| 2 | SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES |
Principal activities
The Company is a holding company. The principal
activities of the Company and its subsidiaries (collectively referred to as the “Company” or “the Group”) are
the provision of business strategy consultancy and technology development solution consultancy. The Company is headquartered in Malaysia
and conducts its primary operations through its significant direct and indirectly held subsidiaries that are incorporated and domiciled
in Malaysia, namely V Capital Kronos Berhad, V Capital Quantum Sdn. Bhd., and V Capital Consulting Limited where was incorporated in
the British Virgin Islands.
BASIS OF ACCOUNTING
The unaudited interim condensed consolidated
financial statements have been prepared in accordance with the historical cost basis, except as disclosed in the accounting policies
below, and are drawn up in accordance with the provisions of the International Financial Reporting Standards (“IFRS”) as
issued by the International Accounting Standards Board (“IASB”).
Historical cost is generally based on the fair
value of the consideration given in exchange for goods and services.
Fair value is the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless
of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset
or a liability, the Company takes into account the characteristics of the asset or liability which market participants would take into
account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial
statements is determined on such a basis.
In addition, for financial reporting purposes,
fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
| ● | Level
1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
that the entity can access at the measurement date; |
| |
● |
Level 2 inputs are inputs,
other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly;
and |
| |
● |
Level 3 inputs are unobservable
inputs for the asset or liability. |
BASIS OF CONSOLIDATION
As the Group were under same control of the controlling
shareholders and their entire equity interests were also ultimately held by the controlling shareholders immediately prior to the group
reorganization, the unaudited interim condensed consolidated statements of profit or loss and other comprehensive income, unaudited interim
condensed consolidated statements of changes in equity and unaudited interim condensed consolidated statements of cash flows statements
are prepared as if the current group structure had been in existence throughout the two-year period ended June 30, 2024, or since the
respective dates of incorporation/establishment of the relevant entity, where this is a shorter period. The unaudited interim condensed
consolidated statements of financial position as at June 30, 2023 and 2024 present the assets and liabilities of the aforementioned companies
now comprising the Group which had been incorporated/established as at the relevant balance sheet date as if the current group structure
had been in existence at those dates based on the same control aforementioned. The Group eliminates all significant intercompany balances
and transactions in its unaudited interim condensed consolidated financial statements.
Subsidiary corporations are all entities (including
structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiary
corporations are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date
that control ceases.
In preparing the unaudited interim condensed
consolidated financial statements, transactions, balances and unrealized gains on transactions between group entities are eliminated.
Unrealized losses are also eliminated unless the transaction provides evidence of an impairment indicator of the transferred asset. Accounting
policies of subsidiary corporations have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests comprise the portion
of a subsidiary corporation’s net results of operations and its net assets, which is attributable to the interests that are not
owned directly or indirectly by the equity holders of the Company. They are shown separately in the unaudited interim condensed consolidated
statements of comprehensive income, statements of changes in equity, and statements of financial position. Total comprehensive income
is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if this results in the non-controlling
interests having a deficit balance.
Acquisition of entities under an internal reorganization
scheme does not result in any change in economic substance. Accordingly, the unaudited interim condensed consolidated financial statements
of the Group are a continuation of the acquired entities and is accounted for as follows:
| |
(i) |
The results of entities
are presented as if the internal reorganization occurred from the beginning of the earliest period presented in the financial statements; |
| |
(ii) |
The Group will consolidate
the assets and liabilities of the acquired entities at the pre-combination carrying amounts. No adjustments are made to reflect fair
values, or recognize any new assets or liabilities, at the date of the internal reorganization that would otherwise be done under
the acquisition method; and |
| (iii) | No
new goodwill is recognized as a result of the internal reorganization. The only goodwill
that is recognized is the existing goodwill relating to the combining entities. Any difference
between the consideration paid/transferred and the equity acquired is reflected within equity
as merger reserve or deficit. |
The acquisition method of accounting is used
to account for business combinations entered into by the Group.
The consideration transferred for the acquisition
of a subsidiary corporation or business comprises the fair value of the assets transferred, the liabilities incurred, and the equity
interests issued by the Group. The consideration transferred also includes any contingent consideration arrangement and any pre-existing
equity interest in the subsidiary measured at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at
the acquisition date.
On an acquisition-by-acquisition basis, the Group
recognizes any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s identifiable net assets.
The excess of (a) the consideration transferred,
the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the
acquiree over the (b) fair value of the identifiable net assets acquired is recorded as goodwill.
When a change in the Group’s ownership
interest in a subsidiary corporation result in a loss of control over the subsidiary corporation, the assets and liabilities of the subsidiary
corporation including any goodwill are derecognized. Amounts previously recognized in other comprehensive income in respect of that entity
are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific Standard.
Any retained equity interest in the entity is
remeasured at fair value. The difference between the carrying amount of the retained interest at the date when control is lost, and its
fair value is recognized in profit or loss.
| |
(d) |
Transactions with non-controlling interests |
Changes in the Group’s ownership interest
in a subsidiary corporation that do not result in a loss of control over the subsidiary corporation are accounted for as transactions
with equity owners of the Company. Any difference between the change in the carrying amounts of the non-controlling interest and the
fair value of the consideration paid or received is recognized within equity attributable to the equity holders of the Company. CONVENIENCE TRANSLATION
Translations of amounts in the unaudited interim
condensed consolidated statement of financial position, unaudited interim condensed consolidated statements of profit or loss and other
comprehensive income, and unaudited interim condensed consolidated statement of cash flows from RM into USD as of and for the year ended
June 30, 2024 are solely for the convenience of the reader and were calculated at the noon buying rate of USD1 = RM4.7172,as published
in H.10 statistical release of the United States Federal Reserve Board. No representation is made that the RM amounts could have been,
or could be, converted, realized or settled into USD at such rate or at any other rate.
FINANCIAL ASSETS
| (a) | Classification
and measurement |
The Group classifies its financial assets at fair value through other
comprehensive income, fair value through profit and loss and amortized cost.
The classification depends on the Group’s
business model for managing the financial assets as well as the contractual terms of the cash flows of the financial assets.
Financial assets at fair value through other
comprehensive income (“FVTOCI”) are equity securities which are not held for trading but more for strategic investments or
debt securities where contractual cash flows are solely principal and interest and the objective of the Group’s business model
is achieved both by collecting contractual cash flow and selling financial assets.
On initial recognition, the Group may make an
irrevocable election (on an instrument-by-instrument basis) to designate investments in equity instruments as at FVTOCI. Designation
at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognised by an acquirer
in a business combination.
Investments in equity instruments as at FVTOCI
are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising
from changes in fair value recognised in other comprehensive income (“OCI”) and accumulated in the retained earnings. The
cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, and will be transferred to
retained earnings.
The Group reclassifies debt instruments when
and only when its business model for managing those assets changes.
At subsequent measurement - Debt instrument
Debt instruments mainly comprise of cash and
cash equivalents and other receivables (excluding prepayments).
Debt instruments that are held for collection
of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost.
A gain or loss on a debt instrument that is subsequently measured at amortized cost and is not part of a hedging relationship is recognized
in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included in interest income
using the effective interest rate method.
| |
(b) |
Recognition and derecognition |
Regular way purchases and sales of financial
assets are recognized on trade date – the date on which the Group commits to purchase or sell the asset.
Financial assets are derecognized when the rights
to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all
risks and rewards of ownership.
On disposal of a debt instrument, the difference
between the carrying amount and the sale proceeds is recognized in profit or loss. FINANCIAL LIABILITIES AND EQUITY INSTRUMENTS
Classification as debt or equity
Debt and equity instruments issued by the Group
are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the
definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences
a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are
recognised at the proceeds received, net of direct issue costs.
Financial liabilities
Except for derivative financial instruments which
are stated at fair value through profit or loss, all other financial liabilities are subsequently measured at amortised cost using the
effective interest method.
The effective interest method is a method of
calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral
part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability,
or (where appropriate) a shorter period, to the amortised cost of a financial liability.
Derecognition of financial liabilities
The Group derecognises financial liabilities
when, and only when, the Group’s obligations are discharged, cancelled or expired. The difference between the carrying amount of
the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss.
Offsetting financial instruments
Financial assets and liabilities are offset,
and the net amount reported in the balance sheet when there is a legally enforceable right to offset and there is an intention to settle
on a net basis or realize the asset and settle the liability simultaneously.
PROPERTY AND EQUIPMENT
| |
(i) |
Property and equipment |
Property and equipment are initially recognized
at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses.
The cost of an item of property and equipment
initially recognized includes its purchase price and any cost that is directly attributable to bringing the asset to the location and
condition necessary for it to be capable of operating in the manner intended by management.
Depreciation on other items of property and equipment
is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as followed;
| | Office renovation | - | 10 years | | | Office equipment | - | 5 years | | | Furniture and fittings | - | 5 years | | | Electrical and fittings | - | 10 years | | | Right of use asset - premise | - | 3 years | | | Right of use asset – motor vehicles | - | 10 years |
Work-in-progress is not depreciated as these
assets are not yet in use as at the end of the financial year.
The residual values estimated useful lives and
depreciation method of property and equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any
revision are recognized in profit or loss when the changes arise.
| |
(c) |
Subsequent expenditure |
Subsequent expenditure relating to property and
equipment that has already been recognized is added to the carrying amount of the asset only when it is probable that future economic
benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. All other repair and maintenance
expenses are recognized in profit or loss when incurred.
On disposal of an item of property and equipment,
the difference between the disposal proceeds and its carrying amount is recognized in profit or loss.
INTANGIBLE ASSETS
Software development costs are recognised
in profit or loss as incurred.
An intangible asset arising from development
is recognised when the following criteria are met:
| |
● |
it is technically feasible
to complete the intangible asset so that it will be available for use or sale; |
| |
● |
management intends to complete
the intangible asset and use or sell it; |
| |
● |
there is an ability to
use or sell the asset; |
| |
● |
it can be demonstrated
how the intangible asset will generate future economic benefits; |
| |
● |
adequate resources to complete
the development and to use or sell the intangible asset are available; and |
| |
● |
the expenditures attributable
to the intangible asset during its development can be reliably measured. |
Other development costs that do not meet
these criteria are recognised in profit or loss as incurred. Development costs previously recognised as an expense are not recognised
as an intangible asset in a subsequent period.
Capitalised development costs are measured
at cost less accumulated amortisation and accumulated impairment losses. The policy for the recognition and measurement of impairment
losses is in accordance with Impairment of Non-Financial Assets.
Software development costs are amortised
on straight-line basis based on the estimated useful lives of three to five years.
The useful lives and amortisation methods
are reviewed at the end of each reporting period. TRADE AND OTHER RECEIVABLES
A receivable is recognised when the Group has
an unconditional right to receive consideration. A right to receive consideration is unconditional if only the passage of time is required
before payment of that consideration is due. If revenue has been recognised before the Group has an unconditional right to receive consideration,
the amount is presented as a contract asset. Trade receivables that do not contain a significant financing component are initially measured
at their transaction price. Trade receivables that contain a significant financing component and other receivables are initially measured
at fair value plus transaction costs. All receivables are subsequently stated at amortised cost, using the effective interest method
and including an allowance for credit losses.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Property and equipment are tested for impairment
whenever there is any objective evidence or indication that these assets may be impaired.
For the purpose of impairment testing, the recoverable
amount (i.e., the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless
the asset does not generate cash inflows that are largely independent of those from other assets. If this is the case, the recoverable
amount is determined for the Cash Generating units (“CGU”) to which the asset belongs.
If the recoverable amount of the asset (or CGU)
is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The
difference between the carrying amount and recoverable amount is recognized as an impairment loss in profit or loss.
An impairment loss for an asset is reversed if,
and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment
loss was recognized. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does
not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment
loss been recognized for the asset in prior years.
A reversal of impairment loss for an asset other
than goodwill is recognized in profit or loss.
TRADE AND OTHER PAYABLES
Trade and other payables represent liabilities
for goods and services provided to the Group prior to the end of financial year which are unpaid. They are classified as current liabilities
if payment is due within one year or less (or in the normal operating cycle of the business if longer). Otherwise, they are presented
as non-current liabilities.
Trade and other payables are initially recognized
at fair value, and subsequently carried at amortized cost using the effective interest method.
CONTRACT LIABILITIES
A contract liability is recognised when the customer
pays non-refundable consideration before the Group recognises the related revenue. A contract liability would also be recognised if the
Group has an unconditional right to receive non-refundable consideration before the Group recognises the related revenue. In such cases,
the corresponding receivable would also be recognised. Contract liabilities are recognized as revenue when the Group satisfies its performance
obligation. BANK AND OTHER BORROWINGS
Borrowings are presented as current liabilities
unless the Group has an unconditional right to defer settlement for at least 12 months after the balance sheet date, in which case they
are presented as non-current liabilities.
| |
(a) |
Borrowings - Borrowings
are initially recognized at fair value (net of transaction costs) and subsequently carried at amortized cost. Any difference between
the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings
using the effective interest method. |
| |
(b) |
Borrowing costs - Borrowing
costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such
time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of
specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. |
All other borrowing costs are recognised in profit
or loss in the period in which they are incurred.
LEASES
When the Group is the lessee
At the inception of the contract, the Group assesses
if the contract contains a lease. A contract contains a lease if the contract conveys the right to control the use of an identified asset
for a period of time in exchange for consideration. Reassessment is only required when the terms and conditions of the contract are changed.
The Group recognizes a right-of-use asset and
lease liability at the date which the underlying asset is available for use. Right-of-use assets are measured at cost which comprises
the initial measurement of lease liabilities adjusted for any lease payments made at or before the commencement date and lease incentive
received. Any initial direct costs that would not have been incurred if the lease had not been obtained are added to the carrying amount
of the right- of-use assets.
The right-of-use asset is subsequently depreciated
using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the
end of the lease term.
The initial measurement of a lease liability
is measured at the present value of the lease payments discounted using the implicit rate in the lease, if the rate can be readily determined.
If that rate cannot be readily determined, the Group shall use its incremental borrowing rate.
Lease payments include the following:
| |
- |
Fixed payment (including in-substance fixed payments),
less any lease incentives receivables; |
| |
- |
Variable lease payment
that are based on an index or rate, initially measured using the index or rate as at the commencement date; |
| |
- |
Amount expected to be payable
under residual value guarantees; |
| |
- |
The exercise price of a
purchase option if is reasonably certain to exercise the option; and |
| |
- |
Payment of penalties for
terminating the lease, if the lease term reflects the Group exercising that option. |
For contracts that contain both lease and non-lease
components, the Group allocates the consideration to each lease component on the basis of the relative stand-alone price of the lease
and non-lease component. The Group has elected to not separate lease and non-lease component for property leases and account these as
one single lease component. Lease liability is measured at amortized cost
using the effective interest method. Lease liability shall be remeasured when:
| |
- |
There is a change in future lease payments arising
from changes in an index or rate; |
| |
- |
There is a change in the Group’s assessment of
whether it will exercise an extension option; or |
| |
- |
There is modification in the scope or the consideration
of the lease that was not part of the original term. |
Lease liability is remeasured with a corresponding
adjustment to the right-of-use assets, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced
to zero.
| |
● |
Short-term and low-value leases |
The Group has elected to not recognized right-of-use
assets and lease liabilities for short-term leases that have lease terms of 12 months or less and leases of low-value leases. Lease payments
relating to these leases are expensed to profit or loss on a straight-line basis over the lease term.
| |
● |
Variable lease payments |
Variable lease payments that are not based on
an index or a rate are not included as part of the measurement and initial recognition of the lease liability. The Group shall recognize
those lease payments in profit or loss in the periods that triggered those lease payments.
EMPLOYEE BENEFITS
Employee benefits are recognized as an expense,
unless the cost qualifies to be capitalized as an asset.
| |
(a) |
Defined contribution plans |
Defined contribution plans are post-employment
benefit plans under which the Group pays fixed contributions into separate entities such as the Employees Provident Fund on a mandatory,
contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid.
| |
(b) |
Employee leave entitlement |
Employee entitlements to annual leave are recognized
when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees
up to the balance sheet date.
PROVISIONS
Provisions are recognised when the Group has
a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the
obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best
estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks
and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required
to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain
that reimbursement will be received and the amount of the receivable can be measured reliably. REVENUE RECOGNITION
Revenue is recognised to depict the transfer
of promised services to clients at an amount that reflects the consideration to which an entity expects to be entitled in exchange for
those services. Specifically, the Group uses a five-step approach to recognise revenue:
| ● | Step 1: Identify
the contract(s) with a client |
| ● | Step 2: Identify
the performance obligations in the contract |
| ● | Step 3: Determine
the transaction price |
| ● | Step 4: Allocate
the transaction price to the performance obligations in the contract |
| ● | Step 5: Recognise
revenue when (or as) the Group satisfies a performance obligation |
The Group recognises revenue when (or as) a performance
obligation is satisfied, i.e., when “control” of the services underlying the particular performance obligations is transferred
to clients.
A performance obligation represents a service
(or a bundle of services) that is distinct or a series of distinct services that are substantially the same.
Control is transferred overtime and revenue is
recognised overtime by reference to the progress towards complete satisfaction of the relevant performance obligation if one of the following
criteria is met:
| |
● |
the client simultaneously
receives and consumes the benefits provided by the Group’s performance as the Group performs; |
| ● | the
Group’s performance creates or enhances an asset that the client controls as the asset
is created or enhanced; or |
| |
● |
the Group’s performance
does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed
to date. |
Otherwise, revenue is recognised at a point in
time when the customer obtains control of the distinct service.
| |
a) |
Business Strategy Consultancy |
Business strategy consultancy services primarily
included listing advisory and solutions, investors relations and boardroom strategies consultancy. The revenues generated from business
strategy consultancy services are generally based on the fixed fee billing arrangements that require the clients to pay a pre-established
fee in exchange for a predetermined set of professional services. The clients agree to pay a fixed fee periodically over the contract
terms as specified in the service agreements.
Our contracts from business strategy consultancy
are typically less than a year in duration. Revenues are generally recognised over time. When contractual billings represent an amount
that corresponds directly with the value provided to the client, revenues are recognised as amount become billable in accordance with
the contract terms. Revenues from fixed-priced contracts are generally recognised using costs incurred to date relative to total estimated
costs at completion to measure progress toward satisfying the Company performance obligations. Incurred cost represents work performed,
which corresponds with, and thereby best depicts, the transfer of control to client.
| |
b) |
Technology Development, Solutions and Consultancy |
Technology development, solutions and consultancy
primarily included digital development, fintech solution and software solutions.
Technology Development
The contract is typically fixed priced and does
not provide any post contract client support or upgrades. The Group designs system based on clients’ specific needs which require
the Group to perform services including design/redesign, development, and integration. These services also require significant customization.
Upon delivery of the services, client acceptance is generally required. The Group assesses that software development services is considered
as a performance obligation. The duration of the development period is usually six months to two years.
The Group’s system development service
revenues are generated primarily from contracts with clients across sectors. The contracts contain negotiated billing terms which generally
include multiple payment phases throughout the contract term and a portion of contract amount usually is billed upon the completion of
the related projects. Pursuant to the contract terms, the Group has enforceable right on payments for the work performed.
The Group’s revenue from technology development
contracts is generally recognized over time. The Group uses an input method based on cost incurred as the Group believes that this method
most accurately reflects the Group’s progress toward satisfaction of the performance obligation, which usually takes six months
to two years. Under this method, the Group could appropriately measure the fulfilment of a performance obligation. Assumptions, risks,
and uncertainties inherent in the estimates used to measure progress could affect the amount of revenues, receivables, and deferred revenues
at each reporting period.
Solutions and Consultancy
Revenue from solutions and consulting services
is primarily comprised of fixed-fee contracts, which require the Group to provide professional solutions and consulting services over
contract terms beginning on the commencement date of each contract, which is the date its service is made available to clients. Billings
to the clients are generally on a monthly or quarterly basis over the contract term, which is typically 6 to 12 months. The solutions
and consulting services contracts typically include a single performance obligation. The revenue from solutions and consulting services
is recognized over the contract term.
Interest income is received from the money lending
other entities and individuals. Interest income is recognised on a time-proportion basis using the effective interest method. When a
receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cashflow discounted
at original effective interest rate of the instrument, and thereafter amortising the discount as interest income.
CASH AND CASH EQUIVALENTS
For the purpose of presentation in the consolidated
statements of cash flows, cash and cash equivalents include cash on hand, deposits with financial institutions which are subject to an
insignificant risk of change in value.
SHARE CAPITAL
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account.
INCOME TAX
Current income tax for current and prior periods
is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have
been enacted or substantively enacted by the end of the reporting period. Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that
a tax authority will accept an uncertain tax treatment. The Group measures its tax balances either based on the most likely amount or
the expected value, depending on which method provides a better prediction of the resolution of the uncertainty. Deferred income tax is recognized for all temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when
the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business
combination and affects neither accounting nor taxable profit or loss at the time of the transaction.
A deferred income tax liability is recognized
on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the Group is able to control
the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable
future.
A deferred income tax asset is recognized to
the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax
losses can be utilized.
Deferred income tax is measured:
| |
(i) |
at the tax rates that are
expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled, based on
tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date; and |
| |
(ii) |
based on the tax consequence
that will follow from the manner in which the Group expects, at the balance sheet date, to recover or settle the carrying amounts
of its assets and liabilities except for investment properties. Investment property measured at fair value is presumed to be recovered
entirely through sale. |
Current and deferred income taxes are recognized
as income or expense in profit or loss, except to the extent that the tax arises from a business combination or a transaction which is
recognized directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition.
The Group accounts for investment tax credits
(for example, productivity and innovation credit) similar to accounting for other tax credits where a deferred tax asset is recognized
for unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax credits
can be utilized.
FOREIGN CURRENCY TRANSACTIONS
| |
(a) |
Functional and presentation currency |
Items included in the financial statements of
each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional
currency”). The financial statements are presented in Ringgit Malaysia (“RM”), which is the functional currency of
the Company and the presentation currency of the Group.
The value of foreign currencies including, the
US Dollar (“USD”), may fluctuate against the RM. Any significant variations of the aforementioned currencies relative to
the RM may materially affect the Group’s financial condition in terms of reporting in RM. The following table outlines the currency
exchange rates that were used in preparing the accompanying consolidated financial statements:
| | |
December 31, | | |
June 30, | |
| | |
2023 | | |
2023 | | |
2024 | |
| RM to USD at the end of the period | |
| 4.4025 | | |
| 4.6679 | | |
| 4.7172 | |
| RM to USD Average rate | |
| 4.3983 | | |
| 4.4863 | | |
| 4.7321 | |
| |
(b) |
Transactions and balances |
Transactions in a currency other than the functional
currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of the transactions.
Currency exchange differences resulting from the settlement of such transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies at the closing rates at the balance sheet date are recognized in profit or loss. Monetary items include
primarily financial assets (other than equity investments), contract assets and financial liabilities. However, in the consolidated financial
statements, currency translation differences arising from borrowings in foreign currencies and net investment in foreign operations,
are recognized in other comprehensive income and accumulated in the currency translation reserve. When a foreign operation is disposed of or any
loan forming part of the net investment of the foreign operation is repaid, a proportionate share of the accumulated currency translation
differences is reclassified to profit or loss, as part of the gain or loss on disposal.
Non-monetary items measured at fair values in
foreign currencies are translated using the exchange rates at the date when the fair values are determined.
| (c) | Translation
of Group entities’ financial statements |
The results and financial position of all the
Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
| (i) | assets
and liabilities are translated at the closing exchange rates at the reporting date; |
| |
(ii) |
income and expenses are
translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the
transactions); and |
| |
(iii) |
all resulting currency
translation differences are recognized in other comprehensive income and accumulated in the currency translation reserve. These currency
translation differences are reclassified to profit or loss on disposal or partial disposal with loss of control of the foreign operation. |
Goodwill and fair value adjustments arising on
the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and translated at the closing rates
at the reporting date.
RELATED PARTIES
| (a) | A
person, or a close member of that person’s family, is related to the Group if that
person: |
| |
(i) |
has control or joint control
over the Group; |
| |
|
|
| |
(ii) |
has significant influence
over the Group; or |
| |
|
|
| |
(iii) |
is a member of the key
management personnel of the Group or the Group’s parent. |
| (b) | An
entity is related to the Group if any of the following conditions applies: |
| |
(i) |
The entity and the group
are members of the same Group (which means that each parent, subsidiary and fellow subsidiary is related to the others). |
| |
|
|
| |
(ii) |
One entity is an associate
or joint venture of the other entity (or an associate or joint venture of a member of a Group of which the other entity is a member). |
| |
|
|
| |
(iii) |
Both entities are joint
ventures of the same third party. |
| |
|
|
| |
(iv) |
One entity is a joint venture
of a third entity and the other entity is an associate of the third entity. |
| |
|
|
| |
(v) |
The entity is a post-employment
benefit plan for the benefit of employees of either the Group or an entity related to the group. |
| |
|
|
| |
(vi) |
The entity is controlled
or jointly controlled by a person identified in (a). |
| |
|
|
| |
(vii) |
A person identified in
(a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of
the entity). |
| |
|
|
| |
(viii) |
The entity, or any member
of a Group of which it is a part, provides key management personnel services to the Group or to the Group’s parent. Close members
of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings
with the entity. |
EARNINGS PER SHARE
The Group presents basic and diluted earnings
per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted-average number of ordinary shares outstanding during the year, adjusted for own shares held,
if any. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted-average
number of ordinary shares outstanding, adjusted for own shares held, if any, for the effects of all dilutive potential ordinary shares.
DIVIDENDS
Dividends to the Company’s shareholders
are recognized when the dividends are approved for payment.
SEGMENT REPORTING
Operating segments, and the amounts of each segment
item reported in the financial statements, are identified from the financial information provided regularly to the Group’s most
senior executive management for the purposes of allocating resources to, and assessing the performance of, the Group’s various
lines of business and geographical locations.
Individually material operating segments are
not aggregated for financial reporting purposes unless the segments have similar economic characteristics and are similar in respect
of the nature of products and services, the nature of production processes, the type or class of customers, the methods used to distribute
the products or provide the services, and the nature of the regulatory environment. Operating segments which are not individually material
may be aggregated if they share a majority of these criteria.
|