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Notes To The Financial Statements

VITROX CORPORATION BERHAD

[649966-K]

For The Financial Year Ended 31 December 2008

2.

SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.3 Financial Instruments (Cont’d)

Fair Values

The carrying amounts of financial assets and liabilities with short maturity periods are assumed to approximate their fair

values.

It is not practicable to estimate the fair values of contingent liabilities reliably due to the uncertainties of timing, cost and

eventual outcome.

2.4 Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if

any.

Property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives of the assets using

the following annual rates:-

Buildings

2%

Furniture, fittings and equipment

18% - 25%

Motor vehicles

25%

Renovation and electrical installation

25%

The residual value, useful life and depreciation method of an asset are reviewed at least at each balance sheet date and

any changes in expectations from previous estimates are accounted for prospectively as changes in accounting estimates.

2.5 Investment Property

An investment property, being a property held to earn rentals and/or for capital appreciation, is stated at fair value. Any

gain or loss arising from a change in the fair value of investment property is recognised in the income statement.

2.6 Research and Development Expenditure

Research expenditure is recognised in the income statement as an expense when incurred.

Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can demonstrate

the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete

and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources

to complete the development and the ability to measure reliably the expenditure during the development. Product

development expenditure which does not meet these criteria is expensed off when incurred.

Development expenditure, considered to have finite useful lives, is stated at cost less any impairment losses and is amortised

on a straight-line basis over the commercial lives of the underlying products over a period not exceeding five years. The

amortisation period and method are reviewed at least at each balance sheet date.