ANNUAL REPORT 2008 - KNM Steel Sdn Bhd

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NOTES TO THE FINANCIAL STATEMENTS (CONT’D) 2. Significant accounting policies (CONT'D) (e) Leased assets (Cont’d) (ii) Operating lease Leases, where the Group or the Company does not assume substantially all the risks and rewards of the ownership are classified as operating leases except for property interest held under operating lease, and the leased assets are not recognised on the Group’s balance sheet. Leasehold land that normally has an indefinite economic life and title is not expected to pass to the lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted for as prepaid lease payments that are amortised over the lease term in accordance with the pattern of benefits provided. Certain leasehold land were revalued in December 2004 and the Group has retained the unamortised revalued amount as the surrogate carrying amount of prepaid lease payments in accordance with the transitional provision in FRS 117.67A when it first adopted FRS 117, Leases in 2006. Payments made under operating leases are recognised in the income statements on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease. (f) Intangible assets (i) Goodwill Goodwill arises on business combinations and is measured at cost less any accumulated impairment losses. For acquisitions prior to 1 January 2006, goodwill represents the excess of the cost of the business combination over the acquirer’s interest in the net fair values of the identifiable assets, liabilities and contingent liabilities recognised. For business acquisitions beginning from 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. Any excess of the Group’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of acquisition (negative goodwill) is recognised immediately in income statement. (ii) Other intangible assets Intangible assets, other than goodwill, that are acquired by the Group are stated at cost less any accumulated amortisation and any accumulated impairment losses. The fair value of technology and marketing related intangible assets acquired in a business combination is based on the discounted estimated royalty payments that have been avoided as a result of the intangible assets being owned. The fair value of customer related intangible assets acquired in a business combination is determined using the multi-period excess earnings method, whereby the subject assets is valued after deducting a fair return on all other assets that are part of creating the related cash flows. The fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets. KNM GROUP BERHAD 66 ANNUAL REPORT 2008
NOTES TO THE FINANCIAL STATEMENTS (CONT’D) 2. Significant accounting policies (CONT'D) (f) Intangible assets (Cont’d) (iii) Subsequent expenditure Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred. (iv) Amortisation Goodwill and intangible assets with indefinite useful lives are tested for impairment annually and whenever there is an indication that they may be impaired. Other intangible assets are amortised from the date that they are available for use. Amortisation of intangible assets is charged to the income statements on a straight-line basis over the estimated useful lives of intangible assets. The estimated useful lives are as follows: • Technology related intangible asset 15 years • Customer related intangible asset 1 - 20 years (g) Investments in debt and equity securities Investments in debt and equity securities are recognised initially at fair value plus attributable transaction costs. Subsequent to initial recognition: a) Investments in non-current equity securities other than investments in subsidiaries and associates, are stated at cost less any allowance for diminution in value, b) Investments in non-current debt securities are stated at amortised cost using the effective interest method less any allowance for diminution in value, c) All current investments are carried at the lower of cost and market value, determined on an aggregate portfolio basis by category of investments. Where in the opinion of the Directors, there is a decline other than temporary in the value of non-current equity securities and non-current debt securities other than investment in subsidiaries and associates, the allowance for diminution in value is recognised as an expense in the financial year in which the decline is identified. On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in the income statement. All investments in debt and equity securities are accounted for using settlement date accounting. Settlement date accounting refers to: a) the recognition of an asset on the day it is received by the entity, and b) the derecognition on an asset and recognition of any gain or loss on disposal on the date it is delivered. KNM GROUP BERHAD 67 ANNUAL REPORT 2008
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KNM GROUP BERHAD (521348-H) World C
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CONTENTS 2 Corporate Information 3
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CORPORATE STRUCTURE AS AT 18 MAY 20
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Malaysia China Canada USA Brazil Au
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CHAIRMAN'S MESSAGE (CONT’D) FINAN
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CHAIRMAN'S MESSAGE (CONT’D) GLOBA
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5-YEAR GROUP FINANCIAL HIGHLIGHTS K
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PROFILE OF DIRECTORS DATO’ MOHAMA
Page 17 and 18: PROFILE OF DIRECTORS (CONT’D) LEE
Page 19 and 20: CORPORATE GOVERNANCE STATEMENT The
Page 21 and 22: CORPORATE GOVERNANCE STATEMENT (CON
Page 35 and 36: AUDIT COMMITTEE REPORT (CONT’D) 2
Page 37 and 38: AUDIT COMMITTEE REPORT (CONT’D) (
Page 39 and 40: STATEMENT ON INTERNAL CONTROL The B
Page 41 and 42: ANALYSIS OF SHAREHOLDINGS as at 18
Page 43 and 44: ANALYSIS OF SHAREHOLDINGS as at 18
Page 45 and 46: LIST OF MAJOR PROPERTIES OWNED BY T
Page 47 and 48: DIRECTORS’ REPORT for year ended
Page 49 and 50: DIRECTORS’ REPORT (CONT’D) Dire
Page 51 and 52: DIRECTORS’ REPORT (CONT’D) Opti
Page 53 and 54: BALANCE SHEETS AT 31 DECEMBER 2008
Page 55 and 56: INCOME STATEMENTS FOR THE YEAR ENDE
Page 57 and 58: CONSOLIDATED STATEMENT OF CHANGES I
Page 59 and 60: CASH FLOW STATEMENTS FOR THE YEAR E
Page 61 and 62: CASH FLOW STATEMENTS FOR THE YEAR E
Page 63 and 64: NOTES TO THE FINANCIAL STATEMENTS (
Page 67: NOTES TO THE FINANCIAL STATEMENTS (
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NOTES TO THE FINANCIAL STATEMENTS (
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INDEPENDENT AUDITORS’ REPORT TO T
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NOTICE OF ANNUAL GENERAL MEETING NO
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NOTICE OF ANNUAL GENERAL MEETING (C
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KNM GROUP BERHAD (Company No. 52134
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(521348-H)
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ANNUAL REPORT 2008 - KNM Steel Sdn Bhd

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