cont'd - KNM Steel Sdn Bhd

96KNM GROUP BERHAD I Annual Report 2012Notes to the Financial Statements (cont’d)25. Contingent liabilities - unsecured (Cont’d)On 13 March 2012, a foreign Tax Authorities has issued a preliminary tax notification amounting to RM7.8million(equivalent to EUR1.97 million) against a foreign subsidiary following a tax inspection on tax years from 2008to 2011. Subsequent to that notification, the subsidiary has provided the necessary documentation to the TaxAuthorities to support its position. Notwithstanding the information provided, on 22 April 2013, the subsidiaryhas received a tax assessment relating only to the tax year 2008 and on the same matter which the TaxAuthorities has challenged and reported in their preliminary notification. Although no assessments have beenraised in respect of the other tax years (2009 to 2011) inspected, the matters reported in the preliminary taxnotification should be considered as still open to assessments.Notwithstanding the above assessment, management of the Group, also with the support of the subsidiary’sindependent tax advisor, believes that the subsidiary has strong grounds to defend its tax position.26. CommitmentsGroup31.12.2012 31.12.2011 1.1.2011RM’000 RM’000 RM’000Capital commitments:Property, plant and equipmentContracted but not provided for in thefinancial statements 14,361 1,836 71,541Authorised but not contracted for 27,124 41,067 37,82541,485 42,903 109,366Jointly-controlled entities commitments:Capital commitments of the Group to thejointly-controlled entities 7,686 10,499 18,200InvestmentAuthorised but not contracted for 5,013 5,064 7,39927. Related partiesIdentity of related partiesFor the purposes of these financial statements, parties are considered to be related to the Group or the Companyif the Group or the Company has the ability, directly or indirectly, to control or jointly control the party or exercisesignificant influence over the party in making financial and operating decisions, or vice versa, or where theGroup or the Company and the party are subject to common control or common significant influence. Relatedparties may be individuals or other entities.Related parties also include key management personnel defined as those persons having authority andresponsibility for planning, directing and controlling the activities of the Group either directly or indirectly. Thekey management personnel include all the Directors of the Group, and certain members of senior managementof the Group.