NOTES TO THE FINANCIAL STATEMENTS 1. BASIS OF PREPARATION (CONTINUED) (a) Statement of compliance (continued) The adoption of the above accounting standards and/or interpretations (including the consequential amendments, if any) is expected to have no material impact on the financial statements of the Group and of the Company upon their initial application except as follows: MFRS 18: Presentation and Disclosure in Financial Statements MFRS 18 ‘Presentation and Disclosure in Financial Statements’ will replace MFRS 101 ‘Presentation of Financial Statements’ upon its adoption. This new standard aims to enhance the transparency and comparability of financial information by introducing new disclosure requirements. Specifically, it requires that income and expenses be classified into 3 defined categories: “operating”, “investing” and “financing” and introduces 2 new subtotals: “operating profit or loss” and “profit or loss before financing and income tax”. In addition, MFRS 18 requires the disclosure of management-defined performance measures and sets out principles for the aggregation and disaggregation of information, which will apply to all primary financial statements and their accompanying notes. The statements of financial position and the statements of cash flows will also be affected. The potential impact of the new standard on the financial statements of the Group and of the Company has yet to be assessed. (b) Basis of measurement The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2. (c) Functional and presentation currencies These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated. (d) Use of estimates and judgements There are no significant areas of estimation of uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements, other than as follows: (i) Revenue The Group’s contract for the implementation of National Single Window (“NSW”) will be ending in August 2026. Thus, there can be no assurance that the Group will be able to continue to enjoy similar level of revenue when the NSW contract expires. (ii) Depreciation of property, plant and equipment and amortisation of intangible assets The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment and amortisation charges for the intangible assets are based on commercial factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges and amortisation charges could be revised. The carrying amounts of property, plant and equipment and intangible assets as at the reporting date are disclosed in Notes 3 and 6 to the financial statements respectively. DNeX INTEGRATED REPORT 2025 144 ABOUT THIS REPORT LEADERSHIP VALUE CREATION @DNeX LEADERSHIP INSIGHTS OVERVIEW OF DAGANG NeXCHANGE BERHAD
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