Serba Dinamik Annual Report 2019

316 2019 ANNUAL REPORT FINANCIAL STATEMENTS SERBA DINAMIK HOLDINGS BERHAD 35. EVENT AFTER REPORTING PERIOD a) The coronavirus (Covid-19) pandemic was announced by the World Health Organisation in early 2020 and has since spread to countries across theworld includingMalaysia. The government of Malaysia announced aMovement Control Order (“MCO”) on 16 March 2020. The MCO began on 18 March 2020. The Covid-19 pandemic has resulted in disruptions to businesses and various macro-economic impacts. The rapid spread of the virus has weakened the global economic outlook and oil demand in the short-term, resulting in oversupply. The unprecedented lockdowns in many countries have translated to the shrinking demand, resulting in the low crude oil prices. The Group considers this outbreak to be a non-adjusting event as it was not a condition that existed as at year end. Accordingly, the current conditions arising from this outbreak do not have an impact on the balances reported for the financial year ended 31 December 2019. As at the date of this financial statement are authorised for issuance, the current situation is still very unpredictable. As a result, it is not practicable for the Group to estimate the financial effect of this outbreak at this juncture. However, the Group is still continously assessing the financial impact of the Covid-19 pandemic to the Group’s performance. b) The shareholders of the Company, by a special resolution passed in Annual General Meeting held on 20 June 2019 approved the Company’s plan to purchase its own shares. In March 2020, the Company made multiple repurchase transactions of shares totaling to 18,779,000 shares from its issued share capital in the open market at a range of average price of RM1.27 to RM1.97 per share. The total consideration paid was RM31,865,817. The repurchase transactions were financed by internally generated funds. The shares repurchased are retained as treasury shares. c) On 23 April 2020, the Company announced that approval has been obtained from shareholders of the Company for the private placement exercise of up to 10% of the total number of issued shares of the Company pursuant to Sections 75 and 76 of the Companies Act 2016. On 5 May 2020, the Company has completed the private placement exercise, in which the Company has issued 306,507,000 new shares with an issue price of RM1.49 per placement share. 36. SIGNIFICANT CHANGES IN ACCOUNTING POLICIES During the year the Group and the Company adopted MFRS 16, Leases and Amendments to MFRS 123, Borrowing Cost (Annual Improvements to MFRS Standards 2015-2017 Cycle). The principal changes in accounting policies and their effects are set out below: (i) MFRS 16, Leases Definition of a lease A contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for a consideration. On transition to MFRS 16, the Company has reclassified all contracts to determine whether the contracts are, or contain a lease at the date of initial application. N O T E S T O T H E F I N A N C I A L S TAT E M E N T S