1. PRINCIPAL ACTIVITIES
The principal activities of the Company consist of investment holding and the cultivation of oil palm and processing of palm oil. The principal activities of the subsidiaries, associates and jointly controlled entities are set out in Note 49 to the financial statements. There have been no significant changes in the nature of the activities of the Group and of the Company during the financial year.
2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS 2.1 Basis of preparation
The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards (“FRSs”) and the provisions of the Companies Act, 1965 in Malaysia. However, Note 52 to the financial statements has been prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad.
2.2 Basis of accounting
The financial statements of the Group and of the Company have been prepared under the historical cost convention except as otherwise stated in the financial statements.
The preparation of financial statements requires the Directors to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and contingent liabilities. In addition, the Directors are also required to exercise their judgement in the process of applying the accounting policies. The areas involving such judgements, estimates and assumptions are disclosed in Note 4 to the financial statements. Although these estimates and assumptions are based on the Directors’ best knowledge of events and actions, actual results could differ from those estimates.
2.3 Presentation currency
The financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency and all financial information presented in RM are rounded to the nearest million, except where otherwise stated.
3. ADOPTION OF NEW FRSs AND AMENDMENT TO FRSs 3.1 New FRSs adopted during the current financial year
Title Effective Date
FRS 124 Related Party Disclosures 1 January 2012
Amendments to FRS 1 Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters 1 January 2012 Amendments to FRS 7 Disclosures – Transfers of Financial Assets 1 January 2012 Amendments to FRS 112 Deferred tax: Recovery of Underlying Assets 1 January 2012
Mandatory Effective Date of FRS 9 and Transitional Disclosures 1 March 2012
Amendments to FRS 101 Presentation of Items of Other Comprehensive Income 1 July 2012
There is no material impact upon adoption of the above FRSs and Amendments to FRSs during the current financial year.
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Notes to the Financial Statements
3. ADOPTION OF NEW FRSs AND AMENDMENT TO FRSs (Continued)
3.2 New FRSs that have been issued, but not yet effective and not yet adopted
Title Effective Date
FRS 10 Consolidated Financial Statements 1 January 2013
FRS 11 Joint Arrangements 1 January 2013
FRS 12 Disclosure of Interests in Other Entities 1 January 2013
FRS 13 Fair Value Measurement 1 January 2013
FRS 119 Employee Benefits 1 January 2013
FRS 127 Separate Financial Statements 1 January 2013
FRS 128 Investments in Associates and Joint Ventures 1 January 2013
Amendments to FRS 1 Government Loans 1 January 2013
Amendments to FRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities 1 January 2013
Improvements to FRSs (2012) 1 January 2013
Amendments to FRS 10, FRS 11 and FRS 12 Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance
1 January 2013 IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine 1 January 2013 Amendments to FRS 132 Offsetting Financial Assets and Financial Liabilities 1 January 2014
Amendments to FRS 10, FRS 12, FRS 127 Investment Entities 1 January 2014
FRS 9 Financial Instruments 1 January 2015
The Group is in the process of assessing the impact of the adoption of these FRSs, Amendments to FRSs and IC Interpretations since the effects would only be observable in future financial years.
3.3 New Malaysian Financial Reporting Standards (“MFRSs”) that have been issued, but have yet to be adopted during the current financial year
On 19 November 2011, the Malaysian Accounting Standards Board (“MASB”) announced the issuance of the new MFRS Framework that is applicable to entities other than private entities. However, the MASB deferred the effective date of MFRS Framework for transitioning entities (i.e. entities affected by MFRS 141 Agriculture and/or IC Interpretation 15 Agreements for Construction of Real Estate) from 1 January 2013 to 1 January 2015. The Group would subsequently adopt the MFRS Framework for the financial year ending 30 June 2016 as it is a transitioning entity.
The subsequent adoption of the MFRS Framework would result in the Group preparing an opening MFRS statement of financial position as at 1 July 2014, which adjusts for differences between the classification and measurement bases in the existing FRS Framework versus that in the new MFRS Framework. This would also result in a restatement of the annual and quarterly financial performance for the financial year ending 30 June 2015 in accordance with MFRS, which would form the MFRS comparatives for the annual and quarterly financial performance for the financial year ending 30 June 2016 respectively. The MFRSs, Amendments to MFRSs and IC Interpretations expected to be adopted are as follows:
MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards MFRS 2 Share-based Payment
MFRS 3 Business Combinations MFRS 4 Insurance Contracts
MFRS 5 Non-current Assets Held for Sale and Discontinued Operations MFRS 6 Exploration for and Evaluation of Mineral Resources
MFRS 7 Financial Instruments: Disclosures MFRS 8 Operating Segments
MFRS 9 Financial Instruments
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