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Notes to the Financial Statements (cont’d)
For the financial year ended 31 December 2011
37. Related party disclosures (cont’d)
(a) Related party transactions (cont’d)
(i) The sale of products to an associate was made according to the market prices and conditions offered to the major
customers of the Group. It is subject to the Group’s normal credit terms which range from cash payment to 90 days.
(ii) The purchase of products from subsidiaries was made according to the market prices. Amount due to and due by
subsidiaries on trade transaction are repayable on demand.
(iii) Interest income arose from the amounts due from subsidiaries and jointly controlled entity. Further details are
disclosed in Note 24 (b) and (c).
(iv) Advance to subsidiaries are subject to interest charged as disclosed in Note 24 (b).
Information regarding outstanding balances arising from related party transactions as at 31 December 2010 and 2011
are disclosed in Note 24 and Note 29.
(b) Compensation of key management personnel
The remuneration of directors and other members of key management during the year was as follows:
Group Company
2011 2010 2011 2010
RM’000 RM’000 RM’000 RM’000
Short term employee benefits 8,113 7,865 4,123 2,961
Post-employment benefits:
- Defined contribution plan 887 941 549 407
Included in the total compensation of key management personnel are:
Group Company
2011 2010 2011 2010
RM’000 RM’000 RM’000 RM’000
Directors’ remuneration (Note 4) 2,588 2,433 1,961 1,750
38. Financial risk management objectives and policies
The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments.
The key financial risks include interest rate risk, foreign currency risk, liquidity risk, credit risk, commodity price risk and market
price risk.
The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the
development of the Group’s business whilst managing its interest rate risk, foreign currency risk, liquidity risk, credit risk,
commodity price risk and market price risk. The policies for managing each of these risks are summarised below.
MALAYSIA SMELTING CORPORATION (43072-A) • ANNUAL REPORT 2011 151