Conclusion
At 1 January 2012
1. BASIS OF PREPARATION (CONTINUED) (a) Statement of compliance (continued)
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2013 (continued)
• IC Interpretation 20, Stripping Costs in the Production Phase of a Surface Mine
• Amendments to MFRS 7, Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities
• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards – Government Loans
• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements 2009-2011 Cycle)
• Amendments to MFRS 101, Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle)
• Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle)
• Amendments to MFRS 132, Financial Instruments: Presentation (Annual Improvements 2009-2011 Cycle)
• Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2009-2011 Cycle)
• Amendments to MFRS 10, Consolidated Financial Statements: Transition Guidance
• Amendments to MFRS 11, Joint Arrangements: Transition Guidance
• Amendments to MFRS 12, Disclosure of Interests in Other Entities: Transition Guidance
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2014
• Amendments to MFRS 10, Consolidated Financial Statements: Investment Entities
• Amendments to MFRS 12, Disclosure of Interests in Other Entities: Investment Entities
• Amendments to MFRS 127, Separate Financial Statements (2011): Investment Entities
• Amendments to MFRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2015
• MFRS 9, Financial Instruments (2009)
• MFRS 9, Financial Instruments (2010)
• Amendments to MFRS 7, Financial Instruments: Disclosures – Mandatory Date of MFRS 9 and Transition Disclosures
The Group and the Company plan to apply the abovementioned standards, amendments and interpretations:
• from the annual period beginning on 1 January 2013 for those standards, amendments or interpretations that are effective for annual periods beginning on or after 1 July 2012 and 1 January 2013, except for IC Interpretation 20 which is not applicable to the Group and the Company.
• from the annual period beginning on 1 January 2014 for those standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2014.
• from the annual period beginning on 1 January 2015 for those standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2015.
Material impacts of initial application of a standard, an amendment or an interpretation are discussed below:
1. BASIS OF PREPARATION (CONTINUED) (a) Statement of compliance (continued)
(i) MFRS 9, Financial Instruments
MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets and financial liabilities.
The adoption of MFRS 9 will result in a change in accounting policy. The Group is currently assessing the financial impact of adopting MFRS 9.
(ii) MFRS 10, Consolidated Financial Statements
MFRS 10 introduces a new single control model to determining which investees should be consolidated.
MFRS 10 supersedes MFRS 127, Consolidated and Separate Financial Statements and IC Interpretation 112, Consolidation – Special Purpose Entities. There are three elements to the definition of control in MFRS 10:
(i) power by investor over an investee,
(ii) exposure, or rights, to variable returns from investor’s involvement with the investee, and (iii) investor’s ability to affect those returns through its power over the investee.
The Group is currently assessing the financial impact of adopting MFRS 10.
(iii) MFRS 11, Joint Arrangements
MFRS 11 establishes the principles for classification and accounting for joint arrangements and supersedes MFRS 131, Interests in Joint Ventures. Under MFRS 11, a joint arrangement may be classified as joint venture or joint operation. Interest in joint venture will be accounted for using the equity method whilst interest in joint operation will be accounted for using the applicable MFRSs relating to the underlying assets, liabilities, income and expense items arising from the joint operations.
The Group is currently assessing the financial impact of adopting MFRS 11.
(iv) MFRS 119, Employee Benefits (2011)
The amendments to MFRS 119 change the accounting for defined benefit plans and termination benefits.
The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur, and hence eliminate the ‘corridor method’ permitted under the previous version of MFRS 119 and accelerate the recognition of past service costs. The amendments require all actuarial gains and losses to be recognised immediately through other comprehensive income in order for the net pension asset or liability recognised in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus.
The amendments to MFRS 119 are effective for annual periods beginning on or after 1 January 2013 and require retrospective application. The amendments to MFRS 119 have no significant impact to the Group.
1. BASIS OF PREPARATION (CONTINUED) (a) Statement of compliance (continued)
(v) Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle) The amendments to MFRS 116 clarify that items such as spare parts, stand-by equipment and servicing equipment shall be recognised as property, plant and equipment when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventory.
The initial application of other standards, amendments and interpretations is not expected to have any material financial impacts to the current and prior periods financial statements of the Group and the Company upon their first adoption.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.
(c) Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency. All financial information presented in RM and has been rounded to the nearest thousand, unless otherwise stated.
(d) Use of estimates and judgements
The preparation of the financial statements in conformity with Malaysian Financial Reporting Standards (“MFRSs”) requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes:
• Note 2(q) - contract revenue
• Note 4 - measurement of the recoverable amounts of cash generating units
• Note 6 - valuation of investment properties
• Note 11 - recognition of unutilised tax losses
• Note 12 - valuation of recoverability and impairment of receivables