Financial Statements - Mewah Group

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MEWAH INTERNATIONAL INC. ANNUAL REPORT 2011 Notes to the Financial Statements For the financial year ended 31 December 2011 3. Critical accounting estimates, assumptions and judgements (continued) (d) Uncertain tax positions The Group is subject to income taxes in numerous jurisdictions. In determining the income tax liabilities, management is required to estimate the amount of capital allowances, incentives and the deductibility of certain expenses (“uncertain tax positions”) at each tax jurisdiction. Where the final outcome of these matters is different from the amounts that were initially recorded, such as due to changes in tax rules or revised interpretations of existing tax laws and precedent such differences will impact the income tax provisions in the corresponding periods. (e) Useful lives of plant and equipment The cost of plant and equipment are depreciated on a straight-line basis over their useful lives, which management estimates to be of 20 years. These estimates could change significantly as a result of technical innovations. If the actual useful lives of these plant and equipment differ by 5% from management estimates, the carrying amount of the plant and equipment will be increased by US$622,000 or decreased by US$562,000 and correspondingly to profit or loss. 4. Revenue Group 2011 2010 US$’000 US$’000 Sale of agricultural products including palm based edible oils and fats, and other consumer products 4,467,933 3,533,071 5. Cost of sales Group 2011 2010 US$’000 US$’000 Cost of inventories 4,212,598 3,280,599 Losses/(gains) from derivative financial instruments 31,139 (48,341) Labour costs and other overheads 38,577 34,563 4,282,314 3,266,821 76
Building Capabilities Notes to the Financial Statements For the financial year ended 31 December 2011 6. Other income Group 2011 2010 US$’000 US$’000 Interest income on bank deposits 795 314 Late interest charge on trade receivables 4,753 3,834 Rental income 325 349 Commission income 426 84 Other miscellaneous income 1,574 580 7,873 5,161 Other miscellaneous income comprises mainly sales of by-products and waste. 7. Other operating gains Group 2011 2010 US$’000 US$’000 Foreign exchange gains 35,212 6,208 Property, plant and equipment written off (260) (977) Loss on disposal of property, plant and equipment (367) (81) Impairment of goodwill (Note 21) (2,717) - 31,868 5,150 8. Finance costs Group 2011 2010 US$’000 US$’000 Interest expense: - Bank borrowings 12,815 9,673 - Finance lease 72 106 12,887 9,779 In 2011, borrowing costs of US$612,000 (2010: US$113,000) was capitalised in property, plant and equipment at a rate of 5.22% (2010: 4.67%) per annum. 77
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Financial Statements - Mewah Group

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