Dagang NeXchange Berhad Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) DAGANG NeXCHANGE BERHAD 184 35. SIGNIFICANT EVENTS Significant events during and subsequent to the financial year are as follows:- (i) On 23 December 2019, the Company entered into a share swap agreement with EC-Council Global Services Sdn. Bhd. (“ECCGS”), EC-Council International Limited and DNeX Technology Sdn. Bhd. (“the Agreement”). Pursuant to the Agreement, the Company shall transfer its total interest in all the issued shares in DNeX Technology Sdn. Bhd. to ECCGS against the issuance of new shares in the capital of ECCGS such that the Company shall hold 15% of all the issued shares in the capital of ECCGS upon the completion of the transaction. 36. SIGNIFICANT CHANGES IN ACCOUNTING POLICIES During the financial year, the Group adopted MFRS 16. Definition of a lease On transition to MFRS 16, the Group elected to apply the practical expedient of which the transactions are leases. The Group applied MFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under MFRS 117 and IC Interpretation 4, Determining whether an Arrangement contains a Lease were not reassessed. Therefore, the definition of a lease under MFRS 16 has been applied only to contracts entered into or changed on or after 1 January 2019. As a lessee Where the Group is a lessee, the Group applied the requirements of MFRS 16 retrospectively with the cumulative effect of initial application as an adjustment to the opening balance of retained earnings at 1 January 2019. Where the Group is a lessee, the Group applied the requirements of MFRS 16 retrospectively with the cumulative effect of initial application as an adjustment to the opening balance of retained earnings at 1 January 2019. At 1 January 2019, for leases that were classified as operating lease under MFRS 117, lease liabilities were measured at the present value of the remaining lease payments, discounted at the Group’s incremental borrowing rate as at 1 January 2019. Right-of-use assets are measured at either: - their carrying amount as if MFRS 16 had been applied since the commencement date, discounted using the lessee’s incremental borrowing rate at 1 January 2019; or - an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments. The Group used the following practical expedients when applying MFRS 16 to leases previously classified as operating lease under MFRS 117: - applied a single discount rate to a portfolio of leases with similar characteristics; - applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term as at 1 January 2019; - excluded initial direct costs from measuring the right-of-use asset at the date of initial application; and - used hindsight when determining the lease term if the contract contains options to extend or terminate the lease. For leases that were classified as finance lease under MFRS 117, the carrying amounts of the right-of-use asset and the lease liability at 1 January 2019 are determined to be the same as the carrying amount of the lease asset and lease liability under MFRS 117 immediately before that date.