MSM Malaysia Holdings Berhad Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 1 GENERAL INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Level 21,Wisma FGV, Jalan Raja Laut, 50350 Kuala Lumpur.The principal place of business of the Company is located at Level 44, Menara Felda, Platinum Park, No 11, Persiaran KLCC, 50088 Kuala Lumpur. The principal activity of the Company is investment holding. The principal activities of the subsidiaries are set out in Note 20 of the financial statements. There have been no significant changes in the nature of these activities during the financial year. The ultimate holding company is FGV Holdings Berhad (“FGVH”), a company incorporated and domiciled in Malaysia, and listed on the Main Market of Bursa Malaysia Securities Berhad. 2 BASIS OF PREPARATION The financial statements of the Group and of the Company have been prepared in accordance with the Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”) and the requirements of the Companies Act 2016 in Malaysia. The Company incurred a net loss of RM358,656,000 during the financial year ended 31 December 2019 (2018: RM422,641,000). At the date, the Company had a net current liabilities position of RM91,109,000 (2018: RM186,789,000). The Company plans to manage its liquidity risk by receiving income in the form of dividends and management fees from its subsidiaries, to meet its obligations over the next twelve months as disclosed in Note 4(a) in the financial statements. Based on this, the Directors are of the view that the Company will have sufficient cash flows to meet the Company’s obligations for the next twelve months from the date of the financial statements. Accordingly, the Directors consider that it is appropriate to prepare the financial statements of the Company on a going concern basis. The financial statements of the Group and of the Company have been prepared under the historical cost convention unless otherwise indicated in the individual policy statements in Note 3 to the financial statements. The preparation of financial statements in conformity with MFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the financial period. It also requires Directors to exercise their judgement in the process of applying the Group and Company’s accounting policies. Although these estimates and judgement are based on the Directors’ best knowledge of current events and actions, actual results may differ. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 5. (i) Accounting pronouncements that are effective and have been adopted by the Group and Company as at 1 January 2019: • MFRS 16 ‘Leases’ • IC Interpretation 23 ‘Uncertainty over Income Tax Treatments’ • Amendments to MFRS 9 ‘Financial Instruments’ - Prepayment Features with Negative Compensation • Amendments to MFRS 119 ‘Employee Benefits’ - Plan Amendment, Curtailment or Settlement • Annual Improvements to MFRS 112 ‘Income Taxes’ • Annual Improvements to MFRS 123 ‘Borrowing Costs’ Other than adoption of MFRS 16, the adoption of other pronouncements did not have significant impact on the financial statements of the Group and Company. The details of the adoption of MFRS 16 are disclosed in Note 41. 127 FINANCIAL STATEMENTS 08