Tropicana Corporation Berhad Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2020 1. CORPORATE INFORMATION Tropicana Corporation Berhad (" 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 and principal place of business of the Company is located at Unit 1301, Level 13, Tropicana Gardens Office Tower, No. 2A, Persiaran Surian, Tropicana Indah, 47810 Petaling Jaya, Selangor Darul Ehsan. The principal activities of the Company are investment holding and provision of management services. The principal activities of the subsidiaries, associate and joint ventures are disclosed in Notes 18, 19 and 20 respectively. There have been no significant changes in the nature of these principal activities during the financial year. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 19 May 2021. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1 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 financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below. The financial statements are presented in Ringgit Malaysia (" RM ") and all values are rounded to the nearest thousand (RM'000) except when otherwise indicated. 2.2 Changes in accounting policies arising from adoption of new MFRSs and Amendments to MFRSs The accounting policies adopted by the Group and the Company are consistent with those of the previous financial year, except for the adoption of the following MFRSs and amendments to MFRSs: Effective for financial periods beginning on or after 1 January 2020: Amendments to MFRS 2 Share-based Payment Amendments to MFRS 3 Business Combinations Amendments to MFRS 3 Definition of a Business Amendments to MFRS 4 Extension of the Temporary Exemption from Applying MFRS 9 Amendments to MFRS 6 Exploration for and Evaluation of Mineral Resources Amendments to MFRS 9, Interest Rate Benchmark Reform MFRS 139 and MFRS 7 Amendments to MFRS 14 Regulatory Deferral Accounts Amendments to MFRS 101 Presentation of Financial Statements Amendments to MFRS 101 Definition of Material and MFRS 108 Amendments to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors Amendments to MFRS 134 Interim Financial Reporting Amendments to MFRS 137 Provisions, Contingent Liabilities and Contingent Assets Amendments to MFRS 138 Intangible Assets Amendments to IC Interpretation 12 Service Concession Arrangements Amendments to IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments Amendments to IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine Amendments to IC Interpretation 22 Foreign Currency Transactions and Advance Consideration Amendments to IC Interpretation 132 Intangible Assets - Web Site Costs 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) 2.2 Changes in accounting policies arising from adoption of new MFRSs and Amendments to MFRSs (cont'd.) Effective for financial periods beginning on or after 1 June 2020: Amendments to MFRS 16 COVID-19 Related Rent Concessions The adoption of the above MFRSs and Amendments to MFRSs does not have any material impact on the financial statements of the Group and of the Company. Amendments to MFRS 16 COVID-19 Related Rent Concessions On 5 June 2020, the Malaysian Accounting Standards Board issued COVID-19 Related Rent Concessions (Amendments to MFRS 16 Leases). The amendments provide relief to lessees from applying MFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the COVID-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a COVID-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the COVID-19 related rent concession in the same way it would account for the change under MFRS 16, if the change were not a lease modification. The amendment applies to annual reporting periods beginning on or after 1 June 2020. Earlier application is permitted. The Group has elected for early application of this practical expedient for all the leases for the financial year ended 31 December 2020. The Group has recognised the effect of the rent concession in profit or loss as a variable lease payment in relation to the change in lease payments that were not a lease modification. This amendment had no material impact on the financial statements of the Group and of the Company. Agenda Decision on MFRS 123 Borrowing Costs relating to over time transfer of constructed goods In March 2019, IFRS Interpretations Committee (" IFRIC ") published an agenda decision on borrowing costs confirming receivables, contract assets and inventories for which revenue is recognised over time are non-qualifying assets. On 20 March 2019, the Malaysian Accounting Standards Board (" MASB ") decided that an entity shall apply the change in accounting policy as a result of the IFRIC Agenda Decision to financial statements of annual periods beginning on or after 1 July 2020. The Group will adopt this change in accounting policy in its financial statements for the coming financial year ending 31 December 2021. Based on initial assessment, the adherence of the IFRIC Agenda Decision would impact the results of Group for the current year and comparative period as finance cost can no longer be capitalised on the Group's ongoing development projects for which revenue is recognised over time. 2.3 Standards issued but not yet effective The standards, amendments to MFRSs and interpretations that are issued but not yet effective up to the date of issuance of the Group's and of the Company's financial statements are disclosed below. The Group and the Company intend to adopt these standards, if applicable, when they become effective. Effective for financial periods beginning on or after 1 January 2021: Amendments to MFRS 9, Interest Rate Benchmark Reform - Phase 2 MFRS 139, MFRS 7, MFRS 4 and MFRS 16 ANNUAL REPORT 2020 TROPICANA CORPORATION BERHAD FINANCIAL STATEMENTS AND OTHER INFORMATION 176 177