Sample Disclosure – Accounting Policy Of Investment Properties (19 January 2011)

Investment Properties

Investment properties are held for long term rental yields or for capital appreciation or both, and are not occupied by companies within the Group.

Investment properties are measured initially at cost. After initial recognition, investment properties are measured and carried at fair value.

Fair value is based on valuation performed by appointed independent registered valuer(s) taking into account factors such as the property growth and market in the surrounding area. The fair value of the investment properties reflects the market conditions at the balance sheet date. Changes in fair values are recorded in the income statement as investment properties fair value adjustment.

On disposal of an investment property, or when it is permanently withdrawn from use and future economic benefits no longer are expected from the property concerned, it shall be derecognised. The difference between the net disposal proceeds and the carrying value is recognised in the income statement in the period of the retirement or disposal.

Transfer to or from investment property will be made when there is a change in use of the property. The commencement of owner-occupation for the property would result in a transfer of the investment property to self-occupied property, included in category of asset named “Property, Plant and Equipment”. On the other hand, the end of owner-occupation of a property would result in  a transfer from the self-occupied property which is included in Property, Plant and Equipment to the category of asset known as “Investment Properties”.

If a self-occupied property became an investment property that will be carried at fair value, the revaluation surplus of the self-occupied property, included in Asset Revaluation Reserve account would be transferred to accumulated profits.

For a transfer from investment property which is carried at fair value to self-occupied property, the fair value of the property at the date of change in use would be treated as deemed cost of the property for subsequent accounting purposes.

For the transfer of investment property to prepaid lease payments, the Group have adopted the transitional provision stated in Para 67A of FRS 117 which allows the Group to retain the unamortised revalued amount of the property as the surrogate carrying amount of prepaid lease payments.

Sample Disclosure – Note On Land Held For Development (16 September 2009)

LAND HELD FOR DEVELOPMENT

Land Held For Development 

Land held for development of certain subsidiary companies are charged together with property development costs for banking facilities granted as disclosed in Note XX. 

Sample Disclosure – Note On Long Term Receivables (27 August 2009)

Long term receivables

 

2009

2008

 

RM

RM

Amount due from subsidiary companies

800,000

700,000

Amount due from associated companies

500,000

500,000

 

1,300,000

1,200,000

 

The above amounts due from subsidiaries and associated companies are unsecured, interest free and are not repayable within the next twelve months except for amount due from subsidiaries amounting to RM200,000 (2008 – RM100,000) which are subject to interest at 5% (2008 – 5%) per annum.

Sample Disclosure – Accounting Policy On Investment In Associates (26 August 2009)

Associates

An associate is an entity over which the Group and the Company have significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

In the Company’s separate financial statements, an investment in associate is stated at cost less impairment losses, if any. An investment in associate is accounted for in the consolidated financial statements using the equity method of accounting. The investment in associate in the consolidated balance sheet is initially recognised at cost and adjusted thereafter for the post acquisition change in the Group’s share of net assets of the investment.

The interest in the associate is the carrying amount of the investment in the associate under the equity method together with any long-term interest that, in substance, form part of the Group’s net interest in the associate. The Group’s share of the profit or loss of the associate during the financial year is included in the consolidated financial statements, after adjustment to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.

Distributions received from the associate reduce the carrying amount of the investment. Adjustments to the carrying amount may also be necessary for changes in the Group’s proportionate interest in the associate arising from changes in the associate’s equity that have not been recognised in the associate’s profit or loss. Such changes include those arising from the revaluation of property, plant and equipment and from foreign exchange translation differences. The Group’s share of those changes is recognised directly in equity of the Group.

Unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate.

When the Group’s share of losses in the associate equals to or exceeds its interest in the associate, the carrying amount of that interest is reduced to nil and the Group does not recognise further losses unless it has incurred legal or constructive obligations or made payments on its behalf. The most recent available financial statements of the associate are used by the Group in applying the equity method. When the reporting dates of the financial statements are not coterminous, the share of results is arrived at using the latest audited financial statements for which difference in reporting dates is no more than three (3) months. Adjustments are made for the effects of any significant transactions or events that occur between the intervening periods.

Upon disposal of an investment in associate, the difference between the net disposal proceeds and its carrying amount is included in income statements.

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.

Sample Disclosure – Note On Investment In Associates (31 May 2009)

INVESTMENT IN ASSOCIATES

Investment in associates consists of:

 

Group

Company

 

2009

2008

2009

2008

 

RM

RM

RM

RM

At Cost:

 

 

 

 

Quoted shares

400,000

400,000

400,000

400,000

Unquoted shares

500

500

500

500

 

400,500

400,500

400,000

400,000

Share of post -acquisition results, net of dividend received

230,128

245,750

Impairment loss

(100,500)

(100,500)

(100,500)

(100,500)

 

530,128

545,750

299,500

299,500

At Market Value

 

 

 

 

Quoted shares

501,850

487,154

501,850

487,154

 

 

 

 

 

The following information relates to the associates which are all incorporated in Malaysia.

 

 

Name of Companies

Effective Equity Interest

 

 

Principal Activities

2009

2008

 

 

 

 

Held by the Company

 

 

 

ABC Berhad

42.00%

42.00%

Investment holding and property development

Held through indirect subsidiary, XYZ Sdn Bhd

 

 

 

EFG Berhad

40.00%

40.00%

Provision of property management services

HIJ Sdn Bhd

40.00%

40.00%

Dormant

 

As at day/month/year, investment in a quoted associate of the Company with carrying value amounting to RMXXX,XXX (2008: RMXXX,XXX) has been charged to a licensed bank for banking facilities stated in Note XX.

The directors are of the opinion that the allowance for impairment loss as of year end is adequate as the carrying value of the investment approximates the net assets of the associates.

The summarised financial information in respect of the Group’s associates are as follows:

 

Group

Assets and liabilities

2009

2008

Current assets

1,820,137

1,756,842

Non-current assets

1,589,630

1,642,693

Total assets

3,411,776

3,401,543

Current liabilities

-2,568,461

-2,948,763

Non-current liabilities

-251,836

164,687

Total liabilities

-2,820,297

-3,113,450

Net Assets

591,479

288,093

The Group’s share of net assets

236,592

115,237

Results

   

Revenue

354,262

249,867

Profit for the financial year

65,317

4,512

 

The results of ABC Berhad and its subsidiaries (“ABC Group”) have been equity accounted for and included in the financial statements of the Group based on the latest audited financial statements.

 

Auditors’ report of the ABC Group for the financial year ended day/month/year

In the auditors’ report, the auditors have included an emphasis of matter in respect of the use of going-concern as the basis for the preparation of the financial statements of the ABC Group.

The auditors reported that the financial statements of ABC Group and have a net current liabilities of RMXXX million and RMXXX million respectively as at day/month/year. However, the financial statements of the ABC Group and of ABC Berhad have been prepared on a going concern basis. The application of the going concern basis is based on the assumption that ABC Group and ABC Berhad will be able to complete the Financial Regularisation Plan within the anticipated timeframe and that the ABC Group will be able to achieve sustainable and viable operations in the foreseeable future and consequently, the realisation of the assets and settlement of liabilities in the normal course of business. In this connection, the directors of ABC Berhad are confident that the Financial Regularisation Plan would be completed successfully within the anticipated timeframe.

Accordingly, the financial statements do not include any adjustments relating to the recoverability and classification of assets and the classification of liabilities that might be necessary should ABC Group be unable to continue as a going concern.