LAPORAN TAHUNAN 2005 ANNUAL REPORT
SIGNIFICANT ACCOUNTING POLICIES (CONTD.)
Investment in Subsidiaries and Associated Companies The Company’s investments in subsidiaries and associated companies are stated at cost or valuation less impairment losses. In 1993, the Company revalued its investment in certain subsidiary companies primarily as a one-off exercise and did not intend to effect a change in the accounting policy to one of revaluation of investments. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(l).
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is charged or credited to the income statement.
(d) Property, Plant and Equipment and Depreciation Property, plant and equipment are stated at cost or revaluation less accumulated depreciation and
impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(l).
The Group and the Company applied certain transitional provisions in the standard with regards to Property, Plant and Equipment, by virtue of which a reporting enterprise which does not adopt a policy of regular revaluation is allowed to retain revalued amounts on the basis of their previous revaluations. In accordance with the transitional provisions issued by the Malaysian Accounting Standard Board (“MASB”) on the adoption of MASB Standard No. 15: Property, Plant and Equipment, these assets continue to be stated at their original valuations less accumulated depreciation and impairment losses.
No amortisation is provided for freehold land while leasehold land is amortised over the lease period of between 15 and 80 years. All other assets other than capital work in progress are depreciated over their estimated useful lives by equal annual installments. The annual rates used are as follows:
Buildings Plant and machinery Renovation works Motor vehicles Office equipment and furniture and fittings
2% 5% - 20% 10% - 33 1/3% 20% 10% - 20%
(e) Inventories Inventories are stated at the lower of cost (determined on the weighted average method) and net realisable value. Cost includes the actual cost of materials and incidentals in bringing the inventories into store. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to completion and costs to be incurred in marketing, selling and production.
Cash and Cash Equivalents For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at bank, deposits at call and short-term highly liquid investments which have an insignificant risk of changes in value, net of outstanding bank overdrafts.