Financial Statements - Berjaya Corporation Berhad

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Notes To The Financial Statements 30 April 2001 2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (12) Property, plant and equipment and depreciation (continued) Short leasehold land Buildings Plant and equipment 7.5% - 50% Renovation, office equipment, furniture and fittings 5% - 50% Motor vehicles 10% - 25% Aircraft 10% Vessels 5% - 10% Golf course development expenditure 1% - 1.75% Plantation development expenditure 5% Recreational livestock and apparatus 10% - 25% Over the period of the lease not exceeding 50 years Over 50 years or the duration of the lease whichever is shorter The initial cost of linen, silverware, cutlery and kitchen utensils is capitalised but not depreciated and subsequent replacements are charged to the income statement as and when incurred. (13) Plantation development expenditure New planting and replanting expenditure incurred respectively on land clearing and upkeep of trees to maturity and harvesting are capitalised as plantation development expenditure. Amortisation of plantation development expenditure commences at maturity of the crop over twenty years. (14) Insurance reserves The unearned premium reserves (“UPR”) represent the portion of the net premiums of insurance policies written that relate to the unexpired periods of the policies at the end of the financial period. UPR is determined in accordance with the method prescribed by BNM under Guideline JPI/GPI 3 and Circular JPI 7/1994 as follows : - 25% method for marine cargo, aviation cargo and transit; - 1/24th method for fire, engineering and marine hull with a deduction of 15% and motor with a deduction of 10% and all other classes of business with a deduction of 20% or actual commission incurred, whichever is lower; - 1/8th method for overseas inward treaty business with a deduction of 20%; - 100% method for bonds with a deduction of 10% for commission. (15) Inventories Inventories of raw materials, work-in-progress and finished goods are stated at the lower of cost and net realisable value. Cost, in the case of work-in-progress and finished goods, comprises raw materials, direct labour and an attributable proportion of production overheads. Cost is determined on the first-in first-out, the weighted average cost method, or by specific identification. Ticket inventories and gaming equipment components and parts are stated at the lower of cost and net realisable value, after adequate provision for damaged, obsolete and slow moving items. Cost is determined on a first-in first-out basis. Stores and consumables are stated at the lower of cost and net realisable value after adequate provision has been made for damaged, obsolete and slow moving items. Cost is determined on a first-in first-out basis. Property stocks are stated at the lower of cost and net realisable value. Cost includes the relevant cost of land, development expenditure and related interest cost incurred during the development period. Trading account securities comprising quoted investments are stated at the lower of cost and market value determined on an aggregate basis after taking into consideration specific provisions made for diminution in value. 89 BERJAYA GROUP BERHAD
Notes To The Financial Statements 30 April 2001 2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (16) Trade and other receivables Trade and other receivables are carried at anticipated realisable value. All known bad debts are written off while doubtful debts are provided for, based on estimates of possible losses which may arise from non-collection. Specific provisions are made for any debts which are considered doubtful or have been classified as non-performing. Clients’ accounts for the stockbroking subsidiary companies are classified as non-performing under the following circumstances: Type of accounts Criteria - Contra losses When the account remains outstanding for 16 calendar days or more from the date of the contra transaction. - Overdue purchase contracts When the account remains outstanding from T+4 market days onwards. - Margin accounts When the value of the collateral has fallen below 130% of the outstanding balance. Hire purchase and equal payment receivables are stated at net of unearned carrying charges and provision for doubtful debts. (17) Acquisition costs Acquisition costs, which are costs directly incurred in acquiring and renewing insurance policies, net of income derived from ceding reinsurance premiums are recognised as incurred and properly allocated to the periods in which it is probable they give rise to income. (18) Claims Provision is made for the estimated cost of all claims together with related expenses less reinsurance recoveries, in respect of claims notified but not paid at balance sheet date, using the best available information at that time. Provision is also made for outstanding claims together with related expenses incurred but not reported at balance sheet date, using a mathematical method of estimation. (19) Provision for retirement benefits (i) Defined contribution scheme Contributions relating to defined contribution plans are charged to the income statement when incurred. Retirement benefits for employees of a foreign subsidiary company are accrued for in accordance with the provisions of that foreign country’s retirement law and are charged to income statement in the period to which they relate. (ii) Defined benefit scheme Certain subsidiary companies operate retirement benefits schemes based on defined benefit plan for the employees of the respective companies. The assets of these schemes are held separately from these companies in independently administered funds. Contributions to the scheme are charged to the income statement so as to spread the cost of the scheme over the employees’ working lives in the respective companies. The contributions are determined by qualified actuary using the projected benefit method. The principal actuarial assumptions used in the actuarial valuation are: - Rate of increase in salary level 4% to 6.5% per annum - Discount rate 7% to 8% per annum - Rate of investment return 6.5% to 8% per annum The April 2001 actuarial valuation of a US subsidiary company showed that the value of the assets was RM11,928,200 (USD3,139,000) as compared to the present value of benefits obligations of RM12,460,200 (USD3,279,000). The shortfall of RM532,000 (USD140,000) was treated as accrued pension liability in the book of the said US subsidiary company and incorporated in the consolidated financial statements. BERJAYA GROUP BERHAD 90
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Page 13 and 14: Consolidated Statement Of Changes I
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Notes To The Financial Statements 3
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List Of Properties As At 30 April 2
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Statement Of Directors’ Sharehold
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Statistics On Shareholdings As At 1
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Notice of Annual General Meeting NO
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R SECURITIES SDN BHD BERJAYA GENERA
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Financial Statements - Berjaya Corporation Berhad

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