DESTINI Annual Report 2018

2. Basis of Preparation (Cont’d) (a) Statement of compliance (Cont’d) Adoption of new and amended standards (Cont’d) (i) MFRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014) (Cont’d) TheGroup and the Company appliedMFRS 9 retrospectively, and have elected not to restate the comparative periods in the financial year of initial adoption as permitted under MFRS 9 transitional provision. The impact arising from MFRS 9 adoption were included in the opening retained earnings at the date of initial application, 1 January 2018. (a) Classification of financial assets and liabilities MFRS 9 contains three principal classification categories for financial assets: measured at amortised cost (“AC”), fair value through other comprehensive income (“FVTOCI”) and fair value through profit or loss (“FVTPL”) and replaces the existing MFRS 139 Financial Instruments: Recognition and Measurement categories of loans and receivables, held-to maturity and available-for-sale. Classification under MFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flows characteristics. Investments in securities are always measured at FVTPL with an irrevocable option at inception to present changes in OCI (provided the instruments is not held for trading). The Group classifies the measurements of the investments in securities as FVTPL. MFRS 9 largely retains the existing requirements in MFRS 139 for the classification of financial liabilities. There were no changes to the classification and measurements of financial liabilities to the Group and the Company. (b) Impairment MFRS 9 requires impairment assessments to be based on an Expected Credit Loss (“ECL”) model, replacing the incurred loss model under MFRS 139. The Group and the Company require to record ECL on all of its debt instruments, loans and receivables, either on a 12-months or lifetime basis. The Group and the Company applied the simplified approach and record lifetime expected losses on all receivables. (c) Effect of changes in classification and measurement of financial assets on 1 January 2018 NOTES TO THE FINANCIAL STATEMENTS As at 31.12.2017 Remeasurement Reclassification to MFRS 9 AC RM RM RM Group Financial assets Loans and receivables Trade receivables 340,629,119 (1,271,536) 339,357,583 Other receivables 92,929,779 - 92,929,779 Amount due from joint venture 693,952 - 693,952 Fixed deposit with licenced banks 41,223,384 - 41,223,384 Cash and bank balances 11,468,292 - 11,468,292 486,944,526 (1,271,536) 485,672,990 DESTINI BERHAD ANNUAL REPORT 2018 110