Quality - UAC Berhad

Notes to The Financial StatementsFor The Financial Year Ended 31 December 20053 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)gForeign currenciesForeign currency transactions are recorded in Ringgit Malaysia at rates of exchange ruling at the date of thetransactions. Foreign currency monetary assets and liabilities are translated at exchange rates ruling at thebalance sheet date, unless hedged by forward contracts, in which case, the rates specified in such forwardcontracts are used. Exchange differences arising from the settlement of foreign currency transactions and fromthe translation of foreign currency monetary assets and liabilities are included in the income statement.The principal closing rates used in the translation of foreign currency amounts are as follows:2005 2004Foreign currency RM RM1 USD 3.8 3.81 SGD 2.3 2.31 CAD 3.3 3.11 GBP 6.7 7.4hRevenue recognitionRevenue for sales is recognised upon delivery of goods where risks and rewards are transferred to the buyers orperformance of services.Other revenue earned by the Group is recognised on the following bases:Interest incomeDividend income- as it accrues unless collectibility is in doubt- when the shareholder's right to receive payment is establishediTaxationTaxation in the income statement comprises current and deferred tax. Taxation is recognised in the incomestatement except to the extent that it relates to items recognised directly to equity, in which case the taxation isrecognised in equity. Current tax expense is the expected tax payable on the taxable income for the year, usingtax rates enacted or substantially enacted at the balance sheet date.Deferred tax is recognised in full, using the liability method, on temporary differences arising between the amountsattributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements.Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available againstwhich the deductible temporary differences or unused tax losses can be utilised.Tax rates enacted or substantively enacted by the balance sheet date are used to determine deferred tax.UAC BERHAD (5149-H) (Incorporated in Malaysia) 57