Maxis Berhad | Annual Report 2012

Maxis Berhad // Annual Report 2012 184 37 CONTINGENT LIABILITIES In the normal course of business, there are contingent liabilities arising from legal recourse sought by the Group’s and the Company’s customers or vendors and indemnities given to financial institutions on bank guarantees. No material losses are anticipated as a result of these transactions. 38 TRANSITION TO MFRS In preparing the first set of financial statements in accordance with MFRS, MFRS provides first-time adopters certain transition elections as specified under the MFRS 1 “First-time Adoption of MFRS” from full retrospective application in the opening MFRS financial statements at 1 January 2011 (transition date). The Group and the Company have complied the following mandatory exception: (a) Mandatory exception for estimates MFRS estimates as at the transition date are consistent with the estimates as at the same date made in conformity with FRS. The Group and the Company have elected the following optional exemptions: (b) Optional exemption for business combinations MFRS 1 provides the option to apply MFRS 3 “Business Combinations” prospectively for business combinations that occurred from the transition date or from a designated date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date or a designated date prior to the transition date. The Group elected to apply MFRS 3 prospectively to business combinations that occurred after 1 January 2011. Business combinations that occurred prior to 1 January 2011 have not been restated. In addition, the Group has also applied MFRS 127 “Consolidated and Separate Financial Statements” from the same date. (c) Optional exemption for deemed cost – investments in subsidiaries In accordance with the exemption in MFRS 1, the Company shall elect to measure certain investments in subsidiaries at cost determined in accordance with MFRS 127 “Consolidated and Separate Financial Statements” or deemed cost, being the fair value or FRS carrying amount as at transition date. The Company elected to measure its investments in subsidiaries at FRS carrying amount as at the transition date as its deemed cost. Reconciliation of equity, comprehensive income and cash flows statement The transition from FRS to MFRS has had no effect on the reported equity, comprehensive income and cash flows statements of the Group and of the Company. 39 APPROVAL OF FINANCIAL STATEMENTS The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on 26 February 2013. NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2012 Continued