Laporan Tahunan Annual Report

Transcription

2010
Laporan Tahunan
Annual Report
Tables Of Contents
Corporate Information................................................................ 2
Corporate Structure................................................................... 3
Location Map ............................................................................ 4
Directors’ Profile . ...................................................................... 5
Financial Highlights ................................................................... 7
President’s Statement ............................................................... 8
Statement On Corporate Governance .................................... 10
Additional Compliance Information ......................................... 16
Audit Committee Report ......................................................... 18
Statement On Internal Control ................................................ 21
Corporate Social Responsibility .............................................. 22
Financial Statements . ............................................................. 23
Analysis Of Ordinary Shareholdings . ...................................... 92
List Of Properties .................................................................... 95
Notice Of Annual General Meeting . ........................................ 97
Form Of Proxy
Incorprated In Malaysia
Corporate Information
BOARD OF DIRECTORS
Dato’ Chen Siak Chan
Executive Director
Jeneral (B) Dato’ Sri Abdullah bin Ahmad
@ Dollah bin Amad
Independent Non-Executive Director
Dato’ Sri Khalid bin Mohamad Jiwa
Executive Director
Mohd Kamarudin bin Haron
Dato’ Mohamed Suhaimi bin Sulaiman
Mohd Sharif bin Hj Yusof
AUDIT COMMITTEE
INVESTOR RELATIONS
Dato’ Mohamed Suhaimi bin Sulaiman (Chairman)
Jeneral (B) Dato’ Sri Abdullah bin Ahmad @ Dollah bin Amad
18th Floor, Menara Atlan
161-B, Jalan Ampang
50450 Kuala Lumpur, Malaysia
Tel No : 603-21792000
Fax No: 603-21792390
E-mail : dmss@dfzcapital.com.my
REMUNERATION COMMITTEE
Jeneral (B) Dato’ Sri Abdullah bin Ahmad @ Dollah bin
Amad
NOMINATION COMMITTEE
Jeneral (B) Dato’ Sri Abdullah bin Ahmad @ Dollah bin
Amad (Chairman)
COMPANY SECRETARY
Thum Sook Fun (MAICSA 7025619)
REGISTERED OFFICE
A nnual R epo r t 2 01 0
Wisma Atlan, 8 Persiaran Kampung Jawa
11900 Bayan Lepas, Penang
Tel No : 604-641 3200
Fax No: 604-642 3200
Web : http://www.dfzcapital.com.my
SHARE REGISTRAR
Symphony Share Registrars Sdn Bhd (378993-D)
Level 6, Symphony House
Block D13, Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya, Selangor
Tel No : 603-78418000
Fax No: 603-78418008
AUDITORS
Ernst & Young
Chartered Accountants
22nd Floor, MWE Plaza
No. 8, Lebuh Farquhar
10200 Penang
PRINCIPAL BANKERS
Affin Bank Berhad
Alliance Bank Malaysia Berhad
Malayan Banking Berhad
MIDF Amanah Investment Bank Berhad
Public Bank Berhad
STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia Securities Berhad
Stock Name : DFZ
Stock Code : 5177
Stock Sector : Trading/Services
Date of Listing: 10 October 1991
Corporate Structure
as at 30 June 2010
100%
Orchard Boulevard Sdn Bhd
100%
DFZ Trading Sdn Bhd
100%
Kelana Megah Sdn Bhd
100%
Cergasjaya Sdn Bhd
100%
Cergasjaya Properties Sdn Bhd
100%
Melaka Duty Free Sdn Bhd
100%
Black Forest Golf And Country Club
Sdn Bhd
100%
DFZ Duty Free Supplies Sdn Bhd
100%
Gold Vale Development Sdn Bhd
100%
Jasa Duty Free Sdn Bhd
100%
Wealthouse Sdn Bhd
100%
DFZ (M) Sdn Bhd
100%
Zon Emporium Sdn Bhd
100%
Jelita Duty Free Supplies Sdn Bhd
100%
First Influx Sdn Bhd
100%
DFZ Duty Free (Langkawi) Sdn Bhd
100%
Media Zone Sdn Bhd
100%
DFZ Tour & Travel Sdn Bhd
100%
100%
Selasih Ekslusif Sdn Bhd
100%
Winner Prompt Sdn Bhd
100%
Emas Kerajang Sdn Bhd
100%
100%
Fleet Car Hire & Tours Sdn Bhd
DFZ Emporium Sdn Bhd
Front Top (M) Sdn Bhd
100%
Seruntun Maju Sdn Bhd
100%
Binamold Sdn Bhd
100%
Tenggara Senandung Sdn Bhd
100%
DFZ Asia Sdn Bhd
99%
1%
100%
PT DFZ Indon
Location Map
PENGKALAN HULU
Annual Rep o rt 20 10
International Ferry Terminal
Directors’ Profile
DATO’ CHEN SIAK CHAN
Executive Director
DATO’ CHEN SIAK CHAN, a Malaysian, age 54 was appointed to the Board of DFZ on 27 June 2008. He is a member
of the Remuneration Committee of DFZ.
He graduated with a Bachelor of Business Administration (Honours) from Wilfrid Laurier University, Canada.
He began his career with a multi-national company and brings with him more than 25 years of experience in senior
management roles as well as investment experience especially in the high-technology industry. He has also served on
the Boards of the Malaysian subsidiaries of Sunningdale-Tech Group, a Singapore Main Board listed company.
Currently, Dato’ Chen sits on the Board of several private limited companies, incorporated in Singapore.
He does not hold directorship in any other public companies.
He does not have any family relationship with any director and/or major shareholder of the Company. He does not have
any conflict of interests with the Company.
DATO’ SRI KHALID BIN MOHAMAD JIWA
Executive Director
DATO’ SRI KHALID BIN MOHAMAD JIWA, a Malaysian, age 51 was appointed to the Board of DFZ on 9 October
2002.
Dato’ Sri Khalid currently sits on the Boards of Pasdec Holdings Berhad and United Industries Holdings Sdn Bhd. He
is also the Group Executive Chairman of K-Corporation Sdn Bhd and its group of companies dealing with construction,
property management, cosmetic products, specialised trading, IT & media services and agriculture activities. Previously
Dato’ Sri Khalid was on the Boards of Naluri Corporation Berhad, Atlan Holdings Bhd and Asian Composite Manufacturing
Sdn Bhd.
Dato’ Sri Khalid is a business graduate and had previously worked in the financial sector after completing his studies
in 1981. He left the bank to start his own business with the vast experience and knowledge in financial business. He is
the Chairman and Founder of Yayasan Nurjiwa which is actively involved in charity activities and social services.
DATO’ MOHAMED SUHAIMI BIN SULAIMAN
DATO’ MOHAMED SUHAIMI BIN SULAIMAN, a Malaysian, age 50 was appointed to the Board of DFZ on 23 April
2004. He is the Chairman of the Audit and Remuneration Committees and a member of the Nomination Committee
of DFZ.
He graduated with a Bachelor of Business Administration (Finance) from the Central State University, Edmond,
Oklahoma. Between 1991 and 2001, he was with Bank Bumiputra Malaysia Berhad (now known as CIMB Bank Berhad)
as a credit analyst.
Dato’ Suhaimi was an Executive Director of Konsortium Jaringan Selangor since 1998.
Directors’ Profile (Cont’d)
MOHD KAMARUDIN BIN HARON
MOHD KAMARUDIN BIN HARON, a Malaysian, age 57 was appointed to the Board of DFZ on 2 February 2005. He is
a member of the Nomination Committee of DFZ.
After finishing his S.E./MCE Form 5 education from English College J.B., he attended various management programmes
and courses ranging from 3 months to a year with the Malaysian Institute of Management. He has over 30 years
experience in the construction and property development industry. He currently has investments as well as directorships
in several private limited companies.
Mohd Kamarudin also sits on the Board of Merge Housing Bhd as an Independent Non-Executive Chairman, a company
listed on Bursa Malaysia Securities Berhad.
JENERAL (B) DATO’ SRI ABDULLAH BIN AHMAD @ DOLLAH BIN AMAD
JENERAL (B) DATO’ SRI ABDULLAH BIN AHMAD @ DOLLAH BIN AMAD, a Malaysian, age 62 was appointed to the
Board of DFZ on 27 June 2008. He is the Chairman of the Nomination Committee, a member of the Audit Committee
as well as the Remuneration Committee of DFZ.
He graduated from the Royal Air Force Staff College in Bracknell, United Kingdom in 1982 and later pursued his
tertiary education at the University of Lancaster, United Kingdom in 1986 where he graduated with a Masters degree in
International Relations and Strategic Studies. He joined the Royal Malaysian Air Force (“RMAF”) in 1968 as a cadet officer
and had served the RMAF for 36 years before retiring as the Chief of RMAF in 2004 with his last rank as General.
Jeneral (B) Dato’ Sri Abdullah does not hold directorship in any other public companies.
MOHD SHARIF BIN HJ YUSOF
MOHD SHARIF BIN HJ YUSOF, a Malaysian, age 71 was appointed to the Board of DFZ on 27 June 2008. He is a
member of the Audit Committee of DFZ.
He is a Fellow Member of the Institute of Chartered Accountants, England and Wales, an Associate Member of the
Malaysian Institute of Accountants and a Member of the Malaysian Institute of Certified Public Accountants. He has
had more than 20 years experience in government and financial sectors, serving the Selangor State Government,
Bumiputra Merchant Bankers Berhad and British American Life & General Insurance Co Bhd (now known as Manulife
Insurance (Malaysia) Berhad) where he held the position of Senior Vice President, Finance/Company Secretary at the
time he retired.
A nnual Rep or t 2 0 1 0
Mohd Sharif currently sits on the boards of APM Automative Holdings Berhad, Ireka Corporation Berhad, Axis Reit
Managers Berhad and Atlan Holdings Bhd.
Financial Highlights
Financial Year/Period
Ended
(12-Months) (12-Months) (14-Months) (12-Months) (12-Months)
31-Dec
31-Dec
28-Feb Annualised
28-Feb
FY2006
FY2007
FP2009
FP2009
FY2010
Revenue (RM’000)
Profit Before Taxation (RM’000)
Profit After Taxation (RM’000)
Paid-up Capital (RM’000)
Total Equity (RM’000)
Net Assets Per Share (RM)
Earnings Per Share (sen)
Dividend Per Share (sen)
275,930
18,338
13,035
113,200
108,976
0.96
6.2
8.0
304,972
27,025
18,566
149,895
116,351
0.78
8.7
8.0
552,920
52,069
37,671
161,199
135,044
0.84
17.8
12.0
473,931
44,631
32,289
161,199
135,044
0.84
17.8
–
526,941
59,341
50,516
210,164
150,179
0.71
24.0
17.0
REVENUE GROWTH
PROFITABILITY TREND
Profit Before Taxation (RM’000)
Revenue (RM’000)
600,000
50,000
400,000
300,000
52,069
526,941
473,931
500,000
44,631
40,000
275,930
304,972
20,000
100,000
10,000
FY 2006
27,025
30,000
200,000
0
59,341
60,000
552,920
FY 2007
FP 2009 Annualised FY2010
FP2009
SHAREHOLDERS’ RETURN
0
18,338
FY 2006
FY 2007
FP2009
DIVIDEND PERFORMANCE
Dividend Per Share (sen)
Earnings Per Share (sen)
24.0
25
20
17.0
20
17.8
17.8
15
12.0
15
10
10
6.2
8.0
FY 2006
FY 2007
5
5
0
8.0
8.7
FY 2006
FY 2007
FP2009
0
FP 2009
FY2010
President’s Statement
On behalf of the Board of Directors, I am pleased to write as your President and present
to you the Annual Report and Audited Financial Statements of DFZ Capital Berhad (“DFZ”)
for the financial year ended 28 February 2010.
FINANCIAL HIGHLIGHTS
The financial year ended 28 February 2010, despite the challenging first half of 2009 with the global economic recession
and the A(H1N1) flu pandemic, sees DFZ Group securing another commendable performance with revenue and pretax profit of RM526.94 million and RM59.34 million respectively. Comparing with the annualised revenue of RM552.92
million and pre-tax profit of RM52.07 million for the 14-month financial period ended 28 February 2009, the Group has
recorded an increase in revenue of RM53.01 million or 11.19% and pre-tax profit of RM14.71 million or 32.96%.
DFZ continues to unlock the synergy from the acquisition of Emas Kerajang Sdn Bhd (“Emas Kerajang”). During the
financial year ended 28 February 2010, DFZ Group added two new companies into its stable, namely Seruntun Maju
Sdn Bhd (“Seruntun Maju”), a duty-free retailer operating a duty-free complex at the Malaysia-Thai border area of
Pengkalan Hulu, Grik, Perak and First Influx Sdn Bhd (“First Influx”), a licensed distributor and wholesaler of duty free
merchandise.
BUSINESS DEVELOPMENT
The Group continues its expansion plan during the financial year.
On 18 March 2009, the Group opened an outlet, Zon Emporium at Low Cost Carrier Terminal, KL International Airport
and on 25 April 2009, at Skypark, Subang Airport.
On 5 August 2009, DFZ acquired the entire issued and paid-up share capital of Seruntun Maju for a cash consideration
of RM13.0 million. Seruntun Maju owns and operates a duty free complex at Pengkalan Hulu, Grik, Perak, another road
gateway of Malaysia-Thai border. With the acquisition of Seruntun Maju Sdn Bhd, DFZ now has presence in all the four
Malaysia-Thai border gateways, hence strengthening its market position in the border-town duty-free business.
On 15 October 2009 DFZ acquired the entire issued and paid-up share capital of First Influx for a total cash consideration
of RM1.7 million. First Influx’s principal activity is that of a licensed distributor and wholesaler of duty free merchandise,
which augurs well with the core business of the Group.
A nnual Rep o r t 20 1 0
The ZON Johor Bahru continues to be the happening place in Johor Bahru with its mix of themed restaurants,
entertainment hall and outlets, café and pubs, enhanced water features and contemporary decor. However, DFZ’s
hospitality segment faces certain challenges in the current economic environment nevertheless it will be resilient with
the financial strength of DFZ Group.
In order to streamline the business at the ZON Johor Bahru, DFZ acquired the entire equity interest in Tenggara Senandung
Sdn Bhd (“TSSB”) from Atlan Holdings Bhd (“Atlan”) for a cash consideration of RM22.0 million. This acquisition was
completed on 7 April 2010. TSSB is principally engaged in the business of operating ferry terminal and car parks and
trading of high speed diesel at the Zon Johor Bahru and operating car parks at Bukit Kayu Hitam Duty Free Zone. The
acquisition of TSSB will enable DFZ to complement and enhance its existing operations at the Zon Johor Bahru and
Bukit Kayu Hitam Duty Free Zone.
On 16 October 2009, DFZ acquired the entire equity interest in Binamold Sdn Bhd (“BMSB”) from Atlan for a cash
consideration of RM2.8 million and assumed the inter-company debt due and owing by BMSB to Atlan amounting to
RM5.2 million. BMSB owns the land and building leased to DFZ as principal place of operations with warehouse and
the acquisition allows DFZ to own its office and warehouse.
President’s Statement (Cond’t)
On 7 April 2010, Orchard Boulevard Sdn Bhd (“OBSB”), a wholly owned subsidiary disposed of OBSB’s entire equity
interest in Radiant Ranch Sdn Bhd (“RRSB”) to Atlan for a cash consideration of RM14.9 million and the assumption
by Atlan of inter-company debt due and owing by RRSB to DFZ and/or its related company(ies) amounting to RM12.1
million. RRSB owns a piece a vacant land for development in Batu Ferringhi, Penang which is adjacent to the property
development project undertaken by a wholly-owned subsidiary of Atlan. The disposal represents the rationalisation of
property development business of Atlan Group while allowing DFZ to realise its investment.
On 28 June 2010, the Board of Directors received notification from Atlan that Atlan had on even date entered into a
conditional sale and purchase agreement with Esmart Holdings Limited (“Esmart”), a public limited company listed
on the Catalist Board of Singapore Exchange Securities Trading Limited (“SGX-ST”) for the proposed acquisition by
Esmart of 156,861,702 ordinary shares in DFZ or 74.71% equity interest owned by Atlan. The consideration is RM470.6
million or RM3.00 per DFZ share and will be satisfied by the issuance of 12,702,123,773 new ordinary shares in Esmart
at the issue price of SGD0.015765 per Esmart Share and 1,270,212,377 free warrants on the basis of one free warrant
for every 10 Esmart Shares. The proposal will result in a reverse take-over of Esmart by Atlan and as such the ultimate
majority shareholder of DFZ will remain as Atlan after the proposal.
Atlan expects the proposed reverse take-over of Esmart to increase the international profile and stature of the Atlan
Group. Atlan and DFZ, via Esmart, would then be better placed to tap into a range of alternative funding options
leveraging on the regional capital markets and international banking community for funding future growth.
OUTLOOK
DFZ will continue to intensify its marketing efforts, enhance its service quality, extend its product offerings and explore
new opportunity in duty-free retailing. I believe there are still areas for us to capitalise our strength in the duty-free
market at the Malaysia-Thai border and we will strive for it. I am confident that our hospitality segment will improve
with the recovery of the economy.
SHARE BUY-BACK AND DISTRIBUTION OF TREASURY SHARES
In the financial year under review, DFZ purchased 3,417,400 ordinary shares for a total consideration (transaction cost
included) of RM12,159,956. In addition, DFZ distributed 3,232,167 treasury shares as share dividends to shareholders
on the basis of 1 treasury share for every 100 existing ordinary shares. As at 28 February 2010, a total of 199,033
shares were held as treasury shares.
ACKNOWLEDGEMENT
The Government and the regulatory authorities have provided us with excellent and progressive macro-economic
management, of which I am indebted to. I believe that our business environment will continue to remain conducive. The
relentless focus of the Government under the leadership of our beloved Prime Minister, Yang Amat Berhormat Dato’
Sri Mohd Najib bin Tun Haji Abdul Razak, to make the Tenth Malaysia Plan with the New Economic Model a success,
will lead the nation to greater heights, thus presenting more opportunities for us in our growing market.
I would like to thank all our shareholders, bankers, suppliers and business partners for their continued support. I also
wish to express my gratitude for the contribution and commitment of our employees.
On my part, I remain your humble and obedient servant and pledge to continue my commitment and diligence to the
Group.
Yours sincerely,
Chen Siak Chan
President
15 July 2010
Statement On Corporate Governance
The Board of Directors of DFZ Capital Berhad (“the Board”) is pleased to report to the shareholders on the manner the
Group has applied the principles and the extent of compliance with the best practices of corporate governance as set
out in the Malaysian Code on Corporate Governance (“Code”) together with the provisions contained in the Listing
Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).
The Board is committed to ensuring that good corporate governance is practised throughout the Group as a fundamental
element and basis of discharging its responsibilities to protect shareholders’ value and enhance financial performance
of the Group both in the immediate future as well as in the long term.
BOARD OF DIRECTORS
The Board of the Company comprises members with a wide range of experience which brings independent judgements
to establish and execute issues of strategy, performance, resources and standards of conduct.
The Board recognises its ultimate responsibility and accountability for the Group’s operations and retains full and
effective control of the Group. The Board assumes responsibilities for determining the Company’s overall strategic
direction, as well as development and control of the Group. It has further adopted the pertinent responsibilities as listed
in the Code to facilitate the discharge of the Board’s stewardship function.
Key matters, such as approvals of annual and interim financial results, acquisitions and disposals, as well as material
agreements, major capital expenditures, budgets, long term plans and succession planning are reserved for the
Board.
BOARD COMPOSITION AND BALANCE
The Board currently has six (6) members, with four (4) Independent Non-Executive Directors and two (2) Executive
Directors. The Company complies with Bursa Securities Listing Requirements for Independent Non-Executive Directors
to make up at least one-third (1/3) of the Board membership, as well as the requirement for a Director who is a member
of the Malaysian Institute of Accountants to sit on the Audit Committee.
The composition of the Board is fairly balanced and complements itself in providing industry-specific knowledge,
technical knowledge and commercial experience. Together, the Board members bring a wide range of business and
financial experience relevant to ensure the Group continues to be competitive in the duty free, trading and service
industries.
A brief profile of the Directors is presented in the preceding pages of this Report.
There is a clear division of responsibilities between the Executive Directors and the Non-Executive Directors to ensure
that there is a balance of power and authority.
The presence of Independent Non-Executive Directors fulfills a pivotal role in corporate governance accountability
and they are fully independent of management and free from any relationship which could interfere with their unbiased
and independent judgment.
10
Balance is further ensured by way of active and unrestricted participation of Independent Non-Executive Directors in
the deliberation and decision of the Board. All Directors have full access to background information pertaining to all
matters placed before them for decision and are entitled to call for full disclosure by the management. This is to ensure
that matters moved for decision by the Board can be discussed and examined in a balanced manner that take into
account the long term interests, not only of the shareholders, but also of the employees, suppliers, customers and the
communities with which the Group conducts businesses with.
Statement On Corporate Governance (Cont’d)
BOARD MEETINGS
The Board targets to have at least four (4) regular scheduled meetings annually, with additional meetings convened
as and when necessary.
Five (5) Board meetings were held during the financial year ended 28 February 2010. The attendance records of the
Directors are as follows:
Director
Attendance
Dato’ Chen Siak Chan 4/5
3/5
5/5
5/5
4/5
Mohd Sharif bin Hj Yusof SUPPLY OF INFORMATION
5/5
All directors are provided with quarterly reports on major operational, financial and corporate issues prior to the Board
Meetings. Agenda and papers on specific subjects are sent to members of the Board in advance to ensure that there
is sufficient time to enable the directors to obtain further explanations where necessary and to facilitate informed
decision-making process.
All members of the Board, whether as a full Board or in their individual capacity, have access to all information within
the Group and direct access to the advice and services of the Company Secretary to assist them in furtherance of
their duties. Where necessary, the Board may engage independent professional advisors, at the Group’s expense, on
specialised issues to enable them to discharge their duties proficiently.
APPOINTMENT AND RE-ELECTION OF DIRECTORS
The Articles of Association of the Company provide that one-third (1/3) of the directors are subject to retirement by
rotation at each annual general meeting (“AGM”) and that all directors shall retire once in every three (3) years. The
Articles also provide that a director appointed during the year by the Board in the course of the year shall hold office
only until the next AGM, and shall be eligible for re-election.
Directors over seventy (70) years of age are subject to re-appointment annually in accordance with Section 129 (6) of
the Companies Act 1965.
DIRECTORS’ TRAINING
The directors are mindful that they should receive appropriate continuous training to further enhance their skills and
knowledge. Accordingly, the Company organises trainings at least once every two (2) years for the Board to ensure
they are kept up to-date on relevant developments.
Some of the seminars and briefings attended by the directors during the financial year to broaden their perspectives and
to keep abreast with the changes on the guidelines issued by the relevant authorities as well as the latest developments
in the market place were as follows:
•
•
Main Market Listing Requirements of Bursa Malaysia Securities Berhad
The Challenges of Implementation of FRS 139 Forum
11
BOARD COMMITTEES
The Board has appointed Board committees, which operate within clearly defined terms of reference. Standing
committees of the Board include the Audit Committee, Nomination Committee and Remuneration Committee.
(a)
Audit Committee
The Audit Committee’s role and functions are set out on pages 18 to 20 of this Report. (b)
Nomination Committee
The Nomination Committee, consisting exclusively Independent Non-Executive Directors, is given the responsibility
of proposing new nominees for the Board including the Board’s committees and assessing the performance of
each individual director and overall effectiveness of the Board on an ongoing basis.
The Nomination Committee currently comprises the following:
•
•
•
The Committee met on 17 June 2010 to review the re-election/re-appointment of the retiring directors as well as
the annual appraisal on the Company’s directors pursuant to the Code.
The appointment of new directors is the responsibility of the full Board after considering the recommendation of
the Nomination Committee.
In making its recommendation, the Committee takes into consideration the required mix of skills and experience
and other qualities, including core competencies which Directors of the Company should bring to the Board.
(c)
Remuneration Committee
The Remuneration Committee, consisting a majority of Independent Non-Executive Directors, is given the
responsibility of recommending to the Board the framework and quantum values for the Executive Directors’
remuneration and the remuneration package for each Executive Director.
The Remuneration Committee currently comprises the following:
•
•
•
12
Jeneral (B) Dato’ Sri Abdullah bin Ahmad @ Dollah bin Amad (Chairman)
The Committee met once during the financial year ended 28 February 2010 to deliberate on the remuneration of
the Executive Directors.
DIRECTORS’ REMUNERATION
The Board endeavours to ensure that the level of remuneration offered to directors is sufficient to attract and retain
people needed to run the Group successfully. In the case of Executive Directors, the component parts of remuneration
are structured to link rewards to corporate and individual performance. In the case of Non-Executive Directors, the
level of remuneration reflects the experience and level of responsibilities undertaken by the particular Non-Executive
Director concerned.
The policy of the Executive Directors’ Remuneration will be in line with the Group’s overall practice on pay and benefits.
Non-Executive Directors’ and the Independent Non-Executives’ remuneration will be a matter to be decided by the
Board as a whole with the Director concerned abstaining from deliberation and voting on decisions in respect of his
individual remuneration. The Company will reimburse reasonable expenses incurred by Non-Executive Directors in
the course of their duties as Directors.
A summary of the remuneration of directors for the financial year ended 28 February 2010 is as follows:
1. Aggregate remuneration of directors categorised into appropriate components:
Salaries & Other
Emoluments
RM’000
Executive Directors
Non-Executive Directors
2,647 –
Below RM50,000
RM50,001 – RM100,000
RM100,001 – RM150,000
RM300,001 – RM350,000
RM400,001 – RM450,000
Total
RM’000
–
252
2.
Number of directors whose remuneration fall into the following bands:
Executive Directors
Allowances
and Fees
RM’000
–
–
–
1
1
2,647
252
Non-Executive
Directors
2
1
1
–
–
ACCOUNTABILITY AND AUDIT
Financial Reporting
In presenting the announcements of annual financial statements and quarterly financial results to shareholders, investors
and regulatory authorities, the Board of Directors aim to present a balanced and understandable assessment of the
Group’s position and prospects. The Audit Committee assists the Board in scrutinising information for disclosure to
ensure accuracy and adequacy.
The Statement by Directors pursuant to Section 169 of the Companies Act 1965 is set out on page 28 of this
Report.
13
Statement of Directors’ Responsibilities in respect of the Audited Financial Statements
The Board is required by the Companies Act 1965 to prepare financial statements which give a true and fair view of
the state of affairs of the Group and the Company at the end of each financial year and of their results and cash flows
for the financial year.
In exercising the functions of the Board, the directors have considered the following in preparing the financial
statements:
i)
ii)
iii)
Appropriate accounting policies have been consistently applied by the Company;
Reasonable and prudent judgments and estimates have been made; and
All applicable approved accounting standards in Malaysia have been followed.
The Board is responsible for ensuring that the Company keeps proper accounting records, which disclose with
reasonable accuracy the financial position of the Company and to enable them to ensure that the financial statements
comply with the Companies Act 1965.
The Board has overall responsibilities for taking such steps that are reasonably available to them to safeguard the
assets of the Company and to prevent and detect fraud and other irregularities, if any.
Internal Control
The Board recognises their responsibilities for the maintenance of a system of internal controls and reviewing its
effectiveness. As with any such system, controls can only provide reasonable but not absolute assurance against
material misstatement or loss.
The Group’s Audit and Risk Assessment division regularly reports to the Audit Committee on the adequacy and integrity
of the system of internal control.
Relationship with the External Auditors
The Board has always maintained a professional and transparent relationship with the External Auditors in seeking
their professional advice through the Audit Committee. The Audit Committee also met with the External Auditors twice
during the financial year ended 2010 without the present of management and Executive Directors in compliance with
the best practice of the Code.
The role of the Audit Committee in relation to the External Auditors is described on pages 18 to 20 of this Report.
Statement on Internal Control
The Statement on Internal Control provides an overview of the Internal Control within the Group and is set out on page
21 of this Report.
14
RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS
Dialogue between the Company and Investors
The Company acknowledges the importance of transparency and accountability to its shareholders and as such
maintains a constructive communication policy with its shareholders and investors through timely dissemination of
information to ascertain that they are well informed of any major developments of the Group.
In addition to the Company’s compliances with the continuing disclosure and announcement obligations contained in
the Listing Requirements of Bursa Securities, shareholders and investors are kept informed of the Group’s progress
through the provision of Annual Report, quarterly financial results, announcements to Bursa Securities and in the
circulars to shareholders.
The Group has also established a website www.dfzcapital.com.my from which shareholders can access information
on the operations and activities of the Group.
Annual and Extraordinary General Meeting
The Board holds the view that the AGM serves as the primary means of communicating with its shareholders. At each
AGM, the Board presents the progress and performance of the Group’s businesses as contained in the Annual Report
and encourages shareholders to participate in the questions and answers session. The members of the Board and
Board Committees are available to respond to the shareholders’ questions during the meeting.
Extraordinary general meetings (“EGM”) are held as and when shareholders’ approvals are required on specific matters.
Each item of special business included in the notice of the AGM and each item of the EGM are accompanied by an
explanatory statement to facilitate full understanding and evaluation of issue involved.
15
Additional Compliance Information
1.
UTILISATION OF PROCEEDS
During the financial year ended 28 February 2010, the Company did not raise any funds through any corporate
proposal/shareholders’ mandate under Section 132D of the Companies Act 1965.
2.
SHARE BUY-BACKS
During the financial year, the Company bought 3,417,400 shares from the open market as follows:
< Purchase price per share (RM) >
Period No. of Purchased
Shares
Highest
Lowest
Average
March 2009
2,315,200
1,101,200
May 2009
Total
Consideration
*(RM)
3.38
3.30
3.35
7,793,485
4.00
3.88
3.94
4,362,488
October 2009
1,000
4.09
3.90
3.93
Total
3,417,400
3,983
12,159,956
* transaction costs included
16
All the shares purchased by the Company were retained as treasury shares. During the financial year under
review, total treasury shares of 3,232,167 were distributed as share dividends. Save for the above, there were no
treasury shares resold or cancelled during the financial year. As at 28 February 2010, a total of 199,033 shares
were held as treasury shares.
3.
OPTIONS OR CONVERTIBLE SECURITIES
During the financial year, the Company increased its ordinary shares capital by the creation of the followings:(a)
Conversion of 8,010,415 Irredeemable Convertible Preference Shares Series A 2005/2010 (“ICPS-A”) to
727,835 ordinary shares by way of tendering equivalent par value of the ICPS-A to satisfy the conversion
price of RM1.10 per new ordinary shares.
(b)
Conversion of 20,000 Irredeemable Convertible Preference Shares Series B1 2004/2009 (“ICPS-B1”) to
20,000 ordinary shares; and 36,435,303 Irredeemable Convertible Preference Shares Series B2 2004/2009
(“ICPS-B2”) to 36,435,303 ordinary shares and 11,781,267 Irredeemable Convertible Preference Shares
Series C 2004/2009 (“ICPS-C”) to 11,781,267 ordinary shares by way of tendering (1) unit ICPS-B1 and
ICPS-B2 and ICPS-C respectively for conversion into (1) new ordinary share of which RM0.10 is paid up. The
remaining RM0.90 was paid up from the share premium reserve of the Company to satisfy the conversion
price of RM1.00 per ordinary share.
4.
DEPOSITORY RECEIPT PROGRAMME
The Company did not sponsor any depository receipt programme during the financial year.
5.
SANCTIONS AND/OR PENALTIES
There were no sanctions or penalties imposed on the Company and its subsidiaries, Directors or management
by the relevant regulatory bodies during the financial year.
6.
NON-AUDIT FEES
Non-audit fees were paid to the external auditors by the Company and Group for the financial year ended 28
February 2010 amounted to RM4,995 and RM111,447 respectively.
Additional Compliance Information (Cont’d)
7.
VARIATION IN RESULTS
There is no material variance between the audited results and unaudited results previously announced.
8.
PROFIT GUARANTEE
There was no profit guarantee given by the Company during the financial year under review.
9.
MATERIAL CONTRACTS
Save as disclosed below, there were no material contracts entered into by the Company and its subsidiaries
involving Directors’ and major shareholders’ interests which were still subsisting as at the end of the financial
year or if not then subsisting, entered into since the end of the previous financial year:
(i) Kelana Megah Sdn Bhd (“KMSB”), a wholly-owned subsidiary of the Company, had entered into a Tenancy
Agreement, Deed of Assignment and Powers of Attorney with Naluri Corporation Berhad (“Naluri”),
previously a major shareholder of the Company, in respect of the leaseback of the duty free complex in
Johor Bahru from 1 December 2004 for a consideration of RM10.0 million per annum and upon the terms
and conditions contained in the said Tenancy Agreement. The rights and obligations of Naluri under the
leaseback arrangement have been subsequently transferred/novated by Naluri to Darul Metro Sdn Bhd,
a wholly-owned subsidiary of Atlan Holdings Bhd (“Atlan”) which in turn is a major shareholder of the
Company, as the new owner of the said duty free complex.
(ii)
KMSB had entered into various agreements with Tenggara Senandung Sdn Bhd (“TSSB”), a wholly-owned
subsidiary of Atlan, for the rental and management of a shoplot, the ferry terminal together with the car
parks all located at the duty free complex in Johor Bahru from 1 November 2003 onwards for a total cash
consideration of RM2.64 million per annum and upon the terms and conditions contained in the said
agreements.
(iii)
Cergasjaya Sdn Bhd and Cergasjaya Properties Sdn Bhd, both wholly-owned subsidiaries of the Company,
have entered into various agreements with TSSB for the management of the car parks located at the duty
free complex in Bukit Kayu Hitam from 1 July 2004 for a total cash consideration of RM0.24 million per
annum and upon the terms and conditions contained in the said agreements.
(iv)
The Company and Atlan had on 16 October 2009 entered into a Share Sale Agreement for the proposed
acquisition by the Company of 300,000 ordinary shares of RM1.00 each representing the entire equity
interest in TSSB for a cash purchase consideration of RM22.0 million and for the proposed acquisition by the
Company of 2,050,000 ordinary shares of RM1.00 each representing the entire equity interest in Binamold
Sdn Bhd (“BMSB”) from AHB for a cash purchase consideration of RM2,800,763 and assumption by the
Company of inter-company debt due and owing by BMSB to AHB amounting to RM5,199,237 (collectively
referred to as “Proposed Acquisitions”). The proposed Acquisitions were completed on 7 April 2010.
(v)
Orchard Boulevard Sdn Bhd (“OBSB”), a wholly owned subsidiary of the Company and AHB had on 16
October 2009 entered into a Share Sale Agreement for the proposed disposal by OBSB, of 4,000,000
ordinary shares of RM1.00 each representing OBSB’s entire equity interest of Radiant Ranch Sdn Bhd to
AHB for a cash disposal consideration of RM14,932,656 and assumption by AHB of inter-company debt
due and owing by RRSB to the Company and/or its related company(ies) amounting to RM12,067,344
(“Proposed Disposal”). The Proposed Disposal was completed on 7 April 2010.
10. REVALUATION POLICY ON LANDED PROPERTIES
The Group has not adopted a policy of regular revaluation of such assets as permitted under the transitional
provisions.
11. RECURRENT RELATED PARTY TRANSACTIONS
There was no recurrent related party transactions of a revenue nature entered into during the financial year.
17
Audit Committee Report
1.
COMPOSITION
The Audit Committee consists of three (3) independent members of the Board of Directors. The members are as
follows:
: Independent Non-Executive Director
Jeneral (B) Dato’ Sri Abdullah bin Ahmad @ Dollah bin Amad : Independent Non-Executive Director
: Independent Non-Executive Director
2.
TERMS OF REFERENCE
The terms of reference of the Audit Committee are as follows:
2.1 Objectives
The principal objectives of the Audit Committee are to assist the Board in discharging its statutory duties and
responsibilities relating to accounting and financial reporting practices of the Company and its subsidiaries
(“the Group”). In addition, the Audit Committee shall:
(a)
(b)
(c)
(d)
evaluate the quality of the audits performed by the internal and external auditors;
provide assurance that the financial information presented by management is relevant, reliable and
timely;
oversee compliance with laws and regulations and observance of a proper code of conduct; and
determine the adequacy and effectiveness of the Group’s internal control environment and quality
of the audits.
2.2 Composition
The Audit Committee shall be appointed by the Board from amongst the directors of the Company and
shall consist of no fewer than three (3) members. All the Audit Committee members must be non-executive
directors, with a majority of them being independent directors. No alternate director is to be appointed as
a member of the Audit Committee.
At least one (1) member of the Audit Committee:
(a) must be a member of the Malaysian Institute of Accountants (“MIA”); or
(b) if he is not a member of MIA, he must have at least three (3) years’ working experience and:
(i) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants
Act, 1967; or
(ii) he must be a member of one of the associations of accountants specified in Part II of the 1st
Schedule of the Accountants Act, 1967; or
(c) fulfills such other requirements as prescribed or approved by Bursa Securities.
The Chairman of the Audit Committee shall be appointed among the members of the Audit Committee
who shall be an independent director.
The definition of “independent director” shall have the meaning given in Paragraph 1.01 of the Listing
Requirements of Bursa Securities.
A nnual Rep o rt 2 01 0
2.3
18
Meetings
The Audit Committee shall hold at least four (4) regular meetings per year, with due notice of issues to be
discussed and shall record its conclusions in discharging its duties and responsibilities. In addition, the
Chairman may call for additional meetings at any time at the Chairman’s discretion.
The quorum for the Audit Committee meeting shall be the majority of members present whom must be
independent directors.
Upon the request of the external auditors, the Chairman of the Audit Committee shall convene a meeting of
the Audit Committee to consider any matter the external auditors believe should be brought to the attention
of the directors or shareholders.
Notice of Audit Committee meetings shall be given to all the Audit Committee members unless the Audit
Committee waives such requirement.
Audit Committee Report (Cont’d)
2.3
Meetings (Cont’d)
The finance manager, the head of internal audit and representatives of the external auditors shall normally
attend meetings. Other Board members and employees may attend meetings upon the invitation of the
Audit Committee. However, the Audit Committee shall meet with the external auditors, the internal auditors
or both, without other Board members and management present whenever deemed necessary.
Questions arising at any meeting of the Audit Committee shall be decided by a majority of votes of the
members present, and in the case of equality of votes, the Chairman of the Audit Committee shall have a
second or casting vote.
The Company Secretary shall be the secretary of the Audit Committee.
2.4 Authority
The Audit Committee shall, in accordance with a procedure to be determined by the Board and at the
expense of the Company:
(a) have explicit authority to investigate any matter within its terms of reference;
(b) have the resources which are required to perform its duties;
(c) have full and unrestricted access to any information pertaining to the Company;
(d) have direct communication channels with the external auditors and person(s) carrying out the internal
audit function or activity;
(e) be able to obtain independent professional or other advice; and
(f)
be able to convene meetings with the external auditors, the internal auditors or both, excluding the
attendance of other directors and employees of the Company, whenever deemed necessary.
Where the Audit Committee is of the view that the matter reported by it to the Board has not been satisfactorily
resolved resulting in a breach of the Listing Requirements, the Audit Committee shall promptly report such
matter to Bursa Securities.
2.5 Duties and Responsibilities
The duties and responsibilities of the Audit Committee are as follows:
(a) To consider the appointment of the external auditors, the audit fee and any question of resignation
or dismissal;
(b) To discuss with the external auditors before the audit commences, the nature and scope of the audit,
ensure co-ordination where more than one (1) audit firm is involved;
(c) To review the quarterly and year-end financial statements before submission to the Board, focusing
particularly on:
• any changes to the accounting policies and practices;
• significant adjustments arising from the audit;
• the going concern assumption; and
• compliance with accounting standards and other legal requirements.
(d) To discuss problems and reservations arising from the interim and final audits, and any matter the
auditors may wish to discuss (in the absence of management, where necessary);
(e) To review the external auditors’ management letter and management’s response;
(f)
To do the following, in relation to the internal audit function:
• review the adequacy of the scope, functions, competency and resources of the internal audit
function, and that it has the necessary authority to carry out its work;
• review the internal audit programme and results of the internal audit process and, where
necessary, ensure that appropriate actions are taken on the recommendations of the internal
audit function;
• review any appraisal or assessment of the performance of members of the internal audit
function;
• approve any appointment or termination of senior staff members of the internal audit function;
and
• take cognisance of resignations of internal audit staff members and provide the resigning staff
member an opportunity to submit his reasons for resigning.
(g) To consider the major findings of internal investigations and management’s response;
(h) To report its findings on the financial and management performance, and other material matters to
the Board;
(i)
To review any related party transaction and conflict of interest situation that may arise within the
Company or group including any transaction, procedure or course of conduct that raises questions
of management’s integrity;
19
Audit Committee Report (Cont’d)
2.5 Duties and Responsibilities (Cont’d)
To review with the external auditors, their evaluation of the system of internal controls and their audit
(j)
report;
(k) To consider and make recommendations to the Board, to be put to shareholders for approval at
the general meeting in relation to the appointment, re-appointment and removal of the Company’s
external auditors;
(l)
To verify the allocation of share option scheme (“ESOS”) in compliance with the criteria as stipulated
in the by-law of ESOS of the Company, if any; and
(m) To consider and examine any other matters as defined by the Board from time to time.
2.6 Reporting Procedures
Minutes of each meeting shall be distributed to each member of the Audit Committee. The Audit Committee
Chairman shall report on each meeting to the Board.
The minutes of the Audit Committee meeting shall be signed by the Chairman of the meeting at which the
proceedings were held or by the Chairman of the next succeeding meeting.
3.
ATTENDANCE
The Audit Committee met five (5) times during the financial year ended 28 February 2010 and the attendances
of the Directors for meetings held during the year are as follows:
Members Attendance
5/5
4/5
5/5
4.
ACTIVITIES OF THE AUDIT COMMITTEE
During the financial year ended 28 February 2010, the Audit Committee carried out the following activities in the
discharge of its functions and duties:
•
•
•
•
•
•
A nnual Rep o rt 2 0 1 0
•
20
Reviewed and discussed the re-election of the external auditors of the Company before tabling to the
shareholders for approval at the Annual General Meeting.
Reviewed with the external auditors their audit plan, audit approach and reporting requirements before the
commencement of the audit.
Reviewed the quarterly and annual consolidated financial statements of the Group before submission to
the Board for approval.
Reviewed any related party transactions that may arise within the Group or Company.
Reviewed with the external auditors their audit findings and approved for adoption their
recommendations.
Reviewed the internal audit programme, considered the major findings of the internal audit programme
and management’s response and ensure appropriate action was taken.
Reviewed the proposed audit fees for the external auditors in respect of their audit of the Group or
Company.
5.
INTERNAL AUDIT FUNCTION
The Audit Committee is supported by an independent and adequately resourced internal audit function. The
Committee is aware of the fact that an independent and adequately resourced internal audit function is essential
to assist in obtaining the assurance it requires regarding the effectiveness of the internal control.
The main role of the internal audit function is to review the effectiveness of the system of internal control. This is
performed with impartiality, proficiency and due professional care.
During the financial year, the internal audit activities have been carried out according to the internal audit plan
which has been approved by the Audit Committee and the total costs incurred by the Group for maintaining the
internal audit function is RM511,000.
Statement On Internal Control
The Board is responsible for the Group’s system of internal control and for reviewing the adequacy and integrity of
those systems. The Board recognises that the Group’s system of internal control is designed to manage the risk of
failure to achieve Group’s objectives. Hence, it can only provide reasonable and not absolute assurance against material
misstatement or fraud.
In compliance with the Listing Requirements of the Bursa Malaysia Securities Berhad and the publication of guidance
for directors on internal control, “Statement on Internal Control: Guidance for Directors of Public Listed Companies”,
the Board confirms that there is an on-going process for identifying, evaluating and managing the significant risks
faced by the Group throughout the financial year.
The Board further confirms that this process is regularly reviewed by the Board and accords with the guidance.
The Group’s system of internal control is maintained to achieve the following objectives:
•
•
•
•
Safeguard the shareholders’ interest and assets of the Group.
Ensure the achievement of financial and operational objectives.
Ensure compliance with regulatory requirements.
Identify and manage risks affecting the Group.
Salient features of the framework of internal control system of the Group are as follows:
•
•
•
•
•
•
•
•
The management and organisation structure are well defined, with clear line of responsibilities and delegation of
authorities.
Key responsibilities are properly segregated in achieving a proper check and balance review and approval
process.
Executive Directors and heads of divisions meet regularly to discuss operational, corporate, financial and key
management issues.
The Board continuously assesses the key business risks with the help of the Audit Committee and external
professionals.
Financial results are reviewed quarterly by the Board and the Audit Committee.
Internal control policies and procedures are properly documented and communicated to all staff members.
Through the internal audit process, the effectiveness of internal control policies and procedures are subject to
continuous assessments, reviews and improvements.
Effective reporting system to ensure timely generation of financial information for management review.
The Board is of the opinion that the existing system of internal control is adequate in achieving the above objectives.
The external auditors have reviewed the Statement on Internal Control as required by the Listing Requirements of Bursa
Malaysia Securities Berhad. Their review was performed in accordance with Recommended Practice Guide 5 issued
by the Malaysian Institute of Accountants.
21
Corporate Social Responsibility
The Board of Directors of DFZ Capital Berhad recognises the importance of balancing the interest of all or key
stakeholders – our customers, our shareholders, our employees, our suppliers and the communities in which we work.
We see the need for corporate social responsibility (“CSR”) as an integral part of the whole operations and a key factor
in our continued growth and success of the businesses of the Group. The CSR initiatives undertaken by the Group
are summarised below.
COMMUNITY
We encourage all our businesses to support the particular needs of their communities by contributing to local charities
and community initiatives. Support takes the form of employees’ time and skill, gifts in kind and cash donations. We
continue to support education and welfares in our local communities.
During the year, the Group had contributed donations to various worthy organisations including non-profit organisation
like Yayasan Harmoni, which promotes the welfare of orphans, single mothers and the less fortunate and Mount Miriam
Cancer Hospital which is a non profit organisation for the treatment and continuing care of patients with cancer.
Contributions were also made through Yayasan Harmoni for the welfare of students at several schools.
A subsidiary, Kelana Megah Sdn Bhd, took pride in organising the official launch of the joint project by our holding
company, Atlan Holdings Bhd, Yayasan Harmoni and Aman Palestin Berhad to raise funds to build a specialist clinic in
Gaza, Palestine, on 7 March 2009 in its complex, at The Zon Johor Bahru. The collection totalled RM 250,000.
The Zon Johor Bahru had continuously organised many events during the year to promote the 1 Malaysia spirit through
the local multiracial festivals celebrations and Merdeka Celebration carnival, encourage active lifestyle, for school
children through its event “3X3 Streetball Challenge”, creating awareness on health and general wellbeing through
“Health Awareness and Blood Donation Campaign” together with Johor State Health Department and many other
activities to reach out to the community.
The Group will continue to support and encourage all our employees and businesses to find ways to help their
communities.
WORKPLACE
The Group aims to attract, retain and motivate the highest calibre of employees within the operating structure that
encourages their contribution and development, considers its human resource as its most valuable asset, and thus,
ensures that it is well taken care of. The employees have access to trainings (internal and external) for their continuous
improvement and development so as to help our employees prepare for new initiatives, as well as equipping them
with the very best customer service skills. In addition, health and safety awareness programs and sports activities
were held to encourage employees to lead a healthy lifestyle. The Group also organised annual dinners and festive
celebrations for its employees.
ENVIRONMENT
Good environment practice and the impact that our operations have on the environment are of great importance to
the Group. We undertook several initiatives in preserving the environment, including reducing the usage of paper via
electronic communication and recycling paper and closely monitor energy consumption such as replacing existing
equipments with more energy efficient and fitting temperature control devices.
A nnual Rep o rt 2 01 0
MARKETPLACE
22
The Group ensures that its operations are in line with the best practices guidelines set in the Code of Corporate
Governance. All activities are conducted at arms length and do not favour any single party. The Group makes efforts
to create a pleasant and convenient shopping experience for our customers.
Corporate social responsibility is an on-going process, and the Group is committed to continue its efforts to ensure
that it makes a difference to the society and world at large.
table
of contents
Financial
Statements
Directors’ Report ..................................................................... 24
Corporate
Statement
By Information................................................................
Directors & Statutory Declaration ..................... 28 2
Corporate Auditors’
Structure...................................................................
Independent
Report . ............................................... 29 3
Location
Map ............................................................................
Income
Statements..................................................................
30 4
Directors’
Profile . ......................................................................
Balance
Sheets........................................................................
31 5
President’s
Statements
Of Statement
Changes In...............................................................
Equity............................................ 33 8
Statement
On Corporate
Governance ....................................
Cash
Flow Statements
............................................................
35 10
Additional
Information
.........................................
Notes
To The Compliance
Financial Statements
........................................
37 16
Audit Committee Report ......................................................... 17
Statement On Internal Control ................................................ 21
Corporate Social Responsibility .............................................. 22
Financial Statements . ............................................................. 23
Analysis Of Ordinary And Preference Shareholdings .............. 88
List Of Properties .................................................................... 95
Notice Of Annual General Meeting . ........................................ 97
Form Of Proxy
Directors’ Report
The directors have pleasure in presenting their report together with the audited financial statements of the Company
for the financial year ended 28 February 2010.
Principal activities
The principal activity of the Company is investment holding.
The principal activities of the subsidiaries are described in Note 17 to the financial statements.
There have been no significant changes in the nature of these principal activities during the financial year, other than
as disclosed in Note 17 to the financial statements.
Change of year end
In the previous period, the year end of the Company was changed from 31 December to 28 February so as to be
coterminous with the year end of its ultimate holding company. Accordingly, comparative amounts for the income
statement, statement of changes in equity, cash flow statement and the related notes are not entirely comparable.
Results
GroupCompany
RM’000RM’000
Profit for the year
50,516
30,435
Attributable to:
Equity holders of the Company
Minority interests
50,553
(37)
30,435
–
50,516
30,435
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in
the financial statements.
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial
year were not substantially affected by any item, transaction or event of a material and unusual nature other than as
disclosed in the financial statements.
Dividends
The amounts of dividends paid by the Company since 28 February 2010 were as follows:
RM’000
A nnual R epo r t 2 01 0
In respect of the financial year ended 28 February 2010:
24
First interim dividend of 5% less 25% taxation on 161,919,099 ordinary shares, paid on 5 June 2009
6,072
Second interim dividend of 2% less 25% taxation on 160,977,102 ordinary shares,
paid on 25 August 2009
2,415
Third interim dividend of 3% less 25% taxation on 164,233,462 ordinary shares,
paid on 6 November 2009
3,695
Dividend of 1.26 sen on 19,500 ICPS-B1 and 36,432,803 ICPS-B2, paid on 8 December 2009
459
Fourth interim dividend of 7% less 25% taxation on 209,964,829 ordinary shares,
paid on 3 March 2010
11,023
23,664
The directors do not recommend the payment of any final dividend in respect of the financial year ended 28 February
2010.
Directors’ Report (Cont’d)
Directors
The names of the directors of the Company in office since the date of the last report and at the date of this report
are:
Dato’ Chen Siak Chan *
Dato’ Mohamed Suhaimi bin Sulaiman ^ * #
Jeneral (B) Dato’ Sri Abdullah bin Ahmad @ Dollah bin Amad ^ * #
Mohd Kamarudin bin Haron ^
Mohd Sharif bin Hj Yusof #
Members of Nomination Committee
* Members of Remuneration Committee
#
Members of Audit Committee
^
Directors’ benefits
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which
the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or
debentures of the Company or any other body corporate.
Since the end of the previous period, no director has received or become entitled to receive a benefit (other than benefits
included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary
of a full-time employee of the Company and its related corporations as shown in Note 6 to the financial statements)
by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is
a member, or with a company in which he has a substantial financial interest, except for those benefits which may be
deemed to have arisen by virtue of those contracts, agreements and transactions (either as a supplier, agent, customer
or contractor) in respect of trading and other services entered into in the ordinary course of business between the
Company and its subsidiaries and companies in which the directors are deemed to have an interest, except as disclosed
in Note 32 to the financial statements.
Directors’ interests
According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year
in shares and warrants in the ultimate holding company during the financial year were as follows:
Number of ordinary shares of RM1 each
1 March 28 February
Atlan Holdings Bhd.
2009AcquiredSold
2010
618,500
20,200,000
–
–
(498,500)
120,000
– 20,200,000
Number of warrants of RM1 each
1 MarchExercised/ 28 February
Atlan Holdings Bhd.
2009AcquiredDisposed
2010
153,750
–
(153,750)
–
None of the other directors in office at the end of the financial year had any interest in shares in the Company or its
related corporations during the financial year.
Issue of shares
During the financial year, the Company completed the conversion of 8,010,415 ICPS-A to 727,835 ordinary shares
on a piece meal basis by way of surrendering equivalent par value of the ICPS-A to satisfy the conversion price of
RM1.10 of the ordinary shares; and conversion of 20,000 ICPS-B1 to 20,000 ordinary shares; and 36,435,303 ICPS-B2
to 36,435,303 ordinary shares; and 11,781,267 ICPS-C to 11,781,267 ordinary shares on piece meal basis by way of
tendering (1) unit of ICPS-B1 and ICPS-B2 and ICPS-C respectively for conversion into (1) unit of new ordinary shares
of which RM0.10 is paid up. The remaining RM0.90 was paid up from the share premium reserve of the Company to
satisfy the conversion price of RM1.00 per ordinary share.
25
Treasury shares
During the financial year, the Company repurchased 3,417,400 of its issued ordinary shares from the open market at
an average price of RM3.55 per share. The total consideration paid for the repurchase including transaction costs
was RM12,159,956. The shares repurchased are being held as treasury shares in accordance with Section 67A of the
Companies Act, 1965.
In addition, the Company also distributed 3,232,167 treasury shares to its shareholders as shares dividend on the basis
of (1) treasury share for every 100 existing ordinary shares of RM1.00 each with a total cost of RM11,477,984.
As at 28 February 2010, the Company held as treasury shares a total of 199,033 of its 210,163,862 issued ordinary
shares. Such treasury shares are held at a carrying amount of RM707,232 and further relevant details are disclosed in
Note 23(c) to the financial statements.
Employee Share Options Scheme (“ESOS”)
The Company’s Employee Share Options Scheme (“ESOS”) is governed by the by-laws approved by the shareholders
at an Extraordinary General Meeting held on 8 April 2003 and 21 September 2004.
The salient features and other terms of the ESOS are disclosed in Note 23(b) to the financial statements.
There are no ESOS granted during the financial year. The Company’s Employee Share Options Scheme has expired
on 13 March 2010 and the Company has no intention to renew the scheme.
Other statutory information
(a) Annual Rep o rt 2 0 1 0
(b) 26
Before the income statements and balance sheets of the Group and of the Company were made out, the directors
took reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of
provision for doubtful debts and satisfied themselves that all known bad debts had been written off and
that adequate provision had been made for doubtful debts in the financial statements of the Group. The
directors were also satisfied themselves that there were no known bad debts and that adequate provision
had been made for doubtful debts in the financial statements of the Company; and
(ii)
to ensure that any current assets which were unlikely to realise their value as shown in the accounting
records in the ordinary course of business had been written down to an amount which they might be
expected so to realise.
At the date of this report, the directors are not aware of any circumstances which would render:
(i)
the amount written off for bad debts or the amount of the provision for doubtful debts in the financial
statements of the Group inadequate to any substantial extent nor are they aware of any circumstances
which would render it necessary to write off any bad debts or the amount of the provision for doubtful
debts inadequate to any substantial extent in respect of the financial statements of the Company; and
(ii)
the values attributed to the current assets in the financial statements of the Group and of the Company
misleading.
(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render
adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading
or inappropriate.
(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report
or financial statements of the Group and of the Company which would render any amount stated in the financial
statements misleading.
(e) As at the date of this report, there does not exist:
(i)
any charge on the assets of the Group or of the Company which has arisen since the end of the financial
year which secures the liabilities of any other person; or
(ii)
any contingent liability of the Group or of the Company which has arisen since the end of the financial
year.
Other statutory information (Cont’d)
(f)
In the opinion of the directors:
(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period
of twelve months after the end of the financial year which will or may affect the ability of the Group or of
the Company to meet their obligations when they fall due; and
(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of
the financial year and the date of this report which is likely to affect substantially the results of the operations
of the Group or of the Company for the financial year in which this report is made.
Subsequent events
Details of subsequent events are disclosed in Note 35 to the financial statements.
Auditors
The auditors, Ernst & Young, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors dated 17 June 2010.
27
Statement By Directors
pursuant to Section 169(15) of the Companies Act, 1965
We, Dato’ Chen Siak Chan and Dato’ Sri Khalid bin Mohamad Jiwa, being two of the directors of DFZ Capital Berhad,
do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 30 to 91
are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to
give a true and fair view of the financial position of the Group and of the Company as at 28 February 2010 and of the
results and the cash flows of the Company for the year then ended.
Signed on behalf of the Board in accordance with a resolution of the directors dated 17 June 2010.
Statutory Declaration
pursuant to Section 169(16) of the Companies Act, 1965
I, Dato’ Chen Siak Chan, being the director primarily responsible for the financial management of DFZ Capital Berhad,
do solemnly and sincerely declare that the accompanying financial statements set out on pages 30 to 91 are in my
opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the
provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by
the abovenamed Dato’ Chen Siak Chan
at Kuala Lumpur in the Federal Territory
on 17 June 2010:
A nnual Rep or t 2 0 10
Before me,
28
AHMAD B. LAYA
No: W259
Commissioner for Oaths
Independent Auditors’ Report
to the members of DFZ Capital Berhad (Incorporated in Malaysia)
Report on the financial statements
We have audited the financial statements of DFZ Capital Berhad., which comprise the balance sheets as at 28 February
2010 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow
statements for the year then ended, and a summary of significant accounting policies and other explanatory notes, as
set out on pages 30 to 91.
Directors’ responsibility for the financial statements
The directors of the Company are responsible for the preparation and fair presentation of these financial statements in
accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes:
designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgement, including the assessment of risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider
internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards
and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of
the Company as at 28 February 2010 and of their financial performance and cash flows for the year then ended.
Report on other legal and regulatory requirements
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:
(a)
In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company
and its subsidiaries for which we have acted as auditors have been properly kept in accordance with the provisions
of the Act.
(b)
We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have
not acted as auditors, which are indicated in Note 17 to the financial statements, being financial statements that
have been included in the consolidated financial statements.
(c)
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial
statements of the Company are in form and content appropriate and proper for the purposes of the preparation
of the consolidated financial statements and we have received satisfactory information and explanations required
by us for those purposes.
(d)
The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did
not include any comment required to be made under Section 174(3) of the Act.
Other matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies
Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content
of this report.
Ernst & Young
AF: 0039
Chartered Accountants
Penang, Malaysia
17 June 2010
Lim Foo Chew
No. 1748/01/12(J)
Chartered Accountant
29
Income Statements
for the year ended 28 February 2010
GroupCompany
Note 01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Revenue
3
Other income
4
Changes in inventories and development properties
Depreciation
Inventories purchased and materials consumed
Maintenance expenses
Professional fees
Promotional expenses
Provision for doubtful debts
Rental of premises
Reversal of impairment loss in investment
in a subsidiary
Royalty expenses
Commission
Employee benefits expense
5
Write down of inventories
Utilities
Other operating (expenses)/incomes
7
526,941
15,176
32,418
(5,265)
(403,285)
(3,224)
(1,022)
(2,557)
–
(26,519)
552,920
12,855
40,904
(5,772)
(411,931)
(4,816)
(1,762)
(4,787)
(4,013)
(29,059)
26,600
5
–
–
–
–
(724)
–
(1,623)
–
21,900
6
–
–
–
–
(1,565)
–
–
–
–
(728)
(1,898)
(35,113)
(1,353)
(9,659)
(19,733)
–
(1,098)
(2,429)
(43,966)
(290)
(11,999)
(27,275)
7,400
–
–
–
–
(7)
964
–
–
–
–
–
(6)
(410)
Operating profit
Finance costs
8
64,179
(4,838)
57,482
(5,413)
32,615
(76)
19,925
(187)
Profit before tax
Income tax expense
9
59,341
(8,825)
52,069
(14,398)
32,539
(2,104)
19,738
(5,444)
Profit for the year/period
50,516
37,671
30,435
14,294
Attributable to:
Equity holders of the Company
Minority interests
50,553
(37)
37,498
173
30,435
–
14,294
–
50,516
37,671
30,435
14,294
24.0
24.0
17.8
17.8
10
10
Earnings per share attributable to equity holders
of the Company (sen):
Basic, for profit for the year/period
Diluted, for profit for the year/period
30
The accompanying notes form an integral part of the financial statements.
Balance Sheets
as at 28 February 2010
GroupCompany
Note 28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Assets
Non-current assets
Property, plant and equipment
Land held for property development
Biological assets
Prepaid land lease payments
Goodwill
Investments in subsidiaries
Other receivables
Deferred tax assets
12
13
14
15
16
17
18
19
74,227
305
2,168
21,006
29,870
–
473
6,708
71,368
12,772
1,779
13,394
21,168
–
714
1,133
–
–
–
–
–
80,678
–
–
–
–
–
–
–
60,235
–
–
134,757
122,328
80,678
60,235
111,434
696
26,828
66,098
79,016
1,299
18,360
55,513
–
174
75,852
143
–
91
63,383
395
12,469
–
–
–
217,525
154,188
76,169
63,869
Total assets
352,282
276,516
156,847
124,104
23
23
210,164
–
161,199
5,625
210,164
–
161,199
5,625
Reserves:
Share premium
Treasury shares
23
Foreign currency translation reserve
24
Accumulated losses
210,164
166,824
210,164
166,824
4,229
(707)
19
(64,143)
59,047
(25)
35
(91,491)
4,229
(707)
–
(202,059)
59,047
(25)
–
(209,289)
Minority interests
149,562
617
134,390
654
11,627
–
16,557
–
Total equity
150,179
135,044
11,627
16,557
Current assets
Inventories
20
Tax recoverable
Trade and other receivables
18
Cash and bank balances
21
Assets of disposal group classified
as held for sale
22
Equity and liabilities
Equity attributable to equity holders
of the Company
Share capital:
Ordinary shares
Preference shares
31
Balance Sheets (Cont’d)
GroupCompany
Note 28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Non-current liabilities
Borrowings
Deferred tax liabilities
24,306
5,910
24,511
4,111
24,000
–
24,000
–
30,216
28,622
24,000
24,000
Current liabilities
27
Provisions
Borrowings
25
Trade and other payables
28
Income tax payable
547
58,055
110,285
2,998
547
41,515
67,894
2,894
–
50,182
71,038
–
–
35,166
48,381
–
171,885
112,850
121,220
83,547
2
–
–
–
Total liabilities
202,103
141,472
145,220
107,547
Total equity and liabilities
352,282
276,516
156,847
124,104
22
Liabilities of disposal group classified
as held for sale
25
19
32
Statement Of Changes In Equity
Attributable to equity holders of the Company
Share capitalNon-distributable
Foreign
currency
Ordinary PreferenceShareTreasury translationAccumulated
MinorityTotal
shares
shares premium
shares
reserve
lossesTotal interestsEquity
GroupRM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
At 1 January 2008
149,895
7,321
68,655
(21)
91
Foreign currency translation,
representing net expense
recognised directly in equity
Profit for the period
–
–
–
–
–
–
–
–
(56)
–
–
37,498
Total recognised income and
expense for the period
–
–
–
–
(56)
–
–
–
–
11,304
–
–
(1,696)
–
–
(9,608)
–
–
161,199
5,625
–
–
Acquisition of minority
interests
Conversion of preference
shares
Purchase of treasury shares
Dividends (Note 11)
At 28 February 2009
Foreign currency translation,
representing net expense
recognised directly in equity
Profit for the year
Total recognised income and
expense for the year
Conversion of preference
shares
Shares dividends
Dividends (Note 11)
At 28 February 2010
(110,566) 115,375
976
116,351
(56)
37,498
–
173
(56)
37,671
37,498
37,442
173
37,615
–
–
–
(495)
(495)
–
(4)
–
–
–
–
–
–
(18,423)
–
(4)
(18,423)
–
–
–
–
(4)
(18,423)
59,047
(25)
35
(91,491) 134,390
654
135,044
–
–
–
–
–
–
(16)
–
–
50,553
(16)
50,553
–
(37)
(16)
50,516
–
–
–
–
(16)
50,553
50,537
(37)
50,500
48,965
–
–
–
(5,625)
–
–
–
(43,340)
–
(11,478)
–
–
(12,160)
11,478
–
–
–
–
–
–
–
–
(23,205)
–
(12,160)
–
(23,205)
–
–
–
–
–
(12,160)
–
(23,205)
210,164
–
4,229
(707)
19
(64,143) 149,562
617
150,179
33
Statement Of Changes In Equity (Cont’d)
Share capitalNon-distributable
Ordinary PreferenceShareTreasuryAccumulatedTotal
shares
shares
premium
shares
losses
equity
CompanyRM’000RM’000RM’000RM’000RM’000RM’000
149,895
11,304
–
–
–
7,321
(1,696)
–
–
–
68,655
(9,608)
–
–
–
(21)
–
(4)
–
–
(205,160)
–
–
14,294
(18,423)
20,690
–
(4)
14,294
(18,423)
At 28 February 2009
Conversion of preference shares
Shares dividends
Profit for the year
Dividends (Note 11)
161,199
48,965
–
–
–
–
5,625
(5,625)
–
–
–
–
59,047
(43,340)
–
(11,478)
–
–
(25)
–
(12,160)
11,478
–
–
(209,289)
–
–
–
30,435
(23,205)
16,557
–
(12,160)
–
30,435
(23,205)
At 28 February 2010
210,164
–
4,229
(707)
(202,059)
11,627
At 1 January 2008
Issue of ordinary shares
Dividends (Note 11)
34
Cash Flow Statements
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Cash flows from operating activities
Profit before tax
Adjustments for:
Amortisation of prepaid land lease payments
Bad debts written off
Deposit forfeited
Deposit written off
Depreciation
Dividend income
Gain on disposal of property, plant and equipment
Inventories written off
Finance costs
Interest income
Property, plant and equipment written off
Provision for doubtful debts written back
(Reversal of provision)/provision for short term
accumulating compensated absences
Reversal of write down of inventories
Reversal of impairment losses for property,
plant and equipment
Reversal of impairment loss in investment in a subsidiary
Reversal of impairment loss for
prepaid land lease payments
Impairment loss on property held for development
Net unrealised foreign exchange gains
Waiver of debts by a supplier
Write down of inventories
59,341
52,069
32,539
19,738
594
–
(2)
34
5,265
–
(13)
223
4,838
(453)
5,335
–
(212)
553
–
(27)
30
5,772
–
(270)
586
5,413
(891)
76
4,013
(144)
–
–
–
–
–
(26,600)
–
–
76
(1)
–
1,623
(1,623)
–
8
–
–
–
(21,900)
–
–
187
(6)
–
–
–
(18)
(75)
39
(199)
–
–
–
–
(5,368)
–
(429)
–
–
(7,400)
–
–
(315)
1,000
(520)
–
1,353
(65)
200
(347)
(435)
290
–
–
–
–
–
–
–
–
–
–
Operating profit/(loss) before working capital changes
71,007
66,234
(1,386)
(1,973)
(Increase)/decrease in trade and other receivables
Increase in inventories
Increase/(decrease) in trade and other payables
(6,913)
(31,738)
27,984
24,034
(35,887)
20,418
(348)
–
78
2,303
–
(671)
Cash generated from/(used in) operations
Interest paid
Taxes refunded
Taxes paid
60,340
(4,822)
256
(15,104)
74,799
(5,151)
–
(16,195)
(1,656)
(60)
–
–
(341)
(755)
–
(4)
Net cash generated from/(used in) operating activities
40,670
53,453
(1,716)
(1,100)
Cash flows from investing activities
Additions of biological assets
Interest received
Acquisition of subsidiaries (Note 17(b))
Acquisition of minority interests
Dividends received
Proceeds from disposal of property, plant and equipment
Purchase of property, plant and equipment (Note A)
Purchase of land held for property development
(389)
453
(13,561)
–
–
38
(5,829)
(1,000)
(379)
891
(33,608)
(1,549)
–
404
(5,660)
–
–
1
(13,043)
–
13,213
–
–
–
–
6
(40,235)
–
16,425
–
–
–
Net cash (used in)/generated from investing activities
(20,288)
(39,901)
171
(23,804)
35
Cash Flow Statements (Cont’d)
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Cash flows from financing activities
Proceeds from term loan
Repayment of term loan
Changes in amount due to ultimate holding company
Changes in amount due to/from subsidiaries
Increase in fixed deposits
Proceeds from other short term borrowings
Repayment of hire purchase and lease financing
Dividend paid:
- preference shares
- ordinary shares
50,000
(35,564)
(224)
–
(778)
(12,160)
611
(300)
38,000
(18,000)
(8,957)
–
(1,906)
(4)
2,404
(334)
50,000
(35,000)
–
11,094
–
(12,160)
–
–
38,000
(18,000)
–
28,522
–
(4)
–
–
(459)
(12,182)
(460)
(22,863)
(459)
(12,182)
(460)
(22,863)
Net cash (used in)/generated from financing activities
(11,056)
(12,120)
1,293
25,195
Net increase/(decrease) in cash and cash equivalents
Effects of foreign exchange rate changes
Cash and cash equivalents at beginning of year/period
9,326
(4)
46,304
1,432
(15)
44,887
(252)
–
395
291
–
104
Cash and cash equivalents at end of year/period (Note 21)
55,626
46,304
143
395
A.
Purchase of property, plant and equipment
During the financial year/period, the Group acquired property, plant and equipment with an aggregate cost of
RM6,262,000 (28.02.2009: RM5,860,000) by the following means:
Group
01.03.2009 01.01.2008
to
to
28.02.2010 28.02.2009
RM’000RM’000
5,829
–
433
5,660
200
–
6,262
5,860
Cash payment
Hire purchase and finance lease liabilities
Payables
36
Notes To The Financial Statements
- 28 February 2010
1.Corporate information
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the
Main Board of Bursa Malaysia Securities. The registered office of the Company is located at Wisma Atlan, No.
8, Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang.
The ultimate holding company of the Company is Atlan Holdings Bhd. which is incorporated in Malaysia, and
produces financial statements available for public use.
The principal activity of the Company is investment holding. The principal activities of the subsidiaries are
described in Note 17. There have been no significant changes in the nature of the principal activities during the
financial year.
In the previous period, the year end of the Company was changed from 31 December to 28 February so as to be
coterminous with the year end of its holding company. Accordingly, comparative amounts for the income statement,
statement of changes in equity, cash flow statement and the related notes are not entirely comparable.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of
the directors on 17 June 2010.
2.Significant accounting policies
2.1 Basis of preparation
The financial statements comply with Financial Reporting Standards and the Companies Act, 1965 in
Malaysia.
The financial statements of the Group and of the Company have also been prepared on a historical basis,
unless otherwise stated in the accounting policies below.
The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest
thousand (RM’000) except when otherwise indicated.
2.2 Summary of significant accounting policies
(a)
Subsidiaries and basis of consolidation
i.
Subsidiaries
Subsidiaries are entities over which the Group has the ability to control the financial and operating
policies so as to obtain benefits from their activities. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when assessing whether the
Group has such power over another entity.
In the Company’s separate financial statements, investments in subsidiaries are stated at cost
less impairment losses. On disposal of such investments, the difference between net disposal
proceeds and their carrying amounts is included in profit or loss.
ii. Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and
its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries are
prepared for the same reporting date as the Company.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group
obtains control, and continue to be consolidated until the date that such control ceases. In
preparing the consolidated financial statements, intragroup balances, transactions and unrealised
gains or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated
financial statements for like transactions and events in similar circumstances.
Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method
of accounting involves allocating the cost of the acquisition to the fair value of the assets
acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost
of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of
the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs
directly attributable to the acquisition.
37
Notes To The Financial Statements (Cont’d)
2.Significant accounting policies (Cont’d)
2.2 Summary of significant accounting policies (Cont’d)
(a)
Subsidiaries and basis of consolidation (Cont’d)
ii. Basis of consolidation (Cont’d)
38
Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities represents goodwill. Any excess of the
Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities
over the cost of acquisition is recognised immediately in profit or loss.
Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by
the Group. It is measured at the minorities’ share of the fair value of the subsidiaries’ identifiable
assets and liabilities at the acquisition date and the minorities’ share of changes in the subsidiaries’
equity since then.
(b)
Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the
cost of business combination over the Group’s interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities. Following the initial recognition, goodwill is measured at cost
less any accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for
impairment, annually or more frequently if events or changes in circumstances indicate that the
carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
(c)
Property, plant and equipment and depreciation
All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included
in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All
other repairs and maintenance are charged to the income statement during the period in which they
are incurred.
Subsequent to recognition, property, plant and equipment except for certain freehold land and
buildings are stated at cost less accumulated depreciation and any accumulated impairment
losses.
Certain freehold land and buildings are stated at revalued amount, which is the fair value at the date
of the revaluation less any accumulated impairment losses. Fair value is determined from marketbased evidence by appraisal that is undertaken by professionally qualified valuers. The land and
buildings of the Group have not been revalued since they were first revalued in 1991. The directors
have not adopted the policy of regular revaluations of such assets and no later valuation has been
recorded. As permitted under the transitional provisions of IAS 16 (Revised): Property, Plant and
Equipment, these assets continue to be stated at their 1991 valuation less accumulated depreciation.
Any revaluation surplus is credited to the revaluation reserve included within equity, except to the
extent that it reverses a revaluation decrease for the same asset previously recognised in profit or
loss, in which case the increase is recognised in profit or loss to the extent of the decrease previously
recognised. A revaluation deficit is first offset against unutilised previously recognised revaluation
surplus in respect of the same asset and the balance is thereafter recognised in profit or loss. Upon
disposal or retirement of an asset, any revaluation reserve relating to the particular asset is transferred
directly to retained earnings.
Freehold land has an unlimited useful life and therefore is not depreciated. Capital-work-in-progress,
which comprise the refurbishment and renovation of building and land improvements are also not
depreciated as these assets are not available for use. Depreciation of other property, plant and
equipment is provided for on a straight-line basis to write off the cost of each asset to its residual
value over the estimated useful life, at the following annual rates:
Buildings
Golf course
Furniture and fittings
Electrical installations and air conditioner
Plant, office equipment and computer
Crockery, kitchenware, linen and uniform for hotel operations
Motor vehicles
Renovations
over 29 to 50 years
over 60 years
5% - 20%
5% - 20%
5% - 20%
20%
20%
5% - 10%
(c)
Property, plant and equipment and depreciation (Cont’d)
The residual values, useful life and depreciation method are reviewed at each financial year end to
ensure that the amount, method and period of depreciation are consistent with previous estimates
and the expected pattern of consumption of the future economic benefits embodied in the items of
property, plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. The difference between the net disposal proceeds,
if any and the net carrying amount is recognised in profit or loss and the unutilised portion of the
revaluation surplus on that item is taken directly to retained earnings.
(d)
Investment properties
Investment properties are properties which are held either to earn rental income or for capital
appreciation or for both. Such properties are measured initially at cost, including transaction
costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated
depreciation and any accumulated impairment losses.
A property interest under an operating lease is classified and accounted for as an investment property
on a property-by-property basis when the Group holds it to earn rentals or for capital appreciation
or both. Any such property interest under an operating lease classified as an investment property is
carried at cost less accumulated depreciation and any accumulated impairment losses.
Investment properties are derecognised when either they have been disposed of or when the
investment property is permanently withdrawn from use and no future economic benefit is expected
from its disposal. Any gains or losses on the retirement or disposal of an investment property are
recognised in profit or loss in the year in which they arise.
(e)
Land held for property development and property development costs
i.
Land held for property development
Land held for property development consists of land where no development activities have been
carried out or where development activities are not expected to be completed within the normal
operating cycle. Such land is classified within non-current assets and is stated at cost less any
accumulated impairment losses.
Land held for property development is reclassified as property development costs at the point
when development activities have commenced and where it can be demonstrated that the
development activities can be completed within the normal operating cycle.
ii. Property development costs
Property development costs comprise all costs that are directly attributable to development
activities or that can be allocated on a reasonable basis to such activities.
When the financial outcome of a development activity can be reliably estimated, property
development revenue and expenses are recognised in the income statement by using the stage
of completion method. The stage of completion is determined by the proportion that property
development costs incurred for work performed to date bear to the estimated total property
development costs.
Where the financial outcome of a development activity cannot be reliably estimated, property
development revenue is recognised only to the extent of property development costs incurred
that is probable will be recoverable, and property development costs on properties sold are
recognised as an expense in the year in which they are incurred.
Any expected loss on a development project, including costs to be incurred over the defects
liability period, is recognised as an expense immediately.
Property development costs not recognised as an expense are recognised as an asset, which
is measured at the lower of cost and net realisable value.
The excess of revenue recognised in the income statement over billings to purchasers is classified
as accrued billings within trade receivables and the excess of billings to purchasers over revenue
recognised in the income statement is classified as progress billings within trade payables.
39
40
(f)
Biological assets
Biological assets comprise oil palm planting expenditure. Expenditure incurred on new planting
and the upkeep of trees to maturity is capitalised under plantation development expenditure, while
replanting expenditure is charged to the income statement in the year in which the expenditure is
incurred. A portion of the direct overheads, which include general and administrative expenses,
is similarly capitalised under biological assets until such time when the plantation attains mature.
Plantation development expenditure is amortised over 10 years. Amortisation commences upon
maturity of the new plantings.
(g)
Impairment of non-financial assets
The carrying amounts of assets, other than investment property, property development costs,
inventories, deferred tax assets and non-current assets (or disposal groups) held for sale, are reviewed
at each balance sheet date to determine whether there is any indication of impairment. If any such
indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment
loss.
For goodwill, intangible assets that have an indefinite useful life, the recoverable amount is estimated
at each balance sheet date or more frequently when indicators of impairment are identified.
For the purpose of impairment testing of these assets, recoverable amount is determined on an
individual asset basis unless the asset does not generate cash flows that are largely independent of
those from other assets. If this is the case, recoverable amount is determined for the cash-generating
unit (CGU) to which the asset belongs to. Goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group’s CGUs, or groups of CGUs, that are expected to
benefit from the synergies of the combination, irrespective of whether other assets or liabilities of
the Group are assigned to those units or groups of units.
An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and
its value in use. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce
the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce
the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.
An impairment loss is recognised in profit or loss in the financial year in which it arises, unless the
asset is carried at a revalued amount, in which case the impairment loss is accounted for as a
revaluation decrease to the extent that the impairment loss does not exceed the amount held in the
asset revaluation reserve for the same asset.
Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an
asset other than goodwill is reversed if, and only if, there has been a change in the estimates used
to determine the asset’s recoverable amount since the last impairment loss was recognised. The
carrying amount of an asset other than goodwill is increased to its revised recoverable amount,
provided that this amount does not exceed the carrying amount that would have been determined
(net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior
years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss,
unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation
increase.
(h)
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost comprises cost of purchase of inventories and is determined using the first-in, first-out method.
The cost of unsold properties comprises cost associated with the acquisition of land, direct costs
and appropriate proportions of common costs.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
(i)
Financial instruments
Financial instruments are recognised in the balance sheet when the Group has become a party to
the contractual provisions of the instrument.
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. Interest, dividends and gains and losses relating to a financial instrument
classified as a liability, are reported as expense or income. Distributions to holders of financial
instruments classified as equity are recognised directly in equity. Financial instruments are offset
when the Group has a legally enforceable right to offset and intends to settle either on a net basis
or to realise the asset and settle the liability simultaneously.
i.
Cash and cash equivalents
For the purposes of the cash flow statements, cash and cash equivalents include cash on hand
and at banks, deposit at call and short term highly liquid investments which have an insignificant
risk of changes in value, net of outstanding bank overdrafts.
ii. Other non-current investments
Non-current investments other than investments in subsidiaries and investment properties are
stated at cost less impairment losses. On disposal of an investment, the difference between the
net disposal proceeds and its carrying amount is recognised in profit or loss.
iii. Receivables
Receivables are carried at anticipated realisable values. Bad debts are written off when identified.
An estimate is made for doubtful debts based on a review of all outstanding amounts as at the
balance sheet date.
iv. Payables
Payables are stated at the fair value of the consideration to be paid in the future for goods and
services received.
v. Interest bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received
less directly attributable transaction costs. After initial recognition, interest bearing loans and
borrowings are subsequently measured at amortised cost using the effective interest method.
vi. Equity instruments
Ordinary shares
Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity
in the period in which they are declared.
The transaction costs of an equity transaction are accounted for as a deduction from equity,
net of tax. Equity transaction costs comprise only those incremental external costs directly
attributable to the equity transaction which would otherwise have been avoided.
The consideration paid, including attributable transaction costs on repurchased ordinary shares
of the Company that have not been cancelled, are classified as treasury shares and presented as
a deduction from equity. No gain or loss is recognised in profit or loss on the sale, re-issuance
or cancellation of treasury shares. When treasury shares are reissued by resale, the difference
between the sales consideration and the carrying amount is recognised in equity.
Preference shares
Preference shares are classified as equity if they are non-redeemable and dividends are
discretionary at the option of the issuer. Preference shares are classified as liability if they are
redeemable on a specific date or at the option of the shareholders and dividends thereon are
recognised in the income statement as interest expense. Preference shares that are compound
instruments are split into liability and equity components. Each component is accounted for
separately.
41
(i)
Financial instruments (Cont’d)
vii. Derivative financial instruments
(j)
Derivative financial instruments are not recognised in the financial statements.
Leases
i.
Classification
A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and
rewards incidental to ownership. All leases that do not transfer substantially all the risks and
rewards are classified as operating leases.
ii. Finance leases - the Group as lessee
Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the
lower of their fair values and the present value of the minimum lease payments at the inception
of the leases, less accumulated depreciation and any accumulated impairment losses. The
corresponding liability is included in the balance sheet as borrowings. In calculating the present
value of the minimum lease payments, the discount factor used is the interest rate implicit in the
lease, when it is practicable to determine; otherwise, the Group’s incremental borrowing rate is
used. Any initial direct costs are also added to the carrying amount of such assets.
Lease payments are apportioned between the finance costs and the reduction of the outstanding
liability. Finance costs, which represent the difference between the total leasing commitments
and the fair value of the assets acquired, are recognised in the profit or loss over the term of the
relevant lease so as to produce a constant periodic rate of charge on the remaining balance of
the obligations for each accounting period.
Leasehold land is depreciated over the remaining lease period of 8 to 79 years.
iii. Operating leases- the Group as lessee
Operating lease payments are recognised as an expense on a straight-line basis over the term
of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised
as a reduction of rental expense over the lease term on a straight-line basis.
iv. Operating leases- the Group as lessor
42
Assets leased out under operating leases are presented on the balance sheets according to the
nature of the assets. Rental income from operating leases is recognised on a straight-line basis
over the term of the relevant lease (Note 2.2(p)(vi)). Initial direct costs incurred in negotiating
and arranging an operating lease are added to the carrying amount of the leased asset and
recognised on a straight-line basis over the lease term.
(k)
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use
or sale, are added to the cost of those assets, until such time as the assets are substantially ready
for their intended use or sale. Investment income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs
eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(l)
Income tax
Income tax on the profit or loss for the financial year comprises current and deferred tax. Current
tax is the expected amount of income taxes payable in respect of the taxable profit for the financial
year and is measured using the tax rates that have been enacted at the balance sheet date.
(l)
Income tax (Cont’d)
Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised
for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary
differences, unused tax losses and unused tax credits to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences, unused tax losses and
unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises
from goodwill or from the initial recognition of an asset or liability in a transaction which is not a
business combination and at the time of the transaction, affects neither accounting profit nor taxable
profit.
Deferred tax is measured at the tax rates that are expected to apply in the financial year when the
asset is realised or the liability is settled, based on tax rates that have been enacted or substantively
enacted at the balance sheet date. Deferred tax is recognised as income or an expense and included
in the profit or loss for the financial year, except when it arises from a transaction which is recognised
directly in equity, in which case the deferred tax is also recognised directly in equity, or when it arises
from a business combination that is an acquisition, in which case the deferred tax is included in the
resulting goodwill or the amount of any excess of the acquirer’s interest in the net fair value of the
acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of the combination.
(m) Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event and
it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each
balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time
value of money is material, provisions are discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision
due to the passage of time is recognised as finance cost.
(n)
Employee benefits
i.
Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in
the year in which the associated services are rendered by employees. Short term accumulating
compensated absences such as paid annual leave are recognised when services are rendered
by employees that increase their entitlement to future compensated absences. Short term nonaccumulating compensated absences such as sick leave are recognised when the absences
occur.
ii. Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays fixed
contributions into separate entities or funds and will have no legal or constructive obligation to pay
further contributions if any of the funds do not hold sufficient assets to pay all employee benefits
relating to employee services in the current and preceding financial years. Such contributions
are recognised as an expense in the profit or loss as incurred. As required by law, companies in
Malaysia make such contributions to the Employees Provident Fund (“EPF”).
iii. Share-based compensation
(o)
The Group’s Employee Share Options Scheme (“ESOS”), an equity-settled, share-based
compensation plan, allows the Group’s employees to acquire ordinary shares of the Company.
No compensation cost or obligation is recognised as share options have not been granted to
employees.
Foreign currencies
i.
Functional and presentation currency
The individual financial statements of each entity in the Group are measured using the currency
of the primary economic environment in which the entity operates (“the functional currency”).
The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the
Company’s functional currency.
43
(o)
Foreign currencies (Cont’d)
ii. Foreign currency transactions
In preparing the financial statements of the individual entities, transactions in currencies other
than the entity’s functional currency (foreign currencies) are recorded in the functional currencies
using the exchange rates prevailing at the dates of the transactions. At each balance sheet date,
monetary items denominated in foreign currencies are translated at the rates prevailing on the
balance sheet date. Non-monetary items carried at fair value that are denominated in foreign
currencies are translated at the rates prevailing on the date when the fair value was determined.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not
translated.
Exchange differences arising on the settlement of monetary items, and on the translation of
monetary items, are included in profit or loss for the year.
Exchange differences arising on the translation of non-monetary items carried at fair value are
included in profit or loss for the period except for the differences arising on the translation of nonmonetary items in respect of which gains and losses are recognised directly in equity. Exchange
differences arising from such non-monetary items are also recognised directly in equity.
iii. Foreign operations
The results and financial position of foreign operations that have a functional currency different
from the presentation currency (RM) of the consolidated financial statements are translated into
RM as follows:
- Assets and liabilities for each balance sheet presented are translated at the closing rate
prevailing at the balance sheet date;
- Income and expenses for each income statement are translated at average exchange rates
for the year, which approximates the exchange rates at the dates of the transactions; and
- All resulting exchange differences are taken to the foreign currency translation reserve within
equity.
(p)
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Group and the revenue can be reliably measured. The following special recognition criteria must also
be met before revenue is recognised:
i.
Sale of properties
Revenue from sale of properties is accounted for by the stage of completion method as described
in Note 2.2(e)(ii).
ii. Sale of goods and completed development properties
44
Revenue is recognised net of discounts and upon transfer of significant risks and rewards of
ownership to the buyer. Revenue is not recognised to the extent where there are significant
uncertainties regarding recovery of the consideration due, associated costs or the possible
return of goods.
iii. Revenue from hotel operations
Revenue from rental of hotel rooms, sale of food and beverage and other related income are
recognised on an accrual basis.
iv. Revenue from services
Revenue from services rendered is recognised net of discounts as and when the services are
performed.
(p)
Revenue recognition (Cont’d)
v. Income from tour, travel and recreation activities
Income from tour, travel and recreation activities is recognised net of discounts as and when the
services are rendered.
vi. Rental income
Rental income is recognised on a straight-line basis over the term of the lease. The aggregate
cost of incentives provided to lessees is recognised as a reduction of rental income over the
lease term on a straight-line basis.
vii. Interest income
Interest income is recognised on an accrual basis using the effective interest method.
viii. Dividend income
Dividend income is recognised when the Group’s right to receive payment is established.
ix. Management fees
Management fees are recognised when services are rendered.
2.3 Standards and interpretations issued but not yet effective
At the date of authorisation of these financial statements, the following new FRSs and Interpretations were
issued but not yet effective and have not been applied by the Group and the Company:
Effective for financial periods beginning on or after 1 July 2009
FRS 8: Operating Segments
Effective for financial periods beginning on or after 1 January 2010
FRS 4: Insurance Contracts
FRS 7: Financial Instruments: Disclosures
FRS 101: Presentation of Financial Statements (revised)
FRS 123: Borrowing Costs
FRS 139: Financial Instruments: Recognition and Measurement
Amendments to FRS 1: First-time Adoption of Financial Reporting Standards and FRS 127: Consolidated
and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or
Associate
Amendments to FRS 2: Share-based Payment – Vesting Conditions and Cancellations
Amendments to FRS 132: Financial Instruments: Presentation
Amendments to FRS 139: Financial Instruments: Recognition and Measurement, FRS 7: Financial
Instruments: Disclosures and IC Interpretation 9: Reassessment of Embedded Derivatives
Amendments to FRSs ‘Improvements to FRSs (2009)’
IC Interpretation 9: Reassessment of Embedded Derivatives
IC Interpretation 10: Interim Financial Reporting and Impairment
IC Interpretation 11: FRS 2 – Group and Treasury Share Transactions
IC Interpretation 13: Customer Loyalty Programmes
IC Interpretation 14: FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements
and their Interaction
Effective for financial periods beginning on or after 1 March 2010
Amendments to FRS 132: Financial Instruments: Presentation, relating to Classification of Rights Issues
45
2.3 Standards and interpretations issued but not yet effective (Cont’d)
Effective for financial periods beginning on or after 1 July 2010
FRS 1: First-time Adoption of Financial Reporting Standards
FRS 3: Business Combinations (revised)
FRS 127: Consolidated and Separate Financial Statements (amended)
Amendments to FRS 2: Share-based Payment
Amendments to FRS 5: Non-current Assets Held for Sale and Discontinued Operations
Amendments to FRS138: Intangible Assets
Amendments to IC Interpretation 9: Reassessment of Embedded Derivatives
IC Interpretation 12: Service Concession Arrangements
IC Interpretation 15: Agreements for the Construction of Real Estate
IC Interpretation 16: Hedges of a Net Investment in a Foreign Operation
IC Interpretation 17: Distributions of Non-cash Assets to Owners
Effective for financial periods beginning on or after 1 January 2011
Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters (Amendment to FRS 1)
Improving Disclosures about Financial Instruments (Amendments to FRS 7)
46
The Group and the Company plan to adopt the above pronouncements when they become effective in
the respective financial period. Unless otherwise described below, these pronouncements are expected
to have no significant impact to the financial statements of the Group and the Company upon their initial
application.
(a)
FRS 3: Business Combinations (revised) and FRS 127: Consolidated and Separate Financial
Statements (amended)
FRS 3 (revised) introduces a number of changes to the accounting for business combinations
occurring on or after 1 July 2010. These include changes that affect the valuation of non-controlling
interest, the accounting for transaction costs, the initial recognition and subsequent measurement of
a contingent consideration and business combinations achieved in stages. These changes will impact
the amount of goodwill recognised, the reported results in the period that an acquisition occurs and
future reported results.
FRS 127 (amended) requires that a change in the ownership interest of a subsidiary (without loss of
control) is accounted for as a transaction with owners in their capacity as owners and to be recorded
in equity. Therefore, such transaction will no longer give rise to goodwill, nor will it give rise to a gain
or loss. Furthermore, the amended Standard changes the accounting for losses incurred by the
subsidiary as well as loss of control of a subsidiary.
The changes by FRS 3 (revised) and FRS127 (amended) will be applied prospectively and only affect
future acquisition or loss of control of subsidiaries and transactions with non-controlling interests.
(b)
FRS 8: Operating Segment
FRS 8 replaces FRS 1142004: Segment Reporting and requires a ‘management approach’, under which
segment information is presented on a similar basis to that used for internal reporting purposes. As a
result, the Group’s external segmental reporting will be based on the internal reporting to the “chief
operating decision maker”, who makes decisions on the allocation of resources and assesses the
performance of the reportable segments. As this is a disclosure standard, there will be no impact on
the financial position or results of the Group.
(c)
FRS 101: Presentation of Financial Statements (revised)
The revised FRS 101 separates owner and non-owner changes in equity. Therefore, the consolidated
statement of changes in equity will now include only details of transactions with owners. All nonowner changes in equity are presented as a single line labelled as total comprehensive income. The
Standard also introduces the statement of comprehensive income: presenting all items of income and
expense recognised in the income statement, together with all other items of recognised income and
expense, either in one single statement, or in two linked statements. The Group and the Company will
adopt two linked statements of comprehensive income. In addition, a statement of financial position
is required at the beginning of the earliest comparative period following a change in accounting policy,
the correction of an error or the reclassification of items in the financial statements. This revised FRS
does not have any impact on the financial position and results of the Group and the Company.
(d)
FRS 123: Borrowing Costs
This Standard supersedes FRS 1232004: Borrowing Costs that removes the option of expensing
borrowing costs and requires capitalisation of such costs that are directly attributable to the acquisition,
construction or production of a qualifying asset as part of the cost of that asset. Other borrowing
costs are recognised as an expense. The Group’s current accounting policy is to expense the
borrowing costs in the period which they are incurred. In accordance with the transitional provisions
of the Standard, the Group will apply the change in accounting policy prospectively for which the
commencement date for capitalisation of borrowing cost on qualifying assets is on or after the
financial period 1 January 2010.
(e)
FRS 139: Financial Instruments: Recognition and Measurement, FRS 7: Financial Instruments:
Disclosures and Amendments to FRS 139: Financial Instruments: Recognition and Measurement,
FRS 7: Financial Instruments: Disclosures
The new Standard on FRS 139: Financial Instruments: Recognition and Measurement establishes
principles for recognising and measuring financial assets, financial liabilities and some contracts to
buy and sell non-financial items. Requirements for presenting information about financial instruments
are in FRS 132: Financial Instruments: Presentation and the requirements for disclosing information
about financial instruments are in FRS 7: Financial Instruments: Disclosures.
(f)
Amendments to FRSs ‘Improvements to FRSs (2009)’
The ‘Improvements to FRSs (2009)’ contains amendments to several FRSs as described below:
i.
FRS 5: Non-current Assets Held for Sale and Discontinued Operations: Clarifies that the
disclosures required in respect of non-current assets and disposal groups classified as held
for sale or discontinued operations are only those described by the Standard. The disclosures
requirements from other FRSs only apply if specifically required for such non-current assets
held for sale and disposal group or discontinued operations. Additional disclosures may also
be necessary to comply with the general requirements of FRS101.
ii. FRS 7: Financial Instruments: Disclosures: Clarifies on the presentation of finance costs whereby
interest income is not a component of finance costs.
iii. FRS 8: Operating Segments: Segment assets and liabilities need only be reported when those
assets and liabilities are included in measures of segment profit or loss that are reviewed or
otherwise regularly used by the ‘chief operating decision maker’.
iv. FRS 101: Presentation of Financial Statements: Assets and Liabilities classified as held for
trading in accordance with FRS139 Financial Instruments: Recognition and Measurement are
not automatically classified as current in the balance sheet. The amendment further clarifies that
the classification of the liability component of a convertible instrument as current or non-current
is not affected by the terms that could, at the option of the holder, result in settlement of the
liability by the issue of equity instruments.
v. FRS 107: Statement of Cash Flows (formerly known as Cash Flow Statements): Clarifies that
only expenditures that result in a recognised asset in the statement of financial position can be
classified as investing activities in the statement of cash flows.
vi. FRS 108: Accounting Policies, Changes in Accounting Estimates and Errors: Clarifies that only
implementation guidance that is an integral part of a FRS is mandatory when selecting accounting
policies.
vii. FRS 116: Property, Plant and Equipment: Replacement of the term “net selling price” with “fair
value less costs to sell”. Items of property, plant and equipment held for rental that are routinely
sold in the ordinary course of business after rental, are transferred to inventory when rental
ceases and they are held for sale. This did not result in any reclassification.
viii. FRS 117: Leases: Clarifies on the classification of leases of land and buildings. For those land
element held under operating leases that are required to be reclassified as finance leases, the
Group shall recognise a corresponding asset and liability in the financial statements which will
be applied retrospectively upon initial application. However, in accordance with the transitional
provision, the Group is permitted to reassess lease classification on the basis of the facts and
circumstances existing on the date it adopts the amendments; and recognise the asset and
liability related to a land lease newly classified as a finance lease at their fair values on that
date; any difference between those fair values is recognised in retained earnings. The Group is
currently in the process of assessing the impact of this amendment.
47
(f)
Amendments to FRSs ‘Improvements to FRSs (2009)’ (Cont’d)
ix. FRS 118: Revenue: The amendment provides additional guidance on whether an entity is acting
as a principal or an agent. It also aligns the definition of costs incurred in originating a financial
asset that should be deferred and recognised as an adjustment to the effective interest by
replacing the term ‘direct costs’ with ‘transaction costs’ as defined in FRS 139.
x. FRS 119: Employee Benefits: The amendment revises the definition of ‘past service costs’,
‘return on plan assets’ and ‘short term’ and ‘other long-term’ employee benefits. It clarifies that
the costs of administering the plan may be either recognised in the rate of return on plan assets
or included in the actuarial assumptions used to measure the defined benefit obligation. The
amendment further clarifies that amendment to plans that result in a reduction in benefits related
to future services are curtailments. It also deleted the reference to the recognition of contingent
liabilities to ensure consistency with FRS 137 Provisions, Contingent Liabilities and Contingent
Assets.
xi. FRS 120: Accounting for Government Grants and Disclosures of Government Assistance: Clarifies
that loans granted in the future with no or low interest rates will not be exempted from the
requirement to impute interest. The difference between the amount received and the discounted
amount is accounted for as government grant. Also, various terminologies used in the Standard
have been revised to be consistent with other FRSs.
xii. FRS 123: Borrowing Costs: The definition of borrowing costs is aligned with FRS 139 by referring
to the use of effective interest rate as a component of borrowing cost.
xiii. FRS 127: Consolidated and Separate Financial Statements: The amendment clarifies that when
a parent entity accounts for a subsidiary at fair value in accordance with FRS 139 in its separate
financial statements, this treatment continues when the subsidiary is subsequently classified as
held for sale.
xiv. FRS 128: Investments in Associates: The amendment clarifies that if an associate is accounted for
at fair value in accordance with FRS 139, only the requirement of FRS 128 to disclose the nature
and extent of any significant restrictions on the ability of the associate to transfer funds to the
investor in the form of cash or repayment of loans applies. It further clarifies that an investment
in an associate is treated as a single asset for the purpose of impairment testing. Therefore,
any impairment loss is not separately allocated to the goodwill included in the investment
balance.
xv. FRS 131: Interests in Joint Ventures: If a joint venture is accounted for at fair value, in accordance
with FRS 139, only the requirements of FRS 131 to disclose the commitments of the venturer
and the joint venture, as well as summary financial information about the assets, liabilities,
income and expense will apply. This amendment has no impact on the Group because it does
not account for its joint ventures at fair value in accordance with FRS 139.
xvi. FRS 134: Interim Financial Reporting: Earnings per share is disclosed in interim financial reports
if an entity is within the scope of FRS 133: Earnings per Share.
48
xvii.FRS 136: Impairment of Assets: Clarifies that when discounted cash flows are used to estimate
‘fair value less cost to sell’ additional disclosure is required about the discount rate, consistent
with disclosures required when the discounted cash flows are used to estimate ‘value in use’.
The amendment further clarifies that the largest cash-generating unit for group of units to which
goodwill should be allocated for purposes of impairment testing is an operating segment as
defined in FRS 8.
xviii.FRS 139: Financial Instruments: Recognition and Measurement: Changes in circumstances
relating to derivatives are not reclassifications and therefore may be either removed from, or
included in, the ‘fair value through profit or loss’ classification after initial recognition. Removed
the reference in FRS 139 to a ‘segment’ when determining whether an instrument qualifies as a
hedge. Require the use of the revised effective interest rate when remeasuring a debt instrument
on the cessation of fair value hedge accounting. The Group and the Company are exempted
from disclosing the possible impact to the financial statements upon the initial application of
this Standard.
(f)
Amendments to FRSs ‘Improvements to FRSs (2009)’ (Cont’d)
xix. FRS 140: Investment Property: Property under construction or development for future use as an
investment property is classified as investment property. Where the fair value model is applied,
such property is measured at fair value. If fair value cannot be reliably determined, the investment
under construction will be measured at cost until such time as fair value can be determined or
construction is complete. The amendment also includes changes in terminology in the Standard
to be consistent with FRS 108.
(g)
Amendments to FRS 1: First-time Adoption of Financial Reporting Standards and FRS 127:
Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly
Controlled Entity or Associate
The amendment to FRS 1 allows first-time adopters to use costs, determined in accordance with
FRS 127, or deemed cost of either fair value (in accordance with FRS 139) or the carrying amount
under previous accounting practice to measure the initial cost of investments in subsidiaries, jointly
controlled entities and associates in the separate opening FRS balance sheet. In the amendment to
FRS 127, there is no longer a distinction between pre-acquisition and post-acquisition dividends. The
amendment also requires the cost of the investment of a new parent in a group (in a reorganisation
meeting certain criteria) to be measured at the carrying amount of its share of equity as shown in the
separate financial statements of the previous parent. The amendments also remove the definition
of the cost method from FRS 127 and will be applied prospectively that affect only the financial
statements of the Company and do not have an impact on the financial statements of the Group.
(h)
IC Interpretation 9: Reassessment of Embedded Derivatives and Amendments to IC Interpretation
9 Reassessment of Embedded Derivatives
This IC requires that there should be no subsequent reassessment of whether an embedded derivative
should be separated from the host contract after initial recognition, unless there have been changes
to the terms of the contract that significantly modifies the cash flows that otherwise would be required
under the contract. The amendment to the IC clarifies that on reclassification of a financial asset
out of the ‘at fair value through profit or loss’ category all embedded derivatives within the scope of
this IC and FRS 139 have to be assessed and, if necessary, separately accounted for in the financial
statements. The IC is to be applied retrospectively. The Group is in the process of assessing the
impact of this amendment.
(i)
IC Interpretation 10: Interim Financial Reporting and Impairment
This IC prohibits impairment losses recognised in an interim period on goodwill or investments in
equity instruments or financial assets carried at cost to be reversed at a subsequent balance sheet
date. This Standard will have no impact on the Group’s and the Company’s financial statements.
(j)
FRS 1: First-time Adoption of Financial Reporting Standards
This FRS supersedes FRS 1 (issued in 2005 and amended in May 2009). The Standard sets out the
procedures that an entity must follow when it adopts FRSs for the first time as the basis for preparing
its financial statements. This Standard will have no impact on the Group’s and the Company’s financial
statements.
(k)
Amendments to FRS 5: Non-current Assets Held for Sale and Discontinued Operations
FRS 5 also applies to non-current assets (or disposal group) that is classified as held for distribution
to owners acting in their capacity as owners (held for distribution to owners). The amendment further
clarifies that all assets and liabilities of a subsidiary shall be classified as held for sale if an entity
has a sale plan involving loss of control of the subsidiary, regardless of whether the entity will retain
non-controlling interest (e.g., an interest in an associate) in its former subsidiary after the sale. This
Amendment will have no impact on the Group’s and the Company’s financial statements.
(l)
Amendments to FRS 138: Intangible Assets
The amendments clarify that an intangible asset must be recognised separately from goodwill even if
it is separable only together with a related contract, identifiable asset, or liability. Also, if an intangible
asset is separable only together with another intangible asset, those assets can be recognised together
as a single asset, and if the individual assets in a group of complementary intangible assets have
similar useful lives, those assets can be recognised together as a single asset. The Group will apply
these amendments prospectively. Therefore, amounts recognised for intangible assets and goodwill
in prior business combinations shall not be adjusted.
49
(m) IC Interpretation 12: Service Concession Arrangements
This Interpretation applies to service concession operators and explains how to account for the
obligations undertaken and rights received in service concession arrangements. The Group is in the
process of assessing the impact of this Interpretation.
(n)
IC Interpretation 15: Agreements for the Construction of Real Estate
This Interpretation requires that when the real estate developer is providing construction services
to the buyer’s specifications, revenue can be recorded only as construction progresses. Otherwise,
revenue should be recognised on completion of the relevant real estate unit. The Group is currently
assessing the impact of the adoption of this interpretation.
(o)
IC Interpretation 16: Hedges of a Net Investment in a Foreign Operation
This Interpretation provides guidance on identifying foreign currency risks and hedging instruments
that qualify for hedge accounting in the hedge of a net investment in a foreign operation. It also
explains how an entity should determine the amounts to be reclassified from equity to profit or loss
for both the hedging instrument and the hedged item. The Group is in the process of assessing the
impact of this Interpretation.
(p)
IC Interpretation 17: Distributions of Non-cash Assets to Owners
This Interpretation clarifies that an entity should measure the non-cash assets distributed to owners at
the fair value of the assets. It also clarifies that the difference between the fair value of the assets and
the carrying amount of the assets distributed is to be taken to income statement. This Interpretation
will be applied prospectively and therefore there will be no impact on prior periods in the financial
statements of the Group and of the Company.
(q)
Improving Disclosures about Financial Instruments (Amendments to FRS 7)
The Improving Disclosures about Financial Instruments reinforces existing principles for disclosures
about liquidity risk. Also, the Amendments require enhanced disclosures about fair value measurements
in which a three-level fair value hierarchy is introduced. An entity is required to classify fair value
measurements using this hierarchy which aims to reflect the inputs used in making the measurement.
These Amendments do not have any impact on the financial position and results of the Group and
of the Company.
2.4 Significant accounting estimates and judgements
50
(a)
Critical judgements made in applying accounting policies
The following are the judgements made by management in the process of applying the Group’s
accounting policies that have the most significant effect on the amounts recognised in the financial
statements.
Classification between investment properties and property, plant and equipment
During the financial year, the Group has rented out a warehouse but has decided not to treat this
property as investment properties because it is not the Group’s intention to hold this property on a
long-term basis for capital appreciation or rental income. Accordingly, this property is still classified
as property, plant and equipment.
(b)
Key sources of estimation uncertainty
The key assumption concerning the future and other key sources of estimation uncertainty at the
balance sheet date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below.
i.
Deferred tax assets
Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances
to the extent that it is probable that taxable profit will be available against which the losses and
capital allowances can be utilised. Significant management judgement is required to determine
the amount of deferred tax assets that can be recognised, based upon the likely timing and level
of future taxable profits together with future tax planning strategies. The total carrying value of
unrecognised tax losses and capital allowances of the Group was RM286,767,000 (28.02.2009:
RM317,174,000).
2.4 Significant accounting estimates and judgements (Cont’d)
ii.
Depreciation of plant and equipment
The furniture and fittings of a subsidiary, Selasih Ekslusif Sdn Bhd costing RM3,829,000 (28.02.2009:
RM4,475,000) during the year are depreciated on a straight-line basis over the assets’ estimated
useful lives of 10 years. The Group is confident that Selasih Ekslusif Sdn Bhd will be able to renew the
lease of shop lots for the remaining useful life of its furniture and fittings even though the remaining
lease period of the tenancy agreement is 5 years. There will be an additional depreciation charge of
RM163,000 (28.02.2009: RM163,000) per annum had the assets been depreciated in accordance
with the remaining lease period of 5 years.
A building of a subsidiary, Cergasjaya Sdn Bhd costing RM2,081,000 (28.02.2009: RMNil) during
the year are depreciated on a straight-line basis over the assets’ estimated useful lives of 10 years.
The Group is confident that Cergasjaya Sdn Bhd will be able to renew the lease of land for the
remaining useful life of its car park and renovation even though the remaining lease period of the
tenancy agreement is within 1 year. There will be an additional depreciation charge of RM2,081,000
(28.02.2009: RMNil) per annum had the assets been depreciated in accordance with the remaining
lease period of 1 year.
iii.
Impairment of goodwill
The Group determines whether goodwill are impaired at least on an annual basis. This requires an
estimation of the value-in-use of the cash-generating units (“CGU”) to which goodwill are allocated.
Estimating a value-in-use amount requires management to make an estimate of the expected future
cash flows from the CGU and also to choose a suitable discount rate in order to calculate the
present value of those cash flows. In calculating the present value of the cash flows of the property
and hospitality segment, the Group has assumed that it will be able to extend the lease period of
its tenancy agreement indefinitely. The carrying amount of goodwill as at 28 February 2010 was
RM29,870,000 (28.02.2009: RM21,168,000). Further details are disclosed in Note 16.
3.Revenue
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Sale of goods
Rental of hotel rooms and other services
Sale of food and beverage
Sale of development properties
Rental income
Tour, travel and recreational activities
Dividend income from subsidiaries
490,288
12,578
12,851
160
9,853
1,211
–
503,399
16,839
18,687
–
11,384
2,611
–
–
–
–
–
–
–
26,600
–
–
–
–
–
–
21,900
526,941
552,920
26,600
21,900
4.Other income
Included in other income are:
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Incentive income
Interest income
Rental income
- advertisement space
- property, plant and equipment and
Service charge
Waiver of debts by a supplier
8,796
453
4,566
891
–
1
–
6
2,779
2,893
–
–
1,806
286
–
1,835
328
435
–
–
–
–
–
–
51
5.Employee benefits expense
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Wages and salaries
29,695
37,153
–
–
Social security contributions
396
481
–
–
Short term accumulating compensated absences
(18)
39
–
–
Contributions to defined contribution plan
3,249
3,784
–
–
Staff welfares and employee meals
1,064
1,613
–
–
Staff uniforms
134
208
–
–
Accommodation benefits
126
170
–
–
Medical benefits
192
164
–
–
Other benefits
275
354
–
–
35,113
43,966
–
–
Included in employee benefits expense of the Group are executive directors’ remuneration amounting to
RM2,647,000 (28.02.2009: RM4,796,000) as further disclosed in Note 6.
6.Directors’ remuneration
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Executive directors’ remuneration (Note 5):
Other emoluments
2,647
4,796
–
–
Non-executive directors’ remuneration:
Fees
Other emoluments
48
204
44
222
48
204
44
222
252
266
252
266
2,899
5,062
252
266
Total directors’ remuneration
The details of remuneration receivable by directors of the Company during the year/period are as follows:
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Executive:
Salaries and other emoluments
Bonus:
- current year/period’s provisions
Defined contribution plan
Social security contributions
52
679
2,318
–
–
–
82
1
100
188
2
–
–
–
–
–
–
762
2,608
–
–
Non-executive:
Salaries and other emoluments
Fees
204
48
–
211
44
11
204
48
–
211
44
11
252
266
252
266
There were no benefits-in-kinds received by the directors.
6.Directors’ remuneration (Cont’d)
The number of directors of the Company whose total remuneration during the year/period fell within the following
bands is analysed below:
Number of directors
28.02.2010 28.02.2009
Executive directors:
RM250,001 – RM300,000
RM300,001 – RM350,000
RM400,001 – RM450,000
RM450,001 – RM500,000
RM750,001 – RM800,000
RM1,100,001 – RM1,150,000
–
1
1
–
–
–
1
–
–
1
1
1
Non-executive directors:
Below RM50,000
RM50,001 – RM100,000
RM100,001 – RM150,000
RM150,001 – RM200,000
2
1
1
–
4
–
–
1
7.Other operating (expenses)/incomes
Other operating (expenses)/incomes are stated:
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
After charging/(crediting):
Non-executive directors’ remuneration (Note 6)
Assessments and quit rent
Auditors’ remuneration:
- Statutory audits
- Current year/period
- (Over)/underprovision in prior period/year
Amortisation of prepaid land lease payments (Note 15)
Bad debts written off
Deposit written off
Donation
Impairment loss on property held for development
(Note 13)
Insurance
Inventories written off
Property, plant and equipment written off
Rental of equipment
Transportation costs
Travelling expenses
Deposit forfeited
Gain on disposal of property, plant and equipment
Overprovision of dividend payable on Irredeemable
Convertible Preference Shares (“ICPS”)
Provision for doubtful debts written back
Reversal of impairment losses for property,
plant and equipment
Reversal of impairment losses for
Reversal of write down of inventories *
Net foreign exchange gain
*
252
909
266
935
252
–
266
–
508
(35)
594
–
34
974
558
14
553
–
30
1,882
80
3
–
–
–
–
93
–
–
8
–
136
1,000
1,155
223
5,335
37
2,952
1,278
(2)
(13)
200
1,486
586
76
39
3,466
1,998
(27)
(270)
–
11
–
–
–
–
36
–
–
–
5
–
–
–
–
80
–
–
–
(212)
(524)
(144)
–
(1,623)
(524)
–
(5,368)
(429)
–
–
(315)
(75)
(1,011)
(65)
(199)
(344)
–
–
–
–
–
–
The reversal of inventories written down is mainly due to the inventories being sold at an amount higher
than the estimated net realisable value.
53
8.Finance costs
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Interest expense on:
Bank borrowings
4,795
43
5,246
71
76
–
91
–
Unwinding of discount on Irredeemable
Convertible Preference Shares (“ICPS”)
dividend payable
4,838
5,317
76
91
–
96
–
96
4,838
5,413
76
187
9.Income tax expense
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
54
Current Malaysian income tax
(Over)/underprovision of Malaysian income
tax in prior period/years
15,321
16,264
2,104
5,439
(331)
(821)
–
5
14,990
15,443
2,104
5,444
Deferred tax (Note 19):
Relating to origination and reversal of
temporary differences
Overprovision in prior period/ years
(6,109)
(56)
(814)
(231)
–
–
–
–
(6,165)
(1,045)
–
–
Total income tax expense
8,825
14,398
2,104
5,444
Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (28.02.2009: 26%) of the estimated
assessable profit for the year. Certain subsidiaries of the Company being Malaysian resident companies with
paid-up capital of RM2.5 million or less qualify for the preferential tax rates under Paragraph 2A, Schedule 1 of
the Income Tax Act, 1967 as follows:
On the first RM500,000 of chargeable income
In excess of RM500,000 of chargeable income
However, pursuant to Paragraph 2B, Schedule 1 of the Income Tax Act, 1967 that was introduced with effect from
the year of assessment 2009, certain subsidiaries of the Company no longer qualify for the above preferential
tax rates.
: 20%
: Malaysian corporate statutory tax rate
9.Income tax expense (cont’d)
A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to
income tax expense at the effective income tax rate of the Group and of the Company is as follows:
01.03.2009 01.01.2008
to
to
28.02.2010 28.02.2009
RM’000RM’000
Group
Profit before taxation
59,341
52,069
Taxation at Malaysian statutory tax rate of 25% (28.02.2009: 26%)
Deferred tax recognised at different tax rates
Effect of income subject to tax rate of 20%
Effect of income not subject to tax
Effect of expenses not deductible for tax purposes
Utilisation of previously unrecognised deferred tax assets
Deferred tax assets recognised during the year/period
Deferred tax assets not recognised during the year/period
Overprovision of income tax in prior period/years
Overprovision of deferred tax in prior period/years
14,835
–
–
(228)
2,207
(1,884)
(5,790)
72
(331)
(56)
13,538
4,241
(152)
(205)
4,693
(6,765)
–
100
(821)
(231)
8,825
14,398
Company
Profit before taxation
32,539
19,738
Taxation at Malaysian statutory tax rate of 25% (28.02.2009: 26%)
Effect of income not subject to tax
Effect of expenses not deductible for tax purposes
Underprovision of income tax in prior period/years
8,135
(6,718)
687
–
5,132
–
307
5
2,104
5,444
Income tax expense for the year/period
Tax savings during the financial year/period arising from:
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Utilisation of previously unrecognised tax losses
1,892
4,182
–
–
Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance
with the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct
tax on dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from
tax in the hands of the shareholders (“single tier system”). However, there is a transitional period of six years,
expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited
circumstances. Companies also have an irrevocable option to disregard the 108 balance and opt to pay dividends
under the single tier system. The change in the tax legislation also provides for the 108 balance to be locked-in
as at 31 December 2007 in accordance with Section 39 of the Finance Act 2007.
The Company did not elect for the irrevocable option to disregard the 108 balance. Accordingly, during the
transitional period, the Company may utilise the credit in the 108 balance as at 28 February 2010 and 28 February
2009 to distribute cash dividend payments to ordinary shareholdings as defined under the Finance Act 2007. As
at 28 February 2010, the Company has 108 balance of RM33,824,000 (28.02.2009: RM41,559,000).
55
10.Earnings per share
Basic/Diluted
Basic and diluted earnings per share amounts are calculated by dividing the profit for the year attributable to
ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the
year/period, excluding treasury shares held by the Company. The weighted average number of ordinary shares
in issue during the year/period has been adjusted for the dilutive effects of all potential ordinary shares from the
conversion of Irredeemable Convertible Preference Shares (“ICPS”).
01.03.2009 01.01.2008
to
to
28.02.2010 28.02.2009
RM’000RM’000
Profit attributable to ordinary equity holders of the Company
including assumed conversion (RM’000)
Weighted average number of ordinary shares in issue (‘000)
Effects of dilution:
Conversion of ICPS (‘000)
Adjusted weighted average number of ordinary shares in issue and issuable
(‘000)
Basic/diluted earnings per share (sen)
50,553
37,498
174,041
151,017
36,209
59,134
210,250
210,151
24.0
17.8
11.Dividends
Dividends in respectDividends recognised
of year/period
in year/period
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Recognised in previous period:
Dividend for 2009: 1.26 sen on 20,000 ICPS-B1
and 36,459,703 ICPS-B2 respectively
(1.26 sen net per preference share)
Dividend for 2010: 1.26 sen on 19,500 ICPS-B1
and 36,432,803 ICPS-B2
(1.26 sen net per preference share)
Proposed for approval at AGM
(not recognised as at 31 December 2007):
Final dividend for 2007: 4% less 26% taxation
on 150,355,507 ordinary shares
(2.96 sen net per ordinary share)
56
–
460
–
–
459
–
–
–
–
–
–
4,450
–
5,564
–
5,564
–
8,409
–
8,409
6,072
–
6,072
–
2,415
–
2,415
–
Recognised during the year/period:
Interim dividend for 2009: 5% less 26% taxation
Interim dividend for 2009: 7% less 25% taxation
First interim dividend for 2010: 5% less 25%
taxation on 161,919,099 ordinary shares
Second interim dividend for 2010: 2% less 25%
Third interim dividend for 2010: 3% less 25%
Fourth interim dividend for 2010: 7% less 25%
3,695
–
3,695
–
11,023
–
11,023
–
23,664
14,433
23,205
18,423
12. Property, plant and equipment
Electrical
* LandCapitalFurniture installation
andGolf work-in-
and
and air + Other
buildings
course progress
fittings conditioner
assetsTotal
RM’000RM’000RM’000RM’000RM’000RM’000RM’000
Group
At 28 February 2010
Cost or valuation
At 1 March 2009
Additions
Disposals
Write off
Reclassification
Reclassified as
prepaid land lease
payments (Note 15)
Acquisition of
subsidiaries
(Note 17(b))
33,654
1,824
–
–
2,135
39,935
–
–
–
4,713
15,832
1,335
–
(4,991)
(9,265)
17,970
1,154
(29)
(642)
501
3,801
241
–
(5)
488
30,940
1,708
(43)
(324)
1,428
142,132
6,262
(72)
(5,962)
–
–
–
(2,891)
–
–
–
(2,891)
4,771
–
–
516
873
779
6,939
At 28 February 2010
42,384
44,648
20
19,470
5,398
34,488
146,408
Representing:
At cost
At valuation
37,822
4,562
44,648
–
20
–
19,470
–
5,398
–
34,488
–
141,846
4,562
At 28 February 2010
42,384
44,648
20
19,470
5,398
34,488
146,408
Accumulated depreciation and impairment losses
At 1 March 2009:
Accumulated
depreciation
Accumulated
impairment losses
10,213
6,470
–
8,697
3,068
22,538
50,986
2,471
14,779
2,528
–
–
–
19,778
Depreciation charge
for the year
Reversal of
impairment losses ^
Disposals
Write off
Acquisition of
subsidiaries
(Note 17(b))
12,684
21,249
2,528
8,697
3,068
22,538
70,764
806
381
–
1,420
160
2,498
5,265
(683)
–
–
(2,157)
–
–
(2,528)
–
–
–
(8)
(339)
–
–
(5)
–
(39)
(283)
(5,368)
(47)
(627)
271
–
–
486
815
622
2,194
At 28 February 2010
13,078
19,473
–
10,256
4,038
25,336
72,181
9,849
3,229
19,473
–
–
–
10,256
–
4,038
–
25,336
–
68,952
3,229
13,078
19,473
–
10,256
4,038
25,336
72,181
Representing:
At cost
At valuation
At 28 February 2010
^
A reversal of impairment loss has been made to increase the carrying value of the golf course to its estimated
recoverable amount based on indicative valuations provided by an independent firm of valuers.
57
12. Property, plant and equipment (cont’d)
Electrical
andGolf work-in-
and
and air + Other
buildings
course progress
assetsTotal
RM’000RM’000RM’000RM’000RM’000RM’000RM’000
Analysed as:
Accumulated
depreciation
Accumulated
impairment losses
11,290
6,851
–
10,256
4,038
25,336
57,771
1,788
12,622
–
–
–
–
14,410
At 28 February 2010
13,078
19,473
–
10,256
4,038
25,336
72,181
At cost
At valuation
27,973
1,333
25,175
–
20
–
9,214
–
1,360
–
9,152
–
72,894
1,333
At 28 February 2010
29,306
25,175
20
9,214
1,360
9,152
74,227
23,450
4,687
39,935
–
14,035
–
15,229
–
3,376
–
28,310
–
124,335
4,687
Additions
Disposals
Write off
Reclassification
Acquisition of
subsidiaries
(Note 17(b))
28,137
–
(125)
–
–
39,935
–
–
–
–
14,035
2,749
–
–
(952)
15,229
1,520
–
(17)
441
3,376
349
(4)
(36)
55
28,310
1,242
(799)
(293)
456
129,022
5,860
(928)
(346)
–
5,642
–
–
797
61
2,024
8,524
At 28 February 2009
33,654
39,935
15,832
17,970
3,801
30,940
142,132
Representing:
At cost
At valuation
29,092
4,562
39,935
–
15,832
–
17,970
–
3,801
–
30,940
–
137,570
4,562
At 28 February 2009
33,654
39,935
15,832
17,970
3,801
30,940
142,132
Net carrying amount
Group
At 28 February 2009
Cost or valuation
At 1 January 2008
At cost
At valuation
At 1 January 2008:
Accumulated
depreciation
Accumulated
impairment losses
58
7,968
6,034
–
6,644
2,924
18,888
42,458
2,525
15,215
2,467
–
–
–
20,207
Depreciation charge
for the period
Reversal of
impairment losses ^
Adjustment #
Disposals
Write off
Reclassification
Acquisition of
subsidiaries
(Note 17(b))
10,493
21,249
2,467
6,644
2,924
18,888
62,665
773
436
–
1,523
107
2,933
5,772
(54)
–
(15)
–
–
(436)
–
–
–
–
–
61
–
–
–
–
–
–
(7)
(3)
–
–
(4)
(16)
–
–
–
(775)
(247)
3
(490)
61
(794)
(270)
–
1,487
–
–
540
57
1,736
3,820
At 28 February 2009
12,684
21,249
2,528
8,697
3,068
22,538
70,764
Electrical
andGolf work-in-
and
and air + Other
buildings
course progress
assetsTotal
RM’000RM’000RM’000RM’000RM’000RM’000RM’000
Representing:
At cost
At valuation
9,623
3,061
21,249
–
2,528
–
8,697
–
3,068
–
22,538
–
67,703
3,061
At 28 February 2009
12,684
21,249
2,528
8,697
3,068
22,538
70,764
Analysed as:
Accumulated
depreciation
Accumulated
impairment losses
10,213
6,470
–
8,697
3,068
22,538
50,986
2,471
14,779
2,528
–
–
–
19,778
At 28 February 2009
12,684
21,249
2,528
8,697
3,068
22,538
70,764
At cost
At valuation
19,469
1,501
18,686
–
13,304
–
9,273
–
733
–
8,402
–
69,867
1,501
At 28 February 2009
20,970
18,686
13,304
9,273
733
8,402
71,368
Net carrying amount
^
A reversal of impairment loss has been made to increase the carrying value of the golf course to its estimated
recoverable amount based on indicative valuations provided by an independent firm of valuers.
#
It relates to impairment loss over reversed in prior year.
+
Other assets consist of renovations, plant, equipment, motor vehicles and others.
*
Land and buildings of the Group
Freehold
landBuildingsTotal
RM’000RM’000RM’000
At 28 February 2010
Cost or valuation
At 1 March 2009
Additions
Acquisition of subsidiaries
Reclassification
6,083
–
–
–
27,571
1,824
4,771
2,135
33,654
1,824
4,771
2,135
At 28 February 2010
6,083
36,301
42,384
Representing:
At cost
At valuation
6,083
–
31,739
4,562
37,822
4,562
At 28 February 2010
6,083
36,301
42,384
At 1 March 2009:
Accumulated depreciation
Accumulated impairment losses
–
592
10,213
1,879
10,213
2,471
Depreciation charge for the year
Reversal of impairment losses
592
–
–
–
12,092
806
(683)
271
12,684
806
(683)
271
At 28 February 2010
592
12,486
13,078
59
*
Land and buildings of the Group (Cont’d)
Freehold
landBuildingsTotal
RM’000RM’000RM’000
Representing:
At cost
At valuation
592
–
9,257
3,229
9,849
3,229
At 28 February 2010
592
12,486
13,078
Analysed as:
–
592
11,290
1,196
11,290
1,788
At 28 February 2010
592
12,486
13,078
Net carrying amount
At cost
At valuation
5,491
–
22,482
1,333
27,973
1,333
At 28 February 2010
5,491
23,815
29,306
At 1 January 2008
At cost
At valuation
6,083
81
17,367
4,606
23,450
4,687
Disposals
6,164
(81)
–
21,973
(44)
5,642
28,137
(125)
5,642
At 28 February 2009
6,083
27,571
33,654
Representing:
At cost
At valuation
6,083
–
23,009
4,562
29,092
4,562
At 28 February 2009
6,083
27,571
33,654
At 1 January 2008:
–
592
7,968
1,933
7,968
2,525
Depreciation charge for the period
Reversal of impairment losses
Disposals
592
–
–
–
–
9,901
773
(54)
1,487
(15)
10,493
773
(54)
1,487
(15)
At 28 February 2009
592
12,092
12,684
Representing:
At cost
At valuation
592
–
9,031
3,061
9,623
3,061
At 28 February 2009
592
12,092
12,684
Analysed as:
–
592
10,213
1,879
10,213
2,471
At 28 February 2009
592
12,092
12,684
At 28 February 2009
Cost or valuation
60
*
Land and buildings of the Group (Cont’d)
Freehold
landBuildingsTotal
RM’000RM’000RM’000
Net carrying amount
At cost
At valuation
5,491
–
13,978
1,501
19,469
1,501
At 28 February 2009
5,491
15,479
20,970
Furniture,
fittings,
office
equipment
and
computer
RM’000
Company
At 28 February 2010
Cost
At 1 March 2009 and 28 February 2010
91
At 1 March 2009 and 28 February 2010
91
Net carrying amount
–
At 28 February 2009
Cost
91
At 1 January 2008 and 28 February 2009
91
Net carrying amount
–
(a)
The land and buildings of the Group were revalued in 1991 by the directors based on valuations by
independent professional valuers on a fair market value basis in 1990 and as revised by the Government
Valuers.
Had the land and buildings been carried at historical cost, the carrying amount that would have been in
the financial statements as at the end of the year/period would be as follows:
Group
28.02.2010 28.02.2009
RM’000RM’000
Buildings
95
233
61
(b)
During the financial year/period, the Group acquired property, plant and equipment at aggregate costs of
RM6,262,000 (28.02.2009: RM5,860,000) of which RMNil (28.02.2009: RM200,000) were acquired by means
of hire purchase and finance lease arrangements. Net carrying amounts of property, plant and equipment
held under hire purchase and finance lease arrangements are as follows:
Group
28.02.2010 28.02.2009
RM’000RM’000
(c)
Motor vehicles
Plant and equipment
504
–
779
136
504
915
The net carrying amounts of property, plant and equipment pledged as securities for borrowings (Note 25)
are as follows:
Group
28.02.2010 28.02.2009
RM’000RM’000
Freehold land
Buildings
2,050
12,904
2,050
7,725
14,954
9,775
13.Land held for property development
FreeholdDevelopment
land
expenditureTotal
RM’000RM’000RM’000
Group
At 28 February 2010
Cost
At 1 March 2009
Additions
Reclassified as held for sale (Note 22)
14,350
1,000
(11,511)
956
–
(956)
15,306
1,000
(12,467)
At 28 February 2010
3,839
–
3,839
At 1 March 2009
Impairment losses for the year ** (Note 7)
2,534
1,000
–
–
2,534
1,000
At 28 February 2010
3,534
–
3,534
305
–
305
14,350
956
15,306
At 1 January 2008
Impairment losses for the period * (Note 7)
2,334
200
–
–
2,334
200
At 28 February 2009
2,534
–
2,534
11,816
956
12,772
Carrying amount at 28 February 2010
62
At 28 February 2009
Cost
Carrying amount at 28 February 2009
13.Land held for property development (Cont’d)
*
An impairment loss had been made to reduce the net carrying amount of freehold land to its estimated
recoverable amount based on indicative valuations on a fair market value basis as provided by an
independent firm of valuers.
**
An impairment loss had been made for a piece of land that may be required, pending further negotiations,
to be surrendered to the Government.
14.Biological assets
Group
28.02.2010 28.02.2009
RM’000RM’000
At cost
At 1 March 2009/1 January 2008
Additions
1,779
389
1,400
379
At 28 February
2,168
1,779
As at 28 February 2010, the biological assets have not reached maturity, hence amortisation has not
commenced.
15. Prepaid land lease payments
Group
28.02.2010 28.02.2009
RM’000RM’000
Surrogate cost
Reclassified from property, plant and equipment (Note 12)
22,057
5,300
2,891
13,114
8,943
–
At 28 February
30,248
22,057
Accumulated amortisation and impairment losses
Accumulated amortisation
6,189
2,474
4,663
2,539
Amortisation for the year/period (Note 7)
Reversal of impairment losses (Note 7)
8,663
594
(315)
300
7,202
553
(65)
973
At 28 February
9,242
8,663
Analysed as:
Accumulated amortisation
Accmumulated impairment losses
7,083
2,159
6,189
2,474
At 28 February
9,242
8,663
Net carrying amount at 28 February
21,006
13,394
Analysed as:
Long leasehold land
Short leasehold land
282
20,724
287
13,107
21,006
13,394
63
15. Prepaid land lease payments (Cont’d)
(a)
The net carrying amounts of leasehold lands pledged as securities for borrowings are as follows:
Group
28.02.2010 28.02.2009
RM’000RM’000
Short leasehold land (Note 25)
12,541
7,833
16.Goodwill
Group
28.02.2010 28.02.2009
RM’000RM’000
Cost
Acquisition of minority interests (Note 17(d))
21,168
8,702
–
–
20,114
1,054
At 28 February
29,870
21,168
Impairment tests for goodwill
Allocation of goodwill
Goodwill has been allocated to the Group’s cash generating unit (“CGU”) identified according to business segment
as follows:
28.02.2010 28.02.2009
RM’000RM’000
64
Trading of duty free goods and non-dutiable merchandise
Property and hospitality
28,816
1,054
20,114
1,054
Total
29,870
21,168
Key assumptions used in value-in-use calculations
The recoverable amount of the CGU is determined based on value-in-use calculations using cash flow projections
based on financial forecasts and its key assumptions approved by management covering a 5-year period with
a growth rate of approximately 5%.
Key assumptions and management’s approach to determine the values assigned to each key assumption are
as follows:
(i)
Budgeted gross margin
The basis used to determine the value assigned to the budgeted gross margin is the average gross margin
achieved in the year immediately before the budgeted year increased for expected efficiency improvements.
The budgeted gross margin for trading of duty free goods and non-dutiable merchandise segment are in the
range of 10% to 26% (28.02.2009: 11%) whereas for property and hospitality segment, it is approximately
68% (28.02.2009: 64%).
(ii)
Selling price
The selling price used to calculate the cash inflows from operations was determined after taking into
consideration price trends of the industries which the CGUs are exposed. Values assigned are consistent
with the external sources of information.
(iii)
Discount rate
The discount rate applied to the cash flow projections of 13.2% (28.02.2009: 11.4%) is based on the
weighted average cost of capital of the Group.
16.Goodwill (Cont’d)
Sensitivity to changes in assumptions
With regard to the assessment of value-in-use of all CGUs, management believes that no reasonable change in any
of the above key assumptions would cause the carrying value of the units to materially exceed their recoverable
amounts.
17.Investments in subsidiaries
Company
28.02.2010 28.02.2009
RM’000RM’000
Unquoted shares at cost
Less: Accumulated impairment losses
83,678
(3,000)
70,635
(10,400)
80,678
60,235
(a)
Details of the subsidiaries as at 28 February 2010 are as follows:
Name of subsidiaries
Proportion of
ownership interest
28.02.2010 28.02.2009 Principal activities
%
%
Incorporated in Malaysia:
DFZ Trading Sdn Bhd
100.00
100.00 Investment holding, provision of
computer related and
management services.
Orchard Boulevard Sdn Bhd
100.00
100.00 Investment holding and resort
development.
Selasih Ekslusif Sdn Bhd
100.00
100.00 Retailing of duty free merchandise and
operation of a supermarket and
department store.
Winner Prompt Sdn Bhd
100.00
100.00 Licensed distributor and wholesaler of
duty free merchandise.
DFZ Asia Sdn Bhd
100.00
100.00
Investment holding.
Emas Kerajang Sdn Bhd *
100.00
100.00 Retailer of duty free and non-dutiable
merchandise.
Seruntun Maju Sdn Bhd *
100.00
–
Retailer of duty free and non-dutiable
merchandise.
Held through DFZ Trading Sdn Bhd
DFZ Duty Free Supplies Sdn Bhd
100.00
100.00 Wholesaler and distributor of duty free
and non-dutiable merchandise.
Cergasjaya Sdn Bhd
100.00
100.00 Wholesaler and retailer of duty free
Jelita Duty Free Supplies Sdn Bhd
100.00
100.00 Wholesaler and distributor of duty free
65
17.Investments in subsidiaries (Cont’d)
Proportion of
ownership interest
%
%
Jasa Duty Free Sdn Bhd
100.00
merchandise.
DFZ (M) Sdn Bhd
100.00
merchandise.
DFZ Emporium Sdn Bhd
100.00
merchandise.
DFZ Duty Free (Langkawi) Sdn Bhd
100.00
merchandise.
Wealthouse Sdn Bhd
100.00
merchandise.
Melaka Duty Free Sdn Bhd
51.00
51.00
Retailer of duty free and non-dutiable
merchandise.
Zon Emporium Sdn Bhd
100.00
100.00 Commenced retailing of duty free and
non-dutiable merchandise activity
during the year.
Media Zone Sdn Bhd
100.00
100.00 Advertising, promotion activities and
investment holding.
DFZ Tours & Travel Sdn Bhd
100.00
100.00 Investment holding, tours and travel
activities.
First Influx Sdn Bhd *
100.00
–
Licensed distributor and wholesaler of
duty free merchandise.
Held through Orchard Boulevard Sdn Bhd
Gold Vale Development Sdn Bhd
100.00
100.00
Property development.
Radiant Ranch Sdn Bhd
100.00
100.00
Resort development.
Black Forest Golf And
100.00
100.00 Golf and country club operator and a
Country Club Sdn Bhd wholesaler and retailer of duty free
66
Cergasjaya Properties Sdn Bhd
100.00
100.00 Resort development and properties
management and cultivation of oil
palm.
Kelana Megah Sdn Bhd
100.00
100.00 Resort development and operating of
duty free complex and hotel.
Held through DFZ Tours & Travel Sdn Bhd
Fleet Car Hire & Tours Sdn Bhd
100.00
100.00 Hire and drive services and tour
activities.
Proportion of
ownership interest
%
%
Held through DFZ Emporium Sdn Bhd
Incorporated in Indonesia:
PT. DFZ Indon *
99.00
99.00
Management consulting.
Ceased operation.
Held through DFZ Asia Sdn Bhd
Incorporated in Indonesia:
PT. DFZ Indon *
1.00
1.00
Management consulting.
Ceased operation.
Held through Emas Kerajang Sdn Bhd
Front Top (M) Sdn Bhd *
100.00
merchandise.
*
Audited by firms other than Ernst & Young.
(b)
During the financial year, the Group completed the following acquisitions:
(i)
On 5 August 2009, the Company acquired 100% of the equity interest in Seruntun Maju Sdn Bhd
(“SMSB”) from its shareholders, Damai Baru Sdn Bhd (83%) and Maju Dua Sdn Bhd (17%) for a total
cash consideration of RM13,043,000.
(ii)
On 15 October 2009, DFZ Trading Sdn Bhd acquired 100% of the equity interest in First Influx Sdn
Bhd (“FISB”) for a total cash consideration of RM1,721,000.
The cost of acquisition comprised the following:
RM’000
Purchase consideration satisfied by cash
Costs attributable to the acquisition, paid in cash
14,700
64
Total cost of acquisition
14,764
The acquired subsidiaries have contributed the following results to the Group:
RM’000
Revenue
Profit for the year
6,524
573
67
(b)
Acquisition of subsidiaries (Cont’d)
The identifiable assets and liabilities arising from the acquisitions were as follows:
Fair valueAcquiree’s
recognised on
carrying
acquisition
amount
RM’000RM’000
Property, plant and equipment (Note 12)
Prepaid land lease payments (Note 15)
Inventories
4,745
5,000
2,182
1,201
1,203
4,515
4,525
2,182
1,201
1,203
14,331
13,626
Borrowings
Tax payable
Deferred tax liabilities (Note 19)
4,229
1,086
565
2,389
4,229
1,086
565
1,540
8,269
7,420
RM’000
Fair value of net assets
Goodwill on acquisition (Note 16)
6,062
8,702
14,764
The cash outflow on acquisition is as follows:
68
14,700
64
Total cash outflow *
Cash and cash equivalents of subsidiary acquired
14,764
(1,203)
Net cash outflow of the Group
13,561
*Total cash outflow consists of:
RM’000
-cash outflow of the Company
-cash outflow of a subsidiary
13,043
1,721
14,764
In the previous period, the Group acquired the entire equity interest in Emas Kerajang Sdn Bhd and its
wholly owned subsidiary, Front Top Sdn Bhd from the holding company, Atlan Holdings Bhd..
The cost of acquisition comprised the following:
RM’000
40,000
235
40,235
(b)
Acquisition of subsidiaries (Cont’d)
The acquired subsidiaries had contributed the following results to the Group:
RM’000
Revenue
169,056
7,291
The assets and liabilities arising from the acquisitions are as follows:
Fair valueAcquiree’s
recognised on
carrying
acquisition
amount
RM’000RM’000
Property, plant and equipment (Note 12)
Prepaid land lease payments (Note 15)
Inventories
4,704
7,970
5,692
16,198
8,134
4,292
5,726
5,692
16,198
8,134
42,698
40,042
Borrowings
Tax payable
Deferred tax liabilities (Note 19)
17,866
1,607
35
3,069
17,866
1,607
35
1,250
22,577
20,758
Cash and cash equivalents comprise:
Bank overdrafts
8,134
(1,507)
Total cash and cash equivalents
6,627
RM’000
Fair value of net assets
Goodwill on acquisition (Note 16)
20,121
20,114
40,235
The cash outflow on acquisition is as follows:
40,000
235
Total cash outflow of the Company
Cash and cash equivalents of subsidiaries acquired
40,235
(6,627)
Net cash outflow of the Group
33,608
Subsequent to 28 February 2010, the Group acquired the entire equity interest in Tenggara Senandung
Sdn Bhd and Binamold Sdn Bhd and the details are disclosed in Note 35.
69
(c)
Dissolution of a subsidiary
In the previous period, Duty Free People Pty. Ltd., a subsidiary of DFZ Group incorporated in Australia
with 75% equity interest, had been deregistered after getting approval from the Australian Securities &
Investments Commission. The subsidiary was previously reported as dormant since incorporation. The
dissolution had no significant effects on the financial position of the Group as at the end of the previous
period.
(d)
Acquisition of minority interests in subsidiaries
In the previous period, the Group had acquired additional 25% and 14.7% equity interests in Wealthouse
Sdn Bhd (“WSB”) and Kelana Megah Sdn Bhd (“KMSB”) respectively. Thus, WSB and KMSB had become
wholly owned subsidiaries. This resulted in additional goodwill of RM1,054,000 as disclosed in Note 16.
18.Trade and other receivables
GroupCompany
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Current
Trade receivables
Third parties
16,346
(6,634)
16,119
(6,606)
–
–
–
–
9,712
9,513
–
–
Other receivables
Due from subsidiaries
Due from ultimate holding company
–
1
–
–
–
–
645,725
–
(570,290)
633,596
–
(570,290)
1
–
75,435
63,306
Due from a main contractor for late delivery claims
Deposits
Prepayments
Staff loans
Sundry receivables
3,519
4,876
5,315
220
13,017
(9,832)
3,519
5,210
6,075
308
3,933
(10,198)
–
4
413
–
–
–
–
4
65
–
8
–
17,115
8,847
417
77
17,116
8,847
75,852
63,383
26,828
18,360
75,852
63,383
Other receivables
Staff loans
473
714
–
–
Analysis of staff loans:
Not later than 1 year
Later than 1 year and not later than 2 years
Later than 2 years and not later than 5 years
Later than 5 years
220
214
259
–
308
237
475
2
–
–
–
–
–
–
–
–
693
1,022
–
–
Trade receivables, net
Non-current
70
18.Trade and other receivables
(a)
Credit risk
i.
The Group’s primary exposure to credit risk arises through its trade receivables. The Group’s trading
terms with its customers are on cash and credit. The Group’s normal trade credit terms range from
30 to 90 days (28.02.2009: 30 to 90 days). Other credit terms are assessed and approved on a
case-by-case basis. Overdue balances are reviewed regularly by senior management. In view of the
aforementioned and the fact that the Group’s trade receivables relate to a large number of diversified
customers, there is no significant concentration of credit risk. Trade receivables are non-interest
bearing.
ii.
Included in trade receivables are balances due from the following related parties:
Group
28.02.2010 28.02.2009
RM’000RM’000
Subsidiaries of the ultimate holding company:
Naluri Properties Sdn Bhd
Atlan Management Sdn Bhd
iii.
24
–
–
331
10
1
Included in sundry receivables are balances due from the following related parties:
Group
28.02.2010 28.02.2009
RM’000RM’000
Darul Metro Sdn Bhd
46
3,519
18
744
41
–
–
–
(b)
Amount due from related companies
The amounts due from ultimate holding company and subsidiaries are advances, which are unsecured,
non-interest bearing and are repayable on demand.
Further details on related party transactions are disclosed in Note 32.
Other information on financial risks of other receivables are disclosed in Note 33.
19.Deferred tax
Group
28.02.2010 28.02.2009
RM’000RM’000
Recognised in income statement (Note 9)
At 28 February
Presented after appropriate offsetting as follows:
Deferred tax assets
2,978
2,389
(6,165)
954
3,069
(1,045)
(798)
2,978
(6,708)
5,910
(1,133)
4,111
(798)
2,978
71
19.Deferred tax (Cont’d)
The components and movements of deferred tax liabilities and assets during the year/ period prior to offsetting
are as follows:
Deferred tax liabilities of the Group:
Property,
plant andRevaluation
equipment
surplusOthersTotal
RM’000RM’000RM’000RM’000
At 1 March 2009
Recognised in income statement
650
14
144
3,695
2,375
(370)
–
–
–
4,345
2,389
(226)
At 28 February 2010
808
5,700
–
6,508
At 1 January 2008
661
46
(57)
769
3,023
(97)
(2)
–
2
1,428
3,069
(152)
At 28 February 2009
650
3,695
–
4,345
Deferred tax assets of the Group:
Unused tax
losses and
unabsorbed
capital
allowancesOthersTotal
RM’000RM’000RM’000
At 1 March 2009
(304)
(5,645)
(1,063)
(294)
(1,367)
(5,939)
At 28 February 2010
(5,949)
(1,357)
(7,306)
At 1 January 2008
(56)
(248)
(418)
(645)
(474)
(893)
At 28 February 2009
(304)
(1,063)
(1,367)
Deferred tax assets have not been recognised in respect of the following items:
28.02.2010 28.02.2009
RM’000RM’000
72
Unused tax losses
Unabsorbed capital allowances
249,726
37,041
257,134
60,040
286,767
317,174
Deferred tax assets have not been recognised in respect of these items as they may not be used to offset
taxable profits of other subsidiaries in the Group and they have arisen in subsidiaries that have a recent history
of losses.
The unused tax losses and unabsorbed capital allowances of the Company are available for offsetting against
future taxable profits subject to no substantial change in shareholdings under the Income Tax Act, 1967 and
guidelines issued by the tax authority.
20.Inventories
Group
28.02.2010 28.02.2009
RM’000RM’000
At cost:
Trading goods
Food and beverage
Consumables
Completed development properties
110,237
779
263
155
77,467
915
332
302
111,434
79,016
The cost of inventories recognised as an expense during the year/period amounted to RM370,867,000 (28.02.2009:
RM371,027,000).
21.Cash and bank balances
GroupCompany
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Cash on hand and at banks
29,402
11,127
143
395
Deposits with licensed banks
36,697
44,386
–
–
Less: Reclassified to assets held for sales
66,099
(1)
55,513
–
143
–
395
–
66,098
55,513
143
395
Deposits with licensed banks of the Group amounting to RM9,987,000 (28.02.2009: RM9,209,000) are pledged
to banks for credit facilities granted to certain subsidiaries as disclosed in Note 25.
Other information on financial risks of cash and cash equivalents are disclosed in Note 33.
For the purpose of the cash flow statements, cash and cash equivalents comprise the following as at the balance
sheet date:
GroupCompany
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Less: Bank overdrafts (Note 25)
Less: Pledged deposits with licensed banks
66,099
(486)
(9,987)
55,513
–
(9,209)
143
–
–
395
–
–
Total cash and cash equivalents
55,626
46,304
143
395
22.Assets of disposal group classified as held for sale
On 16 October 2009, Orchard Boulevard Sdn Bhd, a wholly-owned subsidiary of the Company had entered into a
conditional Share Sale Agreement with the ultimate holding company, Atlan Holdings Bhd. (“Atlan”) to dispose of
all the shares in Radiant Ranch Sdn Bhd (“RRSB”) for a cash consideration of RM14,932,656 and assumption by
Atlan of inter-company debt due and owing by RRSB to the Company and/or its group of companies amounting
to RM12,067,344.
On 10 February 2010, the shareholders of the Company had approved the proposed disposal and the disposal
was fully completed on 7 April 2010.
As at 28 February 2010, the assets and liabilities of RRSB have been presented on the consolidated balance
sheet as a disposal group held for sale.
73
22.Assets of disposal group classified as held for sale (Cont’d)
The major classes of assets and liabilities classified as held for sale on the consolidated balance sheet as at 28
February 2010 are as follows:
Carrying
amount as at
28.02.2010
RM’000
Group
Assets
Land held for property development (Note 13)
Other receivables
12,467
1
1
Assets of disposal group classified as held for sale
12,469
Liabilities
Other payables
2
Liabilities attributable to the disposal group classified as held for sale
2
23.Share capital and treasury shares
Number of
ordinaryNumber of irredeemable
shares of RM1 convertible preference sharesAmount
each
(“ICPS”) of RM0.10 each
Irredeemable convertible preference
shares (“ICPS”)
OrdinaryOrdinary
shares shares
(Issued (IssuedTotal
and
and share
fully paid)ICPS-AICPS-B1ICPS-B2ICPS-Cfully paid)ICPS-AICPS-B1ICPS-B2ICPS-CSubtotal capital
‘000
‘000
‘000
‘000
‘000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
At 1 January 2008
149,895 14,234
43 36,460 22,472 149,895
1,424
4
3,646
2,247
7,321 157,216
Ordinary shares
issued during
the period:
Conversion of
11,304 (6,223)
(23)
(24) (10,691) 11,304
(623)
(2)
(2) (1,069) (1,696) 9,608
preference shares
At 28 February 2009
and 1 March 2009
Ordinary shares
issued during
the year:
Conversion of
preference shares
At 28 February 2010
74
161,199
8,011
20
11,781 161,199
801
2
3,644
1,178
5,625 166,824
48,965
(8,011)
(20) (36,436) (11,781) 48,965
(801)
(2)
(3,644)
(1,178)
(5,625) 43,340
210,164
–
–
–
–
–
– 210,164
–
36,436
–
– 210,164
Number of sharesAmount
28.02.2010 28.02.2009 28.02.2010 28.02.2009
’000
’000RM’000RM’000
Authorised share capital
Ordinary shares of RM1.00 each
900,000
900,000
900,000
900,000
Preference shares of RM0.10 each
1,000,000
1,000,000
100,000
100,000
Total
1,900,000
1,900,000
1,000,000
1,000,000
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to
one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s
residual assets.
(a)
Irredeemable convertible preference shares (“ICPS”)
The ICPS are constituted pursuant to the restructuring plan of the Group.
The main features of the ICPS are as follows:
(i)
Each registered holder of ICPS-A, ICPS-B1, ICPS-B2 and ICPS-C shall have the right to convert
such amount of ICPS-A, ICPS-B1, ICPS-B2 and ICPS-C held into fully paid-up ordinary shares of
the Company at any time during the Conversion Period.
(ii)
The conversion of ICPS-A into new ordinary shares of the Company at a conversion price of RM1.10
each shall be satisfied by tendering the equivalent par value of the ICPS-A for every one new ordinary
share.
(iii)
The conversion of ICPS-B1, ICPS-B2 or ICPS-C shall be by tendering one unit of ICPS-B1, ICPS-B2
or ICPS-C respectively for conversion into new ordinary shares of the Company of which RM0.10 is
paid up. The remaining RM0.90 shall be paid up from the share premium reserve of the Company.
(iv)
The holders of ICPS-A will have the right to convert the ICPS into new ordinary shares of the Company
at any time during the tenure of the ICPS-A. The holders of ICPS-B1 will have the right to convert
the ICPS into new ordinary shares of the Company from the third anniversary date of its issuance.
The holders of ICPS-B2 and ICPS-C will have the right to convert the ICPS into new ordinary shares
of the Company from the fourth anniversary date of their first issuance.
Unless previously converted, all outstanding ICPS-A, ICPS-B1, ICPS-B2 or ICPS-C will be mandatorily
converted on the immediate day before the fifth anniversary of the date of the first issuance.
(v)
The Company shall maintain sufficient Share Premium Reserve of up to RM85,853,000 at all times
to allow the conversion of outstanding ICPS-B1, ICPS-B2 or ICPS-C into new ordinary shares of the
Company.
(vi)
The ICPS-A rank pari passu with the ICPS-B1 and ICPS-B2 but shall rank in priority to the ICPS-C
and ordinary shares in respect of return of capital on liquidation or otherwise for the par value of the
ICPS-A provided that there shall be no further right to participate in the surplus assets or profits of
the Company.
(vii) The ICPS-B1 and ICPS-B2 shall carry a cumulative dividend of 1.26 sen per ICPS-B1 and ICPSB2, payable annually over the tenure of ICPS-B1 and ICPS-B2 at the end of each financial year,
commencing on the second anniversary of the date of first issuance, subject to the Company having
sufficient profit to declare dividend. Such rights to the cumulative dividends which have not been
declared shall be extinguished upon the conversion of ICPS-B1 or ICPS-B2 into new ordinary shares
of the Company.
No dividend is distributable to ICPS-A and ICPS-C prior to the conversion into ordinary shares of
the Company.
(viii) The new ordinary shares of the Company to be issued pursuant to the conversion of the ICPS-A,
ICPS-B1, ICPS-B2 or ICPS-C shall, upon allotment and issue, rank pari passu in all respect with
the existing ordinary shares of the Company, save and except that they will not be entitled to any
dividend or distributions made prior to the conversion date.
As at 28 February 2010, all ICPSs were fully converted.
(b)
Employees’ Share Option Scheme (“ESOS”)
The Company implemented an ESOS which is governed by the by-laws approved by the shareholders at
Extraordinary General Meetings held on 8 April 2003 and 21 September 2004.
The salient features of the ESOS are as follows:
(i)
Eligible persons are employees of the Group (including directors) who have attained the age of 18
years, have been confirmed in the employment of the Group and are employed full time by and on
the payroll of a company within the Group. The eligibility for participation in the ESOS shall be at the
discretion of the Options Committee appointed by the Board of Directors.
In the case of directors, major shareholders or persons connected with directors or major shareholders
of the Group, their specific entitlements under the Scheme shall be approved by the shareholders
of the Company in a general meeting.
75
(b)
Employees’ Share Option Scheme (“ESOS”) (Cont’d)
(ii)
The total number of shares to be offered shall not exceed in aggregate 15% of the total issued share
capital of the Company at any point of time during the tenure of the ESOS, which shall be in force
for a period of five years.
(iii)
Not more than 50% of new shares of the Company available under the Scheme should be allocated
in aggregate to the directors and senior management of the Company and not more than 10% of new
shares of the Company available under the Scheme should be allocated to any individual director or
employee who, either singly or collectively through persons connected with him, holds 20% or more
in the issued and paid-up capital of the Company.
(iv)
The option price for each share shall be subject to a discount of not more than 10% from the 5-day
weighted average market price of the shares of the Company immediately preceding the offer date,
or the par value of the shares of the Company of RM1, whichever is the higher.
(v)
No option shall be granted for less than 100 shares to any eligible employee and shall always be in
multiples of 100 shares.
(vi)
An option granted under the ESOS shall be capable of being exercised by the grantee by notice
in writing to the Company before the expiry of five years from the date of the offer or such shorter
period as may be specified in such offer.
(vii) The new shares to be issued upon any exercise of the option shall, upon allotment and issuance,
rank pari passu in all respects with the existing shares of the Company save and except that the new
shares will not be entitled to any dividends, rights, allotments and/ or other distributions where the
entitlement date precedes the date of allotment of the new shares. The option shall not carry any
rights to vote at any general meeting of the Company.
(viii) The non-executive directors of the Group who have been granted options shall not sell, transfer or
assign the new ordinary shares of the Company obtained through the exercise of the options offered
to him under the ESOS within one year from the date of offer of such options.
76
There are no ESOS granted during the financial year or previous period. The Company’s ESOS has expired
on 13 March 2010 and the Company has no intention to renew the scheme.
(c)
Treasury shares
This amount relates to the acquisition cost of treasury shares.
The shareholders of the Company, by an ordinary resolution passed in an annual general meeting held
on 26 August 2009 approved the Company’s plan to repurchase its own ordinary shares. The directors of
the Company believe that the repurchase plan can be applied in the best interest of the Company and its
shareholders.
During the financial year, the Company repurchased 3,417,400 of its issued ordinary shares from the open
market at an average price of RM3.55 per share. The total consideration paid for the repurchase including
transaction costs was RM12,159,956, comprising consideration paid amounting to RM12,117,504 and
transaction costs of RM42,452. The repurchase transactions were financed by internally generated funds.
The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies
Act, 1965.
In addition, the Company also distributed 3,232,167 treasury shares to its shareholders as shares dividend
on the basis of (1) treasury share for every 100 existing ordinary shares of RM1.00 each with a total cost
of RM11,477,984.
Of the total of 210,163,862 (28.02.2009: 161,199,457) issued and fully paid ordinary shares as at 28 February
2010, 199,033 (28.02.2009: 13,800) are held as treasury shares by the Company. As at 28 February 2010,
the number of outstanding ordinary shares in issue after the set off is therefore 209,964,829 (28.02.2009:
161,185,657) ordinary shares of RM1 each.
24.Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of
the financial statements of foreign operations whose functional currencies are different from that of the Group’s
presentation currency.
25.Borrowings
GroupCompany
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Short term borrowings
Secured:
Bankers’ acceptances
Bank overdrafts (Note 21)
Term loans
Hire purchase and finance lease liabilities (Note 26)
Interest payable
6,593
486
50,508
206
182
5,982
–
35,000
287
166
–
–
50,000
–
182
–
–
35,000
–
166
57,975
41,435
50,182
35,166
80
80
–
–
58,055
41,515
50,182
35,166
Secured:
Term loans
24,000
306
24,000
511
24,000
–
24,000
–
24,306
24,511
24,000
24,000
Bank overdrafts
Term loans
6,593
486
74,508
512
5,982
–
59,000
798
–
–
74,000
–
–
–
59,000
–
Interest payable
82,099
262
65,780
246
74,000
182
59,000
166
82,361
66,026
74,182
59,166
Maturity of borrowings (excluding hire purchase
and finance lease liabilities)
57,849
24,000
41,228
24,000
50,182
24,000
35,166
24,000
Unsecured:
Interest payable
Long term borrowings
Total borrowings
The borrowings are secured by way of:
•
•
•
•
fixed charges on certain properties of the Group with a net carrying amount of RM27,495,000 (28.02.2009:
RM17,608,000);
deposits with licensed banks amounting to RM9,987,000 (28.02.2009: RM9,209,000);
fixed and floating charges over the property, plant and equipment of certain subsidiaries; and
corporate guarantees from the Company and ultimate holding company.
Other information on financial risks of borrowings are disclosed in Note 33.
77
26.Hire purchase and finance lease liabilities
Group
28.02.2010 28.02.2009
RM’000RM’000
Future minimum lease payments:
Later than 5 years
232
189
137
–
329
231
321
5
Total future minimum lease payments
Less: future finance charges
558
(46)
886
(88)
Present value of finance lease liabilities (Note 25)
512
798
Analysis of present value of finance lease liabilities:
Later than 5 years
206
175
131
–
287
205
301
5
Less: Amount due within 12 months (Note 25)
512
(206)
798
(287)
Amount due after 12 months (Note 25)
306
511
The Group has hire purchase contracts on property, plant and equipment (see Note 12(b)). There are no restrictions
placed upon the Group by entering into these leases.
Other information on financial risks of hire purchase and finance lease liabilities are disclosed in Note 33.
27. Provisions
Group
28.02.2010 28.02.2009
RM’000RM’000
78
Liquidated ascertained damages
547
547
At 28 February
547
547
At 28 February
Current
547
547
Provision for liquidated ascertained damages is in respect of projects undertaken by a subsidiary. The provision
is recognised for expected liquidated ascertained damages claims based on the terms of the applicable sale
and purchase agreements.
28.Trade and other payables
GroupCompany
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Current
Trade payables
Third parties
Retention sums
80,780
301
47,343
301
–
–
–
–
81,081
47,644
–
–
–
–
–
232
59,765
–
47,751
–
Accruals
Contribution costs payable
Rental payables
Deposits received
Dividend payables
Royalty payables
Sundry payables
–
8,001
209
2,547
2,488
11,023
890
4,046
232
9,006
230
1,597
2,526
459
1,115
5,085
59,765
134
–
–
–
11,023
–
116
47,751
96
–
–
–
459
–
75
29,204
20,250
71,038
48,381
110,285
67,894
71,038
48,381
Other payables
Due to subsidiaries
Due to ultimate holding company
(a)
Trade payables
Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from
30 to 90 days (28.02.2009: 30 to 90 days). Included in trade payables are balances due to the following
related parties:
Group
28.02.2010 28.02.2009
RM’000RM’000
16
21
–
3
(b)
Amount due to related companies
The amount due to ultimate holding company is mainly advances which is interest bearing, unsecured and
is repayable on demand.
The amounts due to subsidiaries are mainly advances which are interest free, unsecured and are repayable
on demand.
(c)
Other payables
i.
In prior period, the amount due to ultimate holding company is mainly advances payable by a
subsidiary of the Group with interest of 7% per annum.
79
28.Trade and other payables (Cont’d)
(c)
Other payables (Cont’d)
ii.
The movements of contribution costs payable are as follows:
Group
28.02.2010 28.02.2009
RM’000RM’000
Utilisation of provision
230
(21)
243
(13)
At 28 February
209
230
iii.
Dividend payables are amount payable to the shareholders as disclosed in Note 11.
iv.
Included in other payables are balances due to the following related parties:
Group
28.02.2010 28.02.2009
RM’000RM’000
Darul Metro Sdn Bhd
Zon Hospitality Services Sdn Bhd
Further details on related party transactions are disclosed in Note 32.
Other information on financial risks of other payables are disclosed in Note 33.
52
204
–
87
80
962
349
64
29.Commitments
(a)
Capital commitments
Group
28.02.2010 28.02.2009
RM’000RM’000
80
Capital expenditure
Approved and contracted for:
232
1,819
Approved but not contracted for:
112
–
344
1,819
(b)
The Group as lessee
Operating lease payments represent rentals payable by the Group for use of land and buildings. Leases
are negotiated for a term of 2 to 10 years.
The future aggregate minimum lease payments under non-cancellable operating leases contracted for as
at the balance sheet date but not recognised as liabilities, are as follows:
Group
28.02.2010 28.02.2009
RM’000RM’000
Future minimum rentals payments:
Later than 5 years
11,441
46,696
–
11,486
48,109
9,983
58,137
69,578
29.Commitments (Cont’d)
(c)
The Group as lessor
Operating lease receipts represent rentals receivable by the Group from renting out the land, buildings and
equipment. These leases have remaining non-cancellable lease terms of 7 months.
The future minimum lease payments receivable under non-cancellable operating leases contracted for as
at the balance sheet date but not recognised as receivables, are as follows:
Group
28.02.2010 28.02.2009
RM’000RM’000
Future minimum rentals receivable:
490
–
840
490
490
1,330
Rental income recognised in profit or loss during the year is disclosed in Note 4.
30.Contingent liabilities
Company
28.02.2010 28.02.2009
RM’000RM’000
Contingent liabilities in respect of guarantees extended in support of banking
and other credit facilities granted to subsidiaries:
Secured by deposits with licensed banks (Note 21)
26,687
30,241
31. Material litigations
The following are the material litigations involving the Group:
(i)
Mancon Berhad (“MB”), on behalf of Nilai Barisan Sdn Bhd (“NBSB”), had commenced arbitration
proceedings on 24 May 1999 against Kelana Megah Sdn Bhd (“KMSB”) in relation to NBSB’s engagement
as a sub-contractor nominated by KMSB for the supply, installation, testing and commissioning of airconditioning and mechanical ventilation works in the construction of the Johor Bahru Duty Free Complex.
The sum claimed by MBSB is approximately RM2,468,000. KMSB has counter-claimed that it incurred
loss/ damage in the sum of approximately RM1,909,000 in rectifying defective and/or incomplete works
of NBSB.
KMSB’s solicitors informed the Arbitrator on 21 January 2002 that NBSB had been wound up on 8 August
2000. In view that NBSB had been wound up, parties were not able to resume the arbitration proceedings
and the same is currently in abeyance.
KMSB’s solicitors had issued numerous letters to the Arbitrator to seek the Arbitrator’s instructions on the
arbitration proceedings and/or instructions that the arbitration proceedings be closed. To date, KMSB has
not received any response from the Arbitrator. KMSB’s solicitors had also written to the liquidator of NBSB
to request that the liquidator decides either if NBSB wishes to continue with the arbitration proceedings or
to withdraw the claims against KMSB. To date, KMSB has not received any response from the liquidator.
(ii)
LH Technology Sdn Bhd (“LHT”) had commenced legal proceedings at the High Court on 30 December
1999 against KMSB, claiming a sum of RM1,026,000 in relation to LHT’s engagement as a sub-contractor
for the design, supply and installation of curtain walling, frameless glass panel, shopfront, balustrading,
aluminum and glazing works in the construction of the Johor Bahru Duty Free Complex.
On 26 June 2000, the Senior Assistant Registrar of the High Court allowed LHT’s application for a summary
judgment against KMSB. KMSB appealed to the High Court Judge against the said summary judgment,
and this appeal was allowed. LHT then appealed to the Court of Appeal against the decision of the High
Court Judge.
On 28 July 2008, LHT’s appeal was dismissed with no order as to costs by the Court of Appeal. KMSB’s
solicitor has informed the High Court of the said dismissal of LHT’s appeal, and requested the High Court
to fix a mention date for the suit. To date, the High Court has not fixed any date.
81
31. Material litigations (cont’d)
(iii)
82
The Company had commenced legal proceedings at the High Court on 30 December 2003 against Eden
Enterprises (M) Berhad (“EEB”) and Zil Enterprise Sdn Bhd (“ZI”), claiming:(i)
from EEB, the sum of RM3,044,000 being unpaid sums due and payable to DFZ and its subsidiaries
arising from various inter-companies debts incurred while EEB and its subsidiaries were subsidiaries
of the Company.
(ii)
from ZIL and EEB, specific relief for their fulfillment of obligations in releasing the corporate guarantee
provided by the Company in the sum of RM13,803,000 which ZIL and EEB had undertaken to do.
On 7 June 2005, the Senior Assistant Registrar of the High Court allowed EEB’s and ZIL’s application to
amend their Statement of Defence and include a counter-claim against the Company. The Company has
appealed to the High Court Judge in Chambers against the said decision of the Senior Assistant Registrar.
The Company’s appeal last came up for mention on 6 November 2008 and has since been vacated to a
date to be fixed by the High Court pending the reconstruction of the High Court’s file on the suit. To date,
the High Court has not fixed any date.
The aforesaid corporate guarantee as provided by the Company had been released by the relevant bank
subsequently. The Company has then filed an application to amend its claim against ZIL and EEB to reflect
the same. The hearing of this application is currently pending the reconstruction of the High Court’s file on
the suit. To date, the High Court has not fixed any date.
(iv)
EEB had commenced legal proceedings at the High Court on 31 January 2004 against DFZ Duty Free
(Langkawi) Sdn Bhd (“DDFL”) and 2 other defendants in respect of an alleged tort of conspiracy on a longterm lease of twenty-eight (28) years entered into between EEB and DDFL for a duty free outlet and staff
living quarters in Langkawi.
EEB had also applied to the High Court via an interlocutory application to compel DDFL to quit, vacate
and deliver up to EEB the said duty free outlet and staff living quarters. EEB’s application was dismissed
by the High Court on 6 December 2005.
EEB then appealed to the Court of Appeal against the said dismissal by the High Court. The Court of
Appeal dismissed EEB’s appeal on 27 May 2009 and further directed that an early date be fixed for trial at
the High Court.
DDFL had filed an application for an interim injunction to restrain EEB and its subsidiary from exercising
self-help to regain vacant possession of the premises and interfering with DDFL’s quiet enjoyment of the
same. DDFL also filed another application subsequently for an interim injunction to restrain EEB and its
subsidiary from prohibiting and qualifying DDFL’s use of lanes around the premises for access to or egress
from the premises. The High Court has fixed the case for trial from 23 to 25 November 2010.
(v)
Adenan, a shareholder of Naluri Corporation Berhad (“NCB”), had commenced legal proceedings at the High
Court on 6 October 2004 against the Company and 9 other respondents, seeking inter alia the following
orders against the Company:-
(i)
that any resolutions passed by the shareholders and/or directors of NCB approving the alleged related
party transactions involving the Company as set out in the Petition be cancelled; and
(ii)
that the Company pays to NCB the monies paid by NCB to the Company and/or the financial
institutions which received monies pursuant to the alleged related party transactions as set out in
the Petition.
Pursuant to the Company’s application to strike out the suit, the High Court had on 17 June 2005 struck
out with costs the suit as against the Company. Adenan has appealed to the Court of Appeal against
the High Court’s striking out of the Petition against the Company. The hearing of the Petitioner’s appeal
against the High Court’s decisions in dismissing the Petitioner’s application for injunction and in allowing
the Company’s application to strike out the suit with costs has been fixed by the Court of Appeal on 21
June 2010.
31. Material litigations (cont’d)
(vi)
By way of a Re-Amended Defence and Counterclaim dated 30 October 2008, the Company has been made
a party to the legal proceedings commenced by Pengurusan Danaharta Nasional Berhad, Danaharta Urus
Sdn Bhd and Danaharta Managers Sdn Bhd (hereinafter collectively referred to as “Danaharta”) against
Tan Sri Dato’ Tajuddin bin Ramli (“TSDTR”) in the High Court.
In addition to seeking from DFZ and 11 other defendants various declarations to void inter alia the Naluri
Scheme (which includes the Capital Repayment and Naluri Acquisitions described in the Counterclaim)
and consequential orders in relation thereto, TSDTR is also seeking from the Company and 26 other
defendants to the Re-Amended Defence and Counterclaim, jointly and/or severally, inter alia the sum of
RM6,246,492,000 (being shares in the 10th defendant to the Re-Amended Defence and Counterclaim at
RM24 per share); general, aggravated and exemplary damages to be assessed; and damages for conspiracy
to be assessed.
Further, TSDTR is also seeking from all defendants to the Re-Amended Defence and Counterclaim, jointly
and severally, inter alia the sum of RM7,214,909,000; damages for conspiracy to be assessed; various
declarations in regards to the invalidity of the vestings made in favour of Danaharta and the acts, deeds and
agreements, transfers, conveyances, dealings executed by Danaharta and the then Special Administrators
of NCB pursuant to the said vestings in favour of Danaharta, including the return and restoration of all
assets and monies transferred or conveyed; damages, including aggravated and exemplary damages to
be assessed; and interest and costs.
The Court had on 12 November 2009 allowed Atlan Holdings Bhd.’s, Atlan Properties Sdn Bhd’s and
NCB’s appeal against the Senior Assistant Registrar’s decision to allow TSDTR’s application to re-amend
the Counterclaim thus the Company is no longer a party in the Counterclaim. The Company had applied
to the High Court to strike out the suit, wherein the Court had on 7 December 2009 allowed the striking
out application. TSDTR had on 4 January 2010 filed an appeal against the decision granting the striking
out application on 7 December 2009.
(vii) On 8 August 1995, Zainal Azman bin Md. Zain (“ZAMZ”), the administrator of the estate of Wan Zainab binti
M.A. Bakar, commenced legal proceedings against the Company and six (6) of its Directors at that point in
time, in the Penang High Court for the alleged: (a) fraudulent and non-payment transfer of 36,666 units of
shares in DFZ (M) Sdn Bhd (“DFZSB”) (formerly known as Syarikat Sriwani (M) Sdn Bhd) to the Company
for the amount of RM37,000 which belonged to his mother, Wan Zainab binti M.A. Bakar; (b) fraudulent and
underpayment of transfer of 5,000 units of shares in DFZSB to the Company which is valued at RM3.50
each totaling RM17,500 which also belonged to his mother, Wan Zainab binti M.A. Bakar; and (c) breach
of trust by failing to give a full and frank disclosure of the said transfers of shares.
ZAMZ has made a claim for the sum of RM13,901,000 being the value of the shares, general, aggravated
and exemplary damages of RM30,000 together with interest and costs.
After the trial, the High Court dismissed the claims of ZAMZ with costs on 31 January 2007. ZAMZ appealed
to the Court of Appeal against the High Court’s dismissal. The appeal was dismissed by the Court of Appeal
on 2 July 2009.
32.Related party disclosures
(a)
In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company
had the following transactions with related parties during the year/period:
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Car park rental paid to
(i)
Car rental receivable/received from
(i)
Purchases from
349
510
–
–
14
17
–
–
–
43
–
–
83
32.Related party disclosures (Cont’d)
(a)
In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company
had the following transactions with related parties during the year/period: (Cont’d)
GroupCompany
01.03.2009 01.01.2008 01.03.2009 01.01.2008
to
to
to
to
28.02.2010 28.02.2009 28.02.2010 28.02.2009
RM’000RM’000RM’000RM’000
Rental payable/paid to
(ii)
Binamold Sdn Bhd
Naluri Corporation Berhad
(ii)
Darul Metro Sdn Bhd
(ii)
Rental receivable/received from
(ii)
Management fee payable/paid to
(iii)
Sales to Tenggara Senandung Sdn Bhd (iv)
Security, maintenance and engineering
services receivable/received from
(v)
Royalties receivable/received from
Naluri Corporation Berhad
Royalties receivable/received from
Darul Metro Sdn Bhd
(Repayment of advances to)/ advances
from ultimate holding company
(Advances to)/repayment of advances
from subsidiaries
Advances from subsidiaries
Dividend receivable/received from
subsidiaries
84
407
475
–
–
–
5,500
–
–
11,000
7,333
–
–
3,453
3,917
–
–
2,560
47
2,310
23
–
–
–
–
528
616
–
–
–
165
–
–
330
220
–
–
(232)
233
–
–
–
–
–
–
(12,129)
23,214
15,394
13,132
–
–
26,600
21,900
(i)
Car park rental incomes/expenses were made in accordance with prices negotiated between the
parties.
(ii)
Rental incomes/expenses were made in accordance with prices negotiated between the parties.
(iii)
Management fees were made according to negotiated prices between the parties.
(iv)
Sales of goods to related companies were made according to negotiated prices between the
parties.
(v)
Security, maintenance and engineering services incomes were made according to negotiated prices
between the parties.
Information regarding outstanding balances arising from related party transactions as at 28 February
2010 are disclosed in Notes 18 and 28.
(b)
Compensation of key management personnel
The remuneration of certain directors and other members of key management during the year/period were
as follows:
Group
01.03.2009 01.01.2008
to
to
28.02.2010 28.02.2009
RM’000RM’000
Short-term employee benefits
3,075
369
4,313
415
3,444
4,728
32.Related party disclosures (Cont’d)
(b)
Compensation of key management personnel (Cont’d)
Included in the remuneration of total key management personnel are:
01.03.2009 01.01.2008
to
to
28.02.2010 28.02.2009
RM’000RM’000
Directors’ remuneration
1,641
3,275
33.Financial instruments
(a)
Financial risk management objectives and policies
The Group’s financial risk management policy seeks to ensure that adequate financial resources are available
for the development of the Group’s businesses whilst managing its interest rate risks (both fair value and
cash flow), foreign currency risk, liquidity risk and credit risk. The Board reviews and agrees policies for
managing each of these risks and they are summarised below. The Group does not trade in derivative
financial instruments during the year, other than as disclosed in Note 33 (c).
(b)
Interest rate risks
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a
financial instrument will fluctuate due to changes in market interest rates. As the Group has no significant
interest-bearing financial assets, the Group’s income and operating cash flows are substantially independent
of changes in market interest rates. The Group’s interest-bearing financial assets are mainly short term in
nature and have been mostly placed in fixed deposits.
The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates
expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to
fair value interest rate risk.
The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings.
The following tables set out the carrying amounts, the weighted average effective interest rates (“WAEIR”)
as at the balance sheet date and the remaining maturities of the Group’s and the Company’s financial
instruments that are exposed to interest rate risk:
Within
More
1
1 - 2
2 - 3
3 - 4
4 - 5
than
NoteWAEIR
year
years
years
years
years 5 yearsTotal
%RM’000RM’000RM’000RM’000RM’000RM’000RM’000
At 28 February 2010
Group
Fixed rate
Term loans
25
26
6.43
3.49
(50,508)
(206)
(24,000)
(175)
–
(94)
–
(32)
–
(5)
–
–
(74,508)
(512)
Floating rate
Bank overdrafts
21
25
25
2.55
7.49
3.38
36,697
(486)
(6,593)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
36,697
(486)
(6,593)
85
33.Financial instruments (Cont’d)
(b)
Interest rate risks
More
Within
1
1 - 2
2 - 3
3 - 4
4 - 5
than
NoteWAEIR
year
years
years
years
years 5 yearsTotal
%RM’000RM’000RM’000RM’000RM’000RM’000RM’000
At 28 February 2009
Group
Fixed rate
Term loans
25
26
6.88
3.19
(35,000)
(287)
–
(205)
(24,000)
(175)
–
(94)
–
(32)
–
(5)
(59,000)
(798)
Floating rate
21
25
1.79
4.07
44,386
(5,982)
–
–
–
–
–
–
–
–
–
–
44,386
(5,982)
Interest on financial instruments subject to floating interest rates is repriced annually. Interests on financial
instruments at fixed rates are fixed until the maturity of the instrument. The other financial instruments of the
Group and the Company that are not included in the above tables are not subject to interest rate risks.
(c)
Foreign currency risk
The Group is exposed to transactional currency risk primarily through sales and purchases that are
denominated in a currency other than the functional currency of the operations to which they relate. The
currencies giving rise to this risk are primarily United States Dollars, Singapore Dollar, Japanese Yen, Euro,
Australia Dollar, Thai Baht, New Taiwan Dollar, Sterling Pound, Indonesia Ruppiah and Renminbi. Foreign
exchange exposures in transactional currencies other than functional currencies of the operating entities
are kept to an acceptable level.
The net unhedged financial assets and financial liabilities of the Group that are not denominated in their
functional currencies are as follows:
At 28 February 2010:
FunctionalUnitedNew
currency ofAustralianJapaneseSingaporeSterlingStatesThaiBruneiTaiwanRenminbi
the GroupDollarEuroYenDollar PoundDollarBahtDollarDollarChinaTotal
RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
86
Trade receivables
Ringgit Malaysia
–
14
–
4
1
737
–
–
–
–
756
Other receivables
Ringgit Malaysia
–
–
–
–
–
12
–
–
–
–
12
Cash and
bank balances
Ringgit Malaysia
4
4
1
24
2
50
141
1
1
3
231
4
18
1
28
3
799
141
1
1
3
999
Trade payables
Ringgit Malaysia
–
199
–
560
–
41,829
–
–
–
–
42,588
Other payables
Ringgit Malaysia
–
–
–
–
–
–
1
–
–
–
1
–
199
–
560
–
41,829
1
–
–
–
42,589
33.Financial instruments (cont’d)
(c)
Foreign currency risk (Cont’d)
At 28 February 2009:
FunctionalUnitedNew
currency ofAustralianJapaneseSingaporeSterlingStatesThaiBruneiTaiwanRenminbi
the GroupDollarEuroYenDollar PoundDollarBahtDollarDollarChinaTotal
RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
Trade receivables
Ringgit Malaysia
–
5
–
–
2
931
–
–
–
–
938
Other receivables
Ringgit Malaysia
–
–
–
13
–
–
–
–
–
–
13
Cash and
bank balances
Ringgit Malaysia
1
1
1
16
1
101
70
7
1
1
200
1
6
1
29
3
1,032
70
7
1
1
1,151
Trade payables
Ringgit Malaysia
165
53
–
8
1
6,377
–
–
–
–
6,604
Other payables
Ringgit Malaysia
–
–
–
–
–
–
3
–
–
–
3
165
53
–
8
1
6,377
3
–
–
–
6,607
As at balance sheet date, the Group had entered into forward foreign exchange contracts with the following
notional amounts and maturities:
MaturitiesTotal
within 1
notional
Currency
year
amount
At 28 February 2010:RM’000RM’000
Group
Forwards used to hedge trade payables
USD
23,564
23,564
(d)
Liquidity risk
The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to
ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management,
the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital
requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to
its overall debt position. As far as possible, the Group raises committed funding from both capital markets
and financial institutions and balances its portfolio with some short term funding so as to achieve overall
cost effectiveness.
(e)
Credit risk
The Group’s credit risk is primarily attributable to trade receivables. The Group trades only with recognised
and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms
are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing
basis. Since the Group trades only with recognised and creditworthy third parties, there is no requirement
for collateral.
The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents and
marketable securities, arises from default of the counterparty, with a maximum exposure equal to the
carrying amount of these financial assets.
The Group does not have any significant exposure to any individual customer or counterparty nor does it
have any major concentration of credit risk related to any financial assets.
87
33.Financial instruments (Cont’d)
(f)
Fair values
The carrying amounts of financial assets and financial liabilities of the Group and of the Company at the
balance sheet date approximated their fair values except for the following:
GroupCompany
CarryingCarrying
Note
amountFair value
amountFair value
RM’000RM’000RM’000RM’000
At 28 February 2010
Hire purchase and
finance lease liabilities
Forward foreign exchange contracts
26
33 (c)
512
511
–
–
–
150
–
–
798
821
–
–
At 28 February 2009
Hire purchase and
finance lease liabilities
26
The methods and assumptions used by management to determine fair values of financial instruments other
than those whose carrying amounts reasonably approximate their fair values are as follows:
i.
Borrowings
Fair value has been determined using discounted estimated cash flows. The discount rates used
are the current market incremental lending rates for similar types of lending, borrowing and leasing
arrangements.
ii.
Forward foreign exchange contracts
The fair value of a forward foreign exchange contract is the amount that would be payable or receivable
on termination of the outstanding position arising and is determined by reference to the difference
between the contracted rate and forward exchange rate as at the balance sheet date applied to a
contract of similar quantum and maturity profile.
34. segment information
88
(a)
Reporting format
The primary segment reporting format is determined to be business segments as the Group’s risks and rates
of return are affected predominantly by differences in the products and services produced. The activities of
the Group are carried out mainly in Malaysia and as such, segmental reporting by geographical locations is
not presented. The operating businesses are organised and managed separately according to the nature of
the products and services provided, with each segment representing a strategic business unit that offers
different products and serves different markets.
(b)
Business segments
The Group comprises the following main business segments:
(i)
Trading of duty free goods and non-dutiable merchandise;
(ii)
Properties and hospitality.
Other operations of the Group mainly comprise provision of management service, recreation, tours and
travel services, neither of which constitutes a separately reportable segment.
(c)
Allocation basis and transfer pricing
Segment results, assets and liabilities include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis.
The directors are of the opinion that transfer prices between business segments are based on negotiated
prices. Segment revenue, expenses and results include transfers between business segments. These
transfers are eliminated on consolidation.
34.Segment information (Cont’d)
Business segments
The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information
by business segment:
Trading of duty
free goods and Properties
non-dutiable
and
merchandise hospitalityOthersEliminationsConsolidated
RM’000RM’000RM’000RM’000RM’000
28 February 2010
Revenue and expenses
Revenue
Sales to external customers
Inter-segment sales
489,997
18,827
36,929
4,751
15
57,606
–
(81,184)
526,941
–
Total revenue
508,824
41,680
57,621
(81,184)
526,941
Results
Segment results
59,285
2,284 55,508
(52,898)
Finance costs
64,179
(4,838)
Profit before tax
Income tax expense
59,341
(8,825)
Profit for the year
50,516
Assets and liabilities
Segment assets
241,627
73,324 29,927
–
Unallocated assets
344,878
7,404
Total assets
352,282
Segment liabilities
95,779
10,081 13,335
–
Unallocated liabilities
119,195
82,908
Total liabilities
202,103
Other segment information
Amortisation of prepaid land
lease payments
Capital expenditure
Depreciation
property, plant and equipment
Non-cash income/ (expenses)
other than depreciation,
amortisation and
impairment losses
(530)
(3,994)
(3,124)
(64)
(2,503)
(1,895)
–
(154)
(246)
–
–
–
(594)
(6,651)
(5,265)
–
5,368
–
–
5,368
–
315
–
–
315
(1,262)
(6,189)
346
–
(7,105)
89
34.Segment information (Cont’d)
Business segments (Cont’d)
The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information
by business segment:
Trading of duty
free goods and Properties
non-dutiable
and
merchandise hospitalityOthersEliminationsConsolidated
RM’000RM’000RM’000RM’000RM’000
28 February 2009
Revenue and expenses
90
Revenue
Sales to external customers
Inter-segment sales
497,473
3,639
54,357
5,519
1,090
43,362
–
(52,520)
552,920
–
Total revenue
501,112
59,876
44,452
(52,520)
552,920
Results
Segment results
65,777
8,335 29,725
(46,355)
Finance costs 57,482
(5,413)
Profit before tax
Income tax expense
52,069
(14,398)
37,671
Assets and liabilities
Segment assets
140,774
90,031
43,279
–
Unallocated assets
274,084
2,432
Total assets
276,516
Segment liabilities
59,490
11,310
4,667
–
Unallocated liabilities
75,467
66,005
Total liabilities
141,472
Other segment information
Amortisation of prepaid land
lease payments
Capital expenditure
Depreciation
property, plant and equipment
Non-cash income/ (expenses)
other than depreciation,
amortisation and
impairment losses
(413)
(3,231)
(3,307)
(140)
(2,774)
(2,145)
–
(234)
(320)
–
–
–
(553)
(6,239)
(5,772)
–
429
–
–
429
–
65
–
–
65
(4,040)
(105)
333
–
(3,812)
35.Significant and subsequent events
(a)
On 16 October 2009, Orchard Boulevard Sdn Bhd had entered into a conditional Share Sale Agreement
with Atlan Holdings Bhd. (“AHB”) to dispose of all the shares in Radiant Ranch Sdn Bhd (“RRSB”) for a cash
consideration of RM14,932,656 and assumption by AHB of inter-company debt due and owing by RRSB
to the Company and/or its group of companies amounting to RM12,067,344 as at 31 August 2009. On 10
February 2010, the shareholders of the Company had approved the proposed disposal and the disposal
was fully completed on 7 April 2010. Upon the completion of the Proposed Disposal, DFZ is expected to
realise a net gain of approximately RM14,400,000 which will be recorded in the next financial year ending
28 February 2011.
(b)
On 16 October 2009, the Company had entered into a conditional Share Sale Agreement with Atlan Holdings
Bhd. (“AHB”) to purchase all the shares in Tenggara Senandung Sdn Bhd for a cash consideration of
RM22,000,000 and all the shares in Binamold Sdn Bhd (“BMSB”) for a cash consideration of RM2,800,763
and assumption by the Company of inter-company debt due and owing by BMSB to AHB amounting to
RM5,199,237 as at 31 August 2009. On 10 February 2010, the shareholders of the Company had approved
the proposed acquisitions and the acquisitions were completed on 7 April 2010. There is no material impact
on the net assets of the Group.
(c)
The Company’s Employee Share Options Scheme has expired on 13 March 2010 and the Company has
no intention to renew the scheme.
36.Comparatives
The following comparative figures have been reclassified to conform with current financial year’s presentation:
As
previouslyAs
classifiedReclassification
reclassified
RM’000RM’000RM’000
Group
Balance Sheet
Deferred tax assets
1,367
(4,345)
(234)
234
1,133
(4,111)
91
Analysis Of Ordinary Shareholdings
as at 30 June 2010
Directors’ Direct and Deemed Interests in the Company and/or its related companies
According to the Register of Directors’ Shareholdings required to be kept under Section 134 of the Companies Act
1965, the Directors’ interests in the Company and its related companies are as follows:a)
Shares in the Company
None of the Directors had any interest in ordinary shares in the Company.
b)
Shares in the holding company, Atlan Holdings Bhd
Direct Interest
No. of Ordinary Percentage
Shares held
(%)
22,270,500
132,300
8.84
0.05
Other than disclosed above, none of the other Directors had any interest in ordinary shares in its related
companies.
ORDINARY SHARES OF RM1.00 EACH (“ORDINARY SHARES”)
Class of Shares
:
Ordinary Shares of RM1.00 each
Voting Rights
:
One (1) vote per ordinary share
DISTRIBUTION OF ORDINARY SHAREHOLDINGS
No. of
No. of PercentageOrdinary Percentage
HoldingsShareholders
(%)Shares
*(%)
Less than 100
100 – 1,000
1,001 – 10,000
10,001 – 100,000
100,001 to less than 5% of issued shares
5% and above of issued shares
4,276
1,463
346
49
39
2
69.25
139,686
23.70
436,017
5.60
972,252
0.79
1,226,026
0.63 38,309,346
0.03 168,880,502
0.07
0.21
0.46
0.58
18.25
80.43
TOTAL
6,175
100.00 209,963,829
100.00
*
92
Excludes 200,033 ordinary shares held as treasury shares.
Analysis Of Ordinary Shareholdings (Cont’d)
THIRTY (30) LARGEST SHAREHOLDERS as per the record of depositors
No. of
Ordinary SharesPercentage
Name
*(%)
1. Atlan Holdings Bhd
156,861,702
74.71
12,018,800 5.72
3. Information Parade Sdn Bhd
4,876,732
2.32
4. HSBC Nominees (Asing) Sdn Bhd
(RBS Coutts SG for Orient Achieve Limited)
3,828,435
1.82
5. A.A. Anthony Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account for Atlas Sapphire Sdn Bhd)
3,550,000
1.69
6. Citigroup Nominees (Asing) Sdn Bhd
(Exempt An for Citibank NA, Singapore)
3,088,501
1.47
7. Cimsec Nominees (Tempatan) Sdn Bhd
(CIMB Bank for Choo Yeow Ming)
2,379,893
1.13
8. DB (Malaysia) Nominee (Asing) Sdn Bhd
(Exempt An for Deutsche Bank AG Hong Kong)
2,147,109
1.02
9. Saw Eng Huat Properties Sdn Berhad
1,483,780
0.71
10. Pure Classic Sdn Bhd
1,399,000
0.67
11. Damai Baru Sdn Bhd
1,326,200
0.63
(RBS Coutts SG for China Leap Limited)
1,059,985
0.50
13. A.A. Anthony Securities Sdn Bhd
1,020,100
0.49
14. Soh Chong Chai
1,003,101
0.48
15. Ventura Holdings Sdn Bhd
976,834
0.47
16. Mayban Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account for Siow Yoon Keong)
949,962
0.45
17. Citigroup Nominees (Tempatan) Sdn Bhd
(UBS AG Singapore for Siow Yoon Keong)
926,793
0.44
18. Jelitron Wira Sdn Bhd
781,900
0.37
19. ECML Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account For Chiew Chi Chong)
735,339
0.35
20. Beaufort Capital Sdn Bhd
680,406
0.32
(Hadrons Capital Sdn Bhd for E-Fos Sdn Bhd)
612,060
0.29
(AA Noms SG for Seymour Pacific Limited)
510,050
0.24
23. Christopher Phang Li Roy
424,954
0.20
24. Khor Shaw Kang
408,040
0.19
(Pledged Securities Account for Stuart Saw Teik Siew)
371,316
0.18
26. RHB Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account for Ong Kar Beau)
357,035
0.17
27. Wong Sue Fern
332,257
0.16
28. Chuan Teik Ping
275,000
0.13
29. Yeap Geok Bow @ Betty Yeap
271,796
0.13
30. Chuan Teik Ling
270,800
0.13
2. Ke-Zan Nominees (Asing) Sdn Bhd
(Kim Eng Securities Pte. Ltd. for The Nassim Fund)
#
Ceased to be a substantial shareholder on 30 June 2010.
#
93
Analysis Of Ordinary Shareholdings (Cont’d)
LIST OF SUBSTANTIAL SHAREHOLDERS as per register of substantial shareholders
Direct Interest
No. of
OrdinaryPercentage
Shares
* (%)
Atlan Holdings Bhd.
Distinct Continent Sdn Bhd
Dato’ Sri Adam Sani bin Abdullah
Sebastian Paul Lim Chin Foo
156,861,702
–
–
–
Notes:
*
(1)
(2)
94
Deemed interested through Atlan Holdings Bhd.
Deemed interested through Distinct Continent Sdn Bhd.
Excludes 200,003 ordinary shares as treasury shares.
Deemed Interest
No. of
OrdinaryPercentage
Shares
* (%)
74.71
–
– 156,861,702 (1)
– 156,861,702 (2)
– 156,861,702 (2)
–
74.71
74.71
74.71
List Of Properties
as at 28 February 2010
LocationDescriptionTenureApproximateUsageApproxNet Book
age of
land areaValue
building
(sq. meter) @28.02.2010
(year)RM
1. DFZ DUTY FREE SUPPLIES Sdn Bhd
Lot 1071, Mukim 11,
Seberang Perai Tengah,
Pulau Pinang
Double storey
Freehold
15
private bonded
warehouse
Rented
out
29,234
5,625,575
Leasehold-
23
Staff
297
(99 years-
quarters
Expiring
2080)
120,292
A single storey
Leasehold-
22
Duty Free
20,234
warehouse
(30 years-
shopping
annexed to a
Expiring
complex &
double storey
2017)
warehouse
shopping complex
and 30 units of
single storey
lock-up shops
and ancillary
building
4,180,945
b.
Lot 127-142 & 169-174,
22 units single
Leasehold-
17
staff
3,216
PT 1889-1904 & 1931-1936, storey terrace
(99 years-
quarters
HS(M) 135/1989-150/1989
house
Expiring
& 177/1989-182/1989,
2088)
Bandar Baru Laka Temin,
Mukim Sungai Laka,
Daerah Kubang Pasu,
Kedah Darul Aman
624,120
c.
Lot 911, 913 & 914,
Vacant Land
Mukim Sungai Laka
Daerah Kubang Pasu,
Kedah Darul Aman
2. DFZ (M) Sdn Bhd
Lot PT 482 HS(D) 19/1981,
Double storey
Mukim Sungai Laka,
shophouse
Daerah Kubang Pasu,
Kedah Darul Aman
3. CERGASJAYA Sdn Bhd
a. Lot 2224 HS(M) 1/1987,
PT 1443, Bukit Kayu Hitam,
Mukim Sungai Laka,
Daerah Kubang Pasu,
Kedah Darul Aman
Freehold
–
Vacant
213,143
3,440,000
Lot 439, Geran 23052,
Vacant land
Freehold
–
Vacant
69,125
Mukim 17, Daerah Timur Laut,
Pulau Pinang
11,511,126
4. RADIANT RANCH Sdn Bhd
5. GOLD VALE DEVELOPMENT Sdn Bhd
a.
Lot 475, Seksyen 1,
Vacant land
Freehold
–
Vacant
2,346
Bandar Batu Ferringhi,
Daerah Timur Laut,
Pulau Pinang
305,260
b.
Lot 481, Geran 67421
Vacant land
Freehold
–
Vacant
8,974
Mukim 17,
Daerah Timur Laut,
Pulau Pinang
–
95
List Of Properties (Cont’d)
LocationDescriptionTenureApproximateUsageApproxNet Book
age of
land areaValue
building
(sq. meter) @28.02.2010
(year)RM
6. CERGASJAYA PROPERTIES Sdn Bhd
Lot 3688, 3689 and PT 2209 Part of Golf
Bukit Kayu Hitam,
and Country Mukim Sungai Laka,
Club
Daerah Kubang Pasu,
Kedah Darul Aman
Leasehold-
12
(60 years-
Expiring
2053 & 2057)
Rented
3,127,220
out and partly
vacant
34,465,493
Leasehold-
25
(99 years-
Expiring
2084)
Business
130
and office
premises
448,209
Leasehold-
15
(30 years-
Expiring
2024)
Duty Free
2,548
complex
1,679,479
7. MELAKA DUTY FREE Sdn Bhd
Lot 44 Premises
4 & 1/2 storey No. 142/1/2&3,
shophouse
Kompleks Munshi Abdullah,
Jalan Munshi Abdullah,
75100 Melaka
8. DFZ DUTY FREE (LANGKAWI) Sdn Bhd
Lot 970, 971, 973 & 1556
Shopping Mukim Kedawang
complex
Daerah Langkawi
Kedah Darul Aman
9. EMAS KERAJANG Sdn Bhd
96
a.
Lot 4720, Mukim of Titi Tinggi, Store
2 Jalan Baru Sadao,
02100 Padang Besar,
Perlis
Leasehold-
16
Store
1,003
(60 years-
Expiring
2054)
b.
Lot 3548, Mukim of Titi Tinggi,
2 Jalan Baru Sadao,
02100 Padang Besar,
Perlis
Leasehold-
18
(60 years-
Expiring 2050)
c.
Lot 2063, Mukim Titi Tinggi,
Shop
Freehold
23
Shop
223
Padang Besar
30 Bangunan PKENPs,
Jalan Besar
02100 Padang Besar, Perlis
218,807
d.
Shop Lot Nos. 47 & 48,
Shop
Leasehold-
20
Shop
59
Mukim Titi Tinggi,
(99 years-
Padang Besar
Expiring 3 D & 4 D Kompleks Arked
2090)
Niaga PKENPs
02100 Padang Besar, Perlis
253,754
Warehouse
annexed to a
single storey
shopping complex
12,032,595
Duty Free
3,545 complex &
warehouse
10.SERUNTUN MAJU Sdn Bhd
PN 108045, Lot 4858
Duty Free
Mukim Pengkalan Hulu
Complex
District Hulu Perak
Perak
Leasehold-
20
Duty Free
10,116
(60 years-
complex
Expiring 2050)
9,364,444
Notice Of Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the 26th Annual General Meeting of DFZ Capital Berhad (“DFZ” or “the Company”)
will be held at the Meeting Room, Wisma Atlan, 8 Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang on Wednesday,
25 August 2010 at 11.30 a.m. for the following purposes:
AGENDA
AS ORDINARY BUSINESS:
1.
2.
3.
To receive the Audited Financial Statements for the financial year ended 28 February 2010,
together with the Directors’ and Auditors’ Reports thereon.
Resolution 1
To approve the payment of Directors’ fees of RM48,000 for the financial year ended 28
February 2010.
Resolution 2
To re-elect the following Directors who retire in accordance with Article 102 of the Company’s
Articles of Association:a)
b)
Resolution 3
Resolution 4
4.
To consider and if thought fit, to pass the following resolution in accordance with Section
129(6) of the Companies Act 1965 as ordinary resolution:
“That Mohd Sharif bin Hj Yusof, who is over the age of seventy years and retiring in
accordance with Section 129 of the Companies Act 1965, be and is hereby re-appointed
as Director of the Company, to hold office until the next Annual General Meeting of the
Company.
Resolution 5
To reappoint Messrs Ernst & Young as Auditors and authorise the Directors to fix their
remuneration.
Resolution 6
5.
6.
AS SPECIAL BUSINESS, to consider and if thought fit, pass the following resolutions with
or without modifications:
6.1 Ordinary Resolution 1
Authority to allot and issue Shares pursuant to Section 132D of the Companies
Act 1965
“THAT, subject to the Companies Act, 1965 (“the Act”) and the Articles of Association
of the Company and approvals from Bursa Malaysia Securities Berhad (“Bursa
Securities”), the Securities Commission and other relevant governmental or regulatory
authorities, the Directors be and are hereby empowered pursuant to Section 132D
of the Act to allot and issue shares in the capital of the Company from time to time
upon such terms and conditions and for such purposes as the Directors may in their
discretion deem fit provided that the aggregate number of shares issued pursuant
to this resolution does not exceed 10% of the issued share capital of the Company
for the time being and that such authority shall continue in force until the conclusion
of the next Annual General Meeting of the Company.”
Resolution 7
6.2 Ordinary Resolution 2
Proposed Renewal of Share Buy-Back Authorisation
“THAT, subject to the Companies Act, 1965 (“the Act”), the provisions of the
Memorandum and Articles of Association of the Company, the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and approvals
of all relevant governmental and/or regulatory authorities, the Company be and is
hereby authorised to utilize the maximum amount of funds available in the Company
which shall not exceed the aggregate of the retained profits and/or share premium
account of the Company to purchase such amount of ordinary shares of RM1.00 each
in the Company as may be determined by the Directors from time to time through
Bursa Securities upon such terms and conditions as the Directors may deem fit and
expedient in the interest of the Company provided that the aggregate number of
shares purchased and/or held pursuant to this resolution does not exceed 10% of
the issued and paid-up share capital of the Company at any point in time;
97
Notice Of Annual General Meeting (Cont’d)
THAT authority be and is hereby given to the Directors of the Company to decide at
their absolute discretion to either retain the shares so purchased as treasury shares
(as defined under Section 67A of the Act) and/or to cancel the shares so purchased
and if retained as treasury shares, may resell the treasury shares and/or distribute
them as share dividends;
THAT authority conferred by this resolution will be effective immediately upon the
passing of this resolution and will expire at:(a)
the conclusion of the next Annual General Meeting (“AGM”) of the Company,
at which time the said authority will lapse unless by an ordinary resolution
passed at a general meeting of the Company, the authority is renewed, either
unconditionally or conditionally; or
(b)
the expiration of the period within which the next AGM is required by law to be
held; or
(c)
revoked or varied by ordinary resolution passed by the shareholders in a general
meeting,
whichever occurs first,
but not so as to prejudice the completion of purchase(s) by the Company before
the aforesaid expiry date and in any event, in accordance with the provisions of the
guidelines issued by the Bursa Securities and/or other relevant governmental and/or
regulatory authorities (if any);
AND THAT the Directors of the Company be and are hereby authorised to take all steps
necessary to implement, complete and to do all such acts or things (including executing
all such documents as be required) as they may consider expedient or necessary
to give effect to the Proposed Renewal of Share Buy-Back Authorisation as may be
agreed or allowed by any relevant governmental and/or regulatory authority.”
6.3 Special Resolution
Proposed Amendment to Articles of Association of the Company
98
“THAT, in line with the amendments to the Main Market Listing Requirements of Bursa
Securities, the existing Article 159 be deleted in its entirety and be substituted thereof,
with the following new Article 159:i)
Existing Article 159
“Any dividend, interest or other money payable in cash in respect of shares
may be paid by cheque or warrant sent through post directed to the registered
address of the holder or, in the case of joint holders, to the registered address
of that one of the joint holders who is first named on the Register or to such
person and to such address as the holder or joint holders may in writing direct
or, if several persons are entitled thereto in consequence of death or bankruptcy
of the holder, to any one of such person or to such person and to such address
as such person may by writing direct. Every such cheque or warrant shall be
made payable to the order of that person to whom it is sent or to such persons
as the holder or joint holders or person or persons entitled to the share in
consequence of the death or bankruptcy of the holder may direct the payment
of such cheque or warrant shall operate as good discharge to the Company
in respect of the dividend represented thereby. Every such cheque or warrant
shall be sent at the risk of person entitled to the money thereby represented.”
ii)
New Article 159
(1) Any dividend, interest or other moneys payable in cash in respect of
share may be paid by way of telegraphic transfer or electronic transfer or
remittance to such accounts as designated by such holder or the person
entitled to such payment (“eDividend”), cheque or dividend warrant or
via any other mode or manner as may be prescribed by the Act, Listing
Requirements of Bursa Securities and any other relevant authority for the
time being in force.
Resolution 8
(2) In the event that a Member has not provided his bank account details to
Bursa Depository, any dividend, interest or other moneys payable in cash
in respect of a share may be paid by cheque, bank draft, dividend warrant
or postal order and (in the case of a cheque, bank draft, dividend warrant
or postal order for such payment) sent:
(a) through post directed to the registered address of the entitled
person;
(b) by post, by courier or by hand to the registered address of the person
becoming entitled to the share by reason of the death, bankruptcy or
mental disorder or the holder or by operation of law or if such address
has not been supplied, to such address to which such cheque or warrant
might have been posted if the death, bankruptcy, mental disorder or
operation of law had not occurred; or
(c) by post, by courier or by hand to such address as the person entitled
may direct in writing,
but the Company shall be entitled to send such cheque or dividend warrant
to such other address or by such other means stated in Articles 159(2)(a)
to 159(2)(c) notwithstanding such direction.
(3) Every such cheque, warrant, electronic payment or payment made using
other methods of fund transfer shall be made payable to the order of the
entitled person, and such payment shall conclusively operate as a good
discharge to the Company in respect of the money represented thereby.
Every such payment shall be made at the risk of the person entitled to the
money represented thereby. The Company shall not be responsible for any
inaccurate details supplied by the Members or any errors, delay or power
or electronic failure encountered during or in the course of transmission of
data or payment or for any loss of any such eDividend, cheque, bank draft,
dividend warrant or postal order (whether in the bank account transfer, post,
while being delivered by courier or by hand, after bank account transferring
and/or delivering to the relevant address or person or otherwise). No
unpaid or unclaimed dividend or interest shall bear interest as against the
Company.
7.
In this article, reference to entitled person shall mean a member whose name
appears in the Record of Depositors of the Company at the material time and
in consequence of death or bankruptcy of a member, persons through whom
payments are to be made such as the representative of the deceased, or assignee
of the bankrupt where such payment will be made through them.”
Resolution 9
To transact any other business of which due notice shall have been given.
By Order of the Board of Directors of
DFZ Capital Berhad
THUM SOOK FUN (MAICSA 7025619)
Company Secretary
Penang
3 August 2010
99
(A)
(B)
NOTES:
1.
A member of the Company entitled to attend and vote at the meeting is entitled to appoint more than one (1) proxy to
attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section
149(1)(b) of the Companies Act 1965 shall not apply to the Company.
2.
Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion
of his holdings to be represented by each proxy.
3.
Where a member is an authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991,
it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company
standing to the credit of the said securities account.
4.
The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorized
in writing or, if the appointor is a corporation, either under the Common Seal or signed by an officer or attorney so
authorized.
5.
The instrument appointing a proxy and the power of attorney or other authority, if any under which is signed or a notarially
certified copy of that power or authority, must be deposited at the Registered Office of the Company at Wisma Atlan, 8
Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang, not less than forty-eight (48) hours before the time appointed
for holding the meeting or any adjournment thereof.
EXPLANATORY NOTES ON SPECIAL BUSINESS:
i)
Resolution 7 - Proposed Authority for Issue of Shares
The proposed resolution, if passed, will give the Directors the power to allot and issue shares up to 10% of the issued
and paid-up share capital of the Company for the time being for such purposes as the Directors would consider in the
best interest of the Company.
100
As at the date of this Notice, no new shares were issued pursuant to the mandate granted to the Directors at the last
AGM held on 26 August 2009 and it will lapse at the conclusion of the 26th AGM.
This renewal of the above mandate would avoid any delay and cost involved in convening a general meeting to specifically
approve such an issue of shares. This authority, unless revoked or varied at a general meeting, will expire at the next
AGM of the Company.
The resolution enables the Directors to take immediate action in the case of a need for corporate exercise or in the event
business opportunities arise which involve the issue of new shares, and to avoid delay and cost in convening general
meeting to approve such issue of shares.
ii)
Resolution 8 - Proposed Renewal of Authority for Share Buy-Back Authorisation
The proposed resolution, if passed, will empower the Directors to buy-back and/or hold up to a maximum of 10% of the
Company’s issued and paid-up share capital at any point of time, by utilizing the funds allocated which shall not exceed
the aggregate of the retained profits and/or share premium reserve of the Company. This authority, unless revoked or
varied by the Company in a general meeting, will expire at the conclusion of the next AGM of the Company.
Further information of this Resolution, please refer to the Share Buy-back Statement dated 3 August 2010, which is
despatched together with the Company’s 2010 Annual Report.
iii)
Resolution 9 - Proposed Amendment to Article of Association of the Company
The Proposed Amendment to the existing Article 159 of the Company is to incorporate the requirements of the Prevailing
Law in order to provide for the payment of dividend, interest or other money payable in cash, directly to the shareholders’
account opened and maintained with a financial institution in Malaysia by way of electronic payment.
STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING
The Directors standing for re-election/re-appointment are as follows:(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Securities)
As at date of this notice, there are no individuals who are standing for election as Directors (other than the Directors named
in the notice who are standing for re-election or re-appointment) at this forthcoming 26th Annual General Meeting.
Details of the Directors who are standing for re-election or re-appointment are set out on pages 5 to 6 in the Directors’
Profile of the Company’s 2010 Annual Report.
DFZ CAPITAL BERHAD
(Company No. 104556-X)
(Incorporated in Malaysia)
FORM OF PROXY
*I/We _______________________________________________________________________________________________
(block letters)
NRIC No./Company No. _ ___________________________________ CDS Account No. __________________________
of__________________________________________________________________________________________________
(full address)
being a member of DFZ CAPITAL BERHAD (“DFZ” or “the Company”) hereby appoint_ _______________________
____________________________________________________________________________________________________
of __________________________________________________________________________________________________
or failing *him/her, ____________________________________________________________________________________
of __________________________________________________________________________________________________
or failing *him/her, the Chairman of the Meeting as *my/our proxy to attend and vote for *me/us on *my/our behalf
at the 26th Annual General Meeting of the Company to be held at the Meeting Room, Wisma Atlan, 8 Persiaran
Kampung Jawa, 11900 Bayan Lepas, Penang on Wednesday, 25 August 2010 at 11.30 a.m. or any adjournment
thereof.
Please indicate your vote by a (X) in the respective box of each resolution. If no specific direction as to voting is
given, the proxy will vote or abstain from voting on the resolutions at his/her discretion.
AS ORDINARY BUSINESS:FOR AGAINST
RESOLUTION 1
To receive the Audited Financial Statements for the financial year
ended 28 February 2010 together with the Directors’ and Auditors’
Reports thereon.
RESOLUTION 2
To approve the payment of Directors’ fees of RM48,000.
RESOLUTION 3
To re-elect Dato’ Sri Khalid bin Mohamad Jiwa as Director of the
Company.
RESOLUTION 4
RESOLUTION 5
To re-elect Encik Mohd Kamarudin bin Haron as Director of the
Company.
To re-appoint Mohd Sharif bin Hj Yusof as Director of the Company
pursuant to Section 129 of the Companies Act, 1965.
RESOLUTION 6To re-appoint Messrs Ernst & Young as Auditors of the Company
and to authorise the Directors to fix their remuneration.
AS SPECIAL BUSINESS:
RESOLUTION 7
To approve the Proposed Authority for Issue of Shares.
RESOLUTION 8
To approve the Proposed Renewal of Share Buy-Back
Authorisation.
RESOLUTION 9
To approve the Proposed Amendment to the Company’s Articles
of Association.
*Strike out whichever not applicable
Dated this_ __________ day of_ ___________________ , 2010.
____________________________________
Signature of Shareholder(s)
COMMON
SEAL
No. of Shares Held
✄
Notes:
1.
A member of the Company entitled to attend and vote at the meeting is entitled to appoint more than one (1) proxy to attend and vote in
his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act 1965 shall
not apply to the Company.
2.
Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to
be represented by each proxy.
3.
Where a member is an authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at
least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said
securities account.
4.
The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorized in writing or, if the
appointor is a corporation, either under the Common Seal or signed by an officer or attorney so authorized.
5.
The instrument appointing a proxy and the power of attorney or other authority, if any under which is signed or a notarially certified copy
of that power or authority, must be deposited at the Registered Office of the Company at Wisma Atlan, 8 Persiaran Kampung Jawa, 11900
Bayan Lepas, Penang, not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.
6.
Any alteration in this form must be initialed.
Fold this flap for sealing
Then fold here
AFFIX
POSTAGE
STAMP
THE COMPANY SECRETARY
DFZ CAPITAL BERHAD
(Company No.: 104556-X)
Wisma Atlan
8 Persiaran Kampung Jawa
11900 Bayan Lepas
Penang, Malaysia
1st fold here
www.dfzcapital.com.my
DFZ CAPITAL BERHAD (104556-X)
Wisma Atlan
8 Persiaran Kampung Jawa
11900 Bayan Lepas
Penang
Tel : 604 641 3200
Fax : 604 642 3200

Laporan Tahunan Annual Report

Transcription

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