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>GuideToUseOfWorksheets Guide To Use of Worksheets following the sequence of pages of the complete reports and financial statements for a non

–

private entity with a subsidiary company in

Malaysia Name of worksheet Page No. as shown in

Table of Contents The Cover Page Click Here

MAINDOCUMENTS

Not applicable The Cover Page for copy to be lodged with Companies Commissions of Malaysia (previously Registrar of Companies

)

Click Here MAINDOCUMENTS Not applicable
Table of Contents Click Here MAINDOCUMENTS
Director

s’ report

Click Here MAINDOCUMENTS

–

3 Statement by directors and statutory declaration

Click Here MAINDOCUMENTS

4 Auditors’ report first page

Click Here

AuditorsReportPg
5

Auditors’ report second page

Click Here

AuditorsReportPg
6

CONSOLIDATED

STATEMENT OF FINANCIAL POSITION

Click Here MAINDOCUMENTS

7 CONSOLIDATED

STATEMENT OF COMPREHENSIVE INCOME

Click Here MAINDOCUMENTS

8 CONSOLIDATED

STATEMENT OF CHANGES IN

EQUITY

Click Here MAINDOCUMENTS

9 CONSOLIDATED

STATEMENT OF CASH FLOWS

PAGE 1

Click Here MAINDOCUMENTS

0 CONSOLIDATED

STATEMENT OF CASH FLOWS PAGE 2

Click Here MAINDOCUMENTS

11 STATEMENT OF FINANCIAL POSITION Click Here MAINDOCUMENTS

12 STATEMENT OF COMPREHENSIVE INCOME Click Here MAINDOCUMENTS

13 STATEMENT OF CHANGES IN EQUITY Click Here MAINDOCUMENTS

14 STATEMENT OF CASH FLOWS PAGE 1 Click Here MAINDOCUMENTS

15 STATEMENT OF CASH FLOWS PAGE 2 Click Here MAINDOCUMENTS

16 NOTE

S TO THE FINANCIAL STATEMENTS SIGNIFICANT ACCOUNTING POLICIES

(Comprising Basis of Preparation, Standards, and Interpretations)

Click Here MAINDOCUMENTS

–

19 SIGNIFICANT ACCOUNTING POLICIES (Comprising Basis of Consolidation &

Goodwill

)

Click Here MAINDOCUMENTS

19 –

20 SIGNIFICANT ACCOUNTING POLICIES (Comprising

Investments

, Property, Plant, and Equipment and

Depreciation

, Financial Assets)

Click Here MAINDOCUMENTS

20 –

21 SIGNIFICANT ACCOUNTING POLICIES (Comprising Financial Liabilities, Offsetting Financial Instruments, & Impairment of Financial Assets)

Click Here MAINDOCUMENTS

21 –

22 SIGNIFICANT ACCOUNTING POLICIES (Impairment of Non-Financial Assets, Income Taxes,

Revenue

Recognition, & Foreign Currency Transactions and Balances)

Click Here MAINDOCUMENTS

–

24 SIGNIFICANT ACCOUNTING POLICIES (Employee Benefits,

Leases

, Segment Reporting,

Contingencies

, & Financial Risk Management Policies)

Click Here MAINDOCUMENTS

24 –

25 SIGNIFICANT ACCOUNTING POLICIES (Comprising Critical Accounting Estimates, Judgments, and Key Sources of Estimation Uncertainty ) and NOTE ON

PROPERTY, PLANT, AND EQUIPMENT

PART 1 FOR

COMPANY

Click Here

Note-PPE

26 NOTE ON PROPERTY, PLANT, AND EQUIPMENT PART 2 FOR

GROUP

Click Here Note-PPE

27 NOTE ON

AVAILABLE-FOR-SALE FINANCIAL ASSETS

INVESTMENT IN ASSOCIATED COMPANY

, AND PART 1 OF

INVESTMENT IN SUBSIDIARY COMPANY

Click Here MAINDOCUMENTS

28 NOTE ON PART 2 OF INVESTMENT IN SUBSIDIARY COMPANY AND PART 1 OF

TRADE RECEIVABLES

Click Here MAINDOCUMENTS

29 NOTE ON PART 2 OF TRADE RECEIVABLES AND

AMOUNT DUE FROM ASSOCIATED COMPANY

Click Here MAINDOCUMENTS

30 NOTE ON

AMOUNT DUE FROM SUBSIDIARY COMPANY

FIXED DEPOSITS WITH LICENSED BANKS

OTHER PAYABLES AND ACCRUALS

, HIRE PURCHASE AND LEASE PAYABLES, AND PART 1 OF BORROWINGS

Click Here MAINDOCUMENTS

31 NOTE ON PART 2 OF

BANK BORROWINGS

SHARE CAPITAL

, DEFERRED TAX

LIABILITIES

, AND

REVENUE

Click Here MAINDOCUMENTS

32 NOTE ON PROFIT BEFORE-

TAXATION

, TAXATION,

CONTINGENT LIABILITIES

FINANCIAL INSTRUMENTS BY CATEGORY

, & PART 1 OF

RELATED PARTIES

Click Here MAINDOCUMENTS

33 NOTE ON CONTINGENT LIABILITIES, FINANCIAL INSTRUMENTS BY CATEGORY, & PART 1 OF RELATED PARTIES

Click Here MAINDOCUMENTS

34 NOTE ON PART 2 OF RELATED PARTIES

Click Here MAINDOCUMENTS

35 DETAILED INCOME STATEMENT PART 1

Click Here MAINDOCUMENTS Not applicable
DETAILED INCOME STATEMENT PART 2

Click Here MAINDOCUMENTS Not applicable
DETAILED INCOME STATEMENT PART 3

Click Here MAINDOCUMENTS Not applicable

Click Here

MAINDOCUMENTS

No.: 12345-X

(AF 1234)

ABC SDN. BHD.

REPORTS AND FINANCIAL STATEMENTS

‘ REPORT

1 – 3

AND

‘ REPORT

STATEMENT OF FINANCIAL POSITION 12
STATEMENT OF COMPREHENSIVE INCOME 13
STATEMENT OF CHANGES IN EQUITY 14
STATEMENT OF CASH FLOWS

Click To Go Back To Guide To Use Of Worksheets
Company No.: 12345-X 1

ABC SDN. BHD.
(Incorporated in Malaysia)

31 December 2010

is principally engaged in the provision of forwarding, warehousing, haulage, and air freight

. There have been no significant changes in the nature of these activities during the year.

of the subsidiary company is disclosed in Note 8 to the financial statements.

GROUP COMPANY

DIRECTORS

As at

2010

31 December 2010

The Company
Abdul Bin Malek

–

Abdul Bin Malek

–

)

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Company No.: 12345-X 2
(ii)

(i)

(ii)

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Company No.: 12345-X 3
(a)

(b)

from associate acquired during the year as disclosed in Note 7 to the financial statements; and

(c)

AUDITORS
Director

Director

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Company No.: 12345-X 4

ABC SDN. BHD.
(Incorporated in Malaysia)

STATEMENT BY DIRECTORS
ABDUL BIN MALEK

Director
…………………………………………..
FERNANDO MORIENTES
Director

STATUTORY DECLARATION

)

at Wonderland this )
)

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Company No.: 12345-X 7

ABC SDN. BHD.
(Incorporated in Malaysia)

31 December 2010

2010

NOTE RM RM

–

CURRENT ASSETS

–

300,000

4,000

AND LIABILITIES

EQUITY
SHARE CAPITAL 16

5,000,000

PROFITS

–

TOTAL EQUITY

9,260,000

LIABILITIES

–

5,000

CURRENT LIABILITIES

Hire purchase and finance lease payables 14

30,000

Bank borrowings 15

– 100,000

21,067,000

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Company No.: 12345-X 8

ABC SDN. BHD.
(Incorporated in Malaysia)

31 December 2010
2010 2009
NOTE RM RM

Revenue 18

)

120,000

)

of post acquisition profits in associated company

–

Taxation 20

)

1,8

comprehensive income attributable to:

1,881,000

– 0

1,881,000 3,860,000

The annexed Notes form an integral part of the financial statements. Auditors’ Report on pp. 5 & 6. Click To Go Back To Guide To Use Of Worksheets

Company No.: 12345-X 9

ABC SDN. BHD.
(Incorporated in Malaysia)

31 December 2010

profits Total

RM RM RM

5,000,000 400,000

– 3,860,000 3,860,000

5,000,000 4,260,000 9,260,000

Total comprehensive income during the year – 1,881,000 1,881,000

5,000,000 6,141,000 11,141,000

The annexed Notes form an integral part of the financial statements. Auditors’ Report on pp. 5 & 6. Click To Go Back To Guide To Use Of Worksheets

Company No.: 12345-X 10

ABC SDN. BHD.
(Incorporated in Malaysia)

31 December 2010
2010 2009
NOTE RM RM

Profit before taxation 3,690,000 6,159,000

–

Depreciation

associated company

–

103,000

)

on foreign exchange

in payables

,048)

)

150,000 30,000

Investment in associated company

–

)

–

(35,000)

80,000

OF YEAR

563,000

The annexed Notes form an integral part of the financial statements. Auditors’ Report on pp. 5 & 6. Click To Go Back To Guide To Use Of Worksheets

Company No.: 12345-X 11

ABC SDN. BHD.
(Incorporated in Malaysia)
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED
31 December 2010
2010 2009
NOTE RM RM

Fixed deposits with a licensed bank 4,120,000 300,000

Cash and bank balances

600,000

15 (300,000)

(300,000)

The annexed Notes form an integral part of the financial statements. Auditors’ Report on pp. 5 & 6. Click To Go Back To Guide To Use Of Worksheets

Company No.: 12345-X 12

ABC SDN. BHD.
(Incorporated in Malaysia)

STATEMENT OF FINANCIAL POSITION AS AT

31 December 2010
2010 2009
NOTE RM RM
TOTAL ASSETS

Property, plant, and equipment 5 500,000

Available-for-sale financial assets 6 66,000

Investment in associated company 7 300,000 –

–

298,000

CURRENT ASSETS

Trade receivables 9

19,382,000

Other receivables, deposits, & prepayments 550,000

Tax recoverable 2,000 –
Fixed deposits with a licensed bank 12 500,000 300,000
Cash and bank balances

600,000

21,067,000

EQUITY
SHARE CAPITAL 16 5,000,000 5,000,000

ACCUMULATED PROFITS

TOTAL EQUITY

LIABILITIES

Bank borrowings 15 400,000 –
Hire purchase and finance lease payables 14 100,000

Deferred tax liabilities 17 12,000 5,000
512,000 140,000
CURRENT LIABILITIES

Trade payables

10,847,000

Other payables and accruals 13

550,000

Hire purchase and finance lease payables 14 30,000 30,000
Bank borrowings 15 450,000 140,000
Taxation – 100,000

11,667,000

TOTAL LIABILITIES

11,807,000

The annexed Notes form an integral part of the financial statements. Auditors’ Report on pp. 5 & 6. Click To Go Back To Guide To Use Of Worksheets

Company No.: 12345-X 13

ABC SDN. BHD.
(Incorporated in Malaysia)

31 December 2010
2010 2009
NOTE RM RM

Revenue 18

200,062,000

Cost of sales

)

Gross profit

21,562,000

Other operating income

120,000

Operating and administrative expenses

(15,420,000)

Profit from operations

6,262,000

Finance costs (315,000) (103,000)

Profit before taxation

6,159,000

Taxation 19

)

(2,196,000)

Net profit after taxation, representing total comprehensive income during the year

3,963,000

Owners of the Company

3,860,000

Minority interest – 0 – 0

2,707,000 3,860,000

The annexed Notes form an integral part of the financial statements. Auditors’ Report on pp. 5 & 6. Click To Go Back To Guide To Use Of Worksheets

Company No.: 12345-X 14

ABC SDN. BHD.
(Incorporated in Malaysia)

31 December 2010
Share Retained
capital profits Total
RM RM RM
As at 1 January 2009 5,000,000 400,000 5,400,000

Total comprehensive income during the year – 3,963,000 3,963,000
As at 31 December 2009 5,000,000 4,363,000 9,363,000
Total comprehensive income during the year – 3,022,000 3,022,000
As at 31 December 2010 5,000,000 7,385,000 12,385,000

The annexed Notes form an integral part of the financial statements. Auditors’ Report on pp. 5 & 6. Click To Go Back To Guide To Use Of Worksheets

Company No.: 12345-X 15

ABC SDN. BHD.
(Incorporated in Malaysia)

31 December 2010
2010 2009
RM RM
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation 4,529,000 6,159,000
Adjustments for:

no longer required

– –

Impairment of trade receivables – 0 802,000
Depreciation

125,000

Interest expense 315,000 103,000

Interest income – 0 (30,000)

Unrealized loss / (gain) on foreign exchange 102,000 (90,000)

Operating profit before changes in working capital

7,069,000

)

(4,873,952)

(1,500,048)

Net cash generated from operations

695,000

Taxation paid

(85,000)

Net cash inflow from operating activities

610,000

CASH FLOW FROM INVESTING ACTIVITIES

Interest received – 30,000
Investment in subsidiary company

–

Investment in associated company (300,000) –
Purchase of available-for-sale financial assets (53,000) –
Purchase of property, plant, and equipment (340,000) (7,000)

Net cash (outflow) / inflow from investing activities

23,000

CASH FLOW FROM FINANCING ACTIVITIES

)

(12,000)

Interest paid (315,000) (103,000)
Proceeds from term loan 650,000 –
Repayment of term loan (100,000) –

(35,000) (35,000)

Net cash outflow from financing activities – (150,000)
CASH EQUIVALENTS

483,000

CASH AND CASH EQUIVALENTS AT THE BEGINNING

OF YEAR 460,000 80,000
OF YEAR

563,000

The annexed Notes form an integral part of the financial statements. Auditors’ Report on pp. 5 & 6. Click To Go Back To Guide To Use Of Worksheets

Company No.: 12345-X 16

ABC SDN. BHD.
(Incorporated in Malaysia)
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED
31 December 2010
2010 2009
NOTE RM RM
CASH AND CASH EQUIVALENTS COMPRISE:

Fixed deposits with a licensed bank 500,000 300,000

Cash and bank balances 220,000 600,000
Bank overdraft 15 (300,000) (140,000)

Less : Fixed deposit pledged as security

(300,000)

460,000

The annexed Notes form an integral part of the financial statements. Auditors’ Report on pp. 5 & 6. Click To Go Back To Guide To Use Of Worksheets

Company No.: 12345-X 17

ABC SDN. BHD.
(Incorporated in Malaysia)
NOTES TO THE FINANCIAL STATEMENTS
31 December 2010

place of business

55880 Wonderful City
Wonderful Land

SIGNIFICANT ACCOUNTING POLICIES

(i)

) accounting principles generally accepted and Companies Act, 1965 in Malaysia. The financial statements have been prepared in accordance with the same accounting policies and method of computations consist of those of the previous financial year, except for changes in accounting policies due to adoption of the relevant new and revised FRSs, IC Interpretations and Amendments to FRSs and IC Interpretations that are mandatory for financial periods beginning on or after 1 January 2010 as described in Note 2 b).

(ii)

(iii)

(i)

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Company No.: 12345-X 18
b)

(ii)

FRSs

FRS 1

1 July 2010

Amendments to IC Interpretation 15

31 December 2010

Amendments to FRS 1

Amendments to FRS 2

1 January 2011

Improvements to FRSs (2010) 1 January 2011

1 January 2011

Improvements to FRSs (2010) 1 January 2011

1 January 2011

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Company No.: 12345-X 19

b) Standards and interpretations (continued)

(ii)

FRSs Effective date
/Interpretations

1 January 2011

Improvements to FRSs (2010) 1 January 2011

1 July 2011

IC Interpretation 15

1 January 2012

d) Goodwill

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Company No.: 12345-X 20
d)

e) Investments

20%

equipment

20%

(i)

(ii)

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Company No.: 12345-X 21
g)

(iii)

(iv) Available-for-sale financial assets
(i)

(ii)

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Company No.: 12345-X 22
h)

(ii)

(iii)

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Company No.: 12345-X 23
l)

(i)

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Company No.: 12345-X 24
m)

(ii)

(i)

(ii)

Leases

(i)

(ii)

Contingencies

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Company No.: 12345-X 25
3.

Group Company
2010 2009 2010 2009

512,000 140,000 512,000 140,000

11,158,100 9,260,000 12,385,000 9,363,000

0.015

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Company No.: 12345-X 28
6. AVAILABLE-FOR-SALE FINANCIAL ASSETS

2010 2009
RM RM

66,000 13,000

and there is actively traded market prices available for this type of membership. There was no significant difference in the fair value as at the reporting date compared to the carrying value stated and hence no adjustment was made for fair value differences.

INVESTMENT IN ASSOCIATED COMPANY

GROUP COMPANY

2010 2009 2010 2009

RM RM RM RM

300,000 – 300,000 –

– – –

2,300,000 – 300,000 –

Principal

2010 2009 activity

Malaysia

services
GROUP

2010 2009
RM RM

INVESTMENT IN SUBSIDIARY COMPANY

2010
RM
Revenue

Cost of sales

Gross profit 500,000
Other operating income 23,000
Operating and administrative expenses

)

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Company No.: 12345-X 29
8.

2010
RM

Property, plant, and equipment 1,500
Fixed deposits with a licensed bank 340,000
Cash and bank balances 2,184,000

2010
RM

Property, plant, and equipment 3,000
Receivables

Cash and bank balances 20,000
Payables

Portion attributable to minority interest

20,900

34,000

54,900

2010
RM

54,900

(20,000)

34,900

TRADE RECEIVABLES

GROUP COMPANY
2010 2009 2010 2009
RM RM RM RM

Trade receivables

(Note 10)

550,000 – 150,000 –

(Note 11)

– – 25,000 –

19,469,000

Related parties

– Associated company – – – –
– Subsidiary company – – – –
Non-related parties

)

(87,000)

19,382,000 20,102,000 19,382,000

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Company No.: 12345-X 30
9.

GROUP COMPANY
2010 2009 2010 2009
RM RM RM RM

6,489,000

8,567,000

4,326,000

– – – –

73,000 87,000 73,000 87,000

19,469,000

GROUP COMPANY
2010 2009 2010 2009
RM RM RM RM

73,000 87,000 73,000 87,000

(73,000) (87,000) (73,000) (87,000)

– – – –

2010 2009
RM RM

87,000 –

– 802,000

)

73,000 87,000

10. AMOUNT DUE FROM ASSOCIATED COMPANY

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Company No.: 12345-X 31

AMOUNT DUE FROM SUBSIDIARY COMPANY

FIXED DEPOSITS WITH LICENSED BANKS

OTHER PAYABLES AND ACCRUALS

GROUP COMPANY
2010 2009 2010 2009
RM RM RM RM

– 20,000 –

150,000

8,000 – 8,000 –

540,000 400,000 500,000 400,000

1,990,000 550,000 640,000 550,000

GROUP / COMPANY
2010 2009
RM RM

35,000 40,000

30,000 35,000

80,000

145,000

(20,000)

130,000

Not later than 1 year 30,000 30,000
Later than 1 year and not later than 2 years 25,000 25,000
Later than 2 years and not later than 5 years 75,000 110,000
130,000 165,000

30,000 30,000

100,000 135,000

130,000 165,000

BANK BORROWINGS

GROUP / COMPANY
2010 2009
RM RM

Bank overdraft 300,000 140,000

(amount repayable within the next 12 months)

150,000 –

450,000 140,000

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Company No.: 12345-X 32
15.

GROUP / COMPANY
2010 2009
RM RM

–

300,000 –

– –

550,000 –
Less:

(150,000) –

400,000 –

(i)

(ii)

(iii)

(iv)

(i)

(ii)

GROUP / COMPANY
2010 2009

% %
Bank overdraft

Term loans

–

SHARE CAPITAL

GROUP / COMPANY
RM RM

5,000,000 5,000,000

5,000,000 ordinary shares of RM1 each 5,000,000 5,000,000

GROUP / COMPANY
2010 2009
RM RM

5,000 9,000

7,000

12,000 5,000

REVENUE

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Company No.: 12345-X 33

GROUP COMPANY
2010 2009 2010 2009
RM RM RM RM

85,000 85,000 85,000 85,000

Impairment of trade receivables – 802,000 – 802,000
Depreciation 126,000 125,000 125,000 125,000

450,000

(150,000) (30,000) – (30,000)

185,000 98,000 185,000 98,000

2,000 2,000 2,000 2,000

3,000 3,000 3,000 3,000

125,000 – 125,000 0 –

250,000 (130,000) 250,000

102,000 (90,000) 102,000 (90,000)

600,000 600,000

400,000

9,000,000

885,000

991,000

12,000 9,000 5,000 9,000

10,000,000

Share of post acquisition profits in
associated company (2,300,000) – – –

TAXATION

GROUP COMPANY
2010 2009 2010 2009
RM RM RM RM

2,200,000

300,000 – – –

Current year provision

– the Company & subsidiary company 7,000 (4,000) 7,000 (4,000)
1,809,000 2,196,000 1,507,000 2,196,000

GROUP COMPANY
2010 2009 2010 2009
RM RM RM RM

Profit before taxation 3,690,000 6,159,000 4,529,000 6,159,000

1,539,750

300,000 – – –

purposes

682,000

1,809,000

2,221,750

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Company No.: 12345-X 34

CONTINGENT LIABILITIES

21. FINANCIAL INSTRUMENTS BY CATEGORY

GROUP COMPANY
2010 2009 2010 2009
RM RM RM RM

Financial assets
Financial assets at fair value through profit or loss (FVTPL) – – – –
Held-to-maturity investments – – – –
Trade receivables 20,977,000 19,382,000 20,102,000 19,382,000
Other receivables, deposits, & prepayments 2,013,540 487,000 550,000 487,000
Tax recoverable 13,450 – 2,000 –
Fixed deposits with a licensed bank 4,120,000 300,000 500,000 300,000
Cash and bank balances 2,184,000 600,000 220,000 600,000
29,307,990 20,769,000 21,374,000 20,769,000
Available-for-sale financial assets 66,000 13,000 66,000 13,000

20,782,000

Financial liabilities
Financial liabilities at fair value through profit or loss – – – –
Liabilities from financial guarantees 8,000 – 8,000 –
Other financial liabilities
Trade payables 18,069,890 10,847,000 8,695,900 10,847,000
Other payables and accruals

550,000 632,000 550,000

Hire purchase and finance lease payables 130,000 165,000 130,000 165,000
Bank borrowings

140,000 850,000 850,000

Taxation – 100,000 – 100,000

11,802,000

12,512,000

RELATED PARTIES

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Company No.: 12345-X 35
22.

GROUP COMPANY
2010 2009 2010 2009
RM RM RM RM

– Associated company – – 550,000 –
– Subsidiary company – – 350,000 –
b)

3,250,000 450,000 3,150,000 450,000

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Company No.: 12345-X
ABC SDN. BHD.
(Incorporated in Malaysia)

31 December 2010
2010 2009
RM RM

REVENUE 121,592,000 200,062,000

OF REVENUE

103,934,000 178,500,000

17,658,000 21,562,000

Fixed deposit interest – 30,000
– realized 130,000 –
– unrealized – 90,000
130,000 120,000

)

(315,000) (103,000)

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Company No.: 12345-X
ABC SDN. BHD.
(Incorporated in Malaysia)

(Appendix A)

31 December 2010
2010 2009
RM RM

14,000 13,000

– 1,000

Auditors’ remuneration 85,000 85,000
Allowance for doubtful debts – 802,000

40,000

Depreciation 125,000 125,000

Directors’ emoluments 3,150,000 450,000

– (20,000)

260,000

1,000,000

103,000 120,000

400,000 400,000

140,000 10,000

90,000 80,000

– realized – 250,000
– unrealized 102,000 –

150,000 300,000

60,000 130,000

50,000 4,000

350,000 400,000

Rent of premises 600,000 600,000

90,000 90,000

5,500,000 9,000,000

10,000 23,000

4,000 3,000

100,000

76,000 40,000

The Detailed Income Statement is presented for management purposes only and does not form part of the financial statements. Click To Go Back To Guide To Use Of Worksheets
Company No.: 12345-X
ABC SDN. BHD.
(Incorporated in Malaysia)
(Appendix A)

31 December 2010
2010 2009
RM RM

12,636,000 14,621,000

21,000

82,000 71,000

50,000 80,000

350,000 450,000

92,000 71,000

13,000 81,000

15,000 130,000

13,259,000 15,523,000
(Appendix B)

31 December 2010
2010 2009
RM RM
Interest expense:

-bank overdraft 185,000 98,000
-leasing 2,000 2,000
-hire purchase 3,000 3,000
-term loan 125,000 –
315,000 103,000

ABDUL BIN MALEK

DEF & CO. (AF 1234)
CHARTERED ACCOUNTANTS Click To Go Back To Guide To Use Of Worksheets

Company

ABC SDN. BHD.

(Incorporated in Malaysi

REPORTS AND FINANCIAL STATEMENTS

31 December

2010

DEF & CO.

CHARTERED ACCOUNTANTS

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Company No.: 12345-X

(Incorporated in Malaysia)

31 December 2010

CONTENTS

PAGE NO.

DIRECTORS

STATEMENT BY DIRECTORS

STATUTORY DECLARATION

INDEPENDENT

AUDITORS

5 – 6

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS

10 – 11

15 – 16

NOTES TO THE FINANCIAL STATEMENTS

17 – 35

DIRECTORS’ REPORT FOR THE YEAR ENDED

The directors have pleasure in submitting their report together with the audited financial statements of the Company for the year ended 31 December 20

10.

PRINCIPAL ACTIVITIES

The Company

services

The principal

activity

FINANCIAL RESULTS

Net profit for the year

1,88

1,000

3,02

2,000

ISSUE OF SHARES

There were no new shares or debentures issued by the Company during the financial year.

DIVIDENDS

The directors do not recommend that a dividend be paid for the year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year.

The directors since the last report are as follows:

Abdul Bin Malek

Muthusamy A/L Ramasamy

(Appointed on 8 February 2010 and resigned on 23 June 2010)

Chan Kim Kong

(Resigned on 23 June 2010)

Fernando Morientes

(Appointed on 23 June 2010)

In accordance with the Articles of Association, Mr. Muthusamy A/L Ramasamy retires from the board at the forthcoming Annual General Meeting and, being eligible, offers himself for re-election.

DIRECTORS’ INTERESTS IN SHARES

According to the register of directors’ shareholdings, the interest of director in the shares of the Company at the end of the financial year was as follows:

Number of ordinary shares of RM1/- each

As at

1 January

Acquired

Disposed

20,000

(20,000)

The Holding Company

ABC International

Group

Bhd.

80,000

(

120,000

60,000

DIRECTORS’ INTERESTS IN SHARES (CONTINUED)

By virtue of Mr. Abdul Bin Malek’s interest in the shares of the holding company, he is also deemed to have interest in the shares of the Company and all the subsidiary companies to the extent the Holding Company has an interest.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than as disclosed in the financial statements) by reason of a contract made by the Company, or a related corporation with the director or his nominees, or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

Neither during nor at the end of the financial year, was the Company a party to any arrangement whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS

(a)

Before the statement of comprehensive income statement and statement of financial position of the Group and of the Company were made out, the directors have taken reasonable steps:

(

to ascertain that proper action has been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and have satisfied themselves that all known bad debts have been written off and adequate allowance had been made for doubtful debts; and

(ii)

to ensure that any current assets which were unlikely to realize their value as shown in the financial statements in the ordinary course of business have been written down to an amount which they might be expected so to realize.

(

As at the date of this report, the directors are not aware of any circumstances:

(i)

which would render the amount written off for bad debts and allowances made for doubtful debts inadequate to any substantial extent;

which would render the values of current assets in the financial statements misleading;

(iii)

which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or

(iv)

not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(

As at the date of this report, there does not exist:

any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

any contingent liability which has arisen since the end of the financial year.

OTHER STATUTORY INFORMATION

At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the financial statements of the Group and of the Company, that would render any amount stated in the financial statements misleading.

OTHER STATUTORY INFORMATION (CONTINUED)

In the opinion of the directors:

the results of the Company’s operations during the financial year were not substantially affected by any item, transaction, or event of material and unusual nature;

no item, transaction, or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report that is likely to affect substantially the results of operations of the Group and of the Company for the financial year in which this report is made other than the effect of share of

profits

no contingent or other liabilities have become enforceable or are likely to become enforceable within the period of 12 months after the end of the financial year that will or may affect the ability of the Group and of the Company to meet its obligations as and when they fall due.

HOLDING COMPANY

The Holding Company is ABC International Group Bhd., a company incorporated in the Malaysia.

Messrs. DEF & Co. have expressed their willingness to continue in office.

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS

……………………………………

………………………………

ABDUL BIN MALEK

FERNANDO MORIENTES

WONDERLAND

Dated:

We, ABDUL BIN MALEK and FERNANDO MORIENTES, being the directors of ABC SDN. BHD. do hereby state that in our opinion, the financial statements set out on pp. 7 to 35 are drawn up in accordance with Financial Reporting Standards in Malaysia and the provisions of the Companies Act 1965 so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2010 and of their results and cash flows for the year ended on that date.

Signed

at Wonderland this

ON BEHALF OF THE BOARD,

…………………………………………..

I, ABDUL BIN MALEK, being the director primarily responsible for the financial management of ABC SDN. BHD. do solemnly and sincerely declare that to the best of my knowledge and belief the financial statements set out on pp. 7 to 35 are correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared

by the above named

Before me,

CONSOLIDATED

STATEMENT OF FINANCIAL POSITION AS AT

2009

TOTAL ASSETS

NON-

CURRENT ASSETS

Property, plant, and

equipment

502,000

5,000

Available-for-sale financial assets

66,000

3,000

Investment in

associated company

300,000

Intangible asset (goodwil

4,000

2,86

8,000

98,000

Trade receivables

20,97

7,000

19,3

82,000

Other receivables, deposits, & prepayments

2,013,540

87,000

Tax recoverable

13,450

Fixed deposits with a licensed bank

4,120,000

Cash and bank balances

600,000

29,307,990

20,76

9,000

32,175,990

21,067,000

TOTAL EQUITY

5,000,000

ACCUMULATED

141,000

260,000

TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY

11,141,000

9,260,000

MINORITY INTEREST

17,100

11,158,100

NON-

CURRENT LIABILITIES

Bank borrowings

400,000

Hire purchase and finance lease payables

100,000

35,000

Deferred tax liabilities

12,000

512,000

40,000

Trade payables

18,069,890

10,847,000

Other payables and accruals

1,9

90,000

50,000

30,000

450,000

140,000

Taxation

20,539,890

11,667,000

TOTAL LIABILITIES

21,051,890

11,807,000

32,209,990

The annexed Notes form an integral part of the financial statements. Auditors’ Report on pp. 5 &

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED

121,777,000

200,062,000

Cost of sales

(104,

45,000

(178,

500,000

Gross profit

17,

632,000

21,562,000

Other operating income

333,000

Operating and administrative expenses

(16,260,000)

(15,420,000)

Profit from operations

1,705,000

6,262,000

Finance costs

(

15,000

(

103,000

2,300,000

Profit before taxation

3,690,000

6,159,000

(

1,809,000

(

2,196,000

Net profit after taxation, representing total comprehensive income during the year

81,000

3,963,000

Total

Owners of the Company

3,860,000

Minority interest

– 0

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED

Retained

capital

As at 1 January 2009

5,400,000

Total comprehensive income during the year

As at 31 December 2009

As at 31 December 2010

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED

CASH FLOW FROM OPERATING ACTIVITIES

Adjustments for:

Impairment of trade receivables

802,000

126,000

25,000

Share of post acquisition profits in

(2,300,000)

Interest expense

315,000

Interest income

(

150,000

(30,000)

Unrealized loss / (gai

102,000

(90,000)

Operating profit before changes in working capital

1,783,000

7,069,000

Decrease in receivables

(3,099,540)

(4,873,952)

Increase / (Decreas

8,553,890

(

1,500

Net cash generated from operations

7,237,350

695,000

Taxation paid

(1,615,450)

(

85,000

Net cash inflow from operating activities

5,621,900

10,000

CASH FLOW FROM INVESTING ACTIVITIES

Interest received

(300,000)

Purchase of available-for-sale financial assets

(53,000)

Purchase of property, plant, and equipment

(

340,000

(7,000)

Acquisition of subsidiaries, net of cash and cash equivalents

(

34,900

Net cash (outflow) / inflow from investing activities

(577,900)

23,000

CASH FLOW FROM FINANCING ACTIVITIES

Changes of fixed deposit pledged as security

(3,820,000)

(12,000)

Interest paid

(315,000)

(103,000)

Proceeds from term loan

650,000

Repayment of term loan

(100,000)

Repayment of hire purchase payables

(35,000)

Net cash outflow from financing activities

(3,620,000)

(150,000)

NET INCREASE IN CASH AND

CASH EQUIVALENTS

1,424,000

483,000

CASH AND CASH EQUIVALENTS AT THE BEGINNING

OF YEAR

563,000

CASH AND CASH EQUIVALENTS AT THE END

1,987,000

CASH AND CASH EQUIVALENTS COMPRISE:

2,184,000

Bank overdraft

(140,000)

Less : Fixed deposit pledged as security

(4,120,000)

1,884,000

460,000

NON-CURRENT ASSETS

285,000

13,000

Investment in subsidiary company

54,900

20,900

20,102,000

487,000

220,000

21,374,000

20,769,000

22,294,900

TOTAL EQUITY AND LIABILITIES

7,385,000

4,363,000

12,385,000

9,363,000

NON-CURRENT LIABILITIES

135,000

8,695,900

640,000

9,815,900

10,327,900

22,712,900

21,1

70,000

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED

121,5

92,000

(

103,934,000

(

178,500,000

17,658,000

130,000

(12,944,000)

4,844,000

4,529,000

(

1,507,000

3,022,000

Total comprehensive income attributable to:

2,707,000

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED

Allowance for doubtful debts

125,000

5,0

71,000

Increase in receivables

(

885,000

Decrease in payables

(2,061,100)

2,124,900

(1,602,000)

522,900

(54,900)

(747,900)

Changes in fixed deposit held as security

(

200,000

Repayment of finance payables

NET (DECREASE) / INCREASE IN CASH AND

(225,000)

CASH AND CASH EQUIVALENTS AT THE END

235,000

(500,000)

(80,000)

GENERAL INFORMATION

The Company is a limited liability company, incorporated and domiciled in Malaysia. The addresses of the principal place of business and registered office of the Company are as follows:

Principal

123, Wonderful Mansion,

55880 Wonderful City

Wonderful Land

Registered office

888, Lucky Mansion,

The financial statements were authorized for issue by the Board Of Directors on

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention modified to include financial assets and financial liabilities stated at fair value and in accordance with Financial Reporting Standards (

FRSs

The financial statements are presented in Ringgit Malaysia (M). Ringgit Malaysia (RM) is the presentation and functional currency of the Group and of the Company.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note

Standards and interpretations

Standards and interpretations effective during the financial year

The Company has adopted all the new accounting standards, amendments to published standards and interpretations to existing standards effective during the financial year.

However, the adoption of these standards, amendments to published standards, and interpretations to existing standards have no significant impact on the financial statements of the Company.

Standards and interpretations (continue

Standards and interpretations issued and not yet effective

Effective date

/Interpretations

Amendments to

FRS 1

Financial Instruments: Presentation – Classification of rights issues

1 March 2010

First-time adoption of Financial Reporting Standards (revised)

1 July 2010

Amendments to FRS 2

Share-based Payment

FRS 3

Business Combinations (revised)

Amendments to FRS 5

Non-current Assets Held for Sale and Discontinued Operations

FRS 127

Consolidated and Separate financial Statements (revised)

Amendments to FRS 1

Intangible Assets

Amendments to IC Interpretation 9

Reassessment of Embedded Derivatives

IC Interpretation 12

Services Concession Arrangements

IC Interpretation 16

Hedges of a Net Investment in a Foreign Operation

IC Interpretation 17

Distributions of Non-cash Assets to Owners

Amendments to

IC Interpretation 15

30 August 2010

TR 3

Guidance on Disclosures of Transition to IFRSs

Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters, Additional Exemptions for First-time Adopters and

Improvements to FRSs (2010)

1 January 2011

Group Cash-settled Share-based Payment Transactions

Amendments to FRS 3

Amendments to FRS 7

Improving Disclosures about Financial Instruments and Improvements to FRSs (2010)

Amendments to FRS 101

Amendments to FRS 121

Amendments to FRS 128

Amendments to FRS 131

Amendments to FRS 132

Amendments to FRS 134

Amendments to FRS 139

IC Interpretation 4

Determining Whether an Arrangement contains a Lease

Standards and interpretations issued and not yet effective (continued)

IC Interpretation 18

Transfers of Assets from Customers

TR i-4

Shariah Compliant Sale Contracts

Amendments to IC Interpretation 13

Amendments to IC Interpretation 14

Prepayments of a Minimum Funding Requirement

1 July 2011

IC Interpretation 19

Extinguishing Financial Liabilities with Equity Instruments

FRS 124

Related Party Disclosures (revised)

1 January 2012

Agreements for the Construction of Real Estate

The adoption of these FRSs and their consequential amendments, Amendments to FRSs and IC Interpretations are not expected to have any significant impact on the financial statements of the Company.

The initial application of other standards, amendments or interpretations is not expected to have any financial impact to the current or prior years’ financial statements upon their first adoption.

Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiary companies made up to the end of the financial year. A subsidiary company is a company in which the Group has power to exercise control over the financial and operating policies so as to obtain benefits therefore. Subsidiary companies are consolidated using the acquisition method of accounting from the date control is transferred to the Group and are no longer consolidated from the date control cease. Intra-group transactions and resulting unrealized profits or losses are eliminated fully on consolidation and consolidated financial statements reflect external transactions only. Any excess of the cost of business combination over the Group’s interest in the net fair value of identifiable assets, liabilities and contingent liabilities is reflected as goodwill. Any excess of the Group’s interest in the net fair value of identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognized as income in the income statement.

Minority interest at the end of the reporting period, being the portion of the net identifiable assets of subsidiaries attributable to equity interests that are not owned by the Company, whether directly or indirectly through subsidiaries, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Minority interest in the results of the Group are presented in the consolidated statement of comprehensive income as an allocation of the comprehensive income for the financial year between minority interest and the owners of the Company.

Where losses applicable to the minority exceed the minority’s interest in the equity of a subsidiary, the excess, and any further losses applicable to the minority, are charged against the Group’s interest except to the extent that the minority has a binding obligation to, and is able to, make additional investment to cover the losses. If the subsidiary subsequently reports profits, the Group’s interest is allocated with all such profits until the minority’s share of losses previously absorbed by the Group has been recovered.

Goodwill arises from business combinations and is measured at cost less any accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity accounted investee.

For the purpose of carrying out impairment tests, goodwill is allocated to each cash-generating-unit all of which is expected to benefit from the synergies of the business combination, from acquisition date. The subsidiary of the Company is a cash-generating-unit.

Goodwill (continued)

Impairment test is performed annually. Goodwill is also tested for impairment when any indication of impairment
exists. When the recoverable amount of the cash-generating-unit is less than the carrying amount associated to that particular cash-generating-unit, the calculated difference is treated as an impairment loss and is recognized in the income statements. Impairment losses recognized are not reversed in subsequent periods.

Upon the disposal of an interest in a subsidiary, the related goodwill will be included in the computation of gain
or loss on disposal of the interest in the subsidiary in profit or loss.

Investments are stated at cost less impairment losses. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. Subsidiary is an entity in which the Company has power to exercise control over the financial and operating policies so as to obtain benefit from its activity.

Property, plant, and equipment and depreciation

Property, plant, and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is calculated on the straight-line basis to write off the cost of the assets over their estimated useful lives. The principal annual rates used are:

Furniture

& fittings

Motor

vehicles

Renovation

Office

The carrying values of property, plant, and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate.

An item of property, plant, and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognized.

Financial assets

The Group and the Company classifies its financial assets into the following categories: at fair value through profit or loss, held-to-maturity investments, loans and receivables, and available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Financial assets at fair value through profit or loss (FVTPL)

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorized as held for trading unless they are designated as hedges. Assets in this category are classified as current assets.

Held-to-maturity investments

Investment in financial assets such as bonds with fixed or determinable payments and fixed maturity dates where the Company has a positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are recorded at amortized cost using the effective interest method less impairment, with revenue recognized on an effective yield basis.

Financial assets (continued)

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting year. These are classified as non-current assets. The Company’s loans and receivables comprise ‘trade and other receivables’ and cash and cash equivalents in the balance sheet.

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting year.

Purchases and sales of financial assets are recognized on the trade date – the date on which the Group or the Company commits to purchase or sell the asset. Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at FVTPL. Financial assets carried at FVTPL are initially recognized at fair value, and transaction costs are expensed in the income statement. Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Group or the Company has transferred substantially all the risk and rewards of ownership.

The Group and the Company assess at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in fair value of the security below its cost is considered as an indicator that the securities are impaired. If such evidence exists for available-for-sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in income statement – is removed from equity and recognized in the income statement. Impairment losses recognized in the income statement on equity instruments are not reversed through the income statement.

Financial liabilities

The Group and the Company classifies its financial liabilities into the following categories: at fair value through profit or loss, liabilities from financial guarantees, and other financial liabilities. The classifications depends on the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities at fair value through profit and loss are initially measured and recognized at fair values. Subsequent to their initial recognition, financial liabilities at fair value through profit or loss are measured at fair value, with the gain or loss calculated recognized in profit or loss.

The Group and the Company have no financial liabilities at fair value through profit or loss.

Liabilities from financial guarantees

Financial guarantees represents those contracts that require the Company or entities within the Group as issuer(s) of such guarantees to make specified payments to reimburse the holders for a loss suffered because a specified debtor fails to make payment when due.

Such liabilities are initially recognized as liabilities at fair value, net of the relevant transaction costs. Subsequent to their initial recognition, liabilities from financial guarantees are amortized and recognized in statement of comprehensive income using straight-line method over the contractual period of the guarantees, or when there is no contractual period specified, such liabilities are not amortized but the entire outstanding carrying amounts are recognized in statement of comprehensive income upon discharge of the guarantees.

Financial liabilities (continued)

Liabilities from financial guarantees (continued)

When settlement of the liabilities become probable, an estimation of the obligation required to honor the settlement is made and if the amount of the obligation estimated is higher than the carrying amount of the liabilities, the carrying amount is adjusted to arrive at the obligation amount.

Other financial liabilities

Other financial liabilities include trade payables, other payables, loans, and borrowings.

Trade and other payables are initially recognized at their fair values, net of the transaction costs incurred. Subsequent to their initial recognition, they are measured at amortized cost using effective interest method.

Loans and borrowings are initially recognized at their fair values, net of the transaction costs incurred. Subsequent to their initial recognition, they are measured at amortized cost using effective interest method. Borrowing costs consist of interest on borrowings and other costs that the Group and the Company incurred in the course of borrowing of funds. Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalized as part of the cost of those assets, until such time the assets are substantially ready for their intended use or sale. All other borrowing costs are recognized in profit or loss in the period they are incurred.

Financial liabilities are derecognized when the obligations under the liabilities have been extinguished. When a financial liability is replaced by another liability from the same lender on terms substantially different from the existing liability, or the terms of the existing liability have been substantially modified, such arrangements are treated as derecognitions of the original liabilities and new financial liabilities are recognized. The difference between the carrying amounts of the existing liabilities and the new liabilities are recognized in profit and loss.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortized cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss.

With the exception of available-for-sale equity instruments, if, in a subsequent year, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. In respect of available-for-sale equity instruments, any subsequent increase in fair value after an impairment loss, is recognized directly in equity.

Impairment of non-financial assets

The carrying amounts of assets are reviewed for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying amounts of the assets with their recoverable amounts. The recoverable is the higher of an asset’s net selling price and its value in use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimated for individual assets, or if it is not possible, for the cash-generating unit.

An impairment loss is recognized as an expense in the income statement immediately, unless the asset is carried at a revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of any unutilized previously recognized revaluation surplus for the same asset. Reversal of impairment losses recognized in prior years is recorded when the impairment losses recognized for the asset no longer exist or have decreased.

Income taxes

Income tax expense represents the sum of the current tax and deferred tax.

The current tax is the amount of income taxes payable in respect of the taxable profit for a period. Taxable profit differs from net profit as reported in profit or loss because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Group and the Company’s liabilities for current tax are calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit, and is accounted for using the liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realized. Deferred tax is recognized in profit or loss, except when it relates to items recognized directly to equity, in which case the deferred tax is also recognized in equity.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group and the Company intend to settle their current tax assets and liabilities on a net basis.

Revenue recognition

Revenue is recognized when it is probable that the undermining economic benefits will flow to the Group or the Company and the revenue can be reliably measured. Revenue is measured at the fair value of considerations received. Revenue from services are recognized upon rendering of services. Interest income is recognized on effective interest method.

Foreign currencies transactions and balances

Functional and presentation currency

The financial statements of each entity within the Group are presented in the currency of the primary economic environment in which the entity concerned operates, which is the functional currency. For this purpose, the functional currency is Ringgit Malaysia (RM), which is also the presentation currency.

Foreign currencies transactions and balances (continued)

Foreign currency transactions and balances (continued)

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the reporting date are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognized in profit or loss.

Employee benefits

Short-term benefits

Salaries, wages, paid annual leave and sick leave, bonuses and non-monetary benefits are recognized as an expense in the year in which the associated services are rendered by employees of the Group.

Defined contribution plan

The Group contributions to defined contribution plans are charged to the income statement in the period to which they relate. Once the contributions have been paid, the Company has further liabilities in respect of the defined contribution plans.

All leases entered into by the Group and the Company are in respect of the Group and the Company acting as lessee.

Finance lease

Finance leases, which include hire purchase arrangements are capitalized at the inception of the lease at the fair value of the leased assets or, if the fair value of the leased assets is lower, at the calculated present value of the minimum lease payments. Periodic lease payments are apportioned between the lease interest amounts and the lease principal amounts so as to achieve a constant periodic rate of interest on the remaining balance of the lease liabilities. The lease interest is charged to income statements and recognized as an expense whereas the lease principal amounts calculated from the periodic lease payments are treated as a reduction to the lease liability.

Operating lease

Operating lease payments are recognized as lease rental expense in the income statements on a straight-line basis over the period of the lease. The aggregate amount of incentives provided by the lessor, if any, is recognized as a reduction of the lease rental expense over the period of the lease on a straight-line basis.

Segment reporting

All the entities within the Group are principally operating in the same geographical area i.e. in Malaysia and in the same operating segment, namely provision of forwarding and warehousing services and therefore additional information on the profit or loss, assets and liabilities of different geographical areas and different operating segments are not presented.

A contingent liability or asset is a possible obligation or asset that arises from past events in which its existence will be confirmed only by the occurrence or nonoccurrence of uncertain future event or events not holly within the control of the Group or the Company.

FINANCIAL RISK MANAGEMENT POLICIES

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s business while managing its risks. The Group operates within defined guidelines that are approved by the Board of Directors and does not engage in speculative transactions. The policies in respect of the major areas of treasury activity are as follows:

FINANCIAL RISK MANAGEMENT POLICIES (CONTINUED)

Foreign currency risk

The Group is exposed to foreign currency risk as a result of its normal trading activities where the currency denomination differs from the local currency, Ringgit Malaysia (RM), primarily with respect to the U.S. dollar. The Group policy is to minimize the exposure of its foreign currency risk to not exceeding RM50,000 at any particular point in time, by engaging in the required forward currency contracts as the hedging instruments. As at the end of the financial year, no forward currency contracts were engaged as there was no such necessity. To arrive at such conclusion, a fluctuation of 1% of U.S. dollar against RM will result in foreign currency risk exposure of lesser than RM3,000 which is deemed insignificant as to its impact to the financial results and financial position of the Group and of the Company.

Cash flow and Interest rate risk

Borrowings at variable rates expose the Group to cash flow interest rate risk whereas borrowings at fixed rates expose the Group to fair value interest rate risk. The Group’s interest rate risk arises mainly from its borrowings and hire purchase and lease payables. Such exposure is partially reduced by the interest income derived from its placement in fixed deposits. The Group monitors its exposure to such risk to ensure that its net interest cost does not exceed 10% of its profit before-tax and also to ensure regular monthly cash flows are sufficient to meet its borrowings’ repayment requirement.

The Management is of the opinion that the current economic conditions do not warrant an unlikely substantial hike in interest rates causing an adverse financial impact on the Group and the Company. Based on the financial position of the Group as a 31 December 2010, on the assumption that there is a hike of 10 basis points of market interest rate with all other variables remained constant, the after-tax profit of the Group would have been RM35,000 lower and the equity component of the Group would have a similar RM35,000 reduction.

Credit risk

The Group’s exposure to credit risk arises mainly from receivables. The Group manages its exposure by the application of the credit approvals, credit limits, and monitoring procedure on an ongoing basis. The Group’s major concentration of credit risk related to debt owing by four trade receivables that constituted approximately 72% of net receivables at the end of the financial year.

Liquidity risk

The Group’s exposure to liquidity and cash flow risks mainly from general funding and business activities. It practices prudent liquidity risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities. The management seeks to achieve a balance between certainty of funding so as to ensure that all repayments and funding needs are met.

Capital risk management

The Company manages its capital to ensure that the Company will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance. The Company will balance its overall capital structure through the payment of dividends, new share issues and the issue of new debt or the redemption of debt. The Directors monitor and determine an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.

During the financial year, the Group’s strategy, which was unchanged from 31 December 2009, was to maintain the debt-to-equity ratio below 1. The debt-to-equity ratios at 31 December 2010 and 31 December 2009 were calculated as follows:

Non-current liabilities which represent Long-term debt (A)

Total equity (B)

Debt-to-equity ratio (A)/(B)

0.046

0.015

0.041

GROUP / COMPANY

At fair value:

Golf club membership

This represents golf club membership owned by the Group for the usage by its CEO for business

purposes

At cost:

Unquoted shares

Share of post-acquisition profits

2,000,000

Ownership equity interest

Place of

Name of associated company

incorporation

MNO Sdn. Bhd.

30%

Nil

Forwarding

and warehouse

The summarized financial information of the associated company (not adjusted for the proportion ownership interest of the Group in this associated company) is as follows:

Financial position:

Total assets

8,650,245

1,546,789

Total liabilities

(983,578)

(546,789)

Net assets

7,666,667

1,000,000

Financial results:

Turnover

23,456,890

3,350,980

Total comprehensive income for the year

6,666,667

230,953

On 1 August 2010, the Company acquired a 55% equity interest in JKL Sdn. Bhd. for a cash consideration RM54,900. This subsidiary is principally engaged in the provision of forwarding and warehousing services and is incorporated in Malaysia.

The acquisition had the following effect on the Group’s financial results for the year:

2,200,000

(1,700,000)

(

540,000

Net loss for the year

(17,000)

INVESTMENT IN SUBSIDIARY COMPANY (CONTINUED)

The acquisition had the following effect of increase on the net assets of the Group as at the end of the year as follows:

Receivables

10,700,000

Payables

(5,400,000)

Increase in Group net assets

7,825,500

The fair values of the assets acquired and liabilities assumed, from the subsidiary on 1 August 2010 were as follows:

124,000

147,000

109,000

Fair value of net assets

38,000

Less:

(17,100)

Group’s share of net assets

Goodwill on acquisition

Total cost of acquisition

The cash outflow on acquisition is as follows:

Purchase consideration satisfied by cash

Cash and cash equivalents of subsidiary acquired

Net cash outflow of the Group

The financial statements of the subsidiary company were audited by another firm of chartered accountants.

Related parties

– Associated company

– Subsidiary company

Non-related parties

20,500,000

19,469,000

20,000,000

Less : Impairment loss

(

73,000

(87,000)

(73,000)

20,977,000

TRADE RECEIVABLES (CONTINUED)

Trade receivables are not interest-bearing and are not secured. The credit period of trade receivables range from 30 days to 90 days.

The aging analysis of trade receivables are as follows:

Aging analysis

Neither past due nor impaired

1 to 30 days

7,016,600

6,489,000

6,725,000

30 days to 60 days

9,282,700

8,567,000

10,014,500

60 days to 90 days

4,677,700

4,326,000

3,362,500

Past due but not impaired

Past due and impaired

21,050,000

20,1

75,000

Trade receivables neither past due nor impaired

Trade receivables that are neither past due nor impaired are debtors with excellent payment records and have been customers of the Group and of the Company for more than 3 years.

There are no trade receivables under neither past due nor impaired category renegotiated during the year.

Trade receivables past due and impaired

The trade receivables past due and impaired with the movement in the respective allowance for impairment loss are analyzed as follows:

Outstanding amount

Allowance for impairment loss

The above receivables represents total of receivables individually impaired. These represent those debtors that are in financial difficulties and have defaulted on payments, and have been individually determined by the Management to be impaired. There was no receivables collectively impaired.

The movement in the allowance for impairment loss is as follows:

GROUP/COMPANY

At beginning of year

Charge for the year

Write off

(

14,000

(715,000)

At end of year

The amount due from associated company is trade in nature and arose from trade transactions conducted with the Company. The terms of the transactions entered into are similar with those entered into with non-related parties. The amount due from associated company has been eliminated for the purpose of preparing consolidated financial statements.

11.

The amount due from subsidiary company is trade in nature and arose from trade transactions conducted with the Company. The terms of the transactions entered into are similar with those entered into with non-related parties. The amount due from associated company has been eliminated for the purpose of preparing consolidated financial statements.

12.

The fixed deposits are pledged to banks as security for banking facilities granted to the Company. Its effective interest rate as at balance sheet date was 3% ( 2009: 3%) per annum.

13.

Sundry payables

1,300,000

Accruals

142,000

112,000

Liability from financial guarantee

Advance payments from customers

Liability from financial guarantee is in respect of corporate guarantee to a licensed bank for a RM300,000 Long Term Loan facility made available to the subsidiary company.

14.

HIRE PURCHASE AND FINANCE LEASE PAYABLES

Minimum hire purchase and finance lease payments:

Not later than 1 year

Later than 1 year and not later than 2 years

Later than 2 years and not later than 5 years

110,000

185,000

Less: Future finance charges

(15,000)

Present value of hire purchase and finance lease liabilities

165,000

Present value of hire purchase and finance lease liabilities:

Analyzed as:

Due within 12 months included in current liabilities

Due after 12 months included in non-current liabilities

The effective interest rates on the hire purchase payables and finance lease payables as at the balance sheet date were 4% (2009 : 4%) and 9% (2009 : 9%) per annum, respectively.

SECURED

Term loans

Total bank borrowings included in current liabilities

BANK BORROWINGS (CONTINUED)

Analysis of term loans repayment:

– Within 2 years

250,000

– Between 2 to 5 years

– More than 5 years

Amount repayable within the next 12 months

Included under non-current liabilities

The above facilities are secured by:

fixed deposits of the Company;

corporate guarantee of Credit Guarantee Corporation Berhad;

corporate guarantee of the Company;

joint and several guarantees by certain directors of the Company.

Covenants

the Group shall maintain a debt-to-equity ratio of not exceeding 1.5 at all time.

the Company shall not declare dividends to its shareholders exceeding 10% of its issued and fully paid up capital.

The effective interest rates as at the balance sheet date were as follows:

6.00

5.00

5.50

16.

Authorized:

5,000,000 ordinary shares of RM1 each

Issued and fully paid:

17.

DEFERRED TAX LIABILITIES

At 1 January

Recognized in income statement (Note 20)

(4,000)

At 31 December

The deferred tax liabilities are in respect of the temporary differences on the excess of carrying values of property, plant, and equipment over their tax bases.

18.

Revenue of the Group and of the Company represents invoiced value of services rendered less discounts.

19.

PROFIT BEFORE TAXATION

Profit before taxation is arrived at after charging/(crediting) the following:

Auditors’ remuneration

Directors’ emoluments

3,250,000

3,150,000

Fixed deposit interest

Interest expense:

-bank overdraft

-leasing

-hire purchase

-term loan

(Gain) / loss on foreign exchange:

– realized

(130,000)

– unrealized

Rent of premises

350,000

Staff costs representing employee benefits expense:

– Wages and salaries

7,000,000

9,000,000

5,500,000

– Employees Provident Fund (Contribution to defined contribution plan)

991,000

785,000

– Social security contribution

7,897,000

10,000,000

6,290,000

20.

Current taxation:

Current year provision

– the Company & subsidiary company

1,502,000

1,500,000

– the associated company

Deferred taxation (Note 17):

A reconciliation of income tax expenses applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Company is as follows:

Taxation at statutory tax rate of 25% (2009 : 25%)

922,500

1,539,750

1,132,250

Share of current year tax in associated company

Expenses not deductible for tax

586,500

682,000

453,500

Tax expense for the year

2,221,750

1,585,750

Subject to agreement of the Inland Revenue Board, the Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967 to distribute its entire retained profits as dividends without incurring additional tax liability.

21.

During the financial year, a creditor commenced legal action against the Company in respect of work completed but remained unpaid. The estimated amount that the Company may need to pay should the creditor’s claim is successful is approximately RM100,000. The Directors claimed that the work done was substandard, not done within the agreed timeframe, and in fact, resulted in additional costs incurred for subsequent follow-up work and therefore made a counter-claim of RM120,000 for the additional costs incurred.

The Directors have been advised by the legal counsel of the Company and are of the opinion that provisions are not required in respect of this legal claim as it is not probable that the creditor’s claim will be successful and hence no provision has been made in respect of this contingent liability in the financial statements.

Loan and receivables:

29,373,990

20,782,000

21,440,000

1,982,000

850,000

21,031,890

11,802,000

10,307,900

12,512,000

21,039,890

10,315,900

The Group and the Company do not have financial assets or liabilities carried at fair value, by valuation method.

22.

Identity of related parties

For the purposes of these financial statements, parties are considered to be related to the Group or the Company if the Group or the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Key management personnel are defined as those persons having authority and responsibility for planning, directing, and controlling the activities of the Group either directly or indirectly. The key management personnel include all the Directors of the Group.

RELATED PARTIES (CONTINUED)

Related party transactions

The following significant related party transactions took place at terms between the Group or the Company with the related parties during the financial year:-

Sale and purchase of goods and services

Services rendered to:

Compensation of key management personnel

Short-term employee benefits representing remuneration paid to the directors

Lodged by:

GOOD COMPANY SECRETARIAL SERVICES SDN. BHD.

28, Jalan SS1/38,

33333 Wonderland,

Tel : 03-77277277

DETAILED INCOME STATEMENT FOR THE YEAR ENDED

LESS:

COST

Direct subcontracting costs

101,023,000

173,409,000

Other direct costs

2,911,000

5,091,000

GROSS PROFIT

OTHER INCOME

Gain on foreign exchange:

17,788,000

21,682,000

OPERATING AND ADMINISTRATIVE EXPENSES

(Appendix A)

(

13,259,000

(

15,523,000

FINANCE COSTS

(Appendix B)

PROFIT FOR THE YEAR

4,214,000

6,056,000

The Detailed Income Statement is presented for management purposes only and does not form part of the financial statements.

OPERATING AND ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED

Attestation fee

Bank charges

76,000

Discount on disposal of plant and equipment

Electricity & water

201,000

Entertainment

370,000

210,000

EPF & SOCSO

790,000

Gift & donation

Insurance

Legal & professional fee

License fee

Loss on foreign exchange:

Management fee

Medical fee

Penalty

Printing, stationery, & postages

Road tax & insurance

Salaries, bonus & overtime

Secretarial fees & disbursements

Service tax

Staff amenities

205,000

Subscription fee

Balance carried forward

12,6

36,000

14,6

21,000

OPERATING EXPENSES FOR THE YEAR ENDED

Balance brought forward

Tax compliance fee

19,000

Telephone & fax charges

Training

Travelling & accommodation

Upkeep of motor vehicles

Upkeep of office

Upkeep of office equipment

FINANCE COSTS FOR THE YEAR ENDED

These Audited Statements of Account of the Company with Qualified/Unqualified Auditor’s Report for the year / period ended 31/12/2010 were tabled at the Annual General Meeting or Adjourned General Meeting held on

Director :

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(Incorporated in Malaysia)

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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF

ABC SDN. BHD. (12345-X)

Report on the Financial Statements

We have audited the financial statements of ABC Sdn. Bhd., which comprise the statement of financial position as at 31 December 2010, and statement of comprehensive income, statement of changes in equity and statement of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pp. 7 to 35.

Directors’ Responsibility for the Financial Statements

The directors of the Group and of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes: designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2010 and of its financial performance and cash flows for the year then ended.

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6
a)

DEF & CO.

Chartered Accountant

Dated:

WONDERLAND Click To Go Back To Guide To Use Of Worksheets

Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:
In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act. The auditors of the subsidiary company have expressed an opinion that such records and register books of the subsidiary company have been properly kept.
We have considered the financial statements and the auditors’ report of the subsidiary of which we have not acted as auditors, which are indicated in Note 8 to the financial statements.
We are satisfied that the financial statements of the subsidiary that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.
The audit report on the financial statements of the subsidiary did not contain any qualification or any adverse comment made under Section 174(3) of the Act.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
No. AF 1234
	Chartered Accountant
DANNY ALFANSO FERRER
No. 1234/10/12 (J)

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Note-PPE

Company No.: 12345-X 26
4.

(i)

b) Income taxes
(ii)

5. PROPERTY, PLANT, AND EQUIPMENT
Furniture Motor Office
& fittings vehicles Renovation equipment Total
COMPANY RM RM RM RM RM

2010

COST
1 January

250,000

15,000

125,000 – 200,000 15,000 340,000

31 December 300,000 250,000 315,000 30,000

ACCUMULATED
1 January

90,000 70,000 5,000

Charge for the year 35,000 50,000 30,000 10,000 125,000
31 December 140,000 140,000 100,000 15,000

110,000

15,000 500,000

NET BOOK VALUE

70,000 160,000 45,000 10,000 285,000

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Company No.: 12345-X 27
5.

GROUP
2010
COST
1 January 175,000 250,000 115,000 15,000 555,000

Additions

– 200,000 15,000

31 December

250,000 315,000 30,000

ACCUMULATED
DEPRECIATION
1 January 105,000 90,000 70,000 5,000 270,000

Charge for the year 36,000 50,000 30,000 10,000 126,000
31 December 141,000 140,000 100,000 15,000

NET BOOK VALUE

AS AT 31 DECEMBER 2010

110,000 215,000 15,000 502,000

NET BOOK VALUE
AS AT 31 DECEMBER 2009 70,000 160,000 45,000 10,000 285,000

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CRITICAL ACCOUNTING ESTIMATES, JUDGMENTS, AND KEY SOURCES OF ESTIMATION UNCERTAINTY
Critical accounting estimates & judgments
In the process of applying the accounting policies, Management has made the following judgments, apart from those involving estimations, which have the most significant effect on the amounts recognized in the financial statements:-
Impairment of receivables
An impairment loss is recognized when there is objective evidence that a financial asset is impaired. Management specifically reviews its loans and receivables financial assets and analyzes historical bad debts, customer concentrations, customer creditworthiness, current economic trends, and changes in the customer payment terms when making a judgment to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.
There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group recognizes tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognized, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made.
Key sources of estimation uncertainty
Useful lives of property, plant, and equipment
Items of property, plant, and equipment are depreciated on straight-line basis over the assets’ estimated economic useful lives of 5 years or 20% depreciation rate per annum. This is the Management’s estimation of useful lives of the items of property, plant, and equipment of the Group and of the Company. This estimation is based on the Management’s past experience and also considered the common economic life expectancies applied by other entities in the same industry. Changes in the expected level of usage and technological advancement could impact the useful lives and the residual values of the assets, and therefore future revision in depreciation charges could be made by the Management.
	175,000	115,000		555,000
	Additions
895,000
	DEPRECIATION
	105,000	270,000
395,000
		NET BOOK VALUE
	AS AT 31 DECEMBER 2010		160,000		215,000
	AS AT 31 DECEMBER 2009
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
128,000	343,000
303,000	898,000
396,000
162,000
Motor vehicles with net book value of RM100,000 (2009 : RM170,000) were acquired under hire purchase installment plans.
Office equipment with net book value of RM5,000 (2009 : RM8,000) were acquired under finance lease installment plan.
[- THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK -]

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MAINDOCUMENTS

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Note-PPE

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