Annual Report (Complete) - MYCRON Steel Berhad
Annual Report (Complete) - MYCRON Steel Berhad
Annual Report (Complete) - MYCRON Steel Berhad
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Notes to the Financial Statements 30 June 2010<br />
(continued)<br />
15. ASSOCIATE (continued)<br />
The Group’s share of revenue, profit, assets (including goodwill) and liabilities of the associate are as follows:<br />
2010<br />
RM<br />
2009<br />
RM<br />
Revenue<br />
Loss after tax<br />
- 1,172,780<br />
(97,625) (121,500)<br />
Non-current assets<br />
Current assets<br />
Non-current liabilities<br />
Current liabilities<br />
Net assets<br />
17,270,591<br />
2,461,506<br />
(740,900)<br />
(1,948,087)<br />
17,043,110<br />
17,308,697<br />
2,530,610<br />
(672,868)<br />
(2,025,704)<br />
17,140,735<br />
The details of the associate, which is incorporated in Malaysia is as follows:<br />
Proportion of ownership interest<br />
Name<br />
Principal activities<br />
2010<br />
%<br />
2009<br />
%<br />
PMP Galvanizers Sdn Bhd* (“PMP”)<br />
Manufacturing and trading of galvanised<br />
metal<br />
20<br />
20<br />
* Shareholding held directly by the Company.<br />
In previous financial year, the Group has commenced legal action to recoup their cost of investment in PMP as a result of non<br />
compliance of certain conditions by the vendor pursuant to a shareholder’s agreement entered in 2005. During the financial<br />
year, the vendor has filed for a change in the jurisdiction for the case to be heard against the Group on the investment in PMP<br />
and the key assumption used in the value-in-use computation has changed since prior financial year as follows:<br />
(a)<br />
(b)<br />
The investment expected to be recovered in 7 years (2009: 5 years) from commencement of legal proceedings in view of<br />
legal action taken by vendor; and<br />
The industry discount rate of 10.97% (2009: 6.85%) per annum.<br />
The amount receivables representing the cost of investment in PMP is in accordance with the terms of the shareholders’<br />
agreement and it is supported by a legal opinion. The discount rate was derived based on weighted average cost of capital of<br />
companies in the cold rolled coil industry.<br />
As at 30 June 2010, the Group has recognised an impairment loss of RM3,940,993 (2009: RM3,955,000) in PMP as the recoverable<br />
amount of PMP was lower than its carrying amount.<br />
16. AVAILABLE-FOR-SALE FINANCIAL ASSETS<br />
Group/Company<br />
2010<br />
RM<br />
2009<br />
RM<br />
Equity securities:<br />
- Unquoted<br />
At 1 July<br />
Less: Impairment loss<br />
At 30 June<br />
934,528<br />
(616,926)<br />
317,602<br />
934,528<br />
-<br />
934,528<br />
The available-for-sale financial asset represents the Group’s investment in Maybach Logistics Sdn Bhd (“Maybach”), a company<br />
providing logistics services.<br />
During the financial year, the Group and Company have recognised an impairment loss of RM616,927 respectively on the<br />
investment, as the recoverable amount of the investment was lower than its carrying value. The recoverable amount of the<br />
investment was determined by adjusting the net assets of Maybach with, impairment loss on a trade receivable and an aircraft,<br />
and accruals for maintenance cost of an aircraft.<br />
pg 72 | Mycron <strong>Steel</strong> <strong>Berhad</strong>