GLOBAL

5. SIGNIFICANT ACCOUNTING POLICIES (cont'd)(e)Deferred income taxesDeferred income tax is provided in full, using the liability method, on temporary differencesarising between the tax bases of assets and liabilities and their carrying amounts in the®nancial statements. Tax rates enacted or substantively enacted by the balance sheetdate are used to determine deferred income tax.Deferred tax assets are recognised to the extent that it is probable that future taxable pro®twill be available against which the temporary differences can be utilised.Deferred income tax is provided on undistributed pro®ts of overseas associated companiesexcept where the timing of the distribution of pro®ts can be controlled and it is probablethat the pro®ts in overseas associated companies will not be distributed in theforeseeable future.(f)Trade receivablesTrade receivables are carried at original invoice amount less speci®c provisions made fordebts considered to be doubtful. Bad debts are written off when identi®ed.(g)InventoriesInventories are stated at the lower of cost and net realisable value. Cost is primarilydetermined on a weighted average basis and includes all costs in bringing the inventoriesto their present location and condition. Net realisable value is the price at which inventoriescan be realised in the normal course of business after allowing for the costs of realisation.Provision is made where necessary for obsolete, slow-moving and defective inventories.(h)Associated companiesThe Group treats as associated companies those companies in which the Group has longtermequity interest of between 20 to 50 percent and over whose ®nancial and operatingpolicies it has signi®cant in¯uence but which it does not control.Associated companies are accounted for under the equity method whereby the Group'sshare of pro®ts less losses of associated companies is included in the consolidatedincome statement and the Group's share of net assets is included in the balance sheet.These amounts are taken from the audited accounts of the companies concerned madeup to the balance sheet date of the Company. Where the accounting policies of theassociated companies do not conform with those of the Group, adjustments are madewhere the amounts involved are considered material to the Group.Unrealised gains on transactions between the Group and its associated companies areeliminated to the extent of the Group's interest in the associated companies. Unrealisedlosses are also eliminated unless the cost cannot be recovered.(i)InvestmentsInvestments in subsidiaries are intended to be held for the long-term and are stated in the®nancial statements of the Company at cost less impairment losses. Pro®ts and losses ondisposal of investments are taken to the income statements.D-9