accounting policy. The Company is currently assessing the fi nancial impact of adopting MFRS 9.
3. SIGNIFICANT ACCOUNTING POLICIES