2003 - KNM Steel Sdn Bhd
2003 - KNM Steel Sdn Bhd
2003 - KNM Steel Sdn Bhd
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<strong>KNM</strong> GROUP BERHAD (521348-H)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER <strong>2003</strong>Significant transactions with related parties other than those disclosed elsewhere in the financial statements areas follows:Group<strong>2003</strong>RM’000Holding company:Inter Merger <strong>Sdn</strong>. <strong>Bhd</strong>.Rental of premises 602Administrative charges 368Associate:<strong>KNM</strong>-DP Fabricators <strong>Sdn</strong>. <strong>Bhd</strong>.Contract billings payable 5,174Rental income receivable (320)Related companies:Inter Merger Trading <strong>Sdn</strong>. <strong>Bhd</strong>.Purchase of materials 370IM Bina <strong>Sdn</strong>. <strong>Bhd</strong>.Manpower supply payable 37Contract billings payable 1,392Inter Merger Realty & Development <strong>Sdn</strong>. <strong>Bhd</strong>.Administrative cost payable 141Balances with subsidiaries, associates and related companies at the balance sheet date are as disclosed inNotes 5 and 7.These transactions have been entered into in the normal course of business and have been established undernegotiated terms.22. FINANCIAL INSTRUMENTSFinancial risk management objectives and policiesExposure to credit, interest rate, liquidity and foreign currency risks arises in the normal course of business. TheGroup monitors the interest rate trend and currency exchange rate on an ongoing basis. Based on the analysisof the market situation and taking into consideration the advice of the Group’s key bankers, the Group determinesand varies the risk management objectives and tolerance limits.Credit riskThe Group’s primary exposure to credit risk arise through its receivables. The management has an informalcredit policy in place and the exposure to credit risk is monitored on an ongoing basis.The Group also places excess funds with reputable licensed financial institutions. The management is of the viewthat credit risk exposure to licensed financial institutions is minimal.Concentration of credit risk arises from exposures to trade receivables from sale of the Group’s products forwhich risk of non-payment is affected by economic changes in the oil and gas industry. The maximum exposureto credit risk for the Group is represented by the carrying amount of the receivables presented in the balancesheet.<strong>2003</strong> ANNUAL REPORT51
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