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Note 1 Significant Accounting Policies
(continued)
j) Impairment of assets:
The carrying amount of assets are reviewed at each Balance Sheet date to assess if there is any indication of impairment
based on internal | external factors. An impairment loss on such assessment will be recognised wherever the carrying
amount of an asset exceeds its recoverable amount. The recoverable amount of the assets is net selling price or value in use,
whichever is higher. While assessing value in use, the estimated future cash flows are discounted to the present value by
using weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending
on changes in the circumstances and to the extent that carrying amount of the assets does not exceed the carrying amount
that will be determined if no impairment loss had previously been recognised.
k) Cash and cash equivalents:
Cash and cash equivalents include cash in hand, demand deposits with bank and other short-term (3 months or less
from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an
insignificant risk of changes in value.
l) Trade receivables:
Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortised cost, using the
effective interest rate (EIR) method, less provision for impairment.
m) Trade and other payables:
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which
are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after
the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the
EIR method.
n) Inventories:
Raw materials, packing materials, purchased finished goods, work-in-progress, manufactured finished goods, fuel, stores
and spares other than specific spares for machinery are valued at cost or net realisable value whichever is lower. Cost is
arrived at on moving weighted average basis.
Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventory to the present
location and condition. Cost includes the reclassification from equity of any gains or losses on qualifying cash flow hedges
relating to purchases of raw material but excludes borrowing costs.
Due allowances are made for slow moving and obsolete inventories based on estimates made by the Company.
Items such as spare parts, stand-by equipment and servicing equipment which is not plant and machinery gets classified as
inventory.
The harvested product of biological assets of the entity that is oil palm Fresh Fruit Bunch (FFB) are initially measured at fair
value less costs to sell at the point of harvest and subsequently measured at the lower of such value or net realisable value.
o) Investments and other financial assets:
Classification:
The Company classifies its financial assets in the following measurement categories:
i)
Those to be measured subsequently at fair value (either through Other Comprehensive Income, or through profit or
loss)
ii) Those measured at amortised cost
The classification depends the business model of the entity for managing financial assets and the contractual terms of the
cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or Other Comprehensive Income.
For investments in debt instruments, this will depend on the business model in which the investment is held. For investments
in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial
recognition to account for the equity investment at fair value through Other Comprehensive Income.
Initial recognition and measurement:
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument.
Financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through
profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs of financial
assets carried at fair value through profit or loss are expensed in the Statement of Profit and Loss.
Notes
to the Financial Statements