Ni Hsin Berhad Annual Report 2018

1. Basis of preparation (continued) (a) Statement of compliance (continued) The Group plans to apply the abovementioned accounting standards, amendments and interpretations: • from the annual period beginning on 1 January 2019 for those accounting standard, amendments and interpretation that are effective for annual periods beginning on or after 1 January 2019, except for those marked “#” which are not applicable to the Group. • from the annual period beginning on 1 January 2020 for those amendments that are effective for annual periods beginning on or after 1 January 2020, except for those marked “#” which are not applicable to the Group. The Group does not plan to apply MFRS 17, Insurance Contracts that is effective for annual periods beginning on 1 January 2021 as it is not applicable to the Group. The initial application of the accounting standards, amendments and interpretations are not expected to have any material financial impacts to the current period and prior period financial statements of the Group, except as mentioned below: MFRS 16, Leases MFRS 16 replaces the guidance in MFRS 117, Leases , IC Interpretation 4, Determining whether an Arrangement contains a Lease , IC Interpretation 115, Operating Leases – Incentives and IC Interpretation 127, Evaluating the Substance of Transactions Involving the Legal Form of a Lease . MFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligations to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting remains similar to the current standard which continues to be classified as finance or operating lease. The Group has assessed the estimated impact that the initial application of MFRS 16 will have on its consolidated financial statements for year ended 31 December 2018 and the beginning of the earliest period presented as at 1 January 2019 as below. The estimated impact on initial application is based on assessment undertaken to date and the actual impacts of adopting the standard may change because the new accounting policies are subject to change until the Group presents its first financial statements that include the date of initial application. Estimated adjustments Estimated adjusted As reported at due to adoption of opening balance 31 December 2018 MFRS 16 at 1 January 2019 Group RM’000 RM’000 RM’000 Right-of-use assets - 204 204 Lease liabilities - (204) (204) The initial application of MFRS 16 is not expected to have any significant impacts to the financial statements of the Company. (b) Basis of measurement The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2. (c) Functional and presentation currency These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated. Notes to the financial statements (continued) Annual Report 2018 50