Quality - UAC Berhad

Notes to The Financial StatementsFor The Financial Year Ended 31 December 20051 GENERAL INFORMATIONThe principal activities of the Company are the manufacture and distribution of fibre cement building products. Theprincipal activities of the subsidiary companies during the financial year are set out in Note 13 to the financial statements.The Company is a public limited company, incorporated and domiciled in Malaysia.The number of employees as at 31 December 2005 amounted to 642 (2004: 644) employees in the Group and 614(2004: 618) employees in the Company.2 BASIS OF PREPARATIONThe financial statements of the Group and the Company have been prepared under the historical cost conventionunless stated otherwise in the individual policy statements set out below.The financial statements comply with the provisions of the Companies Act, 1965 and the MASB approvedaccounting standards in Malaysia.The preparation of financial statements in conformity with the provisions of the Companies Act, 1965 and theMASB approved accounting standards in Malaysia requires the directors to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expenses during the reported year. Actualresults could differ from those estimates.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe following accounting policies have been used consistently in dealing with items which are considered materialin relation to the financial statements.aBasis of consolidationThe consolidated income statement and balance sheet include the financial statements of the Company and itssubsidiary companies made up to the end of the financial year. The results of the subsidiary companiesacquired or disposed during a financial year are included in the consolidated income statement from the date ofacquisition or up to the date of disposal.The excess of the purchase price over the fair value of the net assets of subsidiary companies at the date ofacquisition is included in the consolidated balance sheet as goodwill arising on consolidation. Goodwill isretained in the consolidated balance sheet at cost. At each balance sheet date, the Group assesses whether thereis any indication of impairment. If such indication exists, an analysis is performed to assess whether thecarrying amount of the asset is fully recoverable. A write down is made if the carrying amount exceeds therecoverable amount.Intragroup balances and intragroup transactions, and resulting unrealised profits are eliminated in full.Unrealised losses resulting from intragroup transactions are eliminated unless cost cannot be recovered.54 UAC BERHAD (5149-H) (Incorporated in Malaysia)