Month: September 2009

Sample Disclosure – Accounting Policy On Intangible Assets (9 September 2009)

Intangible Assets

Research and Development Expenditure

Research expenditure is recognised as an expense when it is incurred. Development expenditure is recognised as an expense except that expenditure incurred on development projects are capitalised as long-term assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure is capitalised if, and only if an entity can demonstrate all of the following:-

  1. its ability to measure reliably the expenditure attributable to the asset under development;
  2. the product or process is technically and commercially feasible;
  3. its future economic benefits are probable;
  4. its ability to use or sell the developed asset;
  5. the availability of adequate technical, financial and other resources to complete the asset under development; and
  6. its intention to complete the intangible asset and use or sell.

Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any. Development expenditure initially recognised as an expense is not recognised as assets in the subsequent period. The development expenditure is amortised on a straight-line method over a period of not exceeding 5 years when the products are ready for sale or use. In the event that the expected future economic benefits are no longer probable of being recovered, the development expenditure is written down to its recoverable amount.

Industrial Operating Right

Industrial operating right represent costs incurred by the Company to obtain the certifications for developed capabilities to design, construct and develop component for low-voltage switchboards to meet international standards. As such certificate obtained do not have any expiry date, the Company does not amortise costs incurred, instead impairment is tested annually or more frequently if events or changes in circumstances indicate that the industrial operating right might be impaired.

Sample Disclosure – Items Of Significant And Unusual Nature In Directors’ Report (9 September 2009)

ITEMS OF SIGNIFICANT AND UNUSUAL NATURE

In the opinion of the directors, the results of the operations of the Company for the financial year ended 30 June 2009 were substantially affected by the impairment loss on property, plant and equipment and prepaid land lease of RMXX,XXX,XXX and RMXX,XXX,XXX respectively. In addition, the financial results were also substantially affected by the inventories written down and the provision for employee termination benefits of RMXXX,XXX,XXX and RMXXX,XXX,XXX respectively. There were no items, transactions or events of material and unusual in nature noted in the interval between the end of the financial year and the date of this report that may affect further materially the results of the Company during the current financial year.

Sample Disclosure – Accounting Policy On Contingent Liabilities And Contingent Assets (8 September 2009)

Contingent liabilities and contingent assets     

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent liability but discloses its existence in the financial statements.

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.

In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured initially at their fair value at the acquisition date, irrespective of the extent of any minority interest.

Sample Disclosure – Employees’ Share Option Scheme In Directors’ Report (2 September 2009)

EMPLOYEES’ SHARE OPTION SCHEME

No options were granted to any person to take up unissued shares of the Company during the financial year apart from the issue of options pursuant to the ESOS. The ESOS which became effective on 1 January 1999 is made available to eligible employees of the Group. At an Extraordinary General Meeting held on 31 January 2002, the shareholders of the Company approved the proposed amendments to the Bye-Laws of its existing ESOS. The ESOS have since expired on 1 January 2009 and the options granted under the ESOS have lapsed.

The information with respect to the number of option granted to employees and Directors of the Company under the ESOS during the financial year are as follows:

[——————Option Of RM1.00 each———————]
 

Exercise price

Balance as at

    

Balance as at

Date of offer

RM/Share

1 January 2008

(Lapsed)

(Exercised)

31 December 2008

10 January 1999

                       2.30

1,600,000

-100,000

-1,500,000

–

The Companies Commission of Malaysia had granted an exemption to the Company from having to disclose the name of the eligible employees who have been granted with options during the last financial year and the number of options granted to them in accordance with Section 169 (11)(a) of the Companies Act, 1965 except for eligible employees who have been granted with options to purchase 100,000 and more ordinary shares in last financial year. This information has been separately lodged to the Companies Commission of Malaysia.

Sample Disclosure – Issue Of Shares In Directors’ Report (2 September 2009)

ISSUE OF SHARES AND DEBENTURES

During the financial year, the issued and fully paid-up share capital of the Company was increased from RM10,000,000 to RM11,500,000 by way of issuance of 1,500,000 new ordinary shares of RM1.00 each by virtue of the exercise of the ESOS. The newly issued shares rank pari passu in all respects with the then existing shares of the Company.

There were no issues of debentures during the financial year.

Sample Disclosure – Different Financial Year End Of Subsidiary In Directors’ Report (1 September 2009)

SUBSIDIARY WITH DIFFERENT FINANCIAL YEAR END

The statutory financial year end of XYZ Subsidiary Trading Ltd., an indirect subsidiary of the Company, does not coincide with the financial year of the Group. However, the Company has consolidated the financial position and results of XYZ Subsidiary Trading Ltd. based on the audited financial statements made up to the financial year of the Group in accordance with the requirements of FRS 127. The Company was granted approval from the Companies Commission of Malaysia pursuant to Section 168(3) of the Companies Act, 1965 for this subsidiary company to continue to adopt the financial year end that does not coincide with the financial year end of the Group.