Application of new and revised International Financial Reporting Standards (IFRS) - September 30, 2013

a)                  Application of new and revised IFRS

           i.         Standards, interpretations and amendments to IFRS which are adopted and are effective in the current year:

IAS 1 'Presentation of Financial Statements' is amendment requires to group items presented in other comprehensive income (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments).

There are other new and amended standards and interpretations that are adopted in the current reporting year but do not have any material effect over the operations or presentation therefore not detailed in these financial statements.

         ii.         Standards, amendments and interpretations effective in current year but not relevant or do not have any significant effect are as follows:

IFRS 1 'First-time adoption of International Financial Reporting Standards'. Government loans – (amendments) the amendment is effective for annual periods beginning on after 1 January 2013.

IFRS 7 'Financial instruments disclosures' – offsetting financial assets and financial liabilities, the amendments are effective on annual periods beginning on after 1 January 2013.

IFRS 10, ‘Consolidated financial statements’ This standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements. The standard provides additional guidance to assist in determining control where this is difficult to assess. This new standard might impact the entities that a group consolidates as its subsidiaries and it shall be effective for annual periods beginning on or after 1 January 2013.IFRS 12 'Disclosure of interests in other entities' – disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28, effective for annual periods beginning on after 1 January 2013.

IAS 27 'Separate financial statements' (revised) effective for annual periods beginning on or after 1 January 2013.

There are certain other new and amended standards and interpretations that are mandatory for accounting periods beginning on or after 1 October 2012 but are considered not to be relevant or do not have any significant effect on the operations and are therefore not detailed in these financial statements.

       iii.         Standards, interpretations and amendments to IFRS that are issued but not yet effective are as follows:

IAS 32 'Financial instruments: Presentation' is amended  to clarify some of the requirements for offsetting financial assets and financial liabilities on the balance sheet and it shall be effective for annual periods beginning on or after 1 January 2014.

IFRS 10 'Consolidated financial statements', IFRS 12 'Disclosers of interests in other entities' and IAS 27 Separate financial statements' are amended resulting that many funds and similar entities will be exempt from consolidating most of their subsidiaries. Instead, they will measure them at fair value through profit or loss. The amendments give an exception that meet an ‘investment entity’ definition and which display particular characteristics. Changes have also been made IFRS 12 to introduce disclosures that an investment entity needs to make. These amendments shall be effective for the annual periods beginning on or after 1 January 2014.

IFRS 9 'Financial instruments' this amendment replace IAS 39, ‘Financial instruments: Recognition and measurement’. IFRS 9 has two measurement categories: amortised cost and fair value. All equity instruments are measured at fair value. A debt instrument is measured at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest. For liabilities, the standard retains most of the IAS 39 requirements. These include amortised-cost accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. It shall be effective for the annual periods beginning on or after 1 January 2015.

IAS 36 'Impairment of assets' is amended to address the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal. It shall be effective for the annual periods beginning on or after 1 January 2014.

IAS 39 'Financial instruments: Recognition and measurement' is amended to allow hedge accounting to continue in a situation where a derivative, which has been designated as a hedging instrument, is novated to effect clearing with a central counterparty as a result of laws or regulation, if specific conditions are met (in this context, a novation indicates that parties to a contract agree to replace their original counterparty with a new one).

There are certain other amended standards and interpretations that are pronounced earlier to the end of the reporting period but still are not yet effective, the management has estimated that they are not expected to have any significant effect and are therefore not detailed in these financial statements.

The management anticipates that all of the above standards and interpretations will be adopted to the extent applicable to them from their effective dates. The adoption of these standards, amendments and interpretations is also not expected to have any material impact on the financial statements in the period of their initial application.