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Reconciliations of Malaysia FRSs with Singapore FRSs
For statutory reporting purposes in Malaysia, the Group and the Company continue to prepare consolidated and separate
financial statements in accordance with Malaysia Financial Reporting Standards (“FRSs”). The reconciliations between Malaysia
FRSs and Singapore FRSs are prepared as the Company is required to lodge its annual report with the Singapore Exchange
Securities Trading Limited (SGX-ST) following the completion of its secondary listing on the Main Board of SGX-ST on 27 January
2011.
Malaysia FRSs vary in certain respect from Singapore FRSs. The application of Singapore FRSs that affected the preparation and
presentation of the consolidated and separate financial statements is discussed below.
- Classification of non-current borrowings
There is a requirement under Singapore FRS 1, Presentation of Financial Instruments (Revised) in relation to the classification
of borrowings whereby the liabilities which are not scheduled for repayment within twelve months after the reporting period,
but may be callable by the lender at any time without cause, shall be classified as current liabilities in its entirety. This is so
unless there is a letter from bank to waive its right to demand for repayment from the Company for the next twelve months.
Malaysia Institute of Accountant has not adopted this requirement. As such, the portion of the bank borrowings of the Group
and the Company repayable in installments which are scheduled to be made after twelve months were reflected as noncurrent
liabilities in the Financial Statements even though the loan facility agreements for these borrowings include overriding
repayment on demand clauses, which give the banks the right to demand repayment at any time, at their sole discretion and
irrespective of whether a default event has occurred (i.e. callable term loans).
For the financial year ended 31 December 2010 and 2011, the Group and the Company obtained letters from banks stating
that they do not contemplate exercising the rights of recalling or cancelling the bank borrowings for the next twelve months
from reporting date unless a default event has occurred. As such, the Group’s and the Company’s bank borrowings which are
scheduled to be repayable after twelve months can continue to be classified under non-current liabilities under Singapore
FRSs. Thus, there is no difference between Malaysia FRSs and Singapore FRSs with regards to classification of non-current
borrowings as at 31 December 2010 and 2011.
Utilisation of Proceeds
On 27 January 2011, the secondary listing of the Company was completed following the listing of and quotation for the entire
enlarged issued and paid-up share capital of the Company of RM100,000,000 comprising 100,000,000 ordinary shares of RM1.00
each on the Main Board of Singapore Exchange Securities Trading Limited (SGX-ST).
The status of utilisation of proceeds from the public issue of 25,000,000 new ordinary shares of the Company as at 31 December
2011 was:
Proposed Actual
Expected
timeframe
Purpose
utilisation utilisation Balance for utilisation
RM’000 RM’000 RM’000
Expansion of mining and smelting operations 19,690 13,448 6,242 One (1) year
(by Feb 2012)
Development of new mines through selective
acquisitions of suitable mining concessions or
leases, mining projects and assets in Malaysia,
Indonesia and other countries
62,300 – 62,300 Three (3) years
(by Feb 2014)
General working capital 13,340 13,340 – One (1) year
(by Feb 2012)
Estimated expenses in relation to the public issue
8,860 8,684 176 One (1) year
and secondary listing
(by Feb 2012)
Total 104,190 35,472 68,718
MALAYSIA SMELTING CORPORATION (43072-A) • ANNUAL REPORT 2011 175