102
ANNUAL REPORT 2016
NOTES TOTHE FINANCIAL STATEMENTS
30 JUNE 2016
(Continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.11 Financial instruments (continued)
(b)
Financial liabilities (continued)
The Group designates corporate guarantees given to banks for credit facilities granted to subsidiaries as insurance contracts
as defined in MFRS 4 Insurance Contracts. The Group recognises these insurance contracts as recognised insurance liabilities
when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of
resources embodying economic benefits would be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
At the end of each reporting period, the Group assesses whether its recognised insurance liabilities are adequate, using current
estimates of future cash flows under its insurance contracts. If this assessment shows that the carrying amount of the insurance
liabilities is inadequate, the entire deficiency shall be recognised in profit or loss.
Recognised insurance liabilities are only removed from the statement of financial position when, and only when, it is
extinguished via a discharge, cancellation or expiration.
(c)
Equity
An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after
deducting all of its liabilities. Ordinary shares are classified as equity instruments.
Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are
accounted for as share premium. Both ordinary shares and share premium are classified as equity. Transaction costs of an equity
transaction are accounted for as a deduction from equity, net of any related income tax benefit. Otherwise, they are charged to
profit or loss.
Interim dividends to shareholders are recognised in equity in the period in which they are declared. Final dividends are
recognised upon the approval of shareholders in a general meeting.
The Group measures a liability to distribute non-cash assets as a dividend to the owners of the Company at the fair value of
the assets to be distributed. The carrying amount of the dividend is remeasured at the end of each reporting period and at the
settlement date, with any changes recognised directly in equity as adjustments to the amount of the distribution. On settlement
of the transaction, the Group recognises the difference, if any, between the carrying amount of the assets distributed and the
carrying amount of the liability in profit or loss.
When the Group repurchases its own shares, the shares repurchased would be accounted for using the treasury stock method.
Where the treasury stock method is applied, the shares repurchased and held as treasury shares shall be measured and carried
at the cost of repurchase on initial recognition and subsequently. It shall not be revalued for subsequent changes in the fair value
or market price of the shares.
The carrying amount of the treasury shares shall be offset against equity in the statement of financial position. To the extent that
the carrying amount of the treasury shares exceeds the share premium account, it shall be considered as a reduction of any
other reserves as may be permitted by the Companies Act,1965 in Malaysia.
No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the own equity instruments of the
Company. If such shares are issued by resale, any difference between the sales consideration and the carrying amount is shown
as a movement in equity.
