NOTES TO THE FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES 1 Basis of preparation
2.3 Changes in accounting policies and effects arising from adoption of new and revised FRSs
The accounting policies adopted are consistent with those of the previous fi nancial year except as follows:
On 1 April 2011 the Group and the Company adopted the following new and amended FRSs and IC Interpretations mandatory for annual fi nancial periods beginning on or after 1 April 2011.
FRS 1 First-time Adoption of Financial Reporting Standards (revised) FRS 3 Business Combinations (revised)
FRS 127 Consolidated and Separate Financial Statements (amended)
Amendments to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters and additional Exemptions for First-time Adopters
Amendments to FRS 2 Share-based Payments and Group Cash-settled Share-based Payment Transactions
Amendments to FRS 5 Non-current Assets Held for Sale and Discontinued Operations Amendments to FRS 7 Improving Disclosures about Financial Instruments
Amendments to FRS 132 Classifi cation of Rights Issue Amendments to FRS 138 Intangible Assets
IC Interpretation 4 Determining Whether an Arrangement Contains a Lease IC Interpretation 12 Service Concession Arrangements
IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation IC Interpretation 17 Distributions of Non-cash Asset to Owners IC Interpretation 18 Transfer of Assets from Customers Amendments to
IC Interpretation 9 Reassessment of Embedded Derivatives Improvements to FRSs 2010 Improvements to FRSs (2010)
Notes to The Financial Statements
as at 31 March 2012 (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.3 Changes in accounting policies and effects arising from adoption of new and revised FRSs(cont’d) Adoption of the above standards and interpretations did not have any effect on the fi nancial performance or position of the Group and of the Company except for those discussed below:
(a) FRS 1 First-time Adoption of Financial Reporting Standards (Revised)
The amendments to FRS 1 (Revised) clarify that an entity may choose to present the analysis of the items of other comprehensive income either in the statements of changes in equity or in the notes to the fi nancial statements. The Group has chosen to present the items of other comprehensive income in the statements of changes in equity.
(b) FRS 3 Business Combinations (Revised)
The revised FRS 3 introduces a number of changes in accounting for business combinations occuring after 1 July 2010. These changes impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs and future reported results. The revised FRS 3 was adopted prospectively by the Group.
The revised FRS 3 continues to apply the acquisition method to business combinations but with some signifi cant changes. All payments to purchase a business are recorded at fair value at the acquisition date, with contingent payments classifi ed as debt subsequently remeasured through the statements of comprehensive income. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquireee’s net assets. All acquisition-related costs are expensed.
The amendments also clarifi es that the amendments to FRS 7,FRS 132 and FRS 139 that eliminate the exemption for contingent consideration, do not apply to contingent consideration that arose from business combinations whose acquisition dates precede the application of FRS 3 (2010). Those contingent consideration arrangements are to be accounted for in accordance with the guidance in FRS 3 (2005).
(c) FRS 127 Consolidated and Separate Financial Statements (Amended)
The amendments to FRS 127 requires accounting for changes in ownership interests by the group in a subsidiary company (without loss of control) to be recognised as an equity transaction.
As a result, such transactions will not give rise to goodwill, nor will give rise to a gain or loss.
Furthermore, the amended standard changes the accounting for losses incurred by the subsidiary company as well as the loss of control of a subsidiary company. The revised FRS 127 was adopted prospectively by the Group.
Notes to The Financial Statements
as at 31 March 2012 (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.3 Changes in accounting policies and effects arising from adoption of new and revised FRSs(cont’d) (d) Amendments to FRS 7 Improving Disclosures about Financial Instruments
The amendments to FRS 7 expand the disclosures required in respect of fair value measurement and liquidity risk. Fair value measurements are to be disclosed by source of inputs using a three level hierarchy for each class of fi nancial instrument. The amendment to FRS 7 requires disclosure of fair value measurements by level of the following fair value measurement hierachy:
(i) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
(ii) inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (is as prices) or indirectly (i.e. derived from prices) (Level 2); and (iii) inputs for the asset or liabilities that are not based on observable market data(unobservable
inputs)(Level 3).
In addition, reconciliation between the beginning and ending balance for Level 3 fair value measurements is now required as well as signifi cant transfers between Level 1 and Level 2 fair value measurement. The fair value measurement disclosures are presented in Note 32.
At the date of authorisation of these fi nancial statements, the following new FRSs, Amendments to FRSs and IC Interpretations were issued but not yet effective and have not been applied by the Company:
Effective for fi nancial periods beginning on or after 1 July 2011:
IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments Amendments to IC
Interpretation 14 Prepayments of a Minimum Funding Requirement Effective for fi nancial periods beginning on or after 1 Jan 2012:
FRS 124 Related Party Disclosures (revised)
Amendments to FRS 1 First-time Adoption of Financial Reporting Standards-Severe Hyperinfl ation and Removal of Fixed Dates for First-time Adopters
Amendments to FRS 7 Financial Instruments: Disclosures - Transfers of Financial Assets Amendments to FRS 112 Income Taxes - Deferred Tax: Recovery of Underlying Assets Effective for fi nancial periods beginning on or after 1 July 2012:
Amendments to FRS 101 Presentation of Financial Statements - Presentation of Items of Other Comprehensive Income
Notes to The Financial Statements
as at 31 March 2012 (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.3 Changes in accounting policies and effects arising from adoption of new and revised FRSs(cont’d) Effective for fi nancial periods beginning on or after 1 January 2013:
FRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009) FRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010) FRS 10 Consolidated Financial Statements
FRS 11 Joint Arrangements
FRS 12 Disclosure of Interest in Other Entities FRS 13 Fair Value Measurement
FRS 119 Employee Benefi ts (revised)
FRS 127 Separate Financial Statements (revised)
FRS 128 Investment in Associated and Joint Ventures (revised) FRS 129 Financial Reporting in Hyperinfl ationary Economies IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine
The above new FRSs, Amendments to FRSs and IC Interpretations are expected to have no signifi cant impact on the fi nancial statements of the Group and of the Company upon their initial application.
Malaysian Financial Reporting Standards (MFRS FRAMEWORK)
On 19 November 2011, the Malaysian Accounting Standards Board (MASB) issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (“MFRS Framework”).
The MRFS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture and IC Interpretation 15 Agreements for Construction of Real Estate (“IC 15”), including its parent, signifi cant investor and venturer (herein called “Transitioning Entities”)
Transitioning Entities will be allowed to defer adoption of the new MFRS Framework for an additional one year. Consequently, adoption of the MFRS Framework by Transitioning Entities will be mandatory for annual periods beginning on or after 1 January 2013.
The Group falls within the scope defi nition of Transitioning Entities and has opted to defer adoption of the new MFRS Framework. Accordingly, the Group will be required to prepare fi nancial statements using the MFRS Framework in its fi rst MFRS fi nancial statements for the year ending 31 March 2014. In presenting its fi rst MFRS fi nancial statements, the Group will be required to restate the comparative fi nancial statements to amounts refl ecting the application of MFRS Framework. The majority of the adjustments required on transition will be made, retrospectively, against opening retained profi ts.
On 30 June 2012, MASB announced that the Transitioning Entities are allowed to defer the adoption of MFRS to 1 Janaury 2014. Thus, the Group will be required to prepare fi nancial statements using the MFRS Framework in its fi rst MFRS fi nancial statements for the year ending 31 March 2015.
The Group has not completed its assessment of the fi nancial effects of the differences between Financial
Notes to The Financial Statements
as at 31 March 2012 (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.3 Changes in accounting policies and effects arising from adoption of new and revised FRSs(cont’d) Malaysian Financial Reporting Standards (MFRS FRAMEWORK)(cont’d)
The Group considers that it is achieving its scheduled milestones and expects to be in a position to fully comply with the requirements of the MFRS Framework for the fi nancial year ending 31 March 2015.