Sample Disclosure – Accounting Policy On Leases Of Land And Buildings (26 August 2009)

Leases of land and buildings

 For leases of land and building, the land and buildings elements are considered separately for the purpose of lease classification and these leases are classified as operating or finance leases in the same way as leases of other assets.

The minimum lease payments including any lump-sum upfront payments made to acquire the interest in the land and building are allocated between the land and the buildings elements in proportion to the relative fair values for leasehold interest in the land element and the buildings element of the lease at the inception of the lease.

Land that has an indefinite economic life and where it does not transfer substantially all the risk and rewards incidental to ownership is treated as an operating lease.

The lump-sum upfront lease payment made on entering into or acquiring leasehold land are accounted for as prepaid lease payments and are amortised over the lease term on a straight line basis.

The buildings element is classified as a finance or operating lease. If the lease payment cannot be allocated reliably between these two elements, the entire lease is classified as a finance lease, unless it is clear that both elements are operating leases, in which case the entire lease is classified as an operating lease. The Company had previously revalued its leasehold land and has retained the unamortised revalued amount as the surrogate carrying amount of prepaid lease payments in accordance with the transitional provisions in FRS 117. Such prepaid lease payments is amortised over the lease term of 30 to 99 years.

Sample Disclosure – Revenue From Forrest Logging (25 August 2009)

Revenue From Forrest Logging

Revenue from forrest logging is measured at the fair value of the consideration receivable and is recognised in the income when the rights of logging have been transferred to logging contractors.

Sample Disclosure – Change In Accounting Policy On Non-amortisation Of Plantation Development Expenditure (24 August 2009)

Non-amortisation of Plantation Development Expenditure

With effect from 1 April 2008, planting expenditure incurred on newly developed land capitalised under plantation development expenditure is not amortised. Replanting expenditure of similar crops on former developed areas is chargeable to the income statement in the financial year it is incurred. In the opinion of the directors, the change in accounting policy provides reliable and more relevant information. This change in accounting policy has been accounted for retrospectively. Previously, amortisation was provided on plantation development expenditure of matured areas. The following table provides the extent of the change in accounting policy on the income statement and balance sheet had the previous policy been applied in the current year:

Effect on income statement for the year ended 31 March 2009  
 

RM

Increase in cost of sales

500,000

Decrease in profit before tax

500,000

Decrease in tax expense

125,000

Decrease in profit for the year

375,000

   
Effect on balance sheet as at 31 March 2009  
 

RM

Decrease in plantation development expenditure

500,000

Decrease in deferred tax liability

125,000

Decrease in retained earnings

375,000

Sample Disclosure – Change In Accounting Policy On Property, Plant and Equipment (21 August 2009)

Change In Accounting Policy

On 1 January 2009, the Company changed its accounting policy on the measurement of its freehold land and buildings form cost model to revaluation model. Pursuant to FRS 116: Property, Plant and Equipment, the revaluation has not been dealt with as a prior year adjustment in accordance with FRS 108: Accounting Policies, Change In Accounting Estimates and Errors, but instead treated as revaluation made during the year.

The effect of the change is as follows:-

Balance sheet as at 1 January 2009

Increase/(decrease)

 

RM

Property, plant and equipment

4,750,000

Asset revaluation reserve

4,750,000

Deferred tax liability

250,000

Sample Disclosure – Financial Results in Directors’ Report (21 August 2009)

FINANCIAL RESULTS

    Group   Company
  RM RM 
Loss for the year:-    
Loss for the year from continuing operations (1,200,000) (1,000,000)
Loss for the year from discontinued operations    (700,000)    –  
  (1,900,000) (1,000,000)

There were no material transfer to or from reserves during the financial year.

In the opinion of the directors, the results and operations of the Group and of the Company during the financial year were not substantially affected by any item, event or transaction of material and unusual in nature except the following:-

(i) the effect arising from review of impairment of property, plant and equipment resulting in an imparment loss of RM800,000 recognised during the financial year.

(ii) the effect arising from the remeasurement of the carrying value of assets of disposal group resulting in remeasurement loss of RM900,000 as disclosed in Note X to the financial statements.

(iii) the effect arising from the review of impairment of investment in subsidiaries of the Company resulting in an imparment loss of RM500,000 recognised during the financial year.

Sample Disclosure – Note On Dividends (19 August 2009)

DIVIDENDS          
  Dividend per share In respect of Year Recognised in Year
    2008 2007 2009 2008
  RM RM RM RM RM
2007 Final dividend of 45% less 25% taxation, on 100,000,000 ordinary shares, declared on 1 March 2008 and paid on 1 April 2008   

0.3375

  

  

33,750,000

  

  

33,750,000

           
2008 interim dividend of 10% less 25% taxation, on 100,000,000 ordinary shares, declared on 1 June 2008 and paid on 10 June 2008   

0.075

   

 7,500,000

  

  

   

7,500,000

           
2008 final dividend of 30% less 25% taxation, on 100,000,000 ordinary shares, amounting to a dividend payable of RM22,500,000   

0.225

  

22,500,000

  

  

 22,500,000

 

 

     30,000,000  33,750,000  22,500,000  41,250,000

At the forthcoming Annual General Meeting, a final dividend in respect of the financial year ended 31 December 2008, of 30% less 25% taxation on 100,000,000 ordinary shares, amounting to a dividend payable of RM22,500,000 (22.50 cents net per ordinary share) will be proposed for members’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the members of the Company, will be accounted for in equity as an appropriation of accumulated profits in the financial year ending 31 December 2009.