Goldis Berhad Annual Report 2009

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE FINANCIAL YEAR ENDED 31 JANUARY 2009
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INVENTORIES
Inventories are stated at the lower of cost and net realisable value.
Cost is determined using the first-in-first-out method. The cost of finished goods and work-in-progress comprises raw
materials, direct labour, other direct costs and related production overheads (based on normal operating capacity).
Net realisable value is the estimate of the selling price in the ordinary course of business, less the cost of completion and
applicable variable selling expenses.
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TRADE RECEIVABLES
Trade receivables are carried at invoice amount less an allowance for doubtful debts. An allowance is established when
there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of
receivables. Bad debts are written off in the financial year when it is established that they are irrecoverable.
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AMOUNTS DUE FROM/(TO) CUSTOMERS ON LONG-TERM CONTRACTS
Where the amounts of long-term contract costs incurred plus recognised profits (less recognised losses) exceed progress
billings, the net balance is shown as amounts due from customers on long-term contracts. Where the progress billings
exceed the sum of contract costs incurred and recognised profits (less recognised losses), the net balance is shown as
amounts due to customers on long-term contracts.
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CASH AND CASH EQUIVALENTS
For the purpose of the cash flow statements, cash and cash equivalents comprise cash in hand, deposits held at call with
banks, other short term, highly liquid investments with original maturities of three months or less, and bank overdrafts.
Bank overdrafts are included within borrowings in current liabilities on the balance sheet.
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BORROWINGS
(a) Classification
Borrowings are initially recognised based on the proceeds received, net of transaction costs incurred. In subsequent
periods, borrowings are stated at amortised cost using the effective yield method; any difference between proceeds
(net of transaction costs) and the redemption value is recognised in the income statement over the period of the
borrowings.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the balance sheet date.
(b) Capitalisation of borrowing cost
Interest cost on borrowings to finance the construction of property, plant and equipment during the period that is
required to complete and prepare the asset for its intended use are capitalised as part of the cost of the asset.
All other borrowing costs are charged to the income statement.
Goldis Berhad (515802-U)
annual report 2009
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