Goldis Berhad Annual Report 2003

Summary of significant accounting policies
for the financial year ended 31 January 2003(cont’d)
Investments
Investments in unquoted shares held as long term investments are stated at cost. An allowance is made when the
Directors are of the opinion that there is a permanent diminution in value of investment. Permanent diminution in
value of investment is recognised as an expense in the period in which the diminution is identified.
Short-term investments in quoted shares are stated at lower of cost and market value, determined on an aggregate
portfolio basis by category of investments.
Market value is calculated by reference to stock exchange quoted selling prices at the close of business on the
balance sheet date. Increases/decreases in the carrying amount of investments are credited/charged to the income
statement.
On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged/
credited to the income statement.
Inventories
Inventories are stated at the lower of cost and net realisable value determined on a first-in, first-out basis.
The cost of work in progress and finished goods comprises raw materials, direct labour, other direct costs and an
appropriate proportion of production overheads.
Net realisable value is the estimated selling price in the ordinary course of business, less the cost of completion
and selling expenses.
Receivables
Trade receivables are carried at anticipated realisable values. Bad debts are written off in the period in which they
are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the financial
year end.
Deferred tax
Provision is made using the liability method for tax deferred in respect of all timing differences except where it is
considered reasonably probable that the tax effects of such deferrals will continue in the
foreseeable future.
No future income tax benefit is recognised in respect of unutilised tax losses and timing differences that result in
a net debit unless it can be demonstrated that these benefits can be realised in the foreseeable future.
The potential tax saving relating to a tax loss carried forward is only recognised if there is assurance beyond any
reasonable doubt that future taxable income will be sufficient for the benefit of the loss to be realised.
46
GOLD IS ANNUAL REPORT 2003