2003 - KNM Steel Sdn Bhd

KNM GROUP BERHAD (521348-H)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2003EffectiveCountry of OwnershipName of Company Principal Activities Incorporation Interest2003 2002Subsidiary of KNM International Sdn. Bhd.KNM Overseas Investment holding Malaysia 100% –(China) Sdn. Bhd.Subsidiary of KNM Overseas (China) Sdn. Bhd.KNM Special Process Design, manufacture, assembly, China 100% –Equipmentcommissioning and maintenance(Changshu) Co. Ltd.* of process equipment, pressurevessels, heat exchanges, skidmounted assemblies, process pipesystems, storage tanks, specialisedstructural assemblies and moduleassemblies for the oil, gas andpetrochemical industries within theChina market* Audited by another firm of accountants.27. ACQUISITION OF SUBSIDIARIESOn 2 May 2003, the Company acquired KNM Process Systems Sdn Bhd. (refer to Note 23).The acquisition was accounted for using the acquisition method of accounting. For the eight (8) months ended31 December 2003, the subsidiaries contributed a net profit of RM4,955,000 to the consolidated net profit forthe year, as follows:Income statement:8 monthsended31December2003RM’000Revenue 64,626Operating costs (56,206)Profit before taxation 8,420Tax expense (3,465)Increase in the Group’s net profit at the end of financial year 4,955562003 ANNUAL REPORT